VIDEO: For Meta, Amazon and Apple, AI Remains the Name of the Game

In today’s Pro Portfolio Daily Rundown video, Chris Versace touches on the movement we are seeing in shares of Axon Enterprise AXON and Universal Display OLED, as well as announcements from Meta META and Amazon AMZN that maintain AI’s headline presence.

We touch on OpenAI’s announcement with Google GOOGL Cloud, explaining not only why it is good for Google but also for Marvell MRVL.

Chris also reminds everyone this week’s Office Hours are today in the Pro Portfolio’s Forum from 4 p.m.–5 p.m. ET. See you there!

More Pro Portfolio: (updated June 9)

Transcript

CHRIS VERSACE: Hey, folks, Chris Versace here. It is June 10, and as we suspected would be the case in our opening comments from this morning, the market is indeed in a bit of a holding pattern of sorts, up modestly, we would say, but not demonstratively, as we wait for some more details to emerge on US-China trade talks and the market, as well as we continue to wait for tomorrow's CPI report and any implications that might have.

Taking a quick look at the portfolio, we are seeing our shares of Axon dip a little bit after being in overbought territory. No real surprise, but remember that between the ongoing AI adoption that we're seeing in public safety, as well as the drone comments we shared with you yesterday, we remain positive on the shares longer term. The thesis, just so folks who remember, is that we continue to see the positive mix shift towards the higher-margin cloud and services business driving margin expansion, as well as EPS growth.

So we continue to see that playing out. And to the extent we see faster AI adoption for its services, again, in the public safety arena, that would turbocharge that mix shift. Now, we are also seeing our shares of Universal Display continue to move higher today after being added to Goldman's conviction list with a 183 target and a buy rating several days ago.

Now, I will share that we're pleasantly surprised to see Goldman Sachs jump on board. As you know, we've continued to collect no shortage of data points about the accelerating shift towards organic light-emitting diode displays. But seeing someone like Goldman come on board, boy, that is a nice, shot in the arm. And it's always nice to see them back and reaffirm our thinking of one of our portfolio's positions.

We'll continue to monitor the data points for that. Obviously, we had TSM's May revenue out this morning, which we talked about in a note with you. But just to quickly recap, up strongly year over year. And when we take the first two months of the current quarter-- that would be April and May-- and combine them, look at them on a year-over-year basis, up 44%, very strong, and up 21% compared to the first two months of the March quarter.

Again, very, very strong signaling that AI demand, robust data center demand, robust, we do not have the color commentary that goes beyond that. TSM really just reports the revenue figures. And as I shared in our note, that means that we'll want to be digging into the May revenue report from Foxconn when we get it. They tend to describe AI and data center servers, other connected devices, PC, smartphones, monitors, that sort of thing. So we'll have a lot more on that.

But, again, as it relates to Universal Display, we continue to see more smartphone models shifting to that Display technology. We tend to see more larger format Display smartphone models as well as adoption, PC, monitors, notebooks, and in automotive. So we continue to see a positive tailwind as we move into the seasonally stronger second half of the year for some of their key end market devices.

Now, I will also share that if you saw our comments on Apple's WWDC event, as we kind of summed up at the end, the event to us was rather evolutionary, not revolutionary. I think that's the right tagline. And others agree with us that Apple simply needs to do more on the AI front.

And that was really called out today, because we saw a number of other AI announcements that suggest that Apple, they really need to get going with Apple Intelligence and AI. And I'm referring to Meta agreeing to pay 14.8 billion for a 49% stake in AI, startup scale AI, and Amazon today launching an improved generative AI tool for advertisers.

So as we sit back and we hear those two announcements, one from Meta, one from Amazon, it just reminds us that AI is really at the forefront of the conversation, with companies looking to expand their lead over their competitors and to sharpen not only their competitive position, but reduce their cost burden.

Remember, Meta has talked about shifting some of its advertising to fully AI-driven, which would, of course, help reduce its cost structure. And I think Amazon, with this improved AI video tool for advertisers, does the same. It also puts pressure, candidly, on Apple, and even others out there, to do something with M&A, possibly to shore up a competitive technology gap.

Remember, generally speaking, we do see companies use M&A to fill product, technology or geographic gaps for their products or their service array. And as we know, big tech, they do have a lot of cash on the sidelines. So if you were to ask us, do we think that it's possible to see some M&A on the AI front? the word that we would use is "certainly possible."

The second piece that I just wanted to mention, and this really ties back to an alert that we shared with you yesterday for Amazon, Amazon's video AI announcement today, it just really hammers home the fact that Amazon is leaning into its advertising business. And the note we shared with you yesterday said that advertisers were switching to Amazon from Trade Desk.

I would say that Amazon is not slowing down on that front. One, it will continue to benefit from the ongoing shift towards digital advertising from what we call analog advertising TV, radio, papers, newspapers, magazines, that sort of thing. But they are really making a push for it. And as we discussed in our note yesterday, they are really leaning into their move with live events, and I think we're going to continue to see more of that, not just at Amazon, but possibly Meta, Netflix and others. And I just think we're going to see a real transition, a real shift, if you will, in the overall advertising market, and potentially in the digital advertising market.

Now, sticking with AI, but kind of going down a different vein, we also read this morning that OpenAI has signed a deal with Google Cloud to help fill capacity for its AI computing needs. Now, clearly this is going to be very good for Google Cloud, just like others, Amazon, Meta and even Microsoft. They were capacity-constrained late last year coming into 2025, and they've been busy adding capacity.

But with an announcement like this, this tells us that at least with Google Cloud, not only as it adds that capacity, it should be taken down, meaning booking revenue. That should be good over the coming quarters for revenue comps for Google Cloud. But it's also going to be good news for NVIDIA and Marvell. And Marvell in particular, remember, they have a third-party silicon relationship with Google, and we expect to hear more about that and Marvell's overall third party silicon efforts at next week's company event.

Now, we also expect to hear more on AI today from Cisco's Cisco Live event, and as companies continue to make investor conference rounds today and later this week, that includes NVIDIA presenting today at the Rosenblatt Technology Summit. So needless to say, folks, we are going to have a lot more coming your way today, tomorrow, the next couple of days. So please be sure to check your alerts. And remember, we also have office hours today between 4:00 PM and 5:00 PM in the forum. Bring your questions. We will bring our answers, and we'll get to as many as time permits. Thanks for watching.

At the time of publication, TheStreet Pro Portfolio was long AXON, OLED, META, AMZN, GOOGL and MRVL.