So here's something interesting: while everyone's been panicking about AI agents replacing traditional software, Wedbush analyst Dan Ives is essentially saying hold on, let's not get carried away here. He just re-added Salesforce Inc. (CRM) and ServiceNow Inc. (NOW) to his list of top 30 AI-focused stocks, and his reasoning matters for anyone thinking about tech ETFs.

The basic argument is that we're watching a temporary freakout, not a permanent shift. Ives describes the current moment as roughly "year 3 of what will be a 10-year cycle of this AI Revolution buildout." That's a pretty specific timeline, and it suggests that the recent software selloff might be missing the forest for the trees.

Why the Software Panic Might Be Overcooked

The enterprise software sector has been getting hammered lately on concerns that AI agents will simply replace subscription-based software models. It's a reasonable worry in theory, but Ives thinks the reality is more nuanced. "We believe the sell-off in tech stalwarts Salesforce and ServiceNow are way overdone and both these tech players will be core participants in the AI Revolution," he noted in his research.

His logic centers on practical business realities. Enterprises aren't going to abandon their existing software ecosystems overnight because of data security risks, integration costs, and the sheer complexity of established infrastructure. You can't just rip out Salesforce because ChatGPT can write an email. The deployment of AI, in Ives' view, will complement rather than displace many enterprise platforms.

For ETF investors, this matters because if the sector stabilizes from its recent volatility, funds heavily weighted toward enterprise software could see renewed interest. We're talking about ETFs tracking U.S. software, cloud platforms, SaaS providers, and enterprise automation. The selloff may have created an entry point if Ives is right about the structural resilience of these businesses.

The Massive Capital Spending Wave

Beyond the software debate, Ives is pointing to something bigger: a truly staggering amount of money flowing into AI infrastructure. He estimates that hyperscalers like Microsoft Corp (MSFT), Alphabet, Inc (GOOGL), Amazon.com, Inc (AMZN), and Meta Platforms Inc (META) will collectively spend around $650 billion on AI-related capital expenditure in 2026 alone.

That kind of spending ripples through multiple sectors in ways that ETF investors can capture. Semiconductor ETFs like the iShares Semiconductor ETF (SOXX) and VanEck Semiconductor ETF (SMH) are obvious beneficiaries, given that companies like Nvidia Corp (NVDA), Advanced Micro Devices Inc (AMD), Broadcom, Inc (AVGO), and Taiwan Semiconductor Manufacturing Co Ltd (TSM) are at the heart of AI chip production.

Then there's cloud computing exposure through ETFs like the iShares Expanded Tech-Software Sector ETF (IGV), Fidelity Cloud Computing ETF (FCLD), and Themes Cloud Computing ETF (CLOD). These funds capture the companies building out the cloud infrastructure that AI applications run on, and increased demand for cloud services should flow directly to their holdings.

Cybersecurity is another angle worth considering. As more companies deploy AI technology, they become more attractive targets for digital threats. That dynamic could benefit funds like the Global X Cybersecurity ETF (BUG) and First Trust Nasdaq Cybersecurity ETF (CIBR), which hold companies focused on protecting AI infrastructure and data.

The Nvidia Multiplier Effect

Here's where Ives gets particularly interesting. He's not just talking about direct spending on chips or cloud services. He's pointing to a multiplier effect where AI infrastructure investment cascades through the broader technology ecosystem.

"We continue to estimate for every $1 spent on an Nvidia GPU chip there is an $8-$10 multiplier across the tech sector which speaks to our firmly bullish view of tech stocks for 2026. Nvidia has changed the tech and global landscape as its GPUs have become the new oil and gold in the IT landscape with its chips powering the AI Revolution and being the only game in town for now," Ives explained in his research note.

That multiplier concept is important for understanding why diversified technology ETFs might be attractive right now. If every dollar spent on advanced AI chips really does generate eight to ten dollars of broader tech ecosystem investment, then funds capturing multiple parts of the AI value chain could benefit from compounding effects rather than just direct exposure to one segment.

Beyond Software and Chips

Ives also highlighted other investment areas connected to AI development: data infrastructure, robotics, autonomous vehicles, and power generation for data centers. These themes are increasingly represented in specialized ETFs focused on AI, automation, clean energy infrastructure, and advanced computing.

The practical takeaway for ETF investors isn't necessarily about picking individual stocks. It's about recognizing sector opportunities. If AI investment continues accelerating as Ives predicts, the most diversified technology-focused ETFs covering chips, cloud, software, and cybersecurity could offer meaningful upside potential while smoothing out individual stock volatility.

What This Means for Your Portfolio

At its core, Ives' thesis boils down to this: the software selloff is a cyclical reset, not a structural collapse. Enterprise software companies aren't going to vanish because AI agents exist. They're going to adapt, integrate, and participate in the broader AI buildout.

If that view holds, ETFs with exposure to enterprise software and AI infrastructure providers might offer a balanced way to play what Ives sees as a long-duration investment cycle without putting all your chips on any single tech stock. The ten-year timeline he's talking about suggests this isn't a trade, it's a secular trend.

The capital spending numbers are hard to ignore. Six hundred fifty billion dollars in 2026 alone from the hyperscalers represents a level of infrastructure investment that typically reshapes entire industries. And if the multiplier effect is real, the ripple effects could justify renewed attention to tech ETFs that have been beaten down alongside the software selloff.

Whether you buy the full bull case or not, the fundamental question Ives is raising is worth considering: are we witnessing the death of traditional software, or just a rough patch in the early innings of a much longer transformation? Your answer to that question might determine whether the current ETF landscape looks like opportunity or risk.