1 00:00:00,080 --> 00:00:01,880 Welcome back everyone. Today on the Joseph Carlson 2 00:00:01,880 --> 00:00:05,000 Show, one of the largest, most monopolistic companies that 3 00:00:05,000 --> 00:00:08,360 makes incredibly complex devices is ASML. 4 00:00:08,560 --> 00:00:11,040 We've talked about this company frequently and they just 5 00:00:11,040 --> 00:00:14,920 reported earnings last night. Now we have all the data and 6 00:00:14,920 --> 00:00:19,600 right now the stock is up 3% on the day back above $1000 per 7 00:00:19,600 --> 00:00:22,040 share and management has changed their tone. 8 00:00:22,040 --> 00:00:24,600 They sound a little bit more optimistic than they did last 9 00:00:24,600 --> 00:00:26,960 quarter. We'll be going over a breakdown 10 00:00:26,960 --> 00:00:29,280 the entire earnings. I'll be dissecting it and 11 00:00:29,280 --> 00:00:30,800 looking at what we can gain from it. 12 00:00:31,080 --> 00:00:33,040 We also have my position in ASML. 13 00:00:33,040 --> 00:00:37,880 I'm invested with the company $87,000, position, 25,000 of 14 00:00:37,880 --> 00:00:40,680 that beam gains and I'll let you know what I'm doing with my 15 00:00:40,680 --> 00:00:42,160 holding. We also have a lot of other news 16 00:00:42,160 --> 00:00:44,080 to get to. Brad Gerstner, the tech 17 00:00:44,080 --> 00:00:46,520 investor, went on to CNBC in a long form interview. 18 00:00:46,600 --> 00:00:49,160 He was asked about many subjects, including ones like do 19 00:00:49,160 --> 00:00:50,560 we think we're in a bubble today? 20 00:00:50,760 --> 00:00:54,040 What are the best companies to invest in where AI will take us 21 00:00:54,040 --> 00:00:57,680 over the next five years and why he remains so bullish on NVIDIA? 22 00:00:57,920 --> 00:00:59,240 So we'll be looking at that interview. 23 00:00:59,680 --> 00:01:02,080 We also have Mark Mahaney. He is one of my favorite 24 00:01:02,080 --> 00:01:05,960 analysts and he goes over one subject, which is agentic 25 00:01:05,960 --> 00:01:08,520 commerce. Agentic commerce is what we see 26 00:01:08,520 --> 00:01:11,760 Open AI implementing with companies like Uber, Booking 27 00:01:11,760 --> 00:01:14,960 Holdings, Expedia and so on. We'll be looking at how this can 28 00:01:14,960 --> 00:01:17,040 change the dynamics of the market overtime. 29 00:01:17,520 --> 00:01:20,520 We also have news that Waymo is yet expanding once again. 30 00:01:20,520 --> 00:01:23,560 We've seen this before. It seems like every week Waymo 31 00:01:23,560 --> 00:01:26,520 is expanding to a new city, but in this case, it's London. 32 00:01:26,560 --> 00:01:28,360 And then finally, we have the next in line. 33 00:01:28,360 --> 00:01:32,320 Salesforce reported a deal with Open AI, typically looked at as 34 00:01:32,320 --> 00:01:34,160 a good thing. Every other time this has been 35 00:01:34,160 --> 00:01:37,720 reported, the stocks go up, but in the case of Salesforce, it 36 00:01:37,720 --> 00:01:39,760 went down. What is wrong with Salesforce? 37 00:01:39,760 --> 00:01:41,720 Why does everyone hate this company so much? 38 00:01:41,920 --> 00:01:43,400 We'll be taking a look at it as well. 39 00:01:43,400 --> 00:01:45,840 So we have a ton to get to in this episode, a lot to go over. 40 00:01:45,840 --> 00:01:48,160 And before we jump in, just a quick mention if you haven't 41 00:01:48,160 --> 00:01:52,160 tried it out, qualtrim.com is the website that I created and 42 00:01:52,160 --> 00:01:54,480 that I use. It's built specifically for my 43 00:01:54,480 --> 00:01:57,680 audience, for investors that like diving into the financials, 44 00:01:57,920 --> 00:02:00,320 looking at KPIs, reading earnings reports. 45 00:02:00,320 --> 00:02:03,960 It's infused with intelligence. It can summarize information, it 46 00:02:03,960 --> 00:02:06,120 can give you news updates every single day. 47 00:02:06,480 --> 00:02:09,080 It has things like discounted cash flow calculators that are 48 00:02:09,080 --> 00:02:12,160 very simple to use, earnings calendars, and so on and so 49 00:02:12,160 --> 00:02:13,600 forth. If you haven't tried it out, 50 00:02:13,600 --> 00:02:17,040 it's $10 per month, $10 per month, and that's not like an 51 00:02:17,040 --> 00:02:19,680 introductory period. That is just the price. 52 00:02:19,800 --> 00:02:22,520 It can't be beat. There is no other service that's 53 00:02:22,520 --> 00:02:24,720 as good and as cheap. So try it out. 54 00:02:24,720 --> 00:02:27,960 I know you'll love it. We're nearing 11,000 paid users 55 00:02:27,960 --> 00:02:30,640 and of course, for some reason you don't like it, you get a 56 00:02:30,640 --> 00:02:33,880 free refund, no questions asked. Now we first kicked things off 57 00:02:33,880 --> 00:02:36,200 by looking at ASML. It's a company that I own that 58 00:02:36,200 --> 00:02:38,560 just reported earnings. Now, before we look at the 59 00:02:38,560 --> 00:02:41,400 earnings report, I just want to go for my stake in this company. 60 00:02:41,760 --> 00:02:44,400 I think it's important to show some transparency here of my 61 00:02:44,400 --> 00:02:47,200 financial interest, how I'm invested in this company, and 62 00:02:47,200 --> 00:02:50,600 I'm a proud shareholder of ASML. It's a company that took some 63 00:02:50,600 --> 00:02:52,960 time to learn about in most cases. 64 00:02:52,960 --> 00:02:55,680 I own software companies, the Google's and Microsoft's. 65 00:02:56,160 --> 00:02:58,200 These companies that I'm I'm well aware of their products. 66 00:02:58,200 --> 00:03:01,600 I know how they work, and ASML is a company that I had to learn 67 00:03:01,600 --> 00:03:03,920 a lot about to become comfortable with investing in 68 00:03:03,920 --> 00:03:06,720 this company. I read the book Focus. 69 00:03:06,720 --> 00:03:09,360 It's one that goes over the history of the company and I 70 00:03:09,360 --> 00:03:13,040 learned about the incredible technological supremacy the lead 71 00:03:13,040 --> 00:03:15,880 in technology this company has. If you really want to study 72 00:03:15,880 --> 00:03:20,240 ASML, the best thing to do is to study how complex their devices 73 00:03:20,240 --> 00:03:21,880 are. It's like nothing you've ever 74 00:03:21,880 --> 00:03:24,640 seen before. More complex than rocket ships, 75 00:03:24,640 --> 00:03:28,160 more complex than satellite, these are possibly the most 76 00:03:28,160 --> 00:03:31,520 complex devices on planet Earth. They're impossible for other 77 00:03:31,520 --> 00:03:33,360 people to replicate what they're doing. 78 00:03:33,680 --> 00:03:36,720 And even though state funded nations like China are trying to 79 00:03:36,720 --> 00:03:38,880 do just that, they're far behind. 