D.A. Davidson tech analyst discusses megacap stocks making headlines this week

After a storm of technology news and earnings this week, D.A. Davidson's Gil Luria suggests ways to play key names in the sector. The firm's head of technology research joined CNBC's "Three-Stock Lunch" segment on Thursday to break down his views on Microsoft , Apple and Nvidia . Microsoft and Apple are reporting results this week, and Nvidia suffered its worst day in almost five years and a history-making loss in market value on Monday, unrelated to earnings results. Apple Apple is the only one of the three that Luria rates buy. The iPhone maker reports earnings for its first fiscal quarter of 2025 after Thursday's closing bell, with analysts closely watching sales of its iconic phone. "We're in the best place possible, which is long term expectations are good, because Apple will be the leader in providing consumer AI," Luria said. But, "short term expectations are low. People don't expect iPhone sales to grow very much." Apple shares were little changed Thursday and have slipped more than 4% since 2025 began. The majority of analysts polled by LSEG have a buy rating and an average price target that suggests shares might only rise about 2% over the coming year. Microsoft Microsoft shares pulled back about 6% on Thursday, one day after giving weak guidance for future revenue. Luria is in the minority on Wall Street, keeping a neutral rating while most other analysts rate the Xbox maker a buy. "Microsoft is investing more and more and getting less and less growth," Luria said. "The decelerating Azure business is a concern, especially since they're indicating some of it is company-specific issues. They've invested so much in AI, they've taken their eye off the ball in terms of their other businesses that are now decelerating, and yet they're still increasing their spend." Shares are now down more than 1% for 2025. Following this decline, Wall Street now expects shares to jump more than 21% over the next year based on the consensus price target. Nvidia Luria also has a neutral rating on Nvidia. While the chipmaker isn't expected to report earnings until late February, the Jensen Huang-led company has been the focus of Wall Street after its explosive two-year runup and the AI challenge from China's DeepSeek lab. "At some point, Microsoft is going to stop wanting to overspend on data centers, and so that's going to have to come out of Nvidia's pocket," Luria said. And if big customers start to moderate spending, "it's going to be hard for Nvidia to keep anything close to the current growth rate." Nvidia shares cratered 17% on Monday as DeepSeek battered global tech stocks, marking its worst day since 2020. While the stock made up some ground later in the week, shares are on track to end the week down nearly 14%, pushing its year-to-date performance into the red, down more than 8%. Unlike Luria, the majority of analysts have a buy rating on the stock. The typical price target implies shares can rise around 9% over the next 12 months.