Anyone hoping that the artificial intelligence boom might be losing momentum will find little comfort in Wedbush’s latest dispatch from Asia.
Analyst Dan Ives and his team returned from a supply chain tour across Taiwan and the region, brimming with optimism and a few raised eyebrows at just how hot demand has become.
By their count, enterprise orders for Nvidia Corp's (NASDAQ:NVDA, ETR:NVD) next generation of graphics chips are running at roughly ten times available supply.
That imbalance, they say, is “staggering” and proof that the AI build-out remains in its early innings.
The strength of that demand, in Wedbush’s view, bodes well not just for Nvidia, but also for chipmakers such as Taiwan Semiconductor Manufacturing Company, Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) and even Intel Corp (NASDAQ:INTC, ETR:INL), as corporate spending on AI infrastructure powers a fresh capital expenditure cycle.
The analysts see no cracks in the supply chain. In fact, they say the opposite is true: factories across Asia report that demand is running far ahead of expectations, with no sign of easing.
That backdrop leads Wedbush to expect a buoyant third-quarter reporting season for technology companies, potentially matching or even exceeding the “AI hype” that has dominated market narratives this year.
Among large customers, the spending taps are open. The firm highlights “eight-figure enterprise AI projects” being approved ahead of schedule by the likes of Microsoft, Amazon and Google. Oracle, too, is singled out as a beneficiary of major enterprise and government contracts, as the company continues what Wedbush calls a “renaissance of growth”.
While geopolitical tensions between the United States and China remain a potential stumbling block, the analysts do not see them derailing what they describe as the “AI revolution”. Despite fears of an investment bubble, Wedbush’s checks across Asia suggest that demand remains broad-based and underappreciated by investors.
Ives argues that this technology cycle, which he dubs the “fourth industrial revolution”, still has years to run. He likens today’s AI market to 1996 rather than 1999, implying we are at the beginning of a multi-year expansion, not the frothy end of one.
Wedbush expects the wave of investment to continue building through 2026 as new use cases for AI emerge in both enterprise and consumer markets, from robotics to autonomous systems.
That should, they argue, keep pressure on the major tech groups to accelerate rather than rein in their spending.
The firm’s top picks heading into earnings season are a who’s who of Big Tech: Microsoft, Nvidia, Apple, Palantir, Tesla and Alphabet. These companies, it believes, will lead the next phase of growth as AI adoption deepens and capital spending continues to surge.
The tone is exuberant, but Wedbush’s message is clear. Far from peaking, the AI boom may still be gathering pace, and the supply chain, from chip foundries to hyperscale data centres, is bracing for another leg higher.