AI spending momentum at Davos points to 2026 inflexion year

The artificial intelligence revolution dominated discussions at the World Economic Forum in Davos, with technology executives, industrial leaders and policymakers signalling that large-scale spending will accelerate into 2026.

In a note, Wedbush said conversations across the Davos pavilions left little doubt that AI has become a central priority for C-suite management globally. Many technology executives now view 2026 as a breakout year for the genuine monetisation of enterprise AI, following several years of experimentation and pilot deployments.

That confidence contrasts with recent market performance. Wedbush said investors remain cautious, pointing to the year-to-date underperformance of major technology stocks. The firm argued this reflects a disconnect between equity markets and what it described as “eye-popping” enterprise AI spending intentions, alongside massive capital expenditure build-outs by large technology companies and rising global demand.

Looking ahead, Wedbush said investors are both excited and uneasy. On one hand, it described AI as a fourth industrial revolution, noting that the United States is now leading China in core technology innovation for the first time in three decades. On the other, the trillions of dollars required to scale AI across enterprise and consumer markets have created anxiety about returns and valuations.

Wedbush said those two views can coexist. In its assessment, 2026 represents an inflexion point for AI, with an important fourth-quarter earnings season approaching that could clarify the scale and durability of demand.

The firm expects a strong run of results led by cloud and platform groups such as Microsoft, Alphabet and Amazon. Based on its field checks, Wedbush said all three saw robust enterprise AI demand in the most recent quarter.

While some investors continue to question valuations and the pace of spending, Wedbush said the market is still underestimating the size of the opportunity. It pointed to roughly $3 trillion of expected AI-related spending over the next three years from enterprises and governments, and said forthcoming earnings are likely to validate aggressive capital expenditure plans heading into 2026.

“We have barely scratched the surface of this fourth industrial revolution,” Wedbush said, highlighting companies including Nvidia, Microsoft, Palantir, Meta, Alphabet and Amazon as core beneficiaries. It added that more than $550bn of capital expenditure is already in motion across the sector.

Wedbush singled out Nvidia as the foundation of the AI build-out, arguing that its chips remain the starting point for most large-scale AI deployments. It said Nvidia chief executive Jensen Huang is uniquely positioned to gauge enterprise demand for AI infrastructure.

Crucially, the firm estimates a powerful multiplier effect. For every dollar spent on Nvidia hardware, Wedbush believes $8 to $10 is generated across the broader technology ecosystem, spanning cloud services, software, networking and data centre infrastructure.

Drawing on recent visits to CES in Las Vegas and meetings in Davos, Wedbush said all indicators point to accelerating momentum rather than excess. “This is not an AI bubble,” the firm concluded, arguing that the pace of adoption and scale of planned investment suggest the AI revolution is moving into a more mature and economically meaningful phase.