Tech bears are wrong again: Nvidia and Palantir still powering the AI bull run

Despite recent share dips in Nvidia and Palantir, Wedbush's Dan Ives asserts the AI-driven tech bull run is merely in its "second inning," dismissing "tech bubble" concerns. He points to Nvidia's 10:1 demand-to-supply ratio, a new US export rule allowing China sales, and substantial global capital expenditure—including $350 billion by US tech giants this year—as sustained growth drivers. Ives views current valuations as typical for transformative growth stocks, suggesting recent pullbacks are buying opportunities and projecting the tech bull cycle to continue for another 2-3 years, with Palantir potentially reaching a $1 trillion market cap.

Analysis

According to analysis from Wedbush's Dan Ives, recent bearish sentiment on technology stocks, specifically Nvidia (NVDA) and Palantir (PLTR), is misplaced. The current AI-driven market is characterized as being in its early stages, or the "second inning," with a projected bull cycle lasting another two to three years. This outlook is supported by several key factors, including a significant demand-to-supply imbalance for Nvidia's AI chips, which Wedbush field checks place at ten to one. Furthermore, a major headwind has been mitigated by a revision to US export rules, which now permits sales to China contingent on a 15% fee, securing a critical revenue stream. The primary growth driver is a massive wave of capital expenditure, with US tech firms alone expected to invest approximately $350 billion in AI infrastructure this year, a trend mirrored by global governments and corporations, particularly in the Middle East. Valuation concerns are dismissed as premature, drawing parallels to the historically high multiples of Amazon and Tesla before their major growth phases. This perspective is underscored by a bold forecast for Palantir to achieve a trillion-dollar market capitalization within three years, positioning the current market volatility as a strategic buying opportunity ahead of potential catalysts like Nvidia's upcoming earnings.

Key Decisions for Investors

• Investors should consider the presented analysis that views recent pullbacks in Nvidia and Palantir not as a warning sign, but as a strategic buying opportunity within a long-term AI growth cycle.
• Monitor upcoming catalysts closely, particularly Nvidia's earnings report next week, which is positioned as a potential trigger for the next leg up in the tech sector.
• Re-evaluate high valuations for AI leaders through the lens of transformative growth, where the investment thesis anticipates companies growing into their multiples, as suggested by the forecast for Palantir.
• Maintain a long-term perspective, as the analysis suggests the core AI bull run has a two-to-three-year horizon, implying that investors should be prepared to look through near-term volatility.