1 00:00:00,080 --> 00:00:01,880 Welcome back, everyone. Today on the Joseph Carlson 2 00:00:01,880 --> 00:00:03,440 Show. We've recently been talking a 3 00:00:03,440 --> 00:00:06,400 lot about Google and the decision from the judge to not 4 00:00:06,400 --> 00:00:09,360 break up the company and the huge success overall this 5 00:00:09,360 --> 00:00:11,640 investment has been, it's been incredible. 6 00:00:11,880 --> 00:00:14,160 Google's now up 20% year to date. 7 00:00:14,160 --> 00:00:16,280 It's up 40% from the recent lows. 8 00:00:16,600 --> 00:00:18,320 And the Sky's the limits for this one. 9 00:00:18,840 --> 00:00:21,160 But as Google has turned out great, there's another 10 00:00:21,160 --> 00:00:23,880 investment that I believe is going to get its turn. 11 00:00:23,880 --> 00:00:26,000 And this one hasn't been bad. But there's reason to believe 12 00:00:26,000 --> 00:00:28,880 that Amazon is next on the list to have its day. 13 00:00:29,320 --> 00:00:33,760 Amazon may have an AI resurgence with AWS and Anthropic. 14 00:00:33,800 --> 00:00:35,720 This is a new write up from Semi analysis. 15 00:00:35,720 --> 00:00:39,200 They do in depth research on this whole ecosystem, on this 16 00:00:39,200 --> 00:00:41,840 entire industry. And in this extensive write up, 17 00:00:41,840 --> 00:00:44,880 they argue their reasoning for Amazon now being in a better 18 00:00:44,880 --> 00:00:49,640 position to win the cloud wars. We know that Microsoft Azure has 19 00:00:49,640 --> 00:00:52,400 speed ahead, gaining more cloud dollars than Amazon last 20 00:00:52,400 --> 00:00:54,880 quarter, and they believe that that's going to turn around, 21 00:00:54,880 --> 00:00:57,160 that Amazon will now be the one speeding ahead. 22 00:00:57,480 --> 00:01:00,560 This caused the stock to move up 3% yesterday, which was a big 23 00:01:00,560 --> 00:01:03,080 move for Amazon, but there's reason to believe it could go 24 00:01:03,080 --> 00:01:04,519 higher. We're going to be looking over 25 00:01:04,519 --> 00:01:07,640 this semi analysis, taking a look at how it may impact Amazon 26 00:01:07,960 --> 00:01:09,640 and how this fits into my thesis. 27 00:01:09,640 --> 00:01:11,200 Now, of course, we also have a lot of other news. 28 00:01:11,200 --> 00:01:13,720 For example, Salesforce just reported earnings. 29 00:01:13,720 --> 00:01:16,400 The stock was down around 7% after earnings. 30 00:01:16,400 --> 00:01:19,240 It's up a little bit today, but overall the earnings were 31 00:01:19,240 --> 00:01:22,360 disappointing towards investors and I think Salesforce is worth 32 00:01:22,360 --> 00:01:24,520 looking at. The stock has not had any 33 00:01:24,520 --> 00:01:26,400 positive sentiment for months now. 34 00:01:26,680 --> 00:01:29,520 It's one of the few losers in My Portfolio, a company that I'm 35 00:01:29,520 --> 00:01:31,720 currently in the red on, and I want to take a look at the 36 00:01:31,720 --> 00:01:34,480 holding as well as its most recent report and see what to 37 00:01:34,480 --> 00:01:37,600 think about it because I don't think that Salesforce's report 38 00:01:37,600 --> 00:01:40,160 was quite as bad as investors are making it out to be. 39 00:01:40,680 --> 00:01:43,040 Now. Another company on the list that 40 00:01:43,040 --> 00:01:46,680 had a very bad day is Lululemon. That one's down 18%. 41 00:01:46,840 --> 00:01:50,080 The CEO went on to CNBC to try to turn things around, but 42 00:01:50,080 --> 00:01:52,520 Lululemon is facing a lot of different challenges. 43 00:01:52,520 --> 00:01:55,320 We'll be going over that one and then another one that's in My 44 00:01:55,320 --> 00:01:58,640 Portfolio. My latest position, Duolingo has 45 00:01:58,640 --> 00:02:01,080 been trading down every single day. 46 00:02:01,160 --> 00:02:04,280 There has been a systematic sell off in Duolingo over the past 47 00:02:04,280 --> 00:02:06,080 month or so and we're going to talk about it. 48 00:02:06,360 --> 00:02:09,000 We'll be looking at my position in Duolingo, the damage that 49 00:02:09,000 --> 00:02:11,880 this has caused to the portfolio, as well as why the 50 00:02:11,880 --> 00:02:14,560 company's selling off and what I plan on doing about it now. 51 00:02:14,560 --> 00:02:16,720 And then finally, we have some other news to get to. 52 00:02:16,840 --> 00:02:19,920 Elon Musk wants to get a trillion dollar pay package over 53 00:02:19,920 --> 00:02:21,600 the next decade. Now, of course, that's a really 54 00:02:21,600 --> 00:02:24,360 big number, but this isn't quite as crazy as it sounds. 55 00:02:24,360 --> 00:02:26,800 And then we have the phenomenon K pop demon hunters. 56 00:02:26,800 --> 00:02:30,560 We have Novak doing the soda pop dance on the tennis stage. 57 00:02:30,840 --> 00:02:33,440 We'll be looking at why he's doing that and how big this show 58 00:02:33,440 --> 00:02:36,080 actually is for Netflix at the end of this episode. 59 00:02:36,160 --> 00:02:37,880 So we have a ton to get to in this episode. 60 00:02:37,880 --> 00:02:41,120 Now starting off, I just want to mention the last couple videos 61 00:02:41,120 --> 00:02:44,680 that I've made have been mostly about Google and frankly, I'm 62 00:02:44,680 --> 00:02:46,000 just excited about it. I'm. 63 00:02:46,000 --> 00:02:48,960 Happy when the companies that I invest in do well, when the 64 00:02:48,960 --> 00:02:51,720 thesis work out, when things go as planned. 65 00:02:52,000 --> 00:02:54,760 And in most cases, that's exactly what happens if you're 66 00:02:55,320 --> 00:02:57,840 an investor that has a good philosophy, if you stick to your 67 00:02:57,840 --> 00:02:59,880 process. You should have the majority 68 00:02:59,880 --> 00:03:02,200 case be a win. You should have most of your 69 00:03:02,200 --> 00:03:05,560 holdings work out, although not every one of them is going in 70 00:03:05,560 --> 00:03:07,400 most cases, this is how it should turn out. 71 00:03:07,720 --> 00:03:10,040 And Google has been a resounding win for investors. 72 00:03:10,480 --> 00:03:13,240 And part of the reason that I'm so excited about Google in 73 00:03:13,240 --> 00:03:15,840 particular is, first of all, it's lifting both of my 74 00:03:15,840 --> 00:03:18,680 portfolios to all time highs. So that's exciting. 75 00:03:19,360 --> 00:03:21,960 But the other reason why is because I get to enjoy this 76 00:03:21,960 --> 00:03:23,960 victory with a lot of other people. 77 00:03:24,080 --> 00:03:27,360 I know that Google is a company that many investors own, 78 00:03:27,360 --> 00:03:30,400 especially retail investors. I can determine that by the 79 00:03:30,400 --> 00:03:33,160 analytics on Qualtrim. I can see in all the I can see 80 00:03:33,160 --> 00:03:36,400 in all the analytics overall and the feedback that I get that 81 00:03:36,400 --> 00:03:38,640 Google is a widely owned retail stock. 82 00:03:38,800 --> 00:03:40,640 Lots of people are bought into this company. 83 00:03:40,720 --> 00:03:44,080 So the victory is shared amongst a lot of people and that makes 84 00:03:44,080 --> 00:03:45,760 it fun as. Well, when I'm winning with 85 00:03:45,760 --> 00:03:48,000 Google, I'm winning with a lot of my followers. 86 00:03:48,000 --> 00:03:49,280 A lot of people invested in the company. 87 00:03:49,360 --> 00:03:51,920 And it's really fun and rewarding to share that victory 88 00:03:51,920 --> 00:03:54,680 with a lot of other people. If I compare and contrast that 89 00:03:54,680 --> 00:03:58,120 with Netflix, for example, Netflix is a company that was an 90 00:03:58,120 --> 00:04:01,480 amazing winner in My Portfolio. It was just truly outstanding 91 00:04:01,480 --> 00:04:04,280 how much this company turned around, how well it performed. 92 00:04:04,800 --> 00:04:07,760 You know, the story of it was incredible, but it was also a 93 00:04:07,760 --> 00:04:10,920 lonely journey. Netflix is not a widely owned 94 00:04:10,920 --> 00:04:13,400 company by retail investors or my followers. 95 00:04:13,720 --> 00:04:15,560 I know that again by the analytics. 96 00:04:16,040 --> 00:04:18,959 And frankly, when I was talking about this company bullish on it 97 00:04:18,959 --> 00:04:23,120 for for years making content on it, my Netflix videos never did 98 00:04:23,120 --> 00:04:24,720 that well. They never got a lot of 99 00:04:24,720 --> 00:04:26,040 viewership. They never got a lot of 100 00:04:26,040 --> 00:04:28,560 engagement. I knew that the the amount of 101 00:04:28,560 --> 00:04:31,240 people that were following me with Netflix was very few. 102 00:04:31,240 --> 00:04:33,640 So even though Netflix has done incredibly well and I'm very 103 00:04:33,640 --> 00:04:36,880 happy about how it turned out, it was a far lonelier journey, 104 00:04:36,960 --> 00:04:39,360 one that I wasn't able to celebrate with as many people. 105 00:04:39,600 --> 00:04:40,960 So that's part of the reason that I'm really. 106 00:04:40,960 --> 00:04:44,440 Excited specifically about Google doing well is just the 107 00:04:44,440 --> 00:04:45,800 amount of people that own this stock. 108 00:04:46,160 --> 00:04:49,640 Another one that I believe on the list here that is well owned 109 00:04:49,640 --> 00:04:52,600 by by investors. Lots of my followers are in this 110 00:04:52,600 --> 00:04:55,600 stock and I think for good reason is Amazon. 