A veteran technology analyst says the dissemination of artificial intelligence (AI) technology is just getting started, and that this week’s selloff of tech stocks presents investors with an attractive buying opportunity.
“It’s 10 p.m. in the AI party that goes to 4 a.m.,” Dan Ives, global head of technology research at Wedbush Securities, told BNN Bloomberg in a Friday interview.
“And any of these selloffs, whether it’s (U.S. Federal Reserve), geopolitical, black swan events – they’re buying opportunities. I think we’re in year three of what’s going to be a five-to-six-year tech bull market.”
The recent tech selloff came on the heels of the Federal Reserve signalling on Wednesday that it expects fewer rate reductions next year due to still-elevated inflation levels, though the U.S. central bank did lower its key rate by a quarter point.
Ives said that despite many “bears coming out of hibernation mode” following the Fed’s decision, he expects another strong year from the so-called “Magnificent Seven” tech stocks, and advised looking at other companies that could benefit from an AI bull run, including major software firms.
He added that U.S. president-elect Donald Trump’s incoming administration is likely to support tech stocks next year, as Trump is likely to usher in deregulatory policies that will allow tech companies to pursue more mergers and acquisitions (M&A).
“I think (with) big tech players and financial players, you’re going to see a lot more tech M&A – get the popcorn out,” he said.
“And then I think probably the biggest beneficiary is going to be Tesla and (Elon) Musk, because autonomous is the future, and now that bromance between Musk and Trump, I think is very important… that continues to be one of our best AI plays in 2025.”
Tesla shares have gained more than 75 per cent so far in 2024, and “it’s just the beginning,” Ives argued.
“It’s my view that this was a bet for the ages in terms of Musk betting on Trump, and autonomous is the future,” he said.
“I could argue autonomous is a trillion-dollar valuation alone, and that’s how for Tesla you start to get to what I believe could be US$2 trillion or more.”