Speaker · Updated
Ted Mortonson: latest market views
Baird
Summary
Ted Mortonson is a Managing Director and Technology Strategist at Baird, a U.S. Naval Academy graduate and former naval aviator who has covered the tech sector for three decades, including senior sales roles at Raymond James, Pacific Crest Securities and RBC.
Chorus has 63 views from Ted Mortonson across 3 episodes on Bloomberg Surveillance and Excess Returns since October 14, 2026. Their latest calls: bullish on Alphabet, Anthropic, Arista Networks and Databricks; bearish on Apple.
Where they stand
Their latest bullish or bearish call on each company.
- AlphabetBullish ·
- AnthropicBullish ·
- AppleBearish ·
- Arista NetworksBullish ·
- DatabricksBullish ·
- Meta PlatformsBullish ·
- Micron TechnologyBullish ·
- MicrosoftBullish ·
- NVIDIABullish ·
- Seagate Technology HoldingsBullish ·
- Space Exploration TechnologiesBullish ·
- TeslaBullish ·
- Western DigitalBullish ·
- SalesforceBullish ·
- ServiceNowBullish ·
What they talk about most
The latest views
Newest first. Every quote is checked against the episode's transcript.
AI infrastructure & data centers
Midterm politics could derail hyperscaler data center timing and rollout, a major investor worry.
Investors are worried about the midterms because they are tied to data center timing and rollout. Street assumptions are about $800 billion of spend this year and $1.1 trillion next year. If politicians intervene against the hyperscalers, especially through regulation, it would be bad for the buildout. The midterms are front and center for investors.
“the midterm elections, and that's linked to data center timing and where it's rolled out and how it's rolled out. ... if the politicians get involved away from the cloud titans or the hyperscalers, it's not gonna be a good thing”at 1:52
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Iran's nuclear-facility phase is the feared risk; Trump unlikely to act before midterms, but worry follows.
He describes three phases of the Iran conflict: bombing supply chains, the Strait of Hormuz blockade, and a third phase targeting five nuclear facilities. He says the street is most worried about the third phase. He argues Trump is unlikely to act before the November midterms, so the risk builds after November 4. Brent near $115 and the conflict's global spillover affect AI rollout, Europe and the US.
“that's the phase that the street is very much worried about. And if you listen to President Trump, he's not gonna do anything before the midterms to influence the vote.”at 3:42
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Brent near $115 leaves Europe with a budget hole and energy dependence, hurting growth and bond rates.
He says about 35% of general tech companies' revenue exposure is European and the assumptions there are for 5-7% growth. Europe has a large hole in its budget and imports a lot of energy. With Brent at $115, that energy cost is not in their budget. He argues this is hitting European bond rates and economies, and that it also has effects in the US.
“They have a huge hole in their budget. They're very energy dependent. ... with Brent at 115, this is not in their budget.”at 4:46
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Europe is three or four years behind on AI and regulating instead of embracing the technology.
He says Europe is now three or four years behind the US on AI. Its response is to regulate without embracing the technology, which he calls insane. He cites a major UK data center cancelled because it could not get power, and says the EU is laced with bureaucracy and knows how to regulate rather than innovate. He frames this as a long-term problem for Europe.
“Europe and AI, they're now three or four years behind us, and they want to regulate by not even embracing the technology, which is just insane.”at 6:54
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Semiconductor index peaked up 87% as retail bought the top; institutions sold and avoided 35% downside.
He uses the semiconductor index as a benchmark of the cycle. It rose 87% to a peak while retail investors were all in and buying the top. His institutional clients sold on risk-reward and avoided about 35% downside. After the prior day's 6.3% drop in the index, he says institutions are not yet interested in getting back into secular names. He argues the group is still in the process of falling and should not be caught on the way down.
“the semiconductor index as perfect benchmark of what's happened. At the peak, we're up 87% on all semiconductors, and the retail investors were all in and buying at the top.”at 7:50
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Market sentiment, positioning & volatility
Retail buy-the-dip strategy could be the worst approach now; wait for charts to base first.
Retail investors are conditioned to buy dips, which he thinks could be the worst strategy going forward and could end in tears depending on the macro backdrop. Institutions were selling near the top, while retail bought in. He compares this to 2000, when about 80% of his tech list traded under $10 and capitulation was obvious. He doesn't expect capitulation this cycle but warns of real damage within days if macro risks go sideways. His advice is to wait until key charts base and the dead-man sideways pattern shows most selling has happened.
“I know all of the retail investors are so conditioned on buying on the dip. That could be the worst strategy going forward on buying the dip.”at 13:52
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
In a stagflation trade tech underperforms; cash, defense, healthcare and energy work better.