111 00:04:55,880 --> 00:04:58,120 Now this is 1 again that I'm fully invested in. 112 00:04:58,120 --> 00:05:00,960 In fact I put an enormous amount of capital into Amazon. 113 00:05:01,280 --> 00:05:05,760 It's a $141,000 position with only $48,000 of that being 114 00:05:05,760 --> 00:05:07,640 gains. Now, that's a decent amount of 115 00:05:07,640 --> 00:05:11,120 gains, but the majority of this position is still contributions 116 00:05:11,120 --> 00:05:14,320 me building it up. I put so much capital into 117 00:05:14,320 --> 00:05:17,840 Amazon because I feel so positive about this company. 118 00:05:17,920 --> 00:05:20,480 Now with Amazon, there's multiple parts of this thesis 119 00:05:20,480 --> 00:05:22,800 that I've highlighted. First of all, it's a widely 120 00:05:22,800 --> 00:05:25,720 diversified business with a lot of optionality, meaning they 121 00:05:25,720 --> 00:05:28,680 have all different assets from Zoox to Project Kiper, which is 122 00:05:28,680 --> 00:05:31,480 satellite Internet. So they have robotaxis that 123 00:05:31,480 --> 00:05:33,680 they're making, they have satellite Internet that they're 124 00:05:33,680 --> 00:05:35,520 making. It's a little bit like SpaceX 125 00:05:35,520 --> 00:05:39,080 combined with the rest of Amazon, but then you also have 126 00:05:39,080 --> 00:05:41,440 the retail business, you have the third party seller business, 127 00:05:41,440 --> 00:05:43,840 you have their subscriptions, You have Amazon Prime Video, 128 00:05:44,120 --> 00:05:46,600 which is like Netflix built into Amazon. 129 00:05:47,360 --> 00:05:50,240 It just goes on and on. You have Audible, you have a 130 00:05:50,240 --> 00:05:53,920 podcast business with Amazon. You of course have the big ones, 131 00:05:53,920 --> 00:05:56,320 which is AWS, the cloud business. 132 00:05:56,320 --> 00:05:58,880 Now, I like a lot of the businesses that Amazon's in. 133 00:05:58,880 --> 00:06:01,000 In fact, I like everything that they're doing right now. 134 00:06:01,680 --> 00:06:05,000 But there is one business that is a stand out and it's far more 135 00:06:05,000 --> 00:06:07,840 important to the story of Amazon than any other part of this 136 00:06:07,840 --> 00:06:11,120 company and that's cloud, it's AWS. 137 00:06:11,440 --> 00:06:14,480 When we filter out the rest of this, we can take a look at AWS 138 00:06:14,480 --> 00:06:17,960 here. AWS alone grew at a compounded 139 00:06:17,960 --> 00:06:21,600 annual growth rate of 17.7% last quarter. 140 00:06:22,040 --> 00:06:27,680 Now, in isolation, in a vacuum, is 18% growth good? 141 00:06:28,280 --> 00:06:31,240 Yeah, it's good, especially at the scale that AWS is at. 142 00:06:31,560 --> 00:06:34,680 It's at enormous scale, $116 billion in revenue. 143 00:06:35,120 --> 00:06:37,080 So this wasn't bad. In fact, they beat their 144 00:06:37,080 --> 00:06:39,120 expectations. But investors were still 145 00:06:39,120 --> 00:06:42,240 underwhelmed by this result. Don't you hate it when you have 146 00:06:42,240 --> 00:06:44,960 something good going on in your life and someone has to steal 147 00:06:44,960 --> 00:06:46,800 your Thunder? Well, that's exactly what 148 00:06:46,800 --> 00:06:49,920 Microsoft did. Amazon has this great cloud. 149 00:06:49,920 --> 00:06:51,520 Business. It's growing quickly, it's 150 00:06:51,520 --> 00:06:53,400 highly profitable, it's super scaled. 151 00:06:53,680 --> 00:06:55,320 You know, it's a fantastic business. 152 00:06:55,800 --> 00:06:58,400 And then Microsoft came in and they said, no, we're the ones 153 00:06:58,400 --> 00:07:00,280 growing faster. We're the ones with the more 154 00:07:00,280 --> 00:07:02,720 special business. Satya Nadella reports with 155 00:07:02,720 --> 00:07:07,200 Microsoft's earnings that the cloud surpassed 75 billion in 156 00:07:07,200 --> 00:07:13,840 revenue, up 34% in the quarter. Now all of a sudden, Amazon's 17 157 00:07:13,840 --> 00:07:16,960 or 18% doesn't feel so special. In fact, it seems like it's 158 00:07:16,960 --> 00:07:19,840 falling behind. Even though it's growing fast, 159 00:07:19,840 --> 00:07:22,520 it's falling behind. And that's what Microsoft did. 160 00:07:22,520 --> 00:07:25,800 This grew so fast that it grew even faster than Google, which 161 00:07:25,800 --> 00:07:27,360 is the smaller of the three clouds. 162 00:07:27,680 --> 00:07:31,200 And Google's growing fast. In fact, Microsoft Azure grew so 163 00:07:31,200 --> 00:07:34,280 fast in that quarter that in just total revenue, it gained 164 00:07:34,280 --> 00:07:39,000 more revenue than Amazon's AWS. So Satya Nadella completely 165 00:07:39,000 --> 00:07:40,680 stole the Thunder from Andy Jassi. 166 00:07:40,680 --> 00:07:43,560 He made the quarter that Amazon had looked like it wasn't so 167 00:07:43,560 --> 00:07:45,960 great by contrast. And that was the problem of 168 00:07:45,960 --> 00:07:48,600 Amazon this most recent quarter. It's part of the reason why the 169 00:07:48,600 --> 00:07:51,080 stock has done OK, but not great. 170 00:07:51,360 --> 00:07:54,000 And Microsoft by contrast, is doing great. 171 00:07:54,080 --> 00:07:58,840 Amazon stock is up 5.8% year to date, lagging the S&P 500 in the 172 00:07:58,840 --> 00:08:01,240 QQQ. We plug in Microsoft, you can 173 00:08:01,240 --> 00:08:03,960 see the dramatic outperformance this company has had. 174 00:08:04,200 --> 00:08:07,040 It's up 18 / 18%. Year to date. 175 00:08:07,360 --> 00:08:09,200 Beating out both the major indices. 176 00:08:09,280 --> 00:08:12,360 And that's where we are now. Investors are most bullish on 177 00:08:12,360 --> 00:08:14,760 the best part of each company, which is the cloud. 178 00:08:15,040 --> 00:08:17,560 And right now it looks like Microsoft is the big winner. 179 00:08:17,560 --> 00:08:20,080 But like we've seen in recent quarters, things can change 180 00:08:20,080 --> 00:08:21,840 quickly. And there's reason to believe 181 00:08:21,840 --> 00:08:23,960 that this may change quickly in the future. 182 00:08:23,960 --> 00:08:26,680 Let's take a look at some of the reasons why with this write up 183 00:08:26,680 --> 00:08:29,840 from Semi Analysis. They say that 2 1/2 years ago we 184 00:08:29,840 --> 00:08:32,120 flagged A looming cloud crisis at AWS. 185 00:08:32,640 --> 00:08:35,919 Today, the evidence has mounted. AWS is the crown jewel of 186 00:08:35,919 --> 00:08:40,200 Amazon's empire, generating 60% of the group profits and 187 00:08:40,200 --> 00:08:42,640 dominating the lucrative cloud computing market. 188 00:08:42,880 --> 00:08:46,760 But it struggles to translate this strength into a new GPU and 189 00:08:46,800 --> 00:08:50,080 XPU cloud era. Microsoft Azure now leads the 190 00:08:50,080 --> 00:08:53,560 market on quarterly new cloud revenue, and the gap between 191 00:08:53,560 --> 00:08:56,400 Google Cloud and AWS has materially narrowed, 192 00:08:56,720 --> 00:09:00,880 specifically or especially with Google's big moves on TPU that 193 00:09:00,880 --> 00:09:02,840 we've been posting about for over a month. 194 00:09:03,400 --> 00:09:07,560 So if you're not aware, Google has their own chips, their Tpus, 195 00:09:07,960 --> 00:09:09,480 and these things are really good. 196 00:09:09,480 --> 00:09:11,960 They're leveraging them to build up their cloud at a very fast 197 00:09:11,960 --> 00:09:14,400 pace. They've also, it also makes it 198 00:09:14,400 --> 00:09:16,000 so that they're less reliant on NVIDIA. 199 00:09:16,560 --> 00:09:20,000 But with Amazon, it says the markets have noticed year to 200 00:09:20,000 --> 00:09:23,400 date, Amazon is a clear laggard among the four tech and AI 201 00:09:23,400 --> 00:09:27,200 Titans as investors mark down the company's most the most for 202 00:09:27,200 --> 00:09:30,920 losing momentum and AI. So if we look at the chart here, 203 00:09:31,800 --> 00:09:35,400 AWS, Microsoft Azure and the cloud computing platform, so 204 00:09:35,400 --> 00:09:39,440 Microsoft is gaining by far the most incremental market share. 205 00:09:39,680 --> 00:09:42,720 They're actually gaining more market share than Amazon, which 206 00:09:42,720 --> 00:09:46,200 is bigger, which by the numbers probably shouldn't be happening. 207 00:09:46,520 --> 00:09:49,200 Amazon should have incrementally added more revenue than 208 00:09:49,200 --> 00:09:51,200 Microsoft Azure because it's at a bigger scale. 209 00:09:51,200 --> 00:09:54,040 That's typically how it works. We see the opposite happening 210 00:09:54,040 --> 00:09:56,120 here today. Semi Analysis is back with 211 00:09:56,120 --> 00:09:59,480 another out of consensus call. While the market overplays the 212 00:09:59,480 --> 00:10:03,320 cloud crisis theme, we call for an AWSAI resurgence. 213 00:10:03,560 --> 00:10:06,440 We laid out our thesis a month ago to our core research 214 00:10:06,440 --> 00:10:10,240 subscribers forecasting an upcoming acceleration beyond 20% 215 00:10:10,440 --> 00:10:13,040 year over year growth by the end of 2025. 216 00:10:13,640 --> 00:10:16,600 So now they're making this call that AW is actually going to 217 00:10:16,800 --> 00:10:21,840 start speeding back up from the 17 to 18% it's at now quarter 218 00:10:21,840 --> 00:10:24,480 after quarter. Next quarter is going to be 219 00:10:24,480 --> 00:10:30,680 18.5%, then 21 percent, 23% all the way up to 25%. 