Contexte
“When I look at an Alphabet, which is one of our core holdings... So, if you talk tech, you know, definitely you've got the Alphabet on the side. We own that.”
these are ones that I want to hold for the next couple of years.
Contexte
“Stryker, Thermo life sciences, even the J&J... these are ones that I want to hold for the next couple of years.”
Transcription Complète
Let's bring in Sarat Sethi, managing partner at DCLA and a CNBC contributor. It's great to see you, Sarat. And I did I I always love to know which side you're taking of this. Is it that you want to see those CapEx plans raised, or you'd maybe prefer a little bit more discipline? >> I would prefer more discipline. But when I look at an Alphabet, which is one of our core holdings, they have so many different levers to toggle. If you look at, you know, definitely in the Gemini side, but you've got YouTube, you've got Cloud. And I think they can always pull it back if at some point two things happen. One, the return on investment's not there. Or the market by itself, which it did last week, but now it's again today, it's saying, "Hey, listen, we think there's enough going on here." I worry about some of the other companies that are spending, you know, what's going to happen in terms of the CapEx for them, and what is the reaction of the stock market? Because that's going to be the report card right there. >> And we I mean, other areas of where the market has been unhappy, IBM comes to mind. Forget what you were sort of saying about that one. So, you know, as you say, you agree with this idea that customers are not spending on hardware. We've talked a lot about what that might mean for other software names. So, how are you positioning now to kind of navigate continue through this period of earning season, and then, you know, into the rest of the year? >> So, if you talk tech, you know, definitely you've got the Alphabet on the side. We own that. We own Amazon on that side. And on the semi side, you know, I got Qualcomm and Nvidia there, too. And what I do like, and you know this guy, we've talked about this for a year, software. And And Mike heard if you look at kind of what IBM said, he said what I said, he said, "People are still spending on software. It's the hardware that they're holding back on." Because not only do they need to make sure that they have enough to spend on AI, they need software and security. So, those are going to be important things to watch for, I think going forward. And you've seen a little bit of rebound. And I think Microsoft's the one that I kind of I'm wondering where it goes, because it's already down double digits since the beginning of the year. It's very software heavy, and most of their money is the extent of R&D. So, I do like the company, but I do think they have They're the one of the few that have to show the return on investment faster than the others. >> What did you think of ServiceNow? And I will point out to you, too, what you were saying that Salesforce earlier was leading the Dow with a nearly 5% gain. >> So, I think ServiceNow came out exactly what people said. They hit their numbers. They didn't say anything about, "Hey, we're seeing a softening in the back end." They are firing on all cylinders, and now it's exactly what we thought. They have to All these software companies have to execute, and they have to show people the cash flow, their good balance sheets. They're buying back shares today as they pre-announced they're buying back billions of dollars of shares. So, companies wouldn't do that if they don't have confidence in the future. Right now, it's just where the allocation of capital is going, and now you're seeing that kind of moving back and forth between semis, software, hardware, and I think hardware is the one that's going to lose the most, but the ones that have the highest return are going to be the best return on investment. >> Which is another, you know, inversion of the narrative. Earlier this year, it was hardware is the new software, and now you're saying hard- software is the new hardware. And anyway, ServiceNow is up 9% for those who are keeping track. You get the final minute, Sarat, to talk about Stryker, Thermo Fisher, and J&J. >> So, Kelly, one of the things that we've seen in this market is, you know, money went from value to momentum, and then it started going from high-quality growth at reasonable price companies to momentum, and we're seeing that come back. So, Stryker, which is hips, knees, Thermo life sciences, even the J&J, these are high-quality cash flow companies, really great balance sheets, earnings, and I think you're seeing money come back to a healthcare sector that's the smallest in the S&P that it's ever been. So, we're not talking about, you know, speculative, this company might have actually earnings. These are real companies that are growing. Each one, I think, has its own specific catalyst going forward, and these are ones that I want to hold for the next couple of years.
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