Purpose Investments reviews how tech execution and crypto swings defined markets this year
As 2025 winds down, two forces dominated investor attention: the commercialization of artificial intelligence and the uneven performance of digital assets.
A year-end market recap from Purpose Investments portfolio manager Nicholas Mersch frames the past 12 months as a period when expectations were tested and, in some cases, validated.
On the technology side, AI stood out for moving beyond hype into real-world impact as corporate spending increasingly shifted toward data centres, networking, and energy infrastructure needed to support large-scale computing.
Rather than experimental pilots, companies began deploying AI to streamline operations, improve customer engagement and enhance decision-making. This transition helped differentiate firms with sustainable revenue models from those riding momentum alone.
While valuations in parts of the tech sector became stretched, the report suggests that not all gains were speculative. Companies tied to the backbone of AI, including chips, cloud infrastructure and power supply, benefited from long-term capital commitments that could extend well into 2026. The key takeaway for investors was selectivity in identifying businesses capable of converting AI demand into consistent earnings.
“In my opinion, the magic isn’t fading; it’s just shifting from story to execution, which could ultimately favour disciplined stock pickers,” wrote Mersch.
After periods of strength earlier in the year, digital assets faced renewed volatility toward the end of 2025. Sharp price moves reflected leverage being unwound, shifting sentiment and the inherent risk profile of the asset class. Rather than signaling a breakdown, the pullbacks highlighted how sensitive crypto remains to liquidity and investor positioning.
Despite the turbulence, the recap notes that the crypto ecosystem continues to evolve. Institutional participation expanded, regulatory clarity improved in several jurisdictions, and products such as ETFs and stablecoins became more embedded in mainstream financial conversations. These developments point toward a market that may remain volatile, but potentially less chaotic over time.
Overall, the 2025 market narrative was less about extremes and more about maturation. AI began proving its economic value, while crypto underwent another stress test common to high-risk assets. For advisors and investors, the year highlighted the importance of distinguishing durable trends from short-term noise as markets prepare for the challenges of 2026.