220 00:10:30,800 --> 00:10:34,600 Now obviously that's massive. If Amazon can speed back their 221 00:10:34,600 --> 00:10:38,600 revenue growth up to 25%, a lot of investors right now are 222 00:10:38,600 --> 00:10:41,000 pricing in more revenue deceleration. 223 00:10:41,200 --> 00:10:44,640 So this is a massive out of consensus call, and their thesis 224 00:10:44,640 --> 00:10:49,480 is based primarily on what they call Amazon savior Anthropic. 225 00:10:49,920 --> 00:10:52,600 The startup has been a clear outperformer in the Gen. 226 00:10:52,640 --> 00:10:56,800 AI market in 2025, multiplying revenue fivefold year to date to 227 00:10:56,800 --> 00:11:00,560 reach 5 billion annualized. So you can see Anthropics and 228 00:11:00,560 --> 00:11:03,560 Open AI annualized revenue. Open AI is much bigger, but 229 00:11:03,560 --> 00:11:06,720 Anthropics growing much faster. To keep that trajectory, 230 00:11:06,720 --> 00:11:08,920 Anthropic is betting hard on scaling laws. 231 00:11:09,240 --> 00:11:13,400 While Dario's startup draws fewer headlines than Open AIXAI 232 00:11:13,400 --> 00:11:16,760 and Meta Super Intelligence, it isn't shy about investments. 233 00:11:17,600 --> 00:11:21,280 AWS has well over a GW of data center capacity in the final 234 00:11:21,280 --> 00:11:25,000 stages of construction for its anchor customers, AWS is 235 00:11:25,000 --> 00:11:27,600 building data centers faster than it has ever done in its 236 00:11:27,600 --> 00:11:30,160 entire history. And there's much more on the 237 00:11:30,160 --> 00:11:33,240 horizon. So we see these, these, they 238 00:11:33,240 --> 00:11:37,520 look like Google Map photos of the massive data center capacity 239 00:11:37,520 --> 00:11:39,640 that AWS is building out. And this makes sense because you 240 00:11:39,640 --> 00:11:42,600 look at Amazon's CapEx and no one else is close. 241 00:11:42,840 --> 00:11:45,560 They spend. Far more on CapEx and R&D than 242 00:11:45,560 --> 00:11:47,880 anyone else. And this is where it's going 243 00:11:47,880 --> 00:11:50,040 towards brand new data center capacity. 244 00:11:50,160 --> 00:11:52,800 Now they mention here that while Amazon's AI data centers are 245 00:11:52,800 --> 00:11:56,040 impressive in scale and speed, the design of the individual 246 00:11:56,040 --> 00:11:59,160 buildings is unremarkable. They're hyper optimized for air 247 00:11:59,160 --> 00:12:01,200 cooling. This blueprint is identical to 248 00:12:01,200 --> 00:12:04,000 five year old traditional AWS cloud data centers. 249 00:12:04,000 --> 00:12:06,840 What makes these facilities unique is on the inside they'll 250 00:12:06,840 --> 00:12:10,960 host the world's largest cluster of non NVIDIA AI chips with just 251 00:12:10,960 --> 00:12:14,640 under 1,000,000 Tranium 2 and the largest campus. 252 00:12:14,760 --> 00:12:16,720 Most of you aren't familiar with the differences in these. 253 00:12:16,840 --> 00:12:19,560 Chips, but this is where we get a little bit technical here, and 254 00:12:19,560 --> 00:12:21,400 this is what's important to Amazon's growth. 255 00:12:21,440 --> 00:12:25,440 Tranium 2 lags NVIDIA systems in many ways, but it was pivotal to 256 00:12:25,440 --> 00:12:30,840 the multi GW AWS Anthropic deal. It's memory bandwidth per TCO 257 00:12:30,840 --> 00:12:34,120 advantage perfectly fits into Anthropics aggressive 258 00:12:34,120 --> 00:12:37,400 reinforcement learning road map. Dario Modius startup was heavily 259 00:12:37,400 --> 00:12:40,800 involved in the design process and its influence on the Tranium 260 00:12:40,800 --> 00:12:43,960 road map only grows from hair. Put plainly, Training 2 is 261 00:12:43,960 --> 00:12:47,200 converging towards an Anthropic custom silicon program. 262 00:12:47,680 --> 00:12:51,640 This will enable Anthropic to be alongside Google Deepmine, the 263 00:12:51,640 --> 00:12:55,440 only AI lab benefiting from tight hardware and software Co 264 00:12:55,440 --> 00:12:59,720 designed in the near term. So we have a a chip here, 265 00:13:00,000 --> 00:13:03,080 Tranium 2, which overall, if you're just to look at the 266 00:13:03,080 --> 00:13:05,040 stats, it's not as good as Nvidia's. 267 00:13:05,440 --> 00:13:07,680 But what they're doing to make up for it not being as good 268 00:13:07,680 --> 00:13:12,080 generally is making it hyper customized to the specific AI 269 00:13:12,080 --> 00:13:15,280 that they're using. They're using Anthropic, and the 270 00:13:15,280 --> 00:13:18,240 people behind Anthropic are involved in the design of this 271 00:13:18,240 --> 00:13:21,320 chip so they can make it be perfect for what they want. 272 00:13:21,400 --> 00:13:23,400 And so now they're having tighter hardware and software 273 00:13:23,400 --> 00:13:25,120 Co. Design Now the reason that this 274 00:13:25,120 --> 00:13:28,080 is important is it's not just to save a few bucks for Amazon, 275 00:13:28,360 --> 00:13:31,040 it's to win over more usage and more customers. 276 00:13:31,040 --> 00:13:34,280 This has been a bottleneck for their sales process, they say. 277 00:13:34,280 --> 00:13:37,280 To understand the causes of Amazon's underperformance in the 278 00:13:37,280 --> 00:13:39,280 Gen. AI era, we can analyse the 279 00:13:39,280 --> 00:13:43,160 drivers of success of the GPU and XPU cloud market in the most 280 00:13:43,160 --> 00:13:45,320 simplistic way. We see two primary customer 281 00:13:45,320 --> 00:13:48,160 groups for this market. There's the wholesale people 282 00:13:48,320 --> 00:13:51,600 like Open AI, Anthropic, Byte Dance, and then there's the, the 283 00:13:51,600 --> 00:13:54,560 managed smaller customers such as start-ups, research 284 00:13:54,560 --> 00:13:57,120 institutions, enterprise pilot projects. 285 00:13:57,600 --> 00:14:00,080 So they're trying to, to gain both of these type of customers. 286 00:14:00,080 --> 00:14:02,920 They're both really important. It says in the second category, 287 00:14:03,080 --> 00:14:05,200 this is where Amazon has been strong. 288 00:14:05,560 --> 00:14:08,000 They're winning over these smaller customers. 289 00:14:08,280 --> 00:14:10,240 In fact, they're, they have more pricing power. 290 00:14:10,240 --> 00:14:12,160 They have the ability to win them over and keep them. 291 00:14:12,720 --> 00:14:15,400 And they say that it has high performance with their advanced 292 00:14:15,400 --> 00:14:17,280 software layers. It's when you're looking for the 293 00:14:17,280 --> 00:14:20,760 big anchor tenants, the big firms to use the Amazon has 294 00:14:20,760 --> 00:14:23,440 fallen behind. More important than AWS is XPU 295 00:14:23,440 --> 00:14:26,720 business growth is the ability to secure anchor customers. 296 00:14:27,080 --> 00:14:29,600 The market makers in this first wave of Gen. 297 00:14:29,720 --> 00:14:34,320 AI demand scale, time to market, deep partnerships and pricing 298 00:14:34,560 --> 00:14:37,720 are key to winning these accounts more so than advanced 299 00:14:37,720 --> 00:14:40,920 software layers. No firm better illustrates this 300 00:14:40,920 --> 00:14:44,600 than Microsoft Azure's AI outperformance over appears is 301 00:14:44,600 --> 00:14:47,600 entirely driven by its open AI partnership. 302 00:14:47,760 --> 00:14:50,440 Even though Amazon's winning over like thousands, you know, 303 00:14:50,440 --> 00:14:53,160 millions of these smaller customers and, and people that 304 00:14:53,160 --> 00:14:55,640 are relying on them, Microsoft's just winning the ones that 305 00:14:55,640 --> 00:14:57,200 matter. They're winning the bigger ones. 306 00:14:57,680 --> 00:15:03,240 As of Q22025, all of open AIS, over $10 billion cloud spending 307 00:15:03,480 --> 00:15:06,320 is booked by Azure. Amazon understood early the need 308 00:15:06,320 --> 00:15:08,520 for an anchor customer, and that's where they expanded their 309 00:15:08,520 --> 00:15:11,760 partnership with Anthropic. The partnership expanded in 310 00:15:11,760 --> 00:15:15,400 March of 2024 and then expanded even further and further. 311 00:15:15,480 --> 00:15:17,360 Amazon's like, we need to have our own open AI. 312 00:15:17,360 --> 00:15:18,640 We're going to go with Anthropic. 313 00:15:18,720 --> 00:15:21,360 So even though Amazon is great at serving the smaller customers 314 00:15:21,360 --> 00:15:24,000 with their cloud needs, they're not winning over the anchor 315 00:15:24,000 --> 00:15:25,560 tenant. Business because they don't have 316 00:15:25,560 --> 00:15:28,800 the chips, they don't have the Tpus and they need more capacity 317 00:15:28,840 --> 00:15:31,040 and that's what they believe is going to change with these data 318 00:15:31,040 --> 00:15:34,000 centers being completed, the training, 2 chip volumes picking 319 00:15:34,000 --> 00:15:36,840 up with over a million of them. They believe that they're going 320 00:15:36,840 --> 00:15:39,480 to handle a lot more of the demand from Anthropic in the 321 00:15:39,480 --> 00:15:41,360 future. Their forecasts again here are 322 00:15:41,360 --> 00:15:44,440 that every single quarter Aws's growth is going to pick up 323 00:15:44,640 --> 00:15:47,520 quarter after quarter. So obviously if this did happen, 324 00:15:47,520 --> 00:15:52,120 if Amazon did reaccelerate AWS back up to 25% over the next 325 00:15:52,120 --> 00:15:54,360 three or four quarters. That would be huge for the 326 00:15:54,360 --> 00:15:56,080 stock. We'd see the stock climb 327 00:15:56,080 --> 00:15:59,560 dramatically. It'd go up to 2425260. 