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00:00 Speaker A
Big Tech stocks leading market gains today with the NASDAQ 100 officially wiping out year-to-date losses. The magnificent seven adding more than $800 billion in market value following the deal between the US and China to temporarily reduce tariffs. Joining us now with more, Dan Ives, Wedbush Securities global head of technology research. Dan, great to have you, as always. I know you say this truce is the best case scenario. Which tech stock is the biggest winner within that scenario?
00:29 Dan Ives
I think it’s Apple and Nvidia. I mean, if you look at this, that was the black cloud, right? I mean, the supply chain heart and lungs are in China. And, and as much as you can talk about moving to India and others, this is a huge sigh of relief. And, and I think it changes our view that, you know, new highs for tech, new highs for the market, now on the table after what we just view as a dream scenario happened this weekend.
01:08 Speaker A
Well, Dan, let’s talk about Apple a little bit. I know you had a call for a $3,500 iPhone if production was brought back to the United States. What’s your call on the price of an iPhone today?
01:21 Dan Ives
Look, it comes down to. I mean, they’re, they’re going to have to struggle not to raise prices. If you actually, they don’t get exemptions and you actually keep some sort of tariff in when it comes to, to China. Look, it, it all comes down to the reality is iPhones need to be made in China. Some can be made in India. They can never really be made in the US, because if you want them made in the US, the price points would basically be massive demand destruction on day one. And it would take four to five years to even build 10% of that in the US. So that’s why our whole point over the last, called six weeks was, let’s talk reality versus fairy tale. And the reality is, is that iPhones will continue to be built in China with some being built in India.
02:51 Speaker A
How do you suss out the reality versus a negotiation in a framework, a thinking of a deal when there isn’t necessarily clarity yet on the goal of these tariffs?
03:08 Dan Ives
Look, I think ultimately, they’re both playing poker. And especially U.S. They look at their hand, it’s not a good hand, right? And I think they had to move further and further back from the cliff in terms of what we saw with the delay of the reciprocal. And obviously, when it came to China, because the cargo data doesn’t lie and the price points doesn’t lie. And whatever CEOs are saying publicly, behind closed doors, what they’re telling the White House is, you need to change, need to move. So our view is, like, even when it comes to the 30%, I mean, that’s probably the high bar. It goes to what called a reciprocal 15%, 20%. Once you work at WTO IP and all the other issues are going to have to get worked out in the next year. But you don’t want a decoupling when it comes to AI revolution. And I think this was, you know, a potential black swan moment that was self-created that’s no longer there.
04:42 Speaker A
And Dan, I guess, has Lou Basanez has a question for you.
04:46 Lou Basanez
So, Dan, I just want to talk to you more about Apple. I feel like earlier in the show, I said, this time of year, everyone gets a bit negative on Apple. How worried are you about price sensitivity, right? I mean, the consumer is super loyal to Apple, 2.5 billion devices out there. You got a lot of subsidies. Does it really matter if the iPhone price is a little bit higher than, than it was expected? I mean, do you really think that impacts demand?
05:17 Dan Ives
Yeah, no, it’s a great question. Look, I mean, the last thing Apple wants to do is, is raise prices. And they’ve kept prices basically the same. The reason that is, is because you have called 300 million iPhones that haven’t upgraded in four years. So if, even if it’s 3%, 4%, 5% of that, that may be delayed for a year because of a $100 increase, or only $150. That’s not what Apple wants, but they’re beholden to their supply chain. But when it comes to going to WWDC and iPhone 17, and obviously AI, I mean, this is a key period for them to actually see growth in terms of high single digit, double digit growth, which is obviously evaded, you know, in terms of the Apple story over the last few years.
06:39 Lou Basanez
Dan, one quick follow up. Earlier in the show, I said that MAG 7 was a boy band like NSYNC that’s breaking up. Who would be your? And I love NSYNC. I love NSYNC. Yeah, look, who would be your Justin Timberlake though for breakout? You said Apple and Nvidia. If you had to pick one for the best breakout for investors right now, which one are you most optimistic about on the aftermath of these trade truce?
07:15 Dan Ives
If there was like a, if there was like a Timberlake part of the NSYNC breaking out, it would have to be Nvidia. I mean, and look, Jensen, we, we’ll see what happens with the black leather jacket if he had to, you know, make it to be a boy band. But look, I think the reality is, is that I think it makes all new, new all-time highs because there’s only one ship in the world fueling the AI revolution and that’s led by godfather of AI, Jensen Nvidia.
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