TLDR
Wedbush analyst Dan Ives says AI stocks are not in a bubble because only 3% of US companies and less than 1% globally have adopted AI technology
Ives released a report identifying 10 stocks he considers essential to the AI economy, including Microsoft, Nvidia, Palantir, and AMD
Current AI companies generate hundreds of billions in revenue with real infrastructure, unlike dot-com era firms that traded at 30 times revenue with unproven models
AI-driven capital spending is expected to reach $550 billion to $600 billion by 2026 as more companies adopt the technology
Companies like Amazon, Salesforce, IBM, and Intel were excluded from the top 10 list despite being part of Ives’ broader AI investment universe
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Wedbush analyst Dan Ives released a new report arguing that AI stocks are not overvalued. He says adoption rates remain extremely low across the business world. Only 3% of US companies have implemented AI technology in their operations. The global adoption rate sits below 1%.
Ives identified 10 companies he considers critical to the AI economy. The list includes chip makers, software providers, and technology platforms. His selections focus on businesses he describes as structurally indispensable to AI development.
Microsoft leads the list as the company best positioned for enterprise AI adoption. Palantir makes the cut as the preferred software for government and corporate AI projects. Nvidia appears on the list as the primary chip supplier for major AI initiatives.
Microsoft Corporation, MSFT
Advanced Micro Devices earned a spot as Nvidia’s main competitor in the chip market. Tesla’s inclusion centers on its autonomous vehicle and robotaxi technology. Apple makes the list based on its consumer device ecosystem and AI delivery capabilities.
Meta appears due to early AI investments starting to generate returns. Alphabet’s Gemini model and proprietary chips secure its position. CrowdStrike and Palo Alto Networks represent the cybersecurity sector with AI-powered security tools.
Meta Platforms, Inc., META
Ives expects AI capital spending to reach $550 billion to $600 billion by 2026. The forecast includes expenditures from private companies and government agencies. Less than 5% of American businesses have deployed AI in their operations.
The analyst drew comparisons to the dot-com era to support his thesis. In 1999, tech stocks traded at 30 times revenue with limited business models. Today’s leading AI companies generate hundreds of billions in actual revenue.
Ives pointed to chip supply constraints as evidence of genuine demand. Nvidia faces orders that exceed its manufacturing capacity. The company supplies chips to Amazon, Google, and Microsoft for their AI projects.
Several major technology companies did not make Ives’ top 10 list. Amazon, Salesforce, IBM, and Intel remain in his broader AI investment group. However, Ives views these firms as supportive rather than foundational to AI development.
The Wedbush analyst covered technology stocks during the dot-com bubble. He says current market conditions differ from that period. Companies now operate with established infrastructure and paying customers.
Demand for AI technology continues to outpace supply across the industry. Ives believes investors are underestimating future growth potential. Government and enterprise spending will drive the next wave of AI investment.
Current adoption rates suggest the AI market has room for expansion. With less than 5% of US companies using AI, the addressable market remains large. The technology sector expects spending to increase as more businesses implement AI systems.