328 00:15:59,840 --> 00:16:02,640 Amazon today would be dramatically undervalued if that 329 00:16:02,640 --> 00:16:04,920 happens. Now, there's no guarantees of 330 00:16:04,920 --> 00:16:08,440 any of this, but I'm bullish on Amazon for a number of reasons, 331 00:16:08,800 --> 00:16:11,520 not just the reaccelerating cloud growth, but also because 332 00:16:11,520 --> 00:16:13,960 like Google, they have a lot of diversification throughout their 333 00:16:13,960 --> 00:16:17,760 business, a lot of optionality. Zoox is now testing robo taxis. 334 00:16:17,760 --> 00:16:21,320 They're driving around in Vegas already with no paid employee. 335 00:16:21,320 --> 00:16:23,080 Nobody's sitting in the passenger's seat. 336 00:16:23,280 --> 00:16:24,760 They're just going on by themselves. 337 00:16:24,840 --> 00:16:26,840 And of course, there's the whole theme of automation. 338 00:16:27,200 --> 00:16:29,920 If I look at a company, there's none other than Amazon that can 339 00:16:29,920 --> 00:16:32,760 benefit more greatly from automation with all their 340 00:16:32,760 --> 00:16:35,120 warehouses, all their delivery drivers. 341 00:16:35,520 --> 00:16:38,560 Making any more efficiency creates enormous operating 342 00:16:38,560 --> 00:16:41,800 leverage, which translates into huge profits for this company. 343 00:16:42,240 --> 00:16:44,960 So right now, Amazon's a company that I still feel good about. 344 00:16:44,960 --> 00:16:47,560 It's a stock that I still think right now is a buy. 345 00:16:47,760 --> 00:16:51,200 I see it going a lot higher in the future, especially if this 346 00:16:51,200 --> 00:16:53,480 AWS growth continues on. Now moving on, we turn our 347 00:16:53,480 --> 00:16:55,960 attention to Salesforce. This is another company in My 348 00:16:55,960 --> 00:16:59,080 Portfolio. It's one of the two companies in 349 00:16:59,080 --> 00:17:01,880 My Portfolio that I consider losers so far. 350 00:17:01,880 --> 00:17:03,080 Let's go ahead and take a look at them. 351 00:17:03,240 --> 00:17:05,839 In my combined portfolios, I have 15 holders buildings. 352 00:17:05,839 --> 00:17:07,200 Two of them are currently in the red. 353 00:17:07,520 --> 00:17:09,760 One of them is Duolingo, one of them is Salesforce. 354 00:17:09,760 --> 00:17:11,680 Let's go ahead and just take a look at Salesforce here. 355 00:17:11,680 --> 00:17:14,000 We have it here. It doesn't have the right logo 356 00:17:14,000 --> 00:17:15,359 there, but we have Salesforce here. 357 00:17:15,760 --> 00:17:19,440 It's a $62,000 position, currently $5000 in the red. 358 00:17:19,880 --> 00:17:22,960 Now this translates to being down 8% on this position. 359 00:17:23,440 --> 00:17:27,560 So when I look at assessing my my wins and losses in My 360 00:17:27,560 --> 00:17:31,920 Portfolio, I like to look at it from how bad are my losers and 361 00:17:31,920 --> 00:17:34,600 how good are the winners in most cases. 362 00:17:34,600 --> 00:17:37,880 What I'm hoping for is that if I, if I lose money on any 363 00:17:37,880 --> 00:17:39,840 company, which I don't want to do, I want to make money on 364 00:17:39,840 --> 00:17:41,640 every single company that I invest in. 365 00:17:42,040 --> 00:17:44,600 That's the goal and that's what I aim for with every single 366 00:17:44,600 --> 00:17:47,400 investment. But in the case that you do have 367 00:17:47,400 --> 00:17:50,320 a loser, and that will happen if you pick stocks, if you have a 368 00:17:50,320 --> 00:17:53,920 portfolio of hand picked stocks, you will have losers. 369 00:17:54,240 --> 00:17:56,800 Warren Buffett has had them, Charlie Munger has had them, 370 00:17:57,000 --> 00:17:59,920 Peter Lynch has had them. You name it. 371 00:17:59,920 --> 00:18:02,760 Pick your favorite investor. Dev Cantosari has had them. 372 00:18:02,760 --> 00:18:04,240 Bill Ackman has had plenty of them. 373 00:18:04,800 --> 00:18:06,520 Every investor experiences losers. 374 00:18:06,520 --> 00:18:09,600 It's just a a matter of time until you do. 375 00:18:10,200 --> 00:18:12,800 And in Salesforce right now, we have a company that's currently 376 00:18:12,800 --> 00:18:15,400 in the red and it's been in the red for a while, like it's, it's 377 00:18:15,400 --> 00:18:17,200 been a shaky company to begin with. 378 00:18:17,520 --> 00:18:21,440 This one traded up at one point to above $300 per share, quickly 379 00:18:21,440 --> 00:18:24,720 went back down and the sentiment is incredibly low for it. 380 00:18:24,720 --> 00:18:29,000 So when I look at Salesforce today, I am down $5000 on this 381 00:18:29,000 --> 00:18:33,240 position, less than 10%. And that's OK. 382 00:18:33,240 --> 00:18:36,360 When I look at my gains in many of these companies with Google, 383 00:18:36,360 --> 00:18:39,480 which I just invested in recently in this portfolio, it's 384 00:18:39,480 --> 00:18:41,960 already up 18,000. And that's the magic of 385 00:18:41,960 --> 00:18:43,920 investing. Naturally, when you buy 386 00:18:43,920 --> 00:18:46,520 companies, especially compounding machines, they have 387 00:18:46,520 --> 00:18:48,800 dramatically more upside than downside. 388 00:18:49,160 --> 00:18:51,160 You can only lose what you invest, but you can have 389 00:18:51,160 --> 00:18:54,800 companies go up 100, two, 100%. There's many companies that I've 390 00:18:54,800 --> 00:18:58,320 invested in that are up well over 100% since my initial 391 00:18:58,320 --> 00:19:00,520 investment. I can look at Texas Roadhouse as 392 00:19:00,520 --> 00:19:02,720 an example. The most money that I've ever 393 00:19:02,720 --> 00:19:07,120 put in the Texas Roadhouse is $35,000 and it has $40,000 in 394 00:19:07,120 --> 00:19:08,920 gains. These are companies like Netflix 395 00:19:08,920 --> 00:19:10,560 where I've made out far more than I put in. 396 00:19:11,200 --> 00:19:13,240 But in any case, we have Salesforce sitting here. 397 00:19:13,240 --> 00:19:15,800 It's a company that this stock is not performing well, not 398 00:19:15,800 --> 00:19:17,120 going the way that I want it to go. 399 00:19:17,120 --> 00:19:19,320 But when I look at the most recent earnings report of this 400 00:19:19,320 --> 00:19:22,920 company, which they just reported, it just didn't look 401 00:19:22,920 --> 00:19:25,560 that bad when I do analysis on it. 402 00:19:25,880 --> 00:19:29,000 And I'm trying to be critical and trying to be fair with this 403 00:19:29,000 --> 00:19:31,120 company. I didn't see anything that was a 404 00:19:31,120 --> 00:19:33,640 major red flag. And I think you can do a thought 405 00:19:33,640 --> 00:19:37,120 experiment here. Just erase the name Salesforce, 406 00:19:37,120 --> 00:19:39,080 get rid of all the bad sentiment. 407 00:19:39,080 --> 00:19:41,960 Get rid of Marc Benioff and your personal opinion of him. 408 00:19:42,360 --> 00:19:45,440 And just try to imagine that this is a generic company that 409 00:19:45,440 --> 00:19:46,800 you're reading an earnings report out. 410 00:19:47,000 --> 00:19:51,000 We have the company posting Q2 results with revenue of 10.25 411 00:19:51,000 --> 00:19:54,680 billion, up 10 percent, 9% on constant currency. 412 00:19:54,720 --> 00:19:57,160 That's not the fastest growth in the world, but that's also not 413 00:19:57,160 --> 00:19:59,920 the slowest. Companies like S&P Global, Ms. 414 00:20:00,000 --> 00:20:01,960 CI. You have companies like Moodys, 415 00:20:02,200 --> 00:20:05,200 you have companies like Equifax, lots of high quality companies 416 00:20:05,200 --> 00:20:08,440 that grow in the range of 10%. Gap margins also expanded. 417 00:20:08,680 --> 00:20:12,240 This marks the 10th consecutive quarter of margin expansion. 418 00:20:12,800 --> 00:20:16,080 So the margins keep going up and it's not a one time thing. 419 00:20:16,280 --> 00:20:19,920 The 10th consecutive quarter of margin expansion, operating cash 420 00:20:19,920 --> 00:20:23,080 flow guidance was raised significantly with expectations 421 00:20:23,080 --> 00:20:25,200 of nearly $15 billion for the year. 422 00:20:25,240 --> 00:20:27,760 So operating cash flow is going up a lot and this company also 423 00:20:27,760 --> 00:20:30,600 doesn't pay a lot in CapEx. So this translates into a lot of 424 00:20:30,600 --> 00:20:32,240 free cash flow. Then you have the remaining 425 00:20:32,240 --> 00:20:35,560 performance obligations. These are the CRP OS, which are 426 00:20:35,560 --> 00:20:39,680 up 29.4 billion eleven percent. So you have more revenue down 427 00:20:39,680 --> 00:20:41,480 the line being added to this company. 428 00:20:41,720 --> 00:20:43,680 These are contracts that they have to fulfill on in the 429 00:20:43,680 --> 00:20:46,200 future. So we have revenue visibility in 430 00:20:46,200 --> 00:20:49,080 the future. The company's increasing its low 431 00:20:49,080 --> 00:20:53,800 end financial year 2026 annual revenue guidance from 41.4 to 432 00:20:53,800 --> 00:20:57,360 41.3 billion. That's up around 8 1/2 and 9%. 