Artificial intelligence is growing fast, and companies are spending much more on it than they did just a year ago, according to Dan Ives, who is the global head of tech research at Wedbush Securities. Indeed, he said that AI now makes up about 15% of company budgets, compared to just 2% last year. However, he said that regulations are far behind and described the situation by saying AI is like a “Ferrari going 100 miles per hour” while regulations are only moving at “35 miles per hour.” Because of this, he believes that the industry may have to rely on self-regulation for now.
Ives also expects AI growth to lead to more mergers and acquisitions in the tech industry. Big companies like Microsoft (MSFT), Alphabet (GOOGL), and IBM (IBM) are likely to buy smaller firms in order to expand their AI capabilities and strengthen their positions. As a result, he thinks that the strongest companies will continue to grow stronger. This trend is already visible with companies like Palantir (PLTR), which has expanded from just 10 AI use cases a year ago to 85 today, showing just how quickly AI adoption is spreading across industries.
Even economic challenges, such as potential tariffs, are unlikely to slow down AI growth. In fact, they may speed it up as businesses look for ways to operate more efficiently. Therefore, Ives remains optimistic about the tech sector and believes that AI is now essential. He explained that the “genie’s out of the bottle,” which means that companies must adopt AI or risk falling behind their competitors.
Which AI Stock Is the Better Buy?
Turning to Wall Street, out of the four stocks mentioned above, analysts think that GOOGL stock has the most room to run. In fact, GOOGL’s average price target of $198.79 per share implies more than 28% upside potential. On the other hand, analysts expect the least from PLTR stock, as its average price target of $98.25 equates to a loss of 17%.
