00:00 Speaker A
When Tim Cook was named as CEO in 2011, I was still a sell-side stock analyst. So it feels in some way like this news of Cook stepping aside is personally a big moment for me too, even though I own no Apple shares. Tim Cook has been my Apple CEO. Now I have to get used to this new guy, John Turnis as I round the corner in I, my retirement years. I am playing around here a little bit, but you get the point, I think. But this news brings up a debate I wanted to have here on opening bid.
00:31 Speaker A
What is the better investment in big tech right now? And I’m going to boil it down to two names for simplicity. Do you go long a John Turnis led Apple, a proven company with an unproven CEO, tasked with hardware rejuvenation and AI relevancy, or do you go long Microsoft, a proven tech beast with OpenAI exposure and a proven CEO in Satya Nadella? As the sweetener here for Microsoft, the stock is down 14% this year. So it can be had at a relative discount to historical valuations. Let’s take it to the opening bid round table.
01:00 Speaker A
Art Hogan, Melissa Otto and senior reporter Brooke De Palma is joining the conversation. Good to see you all. Melissa coming back to you. You have the hot hand today in addition to art. Uh, which one do you like here and why?
01:13 Melissa Otto
I think what we see in in the numbers is that Microsoft from a valuation perspective is looking compelling here. And, you know, and it’ll be very interesting to hear what they say in the quarter about their capex levels. Part of what has been an overhang on not just the software industry, but also specifically Microsoft has been that capex spend and investors just questioning the level of investment in AI infrastructure.
01:46 Speaker A
Art, let me get over to you because we had this news uh this week. I was last night actually. Anthropic or Amazon investing more and Anthropic. That Anthropic business benefiting AWS. I see Microsoft pouring more money into Open AI. Open AI getting a higher valuation. Look at Apple. Yeah, it’s got Siri and and John Turnis. Why why am I excited about Apple?
02:27 Art Hogan
Yeah, if they get I I would say in the here and now and we own both of these, but in the here and now, if those are your two choices this morning, you have to go with Microsoft for a host of reasons. First and foremost, you know, a group of my friends and I vibe quoted over the weekend, we found a replacement for all of the office suite and
02:42 Speaker A
Vibe coding? Art, what are you doing?
02:44 Art Hogan
All right, I’m just kidding. That’s but the stock is reflecting the fact that it may be disrupted by artificial intelligence, which is ludicrous to trade at 24 times next 12 months, the kind of management team that they have, they’re going to survive this AI disruption sell-off that they’ve seen and it’s probably the most undervalued of the mega cap technology stocks right now.
03:01 Speaker A
Brooke, you’re over there vibe coding on who uh trying to figure out who the next CEO will will leave, right?
03:06 Brooke DiPalma
Absolutely, and I’m using Polymarket hub to do that. So maybe not exactly vibe coding, but similar there. And the odds were pretty uh interesting to see here because the youngest, one of the youngest executives right now actually is most likely according to Polymarket users in their mind to be out before 2027. That’s Sam Altman. Keep in mind, Sam Altman joined as CEO of OpenAI since 2019, co-founded the company or rather founded the company about four years earlier before that. But other executives that were also mentioned includes Google CEO Sundar Pichai, which interestingly enough, he’s been CEO since August of 2015. So uh you know about a 10 year, 11-year run now. So interesting point there. Also you have Microsoft CEO who became CEO back in 2014 and so all very similar timelines as well. You’ve also have Andy Jessie who also became CEO in 2021. so more of a recent run. So likely from what I understand to stick around there, but according to Polymarket there’s some that think maybe not.
04:02 Speaker A
I love me some Polly market, Brook, but I don’t agree with any of those. Sam Oman is going to take that company public. Andy Jessie just wrote the company’s shareholder letter. He ain’t going anywhere and even uh hint at a potential successor and I mean he’s just uh doing everything uh right now. But uh that brings up another good point. Where are you playing Melissa, Mag 7? Uh this has been an interesting time to be having exposure to them. The stocks have rallied aggressively off the lows, but not all Mag 7 names are treated equally. I mean just look at Apple, it’s going to have a new CEO soon.
04:31 Melissa Otto
One of the big questions around Apple is what are they going to do with their cash position? And there has been a lot of chatter in the market about whether or not they may buy somebody. It’s not traditionally something Apple has done, you know, to make a a very significant large scale acquisition. but given the backdrop and the speed at which AI is moving forward, one wonders if this could potentially be an interesting catalyst for them.
05:10 Speaker A
Uh Art, let me uh let me get back to you. Is that one of the things that Turnis has to finally do? Make a big acquisition. We’ve seen Microsoft invest more to open the eye. Like I just mentioned, Anthropic and Amazon are are tying up, but we haven’t seen, I mean Apple’s poured its money, its really significant cash position back into stock buybacks and you know, that may have been cool 10 years ago, but the whole world is changing.
05:43 Art Hogan
Yeah, I would say this, they have never been a company that wanted to make a large acquisition because they’ve never been the first to roll out something new. Just think about the history of the products that Apple’s rolled out. They weren’t the first smartphone for sure. They weren’t the first laptop for sure. They weren’t the first earbud for sure. MP3 players were out long before Apple got into the game. They were a fast follower. They just make it better than everyone else and I think that’s what they’re going to do going forward. So, even if someone comes up with the coolest new device and no idea what that may be, Apple’s going to make it better, the consumer’s going to like it more and then they’re going to dominate the field. And I think that’s exactly the future for Apple as well.