433 00:20:57,720 --> 00:21:00,480 Now this is a part that investors had a problem with and 434 00:21:00,480 --> 00:21:01,800 the reason that the stock was down. 435 00:21:02,000 --> 00:21:05,360 It's growing just a bit slower than investors would like, but 436 00:21:05,360 --> 00:21:07,960 they also raised their margin and cash flow outlook as well. 437 00:21:07,960 --> 00:21:10,000 Again, if you just try to disconnect that this is 438 00:21:10,000 --> 00:21:12,960 Salesforce, which you're told is a bad company and you shouldn't 439 00:21:12,960 --> 00:21:15,920 like it, these results don't look that bad. 440 00:21:15,960 --> 00:21:17,880 And even when we look at Salesforce in the different 441 00:21:17,880 --> 00:21:20,000 projects they're working on, a huge push has been with 442 00:21:20,080 --> 00:21:23,280 Agentforce. Agentforce is their new agentic 443 00:21:23,280 --> 00:21:24,960 approach and it's tied to everything. 444 00:21:25,240 --> 00:21:27,240 So this isn't just a customer service spot. 445 00:21:27,320 --> 00:21:30,320 That's not what Agentforce is. It's literally part of every 446 00:21:30,320 --> 00:21:33,200 aspect of Salesforce. Salesforce is focused on 447 00:21:33,200 --> 00:21:37,400 transforming into an enabling agentic enterprises where AI 448 00:21:37,400 --> 00:21:40,720 agents work alongside humans to automate, orchestrate and 449 00:21:40,720 --> 00:21:43,000 augment workflows across all products. 450 00:21:43,160 --> 00:21:45,800 This transformation extends across sales, service, 451 00:21:45,800 --> 00:21:49,280 marketing, commerce, Tableau that's like their charting tool, 452 00:21:49,680 --> 00:21:53,200 Slack and the new IT service service segment, ITSM, which 453 00:21:53,200 --> 00:21:55,240 they're competing. It looks like they're competing 454 00:21:55,240 --> 00:21:57,920 directly with teams and maybe a little bit of work day, but 455 00:21:57,920 --> 00:21:59,560 they're moving into that category as well. 456 00:22:00,000 --> 00:22:04,160 Agentforce, Salesforce's AI, Agent platform and Data Cloud 457 00:22:04,160 --> 00:22:06,400 are key pillars in this transformation. 458 00:22:06,920 --> 00:22:10,880 Adoption is accelerating. There has been 60% quarter over 459 00:22:10,880 --> 00:22:14,560 quarter increase in customers moving from pilot to production 460 00:22:14,800 --> 00:22:18,480 into Agent force. And over 40% of bookings are 461 00:22:18,480 --> 00:22:22,320 from our new bookings are from Agent Force, come from upsells 462 00:22:22,320 --> 00:22:24,840 of existing customers. Agentic use cases are 463 00:22:24,840 --> 00:22:28,920 highlighted including DIRECTV, Under Armour, Reddit, Telepass, 464 00:22:28,920 --> 00:22:32,200 Pandora, williams-sonoma demonstrating rapid development, 465 00:22:32,200 --> 00:22:35,520 cost saving and improved KPIs. So Agent Force is their new 466 00:22:35,520 --> 00:22:37,800 direction and you can see that this is actually getting 467 00:22:37,800 --> 00:22:39,680 customers. In fact, when we look at one of 468 00:22:39,680 --> 00:22:42,040 the KPIs we have here in Qualtrim, this is a new one. 469 00:22:42,480 --> 00:22:46,000 It tracks the total customers of Agent Force as well as the paid 470 00:22:46,000 --> 00:22:48,760 customers over time. So you have right here total 471 00:22:48,760 --> 00:22:51,480 customers and this isn't year over year, this is quarter by 472 00:22:51,480 --> 00:22:54,920 quarter. So just Q4 of 2024, they had 473 00:22:54,920 --> 00:22:58,280 200. Now they have 12,500 customers 474 00:22:58,280 --> 00:23:01,840 using Agent Force. Now the reason that some of the 475 00:23:01,840 --> 00:23:04,840 customers aren't paid is because this is simply part of their 476 00:23:04,840 --> 00:23:07,800 sales process. They give free trials, they they 477 00:23:07,800 --> 00:23:10,280 give you opportunities to integrate it into your services, 478 00:23:10,280 --> 00:23:13,360 try it out and then they funnel you down to the paid version. 479 00:23:13,600 --> 00:23:16,640 It's kind of like a, a freemium way of selling it. 480 00:23:16,840 --> 00:23:19,880 They want to get you used to it and using it and integrate it 481 00:23:19,880 --> 00:23:22,040 into your business. And then they have little 482 00:23:22,040 --> 00:23:23,640 upgrades and different things to sell you. 483 00:23:23,920 --> 00:23:26,120 So you can see that they have the total customers growing 484 00:23:26,120 --> 00:23:30,360 rapidly now to 12,500, but they also have paid customers growing 485 00:23:30,360 --> 00:23:35,160 rapidly from Q2 of 2025, it went from 4000 to 6000 customers. 486 00:23:35,640 --> 00:23:37,840 A lot of customers now switching to agent force. 487 00:23:37,840 --> 00:23:41,000 Now as Salesforce trades down, the valuation becomes a bit more 488 00:23:41,000 --> 00:23:43,120 attractive. Right now it's at five year low 489 00:23:43,120 --> 00:23:45,640 valuations. Doesn't mean it can't go lower, 490 00:23:45,880 --> 00:23:48,560 but it's also just a bit more safe now than it has been. 491 00:23:48,960 --> 00:23:52,080 And if Salesforce continues to grow even at the moderate pace 492 00:23:52,080 --> 00:23:55,400 that it is, 10% revenue growth, maybe a little bit faster. 493 00:23:55,400 --> 00:23:59,080 Earnings per share growth 1213%. The stock should become 494 00:23:59,080 --> 00:24:01,280 attractive over time. So even though it's not a 495 00:24:01,280 --> 00:24:04,440 company that I'm I'm hyper excited about, I haven't loved 496 00:24:04,440 --> 00:24:06,840 the developments of Salesforce. I wish it was growing faster. 497 00:24:07,200 --> 00:24:09,320 Right now, it's just not in a situation where I want to sell 498 00:24:09,320 --> 00:24:11,280 it. I feel like there is upside for 499 00:24:11,280 --> 00:24:13,360 this company. I feel like the shares are 500 00:24:13,360 --> 00:24:15,560 attractive here. So I'm fine putting this one on 501 00:24:15,560 --> 00:24:18,160 hold, just having it in the portfolio and waiting a bit 502 00:24:18,160 --> 00:24:20,400 longer. I don't see any urgent need to 503 00:24:20,400 --> 00:24:22,640 sell out of this one. Now moving on, we get to another 504 00:24:22,640 --> 00:24:24,520 loser in My Portfolio. And this is something that I 505 00:24:24,520 --> 00:24:27,600 just want to emphasize a lot of investors online, they'll show 506 00:24:27,600 --> 00:24:30,120 you all the stocks that are doing well and I have many that 507 00:24:30,120 --> 00:24:32,880 are doing well. Again, we have Google, Amazon, 508 00:24:32,880 --> 00:24:35,920 Netflix, S&P Global, MasterCard, you name it. 509 00:24:35,920 --> 00:24:39,280 Most of them are doing well and those are fun to show off, but I 510 00:24:39,280 --> 00:24:40,600 do show the ones that don't go well. 511 00:24:40,600 --> 00:24:43,240 Salesforce and Duolingo are two of the stocks that are in the 512 00:24:43,240 --> 00:24:46,280 red of My Portfolio. Duolingo is 1 in particular. 513 00:24:46,360 --> 00:24:50,120 It's a $20,000 position and it's now down $5000. 514 00:24:50,520 --> 00:24:54,360 Now I added 1000 more to the position, so I put in $21,000 515 00:24:54,360 --> 00:24:58,400 total and this one has been selling down every single day 516 00:24:58,600 --> 00:25:01,920 like clockwork. Every day it's down another 2 or 517 00:25:01,920 --> 00:25:03,680 3%. Now if you followed me for 518 00:25:03,680 --> 00:25:07,080 years, you'll see that I've had some situations where I buy 519 00:25:07,080 --> 00:25:10,440 stocks and they rock it up afterwards, almost immediately 520 00:25:10,440 --> 00:25:12,560 afterwards. Texas Roadhouse is one of those. 521 00:25:13,000 --> 00:25:16,080 I I bought the stock at a decent time and it was just off to the 522 00:25:16,080 --> 00:25:17,680 races. That one was in the green so 523 00:25:17,680 --> 00:25:20,520 fast. Another one was Booking 524 00:25:20,520 --> 00:25:22,280 Holdings. I bought that one. 525 00:25:22,680 --> 00:25:25,200 I think it dipped a little bit because of an earnings report. 526 00:25:25,200 --> 00:25:27,960 And then after that it was immediately in the green into. 527 00:25:27,960 --> 00:25:30,720 It's another company that almost immediately after I bought it, 528 00:25:30,720 --> 00:25:33,720 it was in the green by a lot. In fact, I made a lot of money 529 00:25:33,720 --> 00:25:36,480 quickly on Intuit. Chipotle's another one bought 530 00:25:36,480 --> 00:25:38,840 it, it was in the green incredibly fast. 531 00:25:38,960 --> 00:25:40,840 Then there's been a number of stocks I've bought and they 532 00:25:40,840 --> 00:25:43,960 immediately went into the. Red ASML was one of them, 533 00:25:43,960 --> 00:25:46,800 Equifax was another one of them. Both of those companies have 534 00:25:46,800 --> 00:25:49,240 recovered back into the green, but right when I bought them 535 00:25:49,240 --> 00:25:52,520 they were headed downwards. And Duolingo has been a unique 536 00:25:52,520 --> 00:25:55,520 stock and that I bought it and it went dramatically in the 537 00:25:55,520 --> 00:25:58,720 green and now it's dramatically in the red, all in a very short 538 00:25:58,720 --> 00:26:00,200 amount of time, in about a month. 