Only one Mag 7 name is investable, this money manager says

00:00 Speaker A

Joining me now with their top picks among the biggest names in the market, George C. Annandale, Capital founder and chairman and Olivia Blanchard, future and research director for semiconductors, EVs, and Autos. Gentlemen, thank you for being here. George, I’m going to start with you. One of the sort of ongoing themes we’ve been talking a lot about this morning is that even if companies beat estimates, that doesn’t mean stocks necessarily go higher. And I’m just curious from a big picture standpoint how you’re thinking about how that could apply to some of these mag 7 names.

00:49 George

Well, that’s the pertinent question actually because if if you’re a money manager and you’re trying to do right by your clients and yourself in terms of performance, you want to try to double your money on these kind of investments as as rapidly as you can. And I think five to seven years is a appropriate benchmark to to do that in. And I think it’s really hard to look at any of these companies except for Google and say you’re going to do that in that time frame. They’re they’re very, very expensive. They’re they’re uh it’s hard to see them getting doubly that expensive in a short period of time. So I think that the the risks are kind of against you at this point. You’ve got to be kind of uh circumspect in terms of when you want to buy into these companies. They’re great companies, but great companies are not not always great stocks. And you look at the Nifty 50 back in the 70s and you look at all the tech stocks before the tech bubble popped in 2000 and you think maybe we ought just watch for a while because they got to beat really, really big for them to keep going up extensively.

02:36 Speaker A

George, you mentioned that Google or Alphabet would be the exception here. Why?

02:46 George

It’s just so cheap. Everybody’s so so down on all the antitrust actions against Google and they’re they’re really down the stock and they’ve driven it way down from a multiple standpoint. I think the odds are in your favor with Google. I think it’s just such a great company. It’s got so much going for it and it if it eventually gets broken up, the parts are worth a whole lot more than the than the uh than the whole the aggregate right now that in one stock. So I don’t I don’t think it’ll get broken up. I think it’ll stay together, but I still think the odds are in your favor with Google. The rest of the stocks, especially Apple and Tesla, I I just don’t think you’ve got the odds in your favor right now.

03:49 Speaker A

Olivia, I want to get your take on Alphabet and um how you think it is positioned here from a fundamental standpoint versus some of its competitors.

04:04 Olivia

Hi Julie, I think George is right on a lot of the things he says. I agree pretty much with everything that was just said. Um I would just add that that Google has a really, really strong position in AI. And I know that in previous segments and just as kind of like a general discussion, Open AI has been sort of, you know, eating into the market share of uh of Google’s kind of like AI business, but Gemini is super strong. It has super strong uh integration into all of its products. And I feel like ultimately all of this is just an ROI discussion, right? Which companies can cut costs the most and which companies can generate the most revenue, the most profitability? Um Google is still sort of like in the in the building phase with uh with Gemini and it’s out pacing a lot of its competitors. I wouldn’t say that it’s it’s ahead of open AI necessarily, but I think that basically when we’re talking about agent AI, we’re talking for consumers especially, and and search. We’re talking about open AI and Google. And then in the enterprise we’re look getting into AWS and and Azure. Um but Google has a really strong position there and I’m I’m just generally impressed with how good Gemini is, how well integrated it is in every single product, whether it’s hardware, software, search. It’s just it’s it’s just a revenue machine just waiting to sort of uh find its find its paces in terms of how they’re going to generate that revenue, but it’s scaling.

06:49 Speaker A

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