Don't bet on the continued strength of Big Technology.
Sanctuary Wealth Chief Investment Strategist Mary Ann Bartels looks at revenue growth in AI Drive and hopes to increase the S&P 500 to a new all-time high by the end of the year.
Bartels is an accurate bullish forecast that won a spot on Business Insider's Oracles of Wall Street last year, forecasting a 12% surge in the stock market by the end of 2025.
“I believe that without the big disruption, the S&P 500 will be able to reach 7,000 by the end of the year,” Bartels wrote in her middle-aged outlook.
Goldman Sachs recently raised its year-end outlook to 6,600, so that's definitely the call above, with strategists like Barry Bannister from Stifel.
AI increases revenue
“It's nothing new about driving this,” Bartels told CNBC Tuesday. “What we've been talking about is really AI technology.”
Bartels believes the tech sector will continue to lift the stock market upwards as new advances in AI, Robotics and Crypto lead to revenue growth. In the meantime, tariff volatility has not shaken her beliefs.
Revenue for the first quarter of 2025 exceeded expectations, with 78% of companies exceeding revenue expectations. Second quarter outlook is even more restrictive as tariff volatility injects uncertainty into the company's outlook.
But Bartels believes that low expectations lay the basis for another revenue surprise. She believes that if more negotiations occur, tariff rates will drop in the coming months and cooling inflation will help lower interest rates.
In Bartel's view, let's keep stock market winners the winners. She is not concerned about market concentration among the big technology names.
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“Revenue growth remains relatively small and is seen primarily in technology and technology-related issues, as well as utility issues that benefit from driving industry, financial and electricity demand,” Bartels wrote.
Tech inventory has outperformed the S&P 500's performance last year when the NYSE Fang+ Index was split into new highs.
Sanctuary's wealth
It's the early innings of AI trade as businesses continue to pour billions into calculations, networking and storage infrastructure.
“Revenue is the most powerful in technology, and that's why we continue to invest in these companies along with our return on equity (ROE),” writes Bartels.
That's not to say that the market remains narrow. Bartels believes that Megacaps is likely to continue to outperform, but points out that as AI improves profits across the economy, it will expand its participation in market gatherings between finance and industry.
Despite others remaining cautious, Bartels doubles in her opposite position.
“The market sentiment is still very bearish,” Bartels said Tuesday. “There's still some skepticism, so that's going to be bullish on the stock market too.”
