Get ready for a broader AI stock rally that stretches beyond just 7 or 8 Big Tech names, Wedbush analyst says
- Tech stocks' massive run of gains will continue, according to Wedbush's Dan Ives.
- The Nasdaq Composite has already jumped 27% in 2023, powered by investor excitement over AI.
Investors should get ready for another massive, artificial intelligence-fueled rally that powers up tech stock prices, according to Wedbush's Dan Ives.
The analyst said Monday that he's expecting the explosion of interest in AI to start lifting a broader group of tech stocks, with most of the stock market's year-to-date gains currently concentrated in a small grouping of mega-cap names.
"This is the start of a new bull market for tech, and I think ultimately it's going to be broader," Ives told CNBC's "Closing Bell". "It's not just those seven or eight Big Tech stocks – we believe that fundamentals are not just stabilizing, but starting to see upticks for the first time."
AI has emerged as a key tailwind for stocks in 2023, with the explosion of interest in ChatGPT inspiring investors to load up on shares in related companies.
The new investing theme has boosted the benchmark S&P 500 by 13% and the tech-heavy Nasdaq Composite by 27% this year – although most of those returns have come from a select group of blue-chip companies.
Nvidia has jumped 178% in 2023 to become a trillion-dollar company for the first time, while Meta Platforms and Tesla have also racked up triple-digit gains.
The AI boom hasn't yet lifted smaller-cap tech stocks to the same extent – but Ives expects that'll soon change.
In a separate research note published Monday, the analyst predicted that the rise of AI will lead to $800 billion of extra spending this year – and compared the emergence of the tech to the rise of the Internet in 1995.