09:10 AM EDT, 05/09/2025 (MT Newswires) -- Artificial Intelligence-driven cloud spending is expected to be a high priority of companies despite tariff uncertainty, likely benefiting technology giants including Microsoft ( MSFT ) , Alphabet's (GOOG, GOOGL) Google ( GOOG ) and Amazon.com ( AMZN ) , Wedbush Securities said in a Friday client note.

The brokerage estimates that more than 15% of cloud services now include some form of AI, with more model integrations of the technology, as companies seek to drive revenue at lower costs. Wedbush sees strong growth ahead for the software layer of AI and expects it to outperform other subsectors of the technology industry.

Cloud and AI projects are being approved despite tariff-related uncertainties as companies are aware that the potential impact of any slowdown in these areas "could be hard to recover from," according to Wedbush. "This dynamic clearly benefits the hyperscalers such as Microsoft ( MSFT ), Google ( GOOG ), and Amazon ( AMZN ) front and center," analysts led by Daniel Ives wrote in the note.

Hyperscalers such as Microsoft ( MSFT ), Google ( GOOG ), and Amazon ( AMZN ) are expected to invest over $325 billion this year through AI capital expenditures, representing annual growth of 40%, the brokerage said.

Wedbush currently believes Microsoft ( MSFT ) is leading the AI revolution with a "strong" 2025 ahead, closely followed by Amazon ( AMZN ) and Google ( GOOG ). The brokerage said Palantir Technologies ( PLTR ) is establishing itself as a "strategic winner" in AI amid growth in use cases on the enterprise front.

"We remain firmly bullish on this AI theme and believe software is now behind the velvet ropes and in the AI party and finally on the dance floor as use cases quickly play out on the enterprise front in 2025 and leading to an inflection moment for the software world," according to Ives.

Wedbush expects Chinese technology companies such as Alibaba Group ( BABA ) to further develop their AI strategies over the coming year, amid ongoing trade tensions between Washington and Beijing.

US and Chinese officials are due to meet in Switzerland over the weekend to discuss economic and trade matters.