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We are back right here on the watchlist and happy to have with us Dan Ives, global head of tech research, managing director, senior equity analyst at Wedbush Securities. We have so much to discuss. We have a lot of earnings that have come out and I want to touch on Snowflake and Salesforce, but just the big picture on the AI revolution.
You talked about it being needing roughly a tenfold increase in computing power by 2030 and how the AI revolution is is it in its infancy? How do you describe where we are because so many of the upgrades and price target raises have an AI story behind them in your notes. Nicole, it's third inning. I mean, the the reality is in terms of where we're heading, you've just seen the first part of this build out happen and look in the US, you only have what?
Less than 5% of companies have gone down the AI path. Asia ex-China less than 2%, Europe obviously you know, really nowhere and the Middle East, India just starting to build out. I mean, it look at my view, this is $4 trillion of spending over the coming years. For every dollar spent on a video chip, $8 multiply across the rest of tech.
That's why the second, third, fourth derivatives, infrastructure, software, power, energy and I think we're still early and then and that's our view, Nasdaq 30,000. Nasdaq 30,000. Well, that's what we're looking at. Let's talk about some of the key names here. I mean, you did talk about Snowflake, you have an out-perform rating and also you said the confidence in the AI strategy and the moat that it has helps you to raise your price target here.
The Rodney Dangerfield of software, no respect. I mean, if you look what Snowflake's done, look Nicole, me and you have talked for years. Look at Palantir first, now DataDog, inner data, now Snowflake. What it's showing you is the data layer is now the monetization. It's not just chips, it's gone to the data layer.
And I think that's why Snowflake it's not just important for Snowflake in my view the stock continues to go higher. It's what this means now about monetization happening on the software. I think I and I think even on salesforce.com we saw that when it came to agent force in terms of what's happening.
That is the most important thing from these earnings. You raised your price target to 280 from 270. Um and Senate had a moat. What's the Snowflake moat? Data. I mean the reality is when you think about data, data warehousing that data layer like that is the new oil, the new gold. That's the moat if you will compound here.
That's what Data Dog's moat is. It's ultimately what I believe Oracle's moat will be. And I think it's something where I'll call it the AI growth trade in terms of the worry that Anthropic, Open AI, you know, they're going to crush every software company. Look, some yeah, could get disintermediated and obviously you know, and and we see some of that playing out, but data infrastructure and stall base is key.
And Palantir by the way, which is up about 7% today, largest percentage increase that we've seen since November of 2025. It's at 141. Do you have a price target or think Palantir goes higher as well? Yeah, we talk about $200 and it's our view Palantir we think that's a trillion dollar market cap in the coming years because look if you start to get caught up in just these ebbs and flows off quarters, sometimes the narrative you miss what's happening underneath.
And the monetization in terms of the use cases it just started with Palantir. Let's talk about Salesforce where you have an outperform there. Tell me a little bit about that story and you talked about the agent force and data cloud, the growth that this the agentic products will really equal organic revenue growth.
Look, I mean they're kind of you look at Benioff, really the poster child for a sales apocalypse, right? In terms of the worries that you see with Salesforce. And I think some of that had you know, was self-inflicted. They were probably late to the game. But it's our view when you look at 150,000 customers, agent force is going to be their opportunity.
It's over a billion now, and I think that you go look look at some of that. That starts to get to 8 10% revenues over the next you know, call 6 months, 9 months. I mean, that becomes a huge driver in the story. A big step in the right direction for Salesforce. And then for IBM, you said it's the quantum strategy that leads you to put a $300 target.
Tell me about the IBM story. Cybersecurity, quantum computing. Look at everything that Arvind's building, right? At IBM. And I think that's one like you know, that that that we saw recently that just sort of put them back on the on the radar. I think this is a transformation story in terms of what's happened with the AI and quantum.
And I think sometimes when you're turning around a cruise ship in a river, okay? That that you're going to look at areas that are declining. And and they're they definitely have pressure in areas of their business. But the growth areas in AI, in quantum, it's a key part of the re-rating. It's a key part of what I believe this is a sweeping giant in terms of as as a tech player.