80 00:03:39,160 --> 00:03:41,680 And every time they seemingly catch up a little bit, ASML 81 00:03:41,680 --> 00:03:44,160 moves much further ahead. And that's not the only 82 00:03:44,160 --> 00:03:48,240 monopolistic part of ASML. The other part of its monopoly 83 00:03:48,240 --> 00:03:51,200 is its distribution. Not only is it unique in the 84 00:03:51,200 --> 00:03:54,240 technology that it makes, but it's also unique and all the 85 00:03:54,240 --> 00:03:56,960 agreements it has with all the supply buyers, all the people 86 00:03:56,960 --> 00:03:59,800 that that supply all the different parts for their 87 00:03:59,800 --> 00:04:01,800 technology. Many of these agreements are 88 00:04:01,800 --> 00:04:05,520 exclusive to ASML. Then you have an additional 89 00:04:05,520 --> 00:04:07,320 layer of remote through distribution. 90 00:04:07,640 --> 00:04:10,480 The people that ASML sell to their long term partners, 91 00:04:10,480 --> 00:04:12,440 they've worked well with them for a long period of time. 92 00:04:12,840 --> 00:04:16,640 In order to disrupt this company, to truly disrupt it, it 93 00:04:16,640 --> 00:04:21,160 would take a monumental effort by someone else, and even then 94 00:04:21,160 --> 00:04:25,280 it would likely be unsuccessful. The amount of capital and time 95 00:04:25,280 --> 00:04:30,040 and energy wasted and trying to defeat ASML is incredible. 96 00:04:30,480 --> 00:04:33,520 So I've invested in this company on the basis that it's a wide 97 00:04:33,520 --> 00:04:36,760 Moat monopolistic company that also has great economics. 98 00:04:36,960 --> 00:04:39,720 It's a company that produces excess cash flow, that does 99 00:04:39,720 --> 00:04:42,440 consistent buybacks. It has a management team that's 100 00:04:42,440 --> 00:04:45,800 very long term focused. They have very predictable long 101 00:04:45,800 --> 00:04:48,040 term growth. So right now this is a new 102 00:04:48,040 --> 00:04:52,000 position in the portfolio. It's less than two years old and 103 00:04:52,000 --> 00:04:56,120 it's an $87,000 position with $24,000 in gains. 104 00:04:56,120 --> 00:04:58,920 This has been an exceptionally good performing position on a 105 00:04:58,920 --> 00:05:01,640 relatively low risk holding. Now, soon after I bought into 106 00:05:01,640 --> 00:05:05,000 ASML and made a relatively large position, we had an earnings 107 00:05:05,000 --> 00:05:08,160 report back in July, just their most recent earnings report 108 00:05:08,160 --> 00:05:11,240 before this one, and this was the warnings that we got. 109 00:05:11,240 --> 00:05:13,200 These were the headlines after that report. 110 00:05:13,520 --> 00:05:17,200 ASML stock tumbles after growth warnings in earnings report. 111 00:05:17,480 --> 00:05:20,840 Tariffs are biting. It looked like a management was 112 00:05:20,840 --> 00:05:23,960 really sounding the alarm saying that things were going really 113 00:05:23,960 --> 00:05:26,200 poorly. At the time of this earnings 114 00:05:26,200 --> 00:05:30,240 report, ASML went down to around $730 per share. 115 00:05:30,760 --> 00:05:32,320 My holding was nearly in the red. 116 00:05:32,680 --> 00:05:36,200 So this was a kind of sad report to see, or at least a 117 00:05:36,200 --> 00:05:39,040 disappointing report to see. And I got a lot of questions 118 00:05:39,040 --> 00:05:41,600 about this company. The video that I made at that 119 00:05:41,600 --> 00:05:44,120 time was I thought this was ridiculous. 120 00:05:44,120 --> 00:05:47,360 I thought the ASML should not be trading down because of a few 121 00:05:47,360 --> 00:05:50,280 comments from management. ASML said that they were fully 122 00:05:50,280 --> 00:05:55,200 prepared to grow in 2026, but they couldn't confirm it now. 123 00:05:55,200 --> 00:05:59,000 Since they couldn't confirm growth because of reasons out of 124 00:05:59,000 --> 00:06:02,280 their control because of tariffs and other restrictions, they 125 00:06:02,280 --> 00:06:04,800 couldn't officially confirm growth just because of that. 126 00:06:04,800 --> 00:06:08,600 The stock sold down 10% and to me that was a time to buy. 127 00:06:08,960 --> 00:06:11,440 So I added to the position after this sell off. 128 00:06:11,520 --> 00:06:13,640 And that brings us to the most recent earnings report that 129 00:06:13,640 --> 00:06:17,360 happened just yesterday. ASML went from 700 and around 130 00:06:17,360 --> 00:06:25,160 $30 per share to now $1010.00 per share, a 38% increase within 131 00:06:25,160 --> 00:06:27,200 a single quarter, a three month period. 132 00:06:27,280 --> 00:06:30,280 So huge expansion and share price in a short amount of time. 133 00:06:30,720 --> 00:06:34,560 Now, in most cases, this would make investors concerned that 134 00:06:34,560 --> 00:06:37,760 the stock price has shot up in only a single quarter, but I am 135 00:06:37,760 --> 00:06:40,400 not concerned about this and I think it's warranted in this 136 00:06:40,400 --> 00:06:41,800 case. Let's take a look at some of the 137 00:06:41,800 --> 00:06:44,000 fundamental developments happening with this company. 138 00:06:44,520 --> 00:06:47,160 First of all, we got a list of management team and appointee 139 00:06:47,160 --> 00:06:49,560 changes. They have a deep bench of of 140 00:06:49,560 --> 00:06:52,240 talent at SML, so they have a lot of people to pick through 141 00:06:52,560 --> 00:06:54,760 and they're now rearranging their management to some degree. 142 00:06:55,120 --> 00:06:58,280 We also have their Q32025 financial results. 143 00:06:58,280 --> 00:07:02,440 This is the most recent quarter they say Q3 net sales were 7.5 144 00:07:02,440 --> 00:07:06,560 billion within guidance. So the net sales was the 145 00:07:06,560 --> 00:07:08,600 disappointing part, the overall revenue. 146 00:07:08,960 --> 00:07:12,720 But like I highlighted in the most previous episode, it is hit 147 00:07:12,720 --> 00:07:15,120 or miss whether or not ASML makes revenue. 148 00:07:15,440 --> 00:07:17,680 It's like a coin flip and it doesn't matter. 149 00:07:17,760 --> 00:07:20,880 They get contracts for revenue and whether or not they 150 00:07:20,880 --> 00:07:23,600 collected this quarter and next quarter doesn't make much of a 151 00:07:23,600 --> 00:07:25,680 difference in the long term. But we get to the part here that 152 00:07:25,680 --> 00:07:28,720 I really have a focus on. I think this is just a really 153 00:07:28,720 --> 00:07:31,280 important part of ASML and an underrated part of it. 154 00:07:31,560 --> 00:07:35,080 With every business, there's like this revenue by segment and 155 00:07:35,080 --> 00:07:38,720 in many cases, there's a sleeper segment, a part that's just far 156 00:07:38,720 --> 00:07:40,880 more important than all the other segments. 157 00:07:41,080 --> 00:07:42,880 And if you're not paying attention, you might miss it. 158 00:07:42,880 --> 00:07:45,440 That segment for Apple is the services. 