AI spend is strong, overpowering weakness in tech, says T. Rowe Price's Rizzo

chips and big tech stocks bouncing back today too though this comes after those names were hit hard in the prior two trading sessions joining us now is T price global technology portfolio manager Dom Rizzo top Holdings in his Global Tech fund include Nvidia Apple Microsoft and AMD it's great to have you back on the show thanks for having me back Morgan so we saw some pretty dramatic moves in some of these big names Nvidia for example from from start to finish in trading on Friday I mean it was a

10% move uh in that stock and then we saw that extend into the beginning of this week uh is it safe to say that at least within Tech we're seeing coming off of Loft valuations that we're seeing maybe rolling Corrections start to sink in here or is this just start of something uh deeper in terms of a correction or pullback well if you go back and you study Market history and you look at kind of bull market consolidations what happens is they're usually short and vicious and I think the question

all technology investors are asking themselves right now is the price momentum reversal that we saw Friday and Monday is this the beginning of the end for the AI trade um I've just been on the road for the past two weeks meeting companies all over Asia and Silicon Valley and I have to tell you the AI spend is strong right now um it's it's very very robust in the data center there's pockets of weakness sure in PC smartphones networking a little bit of Telco but in general I think that AI spend is

more than to more than overpowered ing the rest of that weakness that we may see so I think between the valuation still actually remaining relatively reasonable and the fundamentals being strong we still have a ways to go yeah and of course you can make that argument that with the earnings that we got from Oracle and the big move in that stock today it continues to maintain that narrative it it does raise the question though um where the leading indicators are in terms of where companies are pu

tting some of this investment to work when they do think about future AI capability and I I asked that cuz I look at your notes and and you talk about a ws and uh growth numbers at AWS as potentially I think uh a an indicator of consumption Revenue accelerating as well on the software side yeah no that's right I think what we saw last quarter was the acceleration in AWS growth rates right we saw AWS grow 133% last quarter I think it's very likely that we see sequential acceleration from each qua

rter from here with AWS and what does that mean that means that the consumption Revenue stocks a data dog or a mongod DB have improving fundamentals as well as we go throughout the year you know John had that great interview with Lisa yesterday and she talked about these hyperscalers being willing to spend before demand comes back for AI right that's really a unique thing in history we haven't really seen that before and I think that's because AI has the potential to be the biggest productivity

enhancer for the economy since electricity so these hypers skillers are willing to spend if we look at the hyperscaler spend this year it's going to grow roughly 25% across all the different hyperscalers and look at Oracle numbers last night they got it to 40% growth in capex next year hey D speaking of AMD I tried to test Lisa Sue's optimism yesterday it seemed pretty firm I asked her what part of amd's portfolio we might be underestimating take a listen the most underestimated piece John is ho

w all of these pieces come together so it is not about just what you do in the data center or just what you do at the edge or what you do in the PC it's the fact that uh we are one of the very few companies that have all of the pieces so we have all of the compute engines that you need uh to optimize for your application but Dom is that integration already priced in or do you dare more buy more AMD here well John let's take a step back first off I love the interview it was a really great job but

if if we look at what Lisa's done at her time at AMD it's really incredible right when she started as CEO the stock bottomed around $2 a share that was A2 billion market cap today we ended over $200 a share and well North with of a $300 billion doll market cap and when she's talking about the the portfolio she's really talking about amd's unique breadth and depth right so best-in-class CPUs both in the PC and in the data center the gpus the new mi30 chip that's coming out with great win at El C

apitan but really strong adoption across the rest of the hyperscalers the dpus the pensando acquisition that they did that was brilliant and then finally the fpga and the xlinks acquisition that they did and then now what they're doing is they're taking their Rockham software stack and they're integrating that all together right and that's what's so exciting about the breath and depth of amd's portfolio not only that they have the best Advanced packaging technology today that's those chiplets so

we can get combo chips that's what's happening with the new Mi 300a the CPU GPU combo chip I think that's going to proliferate whether it's in the data center or at the edge and so AMD is in a unique position between the bre and depth of the hardware the software and the chiplet technology you put it all together I mean it's really only them and Nvidia who has that type of positioning