Bloomberg Daybreak Holiday Special - New Years Day 2024

Thanks for joining us for this special edition of Bloomberg Daybreak. 0:00:05.080 --> 0:00:08.039 I'm Nathan Hager Pay Happy New Year, everybody. Of course, 0:00:08.280 --> 0:00:11.840 markets are closed as we kick off twenty twenty four. Well, 0:00:12.039 --> 0:00:14.880 they're back. Last summer, you may recall we brought you 0:00:14.960 --> 0:00:18.880 a special high tech roundtable with Gene Munster, managing partner 0:00:18.920 --> 0:00:22.560 at Deepwater Asset Management, and wet Bush Securities senior equity 0:00:22.600 --> 0:00:25.840 research analyst Dan Ives. This was about halfway through the 0:00:25.880 --> 0:00:28.280 trading year. Well, now, we thought we'd bring the guys 0:00:28.360 --> 0:00:31.360 back to see how their stock picks fared since they 0:00:31.440 --> 0:00:33.959 last joined us on the fourth of July, and we'll 0:00:34.000 --> 0:00:35.800 look as well at some of the trends that could 0:00:35.800 --> 0:00:38.879 shape the tech sector well into twenty twenty four. Well, 0:00:38.920 --> 0:00:41.839 let's start things off with you, Dan and remind our 0:00:41.880 --> 0:00:44.720 listeners just what you liked and didn't like when it 0:00:44.760 --> 0:00:46.880 comes to tech stocks back in the summer. 0:00:46.960 --> 0:00:50.959 Listen, Apple and Microsoft to me are the table pounders 0:00:51.000 --> 0:00:52.400 here along with Tessa. 0:00:52.479 --> 0:00:55.000 Because of the growth themes. 0:00:54.600 --> 0:00:57.680 That are going on for Cloud, Microsoft and the Della 0:00:57.720 --> 0:01:00.400 continues to be the core Cloud and AI name the 0:01:00.600 --> 0:01:04.720 names right now. If you looked up disaster in the dictionary, 0:01:05.319 --> 0:01:08.560 you'd see the tickers, lift and Snap. 0:01:08.880 --> 0:01:11.200 Those are names under new circumstance. 0:01:11.280 --> 0:01:15.039 What I focus on despite maybe the stocks that have 0:01:15.080 --> 0:01:16.640 obviously sold off significant. 0:01:17.160 --> 0:01:20.920 Okay, so since the fourth of July, Dan Apple's gained, 0:01:21.280 --> 0:01:26.000 Microsoft's up about ten percent, Tesla's down about ten percent. 0:01:26.160 --> 0:01:28.720 Kind of nailed it on the Apple Microsoft story. But 0:01:29.360 --> 0:01:31.080 Tesla's been a little more complicated. 0:01:31.440 --> 0:01:35.440 Yeah, it has. I think they've essentially gone through a 0:01:35.480 --> 0:01:39.800 price war, especially in China, and I think what we're 0:01:39.800 --> 0:01:43.360 starting to see with electric vehicles is this is I 0:01:43.400 --> 0:01:46.600 still viewed as an air pocket period for Tesla, but 0:01:46.760 --> 0:01:50.080 no doubt for the first time they're going through some 0:01:50.200 --> 0:01:53.000 challenges and you know, I think right now for twenty 0:01:53.040 --> 0:01:58.200 four it's about standing firm on margins, no more price cuts, 0:01:58.640 --> 0:02:01.600 and starting to ramp unit volume. That's going to be 0:02:01.640 --> 0:02:03.680 the name of the game for Tesla. But is Geneo 0:02:03.720 --> 0:02:07.520 as well when you look out this is still second 0:02:07.840 --> 0:02:10.400 third inning of a nine inning game in terms of 0:02:10.440 --> 0:02:11.160 this gross story. 0:02:11.880 --> 0:02:14.399 Well, gene can't let you off the hook here. Let's 0:02:14.440 --> 0:02:16.440 take a listen to your July fourth picks. 0:02:16.480 --> 0:02:20.160 Now, on the standout side, is Google still not getting 0:02:20.200 --> 0:02:23.160 the credit what they've done in AI remember in twenty 0:02:23.200 --> 0:02:25.360 seventeen they said they're an AI first company of some 0:02:25.360 --> 0:02:27.640 of the smartest people on it. Yes, there's going to 0:02:27.680 --> 0:02:29.760 be some sort of a bump in the road related 0:02:29.800 --> 0:02:31.720 to their revenue, but I think we haven't even seen 0:02:31.760 --> 0:02:32.840 the beginning of what they're going to. 0:02:32.840 --> 0:02:33.360 Do in AI. 0:02:33.520 --> 0:02:35.600 And then I would put Apple in there. I think 0:02:35.680 --> 0:02:38.520 Vision Pro is one that is going to surprise investors 0:02:38.520 --> 0:02:40.760 over the next few years. And a third one, a 0:02:40.960 --> 0:02:43.880 much smaller one, is Zillo. They can use AI to 0:02:44.320 --> 0:02:47.840 finally fix this estimate. I think that's going to benefit Zilo. 0:02:48.040 --> 0:02:50.080 And on the ones that we're a little bit more 0:02:50.160 --> 0:02:53.320 cautious on, We're negative on Lift. They've obviously had some problems. 0:02:53.320 --> 0:02:55.080 Don't want to pile on that, but I'll put Lift 0:02:55.080 --> 0:02:55.840 in that category. 0:02:55.960 --> 0:02:57.400 We're going to have to pile on Lift just a 0:02:57.400 --> 0:03:00.240 little bit. But first Gene, you'll be happy to know 0:03:00.480 --> 0:03:04.160 Google parent Alphabet up about fifteen percent since the fourth 0:03:04.200 --> 0:03:07.359 of July. We mentioned Apple as well, it's higher. Zillow's 0:03:07.400 --> 0:03:10.240 up about ten percent. That AI call does seem like 0:03:10.280 --> 0:03:11.920 it had some pretty decent rethrow. 0:03:12.440 --> 0:03:15.480 We're getting some tracks that I mean it is. This 0:03:15.560 --> 0:03:17.680 is a theme that Dan and I operate in on 0:03:17.720 --> 0:03:20.280 a daily basis, which we're seeing where the world's going 0:03:20.320 --> 0:03:24.639 the next few years. It takes time to get there, 0:03:24.680 --> 0:03:26.920 and Zillo is starting to do that. The zestament has 0:03:26.960 --> 0:03:30.320 been broke for a long time. It's just starting to heal. 0:03:30.919 --> 0:03:34.400 I think that that's going to add better transparency, better 0:03:34.560 --> 0:03:38.000 accuracy to what people is. The largest part of their 0:03:38.040 --> 0:03:41.040 net worth is is their home and I think that 0:03:41.800 --> 0:03:44.400 taking some of the friction out of understanding the value 0:03:44.440 --> 0:03:47.000 of your home I think is valuable. And on top 0:03:47.040 --> 0:03:49.720 of that, you get a natural boost which I think 0:03:49.800 --> 0:03:52.160 is going to come to some of these real estate 0:03:52.200 --> 0:03:55.640 tech companies in the next year, just because raids as 0:03:55.680 --> 0:03:58.840 they even stabilize and maybe they get better, maybe they 0:03:58.840 --> 0:04:02.200 go down stabilization. I think it's going to be benefit 0:04:02.320 --> 0:04:06.880 just across the board and Zillo. Other companies beyond zill 0:04:06.920 --> 0:04:09.240 in real estate tech that have been to say they've 0:04:09.240 --> 0:04:12.080 been obliterated over the last couple of years as an understatement, 0:04:12.240 --> 0:04:14.440 but I think they're due for a bounce back. Now. 0:04:14.440 --> 0:04:17.680 I want to talk about both the really good calls 0:04:17.760 --> 0:04:22.240 that you both had, but you both mentioned Lift as 0:04:22.320 --> 0:04:25.400 a stock that you didn't like. You might be surprised 0:04:25.400 --> 0:04:28.520 to hear that since that fourth of July call, Lift 0:04:28.560 --> 0:04:35.120 has gained about fifty five zero percent. Dan any regrets. 