159 00:07:45,440 --> 00:07:47,480 That's the part that they're really focused on growing. 160 00:07:47,480 --> 00:07:49,480 That segment for Google is Google Cloud. 161 00:07:49,480 --> 00:07:53,760 That segment for Amazon is AWS and their services for ASML. 162 00:07:53,760 --> 00:07:57,120 That segment I believe is installed base management, 163 00:07:57,200 --> 00:08:01,400 sales, install based management, what they do in services after 164 00:08:01,400 --> 00:08:03,720 they install a machine. When you install a machine in 165 00:08:03,720 --> 00:08:06,120 this complex it requires constant maintenance. 166 00:08:06,440 --> 00:08:09,240 To have 100% up time or be running all the time is 167 00:08:09,240 --> 00:08:12,080 incredibly important. If these machines are down for a 168 00:08:12,080 --> 00:08:16,280 few minutes, if not an hour, the company TSM will lose millions 169 00:08:16,280 --> 00:08:18,800 of dollars in the process because everything comes to a 170 00:08:18,800 --> 00:08:21,800 grinding halt if the EUV machine stops. 171 00:08:22,040 --> 00:08:24,400 So install based management is critical. 172 00:08:24,560 --> 00:08:27,520 It is mission critical to the companies that are operating 173 00:08:27,520 --> 00:08:30,600 ASML's machines. ASML's machines are mission 174 00:08:30,600 --> 00:08:33,159 critical as well. When we look at ASML and we 175 00:08:33,159 --> 00:08:35,960 breakdown the install based management, I just want to show 176 00:08:35,960 --> 00:08:38,000 you the picture here to give a full idea of it. 177 00:08:38,080 --> 00:08:41,200 When you just look like this quarter by quarter, you can get 178 00:08:41,200 --> 00:08:43,159 an idea that it's growing over time. 179 00:08:43,200 --> 00:08:45,240 You can see install base management going up a little 180 00:08:45,240 --> 00:08:47,840 bit, but it's kind of difficult to tell. 181 00:08:48,280 --> 00:08:51,200 What I would do is I'd switch this to quarterly trailing 12 182 00:08:51,200 --> 00:08:53,680 months. This gives a smoother more trend 183 00:08:53,680 --> 00:08:56,760 view because you can see over the trailing 12 months every 184 00:08:56,760 --> 00:08:58,960 single quarter. So when I look at this, you can 185 00:08:58,960 --> 00:09:01,000 also see the trend over time that it's going up. 186 00:09:01,280 --> 00:09:04,760 When we erase the other two segments, it becomes a lot more 187 00:09:04,760 --> 00:09:06,960 clear. The install base management is 188 00:09:06,960 --> 00:09:09,920 growing rather fast. In fact, in the trailing 12 189 00:09:09,920 --> 00:09:14,040 months it grew 39.75%. Now it's not going to grow that 190 00:09:14,040 --> 00:09:18,360 fast forever, but it is going to grow 20% or above. 191 00:09:18,720 --> 00:09:21,520 That's really fast growth for what I consider the most 192 00:09:21,520 --> 00:09:24,040 important aspect of this investment profile. 193 00:09:24,080 --> 00:09:26,480 Other things we can look at that management's doing that I 194 00:09:26,480 --> 00:09:29,920 appreciate. They repurchased €148 million. 195 00:09:30,120 --> 00:09:34,480 That's 9 million shares bought back so far at a total of 5.9 196 00:09:34,480 --> 00:09:38,840 billion. So they spent $5.9 billion on 197 00:09:38,840 --> 00:09:41,680 share repurchases. They bought the dip. 198 00:09:42,000 --> 00:09:45,320 Management did exactly what investors wanted to do. 199 00:09:45,760 --> 00:09:49,200 When a company has a big low, when the stock price goes down 200 00:09:49,440 --> 00:09:52,080 and the company still has strong fundamentals, it's generating 201 00:09:52,160 --> 00:09:54,080 revenue, generating free cash flow. 202 00:09:54,760 --> 00:09:56,960 Investors want them to buy the shares back when they're 203 00:09:56,960 --> 00:09:59,320 underappreciated, and that's exactly what they did. 204 00:09:59,760 --> 00:10:02,040 Now next, what they say here is also important. 205 00:10:02,280 --> 00:10:05,520 The current $12 billion buyback program likely won't be 206 00:10:05,520 --> 00:10:09,160 completed by the end of 2025. The new program expected in 207 00:10:09,160 --> 00:10:12,120 January 2026. Now, they don't officially say 208 00:10:12,120 --> 00:10:15,160 this, but to me, the way that this comes across saying they 209 00:10:15,160 --> 00:10:18,760 won't finish the buyback program is now that the stock has surged 210 00:10:18,760 --> 00:10:23,480 up 38% in only two months, they're likely just tempering 211 00:10:23,480 --> 00:10:25,320 their buybacks. They're holding back a little 212 00:10:25,320 --> 00:10:27,120 bit. This is extraordinarily good 213 00:10:27,120 --> 00:10:29,600 capital allocation. And it's much easier said than 214 00:10:29,600 --> 00:10:32,400 done to have a management team that first prioritizes high 215 00:10:32,400 --> 00:10:35,200 return investments within the company, developing, of course, 216 00:10:35,200 --> 00:10:37,720 their new products in their new road map, making sure they have 217 00:10:38,000 --> 00:10:40,760 ample capital for that. Then beyond that, looking for 218 00:10:40,760 --> 00:10:44,120 the best opportune times to buy back shares at depressed prices, 219 00:10:44,360 --> 00:10:46,520 which is exactly what they did earlier this year. 220 00:10:46,800 --> 00:10:49,720 When the share price rockets up, maybe you hold back a little bit 221 00:10:49,720 --> 00:10:51,080 and look for other opportunities. 222 00:10:51,520 --> 00:10:55,040 So I like everything that I see here in terms of the future of 223 00:10:55,040 --> 00:10:57,320 what to look for going forward with ASML. 224 00:10:57,320 --> 00:11:00,320 We have a healthy backlog. We have lots of people lining up 225 00:11:00,320 --> 00:11:03,280 to order these machines, sometimes two years in advance. 226 00:11:03,600 --> 00:11:06,560 So it won't show up maybe in 2026 some of these orders, but 227 00:11:06,560 --> 00:11:07,840 some of them are just beyond that. 228 00:11:08,320 --> 00:11:12,280 Orders remain lumpy, not necessarily linear or predictive 229 00:11:12,280 --> 00:11:14,520 for future quarters. And this is a distinction that 230 00:11:14,520 --> 00:11:17,720 Chris Hohn really nailed down. He said in terms of looking at 231 00:11:17,720 --> 00:11:21,240 future predictability of a company, it's not that important 232 00:11:21,280 --> 00:11:23,240 in knowing when you'll get the cash flows. 