Has The NASDAQ Topped? Is NVIDIA Still A Buy? Analyst Anwers | John Belton
Speakers
John Bolton
— Former US National Security Advisor / Ambassador
Summary
John Belton, portfolio manager at Gabelli Funds, discusses whether the Nasdaq has topped, DeepSeek's impact on US tech, Nvidia, Chinese AI competition, tech earnings, Stargate, Microsoft, Google, asset allocation, and Tesla. He remains constructive on US AI leadership, AI infrastructure, and mega-cap tech, while flagging near-term valuation, margin, and Tesla auto risks.
- US equities entered 2025 with high valuations; Belton is long-term constructive but sees limited near-term multiple expansion.
- DeepSeek is viewed as evolutionary, with cheaper compute likely expanding AI usage and spending.
- He favors Nvidia, AI infrastructure, public cloud AI demand, and US tech over China tech.
- Stargate is a positive signal for AI capex, with Oracle, Nvidia, and Broadcom named as beneficiaries.
- Microsoft is a blue-chip holding despite near-term Azure execution issues; Google's margin discipline is the key watch item.
- ServiceNow is highlighted in agentic software; Tesla offers long-term optionality but near-term auto risks.
- Mega-cap tech valuations are premium but supported by strong fundamentals, not a dot-com bubble.
Ideas
US still leads China in AI
DeepSeek and Alibaba show China's AI development is more robust than appreciated and are a wake-up call, but DeepSeek's models do not match frontier Western models, and China remains behind in chip design/manufacturing and access to advanced compute due to export restrictions. The US/West remain the generative-AI leaders and are far ahead in real-economy AI adoption, so investors should not shift capital east.
US still leads China in AI
DeepSeek and Alibaba show China's AI development is more robust than appreciated and are a wake-up call, but DeepSeek's models do not match frontier Western models, and China remains behind in chip design/manufacturing and access to advanced compute due to export restrictions. The US/West remain the generative-AI leaders and are far ahead in real-economy AI adoption, so investors should not shift capital east.
Long-term constructive, near-term multiple expansion hard
Entering 2025 after back-to-back 20%+ total returns and top-decile index valuations, US equities were priced for perfection amid policy uncertainty. Near-term multiple expansion is difficult, but the economy is resilient, AI has long-term promise, and the new administration is business-friendly, so long-term stocks remain a good place even though timing is hard.
Cheaper compute expands AI infrastructure demand
DeepSeek's efficiency gains are evolutionary rather than revolutionary; historically cheaper compute expands AI usage, spending, and investment rather than reducing it. This benefits AI adopters and pick-and-shovel AI infrastructure, including chip companies and data center industrials, while the buildout shifts from massive training data centers toward a new inference data-center/infrastructure cycle.
No real competition; still a buy
NVIDIA remains the dominant full-stack generative compute provider with CUDA, networking, and modular computing, and he sees no real competitive alternative. Valuation is still reasonable, the hyperscale AI investment cycle is alive and continuing through this year into next, and while semis are cyclical, earnings are not near a peak; he is comfortable holding over the medium to long term. Stargate also gives NVIDIA another large hyperscale customer.
AI boosts Meta and Google ads
Mega-cap internet advertising—Meta and Google specifically—is benefiting from robust consumer spending and AI-powered content-recommendation and ad-targeting systems. AI is driving engagement and ad pricing, producing strong revenue growth at these companies.
Cloud AI demand exceeds supply
Every major US public cloud infrastructure provider—Amazon AWS, Microsoft Azure, and Google Cloud—is still supply-constrained on AI services, lacking enough data-center and GPU capacity to meet demand, while reporting extraordinary AI revenue growth. He views this as a bullish signal for AI services.
Cloud AI demand exceeds supply
Microsoft's December quarter was mixed: Azure missed on the non-AI/smaller-customer side after a go-to-market reshuffle, delaying the expected Azure acceleration, but over a one-to-three-year horizon Azure should reaccelerate, the cloud migration story is intact, AI infrastructure is well positioned given supply constraints, and Microsoft can monetize AI applications through GitHub Copilot and eventually Office Copilot. He still sees Microsoft as a blue-chip cornerstone tech holding.
Stargate gives Oracle cloud credibility
Stargate is a clear positive for Oracle because it gives Oracle a seat at the table with the largest cloud infrastructure platforms, and there is already an operating Texas facility run by Oracle Cloud that is described as the first Stargate training facility for OpenAI models.
Stargate boosts Broadcom networking demand
Broadcom is an obvious Stargate beneficiary and appears likely to provide some of the networking equipment for the AI compute clusters; he also named Broadcom among the pick-and-shovel AI arms dealers that should benefit as compute gets cheaper and usage expands.
ServiceNow leads agentic AI software
ServiceNow is the clear early leader in agentic software, which automates mundane or routine workflows and is one of the two big AI use cases that could prove AI investments have real paybacks and fuel a further investment cycle.
Long-term Tesla options, near-term auto risks
Tesla has ample long-term optionality—autonomous driving/FSD reaching human-safety parity, licensing autonomy and batteries to third-party OEMs, energy storage growing over 50%, robotaxis, and Optimus—but near-term core auto sales/deliveries are weak, Musk-related demand concerns and the potential loss of the $7,500 EV tax credit create risks. It is a tough stock without a clear fundamental framework and is easier to advocate over 10 years than 10 weeks.
Up Next
This The David Lin Report video, published February 24, 2025, features John Bolton discussing XLK, KWEB, SPY, AIQ, SMH, Data center industrials, NVDA, META, AMZN, GOOG, MSFT, ORCL, AVGO, NOW, TSLA. 12 trade ideas extracted by AI with direction and confidence scoring.
Speakers: John Bolton · Tickers: XLK, KWEB, SPY, AIQ, SMH, Data center industrials, NVDA, META, AMZN, GOOG, MSFT, ORCL, AVGO, NOW, TSLA