Ray Wang of Constellation Research expressed his belief that Big Tech is the ultimate refuge and growth catalyst for investors.
What Happened: Wang's comments come as the market eagerly awaits the delivery of Nvidia Corp.'s (NASDAQ:NVDA) Blackwell chips. Investors are anticipating strong earnings due to significant investments in data centers and AI chips by almost every tech company.
However, Wang warned during CNBC's "Sqauawk Box" that while Nvidia's stock might impress Wall Street, it won't necessarily bring others along. He compared the current scenario to the internet era, stating that, unlike the decentralized and open nature of the internet, the tech industry today is more centralized and closed, with only a few players destined to win.
Despite the centralization, Wang believes that this is the right thesis to continue driving the market, especially with falling interest rates. He dismissed the idea that investors would turn to emerging markets when interest rates drop, stating, "Big Tech is your flight to safety, and your flight to growth."
Why It Matters: Wang's comments come at a time when Wall Street is in a wait-and-watch mode, particularly with respect to Nvidia's earnings. Nvidia has been a driver of Magnificent 7 volatility Market strategist Ed Yardeni stated that Nvidia's earnings are a function of AI investments by mostly other large-cap tech companies, making Nvidia the fulcrum of not only the AI trade but a large portion of the entire stock market rally.
Moreover, Nvidia's stock might experience a $298 billion market value fluctuation following its second-quarter earnings report, according to a note from Goldman Sachs.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari