00:00 Speaker A
Alphabet good results. IBM good results. I mean software up double digits for their quarter, infrastructure business, up double digits. What’s your read through to some of these reports that we’re getting from a lot of competitors like Microsoft and Amazon coming over the next few weeks?
00:17 Lisa Shalett
So, I think, especially when we look at uh Alphabet, which was the first ones of the mega seven names to report earnings yesterday, and uh what we see here is that AI spend is going absolutely nowhere but up. So, it’s still very strong, which is a very uh perfect backdrop for the rest of the hyperscalers, as they’re coming in over the next couple of weeks, that benefits even more uh more parts of the industries, when we look at the uh the rest of the value chain that needs to happen to uh make AI happen. So, I think it’s a very healthy backdrop, uh Alphabet crushed its earning and that uh is also very important for the market overall, given the mega seven names um have a waiting of about 30% of the market and are again uh driving the bus here.
01:06 Ali Canal
Ali, uh yesterday you and I started the show talking about uh how Texas Instruments let everybody down, and that put pressure on a lot of those similar uh analog chip plays. But, I look at what uh in Alphabet, and what IBM reported here this morning, and my one of my read throughs is wow, that next quarter from Nvidia is going to be huge, and maybe the market is right to send up Nvidia well beyond a $4 trillion dollar market cap.
01:42 Alexandra Canal
Right, and if you have these hyperscalers aggressively spending, that’s another company’s revenue, right? And that feeds through into Nvidia. So, Alphabet shares I I mean, they are undervalued, according to some on Wall Street and after this earnings report, there’s a lot of bullish optimism out there. Pivotal research raising its price target on shares to uh 245 bucks a a share, and search results really stood out to me, especially since heading into this report. There have been a lot of discussions around artificial intelligence, whether or not that’s going to bleed into some of the the search impact for a company like Alphabet. But, clearly, we do not see that happen in the quarter, and also YouTube, this sticks out to me, because I’m on these earnings calls for all these streaming companies, Netflix in particular, and they consistently cite YouTube as their biggest competition. YouTube is taking over more share of TV viewing time. It is the biggest non-premium audio and video platform in the entire world. So, there’s just a lot of strength in YouTube and a lot of different touch points for Alphabet as a company to really lean into. So, start of the MAG seven, you know, huge for this company and really huge for the broader tech sector as well.
03:00 Ali Canal
Yeah, good call out on YouTube. I think my mom watches Yahoo Finance on YouTube there, Ali, so she’s a very loyal fan. Lisa, let me go over to back on on Alphabet though, because they came out, they raised their CAPEX guidance by 10 billion dollars. Now, this guidance raise would have come three months ago, I would argue the stock would have been absolutely hammered. Uh what are your thoughts on that guidance raise for CAPEX from from Alphabet, and should we expect more of this from Microsoft and even meta, which is spending billions upon billions of dollars on AI?
03:46 Lisa Shalett
Yeah, I think it’s very uh positive to begin with. I mean, I think these companies have to spend at the moment to stay on the forefront of the AI build out, and that’s not only uh the AI. There’s more the the generative AI, and the next part of AI, so they’re all building on on on the future on the future there. And um I think it’s it’s a healthy backdrop. Again, it benefits a lot of different industries, um and I think it’s necessary for them to keep the edge here uh and and keep on the forefront of the AI build out.