233 00:11:23,520 --> 00:11:26,640 What's important is knowing that you will get the cash flows 234 00:11:26,720 --> 00:11:29,760 eventually. In their 2026 road map, this is 235 00:11:29,760 --> 00:11:32,640 one of the the funniest things that the ESML management test 236 00:11:32,640 --> 00:11:36,120 said because it's almost exactly what they said three months ago 237 00:11:36,200 --> 00:11:40,040 that tank the stock down 10%. But just the way that they 238 00:11:40,040 --> 00:11:43,000 rephrased it now has caused the stock to go up. 239 00:11:43,560 --> 00:11:47,720 They say right here the full 2026 guidance to be provided in 240 00:11:47,720 --> 00:11:52,960 January, but early signals are that next year will not be below 241 00:11:52,960 --> 00:11:56,320 2025 in aggregate sales. OK. 242 00:11:56,320 --> 00:12:01,560 So they're saying next year the sales won't be below this year's 243 00:12:01,560 --> 00:12:04,240 sales. That's kind of a a reverse way, 244 00:12:04,240 --> 00:12:06,400 a backwards way of saying sales are going to grow. 245 00:12:06,440 --> 00:12:09,760 They're going to grow next year. Now, what was the whole debate 246 00:12:09,800 --> 00:12:13,000 last quarter about ASML management saying that they 247 00:12:13,000 --> 00:12:16,360 couldn't confirm growth even though they're expecting growth? 248 00:12:17,040 --> 00:12:20,400 So management said we can't confirm growth and then the 249 00:12:20,400 --> 00:12:23,400 market freaked out. The stock slowed down to 730. 250 00:12:23,800 --> 00:12:27,720 Even though ASML back in this quarter said we expect growth, 251 00:12:27,800 --> 00:12:30,960 we just can't confirm it. Now they're saying early signals 252 00:12:30,960 --> 00:12:33,040 are that next year we're going to have growth. 253 00:12:33,040 --> 00:12:35,160 This is how the market behaves in many cases. 254 00:12:35,560 --> 00:12:37,960 Of course there's times where there's sell off in companies 255 00:12:37,960 --> 00:12:41,680 because of totally valid, totally authentic reasons and 256 00:12:41,680 --> 00:12:44,000 then there's sell offs in companies because of completely 257 00:12:44,000 --> 00:12:47,800 invalid or superficial reasons, because of slight verbiage from 258 00:12:47,800 --> 00:12:49,480 management. And that's what happened with 259 00:12:49,480 --> 00:12:52,520 ASML 3 months ago. It sold off simply because 260 00:12:52,520 --> 00:12:55,880 management said something in a in a odd way, they said that 261 00:12:55,880 --> 00:12:59,560 they couldn't confirm growth. Now management is basically 262 00:12:59,560 --> 00:13:01,680 saying the same thing in a slightly different way. 263 00:13:01,680 --> 00:13:06,240 In the stock is up 38%. So the sell off in ASML 3 months 264 00:13:06,240 --> 00:13:09,640 ago was entirely invalid. It was unjustified. 265 00:13:09,800 --> 00:13:11,560 It had nothing to do with the fundamentals. 266 00:13:11,840 --> 00:13:15,000 The ASML management is basically reiterating the exact same thing 267 00:13:15,000 --> 00:13:18,320 they said three months ago and here we are at above $1000 per 268 00:13:18,320 --> 00:13:20,400 share. If there's sell offs like that, 269 00:13:20,400 --> 00:13:23,400 those are times where you can take advantage to get into high 270 00:13:23,400 --> 00:13:25,760 quality companies. ASML is winning. 271 00:13:25,760 --> 00:13:28,520 It's a stock and a company that are both winning. 272 00:13:28,800 --> 00:13:31,360 The fundamentals continue to move in a positive direction. 273 00:13:31,360 --> 00:13:34,360 The Moat, which is already considerably huge, is getting 274 00:13:34,360 --> 00:13:37,160 even wider. They know a broader customer 275 00:13:37,160 --> 00:13:40,800 base, meaning more diversified, less reliant on single consumers 276 00:13:40,800 --> 00:13:43,520 or single customers. They note that install based 277 00:13:43,520 --> 00:13:45,880 management is making up a greater portion of the company, 278 00:13:46,080 --> 00:13:48,280 which is very welcome for this company. 279 00:13:48,680 --> 00:13:51,880 And overall, they note that the demand, the demand for their 280 00:13:51,880 --> 00:13:54,720 products in their future pipeline remains incredibly 281 00:13:54,720 --> 00:13:56,680 strong. They still have orders and 282 00:13:56,680 --> 00:13:59,840 although they're lumpy, they continue to have orders years in 283 00:13:59,840 --> 00:14:01,880 advance. So you have long term 284 00:14:01,880 --> 00:14:04,080 predictability in revenue and growth. 285 00:14:04,480 --> 00:14:07,680 And management noted with the stock price going up so fast 286 00:14:07,680 --> 00:14:09,400 that they're going to hold on to some cash. 287 00:14:09,600 --> 00:14:12,160 So in case there's a sell off again, they will buy the dip and 288 00:14:12,160 --> 00:14:13,800 cause the stock to come right back up. 289 00:14:14,160 --> 00:14:16,360 This is a company that has downside protection. 290 00:14:16,560 --> 00:14:18,320 It's a company that's growing earnings fast. 291 00:14:18,560 --> 00:14:21,640 It's a monopolistic wide Moat company as of right now. 292 00:14:21,640 --> 00:14:25,480 I will continue to hold it in My Portfolio and if we get any, any 293 00:14:25,480 --> 00:14:27,960 dips at all in this company, I'll continue to add to the 294 00:14:27,960 --> 00:14:30,680 position. I see no weaknesses so far and I 295 00:14:30,680 --> 00:14:33,280 think this is incrementally bullish for the company. 296 00:14:33,440 --> 00:14:36,400 Now moving on, we get to some news here we have Brad Gerstner 297 00:14:36,400 --> 00:14:39,640 going on to CNBC and explaining his thought process looking at 298 00:14:39,640 --> 00:14:42,120 the AI revolution. If you know Brad Gerstner, he's 299 00:14:42,120 --> 00:14:45,080 somebody that was an early investor in open AIA, private 300 00:14:45,160 --> 00:14:48,200 private fund investor in IT, and he's invested in NVIDIA and a 301 00:14:48,200 --> 00:14:51,600 lot of other technology focused companies, Snowflake and many 302 00:14:51,600 --> 00:14:54,400 others. He did have some skepticism for 303 00:14:54,400 --> 00:14:56,560 Google. He saw that massive growth in 304 00:14:56,560 --> 00:14:59,280 open AI and concluded that it would be destructive to Google. 305 00:14:59,440 --> 00:15:02,000 Like many others that has proved out to be wrong. 306 00:15:02,320 --> 00:15:05,080 But overall, Brad Gerstner I think has been overwhelmingly 307 00:15:05,080 --> 00:15:07,840 right with his calls. He's been invested in the 308 00:15:07,840 --> 00:15:09,800 majority of companies that have done really well. 309 00:15:09,920 --> 00:15:13,200 And the first topic that he's asked about in this interview is 310 00:15:13,240 --> 00:15:16,280 the AI bubble, the bubble that we've been hearing about so 311 00:15:16,280 --> 00:15:19,280 frequently right now. Anytime there's a revolutionary 312 00:15:19,280 --> 00:15:21,760 technology like artificial intelligence and there's lots of 313 00:15:21,760 --> 00:15:25,200 investors excited about it, the topic of a bubble continues to 314 00:15:25,200 --> 00:15:26,560 go up. And here's Brad Gerstner's 315 00:15:26,560 --> 00:15:28,880 response to being asked about the AI bubble. 