Holiday Special: 2026 Tech Trends with Ives and Munster

Thank you so much for joining us for this special
edition of Bloomberg Daybreak. I'm Nathan Hager. US markets are
closed for the Independence Day holiday and it's become a
tradition for the Fourth of July. You got the fireworks,
the Nathan's Hot Dog eating contest, and Genemunster and Dan
Ives for the hour on Bloomberg Daybreak. That's right, we
have a special one hour high tech roundtable once again
with two of Wall Street's most influential analysts in the space.
Gene Munster, managing partner in deepwater Asset Management and Dan Ives,
the former head of Global Technology research at Webbush Securities.
We should note we did tape this conversation a few
days before the holiday, but it's great to have the
both of you back with us for this roundtable. And
I know you like to both talk about where things
stand in the AI investment cycle. Where we are, so, Dan,
here's what you told us last time we did this conversation.
At the beginning of the new year.
It's ten pm in his AI party that goes to
four A. This is just the first step in two
trillion of AI cat backs.
Well, since then, it's kind of gotten a little bumpy
as far as the clock goes for the AI party,
hasn't it?
Dan?
Yeah, Look, we've always said, I mean, in the party,
DJ could stop playing music, Glass could drop in the
dance for cops could come to try and breakout for
noise violation. But that's gonna happen. But the party is
gonna continue. And we think right now it's still eleven
eleven thirty pm in the party, third inning in the
in the baseball game, because you've only gone through fifteen
percent of the cat backs demonizations spreading and you see
it from memory to what we see on the infrastructure,
to energy, some of the neo clouds. So that's my view,
like you were gonna have bumps, you're gonna have turbulence.
But we continue to believe Nazak thirty thousand and this
is just sort of, you know, worth early stages in
terms of where this all heads.
I want to ask you a little bit more about
that fifteen percent in AI capex. I mean, we've been
talking about hundreds of billions of dollars that just the
four main hyperscalers are saying that they're going to spend
just in the last earning cycle. I mean where do
you see this trajectory as far as the spending, Isn't
that part of the reason why we're seeing so many
jitters in this market?
Uh? Hunt, Yeah, hundreds and Gene, we've talked about a lot.
But I view it as like it's Vegas in the
nineteen fifties building the strip. Are there going to be
speed bumps?
Yeah?
But if someone told you the strip where it is
today back in the fifties, you'd say, no, what. That's
my view. When it comes to physical AI, and when
it comes to enterprise and the consumer side, you're building
out the foundation. Sovereigns haven't even started building out, and
then you start to think about you're up nothing, Asia
just starting.
I want to bring you into the conversation Gene as well,
but before I do, I want to give you a
little bit of a memory of what you had to say.
As far as where things are in the AI game, I.
Think we're probably on the fourth inning. We're still early,
which seems out of touch with reality, but I think
that that is how significant this transformation is going to be,
and so we're definitely further along. But I still believe
I talked about three to five years. I think we've
still got another two good years left here.
Okay, so maybe the question following that is are we
in for some long innings in the AI build out?
Well, I would first mention that on the inning question
is the way I answer that, I'm answering it to
amount of wealth creation that's left, not how much the
technology is going to advance.
So it's specific to the markets.
And kind of funny enough, after those comments in January,
I shifted my commentary to warn the second inning kind
of in February actually better than what we thought, and
I'm inching more towards that third inning. Now this is
all getting kind of caught in the details here. The
point is we're still early, whether it's the second or
third inning. And I think that from like a rational perspective,
that seems irrational that just given this these parabolic moves
that a lot of these companies have had, that these
massive amounts of invest that Dan's talking about, how could
we be in the middle of the second the third inning.
And the answer is that there's just the desire to
build out the brain the infrastructure side is increasing far
more than even the high expectations. I think Google's recent
equity sale that ultimately netted them about eighty five billion
dollars that they're going to spend majority of that on
basically building out their AI brain, I think is evidence
that we're still very early in this And ultimately, if
it comes down to a question, do you believe that
these companies that are spending the most are competent and
have a good view on what's going on in the future.
If you think the answer is yes to that, then
we're probably somewhere getting close to the third inning.
Well, that does get again to the question of how
much these companies are spending, not just in their own capital,
but you know, dipping into investment grade debt issuance as well.
