Ever since the release of OpenAI’s new chatbot ChatGPT in November, investors have been enamored with A.I. and its potential to revolutionize the world’s economy. Hopes for a future with increased productivity and lower costs as A.I. tools are rolled out to the masses have helped to lift markets in 2023 despite stubborn inflation, rising interest rates, and consistent recession predictions from economists. After dropping more than 30% in 2022, the tech-heavy Nasdaq Composite has recovered nearly all of its losses, gaining over 28% year to date, and the S&P 500 is now up more than 12%.

While some on Wall Street question whether stocks can continue their run of form in the second half of the year, pointing to stretched valuations in the Big Tech names and A.I. plays that have led the rebound so far, Wedbush’s top tech analyst Dan Ives argues it’s just the beginning of the “A.I. gold rush.”

“Many of the tech skeptics will point to today as a ‘1999 moment,’ à la on the verge of the dotcom bubble/collapse, given the significant move in tech valuations. We strongly disagree,” the veteran analyst wrote in a Monday research note. “While valuations in tech will be front and center, we continue to believe A.I. is driving the tech sector to a ‘1995 moment’ with a long runway of growth ahead that we have not seen since the 1990s.”

The parallels between the dotcom era that began in 1995 and the A.I. revolution of 2023 are quite striking. Both then and now, experts argued that a new technology was on the verge of rewiring the global economy. Stocks were coming off a down year, and economists and business leaders were worried about the future of the U.S. because of its rising national debt. Books like the January 1993 title Bankruptcy 1995 became bestsellers in the early ’90s, warning of a coming economic crash due to America’s “deficit crisis”—which, of course, never came.

Despite the fears and pessimistic predictions, between 1995 and the collapse of the dotcom bubble in 2001, the Nasdaq Composite rose over 800% as the economy remained stable and investors looked to profit from the rise of the internet. Over the following year and half, the index gave back nearly all of those gains when valuations came back to earth, but 1995 was the start of the bubble, not the end.

Ives believes that we could be seeing a similar pattern now, arguing the development of A.I. represents something akin to the internet, calling it the “4th Industrial Revolution.” He predicts the “tech sector” stocks will soar another 10% to 12% in the second half of the year alone as investors recognize that A.I. is an “$800 billion opportunity” for tech firms, and monetization has already begun.

On top of that, he argued that inflation is “rapidly cooling,” which should enable the Federal Reserve to end its streak of aggressive interest rate hikes that have weighed on the economy. As measured by the consumer price index, year-over-year inflation dropped from its June 2022 four-decade high of 9.1% to just 4.9% in April, according to the U.S. Bureau of Labor Statistics. The agency will release May’s data on Tuesday.

If inflation does continue to fall, it should lead investors back into riskier stocks that can benefit from a bull market, according to Ives. “This speaks to a strong year for tech stocks in 2023,” he wrote, arguing the “risk-on trade” will gain momentum as investors focus on the A.I.

Ives said that Microsoft and Nvidia remain the “clear market leaders” in A.I., but he also believes Google, Oracle, Amazon, Salesforce, Palantir, MongoDB, Apple, IBM, Meta, Snowflake, C3.ai, and other tech stalwarts, along with smaller players in the industry, will benefit as the technology advances.