In a recent interview on the Master Investor Podcast, Dan Ives, a well-known tech bull and Wedbush Securities analyst, shared his core reasons for his long-term bullish view on AI. He began by discussing his investment experience during the 1990s tech bubble, extending to key areas such as AI chips, cloud computing, data centers, and enterprise applications. He further explained his thinking on selecting tech stocks and how he maintains investment discipline and conviction amidst market volatility.
From the 1990s to the present, why choose to embrace technology and AI stocks?
Dan Ives stated that he has been researching tech stocks since the late 1990s, experiencing the dot-com bubble and the financial crisis. However, he believes that the changes brought about by AI today are different from past speculative bubbles. He describes the current stage of AI development as closer to 1996 than 1999, because the proportion of companies worldwide that have truly adopted AI is still extremely low.
He pointed out that currently only about 3% of companies in the United States have officially embarked on the AI application route, and Europe and Asia (excluding China) have hardly yet fully implemented it. Governments and sovereign wealth funds have only just begun to evaluate it, and the whole is still in a very early stage.
Valuation is not the most important factor; the key lies in people and long-term direction.
Regarding his stock selection strategy, Dan Ives bluntly stated that focusing solely on valuation could lead to missing out on all the key growth stocks of the past 20 years. He emphasized that the real focus should be on technological direction, industry structure, and the leaders themselves.
He specifically named Elon Musk, Jensen Huang, Lisa Su, Microsoft CEO Satya Nadella, and Palantir founder Alex Karp. He believes that the key to these companies overcoming market skepticism lies in whether their CEOs can make long-term bets at crucial moments.
Nvidia remains at the heart of the AI revolution, while competitors are still catching up.
Regarding the competition in AI hardware, Dan Ives stated that the global AI revolution is currently dominated by a single key chip supplier, namely Nvidia. He pointed out that after recently visiting the Asian supply chain, he observed that the demand-to-supply ratio for AI chips is as high as 12 to 1, indicating that they are still difficult to replace in the short term.
He acknowledged that more competitors will emerge in the future, including Google TPU, AMD, and even domestic Chinese chips, but Nvidia still holds a lead of at least 4 to 5 years in terms of technological maturity and ecosystem. He also emphasized that the US restrictions on Nvidia's entry into the Chinese market may actually accelerate the formation of domestic alternatives in China.
AI is not a winner-takes-all game; its true breakthrough lies in the application layer.
Regarding the competition between cloud computing and cloud-based models, Dan Ives does not believe that AI will result in a single winner. He points out that currently less than 50% of global workloads are still on the cloud, and enterprise applications of AI are still in their infancy.
He believes that, apart from large cloud service providers, the real growth momentum will come from second- and third-tier application and infrastructure companies, including data analytics, databases, cybersecurity, AI infrastructure, and new cloud services. He estimates that for every $1 a company invests in Nvidia's AI chips, it will typically drive an additional $8 to $10 in overall technology-related spending.
The competition for models is fierce, but OpenAI still has the advantage of a complete AI stack.
Regarding the competition for large-scale models, Dan Ives stated that Google's Gemini has proven to be truly competitive, but this does not mean OpenAI is losing ground. He believes that the AI revolution requires multiple models to coexist, and model prices will decrease rapidly over time.
He stated bluntly that if OpenAI were to go public independently today, its market value could reach one trillion US dollars, because its strategy is not based on a single product, but rather on an attempt to build a complete AI stack ecosystem, which will be a long-term competition for decades to come.
Data centers will not be excessive; AI is only just beginning to consume computing power.
In response to concerns about an oversupply of data centers, Dan Ives stated that he does not believe AI data centers will repeat the fiber optic surplus of the 1990s. He pointed out that the number of data centers currently under construction globally already exceeds the total number of existing operational centers, but future demand will only continue to increase.
He mentioned that the real demand for computing power in self-driving cars, humanoid robots, biomedicine, government applications, and enterprise AI is still at the forefront, and ChatGPT is just the tip of the iceberg.
Apple, Tesla, and TSMC: Their Different Positions in the AI Ecosystem
Regarding Apple, Dan Ives believes that although Apple has been slower in the early stages of AI development, its more than 1.5 billion iPhones and vast ecosystem remain a crucial foundation for the future commercialization of AI. He anticipates that Apple will gradually launch AI subscriptions and an AI App Store through collaborations and self-built models.
Speaking of Tesla, he stated frankly that Tesla's greatest asset remains Elon Musk himself, and believes that self-driving cars and humanoid robots will be the most crucial growth chapter in Tesla's history.
As for TSMC, Dan Ives described it as the heart and lungs of the global AI supply chain, noting that almost all AI chips from companies like Nvidia, Google, and others rely on TSMC's advanced manufacturing processes. He pointed out that the market has long underestimated TSMC's strategic position in the entire AI ecosystem.
Retail investors are no longer bystanders; the information gap is narrowing in the AI generation.
Dan Ives also observed that in recent years, retail investors' access to information has improved significantly, narrowing the gap with institutional investors. He pointed out that during periods of market volatility, it was actually retail investors who chose to buy while institutions withdrew, indicating a shift in the investment structure.
He believes that even if AI tools enable information to flow faster, the real key lies in long-term industry understanding and risk tolerance, rather than short-term trading.
The AI bull market is not over yet; please stick to your original investment logic.
Dan Ives concluded by emphasizing that the market will always have noise, pullbacks, and doubts, but what truly matters is maintaining investment discipline and a long-term direction amidst volatility. He believes that the structural growth driven by AI still has at least several more years of room for development, and the real turning point has yet to arrive.
How to Select AI Technology Stocks? A Comprehensive Guide to the Market Mindset of Tech Bull Dan Ives . This article first appeared on ABMedia, a ABMedia .