He says tech has been a screamer for about a decade, but a stagflation or hyperinflation regime would break that tactic. Tech does not work in stagflation. Cash, defense, healthcare and energy are the sectors that work. He warns of brutal sector rotation and says institutions are trained to watch for it while retail investors are not.
“But when you have a stagflation play, tech doesn't work. What works is, other sectors like cash or defense or healthcare or energy.”at 15:56
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
This AI cycle is far more powerful than 2000, which valued companies on eyeballs.
He sees this cycle as totally different from 2000. In 2000 companies were valued on eyeballs, the move was to internet 1.0, and it was a less powerful cycle. He argues the agentic or superintelligence cycle will affect every industry. He expects the infrastructure build to run through 2030, and says the cycle is about secular shifts, not just tech upgrades as in 2000. He points to operating-margin advantages for companies that embed AI.
“The most powerful I've seen as not only an engineer, but dealing with the institutional community. This is totally different from 2000. In 2000, we were valuing companies off of eyeballs.”at 16:50
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Workers 40 and older must evolve now with AI or risk losing their jobs.
He argues that the agentic or superintelligence cycle will affect every single industry. He gives advice to people 40 and older that they have to evolve now or they will put themselves out of a job. His support is the scale of the change and the view that industries that do not evolve put their operating margins at risk. No specific job numbers are given.
“people that are 40 years and older, my advice to everybody on this podcast would you have to evolve and you have to evolve now or you're gonna put yourself out of a job.”at 17:32
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
AI-driven growth and hyperscaler taxes are the way to reduce the US deficit.
He says AI is so disruptive that it is the only way for government to reduce a $40 trillion deficit. He expects unique taxes on hyperscalers and strong growth to help. He also cites the government's stake in Intel, which he says has returned three times the investment and goes into the Treasury coffers. He sees government picking early winners as a way to reduce the deficit, though he dislikes government picking winners.
“It's really the only way if you're in government to reduce a $40,000,000,000,000 deficit, and we're gonna see some very unique taxes against the hyperscalers over time.”at 19:31
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
AnthropicBullish
Anthropic's Claude is a competitive weapon for his tech team and will change how they invest.
His tech team has embraced Anthropic and Claude. He can put the whole tech vertical on his phone and walk into meetings with an unrivaled amount of information at his fingertips, which looks like savant-level preparation. He calls it a competitive weapon he has seen in real time and says it will change the way his team invests. He is a user, not an investor or executive.
“my tech team has totally embraced Anthropic and Claude... It's a competitive weapon... I think it's gonna change the way we invest.”at 20:02
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Enterprise AI adoption & AI software
Enterprise AI adoption is slower than infrastructure build; Fortune 500 embraces it from 2028 once security catches up.
About 70% of Global 2000 companies have not upgraded infrastructure, while 30% are embracing AI. Early adopters include JPMorgan and Goldman in finance and pharma firms using AI for drug discovery. Infrastructure takes a couple of years to build, and enterprise adoption always takes longer. Agentic security has not kept up, which is a near-term inhibitor. Once that is solved, he expects the Fortune 500 to embrace the technology from 2028 onward. He says the evaluation phase is past and implementation is required.
“our enterprise adoption cycle always takes longer... I think [2028] and beyond, the Fortune 500 is going to embrace this technology.”at 21:59
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Agentic AI security has not kept pace with adoption, a near-term inhibitor to enterprise rollout.
Agentic or agent AI is such new technology that security has not kept up with where the market is going. He calls that a near-term inhibitor to adoption. He expects security to be a big part of the cycle and a driver of M&A, with small security point solutions becoming parts of larger companies with free cash flow.
“Security is going to be a big part of it... the security has not kept up with where the market's going. That's a near term inhibitor.”at 22:14
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Shutting down FTC monopoly enforcement gives hyperscalers carte blanche to roll out AI.
He says the Trump administration is letting the FTC and anyone regulating monopolies be effectively shut down. That gives the tech companies, which he calls the hyperscalers, carte blanche to roll out AI because it is so disruptive. He argues the only real competition is China, so economic and defense considerations should drive the discussion.
“The Federal Trade Commission or anybody that regulates a monopoly is basically being shut down... giving them carte blanche to roll out this technology because it's so disruptive.”at 24:02
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
NVIDIABullish
Nvidia is among the free-cash-flow AI winners that will benefit most from the buildout.
He says the real beneficiaries of the cycle are companies with free cash flow and scale. Nvidia is named alongside Microsoft and Micron as cash generators that can keep funding the buildout. He sees these large-cap names as the clear winners, because the cycle takes an immense amount of free cash flow.
