Wedbush analyst Dan Ives believes the AI boom will charge ahead at full throttle in the back half of 2025.

Trump tariffs and their potential impact on the global economy have sparked concerns of a potential artificial intelligence slowdown in recent months.

However, Ives remains convinced that tariffs will fail at stopping the AI-driven, “once in a generation Industrial Revolution.”

The senior Wedbush analyst now expects the semiconductor market to be worth up to $2.4 trillion by 2040.

A bunch of AI stocks are particularly well-positioned to capitalise on the exploding use cases, launch of new LLMs, and rising enterprise consumption, Ives told clients in his latest research note.

Two names other than Nvidia he recommends owning to play the artificial intelligence revolution are Baidu Inc (NASDAQ: BIDU) and Snowflake Inc (NYSE: SNOW).

Why is Wedbush bullish on Baidu shares?

Wedbush counts Baidu among the top consumer internet names that offer ample exposure to continued momentum in the artificial intelligence market.

Dan Ives remains positive on Baidu stock despite the recently escalating trade tensions between the US and China since “its comprehensive platform offers a robust foundation to develop and deploy these solutions to drive growth and cut costs.”

Note that Baidu rolled out two new AI models in March – one of which it claimed rivals DeepSeek in terms of reasoning capabilities.

Additionally, Baidu shares are currently down some 20% versus their YTD high.

Their valuation metrics also indicates it’s a name worth owning for exposure to the AI trade in 2025.

Other Wall Street analysts agree with Dan Ives’ constructive view on Baidu shares as well, given the consensus rating on the China-based name currently sits at “overweight”.

Why does Ives recommend owning Snowflake stock?

According to Wedbush Securities, Snowflake is another high-quality name that’s worth owning to benefit from continued momentum in the global AI market.

Dan Ives sees SNOW as strongly positioned to build its AI pipeline and enable access to its state-of-the-art tech solutions to countless organizations across several industries.

Note that Snowflake has already started providing “easy-to-use GenAI solutions through Cortex which leverages best-in-class models with fully managed infrastructure” that formed the basis of Ives’ positive view on the cloud stock.

Last week, the NYSE listed firm raised current-quarter guidance for product revenue, citing rising enterprise demand.

Snowflake now expects products revenue to fall between $1.035 billion and $1.040 billion in Q2 – well ahead of its previous outlook for $1.021 billion.

Other Wall Street shops agree with Wedbush’s bullish view on SNOW shares as well. Consensus rating on Snowflake stock currently sits at “overweight”.

Analysts have an average price target of about $221 on the AI stock that represents potential for another 10% gain from current levels.

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China’s manufacturing PMI improved somewhat in May due to the resumption and frontloading of shipments to the US amid the 90-day tariff truce which will end in mid-August, Commerzbank AG said. 

May saw an increase in the official manufacturing PMI to 49.5, up from April’s reading of 49.0, official data showed.

In May, the production subindex rebounded to 50.7, exceeding the neutral 50 threshold after registering 49.8 in April.

Tensions rise despite truce

New export orders saw improvement, increasing to 47.5 in May from April’s 44.7.

Similarly, overall new orders experienced a rise, reaching 49.8 compared to the previous 49.2.

“However, the subindex still remained in contraction territory, reflecting weakness in overall domestic and external demand,” Tommy Wu, senior economist at Commerzbank, said in a report.

Exports should be supported by the tariff truce with the US for the 90-day period till mid-August. However, the two sides have been accusing each other of violating the truce agreement.

Despite the tariff truce, US-China tensions are rising in other sectors.

The Trump administration implemented several measures targeting China.

These included revoking some Chinese student visas, limiting chip design software sales, and attempting to hinder global sales of AI chips from a major Chinese technology company.

Recent comments from US Treasury Secretary Scott Bessent indicate that trade discussions between the two nations are currently in a state of slight standstill. 

He noted the possibility of tariffs increasing once more in August should negotiations fail to advance.

Services activity lacklustre

China’s non-manufacturing PMI stayed in expansion mode at 50.3 in May, slightly lower than April’s 50.4, according to official figures.

The construction PMI saw a slight decrease, moving from a previous value of 51.9 to 51, but it still held steady within the subindexes.

Government investment in infrastructure contributed to this support.

Driven by increased holiday spending during the Labour Day holiday in early May, the Services PMI saw a slight increase to 50.2, up from the previous reading of 50.1, Wu noted.

“Nevertheless, such readings suggest domestic demand has remained rather soft despite this year’s policy focus to support consumption,” Wu said.