316 00:15:28,920 --> 00:15:32,280 The word bubble is going to be raised at this conference 317 00:15:32,280 --> 00:15:34,280 multiple times, if it hasn't already. 318 00:15:34,280 --> 00:15:36,720 Last night. Are we in one? 319 00:15:37,080 --> 00:15:40,240 If we are, where are we, you know? 320 00:15:40,760 --> 00:15:43,360 AI. Or AI, some kind of economic 321 00:15:43,360 --> 00:15:45,320 bubble, market bubble. I don't know what you think it 322 00:15:45,320 --> 00:15:47,200 is. And I will say, you know, you 323 00:15:47,200 --> 00:15:49,920 mentioned Paul Tudor Jones, He was on our air about a week and 324 00:15:49,920 --> 00:15:53,120 a half ago now and he said he thought we were in some kind of 325 00:15:53,120 --> 00:15:56,280 bubble and he put us on a comparable basis. 326 00:15:56,280 --> 00:16:00,520 He thought of October of 1999, which was an interesting moment 327 00:16:00,520 --> 00:16:02,840 because the market still had 40% to go. 328 00:16:03,440 --> 00:16:06,680 That's right. Well, first, you rarely have a 329 00:16:06,680 --> 00:16:10,160 bubble when the hottest book in New York is about a stock market 330 00:16:10,160 --> 00:16:13,640 crash and everybody who comes on the show talks about a bubble. 331 00:16:13,800 --> 00:16:16,040 It's a bubble and bubble. Howard Marks said. 332 00:16:16,280 --> 00:16:19,440 You know it's too early because everybody's talking about a 333 00:16:19,440 --> 00:16:20,840 bubble. If you look at if you look at 334 00:16:20,840 --> 00:16:23,520 multiples as an example. We'll go ahead and pause it 335 00:16:23,520 --> 00:16:26,560 there. Now, his first argument against 336 00:16:26,560 --> 00:16:29,680 us being in a bubble is that you rarely have a bubble. 337 00:16:29,680 --> 00:16:33,680 When people write books about a bubble, when everybody's talking 338 00:16:33,680 --> 00:16:36,840 about a bubble, after all, you know, how could we be in a 339 00:16:36,840 --> 00:16:39,320 bubble if everybody thinks we're in a bubble? 340 00:16:39,840 --> 00:16:43,400 That's kind of an argument that sounds like it would be correct. 341 00:16:43,680 --> 00:16:46,160 I think intuitively that's what people would believe. 342 00:16:46,160 --> 00:16:48,280 That's at least what I would believe, is that if everybody 343 00:16:48,280 --> 00:16:51,200 thinks it's a bubble, it can't really be a bubble because all 344 00:16:51,200 --> 00:16:54,120 of us would realize if we're we're discussing bubbles, we'd 345 00:16:54,120 --> 00:16:57,040 realize that we're in one. But if you actually look at this 346 00:16:57,040 --> 00:17:00,920 subject, which I have, I've looked at it very in depth in 347 00:17:00,960 --> 00:17:04,599 every single massive bubble throughout human history, there 348 00:17:04,599 --> 00:17:07,240 was massive amounts of discussion about bubbles. 349 00:17:07,599 --> 00:17:10,400 Many people recognized that things were out of control. 350 00:17:10,800 --> 00:17:13,400 Many people wrote books and wrote articles and wrote 351 00:17:13,400 --> 00:17:17,079 research thesises about the bubble that they were in before 352 00:17:17,079 --> 00:17:19,520 the bubble popped. So this is one of the arguments 353 00:17:19,520 --> 00:17:21,520 that again, it, it sounds good and I'm not trying to be. 354 00:17:21,760 --> 00:17:23,960 I I like Brad Gerstner, I'm not trying to be hard on him here. 355 00:17:24,319 --> 00:17:27,480 But it's just totally false. If there's a bubble, it does not 356 00:17:27,480 --> 00:17:30,000 mean the bubble doesn't exist because lots of people are 357 00:17:30,000 --> 00:17:32,240 discussing it. And I can show counter examples 358 00:17:32,240 --> 00:17:35,160 to each one of these. For example, he references 359 00:17:35,160 --> 00:17:38,080 Howard Marks. Howard Marks has never once said 360 00:17:38,400 --> 00:17:40,680 that if lots of people talk about a bubble, that means we're 361 00:17:40,680 --> 00:17:42,840 not in one. He never made that argument. 362 00:17:42,840 --> 00:17:46,480 Howard Marks actually wrote about the bubbleinthe.com bubble 363 00:17:46,720 --> 00:17:48,920 before it popped. Howard Marks is one of the ones 364 00:17:48,920 --> 00:17:50,680 talking about bubbles while we're in one. 365 00:17:50,720 --> 00:17:53,840 This is Barton Briggs, the chairman of Morgan Stanley, and 366 00:17:53,840 --> 00:17:56,960 this was beforethe.com bubble. Right before it. 367 00:17:57,360 --> 00:18:00,880 He says quote, the history of manias is that they have almost 368 00:18:00,880 --> 00:18:04,360 always been solidly based on revolutionary development that 369 00:18:04,360 --> 00:18:08,000 eventually change the world. Without fail, the bubble stage 370 00:18:08,000 --> 00:18:11,160 of these crazes ends in tears and massive wealth destruction. 371 00:18:11,440 --> 00:18:13,760 Many of the professional investors involved in these 372 00:18:13,760 --> 00:18:17,480 areas know that what is going on today is madness. 373 00:18:17,760 --> 00:18:21,520 However, they argue that the right tactic is to stay invested 374 00:18:21,520 --> 00:18:23,560 as long as the price momentum is up. 375 00:18:24,160 --> 00:18:26,280 So what does he say here? This is the chairman of Morgan 376 00:18:26,280 --> 00:18:29,760 Stanley during a time period of a bubble, says many professional 377 00:18:29,760 --> 00:18:33,400 investors involved in these areas know that what's going on 378 00:18:33,400 --> 00:18:37,440 today is madness. Again, lots of people are aware 379 00:18:37,440 --> 00:18:40,120 that you're in a bubble. When you're in one, they just 380 00:18:40,120 --> 00:18:43,520 argue the best thing to do is to play the momentum game. 381 00:18:43,880 --> 00:18:46,040 As long as prices are going up, you don't want to be left 382 00:18:46,040 --> 00:18:48,520 behind. When momentum begins to ebb, 383 00:18:48,840 --> 00:18:51,400 they will sell their position and escape the carnage. 384 00:18:51,680 --> 00:18:54,640 Since they have a very large position and since they all 385 00:18:54,640 --> 00:18:57,920 follow the same momentum, I suspect they are deluded and 386 00:18:57,920 --> 00:19:00,800 thinking they'll be able to get out in time because all the 387 00:19:00,800 --> 00:19:03,200 other momentum investors will be doing the same thing. 388 00:19:03,800 --> 00:19:07,720 So if everybody tries to sell the same stocks at the same 389 00:19:07,720 --> 00:19:10,920 time, only a couple of them are going to be first and everybody 390 00:19:10,920 --> 00:19:13,720 else is going to be second or third and sell at much, much 391 00:19:13,720 --> 00:19:15,840 lower prices. Howard Marks notes that these 392 00:19:15,840 --> 00:19:18,200 type of bubbles follow the same blueprint. 