Stage is set for Nasdaq, tech stocks to move higher: Wedbush

The Nasdaq and tech stocks are poised for significant gains heading into year-end, driven by the accelerating AI revolution, according to a recent note from Wedbush analysts.

"[The] stage [is] set for tech stocks to move higher into year-end with [the] AI revolution," said the firm.

Despite market volatility, growth concerns, and other macroeconomic challenges, Wedbush believes that the tech sector is on the brink of substantial growth, underpinned by the expanding influence of AI.

Wedbush highlighted that while there were some "soft spots" in recent tech earnings, including Amazon (NASDAQ:AMZN )'s weaker e-commerce guidance and Alphabet (NASDAQ:GOOGL )'s YouTube ad revenue dip, the overall earnings season was "generally robust."

This performance, the analysts argue, "further solidifies the AI tidal wave of spending is coming to the shores of the rest of the tech world."

The firm emphasized the foundational role of cloud and AI technologies in the ongoing "4th Industrial Revolution."

They state that companies like Microsoft (NASDAQ:MSFT ), Google, and Amazon have demonstrated "rock solid" underlying cloud strength, with more enterprises expected to adopt cloud and AI solutions in the next 12 to 18 months.

Wedbush believes key players like ServiceNow (NYSE:NOW ) and Palantir (NYSE:PLTR ) have also shown significant AI momentum, further validating this trend.

Wedbush also sees Nvidia (NASDAQ:NVDA )'s upcoming earnings report on August 28th as a critical moment for tech investors. Describing Nvidia's CEO Jensen Huang as the "Godfather of AI," they anticipate his insights will showcase the "massive demand trajectory for AI chips into 2025."

Wedbush believes the current AI revolution is akin to the early days of the internet, marking the beginning of a transformative era for tech stocks rather than a speculative bubble. They remain bullish on the sector heading into 2025.

Source: Investing.com