0:04:36.240 --> 0:04:40.440 I mean, look, you're going to see maybe people talking 0:04:40.440 --> 0:04:43.560 about could this get acquired? Could it be a restructuring 0:04:43.600 --> 0:04:46.599 story activist. So that's definitely some of the stuff that's 0:04:46.600 --> 0:04:51.799 happened with LYFT. But the reality is they have averaged 0:04:51.960 --> 0:04:56.200 like uphill challenges, and this is one where Uber continues 0:04:56.240 --> 0:05:00.120 to be our table pounder. You focus on your flowers, 0:05:00.160 --> 0:05:03.320 not your weeds. That's how you lift. It's the little 0:05:03.400 --> 0:05:04.880 brother Tuber. 0:05:05.880 --> 0:05:08.839 How about you, Gene, you still love sour on Lift? 0:05:09.440 --> 0:05:11.880 Yeah, it's painful to hear that that it's up to 0:05:11.880 --> 0:05:15.240 fifty five percent since I was negative on it, and 0:05:15.520 --> 0:05:19.880 I have a similar type of view, is that wish 0:05:19.960 --> 0:05:22.280 we would have been more positive on it six months ago, 0:05:22.360 --> 0:05:24.279 and then all the way we like to think about 0:05:24.320 --> 0:05:27.240 it deep waters that there's no rear ver mirror and 0:05:27.600 --> 0:05:30.080 we have to look forward. And I'm on that same 0:05:30.120 --> 0:05:33.599 page that Dan is. I think that Uber is by 0:05:33.640 --> 0:05:36.760 far and away orders a magnitude better positioned, and I 0:05:37.560 --> 0:05:40.520 think that going forward, wish I would have gotten it 0:05:40.640 --> 0:05:43.360 right going forward, still think this company is going to 0:05:43.440 --> 0:05:47.000 be structurally challenged in the next few years. 0:05:47.480 --> 0:05:51.000 So going forward, let's talk about the names that did 0:05:51.080 --> 0:05:55.760 really well, those calls that you both had. Microsoft Alphabet 0:05:56.160 --> 0:06:00.039 part of those Magnificent seven that have really driven the 0:06:00.160 --> 0:06:03.479 rally this year. Dan, When we see the kind of 0:06:03.560 --> 0:06:07.880 games that we've seen from those names, in particular Microsoft Alphabet, 0:06:08.040 --> 0:06:10.599 at what point do the megacaps start to look stretched 0:06:10.640 --> 0:06:10.839 to you? 0:06:11.480 --> 0:06:15.359 I mean, I still believe we're in the be just 0:06:15.440 --> 0:06:18.080 the beginning of this AI revolution. So when I look 0:06:18.120 --> 0:06:20.680 at Microsoft, you know, we spend so much of our 0:06:20.720 --> 0:06:24.680 time traveling around the world trying to understand the monization 0:06:24.839 --> 0:06:28.080 of AI from Microsoft. For every one hundred dollars of 0:06:28.160 --> 0:06:31.560 cloud spend on Azure Wen, there's incremental thirty five to 0:06:31.720 --> 0:06:34.880 forty of AI spend. You put that together, a year 0:06:34.920 --> 0:06:37.120 from now, we're looking at a mark cap that's probably 0:06:37.120 --> 0:06:40.000 closer to four trillion than three trillion. So I think 0:06:40.360 --> 0:06:44.960 the golden story under Nadella is just starting to take 0:06:45.000 --> 0:06:46.560 place in terms in Redmond. 0:06:46.800 --> 0:06:50.239 You still piling in to Microsoft as well, Gene. 0:06:50.520 --> 0:06:53.359 We do own it. We think that they're well positioned, 0:06:53.400 --> 0:06:55.320 and you know, I just want to put a little 0:06:55.320 --> 0:06:59.039 bit of A. I guess my view on what Dan 0:06:59.160 --> 0:07:02.320 said related to where AI is and where it's potentially going. 0:07:02.400 --> 0:07:05.000 And you know, we've been struggling over the past year 0:07:05.040 --> 0:07:08.400 to try to put context into the significance of this. 0:07:08.720 --> 0:07:11.600 There seems to be this tripping over each other in 0:07:11.680 --> 0:07:13.760 terms of what are the adjectives to describe it. So 0:07:13.760 --> 0:07:16.160 I'm going to take a shot at it. Here is 0:07:16.200 --> 0:07:19.160 that I would put electricity in a scale of one 0:07:19.280 --> 0:07:23.720 to one hundred, one hundred being most transformative. Electricity is 0:07:23.760 --> 0:07:27.320 at one hundred. I would put AI at ninety or 0:07:27.440 --> 0:07:31.840 ninety five, the Internet at fifty, the smartphone at thirty 0:07:32.840 --> 0:07:36.200 three d TV if you're curious, as a negative five. 0:07:38.240 --> 0:07:41.400 Been a while since we thought about shot correct. 0:07:42.200 --> 0:07:47.000 The reason why I put that into context is it 0:07:48.280 --> 0:07:52.240 I think illustrates how bullish we are and we think 0:07:52.360 --> 0:07:55.720 we're going to see We're in nineteen ninety five and 0:07:55.760 --> 0:07:59.800 we haven't even started to see the enthusiasm around A 0:08:00.120 --> 0:08:02.600 and we think we're gonna get a point where the 0:08:03.440 --> 0:08:05.680 optimism around it in three to five years is going 0:08:05.760 --> 0:08:09.640 to be deafening and it's gonna be a bubble. Good 0:08:09.680 --> 0:08:13.000 news is going into this. I think you are owning 0:08:13.040 --> 0:08:15.560 companies like Microsoft and Google and Apple are going to 0:08:15.640 --> 0:08:19.160 benefit from this massive run up. You gotta be careful 0:08:19.160 --> 0:08:21.880 on the opposite side of it. We learned that. But 0:08:22.080 --> 0:08:25.880 I'm agree with this thought that Microsoft is one of 0:08:25.960 --> 0:08:32.199 those foundational AI companies, thanks obviously to their partnerships, and 0:08:32.600 --> 0:08:33.880 they're gonna benefit from it. 0:08:33.920 --> 0:08:37.120 Interesting that you say it's gonna be a bubble, Gene, 0:08:37.160 --> 0:08:39.920 because when you have the kind of valuations that we've 0:08:39.960 --> 0:08:42.720 seen for these companies and so much focus this year 0:08:42.760 --> 0:08:45.800 on this Magnificent seven, a lot of folks are wondering 0:08:45.920 --> 0:08:50.079 whether we might be in the bubble already. Dan, I'm 0:08:50.080 --> 0:08:52.160 guessing that's not your view just yet. 0:08:52.280 --> 0:08:54.520 Why look, I think it look a lot of the 0:08:54.559 --> 0:08:57.040 work that even Gene, you know, Dug and his team 0:08:57.120 --> 0:09:01.360 done in deep water, it just shows similar to our work. 0:09:01.559 --> 0:09:04.560 We are in their early days of monization. So I 0:09:04.559 --> 0:09:06.560 don't view it as a bubble. This is not a 0:09:06.760 --> 0:09:10.920 nineteen ninety nine two thousand movement. It's a nineteen ninety 0:09:10.920 --> 0:09:15.120 five movement and the monization of AI is just starting. 