The Compound and Friends - Dan Ives: Still the First Inning for AI

Episode Date: January 31, 2025

On episode 176 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Dan Ives to discuss: DeepSeek's impact on the market, Nvidia's growth outlook, Elon's bold Tesla prediction, and much more! This episode is sponsored by Public. Fund your account in five minutes or less at www.public.com/compound. Sign up for The Compound Newsletter and never miss out!: https://www.thecompoundnews.com/subscribe Instagram: https://instagram.com/thecompoundnews Twitter: https://twitter.com/thecompoundnews LinkedIn: https://www.linkedin.com/company/the-compound-media/ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today is Dan Ive's appreciation day at the Thumbnail. I love this! We couldn't have scripted a better time for you to be on the show. It's crazy. It's kismet. I mean... It's just wild the way this worked. The timing worked out so awesome. Dude, it's a 516 connection. But I want to hear your timeline.

Like when was the first time you got a question about this? Was it before the New Year? Mm-hmm. Okay. So didn't the first version kind of dribble out like December 27th or something? In late December, we got questions on it. At CES, there was buzz about it.

Oh, there was? Yeah, so when I was in Vegas, that was a big conversation in terms of Deep There was a lot of Chinese tech players at CES this year. Why are you pointing at me? So because... Because he knows you appreciate that information. Because I know you appreciate that information.

Given, you know, given your tech appreciation. Given your status in the Chinese tech market. And, but then really, it started like late last week as more started to come out about Deep Seek. But then the weekend was insane It was my fault Josh is right. Well, that's I mean that's I felt like Joe was a week before everyone Joe's ago pointing out that this might have ramifications for the stock market. Yeah, it was I mean look and clearly on X There was a lot of questions about it was starting to sort of build But then it was really reason squirted gasoline reason with the whole Sputnik

Comment and then remember like the Bears right as we always say the Bears that are hibernation mode Like when things like this happen, they're gonna come out and droves and that's sort of what happened And then on the weekend, especially with the six million was this mean for Nvidia GPUs? Going into a tech earnings week, could they lower capbacks? I mean, I probably 50, 60 calls this weekend. Is the timing suspicious in terms of like when this was... The research paper came out during the two hours that TikTok was offline. And I can't help but think that, and I'm not the only person that thinks, there's

something symbolic in that timing. And the Chinese love to send signals and you know. This was a shot across the bow from Beijing. And I know it continues to be our viewers. A shot across bow from Beijing, given where we are with TikTok, ByteDance, and I think also just going into this sort of China in terms of tariff negotiations but then also you have Big Tech earnings week, nervousness was there across the board and this was kind of like there was gasoline you know sort of hay it hasn't rained in years and this was kind of like a little spark that obviously started off. Alright so we're going to get into all this. We're gonna debunk all the stuff. We want to hear about everything that you heard.

But I just can't help but notice a lot of people have opinions on this. Most of them have absolutely no idea what they're talking about. I feel like we're in a moment where it almost doesn't matter. People just feel really comfortable talking about enterprise class AI with like literally no. So I noticed that's a really big thing, which makes you even more important because you actually are talking to the companies that are deploying the technology.

Okay, so that's really cool. And then I also noticed though, a lot of people are straddling the fence right now, which we're gonna get your take on also once we start the show. Like a lot of people are like, even people in AI are like Sam Altman's like yeah we might bump up some releases because of this. Now he might privately be saying something else you would know

better than I would but the real people in this business are making noises about this like being real. So I thought that was I thought that was interesting but so that's why it's so important that we talk to you. Dan, can I ask you a question? Of course. Thank you. So when you're like looking at these story companies, right, because a lot of it is story, how do you balance the fundamentals of like the whole thing versus like the actual financials mixed in with the technology? Like the actual tech? It's a lot.

Look, and we've talked about it here before and with you guys a bunch. It's like the generational tech names. I think if you just focus on financials and just near term sort of numbers, you've missed out on every transformational tech stock the last 20 years. Right? I mean that sort of always been our view. I think here it's also why we spend so much time talking to AI, regardless where they are in the ecosystem, tech companies around the world, to understand like what's real, what's not. You have, you need the mosaic. You need all the tiles like where everyone stands.

But I always say like look, three million air miles later, right? Part of how I've done it, you can't call these on Metro North in your Peter Millar vest, okay? Just because you can't see it in the spreadsheet. So I think many have missed so many of these stories because they're not doing the work. They fear into this whole Black Swan narratives. This is it. What can happen.

I feel like when you do the work across the ecosystem, okay, regardless who you're talking to, you feel like you have the confidence to actually, to guide others through times like this. Because I always say, like, when things are going up and to the right, my shit-to-a-terrier can do that. Yeah.

When you're just another person saying the same thing. You're just another one this party line. When things are tough and you're going through white knuckle moments, in our 25 years, that's how we've separated ourselves. Was this a white knuckle weekend? This was a white knuckle weekend because- Are you shook?

Not at all. I mean, if I was, I'd be wearing like Eddie Bauer's sweatshirt or something. Not, yeah, I like that, but also- What, his suit and tie? I'd be wearing- Can't be was, I'd be wearing like Eddie Bauer sweatshirt or something. Not, yeah, I like that. But also... What? A suit and tie? I'd be wearing... I'd be wearing a suit. If you ever come in here in a suit and tie, I'd sell everything.

No, that's the bottom. Oh, that's the bottom. Imagine I came in here with like a Brooks Brothers bag and all of a sudden I'm like, look man, valuations. And I'm like, just talking DCFs, that'd be pretty negative. So... So wait, wait. So when you say this is white knuckle, what would you put this on a par with in like the last 10 years? I would put it on par with from a white knuckle like being in Tokyo, Black Monday,

and just going through that floor. So I'd put probably above that because of the fundamental reasons. Wait like 1987? No, in of the fundamental reasons. Wait, like 1987? No, in terms of last year. When was the... Oh, the Yen thing? That was August. No, in terms of August.

Oh, I was like, what? So in terms of August being in Tokyo, when that happened, that was probably like, I would put that in like a top five in the last few years. But what about like in the 10-year-old world? But I would probably put this along with some of those COVID moments in terms of March 2020, in terms of just navigating investors through.

I'd put it in that level of a moment relative to like a fear level. That's a degree of unknown. Well to that unknown and just to like, there's so many investors like institutionally where you never hear from them. They're human voice mails. When they call you on your cell on a Sunday, that's ultimately, that's where you sort of earn your value. And, but we don't just sit there taking sort of deep-seek and giving our own sort of view of it. We talked, I'd probably say like 30, 40,

within the industry, whether it's CIOs, CEO, big tech companies, AI engineers, we know around the world. But for me, it's trying to understand what's real, what's not. So it's like six million, not using Nvidia hardware, fictional, it's like I've said, better chance me line, I'm the Saquon Super Bowl.

That's like, so like right away, I took that off. Yeah. Was this a great model? A great LLM? No doubt. But the reality is, it's similar to our view of AI. There's no less GPUs that are going to be used because of DeepSeek. You know why a lot of people were panicking?

Not even because the investment implications, the geopolitical implications. Wait a minute China has AI and somebody like Andreessen correctly points out Forget about how many GPUs it is a Sputnik moment because Sputnik is what forced us To go land something on the moon like you could like so you could say like this might be the most bullish development for AI ever that we now are in a bipolar kind of AI race. Granted, we're probably kicking their asses, but up until last week, who was our competitor

in AI? The French? Nobody. But I also think that the market has overly discounted, and I think even seen in China Tech, just the view of China Tech in AI. Now, the US is way ahead of China Tech, but it's someone that goes to the region four or five times a year. I mean, to just say that they're out of it is the wrong move.

