Wedbush analyst Daniel Ives said the recent turbulence in tech stocks reflects short-term investor anxiety rather than a shift in the long-term artificial intelligence-driven bull market. The analyst noted that despite concerns about an "AI bubble," Palantir Technologies Inc.’s (NASDAQ:PLTR) sharp selloff after stellar earnings, and uncertainty over Nvidia Corp's (NASDAQ:NVDA) China exposure, the sector’s underlying fundamentals remain strong.
He expects tech stocks to rise another 8%–10% by year-end as investors continue to position for the next phase of the AI revolution.
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Ives emphasized that the technology sector is entering a multiyear capital expenditure supercycle — the backbone of what he calls the "fourth industrial revolution."
According to the analyst, third-quarter earnings from Microsoft Corp (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN), and Alphabet Inc (NASDAQ:GOOGL) reinforced the strength of cloud computing, while Meta Platforms Inc (NASDAQ:META) and other large tech firms are driving a surge in AI-related spending. He projects Big Tech capital expenditures could soar to between $550 billion and $600 billion by 2026, up from roughly $380 billion this year, as AI infrastructure and enterprise adoption accelerate.
Ives identified Palantir as a key barometer for enterprise AI adoption, citing its blowout U.S. commercial growth as evidence of widespread corporate investment in artificial intelligence. The analyst expects similar momentum from Snowflake Inc (NYSE:SNOW) and MongoDB Inc (NASDAQ:MDB) as more companies expand AI integration across business operations.
He described the current environment as an "AI arms race," fueled by aggressive Big Tech investment that shows no sign of slowing.
At the center of this revolution, Ives said, is Nvidia — the foundational company enabling AI infrastructure worldwide. The analyst highlighted that for every $1 spent on Nvidia's technology, roughly $8–$10 in value is created across the broader tech ecosystem.
Looking ahead, he believes Nvidia's upcoming earnings will serve as a major validation point for the AI revolution, further strengthening investor confidence.
Despite near-term volatility, Ives expects continued growth in AI spending to propel the tech sector's bull market for at least the next two years.
Price Action: NVDA stock is up 4.36% at $196.36 at last check on Monday.
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