Wedbush: AI cloud computing spending brings a wave of growth, US tech stocks will welcome a strong Q2 report

According to the Zhitong Finance APP, Wedbush stated that it expects strong earnings performance in the technology sector for the second quarter, with spending in cloud computing and artificial intelligence being the main driving forces. Wedbush's top five technology stock recommendations for the second half of this year are: NVIDIA (NVDA.US), Meta (META.US), Microsoft (MSFT.US), Palantir (PLTR.US), and Tesla (TSLA.US).

The analyst team led by Daniel Ives expressed that they believe technology stocks will perform strongly in the second half of this year, as a robust tech earnings season is approaching. Meanwhile, the "driving force of the artificial intelligence revolution" is accelerating in the semiconductor, software, and enterprise and consumer sectors.

Analysts stated, "We believe the market has underestimated the strong growth momentum driven by artificial intelligence in the future. We expect a very strong second quarter earnings season for technology stocks in the coming weeks, which will further validate our bullish view on the major tech giants."

The analysts pointed out that their optimism stems from the fact that investors have not yet fully recognized the "growth wave" brought about by the $2 trillion spending from enterprises and governments on artificial intelligence technology and applications over the next three years.

Ives and his team stated, "Our current understanding of this fourth industrial revolution unfolding globally is still very limited, a revolution led by major tech giants such as NVIDIA, Microsoft, Palantir, Meta, Alphabet, and Amazon (AMZN.US)."

The analysts added that after experiencing relatively strong months (during which they successfully navigated challenges related to tariffs and geopolitics), technology stocks are now expected to see another significant rise in the second half of 2025. This rise will be led by the leaders among technology stocks that are currently in the "golden age of technology."

Analysts noted that so far, 2025 is a turning point in the development of enterprise generative artificial intelligence. As more companies begin to apply artificial intelligence in actual production (transitioning from the conceptual stage to large-scale application), true widespread application has begun, and these companies are also seeking to invest in artificial intelligence to reduce costs and improve productivity.

Analysts stated, "Looking ahead, the key lies in the emergence of various application scenarios, which will drive the technological transformation led by software and chips to play an important role throughout 2025 and beyond. Therefore, this further confirms that our thesis of a tech bull market and the artificial intelligence revolution will continue to deepen in the next 12 to 18 months."

Ives and his team believe that the Trump administration's tough stance on tariffs will ease and will seek to reach comprehensive trade agreements with countries including China, Japan, and India, which will not significantly impact the current status of large tech companies and the artificial intelligence revolution. Analysts added that NVIDIA's move to resume sales of its H20 chips to China this week is an important strategic positive for the technology industry Analysts stated: "In the early stages of artificial intelligence applications, the main products used are NVIDIA chips and those from cloud computing giants. However, it is worth noting that we estimate that for every $1 invested in NVIDIA products, the rest of the technology ecosystem will receive a return of $8 to $10."