Yahoo Finance Live’s Brian Sozzi discusses the top takeaways from the 2022 Goldman Sachs Communacopia + Technology Conference.
- You might have noticed it was a little quieter around here over the past couple of days, not quite as opinionated on certain stocks.
BRIAN SOZZI: That's funny.
- And indeed that's because Brian Sozzi was hanging out on the Golden Gate Bridge in San Francisco or is that the Bay Bridge? I don't know. At the Goldman Sachs Tech and Media Conference, he spoke to dozens of business leaders when he wasn't walking over the bridge, swimming to Alcatraz. Everywhere he goes, Soz learns some lessons. Of course. So today we have your takeaways from that conference.
BRIAN SOZZI: Well, in true top form and how I handle conferences, I did not visit the Golden Gate Bridge.
- Of course you didn't. You spent the whole time in a hotel talking to people.
- What I did see is someone go to the bathroom outside of my hotel. But we'll take that offline. That was a very, very tough to see, not fun. Nonetheless, some of my takeaways from this conference, first up, private companies with once lofty valuations and insane dreams continue to retrench.
I go through a lot more of these in today's Morning Brief newsletter. But I'm just hitting the highlights here. You're seeing companies like a Klarna, a lot of down rounds, which is interesting. And now because they're raising money at lower valuations, their operations are starting to pull back. And that is benefiting a lot of the larger companies in certain industries.
Next, deals to pick up in early 2023, we're seeing some of that perhaps starting now with Adobe's $20 billion acquisition of Figma, another company that perhaps has seen its valuation cut from where it raised its last round of money last year. Next, stock market bottom may not be end for the year. I talked to a lot of executives. They are just not convinced that the market has bottomed for the year. So that a little bit of a red flag for me.
Next, consumer demand doesn't appear to be falling off a cliff. You know, I talked to Expedia CEO, he says travel demand looks to be pretty strong. And I don't want to come out here and reiterate guidance or raise it at all, but that was a nice takeaway. So I put that in my memory bank.
And last but not least, investors are eyeing turnaround stories. And we spent some time with Goldman's top media and tech analyst, Eric Sheridan, telling me that people are starting to kick the tires, potential turnarounds. He called out Peloton. He did stop short in saying people are willing to make a large bet on Peloton just yet because they need to show a couple of good quarters of profits. But we're at that point in the year where you've seen a lot of stocks slammed in tech and telecom and now they're starting to look for potential turnarounds stories for next year. So maybe keep an eye on Peloton. Just a name to tuck away here.
Last but not least is my takeaway for this conference. It is, these are tricky times. And a reference perhaps to the upcoming Halloween season. But nonetheless it is hard to find a turnaround story. It is hard to ultimately pick a bottom in the broader market, a lot of mixed commentary. But good to see that demand for a lot of companies not falling off a cliff.
- If there's one thing that companies were most confident about or that they would lean into for their confidence right now, I mean, is it just having a strong balance sheet, solid cash flows, like what did you get the sense was out there?
- They're confident they're not going out of business. And then number two, that there is no bruising recession you think if you talk to a lot of executives, they do expect a mild recession, maybe just a slight downtick in growth. But nobody's saying here hey, we're expecting a financial crisis or a long term bruising recession.
And I'll even add this too. A lot of folks are just terrified. I'll use the word terrified again, of the Federal Reserve, what they might do on rates. Because it's going to raise their funding costs a great, great deal.
- All right there you go. Sozzi's Take. Welcome back from San Francisco.
BRIAN SOZZI: Absolutely.