Wedbush has told clients to treat this week’s tech wobble as a buying opportunity, arguing the “AI Revolution” remains in its early stages and will drive trillions of dollars of investment over the next few years.
Tech shares have come under pressure amid talk of stretched valuations and uncertainty around tariffs, US chip restrictions and government stakes in semiconductor groups.
But Wedbush’s analysts, led by Dan Ives, said the pullback was familiar market noise: “We are still in the early days of the AI Revolution … this tech bull market is being fuelled by the biggest transformational spending cycle in 40 years.”
Nvidia, the chipmaker at the heart of the boom, reports results next week. Wedbush said demand for its processors outstrips supply by ten to one, describing them as the “golden chips” of the AI build-out.
It expects earnings to act as a fresh catalyst, noting that Nvidia has reopened access to China under what it calls a “pay-for-play” model, where sales attract a 15% fee to Washington. AMD is also tipped to benefit.
So far, the bulk of spending has come from a small group of US technology giants, which will pour almost $350 billion into capital expenditure this year.
Wedbush expects that to broaden as more companies and governments commit funds. Saudi Arabia and the United Arab Emirates are cited as examples, with plans to work with US hyperscale cloud providers to construct vast AI-powered data centres.
The broker also highlighted Palantir, the US software group, which it believes could reach a $1 trillion market value within two to three years thanks to what it called its “AI secret sauce”.
It acknowledged that valuations are demanding but cautioned investors not to focus too narrowly on near-term multiples: “If you focus solely on valuation looking out a year … you would have missed every transformational growth tech stock in the last 20 years.”
Wedbush’s conclusion is that volatility is inevitable but temporary. The firm urged clients to use pullbacks to accumulate positions in what it calls the “core winners” and its basket of 30 favoured AI names.
“The tech bull cycle will be well intact for another two to three years,” the note said, pointing to a wave of spending on infrastructure, chips, software and power supply.