Wedbush Sees an AI M&A Increase Forward: 3 Prime Takeover Targets

The synthetic intelligence (AI) arms race has entered a brand new part, this time centered on mergers and acquisitions. Based on CNBC, Wedbush Securities analyst Dan Ives believes that the “AI M&A floodgates” are set to open extensive as Large Tech and personal fairness corporations compete to purchase their strategy to dominance. Ives predicts {that a} friendlier regulatory local weather beneath the new administration will pave the best way for a surge in dealmaking within the tech sector.

Ives spotlights a number of smaller, specialised corporations being absorbed by deep-pocketed giants looking for to bridge functionality gaps. Amongst them, Ives highlights C3.ai (AI), Sandisk (SNDK), and Tenable Holdings (TENB) as significantly interesting.

Valued at $18.6 billion, Sandisk is a expertise firm finest identified for creating, manufacturing, and distributing flash reminiscence storage techniques. These are utilized in numerous purposes, together with smartphones, cameras, computer systems, and information facilities.

Sandisk’s relisting beneath the SNDK ticker earlier this 12 months has been one of the vital unimaginable comeback tales in tech. Since February, the inventory has risen by greater than 288%, pushed by elevated demand for high-performance information storage options required for AI workloads.

AI fashions demand huge storage and reminiscence capacities, and Sandisk’s next-generation flash expertise might make it an interesting goal for Large Tech corporations growing or increasing AI information facilities. For the complete fiscal 12 months 2025, Sandisk reported a ten% enhance in income to $7.3 billion. The corporate additionally reported a revenue of $2.99 per share in comparison with a lack of $3.46 per share in fiscal 2024.

Analysts anticipate Sandisk’s income to climb by 22% to $8.9 billion, with earnings rising by 119% to $6.55 per share, respectively. The aggressive panorama, nonetheless, stays fierce, with Micron (MU) dominating this house in each the NAND and DRAM markets. Flash reminiscence manufacturing is capital-intensive and extremely delicate to pricing swings. Even little fluctuations in demand or provide can have a long-term influence on profitability.

General, Wall Avenue charges Sandisk inventory a consensus “Reasonable Purchase.” Out of the 18 analysts who cowl SNDK, 11 suggest a “Robust Purchase,” six suggest a “Maintain,” and one suggests a “Robust Promote.” The inventory has surpassed its common analyst worth goal of $94.28. Nonetheless, the excessive worth estimate of $150 implies an upside potential of 8% over the subsequent 12 months.

C3.ai has lengthy been a distinguished identify in enterprise AI. Based on Ives, it might be one of the vital sought-after targets on this upcoming AI M&A wave. The corporate affords software program that permits enterprises to make use of AI at scale, together with predictive analytics, automation, and data-driven insights in industries resembling protection, vitality, and manufacturing.

The inventory has fallen 45% year-to-date (YTD), as the corporate faces vital operational points regardless of its early-mover benefit.

Within the first quarter of fiscal 2026, income declined 19% year-over-year (YoY) to $70.3 million, signaling a troubling slowdown simply as AI adoption accelerates globally. The first concern, nonetheless, stays profitability. C3.ai reported a internet lack of $49.8 million, or $0.37 per share, with unfavorable free money stream of $34.3 million. Regardless of having greater than $711 million in money reserves, the corporate continues to lose capital every quarter, elevating considerations about how lengthy it could actually proceed operations with out vital enhancements in effectivity or income momentum.

Administration cited poor gross sales execution and inside discord as the important thing causes of the decline and said that the corporate is restructuring to deal with its scenario. Analysts predict that the corporate will proceed to lose cash for the subsequent two years, regardless of its increasing portfolio of greater than 131 enterprise AI purposes.

Ives believes C3.ai could be a horny acquisition goal for corporations resembling Apple (AAPL), IBM (IBM), and Oracle (ORCL), all of which wish to develop their AI infrastructure and enterprise integration capabilities.

C3.ai’s struggles haven’t gone unnoticed on Wall Avenue. General, AI inventory is rated as a “Maintain.” Out of the 15 analysts who cowl the inventory, three charge it a “Robust Purchase,” six charge it a “Maintain,” two say it’s a “Reasonable Promote,” and 4 say it’s a “Robust Promote.” The inventory has surpassed the imply goal worth of $16.67. The Avenue-high estimate of $40 implies upside of 110% over the subsequent 12 months.

With cybersecurity changing into inseparable from AI, Tenable Holdings represents one other logical acquisition alternative. The corporate focuses on publicity administration and vulnerability evaluation, which entails helping organizations in figuring out, measuring, and mitigating safety threats earlier than they’re exploited.

Though Tenable’s inventory is down 25% YTD, its sturdy shopper base and recurring income mannequin make it a dependable long-term asset.

Within the second quarter, Tenable reported income of $247.3 million, up 12% YoY, and non-GAAP working revenue of $47.7 million, reflecting a 19% working margin. Administration emphasised that the corporate’s development was pushed by the rising adoption of its Tenable One platform, which affords firms a unified view of their assault floor and allows them to handle safety threats extra proactively.

In the course of the quarter, free money stream totaled $44.3 million. Tenable additionally elevated its current inventory repurchase program by $250 million, signaling confidence in its long-term development prospects.

The corporate has additionally been increasing its buyer base, gaining 367 new enterprise platform prospects and 76 internet new six-figure accounts through the quarter. Bigger cybersecurity and cloud infrastructure suppliers may even see Tenable as a strategy to broaden their AI-powered menace detection capabilities.

General, Wall Avenue charges TENB inventory a consensus “Reasonable Purchase.” Out of the 24 analysts who cowl TENB, 12 suggest a “Robust Purchase,” one recommends a “Reasonable Purchase,” and 11 charge it a “Maintain.” The common analyst worth goal of $39.84 represents a possible 35% enhance from present ranges. Moreover, the excessive worth estimate of $45 implies an upside potential of 52% over the subsequent 12 months.

On the date of publication, Sushree Mohanty didn’t have (both immediately or not directly) positions in any of the securities talked about on this article. All data and information on this article is solely for informational functions. This text was initially revealed on Barchart.com