10:53 AM EDT, 07/03/2025 (MT Newswires) -- Microsoft ( MSFT ) and Nvidia ( NVDA ) are set to lead another rally in tech stocks in the second half of 2025, driven by growing enterprise and government spending on artificial intelligence, Wedbush said in a note Thursday.

The two companies, described by Wedbush as the "poster children" of the AI revolution, are expected to cross the $4 trillion market capitalization threshold this summer, with a $5 trillion mark potentially in sight over the next 18 months.

Wedbush said Nvidia ( NVDA ) is "the foundation for the AI Revolution," estimating that each dollar spent on the chipmaker generates an $8 to $10 multiplier effect across the tech ecosystem. Microsoft ( MSFT ), along with Nvidia ( NVDA ), is seen as a key beneficiary of what Wedbush calls the "4th Industrial Revolution."

Other top picks for the second half of the year include Meta Platforms ( META ) , Palantir ( PLTR ) , and Tesla (TSLA), as enterprise AI adoption moves from "idea to scale," according to the note.

Wedbush also said broader software companies are likely to join the AI-driven rally as use cases expand and deployment accelerates. It added that macro conditions could be helped by trade policy softening under a second Trump administration, following recent agreements such as the Vietnam framework.

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