00:00 Speaker A
First of all, I’d like to talk about what we’re actually seeing in this market. The S&P 500 is within striking distance of another all-time high. Ken, I’d like to go to you first. Do you think this market is shifting back to focus on profits, on AI, and why do you like Microsoft and Apple in this market right now?
00:23 Ken
I’ll go again just to be safe, but thank you for giving me a ride. So I think what we’re going to start to unravel is that the market has always been positive, and even though there are still some challenges in the straight, the market is going to move beyond that. Obviously as supply increases through pipelines and other means, oil will start to come back. And the Federal Reserve is definitely going to do something here as the transition happens here and probably in the next few months.
00:52 Ken
In addition to that, there is also an earnings report. We are now in a period where profits are extremely high, right? And then you sell the reaction to the news. Revenues are dragging their feet. Understood? So, while we’re completely dragging our feet in terms of revenue, I think the bar is low and set pretty well. The reason I like Microsoft and Apple is that they’re actually clearly very different businesses. Microsoft has 1.1 billion licenses, but they were thrown out with the bath water saying, “We’re working on AI, we’re not doing enough with AI.” that’s right. They’re co-pilots, right? We have a variety of verticals, clouds, etc.
01:21 Ken
And it’s not hyperscalar that Apple is sitting there. They note that first movers spent $200 billion and Apple holds the cards. They’re shipping 2.4 billion devices into the world. So, again, for people who want to dip their toe into all of this volatility, I think Apple and Microsoft are one of the best places to look because of the tenacity of their products and services.
01:42 Speaker A
What’s been really interesting to watch over the past few days is that investors are returning to that risk appetite. They’ve probably built a portfolio with more semiconductor companies, including Taiwan Semiconductor and Broadcom, both of which are up this week. ASML has also risen to the top. And, as I know, you’re also following some positive views on the outlook for JPMorgan. What exactly do you hear from the street?
02:05 Speaker B
right. ASML currently has a slow share price reaction, but is performing well. They were highly anticipated. Perhaps that’s why we’re seeing the stock price reaction today. But nevertheless, there are also some strong opinions from JPMorgan and Morgan Stanley. Importantly, the company said demand for chips is outstripping supply, so customers are accelerating capacity expansion plans for 2026 and beyond. Remember, this is a company that makes the actual machines that make semiconductors. JPMorgan therefore noted that the company is confident in the strength of demand and the outlook is very solid, which is a positive reading for the chip equipment space as a whole. Morgan Stanley also noted that demand outstrips supply, suggesting strong sales momentum through 2027. Well, we’ve been watching a gathering in the semiconductor field. In fact, they’ve been driving the market higher, especially earlier this week. Today’s response is more subdued, but TSMC is still expected to report results tomorrow. However, it is expected to perform well as it already reported a 39% year-on-year sales increase last week. This means strong demand from the street is already expected.
