As 2024 unfolds, Wedbush anticipates a transformative "Year of AI" poised to elevate tech stocks.
Highlighting the pivotal role played by Jensen Huang of Nvidia (NASDAQ:NVDA) and Microsoft/OpenAI in igniting an AI revolution reminiscent of the Internet's inception in 1995, the stage is set for substantial growth, according to analysts at Wedbush.
Microsoft (NASDAQ:MSFT) emerges as a frontrunner in the AI arms race, leveraging Azure and the promising Microsoft Co-Pilot for significant monetization opportunities. Meanwhile, Google (NASDAQ:GOOGL) is gaining prominence as a major Generative AI player, earning recognition from Chief Information Officers for advancements in its core technology platform.
“Both Microsoft and Google appear to be in the AI driver’s seat which we think will be a battle over the next decade as we expect other technology companies such as Amazon, Meta, Nvidia, Apple, and other tech stalwarts along with smaller players in the industry to collectively spend billions in this AI arms race over the coming years,” analysts said.
Overall, the key driver remains the burgeoning global demand for AI applications, a trend substantiated by Wedbush's enterprise survey findings.
“Use cases lead to the pot of gold at the end of the rainbow.50%+ of all enterprises we have recently surveyed see 20+ use cases for Generative AI and 80%+ of all enterprises see 10+ use cases including data analysis, marketing content creation, document editing/summarization, and many more,” analysts added.
Analysts also see potential for “a tidal wave of M&A in the software and chip sectors in our view by both financial and strategic players.”
Wedbush’s bull case for the tech sector assumes 25% gains in 2024, which translates into Nasdaq rallying to hit $20,000.
“The Street is still significantly under estimating how quickly this AI monetization cycle is playing out among enterprises in the field,” analysts concluded.