Bloomberg Daybreak Holiday Special - New Years Day 2024

Podcast Summary

• Discussion on tech stocks and AI growth: Apple, Microsoft, and Google's AI advancements are driving growth in the tech sector, while Tesla faced challenges and caution is advised for Lyft and Snap.

  The tech sector, specifically the adoption and development of artificial intelligence (AI), is a significant focus for both established tech companies and startups. During a roundtable discussion from the summer of 2023, Gene Munster and Dan Ives shared their views on tech stocks, predicting the success of companies like Apple, Microsoft, and Tesla, while expressing caution towards Lyft and Snap. Since then, Apple and Microsoft have seen substantial growth, while Tesla faced challenges, particularly in China. Looking forward, the growth story for tech, specifically AI, is seen as ongoing, with Google's advancements in AI being a notable area of interest. Overall, the tech sector, particularly in the realm of AI, is expected to continue shaping markets and trends into 2024.

• Real estate tech improving home valuation transparency and accuracy: Microsoft and Alphabet leading tech market rally due to AI positions, hosts bullish on Microsoft's growth potential in AI revolution

  The real estate tech industry, specifically companies like Zillow, are making strides towards improving transparency and accuracy in home valuation. This is important as people's homes represent a significant portion of their net worth. Additionally, the stabilization of interest rates is expected to benefit real estate tech companies that have struggled in recent years. Despite some strong performances from stocks like Lyft, the hosts believe that Uber is better positioned for long-term success. In the technology sector, Microsoft and Alphabet, among others, have driven the market rally this year due to their strong positions in the AI revolution. The hosts remain bullish on Microsoft's potential for continued growth in this area. While it's difficult to predict exact timelines or market caps, the hosts believe that the AI revolution is just getting started and that companies like Microsoft are well-positioned to benefit.

• AI as transformative technology with significant growth potential: Speakers see AI as a game-changer, early stages of monetization, potential new tech bull market, high valuations, optimistic future, but also caution

  The speakers on Bloomberg Daybreak see Artificial Intelligence (AI) as a transformative technology on par with electricity, with significant growth potential in the coming years. They believe we are currently in the early stages of monetization for AI and view this as the beginning of a new tech bull market. Valuations for AI companies are high, but the speakers do not see this as a bubble yet, comparing it instead to the 1995 internet boom. Microsoft, Google, and Apple are seen as foundational AI companies that will benefit from this growth. The speakers are excited about the potential wealth-generating opportunities in AI and encourage investors to "get the popcorn and get ready." They also acknowledge the risks and encourage caution, but overall, they are optimistic about the future of AI.

• AI use cases in finance, insurance, healthcare, and government: AI technology's rapid advancement will bring significant monetization opportunities for companies in finance, insurance, healthcare, and government by 2024 through effective implementation and utilization of over 80 identified use cases

  The use of Artificial Intelligence (AI) is expected to bring significant monetization opportunities for tech companies as early as 2024. According to Dan Ives, there are currently over 80 identified use cases for AI, with the most promising areas being finance, insurance, healthcare, and government. Companies that can effectively implement and utilize these use cases are likely to be the industry leaders. Gene Munster agrees, specifically mentioning Microsoft's Copilot as a promising product with real utility that is expected to be available in the near future. The rapid advancement of AI technology is causing a transformation in various industries and is expected to bring significant change, especially in the areas mentioned above.

• Impact of AI on Social Media and its Companies: AI integration in social media to boost engagement, daily active users, and time spent, benefiting companies like Meta, Nvidia, and AMD. Regulatory efforts to eventually catch up to prevent potential risks.

  The integration of artificial intelligence (AI) is set to significantly impact various industries, particularly social media, in the coming years. AI is expected to increase engagement and addictiveness, leading to growth in daily active users and time spent on these platforms. Companies like Meta, Nvidia, and AMD are expected to benefit from this trend. However, there are concerns about the potential negative consequences of AI becoming too enmeshed in our lives, including the risk of outrunning regulatory efforts and potential negative impacts on humanity. Companies driving AI innovation are reportedly aware of these risks and are taking steps to ensure self-regulation and prevent potential existential risks. Regulatory efforts, despite the current slow pace, are expected to eventually catch up to the rapidly advancing technologies.

• Impact of AI on the Stock Market: The Magnificent Seven: AI's role in the tech sector's impressive gains, with the Magnificent Seven stocks doubling in value in 2023, driven by optimism and the US's lead in AI development, while regulatory challenges persist.

