‘Tidal Wave’ of AI Spending to Power Tech Bull Market, Wedbush Says
The promise of artificial intelligence to rewire large swaths of the American economy supercharged tech shares for most of the year before the fever broke this fall. But investors would be remiss in thinking AI’s power to juice returns is over.
That’s the view of Dan Ives, the Wedbush tech analyst known for his bullish takes on the sector. He says expectations for AI’s impact on all corners of the industry are too low, he anticipates a “tidal wave” of spending on AI applications that should boost shares in the likes of Apple by nearly 30% over the next year.
“We view AI as the most transformative technology trend since the start of the Internet in 1995 and believe many on the Street are underestimating the $1 trillion of AI spend set to happen over the next decade in a bonanza for the chip and software sectors,” Ives wrote in a research note.
Despite a murky macroeconomic backdrop — with the Federal Reserve’s interest rate hiking campaign and soaring US Treasury yields — the technology sector has managed to lead the broader market higher this year as investors flocked to companies with strong balance sheets that could withstand a potential economic downturn.
Hype over artificial intelligence and cloud computing also drove investors to snap up stocks of companies set to be winners in the growing trends. The Nasdaq 100 has surged more than 41% in 2023, trumping the S&P 500 Index’s nearly 15% gain.
