AI party just getting started, here are winners and losers
The artificial intelligence party isn’t over yet despite fears of a bubble, according to tech bull Dan Ives — and he’s got a handful of names in mind as winning and losing from the trend. “My view is, you’re going to have these digestion periods, but you cannot get too nervous,” Ives, who is managing director of Wedbush Securities, told CNBC’s “Squawk Box Europe” on Friday. Markets bears are “going to come out of hibernation mode every time there’s some volatility,” said Ives, but he added that, “I view those more as a golden opportunities to own the tech winners.” Ives said that, although some names in the AI sphere — such as OpenAI CEO Sam Altman — have warned of overexuberance from investors about the technology, in his view, “the AI party … started at 9pm. It’s now 10pm. That party goes to 4am.” The analyst added there are certain companies that will be winners — and losers — during what he sees as an AI-driven market rally that could add another 20% to 25% to tech stocks over the next 12 months. Winners Big Tech: Ives praised the AI strategies of Big Tech firms such as Microsoft , Amazon , Google , Nvidia , Tesla and Meta . In the case of Microsoft, Amazon and Google, Ives said these so-called “hyperscaler” cloud names are benefiting from the wave of demand for data centers that are used to train and run powerful AI systems. All of these names, he said, have “wartime CEOs across the board,” but are ultimately “going to have to prove out” their respective strategies. With Tesla, Ives called out the electric car maker’s autonomous vehicles and robotics play — Tesla is aiming to roll out so-called “robotaxi” services, which are akin to a ride-hailing platform, but with vehicles operated autonomously with AI rather than human drivers. As for Meta, Ives said the key for the social media giant will be to prove that it can monetize its billions of users. Meta makes money from ads. But CEO Mark Zuckerberg is increasingly staking the company’s future on AI. He recently formed a new team focused on building AI that surpasses human intelligence. Select software names: Ives says that certain software firms like Palantir , Snowflake and Salesforce are going to see “a renaissance growth” thanks to heightened enterprise demand for AI services. Losers Legacy firms struggling to adapt: In the losers camp, meanwhile, Ives names design software firm Adobe and chipmaker Intel as some of the stocks to avoid. Adobe “has not pivoted quick enough and AI is potentially eating away its business model,” Ives told CNBC, adding, “They need to acquire aggressive and put in defensive and offensive strategic efforts to stop this boat from hitting into an AI iceberg.” Ives said that Intel “has lost its competitive edge and been run like a government agency with so much red tape.” He was likely referring to reports that the White House was discussing securing a 10% stake in Intel in exchange for funding under the CHIPS and Science Act, a law that aims to boost domestic U.S. semiconductor manufacturing. “It’s been a disaster and they massively miscalculated the competitive environment over the last decade,” Ives added. “Intel stayed on a treadmill while every chip player in the world passed them from an innovation perspective.” Intel has lost significant ground to rivals like Nvidia and AMD over the years. Nvidia in particular has capitalized on the AI boom, cornering the market for the GPUs, or graphics processing units, required for training and running large language models.
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