2025: Evercore predicts critical year for AI adoption
Enthusiasm for artificial intelligence (AI) continues to skyrocket across various industries, with Evercore ISI pinpointing 2025 as the pivotal year for widespread adoption. While AI mentions have been on the rise in corporate earnings calls, the actual adoption of AI technology is lagging behind, despite the robust capital expenditure by hyper-scalers and the surge in Google (NASDAQ:GOOGL) searches related to AI technologies.
According to Evercore strategists, led by Julian Emanuel, consumers are eager for AI adoption, but sentiment in Corporate America remains relatively muted. 2025 is predicted to be the critical AI adoption inflection year. In 2024, the evolution of AI went beyond basic chatbot interactions, with generative AI being used to automate both physical and digital tasks, contributing to advancements in robotics, digital autonomous agents, and tools for manufacturing and services.
The breakthroughs in Inference Time Reasoning, communication, and training data capabilities have enabled AI to automate complex tasks. Evercore highlights that AI-infused Autonomous Agents are now capable of handling a broader range of tasks by eliminating hardcoded rules, allowing AI systems to “think” before they “act.” The firm is confident that 2025 will signify a major turning point for AI adoption.
Despite making notable progress, investor sentiment turned cautious in mid-2024. AI-exposed stocks experienced their first significant pullback since the launch of ChatGPT. Notably, industry leader Nvidia (NASDAQ:NVDA) “has moved sideways until its recent resumption of outperformance,” as noted by Evercore strategists.
In the realm of AI, key players are classified as “Enablers, Adopters, and Adaptors,” with Evercore emphasizing their importance for portfolio positioning in 2025. The firm views these names as essential core holdings and projects the S&P 500 to reach 6,800 by year-end. Evercore believes that 2025 will attract more participants to the “AI Revolution” as technological advancements and practical applications make AI indispensable for companies to remain competitive in the years ahead.
Following the Q3 earnings, Evercore updated its list of “AI Enablers, Adopters, and Adapters” by identifying Russell 3000 companies with over $3 billion market cap that mentioned AI in earnings reports, had positive post-earnings reactions, and showed stronger-than-expected growth in 2025. The focus was on firms with high AI mention growth and competitive AI strategies for highlighting.
In conclusion, Evercore’s analysis suggests that 2025 will be a critical year for AI adoption, with significant advancements in technology and applications paving the way for AI to become an essential tool for companies striving to compete effectively in the future.
