2025 Equity Sector Performance Outlook

Key Takeaways: Growth-oriented themes lead the way

A slowing in the pace of inflation, easing monetary policy from the U.S. Federal Reserve, and a resilient U.S. economy provided a favorable backdrop for equities—and especially growth stocks—for much of 2024. Looking ahead, our sector leaders believe the major growth-oriented investment themes that dominated the markets in 2024 are likely to persist in the coming year.
From a sector performance perspective, the adoption of cloud infrastructure, spending on artificial intelligence capabilities, and the build-out of data centers continues to drive earnings growth expectations for the stocks of certain companies in the information technology sector. In communication services, AI is proving to be a major driver of growth, along with digital advertising. Demand for electricity to power data centers remains a secular theme that is expected to drive growth for certain well-positioned power producers in the utilities sector.
These are just a few of the investment themes and trends our sector leaders are optimistic about in 2025. Read on to learn more about Fidelity sector managers’ highest-conviction ideas across the 11 equity sectors as part of Fidelity’s investment market outlook for advisors in 2025.