Why Are Oracle and Meta Buying Opportunities?

Transcript

There are opportunities. What? What have you been maybe buying in this, you know, recent pullback? You interests that you're in the hyperscale. Look at Oracle, the sell off here. Look at Meta. I mean, these are golden buying opportunities for the next two, three, four years. And that's that's my view where we are in the revolution, that you use the... Read More

Key Insights

• Oracle and Meta are long-term buying opportunities in Dan Ives's view because their selloffs provide entry points for investors with a two-to-four-year horizon. He treats market weakness as part of the developing AI investment cycle rather than evidence that the cycle has ended.
• Wall Street's expectations may be 20% to 30% too low for next year, according to Ives. This perceived gap between market forecasts and future company performance supports his recommendation to own leading AI beneficiaries during pullbacks, even if technology shares experience additional short-term declines.
• The Nasdaq could reach 25,000 or 30,000 within the next two to three years, according to Ives's stated outlook. That projection explains why he remains constructive despite the possibility of another 10% market pullback and views current weakness through a multiyear investment lens.
• Nvidia's demand could be 20% higher than Wall Street expects during the next 12 to 18 months, even without China, according to Ives. He sees Nvidia's earnings and management commentary as important evidence for assessing whether the broader AI spending thesis remains intact.
• The AI capital-expenditure supercycle is being driven by hyperscalers and continuing demand for computing infrastructure. Ives argues that the recent technology pullback is normal and healthy after a substantial run, describing the current stage as only the second inning of a nine-inning development.
• AI adoption could create more jobs than it eliminates, according to Ives. Although he acknowledges that some jobs will be lost, he expects net job creation through innovation centers, manufacturing, data centers, and other activities associated with a broader United States innovation renaissance.
• Robotaxis and humanoid robots could become practical parts of everyday life within the next four or five years, according to Ives. He connects these technologies to a fourth industrial revolution that could reshape employment, manufacturing, transportation, and the United States technology sector.
• Power availability is the primary constraint on the AI revolution in Ives's assessment. He says only 3% of companies have moved down the AI path, but shortages could become severe as adoption approaches 20%, requiring greater investment in nuclear energy, fusion, grids, and power technology.

Questions & Answers

Q: Why does Dan Ives consider Oracle and Meta buying opportunities?

Dan Ives considers Oracle and Meta buying opportunities because he evaluates their recent selloffs against a two-to-four-year investment horizon. He believes the AI revolution remains at an early stage and expects leading technology companies to benefit as spending continues. His thesis also assumes that Wall Street is underestimating next year's numbers by 20% to 30%, creating potential upside from current expectations.

Q: What happens to the investment thesis if technology stocks fall another 10%?

Another 10% pullback would not change Dan Ives's long-term thesis, based on his comments. He views market declines as opportunities to own leading beneficiaries of the AI buildout rather than as proof that the trend has ended. His outlook calls for the Nasdaq to reach 25,000 or 30,000 over the next two to three years, although that remains his forecast rather than a guaranteed outcome.

Q: What should investors watch in Nvidia's upcoming earnings?

Investors should watch Nvidia's reported demand outlook and management commentary, particularly what Jensen says about conditions during the next 12 to 18 months. Dan Ives expects demand to be 20% higher than Wall Street anticipates, even without China. He also considers spending signals from hyperscalers important because they could confirm whether the AI capital-expenditure supercycle is continuing as expected.

Q: Why does Dan Ives call the technology pullback normal and healthy?

Dan Ives calls the pullback normal and healthy because technology stocks had already experienced a substantial run, making investor nervousness and profit-taking unsurprising. He rejects the idea that the decline necessarily marks the end of the AI expansion. Instead, he describes the market as being in the second inning of a nine-inning game, indicating that he expects much more development ahead.

Q: How could successful AI investment affect everyday life?

Successful AI investment could bring robotaxis into everyday transportation and make humanoid robots a practical reality over the next four or five years, according to Dan Ives. He also expects broader changes through innovation centers, manufacturing, and data-center construction. These developments form part of what he calls a massive innovation renaissance and the fourth industrial revolution in the United States.

Q: Will the AI revolution create jobs or eliminate them?

The AI revolution will cause some job losses, but Dan Ives expects it to create more jobs on a net basis. He identifies innovation centers, manufacturing, and data-center development as potential sources of employment. His conclusion is tied to the scale of expected technology investment and infrastructure construction, including the observation that more data centers are under construction than are currently active.

Q: Why is electricity supply a major challenge for AI growth?

Electricity supply is a major challenge because rapid data-center construction is increasing demand for power while some planned facilities lack adequate energy resources. Dan Ives calls power the only factor currently stopping the revolution. He says only 3% of companies have moved down the AI path, but shortages could become massive when adoption reaches 20%, placing additional pressure on electricity systems.

Q: What energy investments could support the AI data-center buildout?

Dan Ives expects a broad increase in investment in technologies that can expand or improve United States power capacity. He specifically points to nuclear energy, nuclear fusion, and grid enhancement as areas requiring an all-hands-on-deck approach. This investment would address the electricity constraint facing data centers, although the discussion also acknowledges that new nuclear capacity cannot be delivered overnight and electricity costs are already rising.

Summary & Key Takeaways

• Dan Ives characterizes the selloffs in Oracle and Meta as attractive opportunities for investors looking two to four years ahead. Even if another 10% pullback occurs, his long-term thesis remains bullish because he expects the AI investment cycle to continue and believes Wall Street is underestimating next year's numbers.

• Nvidia's upcoming earnings are presented as an important test for the broader AI thesis. Ives expects demand over the next 12 to 18 months to be 20% higher than Wall Street anticipates, even without China, and describes spending by hyperscalers as part of an unfolding capital-expenditure supercycle.

• Successful AI investment could produce robotaxis, humanoid robots, new manufacturing activity, innovation centers, and net job creation, according to Ives. The central constraint is electricity: data-center construction is accelerating, power shortages could intensify as adoption expands, and the United States may require substantial investment in nuclear energy, fusion, and grid technology.