(Bloomberg) -- Neuberger Berman Group’s Steve Eisman expects the outsized strength in US megacap technology shares will “last for years,” as artificial intelligence becomes more accessible to consumers via electronic devices.
People will want new AI apps on cellphones and personal computers, spurring the “biggest refresh cycle in history” as they purchase upgraded gadgets, he told Bloomberg Television in an interview on Thursday.
“You have to own the big, large-cap tech stocks,” Eisman said. That demand is poised to keep benefiting companies like Apple Inc., Nvidia Corp., Microsoft Corp., and Oracle Corp., said Eisman, a senior portfolio manager at Neuberger Berman. While Nvidia may be considered expensive at its high valuation, that really isn’t a concern since earnings have tripled, Eisman said.
Eisman’s words attract notice on Wall Street because he made a name for himself with his “Big Short” bet against subprime mortgages ahead of the global financial crisis. He has said he owns “a lot” of stock in Nvidia — an equity story that he sees running for years.
He also offered a political prediction in a week framed by the crisis gripping President Joe Biden’s campaign and Donald Trump’s march to the Republican nomination: Trump will win in November, whether or not Biden stays on the Democratic ticket.
Notwithstanding his famed mortgage bet, Eisman said that he never shorts for clients but on rare occasions does so personally. There is a slowdown underway in the US economy, he said, but the overall outlook is fine — and there is no fundamental case to be massively short stocks.
“I predicted the end of the world once — it was pretty awful for everybody,” he said. “I have no interest in predicting it again and there’s no data to show that it’s going to happen.”
On Tesla Inc., Eisman said there are times to short the EV maker when fundamentals are deteriorating. But, he said, that’s an impossible task with the market focused on the company’s robotaxi and AI ambitions instead of the basics of investing.
--With assistance from Katie Greifeld, Sonali Basak and Matthew Miller.
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