Transcript
0:04 this week, trying for a comeback in early trading. Our next guest says it's time to buy the dip ahead of a major rally into year end. Wedbush securities head of technology research Dan Ives joins us now. Dan, I don't think it's surprising for people to hear you pound the table on on the tech trade. You've been super bullish. Do you not have concerns now about monetary policy? You know, as as the market rethinks the cut for December and and the overall frothiness or valuations around AI.
0:30 >> Yeah. Look I mean I get some of the nervousness. But I mean I was just in Egypt for three weeks and demand supply from India chips or pent on demand increased about 30% since June from what we see. You look at Hyperscaler. This is a CapEx supercycle. So it's my view if you're in the second or third inning to be sort of bearish or nervous here, I just view it as shortsighted because I think there's a tech bull market that goes on for another two years.
0:59 And I think these are golden buying opportunities for the names that I view, where Street's underestimating numbers 2,030% over the next 12 to 18 months. >> But do you think there will be a point where the where the CapEx should get more scrutinized, you know, until the profitability materializes to match the level of spending? >> Sure. And look, and I get the scrutiny, if you look obviously Meta and Oracle and you see some of the worries there, the circular financing in terms of open AI. But to me it's all about you're building out a new economy on the consumer, on the enterprise front, for every dollar they put on CapEx, they're going to ultimately make 8 to $10 on that over the coming years. So I just think that is the best move for these companies in the arms race. And that's why for meta, I got to talk about that's a table pounder on that stock and sell off Oracle. Same thing. And you know, so many times we've talked about in your show like these are the opportunities whether it's deep tech or other moments. And then investors are like I missed it.
1:59 But these will be the opportunities. I think you're going to have a massive tech rally into year end, Dan. >> Oracle is a great example. What explains that early September gap getting filled as we are back to the 200 day here for the first time since June. >> Yeah, Carl, I think it's just worries about debt taking on financing, CapEx, the depreciation, the OpenAI pop. Like, did they get over their skis? And actually I disagree I think Oracle this is this is a massive renaissance that they're going to see. I mean you talk about their 2% penetrated within their install base when it comes to AI.
2:37 Everything they're doing are the right moves. And I think this sell off here we're going to look back three, six, nine months from now. And this was just I think a golden buying opportunity to own Oracle. And I think right now the nervousness is coming out. But it just comes back to 3% of US enterprises have gone down the AI path. And I think that goes to 20% over the next 18 to 24 months. That's what you're playing for, especially in the second, third, fourth derivatives. We see it cybersecurity. I see human proof authentication. I see it on, you know, infrastructure.
3:10 Net core we've and others. >> Does that view extend to Tesla, which as we said earlier this morning is now red for the year. And worst performing Mac seven. >> I think actually Tesla is probably of all of these names. That's probably the one to me that sticks out the most because in my opinion, the future about autonomous and robotics. Musk obviously right now, wartime CEO, you look at the coming years, I think Tesla's a 2 trillion and ultimately $3 trillion market because autonomous, 80% autonomous. I think Tesla's going to own. So I get the stock selling off here because you can't see it in the numbers.
3:48 But I mean, this is something where I look out 600 base case, 800 bull case. And that's my view. I mean, I think this is only like I talked about, this is just the early days of a fourth industrial revolution. And for the first time in 30 years, the US is ahead of China when it comes to tech. >> Yeah, I mean that that that's the bull case Dan. So aren't there going to be winners and losers. It sounds like you like all of the big players.
4:14 >> Yeah. And there's going to be I mean you Adobe are they a loser if you look at like you know some of the other sort of large cap names like they're trying to sort of I mean, I think Salesforce, you know, could is going to be a winner, but they're obviously under a lot of pressure from a software perspective. You know, you look at some of the infrastructure plays like Cisco. They're turning it around. I think it's really more about the second, third, fourth derivatives in software. I look at them, I look at names like core. We've in the sell off because it's all to me about for every dollar. And this is the most important is that for every dollar spent on Nvidia chip, there's an 8 to $10 multiplier across the rest of tech 3 trillion. That's going to be spent next two years.
4:57 >> Right. So who. So but but you in your view it's all the hyperscalers that are the winners the Amazons the Googles the Microsoft meta. You said as a table pounder. So everybody that's spending big now. >> I view it as if they're not spending. I actually view it as a negative. Like if if meta ultimately pulled back and they raise numbers for next year and they cut CapEx, I would view that as a huge negative because Zuckerberg right now wartime CEO, building out what could be modest and incremental, 40, 50% on advertising on the consumer side. And even as they build out on the glasses on the hardware side, that's the smart move for meta. I also look at names like when you think about we've talked about, like in the Power Side, nuclear and things like ARKO and others. I mean, this all is about the second or fourth derivatives. People think that this is sort of a white knuckle clock strikes midnight moment. I've talked about this is nowhere near a bubble. It's a 1996 moment. Not in 1999 2000 bubble moment.
5:58 >> Is there any demarcation line between names you would like and not like? Alcoa is a great example where you're either talking about no profits or in some cases in quantum, for example, minimal revenue. >> Sure. Yeah. And I think that's where you have to be selective in terms like the winners and who ultimately is going to be there. I think there's going to be other nuclear plays, right? There's going to be other power plays out there. If I see the demand is showing cracks and I see customers cutting back, the ROI is not there. Use cases aren't exploding, then we get negative.
6:32 But to some extent it's the opposite. If you look at where we are right now and I just think like globally, given where US tech is, this continues to be what you want to own. And I think for the winners. And look, if you focus just on valuation one year out, two year out, you missed every transformational tech stock the last 20 years. And that's why I focus on we talk about in our