The analysts said investor anxiety has overtaken the narrative around AI, creating a disconnect between fundamentals and sentiment.
- Wedbush contended that software companies remain in the early innings of monetizing AI tools.
- Among the triggers the firm highlighted were fresh funding momentum at OpenAI, and Nvidia CEO Jensen Huang reaffirming robust chip demand.
- Wedbush also pointed to earnings updates from Salesforce Inc. as evidence that AI-driven revenue is beginning to materialize.
Technology stocks have stumbled in recent weeks, but analysts at Wedbush Securities, led by Dan Ives, say the artificial intelligence trade has not run out of steam.
Instead, the firm has laid out 10 developments it believes could reignite momentum across the sector.
AI At The Crossroads
The analysts said investor anxiety has overtaken the AI narrative, creating a disconnect between fundamentals and sentiment. They pushed back on the idea that artificial intelligence threatens every corner of the economy.
Wedbush contended that software companies remain in the early innings of monetizing AI tools and that heavy capital expenditures approaching hundreds of billions of dollars annually signal commitment rather than excess.
Among the triggers the firm highlighted were fresh funding momentum at OpenAI, commentary from Nvidia Corp. (NVDA) CEO Jensen Huang reaffirming robust chip demand, and progress from Oracle Corp. (ORCL) in its multibillion-dollar capital raise.
Wedbush also pointed to earnings updates from Salesforce Inc. (CRM) as evidence that AI-driven revenue is beginning to materialize. The firm expects merger activity in software to pick up in the coming months as companies pursue strategic acquisitions.
Big Tech And Enterprise Adoption
Consumer-facing milestones could also help sentiment. Wedbush cited Apple Inc. (AAPL) advancing its AI-enabled Siri features and broader adoption of AI products by enterprises, including tools from Anthropic. It also flagged signs of monetization gains at Microsoft Corp. (MSFT), ServiceNow Inc. (NOW), Meta Platforms Inc. (META), and Alphabet Inc. (GOOG, GOOGL).
Last week, Dan Ives said that major enterprise software platforms are expected to see significant expansion as AI adoption increases.
In the first week of February, shares of several software and tech companies dropped sharply amid investor concern that rapid advances in artificial intelligence might reduce the need for traditional subscription-based software.
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