According to CNBC's latest Delivering Alpha stock survey, 71% of respondents believe that Trump's presidency will be a boon for the economy and financial markets. Meanwhile, 29% are uncertain about this. But it is clear that his pro-business rhetoric and grand promises have resonated with a large majority of investors.
The survey also revealed a surprising level of confidence in Trump's ability to navigate the complexities of artificial intelligence. More than half—57%—of respondents expressed trust in how Trump and his team would handle AI development.
However, tariffs remain a hot topic, with respondents evenly split on whether these trade policies will benefit or harm the economy, workers, and consumers.
Tariffs and their complex web
Trump's aggressive tariff strategy has always been a defining feature of his economic approach. During his campaign, he imposed tariffs exceeding 60% on imports from China. In recent months, he has doubled down on those threats, committing to an additional 10% tariff on Chinese goods and increasing tariffs on Canada and Mexico by 25%.
The investment world is deeply divided. Some believe that these measures will level the playing field for American businesses, while others are concerned about rising costs for consumers and potential backlash from global trading partners.
"This is a gamble," one survey participant said.
Trump's influence extends beyond policy. He is also building alliances with powerful figures in the industry. His close relationship with Tesla and SpaceX CEO Elon Musk has received mixed reactions.
When asked whether Musk's influence on the Trump administration is positive, 36% of survey participants agreed, while another 36% remained hesitant. The remaining 28% completely rejected this view.
Investors set sights for 2025
As the dust settles in 2024, small-cap stocks are becoming a favorite in the investment world. Nearly 30% of survey respondents chose small-cap as the top asset class for 2025. This choice is not surprising, as the Russell 2000 index, which tracks small-cap stocks, has risen nearly 12% this year.
However, it still lags behind the impressive 26% gain of the S&P 500 and the 33% increase of the Nasdaq Composite. Large-cap technology is also not far behind, with 14% of investors considering it their top choice. Another 14% are betting on the S&P 500 overall.
Bitcoin, Chinese stocks, Indian stocks, and private markets each garnered 7% of the vote. The technology sector has been unstoppable this year, with the S&P 500 Technology index soaring more than 40%, thanks to giants like Apple, which reached record highs during the Christmas Eve trading session.
But investors are not putting all their bets on the "Fabulous Seven" - a group of large-cap tech stocks including Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla. As many as 77% believe that the rest of the S&P 500 will outperform these tech giants in 2025.
23% believe that large technology companies still have room for growth. AI-driven sectors such as software and semiconductors are also attracting attention. The SPDR S&P Software & Services ETF has increased by 29% year-to-date, while the VanEck Semiconductor ETF has surged by 44%.
However, 71% of investors expect software stocks to outperform semiconductor stocks in the coming year.
Bitcoin: Boom or Bust?
The cryptocurrency market has had a tumultuous journey in 2024, with Bitcoin surpassing $108,000 in December. But not everyone believes that the rally will continue. 57% of respondents believe that Bitcoin is more likely to drop to $50,000 than rise to $200,000.
The remaining 43% see a chance for further highs. Despite the excitement around Bitcoin, cryptocurrency mining stocks are not favored by the investors surveyed. None of the respondents view these companies as worthwhile investments for 2025.
Instead, 64% favor cybersecurity stocks, while 36% point to AI-related stocks as promising bets. The recent decline in Bitcoin does not help its case. The leading cryptocurrency has dropped 3% as of press time, even after MicroStrategy announced plans to issue more shares to buy additional tokens.
Other cryptocurrencies, including Ethereum, Solana, and Dogecoin, also followed suit, each down about 3%. On Friday, $43 billion in open cryptocurrency options will expire on Deribit, a derivatives exchange. This includes $13.95 billion in Bitcoin options and $3.77 billion in Ether options, raising concerns about increased volatility.
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