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Wedbush's analysts say the current 'historic tech run' can keep going

Published 2024-03-05, 09:56 a/m
Updated 2024-03-05, 09:56 a/m
© Reuters.

As the tech sector’s historic rally continues, investors across the U.S. and Asia are raising questions about whether these equities can sustain their momentum.

Wedbush analysts believe the answer is “yes,” attributing the sector's potential for continued growth to the significant impact of the artificial intelligence (AI) revolution.

“This is a transformational tech trend we have not seen since the start of the Internet in the mid 90's,” they said in a note.

Analysts added that “for every $1 of spend with Nvidia (NASDAQ:NVDA) on GPUs the multiplier around the enterprise and consumer space we estimate could be $10+ over the next few years as this all plays out over the coming years.”

Analysts likened the ongoing AI boom to 1995, saying the current revolution is poised to infuse the software ecosystem and the broader tech sector with an additional $1 trillion in spending over the coming ten years.

Nvidia, under Jensen Huang's leadership, has effectively “cracked the code,” analysts said, “and sparked a generational tech transformation that investors are trying to get their arms around.”

Looking forward, investors will be focused on identifying “the 2nd/3rd/4th derivatives of AI play out in this market over the coming 12 to 18 months,” they added.

“For the elite, transformational tech stories such as Nvidia and the AI Revolution investors must see the forest through the trees to where this enterprise spending wave (and estimates) can head over the next 3 years,” analysts wrote.

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