0:09:15.160 --> 0:09:17.360 We viewed as a trillion dollars of incremental spend over 0:09:17.400 --> 0:09:20.160 the next decade. As at his the shores of tech. 0:09:20.640 --> 0:09:23.600 I view this not the time to go deep into 0:09:23.640 --> 0:09:26.080 the caves like a lot the bears have done this year, 0:09:26.120 --> 0:09:28.960 missing out. This is the time to basically get the 0:09:29.000 --> 0:09:32.400 popcorn and get ready for what we've used a new 0:09:32.440 --> 0:09:33.359 tech bulmarket. 0:09:33.559 --> 0:09:35.520 Are we at the start of a bull market in tech? 0:09:35.600 --> 0:09:36.680 For you, Geene? 0:09:37.080 --> 0:09:42.079 I think so. I think that to put there where 0:09:42.120 --> 0:09:44.520 we're currently in terms of evaluation, where we were in 0:09:44.600 --> 0:09:48.560 two thousand, call it the Nasdaq is twenty five or 0:09:48.559 --> 0:09:51.640 so multiple or twenty twenty five multiple, and at the 0:09:51.679 --> 0:09:54.120 peak of the bubble it was almost a two hundred 0:09:54.200 --> 0:09:58.560 multiple earning it's multiple, and so we it's just a 0:09:58.720 --> 0:10:01.840 very it's just a lot to go. I agree with Dan. 0:10:02.040 --> 0:10:05.560 I just love the way he can just capture exactly 0:10:05.559 --> 0:10:08.000 how to think about these getting a popcorn and sitting 0:10:08.040 --> 0:10:10.400 back and just watching this happen, because it's going to happen. 0:10:11.000 --> 0:10:15.240 And so I think we're just have We're at a 0:10:15.280 --> 0:10:17.720 point right now. I've been for the last two years. 0:10:17.760 --> 0:10:23.120 I've been more on the cautious side, and I am 0:10:23.160 --> 0:10:26.320 just extremely excited about how this AI is going to 0:10:26.360 --> 0:10:29.920 impact and bring a lot of just generate a lot 0:10:29.960 --> 0:10:33.400 of wealth for investors in the next three to five years. 0:10:33.600 --> 0:10:35.600 I do I actually have a question Nathan again for 0:10:35.840 --> 0:10:37.880 Dan on this topic around Okay, and. 0:10:38.120 --> 0:10:41.199 Well, let's get to that question in just a moment, 0:10:41.240 --> 0:10:43.439 because we do have a lot more to unpack here 0:10:43.480 --> 0:10:46.360 when it comes to the Magnificent seven and the AI story. 0:10:46.400 --> 0:10:48.679 So we'll let you pose that question to Dan as 0:10:48.720 --> 0:10:52.439 we continue this conversation on big tech in the new 0:10:52.559 --> 0:10:56.000 year on this special edition of Bloomberg and Daybreak. It 0:10:56.080 --> 0:10:59.120 is now eighteen minutes past the hour on Nathan Hager 0:10:59.320 --> 0:11:07.000 and this is Bloomberg. Welcome back to the special edition 0:11:07.040 --> 0:11:09.560 of Bloomberg Daybreak. The markets are closed for the New 0:11:09.640 --> 0:11:12.400 Year's holiday. I'm Nathan Hager. We are back with Gene 0:11:12.440 --> 0:11:16.319 Monster managing partner, Deepwater Asset Management and Wetbush Security senior 0:11:16.360 --> 0:11:19.840 equity research analyst, Dan Ives and Gene Before we were 0:11:19.880 --> 0:11:22.319 so rudely interrupted by the break, you had a question 0:11:22.400 --> 0:11:24.120 you wanted to post a Dan, So go ahead. 0:11:25.160 --> 0:11:27.720 It feels like Dan, you know, on the same page 0:11:27.760 --> 0:11:31.160 in terms of how impactful AI. It's going to be 0:11:31.200 --> 0:11:34.760 a massive impact. There's an opportunity of the next three 0:11:34.800 --> 0:11:41.240 to five years for wealth creation as the synergies and 0:11:40.520 --> 0:11:44.680 the revenue opportunities start to emerge from these companies around AI. 0:11:44.720 --> 0:11:46.680 It sounds like in general we're on the same page. 0:11:46.720 --> 0:11:49.920 And my question is this more about twenty twenty four. 0:11:50.520 --> 0:11:52.560 Do we think we're actually going to see some of 0:11:52.600 --> 0:11:55.839 the monetization for AI in twenty twenty four or is 0:11:55.880 --> 0:12:01.680 it going to be more just announcements and building towards 0:12:02.000 --> 0:12:04.520 better products that start to have an impact on revenue 0:12:04.520 --> 0:12:06.199 in twenty five, twenty six, twenty seven. 0:12:06.440 --> 0:12:08.800 H Gee, I think you nailed that. I think that's 0:12:08.840 --> 0:12:12.640 the biggest question. And to our point, there all the 0:12:12.679 --> 0:12:16.680 research we've done, I think we see monization front and 0:12:16.760 --> 0:12:20.600 center from copile, it from some of the hyperscale players, 0:12:21.160 --> 0:12:23.760 starting as early as March and April, and I think 0:12:23.840 --> 0:12:26.320 that is going to be the tip of the iceberg 0:12:26.679 --> 0:12:28.920 to this broader trend we're seeing right now. We have 0:12:28.960 --> 0:12:32.319 over eighty use cases based on our survey work four 0:12:32.400 --> 0:12:34.520 or five months ago, bay less than fifteen. And I 0:12:34.559 --> 0:12:37.800 think that you filew like Nathan Gene knows this so well. 0:12:38.160 --> 0:12:41.400 You follow the use cases. That's the yellow brick road 0:12:41.640 --> 0:12:43.200 to the winners and who you want to play. 0:12:43.320 --> 0:12:46.560 Okay, Well, if you've got eighty use cases Dan, and 0:12:46.600 --> 0:12:49.080 you've narrowed it down to that a dozen or so, 0:12:49.320 --> 0:12:52.280 what do you think of the most likely use cases 0:12:52.440 --> 0:12:55.480 that we could see start to bear fruit in this 0:12:55.559 --> 0:12:57.840 new year, Because, like as GEDD was saying, the big 0:12:57.960 --> 0:13:01.400 question is there's so much prompt around AI, you got 0:13:01.400 --> 0:13:03.520 to think that maybe this is the year that a 0:13:03.520 --> 0:13:05.360 lot of these companies are going to have to show 0:13:05.400 --> 0:13:07.400 that the promise leads to results. 