At some point do we start to see a breaking
point here?
Gene, Well, this is you talked about the jitters with
Dan a minute ago and mentioned about kind of this
commentary around overspending, and at some point is there a
breaking point? And the simple answer is maybe, if in
fact that the revenue starts to accelerate, at least a
handful of companies can show meaningful revenue acceleration around AI,
then I think the market's going to largely be okay
with us. And if we don't really see that in
substance so far. Of course, we've seen Google with their
search business going from called eleven percent to nineteen percent,
their cloud business going from mid twenties growth to almost
sixty percent recently. That's over a three quarter period, just
these crazy growth numbers. Meta their advertising is going fifteen
to mid was it low thirty percent growth?
I mean, just crazy increases.
But it needs to expand out beyond what Google and
Meta have experience, to a lot of companies showing this
acceleration and revenue growth or margins. And so to ask
your question, Nata, is that the answer is maybe if
we probably start to need to see one or two
more really clear stories in the next year for the
market largely distill.
To go along with this trade.
We're speaking with Gene Munster, managing partner Deepwater Asset Management
and the former head of Global Technology at Webbush Securities,
Stan Ives, assessing where things stand in the AI race
right now. I want to get your view, Dan, picking
up on what Gene had to say in terms of
monetization around so much of the spending that we're seeing
among the hyperscalers. Where do you see things as far
as what these companies need to show to show that
they're really starting to turn a profit on this massive
spending that they're under way with.
Look, I think to that point we're almost in this
air pocket period between cap bacs and modernization for the
hyper scalers. When you look at ASURE growth, or you
look at you Cloud growth for Google, you look what
we see with AWS, it's really starting to see like
an acceleration. I think it's a very important earning season
coming up to really start to see that. And then
how does men monetize AI into its install base? It's
billions of users.
How does Microsoft take.
The next level in terms of making sure as the
enterprise is moved to AI that they're across and up
selling and you see the revenue growth and ultimately you're
really changing the model. That's why right now, like hyper
scalers outside alp BET have really been put in the
penalty box. Very important few quarters ahead.
And we haven't even to yet about the massive run
that we've seen in the memory chip stocks. They've gone
gangbusters over the last few months off the back of
this enormous pricing power that they have. It sent those
stocks up triple digits. Gene I want to put the
question to you as to what that means for these hyperscalers.
Does that start to have an impact on their profit trajectory.
Well, definitely can have an impact on that profit trajectory,
just because these cost of memory. If you just kind
of look at the first six months of the year,
somewhere between three and four hundred percent increase, This is
now accounting for fifteen percent of kind of the cost
of at least the core compute infrastructure outside of buildings
are on data centers. These are big numbers we're talking about.
The reality is is that these companies, I think this
is probably the biggest takeaway to Micron on where we
are on the AI trade, is that the biggest takeaway
is that they signed up the companies that are spending
the most, the big the hyper scalers, other companies that
are using a lot of this memory in there to
build consumer electronics. For example, Apple is a good example.
The number that have signed long term five year agreements
went from one in total, so they had their first
ever Micron did in the March quarter and they they
added fifteen in total, but call it six of those
were of five year.
Term.
So going from zero six months ago to seven. And
the only reason why these big companies would sign a
five year deal with Micron is if they knew how
much that they expected to spend far out well beyond
what they've communicated to the street. I think that's a
big tell. And so when you think about what's really
driving this, the insatiable demand to continue to build. Yes,
the high memory prices are having an impact on this,
but these companies are finding ways to navigate around it.
And I think that you know, this was a resounding
the Micron commentary around their strategic customer announcements agreements. I
think that is a resounding endorsement that we're still early
despite the negative impact that it's going to have on margins.
What does it mean for the overall market though, Gene,
When we have the chip companies as expensive as they are,
and you mentioned so much of the spending happening by
the hyperscalers, does that potentially leave other names, other sovereigns
potentially that want to get in on this in the cold.
