Wedbush expects a robust second-quarter earnings season for the technology industry, with spending on artificial intelligence and cloud computing serving as the primary drivers.
According to Zhitong Finance APP, Wedbush anticipates strong second-quarter earnings performance in the technology sector, driven primarily by expenditures in cloud computing and artificial intelligence. The top five tech stock recommendations for the second half of the year are: NVIDIA (NVDA.US), Meta (META.US), Microsoft (MSFT.US), Palantir (PLTR.US), and Tesla (TSLA.US).
The analyst team led by Daniel Ives believes that technology stocks will perform strongly in the second half of the year, anticipating a robust earnings season for the technology sector. Simultaneously, the “impetus of the AI revolution” is accelerating in semiconductors, software, and both enterprise and consumer sectors.
The analysts stated, “We believe the market underestimates the robust growth driven by AI. We expect a very strong second-quarter earnings season for technology stocks in the coming weeks, which will further validate our bullish stance on the major technology giants.”
The analysts noted that their optimism stems from the fact that investors have not fully recognized the “wave of growth” from $2 trillion in spending on AI technologies and applications by enterprises and governments over the next three years.
Ives and his team stated, “Our current understanding of the fourth industrial revolution unfolding globally, led by major technology giants such as NVIDIA, Microsoft, Palantir, Meta, Alphabet, and Amazon, is still quite limited.”
The analysts added that, after several relatively strong months (during which they successfully navigated challenges related to tariffs and geopolitical issues), technology stocks are poised for another significant rally in the second half of 2025. This rally will be spearheaded by the top performers in the “golden age of technology.”
Analysts point out that 2025 marks a turning point in the development of generative artificial intelligence for enterprises. As more companies begin to apply AI in actual production (transitioning from the concept phase to large-scale application), widespread adoption is already underway, and these companies are also seeking to invest in AI to reduce costs and boost productivity.
The analysts state: ‘Looking ahead, the key will be the proliferation of various use cases, which will drive the technological transformation led by software and chips throughout 2025 and beyond. This further validates our argument that the technology bull market and the AI revolution will deepen over the next 12 to 18 months.’
Ives and his team believe that the Trump administration’s hardline stance on tariffs will soften, and it will seek comprehensive trade agreements with countries including China, Japan, and India, which will not significantly impact the current state of large technology companies and the AI revolution. Analysts add that NVIDIA’s resumption of H20 chip sales to China this week is a significant strategic positive for the technology industry.
The analysts note: ‘In the early stages of AI applications, the primary reliance was on NVIDIA chips and products from cloud computing giants. Notably, we estimate that for every dollar invested in NVIDIA products, the rest of the technology ecosystem will see returns of between $8 and $10.’