Dan Ives says the AI trade is entering a new phase, with monetization now becoming the dominant driver after years of infrastructure buildout.
In a new CNBC interview, the Wedbush analyst says investors are underestimating how quickly AI spending is translating into revenue, particularly across enterprise software, cybersecurity and cloud platforms.
He notes that the early phase of the AI cycle was defined by infrastructure spending, but the next stage will be measured by real use cases and revenue capture.
“I think it’s about the monetization of the AI revolution, specifically on the software side… You look at MongoDB, Snowflake, the use cases… I think this is really going to be a key period to show the next stage of the AI revolution from a software, cybersecurity, and infrastructure perspective.”
He believes the AI trade is in the early stages of a long cycle, highlighting that investors are only beginning to see the downstream effects of AI adoption.
“I’ve talked about the third inning in terms of this nine-inning game, but now the second, third, fourth derivatives play out across software, across infrastructure, across cybersecurity.”
Ives ties the monetization shift directly to accelerating enterprise demand, particularly at Microsoft, where he says that deal activity is moving faster than markets expect. He says those deal trends support a more bullish 2026 outlook for large-cap technology leaders positioned at the center of enterprise AI spending.
“What investors are underestimating is that we’ve seen deals accelerate 30% from Azure, from our checks… I think Microsoft could be up 30% to 40%”
Ives also points to Oracle, arguing that recent weakness in the stock does not reflect the company’s positioning in the AI infrastructure and enterprise software stack.
“I think Oracle, the sell-off here is way, way overdone. I think it could be a $250 stock.”
Zooming out, Ives believes that the tech sector could surge by 20% next year.
Ives is not alone in the view that AI is moving beyond a buildout story and into a revenue-driven phase. Wall Street analyst Jordi Visser also believes that AI firms will unlock revenue streams next year using AI agents and digital employees.
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