| The Hottest Growth Trend of 2025 |
| Not surprisingly, AI, broadly speaking, will continue to be the hottest growth trend in 2025. |
| Hundreds of billions will continue to be spent on the hyperscale "AI factories" being built to train AI foundation models. I stand by my prediction that we'll see at least one company develop an artificial general intelligence (AGI) by the end of 2026. |
| With that said, I'm also predicting that we'll see something pretty close to AGI before the end of 2025. I'll go so far as to say that at least some in the industry will claim that it has been achieved. It will be contested, but it's going to happen. |
| Along similar lines, we'll see the equivalent of genius-level IQs from the foundational models of OpenAI, Anthropic, Meta (Llama), Alphabet (Gemini), and xAI (Grok). And the outlier – the big surprise in 2025 will be from Elon Musk and his team at xAI. |
| The entire industry has discounted xAI because it was a bit late to the game of building a foundation model for AI. That's a mistake, for two reasons. Within a few months, xAI will have the largest training cluster of GPUs, at least 200,000 GPUs developing Grok 3.0. |
| xAI is also developing a "maximum truth-seeking AI." When training an AI, the quality and accuracy of a model's outputs depend heavily upon the quality and accuracy of the inputs. Other companies trying to program their foundational models with clear bias and/or political narrative actually slow down their own technological development. Doing so adds complexity. |
| xAI is avoiding that trap by designing, building, and training for performance. This is a large competitive advantage that will catch the rest of the industry off guard. |
| xAI's Grok will outperform the rest of the industry. |
| The Year of Level 5 |
| 2025 will also be the year when we experience Level 5 autonomous transport without any geofencing, entirely driven by vision models. This is different than Waymo, Cruise, or others that are heavily dependent upon LIDAR and require very precise maps allowing them only to operate in geofenced areas. |
| And there is only one company capable of this technology – Tesla. |
| This year will be the first year when we experience unsupervised full self-driving technology.Unsupervised means that no one will have to sit in the front seat and monitor the full self-driving software for safety. Tesla will succeed in "turning on" this technology in at least one U.S. state this year. |
| This will also enable Tesla to launch a robotaxi network, enabling Tesla owners to opt their Teslas into the network, enabling their electric vehicles to earn income. |
| This will change the entire dynamic of the automotive industry, as Teslas will become affordable to an even larger percentage of the market. |
| And it will, of course, be bullish for Tesla as the only EV company capable of this technology. |
| Humanoid Robots Overtake Offices & Factories |
| We'll also see impressive advancements in AI in the manifested form of humanoid robots. |
| Again, Tesla will lead here with its forthcoming release of Optimus Gen 3, which will be capable of autonomous operations in both industrial and consumer settings. While I don't expect Tesla to start external sales of Optimus until 2026, it will widely use its production of Optimus in both its own office and factory settings. |
| Optimus will set the standard for humanoid robot productivity, and investment will increase dramatically in other major players in this field. |
| Figure AI, 1X Technologies, Agility, and Boston Dynamics will work hard to catch up to Tesla's technology. |
| The whole industry will benefit, as the return on investment will be clear, with increased productivity and a solution to the widespread labor shortage. |
| LLMs Take a Leap: The Year of Agentic AI |
| Speaking generally, 2023 was the year of chatbots, like ChatGPT, as large language models were trained. |
| 2024 moved the technology forward, developing multi-modal models for generative AI capable of ingesting video, images, text, audio, and software code. |
| 2025 will be the year of agentic AI technology. |
| These AI agents will be capable of reasoning and solving tasks that require multiple steps to complete. Agentic AI will be capable of transacting on behalf of anyone. The technology will be able to interface with the internet and fill out fields to complete assigned tasks. |
| This technology will extend even further to the blockchain industry, where AI agents will be capable of managing smart contracts and engaging in self-directed economic activity. |
| Blockchain technology is particularly conducive to agentic AI technology because of the ease of transacting with digital assets and the construction of smart contracts using blockchain technology. |
| Which brings us to the digital assets industry… |
| The Year of Digital Asset Revitalization |
| We turned a corner in November with the results of the U.S. presidential election. |
