The market is still underestimating how large and far-reaching the artificial intelligence boom will be, analysts at Wedbush believe.
The analysts reiterated their bullish stance on the sector, highlighting strong earnings from major tech names and growing enterprise adoption of AI.
“Investors are still not fully appreciating the tidal wave of growth on the horizon,” the analysts wrote, pointing to more than $2 trillion in expected enterprise and government AI spending over the next three years.
“2025 so far has been an inflection year within enterprise generative AI as true adoption has begun by going from idea to scale,” they wrote.
The firm’s top picks for the second half of 2025 are Nvidia Corp (NASDAQ:NVDA, ETR:NVD), Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB), Microsoft Corp (NASDAQ:MSFT), Palantir Technologies Inc (NYSE:PLTR), and Tesla Inc (NASDAQ:TSLA).
Nvidia, in particular, remains central to Wedbush’s AI thesis. “There is one company in the world that is the foundation for the AI Revolution and that is Nvidia with the Godfather of AI Jensen leading the way,” the analysts wrote.
“We estimate that for every $1 spent on Nvidia, there is an $8 to $10 multiplier across the rest of the tech ecosystem.”
Wedbush projects Nvidia could reach a $5 trillion market cap by 2026. “This all bodes well for Nvidia,” the firm said.
The analysts also expect the broader software sector to enter a new phase of AI-driven growth.
“Now the time has come for the broader software space to get in on the AI Revolution,” Wedbush noted, pointing to increased use cases, expanding enterprise demand, and widespread deployment of large language models.
“Looking forward, it's all about the use cases exploding, which is driving this tech transformation being led by software and chips into the rest of 2025 and beyond,” the analysts wrote.
Despite macroeconomic concerns, Wedbush sees conditions improving for tech stocks in the months ahead.
“In our opinion after a relatively strong few months navigating tariff and geopolitical storms, now tech stocks are poised to see another major move higher,” they wrote. “The best barometers for the AI Revolution are led by Nvidia, Palantir, Meta, and Microsoft. We have barely scratched the surface.”