Dan Ives said the AI revolution is currently in its "third inning," signaling that the technology trade still has significant growth potential.
This perspective comes as investors grapple with a recent pullback in chip stocks. Ives said the current volatility is a test of market fundamentals rather than a sign of weakening demand for artificial intelligence tools.
Speaking on Bloomberg Surveillance, the partner and senior managing director at Yorkville Ives & Co. said the recent sell-off was a "gut-check moment." He said the broader market is reacting to the pace of implementation, but the underlying trajectory remains positive.
Ives said the tech sector could see 15% more upside by 2026 [2]. He said the current phase of the market is a period of consolidation before the next leg of growth takes hold.
According to Ives, the scale of the current shift is unprecedented. He said that trillions in AI spending are just the start of the Fourth Industrial Revolution [1]. This investment level indicates a systemic shift in how global businesses operate and process data.
While some market observers have debated the specific stage of the memory-chip trade, Ives said the AI trade is still in the "third inning" [2]. He said the demand for high-performance chips and AI infrastructure continues to outpace supply, supporting a bullish long-term outlook.
Ives said the market is currently navigating the gap between the initial hype of AI and the realization of its full economic utility. He said that as companies move from experimentation to deployment, the value of the AI ecosystem will become more evident.
“The AI revolution is in the third inning.”
The 'third inning' metaphor suggests that while the initial excitement phase has passed, the primary value-creation phase is only beginning. By framing the chip-stock decline as a 'gut-check,' Ives is arguing that the volatility is a psychological market correction rather than a fundamental failure of AI to deliver returns on investment.
