Nvidia (NVDA) is the market big man and has led the tech sector's growth amid the AI boom, but Nancy Tengler, CEO and chief investment officer of Laffer Tengler Investments, says there are other companies in the space she believes offer buying opportunities.
She points out that Microsoft (MSFT) is a great buy, even though it has underperformed most of the “Magnificent Seven.” The stock represents “an opportunity to buy up a few easy winners in AI and companies that we think will benefit from the AI PC upgrade cycle,” she explains.
Tengler also believes Amazon (AMZN) is a great investment opportunity, pointing to the company's cloud computing division, advertising, retail, and streaming businesses as key growth areas.
To learn more about expert insights and the latest market trends, click here to watch this full episode of Catalysts.
This post was written by Melanie Leal
Video Transcript
Nancy.
So I want to ask you about your comment here about hedge funds specifically flooding into NVIDIA. Where is the opportunity to go against the tide of what hedge funds are doing, when they're flooding into a big name company like NVIDIA?
That's what's driving this market surge.
How do you follow that wave?
But can you also find areas of opportunity outside of that to gain an advantage?
Well, it's not that easy, Madison, but what we saw from Goldman Sachs is that tech stocks last week were the worst they've been in the last 11 weeks. And that's still a very short period of time, right?
But 60% of sales were software.
So what we've done is look at the higher quality stocks that we own and look for opportunities to add to them.
That's why I suggested in my note that Microsoft, while an obvious name, is interesting to us because it has been the worst performing of the Magazine 7 stocks so far this year.
It then gives you the opportunity to analyze the companies that are likely to be easy winners in the AI space and benefit from the AI PC upgrade cycle.
Nancy, I think you also see opportunity within Amazon.
So, II, is that a similar investment point?
Is it all about AI?
Is it all about the growth there or is it all about Amazon?
Perhaps you too find this level appealing?
Well, Sean, both of those names are hyperscale computers or cloud computers.
So that brings us to cloud computing. Sorry.
And last quarter, giant Amazon grew about 17% year-over-year on the cloud computing front, while Microsoft's Azure grew 31%.
As the debate rages over who will benefit from AI, we believe these two companies will be the winners.
And we want to position ourselves on both sides as well as other sides, including Amazon's advertising growth, the retail side of the business, Amazon Prime Video, which we think will continue to be drivers of growth.
Andy Jassy really, you know, cooked up what was called Tim when he came in.
Well, you know, like when Tim Cook took over at Apple, there were a lot of doubts about whether he could run the company.
Hmm, this is what happens when you follow an iconic CEO.
But overall, I think he's doing a great job and the company is on track for growth.
