Dan Ives makes bold tech prediction as AI boom enters 'second inning'

Tech stocks are abet shut to narrative highs, however Dan Ives says that is nice the starting up. The Wedbush analyst joined TheStreet to bid why the AI bull market is mighty from over, and which names may lead the next leg increased.

Associated: Veteran Wall Highway firm makes surprise call on tech stocks

Beefy Video Transcript Below:

CAROLINE WOODS: Becoming a member of me is Dan Ives, Managing Director and Senior Equity Compare Analyst at Wedbush Securities. Dan, Thanks so mighty for being here.

DAN IVES: Great to be here. Taking a watch forward to it.

CAROLINE WOODS: Dan, tech has had this if truth be told spectacular restoration off the April lows. It be shopping and selling at or shut to all time highs. What's your outlook for the the relaxation of the year?

DAN IVES: I judge we will proceed to indulge in a examine new highs. And we now indulge in talked about you can be having a watch at S&P doubtlessly 7,000 and NASDAQ. I judge there'll be one more 15% increased because watch or no longer it is our behold, the AI revolution is nice hitting its next stage of sing from instrument to user to if truth be told the the relaxation of the provision chain. And even supposing we indulge in tariffs and obviously geopolitical, I judge or no longer it'd be a anguish on rather valuable going into the summer season moreover because the the relaxation of the year.

CAROLINE WOODS: So what's it that will get the S&P to 7,000 and the NASDAQ up one more 15%?

DAN IVES: It be numbers. I imply, I good factor in Highway's underestimating numbers doubtlessly for 2d half of the year, however particularly into next year by upwards of 10% to 15% I judge numbers hunch a lot increased on memoir of the spending, and because we will indulge in a examine 2 trillion of incremental exercise next three years. And even whereas you happen to begin as a lot as factor in now, sovereigns are starting up to be conscious at AII you watch at that spreading geopolitically, no subject about a of the uncertainty there, you is liable to be going to begin as a lot as indulge in a examine it pop up more internal Asia, internal Center East. And that's the explanation bullish for Nvidia (NVDA) . Bullish for Microsoft. Bullish for Palantir (PLTR) . Which speaks to my behold. Whilst you focal point good on one year PE valuations you overlooked every transformational tech stock for the final Twenty years.

CAROLINE WOODS: You discuss it going into next year. How carry out you watched or how long carry out you watched the total tech bull market is going to final?

DAN IVES: I judge or no longer it is one more three year bull marketplace for tech because watch, or no longer it is our behold. It is a fourth Industrial Revolution that we're residing in, and we're good in the bottom, first, top, 2d inning of the attach AI is going. And now or no longer it would unfold all around the board to diverse whether or no longer it is cybersecurity, whether or no longer it is diverse ingredients of instrument, whether or no longer it is infrastructure on the potential aspect in phrases of nuclear and others. And that's clarification why I factor in, I imply, that, , I in finding why some in finding concerned on valuation, however I factor in we will be talking about issues esteem NASDAQ 25,000, , over the next call it 12 to 18 months.

CAROLINE WOODS: What's the specter of tariffs at this point. Because previously you had referred to it as an financial tariff Armageddon. And these sever-off dates are drawing method. So how big of a anguish are they now?

DAN IVES: Yeah however my behold then. I imply, take into accout there indulge in been some provoking weeks ministrations backed off deal in phrases of China. And I judge you can quiz these descale extra in phrases of ultimate tariffs. And I judge the Trump administration's acknowledge and I've viewed it, , being in DC a couple of times perchance in the origin what they're making an strive to in finding. They had a backpedal. And I judge that's what the market is factoring in moreover. You may per chance indulge in a baseline 10% tariff. You may per chance indulge in some incremental reciprocal tariffs. Nonetheless that's no longer deal transferring the needle here. I moreover judge the largest thing is the united states-china change deal on the desk. And that's the explanation something particularly for Nvidia. Whenever you claw abet 50, 60% of that China industrial that they've if truth be told handed to Huawei.

