‘Tech is really going to be a the core of keeping businesses operating’: Futurum Research
Daniel Newman from Futurum Research joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to discuss how the technological industry is handling the coronavirus outbreak.
Video Transcript
ALEXIS CHRISTOFOROUS: I want to welcome Daniel Newman of Futurum Research now for a deeper look into tech. And Daniel, I mean look, the whole market is rallying today, including these recently beaten down tech stocks, but can you make the argument for why you should remain in big tech, especially the FAANG stocks right now?
DANIEL NEWMAN: Oh, I think across the board, there's a couple of things. If you've hit-- if you've hung on this long, you know, there's no way you can predict the bottom, but we are we are down 30%, in some cases even more. Of course, today everybody's up, and everybody's feeling really good, but think about how tech is impacting our lives right now. You look at everybody working from home. Everybody being at home more. This means more Netflix. This means more time on social media. This has become the key way that we're communicating with one another. We look at how we're getting our goods and services from Amazon right now.
So across the FAANG space, we are certainly seeing a compelling case that our economy continues plodding forward with these companies in mind. I mean, tech is really going to be at the core of keeping businesses operating, especially those nonessential companies where people are working remote and trying to keep their businesses going, despite what's going on in the economy right now.
BRIAN SOZZI: Daniel, Brian here. Always good to, always good to talk with you. Who has the best
DANIEL NEWMAN: Hey, Brian.
BRIAN SOZZI: Super computing power right now in the tech industry that could probably get in the good graces of the government? I know the government has teamed up with Google on some things, but who could really get close to them at this point?
DANIEL NEWMAN: Yeah. There's a few companies. Yesterday, IBM made a big announcement about a new consortium-- and actually Amazon is involved, Microsoft is involved, along with a number of the world's largest laboratories, like Argonne and others-- that they were actually making the horsepower of their computing available to those that are looking to utilize it to solve some of these issues with the pandemic, whether that's developing drugs, utilizing data to slow the spread and flatten the curve. So that was a really interesting announcement. You can check it out. Yesterday, it came from IBM, but it was a number of different companies and laboratories and organizations involved.
Another ones NVIDIA. NVIDIA has not only the high performance computing, but they have a number of models and algorithms, and they actually made their Parabricks-- which is a modeling and set of tools that could be utilized for a similar purpose as what we just talked about, but this is more on the AI and machine learning side. So there are a number of companies right now that are volunteering the technologies that they've built and invested in to be utilized by industry, by biotech and pharma, by health care, and of course, universities and laboratories that are really trying to put their best data scientists and engineers and health care leaders forward to make progress, which is I think what the market is really looking for right now is hearing about finite progress. That we are going to be moving forward and moving on, you know, with a more definite timeline.
ALEXIS CHRISTOFOROUS: Daniel, what about people who are looking at how far some of these high flying tech stocks have fallen? I mean, the valuations have come back down to earth for a lot of these companies. Would you recommend getting in now, or is this still too risky?
DANIEL NEWMAN: Well, I think it's-- personally, I would say I'm dabbling, and I'm buying a little bit kind of with each step down because I do think-- I think it was really overbought, and I think there's starting to be value right now. It's a little scary though, as I mentioned, without kind of having a longer horizon of when we're going to kind of turn the corner, but some of these companies are tremendous values. I'm working on an article about some of these companies I think are going to really bounce back, and for instance, like Qualcomm, the company that's sort of pushing 5G into market. And that's going to be something that's going to catch wind in a big way over the next couple years. Stock fell 30% plus in a short period of time.
Cisco-- you know, we've all heard about Zoom, and Zoom has gotten a huge write up-- well, Cisco has one of the largest platforms on the planet for web collaboration. Chuck Robbins came out and said 5.5 billion minutes of meetings in March, and the stock's gone down. It has not benefited, and maybe that's because of a more diverse portfolio. So that's on my mind, and just one other thing that's really interesting is talking to the OEMs, the [? client ?] and PC makers, they can't keep these devices on the shelf right now because companies are outfitting workers. So companies like HP and Dell, Lenovo are all selling PCs at a cut-- at a really breakneck pace to try to outfit school-- outfit workers that are working from home, [AUDIO OUT] companies to benefit.
ALEXIS CHRISTOFOROUS: Danny, I've got to jump in here. We got to take a break. Thank you so much for those insights.
DANIEL NEWMAN: Oh, no problem.
