Andrew Curtayne: Milford Asset Management expert on the factors impacting the tech stocks

It's been an interesting time for the tech sector, with many big companies reporting their results.

Tech stocks recently reversed some of the recent selloff last night - with the Nasdaq up 1.9 percent.

Milford Asset Management's Andrew Curtayne explained further.

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Episode Transcript

Speaker 1 (00:00):
Now Andrew Kurtain Milfit Asset Management is with us Alo Andrew.

Speaker 2 (00:04):
Hi Heather convenient, So listen, talk me.

Speaker 1 (00:06):
Through the technology stocks reversing some of the recent sal
off last night. Was there anything that triggered the bounce?

Speaker 2 (00:12):
Yeah, there was a little bit, But I guess the
tech stocks have been quite weak for about four to
six weeks now, and it's after a period of an
incredibly strong run, and the semiconductive stocks were up over
one hundred percent. They gave back about twenty percent of
that move, and the market's been a little bit jittery
as we come into results season. But I guess we
point to anything last night, it's probably the market became

(00:33):
a little bit more relaxed about this new Chinese model
called Kimmi ky three released by a company called Moonshot,
which which is basically quite a powerful model, which is
not quite as good as Anthropic and Chat gbt's model,
but not far behind, and the market initially got a
little bit worried about it. Then the market actually concluded
last night that you know what, this is actually quite
good for demand for GPUs and chip stocks, so they

(00:57):
had a bit of a.

Speaker 1 (00:57):
Rally on it. Okay, so we're obviously we're in the
results season now and you've got the Google tomorrow. What
are we looking for here?

Speaker 2 (01:04):
The results season is going to be extremely important for
both the market and the technology and AI trade in general.
What the market wants to see from the sort of
combination of the big big tech stock this is the
Google's Microsoft Amazons, et cetera. Is they want to see
confidence that one they're going to continue to invest more
in AI, I spend more money on buying buying ships,

(01:25):
and two that they're getting returns from these from these investments.
So Google's first, first off, the rank from the major
companies tomorrow, and Google has been a little bit of
an AI daling in the recent recent sort of six
month period, So marker wants to see that that they're
going to grow their cloud revenue, which is where a
lot of their AI revenue goes through. They want to
see a big number there. They want to see confidence

(01:45):
from the CEO and CFO that they're going to keep
spending more money on KPX, and ultimately they want to
get confidence that the margins or that let's say, the
return on this investment is looking attractive and expectations are
pretty high. So look, it could go the way on
the result, but I don't I don't expect we're going
to get a weak number from them. It's just kind
of is it good enough to beat kind of lofty expectations. Yeah.

Speaker 1 (02:06):
Now you you've seen some stuff happening AI wise that's
impacting your view on the tech stocks.

Speaker 2 (02:11):
Yeah. So the increasing focus over the last sort of
month or so has been basically this U s versus
fress Chinese competition and AI. The rarely is that these
Chinese companies are producing some pretty good models. They're closing
the gap to the US models, and the market's getting
a little bit concerned that if the Chinese models dominate,
does this take revenue and earnings away from the US companies.

(02:34):
And it's the US companies that are driving most of
the spending. So you you kind of while having a
strong Chinese competition is maybe good for us as consumers
because we can use good models that are that are cheaper,
it's not particularly good for companies like Anthropic and Open AI.
So it's sort of increasing I guess called it a
war and AI going on. There's there's regulatory issues so

(02:55):
and that's that's the sort of key, key development. But
outside of that, if you if you step back, AI
and its capability is progressing at an incredibly fast rate.
It's all getting better, it's getting cheaper, it's getting better
for the consumers. So look, in general, I think it's
all heading in the right direction. It's all it's all
kind of good for usability. But you know, it's just
this sort of tension between US and China that's becoming

(03:18):
a bigger focus.

Speaker 1 (03:18):
Yeah, thanks very much, Ben, really appreciate talking to you.
Andrew Kataine Milford, Act Management.

Speaker 2 (03:23):
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