Big tech earnings have validated the AI bulls' thesis: Wedbush's Ives

0:00 Recent big tech earnings have been strong across the board and 2026 is

0:04 on track to be an inflection point year for AI according to our next guest.

0:08 Dan Ives joins us, managing director Wedbush Securities.

0:11 Thank you so much for joining us today, Dan.

0:13 We've had so many earnings crossing and there's still more to come.

0:16 Cisco later this week already at a record.

0:18 When we hear from Michael Burry,

0:19 he suggests that investors are wrong-footed, that they're racing into one space.

0:23 But the argument has been that there's so much uncertainty with geopolitics.

0:27 AI demand is hot, investors want to be exposed to that a little

0:29 bit like we saw post financial crisis with the Fang stocks.

0:33 What's your perception as you see

0:34 the earnings and the reality of the performance?

0:36 Look, I think the reality these earnings has validated the AI bullish thesis.

0:41 And I you know, we saw it last month when we were in Asia,

0:44 demand to supply is 10 to 1 for chips.

0:47 I mean, we are Look, we are in the early days still of the AI revolution.

0:52 I think look, the haters will hate and we know

0:54 that, but we're going to be talking about tech stocks for the coming

0:58 years cuz I I think we're going in Nasdaq 30,000 as this all

1:02 plays out given where I see now it spreads the second,

1:05 third, fourth derivatives.

1:07 Well, do the derivative and where you should be playing this.

1:09 Investors have gone right back to the semiconductors now.

1:11 They've looked at the issue that is

1:13 in memory capacity with some of the chip makers,

1:16 but they're also looking at the high-end AI side as well.

1:18 So So what do you make of whether that is the right space

1:21 to be exposed or would you go a little bit further away from that stock?

1:24 Yeah, look, I think it's a memory super cycle.

1:26 So when it comes to SK, when it comes to Micron Sandisk, I mean,

1:30 we're very bullish in terms of what we're seeing

1:32 there and that's not going to end anytime soon.

1:35 But I you know, we talked about in our Ives AI 30,

1:37 it's about playing the hyperscalers.

1:40 Of course, chips.

1:41 Then you have to play software, cybersecurity, some of the infrastructure,

1:46 power, names like GE Vernova, Iron and others.

1:49 I think that that speaks to my view.

1:51 You can't just own one subsector, you have to own the derivative plays and I

1:56 continue thinking this AI party started 9:30 p.m.

2:00 It's now about 11:00 11:30 p.m.

2:03 goes to 4:00 a.m.

2:04 And now look and now like Intel, they're on the dance floor.

2:06 I mean others are going to continue participate in it.

2:09 Yeah, it's fascinating what has happened with Intel,

2:11 but I want to just pick up on your point around moving further out down

2:14 the line because the apocalypse moment for SaaS

2:17 has been at the back of everybody's mind still.

2:19 They're concerned about it.

2:20 I was talking to VCs that saying look they

2:22 they spend the whole time talking about the moat.

2:23 They're really concerned that companies they've invested in as well that have

2:27 just bringing in these amazing revenue numbers could at some point not.

2:31 How do you navigate from the winners and losers when

2:33 it feels as though that winner could be tomorrow's loser instantly?

2:37 It's a great point.

2:37 Look and I talk about it sometimes like an AI goose trade in terms

2:40 of Anthropic the words it's going

2:42 to essentially structurally break the software sector.

2:46 Look I think you have to separate for you

2:48 know winners and losers who has the moats.

2:50 I think ServiceNow is a good example way overdone.

2:53 Like I think that's an a good example of one the stack that they're

2:57 going to build they're going to be

2:59 able to ultimately monetize the AI revolution.

3:01 I think Salesforce is another example.

3:03 And now look at Adobe backs against the wall.

3:06 They're going to need to really whether it's acquisitions maybe

3:09 strategic more focused they're going to have to show it.

3:13 So I think investors are painting it all with the same

3:16 brush but when you look at say today cybersecurity CrowdStrike,

3:20 Palo Alto I mean those are two golden opportunities that it's actually

3:24 just going to get bigger based on what we see with AI.

3:28 Um I hear you Dan and I'm I'm so repetitive and I'll come at it from exactly

3:32 the same point as ever cuz I think

3:33 the viewers always love the same conversation sometimes.

3:36 Um is kind of almost a short chance if I can for this one.

3:39 Is Nvidia still the best company out there making chips for AI going forward?

3:44 Yeah and you always make great points in terms

3:46 of like everything that we're seeing right now with AI.

3:48 There's only one Godfather of AI and then that's Jensen.

3:52 And it just speaks to everything starts

3:56 the hearts and the lungs of AI is Nvidia.

4:00 Right.

4:00 Thank you for keeping that one short because

4:01 this brings me to the point I wanted to make.

