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RiskReversal Pod

Okay, Computer: Tech Is Still A Minefield with Dan Niles

Aug 16, 2023
Financial expert Dan Niles predicts a 10% decline in the stock market and discusses high-valuation tech, China's impact on commodities, interest rates, Apple/Microsoft, Nvidia, and Tesla.
52:49

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Apple and Microsoft, two major components of the S&P 500, are facing challenges in growth and declining margins, potentially leading to multiple compression and downside risk.
  • Tesla is confronted with numerous risks including a potential slowdown in the Chinese market, rising competition, declining margins, and geopolitical risks, which could result in a significant correction in its stock price.

Deep dives

Apple and Microsoft face slowdown and declining margins

Apple and Microsoft, which make up 15% of the S&P 500, are experiencing a slowdown in growth and declining margins. Apple has reported three consecutive quarters of declining revenues and has guided for a fourth quarter with expected declines in year-over-year revenues. Microsoft's cloud business, while benefiting from AI growth, has seen revenue growth slow down and is guiding below street expectations for the next quarter. These companies are trading at high multiples and are facing headwinds such as increasing financing costs for their products, geopolitical risks, and possible market saturation. The market may no longer turn a blind eye to these challenges, leading to potential multiple compression and downside risk.

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