According to Wedbush Securities, software companies like Microsoft (MSFT), Amazon (AMZN), Google (GOOGL), and Palantir (PLTR) are in a strong position as artificial intelligence continues to grow rapidly. Indeed, the firm noted that over 15% of cloud services now include AI features that help companies boost revenue while cutting costs. As a result, Wedbush expects AI and cloud-related spending to stay a top priority even during economic uncertainty and believes that software stocks are likely to outperform other tech sectors.
The analysts pointed out that major cloud providers like Microsoft, Amazon, and Google are at the center of this trend, as businesses continue investing in cloud and AI projects regardless of the broader economy. Meta Platforms (META) is also part of this group. Together, these companies are projected to spend $325 billion in capital expenditures in 2025, which is up 40% from the prior year and shows just how serious they are about expanding their AI and cloud infrastructure.
Wedbush also sees Palantir as a key player in the AI space because of its strong position in enterprise applications. The firm said that it’s still very optimistic about the AI trend and described software as now being “on the dance floor” of what it calls the AI Party. With more practical use cases showing up across different industries, the analysts believe that 2025 could be a turning point for the software world.
Which AI Stock Is the Better Buy?
Turning to Wall Street, out of the five stocks mentioned above, analysts think that GOOGL stock has the most room to run. In fact, GOOGL’s average price target of $197.69 per share implies more than 29% upside potential. On the other hand, analysts expect the least from PLTR stock, as its average price target of $98.56 equates to a loss of 15.8%.
