A forthcoming tech earnings season is on the horizon, with artificial intelligence poised to drive valuations higher beyond established players like Nvidia and Microsoft, as per Wedbush analyst Dan Ives.
In a recent communication, Ives drew a parallel between investors expressing recession worries and individuals causing panic in a crowded venue. Anticipating a surge in demand for enterprise software, cybersecurity, and AI, he foresees a wave of fresh initiatives and applications in 2024.
The focal point of the upcoming earnings season, according to Ives, will be the onset of the AI Revolution permeating the broader tech sector, spearheaded by Microsoft’s Nadella and AI pioneer Jensen from Nvidia.
Moreover, the substantial consumer expenditure and demand are flowing into secondary and tertiary AI-related sectors encompassing software, chips, and hardware.
AI technology is progressively gaining traction in mainstream markets, a trend that Ives believes will drive further expansion and innovation.
Ives predicts a robust “year-end budget flush” in the December quarter, particularly benefiting cloud giants such as Microsoft, Amazon, and Google, as well as the software industry at large.
Among Wedbush’s favored tech selections are Microsoft, Apple, Palo Alto Networks, Palantir, Zscaler, CyberArk, Crowdstrike, and MongoDB.
While concerns persist regarding tech valuations, Ives is confident that estimates (and valuations) for 2024 and 2025 will climb as the wave of AI investments engulfs the tech landscape.
Notably, corporate entities and their leaders have displayed a more optimistic outlook in recent times. Apprehensions of an economic downturn have subsided, evidenced by a decline in “recession” mentions during third-quarter earnings calls. Although risks persist, Wall Street is increasingly advocating for a smooth economic transition.
