Dan Ives Says Big Tech Earnings Were The 'Wow Moment' For AI Monetization — 'It's All Starting To Come Together'

• Ives believes the latest earnings season has provided investors with increasingly clear evidence that the massive spending on AI infrastructure is translating into real demand across the technology ecosystem.
• He said the acceleration is visible across the AI stack, from hyperscalers and chipmakers to data-center operators and software companies, making the breadth of the strength hard for investors to ignore.
• Ives believes Microsoft’s latest results offered a clear sign that hyperscalers are beginning to monetize their massive AI investments.

Tech strategist Dan Ives on Monday said that the latest earnings from technology companies and hyperscalers were the “wow moment” for investors when it comes to the monetization of the AI capital expenditure.

During an interview with CNBC, Ives said that to some extent, earnings of big tech companies have “almost” caught up with valuation.

“If you think about the tech earnings, what you saw with the hyperscalers, Microsoft in particular, that was sort of the wow moment for investors,” he said.

Ives Sees AI Demand Accelerating Across Tech

Ives believes the latest earnings season has provided investors with increasingly clear evidence that the massive spending on AI infrastructure is translating into real demand across the technology ecosystem.

“Even now when you think of this week, with Cisco and you look at CoreWeave, it's pieces of a puzzle and it's all starting to come together where demand is accelerating,” Ives said.

That acceleration is visible across the AI stack, from hyperscalers and chipmakers to data-center operators and software companies such as Palantir Technologies Inc. (PLTR), he said, while adding that for investors, the breadth of the strength is becoming difficult to ignore.

“You see that from the hyperscalers to chips to Palantir and others... that is why you see tech stocks continue to move higher,” Ives said.

The strategist believes that the shift is particularly important because it suggests that earnings growth is beginning to justify the elevated valuations that have defined the AI trade. Rather than simply relying on expectations for future AI spending, investors are starting to see evidence of the economic returns from that spending.

AI Capex Is Starting To Turn Into Monetization

The bigger question for investors, however, is whether hyperscalers can ultimately generate enough revenue and cash flow from their AI investments to justify the capital being deployed.

Ives believes the latest results from Microsoft Corp. (MSFT) offered one of the clearest indications yet that this transition is underway.

“I think on the capex to monetization, the reason the Microsoft quarter was so important, just for broader tech, it shows and I think they lay it out perfectly, is that monetization is starting to happen with capex,” Ives said.

That process will take time, and Ives cautioned investors against judging the AI trade over a six-month horizon. Instead, the focus should be on how the investments being made today translate into cash flows over the next 12 to 24 months.

“Investors need to look out not over six months but over 12, 18, 24 months to see what the cash flow is going to look like,” he said.

The Next Big Test: Nvidia

The next major test will come later this month when Nvidia reports earnings. Ives described the current results as merely a prelude to what he considers the biggest AI event on the earnings calendar.

“This is all an appetizer for the main event, being the Godfather of AI, Jensen and Nvidia, as we get to later in the month,” he said.

For Ives, each new earnings report is another piece of the same puzzle, and the more pieces investors see, the clearer the monetization story becomes.

The S&P 500 ETF (SPY) is up 22% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 27%.

The Global X Artificial Intelligence & Technology ETF (AIQ) is up 42% during this period, while the iShares Semiconductor ETF (SOXX) is up 126%.

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