SOTS 2nd Hour: Apollo’s “No Free Lunch” Warning, Tech Investor Dan Niles, & A Read On Luxury 7/25/25

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Sara Eisen (1:01)

Welcome back, NASDAQ coming off another record close and Big Tech will be front center again next week. Meta, Microsoft, Apple, Amazon report quarterly results. Niles Investment Manager, management founder, Dan Niles joins us now with his outlook. It's good to see you, Dan. So how would you be positioning, given we've seen such strong run-ups, but now some good reports from the likes of Alphabet and others into next week?

Dan Niles (1:26)

Well, I mean, I think you're seeing it in the stock reactions where even if numbers are great, you might not have a lot of upside, right? You saw that with Netflix, stocks down 5% the day after the reports down 2% since that. And if you look at yesterday, I mean, I saw the Google numbers yesterday. I mean, I was leaning positive coming into it. I wrote about that and I thought the stock would be up 5% plus. It was up just barely a percent. Now you can say it had a 10-day, it was up 10 days in a row shortly before that. But it's still not up that much here today. And if you miss, and IBM didn't really miss, they just reiterated guidance, the stock's down 8% yesterday. Honeywell, Dover, they were down 6%, 2%, beaten race quarters there. And so a lot of this, I think, comes down to positioning. And Google set a really high bar. I mean, that was a very good report. So I'm seeing the stock reactions and what you exactly said, Sara. These stocks have had a huge run up. Multiples are high across the market. You have to be very concerned if it's a consensus loan. So that's kind of how big picture I'm approaching.

Sara Eisen (2:35)

Do you, any of them? Do you like more than others? I think Microsoft is one you're eyeing.

Dan Niles (2:40)

Absolutely. Yeah. So specifically Microsoft, I think, is the best one, partly because they had such a rough time last year. If you go back to last year, when they reported the June quarter, Azure was a disappointment. Then they reported the September quarter, Azure was a disappointment. They reported the December quarter, Azure was a disappointment. Then they did the Stargate deal where they restructured their agreement with OpenAI. In the March quarter, they actually saw Azure reaccelerated, grew 2 percent faster than it did in the December quarter. I think you're going to see that continued benefit as you go into June. Then with Nvidia, don't forget, they had that massive write down. I got bullish on that after the write down.

Now, China comes back into the models when it got taken out of the models. You're seeing CapEx now really strong, driven by inference, which is much more sustainable than training, because we all want answers to our questions. We don't care about the training. I think you're going to see that continue to do well. Obviously, they're off quarter. But the ones I'd be concerned about are the ones that you potentially have tariff related impacts that could skew what the guidance looks like. Because the issues with a lot of these reports have been, well, if you're saying there's a pull-in, you've got a problem. So Amazon, obviously, lots of product source from China. I'm sure the quarters are all good for all of these companies. But like an Apple, like what do they say about pull-ins, even though I'm sure they're going to have a great quarter as well. And so Microsoft, by far, my favorite for next week. Obviously, everybody expects good results, which is the one concern. And then Nvidia, those are the two favorites of the Mag 7 that I have.