By coinnews 
00:00 Speaker A
It’s now time for some of today’s trending tickers. This morning, we are watching AMD, Datadog, and Ferrari. First up, AMD is reporting first quarter earnings after the close. The chipmaker offering a window into the AI landscape, particularly of note ahead of Nvidia earnings. Investors will be keeping an eye on AMD’s guidance. The company saying in April that it could take an $800 million hit thanks to tighter export controls. Chris Roan from Strategas is still with me to discuss. And Chris, it’s interesting, the Philadelphia Semiconductor Index down about 14% year-to-date. How are you thinking about semis right now?
00:42 Chris
I think it’s important to remember the SOX is very Nvidia heavy. When you look at the group of semis equally weighted, they didn’t peak in January with Nvidia, they peaked last spring and last summer. So this bear market in cyclical semis is almost a year old. So we kind of subscribe to the view, maybe first in, first out. So I’m actually looking for when some of these more analog names, AMD obviously today, others can actually start to respond to bad news well. I mean, that’s the first step of putting in a real tradable low when you become immune to bad news. I’m not quite sure we’re at that point yet with some of these. They’re still largely year relative laggards. Software has generally traded better than semis. It’s an important kind of relative guide for us. So I’m not convinced that the more analog semis are quite ready to be bought yet.
01:41 Speaker A
All right, really great context there. We’re going to continue to talk a little bit about the AI trade in particular. Looking at Datadog topping expectations in its first quarter, lifting guidance for Q2 as well. The company adding over 3,000 customers with average recurring revenues of $100,000 or more amid macroeconomic uncertainty. Still, you see the shares just below the flat line this morning, not necessarily enough to excite investors. But a name like this makes me think about what you were saying earlier, Chris, about how you may want to look for other opportunities within the tech trade and not kind of the same names that we talk about all the time.
02:21 Chris
Well, you know, I think given where the stock opened, I think it was down four or five percent at the open, it’s actually trading well in light of what was kind of squishy earnings. Um, I think the longer term question about AI is what we’ve seen in phase one is the Nvidias and all the obvious. What is phase two of AI? I’m so reminded of the lesson from the tech bubble in ’99 and 2000 is that the ultimate winners of the internet race were companies that didn’t exist yet then. I mean, it wasn’t, I don’t think Alphabet went public until ’03 and all of those, like those going for Facebook and 12. So my suspicion is the real winners here are still yet to be known. I think in the interim, play the power story, but these, the price response from CEG today is impressive. Even Innova continues to trade well. Natural gas is a way to play this as well. So I think the power story remains the most potent part of the AI story.
03:49 Speaker A
Right, those kind of picks and shovels to a degree in the space. Really interesting context there, Chris. We do also want to talk about Ferrari reporting a 15% year-over-year rise in profit in its first quarter on strong demand personalization for its luxury vehicles. Still the company reiterating that tariffs could hurt its profitability to come this year. The shares up nearly one and a half percent. Is luxury enough to beat any negative impact of macro uncertainty and tariffs?
04:27 Chris
Well, it’s notable how different Ferrari is trading from the other European luxury stocks. If you looked at LVMH or Carring or Dior, I mean they are weak. So there seems to be something going on at Ferrari that’s very, very different than going on with the majority of the other Euro luxury names. Now, those others are read into China, and they’ve been very, very weak. So perhaps some impact there. What we like to look at domestically is discretionary versus staples. I think if the market and the economy is going to come out of this unscathed, you want to see the discretionary stocks really take the leadership baton from the staples. Now, that really hasn’t been the case much of this year. So important that shifts moving forward.