Can we talk about the CapEx spend that we've seen on AI versus the return on investment and the monetization of AI? I mean, what are the top names in your mind that are showing monetization? Say, "Look, they've spent a lot, but they're making a lot." Which ones would those be? Well, I think Alphabet's clearly one and I think they've been rewarded accordingly.
I think two is, you know, I think if you I think if you look at Amazon, that's one where monetization's clearly coming and I think you're starting to see that that the CapEx dollars. And then, you know, and then look and then in terms like Microsoft, I I think that's one way oversold relative to the monetization that's starting to happen.
I think Microsoft and Oracle are the two names. I think those are going to be the comeback kids as we look into the second half of the year, Microsoft and Oracle. All right. So, you did say get the popcorn out because it's only the beginning of the AI buildout and you have some other names, let's say, in the AI tailwinds for the cybersecurity sector.
Talk about that. I mean, CrowdStrike, Palo Alto. But look, go back, you know, you go back to March, you know, RSA conference and throughout that the ghost fears of stocks getting crushed. Look, cybersecurity, the budgets are going to double, in my opinion, next few years. The surface area is increasing.
CrowdStrike, Palo Alto, I think incrementally well positioned to capture this market. I think it's one where I think investors are still underestimating what the opportunity is going to look like. Look, Zscaler, it's a name we still like. Obviously, that was a huge sort of gut punch, but I think that probably that stock got a little way oversold relative to the numbers.
Would you scoop up Zscaler today when it's down 30% this week? Yes. I mean, look, I we kept our rating. I mean, I'm a believer in everything Jay and Zscaler are doing. Was that a step back in terms of the quarter and guidance? Yeah, but I don't view that you can just throw these stocks away. I think that I think this is one where they will be one of the core winners in cybersecurity.
Maybe not at the level of CrowdStrike and Palo Alto, but I don't think any of that's really being factored into the stock. What is the fork in the road period for Meta? What does that mean? Are you worried? No, when you're spending cap I mean Nicole, you're talking about like who's spending cap backs in this scene?
I mean Meta, that's why they're in that penalty box cuz they spend the cap backs. You saw a very subpar quarter relative to monetization. The subscription service was a step in the right direction. I think that's going to be I think this is all part of the strategy. You have 3 and 1/2 billion users.
How do you monetize them? How's Apple going to monetize? They're going to be, you know, essentially a toll collector on the AI highway. So, I just think this is one where some companies are going to be able to do it quicker than others, but you cannot look at a Meta and just say that they're not going to monetize.
I think it's just going to take longer, but you're seeing strategically right steps. What about the tie-ups? How important are those? I mean, you did allude to the one about Snowflake's potential Amazon tie-up could be a game-changer. Tell me about some of the you know, the cyclical spending, the the tie-ups that we're talking about.
I mean, the Snowflake-Amazon one could be one where you start. Look, I think it it's when you first of broader, you want to see these tie-ups. This is no different than a eighth grade prom or whatever. I mean, you're going to see dancing partners. But, that's what you need to do in terms of this AI arms race, whether it's GPU, whether it's capacity, whether it's technology.
I mean, when you look at Snowflake-Amazon, that's the smart move. When you look at everything Jensen's doing or Lisa Su at AMD, I think these are the super smart moves relative to this is just [clears throat] the start of this next phase of the build-out. And I think there's names like Nebius and others that are clearly going to be, you know, directly beneficiaries.
And I think it's one everyone's trying to figure out who ultimately will be the winners cuz you will have losers, but these companies cannot wait. They need to have stakes in the ground. Mhm. Well, you talked about AI just being in the third inning of this game, so a long way to go and we could just say where in the world is Dan Ives cuz I know you're galloping around the globe um spreading the word on tech and learning more and more with your channel checks.
Dan Ives, global head of tech research managing director senior equity analyst Wedbush Securities. He needs a watch with many different uh global times. Thank you, Dan Ives.
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