But it's also my view of globally where there's all going physical AI in terms of autonomous in terms of robotics Jensen will be the first one to tell you I'm I'd say what 20% of companies that I met CES were ultimately China tech companies this is not a bad thing because ultimately whether it's Jevons paradox or however you want to think about it the cheaper that models are, whether it's Deepsea, Dan, Batnik, whatever it may be, that's just more and more bullish for use cases, software, and ultimately the use cases as they actually play out. But for everyone, for anyone to actually think that like CapEx is going to dramatically change,

they're doing something that we haven't focused on. I know a tech company for the last month have had war rooms looking at the model, dissecting it, and basically the view is like you talked about like it's viewed as a great model, but I think internally they viewed this much more like okay we got some competition regardless how they did it, that's a good thing. They were never, I never felt that this was something where it's like, oh my, this is like, this could be dramatically changed the whole industry.

So your first blush was, yeah, of course they're making their own LLMs, okay? I think that's the right stance. But then as the weekend progressed and you had conversations, you became even more emboldened in that field. By Sunday night, like, literally, as the Eagles, as NFL games are going on,

I felt, by the time the Kansas City game ended, I'm like, okay, our thesis here is pretty emboldened. So when I put No Doubt on Monday morning and basically just go out there and handhold everyone, I felt like we did so much due diligence that it was something where investors sort of navigate in the storm being like, look, this is not some black swan, the end of the dot com bubble. To some extent, it's actually more bullish. And I think what you're going to hear from tech earnings, I think you heard from Meta,

Microsoft, others. They're not pulling back. They doubled down on ABL, doubled down on 65 double down 65 billion because also why these cap ex? Let's start the show. Let's start the show and John click John play us play us in so to speak Great. All right Do I almost forgot to start the show crazy, right? Whoa, whoa, whoa stop the clock. Here's a word from our sponsor. All right, motherfuckers, if you're serious about investing, you need to know about public.com. That's where you can invest in everything, stocks, options, bonds, crypto.

You can even earn some of the highest yields in the industry, like the 6% or higher yield you could lock in with a bond account. Public is a FINRA registered SIPC insured platform that takes your investments as seriously as you do. This has been paid for by Public Investing. Full disclosures and podcast description. Go to public.com slash compound to learn more. Welcome to the compound and friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates are solely their own opinions and do not reflect the opinion of Ridholtz Wealth Management.

This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ridholtz Wealth Management may maintain positions in the securities discussed in this podcast. Ladies and gentlemen, welcome to Dan Ive's Appreciation Day here at The Compound. Dan is a longtime friend of the show, one of the most requested repeat guests in compound history. The audience loves to learn from him.

We love to dress like him. Got Rob Passarella and his son, Con, in the house. Budding equity analyst and training, right? All right, you're about to watch a master at work. Nicole is here, Duncan is here, John is here. Shout out to everyone who is listening to the show for the first time. My name is Downtown Josh Brown, here as always,

my co-host, Mr. Michael Batnick. Give it up. Hello, hello. Thank you, thank you. Hello, hello. Thank you, thank you. And with us today, a literal legend, literal legend in the tech equity analysis space, Dan Ives is a veteran on Wall Street. I'm going to read your official bio.

Let me just scroll down to it. Hold on, through all the disclaimers. All right. Dan is a managing director and senior equity research analyst covering the tech sector for Wedbush Securities. Dan has been a tech analyst on Wall Street for over 20 years and makes frequent appearances on CNBC, Bloomberg, NBC, CBS, Nickelodeon, the New York Times. Dan, you're everywhere.

All right, here's how I want to start. So the timing worked out as such that we had maximum fear on Sunday night into Monday. Nvidia had the one day record, market cap lost 500, let me take this shit off 580 billion dollars in one day Sort of bounced on the second day and Today, I'm not where's Nvidia today. No bounce 118

All right, so that's pretty momentous and the entire media was just captivated by this story People were asking the White House questions about it. Like this has gone so far beyond just tech and stocks. Oil down. Yeah, like the ramifications of this could be military. But then we get Mag-7 earnings start to roll in. And we hear from Zuck. He says this could be the first year.

This could be the year rather, 2025, where a billion meta users get their own personal assistant. AI assisted. Okay, we hear from Microsoft, they have zero intention of spending any less money this quarter than they already were gonna spend and they kind of double down, which you're gonna tell us more about. We hear from Elon Musk, like within five minutes later, I listened to all of them, tell us like without a trace of irony that autonomous, the optimist humanoid robot could be 10 times bigger than the car business at Tesla. So I don't know what that really means for stock prices near term, but like, nobody seems to be backing down, and nobody seems to be like changing their mind,

but they're all paying attention to this development. So talk us through that. Yeah, look, it's a fourth industrial revolution that's playing out. And we've talked about it for years, but now it's not even a question of if it's playing out, it's the pace, and ultimately enterprise use's playing out. It's the pace and Ultimately enterprise use cases how quick that's gonna happen what physical AI

robotics autonomous and ultimately where this is all going and I just view it as you have two trillion of AI cap X the next three years that I essentially view is lock cemented. That's gonna happen Now big number now just to put it in context, for every dollar spent on an Nvidia chip, there's an eight to $10 multiplier across the rest of tech and across the ecosystem, from software to infrastructure to data centers to energy to... So two trillion becomes how much? You go two trillion, ultimately, you start to to look at it that becomes a multiplier of 15

trillion when you actually start to look out over the next 10 years. So my view of this is... Sorry, despite the energy intensity of training or inferencing, it's still going to happen? It's going to happen. Because that's what's in doubt this week. But that's why when you look at names like throughout the energy complex and that's it's not a question of if it's gonna happen it's when it happens at what pace. Because look we're we're going through a point where if you have a seven-year-old I arguably don't believe they might not even need to get

a license. Like in other words like autonomous technology is coming. The fact that Musk is talking about in terms of Austin June you'll actually have unsupervised he said the cybertaxi unassisted starting June five months best case was December that it was gonna happen and most thought it wasn't happened till 2026 so it's another example of Tesla's one you could look at it remember in the spreadsheet, they're lowering number. That's bread at the restaurant. This is all about an autonomous AI story.

When it comes to everything that happened this week with DeepSeek, DeepSeek competition is going to have, whether it's China or US. These models are just the tip of the iceberg to where broader AI spend's gonna go. And there's only one chip in the world. You're saying they're all gonna get cheaper? They're all gonna, look, if you look at semi prices, semi price a lot of times, like if you look at tap backs,

like a lot of times price is going down 50% every two years. So it's not about that things are not gonna get cheaper. It's you are still, you're in the dugout of the first inning with overall AI spend. So as you talk about the white knuckle, the massive sell-off we took on Monday, in my opinion, in the last decade, outside of, I'd say probably COVID, March 2020, that was, that will be looked upon as one of the best moments to buy tech I think in the last four or five years Were you surprised?

By the fact that within 24 hours of the markets being open the stock started to separate themselves Started to see Apple and Metta rallying while Nvidia continued to sell off I think a lot of investors probably the people that you talk to even professionals started to see Apple and Metta rallying while Nvidia continued to sell off. I think a lot of investors, probably the people that you talk to, even professionals, they just assume that this is all one big AI trade. But now, there's a nuance. There are makers and there are takers. There are buyers of technology and sellers of technology.

And these stocks are not all doing the same thing in the wake of this bomb that's been dropped. And there's the non-LLMs. If you look at names like Palantir, And these stocks are not all doing the same thing in the wake of this bomb that's been dropped. And there's a non-LLM. So if you look at names like Palantir, Carp's view is always like, we're not building LLMs. Apple didn't build an LLM. And then our view of Apple, and we've always talked about it, like the reason this is the consumer AI play, regardless of what units come in in a given quarter over the coming quarter is that the consumer AI revolution goes to Apple.

