Trump’s Legacy: The Tech Prez?
Aaron Gentzler: Hello everyone. Welcome to the latest installment of Q&A with Ray.
I’m publisher Aaron Gentzler. With me, live from Florida, is Chief Technology Expert Ray Blanco. How are you doing today, Ray?
Ray Blanco: I’m doing great. It’s great to be here, Aaron.
Aaron: The topic we’re discussing this month is Donald Trump: The Technology President.
Quietly, Donald Trump has advanced major tech developments as a national security priority, a military priority and a trade war priority.
One could argue this has done more for the development of big tech in a short amount of time than several presidents did before him.
What does that mean for the tech sector, and trade war with China? And where will our best profit opportunities lie in wake of the tech wars?
Ray: Donald Trump is setting a priority for the United States to be the leader in artificial intelligence (AI).
This is extremely important from an economic and military perspective. AI has everything to do with the United States staying on top of the heap as the dominant world superpower.
China, however, appears less interested in closing the tech gap and more interested in creating a new one. They really want to leapfrog us on the next big thing, which is AI and quantum computing, and super-fast wireless 5G networks and things like that.
It’s a similar situation to the Cold War. A lot of technologies back then, including the first iterations of what we now call the World Wide Web, were developed to gain a military edge over the Soviet threat.
These things all trickled down to the consumer market in some way, shape or form. And as they did a lot of money was made in tech stocks. I see a similar long-term trend developing.
2020’s presidential election will be very important to this narrative.
Aaron: Thanks, Ray, great assessment of the current overarching themes in tech. Let’s jump into some reader questions now…
George in Nova Scotia, Canada, wants to know if Canadians will be affected by Trump’s technology decisions.
Ray: Well, that’s an easy one. The United States sneezes and Canada catches a cold. It’s a very closely integrated economy, so if Trump makes a decision here, it’s going to have an immediate effect in Canada.
Martha in Houston, Texas, wants to know what your outlook is, big picture, for Amazon, Apple and Nvidia in 2019.
Ray: Amazon (NASDAQ: AMZN) is strong company and doing really well. But I don’t particularly care for them as a whole. I think there are some problems with their anti-competitive practices. But as a business, they got what you want. They’re a near-monopoly in certain ways and I think they’re going to have a strong year.
Apple (NASDAQ: AAPL), I’m much more cautious on. Sales are falling for their iPhone. They say that service is doing better, but fundamentally they are still a hardware company. And one that has not introduced anything groundbreaking to markets in almost a decade now.
With Nvidia (NASDAQ: NVDA), I’m in wait-and-see mode. There’s a hangover from the crypto frenzy. Also there are a lot of secondhand or unsold NVDA GPUs out there flooding the market, lowering prices and hurting share values.
That all said I think they may have bottomed out already.
For speculative folks today’s share price could be a good entry point, but for my money I’m waiting another quarter to see if NVDA can in fact stabilize.
Jerry in Denton, Maryland, asks what you think of Chinese 5G stocks right now.
Ray: I’d be very cautious with Chinese tech right now. The preeminent 5G company, Huawei, is going to be blocked out of a lot of markets.
Huawei will of course grow inside of China, and perhaps in other countries as well.
But it remains to be seen which countries are going to allow Huawei equipment and which countries aren’t.
A good example of what you could expect for Huawei is what happened to ZTE last year when Trump blocked Qualcomm from providing them with technology.
Trump eventually relented. But ZTE is now a dead company. I’d be really careful investing in Chinese tech stocks.
Which is all the more reason why I’m buying the idea that Trump’s real legacy will be as the Technology President.
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