As this is the investing issue, The Duffy Mathais Group is committed to keeping our clients informed on what’s ahead. Our team at Baird Private Wealth Management breaks down four key economic trends to watch in 2025.
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Artificial Intelligence: The rise of ChatGPT has spurred companies to explore AI’s potential to boost productivity and profitability. Investment options range from traditional technology companies (e.g., those that provide software applications capable of intelligent learning, coding, data analytics, etc.) to any industries looking to utilize AI as a productivity enhancer and problem-solver while decreasing the risk of human error (e.g., healthcare).
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Industrial Power Renaissance: The demand for power has surged due to AI, electric vehicles, and new manufacturing and data centers. Global data center electricity consumption is expected to more than double from 2022 to 2026. We favor investing in securities directly involved in creating sources of power and those benefiting from add-on impacts of increased power generation.
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Deglobalization: Recent supply chain disruptions have led companies to consider near-shoring or onshoring operations as countries focus on greater self-reliance. We see opportunities in Energy and Materials companies that benefit from established operations, cybersecurity and traditional defense firms, and businesses with more domestic-focused revenues and inputs.
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Cash Is King: Post-pandemic shifts in monetary policy are likely to keep interest rates elevated, inevitably consuming a greater share of corporate cash. Investments in companies that generate cash flow, manage it well, and return income to shareholders are prudent. Self-funding firms have a significant advantage against this backdrop.
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