Dan Ives on the Tech Rally, Growth of AI, Data Centers
Speakers
Dan Ives
— Managing Director, Wedbush Securities
Summary
Dan Ives argues that massive AI capex by hyperscalers is not wasted spending but funding a new tech economy. He expects the Magnificent Seven to outperform in H2 2024 as monetization materializes, calls Microsoft the ultimate enterprise AI winner, and sees software vendors as underappreciated beneficiaries of the AI buildout.
- Hyperscaler AI capex is building a new tech economy, not spending to nowhere
- The Magnificent Seven are in a penalty box but poised for significant H2 outperformance
- Microsoft is positioned as the ultimate enterprise AI winner despite model commoditization
- Software vendors are second/third derivative AI plays analogous to cybersecurity
- AI models will commoditize, shifting value to data and enterprise penetration
- CapEx trajectory for big tech continues to accelerate, with monetization starting soon
- US tech leads China for the first time in thirty years in the AI race
Ideas
MAG7 to outperform in second half
The Magnificent Seven are currently in a penalty box, but they will significantly outperform in the second half of the year driven by AI monetization, massive capex that is building a new tech economy rather than being wasted, and upcoming earnings validation.
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