Dan Ives says the recent software pullback has created a major disconnect in the value of one of Wedbush’s top stock picks.
In a new CNBC interview, the Wedbush analyst singles out Microsoft (MSFT) as one of the most mispriced large-cap tech names he has seen in years.
While Ives acknowledges investor concerns around competition and hyperscaler spending, he says the AI revenue opportunity for Microsoft is still early.
“Microsoft, I think it’s probably the most disconnected stock that I’ve seen in the last few years relative to where it’s trading. My view is 10% of Azure customers have gone down the AI path. So, as you actually look at this, it’s gonna be an incremental $25-$30 billion of revenue from Microsoft.
It’s just right now, it’s a do-not-enter zone in terms of the view from investors.”
Despite the turbulence, Ives reiterates that Microsoft remains a core conviction for Wedbush.
“This is one of our top picks for the year, multiple years. Because of where they play in enterprise, what Nadella is doing, in my view, like OpenAI was essentially the training wheels for now what I think they’re going to be able to do themselves.
And I think numbers are significantly underestimated. It’s a massive head scratcher at this sub-$400.”
As of Friday’s close, MSFT is valued at $392.74.
Ives also believes that broader software names could begin to stabilize following recent volatility tied to Anthropic’s spat with the Pentagon.
“I think software is going to start at the bottom here, especially after the Anthropic event, Salesforce, ServiceNow, and others. So this is a turbulent period, but our thesis is unchanged. I’d say more bullish relative to the overall thesis.”
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