Big Tech roundup: Tesla, Nvidia, Apple and more

SPEAKER_1 (0:01)

Bonds are back.

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Ethan Wu (0:36)

Thank Pushkin.

Stock returns, not just in the US but in the entire world in 2023, have been dominated by just seven stocks, the Magnificent Seven, and you have definitely heard of them, Nvidia, Apple, Google, Microsoft, Amazon, Meta and Tesla. In July on Unhedged, two of our correspondents took bets on their favorite three of the Magnificent Seven tech stocks. Now with just a few weeks left in the year, we take stock of how they're doing.

This is Unhedged, the markets and finance show from the Financial Times and Pushkin. I'm reporter Ethan Wu here in the New York studio, joined by Rob, value this Armstrong. What up? And from a hotel room in Chicago, Elaine putting the Lex into Flex Moore.

SPEAKER_4 (1:25)

Hi.

Ethan Wu (1:26)

I just had to reprise both of your nicknames from the last time we did this draft style pick, but we thought we'd do kind of a mid-year check-in.

We got a lot of stocks to run through. I mean, by far, the most interesting one, I think, has been Nvidia, which was controversial last time we talked about it. Rob thought the peak was kind of in for Nvidia. Elaine thought there was a lot more to go. And it's been the best performer among the Magnificent Seven, up 11.5% since we last recorded in July. Elaine, how does it feel to have picked the biggest winner?

Elaine Moore (1:55)

It feels amazing, but I have to give Rob some credit because in a way we were both right and both wrong. Nvidia came out with some spectacular earnings between the time that we last spoke, which is what I was expecting and what they had hinted at.

But the stock has been quite volatile. Things have stalled in the last couple of months. It's up, but I thought it would be up a lot more. I thought we would be talking about it, sort of steaming straight ahead of everyone.

Even the CEO has come out and talked about his company being always in peril. And a lot of that is to do with China.

Rob Armstrong (2:25)

I mean, the fact was the earnings were unbelievable. Wall Street's expectations were sky high. They crushed even those.

And in the immediate aftermath, the stock didn't move. So everybody knows this stock is killing it. The question is, is it so richly priced that it can't possibly do anything to give the stock another leg up?

Ethan Wu (2:48)

Yeah.

Elaine Moore (2:49)

Two things I think that we're thinking about. And one is that they've just come out with a new AI chip. So if they can keep their position ahead of everyone else in AI going, then they should do very well. But also, it just depends on what happens to the sale of their chips to China and if there's more tightening.

Ethan Wu (3:04)

Rob, you've been writing about some of the kind of longer-term competitive pressures on Nvidia, which I think people conventionally think of as from other chip makers catching up. But your point, talking to some analysts, was that it's actually not Nvidia. It's the other big techs that could...

If Nvidia has the luxury car of processors, Amazon or Google or Microsoft could give you the SUV.

Rob Armstrong (3:25)

This is a long-term story. It's not going to affect what happens in the rest of this year or even next year. But the point is the people who are going to be selling artificial intelligence services are largely going to be the large platform companies you just mentioned. And for them, it is going to be a cost game. Artificial intelligence consumes an incredible amount of computer power.

And they are going to want to build very cost-efficient ways to deliver that product to users.

Is that solution they get to eventually, that cost-effective solution, going to use Nvidia's highly specialized, very expensive, very high-performing products, or something that is cheap and cheerful and made in-house? I think that's a long-term question. But again, that didn't happen in 2024

Ethan Wu (4:21)

Yeah. Well, let's talk about one of those companies, Google, another Elaine pick that performed very well in the last couple of months, up 11.2%.

Google has been kind of a cloud store recently. That seems to be the big part of earnings that investors fixate on. And the stock...