Overview:
The global technology portfolio manager, Dom Rizzo, discusses the recent movements in the tech industry, particularly focusing on AI spend and market valuations. Rizzo highlights the strong AI spend in data centers despite pockets of weakness in other areas such as smartphones. He emphasizes that this robust AI spend is overpowering any weaknesses and believes that valuations remain reasonable with strong fundamentals.
Analysis of Tech Market:
– Tech market experienced dramatic movements with a 10% move in some big names.
– Investors question if the price momentum reversal signifies the end of the AI trend.
– Rizzo mentions that AI spend is robust and overpowering other weaknesses in the market.
– He predicts a growth of approximately 25% across all hyperscalers this year.
Future AI Capability:
– Rizzo highlights indicators of future AI investment like AWS.
– He predicts sequential growth in AI spending, emphasizing the potential of AI to enhance productivity.
– The integration of hardware and software in companies like AMD is crucial for future capability.
– Rizzo commends AMD’s unique portfolio breadth and depth, which includes advanced packaging technology and strong adoption in hyperscalers.
Hot Take:
Despite the recent market turbulence, the AI spend in the tech industry remains strong, overshadowing any weaknesses in other sectors. With companies like AMD leading the charge with their unique portfolio offerings, the foundation for continued growth and innovation in the tech market seems solid. Investors should keep an eye on indicators like AWS and sequential growth rates to gauge the future potential of AI investments.
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