25% of the world, they're going to access AI through an Apple device. China, US, Middle East, regardless of where it is. So Apple ultimately benefits. That's why the reason Apple's- Wait, why do they benefit? Because now the same technology is cheaper and it could be used on an edge device like a phone?

Because ultimately it's going to be an app. So, an app has to go through, basically have to go through Apple. And then you think about 1.5 billion iPhones in the world, 2.3 billion iOS devices. Apple is a vehicle for consumers on the AI front. Josh, tell them your theory. You had a good one. Which one? About why Apple bounced because they didn't go all in on the AI front. Josh, tell them your theory. You had a good one. Which one? About why Apple bounced because they didn't go all in on the AI spend.

Well, that was seemed to be the narrative that was forming. Like wait, wait, wait, wait, wait, wait, wait. Nvidia's crashing, Broadcom's crashing, AMD, Microsoft is down, Sam Altman's panicking, blah, blah, blah. Why is Apple rallying? So the theory that people had coalesced around was that, well they looked like they were playing from behind until yesterday, and now they look like they very studiously

sat out the first round so they could win in the second round. Okay, so I think I would like agree. Did I invent that? No, I think there's nuance. I think some are right, some, in terms of the first round, they lost. Second round, they went.

I agree with. I think the CapEx piece, I disagree with because I think the reason Apple route from investors that I was talking to that was calling is that it's because it's viewed as like they're number one in the App Store and all of a sudden the light bulb went off. US or China. Oh, DeepSeek was number one in the App Store. Because guess what? Apple, I believe it's going to ultimately be an incremental 10, 12, 15 billion per year of services.

So they're like the toll booth. They're the toll. So it doesn't matter if perplexity beats Gemini and DeepSeek beats. Apple gets paid out of the way. Apple, if you're not in the App Store and you're not paying Apple, you're not relevant. And that's why it always comes down to it. Cook plays chess, others play checkers.

So can I disagree with you then? Because, not disagree with you, I didn't mean that. Can I throw monkey wrench into that idea? Yeah. I know you're bullish on Metta. I mean I think Metta could already be one of the best. Mark Zuckerberg said that this is the year we're going to find out whether or not the glasses are the iPhone. He said it last night. He's like, it's very possible that that business explodes this year because glasses are the only correct form factor for experiencing AI.

More so than a device being held in your hand. If he's right and the glasses really go this year, like I know the Ray-Bans are popular, but like if they really take off like the iPhone 2, then that Apple App Store paradigm might not end up being the correct paradigm. If we're all wearing Meta glasses by year end or by the end of next year,

then it's a different story for Apple. And look, and I love Zuck. Because Apple built a f***ing helmet. They didn't do the glasses. But our view of our view of Metta is we're bullish because the monetization of 3.3 billion DAU in terms of what AI is going to do there. In other words, so when it comes to hardware, that's what I continue to view it as. Apple owns the consumer because you when you have 1.5 billion iPhones,

and 99.3% always stay within the Apple ecosystem, Meta, as much as they want, will never be able to unseat that. Now, Apple, when you talk about Vision Prime. So he's making the opposite bet. He thinks he will. No, again, it's all part of the Rogan, us versus Apple, kind of like call it a little MMA battle, maybe Jiu-Jitsu, but I get that sort of shot across the bow from him.

My argument for Apple has always been, they'll be wrong sometimes in initial cycles, but then you ultimately look at it like, AirPods, they're going to do five million AirPods, best case, they did 95 million do 5 million AirPods, best case. They did 95 million the first year. Because the whole point is like services can never get to 20 billion. That's impossible.

First version of the watch was shit. Look, it goes back to like all the, I mean, if I actually kept it, but the amount of hate mail that I used to get on Apple going back to like 14, 15 services? The thesis that services could be a two trillion dollar valuation and get to a hundred billion. People literally like, are you on Montego Bay? What are you smoking? How is that possible? What are they doing now? Services? A hundred ten billion. But the reason that is because it's monetization of the install base.

Go back to Nokia had a billion users. They looked invincible. Blackberry, billion users. You're like, well, why can't they be the next Nokia or the next Blackberry? There's no ecosystem. But that, bingo. I mean, again, 516, a little view right there.

But the point is, that's exactly it. It's about monetizing the ecosystem. And that's why Apple, It's about monetizing the ecosystem. And that's why Apple, they can miss that first round, but they are not missing out when it comes to the consumer AI revolution, just like the enterprise AI revolution. What does this do for the deal Apple made with OpenAI? Look, ultimately- That's not an exclusive deal.

It's not an exclusive, but look, they recognize that they're not gonna be they're not gonna be able to do that themselves They're gonna need to partner that's a chat GPT is the engine for Apple intelligence, which I think nobody is using But remember this is this is a sort of very important point where I think people missed Apple, okay? Everyone's like Chad Apple intelligence. I don't see it this thing. I don't see anything here Why you're in imitating me base but but ultimately it's about the? 800 to thousand apps currently under development on top of Apple intelligence that developers are building That is going to be the key because you're to basically have almost a generative AI app store for Apple in the coming years.

What are people doing in AI on an Apple device today? They're making the genmojis. Exactly. Today it's like a joke. But that would be no different than like, if we talked about iPhone in 2009, 2010, I told you you're going to be able to watch movies on an iPhone, you say,

I want that wine that you're drinking. So we're too early to be critical of whatever they've motioned AI. Yeah, but when? How long are your investors going to give the story? I believe in the next year, you're going to literally be looking in an app store and you're going to have 10, 20% of that app store going to be generative AI apps. And no different than what we saw with from a DeepSeek perspective, that's just the first sign where Apple, look, it's just a matter of time until they're going to launch their

partner in China, whether it's Baidu, Tencent, or ByteDance. So that they can AI enable the phones. They're going to AI enable the phones. That's a Chinese requirement. A Chinese requirement as a partner and then eventually whether it's iPhone 17 or different you're gonna have different hardware requirements that they're ultimately gonna build so it goes back to like you could be wrong on a quarter in Apple and it goes back to my view. Yeah. New York City cab driver, the Uber driver is bearish on Apple and as I've always said like bears they've hated for the last two and a half trillion mark.

So you think that's why it was rallying this week? Because people are saying, you know what? I don't care who wins. It's all running through Apple. That's, okay, that's... I'd buy that. And that's a hundred percent. And now when it comes down to it, it's like, you're starting to realize more and more, like, okay, if you think about our way that we played AI, late 2022, no matter who we meet, be like, literally, Nvidia, Microsoft, and like, Penn State.

Like, those are the three things that, no matter what investor I talk to, then 2023. We are. Then 2023, you start to, as you start to get later into it, then it's like, okay, now you gotta play rest of the hyperscalers. It's not just about Nvidia and Microsoft. That Oracle.

And then the messy of AI, Palantir. That's where that thing went from Bar Mitzvah to Senior Citizen in the course of one year, 12, 13 to 80. So the point is, it was all then, sort of now it's building, who are the second, third, fourth derivatives. Now, that's where Oracle, Service Dev, Mongo.

Dude, do you see IBM recently? But IBM is another good example of like IBM, Oracle, they're going to continue to be huge players in AI because of that ecosystem. So I just view it as, as much as everyone can focus on deep seek and what this ultimately means, I view it as bullish for software, for infrastructure, and actually accelerating the AI revolution. Can we run through some charts with you? You might be right in the story and how this plays out, but the problem or the potential

problem is that investors have very high expectations for these names. And we saw it with Microsoft. Blown out numbers, stocks getting hit. So for the Mag-7, expected earnings growth year over year for the fourth quarter is 21.7%. I mean, these are big boy numbers. Yep. But look, my view is that-

Double the expectation for the rest of the market, but I actually think that the streets Underestimating where numbers go over the next two three years and that's sort of been our view is that To sit here and micro analyze Microsoft even though AI revenue beat by a billion 13 billion, that's a lot of revenue. Where, what's the source of that? 13 billion. Is that like copilot?

