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Wedbush Securities analyst Daniel Ives predicts a seismic shift in IT spending towards AI and related technologies. He estimates that such purchases will account for 8%-10% of IT budgets in 2024, a big jump from less than 1% in 2023.

Significant growth Trajectory Ahead

Major players in the tech sector, including Microsoft Corp (NASDAQ:MSFT), Salesforce Inc (NYSE:CRM), Palantir Technologies Inc (NYSE:PLTR), MongoDB Inc (NASDAQ:MDB), Oracle Corp (NYSE:ORCL), Snowflake Inc (NYSE:SNOW), Elastic NV (NYSE:ESTC), stand to experience a significant growth trajectory fueled by this surge in investment, the analyst says.

Ives identifies this phenomenon as the “initial wave of AI software growth,” heralding a transformative period for the industry. Pioneers like Jensen Huang of Nvidia Corp (NASDAQ:NVDA) and Microsoft’s Satya Nadella spearheaded the first wave of the AI Revolution. Now, the ripple effects cascade across the tech landscape, offering substantial opportunities for companies positioned to capitalize on this burgeoning market.

Also Read: Nvidia Stock Trades At 13% Discount To Long-Term Average, Other AI Stocks At 52% Premium

Analyst Ratings & Price Targets

Among the beneficiaries highlighted by Ives, Microsoft stands out as a prime candidate for substantial growth. Ives has an Outperform rating and a price target of $500 on Microsoft stock. Similarly, MongoDB, with its innovative database platform, earns an Outperform rating and a price target of $475.

However, not all companies possess equal readiness to ride this wave. Snowflake, while maintaining a Neutral rating, holds a price target of $210 from Wedbush. The rating suggests a more cautious outlook on its potential to capitalize on the AI-driven market expansion.

As businesses increasingly recognize the transformative potential of AI technologies, experts anticipate a soaring demand for advanced software solutions. Companies like Palantir, Oracle, and Elastic, each rated Outperform by Wedbush Securities, position themselves to thrive in this evolving landscape.

The forecasted surge in AI software spending represents a monumental growth catalyst for the tech sector. It could propel companies across the board towards unprecedented opportunities for innovation and expansion.

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