Disparity Between Tech Giants and the Rest of the Sector
The performance disparity between top tech companies and the rest of the space is evident in the market. For example, the Invesco QQQ Trust Series 1 QQQ, which tracks the Nasdaq-100, has witnessed a 51% gain this year. In contrast, the equal-weight version QQQE has seen a more moderate increase of 31%.
On the other hand, the Roundhill Magnificent Seven ETF MAGS, a relatively new addition since April, has already recorded a 33% gain since inception. However, the equal-weight Nasdaq 100 has outperformed the MAGS ETF in December.
AI Monetization Set to Transform the Sector
Citing recent field checks, Ives emphasized that the monetization of AI is starting to have a positive impact on the tech industry. Companies such as Nvidia, Microsoft, Google, Datadog, and Palantir are witnessing the proliferation of AI use cases in various sectors, spanning both enterprise and consumer landscapes.
Notably, Ives drew attention to AI-related announcements, including Intel’s recent unveiling of a new AI chip. He expressed his view that AI represents the most transformative technology trend since the advent of the Internet in 1995. Ives believes that many in the industry are underestimating the potential $1 trillion AI spend over the next decade. This presents significant opportunities for chip and software sectors, with Nvidia and Microsoft leading the way.
Preferred Tech Stocks by Wedbush Securities
Wedbush Securities’ top picks in the tech sector include Apple AAPL, Microsoft MSFT, Alphabet GOOGL, Palo Alto Networks PANW, Palantir Technologies PLTR, Zscaler ZS, CrowdStrike CRWD, and MongoDB MDB.