Tech Sector Poised for Continued Growth in Second Half of 2025
Following a robust first half of the year that propelled the S&P 500 to record highs, the technology sector still appears to have momentum heading into the latter half of 2025. The S&P 500's information technology segment surged over 23% in Q2, bolstered by renewed enthusiasm around artificial intelligence (AI) advancements. Despite the strong gains, industry experts believe this tailwind has even more room to grow as the broader AI transformation unfolds.
AI: The Engine Driving Tech's Next Wave
Many analysts, including a prominent investor from Deepwater Asset Management, anticipate AI will continue to surprise on the upside throughout the year. This technology revolution is only in its early stages, and its impact extends far beyond current market expectations.
"People will look back on 2025 thinking the AI momentum kept going much longer than anyone expected," said the investor, underscoring a sense of sustained optimism for the tech sector’s trajectory.
Standout Stocks to Watch: Apple and Box
Amid this landscape, two companies stand out as key plays for the second half: Apple, the iconic smartphone maker, and Box, a cloud storage and file management pioneer.
Box: A Quiet AI Contender
Unlike some buzzy AI names with high revenue growth, Box operates under the radar but holds immense potential. Its shares have climbed approximately 5% so far this year, outperforming competitors like Dropbox, which has declined nearly 7%. The difference lies in Box's strategic focus on AI-driven agents—tools designed to simplify complex tasks and boost productivity—that help clients gain actionable insights from vast data repositories.
Analysts tend to undervalue Box's growth outlook, typically projecting modest increases of 7-9% through 2026. However, insiders argue the company could exceed those figures by tapping into AI capabilities tailored for small businesses and everyday users.
"Box may not capture headlines like Meta, but it’s quietly building AI solutions that bring tangible benefits," the expert explained. "This makes it a compelling long-term play as AI adoption broadens beyond headline-grabbing companies." Notably, over 70% of analysts tracking Box rate it a buy or strong buy, with consensus price targets suggesting more than 14% upside.
Apple’s Underrated Growth Prospects
Apple’s stock has faced challenges this year, dropping nearly 15% amidst tariff concerns and cautious investor sentiment. Tariffs expected to add nearly $900 million in costs highlight ongoing geopolitical risks, especially since most iPhones are manufactured in China.
Yet, there’s strong conviction that Apple's upcoming iPhone upgrade cycle remains underestimated. A large base of users from previous upgrade waves still awaiting new devices could fuel sales momentum in the latter half of 2025.
Additionally, Apple's cautious approach to AI—marked by delayed Siri enhancements—has tempered expectations, creating a low bar that could set the stage for positive surprises. Investors are not anticipating major AI breakthroughs imminently, which could make any meaningful upgrades especially bullish.
Market sentiment is generally optimistic, with roughly two-thirds of analysts assigning buy ratings. The consensus forecast suggests around 8% stock price appreciation moving forward.
Conclusion
While the tech sector has already made impressive strides in 2025, the AI revolution underpinning this growth appears poised to sustain momentum. Investors focusing on select names like Apple and Box might find opportunities as these companies capitalize on innovation and shifting consumer demand throughout the second half of the year.
