Key takeaways

• The tech sector is entering a new bull cycle, largely driven by advancements in AI.
• Software remains a critical component of the AI revolution, contrary to beliefs that it’s a declining sector.
• The current tech landscape presents significant investment opportunities, not a bubble.
• The US has surpassed China in tech leadership for the first time in three decades.
• Demand for AI technology and infrastructure is set to grow, offering lucrative investment avenues.
• Tech stocks are projected to yield a 20% return by 2026, potentially boosting the broader S&P index.
• The software sector is being misjudged by the market, which fails to recognize the strengths of individual companies.
• Crypto market sell-offs impact tech investors by creating a risk-off sentiment.
• The fourth industrial revolution is still in its early stages, with substantial growth ahead.
• Today’s tech companies have stronger fundamentals compared to those during the dot-com bubble.
• Tesla is evolving from an auto company to a major AI player.
• Visionary tech leaders like Musk can foresee industry trends that others miss.
• The shift towards robotics will significantly alter the employment landscape.
• A massive innovation renaissance is on the horizon in the US, akin to the post-WWII era.
• Technological innovation is expected to create more jobs than it eliminates.

Guest intro

Dan Ives is Global Head of Technology Research, Managing Director, and Senior Equity Research Analyst covering the technology sector at Wedbush Securities. He previously served as a Managing Director and technology equity research analyst at FBR Capital Markets for 16 years, focusing on enterprise software, cybersecurity, cloud computing, and AI. Dan has covered tech on Wall Street for 25 years with a major research focus on the AI revolution.

The rise of AI in the tech sector

• We are in the early stages of a bull cycle in tech, particularly driven by AI.

  — Dan Ives

• Tech stocks are predicted to rise by 20% this year, marking the beginning of a prolonged bull cycle.
• Software companies like Salesforce, ServiceNow, Oracle, and Microsoft are pivotal to the AI revolution.

• The belief that software is a dead sector is misguided and disconnected from reality.

  — Dan Ives

• AI’s influence is expanding rapidly, affecting corporate budgets and investment strategies.

• Talk to any company in the world, 60 to 70% of IT budgets right now are influenced by AI.

  — Dan Ives

• The demand for AI technology and infrastructure is growing, presenting investment opportunities.

• You have more data centers under construction today than active data centers… I’ll take that bet.

  — Dan Ives

The US tech advantage over China

• The US is currently ahead of China in technology for the first time in thirty years.

  — Dan Ives

• This shift marks a significant change in global tech dynamics, crucial for investors.
• The US tech sector’s leadership is driven by innovation and strategic investments.
• The current tech landscape is not a bubble but an opportunity for growth.

• I view that more as opportunities because they see where the demand is… to call this a bubble to say that this is one where you know this is the end of the road it’s it’s the opposite.

  — Dan Ives

• The US is poised for a massive innovation renaissance, reminiscent of the post-WWII era.

• We’re gonna be going through a massive innovation renaissance in this country that we haven’t seen maybe going back to like post world war two.

  — Dan Ives

The future of tech stocks and the S&P

• A 20% return for tech stocks is predicted for 2026, with potential positive effects on the S&P.

• You’re calling for a 20% you know 2026 tech stock return… you could argue like S&P is gonna be up same or you could argue maybe even it’s higher to some extent relative to the ripple effect.

  — Dan Ives

• The software sector is being misjudged by treating it as a whole rather than recognizing individual strengths.

• You’re putting the whole sector in one and I think that’s the wrong trade here when you think about AI and Bitcoin.

  — Dan Ives

• The current sell-off in software stocks presents a generational opportunity for investors.

• I just think right now software is a generational like opportunity in terms of the sell-off from Salesforce to what I view with Microsoft Oracle.

  — Dan Ives

The impact of crypto on tech investments

• The sell-off in the crypto market affects tech investors, indicating a risk-off sentiment.

• I think when you see crypto selling off the way it has it does have an effect on tech investors it’s a risk-off trade that you see playing out.

  — Dan Ives

• Periods of dislocation in tech make Dan Ives more bullish due to the disconnect from fundamentals.

• When we go through periods like this on the software and tech dislocated sell-off it actually makes me more bullish because it’s so dislocated relative to the fundamentals.

  — Dan Ives

• You can’t be bullish on tech and disruptive tech without being bullish on Bitcoin.

• It’s my view that like it’s gonna create from it the use cases that we don’t even see today in terms of ultimately companies that are gonna be created especially on the blockchain side.

  — Dan Ives

Tesla’s transformation into an AI powerhouse

• Tesla is transitioning from being viewed as just an auto company to becoming a significant player in AI.

• I do believe part of it is like you have to be an optimist you have to be a technologist to understand where this is going and I think Musk has this is the year for Tesla where it’s all gonna start to take shape and like I’ve said in terms of autonomous optimists I mean Tesla is gonna be less about cars and much more what I view as a true AI name.

  — Dan Ives

• Musk and other tech leaders have a unique ability to foresee industry trends that others miss.

• I think that’s something where when you look at Karp at Palantir and you look at Musk and you look at Genta and other they’re able to see around corners that others can’t and I just think that’s the right play.

  — Dan Ives

Robotics and the future of employment

• The employment landscape will shift significantly towards robotics, impacting companies across various sectors.

• Amazon employs 1,500,000 humans a million robots… that is likely going to switch at some point in the next couple years.

  — Dan Ives

• Technological innovation is expected to create more jobs than it eliminates.

• I would argue the innovation that’s gonna happen is gonna much more out you’re gonna have many more jobs created than taken away.

  — Dan Ives

• The shift towards robotics will significantly alter the employment landscape.

The role of private companies in public market analysis

• Private companies provide valuable data points that can inform public market analysis.

• Private companies give you so much good data points you wanna understand where the bids are right relative to private markets and public.

  — Dan Ives

• This insight highlights the importance of private market data in making informed public market investment decisions.
• The current market dislocation creates opportunities for investors in US tech stocks.

• It just speaks more and more to just the emotional bull bear to be in terms of AI revolution… it’s an exciting time to be an investor in US tech stocks.

  — Dan Ives

The potential market low and bullish trends

• We are likely near a market low, suggesting a potential bullish trend ahead.

• I definitely think that we’re at somewhere near a low right.

  — Dan Ives

• This forecast indicates a potential turning point in the market, which could influence investment strategies.
• The current market dislocation creates opportunities for investors in US tech stocks.

• It just speaks more and more to just the emotional bull bear to be in terms of AI revolution… it’s an exciting time to be an investor in US tech stocks.

  — Dan Ives