Last week, Deepwater Asset Management, the Minneapolis-based investment firm led by former tech analyst Gene Munster, issued its top 2024 predictions. The list is worth keeping an eye on given that the firm went 8.5 for 10 on their 2023 predictions.
While this year's list includes 13 total items, maybe the most near-term actionable item is the idea that Apple (NASDAQ:AAPL) will acquire Peloton (NASDAQ:PTON).
"Apple will look to bolster their workout segment in 2024 by adding fitness equipment to compliment the Watch and fitness tracking software," analysts commented. "Peloton has a loyal subscriber base of about 3 million users that will add about $1.7B to Apple’s subscription revenue, additionally this fits well into Apple’s continued investment in health and wellness."
Peloton shares were down 23% in 2023 and are down about 96% from their 2021 COVID-19 highs.
Below are all of Deepwater's predictions for 2024:
- IWO will outperform the S&P500. The iShares Russell 2000 Growth ETF (IWO) will outperform the SPDR S&P 500 EFT Trust (SPY). Performance from the sub-$20B tech companies will outperform the large cap companies.
Large cap technology platform will be acquisitive in 2024. Companies spent the last two years rationalizing spend and consolidating the number of vendors that they work with. We’ve seen the larger platform companies, like CRWD, PANW, and DDOG outperform in 2023, as their customers turned to them for more and more products in their portfolio. We think these companies will be acquisitive in the coming year as they continue to add point solutions to their platforms.
Analysts' Intelligent Alpha AI powered investment strategies outperform their major market benchmarks.
Apple will bring generative AI to Siri. Apple’s Ajax foundation model will power a generative AI version of Siri (likely announced at WWDC), adding more personalization and natural conversation to Siri.
Apple will not announce any additional devices in the Vision product line. It has been reported Apple is already working on a cheaper ($1,500), less advanced version of the soon to be released Vision Pro headset. We believe Vision Pro needs time to gain traction with developers in the market before a lesser model is released. We expect Apple will sell between 400k-500k Vision Pro’s in 2024.
Apple will acquire Peloton. Apple will look to bolster their workout segment in 2024 by adding fitness equipment to compliment the Watch and fitness tracking software. Peloton has a loyal subscriber base of about 3 million users that will add about $1.7B to Apple’s subscription revenue, additionally this fits well into Apple’s continued investment in health and wellness.
The Tesla Robotaxi will not be announced. In 2024, it's believed that it's in Tesla’s best interest to stay quiet on the Robotaxi. The new vehicle’s selling “feature” is its price and Tesla showcasing the upcoming vehicle would likely have a cooling effect on current low-priced Model 3 sales, a risk not worth taking in a year where EV sales will continue to muted. On top of that, the car will likely be produced in Giga Mexico which is not expected to be operational until 2027.
Tesla will maintain US EV market share. While most investors expect Tesla to lose share in 2024 given they have almost 60% US market share today, it's believed the company will maintain share as traditional car makers are slowing their investments in EVs.
While EVs growth will slow in 2024, it will rebound in 2025. It's expected that EV deliveries in the US will grow by about 25% in 2024, down from over 40% in in 2023. Growth is expected to reaccelerate in 2025 as consumer optimism around the category improves along with affordability.
The IPO market returns to 2019 levels. This year saw 153 IPOs, down from 181 the year prior. It's thought that the number of IPOs will climb above 200 in 2024, being closer to 2019 levels.
The anticipation of GTA VI makes TTWO the best performing US gaming stock in 2024. In December, Rockstar Games released the trailer for GTA VI, citing a 2025 release date. Given company commentary, it seems likely the game will be released in the first quarter of calendar 2025. As the release date approaches, it's believed that shares of TTWO will outperform its US-peers EA and RBLX.
Reddit will be acquired for their data. A company with a LLM will buy Reddit to train its model from.
AI will negatively impact the 2024 Presidential Election. Intentionally misleading content will be released to interfere with the election (e.g., deepfakes)