Proactive Investors - The AI revolution is still in its early stages with many more opportunities ahead before it reaches its peak, according to analysts at Wedbush.
In a recent note, analysts deemed the current "AI Party" at 9 pm, far from reaching its peak.
“We believe this AI Party its only 9 pm and the AI driven tech bull party goes till 4 am,” Wedbush wrote in the note.
“To this point many investors have asked us over the past few weeks why is it not midnight or 2 am? To us the answer is simple: based on all of our work in the field globally only the first part of this AI Revolution has just begun with Nvidia and Microsoft.”
Analysts anticipate the second, third, and fourth derivatives of the AI revolution—including use cases, software, infrastructure, and consumer applications—to emerge over the next 12 to 18 months. This expansion is expected to drive a tidal wave of $1 trillion in tech sector spending.
Wedbush had forecasted a 25% rise in tech stocks for 2024, driven by the burgeoning AI revolution. The first half of 2024 has already seen strong performance from tech giants like NVIDIA Corp (NASDAQ:NVDA, ETR:NVD), Microsoft Corp (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN), and Meta (NASDAQ:META) Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB).
"This 4th Industrial Revolution has just begun to play out in our view in this 1995 Moment....and NOT a 1999 Moment," Wedbush noted, emphasizing their belief in sustained growth rather than a bubble.
Looking ahead, Wedbush predicts another 15% rise in tech stocks in the second half of 2024, with accelerating tech fundamentals and expanding AI use cases.
They highlight Nvidia and Microsoft as key drivers in enterprise AI, while Apple (NASDAQ:AAPL), Meta, and Google (NASDAQ:GOOGL) are poised to lead the consumer AI revolution with upcoming innovations like the iPhone 16.
Wedbush described Nvidia CEO Jensen Huang and Microsoft CEO Satya Nadella as the "stars of the AI Party on the disco dance floor," leading the way in the enterprise AI spending surge.
The note also identifies the potential winners and losers of this AI revolution.
"The winners of this next phase of the AI Revolution will be those tech vendors that are able to monetize their installed bases with new AI platforms," Wedbush explained.
Conversely, tech players lacking the necessary tools, technology, and software engineers may be left behind.