Episode summary
Alphabet Overtakes Apple, Becoming Second to Nvidia in Size
Bloomberg Surveillance
· · 7 min · Guests: Dan Ives
Summary
Dan Ives argued that the AI trade is still early, even after the surge in megacap tech and the market’s obsession with valuation. He said the next phase is moving beyond software hype into physical AI, autonomous systems, embedded devices, and robotaxis, with NVIDIA positioned as both a chip supplier and a platform winner. He also said investors should not mistake the latest moves for an AI bubble, because the buildout will extend for years and likely include significant consolidation and acquisitions across the sector.
On Microsoft, he said the street is underestimating both Azure growth and cash flow, and that the company’s margin profile leaves room for upside. On Apple, he framed the next cycle as an ecosystem monetization story, pointing to the installed base of 1.5 billion iPhones and 2.4 billion iOS devices. In his view, this is a major stage for Apple rather than a mature one.
He also described the current environment as an arms race in tech, with valuation and circular-financing concerns driving some pushback from clients. Even so, he said tech stocks are still up 20% this year and expects capex trends to become the key driver as earnings season ends.
Key takeaways
- Dan Ives said the AI boom is still in its early stages, not a bubble, because embedded devices, robots and autonomous systems are just starting to scale.
- He argued that NVIDIA is becoming both a chip supplier and a platform play in autonomous AI.
- He said the Street is underestimating Microsoft’s cloud growth and cash flow, especially Azure.
- He called Apple’s installed base a major monetization opportunity, citing 1.5 billion iPhones and 2.4 billion iOS devices.
- He expects more tech M&A and consolidation because the AI race is becoming an arms race.
- He said client pushback centers on valuation and circular financing, but he still sees tech stocks up 20% this year.
Notable quotes
“the street is underestimating what this means for Microsoft”
“I think you can see a lot of acquisitions, strategic financial acquisitions in terms of tech”
How the episode opens
Physically, I saw that autonomous robot. I mean, this is now what I knew in the consumer revolution starts in terms of physical. And and I think what you saw within video their way and platform on autonomous we've talked about it's why we're so bullish and fatso you've been robotaxi animals sort of vision there but this is this is the next stage of AI but it's all fueled by the Godfather Bay agents in their video I looked Dan and Wells Fargo reducing their overweight they stay overweight and Microsoft from whatever it was down to 665 down the income statement end of the earnings season Danny with you with a 625 outperform on Microsoft where and the financial statements is the important point for Microsoft earnings.
I mean, I think it's about Azure and about growth. I to put it in the context, I mean, you talk about the highest margin business that I believe the Street's underestimating probably by 10 to 15% this year. And you're talking about the industry is already underestimating about 25 billion of incremental growth.
From a cash flow perspective, we're talking about 15 billion. But I don't think back to industry model to Microsoft. Right?
Well, in their model and 15% revenue growth. So are you saying down the income statement is the underestimation of Microsoft? Yeah, I think I think it's underestimated from a growth perspective on cloud and underestimated in terms that we saw in cash flow.
And the reality is the enterprise air revolution, it all starts in Redmond in the dollar, and the street is underestimating what this means for Microsoft. Dan, one of the things I heard from CBS and video, they launched this alpha male platform. Tell us what this is, because this gets a little scary for some people, I think.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai investing
- consumer electronics show
- alphabet apple market cap
- nvidia market leadership
- gemini ai competition
Companies and tickers mentioned
- GOOGL
- GOOG
- AAPL
- NVDA
- Alphabet Inc.
- Apple Inc.
- Nvidia Corp.
- OpenAI
- Wedbush Securities
Watch the episode
Watch “Alphabet Overtakes Apple, Becoming Second to Nvidia in Size” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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