BNN - Wednesday, May 22, 2024 - 06:00 p.m. (ET) - Segment #1

You have to be tough. Let's move! Get down! GET INTO A NEW STATION 19 ON CTV (Mid-tempo music) >> Hi, there. I'm Paul Bagnell. Welcome to Market Call today. Kim Bolton is on our program today he's president and portfolio manager at Black Swan Dexteritas. He will be taking your questions on what else but the technology stocks. Call us toll free. Our number as always is 1-855-326-6266. Or send us an email to Marketcall@bnnbloomberg.ca. We will have a full hour of Kim and his expertise on the tech stocks. So get your calls-- calls and emails in. In the meantime we will chat with Kim to see where... What his thoughts are on this current marketplace. And, Kim, I think what a lot of viewers want to know is your thoughts on the NVIDIA results due after the closing today. What will you be looking at when you get your hands -- or your eyes on that release? >> Well, it's almost like we planned this way, right? (Chuckling) Well, I think everyone knows that they will have a great quarter. 24.5, 25 billion in revenue which is, my gosh, three times that of a year ago. People will be also be looking at the margins. You know, think about it. The margins that NVIDIA has now, gross margins, are 76%. It's phenomenal. But most importantly they will be looking at the guidance. And so we're going to have to wait for-- well, they will probably give a little bit of guidance on the report but then when they have the analysts interviews and so on that will be key to actually look out, you know, into 2025 and what they are thinking. They have stayed that they will be sold out this year and then see what the competition can do to them. >> You say the AI revolution is both broadening and deepening. What does that mean to investors? >> Well, you know, it was all about the-- you know the suppliers, the picks and shovels that go into this. The chip makers, software companies. You know, data-- data equipment makers, the data centre owners and operators but now it's sort of spread into what people are calling AI grids, so the whole energy grid and how the energy will be sucked over into the AI eco-system. So everyone is starting to participate. >> Where-- what areas of AI do you like the best right now? Where are the best opportunities for investors? >> I would still say that the end users are still trying to get some traction out of this, so I still believe this year is still going to be very much more about the picks and shovels, you know, the suppliers, the chip suppliers, the designers, but also you know the data centres, the amount of data that is going into this and you know, Paul, there aren't that many participants when it comes to the real data centres. You know, there is Equinox and then there is Digital Realty and those are the two main guys out there so you got to have participation-- participation in that. You would think by this time, because of the -- if the AI revolution started back in like the fall of 2022 when open eye-- OpenAI came out would you think the software guys would actually be getting some traction but there is still some difficulty in sort of monetizing that. >> That's Kim Bolton. Those are his early thoughts including his thoughts on what he will be looking for in the NVIDIA numbers due after the close today. We'll be back with Kim after this. He will begin taking your questions. He is president and portfolio manager at Black Swan Dexteritas. Get a question in. Kim will begin taking your questions right after this. (Song in French) ( ) ( ) Oh ( ) ( ) Get a head start with Samsung Galaxy S24 Ultra and Canada's fastest 5G+ network. We all strive for peace of mind, whether in life or our investments. But that's not easy with today's market complexity. For over two decades, Goodreid has helped Canadians from coast to coast to achieve their financial goals, through both good times and bad.

