Wedbush analyst Dan Ives believes the fundamental catalyst powering the dominance of tech stocks has not changed amid the market correction.
In a new CNBC interview, Ives says the multi-trillion-dollar AI spend is still in play and has not changed, even amid fears about soaring oil prices and geopolitical tensions.
“I mean, the message is that it’s a white-knuckle environment, but just like the Covid days, just like Liberation Day. It comes down to like, what does the spending look like in tech in terms of the AI revolution, in terms of the $4 trillion of CapEx that’s going to be spent? That’s not changing…
Nothing’s changed, and to some extent, accelerating in terms of a lot of these projects. So our whole point is, similar to what you were talking about with Meta, and I guess you were saying about Microsoft, and Tesla, and many of these other names, you have to be able to navigate these white-knuckle periods, and that’s what it is, to understand who are the winners, and especially a lot of these stocks right now, they’re trading like numbers are getting cut. Not that numbers are going higher.”
Ives believes that higher energy prices will be temporary, and it will not have an impact on the tech giants’ plans to pour money into the AI buildout.
“I think if this lasts, you know, going into the summer, into the next few months, then, of course, there’s some ripple effect on the economy, on enterprise, on consumer, where eventually then CapEx could start to get cut. But our whole point is, is that if this is contained and it’s something that is not prolonged, it’s really a speed bump on the broader view.”
He also says tech stocks have mostly priced in the negative impacts of hostilities in the Middle East.
“And I think right now where you’re looking in terms of tech, a lot of these stocks are basically saying like numbers are already coming. I mean, I would already say bad news is starting to get baked significantly into these names.”
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