SOTS 2nd Hour: Top Tech Picks, A Billionaire Spending Spar, and Davos Deep Dives w/the CEO of Pinterest & SHEIN’s Exec Chairman 1/23/25

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Carl Quintanilla (1:09)

Great, I'm Carl Quintanilla with David Faber here at Post 9 of the New York Stock Exchange. Sara is in Davos at the World Economic Forum. A lot more from Sara coming up this hour. In any time, watching the markets, we came off those record highs yesterday around 6,100. Little softer today, 6,082. Dow holding onto some gains up about 80 Some big movers we're watching. GE Aerospace is the top gainer in the S&P after blowing past estimates. Electronic Arts going in the opposite direction, slashing some full year guidance due to bookings on some underperforming games. And Apple is the worst performing MAG-7 name on the year now. Firmly in correction territory as Goldman cuts their target down to 280 Meantime, the S&P tech sector is coming off the best day since November, powering both the S&P and the NASDAQ, as we said, to those fresh record highs. Joining us this morning, T Rowe Price portfolio manager Tony Wong. He runs the T Rowe Science and Tech Fund, 10 billion in assets under management. Some top holdings include NVIDIA, Alphabet, Meta and Microsoft. Tony, good to see you. Thanks for kicking off the hour.

Tony Wong (2:12)

Absolutely. Thank you.

Carl Quintanilla (2:13)

Are you seeing some divergences within tech? We talked a bit about some softness in Apple. Microsoft has been a focus lately. Are there some winners and losers taking shape in this early part of the year?

Tony Wong (2:26)

Yeah. I think that what we're seeing is going forward, there's a big focus on AI still. There's a view that who has the most immediate gains in AI. I think that you're seeing that Meta continues to be out in front with their build-outs. I think you see Microsoft being pretty front-footed, especially from here.

I think that you see look at Apple, I think that some of their features are going to be on a slower rollout and so that's why you see more of a divergence. In addition, some softer macro in China, that's by creating some more softness in the iPhone. So I think that that's probably the setup here going into next years. There's still a focus on AI and who has those features and core competencies there.

Carl Quintanilla (3:14)

Right. What do you think of this Stargate news this week? How does it move the needle and where is the effect going to be felt the most? Is it still within some hardware elements like answering some worries about NVIDIA demand?

Tony Wong (3:28)

Well, I thought it was pretty exciting. I mean, you see that Trump make that big announcement with Sam Altman, Masa Saan, Larry Ellison, and launching into this golden age of AI infrastructure. I think that the market has always been, over the last year, searched for how sustainable is this? When you have $500 billion of spend that's being talked about, I think that creates more sustainability over the multi-year, and I think that this benefits a lot of US tech companies, and it shows that the executive orders probably will clear the way for better data center build-outs just for regulation and empower an AI. And so I think it's a big positive, and you can probably see it throughout the semi-value chain as well.

David Faber (4:17)

Tony, in looking at the holdings and your percentage ownership in your science and technology fund, no surprise in video obviously is your largest holding, at least is the numbers I have, which may be slightly dated. I do notice Apple, perhaps underweight, at least in terms of a reflection of its market cap versus some of the others. Why is that?

Tony Wong (4:40)

Yeah, I think that over the long term, I am very bullish on this AI infrastructure build out. You have to build out the infrastructure and then develop the apps on it. I think Apple continues to be a great company. I don't think you can count them out on any means. Their ecosystem is still quite strong. I think that when my framework, we're always like adjusting positions. But I like both companies long term. I do think that we are in the early innings of AI infrastructure build out. NVIDIA continues to be the platform that everybody is building on. You look at their new products that are just improving the performance by leaps and bounds.