00:00 Speaker a
Hello, Josh. That's right. Big Technology AI spending is rolling here and is growing. I've heard it from Amazon, Alphabet, Microsoft and Meta, and hope to spend a total of $364 billion in 2025. This has risen sharply from previous estimates of around $325 billion. Wall Street certainly supports this news. Meta and Microsoft stocks saw a surge in revenue. Microsoft actually exceeded its $4 trillion market capitalization for a short time. The alphabet has also recovered. Amazon was the only exception here. After AWS' guidance was weak, the stock sucked up investors there when it actually became where Amazon was standing in this AI race. Now, these companies say spending is essential to meet many of their burgeoning AI demand, including building data centers and expanding cloud infrastructure. Microsoft alone is planning to spend nearly $30 billion in the first quarter of the new fiscal year. Analysts certainly buy it too. RBC Capital Markets calls Microsoft's AI footprint an undervalued, and says Google is leading Genai innovation. Wedbush hikes Meta's price target to a whopping $920 per share. So there's a lot of optimism on the streets. There are some speculations as to whether these are bubble-like numbers, especially the AI returns are still a bit vague and monetization remains unknown, so there is some speculation as to whether the valuation can really be justified. But for now, investors are paying, betting, but I should say, the payoff is only a matter of time here. So, overall, it's a very solid result, all of which will earn Nvidia's income at the end of the month. But Josh, judging from what we see from many of these hyperschools, I think we're really looking for a strong Nvidia report.
05:17 Speaker b
So there are a lot of important cross currents out there, Ally. How do strategists and market strategists generally feel about big technologies?
05:48 Speaker a
Very positive and very strong. To really tell that story, we can see the actions of the sector that we saw throughout the year. Tech is one of the main sectors, and conversely, looking at the biggest lagard of the year, it's a consumer discretionary staple. So many of these companies exposed to consumers, especially low-income consumers, have seen a lot of pain in terms of tariffs. I know that inflation is a bit edged. Earlier this morning, the employment data points to potential labor markets in the weaker labor market than they are heading this month. So all of this is really insulated from Big Technology. Or, you could say that Big Technology is insulated from many of these concerns. Of course, Apple said it was expecting a $1.1 billion hit when it comes to tariffs this quarter, but investors weren't really worried about it. They shrugged a lot of it. They are considering the demand for iPhones and are looking at China. Many of these large companies have different guidelines and different sets of rules. So that's why it really leads a lot of profits and leads the rally we've seen this year.
07:42 Speaker b
Okay. Thank you, Ally. appreciate.
