Tech Investors Start the Week Risk On

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00:00Look, we see these technical glitches and the realization and, well, maybe just

00:06rememorizing the idea that we do depend on a few very big players,

00:10not just for our infrastructure, but for the market to go higher, too. What do you make of

00:14the rally today? Yeah, the rally, I mean, especially for Amazon, it seems like there

00:19was no glitch today because Amazon is also up with the rest of the market. As regards to Amazon,

00:25I do think that there is a concentration problem. Everyone talks about the stock market

00:29concentration. I mean, this is sort of the same thing. I think we have to start looking at digital

00:35infrastructure almost as utilities. You really can't live without it. And so from that standpoint,

00:42I think barriers to entry are high, but we need to start thinking about sort of diversifying our

00:48exposure. With regards to the rest of the market, I think there is a lot of excitement, certainly not

00:55only in tech, but in other areas of the markets as well. I mean, last week we learned about Walmart

01:01and OpenAI. Today we learned about Cleveland Cliffs and rare earths exploration. I feel like what's

01:07happening now is something that investors have been waiting for for a long time, which is to see the

01:12expansion of the tentacles of AI reaching the different parts of the economy and different parts

01:18of the markets. And this makes us feel a lot better about the AI play and AI development because

01:25it's becoming stickier. We can't peel this off as easily. We can't just say, OK, those are the data

01:31centers that are going to go dark and we may not use it for 10 years. This is becoming more of a real

01:35thing in our daily lives.

01:38It's so interesting that you're talking about the broadening out effect in the markets. But let's just go back to

01:42the first point about the over focus. There are basically an oligopoly when it comes to cloud

01:48provision. I'm here in Europe because we've got our tech summit in London. And one of the key debates

01:53is to be had is Europe's over dependence on other global players, the fact that they don't make their

01:59own chips, but they also don't have their own cloud providers. What do you make out of whether that might

02:04indeed change as we all think about sovereign AI and sovereign cloud?

02:09Yeah, so I think the concentration risk we talked about earlier, it applies to everybody. This was a

02:16global event, right? And so you do need to think about diversifying your exposure. But we've had

02:23stuff like this in the past, maybe not as large as Amazon, but I think the previous speaker talked

02:28about CrowdStrike. It really it requires a massive amount of investment and a massive amount of effort to

02:36get that done. And so far, the effort has been coming from a select few regions and countries.

02:43Certainly, Europe probably needs to think about having their own infrastructure as well. But

02:48it's not as easy to do as it is to say.

02:54And Apple's just touched 4% in the session, again, hitting a record high for the first time this year.

02:59It's a big factor at the index level. What do you make of all of these upgrades on optimism around

03:06iPhone?

03:08Yeah, so especially with regards to the negotiations with China, it is really nice to see sales up in

03:16the United States because then it makes Apple look like less dependent on some of this rhetoric

03:21between China and the US. But I would also say that there is a little bit of a spending,

03:26pulling forward of spending. When you think that iPhones or anything is going to cost 4% or 5% more in a year,

03:35are you really going to wait for iPhone 18? No, you're going to buy it today, especially if you have an iPhone X or

03:41iPhone 9. I can't even remember the numbers anymore. But a lot of people have been keeping them. And if they're going to

03:47renew it, they're going to renew it now rather than waiting until next year. So I think we're seeing some of that

03:52pulling forward effect as well. The optimism in technology markets today seems to be around

03:58earnings in particular and what's to come this week. But trade negotiations are also to come this week.

04:04Balance those two risk factors for us.

04:08Well, earnings is fundamental. And in my mind, it's much, much more important. And I do think that the

04:14stock prices will react to earnings. With regards to trade talks, I mean, I feel like the market's rising

04:21ever since the first day when President Trump said that he may not meet with President Xi.

04:27It's been going up. And I think that's the market basically calling bluff on both countries.

04:33China is an export dependent country. It needs to export rare earth minerals as much as we need to

04:38buy them. U.S. is a consumer based economy. We need to be able to import cheaper goods from China as

04:44much as, you know, China needs to export them. We need each other. So I think the markets are saying,

04:50OK, the deal is probably going to get done. It's just a matter of time.

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