ZINGER KEY POINTS
Wedbush's Ives highlights AI as a '1995 Moment' for tech, with cloud services leading the charge in consumer Internet impact.
Apple remains top tech pick for Wedbush's Ives, expecting strong iPhone 15 cycle and robust China growth to drive future success.
Wedbush analyst Daniel Ives' favorite tech names remain Apple Inc, Microsoft Corp, Alphabet Inc, Google, Palo Alto Networks, Inc, Palantir Technologies Inc, Zscaler, Inc, CrowdStrike Holdings, Inc, and MongoDB, Inc.
Ives noted that this is the most significant technology revolution in the last 30 years, with AI a "1995 Moment," and the fundamental tech growth stories are now starting to see the derivatives of this AI Revolution into 2024.
The impact of the AI cycle on consumer Internet will be massive, and it will start with the cloud service divisions, Amazon.Com Inc's AWS and Alphabet's GCP.
AWS and GCP acquire AI-capable chips, build AI-capable service offerings, and sell those services into their installed bases. He continues to like Amazon, Alphabet, and Meta Platforms Inc as his favorite tech plays.
Apple's narrative quickly changing. Once the dust cleared from Apple's quarter and guidance, investors would focus through the noise around weak iPads, Macs, and FX and instead see iPhone units growing again, with Services back to steady double-digit growth.
Finally, the "iPhone China demise narrative" was a great fictional story by the bears, which is far from reality as underlying mainland China's growth remains strong and a key asset for the core iPhone franchise.
Ives cares about iPhone growth, Services revenue, gross margins, and China iPhone growth, which appears much better than feared, along with positive anecdotal commentary from Cook.
Apple remains Ives' top tech pick with a strong iPhone 15 upgrade cycle playing out into a strong holiday season, which appears to be a good start post-Black Friday weekend.
Heading into 2024, Ives noted that the tech sector will likely accelerate spending around cloud and AI spending that the Street is significantly underestimating.
Ives noted that the new tech bull market has begun, and tech stocks are likely for a strong 2024 with tech stocks we expect to be up 20%+ over the next year, led by Big Tech as the AI spending tidal wave hits the shores of the broader tech sector.