CAROLINE WOODS: I am uncommon, how is your AI playbook altering for the 2d half of the year, particularly now that you just if truth be told are centered on this golden age of instrument, as you call it?

DAN IVES: Yeah and watch, and that speaks to our lives. I the 30 names we now indulge in acknowledged the derivatives all over. Whenever you watched about 2d third derivatives of AI, or no longer it is if truth be told about instrument. I imply, I carry out behold it as a golden age for instrument, from the hyperscalers to names esteem Oracle, IBM (IBM) , of direction, led by names esteem Palantir, which I factor in Palantir is going to be dollar trillion market cap next two to about a years. Nonetheless the exercise circumstances are taking part in out, and likewise you handiest indulge in 3% of us enterprises that indulge in long previous down the AI direction. And that's clarification why the Bears, they're sitting there of their caves and hibernation mode. They are able to't quiz AI and spreadsheets.

CAROLINE WOODS: I are making an strive to focal point on Tesla (TSLA) because I do know you took about a rides in the Robotaxi final weekend. You stated it exceeded your expectations, however no longer ample for you to interchange your ticket target on Tesla shares. So I am uncommon about if it exceeded your expectations. Why doesn't that affect your ticket target?

DAN IVES: Yeah, I imply watch our crew being able and obviously is a moderately exclusive. Now not many people bought rides on Sunday. I going into it, we opinion it become going to be 8 out of 10. It become a 10 out of 10, because what I factor in become the maneuverability in phrases of the protection, the actual person abilities, watch, they'll indulge in tempo bumps, they'll indulge in points, and all these points will proceed to be scrutinized. Nonetheless the explanation we're no longer elevating ticket target here or anything else esteem that is because as they present it out because the geofence scales in Austin, as they hunch to more cities, I judge more merchants are going to acknowledge self reliant is dollar trillion market opportunity for Tesla. Nonetheless it speaks to our $2 trillion valuation for Tesla. And watch and I in finding haters will abhor. Nonetheless I judge they're if truth be told going to be the driver of self reliant globally.

CAROLINE WOODS: Nonetheless Dan they did starting up up small to your point, they required security monitors in the autos. There may be already regulatory scrutiny over about a of the points with the auto. So it doesn't seem esteem a extraordinarily quick ramp. So I judge the huge demand is, can they ramp quick ample to compete with competitors esteem Waymo?

DAN IVES: Yeah and watch, I'd rather them carry out this in phrases of security first. Inch off behind, geofence slowly create it out because they know I imply, if they bustle over a squirrel that is liable to be world data proper? So so that they bought to be careful. Nonetheless my behold on Waymo I imply esteem Waymo is in four cities now doubtlessly 5. There are $230,000 autos. Cherish no person may scale the technique Tesla can. And I judge that's something that's good no longer being factored into the stock in my behold.

CAROLINE WOODS: In phrases of the DOGE fallout. How mighty stamp and reputational damage carry out you watched become performed to Tesla? How long does it take to increase from that. And the method big of a anguish is Musk no longer necessarily taking part in nice with President Trump?

DAN IVES: Yeah watch 5% to 10% doubtlessly eternal brain damage in phrases of, 5% 10% of perchance shoppers that will never aquire a Tesla, proper? I judge that will finally fade about a of that internal the US, which is why it speaks. It become so predominant for Musk to distance himself from Trump and DOGE. I judge Europe, the logo points are doubtlessly more unfavorable than perchance in the US, and I judge we're seeing that in about a of the numbers. Nonetheless watch, I imply, it came about, proper? I imply, DOGE took on a life of its comprise. And I judge, , Musk acknowledged that. I carry out factor in in phrases of Trump, there's a cordial relationship. I judge I carry out judge they change into kind of pleasant, , slowly again. I don't behold that as a bad. I judge Trump is going to proceed to be a supporter of self reliant, the Musk imaginative and prescient. Nonetheless watch, that is going to be some work ahead, proper? Specifically in phrases of stamp title and a few of the dear points that they are having in Europe, in us moreover as in China.

