Wedbush said checks from its Asia trip showed bullish sentiment for the “AI Revolution” and chip demand accelerating into 2026.
“In a nutshell, we are seeing clearly accelerating chip demand in the field for Nvidia as we estimate the demand to supply ratio from enterprises for Nvidia’s next generation GPUs are approaching 10:1 which is a staggering number which speaks to how early this AI Revolution is in its life cycle,” said analysts led by Daniel Ives.
The analysts noted that the demand trends bode very bullish for Taiwan Semiconductor Manufacturing (NYSE:TSM), Advanced Micro Devices (NASDAQ:AMD), and ultimately Intel (NASDAQ:INTC) as well among others, with the AI cap-ex super cycle set to roll on and benefit the core chip players with Nvidia front and center.
The analysts added that supply chain checks are seeing no signs of cracks and to some extent its the opposite as the demand trajectory is way quicker than many across Taiwan and the broader region expected at this point.
“We view this is [as] another green light sign to be bullish on tech into earnings season as we expect 3Q tech earnings season to match/exceed the AI hype in the market and drive stocks higher into year-end with this tech bull market still having a lot of runway ahead in our view into 2026,” said Ives and his team.
The analysts noted that we have seen many major eight figure enterprise AI projects being given a green-light ahead of time, which is a clear bullish sign for hyper scalers Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN) and Alphabet’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google.
Oracle (NYSE:ORCL) is well positioned on many of the major enterprise and government deployments which speaks to why we believe it is still early days in the Oracle renaissance of growth taking place this year with strong momentum into the next few years, the analysts added.
“While there continues to be clear tensions in the region with the trade war battle royale going on between the US and China, it’s clear this is not slowing down underlying demand for these golden Nvidia chips fueling the AI Revolution,” said Ives and his team.
The analysts believe tech stocks will be very strong into year-end and could be up another 10% plus into the rest of the year as the next part of “this AI Revolution takes hold” with upcoming techearnings season further swaying investors.
“In a nutshell, there are concerns among investors in the region around the on again/off again US/China tensions and this remains an ongoing soap opera as we saw manifest last week. There clearly could be hiccups ahead on the trade war tensions, but we instead focus on the sheer demand, AI use cases, supply chain feedback to further confirm our bullish view of the AI Revolution,” said the analysts.
Ives and his team said that their top tech picks heading into the earnings season and year-end are — Microsoft, Nvidia, Apple (NASDAQ:AAPL) Palantir Technologies (NASDAQ:PLTR), Tesla (NASDAQ:TSLA) and Alphabet.