Working with our portfolio managers, you can navigate tomorrow's financial uncertainty with confidence. It's time. Take control of your wealth. I'm Gordon Reid. Invest with confidence, invest with peace of mind. To learn more,visit Goodreid.com. >> Okay, let's begin putting questions to Kim Bolton. Dave has written us an email message. His subject is Twilio, ticker symbol TWLO on the New York Stock exchange. Can I get Kim's look at Twilio? >> Thanks for the question, Dave. You know, this sort of falls into that software side of things. And if you look at like three or five-year chart it sort of climbs that mountain and sort of fell off and sort of flatlined. This is just a great example of where people are trying to get an idea of how they are actually monetizing the AI Component of their sort of platform as a service. So what they do is their cloud communications platform, so they sit in the cloud with the software and the clients' developers uses the APIs, the application programming interfaces and other software tools to design specific cases to develop communication mechanisms amongst, you know, inside the cloud but also with the customers outside. It's a great idea but it's just difficult to monetize. And so we got in and got out as it was climbing the mountain and it just sort of flatlines. Dave, it's a difficult one. I got to wait for a couple of more quarters of earnings just to see how they are monetizing the AI side. >> Okay. Thanks for that question, Dave. Let's go to Skip. Skip has also written us an email message. Ticker symbol is Zoom, that's ZM on the NASDAQ, and Roku, ticker symbol ROKU on the NASDAQ. "Could have Kim's current view of Zim and-- uh, of Zoom, rather, Zoom and Roku?" >> I was looking at this earlier today and I think the only thing that Zoom and Roku have in common is that they're just not performing, which is pretty surprising, because they are both-- well, Zoom is definitely profitable. You know, last, uh-- last quarter they made, what, $330 million. Roku actually-- um, yeah, they had gross profit of 388. They are profitable on the software side, but they just sort of flatlined. You can see it on the chart. I mean, there's just-- you're probably hear this more and you will see it certainly in the past picks and the top picks. You got to gravitate to the big guys, because those are the ones with the muscle, that have the cash to be able to spend on this, and they're actually turning a profit out of, uh-- out of a lot of their AI side. Now, Roku, you know, they have all the ingredients. They-- you know, they dominate the connected TV market with about 53% of the market share in North America. So they should do pretty well, but they are just having difficulty monetizing. >> Paul: where is the money in the connected TV market? Many of us, myself included, have a Roku TV at home. I know there are Roku TV channels that is provide content with advertising. Is that where the money comes from? >> Absolutely, out of the advertising, but they sort of have two sides of it. So there's the platform segment that includes the advertising, and also sort of promotional spending, and then there's the devices which is the actual Roku-branded TVs. And they also have smart home products and services, and audio products and so on. But that's where they make their money: on the licensing arrangements for that hardware, but also in the advertising. >> Okay. Thanks for that question on Zoom and Roku. Let's go to the phones for the first time in this show. John is calling from London. Hi, John, and thank you for your call. >> Caller: (On phone) Hi, Paul. Thanks very much. Kim Bolton, the titan of all things technology; perfect timing. >> We try. >> Caller:I've been trying to ahead to my position in Celestica, but it keeps going up and up and up. They have very innovative products, including lower electrically demanding switches, which is providing a lot of profit. Is now the time to add to Celestica? Thank you. >> well, good job getting in there. Um, is it time? No, I wouldn't say it's time to add to it, because right now it's trading--

yikes, almost 74. The average analyst out there has a 12-month price target of $69.50, so it's already travelled through there. So, what I would recommend, look for-- well, and you're probably gonna be in line with a lot of other people, but, you know, if you can pick it up a little more down around 70, and then down around 67, and then if you're lucky, down around 63.5. >> Paul: okay. Thanks for the question. Frida is in Chilliwack, BC. Hi, Frida. >> Caller: (On phone)Hi. I wondered what Kim would say about Shopify with the recent developments. Thank you. And the future down the way. Thank you. >> Thanks, Frida. Actually it's pretty topical today, Frida, because Goldman Sachs actually came out with a buy, and so it's given them a bit of a-- bit of an oomph. Currently trading right around that sort of-- oh, that's the Canadian version around 80. So, that's the-- >> Paul: would you rather a US chart? Is that-- >> Kim: Yeah, if you could. >> Let's get a US chart up, if we can, of Shopify. >> Kim: I think it's trading just, uh-- around $60 on the US. It's got a nice runway. It's on the US trading-- >> Paul: Here it comes. >> Kim: There it is. 59. And it's got a 12-month price target on the US side of 81.75. So, as everyone knows, they reported a couple of weeks ago. It was a bit of a disappoint-- not so much on the top and bottom line, but certainly on the-- on the guidance. And they saw some clouds on the horizon. Through the expanded partnerships, Shopify merchants have been able to manage and automate their global tax compli with that new company that they brought in, Avalara. And so, yeah, they reported back on May 5th. I think, Frida, if you can-- you can buy it definitely here, and I'd also add another third down around 56, and another third down at 53. >> Okay. Thanks, Frida, for your call. We'll be back with Kim Bolton after this; president and portfolio manager at Black Swan Dexteritas. He'll continue taking your questions on technology stocks. CRAVE, The most talked about... Sounds intense. ... most anticipated shows... You step out of line even once. ... All right here. Subscribe now atCRAVE.CA. (Audio montage) >> Male Announcer: When it comes to finance everyone thinks they're an expert-- our guests actually are. Monkey Talk with Kim Parlee, brought to you by TD Wealth. ( ) ( ) The INFINITI QX60 exemplifies modern luxury. With powerful SUV performance, three rows of comfort, and a sleek-yet-daring design. ( ) Lease a 2024 QX60 from 0.99% APR for up to 24 months. Visit INFINITI.ca. ( ) (upbeat music plays) ( ) ( ) ( ) Closed captioning of this BNN Bloomberg program is brought to you by Goodreid Investment Counsel. Invest with confidence. >> Let's keep the questions coming to Kim Bolton. Costa is in Montreal and he's up next. Hi, Costa. >> Caller:Hello, gentlemen. Thank you for taking my call. Great show. I watch you every day. >> Perfect. >> Caller:Mr. Bolton, my tech guru, Constellation Software. I would appreciate your views. She's had a double in the last few years. Is it possible that she'll double again in the next few years? Thank you so much. >> Ooh, Costa, in the next three years. So, what it's currently trading Canadian, just around 3,700. We have a-- yeah, 3,743. So, we have a 12-month price target on Constellation of 3,980. This is just the poster child

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