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Demand Is Robust Despite 'White Knuckle Environment' For Tech, Says Dan Ives

Dan Ives told listeners that despite a “white‑knuckle” market, demand for Taiwan‑made memory and other components remains surprisingly strong, underpinning the outlook for hyperscalers. He noted that investors are currently fixated on semiconductor hardware, sidelining software‑as‑a‑service stocks even though use‑case growth from Microsoft to Salesforce is accelerating. He highlighted that AI‑driven models like Anthropic could disrupt pure‑play software firms, while entrenched platform players retain resilient install bases. Ives cited Microsoft’s free‑cash‑flow multiples—trading at 12‑month forward P/E around 21—as evidence of a “massively disconnected” valuation, and warned that cybersecurity spend could rise from 5% to 10% of IT budgets as AI expands the attack surface, benefitting firms such as CrowdStrike and Palo Alto. The takeaway for investors is to balance exposure: maintain positions in hardware and cloud infrastructure, seek undervalued SaaS opportunities, and allocate to cybersecurity leaders poised for budgetary tailwinds in the AI era.