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Sectors Primed for Success: The Industries Poised to Rule the Latter Half of 2024 Sectors Primed for Success: The Industries Poised to Rule the Latter Half of 2024

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	Sectors Primed for Success: The Industries Poised to Rule the Latter Half of 2024

Investing in stocks demands a keen observation of the sectors they operate in. Choosing shares wisely involves analyzing thriving sectors. For example, investing in a restaurant at a time when consumer dining is low might not reap rewards. Therefore, it is imperative to research and identify industries that are anticipated to flourish in the latter half of 2024 before making investment decisions.

To anticipate successful sectors in the near-to-mid term, one must consider the impact of prevailing macro trends. The rapid growth in U.S. consumer spending and the widespread adoption of artificial intelligence (AI) stand as prominent macro trends. Despite the recent uptick, indications point towards a projected decrease in interest rates by at least 0.75 percentage points within the year. Bearing these macro trends in mind, let’s delve into the industries poised to dominate the latter half of 2024.

Data Center Domination

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The Forbes estimate suggests that the global AI market is set to expand at a compound annual growth rate of 37.3% from 2023 to 2030, anticipating revenues to hit $1.8 trillion by 2030. This surge in AI adoption bodes well for the data center industry, given the insatiable demand for data storage and computing resources required for AI training and delivery. Unsurprisingly, data center rental costs have soared in response to the AI boom. The average rental rate spiked 18.6% last year following a 14.5% increase in 2022. With AI usage showing no signs of slowing, the demand for data centers is expected to skyrocket in 2024, driving rental prices up once more.

Noteworthy players set to reap the benefits include Digital Realty (NYSE:DLR) and Equinix (NASDAQ:EQIX).

Sky-High for Cloud Infrastructure Providers

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The expenditure on cloud deployment saw a robust 18.5% surge in the fourth quarter of the previous year, driven predominantly by the AI proliferation. This uptick in cloud computing and storage tools is particularly beneficial for cloud infrastructure providers such as Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), and Salesforce (NYSE:CRM).

The increasing trend of cloud service spending is expected to soar in tandem with the AI expansion. According to Statista, global user spending on public cloud services is projected to leap from $563.59 billion in 2023 to $678.79 billion in the current year.

Revving Up the Automakers

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On March 13, Morgan Stanley upgraded its rating on the automotive sector to “attractive” from “in-line.” The bank foresees numerous automakers benefiting from an unexpectedly strong demand for gasoline-powered vehicles and reduced capital expenditure.

General Motors (NYSE:GM) upped its quarterly dividend from 9 cents to 12 cents. This move, coupled with renowned investor David Tepper’s acquisition of 265,000 shares of GM stock in Q4 2023, bolsters optimism in the sector. Moreover, top-selling automakers in the U.S., GM and Toyota (NYSE:TM), already exhibit significant momentum. GM stocks surged 25% and Toyota recorded a 33% gain in 2024 to date.

Automakers are poised to benefit from the anticipated decline in interest rates in the latter part of 2024.

On the date of publication, Larry Ramer held a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer, a seasoned financial writer with 15 years of stock research under his belt, has contributed articles on U.S. stocks for major publications. His contrarian picks, including SMCI, INTC, and MGM, have earned him acclaim. Connect with him on Stocktwits via @larryramer.