According to five-star Wedbush analyst Dan Ives, AI stocks aren’t in a bubble. In fact, he says that the AI boom is just beginning. In a recent Yahoo Finance interview, Ives explained that we’re still in the early stages of the AI revolution, with only about 3% of U.S. companies and less than 1% of global companies having adopted AI. So while there’s a lot of hype, actual usage is still in its infancy. That’s why Ives believes we’re far from the kind of overhype seen in previous tech bubbles.
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Instead of being driven by speculation, Ives argues that the high valuations we see today are based on real demand, especially from businesses and governments, along with a tight supply of AI chips. He points out that today’s tech giants, like Nvidia (NVDA) and Microsoft (MSFT), are earning hundreds of billions in real revenue, unlike the dot-com era, where many companies had no products or profits. Nvidia’s chips are in such high demand that even major players like Amazon (AMZN), Alphabet (GOOGL), and Microsoft can’t get enough, which Ives says proves how early we are in meeting actual AI needs.
These Are the 10 Companies Ives Believes Are Essential to the Future of AI
In his latest research, Ives names 10 companies he believes are essential to the future of AI. These are the core players he sees as “category-defining” leaders in the AI economy:
- Microsoft – Expected to benefit the most as businesses adopt AI tools.
- Palantir (PLTR) – A key software provider for governments and corporations using AI.
- Nvidia – Powers nearly every major AI project with its advanced chips.
- Advanced Micro Devices (AMD) – Nvidia’s main rival, likely to gain market share.
- Tesla (TSLA) – Its future growth depends on autonomous vehicles and robotaxis.
- Apple (AAPL) – Positioned to lead in consumer AI through its ecosystem of devices.
- Meta (META) – Early AI investments are starting to generate real returns.
- Alphabet – Its Gemini AI model and in-house chips keep it ahead in the race.
- CrowdStrike (CRWD) – Offers AI-powered cybersecurity that many businesses now rely on.
- Palo Alto Networks (PANW) – Integrates AI across security products to drive growth.
Ives also predicts that total AI-related spending could reach $550–$600 billion by 2026, and he believes most investors are still underestimating how big this could get. In his words, “It was 9 p.m. It’s now 10:30 p.m. in the AI party that goes to 4 a.m., and the bears watch the party through the windows from the outside.”
Which AI Stock Is the Better Buy?
Turning to Wall Street, out of the top 10 stocks mentioned above, analysts think that Nvidia stock has the most room to run. In fact, Nvidia’s average price target of $257.26 per share implies more than 42.8% upside potential. On the other hand, analysts expect the least from Tesla stock, as its average price target of $383.04 equates to a loss of 10.2%.
