The technology sector experienced significant growth in 2024, primarily driven by chip companies that bolstered artificial intelligence (AI) infrastructure, resulting in tech earnings per share soaring nearly 400% since the Great Financial Crisis.

Looking ahead, AI spending is projected to expand at a remarkable compound annual growth rate of 29% through 2028, underscoring a robust long-term demand for technology investments.

Despite facing challenges, Deloitte forecasts a 9.3% increase in global IT spending for 2025, with notable growth anticipated in data center and software segments.

Goldman Sachs analysts predict a transition in AI-driven investments from data center infrastructure to software companies, as the monetization of AI becomes more pronounced and focuses on revenue-generating applications.

A Morgan Stanley analysis from 2024 revealed that hedge funds are increasingly channeling investments into technology, media, and telecom stocks, reflecting institutional confidence in the tech sector.

However, after a strong performance in the first half of 2024, the sector faced a slowdown later in the year due to concerns over high valuations and uncertainties regarding AI development timelines.

As of March 18, 2025, major U.S. indices continued to decline amid economic uncertainties and Federal Reserve policy expectations, raising alarms about the tech sector's stability.

Amidst the robust performance of the technology sector in 2024, Goldman Sachs has identified Meta Platforms, Inc. (NASDAQ:META) as one of the top tech stocks to buy.

By early March 2025, the Information Technology and Communication Services sectors had declined by 4.42%, contributing to a broader market downturn, particularly affecting the 'Magnificent Seven' tech giants, which collectively lost around $2.7 trillion in market value over a span of 50 days.

In response to the competitive landscape, major cloud computing and tech firms are ramping up capital expenditures on AI, aiming to achieve artificial general intelligence (AGI), despite emerging competition from companies like DeepSeek.