For all the “bubble” talk on the AI trade, the truth is that it continues to defy gravity. That’s showing up in the tape, with earnings, and with Wall Street’s top voices concurring that the current boom has legs.
Let’s start with the scoreboard.
The S&P 500 is up nearly 13% in 2025, and AI-powered tech giants have driven close to 80% of those gains, led by companies such as Nvidia, Microsoft, and Alphabet. Also, there’s the wealth effect, where 30 AI stocks have added close to $5 trillion to U.S. household wealth in the past year, according to JPMorgan.
Further, on earnings, the math speaks for itself.
FactSet effectively pegs 2025 S&P EPS growth at a superb 11%, with Q3 tracking at a stellar 8% to 9%, as the “Magnificent 7” delivered 27% EPS growth in Q2, with every single one beating estimates.
Nvidia alone is among the top contributors to Q3 bottom-line growth, proving that AI is showing up in cash and is not just hype. Additionally, with TSMC’s bullish AI demand outlook and ASML’s strong results, the supply chain continues to confirm it.
The concentration is real, though, and that trend is showing up in the profits as well.
Some strategists expect Nvidia may soon account for a double-digit percentage of the S&P 500, but that’s likely to be more of a reflection of real capital expenditures, not dot-com vapor. Even Goldman Sachs and Citi see AI exposure broadening across nearly 50% of the index.
That said, veteran tech analyst Dan Ives, who’s betting that this momentum won’t be fading anytime soon, just refreshed his Big Tech “buy” list heading into year-end.
The names sound familiar, but his reasoning might surprise you.
Daniel Ives isn’t buying the “AI bubble” narrative. The Wedbush tech analyst even argues that the AI trade is entering its next leg higher.
He likens the moment to a “1996, not 1999 moment,” saying there’s a real industrial-scale transformation happening in digital infrastructure.
Despite global tensions and valuation noise, Ives feels it’s imperative to focus on the sheer AI demand, use cases, and supply-chain feedback that underscore the sustainability of the trend.
We believe tech stocks will be very strong into year-end and could be up another 10%+ as the next part of this AI Revolution takes hold.
Despite global tensions and valuation noise, Ives feels it’s imperative to focus on the sheer AI demand, use cases, and supply-chain feedback that underscore the sustainability of the trend.
Taking that view forward, he just refreshed his Big Tech “buy” list for the rest of 2025, highlighting that Apple, Tesla, and Salesforce remain the three companies he sees as the backbone of the AI economy’s next phase.
Despite the flak Apple has received, it’s still Ives’ quiet favorite, a tech giant sitting on a 2.35 billion-device ecosystem that can effectively monetize AI across hardware and services.
The company’s fiscal Q3 2025 results showed record quarterly sales of $94 billion, which is up 10% year over year, while its EPS of $1.57 has skyrocketed 12%. Those numbers, Ives argues, form a launchpad for the company’s next act.
Related: Apple CEO Tim Cook meets the Labubu trend head on
“The elephant in the room has been the invisible AI strategy,” Ives said. He feels that with 2.4 billion iOS devices and 1.5 billion iPhones, Apple has the impetus to supercharge its AI efforts through external partnerships. That missing piece of the AI monetization puzzle could potentially add $75 to $100 per share to the Apple story.
Apple’s “Apple Intelligence” suite, which is layered with iOS 18, iPadOS 18, and macOS Sequoia, is just the start. For Ives, the lack of an “AI premium” in Apple’s stock makes it perhaps one of the most compelling undervalued names to own into year-end and 2026.
For Ives, Tesla isn’t just a carmaker, but also a robust AI platform in motion. With a whopping $1.4 trillion market cap, it’s building a parallel economy built on autonomy and robotics.
“The AI valuation will start to get unlocked in the Tesla story,” Ives wrote, forecasting that the EV giant may hit a $2 trillion market cap by early 2026 and $3 trillion by year-end 2026.
Related: Tesla urges investors to ignore trillion dollar warning from influential firm
Tesla’s Full Self-Driving (FSD) and Robotaxi programs are critical to that thesis.
The Robotaxi service is currently live in Austin and the Bay Area, and is expanding testing to Arizona and Nevada, with plans for Chicago and Aurora, Illinois. On the robotics front, Optimus, Tesla’s humanoid robot, may eventually account for as much as 80% of revenues, according to Musk’s projections.
Though Q2 2025 revenue dropped 12% year over year to $22.5 billion, Tesla still comfortably beat market estimates, and Ives feels that pullback is mostly temporary.
“We believe the march to an AI-driven valuation for Tesla has now begun,” he said. “Cybercab and autonomy penetration are the golden goose for Musk & Co.”
Ives rounded out his list with Salesforce, hailing it as arguably the most underappreciated AI play among enterprise software giants.
The company effectively transitioned from CRM to full-scale enterprise AI through Agentforce, a digital-agent suite that’s tailor-made to efficiently automate sales, service, and workflows.
Recent partnerships with OpenAI and Google are deepening Salesforce’s moat.
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Users gain access to Agentforce 360 through ChatGPT, while Google’s Gemini models seamlessly plug into Salesforce data for smarter personalization.
The payoff is already here with fiscal 2026 revenue hitting a whopping $10.2 billion, up 10% year over year, with non-GAAP EPS of $2.91 blowing past expectations by 13 cents.
“CRM has grown sales capacity by 20% year over year while boosting productivity across accounts,” Ives said. “With 40% of Fortune 1000 work elevated by AI by 2029, Salesforce is positioned to lead.”
Ives feels that Salesforce is reaching 20,000 paying Agentforce customers by FY26, which should drive a powerful new wave of subscription and service growth.
Related: Salesforce CEO targets giant rival with new product
This story was originally reported by TheStreet on Oct 19, 2025, where it first appeared in the Technology section. Add TheStreet as a Preferred Source by clicking here.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: finance.yahoo.com
