The artificial intelligence boom is entering a more complicated (and arguably more interesting) phase.
According to Dan Ives, senior technology analyst at Wedbush, 2026 will mark a genuine inflexion point for the AI revolution, with markets forced to reconcile enormous long-term potential with the equally enormous capital required to get there.
In his latest outlook, Ives argues that excitement and anxiety can comfortably coexist. On one side sits what he calls a fourth industrial revolution, with the United States regaining technological leadership over China for the first time in three decades.
On the other is growing unease over the trillions of dollars being poured into chips, data centres and infrastructure before many AI business models are fully proven.
That tension, Ives believes, sets the stage for opportunity. His central call is bold: technology stocks rising more than 20% in 2026 as second-, third- and even fourth-order effects of AI adoption ripple through software, semiconductors and cloud infrastructure.
Autonomous transport features prominently. Tesla is expected to launch robotaxi services in more than 30 cities next year, while beginning volume production of its Cybercab vehicles.
Wedbush’s base-case valuation for Tesla sits at $600 a share, with a bull case of $800, as Elon Musk’s long-promised autonomous vision starts to look tangible.
Consumer technology also takes centre stage. Ives expects Apple and Google to formalise an AI partnership built around Google’s Gemini models.
That could finally give Apple a clear AI roadmap, delivered as a subscription service embedded across its ecosystem, a move Ives believes could propel Apple towards a $5 trillion market capitalisation.
Behind the scenes, infrastructure remains the critical battleground. Ives sees Nebius as the most attractive acquisition target in AI infrastructure, with Microsoft Corp (NASDAQ:MSFT), Alphabet Inc (NASDAQ:GOOG) and Amazon.com Inc (NASDAQ:AMZN) all potential buyers as hyperscalers race to secure capacity.
Cybersecurity is another standout theme. As AI expands the attack surface for enterprises, Ives expects the sector to outperform, alongside heightened merger and acquisition activity. CrowdStrike and Palo Alto Networks are his preferred names.
Notably, some of the most contrarian calls involve incumbents. Oracle Corp (NYSE:ORCL, XETRA:ORC) is forecast to convert its large AI-related order backlog as data centre expansion gains traction, with Ives targeting $250 a share despite what he describes as entrenched scepticism.
Microsoft, meanwhile, is expected to hit a “sweet spot” as enterprises accelerate AI adoption via Azure.
At the hardware level, Ives remains unequivocally bullish on Nvidia, arguing demand expectations remain materially underestimated. He sees potential upside to $275 if access to China improves through US–China trade negotiations.
Finally, politics enters the frame. Wedbush expects the Trump administration to make a direct equity investment into a quantum computing company, with IonQ and Rigetti Computing highlighted, citing national security concerns.
Taken together, Ives’ message is clear: 2026 will test patience, capital discipline and conviction. But for those willing to stomach volatility, the AI revolution is only just getting started.