00:00 Speaker A
To me, Dave, one of the most interesting developments in the market lately is what’s happening with the big tech companies, right? We’re seeing a pullback in the big tech stocks. We’re seeing we’re seeing an uneven recovery, but there’s also this rotation within the big tech companies, or at least the sense of changing leadership to some degree. Well, I’m just curious what your thoughts are on this.
00:30 dave
I think there are two catalysts happening at the same time. So to your point, the environment in November saw a sharp pullback away from tech stocks and toward defensive stocks. In fact, the healthcare industry outperformed the IT industry by the largest gap in 20 years. Well, I think that underscores such a huge dynamic shift. A lot of the driver of this macro-control is the potential for rate cuts, right?
01:00 dave
So that was kind of baked into the market, and it was very serious when some Fed governors expressed disapproval, and then again, we saw a resurgence in tech stocks. But at the same time, behind the scenes, there was a change in leadership to what Nvidia and I called the Open AI team. So the stock prices of Microsoft and other companies and vendors in the space had been rising, and then the Google news happened.
01:30 dave
Google is a triple whammy when it comes to generating artificial intelligence. They are considered laggards. Well, but they’re superscalar themselves, they make chips, and they have large language models. So now investors are saying, wait a minute, we’ve kind of forgotten about all the other players because we’ve been so focused on open AI and all their circular investments, and now we’re seeing investors repositioning themselves and saying, who’s going to be the next winner in the future? Even Amazon’s chip news yesterday gave them some leadership that we haven’t seen in a while.
