Davos focuses on AI revolution as tariffs and geopolitics linger, Wedbush says

• Nvidia remains the central force powering AI development, with demand from hyperscalers like Microsoft, Amazon, and Google driving growth, while Palantir emerges as a key beneficiary in AI monetization
• Wedbush estimates approximately $3 trillion in AI-related spending over the next three years from enterprises and governments, with over $550 billion in capital expenditures already underway
• Ives compares the current moment to 'mid-1996' rather than the 1999 bubble, arguing AI-driven growth is in early stages and maintains a bullish stance on technology sector valuations

Summary: Davos Highlights AI Revolution Amid Geopolitical Concerns

Wedbush Securities analyst Dan Ives reports that the World Economic Forum in Davos is primarily focused on artificial intelligence, with geopolitical concerns including tariffs and US-EU tensions taking a secondary role. Following meetings with global tech executives, Ives noted discussions centered on AI investment, adoption, and monetization.

Key Companies and Market Position:

• Microsoft (NASDAQ:MSFT) remains the central force in AI development
• Hyperscalers including Amazon, Microsoft, and Google (Alphabet) are driving growth
• Palantir has emerged as a standout beneficiary in the AI monetization phase

Major Financial Projections:

• Approximately $3 trillion in AI-related spending expected over the next three years from enterprises and governments
• Over $550 billion in capital expenditures already underway
• Ives expects capital expenditure plans to accelerate further into 2026

Market Implications:

Ives emphasized that "the US tech world is dominating the AI Revolution with China a distant second," marking the first time in 30 years the US leads China in technology. He characterized the current moment as a "mid-1996 moment — and not a 1999 moment," suggesting AI-driven growth remains in early stages and isn't fully reflected in technology valuations.

Upcoming Catalysts:

The upcoming Q4 earnings season is expected to validate the AI investment cycle, with Wedbush's field checks indicating robust enterprise AI demand. The analyst anticipates a strong earnings season led by Big Tech companies with significant cloud and AI exposure.

Ives maintains a bullish stance on the technology sector, describing the situation as a "fourth industrial revolution" with real-world AI use cases across software and semiconductor markets expected to expand over the next 12-18 months.