AI stocks are heating up — what’s driving the next wave of innovation?

Welcome to FinTech TV.

I'm Remy Blair.

Big US tech stocks rallied Monday after the White House and China agreed to slash tariffs.

Companies like Amazon, Tesla, and Apple, all tied closely to China through sales or supply chains, got a boost even as Apple considers an iPhone price hike.

Now the US and China agreed to sharply reduce their high tariffs on each other's goods, marking a major step toward easing tensions.

The move signaling a shift from trade conflict to more constructive dialogue.

Between the world's two biggest economies, also we saw chip stocks surging with Broadcom and Tesla both climbing back above the 1 $trillion trillion market cap mark, and the semiconductor sector remains a key player in the US-China trade story.

Well joining me at the New York Stock Exchange today is Stephen Dickens, who is CEO and principal analyst at Hyper Frame Research.

Well, Stephen, thank you so much for joining me.

Hey Remy, thanks for having me on the show.

Well, first and foremost, we know.

2025 has seen massive volatility not just across equity markets but across all assets as well.

And when it comes to the AI trade coming into this year, there was already focus on valuation and of course when it comes to the difference between equal weight, S&P and the broader index as well.

So where do we stand right now when it comes to the AI trade?

So I think for me I look at some of the fundamentals.

You look at the hyper scales we've all reported, that's AWS, that's Microsoft.

That's Google.

You can include Oracle in that play as well.

All of them have announced where they're going to be capex, and we're looking at over 300 billion of CapE invested this year.

So fundamentals are strong.

Where that money goes is downstream into the likes of primarily Nvidia, but also through some of the network in play and into the infrastructure providers, the picks and shovels companies.

So I think if you look at the fundamentals, we're still strong.

We had a wobble.

There with the deep sea.

But I think if you look at where we are fundamentally, and we're still we're still nascent in this market.

We're only really 2 years in, so we're looking at a foundational trend that I think's going to take us over the next decade.

So I think we we look at the 10 year cycle through a 24 hour news cycle perspective.

Yeah.

But I think if you look at some of the fundamentals, we're still so early, adoption still growing with that that I saw.

When I was with IBM last week that only 1% of enterprise data has been touched by AI.

So you look at the upside and the potential, still a long way to go, and I think that's a great overview because when we're talking about the AI trade, there's so many ways to get access to this when we're talking about individual investors.

So given the fact that there is a focus on different plays here when we're talking about artificial intelligence from data centers as well as real estate, what do you I think it's important to keep in mind when you're focused on the space.

I think as you say, you can, you can go to Nvidia and a lot of people have, and that's a good place.

The really strong fundamentals from the product roadmap that I track of where they're going to be trying to move people to an annual cycle.

So there's there's obviously that as a center of gravity, but you can then get exposure to the HPEs, the Lenovos, the Dells.

I'm out with Dell next week.

A lot of private infrastructure, talked about a plan.

Like IBM, they've got their granite models and are doing a lot in that space.

So I think you can look at this as a sector-wide play that's going to be a, I think we're at the start of, as I say, a 10 year trade and we're 2 years in.

So I think you can look at a lot of those picks and shovels companies, people like AMD Intel starting to bounce back now with Gaudi, they're going to be there.

So I think you can look at those a whole bucket of stocks and see that the entire sector is going to benefit.

And of course when we take a step back we've been focusing on the daily developments when it comes to tariffs and of course when we're taking a step back and looking at the implications of this, what this means for the AI play as well as big tech, how are you parsing in all of the daily moves and the headlines that are coming in?

So I think as I I'm overall bullish on the sector, but the one nagging doubt in my mind is TSMC and the wider China play, whether that's tariffs related or whether it's geopolitical tensions, I think that's the what the Trump administration is doing the right thing.

The chips Act was on the right path as well from the bind at previous administration.

I think near shoring or at least onshoring some of that chip manufacture is crucial for our long term prospects, rare earths, some of those are key components I think are crucial.

So I think whilst we're overall positive, while I see that this place is going to go out over the next 89, 10 years, the one nagging day for me is geopolitical tensions in Taiwan.

And finally, before I let you go, you mentioned a key name there and that was Deep Sea again earlier this year that did move markets as well as some of our portfolios.

So when we look not just in the short term, the rest of 2025, but beyond, so we're talking 5 years or 10 years, what do you think are the key catalysts that we all need to keep our eyes on here?

It's these companies that are putting a lot into R&D as I was looking at earnings.

I mentioned it earlier, I'm looking at key fundamentals, capE investment, recruitment of key software engineers and AI specialists, some of those long term trends.

So I think whilst we short saw shocks and a lot of us technology analysts kind of reacted to that and we saw that some of the claims for the cost of deep sea get debunked within sort of 48, 72 hours of the stuff that happened over the weekend.

I think for me and my peers who look at this sector, we're looking at some of those fundamentals looking at where the product road maps.

I was with IBM last week, foundational road maps going forward.

I'm out with Dell next week, where they're going, you know, a few on briefing.

With the Nvidia team or the AMD team, what are they saying about not just this drop but also subsequent drops of technology?

If I can see a strong product road map, then I gain a lot of confidence that they're making the right investments and that translates.

Yeah, and that is something to keep our eyes on not just during earnings season but beyond.

So Stephen, pleasure having you here.

Thank you so much for joining me.

Thank you.

Thank you appreciate it.