We’re about to head into Q2 earnings season and—as the recent market jolt around Apple’s price increase announcement shows—investors are still nervous that this whole AI thing just isn't going to pan out. “Microsoft and Meta are being treated by investors like they are wearing winter jackets to the beach in the summer,” Wedbush’s Dan Ives pined in a recent email. Ives, a closely followed infamous tech stock bull, previously complained that traders are “treating Microsoft and Meta like they are bear market names that cannot be owned.”
“Why?”
His answer: We are in a six-to-12 month “air pocket” in which the hyperscalers are spending up to $700 billion on AI data center construction “but big tech stalwarts such as Microsoft, Meta, and Amazon/Alphabet to a lesser extent are in the waiting stage to see the growth/monetization boom.”
“To this point, the costs will start to slow down over the coming year and when the AI consumer hardware, physical AI deployments, and enterprise use cases explode at scale over the coming years this will all be a distant memory (like building the Las Vegas strip in the 1950's),” he says.
“In the meantime, the bears will continue to yell fire in a crowded theater any chance they get.”