| It was a defining moment in the history of the digital assets industry. |
| One outcome would have been devastating for the entire industry, resulting in draconian controls in the U.S. markets. |
| The other outcome was pro-crypto, pro-innovation, and a plan to put clear regulations in place for digital assets. I couldn't have imagined two radically different possibilities. |
| Fortunately for the digital assets industry, we're already seeing a complete revitalization of the blockchain industry with regard to investment in the U.S. |
| 2025 will be a big year for crypto. |
| New regulations will be put in place, providing clarity and clear guidance on industry rules. And the enforcement of baseless and antagonistic actions against the leaders in the industry will come to an end. |
| This will be bullish for high-quality cryptocurrencies. We should expect to see a lot of speculation in the industry, as well. |
| This is precisely why I relaunched my Neural Net Profits research service. It is powered by a sophisticated neural network my team and I developed at a cost of more than $1 million, called The Perceptron, that picks up on short-term trading signals in cryptocurrencies. |
| Neural Net Profits is already off to a great start, and I can't imagine a better environment for a trading service like this than what I see looking ahead into 2025. |
| The latest developments are also the reason why I will launch my fundamental buy-and-hold investment research service,Permissionless Investor, this month. Our team's mission is to help self-directed investors better understand blockchain technology and the incredible investment opportunities that will result in this pro-crypto, pro-innovation environment in digital assets. |
| Additionally, we'll see U.S. dollar stablecoin projects thrive this year, as more and more financial transactions happen and settle on blockchain technology. |
| And I'm happy to predict that the talk of a central bank digital currency (CBDC) in the U.S. will completely die. |
| That's a wonderful development, as well, as the CBDC technology was intended to be used as a technology for social control over the population. Sadly, I believe this trend will continue in Western Europe. |
| Lift Off for the Space Economy |
| Another industry that will thrive this year will be the aerospace industry. |
| And we're going to see some incredible developments in both space, defense, and commercial air transport technology. |
| I fully expect that Boom Supersonic will succeed in flying its one-third-scale aircraft supersonic in the first half of this year. |
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| Boom XB-1 | Source: Boom Supersonic |
| As a reminder, Boom is the most advanced aerospace company in building a supersonic commercial aircraft capable of traveling at Mach 1.7 with 64-80 passengers. It is an answer to what comes next after the Concorde. |
| I also expect that Blue Origin, Jeff Bezos' privately funded aerospace company, will successfully launch its New Glenn rocket, which also has a reusable first-stage booster similar to Musk's SpaceX approach. |
| Speaking of SpaceX, it will launch at least 15 Starships this year, as it refines the technology of the largest rocket and spacecraft in history. SpaceX will successfully demonstrate the catch by the Mechazilla of not only the first stage booster again, but also the Starship itself after its return from low earth orbit. |
| SpaceX will also demonstrate the docking of two upper stages in low earth orbit and the transfer of fuel from one to another – yes, while in low earth orbit. |
| This is a critical process necessary for SpaceX's plans for supporting NASA in the establishment of a lunar outpost, as well as its own plans for sending multiple Starships to Mars in 2026 when the orbital alignment window opens up between the Earth and Mars – a unique window that opens up roughly every two years. This is what SpaceX is building for. |
| These developments will be bullish for the aerospace industry. |
| Between SpaceX, Blue Origin, and smaller outfits like Rocket Lab, the space economy will lift off. And the legacy incumbents will have to step up their game to keep up. |
| The Trump/Musk partnership will also put NASA back on track for its return to the moon program – Artemis – by 2026. |
| Radical Shifts in Defense Spending |
| As for the defense industry, we can expect a radical shift in 2025. |
| I predict that the conflict between Ukraine and Russia will end within the first 90 days of Trump's presidency. |
| We should also expect that Trump and his team will build upon the success of the Abraham Accords from his first term, which will bring about more peace in the Middle East. |
| Less war, more peace in 2025. I can't wait. |
| But that won't mean less investment in defense. |
| The U.S. will stop the absurd spending and funding of overseas wars and focus instead on rebuilding a technologically advanced defensive capability for the U.S. military… a peacekeeping military. |
