Investing.com -- Enthusiasm for artificial intelligence (AI) continues to build across industries, but Evercore ISI views 2025 as the pivotal year for widespread adoption.
While AI mentions have surged in corporate earnings calls, capital expenditure by hyper-scalers remains robust, and Google (NASDAQ:GOOGL) searches for AI technologies hit record highs, actual adoption lags behind.
“With consumers enthusiastic on AI adoption yet sentiment in Corporate America relatively muted, 2025 is the critical AI adoption Inflection year,” Evercore strategists led by Julian Emanuel said in a Sunday note.
AI’s evolution has moved beyond simple chatbot interactions. In 2024, generative AI began to automate both physical and digital tasks, driving advancements in robotics, digital autonomous agents, and tools used for manufacturing and services.
Evercore emphasizes that AI’s ability to automate complex tasks now stems from its breakthroughs in Inference Time Reasoning, communication, and training data capabilities.
"AI-infused Autonomous Agents can now tackle a broader set of tasks," Evercore explains. By eliminating hardcoded rules, AI systems are gaining the capacity to “think” before they “act.” This, the firm says, is a key factor in its confidence that 2025 will represent the inflection point for AI adoption.
Despite notable progress, investor sentiment turned cautious in mid-2024. Evercore highlights that AI-exposed stocks experienced their first significant pullback or “Air Pocket” since the launch of ChatGPT. Industry leader Nvidia (NASDAQ:NVDA) “has moved sideways until its own recent resumption of outperformance,” strategists noted.
Evercore maintains its conviction that AI will reshape skilled work, addressing the growing challenge of labor shortages.
Key players in the AI ecosystem are categorized as "Enablers, Adopters and Adaptors," a group Evercore sees as crucial to portfolio positioning in 2025. The firm reiterates the importance of these names as core holdings, projecting the S&P 500 to reach 6,800 by year-end.
“We believe 2025 will draw in more participants to the “AI Revolution” as the advances in the technology and its application make AI a “must have” for companies’ ability to compete effectively in the years ahead,” Emanuel and his team wrote.
Following Q3 earnings, Evercore updated its "AI Enablers, Adopters and Adapters" list 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 2025 growth. Firms with high AI mention growth and competitive AI strategies were highlighted.