Dan comments on Uber and Airbnb and their massive rallies over the last few months.
Dan also discusses semis.
Guy comments on Snowflake and Oracle and how he would play the two names.
Dan also discusses semis.
Guy comments on Snowflake and Oracle and how he would play the two names.
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NewsTranscript
00:00 We start off with an under the radar rally in the tech sector.
00:03 Yes, the mega caps, the AI focused semis have been stealing the spotlight of late,
00:07 but there are some other pockets of strength that you may not have noticed.
00:09 Check out the moves in software names like Datadog, Adobe and Snowflake,
00:13 all significantly higher today.
00:15 Media names also on the move.
00:16 Paramount, Netflix, Warner Brothers Discovery, all well in the green
00:20 and the gig economy stocks on the go.
00:22 Uber, DoorDash and Lyft feeling the love.
00:24 So what does this broadening out of the tech rally tell you about the market?
00:29 Are you more hopeful, Dan Nathan?
00:31 I ask sarcastically.
00:32 Yeah, you know what's interesting?
00:34 One thing that the gig ones are really interesting to me,
00:35 because I think those are models that were heavily debated.
00:38 They saw the pull forward during the pandemic.
00:39 They rose to crazy heights in 2020 into 2021.
00:43 There were some of the first ones that started to sell off.
00:46 And obviously, Uber is a little different.
00:47 They had some different dynamics going on between ride share and delivery.
00:50 But if you look at Airbnb and if you look at Uber, that's going to report.
00:53 I know we're going to talk about it later.
00:55 Those stocks are both 100 billion dollar market cap companies right now.
00:58 They've had massive rallies over the last few months and they've gone from,
01:01 you know, probably decent market size to very large.
01:04 If you think about it in the, you know, just in the context of the NASDAQ 100.
01:08 So those and how they react to their earnings and guidance,
01:11 I think are going to be really important.
01:13 You know, the valuations are kind of getting a little stretched up here.
01:15 I do think it's interesting, though, if we look at the semis and today,
01:19 you know, we had that Intel move was up six and a half percent on Friday
01:22 after it results in guidance.
01:24 Give half that back today in Taiwan, semi, which guided a few weeks ago
01:27 is also being kind of stuck in the mud a little bit.
01:30 That's why I think that AMD report and guide is going to be really interesting.
01:32 But we have seen a rotation out of semis into these other names.
01:36 And I think that is bullish.
01:37 If you're thinking about it is bullish.
01:39 I'm not saying I'm bullish.
01:40 I heard that right.
01:42 It is bullish.
01:43 I mean, there's no way to say it otherwise.
01:46 No way to say it otherwise. Hi, Mel.
01:47 Oh, hi, guy.
01:48 Tim looks great.
01:49 So we were talking about his hair looks a little bit different, but equally good.
01:53 It's just I'm just going to say it's a fresh shower,
01:56 which doesn't mean I don't usually shower, but there's a lot of information.
01:59 But it's wet, not gel.
02:01 So now we can move on.
02:02 We got that out of the snowflake is interesting.
02:04 Right. It's obviously rallied significantly from the lows that we saw.
02:06 It was ridiculously overvalued at its peak.
02:09 We talked about it. Dan mentioned it now.
02:11 It's approaching close to 18 times revenue again.
02:13 They report in a couple of weeks.
02:15 It's one of these names or probably levitate in earnings.
02:18 And it's going to have to prove itself when I say levitate.
02:20 One ninety seven was sort of a breakdown level a couple of years ago.
02:23 But Oracle, on the other hand, reasonable valuation,
02:26 which is within a whisper of its all time high.
02:28 I mean, that's a stock you could actually sort of wrap your arms around in terms
02:32 of valuation, in terms of what they're doing.
02:34 If you recall, Mel, which you do, Oracle was one of the O's,
02:37 the only O in my hope trade way back when it is.
02:40 It is quite an extraordinary well.
02:42 So Dawn Dawn was a different one.
02:44 Dawn has a little Dawn.
02:46 Yeah. I mean, unless you spell it Gazi.
02:49 I don't know.
02:51 We are so distracted tonight getting back to this rally because it does seem like
02:56 there's a churn, at least even within the tech sector,
02:58 into some of the more sort of value pockets, if you want to call it that.
03:02 Well, and then and then there's also the high multiple ones like a crowd strike
03:05 and a snowflake and a data dog.
03:07 And what we've learned out of the hype that's hung over the industry
03:11 and the question first, the first question was, was this going to trigger
03:14 some kind of an AI cap expend within mega cap tech?
03:17 And is that a reason to go buy it?
03:18 And I think we're getting some follow through on that.
03:21 If you're going to follow through on AI spend, if there's always room for AI
03:24 spend, maybe at the expense of CPU or people like Intel,
03:27 there's also room for cyber.
03:29 There's also room for some of these high end software.
03:31 That's what this has told me.
03:33 And that's what we're seeing on the fall through here.
03:34 So and guys, Adobe, I mean, you look at a couple of these names and it is guys
03:38 Adobe because he's often he's often talking about a company
03:41 that he's often right about is usually trading at a higher multiple.
03:44 And it continues to rewrite.
03:46 If you look at the other parts of the market, though, look at energy coming back.
03:49 Look at look at in other words.
03:50 So the parts of the market that are the other side of the growth barbell,
03:54 you're actually seeing commodities come back.
03:55 You're actually seeing some of these industrial names that involve
03:58 some cyclicality and then the media rally today.
04:01 I don't know that you think media's fortunes have changed overnight,
04:04 but listening to Facebook, listening to Google, we're getting an understanding
04:08 about what's going on with ad spending.
04:09 It all leads up to that recession in name only is is what it is now.
04:15 I just think it's pushing it all out.
04:16 That's what everybody's now doing.
04:18 I think there's still a big cry for recession.
04:20 It's now at the second half of twenty four instead of the first half of twenty four.
04:23 And that's what's going on for the market.
04:25 Julie, how do you feel about this rally?
04:26 Seeing the broadening that we've seen in recent weeks and months,
04:30 but also the churn within the tech sector?
04:32 Yeah, I think the broadening is important and it is a positive indication,
04:37 but at the end of the day, the things that, you know,
04:39 we pay the most attention to are still the fundamentals and they're uneven.
04:42 Right. You know, you see in high quality software, you still see that deal cycles
04:48 sales cycles are pretty long.
04:49 There's still hesitation.
04:51 And I think that that until that gets resolved, it's hard to get super enthusiastic
04:56 because that's, you know, at the end of the day, the fundamentals really do have to matter.
05:00 And so what I worry about is, you know, when we get snowflake trading, you know,
05:03 20 times revenue, it starts to just be narrative and eventually narrative
05:07 has to be backed up with fundamentals.
05:09 So I'm a little concerned here.