Technology Sector Earnings and Investment Trends Ahead

Alison believes that technology investments will continue to thrive despite market fluctuations and emerging applications.

### Focus on Technology Earnings and Investment Opportunities
* 📈  Next week is critical for the technology sector, with a strong emphasis on **earnings reports from major players** like Cisco, Dell, and Network Appliance, indicating **potential enterprise demand growth**.
* 💬  Conversations around the industry's impact suggest concerns about indexes needing to rebalance, but fundamentals remain key, especially regarding **interest rates and their effects on market dynamics**.
* 📊  Historical trends show that large-cap tech companies can continue to thrive regardless of interest rate fluctuations, with a notable **speed in reaching higher valuations** compared to smaller firms.
* 🔍  The focus on **active investing** is emphasized, as not all past leaders will maintain their positions in future cycles, suggesting **opportunities for discerning investors**.
* 💡  Companies like NVIDIA are expected to **benefit significantly**, but there is potential for a **broader range of beneficiaries** in the evolving landscape of technology investments.
* 🌍  Exciting opportunities are emerging globally, particularly in India, and within the U.S. market where **AI-driven productivity gains** are being recognized, especially among **contract manufacturers**.
* ⏳  The development of applications following infrastructure advancements is a gradual process, with historical examples showing that **significant changes take years to unfold**, requiring **patience from investors**.
* 📅  Overall, the technology sector is on a transformative path, with expectations for **continued investment and growth** across various layers of the market.

Jackson Hole has been and gone in video. Is next Wednesday, which is top of mind for you, Alison. I think, you know, we've very much focused on the bottom up and focused on where the technology sector is. And the key focus is going to be on earnings next week. And, you know, seeing the enterprise demand pick up, that we saw some signs of that from both Cisco and La Norvell in recent weeks. If that carries through not just ten PDA, but we have Dell and Network Appliance and a pure storage all for next week as well. Okay. I love how you're going bottom up here, Alison. Does any conversation around the dinner table or conversation of big conferences that you're going to at the moment end up with people saying, boy, your industry is just sucking up all the oxygen, but also all the passive money? And is the real worry about indexes having to come in and rebalance here in some way.

I think you always come back to fundamentals, and there's always a focus on, you know, will interest rates, you know, result in this rotation into smaller caps? Is there necessarily going to be growth? And I think we'll look back if you look back even to 1990, and when you see, you know, trillion-dollar companies, the pace at which they've reached 2 trillion has been faster and more likely than companies. That 100 billion going to 200 billion. So technology always tends to be quite size agnostic. And those large caps, when asked when they achieve scale on key competitive advantages, can continue to grow on that. And in spite of the interest rate environment through rising and falling rates. So we're quite agnostic about the size of companies and, you know, the indexes, you know, just know there are winners and losers, and those large-cap names. When you look back to prior cycles, not

all of the past leaders become the leaders in the next cycles. We think it's a great time to be an active investor and actually choose which of those companies are going to lead in this next week. So does NVIDIA just stay the main company that benefits from a picks and shovel perspective? Do others win? And indeed, when does the investment coming from the hyperscalers pay off to them too? Yeah. I mean, I think, you know, for VTR, we had many of the same questions about Apple during the mobile EDA. Could Apple continue to win? And we do think that the majority of the value in parallel processing is accruing to Fed, but that is the majority of it and not all. And we well, through just as we've seen previously, see a broadening of beneficiaries. And on that return on investment spend on I, you know, just as recently as a few days ago, we had Wal-Mart actually talk

about the huge benefits to their product catalog, being able to, you know, take 850 million pieces of data that would have taken them a hundred times the headcount before. So, real productivity gains, and that is coming from that. I spend, we've heard Andy Jassy blog today talking similarly about the number of developers that you can see with faster coding. So, we think that will continue to encourage and spend in that broadening of speed, not just to the hyperscalers but eventually to enterprises as well. To that point, Jackie and the team in New York, let's bring back that chart you had a second ago, some of the mega caps and their performance in the session because Amazon in your biggest fund, these are all names you hold, Microsoft, Amazon, Alphabet, and Matt are not in that ranking order in terms of allocation. When all is said and done, August 29th, what would need to happen within video is earnings for you to rethink your allocation to each of those names?

