Transcript:
Caroline Woods
We couldn’t let the biggest week for tech earnings pass without checking in with one of the biggest bulls on Wall Street. Dan Ives joins us now. He’s managing director and senior equity research analyst at Wedbush Securities. Dan, always great to have you on.
Dan Ives
Always great to be here.
Caroline Woods
So Dan, you said this quarter was a prove it moment for AI. What specifically did it prove to you.
Dan Ives
To prove that demonization is just starting in terms of their. If you look at big cloud growth numbers, Amazon, Google, Microsoft, I think that was as robust as we’ve ever seen. Relative. Right. I and I think when you look especially at Microsoft, that shows from the enterprise in terms of what adoption looks like. And then cherry on top of the sundae is Apple, where, you know, New York City cab driver was bearish in Apple.
Dan Ives
And now look at that quarter. Look at the growth next quarter. So I think when you put it all together pause go into the weekend. Very happy the bears. They’ll be in hibernation mode in their caves looking for some bad news over the weekend.
Caroline Woods
If it’s early innings for the AI trade, what is it for the stocks though? Because obviously stocks are forward looking. Are we earlier or are we later than that.
Dan Ives
I look I mean it’s year three of an 8 to 10 year build out from the AI revolution. So I get that we’re going through some bifurcation in terms of some of the stocks. But the reality is that we believe tech stocks are up another 1,215% rest of the year. And I think you have a lot of money coming off the sidelines that’s going to start to go to derivatives second, third, fourth, third.
Dan Ives
That’s why you see names like Intel doing what it’s doing or Cisco doing when it’s doing. I think you’re going to continue to see this play out over the coming months.
Caroline Woods
But to your point, there has been this bifurcation even within the Mac seven, we have Tesla, Microsoft actually a lower a year to date. So if the AI trade just got reconfirmed, where does new money go today?
Dan Ives
Yeah. But to that point you also need to see monies each. And they give you a capacity in building out their fiscal strategy when it comes to autonomous robotics. You know obviously cyber tab. You look at Apple just starting the strategy in terms of, you know going back. And obviously I think that’s going to be a golden era for them.
Dan Ives
But you want to put money in Google in Microsoft I believe meta is way oversold here. And of course in Nvidia this is all just leading up to where it’s going to be. Just a robust quarter for Nvidia. And I think the new thing that’s a $6 trillion mark. 2027.
Caroline Woods
Outside of the Meg seven. What stocks should definitely be in an everyday investors portfolio at this point.
Dan Ives
I think it’s a derivative of chips. Right. When we come back from this AMD to micron, from a software perspective unique about Palantir, snowflake, Salesforce I think ServiceNow way oversold in terms of what we saw last week. But then it’s about the derivatives, right, in terms of energy and renewables. The irony is I think you’re just starting to see what, to me are going to be the sort of second, third and fourth derivatives of the AI revolution playing there.
Caroline Woods
Where could investors get hurt chasing this, though?
Dan Ives
I think investors could get hurt in trying to understand where there’s fraud. Just because a company says that they’re doing, I just mean that they’re and I, I think it’s it’s separating out what the demand, what the mind edition looks like. And we’re going to be the winners, especially when it comes to infrastructure software. And I think and we have our, our eyes power of 30.
Dan Ives
You know, research that we put out to me it’s about derivatives that are going to continue to play out across software, across the infrastructure, across power. But that’s also why I believe, like you’ve talked about, just about Nasdaq 25,000 will give me to my Nasdaq 30,000 in the next 12 to 18 months.
Caroline Woods
So when you were last on in March, though, when oil was in the 80s, you said, if this war goes into late April, May, into the summer, it could start to dent some growth. So now with oil above 100, is that risk starting to show up? I mean, it certainly doesn’t look at as I see the S&P 500, you know, at well over now 7200 right now.
Caroline Woods
But when does that risk start showing up. Have you moved your timeline out.
Dan Ives
Well for me it was being in Egypt for two weeks. I mean, we didn’t see any really major supply issues. And I actually think it extends out further. I mean, you’d have to see this go into June, July to, to really make it. Then from a supply perspective. And I also think investors are kind of gaming out the like a cease fire ultimately will lead to some resolution.
Dan Ives
The long curve when it comes the oil is still I think called sub $8,790. And then it just you will get the tax. The I revolution is spending you cannot deny. And I think that’s the one thing from this week. It’s about the monetization of validation of the thesis.
Caroline Woods
What’s the one thing that could break the eye trade over the next 6 to 12 months?
Dan Ives
Power shorter. It’s it’s that, local communities go down to the centers. They don’t want to see their electricity bills go up. There’s a lot, you know, whether it’s a real estate worries or, you know, things on the local side, I think those are probably some of the biggest risk, because right now, when it comes to I, you need data centers, you know, so that’s why a lot of times we were talking when we were in D.C. and there’ll be politicians there with me with, you know, say, well, we don’t want to be the center in our state or in our municipality.
Dan Ives
The reality is the data centers are the hearts and minds of the Arab region.
Caroline Woods
Okay. All right. What name looks closest to fully valued right now? Damn.
Dan Ives
Well, I think some would say Intel, you know, in terms of that. But look, I still believe it’s like when you seen that second, third derivative. That’s one I don’t think you could say it’s $4 and three. You got to see if they’re able to continue to execute how they ultimately would, I believe, become a bigger player in this sort of second, third derivative trades and chips, I mean, work, you know, in terms of Musk in Terra Fab and obviously we’re in Intel.
