Latest / Best of Business / Andrew Curtayne: Milford Asset Management expert on the factors impacting the tech stocks

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Andrew Curtayne: Milford Asset Management expert on the factors impacting the tech stocks · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk zed B.
• 0:12
  Speaker 1: Follow this and our wide range of podcasts now on iHeartRadio.
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  Speaker 2: Now Andrew Curtain Milford Asset Management is with us.
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  Speaker 3: Hello Andrew, Hi, Heather Coodvenent, So listen.
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  Speaker 2: Talk me through the technology stocks reversing some of the
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  Speaker 2: recent salof last night. Was there anything that triggered the bounds?
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  Speaker 3: Yeah, there was a little bit, But I guess the
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  Speaker 3: tech stocks have been quite weak for about four to
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  Speaker 3: six weeks now, and it's after a period of an
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  Speaker 3: incredibly strong run, and the semi conductor stocks were up
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  Speaker 3: over one hundred percent. They gave back about twenty percent
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  Speaker 3: of that move, and the market's been a little bit
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  Speaker 3: jittery as we come into results season. But I guess
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  Speaker 3: we point to anything last night, it's probably the market
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  Speaker 3: became a little bit more relaxed about this new Chinese
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  Speaker 3: model called Kimmy K three released by a company called Moonshot,
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  Speaker 3: which which is basically quite a powerful model, which is
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  Speaker 3: not quite as good as Anthropic and chet gbt's model,
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  Speaker 3: but not far behind, and the market initially got a
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  Speaker 3: little bit worried about it. Then the market actually concluded
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  Speaker 3: last night that you know what, this is actually quite
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  Speaker 3: good for demand for GPUs and chip stocks, so they
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  Speaker 3: had a bit of a rally on it.
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  Speaker 2: Okay, so obviously we're in the results season now and
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  Speaker 2: you've got the Google tomorrow. What are we looking for here?
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  Speaker 3: YEA results season is going to be extremely important for
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  Speaker 3: both the market and the technology and AI trade in general.
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  Speaker 3: What the market wants to see from the sort of
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  Speaker 3: combination of the big big tech stocks this is the
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  Speaker 3: Google's Microsoft Amazons, et cetera. Is they want to see
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  Speaker 3: confidence that one they're going to continue to invest more
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  Speaker 3: in AI, I spend more money on buying buying ships,
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  Speaker 3: and two that they're getting returns from these from these investments.
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  Speaker 3: So Google's first first off, the rank from the major
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  Speaker 3: companies tomorrow and Google has been a little bit of
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  Speaker 3: an AI darling. And in the recent recent sort of
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  Speaker 3: six month period, the market wants to see that that
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  Speaker 3: they're going to grow their their cloud revenue, which is
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  Speaker 3: where a lot of their AI revenue goes through. They
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  Speaker 3: want to see a big number there. They want to
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  Speaker 3: see confidence from the CEO and CFO that they're going
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  Speaker 3: to keep spending more money on CapX, and ultimately they
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  Speaker 3: want to get confidence that the margins or that let's say,
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  Speaker 3: the return on this investment is looking attractive and expectations
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  Speaker 3: are pretty high. So look, it could go either way
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  Speaker 3: on the result, but I don't I don't expect we're
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  Speaker 3: going to get a weak number from them. It's just
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  Speaker 3: kind of is it good enough to beat kind of
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  Speaker 3: lofty expectations.
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  Speaker 2: Yeah, now you've seen some stuff happening AI wise that's
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  Speaker 2: impacting your view on the tech stocks.
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  Speaker 1: Yeah.
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  Speaker 3: So the increasing focus over the last sort of month
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  Speaker 3: or so has been basically this US Chinese competition and AI.
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  Speaker 3: The rarely is that these Chinese companies are producing some
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  Speaker 3: pretty good models. They're closing the gap to the US models,
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  Speaker 3: and the market's getting a little bit concerned that if
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  Speaker 3: the Chinese models dominate, does this take revenue and earnings
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  Speaker 3: away from the US companies. And it's the US companies
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  Speaker 3: that are driving most of the spending. So you kind
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  Speaker 3: of while having a strong Chinese competition is maybe good
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  Speaker 3: for us as consumers because we can use good models
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  Speaker 3: that are that are cheaper, it's not particularly good for
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  Speaker 3: companies like Anthropic and Open AI. So it's sort of
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  Speaker 3: increasing I guess called little war and AI going on.
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  Speaker 3: There's there's regulatory issues, so and that's that's the sort
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  Speaker 3: of key, key development. But outside of that, if you
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  Speaker 3: if you step back, AI and its capability is progressing
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  Speaker 3: an incredibly fast rate. It's all getting better, it's getting cheaper,
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  Speaker 3: it's getting better for the consumers. So looking in general,
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  Speaker 3: I think it's all heading in the right direction. It's
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  Speaker 3: all it's all kind of good for usability. But you know,
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  Speaker 3: it's just the sort of tension between US and China
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  Speaker 3: that's becoming a bigger focus.
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  Speaker 2: Yeah, thanks very much, man, really appreciate talking to you.
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  Speaker 2: Andrew Kataine Milford, Asset Management.
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