May 2026 AI 30 Update
Memory Super-Cycle Takes Center Stage as Software Snaps Back
Dan Ives and the Wedbush research team have added Datadog and SK Hynix to the IVES AI 30 while removing Shopify and Alibaba. The May 22, 2026 update reflects two themes the team sees defining the next phase of the AI buildout: an unprecedented memory super-cycle and a recovery in enterprise software after the sharp sell-off earlier this year.
The broader AI thesis remains intact. Wedbush describes the current period as the 3rd inning of a 9-inning game, with Q1 earnings validating the bullish view as hyperscaler results exceeded expectations and cloud backlogs reached record levels. Big Tech capex for 2026 has moved up to roughly $725 billion, higher than the $650 billion cited earlier in the year, with additional spending expected from governments, Global 2000 organizations, and Asia and the Middle East. With chip demand still outstripping supply, Wedbush continues to view 2026 as the inflection point year for the AI Revolution.
IVES AI 30 Updates
Additions to the IVES AI 30
- Datadog (DDOG): Added as a second-derivative AI play in observability, as enterprises deploying AI at scale need to monitor, secure, and optimize those workloads. Wedbush points to a strong first quarter, with revenue topping $1 billion for the first time and an AI-native customer cohort that represents a small share of the customer count while driving the large majority of recurring revenue.
- SK Hynix (SKHY): Added as one of the most direct beneficiaries of the memory super-cycle, given its dominant position in high-bandwidth memory (HBM) and its central role supplying Nvidia. Wedbush believes the Street underestimates the duration and magnitude of the cycle, with HBM capacity sold out through 2026 and orders for 2027 building. The addition also increases the list’s exposure to the Korean technology ecosystem.
Removals from the IVES AI 30
- Shopify (SHOP): Removed as AI monetization has been slower to materialize than anticipated, though Wedbush remains positive on the long-term commerce platform vision.
- Alibaba (BABA): Removed as significant AI infrastructure investment has yet to translate into the cloud and enterprise revenue acceleration needed to stand out among consumer internet names.
Memory Becomes the Bottleneck of the AI Buildout
A central message in the note is that AI infrastructure demand for HBM, DRAM, and NAND has reached levels never seen before. With every hyperscaler racing to add capacity and AI workloads requiring more memory than traditional cloud workloads, pricing power for memory suppliers is the strongest in over a decade, and Wedbush expects pricing to inflect meaningfully higher into the back half of 2026. The team frames memory as the bottleneck of the entire AI compute stack, with SK Hynix and Micron positioned as core beneficiaries of the hyperscaler capex wave.
Software Recovery Validates the Earlier Call
The note also revisits the software sell-off that dominated early 2026. Wedbush argued at the time that the market had priced in a doomsday scenario, and the sector’s recovery from its February lows supports that view. Enterprises have not abandoned decades of software infrastructure, and strong results across the landscape reinforce that trusted software partners will be needed to deploy AI at scale. Wedbush acknowledges the budget reallocation pressure from frontier model providers is real, while arguing the AI buildout is separating software into winners and losers, rewarding companies that lean into AI integration. In the team’s view, software names still trading below their 2025 highs represent one of the more attractive risk and reward setups in the market.
Conclusion
The May update sharpens the list’s positioning around where the AI buildout is heading next rather than changing the underlying thesis. Memory has become the choke point of the compute stack, observability has become essential infrastructure for AI deployment, and the software recovery has confirmed that the earlier sell-off overshot. With capex commitments still climbing and enterprise adoption still early, Wedbush sees the AI Revolution accelerating into the back half of 2026.
Important Information
This content draws from the May 2026 AI Revolution report by Dan Ives and the Wedbush Research team. Excerpts are used under fair use for educational and informational purposes. All rights reserved to Wedbush Securities Inc.
This material is for informational purposes only and does not constitute investment advice or an offer to buy or sell any security. The views expressed are those of the authors and are subject to change. Investing involves risk, including loss of principal. Past performance is not indicative of future results.
References to specific securities are for illustrative purposes and do not constitute a recommendation.