  The discussion revolved around the significant impact of artificial intelligence (AI) on the stock market, specifically the "Magnificent Seven" tech stocks, which include NVIDIA, Alphabet, Amazon, Apple, Meta, Microsoft, and Tesla. These stocks collectively doubled in value in 2023, with AI being a contributing factor, but not the sole driver. The optimism surrounding the potential of AI, combined with the tech sector's recovery from a rough 2022 and the general flight to quality, played a role in the impressive gains. Additionally, the US being ahead of China in AI development adds to the importance of this technology and its potential impact on the market. The conversation also touched upon the regulatory challenges and the need for self-regulation in the AI sector. Overall, the conversation highlighted the significant role AI is playing in the tech sector and its potential impact on the stock market.

• Strong tech performance, AI revolution, and institutional investment drive growth in 2023: Despite potential cyclical downturns, tech sector's strong performance, ongoing AI revolution, and institutional investment create a bullish outlook for the next three years, with stable or decreasing interest rates potentially leading to further inflows into tech stocks and continued M&A activity.

  The tech sector had a surprising strong performance in 2023, with numbers coming in ahead of expectations and the ongoing AI revolution driving growth. This led to increased institutional investment and a bullish outlook for the next three years, despite some potential cyclical downturns. The impact of interest rates and money flows also plays a role, with stable or even decreasing rates potentially leading to further inflows into tech stocks. The trend towards mergers and acquisitions is expected to continue, with big tech companies making large deals and the regulatory landscape becoming less of a barrier. Overall, the speakers are optimistic about the future of tech in 2024 and beyond.

• AI and M&A in Tech Industry in 2024: Apple, Palantir, MongoDB, Snowflake, and NVIDIA: Apple's role in AI is a focus, AI companies M&A expected, Palantir, MongoDB, Snowflake are strong contenders, NVIDIA's dominance in AI chips, long-term growth potential, tech roundtable on future of big tech, potential risks and unintended consequences of AI adoption.

  The tech industry is expected to continue its focus on artificial intelligence (AI) in 2024, with potential mergers and acquisitions (M&A) involving AI companies on the horizon. Apple's role in AI is a significant topic of interest. The broadening of tech outperformance beyond the current seven stocks is also anticipated. Companies like Palantir, MongoDB, and Snowflake are considered strong contenders due to their AI use cases and massive install bases. NVIDIA's dominance in AI chips is not yet under threat, but growth in 2025 is a key question. Investments in companies building chips to compete with NVIDIA are being made, but they are still a few years away from being deployed. Overall, the focus is on the long-term growth potential of these tech companies, especially in the context of the 4th industrial revolution. The tech roundtable between Gene Munster of Deepwater Asset Management and Dan Ives of Wedbush Securities also touched upon the future of big tech and the potential risks and unintended consequences of AI adoption. Join Emily Chang at Bloomberg Tech in San Francisco on May 9th for further insights on these topics.

• Experts predict tech stocks to rise and AI's role in growth: Experts Dan Ives and Gene Munster anticipate a 25% increase in tech stocks, emphasize M&A and AI monetization, and single out Google, Apple, Palantir, MongoDB, and Microsoft as top picks, with Microsoft having a potential $4 trillion valuation.

  Optimistic outlook on technology for the year 2024. Dan Ives expressed his expectation for tech stocks to rise by 25% and the significance of M&A and AI monetization. Gene Munster shared his belief in the fracturing of the mega tech companies and the potential of smaller tech firms with market caps below $100 billion. Both experts mentioned specific stocks they are bullish on, including Google, Apple, Palantir, and MongoDB. Microsoft was highlighted as a top pick with a potential valuation of $4 trillion. The consensus seems to be that AI will play a major role in the tech industry's growth in the coming years.

• Analysts express concerns over underperforming local card names and Netflix's growth potential: Analysts Gene Munster and Dan Ives predict struggles for underperforming card companies and Netflix due to intense competition and questionable innovation strategies.

  Both Gene Munster from Deepwater Asset Management and Dan Ives from Wedbush Securities shared their investment dislikes for the upcoming year. Munster expressed his concern over local card names with a history of underperformance, while Ives identified Netflix as a large company in a hypercompetitive market with questionable growth potential and a lackluster AI strategy. Despite their large market caps, both analysts believe these companies may struggle to innovate and stand out in their respective industries. As we move forward into 2024, it will be interesting to see if these predictions hold true.