Doug Clinton from Deepwater Management explained why his firm does not invest in Apple, stating that the company relies on third-party AI technologies, which limits its control over its AI destiny. He also discussed NVIDIA’s recent earnings performance, highlighting the strong interest in AI from hyperscalers and expressing a cautious optimism about the future of AI in the tech sector.
In a recent discussion, Doug Clinton from Deepwater Management expressed his views on why his firm does not invest in Apple. He emphasized that they prefer to invest in companies that have control over their own artificial intelligence (AI) destiny. Clinton pointed out that Apple is likely to rely on third-party technologies, such as OpenAI and Google’s Gemini, to enhance the AI experiences on their devices, particularly the iPhone. While Apple has its own AI technology, he believes that they will depend on external partners for more complex tasks, which could limit their autonomy in the AI space.
Clinton acknowledged that many major tech companies, including hyperscalers, rely on partnerships to bolster their AI capabilities. He noted that the collaboration between Microsoft and OpenAI has significantly influenced the current AI landscape. However, he differentiated between companies like Google and Meta, which have developed their own AI models and infrastructure, and those like Apple, Microsoft, and Amazon, which seek external partnerships to enhance their offerings.
When discussing NVIDIA, Clinton highlighted the company’s impressive performance and the market’s reaction to its recent earnings report. He mentioned that NVIDIA’s stock had experienced significant fluctuations, dropping over 30% before rallying nearly 30%. Despite the stock’s volatility, he viewed the earnings report as a positive outcome for shareholders, indicating that the AI narrative in the tech sector remains strong.
Clinton also addressed the concerns surrounding NVIDIA’s earnings and the potential for the company to miss expectations. He noted that there were doubts leading into the quarter about whether NVIDIA could maintain its momentum in the AI market. However, the results did not suggest a decline in interest or investment in AI from hyperscalers, which bodes well for the company’s future prospects.
Finally, Clinton mentioned that while Deepwater Management holds a full position in NVIDIA, they would not be looking to buy more shares at the moment. He acknowledged that the stock appears more attractive following the earnings report, but emphasized that they are not in a position to increase their stake. Overall, Clinton’s insights reflect a cautious yet optimistic outlook on the AI landscape and the companies that are shaping its future.