According to the Zhito Finance APP, analysts from bank of america securities believe that usa cyclical stocks are expected to perform well in 2025.

The bank stated that in 2022, usa was at a 9% level after reaching peak inflation, but the interest rate system will be higher than that of the 2010s, and today's environment looks very much like the late 1990s to the early 21st century, as only a few expensive large stocks account for one-third of the S&P 500 index.

Savita Subramanian, head of usa stocks and algo strategy at bank of america, stated that she believes common stocks have more opportunities than the index. "We prefer companies with good cash return prospects linked to the usa economy—cni large cap value stocks."

She predicts that in 2025 the eps will reach $275, a year-on-year increase of 13%, while the estimated growth rate for 2024 is 10%.

Thomas Thornton, head of global research product marketing at the bank, wrote in a report: "The story of volume has replaced the story of large technology stocks in the past two years."

In addition, a manufacturing recovery should drive sales growth of 6%, thereby driving the operation leverage of cyclical sectors. Moreover, "2026 is likely to be a year of normalization, with profit growth approaching the long-term average level of 7%."

Deregulation is also expected to benefit cyclical stocks. Thornton wrote that regulations after 2008 prevented the expansion of the pe of financial stocks and hindered the loan growth of public banks.

In addition, analysts believe that the inventory reduction cycle has ended.

Thornton stated: "The inventory in the semiconductor and auto sectors has decreased the most year-on-year, while the pharmaceutical, biotechnology, life sciences, durable consumer goods, and outfits sectors have seen the largest increase in inventory."

After experiencing inventory lows in 2003, 2001, and 2022, the S&P 500 index's earnings grew by 6%, 44%, and 35% respectively in the following 12 months.

Two other factors influencing analysts' bullishness on cyclical stocks are the end of election uncertainty and the rise in capital expenditure cycles for the S&P 500 index, which grew by 17% year-on-year in the third quarter—this is the strongest growth rate since the third quarter of 2022.

“More importantly, the S&P 500 index and tech stocks have seen capital expenditure accelerate for the first time since the third quarter of 2022, growing by 7% year-on-year (compared to +2% last year),” Thornton said. “The accelerated capital expenditure in non-technology sectors suggests that strong fundamentals may extend to more areas of AI investment.”

Finally, analysts expect the earnings of the S&P 500 index to expand. It is projected that earnings per share growth in the second half of next year will reach a record 96%.

Bank of America analysts recommend increasing shareholding in the financial, materials, real estate, utilities, and consumer discretionary sectors.