- Top stocks for the AI boom include chipmakers like NVIDIA and hyperscalers such as Microsoft, according to analyst Dan Ives.
- Despite a brutal week for software stocks, Ives believes this period will be viewed as a major buying opportunity.
- Microsoft’s AI business with Azure could generate an incremental $35 billion to $40 billion in revenue.
- Ives called Nvidia a “stunner” and stated its recent downturn is due to nervous investors, not fundamentals.
Analyst Dan Ives of Wedbush Securities declared on Friday that embattled software stocks may finally be reaching a turning point, as detailed in a recent interview with CNBC. He specifically pointed to companies like Salesforce and ServiceNow as poised to recover from their lows.
Consequently, he identified the clear winners in the current climate. Ives highlighted leaders in chips, including Nvidia and AMD, alongside hyperscalers like Microsoft and Amazon.
However, he described a challenging “AI ghost narrative where good is bad and bad is worse” affecting market sentiment. Despite the brutal recent period, Ives framed it as a future opportunity if AI companies maintain their capital expenditure.
The analyst called Nvidia’s recent results a “stunner,” attributing its stock decline solely to nervous tech investors. He reiterated a price target of $210 to $215, affirming his firm’s bullish thesis remains unchanged.
Meanwhile, Microsoft stands as one of Wedbush’s top picks for the year. Ives noted that 10% of Azure customers are now using AI, a trend he predicts will bring in $35 billion to $40 billion in new revenue.
He called Microsoft the most disconnected stock he has seen in years, expressing confusion over its sub-$400 trading level. Finally, Ives also touted Amazon as being in its most attractive position in half a decade, praising CEO Andy Jassy’s leadership.
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