It's copilot and it's basically what's really the use case is now- A business that came out of nowhere. A year ago that's two billion. Yeah. And that is the top of the first inning. And it's top of the first. So let's just take Microsoft as a good example.

Non-AI revenue is weak, essentially non- Chart on, Jon, Microsoft. Essentially non-AI revenue. So there's Q4 earnings. So you're seeing that disrupted in terms of, you know, this past quarter. All I care about on Microsoft is purely what the AI story's going,

what ultimately does that mean for this model? When does 13 billion become 25, 30 billion? And I could argue that starts to accelerate at a pace where instead of Azure numbers being 31%, you're now going to be at points where Azure is going to be growing 40, 45. Oh, come on. You think it's going to re-accelerate? Because what's going to happen is that now you only have 45% of workloads that are in the cloud today.

As more of these use cases build out, there's going to be just, this is why there's more data centers under construction in the active data centers because you're going to need to put everything on the cloud. Zook said what they're building would be the size of Manhattan. Essentially.

What even is that? But it goes back to you're going to have data center. Look, when we think about... Wait, there are more data centers under construction now than there are working data centers. Why is that bullish for the companies that are building them? Because... That sounds not bullish. It's bullish because it shows how much capacity is ultimately the demand.

And bottom line is, if tech companies are spending $400 billion in AI CapEx, I feel pretty comfortable that Sundar, Musk, Zuck, Cook, and so they know exactly where they're going in terms of skating where the puck's going and they basically they don't want to be on the outside looking in. I think it's existential for some of them where it would be riskier to not bet big. 100%. I think of alphabet in that category if like search gets annihilated by by all these AI queries that people are doing instead. And people look at him and say, why didn't you spend more?

Like it's game over. The biggest regret within Redmond, within their history, if you ask anyone that's been on that campus, is when they were on the DOJ investigation, anti-trust late 90s, 2000, they basically, they put the brakes on, didn't invest, never really focused on mobile, eventually social, everything, and they basically missed out on that whole trend

for 15 years, till Nadella got there in 2014. So the point is, our view is where everything is going today, the reason we think tech stocks are gonna be up another 25% this year, and you're gonna see massive M&A, and I think MAG-7, despite expectations being high, are gonna continue to massively outperform, because now investors are starting to recognize where this is going.

We're gonna have 20% of vehicles that are autonomous at the end of the decade. Robotics, we believe one out of every eight to 10 households is gonna have 20% of vehicles that are autonomous at the end of the decade Robotics we believe one app to every 10 to 10 households gonna have a robot You talk about enterprise use cases the use cases are going to Exponentially increase as you have more and more going down this path across verticals So it sounds like so it sounds like the CapEx across verticals. So it sounds like the CapEx has to keep up or slightly be ahead of

the product launches and the adoption curves. Has to. Okay. And so therefore who gives a shit if there's a large language model that's more efficient than the last one. That's what we need. And to some extent the reason it's more bullish is because if danjosh.com didn't want to go down the AI path, and now with cheaper models, we could actually spend less on MOT, we could spend more on GPUs, more on heart, then all of a sudden the 4% enterprises in the US that are going down AI path, now it's 15%. And let's just remember where we are Europe dark age is having you in focus on AI Asia obviously without with

constrictions in terms of export controls in China but that is gonna continue accelerate we're just talking about one little piece that's actually gone down AI path and it's mostly big tech let me read you some of these Elon quotes from the call last night. Like I just don't... We're going to hit Tesla at the end. No, but it's great that you're bringing that because... I don't buy it. Sorry.

Wait, wait, wait. I don't want to skip to Tesla. I want to stay on Microsoft Meta. John, can we put this next chart up? So this is Meta's operating margin is up to 48% from 41% the same quarter a year ago, thanks to Charged Kid Matt for these visuals. Clearly they're making more money than ever on video, video ads, reels. These are huge successes. There's no AI in these numbers.

All spending. Like all the AI in Meta's numbers is in the form of expenses. But it goes back to your question, in other words, you talk about numbers, numbers. And I think investors now, it's like the light bulbs going off, they're recognizing, look, you are spending, spending, spending. But more and more, the actual output and the revenue, let's say for a Metta, when you monetize

even 5% of 3.3 billion DAUs, that could be an incremental $1.52 earnings power. I'm skeptical that Wall Street is going to give them as much room as you think. I don't think they have five more quarters. I actually think 2025 is a pivotal year for AI. They're all saying that. No, but the reason is that because now, and I think the only one,

the ones that have seen it early, Palantir, because they're really front and center when it comes to use cases. Salesforce. Salesforce, ServiceNow. Those are really the three on software. Oracle has pieces of it. Obviously the hyperscale is that piece of it that have actually seen it in terms of

these bootcamps, these use cases and what that's actually doing. I give you one more category of stocks. I don't know if you follow these or somebody else that Wedbush does. I was some of these on TV today. The IT consulting firms. They're all at record highs Accenture cognizant Gartner Group IT

I can't believe what these stocks are doing but it's all it's all part. It's all AI No, it's all part they could think my Julia the center 20% of their consultants are more now AI focused says that's my point If my firm riddholtz Wealth Management, was like, all right, we have a budget. We're going to spend $3 million on tech this year. For an AI assistant. We can't do that shit. We have to call Accenture, or somebody.

We probably can't afford Accenture, and say, here are our workflows. Here are our ambitions sales-wise. This is what we're trying to do. AI this shit. That's who's getting paid for that and that's happening at a hundred million businesses around the world right now. And let's even just take a step back.

In a Trump administration that's going to be pro AI driven, I can tell you someone spends a lot of time in DC. The amount of I think improvements that AI could do in terms of DoD and a lot of the agencies is almost hard to put together even from numbers perspective. If you have 10% of IT budgets, 15% on the government that go toward AI, then like those numbers that you showed are, they're almost embarrassing for companies as a minimum in terms of what they can do. But it just speaks to ultimately where we are in this cycle and that's why I get it in terms of like hype,

look, hate mails continue to increase because I get like bears, this, valuation, black swan. What's the best bear case? Like when you're like, all right, that one, I can't take that one off the table. The best bear, cause I don't view bear cases as, I remember a lot of the bears talked like super smart. It's not about a lot, like I learned a lot

from talking to bears. It's not about valuation arguments. The biggest bear case. They're faking sales. Is that the biggest bear cases, there's a window here where you need to use cases to ultimately start to launch. You need the killer app, Chow GPT-5 or whatever it may be. You need something to ultimately be the aha moment.

Yeah, I agree with that. Something needs to break through. The bear case that I hear most about is there's a warehouse filled with GPUs. That CoreWeave has stuffed in there. And NVIDIA is selling products to China through Singapore and all the bear cases are about like outright fraud. I don't hear anybody. And again, those bear cases are the same as people like, oh I got these Hermes sneakers for $30 and Times Square they're awesome.

That's my point, it sounds like wish casting when you hear the bears on it. Nvidia is now what, 25 times earnings? Remember. You need it to be a fraud to fall. bears on it on uh, NVIDIA is now what, 25 times earnings? You need it to be a fraud to fall. And what's amazing to me is that, and remember it's the same ones like Tesla's a fraud this, they've said that literally for the 8000% increase the whole time, but my view is the reason that that's the best bear case is that that's the one where it's a proven moment But I just go back to like our last trip in Asia demand the supply for Nvidia chips is 15 to 1

Can you give me chart 6 John Dan? What do you make of this? This is the mag 7 earnings per share growth versus valuations So alright, this is an amazing chart. Yeah, so look at these seven I'm just gonna read them for the people that are not looking at the chart. Nvidia is now 28 times earnings with 51% earnings growth expected over the next year. That seems appropriately priced. Not a bubble, if that happens. Alright, Tesla is a little bit out of control. 116 times earnings on 34% growth and they're still shrinking,

which we're going to talk about later in the show. That's the one that you and I disagree with the most on by the way. Amazon, 22% growth, 37 multiple. Expensive but not wild. Apple, 17% growth, 31 multiple. People have an issue with that, but the lock-in explains it, right? The consumer lock-in. Okay, fine. Forget Microsoft, we did that. Alphabet, 12% growth, 21 times earnings. It's a market multiple for like the third largest internet company in the world. Okay. Meta, 12% growth expected, 26 multiple. Also a lot of lock-in there. 3 billion users.

Nobody's leaving Instagram. None of those valuations are obnoxious to me. None of them, not one of them outside of Tesla. So what we did was we averaged them. Take those seven, it's 23% growth expected this year on a forward PE of 41, expensive but not outrageous. And if you pull out Tesla, it's 21% growth at a 29 forward multiple. Who the f*** wouldn't pay for that?

Like who wouldn't invest in that? But I would argue that those, the multiples are being overstated by 15 to anywhere to 30%. Because they keep eating our... Because numbers are going to go up so much more than the streets anticipate. Look, that was all of you in Nvidia, right? Everyone's like, super expensive, and I'm like, look, the reason Godfather of AI, because numbers are going from 50 cents to $5. So the point is...

Sorry, that's the next chart. This is your point. Sorry. This is Nvidia rallying 1900% and getting cheaper. That's exactly... It was 33 times earnings in 2020. Now it's 28 times earnings and it's up 2000 percent. Exactly. Okay. And I saw and I believe not to the same level as Nvidia, but when we're going to look at Mag 7, if we sit here a year from now,

we're going to be like, look, first half 25, they were good numbers, they were beaten here and there. What's wild is the acceleration in the second half 25 into 26, the street was not anticipating that. So I believe it speaks to our narrative. It's always, the timing has always been 23 and 24 was the build out. Second half 25 is where you start to see it. And then from then on, it's our view. Like we're in less than halfway through a tech bull market where I just believe like if you just sit here focused on, let's say, and we can talk about Tess or others, but if you sit here focused on valuation

over the next year. You miss it. Not just have you missed every transformation technique in the last 20 years. You will miss, I believe, the biggest tech revolution we've ever seen. Right. The dispersion in Mag7 returns this year. Valuation has nothing to do with what's going on. Because we have chart 8.

Can you grab that one for us, Duncan? So this is basically showing the year to date, and I know it's like three weeks, but just bear with me. This year, so far, valuation has not been the thing that performance is hinging on. You have Nvidia down 9%, you have Meta up 18% at the high end, everybody else sort of falling in the middle. It really seems like it's more narrative than anything else, And you're making the point that that's going to continue. It's more... Dan, do we need... So to support these valuations, I think this needs to change the way we live.

But does it have to be on the consumer side or is it enough if it changes every business in the world? The first two years of this build out is enterprise. I mean, enterprise... Consumers, in in theory until autonomous. Consumers, it's going to be about apps in the app store, building on top of Apple intelligence. But this is an enterprise AI build out for the next two years. So is that why people are missing it because they're not seeing it?

So the thing is, a lot, so part of the, what I believe is like a flawed bear argument, like Chad GPT ID, I don't even do it now this bear I'm like, yep, I get your view. I'm talking about the CIO Spending 19 million dollars on the AI project over the next two years Where they literally just increased their spend with Microsoft pound-tier Google and Nvidia by legit like three thousand percent So of course your neighbor doesn't see that so no, but that's but that's also why like I think you have to separate it out between the enterprise piece and consumer. Do you remember the early days of the internet when we had two types of stocks?

We had B2C and B2B. And there was a moment in 2000 Let's say in 99 the B2C names fell out of favor a lot of people don't remember this but you definitely do We stopped trading Yahoo and Amazon and we started trading the companies that were gonna do e-commerce between companies Yeah, I too manages. Yeah. Yeah. Yeah. So we have like a whole new category of stocks that were enterprise or thought they were Yeah, but we believe we should even go back to like Dotcom, Bubble, Cisco, Char, showing the Nvidia. I mean, they're like the average tech stock was trading 38 times revenues. 98% of them were not profitable.

And their business models were built on 85% of companies that were startup basically business model flawed funded. Here, what's funding this is Tech companies a 1.2 trillion of cash generating 350 billion of cash per year So it's like you can argue it but bottom line is if Nadella is like I'm giving my 80 billion Zuckerberg his 65 billion that keeps that you can have 400 billion just so you okay We're not finding this from junk bond market And we're not finding this from equity IPOs,

because there are no IPOs, and there are no tech borrowers in the junk bond market. Exactly. Okay, this is being funded by companies with huge cash flows choosing to spend money from those cash flows on CapEx. That's a, I would argue, that's healthier than dot com, but I would also argue, Microsoft barely went up last year.

This year it's got a negative return. Right now he's doubling down. But to Michael's earlier question, like if they quote unquote disappoint next quarter or the quarter after, you got to believe that at some point the board tells Satya, slow the f*** down. Like this is not working. But it's something like my...

I think Michael asked you the best question. But I agree, but it's something like myself, it's come to Microsoft since late 90s. When Nadella takes over and stocks 25 bucks, post-bomber, disaster, Nokia, the whole thing, and literally... Just everything that he went... So, and he's like, cloud, cloud, cloud,

2014 comes, even though he was internal, everyone wants him, an external, Michael Dell, whatever. When you take a stock from 25 to 430, from 14th, they're like, hey, Sully Salinger finally the plant, I feel pretty good. The point is like, if you- Is that forever? But I believe when I look at Nadella's vision, it's a two part vision. First part, cloud, check. Second part, AI enterprise, check. So you're building it out now. So my argument would be the only way that you get to a stock that's six, 700 bucks, you have to go through this period,

because that's the hyperbolic earnings power and what I believe is going to be growth for Microsoft. As well as also, just taking a step back, Khan, Donut, FTC, M&A is going to massively accelerate. Tech companies know, stronger gets stronger, they also have M&A that they could do more acquisition to just accelerate that sort of mood. Here are some of your sizzling takes from the week. DeepSeek is the Tmoo of AI. Just

and I know some people say Temmoo and maybe they're right but I won't do that. Just like Tmoo was the Amazon model destroyer which which you put in quotes, and I remember that, a few years ago, Amazon's team adjusted and now look where Ti Mu and Amazon both are sitting. This latest shot across the bow from China will also play a role in TikTok saga and more hardline US stance. So it's like a cheap imitator from China, but sometimes the cheap imitator like works out and I think that's the cause of the alarm Because every once in a while it is a bite dance. It is a ten cent. It works out but put this way American Express is not building out their AI strategy

Like I mean we could go across the board. I mean I just spoke to 25 companies They were spending more than 10 million AI CapEx Over the in 2025. Billion. Okay billion There's none of them None of them combined that are changing their paths When it comes to this and then I'll start the other side when you look at projects I'll ask you a question. What do you mean by changing their paths? Like if they were building something on Claude's sonnet, they still are in the aftermath?

