Dan Ives: Tech Has 15% More Upside in 2026 and AI Trade Is in "3rd Inning"

Dan Ives, the global head of technology research at Wedbush Securities, recently delivered a very clear message for investors trying to determine whether the artificial intelligence (AI) trade is peaking. His message: It's not nearly over.

In a CNBC interview last week, Ives said that he believes tech stocks still have another 15% upside potential for the remainder of 2026. He also noted:

We're in the third inning of this nine-inning game relative to AI, and that's bullish.

But that wasn't it. Ives told CNBC that he sees opportunities in several non-"Magnificent Seven" stocks and explained the growth drivers that investors should look for. Here are a few of his more notable quotes from the interview.

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The AI trade is expanding

Intel, Cisco, Dell ... it's spreading. What's essentially happening is that this tech trade is now ... second, third derivatives playing out across hardware, semis, what I ultimately believe will be software and infrastructure.

The biggest returns during the AI boom came from the megacap names. Now, the next level of participants is beginning to see their moment as well. The three companies Ives mentioned here -- Intel, Cisco Systems, and Dell Technologies -- are still considered old-school tech by many. But they, along with other smaller tech companies, have shown positive results as well.

It's all about capex

I think what you're gonna see is not just a reiteration of CapEx. Monetization is starting to happen from an AI perspective.

Tech companies are committing hundreds of billions of dollars toward developing AI capabilities. At times, the market has grown concerned about that, wondering whether it's too much and whether companies will see a reasonable return on that investment.

If companies reiterate their capital expenditure (capex) spending in upcoming earnings calls, it should be a positive sign for these stocks. If they indicate a pause or even a pullback on spending, it could be a sign of a top.

Palantir could soon become a trillion-dollar company

That's at the epicenter. That's, I believe, a trillion-dollar market cap in the next two or three years.

Ives also mentioned Palantir Technologies as his top tech stock to own outside of the Magnificent Seven, saying that it's at the "epicenter" of the AI revolution.

What investors can take away from Ives' comments?

If you agree with Ives' statements above, there's little reason to abandon the AI trade here. I don't think that means pushing all-in. Investors should be wary of position sizing, but tech can still be a larger part of a portfolio.

Any of the big tech exchange-traded funds (ETFs), including the Invesco QQQ ETF (NASDAQ: QQQ) or the Vanguard Information Technology ETF (NYSEMKT: VGT), have sizable Magnificent Seven allocations. If you want better value, take a look at the State Street SPDR S&P Software & Services ETF (NYSEMKT: XSW). Software stocks have mostly been left behind in the recent AI rally, and this ETF is more than 25% below its high. There's plenty of catching up to do if this sector can get a catalyst.

David Dierking has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cisco Systems, Intel, and Palantir Technologies. The Motley Fool has a disclosure policy.