393 00:19:18,200 --> 00:19:21,760 The positives behind stocks can be genuine and still produce 394 00:19:21,760 --> 00:19:26,800 losses if you overpay for them. So having a great company is not 395 00:19:26,800 --> 00:19:28,800 enough. We need to pay the right price 396 00:19:28,880 --> 00:19:31,840 even for a great company. Those positives and the massive 397 00:19:31,840 --> 00:19:35,720 profits that seemingly everyone else is enjoying can eventually 398 00:19:35,720 --> 00:19:39,360 cause those who have resisted participating to capitulate. 399 00:19:39,840 --> 00:19:41,800 So this is another aspect of a bubble. 400 00:19:42,200 --> 00:19:45,680 When you're looking at the bubble in 2021, for example, I 401 00:19:45,680 --> 00:19:48,200 knew that that was a bubble. I had full knowledge of it 402 00:19:48,200 --> 00:19:50,520 before it happened. I had knowledge of it that we 403 00:19:50,520 --> 00:19:52,520 were in it. This wasn't something where it 404 00:19:52,520 --> 00:19:55,080 was special of me. It didn't take a genius to 405 00:19:55,080 --> 00:19:58,400 figure out that Zoom stock wasn't worth a trillion dollars. 406 00:19:58,560 --> 00:20:01,200 All of these companies, every single one of the companies, and 407 00:20:01,200 --> 00:20:05,840 Kathy Woods ETF at the time, raced up without any thought of 408 00:20:05,840 --> 00:20:08,600 fundamentals. All of it was momentum, price, 409 00:20:08,600 --> 00:20:11,520 disruptive innovation. Investors were tripping over 410 00:20:11,520 --> 00:20:12,960 themselves to buy these companies. 411 00:20:13,320 --> 00:20:15,520 I created multiple warnings about this. 412 00:20:15,600 --> 00:20:19,040 This bubble warnings about Kathy Wood warning about ARK Invest, 413 00:20:19,280 --> 00:20:21,680 seeing all these different retail investors piling into 414 00:20:21,680 --> 00:20:23,360 this bubble. And although they're making 415 00:20:23,360 --> 00:20:26,120 gains for a time, eventually it collapsed. 416 00:20:26,600 --> 00:20:30,520 And the problem was like Howard Marks highlights here is that if 417 00:20:30,520 --> 00:20:33,240 you were sitting on the sidelines and you're watching 418 00:20:33,280 --> 00:20:35,360 ARK innovations go up and up and up. 419 00:20:35,680 --> 00:20:39,000 If you're watching Kathy Wood's ETF, all of them just make 420 00:20:39,000 --> 00:20:42,680 hundreds of percentage of return while your your portfolio was 421 00:20:42,680 --> 00:20:45,880 going up 10 or 20%. You would eventually capitulate 422 00:20:46,000 --> 00:20:48,360 that the massive profits that everyone else is making in all 423 00:20:48,360 --> 00:20:52,080 these momentum stocks eventually causes you to abandon your well 424 00:20:52,080 --> 00:20:55,720 thought out strategy to capitulate and buy into those 425 00:20:55,720 --> 00:21:00,640 same momentum names. Now #3 He says a top in a stock 426 00:21:01,080 --> 00:21:05,200 group or market occurs when the last holdout will become a buyer 427 00:21:05,400 --> 00:21:08,360 does so. So when finally the last person 428 00:21:08,760 --> 00:21:12,400 that's that's resisted, that's eventually going to capitulate, 429 00:21:12,720 --> 00:21:16,040 when they finally buy that stock and there's no one else behind 430 00:21:16,040 --> 00:21:19,520 them to buy it at a higher price, that is the timing of the 431 00:21:19,520 --> 00:21:22,760 top of the bubble. It's often unrelated to 432 00:21:22,760 --> 00:21:25,840 fundamental developments. It's simply human psychology. 433 00:21:25,920 --> 00:21:29,760 January 2nd, 2000. Many people talk about bubbles 434 00:21:29,760 --> 00:21:32,640 while we're in bubbles. That's happened every single 435 00:21:32,640 --> 00:21:35,480 time. In fact, we have entire research 436 00:21:35,480 --> 00:21:39,000 institutions, Bernstein Research, that calledthe.com 437 00:21:39,000 --> 00:21:41,760 bubble in 1999. They said the performance of 438 00:21:41,760 --> 00:21:44,280 momentum anomalies continues to set records. 439 00:21:44,280 --> 00:21:47,880 The extreme nature of this behavior suggests it could 440 00:21:47,880 --> 00:21:52,040 reverse abruptlythe.com bubble was widely discussed as a bubble 441 00:21:52,040 --> 00:21:55,720 for many years preceding it. It was a widely debated topic. 442 00:21:56,000 --> 00:21:58,720 So the notion that we're not in a bubble because people are 443 00:21:58,720 --> 00:22:00,520 talking about it is totally false. 444 00:22:00,720 --> 00:22:02,840 That has no bearing on whether or not we're in a bubble. 445 00:22:03,200 --> 00:22:05,880 And in some cases, of course, we do talk about bubbles when we're 446 00:22:05,880 --> 00:22:08,400 not in one and hopefully that's the case today. 447 00:22:08,800 --> 00:22:11,280 Now one thing that Brad Gerstner mentions that I think is a much 448 00:22:11,280 --> 00:22:13,600 stronger argument that I tend to agree with him. 449 00:22:13,720 --> 00:22:17,080 Part of being in a bubble means incredibly high valuations, 450 00:22:17,080 --> 00:22:18,840 valuations that are unreasonable. 451 00:22:18,840 --> 00:22:22,680 Like we saw in 2021, many of the so-called disruptive companies 452 00:22:22,680 --> 00:22:25,080 had valuations that were incredibly detached from their 453 00:22:25,080 --> 00:22:27,560 fundamentals. They were not based in reality 454 00:22:27,560 --> 00:22:30,240 whatsoever. It was a bubble waiting to pop. 455 00:22:30,240 --> 00:22:31,960 Great. He was talking about 50 times 456 00:22:31,960 --> 00:22:35,520 trailing PE for NVIDIA. It's a it's 25 to 30 times on a 457 00:22:35,520 --> 00:22:37,880 forward PE. That's not the stuff that 458 00:22:37,880 --> 00:22:41,080 bubbles are generally made of. But certainly the further and 459 00:22:41,080 --> 00:22:44,120 further you go out on the risk curve, Andrew, you will find 460 00:22:44,120 --> 00:22:46,080 things that make you scratch your head. 461 00:22:46,240 --> 00:22:47,480 You say I wouldn't have done that deal. 462 00:22:47,480 --> 00:22:50,360 And they're going to be meme stocks that certainly, you know, 463 00:22:50,360 --> 00:22:53,360 have no revenue, Becky, and, you know, in the quantum space or 464 00:22:53,360 --> 00:22:55,280 whatever where you say that valuation doesn't make any 465 00:22:55,280 --> 00:22:58,640 sense. At a high 20s PE doesn't feel 466 00:22:58,640 --> 00:23:01,280 much like a bubble. But I've noticed that every time 467 00:23:01,280 --> 00:23:04,640 tech investors want to say that we're not in a bubble, they use 468 00:23:04,640 --> 00:23:08,400 NVIDIA as the go to example. For whatever reason, they're not 469 00:23:08,400 --> 00:23:12,640 using the example of Palantir. Isn't Palantir the messy of AI? 470 00:23:12,640 --> 00:23:16,800 The leader of AI, The company that's emblematic of the AIAI 471 00:23:16,800 --> 00:23:18,640 tech sector? Palantir trades up 472 00:23:18,640 --> 00:23:22,280 valuationsthatwouldmake.com bubble companies blush. 