According to CNBC’s latest Delivering Alpha Stock Survey, 71% of respondents believe Trump’s presidency will be a boon for the economy and financial markets. Meanwhile, 29% aren’t so sure. But it’s clear that his pro-business rhetoric and big promises have struck a chord with the majority of investors.
The survey also showed a surprising level of trust in Trump’s ability to navigate the complexities of artificial intelligence. More than half—57%—of those polled expressed confidence in how Trump and his team will handle AI development.
Tariffs, however, remain a hot-button issue, with respondents evenly split on whether these trade policies will help or harm the economy, workers, and consumers.
Tariffs and their tangled web
Trump’s aggressive tariff strategy has always been a defining feature of his economic playbook. During his campaign, he floated tariffs exceeding 60% on Chinese imports. In recent months, he’s doubled down on those threats, pledging to slap an extra 10% tariff on Chinese goods and raising duties on Canada and Mexico by 25%.
The investment world is deeply divided. Some believe these measures will level the playing field for American businesses, while others worry about rising costs for consumers and potential backlash from global trade partners.
“It’s a gamble,” said one participant in the survey.
Trump’s influence doesn’t stop at policy. He’s also building alliances with industry heavyweights. His close relationship with Tesla and SpaceX CEO Elon Musk has earned mixed reactions.
When asked whether Musk’s influence on Trump’s administration was positive, 36% of survey participants agreed, while another 36% were on the fence. The remaining 28% dismissed the idea outright.
Investors set their sights on 2025
As the dust settles on 2024, small-cap stocks are becoming the darlings of the investment world. Nearly 30% of survey respondents picked small caps as the top asset class for 2025. This choice isn’t surprising, given that the Russell 2000 index, which tracks small-cap stocks, climbed nearly 12% this year.
Still, it lagged behind the S&P 500’s impressive 26% gain and the Nasdaq Composite’s 33% surge. Big-cap tech wasn’t far behind, with 14% of investors naming it their top pick. Another 14% bet on the broader S&P 500.
Bitcoin, Chinese stocks, Indian equities, and private markets each garnered 7% of the vote. The tech sector has been unstoppable this year, with the S&P 500 tech index soaring over 40%, thanks to giants like Apple, which hit record highs during the Christmas Eve trading session.
But investors aren’t putting all their chips on the “Magnificent Seven”—a group of mega-cap tech stocks including Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla. A whopping 77% believe the rest of the S&P 500 will outperform these tech titans in 2025.
The remaining 23% think the tech juggernauts still have room to run. AI-driven sectors like software and semiconductors also captured attention. The SPDR S&P Software & Services ETF gained 29% year-to-date, while the VanEck Semiconductor ETF skyrocketed 44%.
Yet, 71% of investors expect software stocks to outshine semiconductors in the coming year.
Bitcoin: Boom or bust?
The crypto market has had a wild ride in 2024, with Bitcoin smashing through the $108,000 mark in December. But not everyone is convinced the rally will continue. 57% of survey respondents believe Bitcoin is more likely to fall to $50,000 than climb to $200,000.
The remaining 43% see a shot at even greater highs. Despite the excitement around Bitcoin, crypto-mining stocks got no love from investors in the survey. None of the respondents saw these companies as worthwhile investments for 2025.
Instead, 64% favored cybersecurity stocks, while 36% pointed to AI-related equities as promising bets. Bitcoin’s recent dip hasn’t helped its case. The apex crypto has slid 3% as of press time even after MicroStrategy announced plans to issue more shares to buy additional tokens.
Other cryptos, including Ethereum, Solana, and Dogecoin, followed suit, each dropping around 3%. On Friday, $43 billion in crypto open interest is set to expire on Deribit, a derivatives exchange. This includes $13.95 billion in Bitcoin options and $3.77 billion in Ether options, raising concerns about heightened volatility.
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