On August 5, Daniel Ives, Managing Director and Senior Equity Research Analyst at Wedbush Securities, shared his thoughts on Bloomberg TV regarding the current state of the tech stock market. Despite recent market jitters, Ives emphasized that this period represents a buying opportunity for large-cap tech stocks, asserting that the bull run for tech stocks is far from over.
Ives explained that there is a noticeable influx of inquiries from investors questioning whether the tech bull market has reached its end. According to Ives, these concerns are misplaced; he described the current situation as a “white-knuckle moment” in an otherwise prolonged bull market for tech stocks. Ives emphasized the need for hand-holding during these turbulent times, reinforcing his belief that the market is experiencing a temporary dip rather than a fundamental shift.
When asked what would make him reconsider his bullish stance, Ives pointed to the necessity of seeing fundamental breakdowns in the tech sector. However, he noted that recent earnings reports, supply chain checks in Asia, and future demand outlooks have not shown any signs of such breakdowns. Ives maintained that these indicators support his view that the current market environment is a prime opportunity to invest in high-quality, large-cap tech stocks.
Ives also addressed the interplay between the tech stock market and broader economic trends, particularly the fluctuations in dollar-yen exchange rates. He acknowledged that the unwinding of tech trades linked to these exchange rate dynamics has contributed to market volatility. Despite this, Ives argued that the underlying fundamentals of the tech sector remain robust, particularly in light of the ongoing AI revolution, which he described as a “once-in-a-40-year cycle.”
Highlighting specific companies, Ives mentioned Microsoft, Oracle, Nvidia, Palo Alto Networks, Apple, and Tesla as examples of high-quality names that investors should hold onto during market downturns. He drew from his 24 years of experience in tech stock coverage to assert that periods of panic are often followed by recovery, reinforcing the importance of maintaining a long-term perspective.
Addressing the recent sentiment shift towards AI stocks, Ives acknowledged the increased skepticism among investors and analysts, such as those from Elliott Management, who doubt the monetization potential of AI. However, Ives reiterated his confidence in the fundamental AI story, suggesting that the market is now demanding concrete results rather than mere promises.
Looking ahead, Ives highlighted the importance of upcoming earnings reports from major tech companies, particularly Nvidia. He noted that the market’s expectations for Nvidia have moderated recently, but the demand for AI-related products remains strong. Ives suggested that the upcoming earnings release from Nvidia could be one of the most closely watched in recent history, given the current market nervousness and the critical role of AI in the tech sector’s future.
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