Dan Ives
So I look it just speaks to my view. You can just look at these stocks and see they’re expensive. And you can see SanDisk is expensive because of historical because you’re in a memory of that.
Caroline Woods
So if a retail investor is buying an AI stock today are they early. Are they late or are they right on time?
Dan Ives
I’d say it’s third in and two out in terms of beginning, but obviously depends where. Because look software is still you know I think obviously software’s still been pretty way oversold relative to what we’ve seen. So I think software needs derivative trades. It plays out.
Caroline Woods
Okay. Before we get to this or that, Dan, we have some audience questions and we’re going to have to do those rapid fire as well because I want to make sure we hit all of them. So let’s do.
Dan Ives
This for total cyber to us coordinated us coordinating I think is very is very is very important. I knew I.
Caroline Woods
Had to wear color, but but we did hit the nail on the head there. Dan, does alphabet have more room to run?
Dan Ives
How much more room to run? I think it could have 3,040% upside from here is the cloud and the advertising strategy plays out. Gemini. We’re not we are not done with this. I mean, I think we’re still early days single.
Caroline Woods
Best way to play I give me one name.
Dan Ives
Godfather Bay Island media.
Caroline Woods
Who has the best AI strategy?
Dan Ives
Right now? It’s Google relative to what they’ve done on the consumer side. On Gemini cab backs, I think they’re firing on all cylinders.
Caroline Woods
Okay, we have another question saying give me three undervalued midcap tech stocks.
Dan Ives
I’d say haggis systems, which I view is actually a derivative sort of I mean, I think on security I look at my board and that is one that kind of sticks out a bit. And then, you know, I look I continue to think in cybersecurity, I think some of these names have been oversold, like names like tenable. The ruinous would be examples.
Caroline Woods
Is Palantir still a buy here.
Dan Ives
It’s it’s in my opinion going to $1 trillion next 2 or 3 or look Palantir is in software as well in video in the chips as to what Jalen Brunson is in next.
Caroline Woods
There’s a question about Tesla. When do investors see returns.
Dan Ives
But I think by the summer into the fall is where you start to see this return as robotaxi scale. It’s my view right? I think space X is the epitome of positive events and parcel ultimately, and the fiscal strategy plays out going into the rest of this year, 2027.
Caroline Woods
Okay. And then, a rapid fire way to answer how do you navigate volatility in software stocks 88.
Dan Ives
Right. So you have to understand who the winners are and what’s oversold ServiceNow oversold Salesforce oversold I think work that you argue over so so I think you have to navigate. And it’s my view to Oracle that the potential is double in the next 1218 months.
Caroline Woods
And final audience question sound hound AI. Is it a sleeper stock or is it hype.
Dan Ives
No, I think it’s they it’s a real strategy. They just have to execute. It’s not hype. They have to execute on the strategy.
Caroline Woods
Why would you be a buyer here.
Dan Ives
Oh look we’re that that that’s a longer term buy and we’re still very positive on it. They just need to navigate and execute and organically okay.
Caroline Woods
All right. So that’s the the end of the audience questions. Time for my rapid fire this or that questions. You ready Dan.
Dan Ives
Yeah let’s go.
Caroline Woods
Here we go. One word for big tech earnings season.
Dan Ives
Goes.
Caroline Woods
Meta or Microsoft.
Dan Ives
Microsoft.
Caroline Woods
Who gets the cloud crown Microsoft or Google.
Dan Ives
Or Google.
Caroline Woods
Nvidia here. Buy more or take profits.
Dan Ives
Find more.
Caroline Woods
Best Meg Severn name to own after earnings.
Dan Ives
Google.
Caroline Woods
Most undervalued Meg Severn name today.
Dan Ives
Margin that sell off is almost a garage sale so off.
Caroline Woods
Most overhyped I stock right now.
Dan Ives
I don’t see I’m gonna have to take like IQ know I don’t see a massively overhyped I stop.
Caroline Woods
Okay we’ll let you have one pass micron or Intel. Micron Oracle or IBM.
Dan Ives
Oracle but still like that. You know.
Caroline Woods
Salesforce or ServiceNow.
Dan Ives
I still Salesforce here but still like.
Dan Ives
And again that’s where you love that.
Caroline Woods
A software a name better than Salesforce.
Caroline Woods
Palantir one Midcap I name nobody’s talking about.
Dan Ives
Hey get systems.
Caroline Woods
Dell or Lam Research.
Dan Ives
Yeah.
Caroline Woods
When there’s a pullback one must buy dip for retail investors.
Dan Ives
Well I mean to me it’s really it’s it’s cloud names like the Microsoft okay.
Caroline Woods
So there’s an opportunity here. If you can only invest in one IPO space anthropic or OpenAI.
Dan Ives
Look I think they’re all going to be super successful. But obviously space that’s the one that I think is going to be a category defining.
Caroline Woods
And finally, biggest AI winner over the next 12 months.
Dan Ives
I believe it’s bound.
Caroline Woods
All right. We’ll leave it there. Dan Ives, I want you to come back soon. I didn’t get to talk about Apple’s new CEO. We didn’t get to talk about a possible SpaceX Tesla combo. So we need to get back to that. But. Oh, Max, thank you so much.
Dan Ives
Thank you so much.
Caroline Woods
If you enjoyed this street talk, check out our full interview with Bill Ackman where he walks through his new fund and why he’s putting money to work at all time highs.
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