Market bears remain in "hibernation mode" following the release of Nvidia's latest quarterly earnings report, according to Wedbush Securities analyst Dan Ives.
This assessment is significant because it suggests that despite high valuations, bearish investors have not yet found a catalyst to trigger a broader sell-off in the technology sector. The continued optimism indicates a strong market conviction in the long-term viability of artificial intelligence integration.
Speaking during CNBC’s "Power Lunch" broadcast from New York, Ives said the AI boom is still in its early stages. He said tech stocks could climb another 15% this year [2].
Nvidia's financial results, released Wednesday, Feb. 22, 2024 [3], exceeded Wall Street expectations. The company posted record revenue of $8.1 billion [1] and earnings per share of $2.70 [1].
Ives said these strong figures reinforce the growth trajectory of the AI sector. He said the lack of bearish activity shows that investors are more focused on the potential for continued expansion than on the risks of a market correction.
The analyst's perspective highlights a divergence between those betting on a bubble and those who believe the fundamental shift toward AI is only beginning. While some critics argue that the pace of growth is unsustainable, the current market behavior suggests a willingness to overlook short-term volatility in favor of long-term gains.
“Market bears are still in hibernation mode after Nvidia's earnings.”
The absence of a bearish reaction to Nvidia's high-profile earnings suggests that the market has shifted its baseline for what constitutes a 'bubble.' By viewing the AI expansion as an early-stage structural shift rather than a temporary spike, investors are signaling a higher tolerance for risk in tech equities, provided the underlying revenue growth remains consistent with the demand for AI infrastructure.