Well, they're probably in the cold the near term, but
long term they will eventually get into on board and
start to buy and build these data centers and so
that's why there's commentary that Micron could be outside of
supply demand equilibrium. They said they didn't have line of
site at the end of twenty seven calendar twenty seven,
I mean it could be twenty twenty nine, and that
could be in part because the sovereigns start to enter
the equation. And kind of just for those listeners who
aren't as familiar with what we're talking about here, is
that basically the big tech companies have been driving this,
but eventually, like countries will be building their own AI
infrastructure and that is likely going to be this kind
of second.
Wave of spending.
So I think that when I line up all the
potential drivers, it gets us to that maybe entering the
third inning, middle of the second inning. Kind of a takeaway,
I think there's another part of that conversation we know
and Dan and I talk about, like this massive wave
of spending and all this transformation that's going on. Why
do we have situations like in Vidia recently over the
since year to date, I think the stock's down something
like eight percent, The Nasdaq is down like one percent.
The numbers the revenue estimates for next year for in
Vidia have gone up three percent over the last six months,
and so you're basically seeing multiple compression and other good
example is Micron, I mean they're multiple despite the stock
of twelve percent over the past year, it's still trades
at like a nine multiple.
How's that possible?
And the reason is that this is the part that
is a concern to me when I think about sovereign
I think about how this trade can continue. Is the
market just progressively believing that eventually we're going to hit
the wall and really don't put too much weight into
all this goodness that's happening.
Now we're going to continue this conversation with Gene Munster
of Deepwater Asset Management and Dan Ives, formerly of Webbush Securities,
as this special high tech edition of Bloomberg Daybreak for
the Independence Day holiday continues. It's now twenty minutes past
the hour. I'm Nathan Hager, and this this boomer Welcome
back to the special edition of Bloomberg Daybreak. US markets
are closed for the long Independence holiday weekend. I'm Nathan
Hager bringing you a high tech power hour. We're speaking
with Dan Ives, former global technology headed Webbush Securities and
Deepwater Asset Management managing partner Gene Monster. We should know
we taped this conversation a few days before the holiday. Dan,
let's pick up where Gene left off in terms of
sort of the split that we're starting to see in
some of these memory chip makers, the ones that have
been so much involved in the AI race. We've seen
Nvidia down a bit, Micron, as we mentioned, has been
surging over the last few months. Where do you see
this going.
There will be a normalization as this starts to play
on the Modernizesian side, which will be bullish for hyperscours,
bullsh for Nvidia, bullsh for a MD But right now,
because of memory prices and because there's only women. I
mean when you go sk and Micron, and you know
Samsung and sand Disk, and we're talking about a very
selective group of companies.
This will normalize.
I believe as we get to the next six nine
twelve months, market will look ahead of that equilibrium. We
don't probably hit for eighteen twenty four months when it
comes to demand, spy for memberships. But to me, it
all comes down to like market will start to look
for on software, cybersecurity, infrastructure, energy on the data center side,
who are going to be the need who's the next Micron,
Who's the next sand disk? And I think that's it's
our viewing. We're in a multi year tech bal market.
It's a year three of a ten year build out.
We're just going through a major gut check period for
a while. The quote unquote traditional winners in max seventy.
Jane, let's bring you back in. Do you see normalization coming?
And that kind of timeline six to twelve months, and
I mean Dan mentioned all the different sectors that are
affected by this. Seems like there's a pretty significant split
on where the winners and losers are right now.
That kind of I had a question for Dan on
that is when we talk about like normalization, can you
tell me a little bit more about what are your
front of just normalization of growth rates?
Yeah, I'm really looking at normalization of price increases because
I think the big issue now as Gene and I've
seen some closely from app O to Microsoft that it's
the fear of the unknown. What happens if this just continues?
When has the price go up more? I think the
normalization will start to happen on a price perspective over
that period.
So, Nathan, my response to that is I agree. I
think that there will be normalization on the price, and
I think some I mean, just using micron as just
like a microcosm.
Of that topic.
Is that the the fact that we're seeing these fifteen
now SCA sixteen scas, these strategic customerments that are long term,
I mean that helps build some normalization within pricing. I
mean there may be an opportunity. It's recently rumored that
Apple is working with a Chinese memory supplier that's currently
blacklisted by the US to get that company unblacklisted, which
can open up some lower priced.
Memory.
And so I think that I would generally agree with that.
I would say the part that.
