Dan Ives, Wedbush’s managing director and chief equity research analyst, believes a lagging group of stocks will surprise investors in the next six months.
In an interview with Bloomberg TV, Ives He says While many investors have taken their eyes off Magnificent 7 due to their huge spending on AI, he believes the super scalers are poised to return as market leaders.
“Look, the hyperscalers are spending $700 billion. I mean, this is what’s funding the AI revolution. I mean, when you get rid of the memory chips, NVIDIA, and everything else, but that’s just the first phase.
Because what the hyperscale does is: this is the structure. It’s the Vegas Strip building in 1955. But eventually, monetization will come now. I mean, when you look at Meta, they’re not just spending for the sake of spending. If you look at Microsoft, they basically own the enterprise. Alphabet: 5% of its clients went the AI route. (It’s) the same thing with Amazon.
According to Ives, the upcoming earnings season will prove Mag 7’s skeptics wrong.
“So the key point is you’ve seen this tech rally, but Mag 7 is now (in the box), basically. I think it’s outperforming dramatically (in) the second half of the year. And I think earnings season, as you see in July, there’s going to be a big validation moment for big tech companies.”
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