CAROLINE WOODS: We'll in finding Q2 deliveries for Tesla next week. What carry out merchants must prepare for. Because I judge for total Q1, you described it as a catastrophe. What carry out you watched you can exercise to picture Q2?

DAN IVES: Yeah, I judge Q2 become esteem, or no longer it'd be, , nothing to write dwelling about, however perchance a small bettering. I imply, no subject, call it 375k, give or take. Nonetheless it speaks to my behold that esteem 90% of the narrative is ready AI, self reliant robotics going forward. Watch, you is liable to be going to indulge in to indulge in refreshes and likewise you can quiz them. And that may assist in phrases of from a question point of view. Nonetheless I judge proper now the purpose of passion is much less bad numbers. And then if truth be told using self reliant in AI.

CAROLINE WOODS: Microsoft continues to hit New all time highs Dan. And you is liable to be getting more bullish. You good raised your ticket target on Microsoft to $600. Recount us why.

DAN IVES: I imply I judge Microsoft in phrases of that is we will be talking about 4 trillion sooner or later $5 trillion because or no longer it is of their yard in phrases of AI. I judge this when I watch on the stack, the I stack industrial cloud sing I judge is going to proceed to massively tempo up. We're seeing more and more Microsoft prospects hunch beefy in on the stack. And that's the explanation something the attach handiest 20% of Microsoft at the moment is what I behold as Cloud Subsequent Gen Cloud Subsequent Gen AI. As that turns into 5,060% and that's the explanation if truth be told a total revaluation that's going to happen in the title 600 I finally judge is perchance conservative.

CAROLINE WOODS: Is Microsoft an Azure strength on the expense of Amazon AWS and Alphabet Google Cloud even though? Because you is liable to be moreover bullish on these names.

DAN IVES: Yeah watch I judge there Microsoft's clearly main in phrases of hyperscale and involves cloud. I carry out judge AWS Google they've had success starting up as a lot as slender the gap, however it completely's no longer a zero sum game. I imply, you is liable to be going to indulge in all beneficiaries here. Nonetheless absolute self belief esteem Microsoft and Nadella are main in phrases of the infrastructure. In phrases of hyperscale. And that's the explanation been an gigantic part of their success. And I don't quiz that slowing down. I judge merchants are good starting up to acknowledge now the next leg of this Microsoft narrative, as you hunch into that golden age of instrument.

CAROLINE WOODS: Dan, there's unexcited hundreds of Magazine seven names in destructive territory. Year to this point and well to attach the highs. Apple (AAPL) , Alphabet (GOOGL) , Tesla, Amazon (AMZN) . Put you watched or no longer it is a ways time to regroup them because they're no longer necessarily gorgeous proper now?

DAN IVES: Yeah no longer gorgeous however every of them indulge in diverse headwinds proper. Apple if truth be told nowhere in phrases of AI. Google the words that AI is going to cannibalize search I judge that's doubtlessly overdone moreover as perchance about a of the regulatory. I judge Amazon is perchance the actual person that I factor in that has the clearest road ahead in phrases of the attach I finally quiz them coming into into phrases of e-commerce moreover as AWS in phrases of about a of the success. So that you just may me, I don't judge you regroup them. I good judge these indulge in non-public scenarios, including tasks that they've to navigate. OK good like a flash, because I do know we're practically out of time.

CAROLINE WOODS: Whenever you watched regarding the largest beneficiaries of AI from here, would you rather aquire Nvidia at all time highs or Apple more than 20% off the highs?

DAN IVES: You are going to rather comprise Nvidia good because there's handiest one chip on this planet, and that's the explanation led by the godfather of AI, Nvidia. And that's the explanation no longer stopping. That's why we're talking about 4 trillion and will finally be $5 trillion market cap.

CAROLINE WOODS: And should it is possible you'll handiest aquire one tech stock total proper now, what would or no longer it is?

DAN IVES: You comprise Palantir. Palantir to me, huge AI. And if truth be told, I factor in main the AI revolution in phrases of the instrument aspect. And I judge that's dollar trillion market cap in the next two or three years.

CAROLINE WOODS: OK Dan Ives, always esteem your insights.