Investor sentiment toward AI is a powerful but capricious force in markets, as recently exemplified by the panic that gripped Wall Street about the potential for AI to threaten certain stock sectors.
Excitement over AI suddenly turned to panic earlier this month, as software, asset management, insurance, and logistics stocks all plummeted as AI companies announced new tools for these industries.
Dan Ives, an analyst at Wedbush, described the move as a “war against ghosts” and said investors don’t know where panic will strike next.
“Today, this market is trading ‘AI is a threat to the narrative of every industry…Software front and center is enemy number one’…For the bulls, it’s like fighting a ghost, but with capital spending approaching nearly $700 billion this year alone…The fear is that AI startups will become a Nightmare on Elm Street horror show for the tech industry,” he wrote.
Here are some of the headlines that Ives thinks could help reinvigorate Wall Street’s view of AI.
OpenAI secures latest $100 billion funding
ChatGPT maker OpenAI is reportedly close to closing a funding round worth $100 billion.
Ives said securing funding would “silence the loud noise.”
The additional financing could push the AI giant’s valuation up to $850 billion, boosting investor interest in a potential IPO and benefiting OpenAI stocks.
Jensen Huang’s comments on Nvidia earnings
Nvidia’s latest financial results are scheduled to be released on Wednesday, February 25th.
The AI chip maker’s CEO, Jensen Huang, is scheduled to speak on the earnings call, and Ives said his comments on chip demand could be a catalyst to reinvigorate AI sentiment.
Oracle successfully raises up to $50 billion in funding
Earlier this month, Oracle announced plans to raise between $45 billion and $50 billion in debt and equity financing in 2026.
The latest funding will fund the company’s rapidly growing cloud business. Oracle Cloud Infrastructure customers include AMD, Meta, Nvidia, OpenAI, TikTok, and Elon Musk’s xAI.
Ives said if Oracle achieves initial success in raising large amounts of funding, it could bode well for the broader AI ecosystem.
Tech company results show AI monetization is working
Strong financial results from major tech companies that show they are monetizing AI could reignite the bullish mood toward AI.
Wedbush said Salesforce, Microsoft and ServiceNow will be watching for future earnings.
CrowdStrike is another name that has the potential to drive broad sentiment, with strong earnings showing its AI success. Ives recently highlighted cybersecurity as a technology sector that can be protected from the horrors of AI.
The analyst specifically cautioned against Meta and Google’s digital advertising businesses, explaining that increased monetization of AI ads would be a positive indicator for the AI space as a whole.
Software M&A is increasing
A resurgence in merger and acquisition activity is one of the key investment themes to watch, according to Bank of America.
Wedbush said an increase in software M&A next month, including large strategic public deals, could reignite Wall Street’s confidence in AI.
The software sector is at the center of investors’ concerns about AI disruption. M&A in this space could help reframe the market’s perception of software exposure to AI as strategic rather than harmful.
Apple releases AI Siri
Apple has become an AI laggard in the eyes of Wall Street, but the iPhone maker’s introduction of AI-powered Siri could upend that narrative.
The company has delayed the release of AI Siri, and bets are rising on how it will leverage AI with its large user base.
Given the prominence of the iPhone, this release is also a milestone in the history of consumer AI.
Enterprise gropes Claude
It was Claude’s update that sparked initial fears that AI would replace software, accelerating a broad sell-off in technology stocks on Wall Street.
Ives said sentiment regarding Claude’s viability as a software replacement could reverse if enterprise customers start implementing Claude and run into scaling and security issues.
