New tech bull market has begun on 'tidal wave' of AI spending declares Wedbush

investing.com:

Wedbush tech analysts believe a new tech bull market has started despite worries. They see the set-up in the sector as strong amid a «tidal wave» of AI spending.

«Heading into 2024 we believe the tech sector is set up for an acceleration of spending around cloud and AI spending that we believe is being significantly underestimated by the Street,» the analysts commented. «While IT budgets are expected to be up modestly in 2024, we believe cloud and AI driven spending will be up 20%-25% over the next year with use cases now exploding across the enterprise and consumer landscape.»

The analysts highlight that during this tech earnings season, a prominent trend has emerged — the positive influence of AI monetization on the tech sector. Microsoft (NASDAQ:MSFT), Datadog (NASDAQ:DDOG), and Palantir (NYSE:PLTR) all reported strong results, providing additional validation that AI use cases are rapidly expanding in both the enterprise and consumer domains.

«To this point, we view AI as the most transformative technology trend since the start of the Internet in 1995 and believe many on the Street are underestimating the $1 trillion of AI spend set to happen over the next decade in a bonanza for the chip and software sectors looking forward with Nvidia (NASDAQ:NVDA) and Redmond leading the way,» the analysts add.

The analysts' favorite tech stocks remain Apple (NASDAQ:AAPL), Microsoft, Google (NASDAQ:GOOGL), Palo Alto (NASDAQ; PANW), Palantir, Zscaler (NASDAQ:ZS), Crowdstrike (CRWD), and MongoDB (NASDAQ:MDB).