Look, a lot of these Catbacks AI strategic build-outs, they're already now cemented between now and mid-26. Okay. So the point is like strategically, I'm not saying that you're not gonna have air pockets at points. I'm not saying that there's points where like any little data point is gonna get, you know, accelerated and nervous. Blackwell, Dewey, is this, Singapore, I get all the stuff, but the reality is like, we are, like, the ships left the port. Like the point is like, this rocket ship or wherever you want to think about is going. But how about this? Are they, are the CFOs and these companies and the boards making the decision to spend the money

because they think that they're going to get an ROI on these investments? Or are they doing it because if they don't, they're dead, they're not going to be able to keep up? It's both. Because if I'm an, I'll just give you an example. If I'm an advertising firm and my four biggest competitors are spending anywhere from 10 to 20 million on AI, I'm just gonna sit there being like, hey, I'm good, you guys spent. Well, unless those four waste a lot of money

and have nothing to show for it. But now even just to take in next level, of those four, two have already potentially identified a use case that they believe could potentially change their company from an advertising model perspective. So, and then if you're like, oh, now we gotta go down that path.

Get in line. The price just went up. But also it's get in line. Because it goes back to GPU, it's a supply demand, 15 to to 1 demand to supply for Nvidia chips. So I'm guessing you think that the concentration in the market is going to increase, that these companies are going to swallow even more market share.

I think it's going to increase. But then going back to the multiplier effect, all of a sudden, there's going to be names I was giving there'll be names across like small cap Or across me like why is this stock up 30% you're like cuz all of a sudden a margin expansion I mean I got a coming like name like Pegasus. I'm just giving example Small cap name went like 50 60, but it's 105, 110. They're like, ah, growth doesn't look that much more. No, but what's happening is they're basically like an IT tool player

that's starting to get more and more AI driven revenue. Bam, multiple expansion, done. I think there's going to be a few of those in every sector. And it's not just tech. And like a lot of times times even like a web push I'm talking always like retail for any other analysts being like don't just sit there with your typical Lens the way you value companies because if there's a coming all of a sudden that they start to change their mouth They get AI driven revenue the multiple changes in terms of how the markets gonna value it Tesla

We got it. We got to end with Tesla. There's so much here. Let me set this up and then we'll go. I don't listen to the Tesla call because I don't like I own Tesla through the S&P 500 and the Q's. I don't own the stock individually. I never understood it. I missed one of the best rallies. I'll always regret having missed the run up in Tesla. I was friends with Jim Chanos for a lot of it and I just, I never understood it. Now I understand it and I can't bring myself to buy it. Okay, so that's my bias on Tesla.

Willingly lay it out. The smartest people I've ever heard talking about anything Investment related all hated the stock forever and I would what it's and I think that is like a perfect way to put it Some of the smartest people they just I know what not just channel I know Warren but so some of the smartest be I'd walk into rooms like this There'd be 15 people and they, we just want to talk about Tesla. And it's some of the smartest people I've ever talked to.

And I'd agree that we're all bearish. So here's where I'm going. He got away with everything, right? He did things that no other CEO or founder of a public company would ever be able to do. And he did it with a gleam in his eye and a smile on his face, and he went through moments where he was almost bankrupt, quote unquote, or they wouldn't be able to do and he did it with a gleam in his eye and a smile on his face and he went through moments where he was almost bankrupt quote unquote or they wouldn't be able to raise money blah blah

blah he's making cars in the tent like all that shit he lit he survived he thrived he's out selling all the u.s car manufacturers nobody could take any of those achievements away from him he's landing rockets blah blah blah now it's you talk about exponential, he f***ing decides who runs the SEC. Like I don't think people understand that. I'm going to read to you how he opened the conference call last night, and you'll giggle a little bit because it's impossible not to, but he could say all of this and even more and nobody's going to do anything about it. Okay, this is Elon last night and I've said this before and I'll stand by it. I see a path,

I'm not saying it's an easy path, very smart the lawyers told me to put that in, but I see a path to Tesla being the most valuable company in the world by far, not even close, maybe several times more than I mean, you know how he stutters, I mean there is a path where Tesla is worth more than the next top five companies combined. There's a path to that. So that'd be $30 trillion-ish. Okay. There is a path to that.

I mean, I think it's like an incredibly, just like a difficult path, but it's an achievable path. And how? This is overwhelmingly due to autonomous vehicles and humanoid robots, so our focus is building toward that. Very few people understand the value of full self-driving and our ability to monetize the fleet. Some of these things I've said for quite a long time, and I know people have said,

well, Elon is the boy who cried wolf several times, but I'm telling you, there's a damn wolf this time and you can drive it. In fact, it can drive you. It's a self-driving wolf. All right, that is, I mean, I took the AirPods out of my ear and hit pause on the quarter app because I was like, this f***ing guy could just basically

do whatever he wants now and it's amazing. And if you're a shareholder, you love it. Because, like, the earnings were sh- No offense, the earnings were not good. No, I don't disagree. The deliveries were down. The earnings were down. The revenue is not growing. Like, the stock went up anyway.

He has an infinite runway of belief in his investors because to Josh's point, earnings were shit. And he even said, forget about the car forget about the car Optimists is gonna be ten times bigger than the cars. Could you imagine McDonald's saying forget about the burgers? We're building robots. No, but look and I get your point and like a lot of people like have that reaction But I so let's just go back to like 2018 They're like there's no way this is a company that could ever get to a few hundred thousand EVs On the roof. Okay, everybody's agrees with you. He's on the benefit of the day. Yeah, he did it, but but I truly believe

Autonomous and robotics will dwarf The EV valuation I could picture it happening too, And I've seen what the robots can already do. In 10 years. Sooner, Tommy, Tommy. Because we don't know. I believe autonomous, and this goes to like the bet for the ages of betting on Trump.

Because Trump's going to cry kid reverend, sweep the leg in terms of everything from a regulatory. You're going to actually have a federal roadmap in terms of autonomous. That's going to be the next step. And I believe cyber cabs will be a reality a year from now. So do I. And when you think about how many will there be, that's the I agree with you, but like, I believe you could ultimately be looking at 80 to 100,000 per year. How is he making that money? Because if you look at the production lines that they have,

and look, it's gonna ultimately take time, of true volume production for a company that's producing two million vehicles. Who's cleaning them at night? Well, you get into a Tesla right now. The robots. No, but eventually what's gonna happen is- I just got out of a Tesla right now. But eventually it's going to happen.

I just got out of a Tesla Model Y. They send me a car to go do CNBC because I'm a huge deal. And you have an EV in your shoe. If I take a piece of gum out of my mouth and stick it to the roof, the driver in front of me will turn around and smack me in the face. And then ultimately he's going to scrape the thing off the roof or he'll force me to. How do you maintain a fleet of a hundred thousand autonomous cars in Austin? Which is arguably the drunkest city in America at least right now

How how possibly is that as high margin as people think it's gonna be? These cars have to live somewhere. They need to be maintained. They'll break down You don't have owners of these cars who are responsible. Who's the owner? So, here's, remember, we're walking through, just like we always have, like, where everything's going. Is that, first of all, in Austin, that would be like pilot sort of projects. So, no different than Wemos. But remember, Wemos $240,000 cars.

They had the same problem I just described as the CyberCab. But what's going to happen is as autonomous licenses on the federal and eventually on the state happen, Josh, Mike, Dan, Gene will basically, they'll have fleets where I'll have two Model Y autonomous vehicles at my house. While I'm here- You contract them out to the fleet. They're doing rides, no different than Uber, and then all of a sudden I have an app that's seeing where they're going. They'll be like ultimately meeting stations that that they can go to as well, charging stations, and then when those come back

to my house, I basically have been making money the whole day on those fleets. You're getting a commission because your cars were out running errands. He said like Airbnb. It's gonna be an Airbnb. It's gonna be that model because if you look today cars probably like you know if you think about only 5% of the time they actually drive. Yeah they sit in a parking lot all day. So he's right about that. The statement he made was that this is going to be the largest increase in asset value ever When I turn all the cars into No autonomous, but I just want to caveat one day, but what's an important GM?

