Heading into year end, Wedbush Securities global head of technology research Dan Ives thinks Microsoft and Nvidia will continue to be the leading stocks to own in the artificial intelligence revolution. After driving most of the year’s rally, AI stocks have faltered in recent weeks as Wall Street has debated whether tech stock valuations have surged to unsustainable levels. While some investors believe that these high-flying tech names will face an inevitable reversal, others think that there’s still more room for them to climb from here. Ives sits in the latter camp. In a Tuesday note, he said that although Big Tech capital expenditures are set to be in the $550 billion to $600 billion range for 2026, he expects to see a “tidal wave” of AI-related spending from governments and the world’s largest corporations. Ives added that “it is still very early days in the AI revolution.” “This is NOT an AI Bubble in our view: 1) given we are have not even seen the consumer AI Revolution start yet, 2) autonomous is just beginning, 3) robotics is still in the lab and about to hit mainstream the next few years, 4) less than 5% of U.S. enterprises have truly gone down the AI strategic path, and 5) globally the AI Revolution is just starting to play out,” he wrote. “We believe this is a 1996 Moment…and NOT a 1999 Bubble Moment and remain firmly bullish on tech stocks into year-end and 2026 despite recent investor bearish fears.” Ives also shared his top tech stocks to own into the year’s end. His top five stock picks are shown in the table below: Microsoft is Ives’ No. 1 stock, writing that the tech titan is the “best positioned hyperscaler for AI enterprise deployments.” Bernstein reiterated its outperform rating on the stock on Tuesday as well. The investment firm noted the stock’s drop from its highs as a strong entry point, and also highlighted the name as a key holding for investors. “Microsoft is positioned to be one of the major winners in Gen AI and yet the stock has been down significantly recently, even after a positive resolution to the OpenAI negotiations and a solid quarter,” wrote analyst Mark Moerdler. “After having spent time with the company we believe the concerns are either overstated or simply wrong and the company should be able to drive sustained strong revenue growth and solid margins for [more many] years to come.” Shares of Microsoft have popped 12% this year. Bernstein’s $645 price target implies 26% upside. AI poster child Nvidia was another name on Ives’ list. The investor said that the company was manufacturing the “one chip in the world fueling the AI Revolution.” However, shares of Nvidia were trading nearly 5% lower in Tuesday’s premarket session after The Information reported, citing sources, that Meta Platforms was considering spending billions of dollars on Alphabet’s AI chips. Shares of Alphabet, which clocked in at number eight on Ives’ list, added 4%. Electric vehicle maker Tesla was another name that Ives highlighted as being “on the doorstep” of a future in autonomous and robotics. Shares of Tesla have added 3% this year. Mizuho this week reiterated its outperform rating on Tesla, although it lowered its price forecast to $475 from $485 due to weaker electric vehicle markets in the U.S. and China. However, this revised target still implies a 14% upside from here. “However, we would note that we continue to see strong LT tailwinds with humanoid robotics, autonomous driving, and robotaxis still in very early stages of their respective ramps,” Mizuho analyst Viyaj Rakesh wrote. Palantir and AMD rounded out Ives’ top five stock picks.
