One corner of the technology sector contains three stocks that should be staples of investment portfolios in 2025, according to Evercore ISI. Analyst Amit Daryanani said in a mid-December report that he is broadly bullish on the information technology hardware and networking group entering the new year. That includes a host of stocks that are likely to benefit from the artificial intelligence boom. “Heading into CY25, we expect increased enterprise AI traction while the cyclical IT spending recovery broadens across the aggregate tech stack,” the note said. The outlook included a group of “AAA” stocks where investors can “set-it and forget it,” including several companies that outperformed the S & P 500 in 2024. The most familiar name is Apple , which is nearing a milestone $4 trillion market value after climbing more than 34% this year. Daryanani wrote that a “long-tailed upgrade cycle” as well as additional monetization opportunities from areas such as wearables and Apple Intelligence should keep pushing up stock of the Tim Cook-led company. Wall Street analysts are broadly positive on Apple, even if their price targets suggest the stock could trade sideways from here, or even decline over the coming 12 months. A less prominent stock highlighted by Evercore is under-the-radar Amphenol , which produces connectors and cables for mobile networks and automobiles, among other industries. Evercore sees upside of 10% or more to Amphenol’s earnings per share estimates next year, citing potential merger and acquisition activity, upside around AI and a cyclical recovery in the industry. “APH can sustain double-digit revenue growth and mid-teen EPS growth with high consistency and low volatility,” the note said. The stock is less of a consensus pick than Apple. Of the 20 analysts who cover Amphenol, 11 have either strong buy or buy ratings, while nine are neutral, according to LSEG. Shares of Amphenol are up 44% in 2024, outperforming Apple and the Nasdaq Composite . However, Amphenol is not the best performer in the AAA portfolio. The hottest stock on the list has been Arista Networks , which has nearly doubled in 2024. ANET YTD mountain Shares of Arista Networks have nearly doubled in 2024. Arista should continue to benefit from the excitement around AI in the new year, according to Evercore. “Ethernet in AI data centers should begin to accelerate, and we see a path to 20%+ revenue growth in CY25 and CY26,” the note said. Similar to Apple, Arista Networks has buy and strong buy ratings from the majority of Wall Street analysts, but the average price target actually implies a decline for the stock in 2025, according to LSEG.
