Kneel to your king Wall Street. <\/p>\n
After forecasting record revenue backed by a \u201ckiller AI app,\u201d Nvidia helped deliver a powerful performance for the Nasdaq Our call of the day<\/strong> offers valuable insight on tech investing amid AI mania from a pair of seasoned investors.<\/p>\n Inge Heydorn, partner on the GP Bullhound Global Technology Fund and portfolio manager Jenny Hardy, advise choosing companies carefully given high valuations in some parts of tech that could make earnings vulnerable. <\/p>\n \u201cBut looking slightly beyond the volatility, tech has the advantage of being driven by many long-term secular themes which will continue to play out despite a weaker macro,\u201d Hardy told MarketWatch in follow-up comments to an interview with the pair last week. GP Bullhound invests in leading global tech companies, with more than $1 billion in assets under management.\u00a0 <\/p>\n \u201cWe try to make sure we\u2019re exposed to these areas that will be more resilient. AI is the perfect example of that \u2013- none of Microsoft, Amazon or Google will risk falling behind in the AI race -\u2013 they will all keep spending, and that will continue to drive earnings for the semiconductor companies that go into these servers higher,\u201d said Hardy, who has worked in the investment industry since 2011.<\/p>\n \u201cThe way that we think about investing around [AI] is in the building blocks, the picks and shovels infrastructure, which for us is really the semiconductor companies that go into the training servers and the inference servers,\u201d she said. <\/p>\n Nvidia As Hardy points out, \u201clots of big tech has given us lots of certainty as it relates to AI, lots of certainty as it relates to the amount they are going to spend on AI.\u201d<\/p>\n Read:<\/strong> Nvidia\u2019s 24% jump Thursday lit an AI fire that carried these 19 stocks to gains of as much as 17%<\/p>\n Enter Nvidia\u2019s results, which Hardy said are proof the \u201cAI spend race has begun\u2026Nvidia\u2019s call featured an impressive roster of companies deploying AI with Nvidia \u2013 AT&T, Amgen, ServiceNow \u2013 the message was that this technology adoption is widespread and really a new normal.\u201d She said they see benefits spreading across the AI value chain \u2014 CPU providers, networking infrastructure players, memory and semicap equipment makers.<\/p>\n Heydorn, who traded technology stocks since 1994 and also runs a hedge fund with Hardy, says there are two big tech trends currently \u2014 \u201cAI across the board and power semiconductors driven by EV cars and green energy projects.\u201d <\/p>\n But GP Bullhound steers clear of EV makers like Tesla Are the tech duo nervous about anything? \u201cThe macro economy is clearly the largest risk and further bank or real-estate problems,\u201d said Heydorn, as Hardy adds that they are watching for second-order impacts on tech. <\/p>\n \u201cOne example would be enterprise software businesses with high exposure to financial services, which given those latest problems in that sector, might see a re-prioritization of spend away from new software implementations,\u201d she said.<\/p>\n
\n COMP,
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\n on Thursday. Indeed, thanks to that chip maker and a few other generals \u2014 Microsoft, Apple, Alphabet, etc.\u2014 tech is seemingly unstoppable: <\/p>\n
\n NVDA,
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\n Advanced Micro Devices
\n AMD,
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\n Taiwan Semiconductor
\n TSM,
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\n 2330,
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\n Infineon
\n IFX,
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\n Cisco
\n CSCO,
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\n NXP
\n NXPI,
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\n Microsoft
\n MSFT,
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\n ServiceNow
\n NOW,
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\n and Palo Alto
\n PANW,
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\n are all in their portfolio. They also like the semiconductor capital equipment industry \u2014 AI beneficiaries and tailwinds from increasingly localized supply chains \u2014 with companies including KLA
\n KLAC,
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\n Lam Research
\n LRCX,
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\n ASML
\n ASML,
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\n and Applied Materials
\n AMAT,
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\n TSLA,
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\n where they see a lot of competition, notably from China. \u201cUltimately, they will need semiconductors and the semiconductors crucially are able to keep that pricing power in a way that the vehicle companies are not able to do because of the differences in competition,\u201d she said.<\/p>\n