Is not going to normalize is that I think the
pace of what we're seeing with the broader hyper scaler
build out and just kind of the cheat sheet here
is that the AI trade focuses. If you're going to
pick one data point, it's probably like hyperscaler cap BAX
growth is kind of like the key indicator about what
that's going to be next year for how the AI
build out and the AI trade is going to perform.
And a year ago, so a year ago in twenty
twenty six, the street is looking for about twenty percent growth.
It's going to be eighty percent next year. The streets
currently looking for twenty four percent growth. It was fifteen
percent growth about a month ago. But because of Micron
and it's going up. I think that a year from now,
i'd say this, in six months from now, I think
that that number, that average number is going to be
close to forty percent and ultimately end up above fifty.
And so maybe you could say that, like the second
derivative isn't getting this strong. So that's a form of normalization.
But the upside surprises that these companies can print, I
think over the next year will still be meaningful and surprising.
I got to ask you both about the bubble question.
I'm anticipating that you're going to tell me that we're
not in an AI bubble. But when you think about
the kind of numbers that you're mentioning their eighty plus
growth in terms of the trajectory of the AI build out,
and as I've been mentioning the triple digit growth in
terms of price of the chip stocks, the bubble question
has to be something you're considering, isn't it.
Dan. When it comes to the bubble, it's obviously a
huge talking point bulls bears go back to niney nine
and two thousands is another Bubble moment. I think it's
an apples to oranges because in my view, textocs call
it whatever you know mid twenty times in terms of earnings,
I go back to bubble the average techom ministrant thirty
times revenues. You have basically big tech with a trillion
dollars in the balance sheet. Find this versus you go
back to Bubble that was a lot of lever it
up balance sheets which basically no business models. I think
part of the problem is that I must say history
pizza self and always the worry, but there's always worris
that oh here we go again. But this is truly
a fourth and dush revolution. And I could argue the
Bubble period nine nine, two thousand we had the groundwork
from a fiver and really from the star of the
Internet to where we are today, and you could argue
it's really actually like a forty year cycle when you
actually put it together. That's why I'm just a believer.
We're in year three of eight ten year build out
Nazak thirty thousand from the rude to that for starters
and I just I'm not a believer in the bubble
given everything we see in Asia and overall demand.
We're speaking with Dan Ives, former global technology headed White
Bush Securities, along with Gene Munster, managing partner at deep
Water Asset Management. In terms of that question, Gene, how
do you answer some of those bearish names who might
be drawing comparison still to what we saw in the
dot com era.
I'm always I have to like check my answer based
on this idea of it's going to be different now,
like that like famous words that blow investors up. They
think it's going to be different this time, and then
history reverts back to the mean. And so I think
what Danced is is really sums up how I feel
about this is this is much bigger than any sort
of like little infrastructure build out. It's it's a it's
a tech revolution, it's it's it's a fundamental change in
how humanity happens. And I think that the trap is
to overweight to what happened in dot Com. That doesn't
mean you shouldn't be have some way of risk management,
but I think the trap is to overweight on that.
And specifically, I mean, if you're going to boil the
Internet down to its most basic level. What it was
is essentially what it ultimately was and all of its
forms that it took mobile to laying the groundwork for AI.
What it ultimately is is just a new distribution mechanism
for data. I mean, that's effectively what this all is.
So that's really important. And when I think about that's
kind of the the one oh one of what the
Internet bubble was all about different ways to use that
data create e commerce. AI to me feels different in
that it is what is the value of scale intelligence
at scale at very low cost? And I mean this
is just how very simplistically I think about it is.
To me, that's a bigger deal. That's a bigger opportunity
thinking is bigger than data distribution and well it seems
like pretty elementary. I think that ultimately that means that
we should not overweight on what happened.
One thing we haven't talked about is some of the
blowback that we've seen, not just from investors but from
regular people about artificial intelligence. We've seen you know, graduates
at college commencements booing speakers when they talk about the
AI development. That sort of thing. I think I've heard
you Dan talk about this as a PR problem for
these AI companies, But I mean, that's a pretty big
PR problem, isn't.