Policy strength may depend on future tariffs

Tariffs and declining exports are expected to significantly slow China’s economic growth in the latter half of this year and into 2026, according to Commerzbank. 

Increased export costs from tariffs will likely reduce international demand and export volumes, negatively impacting the manufacturing sector and potentially employment. 

Lower export earnings will affect China’s trade surplus and may decrease investment in export-oriented industries. 

This combined effect is projected to moderate overall economic growth, potentially impacting domestic consumption and requiring government policy intervention.

To bolster the economy, China’s government will persist in executing the policies established during the National People’s Congress annual meetings held in March.

Beijing has indicated its readiness to implement further measures as necessary. 

Wu said:

We think this will depend on the future path of the tariffs.

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European stock markets commenced the trading week on a weaker footing Monday, retreating from recent gains as fresh tariff pronouncements from US President Donald Trump threatened to reignite global trade tensions.

The cautious sentiment permeated most sectors, with particular pressure on steel and automotive stocks, while investors also looked ahead to a pivotal interest rate decision from the European Central Bank later in the week.

The continent-wide STOXX 600 index was down 0.2% as of 0708 GMT, reflecting a broad-based pullback after a period of positive performance that saw the benchmark round off monthly gains in May.

The catalyst for Monday’s downturn was President Trump’s statement late on Friday, in which he announced plans to increase tariffs on imported steel and aluminum to a hefty 50%, up from the previous 25%.

This move immediately drew a response from the European Union, which stated it was prepared to retaliate, setting the stage for a potential escalation in trade disputes.

The impact of these renewed tariff threats was felt acutely in specific sectors.

European steel companies experienced a decline, with industry giant ArcelorMittal falling 1% and German conglomerate Thyssenkrupp dropping 1.1%.

The automotive sector, highly sensitive to import duties, also came under pressure, with the (.SXAP) index down 1.2%.

Auto stocks overall fell 1.4% amid fears that this latest development in the Trump tariff saga could lead to more stringent tariffs on vehicles, particularly following the US president’s unexpected announcement of the steel duty hike.

Risk-sensitive technology stocks also retreated, dropping 1%.

Corporate developments and market safe havens

Amidst the broader market unease, French pharmaceutical group Sanofi announced a significant acquisition.

The company agreed to buy US-based Blueprint Medicines Corporation, paying $129 per share, which represents an equity value of approximately $9.1 billion. Shares in Sanofi were slightly lower following the announcement.

As investors navigated the trade uncertainties, traditional safe-haven assets saw increased appeal.

Spot gold prices were up by around 1.5% ahead of the stock market open, trading at $3,337 an ounce – its highest level in a week.

This demand for gold may reflect investor concerns that President Trump could take even more aggressive tariff actions against specific countries and sectors, compounded by the escalating conflict in the Russia-Ukraine war.

Central Bank spotlight: ECB decision and key speeches awaited

Looking ahead, the major focus for the week will be the European Central Bank (ECB), which is scheduled to announce its interest rate decision on Thursday.

Market participants will be keenly awaiting any signals from the ECB regarding its monetary policy stance in light of the evolving economic and trade landscape.

Adding to the week’s significance, comments from both Federal Reserve Chair Jerome Powell and ECB President Christine Lagarde are anticipated.

These speeches will be closely scrutinized for insights into the central bankers’ views on inflation, growth, and potential policy responses.

A slew of economic data releases from the European trade bloc is also expected throughout the week, which will provide further context for market direction.

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Social media platform X, under the ownership of Elon Musk, is introducing a new messaging feature dubbed ‘XChat’, which Musk claims will incorporate “Bitcoin-style encryption.”

This development, alongside a forthcoming payments feature called X Money, signals X’s continued ambition to evolve into an “everything app,” though Musk’s specific technical claims about encryption have drawn swift reactions and clarifications from the Bitcoin community.

XChat is being positioned as a significantly more feature-rich iteration of the platform’s existing direct messaging function.

According to a June 1 X post by Musk, the new service will boast audio and video calling capabilities, “encryption, vanishing messages, and the ability to send any kind of file.”

Musk further elaborated that XChat is built on the Rust programming language, which he stated had “(Bitcoin style) encryption, whole new architecture.”

This announcement follows a statement from X on May 29, indicating a temporary pause on its encrypted messaging feature to implement improvements, a move that may have been linked to the development and imminent release of XChat.

Crypto community reacts: debating ‘Bitcoin-style encryption’

Musk’s assertion regarding XChat’s ‘Bitcoin-style encryption’ immediately spurred a flurry of responses from prominent figures within the Bitcoin community.

Many were quick to point out the technical nuances of Bitcoin’s security model.

