Wedbush analysts said the firm believes the tech sector is set up for an acceleration around cloud and AI spending that is still being significantly underestimated by the Street.
The bullish tech analysts declared that "a bullish 2024 year of AI awaits," with cloud and AI-driven spending forecast to be up 20%-25% over the next year, "with use cases now exploding across the enterprise and consumer landscape."
"In our opinion, the new tech bull market has now begun, and tech stocks are set up for a strong 2024 with tech stocks we expect to be up 25% over the next year, led by Big Tech as the AI spending tidal wave hits the shores of the broader tech sector," the analysts said. "We believe now the rest of the tech sector joins the Magnificent 7 party in this rally into 2024 with AI tailwinds abound."
The firm claims that its recent checks in the field have shown that AI monetization has begun to positively impact the tech sector, with Nvidia, Microsoft (NASDAQ:MSFT), Google, Datadog, and Palantir (NYSE:PLTR) all showing AI use cases are multiplying across the enterprise and consumer landscape.
As stated in previous notes, the analysts said they "view AI as the most transformative technology trend since the start of the Internet in 1995 and believe many on the Street are still 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 and Redmond leading the way."
Webush's favored tech names are still Apple (NASDAQ:AAPL), Microsoft (MSFT), Alphabet (NASDAQ:GOOGL), Palo Alto Networks (NASDAQ:PANW), Palantir (PLTR), Zscaler (NASDAQ:ZS), CyberArk Software (NASDAQ:CYBR), CrowdStrike Holdings Inc. (NASDAQ:CRWD), and MongoDB (NASDAQ:MDB).