5 Sectors That Will Quietly Dominate 2025

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Happy Sunday.

2025 isn’t here to start a fight—but I do think it wants to shake up our portfolios. AI’s snack habit is about to gobble up 70% more power annually (good luck grid crisis), GLP-1 drugs are making Big Pharma the new Big Tech, and small-cap stocks could finally get their “hold my beer” moment.

We’ve got nuclear plants salivating over data centers contracts, China betting $1.8 trillion that biotech cures its economic hangover, and telecom companies awkwardly rebranding as AI’s best friend.

The drugs might not just make the salads obsolete this year but we are living in truly remarkable times. The best investors I’ve know use themes to organize their bets, they always took shots in “baskets” revolving around a theme.

Here are the themes I’m paying attention too in 2025.

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1. Artificial Intelligence (AI) & Semiconductor Infrastructure

Why in Play: AI’s exponential growth drives demand for advanced hardware, data centers, and energy solutions.

• Market Growth: Global AI market projected to reach $1.81 trillion by 2030 (CAGR 36.6%), with data center power demand surging 70% annually.

• Key Drivers:

  • Chip Demand: U.S. CHIPS Act fuels $400B in semiconductor investments, targeting 30% global market share by 2032.

  • Energy Needs: AI data centers require 75,000+ miles of new U.S. transmission lines by 2035, accelerating nuclear and renewable energy investments.

  • Labor Impact: AI could automate 20% of tasks for 80% of the U.S. workforce by 2030, saving 15%+ in labor costs.

Top Looks: NVIDIA (AI chips), Microsoft (Azure AI), First Solar (renewables).

2. Healthcare & Biotech (GLP-1s, Precision Medicine)

Why in Play: Obesity drugs and AI-driven therapies redefine longevity investing.

• Obesity Drug Boom: GLP-1 agonists (e.g., Ozempic) projected to create a $105B market by 2030, reducing diabetes risk by 73% and cardiovascular deaths by 20%.

• M&A Surge: Large pharma firms target small-cap biotechs for breakthroughs in gene therapy, oncology, and AI drug discovery. $45B in biotech M&A deals in 2024, with premiums averaging 83%.

• Regulatory Tailwinds: FDA fast-tracks weight-loss drug combos and precision therapies, with trials showing 40% longer cancer survival rates.

Top Looks: Novo Nordisk (GLP-1s), UnitedHealth (digital health), CRISPR Therapeutics (gene editing).

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3. Energy Transition & Utilities

Why in Play: AI and EV-driven power demand forces grid modernization and nuclear resurgence.

• Grid Crisis: U.S. needs $4 trillion in grid upgrades by 2035 to support AI/data centers and EVs.

• Nuclear Boom: $1 trillion in nuclear capex by 2027 to meet 24/7 power needs, with Amazon and Microsoft exploring modular reactors.

• Natural Gas Volatility: Prices may spike 30% if renewable rollouts lag, creating trading opportunities.

Top Looks: NextEra Energy (renewables), Constellation Energy (nuclear), Enphase Energy (solar storage).

4. Defense & Cybersecurity

Why in Play: Geopolitical tensions and AI integration drive defense spending and cyber innovation.

• Defense Budgets: U.S. defense spending to hit $1.1 trillion by 2034 (+20% vs. 2023), focusing on missile systems, naval readiness, and autonomous drones.

• Cybersecurity Demand: Global spending to exceed $200B by 2025, driven by AI threat detection and zero-trust architectures.

• Policy Catalyst: Trump’s deregulatory agenda favors defense contractors and mergers (e.g., Lockheed Martin, Northrop Grumman).

Top Looks: Palo Alto Networks (cybersecurity), Lockheed Martin (defense tech), CrowdStrike (cloud security).

5. Financials & Small/Mid-Cap (SMID)

Why in Play: Rate cuts into end of year, domestic reindustrialization, and trade war insulation fuel SMID outperformance.

• Fed Rate Cuts: 50–100 bps in cuts by 2026 supports financials (banks, insurers) and high-yield bonds.

• SMID Edge: Russell 2000 earnings growth outpaces S&P 500 by 30%, with 65% of SMID firms having zero China exposure.

• Tariff Play: U.S. reshoring boosts industrials and advanced manufacturing, with automation adding $1.2 trillion to global GDP by 2030.

stay curious 🙂 

- John