Wedbush stated that the technology company earnings season should serve as an affirmative signal for the artificial intelligence (AI) bull market led by large-cap tech firms. An analyst team led by Dan Ives commented, "Looking ahead to 2026, investors are both excited and apprehensive about the AI revolution. On one hand, this is the blueprint for the fourth industrial revolution... On the other hand, the trillions of dollars in investment required for the enterprise/consumer AI revolution are also making investors nervous." The analysts believe both perspectives may hold merit, ultimately indicating that 2026 will be the inflection point year for the AI revolution, with the crucial fourth-quarter tech earnings season fast approaching. Ives and his team stated, "We believe tech stocks will deliver strong results in the Q4 earnings season, led by the big tech players. Based on our field checks, demand from AI enterprises was very robust this quarter for cloud computing giants Microsoft (MSFT.US), Alphabet (GOOGL.US), and Amazon (AMZN.US)." The analysts noted that while some investors still question the valuation and pace of tech spending trends, they contend that Wall Street continues to underestimate the scale of AI expenditure growth. The analysts anticipate that tech earnings will once again validate this viewpoint and are expected to drive a further increase in positive capital expenditure through 2026. The analysts added that their optimistic view is predicated on investors not yet fully appreciating the massive growth wave stemming from an estimated $3 trillion in enterprise and government spending on AI technology and applications over the next three years. The analyst team claimed, "We are currently only scratching the surface of this fourth industrial revolution playing out globally, a revolution being led by tech giants like NVIDIA (NVDA.US), Microsoft, AI standout Palantir (PLTR.US), Meta (META.US), Alphabet, and Amazon." The analysts believe that as the next phase of the AI revolution arrives, tech stocks will maintain strong momentum through 2026. The upcoming tech earnings season will further impact investors, as capital expenditure exceeding $550 billion is currently being progressively deployed. The analysts stated that it is now time for the broader tech sector to participate in this AI revolution, as they believe AI use cases are exploding. The analysts added that the enterprise consumption phase will arrive ahead of schedule in 2026, when LLM models will be fully operational, and the true proliferation of generative AI will act as a significant catalyst for the software industry. Key companies like Snowflake (SNOW.US) and MongoDB (MDB.US) are also poised to benefit from this once-in-a-century fourth industrial revolution. Ives and his team stated, "While the initial step in AI deployment primarily revolved around NVIDIA chips and cloud service giants, it's important to note that we estimate for every $1 spent on NVIDIA, it generates a multiplier effect of $8 to $10 throughout the broader tech ecosystem. We believe Microsoft is accelerating its AI strategy, with the Azure cloud platform positioned to be the star performer."
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