Title Tech Giants Face Currency Headwinds as Earnings Season Begins

Dan Niles, the founder and portfolio manager of Satori Fund, expresses his optimism for Alphabet Inc $Alphabet-A (GOOGL.US)$ and Nvidia Corp $NVIDIA (NVDA.US)$ as he enters the earnings season. He predicts that both companies will have impressive performances and provide positive guidance for the future.

However, Niles also acknowledges the challenges that lie ahead for the tech giants, including Apple Inc $Apple (AAPL.US)$ and Tesla Inc $Tesla (TSLA.US)$ . These companies heavily rely on international markets for more than half of their revenues. Unfortunately, the strengthening of the U.S. dollar, which has appreciated by 6% since mid-July, poses a significant obstacle for their guidance in this quarter.

Taking a different stance, Niles has taken a short position on Apple and Tesla. He believes that investors need to carefully select their investments within this group, rather than blindly investing in all seven tech giants. The valuations of some of these companies make it necessary to be cautious. Currently, Tesla trades at a forward P/E ratio of approximately 58, while Apple trades at around 27 times forward earnings.