It look a lot of itself created. I mean, if
you go out there and tell people that they're going
to lose their jobs and then there are trisy bills
going to go up higher because the data center's being
built in their backyard, what's in it for them? It
just goes back to why you know, a while surveys
AI is like under long TSA lines, you know, when
it comes to survey data. The reality is is much
different than that dystopian view because, in my opinion, like
for the first time in thirty years, the US is
headed China when it comes to tech. Are there gonna
be changes in the job market, no doubt, But also
remember when it comes to like a lot of big
tech companies, like these companies basically hired city's worth of
people from COVID to now. So I'm just saying some
of those cuts sometimes get, you know, in terms of
the numbers, and I just think where we're just starting
to rip effect, more jobs will be created from AI
than taken away over the next five to ten years.
That's my view, but the PR pump. If you go
out there and you scare people saying, don't jump in
the pool because there's alligators, Yeah, you could understand why
people are afraid to go in the pool and while
they're against it. And I think that is a PR problem.
You've seen, you know, Altman change a bit, but obviously
in anthropic and others that continues to be I think
part of this sort of you know, tug of war
that you're seeing in terms of you know, the PR perspective.
And how do you see that tug of war playing
out over the next not just a few months, but
potentially a few years, Jane, I.
Mean, this may be one of those rare examples that
maybe we're Dan and I on a slightly different page.
I do think that ultimately we will see more job
creation with around AI, but I think there's a gap,
probably somewhere between a five and eight year gap, or
it takes kind of the world to kind of reassess.
I believe the biggest reason why we haven't seen more
headcount reductions is because it's just politically not acceptable within country.
Inside company needs to do this is I've talked to
leadership who've made aggressive changes related to AI, and it
can have a massive demoralizing effect on the ones that
are remaining, thinking they have to look over their shoulder,
maybe it's time for them to find something new. And
so I think there's kind of this natural like break
that's in place for companies really to fully embrace what
can be done with some of these agents. Eventually those
breaks come off. I don't think it's a wholesale come off,
but I think they do come off, and I think
we will see some elevated unemployment with knowledge workers. But
if in fact this is such a big opportunity around
intelligence at scale, humans will figure out ways to become valuable,
to leverage the tools themselves, to leverage their people skills,
whatever it may be, and ultimately I think that it
will create new opportunities, just like we saw with the
Internet and all the different industrial revolutions. But I'm a
little bit more and by the way, I debate this
topic internally at deep Water, and I'm the only one
who thinks that were headed over the next few years to.
Some elevated knowledge worker unemployment.
We'll continue this conversation with Gene Munster of deep Water
Asset Management and Dan Ives, formerly of Webbush Securities. As
this special holiday edition of Bloomberg Daybreak continues, It's thirty
seven minutes past the hour. I'm Nathan Hager, and this
is Bloomberg. Thanks again for being here on this special
edition of Bloomberg Daybreak. US markets are closed for America's
two hundred and fiftieth birthday. I'm Nathan Hager, and it's
time to close out this hour speaking with two of
the biggest names in tech on Wall Street. Dan Ives,
the former global technology head had Webbush Securities, and Gene Monster,
managing partner at Deepwater Asset Management. Again, we recorded this
conversation a few day before the holiday, but before we
get to some of the individual names that the two
of you cover, Gene, I know you have a few
thoughts here about what it means for America to hit
the big two five zero.
You know, we got to mark these big milestones. And
one of the things that I think about every Fourth
of July and make a special note today, is when
I think about probably the most like holy part of
American history, which is the Gettysburg Address. Kind of seems
like an off topic is this, of course, was in
the eighteen hundreds, not the seventeen seventy six. But I
just want people to get on the same page about
the Gettysburg Address for just a quick minute, Nathan. I
appreciate the time sure the Gettysburg Address. Many think most
people memorize it and they remember the first one or
two sentences of it, but most think it's about Lincoln's
commentary about slavery and a critical part about this division
of the states that was a big topic related to it.
But I just want to sum up what Lincoln says
in this He has asked to go to Gettysburg to
commemorate the fallen soldiers that had fought so bravely previously,
and he says in the address that he actually has
no power to do that, nothing to add or detract.
