Consumer AI revolution should drive Apple higher: Dan Ives

Supply chain conditions and the Federal Reserve's interest rate cut could be setting up a very promising environment for tech stocks to run higher. Wedbush managing director and senior equity analyst Dan Ives joins Market Domination to talk about how the AI revolution is guiding notable tech names, including Apple (AAPL) after it unveiled its iPhone 16 lineup last week.

"This is all about as Apple intelligence rolls out into the December quarter into March, that's where I believe this will be the largest Apple iPhone cycle that we've seen. I think markets better digesting it the last few days, but we're going to continue to sort of navigate," Ives tells Yahoo Finance, later adding: "And I just think this is one where the Street is underestimating what the consumer AI revolution is going to mean to Apple stock."

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Luke Carberry Mogan.

Video transcript

Dan, you just mentioned the fact that you were over in Asia.

I'm curious what you've learned from a supply chain standpoint and, and, and, and when you talk about the fact that this is a risk on trade right now and you're confident of techs move higher.

I'm curious because of that rate cut.

Are there any specific sectors or areas within tech that you think are poised to benefit the most?

Yeah, I mean demand out shipment supply 15 to 1 from a chip perspective.

It's actually generally more bullish than even a few months ago when we were in Asia because of enterprise demand.

And look NVIDIA grow is the only game in town now.

But the use cases are exploding.

That's bullish for hyper scourers.

You know, you look at Microsoft Google, you know, of course, Amazon and I think it just shows this is about a trillion dollars of incremental A I cap back over the next 3 to 4 years.

Big tech's leading it, the sovereigns all will get it from a government perspective and other enterprise.

And that's why I view it.

This is still 9 p.m. in the A I party that goes to 4 a.m. Dan.

Let me get your take on one big theme that played out this earnings season, which was big tech was spending, spending spending on A I but investors had some new questions, right?

I mean, you did hear that kind of bubbling up.

Where is the actual return on all this A I investment?

How are you thinking through that dynamic, Dan?

Yeah, look, Josh, you're obviously new attack, you know, as well as anyone.

I think we're in between this sort of cap X massive tidal wave and where you've actually seen the numbers come out where it's gonna, you're gonna see the modernization from a software perspective you've seen in Microsoft, seen the oracle see in pune your service now, but the 2nd, 3rd, 4th derivatives, all of our checks are showing when we go into December, you go into March, you go into June and 25.

That's why I think numbers come up significantly higher.

And I think that's why, you know, it's, we've seen some sort of soft spots, you know, obviously with sales force a few quarters go and others, I believe this is just an air pocket.

And ultimately, we're gonna see numbers go a lot higher for software dan.

Are there any macroeconomic risks though that you are a bit worried about?

You're viewing rate cuts as a bullish move or a bullish sign here for tech.

But just more broadly speaking, that risk of recession is still not going anywhere.

Right.

Some on Wall Street are still worried about that.

Are there any macroeconomic factors that you're closely watching?

The Bears have been worried about recession the last two years.

Why tax just continue to rip higher and they'll come out of hibernation mood here and there over the coming months, you got the election, of course, in terms of some of the risks, but it just as we talked about, this is the fourth industrial revolution and that's not changing its 25.

It was obviously it was 50 bits.

It's not change in regards to who's gonna be president.

This is an unprecedented tech spending environment fed cutting, I believe just makes it more of an auto bond in terms of what we're seeing for tech.

I'm not saying everyone's gonna benefit but in terms of the A I revolution, the winners that that's why I believe over the next, you know, 3 to 6 months, we're looking at NASDAQ 20,000, Dan.

Well, I have you, let's switch, let's switch gears a bit here.

Talk Apple another name you cover big day on Friday, that new iphone hitting store shelves.

How should we and his investors think about that, Dan.

Is this gonna be another iphone supercycle?

Look?

I I mean this, it's a matter of when not if that this is an iphone 16 supercycle, an A I driven one.

Now, obviously a lot of, you know, the bears talking about preorder and trying to, you know, obviously scared many uh investors earlier this week, Josh in Asia, no one was expecting pre orders to be up massively and it's actually in line with expectations.

This is all about as Apple Intelligence rolls out into the December quarter into March.

That's why I believe this will be the largest Apple iphone cycle that we've seen.

I think markets better digesting it the last few days, but we're going to continue to sort of navigate.

I mean, the haters will continue to hate on Apple, but I believe this is a, you know, $24 trillion mark happening in what I believe in 2025 Dan.

Talk to me about the catalyst that you think this is going to be, I guess more specifically here when you take a look at Apple over the next couple of months leading up to this super cycle.

How much of that has already been priced in, in the near term?

Oh I don't think it had, I mean, I think actually markets under pricing where units go.

I think units could ultimately be up high, single digits, potentially double digits market called 5% in terms of overall growth.

300 million and this most forms that 300 million iphones have an upgrade in four plus years of 1.5 billion iphones that's setting up for an unprecedented upgrade cycle.

And what the A I revolution now is coming through cook and Cupertino.

And I believe 20% of the world over the coming years will access A I through an Apple device.

And I just think this is one where the street is underestimating what the consumer A I revolution is gonna mean to apple stock.