Time to buy US AI, tech names if Middle East de-escalation holds, say analysts

[SINGAPORE] US artificial intelligence and wider technology counters could see a “significant rebound” if the Iran war sees a sustained de-escalation – with certain big tech names from the US drawing interest again, said Maybank and Wedbush Securities analysts at a panel on Tuesday (Apr 7).

Markets had been pricing in a scenario between “a swift resolution” and “an extended conflict” thus far, said Seth Basham, managing director and director of research at Wedbush Securities.

Nigel Green, CEO of deVere Group, said that any de-escalation could therefore encourage investors to rotate back into areas which were previously hit hardest, such as tech and consumer-facing sectors.

A two-week ceasefire agreement between the US and Iran was announced on Tuesday. The deal could mean that a safe and complete reopening of the Strait of Hormuz is on the horizon.

US markets have undergone wild swings amid recent volatility and rising yields during the Middle East conflict.

But falling energy prices would reduce inflation expectations at the margin – which supports valuations in these industries, said Green.

This implies that “strong moves” are expected in mega-cap tech and AI-driven names, he added, which could also lead the rebound among broader equity markets.

A “significantly underestimated” industry

Certain “Magnificent Seven” names are therefore drawing in interest once again, with experts noting Tesla as a standout player.

“Tesla is not a (mere) car company – it’s (making waves) in disruptive tech,” said Dan Ives, managing director and senior technology sector analyst at Wedbush Securities.

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“They may be going through some headwinds on their electric vehicle front, but their AI future is bright and promising.”

He also noted that Apple is going to be the “foundation” where most consumers access AI technology, their apps and many other models, which will automatically translate into a subscription service through an Apple device in the coming years.

Ives expects the global AI industry to reach US$5 trillion in market capitalisation in the next 12 to 18 months. “The market is massively underestimating (the sector),” he added.

The analyst warned that if investors get too focused on the near-term macro concerns and geopolitical developments in Iran, they risk “missing the forest for the trees”, in terms of sighting “generational tech winners”.

Ives is bullish on AI-driven cybersecurity firms, such as Crowdstrike and Palo Alto Networks. He also named Z Scaler, a US cloud-driven cybersecurity company, which he says has “massive upside”.

He added that the cybersecurity sector could be up 40 per cent over the next six to 12 months, given how AI has not been factored into certain valuations.

While concerns over mega-AI players such as OpenAI and Anthropic unseating cybersecurity names have surfaced, Ives remains unfazed.

He explained that the worries are “massively disconnected”, given that annual budgets for cybersecurity will double in the next few years from 5 per cent to 10 per cent of overall budgets.

“These stocks and these sectors will prove themselves over the coming quarters, and I think we’re going to look back on these (key) opportunities in software and cybersecurity – as the winners, and (soon the) hearts and lungs of the AI revolution,” he said.

Wedbush’s Basham also reiterated that valuation of tech as a sector is at the bottom third right now, which means it is a “good opportunity” for investors to buy in.

AI in Asia

John Lin, chief investment officer of China Equities at AllianceBernstein, said that as big tech companies in the US raise their AI capital expenditure, more business for related companies in the Asia-Pacific can be expected.

Tech giants Microsoft, Amazon, Alphabet and Meta had set out to spend around US$635 billion on data ​centres, chips and other AI infrastructure in 2026 before the Iran war outbreak, data from S&P Global showed.

At an AllianceBernstein emerging-markets roundtable on Thursday, Lin pointed to key players in Asia along the AI supply chain, including semiconductor manufacturer TSMC.

South Korea is also known as a global semiconductor powerhouse that dominates the memory chip market, with players such as SK Hynix and Samsung Electronics.

Thilan Wickramasinghe, head of research at Maybank Securities Singapore, said that as AI comes to the fore in Asia, Singapore will be the first to see clear results.

He noted on Tuesday that a significant part of Budget 2026 is focused on deploying AI across industries, particularly across large-cap firms. “(We’re) going to see the diffusion of AI use cases across multiple sectors, moving from large-caps to small-caps,” he added.

This also comes amid recent support for small and mid-cap companies in Singapore, with the launch of the Equity Market Development Programme by the Monetary Authority of Singapore in February 2025.

For locally listed tech plays, the Maybank Securities analyst was positive on Addvalue Technologies and CSE Global.