0:13:07.520 --> 0:13:10.720 Yeah, And I think where you're seeing it first areas 0:13:10.760 --> 0:13:15.520 of financial some of the regulatory insurance. There's massive use 0:13:15.600 --> 0:13:20.720 cases around that actuaries are using that we're seeing from 0:13:20.720 --> 0:13:24.920 an unstructured data perspective. Banks are going after, they're diving 0:13:25.000 --> 0:13:28.880 to deepend the pool. The use cases are massive, and financials, 0:13:28.960 --> 0:13:34.720 life insurance. I also think we're seeing massive use cases healthcare, hospitals. 0:13:35.040 --> 0:13:41.080 Science is a very very big focus. And then ironically, government, 0:13:41.240 --> 0:13:44.640 which usually is so far behind, we're seeing a lot 0:13:44.679 --> 0:13:47.200 of use cases when it comes to on DoD and 0:13:47.280 --> 0:13:50.760 on defense and military and some of the agencies. And 0:13:50.800 --> 0:13:53.720 that's why we view this as probably the biggest transformation 0:13:53.800 --> 0:13:57.160 that we've ever seen, especially going back to mid nineties. 0:13:57.360 --> 0:14:00.120 That's really fascinating because we have seen a lot of 0:14:00.120 --> 0:14:03.280 the big banks, in particular Gene is trying to get 0:14:03.320 --> 0:14:06.120 ahead of the trend on AI and getting those use 0:14:06.200 --> 0:14:11.640 cases implemented. Where do you see the most promising use 0:14:11.720 --> 0:14:15.840 cases for AI right now, Well, it's. 0:14:15.800 --> 0:14:19.000 In twenty twenty four. I agree with Dan on this 0:14:19.280 --> 0:14:21.840 concept of copilot, and I think that when he talks 0:14:21.840 --> 0:14:26.000 about those eighty features, that's like real substance. There's real 0:14:26.360 --> 0:14:29.760 utility that's being delivered next year. When I saw some 0:14:29.880 --> 0:14:33.760 of these products previewed by Microsoft in twenty twenty three 0:14:33.960 --> 0:14:37.640 around copilot, my sense was we're going to see these 0:14:37.720 --> 0:14:40.600 in five years, and then they start talking about them 0:14:40.640 --> 0:14:44.280 being available in two months. It just hit home how 0:14:44.360 --> 0:14:47.040 fast things are moving. So I think that you will 0:14:47.040 --> 0:14:51.520 see an uptake small uptake and Microsoft revenue next year. 0:14:51.760 --> 0:14:54.240 I think another company that's going to benefit from this 0:14:54.320 --> 0:14:57.160 is you know, outside of the banking don't spend as 0:14:57.240 --> 0:14:59.520 much time on the banking side specifically, but we spend 0:14:59.520 --> 0:15:02.320 a lot of time on social side. And I think 0:15:02.360 --> 0:15:06.760 companies like Meta and even though it's not the AI 0:15:07.320 --> 0:15:11.760 quote AI product, I think AI making content easier to 0:15:11.840 --> 0:15:17.880 generate and really making the algorithms more I would say 0:15:17.920 --> 0:15:21.440 for lack of a better word, addictive and to increase engagement. 0:15:21.560 --> 0:15:23.880 I think you're going to continue to see where it 0:15:23.920 --> 0:15:28.480 actually presents itself is the growth in daily active users 0:15:28.520 --> 0:15:30.320 and time spent the metric they don't give out, but 0:15:30.400 --> 0:15:34.120 daily active users continues in this two three percent year 0:15:34.120 --> 0:15:35.560 of year, which is a hard number to grow and 0:15:35.640 --> 0:15:38.520 it's close. It's over two billion. I think that that 0:15:38.680 --> 0:15:41.200 is going to be how I think we're going to 0:15:41.280 --> 0:15:47.160 see AI impacting these businesses and that's real and we're 0:15:47.160 --> 0:15:49.520 going to start to see. Of course, obviously the hardware 0:15:49.560 --> 0:15:51.960 side and video will continue to be a big beneficiary, 0:15:52.000 --> 0:15:55.760 maybe a little bit with amw AMD and then play 0:15:55.800 --> 0:15:58.400 it forward. I think twenty five twenty six is when 0:15:58.920 --> 0:16:02.600 things really get and when it comes to monetization around AI. 0:16:03.200 --> 0:16:06.400 No I want to ask you Dan to think about 0:16:06.600 --> 0:16:09.840 AI getting more implemented in social media. There's so much 0:16:09.960 --> 0:16:13.920 question around social media, whether it's too addictive right now, 0:16:13.920 --> 0:16:16.880 and then when you think about artificial intelligence getting wrapped 0:16:16.880 --> 0:16:18.720 into it, whether that could create even more of a 0:16:18.760 --> 0:16:23.600 backlash around social media and AI more broadly. There's still 0:16:23.640 --> 0:16:27.360 a lot of concern, isn't there that artificial intelligence has 0:16:27.400 --> 0:16:29.400 the risk of getting to and meshed in our lives. 0:16:29.560 --> 0:16:29.760 Yeah. 0:16:29.800 --> 0:16:32.840 Look, it's been a concern and that's not going away. 0:16:33.000 --> 0:16:35.280 But I think with Jane's talking about, I think is 0:16:35.680 --> 0:16:38.920 a very important issue because when you look what's happened 0:16:38.960 --> 0:16:41.320 in social media and you look at Facebook, and you 0:16:41.360 --> 0:16:45.560 look at Google and snap TikTok and everything else, I 0:16:45.560 --> 0:16:49.600 mean AI, the monization's real in terms I mean from 0:16:49.720 --> 0:16:55.400 better words, essentially targeting, advertising, ramping. The regulators right now 0:16:56.240 --> 0:16:59.400 are in the right lane in a minivan going twenty 0:16:59.400 --> 0:17:04.080 five miles. The technologies a ferrari left ling going ninety 0:17:04.119 --> 0:17:08.800 five and the reality is regulatories despite all the noise, 0:17:08.920 --> 0:17:10.960 it's not stopping this free graine. 