As Big Tech companies report earnings, they also reveal massive spending plans for AI projects and infrastructure. While some companies like Alphabet (GOOG, GOOGL), Meta (META), and Microsoft (MSFT) are making progress, others like Apple (AAPL) face increasing challenges.
Wedbush Securities Managing Director Dan Ives joins Morning Brief to discuss what he calls the “Fourth Industrial Revolution” of AI and Apple's progress on its frontier. .
Ives said Apple's annual Worldwide Developers Conference will be the company's most important. [CEO Tim] Cook lays out his AI strategy for developers on the service side, but the real idea in terms of how that might change is with the beginning of AI app stores, and then in September I believe that the iPhone 16 that will be released will have its own AI technology. ”
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This post was written by Nicholas Jacobino
video transcript
AI has been in the spotlight this week as investors digest a slew of earnings results from Arm Holdings, Taiwan Semiconductor, Sound Hound AI and more.
The situation remains complex, especially when it comes to teaching.
But our next guest says there's a big wave on the way, and there are some important names that are going to benefit even more from this.
I would like to take Dan I with me.
Well, Dan, Senior Equity Analyst at Bush Securities, nice to meet you.
So tell me about this memo you just put out this morning.
The title seems to speak to the fact that the AI revolution's spending tsunami is well underway, as seen in Q1 results.
So what does this suggest about the performance of some of these names going forward?
I think this shows that the demonization of this revolution is really starting. It's not just his NVIDIA Jensen, the godfather of AI, and what Nadel is doing for Redmond, but the rest of the technology as a whole.
Now you can think of names like Services, Salesforce Oracle, and Arm Holdings.
So these are just solid numbers, and we see similar things happening in other areas.
Pound here.
sound hound.
And what I believe will be the rest of the software and semi.
I believe that the fourth industrial revolution has begun.
How can investors best determine what is a healthy amount to spend on their generative AI ambitions, and what looks like an unhealthy amount to spend or what amount to spend in excess of index capital allocation?
Well, if we look at these hyperscale players, Microsoft, Amazon, Google, and you, we can break down some of the spending that we're seeing from the meta and so on.
It's just the beginning.
So we're not even an inning in, I would say we're in the dugout in terms of how this situation is going to play out.
Now, when it comes to over-indexing, I think you need to own the right plays.
I think we need to play with semi-final software and infrastructure.
And I think there's almost a basket approach to this.
But even if someone told you six months ago, Dell would play the role of AI.
You say, “Okay, I'm sure you had a fun Friday night,” but look what's happening.
Check out Dell's work and more.
This is a 1995 moment, not a 1999 moment.
Dan is one of the names we've been talking about a lot when it comes to AI. It hasn't been talked about much in the last few months, at least not recently, but just recently there have been a lot of questions about what exactly Apple's AI strategy is. Looks like we can expect to hear a little more at a big event next month.
But I want to know from your perspective, what do you expect to hear from culinary companies in terms of what their strategy is going to be?
Look, I think this is probably the most important event we've seen for Apple potentially in the last 10 years. This is because this will create a service-based AI strategy for developers.
What I believe is the beginning of the A in the AI APP store and how it morphs into the unique AI technology found in the iPhone 16 launched in September.
It was behind the scenes.
Were they behind when it came to AI?
Yeah, but I think they're catching up quickly and they have the highest installed base in the world at 2.2 billion.
So this is the beginning of AI to Cupertino. This compactor adds dans.
But first of all, Apple rarely actually apologizes.
But I also think it shows that they are under the microscope and have a target on their backs on the Brussels ring road.
But if you make the best product in the world and the spotlight is on you, they will.
And as much as I wish they'd make more ads like this, Apple is apologizing for the best product in the world, and that's essentially what they're doing.
