Nvidia, Apple, and Oracle—How to navigate tech sluggishness

Neuberger Berman senior research analyst Dan Flax joined Market Domination anchors Julie Hyman and Josh Lipton on the Yahoo Finance Playbook to discuss navigating recent sluggishness in some tech stocks.

Apple (AAPL) demonstrated that it "can continue to innovate" at Monday's event, Flax said, noting that "the user experience is continuing to change" while "the developer community remains healthy." The analyst said he expects "better growth over the next year, which will contribute to stock price outperformance."

Flax said that Nvidia (NVDA) stands to gain as cloud vendors like Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOG, GOOGL) invest in artificial intelligence (AI) despite near-term volatility amid Blackwell delays. He says the key for Nvidia "is to continue to execute on its product cycles."

After Oracle (ORCL) stock jumped following its first quarter earnings beat, Flax noted positive feedback from Oracle's cloud customers. The analyst expects "growth for Oracle cloud to remain robust over the next few years" though "it's certainly lumpy quarter to quarter."

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Naomi Buchanan.

Video transcript

Tech stocks see sharp declines to start September.

The NASDAQ composite shedding about 5% so far this month, and some of the worst performers are NVIDIA and Apple.

We're looking at how to navigate the big picture with the Yahoo finance playbook.

Dan Flax, Newberger Berman senior research analyst, is joining us now.

Dan.

It's to see you.

Uh, those two names, among others, are still among your top picks.

And, you know, obviously we've had some volatility come into the tech trade.

Um, there are different stories with the two of them.

Let's start with Apple.

Since we just had the event yesterday, we had the EU tax ruling this morning.

Why are you sticking with that one?

Good to see you.

I think what's going on with Apple is that they're demonstrating that they can continue to innovate.

We we see with iPhone 16, the the the Camera control Apple Intelligence.

Uh, the journey around that is beginning that will play out over many months.

But the user experience is continuing to change.

I think the developer community remains healthy, and what we'll see over the coming months is that, uh, growth should be a little bit better.

You're seeing the installed base continue to increase China.

While while a concern, uh, apple has continued to navigate that pretty well.

And so services remains durable.

And the the the wearables opportunity, in my view, remains early.

And so I expect better growth over the next year, which will contribute to stock price performance, in my view, from current levels.

Let me also get your take on NVIDIA.

Dan, you know, one concern that I want to get your take on this is this idea that big tech is gonna start coming under some pressure from their investors to just kind of slow down this rush of a I spending, uh, how what do you make of that concern, Dan?

What could it mean for NVIDIA?

Brian?

Uh, excuse me, Josh.

We're we're sitting at a very interesting, uh, juncture here because you have the cloud vendors Uh uh, Amazon and and Microsoft, um, Google investing aggressively because they see revenue growth opportunities in their core businesses and new opportunities around generative a I and so they're spending aggressively.

There is some concern, uh, around the capacity, but in my view, they're gonna be able to to absorb that, uh, as we think through the coming quarters and over the next year or two.

As far as, uh, NVIDIA is concerned, there's a little bit of a delay in in Blackwell, their new platform.

But demand for Hopper remains healthy.

And and I think the key for NVIDIA is to continue to execute on its product cycles.

What what's happening with with, uh, artificial intelligence?

There's really a whole host of new use cases if you think about the health care world, uh, drug Discovery, uh, studies around climate change in manufacturing, you have, uh, digital twins.

And so there are a lot of new opportunities for both the cloud companies as well as traditional enterprises to to transform themselves over the next couple of years.

And NVIDIA really sits at the heart of that opportunity.

So we continue to like that name appreciating, of course, that there is some near term volatility.

Dan, how quickly and at what magnitude are these companies going to have to start to, um, really show more profit directly tied to some of these?

This a I technology, I think for the traditional cloud vendors, they're seeing revenue like Microsoft azure in the billions of dollars today.

I think that will continue now.

Clearly, they're investing to drive that growth.

But if the market sees and the companies are demonstrating that there are large revenue pools to be captured in both the near and perhaps as importantly, the medium and long term, I think the market will be OK with that.

The the key for these companies is to drive growth in these newer areas while at the same time demonstrating that in the core, the existing businesses, uh, things are healthy.

So if you think about the cloud businesses, uh, you're continuing to see AAA, uh, a shift towards the cloud.

And when we speak to enterprise customers, many of them are relatively early in their journey of what they're getting is that they're getting access, like with generative a i to the newest tools and technologies.

And so that's why they're going to the cloud.

In addition to the ability to to turn turn on the capacity, like like flipping a light switch, it's, uh, it's very quick and that that's a contrast with a lot of the traditional IT infrastructure.

And so it's a journey, and our focus is on the company like an NVIDIA that can innovate and really empower their customers as we think about uh um, the customer's ability to to capitalise on all this as we move into next year and beyond.

Dan, I also want to get your take on Oracle.

Larry Ellison's company reports investors clearly like what they see Dan the stock up about 12% right now.

What did you make of that print, Dan?

And also just your take on on the broader business software landscape?

Uh, the the results were solid oracles demonstrating that that they're really able to to invest and drive growth in the Oracle cloud.

And And when we speak to their customers, they like what Oracle is is doing as they extend, Um uh, their their ability to de deliver value, uh, for their workloads in the different clouds.

We saw the Amazon Web services announcement last night.

So Oracle customers are are liking the fact that you can continue to, uh uh on workloads on premise but also move into the cloud.

I think the growth for Oracle Cloud is likely to remain robust over the next few years.

It's certainly lumpy quarter to quarter, but the company is investing.

Customers are seeing results.

Um, from from, uh, migrating to the cloud.

And I think it sets the company up.

Well, as as I look out into next year, so we continue to like that name as well.

All right?

You and a lot of investors, Dan.

Thank you so much as always.

Come on.

The show.

Appreciate it.

Thank you.