0:17:11.080 --> 0:17:14.439 But that's the thing though, If the regulation stays in 0:17:14.520 --> 0:17:17.800 the slow lane, it raises the question once again about 0:17:17.840 --> 0:17:22.960 whether artificial intelligence has a risk of outrunning itself and 0:17:23.320 --> 0:17:27.159 getting two out of control. What's the concern Do you 0:17:27.280 --> 0:17:29.040 have that concern, Jane. 0:17:28.960 --> 0:17:32.320 Well, I think that there's the companies know. I think 0:17:32.359 --> 0:17:36.320 the companies are really defining and driving AI, know of 0:17:36.359 --> 0:17:39.879 what the risks are, and I think, as I agree, 0:17:40.000 --> 0:17:43.000 I love that analogy. Dan, You are just wonderful at 0:17:43.040 --> 0:17:46.680 these analogies that far they're in the Ferrari and ripping along, 0:17:47.040 --> 0:17:50.600 and they know that I'm going to try my best 0:17:50.640 --> 0:17:53.800 to stick with this Ferrari example, but they know that 0:17:54.040 --> 0:17:56.040 if you go take it to one hundred and eighty 0:17:56.040 --> 0:17:59.639 miles an hour, you could crash and then you're done. 0:18:00.160 --> 0:18:04.040 And I believe that these companies know about the existential 0:18:04.119 --> 0:18:07.240 risk from AI, and there is, and they know that 0:18:07.480 --> 0:18:10.600 the risk is can be pretty it could be a 0:18:10.640 --> 0:18:14.080 significant negative to humanity. I'm not an alarmist, but I 0:18:14.119 --> 0:18:18.440 think that people when we talk to you know, Doug 0:18:18.480 --> 0:18:20.960 from our team, Dan mentioned him. He is the smartest 0:18:21.000 --> 0:18:23.960 guy on AI and he does a ton of interviews 0:18:24.000 --> 0:18:28.120 with founders and AI, and that's something that's on their mind. 0:18:28.160 --> 0:18:32.440 And so Nathan, I think that they're going to there's 0:18:32.480 --> 0:18:35.880 going to be this actually self regulation piece sounds bizarre 0:18:35.880 --> 0:18:39.560 when it comes to tech and not in regulating to 0:18:39.560 --> 0:18:43.760 be nice and not you know, for the greater good 0:18:43.760 --> 0:18:47.719 of all humanity, regulating AI to make sure that humanity 0:18:48.480 --> 0:18:51.600 stays around. I think that that is as bizarre as 0:18:51.640 --> 0:18:55.600 it is, it's a real topic, and I feel that 0:18:55.440 --> 0:18:59.720 the knowledge of the existential risk will prevent very bad things. 0:19:00.080 --> 0:19:01.879 As Dan said, the regulars are going to try to 0:19:01.960 --> 0:19:04.000 keep up with AI and they're just they're not going 0:19:04.040 --> 0:19:05.280 to have a chance to keep up with it. 0:19:05.480 --> 0:19:07.840 And Nathan I would just say one, Dan Jean, sounds 0:19:07.920 --> 0:19:10.840 very important when you talk about what's happened in self regulation. 0:19:11.080 --> 0:19:15.520 The other overarching theme is US first China. For the 0:19:15.560 --> 0:19:19.480 first time in years, US is ahead of China. So 0:19:19.600 --> 0:19:22.399 the issue from a belt way to a two perspective, 0:19:22.480 --> 0:19:25.040 where you are do you shoot yourself in the foot 0:19:25.320 --> 0:19:27.439 at a time that you're in arms race with China? 0:19:27.520 --> 0:19:30.959 Where right now we have the golden Child's Nvidia, Microsoft 0:19:31.040 --> 0:19:34.000 Open AI in the US And that's the balance. 0:19:34.040 --> 0:19:35.600 And that's the thing. I mean, we're right at the 0:19:35.600 --> 0:19:39.200 start of how to think about this technology and twenty 0:19:39.240 --> 0:19:43.480 twenty four really could be the year that things really 0:19:43.680 --> 0:19:45.840 start to come into focus when it comes not just 0:19:45.880 --> 0:19:49.280 to how to apply artificial intelligence, but how to keep 0:19:49.280 --> 0:19:51.200 it under control. And we're going to carry on this 0:19:51.240 --> 0:19:55.080 conversation focused on tech with a Gene Monster of Deep 0:19:55.160 --> 0:19:58.160 Water and Dan Ives of web Bush. Take a closer 0:19:58.160 --> 0:20:01.679 look as well at this mag Magnificent seven, those seven 0:20:01.840 --> 0:20:05.520 tech stocks that have really driven the stock rally this 0:20:05.600 --> 0:20:09.959 year that says this holiday edition of Bloomberg Daybreak continues. 0:20:10.119 --> 0:20:13.840 It is thirty five minutes past the hour. I'm Nathan Hager, 0:20:14.240 --> 0:20:22.200 and this is Bloomert. Welcome back to this special edition 0:20:22.280 --> 0:20:25.280 of Bloomberg Daybreak. The markets are closed on the New 0:20:25.359 --> 0:20:28.280 Year's holiday. I'm Nathan Hager, and we are back now 0:20:28.280 --> 0:20:31.760 with Dan Ives, senior equity research j analyst at Wedbush Securities, 0:20:32.000 --> 0:20:36.080 and Gene Munster, managing partner over at Deepwater Asset Management. 0:20:36.160 --> 0:20:39.080 It's been such a fascinating discussion so far, guys, about 0:20:39.160 --> 0:20:44.320 artificial intelligence, and so much of what's driven this excitement 0:20:44.359 --> 0:20:48.520 around AI is these seven stocks, the so called Magnificent 0:20:48.640 --> 0:20:55.240 Seven in Nvidia's one of them, along with Alphabet, Amazon, Apple, Meta, Microsoft, Tesla. 0:20:55.760 --> 0:20:59.320 Think I got them all? Those seven stocks altogether doubled 0:20:59.359 --> 0:21:03.000 in value in twenty twenty three on the Bloomberg Magnificent 0:21:03.040 --> 0:21:06.399 seven Total Return Index. So I want to ask you, 0:21:06.480 --> 0:21:10.800 first off, gene was AI alone the biggest driver of 0:21:10.840 --> 0:21:13.360 these gains? And do you see it continuing in the 0:21:13.359 --> 0:21:14.480 next into this year. 0:21:14.760 --> 0:21:18.640 I think AI was a quarter of the of the gains, 0:21:18.760 --> 0:21:22.520 and some companies, more like Nvidia was one hundred and 0:21:22.560 --> 0:21:25.680 fifty percent of it. In Google's case, it was there's 0:21:25.680 --> 0:21:28.840 a lot of debate where investors stand on Google relative 0:21:28.840 --> 0:21:33.399 to AI, but I think the biggest driver in twenty 0:21:33.440 --> 0:21:35.879 twenty three. We came off of twenty twenty two where 0:21:36.560 --> 0:21:39.560 tech was a four letter word, and now we go 0:21:39.600 --> 0:21:43.720 into twenty three where there's just this optimism that rates 0:21:43.720 --> 0:21:45.879 are going to start to stabilize or go down, and 0:21:46.560 --> 0:21:49.439 then so you have not only the benefit of wanting 0:21:49.480 --> 0:21:53.600 to have growth, but there's still this flight to quality, 0:21:53.640 --> 0:21:55.159 and so I think that that benefits some of the 0:21:55.160 --> 0:21:58.560 Magnificent seven. I think company like Apple, world's greatest company 0:21:58.640 --> 0:22:02.600 you have, they've been pretty quiet when it comes to AI, 0:22:02.680 --> 0:22:05.000 and the stocks at fifty five percent this year, well 0:22:05.000 --> 0:22:08.199 ahead of the NASDAC, and so I think that I 0:22:08.200 --> 0:22:11.119 think that AI has played part of it, but also 0:22:11.240 --> 0:22:14.879 the bigger part is just our lives are becoming more 0:22:14.880 --> 0:22:16.280 dependent on these companies. 