Tech stocks, driven by increased spending on innovations in cloud and AI technology, are set for a new bull market next year say analysts at Wedbush.
Among Wedbush's top picks, tech giants such as Apple Inc
"We believe the new tech bull market has now begun and tech stocks are set up for a strong 2024 as the AI spending tidal wave hits the shores of the broader tech sector," said Wedbush lead analyst Daniel Ives.
Spending On Tech Innovations To Increase Next Year
Wedbush expects cloud and AI spending to be up between 20%-25% in 2024, despite the economic backdrop of higher interest rates as new use cases for the technology make it the "most transformative" trend in the sector since the start of the internet in 1995.
"While it's still a murky macro picture and the Fed shadow remains an albatross around tech stocks, we believe a short covering for the tech sector into year-end is on the horizon as the fundamental picture for growth tech stocks is rock solid based on our recent checks," Ives said.
While Apple shares have had a tough couple of months since hitting a new record high at the end of August, they are still up more than 40% over the year and Apple is Wedbush's top pick in the sector.
AI Monetization Has Been A Positive
Microsoft, which has been among the leaders in AI technology, recently published robust third-quarter results, contributing to a 20% rally since its summer trough.
Wedbush believed the revival in these big names will also help generate a new boom in the chip sector, with Nvidia Corp
"To this point, we view AI as the most transformative technology trend since the start of the Internet in 1995 and believe many on the Street are underestimating the $1 trillion of AI spend set to happen over the next decade."