“The real beneficiaries are the companies with free cash flow. The companies like Microsoft or a Nvidia or, you know, even a Micron...”at 24:32
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Micron TechnologyBullish
Micron is a free-cash-flow AI winner in the memory layer of the buildout.
He lists Micron among companies with scale and free cash flow that are the clear winners of the cycle. He also names memory as one of the second-tier next-generation technologies with a secular role. He gives a per-quarter cash flow figure that is hard to read in the transcript, so the magnitude is uncertain. The argument is that Micron's cash generation lets it keep funding AI capacity.
“The real beneficiaries are the companies with free cash flow. The companies like Microsoft or a Nvidia or, you know, even a Micron...”at 24:32
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
MicrosoftBullish
Microsoft is a real AI beneficiary, generating strong free cash flow while still spending heavily on capex.
He says the real beneficiaries of the cycle are companies with free cash flow and scale, which can keep spending. Microsoft generates about $19 billion of cash flow a quarter and is still spending on capex. He says these scale players are the clear winners and expects them to become worldwide monopolies.
“The real beneficiaries are the companies with free cash flow. The companies like Microsoft... Microsoft's cash flowing 19,000,000,000 a quarter, and they're still spending on capex.”at 24:32
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
AI infrastructure & data centers
US hyperscalers like Amazon, Meta, Microsoft and Google will become worldwide monopolies.
He says these were US monopolies and will become worldwide monopolies as the cycle plays out. He names Amazon, Meta, Microsoft and Google as examples. Their scale and free cash flow allow them to keep spending while smaller players are left with table scraps. He describes the race for the next winners as a race for one or two more.
“And these were US monopolies. Now they're gonna be worldwide monopolies. So think of Amazon. Think of Meta. Think of Microsoft. Think of Google.”at 25:02
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Space Exploration TechnologiesBullish
SpaceX, after integrating Tesla, will become a fifth hyperscaler monopoly.
He says SpaceX, after it integrates Tesla, will be the fifth hyperscaler and go on to be a monopoly. He frames it as one of the race for the next one or two winners, with the other companies left with table scraps. He gives no specific figures for the claim, so the support is thin.
“like SpaceX after they integrate Tesla. They're gonna be the fifth, I would say, hyperscaler that is going to be a monopoly”at 25:16
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
AI infrastructure & data centers
Data center networking is moving from copper to optical, favoring a few firms with hard-to-replicate capacity.
He says data centers are moving off copper infrastructure into optical, which is a totally different way of engineering. Only four companies play there, and they have manufacturing capacity that is extremely difficult to replicate. He argues those names have unbelievable pricing leverage and can charge any price for their product, and that they benefit massively from free cash flow.
“We're moving off copper infrastructure... into optical... There's four companies that play there, companies with manufacturing capacity that is extremely difficult to replicate.”at 26:13
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Arista NetworksBullish
Arista, with Cisco, holds a networking duopoly and is a secular AI winner.
He says that in networking there is a duopoly of Arista Networks and Cisco. He includes these names among the secular winners he has picked out across about 20 tech subsectors. His reasoning is structural: a duopoly in a secular growth area is a durable position, and the names benefit from the buildout. He gives no specific numbers for Arista.
“in the networking area, we have a duopoly. We have Arista Networks and Cisco.”at 27:03
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Small-cap point-solution tech firms lack free cash flow and will be absorbed in a large M&A cycle.
He is most worried about small-cap tech names. They lack free cash flow, sales and marketing, and engineers. He expects a pretty massive M&A cycle as point-solution companies, especially in security, become parts of bigger companies with free cash flow. He thinks application software will see a lot of M&A in the next couple of years.
“Where I have the biggest worry is more on the small cap names. They don't have the free cash flow... I think you're gonna see a pretty massive m and a cycle on taking really point solutions on the small cap side.”at 27:32
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Politicians lack feel for tech; regulating AI will cause many mistakes, so let industry self-police.
He is not a fan of politicians and says they do not have a good feel for technology or the pace of change in superintelligence. If they regulate AI there will be many mistakes. He argues the White House has put the onus on tech companies to self-police, and that the companies must show how the technology benefits everyone, for example through drug discovery and math breakthroughs like OpenAI's. He sees the risk of politicians getting involved as the main threat to the cycle.
“I don't think they understand the pace of change and superintelligence. If they get involved on regulating this, boy, are we gonna have a lot of mistakes.”at 28:33
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
AI infrastructure & data centers
Data center financing windows must stay open, with one to two years of capex drain and negative free cash flow ahead.
