- 2024-05-23
- Posted by: kimsite
- Categories: Commentary, Insights, News
Click here to listen to the full interview.
LARRY GLAZER: Just like the internet boom, as Scott was saying, you have the haves and the have-nots. You have the old economy and the new economy, right? And the new economy is Nvidia, but it’s also those big tech giants—it’s Google, it’s Meta, it’s Amazon. These are the dominant companies. And what we saw with the internet revolution is sometimes the old economy actually can be a better investment, a better way to play the new economy. Look at what powers those data centers that’s powering AI. It’s utilities, right? It’s coal, it’s nuclear that you need to power the data centers that Microsoft and Amazon are using to power those energy-hungry data centers. It’s copper, right? It’s industrial manufacturing equipment. So sometimes those are the better, more sane ways to play this AI revolution. Look, even in the market today, you see this divergence. You see the Dow weak, but you see a handful of tech stocks very strong. Even the second-tier tech stocks can’t compete with Nvidia. And I think there are lots of ways we can play this. There’s going to be a massive productivity innovation wave that comes out of this, but you’ve got to look at things like utilities as the way to play it, not just chase multiple-rich companies. That’s a one-shot deal.
NEIL CAVUTO: You mentioned utilities, and your intent was not obviously to mention the utility average, but I had noticed, Scott, not to wander afar here, but utilities are doing great. They’re having a great year. So I guess by saying that, the Dow notwithstanding today, almost anything you’ve been throwing money at, you had a chance to make money off of it of late. What do you make of that? It has to be a sorting out process here, right?
SCOTT MARTIN: Reminds me of ’99. Isn’t that amazing when you can do that, and you wake up tomorrow and you’ve made money when you didn’t even know what you were buying? I mean, hey, this…
NEIL CAVUTO: Seems like we’re in a day and age where a yellow jacket would be fashionable. So I think it…
SCOTT MARTIN: May still be, we’ll find out later. But I’ll tell you what, Neil, what could possibly go wrong from here? And I mean, Larry makes a good point. I mean, there are a lot of things on the backend of this boom that could be good. And utilities, you’re right, Neil, have been benefiting from maybe the fact that interest rates have stabilized. It’s a more stable cash flow business. So that’s something too that could be better for the investors as they don’t chase valuations here. Because you’re right, Nvidia is an expensive stock, but it’s expensive for a reason, and stocks can get more expensive before they crash. So as you add these things to your portfolio, I think as Larry said, and the points are so prescient, he might be powered by AI because you’ve got to add things that are going to be safe and stable along with these risky things like Nvidia, Microsoft, Amazon, and Google.
NEIL CAVUTO: The market, I know, Larry climbs a little on worry, and you’ve always reminded me of that. Some of the big worries are what’s going on abroad. Some of the big worries are what if the Federal Reserve doesn’t cut rates? What if Washington DC blows up because they’re at each other’s throats all the time? It’s always been out there, but it’s always a worry. What do you make of it?
LARRY GLAZER: Look, Nvidia is the great patriotic, All-American growth story that we should be so proud of, but let’s not lose sight that even AI and Nvidia can’t overcome the inflationary concerns that are lingering over the market. Even today, with the industrial data, the purchasing manager’s information, you have retail sales that are weak, you have housing data that’s weak. So all of those are a victim of runaway government spending, and there hasn’t been a peep in this election cycle about really dealing with the elephant in the room. That’s not Nvidia; that’s actually the national debt that’s going up by a trillion dollars every 90 days. So we’ve got to address that issue if we want to keep this innovation boom that everybody loves in this country. And you don’t want to see how the sausage is made, but you’ve got to deal with the realities of that because those inflationary concerns are not going to be overcome by this productivity boom that we all love in AI and innovation technology.
NEIL CAVUTO: Very good. Gentlemen, I want to thank you both. Always good catching up with you, and you’re both splendid dressers, which I do appreciate. Speaking of splendid dressers, one of my favorite people here at Fox is Brian Jenice.
