Throughout this year, Wall Street has been focusing on stocks related to artificial intelligence (AI). However, according to Dan Ives, an analyst at the American investment bank Wedbush, the market is still largely underestimating the transformative potential and massive spending frenzy that this technology will bring.
In a report released on Monday, strategists led by Ives predicted that with companies increasing their investments in AI and cloud technologies, tech stocks are expected to continue soaring in 2024. According to Wedbush, spending in these two areas will surpass budgets in the IT sector.
Ives wrote: “We believe a new tech bull market has begun and expect strong growth for tech stocks in 2024. With the wave of AI spending impacting a broader range of industries within tech next year, we anticipate over 20% upside for large-cap tech names.”
Wedbush insists on comparing the impact of AI on business and technology to that of the internet. Analysts state that AI is currently at its “1995 moment” (referring to the dot-com boom).
The firm stated that companies such as Nvidia, Microsoft, Datadog, and Palantir have already demonstrated how AI usage has increased in both enterprise and consumer sectors. Furthermore, they predict even more future applications.
According to Monday’s report from Wedbush, their favorite tech companies include Apple Inc., Microsoft Corporation Palo Alto Networks Inc., Palantir Technologies Inc., Zscaler Inc., CrowdStrike Holdings Inc., and MongoDB Inc.
Meanwhile, regarding consumer technology sector considerations highlighted by Wedbush include Amazon.com Inc., Alphabet Inc. (Google’s parent company), and Meta Platforms.
“We view AI as one of the most transformative technology trends since birth of internet back in 1995…and believe many on Wall Street still underestimate $1 trillion-plus [in] spend coming over next decade around all things AI-related which represents a rich vein for chip and software players with Nvidia and Microsoft leading this trend,” the strategists stated.