Neuberger Berman's Dan Flax on his top tech stock picks

Summary

Neuberger Senior Research Analyst discusses the macroeconomic factors affecting tech stocks, emphasizing the potential of companies like Amazon, Microsoft, and Apple. Despite cyclical headwinds, there are select opportunities in technology, particularly in cloud platforms, AI, and digital infrastructure. The analyst anticipates a mixed economic landing, with enterprise customers focusing on transformation and investment in sectors like healthcare, fraud detection, and digital manufacturing. NVIDIA's strong product cycles and ecosystem are seen as a positive force in tech.

Takeaways

• 📈 **Market Outlook**: The macro picture will significantly influence tech investments, with a potential for a mixed landing scenario.
• 🌐 **Global Market Dynamics**: There's a bifurcated consumer market with low and mid-end segments facing pressure, while the mid to high-end and certain global regions show resilience.
• 💻 **Tech Giants' Positioning**: Companies like Amazon, with its cloud platform AWS, are well-positioned to capitalize on new workloads and technologies like generative A.I.
• 🛒 **Retail Transformation**: Amazon and others are redefining consumer experience with faster delivery and more video content, suggesting a shift in retail dynamics.
• 📊 **Advertising Potential**: The potential of Amazon's advertising business is noted as underappreciated, indicating a possible area of growth.
• 🌐 **Microsoft's Cloud Strategy**: Microsoft's Azure is highlighted as a key player in helping enterprises build digital infrastructure.
• 🍎 **Apple's Innovation**: The upcoming infusion of Apple Intelligence and the evolution of the iPhone experience are anticipated to be significant.
• 🏥 **Healthcare and Tech**: The intersection of technology and healthcare, including drug discovery and fraud detection, is seen as a critical area for the coming years.
• 💼 **Enterprise Adaptation**: Enterprises are looking to transform their organizations amidst cyclical changes, focusing on long-term opportunities.
• 🚀 **NVIDIA's Positive Impact**: NVIDIA is seen as a positive force in tech, with a strong product cycle and a broad ecosystem supporting various industries.

Q & A

What is the analyst's general outlook on the macro picture for technology investments?

The analyst expects concerns about cyclical headwinds to remain a factor but also sees select opportunities in the technology sector.

How does the analyst view Amazon's position in the market, particularly with Amazon Web Services?

Amazon Web Services is well positioned with over $100 billion in revenue and is expected to capitalize on the next generation of workloads, including generative A.I.

What are the analyst's thoughts on the retail sector and consumer experience?

The analyst notes that retail pockets are pressured, but the consumer experience is being redefined with initiatives like Prime one-day delivery and more video content.

Why does the analyst continue to favor Microsoft's stock?

Microsoft's Azure cloud platform is well positioned to help enterprises build up their digital infrastructure, which is a key driver for the analyst's positive view.

What upcoming development does the analyst anticipate from Apple that could impact the stock?

The analyst is looking forward to the beginning of infusing Apple Intelligence and the evolving iPhone experience, which will play out over the next year and beyond.

What is the analyst's perspective on the economic landing, and how might it affect tech stocks?

The analyst foresees a mixed landing with pockets of consumer pressure at the low and mid-end, while the mid and high-end consumer sectors are faring better.

How does the analyst view the current state of enterprise customers in relation to technology investments?

Enterprise customers are looking to adjust to cyclical changes and invest in transforming their organizations, which should drive technology spend despite challenging periods.

In which areas does the analyst see significant opportunities for technology in the second half of the decade?

The analyst identifies healthcare, drug discovery, fraud detection, financial services, and digital manufacturing as areas with tremendous opportunities for technology.

What is the analyst's opinion on NVIDIA's current position in the technology sector?

NVIDIA is seen as a positive force in tech due to its strong execution on product cycles and the broad ecosystem it supports, with millions of developers utilizing its platform.

How does the analyst assess the delay in NVIDIA's Blackwell platform and the demand for Hopper?

While there is a slight delay in the wrap of the Blackwell platform, the demand for Hopper remains very healthy, indicating a positive outlook for NVIDIA.