Here's what an analyst says could end the AI panic that's gripped Wall Street
OpenAI
Bhawika Chhabra/Reuters
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4 mins
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Business Insider
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Naomi Buchanan
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Wall Street has grown nervous about the disruptive power of AI. Wedbush's Dan Ives lists several things that could reinvigorate the bulls.
- Fears of AI disruption have tanked everything from software to trucking stocks.
- Wedbush's Dan Ives says the narrative could be dispelled by a few positive headlines.
- Here's what he thinks it'll take to get investors excited again.
Investor sentiment about is a powerful but fickle force in markets, illustrated most recently by the panic that's gripped Wall Street about the possibility that AI threatens certain stock sectors.
Excitement for AI abruptly turned to panic earlier this month, as stocks in software, wealth management, insurance, and logistics all plunged as AI companies unveiled new tools for those industries.
Wedbush analyst Dan Ives described the moves as "fighting a ghost," with investors unsure where the panic will strike next.
"Today the "AI is a threat to every industry narrative....with software front and center as enemy #1" trade in this market … For the bulls its like fighting a ghost, while the cap-ex dollars approach ~$700 billion this year alone....the fear is AI startups will be the Nightmare on Elm Street horror show for the tech industry," he wrote.
Here are some of the headlines Ives thinks could help re-energize Wall Street's views on AI.
OpenAI secures the latest $100 billion in funding
ChatGPT maker, OpenAI, is reportedly close to finalizing a funding round worth $100 billion.
Ives says that securing the funding will put "the loud noise to rest."
The additional financing would bring the AI juggernaut's valuation up to $850 billion, which could boost investor interest in a potential IPO and benefit stocks connected to OpenAI.
Jensen Huang's Nvidia earnings comments
Nvidia's latest earnings are slated for Wednesday, February 25.
The AI chipmaker's CEO Jensen Huang will speak on earnings call, and Ives says that his comments on chip demand could serve as a catalyst for reinvigorated AI sentiment.
Oracle finds success in its up to $50 billion capital raise
Oracle announced plans earlier this month to raise between $45 billion and $50 billion in debt and equity financing during 2026.
The financing will fund the company's rapidly growing cloud business. Oracle Cloud Infrastructure customers include AMD, Meta, Nvidia, OpenAI, TikTok, and Elon Musk's xAI.
Ives says that if Oracle has initial success with its enormous capital raise, it could be a positive sign for the broader AI ecosystem.
Tech earnings show AI monetization is paying off
Strong earnings from big tech companies that demonstrate that they are monetizing AI could reignite AI bullishness on the Street.
Salesforce, Microsoft, and ServiceNow are some of the earnings to watch, going forward, Wedbush says.
CrowdStrike is another name that could boost broader sentiment with strong earnings showing AI is paying off. Ives recently highlighted cybersecurity as a tech subsection protected from AI fears.
The analyst flagged Meta and Google's digital advertising businesses, specifically, explaining that AI ad monetization ramping up would be a positive indicator for the AI space at large.
Software M&A picks up
A revival in merger and acquisition activity is one of the key investment themes to watch, according to Bank of America.
Wedbush says a rise in software M&A in the coming month, including strategic large public deals, could reignite Wall Street's faith in AI.
The software sector has been at the center of investors' AI disruption fears. M&A in the space could help reframe the market's perception of software's AI exposure to be strategic rather than detrimental.
Apple releases AI Siri
Apple has become an AI laggard in Wall Street's eyes, but the iPhone-maker unveiling AI-powered Siri could flip that narrative.
The company has delayed its AI Siri release, raising the stakes for how it will leverage AI with its massive user base.
The release would also mark a milestone in the consumer AI story, given the iPhone's prominence.
Enterprises fumble with Claude
It was a Claude update that sparked the initial fears that AI would replace software, fueling the broad tech sell-off on Wall Street.
Ives says that if enterprise customers start implementing Claude and run into scaling and security issues, it could reverse sentiment around Claude's viability as a software replacement.
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