0:22:17.000 --> 0:22:20.240 How do you see it, Dan? What drove the Magnificent 0:22:20.320 --> 0:22:21.840 seven rally and does it continue? 0:22:22.040 --> 0:22:25.440 I think a big part was these tech companies, after 0:22:25.520 --> 0:22:28.520 spending money like nineteen eights rock stars, you know for 0:22:28.640 --> 0:22:30.879 many years, they started cut costs. I mean that was 0:22:30.920 --> 0:22:34.480 the Zuckerberg your turnaround. I think you say the same 0:22:34.520 --> 0:22:38.399 thing at Google and others, So they prepared for a 0:22:38.440 --> 0:22:42.000 hard landing, but instead we got a Pillsbury dough Boys 0:22:42.080 --> 0:22:45.480 soft landing numbers were ahead expectators. I think that was 0:22:45.520 --> 0:22:49.160 a big piece. And then AI, it's the gold rush. 0:22:49.440 --> 0:22:53.440 You put that in there. Combined that creates what we've seen, 0:22:53.680 --> 0:22:58.399 especially where so many investors, institutionally speaking, we're yelling fire 0:22:58.400 --> 0:23:02.720 in a crowded theater. Now into twenty twenty four, now 0:23:02.760 --> 0:23:06.199 the real monization starts to happen. So I view it 0:23:06.240 --> 0:23:09.800 as kind of again, this is in ninety five going 0:23:09.840 --> 0:23:11.600 into what I've used a three year stretch. 0:23:11.880 --> 0:23:14.800 Geene, you mentioned that twenty twenty two was the year 0:23:14.880 --> 0:23:17.480 when tech was a four letter word. Obviously this past 0:23:17.520 --> 0:23:21.480 year much different story. What's to say that we don't 0:23:21.520 --> 0:23:24.840 see cyclicality in twenty twenty four that we could see 0:23:24.920 --> 0:23:26.560 up and downs once again for tech? 0:23:26.840 --> 0:23:29.680 You know, people like Dan and I we obsess about 0:23:29.960 --> 0:23:32.600 where the world's going, what the next three to five 0:23:32.680 --> 0:23:35.119 ten years look like, how it's going to change our lives. 0:23:35.720 --> 0:23:40.240 And when it comes to markets, there's this other piece 0:23:40.280 --> 0:23:45.240 to it, which is around interest rates and money flows, 0:23:45.520 --> 0:23:49.400 and it's something that we're not experts on and we 0:23:49.480 --> 0:23:53.399 don't we're not economists, but unfortunately it does have an impact. 0:23:53.440 --> 0:23:56.040 And so when we think about twenty twenty four and 0:23:56.080 --> 0:24:00.119 think about you know the impact of money flow and 0:24:00.119 --> 0:24:02.879 and rates and the market saying there's going to be 0:24:03.160 --> 0:24:06.200 rate cuts next year, if that happens, it's going to 0:24:06.280 --> 0:24:09.040 be really positive for even though they're anticipated, it will 0:24:09.080 --> 0:24:12.399 be positive for these tech socks. I believe even a 0:24:12.440 --> 0:24:16.760 stable rate environment. This is contrarian, but I believe even 0:24:16.800 --> 0:24:19.920 a stable rate environment, so the FED doesn't really move 0:24:20.000 --> 0:24:22.560 rates in twenty twenty four, I actually think it's going 0:24:22.600 --> 0:24:25.120 to be okay and positive for tech stocks, and because 0:24:25.440 --> 0:24:29.200 we've been through such a crisis over the past twenty 0:24:29.280 --> 0:24:33.359 four months related to uncertainty around rates. Even though they're higher, 0:24:33.359 --> 0:24:35.239 even though they're not necessarily going down, the fact if 0:24:35.240 --> 0:24:38.399 they stay stable, I think that's going to allow more 0:24:38.680 --> 0:24:42.880 inflows into tech just because the discounting mechanism that interest 0:24:42.960 --> 0:24:46.080 rates have on it. And so I'm really optimistic about 0:24:46.080 --> 0:24:48.600 tech and twenty four, even though it's had a great 0:24:48.720 --> 0:24:50.879 run in twenty three, I think it's going to be 0:24:50.880 --> 0:24:53.679 the first year of that three to five year ramp 0:24:53.720 --> 0:24:56.840 going into what's going to be Again, I believe it 0:24:56.880 --> 0:24:59.520 will be a bubble, but we got a long way 0:24:59.560 --> 0:25:01.080 to go from where we're at to the top of 0:25:01.080 --> 0:25:01.560 that bubble. 0:25:01.920 --> 0:25:06.920 And clearly, Dan, you're bullish, megabullish on tech. I mean, 0:25:07.320 --> 0:25:09.800 the stocks that we've been talking about have managed to 0:25:09.840 --> 0:25:14.480 power through despite massive rate hikes from the Federal Reserve. 0:25:15.440 --> 0:25:19.160 How does it keep going? How does that monetization continue 0:25:19.160 --> 0:25:20.160 into twenty twenty four. 0:25:20.320 --> 0:25:22.959 Well, first, I think street numbers are under estimated by 0:25:23.000 --> 0:25:26.160 five ten percent for twenty four, so as numbers are 0:25:26.200 --> 0:25:28.639 going to move higher into twenty four and twenty five 0:25:29.520 --> 0:25:32.919 fed despite all the jaw booning boy that cried wolf. 0:25:32.960 --> 0:25:36.080 They're cutting whether it's two or three times, probably starting 0:25:36.119 --> 0:25:39.119 in the spring, and then you start seeing more and 0:25:39.119 --> 0:25:41.480 more of this monization that happens not just with mag 0:25:41.560 --> 0:25:45.479 seven but across broader tech. And what that's also going 0:25:45.560 --> 0:25:48.480 to do, it's going to stimulate M and A. I 0:25:48.480 --> 0:25:50.399 think there's going to be just a tidal wave of 0:25:50.560 --> 0:25:53.800 M and A the FTC con that's kind of us 0:25:53.840 --> 0:25:56.400 a mosquito now that I mean, it's black eye after 0:25:56.480 --> 0:25:59.560 black eye, especially in Microsoft, Activision and the others, Big 0:25:59.600 --> 0:26:01.760 text free daymore so you can see a lot of 0:26:01.840 --> 0:26:05.199 big deals you probably have. You know, the markets is 0:26:05.280 --> 0:26:09.080 really gonna, I think, go into this next phase of 0:26:09.160 --> 0:26:13.800 this modernization and what that does. It creates this bull 0:26:13.880 --> 0:26:16.120 market that we've already begun in tech. 0:26:16.560 --> 0:26:19.200 It's an interesting idea to think about these big tech 0:26:19.240 --> 0:26:22.240 companies getting even bigger through M and A. Is that 0:26:22.359 --> 0:26:25.320 something that's on your radar as well, Gene. 0:26:25.800 --> 0:26:28.000 I think we're gonna see more M and A. I 0:26:28.000 --> 0:26:30.480 think the biggest I love to have the conversation with 0:26:30.600 --> 0:26:33.680 Dan around Apple and AI and how they're thinking about 0:26:33.880 --> 0:26:37.040 leveraging other models or building their own foundation model. To me, 0:26:37.160 --> 0:26:42.840 that's kind of the topic of the breakouts we're gonna do. 0:26:43.160 --> 0:26:48.320 We usually wait till the I would recommend checking out 0:26:48.800 --> 0:26:53.400 Dan's projections predictions for twenty twenty four. We always does 0:26:53.400 --> 0:26:56.560 such a good job on it from our perspective. I 0:26:56.600 --> 0:26:59.320 think that a huge topic is going to be you know, 0:26:59.359 --> 0:27:02.359 what is Apple going to do relative to AI? And 0:27:02.359 --> 0:27:04.560 I think that there could be some M and A 0:27:04.800 --> 0:27:07.119 related to that, whether it's next year or the year after. 