Dan Ives says the market is still missing the scale of the artificial intelligence boom, calling the current expansion an “AI supercycle” that will last for another two years.
In a new Yahoo! Finance interview, the Wedbush Securities managing director and global head of technology research says he expects the upcoming third-quarter earnings season to prove how deeply AI demand is embedded across the tech stack.
He also notes that Wall Street remains behind the curve in assessing the earnings power of the sector.
“The Street’s still massively underestimating what this tech cycle is going to look like. I think it’s an AI supercycle. And I think this 3Q earnings is going to be much more of a validation moment in terms of not just for chips, but for software.”
Contrary to popular calls that the AI-driven bull market is already in its late stages, Ives says he believes the market will continue to climb a wall of worry in the coming years.
“The bears in hibernation mode, they’ve missed the last two and a half years. And they’ll
continue to miss this bull market that I think has another two years ahead of it.”
But Ives warns that he will change his bullish stance on the AI trade if demand drivers decline.
“So I think if I see demand soften, if I see the use cases not exploding, if I see ultimately the demand trajectory in terms of the second, third, fourth derivative, like our Ives AI 30, then you pause. But right now, it’s accelerating. And I think that’s going to continue.”
Last week, Ives predicted that the Nasdaq would soar to greater heights, fueled by the AI supercycle.
“For OpenAI, for every dollar they put into AMD, they’ll get $12 to $15. Nvidia, it’s the same thing. And I think that’s why this is more of a 1996 moment than a 1999 moment, despite obviously a lot of the worries. And that’s why we think Nasdaq 25,000, Nasdaq 30,000. These are going to be some of the conversations over the next one, two, three years.”
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