TLDR
- Tech analyst Dan Ives sees the recent tech stock sell-off as a buying opportunity, calling it a healthy “1996 moment”
- Major tech stocks like Nvidia, Microsoft, and Alphabet have declined 2-3% this week during broader market weakness
- Ives expects the AI-driven tech bull cycle to continue for another two to three years with Nvidia leading demand
- Meta Platforms delivered strong Q2 results with 36% net income growth and 3.48 billion daily active users across its apps
- Reddit posted explosive 78% revenue growth to $500 million with its first profitable quarter, benefiting from AI content licensing deals
Tech stocks have faced pressure this week as investors worry about high valuations and global economic risks. Nvidia dropped nearly 3% while Microsoft fell 2.7% and Alphabet declined 2.24%. Chipmakers including AMD, Broadcom, and Micron also posted losses during the broader market sell-off.
Wedbush Securities analyst Dan Ives remains optimistic about the sector’s prospects. He views the current pullback as a healthy correction similar to 1996 when Federal Reserve Chair Alan Greenspan warned about market exuberance. That tech rally continued for several more years despite initial concerns.
Ives believes the current tech boom is driven by the largest wave of technology investment in decades. The AI revolution is still in its early stages with companies just beginning to recognize the value artificial intelligence can create. He expects the bull cycle to remain intact for another two to three years.
Nvidia Earnings Drive Market Focus
The analyst stays particularly bullish on Nvidia ahead of its earnings report next week. He points to overwhelming demand for the company’s AI chips with a supply-to-demand ratio of 10:1. Ives sees Nvidia continuing as the central player driving the AI revolution forward.
Among major tech stocks, analysts rate Nvidia, Microsoft, Broadcom, and Micron as Strong Buys. Micron carries the highest upside potential with a projected 31.23% gain based on analyst price targets. The memory chip maker stands to benefit from increased AI data center demand.
Meta Platforms recently delivered strong second-quarter results that highlight the momentum in digital advertising. The company’s net income surged 36% while daily active users across its app family reached 3.48 billion people. Ad impressions grew 11% year-over-year with pricing up 9%.
Social Media and Gaming Stocks Gain Traction
The social media giant is investing heavily in AI infrastructure while maintaining positive cash flow. Meta trades at a price-to-earnings ratio of 28 despite rising over 340% in the past three years. Analysts expect the company to grow earnings at a 17% annual rate long-term.
Southeast Asian tech conglomerate Sea Limited has also caught investor attention. The company operates gaming, e-commerce, and fintech businesses across seven countries plus Brazil. Revenue for the first half of 2025 reached $10 billion, up 35% from the prior year period.
Sea Limited’s gaming segment Garena has returned to growth with its popular mobile game Free Fire. The e-commerce platform Shopee holds the largest market share in Southeast Asia after focusing on its home region. Net income for the first two quarters hit $809 million compared to just $58 million in 2024.
Reddit has emerged as another standout performer in the social media space. The platform posted 78% revenue growth to $500 million in its second quarter. This marked the company’s first profitable quarter with net income of $89 million versus a $10 million loss last year.
The discussion platform benefits from AI licensing deals as language model developers use its content for training. Reddit signed an agreement with Alphabet to license its vast library of user-generated content. Daily active users grew 21% to 110 million as engagement remains strong across the platform.
Reddit’s gross margin reached 91% in the recent quarter while operating margin was just 3%. This suggests room for profit expansion as the company scales its advertising business and potentially introduces subscription services. Ad revenue makes up 93% of total revenue and grew 84% year-over-year.
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