473 00:23:22,680 --> 00:23:28,360 It trades at a 540 trailing PE, a price to sales of above 100, 474 00:23:28,600 --> 00:23:31,280 now at 117. A free cash will yield when you 475 00:23:31,280 --> 00:23:36,560 adjust for a dilution of .24. This is in a category that has 476 00:23:36,560 --> 00:23:38,880 never happened ever throughout history. 477 00:23:39,440 --> 00:23:41,960 When we even compare it to the.com bubble, We can take a 478 00:23:41,960 --> 00:23:44,400 look at the valuations. Here We have the most egregious 479 00:23:44,400 --> 00:23:46,160 ones. The price to trailing earnings 480 00:23:46,160 --> 00:23:50,360 ratio of American Airlines was 540, but the price to sales is 481 00:23:50,360 --> 00:23:54,640 much lower, 41 compared to 110. In fact, looking at every single 482 00:23:54,640 --> 00:23:58,320 company on this list, there is not one that comes close to the 483 00:23:58,320 --> 00:24:01,560 valuation of Palantir on a price to sales basis. 484 00:24:02,080 --> 00:24:05,480 Not even close. It is around 4 times the highest 485 00:24:05,480 --> 00:24:07,680 valued company in the.com bubble. 486 00:24:07,680 --> 00:24:10,360 Maybe it will be justified, Maybe Palantir will be just fine 487 00:24:10,360 --> 00:24:12,600 because it is a different company than all those in 488 00:24:12,600 --> 00:24:15,320 the.com bubble. But it is a much harder 1 to 489 00:24:15,320 --> 00:24:18,440 defend the valuation of it, to say that this company is being 490 00:24:18,440 --> 00:24:22,000 valued efficiently and fairly and strictly on the fundamentals 491 00:24:22,120 --> 00:24:25,800 without any type of exuberance. When you trade at price to sales 492 00:24:25,800 --> 00:24:29,040 above 100, that is much more difficult to defend than the 493 00:24:29,040 --> 00:24:32,160 valuation of NVIDIA. So there is some selective bias 494 00:24:32,160 --> 00:24:34,320 going on here. Brad Gersner highlights that 495 00:24:34,320 --> 00:24:36,720 instead of focusing on the valuations of some of the 496 00:24:36,720 --> 00:24:40,160 companies that are crazy in this market, to rather focus on the 497 00:24:40,160 --> 00:24:42,520 developments of artificial intelligence and where you can 498 00:24:42,520 --> 00:24:44,320 find still investment opportunities. 499 00:24:44,320 --> 00:24:47,680 That makes sense because long term AI is real. 500 00:24:47,880 --> 00:24:49,800 It is like the Internet and it's going to be massively 501 00:24:49,800 --> 00:24:52,760 transformational. The bigger question is this is 502 00:24:52,760 --> 00:24:55,360 the phase shift associated with AI? 503 00:24:55,800 --> 00:24:59,680 Is the transformation of all computing with now computer 504 00:24:59,680 --> 00:25:02,680 assisted intelligence? Is it as big as the Internet? 505 00:25:03,040 --> 00:25:05,320 And I would argue that it's as big as the Internet. 506 00:25:05,320 --> 00:25:08,240 And if you spend all your time hand wringing like many people 507 00:25:08,240 --> 00:25:11,920 did in 2001 and 2002 about the Internet, saying I told you so, 508 00:25:12,240 --> 00:25:15,840 they missed the next 20 years of compounding in Amazon, in 509 00:25:15,840 --> 00:25:18,480 Google, and all these big. Ones investors can successfully 510 00:25:18,480 --> 00:25:21,960 navigate through bubbles by avoiding the most exuberantly 511 00:25:21,960 --> 00:25:25,080 priced companies in the market. We don't always get it right, 512 00:25:25,080 --> 00:25:26,800 but that's the goal. And if we have a diversified 513 00:25:26,800 --> 00:25:29,560 portfolio, we should be successful in accomplishing it. 514 00:25:29,640 --> 00:25:32,080 Now moving on, we get to another dynamic that's changing the 515 00:25:32,080 --> 00:25:35,040 market over time, and this is agentic commerce. 516 00:25:35,240 --> 00:25:38,560 It's something that Open AI introduced with their new API. 517 00:25:38,880 --> 00:25:41,760 It gave the ability for top websites to integrate directly 518 00:25:41,760 --> 00:25:45,040 within Open AI's user interface, their ChatGPT interface. 519 00:25:45,360 --> 00:25:49,440 For example, instead of going to the Uber app to book an Uber, 520 00:25:49,640 --> 00:25:53,480 you could do it right within ChatGPT and you could use the AI 521 00:25:53,480 --> 00:25:56,160 to like ask questions and interact with Uber. 522 00:25:56,440 --> 00:25:59,160 And Uber is connecting with Open AI to do this. 523 00:25:59,160 --> 00:26:01,560 They're giving them permission. They're working together. 524 00:26:01,880 --> 00:26:05,120 But it was the same thing for Expedia and Booking Holdings. 525 00:26:05,400 --> 00:26:07,920 It's the same thing for Zillow. All of these companies 526 00:26:07,920 --> 00:26:12,160 integrated directly within Open AI ChatGPT so that they had this 527 00:26:12,160 --> 00:26:15,040 nice integration. Mark Mahaney believes that this 528 00:26:15,040 --> 00:26:17,640 won't really disrupt these companies means integrating, 529 00:26:17,920 --> 00:26:21,480 rather it will grow the overall total addressable market and 530 00:26:21,480 --> 00:26:24,120 lower their customer acquisition cost there there. 531 00:26:24,120 --> 00:26:26,880 May be what I'm really interested in is you had a slew 532 00:26:26,880 --> 00:26:29,240 of announcements just in the last 10 days. 533 00:26:29,240 --> 00:26:33,640 You had Expedia, Uber, Spotify, booking.com, Walmart, they're 534 00:26:33,640 --> 00:26:37,600 all integrating with Chachi BT. What a sign of the times. 535 00:26:37,600 --> 00:26:40,880 And so it is emerging. It's still small and 800 million 536 00:26:40,880 --> 00:26:43,640 is still small. You've got 2 to 3 billion person 537 00:26:43,640 --> 00:26:47,600 assets with with, with, with Google and with Meta. 538 00:26:47,880 --> 00:26:50,840 But, you know, watch this space. And if those companies are 539 00:26:50,840 --> 00:26:54,880 seeing early on that they need to be integrated with, with 540 00:26:54,880 --> 00:26:57,920 ChatGPT, I think you're going to see a lot more companies come 541 00:26:57,920 --> 00:26:59,720 on. And there's a chance here that 542 00:26:59,720 --> 00:27:03,120 this dramatically changes the Internet landscape in a tech 543 00:27:03,120 --> 00:27:05,800 landscape, you know, in the space of the next two or three 544 00:27:05,800 --> 00:27:06,920 years. Well, he says that it will 545 00:27:06,920 --> 00:27:09,280 dramatically change the landscape, but he hasn't told us 546 00:27:09,280 --> 00:27:11,280 whether or not we should be concerned about this. 547 00:27:11,360 --> 00:27:13,520 Actually you should think about it more positively for a name 548 00:27:13,520 --> 00:27:16,920 like a booking in Expedia and eventually Amazon too probably 549 00:27:17,160 --> 00:27:19,720 and and a Walmart. This is just another customer 550 00:27:19,720 --> 00:27:23,000 acquisition cost channel. Who's paying who? 551 00:27:23,000 --> 00:27:25,720 Because we, we just had another retail analyst who was here 552 00:27:25,720 --> 00:27:28,480 saying they look, these retailers were all slow when the 553 00:27:28,480 --> 00:27:30,800 Internet first launched. They let all these E retailers 554 00:27:30,800 --> 00:27:33,440 come in and eat their lunch. They don't want to get caught in 555 00:27:33,440 --> 00:27:36,400 the cold again. Are they paying ChatGPT for 556 00:27:36,400 --> 00:27:37,680 this? And is it a lot of money? 