Only the men who bravely gave the full measure can
do that. And I thought, that's just amazing that the
President says, You've asked me to come here and do
something that I have no power to do. But then
he adds that there is something that we all can do,
which is take full this dedication that these soldiers have
given and finish the work that they started. And that
work that they started was to maintain essentially the greatest
thing on earth, which is a government for the people,
by the people, and that if we continue that, if
we continue the work of those people and get that
job done of maintaining that by the people, for the people,
that it shall never perish. And I think about all
the amazing things that we have around us. I think
about our lifestyle here, I think about all the technology innovation.
You know, at the very very baseline I think of
that is this incredible structure that we have here. And
so I just encourage people. It's short, it's a short,
a short read. Just to take a minute. It's two
hundred and fifty You won't have to do it again
for another two hundred and fifty years.
Just do it this time. Read the Gettysburg Address and
just savor it.
Yeah, Nation conceived in liberty one of the lines from
President Lincoln's Gettysburg Address. We're coming up on that anniversary
as well, that very important moment in the Civil War.
Thanks for bringing that to us, gee, I appreciate that.
As we close out this conversation though, on the tech space,
let's talk about some of those individual names that you
all focus on so closely. I'll start with you, Dan.
We were talking a bit about the dot com era,
and it just so happens that Microsoft is coming off
its worst month since y two K, losing more than
five hundred and seventy billion dollars in market value. There's
this question about where Microsoft is going to stand when
it comes to the AI race. Is there going to
be the focus on the cloud? Is there going to
be the focus on some of the software names that
Microsoft puts out that could be potentially disrupted by AI?
Where do you see things now when it comes to Microsoft.
I think Microsoft's the most over sold tech stoc, especially
when it comes to large cap. I think investors are
misreading or heavily discounting the success that they're going to
have in monetizing their core enterprise and install base around Azure,
as well as what I believe is probably an incremental
forty to fifty billion of crossow opportunities nolok Is Are
there competitive forces that could eat at some market chair? Yeah,
but when I look at the stock, I mean, I
believe this is five and fifty six und drawer stock,
and I think, just like off but a year ago,
with that narrative, they got way overdone we saw the rebound.
That's my view of Microsoft. I just think enterprise they
will own and they're going to be a core winner
when it comes to AI.
I did want to ask you a little bit more
about Apple Gene, because I know you follow that stock
very closely. They recently announced their increasing prices across much
of their product line because of the what we talked
about for so much of this hour, memory chip prices.
Where do you see things going for Apple? Are these
price increases going to be an issue for Apple fans?
I mean, I'd kind of revisit my price elasticty curs
from back in school, and in this case, I generally
see Apple's products as being inelastic demand. That means a
large increase in price has a less big, less negative
impact on demand, and so these tend to be when
consumers are relatively priced takers. Now, if we look at
the average price increase, if it ends up being twenty
percent across all their products, that could be around two
hundred dollars. If you look at a Mac for example,
average life of the initial Mac four and a half years,
that adds right around three to four dollars per month.
Now people per month over the lifetime, so it's relatively small.
Consumers don't think about it generally like that. They think
about cost an extra two hundred bucks. So there is
going to be some demand destruction, but I think in
large part, the vast majority of this kind of comes together.
And now, if I was going to put it together
really rough numbers, here is kind of for next year.
The Street's high four hundred billions in revenue for Apple.
I think the price increase, factoring in they're going to
lose some customers, is going to add about thirty five
billion to revenue, which is pretty similar to probably what
their incremental costs around memory are. We'll see it happens
with this China opportunity. So I think kind of the
net of this is you're gonna see growth rates next
year probably eleven to twelve percent versus the Street at
six percent, so meaningfully higher, and margins probably similar. I'd
be very curious Dan, how you think about the margin question.
I'm sure you've given a lot of thought over the
past few days that, yeh, the speet's at forty nine percent.
I kind of think that's probably a good number for
next year as well as similar margins.
Is this year Nathan.
That's why they call gene Tex north Star. It's like
because he what he said poetic, I mean not Gaysberger
dress like, but poetics because because it look that's far
as the trees like. In terms of what Apple's doing.
We know the price increases, Yeah, they they're going to
navigate into the takeoff called one hundred bits off gross
margin max possible, but the churn rate's going to be small.
The reaction has been dramatic in terms of what we
see with the stock. And this is also Apple going
into probably what's gonna be their strongest three year product
cycle ever. You know, when you start to think about
how they've laid out for AI and ultimately AI power
devices across the hole sort of spectrum that's turners what
what he'll ultimately build. So I just think it's right time,
right place to do this.