0:27:07.680 --> 0:27:09.399 And I think we will see more M and A. 0:27:09.560 --> 0:27:11.280 I don't know if it's going to be Blockbuster M 0:27:11.320 --> 0:27:14.639 and A, but I think there will be some Blockbuster 0:27:14.760 --> 0:27:17.920 M and A related to AI companies like Anthropic for example. 0:27:18.200 --> 0:27:22.000 Interesting raises a question as well, Dan, whether we continue 0:27:22.040 --> 0:27:24.480 to see this kind of outperformance from just these seven 0:27:24.520 --> 0:27:27.040 stocks in particular, or whether we start to see a 0:27:27.040 --> 0:27:29.720 little bit more of a broadening when it comes to 0:27:29.880 --> 0:27:32.159 the tech story. Are you looking at some other names 0:27:32.520 --> 0:27:34.720 that could start to outperform this year? 0:27:34.880 --> 0:27:37.240 Yeah, I think the broadening starts to happen. You look 0:27:37.280 --> 0:27:39.879 at what I've used, the messy of AI poun Teer. 0:27:40.400 --> 0:27:42.719 I think from a use case pure play, it's one 0:27:42.720 --> 0:27:47.320 of the best out there names like Mango, dB, Snowflake 0:27:47.520 --> 0:27:50.400 or just some examples. And then I think the install 0:27:50.440 --> 0:27:53.040 based plays is not just what's happened Redmond in the 0:27:53.040 --> 0:27:57.200 trophy case, what Adobe's doing, what Salesforce dot com is doing. 0:27:57.400 --> 0:28:00.800 Now you're taking AI into these massive installed bases, and 0:28:00.840 --> 0:28:03.520 I think that's why it's really giving a renaissance of growth. 0:28:03.880 --> 0:28:07.080 And I think that's something that you know when you 0:28:07.240 --> 0:28:09.440 go with Gene and I do just like he said, 0:28:09.440 --> 0:28:11.600 and he does a great job in his podcast with Doug, 0:28:12.320 --> 0:28:15.520 we're looking at let's just don't focus on valuations. What's 0:28:15.520 --> 0:28:19.040 focused the next two three, five years, and that's where 0:28:19.080 --> 0:28:21.960 this Fourth Industrial Revolution is happening. 0:28:22.160 --> 0:28:25.800 I want to ask aswell about in video. Obviously it 0:28:25.960 --> 0:28:31.240 was the big focal point for AI chips gene Does 0:28:31.320 --> 0:28:33.760 in Nvidia need to watch its back when it comes 0:28:33.760 --> 0:28:37.159 to that kind of dominance. Are other players nipping it 0:28:37.240 --> 0:28:37.760 its heals? 0:28:38.920 --> 0:28:42.360 Not yet? The key question within video right now is 0:28:42.400 --> 0:28:44.320 what's their growth going to be in twenty twenty five 0:28:44.400 --> 0:28:47.440 The streets looking for fifteen percent revenue growth one to five. 0:28:48.280 --> 0:28:51.320 That growth has been ripping a lot higherbe two hundred 0:28:51.320 --> 0:28:55.120 percent in the or in the quarter that just ended 0:28:55.240 --> 0:28:56.440 ends at the end of this month, at the end 0:28:56.480 --> 0:29:00.960 of January. The As far as comp ddition, we're invested 0:29:01.240 --> 0:29:05.240 at deep Water. We invest in both venture private companies 0:29:05.240 --> 0:29:08.440 and public companies the whole spectrum of tech, and we 0:29:08.480 --> 0:29:12.520 are invested in companies that are building chips to compete 0:29:12.600 --> 0:29:16.680 with Nvidia, and just knowing what their timeframe is, it's 0:29:16.680 --> 0:29:19.040 still a few years out before they get the chips 0:29:19.080 --> 0:29:21.680 taped to a point where they can actually be deployed. 0:29:21.720 --> 0:29:25.120 So I think that AMD Intel aren't going to make 0:29:25.200 --> 0:29:27.680 much of a dent in this and there's just going 0:29:27.760 --> 0:29:30.280 to be such a massive infrastructure build. I think in 0:29:30.400 --> 0:29:32.720 VideA is still in a great place. I think I'd 0:29:32.800 --> 0:29:35.600 rather have my money in companies like Apple or Google, 0:29:35.640 --> 0:29:37.280 but in Vidia still in a great spot. 0:29:37.320 --> 0:29:38.880 All Right, We've still got a little bit of time 0:29:39.000 --> 0:29:42.960 left to continue this tech conversation a few more minutes 0:29:43.000 --> 0:29:46.400 time with Gene Mounster of a deep Water Asset Management 0:29:46.440 --> 0:29:50.240 and Dan Ives over web Bush Securities. So we'll continue 0:29:50.240 --> 0:29:52.720 this tech roundtable with more of a look ahead to 0:29:53.120 --> 0:29:55.840 what's in store for big tech in twenty twenty four. 0:29:56.280 --> 0:30:00.440 As this holiday edition of Bloomberg Daybreak continues, it is 0:30:00.640 --> 0:30:04.240 fifty minutes past the hour. I'm Nathan Hager, and this 0:30:04.960 --> 0:30:12.440 is going to welcome back to this special edition of 0:30:12.440 --> 0:30:15.720 Bloomberg Daybreak. The market is closed for the New Year's holiday. 