Tech Selloff a 'Garage Sale,' Says Wedbush's Ives, Highlighting 5 AI-Linked Stocks to Buy Now
This week's steep decline in software stocks, dubbed by some as a sector 'armageddon,' is being reframed by one of Wall Street's most vocal tech optimists as a rare chance to buy. Dan Ives, managing director and senior equity analyst at Wedbush Securities, contends in a new note that the panic is overdone and has identified five stocks he believes are poised to rebound.
"What we're seeing is a market overreaction, not a fundamental breakdown," Ives told Business Insider. "For investors with a long-term view on artificial intelligence, this is a garage sale in the tech sector." The selloff, among the worst since 2022, was triggered by renewed investor anxiety over how quickly AI will disrupt legacy software business models and whether current valuations can be sustained.
Ives acknowledges AI presents near-term headwinds as enterprises navigate implementation risks, but argues the core growth narrative remains intact. "The magnitude of this sell-off is factoring in a doomsday scenario that is far from reality," he wrote. His team believes concerns about data security and migration complexities will ultimately reinforce, not weaken, the position of established platform companies.
Here are the five companies Ives and his colleagues recommend, citing their central roles in the AI infrastructure build-out:
Microsoft (MSFT)
Closing at $414.19, down over 12% year-to-date. Ives calls the tech giant a "core winner" of the AI revolution, with its price target set at $575. He points to accelerating cloud and AI monetization through Azure and its deep partnership with OpenAI as key drivers.
Palantir (PLTR)
Closed at $139.54, sinking more than 16% this year. Ives sees a "golden path" for the data analytics firm, with a $230 target, as enterprises shift from AI experimentation to production, valuing its platform for governance and workflow integration.
Snowflake (SNOW)
Fell over 23% to $165.29, the sharpest decline of the group. Ives sets a $270 target, arguing the company is the essential "trusted layer" between enterprise data and external AI models, a position strengthened by the need for security and governance.
Salesforce (CRM)
Down more than 21% to $199.44. Despite being in the "epicenter" of the selloff, Ives maintains a $375 target, believing the market overlooks its differentiated AI strategy (Agentforce) and its massive installed base.
CrowdStrike (CRWD)
Closed at $415.36, off over 8%. With a $600 price target, Ives states the cybersecurity leader's role as the "gold standard" is unchanged, as securing AI-augmented workloads becomes increasingly critical.
Market Voices: A Split Reaction
The note sparked immediate debate among investors and observers:
Michael Chen, Portfolio Manager at Horizon Capital: "Ives is right to focus on the long-term infrastructure play. This volatility is noise. Companies like Microsoft and Snowflake aren't just software vendors anymore; they're becoming the plumbing for the AI economy."
Sarah Gibson, Independent Tech Analyst: "This feels like a desperate attempt to catch a falling knife. The 'AI monetization' story for many of these firms is still just that—a story. Earnings multiples are contracting for a reason, and Ives's perennial bullishness ignores real margin pressures and adoption hurdles."
David Park, Retail Investor: "It's exhausting. One week we're told AI changes everything, the next the sky is falling. I'm using this dip to cautiously average into my position in CrowdStrike. The cybersecurity angle feels like a safer bet regardless of which AI app wins."
Rebecca Shaw, Chief Technology Officer at a Mid-Market Retailer: "From an enterprise buyer's perspective, the hype cycle has peaked. We are slowing our roll-out of new AI software tools to assess ROI and integration costs. The market is finally reflecting that cautious reality."
Read the original article on Business Insider