Dan Ives Talks Micron Earnings

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**Tom Keene** (0:07)
For many people, and particularly the gloom crew out there, this is the pinata of the day. Dan Ives joins us now quietly dressed with Wedbush Technologies and Securities. I should say, what's the character of this pullback? There's 14 kinds of pullback. Which kind is this?

**Dan Ives** (0:26)
Look, I think this pullback is, it's really, look, I view it as it's all related to what's happened in Korea, right? In terms of like the cost be what we've seen there. It's just this white knuckle moment that's going to be nothing more than a breather.

**Tom Keene** (0:41)
You go to China a lot. The zeitgeist without question is about China developing through DeepSeek and others, 90 percent of the efficacy of AI for one-tenth the cost. Is it legit worry?

**Dan Ives** (0:55)
No, because for the first time in 30 years, the US is ahead of China when it comes to tech. The reality is it's not just from NVIDIA to what we see with the models, with Anthropic to the hyperscalers, to the software companies like Palantir and others. Look, could they do it cheaper? Yeah. Are they winning on robotics? Are they winning when it comes to energy because of nuclear?
But when it comes to the AI race, I don't even think it's a question in terms of right now where US is versus China, and that's why I think some of those fears, and we've seen the deep seek moments in some of the others, I think a lot of that are more fictional sort of fears.

**Paul Sweeney** (1:35)
Microsoft, stock is off 23% year to date. Trades at 20 times earnings.
Talk to us about Microsoft here.

**Dan Ives** (1:44)
Look, I think it continues to be somewhere between a head scratcher to just a table pounder.
In my view, very similar to like, when I think about Alphabet a year ago, in terms of you like they were done, AI was gonna crush search, you know, the DOJ was gonna break it up. Look, I think with Microsoft, I think the issue is just tied to open AI, and right now, whether it's Oracle, Microsoft, I think being tied to open AI is a negative relative to Anthropic being Golden Child.

**Paul Sweeney** (2:14)
Why is that the case?

**Dan Ives** (2:15)
Because I think Anthropic relative to the model, Claude, Golden Child, best model out there, I think anyone tied to open AI right now, that's been negative for Microsoft.
Two is, look, when you look at Azure growth, it's been strong, but maybe not the overwhelming point where there's a view that Amazon and Google have started to narrow the gap. Copilot clearly had stumbled out of the gate. So right now, that is a penalty box stock that I think is ultimately a $550 stock.

**Tom Keene** (2:46)
Does a penalty box stock have to have active management helping the stock here? Do they do a share buyback? I got a dividend growth, five-year dividend growth of 10.2%, put some steroids on it. Is that what they have to do?

**Dan Ives** (3:00)
Well, I think that Nadella and the team, it's getting to a point here where they're gonna have to do something. Look.

**Tom Keene** (3:09)
21 multiple, Paul, to your point.

**Dan Ives** (3:12)
But then it goes back to like, if you look at Apple, if I told you a year ago where Apple would be today relative to maybe some of the doomsday fears, a lot of that was also like Cook, one of their mean pieces of success is that despite some of the bumps and the short roll course that they saw when it came to what they've done on the capital side.

**Tom Keene** (3:33)
I agree with that. But come on, they're not pissing away money on AI like everybody else. Does Microsoft have to adjust their timeline of spending on all this CapEx AI stuff?

**Dan Ives** (3:44)
Well, I think the market's telling Microsoft, show us the execution, show us the growth, otherwise, you're gonna have to get curtailed. And the market's saying that not just to Microsoft, but to Meta.
Because for Meta, investors no longer want to see dog-eat-the-homework type quarters when you're spending CapEx like that. For Google, they've succeeded massively. So when they do equity raise and things like that, investors are fine with it. Now look, they have obviously lost engineers and others and with Anthropic and that caused some of the sell-off. But I just think now, you're starting to see a separation in terms of you can't just own the names as a broader trade. They each have their own sort of characteristics that are ultimately going to drive their growth.