Wedbush Securities head of technology research Dan Ies joins us now. Dan, I don't think it's surprising for people to hear you pound the table on on the tech trade. You've been super bullish.Do you not have concerns now about monetary policy, you know, as as the market rethinks the cut for December and and the overall frothiness or valuations around AI. Yeah, look s I mean I get some of the nervousness but I mean I was just in Egypt for three weeks >> and demand to supply for chips are 10 to1 demands increa ...

You can catch Trader Talk on Apple Podcasts, Spotify, YouTube, or wherever you get your podcasts. Are you riding the AI wave or worried you’re the last one in? On this episode of Trader Talk, Kenny Polcari breaks down why he sees AI as a Fourth Industrial Revolution, not a replay of the dot-com bubble, and explains how real cash flows and productivity gains set today’s leaders apart from the 2000s hype. He’s joined by hedge fund manager Tom Hayes of Great Hill Capital, who unpacks how crowded the AI trade h ...

Core Insights - The current AI market is compared to the dot-com bubble, but it is argued that AI represents a genuine industrial revolution rather than mere speculation [2][6][7] - Major companies like Nvidia, Microsoft, Amazon, and Apple are leading the AI charge, differentiating the current landscape from the dot-com era where many startups lacked revenue [4][5] - AI is seen as a productivity enhancer across various industries, driving cost reductions and innovation, which is expected to lead to margin expansion [5][6] Industry Analysis - The AI sector is characterized by significant infrastructure demand and cash flow, with established companies rather than startups at the forefront [4][5] - The current investment climate shows a high level of capital expenditure (capex) among hyperscalers, comparable to the oil industry, indicating a long-term commitment to AI development [12] - Despite some expected shakeouts in the startup space, the overall sentiment is that the AI boom is about execution rather than mere possibility [6][7] Market Dynamics - Retail investors have been aggressive buyers in the AI space, while institutions have been net sellers, indicating a potential froth in the market [31][34] - The earnings season has shown a strong performance overall, with a high beat rate, but specific sectors like communication services have underperformed due to misses from major players like Meta and Netflix [50][51] - The emotional nature of retail trading can exacerbate market movements, leading to volatility as investors react to short-term fluctuations [52][54] Investment Opportunities - Companies like Alibaba and Intel are highlighted as potential investment opportunities due to their strong fundamentals and positioning within the AI landscape [41][43] - The discussion emphasizes the importance of understanding the underlying business fundamentals rather than getting caught up in market trends or emotional trading [52][55] - The potential for significant returns exists for those who can identify undervalued companies with improving fundamentals in the AI sector [41][43]

Core Viewpoint - Tech stocks are expected to rally into year-end, driven by the AI Revolution and capital expenditure, with a potential continuation of the tech bull market for another two years [1][2]. Group 1: Tech Bull Market - The current tech bull market is anticipated to last for an additional two years, fueled by the AI Revolution and increased capital expenditure [2]. - Dan Ives believes that tech stocks will experience significant gains as the market continues to embrace AI-related themes and spending [2]. Group 2: Key Companies - Meta Platforms Inc. and Microsoft Corp. are highlighted as major beneficiaries of the ongoing AI Revolution, with expectations of increased spending on technology and infrastructure [3]. - Ives predicts that Meta's rising capital expenditure will lead to substantial returns, stating the company will make "multiples" of its spending [3]. - Microsoft is expected to dominate the enterprise segment, while Apple Inc. is projected to enhance its consumer segment, potentially adding $75 to $100 to Apple's stock price [4]. Group 3: Market Predictions - Ives dismisses concerns about an AI bubble, asserting that the market is in the early stages of a "Fourth Industrial Revolution" with significant growth potential ahead [4]. - A forecast suggests that the NASDAQ could reach 30,000 points, driven by a "profit wildfire" from AI leaders [4]. Group 4: Contrasting Views - Michael Burry expresses caution regarding the AI boom, likening it to the 2000 dot-com bust, and has made bearish bets against AI-centric stocks [5]. - Despite Burry's warnings, Ives remains optimistic and critiques Burry's perspective, particularly regarding the future of Palantir Technologies [5].

