If you're still thinking about AI investing purely through the lens of semiconductor companies, Wedbush analyst Dan Ives has news for you: you're looking at the wrong part of the equation.
Wall Street is already positioning for what comes after the initial AI infrastructure buildout, and Ives told CNBC's "Squawk Box" on Tuesday that the real action in 2026 won't be in chip sales. It'll be in what he calls the "AI ripple effect," where companies downstream from chipmakers capture the value as AI actually gets deployed and used.
"It's about the derivatives of the AI revolution playing out, I mean that's our whole thesis going in 2026," Ives said.
Sure, Nvidia Corp. (NVDA) remains one of his top overall AI names heading into the new year. But here's the interesting math: Ives argues that every dollar spent on Nvidia chips generates an $8 to $10 multiplier across the broader tech ecosystem. That multiplier effect is where he sees the biggest upside opportunities.
The AI Derivative Playbook
Ives laid out five top AI-driven stock picks for early 2026: Tesla Inc. (TSLA), Microsoft Corp. (MSFT), Palantir Technologies Inc. (PLTR), CrowdStrike Holdings, Inc. (CRWD), and Apple Inc. (AAPL). Notice something? Most of these aren't chip companies. They're platforms, software providers, and ecosystem players.
Take Microsoft. Ives said the company leads the enterprise AI race through Azure, calling it a stock with $100 of upside as cloud and AI demand accelerate. That's a direct bet on companies actually implementing AI solutions, not just buying the hardware to run them.
Then there's Apple, which Ives acknowledges has lagged in AI so far. But he expects a major shift in 2026 as consumer AI adoption flows through Apple's ecosystem, potentially boosted by a deepened partnership with Alphabet Inc. (GOOGL) Google. He said AI could add $75 in incremental value to the stock. That's the ripple effect in action: AI features driving upgrade cycles and ecosystem lock-in.
The Autonomy Bet
Ives also sees Tesla entering its most important year yet, driven by autonomous driving and robotics. This is what he calls "physical AI," where artificial intelligence moves beyond chatbots and image generators into the real world.
The numbers here are eye-popping: Ives said autonomy alone could be worth $1 trillion to Tesla's valuation. That would represent a fundamental revaluation of the company from car manufacturer to AI-powered transportation platform.
Software and Security in the AI Age
The inclusion of Palantir and CrowdStrike in the top picks highlights another dimension of the AI ripple effect. As companies deploy more AI systems, they need platforms to manage and secure them. That's where enterprise software and cybersecurity companies come in.
Ives's overall message to investors is clear: focus on AI derivatives in software, platforms, autonomy, and cybersecurity rather than only on semiconductor leaders. Those areas could see the biggest gains in the next phase of the AI cycle, as the technology moves from buildout to actual deployment and monetization.
It's a shift from asking "who's building AI?" to "who's making money from AI?" And according to Ives, that's where the next wave of returns will come from in 2026.