Dan Ives reveals his top 5 tech stocks to buy next year — and one of them is up 129% year-to-date

Dan Ives, the prominent technology analyst and former Wedbush Securities managing director, remains bullish on artificial intelligence despite growing concerns about stretched valuations. He has identified five tech stocks he expects to benefit from continued AI growth in 2027.

In a recent note published under his new venture, Yorkville Ives, the analyst called AI “the largest technology buildout in history,” according to Business Insider. He argued that its influence now extends beyond technology to capital investment, energy and government policy.

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Ives used a baseball analogy to suggest the AI boom is still in its early stages, describing it as the third inning of a nine-inning game.

Baseball, naturally, has its prospects. And Ives’ top five picks heading into 2027 are Apple (AAPL), CrowdStrike (CRWD), Microsoft (MSFT), Nvidia (NVDA) and Palantir (PLTR). All five have gained ground this year, but none more than CrowdStrike, which has surged 129%.

The cybersecurity company’s rally follows a difficult period that began in July 2024, when a faulty software update triggered a global IT outage that affected an estimated 8.5 million Microsoft Windows devices, grounding flights and disrupting businesses worldwide. CrowdStrike shares fell sharply in the aftermath, and several Wall Street analysts downgraded the stock over concerns about potential financial and legal fallout.

Shares have since climbed to nearly $270 following a 4-for-1 stock split in July 2026. CrowdStrike’s recovery has been supported by rising demand for AI-related cybersecurity services, broader adoption of its Falcon platform and strong revenue growth, including record net new annual recurring revenue.

As Business Insider reported, the list is a significant departure from Ives’ June recommendation, when he was still at Wedbush Securities. Palantir is the only company to appear on both lists.

Still, Ives says he sees opportunities beyond his top five picks, particularly in enterprise software, a sector he believes was prematurely written off over fears that AI would replace traditional software services.

Software stocks are poised for a comeback

Enterprise software stocks were hammered during the so-called “SaaSpocalypse,” as investors worried that autonomous AI agents could make traditional software products obsolete and undermine industry profits.

At the height of the selloff in early February, software stocks shed roughly $1 trillion in market value, Reuters reported. The S&P 500 Software & Services Index, which includes companies beyond traditional SaaS providers, declined more than 25% between January and April.

Ives says he believes corporate earnings results have challenged those fears, particularly as AI models become increasingly “commoditized,” meaning they are becoming more widely available and harder to distinguish from one another.

“Enterprise software, written off in the first quarter as AI’s presumed victim, has recovered as the prints showed that models are commoditizing,” he wrote.

The latest financial results seem to support Ives’ assessment. Salesforce (CRM) and ServiceNow (NOW), two companies caught in the early-year selloff, both reported double-digit revenue growth in their latest quarters. Salesforce’s fiscal second-quarter revenue rose 11% year over year, while ServiceNow reported a 24% increase.

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AI’s continued growth comes at a premium

Ives may be right that the AI boom is only in its third inning. Goldman Sachs forecasts that hyperscaler AI spending could reach $1.1 trillion to $1.4 trillion next year, while Gartner expects global spending on the technology to approach $3.5 trillion.

However, much of that anticipated growth may already be reflected in stock valuations.

Palantir, for example, has a forward price-to-earnings (P/E) ratio of roughly 85, according to Yahoo Finance. CrowdStrike is even more expensive, trading at more than 200 times expected earnings over the next 12 months. By comparison, the S&P 500’s forward P/E ratio is around 19.8, according to Birinyi Associates data cited by The Wall Street Journal.

Nvidia trades at a more modest 25 times forward earnings, reflecting its substantial profit growth and dominant position in AI chips. Although its valuation is closer to the broader market, Nvidia remains heavily dependent on sustained spending by major technology companies.

Those investment plans remain intact for now, but analysts are beginning to question whether AI spending is generating enough revenue to justify the enormous costs. As Moneywise reported, Goldman Sachs estimates that the largest hyperscalers would need to generate $300 billion in annual AI revenue to cover their investment costs so far, with early revenue figures falling well short of that threshold.

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