Wedbush sees tech rally continuing to year-end fueled by AI

Wedbush analysts said in a note Tuesday that their firm sees the tech rally continuing into the year-end due to the 2024 growth prospects led by artificial intelligence.

In Wedbush’s opinion, the latest pullback in tech stocks is “just a brief pause,” and they see the tech rally resuming in full force post-Labor Day heading into year-end.

The analysts stated that the tech sector’s growth prospects are now “on the cusp of a massive wave of software and chip spend,” driven by AI use cases surging globally.

“We firmly stick with our bullish call that a 12%-15%+ in tech stocks will be in the cards heading into year-end as the new tech bull market has already kicked off in our opinion,” they wrote.

They went on to declare that AI is “set to unleash an unprecedented wave of spending that could comprise 10% of IT budgets in 2024,” with the analyst adding that AI is a “1995 moment happening before our eyes.”

“This spending wave we estimate will result conservatively in an incremental $800 billion of enterprise/consumer spending over the next decade and is now starting to quickly prove it’s not a hype cycle but transformational real spend,” the analysts said.