Core Viewpoint - Dan Ives argues that the market is in the early stages of a "Fourth Industrial Revolution" rather than facing an AI-driven tech bubble, suggesting significant growth potential ahead [1][2]. Market Predictions - Ives predicts the NASDAQ could reach 25,000 to 30,000, driven by a "profit wildfire" from AI leaders impacting the broader economy [2]. - He emphasizes that the current market boom is not a bubble, countering bearish sentiments [2]. Earnings and Investment Trends - Strong earnings from companies like Microsoft and Palantir are cited as validation for ongoing market growth [3]. - Ives highlights a "capex super cycle" in technology spending, projecting more investment in the next two years than in the previous decade combined [3]. Cautionary Perspectives - Thomas Shipp expresses caution regarding the sustainability of the current investment trends, questioning the quality of the investments being made [4]. - Gordon Johnson raises concerns about the AI investment landscape, particularly in comparison to China's data center investments [5]. Macroeconomic Environment - Ives sees a favorable macroeconomic environment for stocks, predicting imminent rate cuts from the Federal Reserve and suggesting a tech bull market lasting another two to three years [6]. - He advises investors to explore opportunities beyond the obvious winners, focusing on sectors like cybersecurity and infrastructure for future growth [6]. Investment Options - A list of AI-linked exchange-traded funds (ETFs) is provided for investors to consider, showcasing various performance metrics [7][8][9].

Market Overview - The stock market is experiencing a downturn, with the Dow dropping 251 points and the S&P losing 1.17% [1] - The NASDAQ also saw a decline, with Palantir's stock tumbling 2.04% [2] Market Segmentation - The market can be divided into three segments: high growth high-tech, the real economy, and speculative markets [2] - The tech/data center economy is a significant part of the high growth high-tech market, encompassing various companies involved in the fourth industrial revolution [3] Valuation Metrics - Companies in the tech/data center sector typically have high price-to-earnings (P/E) multiples, with the average S&P 500 stock trading at 23 times next year's earnings [4] - Notable companies in this sector include Amazon (32 times), Apple and Microsoft (around 33 times), and Nvidia (about 30 times), all trading at a premium compared to the average [4][5]

We've had an incredibly big week of earnings, particularly for the tech sector when you had five of the seven mag seven names reporting. I want to break it all down. The AI revolution, which is underway and still has room to run, according to Dan Ies, global head of tech research, managing director, senior equity analyst at Wed Bush Securities.I'm so glad to speak with you and I want to get to the details of this week. But when I think about everybody talking about the AI bubble and you said we go back to 2 ...

Core Insights - The article revisits four growth stocks identified in December 2024, assessing their performance nearly one year later [1] Group 1: Investment Strategy - The focus is on high-yield income investments to support retirement lifestyle, emphasizing dividend-paying stocks and funds such as BDCs, REITs, CEFs, and ETFs [1] - The author expresses a commitment to making informed long-term investment decisions after experiencing the Great Recession [1] Group 2: Market Psychology - There is an interest in the human psychology of markets, which is viewed as both fascinating and complex [1]

Group 1 - The tech industry is experiencing significant investment in data centers to support artificial intelligence, indicating a shift in operational needs [1][5] - The stock market performance shows mixed results, with the NASDAQ gaining 66% driven by AI-related stocks, while the Dow dipped 17 points and the S&P advanced 4% [2] - Salesforce's stock fell over three dollars following CEO Mark Benioff's keynote on the Agent Force initiative, reflecting Wall Street's skepticism about its immediate impact on the company's performance [3][4] Group 2 - There is a growing concern about the substantial backend investment required to power AI applications, which is seen as a critical battleground for tech companies [4][5] - The fourth industrial revolution, characterized by advancements in AI, is compared to previous industrial shifts, emphasizing its potential to transform the operational landscape [5][6]

Core Insights - The discussion revolves around the significant investments required for data centers to support artificial intelligence (AI) technologies, highlighting the skepticism in the market regarding the sustainability of these expenditures [2][4][10]. Industry Overview - The current phase is described as the fourth industrial revolution, driven by advancements in AI and data center capabilities, likened to previous revolutions such as the steam engine and personal computers [5][7][12]. - The AI sector is experiencing a massive buildout of data centers, which is seen as both a necessary investment and a potential bubble, with concerns about overvaluation and unsustainable spending [9][10][12]. Company Insights - Salesforce is making significant strides in AI with its Agent Force initiative, but market reactions indicate skepticism about its immediate impact on the company's stock performance [3][4]. - OpenAI is highlighted as a company potentially engaging in risky financial practices, raising concerns among analysts about its long-term viability and the sustainability of its valuation [9][10]. Market Reactions - The stock market's mixed performance reflects broader uncertainties, with the Dow dipping while the NASDAQ gained, primarily driven by AI-related stocks [2][3]. - Analysts express concerns that the current spending patterns in the AI sector resemble those seen during the dot-com bubble, leading to fears of a similar outcome [10][12].