Wedbush's Dan Ives Sees 15% Upside for Tech as AI Cycle Enters 'Third Inning'

Dan Ives, Global Head of Technology Research at Wedbush Securities, has signaled that the artificial intelligence (AI) investment cycle is far from peaking. In a recent interview, Ives characterized the current market phase as the 'third inning' of a nine-inning game, suggesting significant growth potential remains for technology equities. Ives projects that tech stocks could see an additional 15% upside for the remainder of 2026. While the initial surge was driven by the 'Magnificent Seven' mega-cap names, the analyst believes the trade is now expanding into second and third-order derivatives, specifically moving toward hardware, semiconductors, and eventually software and infrastructure. Among non-mega-cap opportunities, Ives identified Palantir Technologies as a primary beneficiary, describing the company as being at the 'epicenter' of the AI revolution. He also noted that 'old-school' tech firms such as Intel, Cisco Systems, and Dell Technologies are beginning to show positive results as the AI trade broadens. The sustainability of this rally likely hinges on corporate capital expenditure. Ives noted that if companies reiterate or increase their AI-related CapEx during upcoming earnings calls, it will serve as a bullish signal. Conversely, any indication of a spending pause or pullback could signal a market top. For investors seeking value, Ives pointed toward software stocks, which have largely lagged behind the broader AI rally. He suggested that this sector could provide a catching-up opportunity if a catalyst emerges, noting that some software-focused indices remain significantly below their previous highs.