In the song "Que Sera, Sera," Doris Day reminds us that whatever will be will be.
Day sang that little ditty in the 1956 Alfred Hitchcock film "The Man Who Knew Too Much."
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That year saw such technological advances as the snooze alarm, the supersonic jet bomber, the cordless TV remote and the first computer with a hard drive, courtesy of IBM (IBM) .
Technology, like time, is relentless and now all these years later analysts are looking at what to expect next from this most sizzling sector.
Will you be pretty? Will you be rich? The future's not ours to see. But if you pay attention to these people, you might come away with a few extra shekels in your pocket.
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Artificial intelligence was a big buzzword in 2024 and analysts at Deloitte say the "future of technology isn’t so much about more AI as it is about ubiquitous AI."
Deloitte: fundamental shift in AI
"Organizations may witness a fundamental shift in AI from augmenting knowledge to augmenting execution," the consulting firm said.
"Investments being made today in agentic AI, as this next era is termed, could upend the way we work and live by arming consumers and businesses with armies of silicon-based assistants."
AI agents are autonomous systems performing specific tasks without human intervention. Deloitte said that the phrase “there’s an app for that” could well become “there’s an agent for that.”
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Adam Benjamin, information technology fund manager with Fidelity Investments, said the outlook for the sector in 2025 and beyond might be bright, as tech companies continue to innovate, and digitization and automation become increasingly important in people's lives.
"I believe we are still in the 'picks and shovels' phase of generative AI, which has favored certain semiconductor and hardware companies that support the AI infrastructure needed for the foundational models," he said.
Benjamin also says the next phase of development could present opportunities for software firms, "as the application layer begins to roll out generative AI agents across end markets, and as the full benefits of AI begin to be realized."
The analyst said that after the pandemic initially caused dramatic shortages for semiconductors, the industry responded by ramping up production, leading to one of the worst oversupply conditions in decades.
"However, I believe these oversupply dynamics are likely to prove temporary and could be poised to resolve soon," he said.
"One catalyst for this could be a coming AI-driven product-upgrade cycle, as AI adoption begins to reach across all technology devices and end markets."
Blair: IT outlays to rise in 2025
Analysts at William Blair are optimistic that IT/software spending will pick up in 2025, now that interest rates are trending down and the U.S. presidential election is in the rearview mirror.
Underpinning this optimism is the firm's belief that app modernization and digital transformation will pick up after a fallow few years. In addition, budget disruptions associated with price increases at VMware after the software company was acquired by Broadcom (AVGO) are in the past.
In addition, Blair said that the end-of-life for Microsoft's (MSFT) Windows 10, which occurred Oct. 14, will catalyze a PC-upgrade cycle and maturing generative AI projects will drive incremental spending.
The firm also said that infrastructure refreshes will rise given that 2025 marks the five-year anniversary of the massive Covid-related spending cycle.
Blair analysts said that adoption of generative AI, which uses machine learning to create new content from existing data, will build through the year as businesses become more comfortable with the new technology.
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"Vendors are at different stages in the monetization journey, but we generally expect early signs of GenAI monetization to gain traction in 2025, with more material revenue streams being generated in future years," the firm said.
Blair: IT budgets are opening up
Blair said challenging macro conditions and a difficult tech spending environment had pressured software growth rates for the past three years.
"Going into 2025, we are more optimistic on the growth outlook as budgets seem to be opening up a bit more, driven by a renewed desire to modernize the tech stack (after a couple years of delayed projects), to innovate, and to get ready for the GenAI era," the investment firm said.
William Blair compiled a list of companies for its technology, media, and communications 2025 outlook.
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The top name on the list is Broadcom. Blair said the company's industry-changing acquisition of VMware is performing better than expected as increased prices, forced bundling and shift to subscription or software-as-a-service licensing have greatly benefited VMware revenue growth.
Workday (WDAY) , which will be added to the S&P 500 on Dec. 23, was up next.
Blair views fiscal 2026 as the year of stability for the provider of finance and HR management software.
Blair expects growth at Workday to slowly accelerate through the year on the back of a revenue-recognition ramp-up for several large, strategic deals that it has signed, increasing demand for its new AI solutions, and easier comparisons from a year earlier.
Blair also said content-delivery network Cloudflare (NET) is well-positioned at the intersection of important trends in the technology space of AI cybersecurity and edge computing. Information storage and computing are being brought closer to the devices producing the information and the users who consume it.
Blair said data-storage company Pure Storage (PSTG) is a pioneer in flash storage with its direct flash module technology.
And Blair said work-management platform monday.com (MNDY) is in the category of emerging platform businesses. Monday should be able to expand its reach within its customers across multiple departments and use cases and beat competitors that offer only disjointed point solutions, Blair said.
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