00:00 Speaker A
To me, Dave, one of the more interesting um dynamics when the market as of late has been what’s going on in Big Tech, right? We saw a pullback in Big Tech. We saw we have seen sort of an uneven recovery, but there’s also this rotation within Big Tech, or at least a perception of changing leadership to some degree. Um and I’m just curious what your thoughts are on that.
00:30 Dave
I think there’s kind of two catalysts that are occurring at the same time. So to your point, the the broader environment saw a big pullback uh away from tech into defensives in November. In fact, actually healthca the healthcare sector outperformed the IT sector by the largest spread in 20 years. Um so I think underscoring just such a huge momentum shift. And a lot of the driver for that kind of macro rotation has been the potential for rate cuts, right?
01:00 Dave
So, that was sort of getting baked into the market, came off really hard when some Fed governors came out sort of against it and then that came back on really hard again and we saw tech recover. But at the same time, under the hood, there has been a changing of leadership where Nvidia and I’ll call it kind of team Open AI. So Microsoft and others and the suppliers in that space were just kind of ripping higher consistently and then the Google news happened.
01:30 Dave
And Google’s the triple whammy when it comes to Generative AI. They were thought of as a laggard. Um but they’re a hyperscalar themselves, they make chips and they have a large language model. And so now investors are saying, wait a minute, we’ve kind of forgotten about all these other players because we’ve been so focused on Open AI and all of their sort of circular investments that now we’re seeing investors sort of reposition and say, who’s going to be the winner on this next leg going forward? Even Amazon’s news uh yesterday with their chips kind of gave them some leadership, which we hadn’t seen in a while.
