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Luke Kawa

Wedbush analyst Dan Ives adds CoreWeave, IREN, and Shopify to his list of top 30 AI stocks, removes SoundHound, ServiceNow, and Salesforce

Wedbush Securities analyst Dan Ives is still very bullish on the outlook for AI stocks as we creep closer to the start of another new year.

“In a nutshell, this AI Revolution is just beginning today and we believe tech stocks and the AI winners should be bought given our view this is Year 3 of what will be a 10-year cycle of this AI Revolution buildout,” the analyst wrote.

But he’s switching up his roster of potential stock market beneficiaries from the ongoing boom.

Ives added neocloud CoreWeave, bitcoin miner turned data center company IREN, and Shopify to his list of top 30 AI winners (which are held in the Dan IVES Wedbush AI Revolution ETF). To make room for the trio, he axed SoundHound AI, ServiceNow, and Salesforce from the list.

His rationale for the additions and removals:

  • 🟢 CoreWeave: Demand for AI compute will exceed supply in the near term.

  • 🟢 IREN: He’s a fan of its “differentiated approach to providing significant power supply necessary to fuel the AI Revolution.” IREN touted its 3-gigawatt secured power portfolio in North America by announcing a deal to provide compute to Microsoft in early November, and aims to vertically integrate power infrastructure into its data center business.

  • 🟢 Shopify: He’s optimistic on how aggressively the company is integrating AI into its business, both in terms of expanding buying channels and pursuing operational efficiencies.

  • ❌ SoundHound AI: Ives is worried that the company is “facing a difficult competitive landscape” over the coming quarters, noting that it’s leaned more into M&A to add customers.

  • ❌ ServiceNow: He says the company has a “choppy path to monetize on its increased usage.”

  • ❌ Salesforce: Ives says that its AI monetization has been slower than anticipated to date.

Of note: the analyst is leaning a little more into the upstream parts of the AI supply chain, rebalancing his ETF toward the facilitators rather than companies that are closer to end consumers.

“The ability to provide enough infrastructure for these AI initiatives becomes more critical with rising risks regarding keeping these facilities online,” he wrote. “We are incrementally positive on these AI Infrastructure names over the coming years as more enterprises go down the AI path which will only increase compute demand over time creating a larger disparity between supply and demand.”

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Max Knoblauch

Electric aircraft maker Beta rises on report it will supply a rival with motors

Newly public electric aircraft maker Beta Technologies is climbing in premarket trading on Tuesday after announcing it would supply a rival in the space, Embraer-funded Eve Air Mobility, with electric motors.

In an industry still light on revenue, the potentially $1 billion, 10-year deal is notable for Beta, which received a $300 million investment from GE Aerospace in September.

Analysts have pointed out Beta’s strength as a supplier since it went public. Morgan Stanley on Monday compared Beta to Tesla, and the company received a “buy” rating from Goldman Sachs. The bank gave rival Joby Aviation a “sell” rating, and tagged Archer Aviation with “neutral.”

Eve Air Mobility Selects BETA Technologies as Pusher Motor Supplier. – Eve

Eve Air Mobility Selects BETA Technologies as Pusher Motor Supplier. – Eve

Analysts have pointed out Beta’s strength as a supplier since it went public. Morgan Stanley on Monday compared Beta to Tesla, and the company received a “buy” rating from Goldman Sachs. The bank gave rival Joby Aviation a “sell” rating, and tagged Archer Aviation with “neutral.”

markets
Luke Kawa

IREN sinks after announcing share offering as part of refinancing plan

Bitcoin miner turned data center company IREN tumbled in postmarket trading on Monday, and remains mired in the red ahead of the open on Tuesday, after announcing plans to sell shares as part of a plan to refinance its debt.

Management is proceeding with a registered direct offering of shares to a limited number of potential buyers, and using those funds to repurchase up to about $1.5 billion in convertible notes due in 2029 and 2030 with coupons of 3.5% and 3.25%, respectively.

How many shares the company ultimately offers will be governed by how many of these convertible note holders are willing to sell.

Separately, IREN is also issuing $2 billion in new convertible senior notes in a private offering to qualified institutional buyers, split between 2032 and 2033 maturities.

Finalized terms, including the interest rate and initial conversion rate of the notes, are yet to be announced, but Bloomberg reports — citing people familiar with the matter — that the company is aiming for the 2032 note to carry a coupon of 0% to 0.25% and for the coupon on the 2033 note to be between 0.5% and 1%. Both notes are expected to have conversion premiums of 25% to 30%.

Meeting the demand for AI compute and power requires that IREN, one of the so-called neoclouds, invests in the necessary infrastructure to boost its capacity. In November, the company booked a near $10-billion deal with Microsoft to provide access to computing capacity at a data center campus in Texas.

IREN was recently added to Wedbush analyst Dan Ives’ list of the 30 biggest beneficiaries of the AI boom.

markets
Hyunsoo Rim

Credo soars on record Q2 results fueled by hyperscaler demand

Credo Technology Group surged more than 18% in premarket trading on Tuesday after the cable solutions provider, which makes many products used in AI data centers, delivered Q2 results that blew past Wall Street’s expectations.

Revenue jumped 272.1% year-over-year to $268 million, topping the ~$235 million estimate, while adjusted EPS of $0.67 easily beat the $0.49 forecast compiled by Bloomberg. Credo’s outlook was also strong, with the company expecting Q3 revenue to come in between $335 million and $345 million, implying 27% quarter-on-quarter growth at the midpoint. Analysts expected Q3 sales of $247.5 million.

CEO Bill Brennan called it the strongest quarterly results in Credo’s history, which “reflect the continued build-out of the world’s largest AI training and inference clusters.” 

The results are so strong that they’re not only buoying shares of Credo, but also fueling a rally in Astera Labs, which also provides high-speed connectivity solutions, as well as POET Technologies ahead of the open.

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Tasha Matsumoto
17h
Stocks and bitcoin slide as investors’ appetite for risk wanes

Stocks broke their five-session winning streak.

A grizzly bear attempts to open Christmas presents given to them by their keepers, at the La Fleche Zoo, western France, on December 23, 2024.
markets
Luke Kawa

Traders are pricing in a big swing in AI chip market share to Broadcom from Nvidia

The story within the AI trade lately has been: Google’s a winner, and OpenAI is a... well, to be kind, non-winner.

Companies closely tied to the former, like Broadcom, which codesigns the TPUs that Gemini 3 was trained on, have benefited from their relationship with the hyperscaling search giant. Conversely, Nvidia, which sells to both Google and OpenAI but is besieged with worries about how custom chips might impact its AI market share (and profitability), has been selling off.

“NVDA stock is now trading at its widest ever ~40% discount to AVGO’s current 42x forward PE versus historical -10%/+7% discount/premium over the past 1/2 yrs, respectively,” Bank of America analyst Vivek Arya wrote. “In other words, consensus has already implicitly shifted at least 10+ points of (2H26E/27E) AI market share towards AVGO, conceptually.”

The abrupt shift in valuation amid this divergent price action is reversing course on Monday: Nvidia’s up about 1.5% as of 10:55 a.m. ET, while Broadcom is off 2.6%.

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