Is the AI investment frenzy returning? Buyers are using real money to guard the "AI bull market narrative" on dips.

In late 2022, the well-known Wall Street investment firm Wedbush accurately predicted the bull market in the US stock market and repeatedly forecasted that this bull market would continue for a long time. Recently, Wedbush stated that in the tech stock bull market since 2023 driven by the AI investment craze, various short-term disruptive factors are normal phenomena. The institution firmly predicts that, as investors eagerly hope to capitalize on the unprecedented AI revolution through a "buy on dips" strategy in the stock market, US tech stocks (based on the Nasdaq 100 index) still have about 10% upside potential for the remainder of this year. At the same time, many Wall Street giants including Goldman Sachs Group, Inc., Morgan Stanley, and UBS Group AG have refuted the AI bubble theory, believing that the AI-driven bull market is far from over. Senior analysts from several Wall Street Financial Institutions, Inc. have stated that the AI bubble narrative, the hawkish stance of the Federal Reserve, or other short-term pullbacks brought about by various factors are significant investment opportunities for investors to buy on dips in this unprecedented AI frenzy. "Last week was a very tense week for tech investors, as there was a sharp decline in safe-haven tech stocks (such as Microsoft Corporation, Palantir, NVIDIA Corporation, and Broadcom Inc.), causing some short-term concerns in this tech bull market," stated the Wedbush analyst team led by senior analyst Daniel Ives. Analysts pointed out that last week Palantir Technologies (PLTR.US) actually "delivered extremely impressive, much better than expected explosive growth data... but the stock price fell sharply the next day, highlighting market concerns about the AI bubble theory and the escalating valuation of Palantir. However, this volatile stock with more than a 10% decline presents the best opportunity for capital allocation, as historical data proves that performance is key, and short-term factors do not hinder the long-term bull market trajectory of the stock." Analysts also noted that some factors have fueled the upgrading of the bearish rhetoric about the "AI bubble," including concerns about the revenue cut off of the "AI chip leader" NVIDIA Corporation (NVDA.US) in the Chinese market, and bearish arguments about OpenAI being "too big to fail"... In addition, the "big short" Michael Burry, who successfully predicted the 2007 US subprime mortgage crisis, issued a heavyweight bearish tweet on NVIDIA Corporation and Palantir, further fueling the bearish views on tech stocks related to the "AI bubble." Senior analyst Ives and his Wedbush team stated: "In short, we believe this is just a brief 'white-knuckle' moment for global tech stocks, as we believe that, as investors seek to actively participate in this unprecedented AI revolution, and the second, third, and fourth-order effects of AI investments unfolding in consumers and global enterprises, tech stocks will see another 8% increase in addition to the already over 20% climb this year in the remaining time of this year, possibly even 10%." Analysts emphasized that the most important conclusion of the global tech stock earnings season in the third quarter of this year is the strong cloud computing revenue data delivered by Microsoft Corporation, Amazon.com, Inc., and Alphabet's Alphabet Inc. Class C, as well as the significant increase in capital expenditure towards AI-related expenditures targeting 2026 by Meta Platforms, the parent company of Facebook, and other tech stalwarts. These earnings conclusions underscore a narrative of a long-term bull market for AI: the growing demand for computing power associated with generative AI and AI agents, and the increasingly positive revenue prospects associated with them. With a massive influx of buy-on-dips orders on the horizon, will the AI investment frenzy sweep through again? Senior analyst Ives and his team at Wedbush believe that with the full-scale launch of the next phase of AI spending, the overall capital expenditure of large tech companies may increase from about $380 billion this year to close to $550-600 billion by 2026. Ives and his team also added that Palantir is the "best barometer of demand for enterprise AI applications," with its significant growth in US commercial business exceeding analysts' expectations, indicating that more and more companies and government organizations are accelerating their investments and deployment plans for "AI + everything," which will also be significantly reflected in the strong performance of Snowflake (SNOW.US) and MongoDB (MDB.US). "This is an unparalleled global AI arms race, and the strong driving force behind the next AI chapter will be the continued fervent AI spending of large tech companies, which has shown no signs of slowing down in the process towards 2026... We believe this is a huge boon and validation moment for the bullish logic of the AI revolution, although investors have had some anxiety in recent weeks related to the AI bubble, this does not prevent funds from continuing to choose to buy on dips." Ives and his team stated. With AI chip leader AMD and SSD storage giant SanDisk announcing incredibly strong performance under the AI boom, and Wall Street financial giants like Goldman Sachs Group, Inc. and UBS Group AG releasing reports refuting the "AI bubble," market concerns about the AI bubble have significantly diminished, driving the stock prices of Asian tech giants closely associated with AI such as Advantest, Tokyo Electron, SoftBank Group, and SK hynix to soar on Monday, highlighting a real influx of buy-on-dips orders streaming towards these AI computing leaders. After the opening of the US stock market on Monday, NVIDIA Corporation, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, and Micron Technology, Inc. among other AI computing industry leaders are continuing their strong rebound in the Asian trading session under the momentum of the AI tech stock. Citigroup recently stated that the short-term market weakness/downward pullback may be within investors' general expectations, and the "fundamental narrative of artificial intelligence supporting the long-term bull market in stocks remains intact, which may create significant buy-on-dips opportunities during the pullback period. Drew Pettit, the senior US equity strategist at Citigroup, expressed that there are significant investment opportunities for buying on dips in AI Beta (AI ). Pettit specifically mentioned the hottest stocks in the AI computing industry - NVIDIA Corporation (NVDA.US) and ETF targets focused on the entire semiconductor sector (such as PSI, SMH, SOXX, and XSD), while also emphasizing the AI Amazon.com, Inc. (AMZN.US), calling it the "super enabler of AI technology." Amazon.com, Inc. recently announced strong AWS cloud computing revenue data and OpenAI recently announced a hefty 7-year, $38 billion AI computing agreement with AWS (Amazon Web Services), the world's largest scale cloud computing service provider under Amazon.com, Inc., with OpenAI gaining rights to hundreds of thousands of NVIDIA Corporation AI GPU devices through AWS, including NVIDIA Corporation's GB200 and GB300 AI GPUs. Michael Wilson, chief strategist at Morgan Stanley, pointed out "clear signs" of significant profit recovery for US companies under the AI drive, with American companies enjoying stronger pricing power. He also noted that profit expectation revisions have bottomed out, indicating a major turning point where the number of analysts downgrading expectations is significantly less compared to those upgrading expectations. Regarding the AI bubble, Wall Street analysts have collectively released reports refuting this pessimistic rhetoric recently, with some analysts believing that even if there is currently an "AI bubble" in the market, it is still in the early stages of forming a bubble, with a considerable amount of time remaining before a stock market bear market crash similar to the 2000 "dot-com bubble burst." Goldman Sachs Group, Inc. stated that there is still significant room for the investment cycle associated with AI infrastructure to advance, comparing the current AI spending frenzy and the soaring tech stock valuations to the early stages of the late 1990s tech boom, rather than a speculative peak. In a new report, Goldman Sachs Group, Inc. pointed out that "from multiple indicators, the current investment frenzy related to AI is more similar to the tech stock investing frenzy of 1997-1998 rather than the pessimistic state of the bubble bursting starting in 1999 or 2000." The fervent investment period of 1997-1998 was a time of infrastructure construction in the internet era, where progress in the productivity system and infrastructure ecosystem began to show, but market speculation had not yet formed.