Why the Trump-Biden debate debacle isn’t shaking the confidence of excited tech investors
A tough-on-the-eyes presidential debate might've left viewers with more concern than confidence (or questions than answers), but there are still plenty of reasons investors should remain bullish on red-hot tech darlings such as Nvidia (NVDA).
“From a tech perspective, the political environment won’t change that much under either [candidate]," Goldman Sachs portfolio manager Brook Dane told Yahoo Finance Executive Editor Brian Sozzi on his "Opening Bid" podcast (see video above or listen here).
Dane says a combination of ingrained bullish sentiment around tech stocks and their strong outlook for profits and cash flow should deflect election concerns. AI companies are particularly shielded from political worries given how fast they are expanding, Dane added.
Former President Donald Trump and current President Joe Biden left debate-watchers stunned last week, with the former spewing falsehoods and the latter appearing frail and out of touch.
Pressing topics like tech regulation and the rising influence of AI remained on the back burner.
Tech investors noticed the lack of attention on said hot-button issues and continued to stick with megacap winners, largely because of the facts Dane laid out.
Nvidia recently climbed to a $3.34 trillion market cap, briefly making it the world's most valuable company. Shares traded mostly sideways after the contentious first debate.
Apple (AAPL) shares barely budged — it's only down slightly from its 52-week high of $220.
Microsoft (MSFT) held firm as well; it's down a hair from the record high it closed on June 27.
Regardless of who wins, Dane acknowledges an environment of tighter scrutiny around social media companies and the relationship between the US and China.
But AI names could still do well. “I think Washington in general is lagging behind understanding how profound this change is and how structural it is,” he said.
Calls from experts like Dane will be put to the test again soon.
The election cycle's next events include the Republican National Convention scheduled for July 15-18 in Milwaukee, the Democratic National Convention from Aug. 19-22 in Chicago, and another presidential debate on Sept. 12.
In the meantime, tech companies promise to show us we haven’t seen anything yet.
“What we are going to see from these tools over the next two to five years is incredibly profound,” Dane said. “It’s going to fundamentally change the way people work and interact with technology.”
Bradesco's head of equity strategy Ben Laidler also thinks the election is a non-event for investors in the medium term. He believes we are in the early innings of a bull market for stocks. Laidler explains his thesis in an episode of "Opening Bid", which you could listen to below.
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