Tech stock kingmaker Dan Ives shuffles his list of the top AI stocks

Wedbush Securities analyst Dan Ives is still very bullish on the outlook for AI stocks as we creep closer to the start of another new year.

“In a nutshell, this AI Revolution is just beginning today and we believe tech stocks and the AI winners should be bought given our view this is Year 3 of what will be a 10-year cycle of this AI Revolution buildout,” he wrote.

But he’s switching up his roster of potential stock market beneficiaries from the ongoing boom.

Ives added neocloud CoreWeave, bitcoin miner turned data center company IREN, and Shopify to his list of top 30 AI winners (which are held in the Dan Ives Wedbush AI Revolution ETF).

The thinking? For CoreWeave, he expects demand for AI compute will exceed supply in the near term. For Shopify, he’s optimistic on how aggressively the company is integrating AI into its business. And for IREN, he’s a fan of its “differentiated approach to providing significant power supply necessary to fuel the AI Revolution,” given its aims to vertically integrate power infrastructure into its data center business.

To make room for the trio, he axed SoundHound AI (“facing a difficult competitive landscape”), ServiceNow (“choppy path to monetize on its increased usage”), and Salesforce (AI monetization has been slower than anticipated) from the list.

Let’s read between the lines here, because there’s something super interesting going on.

The Takeaway

The analyst is leaning a little more into the upstream parts of the AI supply chain, rebalancing his ETF toward the facilitators rather than the names that are closer to end consumers. He's swapping out three downstream companies for one downstream and two upstream companies. One would think that by now, the beneficiaries of the AI boom ought to be the businesses applying the tech, you know, like ServiceNow and SoundHound. Instead, Ives is rallying behind the picks and shovels of the gold rush.

Jensen Huang is talking about robots. Masayoshi Son is talking about AI being 10,000x to 100,000x smarter than a human. Dan Ives is like, yeah, buy the fundamental nuts and bolts. Worth a thought!