This article first appeared on GuruFocus.
Wedbush analyst Dan Ives named the software giant Microsoft (NASDAQ:MSFT) his top AI hyperscaler pick, saying it was best positioned for enterprise cloud growth.
Ives argued that hyperscalers with large cloud footprints are likely beneficiaries of the multi-year data-center buildout that supports generative AI, and he kept Microsoft atop his list of top-10 picks for 2026.
The analyst acknowledged valuations remain elevated but said structural demand for cloud compute could support further margin expansion over time.
Market watchers noted that Microsoft’s forward price-earnings multiple is about 30 times, which some investors view as demanding versus peers.
Ives’ bullish stance contrasts with more cautious voices who say AI valuations look frothy and that execution and supply constraints will matter.
Investors will be watching upcoming corporate and macro data for clarity, and trading in MSFT and other big-cap tech names may remain volatile into year-end.
Traders said Ives’ call could steer flows into cloud-focused funds and AI equities, boosting demand for related hardware and services.