Wedbush: AI Cloud Computing Spending Drives Growth Surge, US Tech Stocks to See Strong Second Quarter Earnings

Wedbush stated that it expects strong profit performance in the technology sector in the second quarter, with expenditures in the areas of cloud computing and artificial intelligence being the main drivers. Wedbush's top five recommended tech stocks for the second half of this year are NVIDIA Corporation(NVDA.US), Meta(META.US), Microsoft Corporation(MSFT.US), Palantir(PLTR.US), and Tesla, Inc.(TSLA.US). An analyst team led by Daniel Ives believes that tech stocks will perform strongly in the second half of this year, ushering in a strong tech earnings season. Meanwhile, the "driving force of the artificial intelligence revolution" is accelerating in the semiconductor, software, and enterprise and consumer sectors. The analysts stated: "We believe the market is underestimating the strong growth momentum driven by artificial intelligence in the future. We expect a very strong second quarter earnings season for tech stocks in the coming weeks, further demonstrating the validity of our bullish view on the tech giants." The analysts point out that their optimism stems from investors not fully recognizing the "growth wave" expected from the $2 trillion spending on artificial intelligence technology and applications by businesses and governments over the next three years. Ives and his team stated: Our understanding of the ongoing Fourth Industrial Revolution, led by major tech giants such as NVIDIA Corporation, Microsoft Corporation, Palantir, Meta, Alphabet, and Amazon.com, Inc. is still very limited on a global scale. The analysts added that after experiencing relatively strong months (successfully addressing challenges in tariffs and GEO Group Inc politics), tech stocks are poised for another significant rise in the second half of 2025. This surge will be led by the cream of the crop among tech stocks currently in the "golden age of the tech era." The analysts noted that 2025 is a turning point in the development of enterprise-generated artificial intelligence. As more companies begin to apply AI in actual production (transitioning from conceptual to scale application), real widespread adoption has begun, with these companies seeking AI investments to reduce costs and increase productivity. The analysts stated: Looking ahead, the key lies in the emergence of a plethora of application scenarios, which will drive software and chip-led technological transformations throughout 2025 and beyond. Therefore, this further confirms that our tech bull market and artificial intelligence revolution arguments will continue to deepen over the next 12 to 18 months. Ives and his team believe that the Trump administration's hardline stance on tariffs will ease, seeking comprehensive trade agreements with countries including China, Japan, and India, which will not have a significant impact on large tech companies and the current state of the artificial intelligence revolution. Analysts add that NVIDIA Corporation's decision this week to resume selling its H20 chips to China is a significant strategic positive for the tech industry. The analysts stated: In the initial stages of AI applications, NVIDIA Corporation chips and products of cloud computing giants are mainly utilized. However, it is worth noting that we estimate, for every $1 invested in NVIDIA Corporation products, other parts of the entire tech ecosystem will receive returns of $8 to $10.