Tech investors have had a bruising week, and the sell-off across big artificial intelligence names has sharpened nerves.
Tesla Inc (NASDAQ:TSLA), Microsoft Corp (NASDAQ:MSFT), Palantir Technologies Inc (NYSE:PLTR) and Nvidia Corp (NASDAQ:NVDA, ETR:NVD) all took hits as markets shifted into risk-off mode, a turn made sharper by the curious reaction to Palantir’s latest results.
The company delivered growth that comfortably beat Wall Street forecasts, only for the shares to sink the next day, fuelling talk of an AI bubble and adding to concerns about Nvidia’s China exposure and the swirl of speculation around OpenAI’s future.
Wedbush is urging investors not to bolt for the exits.
The firm characterises the turbulence as a short-lived bout of panic rather than the start of a broader retreat. In its view, the backdrop for the sector remains strong, with the AI theme still drawing heavy investment across consumer and enterprise markets.
It argues that the tech bull run has further to go and that the remainder of this year could still see a meaningful rally.
The broker points to several markers supporting that case. Cloud revenue from Microsoft, Amazon and Alphabet was notably firm during the third quarter, and capital spending plans from Meta and other giants suggest a sizeable step-up ahead.
Wedbush believes Big Tech capex could reach as much as $600 billion in 2026, well above the estimated $380 billion expected this year. It regards Palantir as a reliable gauge of enterprise adoption of AI, noting that its US commercial growth comfortably topped expectations.
Nvidia remains central to the story. Wedbush sees the company as the linchpin of the AI ecosystem, estimating that every $1 spent on Nvidia generates $8 to $10 of additional outlay across the wider tech sector.
With its next set of earnings due, the broker expects another strong update that would reinforce the scale of demand and steady investors’ nerves after a jumpy spell.