557 00:27:37,920 --> 00:27:40,240 Eventually they will. I think what ChatGPT is going to 558 00:27:40,240 --> 00:27:42,320 do is this is like Mark Zuckerberg in private. 559 00:27:42,520 --> 00:27:45,200 Build out the user base, build out the engagement and charge 560 00:27:45,200 --> 00:27:46,120 them. But a lot. 561 00:27:46,280 --> 00:27:48,200 Later. Mark Mahaney believes agentic 562 00:27:48,200 --> 00:27:51,480 commerce is the next big iteration, the next big thing. 563 00:27:51,480 --> 00:27:54,080 All these type of companies, whether you're Spotify, a 564 00:27:54,080 --> 00:27:58,520 Netflix, say Uber or an Amazon, you're all trying to become more 565 00:27:58,520 --> 00:28:00,320 agentic with your shopping experience. 566 00:28:00,520 --> 00:28:04,760 Now, Next up, we have news that Waymo, Google's Waymo is at it 567 00:28:04,760 --> 00:28:06,760 again. They're marking a new place that 568 00:28:06,760 --> 00:28:08,560 they're going to be opening up in 2026. 569 00:28:08,840 --> 00:28:11,160 This time it's London. They say we're bringing our 570 00:28:11,160 --> 00:28:14,600 fully autonomous ride hailing service across the pond where we 571 00:28:14,600 --> 00:28:19,240 intend to offer rides with no humans behind the wheel in 2026. 572 00:28:19,400 --> 00:28:21,120 This company is, it's moving fast. 573 00:28:21,120 --> 00:28:24,200 Waymo is actually scaling and they're doing this rather 574 00:28:24,200 --> 00:28:26,240 quickly. They say that we're excited to 575 00:28:26,240 --> 00:28:29,200 support London's extensive network of bus to bike and 576 00:28:29,200 --> 00:28:32,720 pedestrian infrastructure with our ride hailing service, which 577 00:28:32,720 --> 00:28:34,560 will be available via the Waymo app. 578 00:28:34,760 --> 00:28:38,160 So in this case there is no indication that they're they're 579 00:28:38,160 --> 00:28:41,400 partnering with an Uber, they're again going get a loan. 580 00:28:41,720 --> 00:28:44,520 And this is one of the advantages that Google has with 581 00:28:44,520 --> 00:28:46,320 Waymo. They don't have to partner with 582 00:28:46,320 --> 00:28:49,160 anyone else because the Waymo app is so good. 583 00:28:49,480 --> 00:28:52,240 We can look at how many people use it, the star ratings, how 584 00:28:52,240 --> 00:28:54,920 much people like it. They love booking Waymo's 585 00:28:54,920 --> 00:28:57,160 through the Waymo app. Now moving on, we get to the 586 00:28:57,160 --> 00:29:00,480 news, and this is somewhat comical, I'd say disappointing 587 00:29:00,480 --> 00:29:02,360 but also comical news about Salesforce. 588 00:29:02,720 --> 00:29:06,640 This stock is so hated by the market, it has such negative 589 00:29:06,640 --> 00:29:09,600 sentiment. It's considered so at risk by 590 00:29:09,600 --> 00:29:12,360 artificial intelligence and disruption that investors want 591 00:29:12,360 --> 00:29:16,000 nothing to do with it. As noted by this latest news, 592 00:29:16,320 --> 00:29:20,240 Salesforce is expanding its AI partnership with Open AI and a 593 00:29:20,240 --> 00:29:24,480 Tropic, integrating their latest models into Agent Force 360, 594 00:29:24,760 --> 00:29:28,560 including deeper Chachi, PT and cloud integrations to accelerate 595 00:29:28,680 --> 00:29:31,360 AI agent adoption. So they're going into 596 00:29:31,360 --> 00:29:34,760 partnership with Open AI. And in every single case, we've 597 00:29:34,760 --> 00:29:37,120 seen that the stocks surge upwards. 598 00:29:37,440 --> 00:29:40,160 The company goes up 10 percent, 20 or 30%. 599 00:29:40,480 --> 00:29:43,800 In this case, after Salesforce announced this partnership with 600 00:29:43,840 --> 00:29:48,920 Open AI, the stock went down. How does a stock go down after 601 00:29:48,920 --> 00:29:52,120 you partner with Open AI? That's almost impossible. 602 00:29:52,560 --> 00:29:55,520 Like Salesforce really accomplished the impossible. 603 00:29:56,160 --> 00:29:59,360 So I guess they we should be giving them an award here. 604 00:29:59,480 --> 00:30:01,760 I should be giving them an award for accomplishing the 605 00:30:01,760 --> 00:30:03,680 impossible. This should be considered one of 606 00:30:03,680 --> 00:30:06,440 the fail of the weeks. It is basically a fail of the 607 00:30:06,440 --> 00:30:08,800 week. Salesforce partnered with Open 608 00:30:08,800 --> 00:30:12,920 AI and the stock went down. Just unbelievable that this 609 00:30:12,920 --> 00:30:15,600 could happen. But either way, it's also 610 00:30:15,720 --> 00:30:18,600 entirely believable because again, everyone hates 611 00:30:18,600 --> 00:30:20,440 Salesforce. It's a common theme that we've 612 00:30:20,440 --> 00:30:21,960 seen. The reason that no investor 613 00:30:21,960 --> 00:30:24,440 likes Salesforce today is it's considered an antiquated 614 00:30:24,440 --> 00:30:26,800 software company. Nobody wants to invest in it 615 00:30:26,800 --> 00:30:29,120 because it's that potential disruption from artificial 616 00:30:29,120 --> 00:30:31,640 intelligence. Salesforce has not yet convinced 617 00:30:31,640 --> 00:30:34,320 investors that it will continue to grow at a quick pace for a 618 00:30:34,320 --> 00:30:37,160 long period of time. And this is a debate that will 619 00:30:37,160 --> 00:30:41,040 happen every quarterly report. Either Salesforce continues to 620 00:30:41,040 --> 00:30:44,600 grow, either it continues to generate more cash flow, either 621 00:30:44,600 --> 00:30:47,680 the fundamentals continue to improve, or the stock continues 622 00:30:47,680 --> 00:30:50,120 to go down. If Salesforce has enough 623 00:30:50,120 --> 00:30:53,480 consistently good reports, the sentiment should slowly 624 00:30:53,480 --> 00:30:56,200 breakdown. Investors should turn a little 625 00:30:56,200 --> 00:30:58,840 bit more positive, but it will all be in the numbers. 626 00:30:58,840 --> 00:31:01,240 But I'll personally continue to hold my shares as long as the 627 00:31:01,240 --> 00:31:02,840 fundamentals continue in the positive. 628 00:31:03,320 --> 00:31:04,560 Now that's gonna be it for this episode. 629 00:31:04,560 --> 00:31:06,240 Hope you enjoyed. See you in the next one.