Just three years ago, in the fall of 2022, the launch of ChatGPT made a splash in the tech world. It marked the public advent of generative AI models, and AI tech has been booming ever since. More and more, companies in fields from semiconductor chip manufacturing to software to cloud computing are moving to support or adopt the new technology.
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Daniel Ives, a well-known tech analyst from Wedbush, has been watching the AI boom with deep interest. He sees clearly how we are only at the beginning of an epochal change in our technological landscape, and he explains how it will impact the stock markets. “As we have discussed often over the last few years this tech bull market in our view is being fueled by the biggest transformational tech spending cycle in the last 40 years…the AI Revolution,” Ives said. “We are still in the early days of the AI Revolution as the use cases are just starting to massively expand as more companies recognize the value creation being driven by a handful of tech companies… In our view the tech bull cycle will be well intact at least for another 2-3 years given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead. This remains our tech playbook and investor road map.”
Ives follows the general outline by suggesting specific tech stocks to buy, and his choices may surprise you – he’s picked out Tesla (NASDAQ:TSLA) and IBM (NYSE:IBM) as long-term winners. We’ve opened up the TipRanks database to see the Street’s broader view of both stocks and to see how Ives’ outlook measures up. Let’s dive in.
Tesla
We’ll look at Tesla first, the leading US electric vehicle (EV) maker. Tesla is notable for being the only US EV company to move from bootstrap start-up to profitability entirely within the 2000s; the company was founded in 2003, launched its Model S sedan in 2012, and saw its first consistently profitable year in 2020. The company currently sees annual revenues of $90-billion-plus, although the year-to-year revenue growth has been slowing down.
While Tesla’s chief business, and its primary revenue source, is electric cars, the company has its hands in plenty of other pots, including AI. Not all of these pots are revenue drivers – that title belongs to the electric generation & storage segment, as well as services & other – but Tesla’s AI work deserves a closer look.
The company is making a concerted push to develop autonomous AI technology, for use in a variety of applications. Probably the most prominent of these is Tesla’s work on self-driving vehicles. The company is working on FSD software for cars – that is, full self-driving – and has equipped its Robotaxi program with the system. The Robotaxi was launched in Austin, Texas in June of this year, using Tesla’s Model Y car as a platform. The program includes a human monitor in the front seat, while software and control problems are identified and corrected, but for the long-term the company hopes to eventually remove the human and offer a fully automated, on-call ride-share service. Tesla is actively pursuing expansion of the Robotaxi, and is testing the system in the San Francisco Bay area.
Tesla has also applied its work with autonomous AI tech to its Optimus robot program. Optimus is a bipedal humanoid robot, designed to perform manual labor that humans would find difficult or impossible – for example, boring or repetitive tasks over long periods of time, or heavy lifting in unsafe environments. In addition to AI tech, the program involves deep computer learning, motion planning, and advanced sensor systems to bring it to life, all of which are active in Tesla’s research and development departments.
Turning to Tesla’s financials, in its last quarterly release, covering 2Q25, the company’s total revenue came to $22.5 billion, for a decline of 12% year-over-year – although it beat the forecast by $360 million. The decline was driven by a 16% y/y drop in automotive revenues (that is, car sales), which came in at $16.7 billion. A 17% gain in ‘services and other revenue,’ pushing that segment to $3.05 billion for the quarter, partially compensated for the drop in auto sales. At the bottom line, Tesla reported a non-GAAP EPS of 40 cents; this figure met expectations, but was down 12 cents per share, or 23%, year-over-year.
Despite Tesla’s current difficulties – slowing car sales and lower year-over-year revenue growth – Daniel Ives still sees the stock as a solid investment in AI. He writes, “We continue to believe that TSLA will begin launching its Robotaxi capabilities across multiple cities (~25 cities over the next year) in the US & abroad over the next 12-18 months as the company goes all in on the AI vision…we believe the autonomous opportunity is worth $1 trillion alone for Tesla. As we have discussed, there are still headwinds, tariffs, and clear growth challenges for Tesla over the coming 3-6 months…but Musk now entering the picture as a wartime CEO to put TSLA on an aggressive AI-focused strategy represents the biggest and best possible news for Tesla investors. AI Future is the focus for long term investors.”
This upbeat long-term stance backs Ives’ Outperform (Buy) rating on the shares, while his $500 price target points toward a one-year upside potential of 44%. (To watch Ives’ track record, click here.)
This is the bullish take. Overall, the Street is more cautious. Shares in Tesla are currently selling for $346.6, and the $305.37 average price target implies a one-year depreciation of 12%. The recommendations on file, 36 of them currently, include 13 to Buy, 15 to Hold, and 8 to Sell, for a Hold consensus rating. (See TSLA stock forecast.)
International Business Machines
The next stock on our list is one of the nation’s venerable names in business technology, and a long-time fixture of the stock indexes. IBM was founded in 1911, making mechanical business machines such as calculators and time clocks. Later, the company moved into electronic computing and was an early innovator in the age of punch-card computers and magnetic tape memory before moving on to floppy disks. The company stayed at the leading edge of tech in the 1970s and provided some of the early PC operating systems, before staking out a place in the world of computer hardware and business software. In the early 2000s, IBM shifted toward cloud computing and high-tech consulting.
In short, IBM has exemplified two features that keep a company relevant in an ever-changing world: an ability to adapt to new conditions, and a clear view of the next frontier of technology. Today, IBM has its hands in several of the tech world’s vital segments: cloud computing, quantum computing, and AI.
IBM’s AI solutions are designed to work across the full extent of the end-use customer’s organization. The company’s platform, watsonx, provides a portfolio of AI products that are designed to drive business processes, automating such segments as regulatory compliance and data management. The platform includes generative AI models and is scalable for use by customers at any level.
IBM’s AI systems are used in everything from HR to IT, with customer service, marketing, and app development in between. The company’s management is upbeat about its AI business and reported an expansion of the ‘generative AI book’ in 2Q25, the last quarter reported.
When we look at the quarter’s financial results, we find that IBM had $17 billion in total revenues, up 7.6% year-over-year and beating the forecast by $410 million. The company reported a bottom line of $2.80 per share by non-GAAP measures, beating the forecast by 15 cents per share. IBM’s free cash flow in the quarter came to $2.85 billion, up 9% year-over-year. The company expects to generate $13.5 billion or more in free cash flow for the full year 2025.
Turning again to Daniel Ives, and the Wedbush view, the tech expert bases a bullish take on IBM mainly on the company’s rapidly growing AI business. He says of the business/tech giant, “The company continues to see strength for its software and infrastructure services despite the current shifts in the operating environment with over 10% of revenue coming from GenAI while seeing its GenAI book of business accelerate to $7.5 billion, above the prior quarter of ~$6.0 billion… We believe that IBM is well-positioned to capitalize on the current demand shift for hybrid and AI applications with more enterprises looking to implement AI for productivity gains and drive long-term profitable growth.”
Ives goes on to rate IBM shares as Outperform (Buy), along with a price target of $325 to suggest an upside of 36% in the next 12 months.
Overall, IBM gets a Moderate Buy consensus rating from the Street, based on 13 recent reviews that break down to 7 Buys, 5 Holds, and 1 Sell. The stock is selling for $239.43, and its average price target, now at $297.33, implies an upside potential of 24% by this time next year. (See IBM stock forecast.)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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