00:00 Speaker A
Investors sold about 10 billion in tech stocks last week. That is the biggest amount ever tracked for selling in that sector by Bank of America. What is going on with tech?
00:15 Speaker B
Yeah, I was I so yesterday I was looking at all the big market cap losses due to chip stocks, and really I took a broader look at the entire S&P 500. The mega caps have not been doing well this month. So I I have a little chart here on the Wi-Fi interactive. I looked at the 15 biggest market cap losers, um, and those are actually down 8.6% in June. Rest of the market, rest of the S&P 500 barely up and a little bit of green there.
00:52 Speaker B
So that just tells you that uh the biggest names plus those chip stocks and sometimes those biggest names are chip stocks like Nvidia and Broadcom, uh they’re just not pulling their weight. In fact, they’re dragging things down. So the market can survive uh and not fall into a bear market if you have rotation, but you take out those AI names, you take out the big the mega cap names, what else do you have there?
01:21 Speaker A
Speaking of big tech, Oracle after the bell. Curious uh what are you going to be listening for there?
01:27 Speaker B
Yeah, for me, I it’s really going to be about the uh the hype it’s a Canary in the coal mine for the hyper scalers. And so a lot of the street is going to be looking at remaining performance obligations. Those are those contracts like how much is left in those recurring contracts? And so I think uh it was $553 billion last quarter. uh the street wants to see another step higher. Um but Oracle is not just another software company, it really is uh kind of the poster child for the AI boom in a non-conventional way.
02:07 Speaker B
It’s not as big as Google, and I’m going to show you a chart here in a second, but it is very important because that’s what Canaries do. When you have problems, you’re looking for the not biggest country uh companies. You’re looking for some of the weaker ones that might be showing some cracks. So I pulled up this chart on the Wi-Fi interactive. We have Alphabet versus Oracle year to date and you can see they were kind of roughly tracking each other up through this uh this latest uh gain that we had into May, but then things got kind of wonky here.
02:42 Speaker B
But I’m going to show you a longer term chart and you can see they really started diverging uh probably about one year ago. So after those April 8th uh post liberation day lows, we saw both of the stocks really head higher, then Oracle, I think that was the day that Larry Ellison became the richest man in the world. Well, the day after that, suddenly he wasn’t because Oracle uh had to raise all this debt and that’s one of the big things I think they recently said they were going to raise $50 billion and uh, you know, Google is raising $80 billion in the capital market.
03:22 Speaker B
So these hyper scalers are not cash rich and Oracle especially is not cash rich. So that’s why they’re my canary.
