A top tech analyst says the current market pullback is a golden opportunity to buy leading AI companies before the next leg of growth.
In a new post on X, Wedbush’s Dan Ives says market bears have a history of dismissing breakthrough technologies that later redefine entire industries.
He notes that pessimists made the same mistake with Apple before the iPhone changed the world and Netflix disrupted home entertainment.
“In 2008, most investors denied that Apple’s iPhone was going to be anything more than a one-year AT&T-led mobile phone cycle… They mocked Netflix in 2007 and Reed Hastings on the concept of moving from DVDs to streaming and crushed the stock accordingly.”
Ives adds that Wall Street also resisted Microsoft’s cloud transformation under Satya Nadella and doubted Nvidia and Jensen Huang when the company started pouring billions into artificial intelligence instead of focusing solely on gaming.
“The concept of Nadella taking Microsoft to a cloud-focused company in 2014 was considered a fantasy and challenged by investors for the next three to four years on almost a weekly basis… Skepticism of Jensen and Nvidia spending massive R&D dollars on AI in 2021 and 2022 when they should be focused on its core gaming market.”
Ives believes that pattern is repeating today as bears question the sustainability of AI spending, while he sees a powerful secular cycle underway.
“The bears cannot see the technology future… we have seen it since covering tech in the 90s.”
Ives says the AI cycle is only in its early years and will drive a decade of spending and productivity gains across the economy. He lists his ten preferred names for buying the dip, including Nvidia, Microsoft, Oracle, Google, Palantir, Tesla, Apple, CrowdStrike, Palo Alto Networks and Amazon.
“In a nutshell, this AI Revolution is just beginning today, and we believe tech stocks and the AI winners should be bought given our view that this is year three of what will be a 10-year cycle of this AI Revolution buildout. This is a nervous, white knuckle moment, but to be clea,r this is still early days in this tech transformation.”
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