Technology analyst Dan Ives sees the rally in the industry’s shares continuing in the second half, despite many calls on Wall Street that the gains are getting ahead of themselves. Ives disagrees and doesn’t see this as a Dotcom Bubble moment but a “1995 Internet moment” with the boom from artificial intelligence only just beginning. “Heading into the second half of 2023 we see a much broader tech rally ahead as investors further digest the ramifications of this $800 billion AI spending wave on the horizon and what this means for the software, chip, hardware, and tech ecosystem over the next year,” the Wedbush analyst wrote in a note Monday. “The 2nd, 3rd, and 4th derivatives of this AI Gold Rush are just starting to evolve for the tech landscape based on our recent work in the field.” XLK YTD mountain S & P 500 tech sector so far in 2023 Ives sees tech stocks up another 12% to 15% in the second half. The Technology Select SPDR and the Communications Services Select SPDR , which contain most of the AI plays, are each up more than 30% in the first half of the year so far. The analyst’s two favorite stocks going into the second half are Microsoft and Nvidia, which are up 40% and 189%, respectively, so far this year. Ives is more optimistic than others on Wall Street who are worried about a recession, partly because his recent checks show enterprise spending stabilizing and increased cloud spending. And then the AI boom really kicks in next year, he wrote. “We estimate for 2024 AI could comprise up to 8%-10% of overall IT budgets vs. ~1% in 2023 with software based AI spend a laser focus of CIOs around the globe,” the note read. Ives also has buy ratings on C3.ai , MongoDB and Salesforce .