4:04 If Nvidia is still the the Godfather, the best out there,

4:07 so which which I thoroughly believe is the case,

4:10 and you've already mentioned Intel,

4:12 why do I have [laughter] to pay four times the price for Intel

4:17 that I do for Nvidia when Nvidia is the standout fantastic company?

4:22 You're I mean you're preaching to the choir.

4:24 I mean I agree 100%.

4:25 That's why I think Nvidia is one where even though I go like AMD,

4:30 I think Lisa Su everything that is one now finally starting to get validated.

4:35 When I look at Intel, that's one like look, it's had a huge run.

4:39 I think they are well positioned relative,

4:41 but I'd every day I'd rather own Nvidia over Intel.

4:45 Isn't that taking away from it's kind

4:49 of just says to me people are scatter-gunning,

4:52 spraying money at it and they don't care about the valuation.

4:54 They care about the momentum, which is great while it lasts,

4:57 but then you've got this is happening.

5:00 Nvidia's done well recently, but it's gone up here,

5:02 whereas Intel's done this kind of thing.

5:03 And then that just says to me that actually

5:05 one of these days it's going to go like that.

5:07 Look, I think part of what's happened,

5:09 it's all about second, third, fourth derivatives.

5:12 And investors are trying to figure out, okay, what's like in Nvidia,

5:15 you know, you look at it and obviously that's been the historic trade.

5:18 Now, is it Intel?

5:20 Do you own AMD?

5:21 Do you play the memory super cycle that's playing out?

5:24 And then look, you could on as it goes, you know,

5:28 there could be there will be areas of froth and we talk about it,

5:31 but I think that's why as an investor you have to separate for who the winners,

5:36 what are the valuations that they could grow into.

5:39 That's been a whole argument with say in a Palantir, right?

5:42 There've been many haters.

5:43 They hated when it's in junior high school at $12,

5:47 it despises it when it's $140.

5:50 I believe that's going to a trillion-dollar market cap next 2 or 3 years,

5:52 but they have to prove it.

5:54 You have to ultimately see them executing, and that speaks to our view how

5:58 you navigate in terms of this winners-losers bucket.

6:02 Mhm.

6:02 And if you were you know, if you're an investor and you're looking at um going

6:06 beyond where the obvious winners would come from, you might

6:09 have been wise enough you might have been lucky enough

6:12 to pinpointed Intel and benefited from that 240% rise this year.

6:16 SanDisk maybe what is it?

6:17 560% rise.

6:20 Um but it feels and correct me if I'm wrong,

6:22 it feels like those windows to kind of ride that wave have have they gone?

6:28 If someone hasn't ridden that wave, have they missed the opportunity?

6:31 But but Tiago, I don't think so

6:32 because the London cab drivers bearish on software.

6:35 I mean, I could look at names like Datadog.

6:38 If I was a week ago or 2 weeks ago, no one owned Datadog.

6:42 Now now look at it.

6:43 There's InterDigital, there's CrowdStrike, there's Palantir.

6:46 I mean, I think on software look right now at salesforce.com,

6:51 ServiceNow as just good examples.

6:53 So it speaks to what we are talking about, the derivatives.

6:57 You have to continue to look out and understand who

7:00 ultimately are the infrastructure players that are going to win.

7:03 I could argue Microsoft,

7:04 there is a hundred hundred fifty dollars left that's not being factored

7:09 in relative to I think that's still

7:11 viewed pretty negatively in terms of Microsoft.

7:14 So I think those are the opportunities a year ago, no one would own Alphabet.

7:18 DOJ is going to break it up, AI is going to crush search.

7:21 Now they have victory parties for Alphabet.

7:25 Mhm.

7:25 In which case, do you think um Apple will come to regret

7:29 its strategy of not investing to the same level in the hardware,

7:33 the infrastructure, the data center build out,

7:35 instead relying this almost like pay as you go licensing and relying on others?

7:40 I believe the table pounder in terms of large cap right now

7:43 right here it's Apple because it's my view the consumer AI revolution

7:49 is going to go through Cupertino that at WWDC there that's where

7:53 they're going to start the Gemini deal then eventually what's going to happen

7:56 is all the models whether it's you as Europe Asia they'll

7:59 be on the phones you'll have an AI enabled device you're going

8:02 to have more and more apps they're going to have a piece

8:05 of that pie they're essentially a toll collector on the AI consumer highway.

8:11 Why is open AI not going to be the toll collector because they're talking about

8:13 coming up with a phone why isn't

8:15 that this Nokia moment or Ericsson moment for Apple?

8:18 Sure because there's 1.5 billion reasons why that's not going to happen

8:22 to open AI because there's 1.5 billion iPhones and it speaks

8:25 to many you know if you many people around the world

8:28 they view as food water and their iPhone maybe Netflix as well.

8:33 to the ecosystem.

8:34 Yeah and the and that's the reality no one has an ecosystem like Cupertino it's

8:39 about monetizing it that's why it will never

8:41 be the Nokia or sort of Blackberry moment.