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[00:05] >> Less than half hour of [00:06] trading. Nasdaq's on pace for another record close as we gear up for tech earnings. My next guest is bullish on the sector. Joining me now is Rockefeller Global Family offices Cheryl Young. Cheryl it's good to have you. So we do start to get tech [00:19] earnings. Google's next week. The stocks have run up into the reports. How do you like the setup. >> Well when you see the stocks have run up into the reports Sarah, not all of them have. [00:30] Most of the Mac seven is [00:32] actually still negative year to [00:33] date. When you look at the broad sector, it's positive. Technology is up about 10%, but the participation is actually brought in this year, which is really exciting to see. The Mac seven has lagged, and most of the returns from the Mac seven year to date have come from one stock, which we all can know and love. Nvidia, which is really about a third of the S&P earnings year to date as well. [00:54] >> So you see some catch up from [00:56] some of the other big tech [00:58] players. >> I hope so. I want to see the broadening. That's a healthy market. Sarah, if we look at the last couple of years, most of the gains in the S&P have come from technology and especially from the Mac seven. If you look [01:10] at year to date, the Mac seven, [01:11] accounting for roughly one third [01:13] of the performance of the S&P. If you look at 2024, it accounted for 53.5% of the returns of the S&P. And if you look at 2023 it was 60%. So we really want to see this broadening not just in these big mega-cap names but in the rest of technology. And there's lots [01:29] of opportunity in AI and data [01:30] centers and cloud computing and [01:32] infrastructure. So I think there's a lot to be said about some tailwinds coming into the year. >> How do you approach the scrutiny around spending? I mean, the market has so far rewarded, certainly for the chips, but even the hyperscalers, all of the, you know, billions, hundreds of billions of dollars that they're spending on AI deployment and infrastructure. How do you how do you decide as an investor whether it's worth it? [01:58] >> Well, that's a very good [02:00] question. You see some of these mega-cap names who've really spent a lot. There was a recent acquisition of scale I that was a very expensive acquisition for meta, $14.3 billion they spent. And so we're seeing we're seeing some companies spend a lot. [02:15] We're seeing other companies [02:16] really lag on spending. And there's been some pressure on a couple of the names on the, on the Mega-caps, where we really haven't seen a lot of acquisitions for years. Just to give you an example, not to talk about any specific stocks or to recommend any specific stocks, but Apple, for example, hasn't had a major acquisition since beats, which was 11 years ago. So again, I think that you have to be careful when you say there's a lot of spending because it's a mixed bag. >> Right now, I kind of don't even count. I'm talking mostly [02:43] about the hyperscalers and that [02:44] has been the story of the [02:46] quarters when it comes to a meta [02:47] or an alphabet or an Amazon or [02:49] Microsoft. And they have they have done well lately and they have been rewarded for the infrastructure they're building out. The question is what what the returns look like on the other side. >> Well, and that is that is the question yet to be seen. We have really not seen as much as we would like to see come out of the spend on AI. However, we [03:08] know that there's about 1.8 trillion expected to be spent on AI over the next five years. And so again, there's a lot of spending going into this area. There's a lot of hype going to this area. You're seeing some of these mega-cap names lay off some of their software engineers. And so you're [03:23] starting to see some [03:24] productivity gains. And I think that'll continue those productivity gains and increase in margins from I hate to say it, but laying off employees because I can improve the technology hopefully will be a tailwind for some of these technology companies. >> And then when you say technology, I mean, is there is there? Earlier today we were talking to an analyst who was saying it's at the coming at the expense of the of the software, the SaaS companies, which were so popular for so long. But now it's all about AI. How do you [03:53] distinguish between the winners [03:54] and losers within tech space [03:55] right now? >> That is the challenge for all of us. I'm based in Silicon Valley, and so I talk to a lot of my clients who are really forefront in the development of AI, forefront in some of the companies that are looking at how to implement AI. So that is really an area that you have to be very, very discerning. I can't talk about individual names, Sarah, but I think really that is the question of the day is who are going to be the winners and the losers. And [04:20] remember, there are about 5500 [04:21] AI startups. So there's a lot out there that aren't even trading. And again, we've seen some pretty massive acquisitions recently. I think that will continue. These companies are spending on talent. They want [04:30] the talent and we're really [04:32] hoping to see that it pays off. But again, these big spin projects have to have years to play out. This is not somethi