Ford other automakers there are nowhere when it comes to OEM when it comes to FSD the way that they're gonna FSD It's gonna be a partnership with Tesla so that equipment will go on to that's off for Bronco exactly okay I believe that so it sounds like a good business so in other words think about the technology and that's why when we talk about physical AI and Jensen's talk about it too autonomous is gonna be as a consumer the best use case and the biggest when it comes to AI. Okay.

Which, we believe the valuation of autonomous is worth a trillion dollars alone for Tesla. But that's why the stock's up today versus down, even though numbers are not good. It's the story. He sold the story. Yeah, he sold the story. So he said, but again, he's saying that like it's optimist. Forget about the car stuff. He said, with regard to Optimus, obviously I'm making these revenue predictions that sound absolutely insane. I realize that.

But they are, I think they will prove to be accurate. Now with Optimus, there's a lot of uncertainty on the exact timing because it's not like a train arriving on the stage for Optimus. We are designing the train on the station and in real time while also building the tracks. What are these robots gonna do for us? Well so far, the robot... They play the piano. Didn't these robots going to do for us? So for the robot, remember- They play the piano. Didn't you see Westworld? But also remember, the robots are going to have, they're basically AI brains.

So no different than like a puppy comes home, doesn't know you, three years later knows that you like the AI's attending. You don't abandon your robot for a new model like a vacuum cleaner. The robot learns. So the robot, they come in as a kindergartner, then they become a PhD, a Stephen Hawkins. They know you, so you're here,

those robots are at home doing your wash. So I'm just trying to- But they're not starting out that way. They're not starting out that way. Start out like R2D2, you get C3PO like three or four iterations later. And then it's all about the AI chip, essentially in the brain. I'm sure it's coming, but like when? It sounds... I believe true optimists, 2026, 2027 is where optimists will be there.

Both... And then we're talking about on the consumer side, on the enterprise side, when you talk about factories. Sure. The amount... There's things that... Whether it's like restaurants, whether it's making fries... Well, Amazon's already got factories filled with robots. They don't look like Optimus because they don't need to. They have an arm for a head that's lifting boxes.

But advanced robotics, when you think about a Tesla factory, anyone that's ever been there, when you start to think about now robotics could be 20, 30, 40 percent. And now people that are actually doing it. He's really asking though, when is the girlfriend Optimus coming? That's like, he doesn't want to say, like the sub subtext of everything is like why don't I have one yet? And that's a great question and that and and I believe you these are the Asians will have that first I want a robot to load my dishes, and I believe that's something by 2026 although you have your laundry folded professionally right mm? Mm-hmm. Like imagine a laundry bot.

Yeah. Well, wouldn't you pay for that? I know. And also... Well, he said they're going to cost, what did he say, less than $20,000 to produce? And he said, somebody said, what are you going to charge? He said, well, whatever the market, you know, that'll be a demand question. But then eventually you're going to be able to lease them.

You'll be able to almost like... Kai, did you watch? Did you watch? Of course you did. The Nvidia keynote at CSES, you there? Okay. Remember that one segment where Jensen stands in the middle and behind him is 20 different humanoid robots?

It kind of looked like Iron Man 3, where like at the end, he like hits the Jarvis, sends everything. Okay, that's what that reminded me of, but every one of those robots behind Jensen is a current humanoid robot prototype that's being built. Like that was not like AI make me 20 robots. Those things are being built now.

And Nvidia and Tesla are gonna compete when it comes to robotics. So that was my question, is Nvidia the arms dealer to all those robots? They are the arms dealer because remember, ultimately those chips that Tesla's gonna need are from Nvidia. So then if you're bullish on Tesla, you have to be, because of Optimus, then you have to be a bullish on Nvidia. But that's why when we came out of the keynote with Jensen, our whole view is like, this might be one of the best things in 25 years that we've ever seen, along with RoboTaxi Day and others.

And then that's going to, stock sells off, because you might, I'm like, this is going to be a rounding error in the broader vision of where this is all going. What do you think of the idea that the energy companies that all got killed this week? What do you think of the idea that maybe the chip stocks that got killed are a buy, but the energy companies

maybe will need less energy for the revolution? I don't believe it. I actually think they're gonna need more energy. More energy. Because of where everything is going on. So you don't cover those stocks, but like. But that's why we cover like let's say aqua and the nuclear because I'm a big believer like nuclear

is gonna play a big role. But when you look like console, when you look at any of the short grid players, the utility. Because bottom line is like, if you're bullish on these names in terms of tech, you have to by definition be bullish in this, because the only way that this works is with the energy.

What do you want to, what do you want to, should we do like a lightning round of Dan's names? What are the names that we didn't come up? You mentioned Palantir twice. I mean Palantir we mentioned. I mean I think like Mongo, Snowflake, Elastic. Tell us the MongoDB story. What does that have to do with AI? Because it's my view of like as the use cases and as ultimately data starts to build the consumption models are going to increase.

Okay. And Mongo is really a consumption AI play. Along with Snowflake. What about the private companies? Yeah, I mean, like, look, we talked to a ton of private companies and I believe we're now at the precipice where you're going to see a lot of these private companies potentially going down the public path or potentially M&A. But there's already been a desert when it comes to IPOs.

And I think we are now at a point also with the regulatory, conda, FTC, a lot of the other changes that it's going to be a golden age for tech. And I think even on the private side with VCs and a lot of the sort of, you know, private equity, they're also going to be huge, huge players in terms of funding these companies. What about the the server robotics of the world? Like you, are you a part of that story? Yeah. Kastrasz.

Yeah, so I know those guys pretty well. Ooh, you do? Yeah. Tell us more. I mean, Ali and those guys. You don't write on them though. Yeah, but I know those guys pretty well. I mean, yeah, tell us more. I mean Ali and those guys You don't write on them though. Yeah, but I know them I spoke to like two of the three analysts that actually publish on Josh owns the stock He's trying to get us to buy it. No, I think but I would argue already downed it huge

I would I'd actually argue they're probably the only true level four Autonomous company level four. No, there, I know. I'm just skeptical of this whole idea, so please, sell me, sell me. Let me pitch you, sir, and then tell me everything that's wrong with my pitch. Elevator pitch. It is not efficient to have people driving

2,000 pound cars to deliver a one pound burrito. It speaks to our whole. It's insane. This whole conversation. Okay, so you don't want an autonomous car just taking the place of a regular person driving a car. You want something else for certain locations. Los Angeles has 100 serve little carts rolling around. In different areas.

They're not being controlled by somebody behind the bushes. They're actually level four autonomous. Those are R2D2s. They earn about $43 in revenue per day. And again, there's only... $43? Well, 100 of them times 365 days. $43?

They have a contract with Uber. Uber's going to be the big... Uber's going to deploy 2,000 of them by the end of this year. And as they go around the country. Dude, that's $50 million, what I'm telling you. No, I mean, look, here's the... 2,000 robots, $40 a day, 365 days a year. That's just Uber.

That could be $50 million business. And I think Serve's a good example of like, they've gone through obviously a lot of challenges in their model, but if you look at where they've come out now, that's a good example where like the street just dismissed it but if you actually understood... Well sub one billion so nobody will even look at it. Exactly.

But if you look at their technology, they're actually under the covers as a pure technology company. One of the more, I think very interesting companies out there in terms of pure robotics and technology. They raised almost $200 million last year through stock sales. They say they won't sell any more stock, but who knows, maybe they will. But like, look, I own a tiny amount of it,

and I'm actually hoping it goes lower, because I want to add to it at lower prices. I spoke to like the bull analyst who covers it. His price target is 12, the stock's 18. I'm like, all right, so. Who else can I talk to? He's like, look, it's just too early. They don't make any money.