We're speaking with Dan Ives, former global technology headed White
Bush Securities, and Gene Munster, managing partner at Deepwater Asset Management. Dan,
I want to ask you about meta platforms as well.
This one's been through quite a few ups and downs
over the last few months. You still bullish on Meta.
Look, it's being treated like the mets of tech rights.
I mean, obviously you know, no, no, allot that's self
inflicted may bike mets as well. But when you look
at meta, the cap acts will result monization of your
talking three billion plus users on the advertising side on
Instagram on what you see when it comes to advertising
really across the whole platform. They're in a media rare pocket.
You can't have dog eate the homework type quarters like
they had last quarter. But I just think this is
way way over there. And unless you think this is
a business model that's going to be destructed, this stock
is a queer buy.
I can't let either of you guys go without asking
you about SpaceX. The stock has almost acted like one
of Elon Musk's own rockets since the IPO, shooting up
past the stratosphere and now basically kind of landing like
it's on a barge where it was close to the
IPO price gene. Where do you see SpaceX going in
the next few months or years?
Two answers. The next few months. I think that you know,
it's going to be pretty choppier on the stock, and
I think there's so much noise around these lockups coming
off and and not just the noise around the lockups,
but concern around investors about what the impact of the
lockups is going to be is probably more the substance,
and that's going to probably be kind of a six
month period when really it's not trading on the true opportunity.
I think it's more of that kind of psychological piece.
If you think about beyond this near term trading, this
company right now called a two trillion dollar market cap,
this is a potential to be a much bigger and
should by all measures, be the largest company in the world.
I think that what they have, the assets they have
are unique, and separately, I think what they're doing around AI,
and this we refer to as sovereign AI is basically
and then everything from energy to chips all the way
to distribution is something that really no other company can touch.
And So, going back to the start of our conversation
today about what this chapter, this industrial tech revolution that's
going on, if you believe that, then it would make
sense to believe that SpaceX is probably the best position
company within that opportunity.
So long term, I'm very bullish.
Dan, do you see SpaceX paying off on you know,
so many of the ambitions that Elon Musk has put
out there, from orbital data centers to getting people on Mars.
I mean we've seen the likes of you know, Softbanks,
Masioshi San throwing cold water on the whole orbital data
center idea.
Yeah. Look, I just view first of all, those that
bet against Musk have been proved wrong and again again
you know when it comes to tests and obviously you
know SpaceX and so many others. Look, my view is
it's really more around AI and data as much as
it is space because when you start to put all
together with the XII and ultimately my view, you know,
eighty percent chance that they acquire Tesla. I mean it
will be from a data perspective, basically probably the most
valuable company in the world from from a data capacity perspective.
I think that's so important when you talk about data
senters in space and when's it happened. Some of the
SpaceX launches. Obviously those are all going to be devils
in the details, but you know that's really the vision
what Musk is building.
Before I let both of you go just rapid fire
stock to avoid gene monster.
Does it have to be in tech, Nathan, does? I'm
still just so optimistic. I mean, I can say this
is that we're big, this isn't avoid but I think
just to some general commentary is a few months ago
we sold our in video position.
Numbers have gone up.
Stock really hasn't done much, but I think that's one
where you probably have your money is better spent in
like an Apple or Microsoft than in video.
How about you, Dan, are there any stocks in your
portfolio that you're ditching?
I mean, look to me, it's it's ones on the
software side. They're heavily exposed to some of the AI
turns in the naked so whether that's Nice Systems, UiPath
and others. I think those are the ones that you
tend to be more weary of. Adobe clearly has a
huge hurdle that they need to get through. Those are
the ones I would focus on to avoid.
Really appreciate the time as always, and thanks for making
this a holiday tradition for us. Dan Ives, former global
tech head at Webbush Securities and Gene Monster, managing partner
at Deepwater Asset Management, here with us for the full
hour on this fourth of July holiday, And thanks to
you as well for taking the time out of your
long holiday weekend to join us, and we hope everyone
has a safe and happy two hundred and fiftieth birthday
celebration for the USA, I'm Nathan Hager. Stay with US
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