539 00:26:00,680 --> 00:26:04,880 I have not owned this stock for long and it is one volatile 540 00:26:04,880 --> 00:26:06,360 stock. Now. 541 00:26:06,360 --> 00:26:07,960 I just want to highlight a couple things here. 542 00:26:08,880 --> 00:26:12,520 First of all, with Duolingo in particular, I want everyone to 543 00:26:12,520 --> 00:26:16,080 just just take a step back and and just relax a little bit. 544 00:26:16,560 --> 00:26:18,800 It's OK. It's OK to have a stock trade up 545 00:26:18,800 --> 00:26:21,720 and down a lot. A lot of people freak out every 546 00:26:21,720 --> 00:26:25,600 single day, Like every single day that the stock goes up or 547 00:26:25,600 --> 00:26:28,640 down 3%. It's going to change my mind if 548 00:26:28,640 --> 00:26:32,760 I see the stock going down 1.8%. That doesn't make me rethink my 549 00:26:32,760 --> 00:26:36,160 whole thesis that that really doesn't inform you of anything. 550 00:26:36,600 --> 00:26:41,080 The the trading patterns of a highly volatile small cap stock. 551 00:26:41,680 --> 00:26:44,920 Doesn't really inform me. It's not information that I find 552 00:26:44,920 --> 00:26:47,640 useful. What I look at as an investor is 553 00:26:47,640 --> 00:26:49,760 real fundamental information on the company. 554 00:26:50,240 --> 00:26:52,960 I look at the revenue growth, the subscriptions, the 555 00:26:52,960 --> 00:26:55,800 profitability, what I think is happening in the future. 556 00:26:56,040 --> 00:26:58,720 I also look at different things like their social media 557 00:26:58,720 --> 00:27:01,680 presence, how many subscribers or social media followers are 558 00:27:01,680 --> 00:27:03,800 gaining, how many likes they have, right. 559 00:27:03,800 --> 00:27:06,520 I look at real data. The trading pattern of the 560 00:27:06,520 --> 00:27:10,200 company is not important data. It doesn't inform me on my 561 00:27:10,200 --> 00:27:13,480 opinion of the company and that's the difference between a 562 00:27:13,480 --> 00:27:16,920 technical analyst or a trader and a long term fundamental 563 00:27:16,920 --> 00:27:19,000 investor. I've always been on the side of 564 00:27:19,000 --> 00:27:22,560 being a long term fundamental investor, so I make decisions 565 00:27:22,560 --> 00:27:25,400 based off the fundamentals, not based off of what direction the 566 00:27:25,400 --> 00:27:28,480 stock is trading. Now when I try to look at the 567 00:27:28,480 --> 00:27:32,400 reasons why Duolingo went up so much and then down, we can only 568 00:27:32,400 --> 00:27:34,160 guess at this. But there's a couple reasons why 569 00:27:34,160 --> 00:27:37,920 I believe this is happening. First of all, Duolingo is facing 570 00:27:37,920 --> 00:27:41,400 a lot of uncertainties. This is not a consensus pick. 571 00:27:41,840 --> 00:27:44,800 A consensus pick is a stock like Amazon or Google. 572 00:27:45,600 --> 00:27:48,040 Most people agree those are great investments, right? 573 00:27:48,200 --> 00:27:51,320 A lot of people agree like 90%. So those are basically a 574 00:27:51,320 --> 00:27:53,640 consensus that everybody loves these companies. 575 00:27:53,640 --> 00:27:56,040 They agree they're goodbyes. That's not the case with 576 00:27:56,040 --> 00:27:57,880 Duolingo. It's 5050. 577 00:27:57,880 --> 00:28:01,520 It's it's 6040. It might even be 70% think it's 578 00:28:01,520 --> 00:28:04,480 not a great investment, 30% think it think it is. 579 00:28:04,800 --> 00:28:08,520 So it's a highly. Divisive non consensus pick and 580 00:28:08,520 --> 00:28:11,480 that's because there's a lot of questions about this company and 581 00:28:11,480 --> 00:28:13,920 its future. When you have headlines like 582 00:28:13,920 --> 00:28:15,480 this, it brings in more questions. 583 00:28:15,800 --> 00:28:19,040 New AI powered live translation and language learning tools in 584 00:28:19,040 --> 00:28:21,920 Google Translate. So Google released a new update 585 00:28:21,920 --> 00:28:24,480 to their translate tool. The Translate tool has been 586 00:28:24,480 --> 00:28:27,280 around for like a decade, but they released a new update where 587 00:28:27,280 --> 00:28:30,400 you can kind of practice language learning like you can 588 00:28:30,400 --> 00:28:32,840 and Duolingo, and a lot of people look at this and they go, 589 00:28:32,840 --> 00:28:36,080 wow, that that's not good. Google Translate's going to 590 00:28:36,080 --> 00:28:39,080 crush Duolingo. I look at it a bit differently. 591 00:28:39,200 --> 00:28:41,600 I'm bullish on Google. I think they own a lot of great 592 00:28:41,600 --> 00:28:45,240 properties, but they don't crush every company that they compete 593 00:28:45,240 --> 00:28:46,800 with. In fact, that's never been their 594 00:28:46,800 --> 00:28:49,560 history. Google also has YouTube Premium, 595 00:28:49,560 --> 00:28:53,280 which includes YouTube Music. It has virtually all the same 596 00:28:53,280 --> 00:28:58,440 music that Spotify has, and Spotify is up around 500% since 597 00:28:58,440 --> 00:29:02,000 Google released YouTube Premium. Despite the growth in YouTube 598 00:29:02,000 --> 00:29:03,920 Premium, Spotify just keeps growing. 599 00:29:03,960 --> 00:29:06,200 And that's the difference between a company that's hyper 600 00:29:06,200 --> 00:29:09,960 focused on a product, the user experience, and one that's a big 601 00:29:09,960 --> 00:29:13,120 company like Google creating 1 little part of their company 602 00:29:13,120 --> 00:29:15,200 that competes somewhat with that product. 603 00:29:15,600 --> 00:29:18,040 Even myself, I have. Experience in this realm. 604 00:29:18,440 --> 00:29:20,760 Google has a tool called Google Finance. 605 00:29:20,920 --> 00:29:22,840 Has Google Finance crushed Qualtrim? 606 00:29:23,160 --> 00:29:25,600 To the contrary, Qualtrim is growing substantially. 607 00:29:25,600 --> 00:29:29,200 We had 70% growth year over year, and despite the new 608 00:29:29,200 --> 00:29:32,240 implementations and new features they come out with, we continue 609 00:29:32,240 --> 00:29:35,360 to see growth because we're hyper focused on this one thing. 610 00:29:35,640 --> 00:29:38,440 I can tailor the experience exactly to what my audience 611 00:29:38,440 --> 00:29:41,000 wants in a way that Google simply can't do. 612 00:29:41,520 --> 00:29:44,240 So even though I hear news of these big companies that are 613 00:29:44,240 --> 00:29:46,960 getting into this type of AI learning, and we're certainly 614 00:29:46,960 --> 00:29:49,520 going to see a lot more of them, this is something that's already 615 00:29:49,520 --> 00:29:52,280 baked into the thesis that I have for Duolingo. 616 00:29:52,560 --> 00:29:55,520 It's not new information. If you see another tool coming 617 00:29:55,520 --> 00:29:58,280 out with an AI powered learning tool, that's going to be one of 618 00:29:58,280 --> 00:29:59,960 the many that Duolingo competes with. 619 00:30:00,400 --> 00:30:03,720 What Duolingo has accomplished is making their app very fun to 620 00:30:03,720 --> 00:30:05,080 use. Try it out. 621 00:30:05,080 --> 00:30:08,320 It is incredibly, incredibly smooth and fun to use. 622 00:30:08,680 --> 00:30:12,200 It keeps you coming back every single day in a way that Google 623 00:30:12,200 --> 00:30:14,120 Translate is not going to be able to do. 624 00:30:14,560 --> 00:30:17,480 People use this for a few days and unless they're incredibly 625 00:30:17,480 --> 00:30:19,640 dedicated, they're going to turn off of it. 626 00:30:19,880 --> 00:30:22,640 So personally, I don't consider this a game changer in my 627 00:30:22,640 --> 00:30:24,880 thesis. But it is affecting the stock 628 00:30:24,880 --> 00:30:26,760 price and it's causing shares to trade down. 629 00:30:27,320 --> 00:30:30,160 Another thing that I think is actually a more important piece 630 00:30:30,160 --> 00:30:32,720 of news, I think that this is more meaningful than Google's 631 00:30:32,960 --> 00:30:36,000 translation tool. We have the analyst DA Davidson 632 00:30:36,000 --> 00:30:40,080 down grading Duolingo to neutral from the buy side and slashed 633 00:30:40,080 --> 00:30:42,520 its price target to $300.00 from 500. 634 00:30:42,520 --> 00:30:45,760 So this huge price target slash, the brokerage said that 635 00:30:45,760 --> 00:30:49,920 Duolingo's active users slipping about .4% from mid-july to late 636 00:30:49,920 --> 00:30:52,880 August, a period when growth has historically accelerated ahead 637 00:30:52,880 --> 00:30:55,480 of back to school season. Over the past five years, 638 00:30:55,720 --> 00:30:59,480 Duolingo has averaged sequential gains of 8% in monthly active 639 00:30:59,480 --> 00:31:03,880 users and 7.2% in daily active users in the third quarter. 640 00:31:04,360 --> 00:31:09,480 So basically what this analyst is seeing here is a deceleration 641 00:31:09,480 --> 00:31:12,120 in user growth. And that's why they they slash 642 00:31:12,120 --> 00:31:15,480 their price target because part of the, the thesis for Duolingo 643 00:31:15,480 --> 00:31:17,880 is fast growth, fast user growth. 644 00:31:18,200 --> 00:31:20,520 That's what leads to the revenue growth and the paid users. 