| Representative companies will be Anduril and perhaps General Atomics. The key will be uncrewed, autonomous drones and aircraft. |
| Given the advancements in artificial intelligence and autonomous technology, the nature of warfare has dramatically changed. The use of autonomous drones and uncrewed aircraft will be an explosive trend in 2025, as will the development of intelligent cybersecurity agents to protect against nation-state attacks – most notably those of China on U.S. infrastructure that has commanded an alarming number of headlines in 2024. |
| In fact, the year ended with the U.S. Treasury announcing that it had just been hacked by China, which accessed some of the Treasury Department's computing systems. |
| Investment will accelerate in advanced technologies in the defense sector, as opposed to the more traditional technological approaches. Western adversaries are using unconventional weapons to infiltrate and fight, and the industry must adjust. |
| We'll also see an increase in spending on defense as it applies to the U.S. Space Force. The progress with hypersonic technology in 2024 will make space-based defense systems and communications that much more critical as a deterrent to war. |
| And as for eVTOL technology as it applies to commercial air transportation, sadly I don't think that we'll see commercial operations commence in the U.S. before the end of the year. I predict this will be pushed out into the first half of 2026. |
| But we will see commercial operations begin in Abu Dhabi and Dubai in 2025, which have been far more welcoming markets from a regulatory standpoint. |
| Nuclear's Next-Generation Renaissance |
| Energy policy will also become a cornerstone development in 2025 for the new administration. |
| Most will be quite surprised by the continued support for clean energy production with no carbon emissions. |
| The "pause" that we witnessed in natural gas production in the last four years will be lifted and the industry will start to invest heavily again in natural gas. Energy produced from coal will drop, just as it did during the first Trump administration. |
| There will also be a major policy push to bring both oil prices, and thus gasoline prices, down. The last four years seriously depleted the U.S.'s strategic petroleum reserves – to levels that we haven't seen since the early '80s. Lower prices will be critical in order to refill those strategic reserves, in order to ensure energy security for the U.S. economy. |
| In parallel, there will be strong regulatory support for the recommissioning of nuclear reactors in the U.S., as well as for the commissioning of new fourth-generation small modular reactors (SMRs) to address the shortages in energy production. |
| Nuclear energy will experience a rebirth in 2025. That will be true for both nuclear fission as well as nuclear fusion technology. |
| I stand by my original prediction made back in 2019: We'll see the first net energy-producing fusion reactor before the end of 2025. |
| I might make an argument that it already happened – at the National Ignition Facility (NIF) at the Lawrence Livermore National Laboratory in December of 2022. It happened, and it was real. |
| But I consider that to be a very large science experiment. My original prediction about nuclear fusion was really referring to a fusion reactor prototype capable of being commercialized. That's a major difference. |
| Frontrunners to achieve this by the end of 2025 are General Fusion, Helion, Zap Energy, Commonwealth Fusion, and China-based private company ENN. There may even be a national laboratory in South Korea, China, Japan, Germany, or the U.K. that may make the claim. |
| Either way, we're extremely close and very few realize what's happening. For most, it won't be real until the first commercial fusion reactor is commissioned and connected to a power grid. But it's happening right now. |
| Industry insiders know this. And I predict record levels of investment in nuclear fusion companies in 2025… precisely because the path is so clear toward net energy production. Institutional capital can now see a path toward commercialization – and ultimately returns – on their invested capital. |
| In addition to these exciting developments, the solar power industry will continue to thrive. Investment will continue in solar in markets where it makes sense. And as interest rates come down, solar will benefit from improved project financing. |
| Energy production from wind, however, will suffer, as it should. Wind power is not economical and environmentally destructive. The carbon footprint of wind turbines is terrible when considering all the minerals that need to be mined, and petroleum needed to keep the wind turbines turning. Not to mention the short lifespans and the fact that turbine blades cannot be recycled. They simply end up in a dump. |
| An IPO Recovery |