JAN3 CEO Samson Mow, for instance, stated that “Bitcoin isn’t encrypted” in the traditional sense of data obfuscation.

Crypto influencer “Pledditor” added a clarifying detail, noting that Bitcoin “uses elliptic curve cryptography.”

Bitcoin Core developer Luke Dashjr also weighed in, asserting that “Bitcoin doesn’t even use encryption” for its core transaction data and further expressed an opinion that using the Rust programming language was “a bad idea for security reasons.”

Offering a potential interpretation of Musk’s comment, BitMEX Research suggested,

“Maybe Musk means like BIP-151 peer-to-peer communication encryption,” referring to a specific Bitcoin Improvement Proposal designed to encrypt communication data between Bitcoin nodes, rather than the transaction data on the blockchain itself.

It’s important to understand that Bitcoin’s security primarily relies on elliptic curve cryptography, which functions like a sophisticated mathematical lock system.

Users possess a secret private key and a corresponding public key that is mathematically derived from it.

This system allows holders to prove ownership of their Bitcoin and authorize transactions without ever revealing their private key, ensuring security without the need for a central authority.

Bitcoin also utilizes SHA-256 hashing for validating transactions and creating unique block and transaction identifiers.

X money payments feature on the horizon

In addition to the XChat rollout, Elon Musk confirmed on May 25 that X is also developing a payments feature named ‘X Money’.

This service is slated to launch in a beta version later this year. Musk emphasized a cautious approach to its introduction, stating that testing will involve a “very limited access beta at first”.

He added, “when people’s savings are involved, extreme care must be taken,” highlighting the sensitivity and responsibility associated with financial services.

These new offerings underscore X’s ongoing transformation since Musk’s acquisition of the platform (then known as Twitter) in October 2022.

Musk has long articulated his vision of turning X into an “everything app,” akin to platforms like WeChat, by integrating a wide array of features and services that extend beyond typical social media functionalities.

The introduction of XChat and the forthcoming X Money suggests X is now actively positioning itself to compete with established encrypted messaging platforms such as Telegram and Signal, while also setting its sights on popular fintech applications like Venmo and Cash App.

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IAG share price has remained under pressure in the past few weeks as investors focused on transatlantic travel amid the ongoing trade tensions between the US and China. It was trading at 328p on Monday, a few points below the year-to-date high of 340p. It remains 55% above its lowest point in April. 

British Airways parent seeing more demand

IAG, the parent company of top airlines like British Airways, Iberia, and Aer Lingus, has been in the spotlight since the trade war between the US and European countries started earlier this year.

Like other airlines, the company said that it saw some softness in leisure and business travel as demand slowed. Business travel slowed as companies adjusted to the new normal and their budgets.

In a statement on Monday, the company said that the weaker demand on transatlantic routes was showing signs of easing in the past three weeks. The statement came from Luis Gallego, the CEO, who was speaking to Bloomberg. 

This statement means that the company is seeing more bookings in its most profitable route, which may help it boost its numbers as the summer season starts.

The trade issue remains being volatile. While the US has reached a deal with the United Kingdom, there is a risk that relations with the European Union will get worse.

Trump recently threatened to impose a 50% tariff on European goods, noting that talks were not moving as fast as expected. He backed down after talking with Ursula von de Leyen, the European Union president.

Still, there is a likelihood that the two sides will not have an agreement by the July deadline. That’s because the US has some unreasonable demands, including the end of the value added tax (VAT), which it sees as being discriminatory to the US. 

IAG financial results

The most recent results showed that the company’s numbers continued doing well in the first half of the year. Revenue rose by 9.6%, while operating profit rose by €130 million to €198 million.

Its revenue rose to €7.04 billion, while its profit for the period surged to €176 million. It also has one of the best balance sheets as its cash, cash equivalents, and interest-bearing deposits jumped to €9.35 billion. 

Most importantly, the company has worked to boost its balance sheet by reducing its debt. Its borrowings improved to €15 billion from €17.3 billion.

The strong balance sheet has helped IAG make a big order from Boeing and Airbus to grow its network. 

IAG share price analysis

The daily chart shows that the IAG stock price bottomed at 210p on April 7, and then bounced back to a high of 340p in May. It has formed a bullish flag pattern, comprising of a vertical line and a rectangle formation. 

The 50-day and 100-day Exponential Moving Averages (EMA) have made a bullish crossover pattern, a highly bullish sign. 

Therefore, the most likely scenario is where the stock bounces back, and possibly hits the important resistance level at 368p, the highest point this year. Such a move would signal a 10% surge above the current level.

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