645 00:31:20,760 --> 00:31:22,320 And they're saying that that's slowing down. 646 00:31:22,400 --> 00:31:26,000 In February of 2025 S early this year, they gained one and a half 647 00:31:26,000 --> 00:31:29,880 million followers on TikTok. So massive growth, which led 648 00:31:29,880 --> 00:31:32,440 into their user growth, their followers on TikTok. 649 00:31:32,440 --> 00:31:34,880 Get exposed to the app that translates to a lot of 650 00:31:34,880 --> 00:31:37,000 conversions. Then after the social media 651 00:31:37,000 --> 00:31:40,200 backlash, the TikTok following went down. 652 00:31:40,440 --> 00:31:43,240 Not only did they stop gaining followers, which they were for a 653 00:31:43,240 --> 00:31:45,840 long period of time, they started losing followers. 654 00:31:45,960 --> 00:31:48,200 And that's what we had before the most recent quarter. 655 00:31:48,680 --> 00:31:51,080 And now we see that that's starting to recover, but it 656 00:31:51,080 --> 00:31:52,720 doesn't look like it's recovering fully. 657 00:31:52,960 --> 00:31:55,480 In fact, right now it's basically neutral. 658 00:31:55,800 --> 00:31:58,320 So they're losing some followers, gaining others, and 659 00:31:58,320 --> 00:32:01,480 they're netting out 0. And Duolingo has forecasted 660 00:32:01,480 --> 00:32:02,760 this. They said that it's going to be 661 00:32:02,760 --> 00:32:06,000 a little bit slower until they regain the momentum on this 662 00:32:06,000 --> 00:32:08,920 social media presence. Now, in terms of sentiment, this 663 00:32:08,920 --> 00:32:11,920 is specifically on TikTok. On Instagram, you can already 664 00:32:11,920 --> 00:32:14,200 see the sentiment improve. There's not many negative 665 00:32:14,200 --> 00:32:16,840 comments and they're even starting to fade away on TikTok. 666 00:32:16,840 --> 00:32:18,320 In the most recent videos they've posted. 667 00:32:18,320 --> 00:32:21,160 There's very few people still having backlash. 668 00:32:21,160 --> 00:32:24,120 Or or making rude comments. Most of it seems overall 669 00:32:24,120 --> 00:32:26,240 positive. So I see this moving in the 670 00:32:26,240 --> 00:32:28,880 right direction, but I also think it could be correct that 671 00:32:28,880 --> 00:32:31,640 this next quarter for. Duolingo maybe a slow one. 672 00:32:31,640 --> 00:32:34,280 I think it could be 1/4 where they gain fewer users than they 673 00:32:34,280 --> 00:32:37,360 typically do, and that's what's being priced into the stock. 674 00:32:37,440 --> 00:32:40,160 If we get another one of those, it'll be bad for the stock 675 00:32:40,160 --> 00:32:43,680 because a lot of investors will price in the end of Duolingo 676 00:32:43,680 --> 00:32:46,600 that it's not growing anymore, the total addressable market has 677 00:32:46,600 --> 00:32:49,840 been met, or the new AI competitors are eating away at 678 00:32:49,840 --> 00:32:51,880 its mode. And there is some risk here. 679 00:32:51,880 --> 00:32:54,360 There's some uncertainty. I can't see the future. 680 00:32:54,760 --> 00:32:57,280 But in my opinion, I don't think this is quite as bad as it 681 00:32:57,280 --> 00:32:59,480 seems. I think that Duolingo is doing 682 00:32:59,480 --> 00:33:01,160 just fine. They're recovering their social 683 00:33:01,160 --> 00:33:03,360 media presence. They still have an incredibly 684 00:33:03,360 --> 00:33:06,480 positive app that has widespread adoption through word of mouth. 685 00:33:06,480 --> 00:33:09,080 It's very addicting and the amount of users they have on a 686 00:33:09,080 --> 00:33:10,880 daily active basis is incredible. 687 00:33:10,880 --> 00:33:13,440 It's surpassing many social media companies. 688 00:33:13,440 --> 00:33:16,400 So my opinion overall really hasn't changed on the company. 689 00:33:16,640 --> 00:33:19,200 What has changed? Is the stock price, so that's 690 00:33:19,200 --> 00:33:20,480 an. Overview of where I stand on the 691 00:33:20,480 --> 00:33:22,320 company. Now, there's another thing I 692 00:33:22,320 --> 00:33:24,520 want to point out which I think is very important here. 693 00:33:24,920 --> 00:33:27,800 You can see that Duolingo's at the very bottom here, and that 694 00:33:27,800 --> 00:33:29,800 is because we're ranking this by their total. 695 00:33:29,960 --> 00:33:32,200 Size. Duolingo is the smallest 696 00:33:32,200 --> 00:33:36,080 position in My Portfolio in both portfolios by far. 697 00:33:36,560 --> 00:33:40,720 In fact, while Netflix and S&P Global are around 12 to 13% 698 00:33:40,720 --> 00:33:43,880 positions overall, Duolingo is around 1.7. 699 00:33:43,880 --> 00:33:46,640 Percent. It's far less than 2%, and that 700 00:33:46,640 --> 00:33:49,000 was intentional. I intentionally sized this 701 00:33:49,000 --> 00:33:51,680 position much smaller because it's a far more volatile 702 00:33:51,680 --> 00:33:53,720 company. Volatile, meaning that the stock 703 00:33:53,720 --> 00:33:56,680 price can rise dramatically in a short amount of time, and it can 704 00:33:56,680 --> 00:33:58,440 fall dramatically in a short amount of time. 705 00:33:58,960 --> 00:34:01,160 The trading is incredibly erratic. 706 00:34:01,440 --> 00:34:04,240 It goes in One Direction. It it's just hard to predict in 707 00:34:04,240 --> 00:34:06,280 the short term. And that was taken into account 708 00:34:06,280 --> 00:34:09,679 when I sized my position. Even if Duolingo completely 709 00:34:09,679 --> 00:34:12,719 fails as a holding, even if the company went completely 710 00:34:12,719 --> 00:34:15,920 bankrupt, which I do not think is going to happen, but if that 711 00:34:15,920 --> 00:34:18,320 did happen. It wouldn't kill My Portfolio, 712 00:34:18,320 --> 00:34:20,960 in fact it would be a minor dent in the portfolio which the 713 00:34:20,960 --> 00:34:24,440 entire portfolio is now in excess of $1.3 million. 714 00:34:24,480 --> 00:34:27,560 Even with these losses in Duolingo, the passive income 715 00:34:27,560 --> 00:34:30,199 portfolio is up around 8% year to date. 716 00:34:30,360 --> 00:34:34,080 It's coming along nicely. This portfolio that includes the 717 00:34:34,080 --> 00:34:37,239 total losses of Duolingo that's factored into this performance 718 00:34:37,239 --> 00:34:42,360 year to date is up 20% year to date, outperforming the S&P 500 719 00:34:42,360 --> 00:34:46,639 and the QQQ by a huge margin. Duolingo, despite the massive 720 00:34:46,639 --> 00:34:50,320 sell off in the stock, is a very small position relative to my 721 00:34:50,320 --> 00:34:52,679 other holdings. In fact, just the gains that I 722 00:34:52,679 --> 00:34:56,320 had yesterday in Amazon alone made-up more than the losses in 723 00:34:56,320 --> 00:34:57,520 Duolingo. In total. 724 00:34:57,680 --> 00:34:59,360 That's one day of trading in Amazon. 725 00:34:59,920 --> 00:35:02,640 So overall, even despite the fact that this one isn't going 726 00:35:02,640 --> 00:35:05,120 the way that I want it to in the short term, the performance of 727 00:35:05,120 --> 00:35:06,800 this portfolio has been incredible. 728 00:35:06,920 --> 00:35:09,480 And if this one does turn around in the future, which I believe 729 00:35:09,480 --> 00:35:12,360 there's a good chance of, this one will be a contributor to the 730 00:35:12,360 --> 00:35:14,680 portfolio, not a detriment overall. 731 00:35:14,680 --> 00:35:17,440 The biggest point of emphasis I would give here is that I've 732 00:35:17,440 --> 00:35:21,120 owned Duolingo for about a month, one month, and I have 733 00:35:21,120 --> 00:35:25,560 people daily, every single day when this stock trades asking me 734 00:35:25,560 --> 00:35:27,640 what my opinion is now that it's moved. 735 00:35:27,640 --> 00:35:31,160 Up or down 2%? That's just not how value 736 00:35:31,160 --> 00:35:33,520 investing works. It's not how long term investing 737 00:35:33,520 --> 00:35:36,560 works. Warren Buffett didn't say buy a 738 00:35:36,560 --> 00:35:39,600 highly volatile small cap stock and then when it trades around 739 00:35:39,600 --> 00:35:43,160 10 or 20% freak out and post online asking what to do. 740 00:35:43,320 --> 00:35:45,200 I don't believe that was ever his advice. 741 00:35:45,560 --> 00:35:48,720 We should be judging companies by their long term fundamental 742 00:35:48,720 --> 00:35:52,880 performance and Duolingo can be viewed as a pass fail in the 743 00:35:52,880 --> 00:35:55,560 long term. In the next two or three years, 744 00:35:55,960 --> 00:35:58,280 Duolingo will either continue growing. 745 00:35:58,640 --> 00:36:01,800 They'll gain market share, they'll gain users, they'll gain 746 00:36:01,800 --> 00:36:04,200 in subscription revenue like they have in the past. 747 00:36:04,640 --> 00:36:06,440 They're already growing this very quickly, but it will 748 00:36:06,440 --> 00:36:09,440 continue to go up and the company will become incredibly 749 00:36:09,440 --> 00:36:11,920 profitable. They're a high margin, low cost 750 00:36:11,920 --> 00:36:13,760 company with great cost structure. 751 00:36:14,160 --> 00:36:15,640 That'll either happen in the future. 752 00:36:16,080 --> 00:36:18,200 Or it won't. The other option is that their 753 00:36:18,200 --> 00:36:21,560 social media declines, the company grows a lot slower, they 754 00:36:21,560 --> 00:36:25,280 get out boxed by AI competitors, and they don't make much money. 