going forward. You know, I think even if you look back at last year, we don't react just to one quarter of earnings because a lot of possession I come into that. But we think we've already seen evidence from all of the reports that those companies that you just saw that they are committed to continuing to spend where they see a return. And we think these results will just continue to show that they are seeing strong visibility and seeing that broadened. So, you know, we don't really see that as being an event from embedded. It's going to materially change your view on any of those mega-cap. Alison, is there anything that excites you outside of the US listed Mega-cap tech names anywhere else in the world? Yeah, we see it. Lots of exciting new companies, particularly. We see some exciting emerging technology leaders in India. We also see, you know, through the US market, there are several areas that are

just emerging in terms of the productivity gains, and that they can be had from artificial intelligence, that have been underappreciated even in some of the contract manufacturers. And where we see trends to sell towards globalization, towards focus on, you know, higher standards in supply chains, that some of the best SDI spend is actually trickled down to some of the companies that will actually have to manufacture. And that's not just TSMC for and Petya, but the servers, the storage that will have that will be made for many of these hyperscalers, and we think we will start to see that occur to some different names much further down to market cap cars. Allison, that's really interesting. But again, we're sort of talking about the infrastructure layer. Where will the money go from the application layer at some point, do you think? Well, it just takes time. And we've seen that before. You know, when we had the mobile data,

you know, between when Apple launched its iPhone in 2008 and you actually had the IPO of Uber, you know, over ten years of developing the App Store, developing applications. And, you know, we do tend to see and this is followed a very similar pattern. I you tend to see advertising benefit fast and that we see and e-commerce we're hearing that from from Walmart. And then you start to see enterprise software, some productivity gains and then eventually that filters into other new applications, many of which we wouldn't have thought of first. But this happens over multiple years, you know, in technology, proper waves rather than just hype cycles. These take, you know, 5 to 7 years to play out. So investors shouldn't necessarily look and think that investments have to be in those applications today because many of those still have to emerge as we start to see, you know, the interface for easy for consumers still evolves somewhat and

Tech Gains Ahead of Nvidia Results

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Bloomberg Technology

Focus on Technology Sector and Upcoming Earnings

The technology sector's performance is under close observation, with key earnings reports from companies like Dell and Network Appliance scheduled for next week.

There are signs of increasing enterprise demand, as indicated by recent results from Cisco and La Norvell.

The conversation around the industry's dominance and the potential for index rebalancing is ongoing, but the focus remains on company fundamentals and their ability to grow regardless of size.

The Impact of Past Leaders on Future Investments

Past leaders in the tech industry are expected to continue their influence in the next investment cycle, with a focus on companies like NVIDIA.

The value from parallel processing is primarily benefiting a few key players, but a broader range of beneficiaries is anticipated.

The return on investment from hyperscalers is expected to extend to enterprises, driving productivity gains and faster coding for developers.

Exciting Opportunities Beyond US Mega-Cap Tech

Companies are committed to continued spending where they see a return, showing strong visibility and growth.

Emerging technology leaders in India and underappreciated areas in the US market are gaining traction, particularly in artificial intelligence and supply chain improvements.

The best SDI spend is trickling down to manufacturers, with potential growth for companies further down the market cap.

The Evolution of Technology and Its Impact on Investment

The development of the App Store and applications spanned over a decade, from the iPhone's launch in 2008 to Uber's IPO.

The pattern of technological impact is consistent, with advertising benefits and e-commerce growth leading the way, followed by enterprise software and productivity gains.

Investors should take a long-term perspective, as new applications and opportunities often emerge over 5 to 7 years, with consumer interfaces evolving in the process.