The AI revolution is just starting, says Wedbush's Dan Ives

Of trader favorite ARM Holdings are getting hit. Right now they’re down just under 10%. They had a relatively lukewarm sales forecast. And once again, whenever anything like this happens, it raises concern that the AI spending spree may be slowing down. Remember, back in 2020, NVIDIA CEO Jensen Wong tried to buy ARM, but the $40 billion deal was shut down by regulators, saying the merger, any merger, would hurt competition and drive up semiconductor prices. Long spoke about ARM and the AI revolution in an exclusive interview with our own John Ford. Look, we’re going through the single greatest platform shift in the computer history. You know, computing hasn’t really changed since the IBM System 360 invented central processing units, and now we’re going through two. At the same time, accelerated computing from central central processing units to generative AI, completely revolutionizing how software is done and what software can do. And so we’re going through that incredible platform shift. Lots and lots of opportunities, of course. But I got to tell you, I love ARM. Then I love ARM to this day. And everybody, everybody now realize what a great franchise it is. So love Fest. There you have it. Jensen loves ARM and his high hopes for AI. The question is, is the broader AI trade alive and well and worth your money? Let’s bring in our friend Wedbush Securities Managing Director Dan Ives. Dan, I’m assuming I’m just throwing this out. You will say that the AI trade is alive and well, but is it topped out? I think the AI revolution’s just started. I mean, you know you heard there, godfather of AI Jensen and now that tidal wave, that trillion dollars of spend, it’s coming to the rest attack. You look at ARM, you look at Microsoft, now we see what’s happening, Alpha and others. That’s why I believe this is just the early stages of a fourth industrial revolution playing out being led by the godfather of AI Jensen, NVIDIA. But when you get an ARM which you know has a slightly lukewarm revenue forecast and it falls just under 10%, I mean traders, how do you soothe jumpy traders. Yeah. And I think that’s really been the difficulty in this market. I mean if you could arm that, that’s a robust forecast and they crush those numbers. I think you got to navigate the volatility and see far through the trees. And we’ve seen similar things on Microsoft and a lot of other names, terms of knee jerk reactions. But if you look at where the spending is and that’s what it comes down to the demand. This demand is unlike anything we’ve seen since 1995 star the Internet, not 1999. Which is why I believe this red the 2nd, 3rd, 4th derivative. It’s a get out the popcorn moment. It’s just starting to play out across software and semis. All right, I want to shift gears. Theoretically get your thoughts on Tesla, Chinese state media. Dan reporting Tesla is proposing roll out rolling out its robo taxis in China. Of course, this comes after Elon Musk made a surprise visit a couple weeks ago to Beijing where he met with the Chinese premier. Assuming it happens, how important, if at all, is China to Tesla’s Robo taxi push? The look China in, in my opinion, is the hearts and lungs of the Tesla growth story. And if you look at FSD robo taxis, this is the first step to altering what we view as FSD and autonomous in China for Tesla and Musk. And it would be a historical moment and I think for for the Tesla story, obviously navigating challenges the next few quarters, but the golden Goose is autonomous and FSD and China plays a key role there. This is a major shift to what I think we’ve seen over the last six to nine months. Musk continues to play well in that sandbox in Beijing.