755 00:36:25,640 --> 00:36:27,280 In that case, I'll lose money on the stock. 756 00:36:27,880 --> 00:36:30,240 So that's how I'm going to judge it over the next two to three 757 00:36:30,240 --> 00:36:32,040 years. I'm not going to be judging this 758 00:36:32,040 --> 00:36:34,800 one based on the daily trading of the stock price. 759 00:36:35,200 --> 00:36:37,360 So if you're you're looking for my opinion, if it goes down 760 00:36:37,360 --> 00:36:39,800 another 3% or if it goes up another 3%. 761 00:36:40,280 --> 00:36:42,600 You can rest assured that my opinion hasn't changed. 762 00:36:42,600 --> 00:36:44,560 Now moving on, we get to some stocks that are not My 763 00:36:44,560 --> 00:36:46,480 Portfolio. One of them here that's having a 764 00:36:46,480 --> 00:36:49,280 tough day is Lululemon. And this is not just a tough 765 00:36:49,320 --> 00:36:51,240 day. This is a tough year. 766 00:36:51,560 --> 00:36:54,200 The stock's down now 54% year to date. 767 00:36:54,200 --> 00:36:56,960 We have the CEO trying to give context to what's going on with 768 00:36:56,960 --> 00:37:00,560 Lululemon, explaining that the tariffs and the de minimis tax 769 00:37:00,560 --> 00:37:02,960 law changes affected the company dramatically. 770 00:37:02,960 --> 00:37:05,000 But he also tries to paint the positive picture that they're 771 00:37:05,000 --> 00:37:07,640 innovating and winning. We have a brand that is uniquely 772 00:37:07,640 --> 00:37:10,040 positioned, a guess that's incredibly loyal. 773 00:37:10,280 --> 00:37:13,680 We just know what we need to do and do it better, in particular 774 00:37:13,680 --> 00:37:16,480 in a couple of key categories. He says that we have a guest 775 00:37:16,560 --> 00:37:19,320 that's incredibly loyal, but that's something that I would 776 00:37:19,320 --> 00:37:22,640 challenge the CEO on. What I've seen is dramatic 777 00:37:22,680 --> 00:37:25,840 growth from their competitors, Aloe Yoga and Viori that are 778 00:37:25,840 --> 00:37:28,840 direct competitors growing rapidly, taking market share 779 00:37:28,840 --> 00:37:30,640 from Lululemon. And then there's the bigger 780 00:37:30,640 --> 00:37:33,200 companies like Nike and Adidas already established that are 781 00:37:33,360 --> 00:37:36,320 making products very similar and competitive to Lululemon. 782 00:37:36,320 --> 00:37:38,080 'S. So they're now in a much more 783 00:37:38,080 --> 00:37:40,480 competitive landscape, and I believe that's eating into their 784 00:37:40,480 --> 00:37:43,240 margins and growth. And even though the stock is 785 00:37:43,240 --> 00:37:46,440 down big, this is a company that I still couldn't hold in the 786 00:37:46,440 --> 00:37:49,560 portfolio. There's just so much competition 787 00:37:49,560 --> 00:37:52,360 in this realm. When you have a fashion brand. 788 00:37:52,920 --> 00:37:55,960 Out of all the different moats, I believe that brand, especially 789 00:37:55,960 --> 00:37:58,920 in fashion, is one of the most difficult to maintain. 790 00:37:59,200 --> 00:38:01,680 In my opinion, it's of the weakest of all the moats that 791 00:38:01,680 --> 00:38:03,440 exist. So this is not one I'm going to 792 00:38:03,440 --> 00:38:05,160 be jumping into now. We also have a couple other 793 00:38:05,160 --> 00:38:07,520 headlines. One of them is that Tesla board 794 00:38:07,520 --> 00:38:11,680 is proposing Musk Pay package worth as much as one trillion 795 00:38:12,160 --> 00:38:13,880 over a decade. The maximum payout would 796 00:38:13,880 --> 00:38:17,960 represent a 12% stake in the company, contingent on 797 00:38:17,960 --> 00:38:21,680 milestones including Tesla reaching a market capitalization 798 00:38:21,680 --> 00:38:25,960 of 8.5 trillion. At that market value, such a 799 00:38:25,960 --> 00:38:28,360 stake would be worth slightly more than one trillion. 800 00:38:28,360 --> 00:38:31,200 Now, you may not expect my response here, but I think 801 00:38:31,200 --> 00:38:35,680 that's fine if Elon Musk is. Able to grow Tesla to almost $9 802 00:38:35,680 --> 00:38:38,280 trillion. Then he should be compensated. 803 00:38:38,280 --> 00:38:41,640 I think I'm owning. 12% is fine and the shareholders in Tesla 804 00:38:41,640 --> 00:38:45,600 would not be complaining if their stock goes up 8.5 X. 805 00:38:45,960 --> 00:38:48,320 They're not going to complain that Elon Musk owns a portion of 806 00:38:48,320 --> 00:38:50,200 the company. They would want them to have 807 00:38:50,200 --> 00:38:52,760 more capital to build more stuff that they can invest in. 808 00:38:52,880 --> 00:38:55,800 Now moving on, we get to continued success from Netflix. 809 00:38:55,920 --> 00:38:58,320 They have this new movie. If you haven't seen it, you 810 00:38:58,640 --> 00:39:01,360 probably don't have kids because if you have kids, you've likely 811 00:39:01,360 --> 00:39:04,080 seen a bit of this movie whether or not you like it or not. 812 00:39:04,320 --> 00:39:06,880 It's called K Pop Demon Hunters that has exploded. 813 00:39:06,920 --> 00:39:09,920 K Pop Demon Hunters has now overtaken Squid Game to become 814 00:39:09,920 --> 00:39:12,080 Netflix's most. Watched title ever. 815 00:39:12,200 --> 00:39:14,920 Previously, the first season of Squid Game held onto the top 816 00:39:14,920 --> 00:39:17,640 spot for four years. This means that the two most 817 00:39:17,640 --> 00:39:21,080 popular titles in Netflix's history are both works that are 818 00:39:21,080 --> 00:39:24,040 grounded in Korean culture. Squid Game is a South Korean 819 00:39:24,040 --> 00:39:26,640 production. K Pop Demon Hunters, although 820 00:39:26,640 --> 00:39:29,920 produced by American studio Sony Pictures, which that's a whole 821 00:39:29,920 --> 00:39:32,800 other story. Sony created this and then they 822 00:39:32,800 --> 00:39:36,360 sold everything to Netflix, but it was It's created with Korean 823 00:39:36,360 --> 00:39:38,600 culture. It features elements of Korean 824 00:39:38,600 --> 00:39:42,680 art, architecture, mythology, shamanism, food, and pop culture 825 00:39:42,680 --> 00:39:44,880 embedded throughout the film. Now, if you weren't convinced by 826 00:39:44,880 --> 00:39:48,800 the numbers how viral this is, we also have evidence here as 827 00:39:48,800 --> 00:39:50,480 some of the best tennis players in the. 828 00:39:50,480 --> 00:39:52,840 World are also. Getting in on the K pop dance. 829 00:39:52,840 --> 00:39:55,680 This is Novak. He he did this dance, he says, 830 00:39:55,680 --> 00:39:57,760 specifically because his daughter's obsessed with the 831 00:39:57,760 --> 00:40:01,080 movie and it was her her birthday, so he wanted to do the 832 00:40:01,080 --> 00:40:09,360 dance to make her happy. Netflix is now a company that 833 00:40:09,360 --> 00:40:12,600 has intellectual property that Disney would be envious of. 834 00:40:13,280 --> 00:40:16,960 Now I want to say that again, Netflix is winning in the 835 00:40:16,960 --> 00:40:20,160 intellectual property game with products like Squid Game, 836 00:40:20,160 --> 00:40:22,400 Stranger Things, and now K Pop Demons. 837 00:40:22,400 --> 00:40:24,560 This is a company that's building out a library of 838 00:40:24,560 --> 00:40:27,000 massive hits. When you look at K Pop Demon 839 00:40:27,000 --> 00:40:29,760 Hunters, this is another product that Netflix is already in talks 840 00:40:29,760 --> 00:40:33,120 to make a sequel with the same people that made the first one. 841 00:40:33,480 --> 00:40:35,800 So Sony's on board. They know that they're not going 842 00:40:35,800 --> 00:40:38,560 to get any of the upside, but Netflix is going to pay them to 843 00:40:38,560 --> 00:40:40,920 make the sequel. And of course, Netflix is going 844 00:40:40,920 --> 00:40:43,040 to merchandise this. They're going to advertise it. 845 00:40:43,240 --> 00:40:46,280 It's another thing that they can promote for years to gain more 846 00:40:46,280 --> 00:40:48,960 and more subscribers. So this is a situation. 847 00:40:48,960 --> 00:40:51,080 Where for a long. Period of time, Disney was 848 00:40:51,080 --> 00:40:53,240 talked about as a company having all the IP. 849 00:40:53,400 --> 00:40:55,800 Disney has struggled with these properties since then. 850 00:40:56,080 --> 00:40:58,720 They've rehashed a lot of the same ideas over and over again, 851 00:40:58,720 --> 00:41:01,600 making live adaptations of the same movies that we've seen a 852 00:41:01,600 --> 00:41:04,000 dozen times. And Netflix is a company that 853 00:41:04,000 --> 00:41:05,960 has the newer. Fresher IP. 854 00:41:06,480 --> 00:41:09,280 Which has shown that this entire time it hasn't been the 855 00:41:09,280 --> 00:41:11,320 intellectual property that's the Moat. 856 00:41:11,600 --> 00:41:13,440 It's been the channel of distribution. 857 00:41:13,720 --> 00:41:15,960 And Netflix again proves that that's been their Moat the 858 00:41:15,960 --> 00:41:17,800 entire time. It's the reason that they 859 00:41:17,800 --> 00:41:19,680 continue to win. It's the reason they'll win in 860 00:41:19,680 --> 00:41:21,320 the future. That's going to be for this 861 00:41:21,320 --> 00:41:22,800 episode. Hope you enjoyed it. 862 00:41:22,800 --> 00:41:23,600 See you in the next one.