Wedbush Securities has added Datadog Inc (NASDAQ:DDOG) and SK Hynix (KRX: 000660) to its closely watched IVES AI 30 list, citing the memory super-cycle and AI observability as two of the most compelling themes in the current phase of the artificial intelligence buildout.
In a note to clients, Wedbush analyst Dan Ives described the AI revolution as entering its “third inning of a nine-inning game,” pointing to record hyperscaler capital expenditures and accelerating enterprise adoption as evidence that the cycle remains in its early stages.
The firm simultaneously removed Shopify Inc (TSX:SH., NYSE:SHOP) and Alibaba Group (NYSE:BABA) from the list.
Wedbush said Q1 earnings results from Microsoft, Alphabet, and Amazon validated its bullish AI thesis, with cloud backlogs reaching record levels and capital spending commitments from Big Tech now tracking at approximately $725 billion. The firm expects that figure to be compounded by a wave of AI-related spending from governments, Global 2000 organizations, and the Asia and Middle East regions, with US Big Tech as the primary beneficiary.
On the memory side, Wedbush argued that SK Hynix stands as one of the most important AI plays in the market today, with demand for HBM, DRAM, and NAND reaching levels the firm described as unprecedented.
Ives said pricing power for memory producers is the strongest in over a decade, with DRAM and NAND pricing expected to inflect meaningfully higher in the second half of 2026.
“After months of doomsday “SaaSpocalypse” narratives that had software stalwarts trading at fire-sale valuations, the software complex has finally started to snap back as investors recognize that the AI Revolution is not the death knell for enterprise software that the market had feared,” Ives wrote.
“Strong prints across the software landscape, increasingly bullish commentary from CIOs in our field checks, and a growing recognition that enterprises will need trusted software partners to actually deploy AI at scale have all combined to spark a meaningful rotation back into the names that were left for dead just a few months ago.”
Datadog, in particular, was characterized as a clear second-derivative AI play, given its role in monitoring, securing, and optimizing AI workloads across enterprise environments.
Wedbush said its field checks with technology and industry leaders globally confirm that AI is dominating C-level conversations, with strategic deployments accelerating throughout 2026.