But don't you want to earn it once early? That's what I thought. But that's like people I talked to on, let's say, like, Aqua, right? What is it? As a nuclear play. What's the name? Aqua.

Like the Sam Al. The Aqua, the Sam Altman nuclear play. Oh, I don need to do that. But that's another example. Like 10 bucks, like it's not making money until 27. I'm like, look, if you believe in AI, Altman's new and some of the technology that they're actually building out, you can't look at revenues, numbers. You got to look at it.

And now of course, stock goes from 10 to 35. And now everyone's like yeah I don't care about numbers 25 26. Let's figure what is gonna do next five ten years. Here's another one that we both on That's like no, no revenue speech in Silicon Valley. What's what's the guy's name? What's the guy's name this guy? Oh The guy who fucks trace comments guy. Yeah, what's up? Russ Hanneman. Russ Hanneman? Yeah, good job Duncan.

Is it Ross Hanneman? Ross, Ross. Is it Ross? Ross. Are you saying Ross or Ross? Are you? Yeah, Ross. So you see, he's talking to the kid, he's like, stop.

No revenue. Why? Because once you have revenue, it's never going to be enough. Alright, so serve has no revenue. I'm guessing the nuclear play has no revenue. Yeah, but to me it's all where we are. And remember, this is not dot com, but because when you think about where everything is going, robotics, autonomous, AI, it's all part of an ecosystem that's building up. Josh and I were laughing. It serves on their deck, on their quarterly deck.

It says they did 00.2 million in revenue in this recent quarter. We've never seen that before. There's never seen that before. One more. So Uber gapped down 4% today. It finished at the highest of the day. I think it was flattish.

So every time there's Tesla news on the self-driving cars. So that's one of my biggest positions. That's really pissing me off. And we're bullish on Uber. And we cover Uber and we're bullish. I don't view it as mutually exclusive. I don't view it like you have to bet on Tesla. But the market does right now.

The market crushes Uber 5% every time Elon talks about cybertaxi. I think it's the wrong knee-jerk reaction. But ultimately, if you look at what Uber's done with Waymo and some other partnerships, I think where it's all going to go, it's our view that eventually Uber and Tesla will partner. Give me some more cope. Uber has a partnership with Waymo for Atlanta and Austin only. Now we know they'll compete in Austin versus the Cyber Taxi. Austin's about to be like an epicenter of autonomous. Which makes sense.

There's people that will absolutely try it, use it, love it. Okay. If Waymo looks at this partnership with Uber in Atlanta and Austin, and says, okay, that's great, but look at how well we do in Vegas, or these other cities without Uber, what do we need to list our rides on their app for? That's like a risk that people are worried about. What do you think?

But I could just continue to view Waymo, their $200,000 vehicles, in other words, they still can't scale to the level, and I just don't think in any way that they're gonna leave Uber. I mean, to some extent, like, Uber is a partner that I think them they get bigger and bigger. The most foolish thing that could happen is Waymo says we've decided we're gonna use Uber in two other cities.

We're gonna expand the cities with... So Uber and Waymo actually doubled down on the partnership because they basically they realized like hey like we're like an eighth grade prom like okay, there's two left me you I withstand. So the point're like an eighth grade prom. Like okay, there's two left, me, you, I withstand. So the point is like they start to realize. But you know what was bearish to your point? When GM gave up on cruise. Because that was supposed to be an obvious partner for Uber. And it doesn't exist now.

But to that point, that's GM specific. They've had to do that. Cruise has almost been a blackout. I'm just saying negative for Uber. Because it's like oh shit, they were going to be like part of the cruise ecosystem, and now there is no cruise ecosystem. Sure, but I actually, I would argue that like everything Tesla's doing with CyberCav and Autonomous is actually bullish for Uber over time, because my view is that eventually,

10-20% of Ubers might not have drivers. So from a profitability perspective, what that could ultimately do to Uber's business model over time, or what you're saying Uber... But wait, whose cars are they then? If they're not going to partner with Tesla, what autonomous vehicles are left? Because we believe ultimately Uber is going to down the road partner with Tesla as part of the OEM.

You think that'll happen? Oh, I believe. The stock will go to 100 if that happens. I believe it's a matter of when not it because Uber at one point and Tesla are I see no way that they don't partner. Okay last question on this If Uber buys Expedia Do you sell Uber or do you buy more? You buy more because- What will the street do? Will the market- In typical street fashion, they'll probably like, the stock would trade off a bit, you know, when they-

You know Dara was the CEO of Expedia. So when those rumors were happening, like stocks sold off a bit because that's typical street reaction, I would view it as bullish. Because I want to see Uber- Super App. Because it's all about, it's all about there. Everyone right now is trying to go to China. Who could build a Super App quicker? Is it Musk? And potentially we could argue TikTok and where that all goes and if he ultimately gets it. Uber's going to try to build a Super App. Book your flight, book your hotel, take your taxi to the hotel. No one knows Expedia better than Dara.

Yeah, okay. So that would be bullish to you. I would view, if that stock sold off, I would drop coverage and own it. In my PA. Okay. Alright, let's, that's a great place to leave it. We always end the show these days. First of all, ladies and gentlemen, Dan Ives. This is so much fun.

You literally are the best. I don't know how else to put it. We always end the show these days, we ask people what they're most looking forward to. I'm guessing you're going to say somewhere you're going or somebody you're meeting or maybe I'm wrong. I'm looking forward to Super Bowl and a football guy. I'm looking forward to Penn State winning the NAD in 2025. Yeah, of course. As are most of the people in the country. I mean, that's what I'm looking forward to most.

But I'm actually looking forward most. I'll be in Asia for three weeks. When are you going? I go in like a week and a half. So I'm really looking forward to that trip because everything we're talking about here, that's feet on the ground. Whether it's Taiwan, whether it's China, trying to really understand has anything changed.

Because then actually, all of our travel, I feel like what it does, it gives us an advantage to actually kind of put our thesis to sort of test if we're actually right. And I think that's something that I'm, at least in the near term, looking forward to. Can't wait to hear what you have to say when you're there and when you get back.

Thank you so much for doing this. Do you have anything you are looking forward to? I do, Future Proof, Miami. Future Proof, Miami? And I actually, when I come back from Asia, like a week or two later, I'll be down in Miami. Dude, All American Rejects, the Frye. Great, two great bands.

And I'm not just saying this because we're here. I actually find like future-proof. I learn so much because I love, just from engaging with so many smart retail investors, I come at that with such a good pulse in terms of whether it's like negative, positive, bullish, or whatever it or whatever may be so actually that's another reason Masaj is hanging out with all the epic good why I look forward to this. You like Miami too I'm guessing. Dude 305. Who doesn't like Miami? 305, Delano. Come on.

So my looking forward to is I watched the first two episodes of Severance season two. Oh great. Holy shit is this is a season gonna be incredible. So I'm looking like. Oh great. Holy shit, this season is going to be incredible. So the next one, if you're listening to this podcast, episode three is out because they come out on Fridays. But I'm going back to rewatch season one. Severance is awesome. And now I'm knee deep in all these reddits and I have like theories and it's just like my favorite.

It's my favorite thing. I can't wait for the next one. All right. Great job this week everybody at the Compound Media. Nicole, Daniel, Duncan, John, CharKid, Matt, Sean, who else? Who am I missing? Got everybody, Rob, Graham, Keith?

The team is going crazy. Great job this week, guys. Saquon, I mean everyone. Special thanks to Dan Ives. Follow Dan Ives on Twitter, LinkedIn, where else? Wedbush.com slash research slash anything. Lovers, haters, I like them all. All right.

That's it from us this week, guys. Thank you so much for listening. We'll talk to you soon. Take us out. Good night.