0:30:15.960 --> 0:30:18.640 I'm Nathan Hager wrapping up this hour now focused on 0:30:18.720 --> 0:30:22.080 tech with Gene Monster of Deepwater Asset Management and web 0:30:22.120 --> 0:30:25.560 Bush Securities. Dan Ives. Guys, since it is the new year, 0:30:26.040 --> 0:30:28.640 let's hear some resolutions. Dan, what are you hoping to 0:30:28.640 --> 0:30:30.480 see out of tech in twenty twenty four? 0:30:30.760 --> 0:30:32.719 I mean, I think tech stocks are gonna be up 0:30:32.720 --> 0:30:35.160 twenty five percent a year from now when the bell 0:30:35.240 --> 0:30:39.560 rings going into twenty five. What I'm really focused on 0:30:39.760 --> 0:30:42.680 is M and A that I think is going to 0:30:42.880 --> 0:30:48.000 really cataize these names, but a really monization of AI, 0:30:48.240 --> 0:30:52.680 the AI party. It's only nine thirty pm, it's not 0:30:52.800 --> 0:30:54.200 two am, so. 0:30:54.200 --> 0:30:57.400 The ball hasn't dropped just yet. What about Eugene your 0:30:57.440 --> 0:30:59.000 New Year's resolutions for tech. 0:31:00.000 --> 0:31:02.479 I think we're going to see some fracturing in the 0:31:02.560 --> 0:31:05.560 Mega seven. I think companies like Apple and Google are 0:31:05.560 --> 0:31:07.080 going to be Microsoft are going to be in a 0:31:07.080 --> 0:31:09.959 great place, and the rest just aren't going to perform 0:31:10.000 --> 0:31:11.800 at that same level. And I think we're going to 0:31:11.800 --> 0:31:16.920 start to see more, I think more performance from some 0:31:16.960 --> 0:31:19.440 of these companies that have been kind of left out 0:31:19.520 --> 0:31:22.400 in part because of just stabilizing interest rates. We have 0:31:22.440 --> 0:31:26.160 a deep water Frontier Tech ETF. It's powered by innovator 0:31:27.280 --> 0:31:30.880 Tickeers Loup, so it invests in these call it sub 0:31:30.880 --> 0:31:34.040 one hundred billion dollar market cap transformative tech companies. But 0:31:34.080 --> 0:31:38.720 that's one segment that I'm really optimistic about how that 0:31:38.840 --> 0:31:41.720 kind of sub one hundred billion dollar tech trade works 0:31:41.720 --> 0:31:42.640 in twenty twenty four. 0:31:43.000 --> 0:31:46.000 Since you mentioned some individual stocks there, Gene and since 0:31:46.040 --> 0:31:48.200 we started this hour with a look back at your 0:31:48.320 --> 0:31:50.920 likes and dislikes. What are some of your likes and 0:31:50.920 --> 0:31:54.280 dislikes when it comes to individual tech stocks at the 0:31:54.320 --> 0:31:55.720 start of this new year. 0:31:55.720 --> 0:32:00.120 So it's Google and Apple on the largest side. I 0:32:00.120 --> 0:32:04.239 think that what Google is doing is I think what 0:32:04.240 --> 0:32:07.120 they've showed it was a heavily edited video, but what 0:32:07.160 --> 0:32:09.520 they showed with Gemini was impressive, and I think it's 0:32:09.560 --> 0:32:14.160 going to really emerge that GPT from open Ai and 0:32:14.520 --> 0:32:16.440 Gemini from Google are going to be the two foundation 0:32:16.520 --> 0:32:19.080 models that are kind of front and center. So I 0:32:19.080 --> 0:32:21.760 have to see that as being a positive. And then Apple, 0:32:22.200 --> 0:32:26.680 people forget there's I mean, Dan wrote the book on this, 0:32:26.840 --> 0:32:30.320 but just to strengthen what's going on with the iPhone, 0:32:30.360 --> 0:32:32.080 I think is going to be a positive. But also 0:32:32.720 --> 0:32:35.320 I think vision Pro is really going to It's not gonna, 0:32:35.920 --> 0:32:38.440 I think, surprise people in twenty twenty four, but I 0:32:38.480 --> 0:32:40.800 think twenty twenty four is the year where investors get 0:32:40.800 --> 0:32:43.840 their hands on these vision pros and the light goes 0:32:43.880 --> 0:32:47.320 on that this is really something different. It's spatial computing. 0:32:47.400 --> 0:32:50.360 Bringing the physical and the real world together is something 0:32:50.400 --> 0:32:53.920 that is magical, and I think they're going to start 0:32:53.960 --> 0:32:57.080 to anticipate that vision pro over the next three five 0:32:57.120 --> 0:32:59.160 plus years is going to be a bigger part of 0:32:59.200 --> 0:33:01.600 Apple's business. I think that's going to be positive for Apple. 0:33:02.080 --> 0:33:04.440 And then kind of in the smaller I just generally 0:33:04.480 --> 0:33:08.000 think about kind of this this group of the sub 0:33:08.080 --> 0:33:11.440 one hundred billion I mentioned our et off that kind 0:33:11.440 --> 0:33:12.200 of plays into that. 0:33:12.920 --> 0:33:15.240 Dan, I know you've got a four trillion dollar valuation 0:33:15.480 --> 0:33:19.080 call on Apple, so you definitely like that stock. What 0:33:19.120 --> 0:33:20.800 other stocks do you like in twenty. 0:33:20.560 --> 0:33:22.560 Four Well, I think this is going to be the 0:33:22.640 --> 0:33:26.000 year for AI. I look at names like Pall and Teer, 0:33:26.440 --> 0:33:29.520 Mango dB, and I think the rerating that happens on 0:33:29.600 --> 0:33:33.720 Google and Amazon it's just starting when it comes to AI. 0:33:34.120 --> 0:33:36.920 But ultimately at the top of that mound is Microsoft, 0:33:36.920 --> 0:33:39.560 and I think that's a four trillion dollar markap by 0:33:39.640 --> 0:33:40.800 early twenty five. 0:33:41.360 --> 0:33:45.080 What about dislike Stan Well dislikes to me, it's really 0:33:45.160 --> 0:33:45.920 low quality. 0:33:46.000 --> 0:33:49.480 I mean that's why I continue you lift, you know, snap, 0:33:49.680 --> 0:33:52.800 if you looked up in the dictionary, disaster continues to be. 0:33:53.000 --> 0:33:55.920 You know, it's dogate the homework excuse quarter after quarter. 0:33:56.240 --> 0:33:58.560 Those are the two in local quality names that stay 0:33:58.560 --> 0:33:59.400 away from. 0:33:59.120 --> 0:34:01.160 How about you're justslike Genemunster. 0:34:00.920 --> 0:34:04.680 My dislikes would be Netflix. I think that Netflix, it's 0:34:04.720 --> 0:34:08.319 just not a compelling growth story, and I think that 0:34:08.719 --> 0:34:10.200 in the midst of and they just don't really have 0:34:10.239 --> 0:34:13.440 a good AI play and so still a large company. 0:34:13.600 --> 0:34:16.120 Is still a two hundred and fifteen billion dollar market 0:34:16.120 --> 0:34:18.719 cap that is in a hyper competitive market with not 0:34:18.880 --> 0:34:20.040 much innovation going on. 0:34:20.360 --> 0:34:23.719 Okay, we'll see if those hold up as we get 0:34:23.719 --> 0:34:26.320 to the rest of twenty twenty four. Here. So great 0:34:26.400 --> 0:34:29.200 to have both the guys for the entire hour, Gene Munster, 0:34:29.800 --> 0:34:33.720 managing partner at Deepwater Asset Management and Dan Ives, senior 0:34:33.719 --> 0:34:36.840 equity research analyst at Webbush Securities. Let's see if we 0:34:36.880 --> 0:34:38.879 can make this a tradition. Happy New Year to both 0:34:38.960 --> 0:34:41.400 of you, and thanks to you as well for joining 0:34:41.440 --> 0:34:44.040 us on this New Year's holiday. But stay right here. 0:34:44.200 --> 0:34:47.319 The day's top stories and global business headlines are coming 0:34:47.400 --> 0:34:50.439 up right now.