| Broadly speaking, we can expect both the elimination of burdensome, unnecessary regulations and the simplification of others in 2025, which will be a catalyst for economic growth in many industries. |
| Additionally, we'll see inflation coming under control and interest rates decline, which will be good for both the economy and the financial markets. |
| I'm also excited about the impact that these policies will have on the IPO markets. There are more than 1,000 exciting private tech and biotech companies that have delayed their potential IPOs for years, due to the economic environment of the last few years. |
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| Source: Renaissance Capital |
| I'm going to make a bold prediction here… |
| We will see 2025 IPO proceeds above the levels we saw in 2018 and 2019, somewhere between $46–60 billion across more than 150 IPOs. This will represent a major jump compared to last year. |
| More than 100 companies have already confidentially filed for an IPO in 2025. But I believe a much larger number will do so later this year. |
| I predict that we'll see a larger number of IPOs in the second half of 2025 compared to the first. |
| Exciting tech companies that I expect to see public offerings from this year include: CoreWeave, Cerebras, Databricks, Figma, Rippling, Klarna, SailPoint Technologies, Canva, and Stripe. |
| There will also be a large number of biotech companies, which tend to go public at much earlier stages. |
| The Final Thaw & a Biotech Spring |
| Speaking of biotech, lower interest rates are critical to driving institutional capital back into this more speculative sector. |
| But I can't imagine a better environment for biotech to thrive. |
| The catalyst, of course, is artificial intelligence. |
| And it's easy to see the impact of this technology on drug development in the below chart: |
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| Source: Drug Discovery Today |
| The above chart is from research that was published this summer, which is why we don't see full-year data for 2024, which is certainly higher than 2023. |
| There has clearly been an inflection point in the last few years, as we can see the positive impact of AI-discovered molecules making it into clinical trials. |
| It's hard to overemphasize the significance of this shift. Novel therapies will be developed in a fraction of the time and for a fraction of the cost of the traditional drug discovery process. The use of AI will also reduce toxicity and improve the safety of drugs. |
| And when we couple the positive impact of AI on the drug discovery process with the cleanup and streamlining of the relevant health agencies in the U.S., we will naturally see an increase in investment in the biotech sector. |
| Another major prediction that I have for 2025 is that the mRNA-based COVID-19 "vaccines" (experimental drugs) will be pulled from the U.S. markets. With RFK Jr. and Bhattacharya in leadership positions, they will default to an evidence-based approach to medicine. Rather than politics, data will drive good decision-making. |
| Not only do we know that these COVID "vaccines" are ineffective (i.e. they don't stop infection, they don't stop replication, and they don't stop transmission of the virus), they have severe side effects, which include death, and what's being referred to now as turbo cancers. The peer-reviewed research is extensive now. |
| The data is very clear, we can see it in the continuing excess death numbers in countries that pushed these mRNA COVID "vaccines" so hard on their populations, like the U.S. |
| And while this will be negative for big pharma, especially Pfizer and Moderna, it will be bullish for restoring trust in the national healthcare system, and also for having an honest framework for acknowledging the massive spike in COVID-19 vaccine-caused injury and deaths, and the necessary compensation structure to support those that we're impacted by these insane policies. |
| Establishing a Pro-Growth Framework |
| 2025 is the year when the government will step back from destructive policies, restore trust, and push ahead on pro-energy, pro-growth, and pro-innovation policies. |
| The answer to the debt/deficit conundrum that I outlined in the beginning is right in front of us all. We need to lean into the technology, lean into the development and employment of AI and robotics, and push ahead into a world of abundance. |
| And I predict that the regulatory and economic policy framework for making that vision a reality will happen in 2025. |
| With that, I wish you all a heartfelt Happy New Year and best wishes for an outstanding 2025. |
| And I can tell you, as both a technologist and an analyst, I've never been more excited about the future than I am right now. We're in for an incredible year. |
| And no matter what happens, we're going to be on top of the latest developments for you at Brownstone Research. |
| We have so much to look forward to, |
| Jeff |
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