Wedbush Securities said the market still largely underestimates the transformative potential and huge spending spree that artificial intelligence technology will bring. Wedbush strategists led by Dan Ives predicted in a report on Monday that technology stocks are poised to soar in 2024 as companies increase their investment in artificial intelligence and cloud technology. The company believes that enterprises will spend more on these two areas than their IT budgets.
Ives wrote: "We believe that a new technology bull market has begun and that technology stocks will usher in strong growth in 2024. As the wave of artificial intelligence spending hits the broader technology industry, we expect technology stocks to rise more than 20% next year, led by large technology companies."
Wedbush compared the impact of artificial intelligence on business and technology to the original Internet, and believed that artificial intelligence is at the "1995 moment."
Companies such as Nvidia, Microsoft, Datadog, and Palantir have already shown how the use of artificial intelligence is increasing in the enterprise and consumer sectors, and this trend will only accelerate.
Wedbush's favored tech companies include Apple, Microsoft, Palo Alto Networks, Palantir, Zscaler, CrowdStrike and MongoDB, according to Monday's report. Meanwhile, in terms of consumer technology, Wedbush highlighted Amazon, Alphabet and Meta as ones to watch.
Wedbush strategists wrote: "We view AI as the most transformative technology trend since the birth of the Internet in 1995 and believe many on Wall Street still underestimate the $1 trillion in AI spending that will occur over the next decade, which will be a bonanza for the chip and software industries, with Nvidia and Redmond leading the charge."