As we transition from Q1 to Q2 of this year, is 2024 shaping up to be another breakthrough year for technology as far as AI catalysts are concerned? Lou Basenise, President and Chief Market Strategist at Public Ventures Join Yahoo Finance's studio to talk about tech stock leaders expanding their use cases for artificial intelligence, covering Alphabet (GOOG, GOOGL), Microsoft (MSFT), and Apple (AAPL).
“You have to play basketball. In this AI race, you can't pick one horse and campaign like Nvidia (NVDA) did last year,” Basenise said. “Honestly, NVIDIA can't continue to operate this year the same way it did last year. The company will just get too big.”
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Editor's note: This article was written by luke carberry morgan.
video transcript
– Let's talk more about Google, the Magnificent Seven, and the idea of AI here. Let's bring in Lou Basenise, President and Chief Market Strategist at Public Ventures. You've just heard what we've been saying here about where we are on this occasion. And it's very fit and feels like it starts stationary.
Lou Basenise: Agreed.
– So what should investors think?
Lou Basenise: Just type that into ChatGPT and you'll get the answer, right? I mean, it would be very simple. but –
– Well, that's the whole problem, except that ChatGPT makes some mistakes.
Lou Basenise: I think last year was the year of Nvidia and the year that the big wave of AI started. And opportunities for first derivatives should be important this year. Where should we do it? Where are the tools and applications where AI can really change things in business, consumer, and healthcare? And I think we're starting to see some of those applications emerge.
From the software side, I agree that you have to play basketball. In this race he won't even have one horse with a plaque and have a good workout like his Nvidia did last year. In other words, let it be, let's just face it. Nvidia cannot operate the same way it did last year, or even this year. That would make the company too big.
I love Microsoft. There is no personal information disclosed. We do not do investment banking with them. But what I love about Microsoft is that they can drive AI adoption by building it into their products. Nvidia, on the other hand, is serious about being drawn into the market by people developing applications that require its chips. So I think they have a little more influence than most players give them credit for.
– In fact, the show just had Dan Ives appear in Wedbush. His research also spoke of a very bullish and bullish stance on Microsoft. That was talking about at least his check indicating further recruitment of co-pilots. By the way, what about Apple? We were just talking about it. This year, it has fallen by about 12%. I understand that sentiment, Lou, because it's about AI strategy, and it's China, and it's being targeted by regulators on both sides of the Atlantic. But what do you think about it?
Lou Basenise: Yeah. So, I'm an unabashed Apple fan and have been for a long time. But as you probably remember, we experience waves of changes in sentiment, and bearish sentiment typically peaks around this time of the year. The next iPhone upgrade cycle won't be as strong, and neither will the average selling price. Then we get amazing results. Services revenue significantly exceeded expectations. Their installed base is larger, so–
– How many times have we heard the death knell for Apple?
Lou Basenise: I mean, always, right? Innovate or die. And I've always said, it just thrives on repetition. They have a very large installed base, so if they can incrementally improve their profitability or their product offering, they're always doing stock buybacks to increase their profitability, so that's really going to help their bottom line. be connected. You know, I've always been a contrarian. If there was a yearbook saying out there, I would most likely be a contrarian. I like Apple even when other people hate it, and so far I don't think Apple is corrupt.
– got it. So let's hear about Alphabet and the mixed feelings we've seen regarding the company's launch of his AI products. I mean, there were a lot of questions, but it was also very volatile.
Lou Basenise: If you look at it on a cloud service, you'd think so, right? They're the third horse in the race, right? The company saw strong growth last quarter, with its cloud services growing by about 26%. But that amount is only about $9 billion, 2.5 times more than Microsoft and well behind Amazon. But I like Alphabet because they're actually an economic plan, an advertising economic plan. And if you look at the underlying strength of the economy, it's really good.
Therefore, advertising business should be boosted. Looking at valuations, I think Alphabet is selling at the lowest valuation of the Magnificent Seven. That's about 22 times expected earnings. I mean, I think in the first half of the show, we talk about expanding our reputation with previous guests, especially in the technology space. Indeed, this is an underrated name in the technology industry. Stay away from Tesla, don't go there. Yeah.
– Why stay away from Tesla?
Lou Basenise: No, I just think it's too unstable. And I think Elon Musk has always been a great promoter and visionary of what's going to happen next. We don't know for now what will happen next. love.
– I think he himself said that we are in between waves of growth.
Lou Basenise: Yes, I think that's correct. Gain credibility and maximum valuation early in your growth wave. It's the S-curve of innovation, and they're looking for that next generation.
– And you're not thinking, Lou, I mean, if you look at the drop in stock prices this year, don't you think all the bad news is priced in?
Lou Basenise: I think no. Because I think the future will bring bad news, not just for Tesla, but for the entire EV industry. I think there's just an economic calculation. And I think investors are trying to figure out where that ends.
– Okay. Mr. Lou, thank you very much for today.
Lou Basenise: thank you.
– I appreciate it