Two funding windows must stay open: equity, where Anthropic and Meta are tapping markets, and debt, which needs to be structured across private equity, Apollo, BlackRock, Blackstone and money-center banks. The government could also backstop funding, as DARPA-driven projects have been. Return on invested capital will not show up until enterprise adoption, so he expects another year or two of capex drain and negative free cash flow before the infrastructure is built.
“The debt window also has to stay open... we've got another year to two years of CapEx drain and negative free cash flow.”at 30:57
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
AI infrastructure & data centers
Compute demand far exceeds supply; leading suppliers fill only 70% of contracted demand, creating pricing leverage.
He says demand for compute is insatiable and nowhere near supply. Most of the winners he tracks can supply only 70% of contracted demand, with the other 30% going into backlog. Once the infrastructure is built, he expects huge pricing leverage on compute. That is the reason he thinks suppliers will earn strong returns on their capital.
“the demand for compute is insatiable. It's not even close to supply. ... can only supply 70% of contracted demand. 30% is going into backlog.”at 31:26
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
AI leaders are messaging poorly; 90% of the public doesn't understand tech and needs a defined return.
He says about 90% of the population doesn't understand technology, and that activists and parts of the party system are driving fear that is not constructive and not true. He says AI leaders like Jensen Huang, Sam Altman and Dario Amodei have to hone their message. He thinks the VCs who own these companies must empower the public with a defined return, so the 90% can benefit from superintelligence.
“Generally, 90% of the population really doesn't understand technology... Sam Altman from OpenAI has to hone his message. Dario from Anthropic has done a horrible job.”at 34:14
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
DatabricksBullish
Databricks is a fast-growing AI software company whose eventual IPO will be in high demand.
He calls Databricks a private company that is so disruptive and growing so quickly. He says it is part of the next superintelligence software stack. He expects it to be one of the very large IPOs that will be in high demand. The support is mostly its growth and strategic position, with no specific financial figures.
“names like Databricks is a private company that is so disruptive and growing so quickly and is part of the next superintelligence software stack... those are gonna be very large IPOs that are gonna be in high demand.”at 36:07
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
If many AI IPOs hit within a quarter or two, funds will have to sell holdings to make room.
Portfolio managers keep cash below 4%, so they have little room. If 20 large IPOs, including Anthropic and OpenAI, come together within a quarter or two, managers will be forced to sell something they love to fund them. He notes five major IPOs have been postponed, including Aura and Freemiss. He says the market will get through it, but capital is limited, as it was in 2000.
“So the only problem is if they all come at the same time or in the same time frame, let's say in a quarter or two, they're generally gonna have to sell something they love to make room for some of these next generation companies.”at 36:41
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
Large AI-company offerings will concentrate in a few big funds and strain capital; smaller funds get scraps.
Ted argues that the large private tech companies heading to public markets have been private for almost a decade with huge funding rounds, so when the IPO window opens they will absorb a meaningful amount of capital (there is a limitation to how much capital these companies have). Portfolio managers will focus on scale, free cash flow and secular advantage. They will not bail out VCs or private equity, so offerings will be concentrated, with allocations going to 20 to 30 funds. Large technology funds with expertise will be over-allocated, while smaller funds get scraps.
“you're gonna see all of these offerings, at least in the next phase when the window definitely opens up wide, is these are gonna be very concentrated with allocations probably to 20, 30 funds, and the rest are gonna get scraps.”at 39:03
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
AI infrastructure & data centers
Circular, off-balance-sheet financing of AI buildout is a problem resembling Enron and needs better disclosure.
Ted says the circular financing being used to fund the AI buildout is a problem that everyone he talks to shares. Special purpose vehicles take capex and redirect it to another entity, moving it off balance sheet. Bankers structure this smartly, but it is complex and hard to follow without reading filings. He notes that it resembles Enron. Chip companies like Nvidia, AMD and Broadcom funding the industry rather than sticking to chip design draws criticism. Because data center growth exceeds 100%, financing the buildout is hard. He calls for a better funding strategy and more open disclosure over the next two years so investors don't have to dig for contingent liabilities.
“It's a problem. It's a problem with everybody I talk to. And what's happening right now... you've got these special purpose vehicles that are taking CapEx and they redirect it to another entity so that they actually move it... to an off balance entity.”at 40:16
Excess Returns: Baird's Tech Strategist Says This Isn't 2000. So Why Is He Warning Against Buying the Dip? ·
33 older views from Ted Mortonson are on the episode pages, and all of them are a question away in your AI with Chorus.
Shows
- Bloomberg Surveillance · 2 episodes
- Excess Returns · 1 episode
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