By coinnews 
00:00 Speaker A
Most of big tech earnings, we know, are in the rear view mirror now. Tariffs remain a dark cloud of uncertainty for the sector as the threat of renewed volatility lingers. We’ll take a look at the state of tech with Baird managing director, that would be Ted Mortenson. Ted, good to see you.
00:14 Ted Mortenson
Good to see you.
00:16 Speaker A
So, may maybe start, Ted, big picture when it comes to tech. I’m just curious how you would how you would judge, Ted, how you would characterize sentiment toward the sector right now. How would you describe it?
00:29 Ted Mortenson
Yeah, it’s a great question. Sentiment is pretty negative, actually. If you look at some of the portfolios that have been structured, they’re very defensive. So, if you look at what happened, uh, I would say the first week of February, we had a lot of complacency and the market was at its all-time highs. Then we really, uh, pivoted down to a down cycle. We’re almost down 22%. Between that February and April time frame, uh, people got very defensive and I had, in my career, I’ve never seen underweights the size as I’ve seen in tech going into, you know, I would say, um, April 7th was the lows. Um, you’ve seen a snapback of roughly 15%, and I think that’s just people trying to get equal weight on certain sectors that they can see growth on that sustainable.
01:56 Speaker A
It’s so interesting, Ted, because before that dip, there was a lot of talk that tech was the new defensive in some ways, or that it had defensive characteristics because of its size, because of the long-term AI growth story. And it doesn’t seem like those sort of underlying beliefs have necessarily gone away or or have they?
02:28 Ted Mortenson
They haven’t. I I I think one of the biggest reports of the whole earning season was Microsoft, okay? They killed it. Uh, they killed it on Azure on 35% growth and half of that growth was just people moving the cloud. They can’t even maintain gen AI, uh, supply demand curves. Same thing with Amazon. They can’t they can’t meet the gen AI demand. So, these companies if you look at meta, Microsoft, um, specifically, their free cash flowing better than than Argentina, quite frankly. They’re putting they’re putting free cash flow out there in the 18 billion dollar range, and that that gives them a lot of latitude that they can spend, like they’re spending on gen AI. I would argue they are somewhat defensive if you look at where the market’s going.