Hello, and a very happy new year to you and your family. Welcome to this special edition of Bloomberg Daybreak. Markets are closed as we ring in twenty twenty six. I'm Nathan Hager coming up at this hour. We're gonna look at what's ahead for the sector that has led the way for the stock market the last couple of years. Big Tech. Twenty twenty five was once again bullish for technology,
but not without its bumps and bruises. A deep sell off in April, followed by a powerful rally, then another sell off of many of the biggest names in the final quarter. So what could be in store for twenty twenty six? Who better to ask than two of the most prominent analysts on the street. Gene Monster, managing partner in Deepwater Asset Management, is with us along with Dan Ives, global head of Tech Research at web Bush Securities.
For the full hour.
It is great to have both of you back on what has become a semi annual tradition here on Bloomberg Daybreak. But before we look ahead to twenty twenty six, let's look back at what both that you had to say about tech the last time we were all together here back on the fourth of July. Gene, let's start with you. You were pretty enthusiastic.
I actually am so bullish on AI. I think that it has the power for these companies to continue to move higher over the next three to five years, despite what is going to happen, what could happen with the overall macro And I don't like being out on a limb that farart and the right approach is that AI is just much more impactful.
Of course, Gene, that was before the rotation at the end of twenty twenty five. Are you still as enthusiastic about big tech as you were then?
Yeah, nothing has changed in that optimism. I still think we're going to see the AI trade outperform the Nasdaq for next year. I think that the Nasdaq is going
to be up call it five ten plus percent. So still optimistic, still believe we're I'd put it in the second inning of all this and understand that that may come across as seemingly out of touch with reality, given I think some of the towards the end of the year, some of that, some of that concern that has poked its head up around the AI trade, some issues that investors have had about the amount of investment that have been made in the market at times just shrugging off
good news. But Ayden, I think that this is still intact. I think the transformation really hasn't even begun, and I think that patients will pay off when it comes to wealth creation over the next few years.
All Right, I want to turn down to you, Dan over at Wedbush. I think I have a feeling what you might say. But let's listen back to what you told us back in July.
This is a fourth Industrial revolution, this tact bull market. It's another three years ahead. And that's why I think it's the popcorn get the Champagne Islands handing slowing it down.
Do you see anything slowing it down since then?
Dan, Look, I'm more bullish on the theme today than I was back in the summer, given my monization, given what we've seen with the spend, given themes like Pallentier and others. Is the use cases are built out and now going into robotics and autonomous. To me, look, it's two more years left this technical market. I'm not gonna say we're not gonna have white knuckles as me and you always talk about. But nothing in any way makes me get off as AI train to some extend. It's more in bolden.
I want to turn back to you, Gene. You say it's the second inning in the AI trade. I think in the times that we've spoken before, it's kind of been where it's been before, right, I mean, I think I've heard you say we're in the second inning for quite some time. When do we get to the third?
Well, earlier in the year, I guess at the beginning of twenty five, I thought we're in the third inning, and so I guess what happened to make me believe that we're in this second inning? Just like to put some specifics on it, and it's this is what I love about this the year end is we can look back and just look at the kind of the arc of what's happened. At the beginning of the year, the street was looking for in Vidia to have eighteen percent growth for calendar twenty six. If you look at what
they said at the end of November. This excludes anything from the H two hundreds in China, but they're going to do somewhere around the mid sixty percent growth. So this is a company that this is not a one to two billion dollar revenue company. This is a two hundred and fifty three hundred billion dollar company that's seen
an acceleration. And why in Vidia, of course is so important when it comes to kind of gauging what inning we're in is this is the brain that think of the hardware piece, what in Vidia powers is the size
of the brain. And when you think about this accelerating spend around the size of the brain, it makes me more optimistic that the output, this is the critical piece, the utility that brain will kick out eventually will be more powerful, which makes me have higher confidence that were earlier than what I thought at the beginning of the year.
I want to ask you Dan, where you think we are in the AI race, and to talk a little bit more about in Nvidia, because just in the last few months, we've seen I think it's safe to say quite a bit more at least chipping away or at
least attempts to at Nvidia's dominance. When you think about Google's TPUs and this investment by open ai or by Amazon into open Ai, with its potential competitor to the Nvidia chip, does in Nvidia continue to keep this motor around itself that it's had over the last couple of years now in the AI chip space.
Look, I love what how Gene puts it with the brain and the utility, because I think that's so true in terms of where in Vidia. Please look, coming back from me three weeks there demand the supplies twelve to one for in video chips. The reality is Nathan like, customers can't get enough that they have to go, whether it's AMD, whether it's Google on TPU, whether it's others. But that's not a bad thing. It speaks to our view that like the lms are going to get cheaper.
You got more competition when it comes to AI chips, but at the end of the day, in video continues to be three to four years maybe, you know, like in terms of a head of competition, and that's why I think it's still a very cheap stock. Two fifty two seventy five, you know, twenty twenty six is where I see this stock playing out.
We're speaking with Dan Ives, global head of Tech Research at web Bush Securities and deep Water Asset Management Managing Director Gene Munster. Gene, that's a very interesting point that Dan just made there. The idea of Nvidia being a cheap stock because there has been all this discussion over the last few months about the value of the Magnificent seven, How do you view Nvidia's valuation right now along with
the rest of the mag seven? Are these still stocks that can keep getting into these sky high valuations?
I mean Dan's doing the right thing. I mean he's looking beyond the appreciation that we've had and asking the question like what is on the come And ultimately that's the question, the central question we all have to answer. And I think when we get to the question about like valuation and where this market potentially go, it can boil down to something as simple as your just your view on how the utility of AI will play out.
So if you take the perspective that we've had a good run and that AI is going to be impactful, but it's not going to be a total game changer, it's not going to exceed the high expectations that are out there in terms of how it's going to impact the world. If you take that approach, there's little that I think anybody could say that is to get you optimistic about where this is ultimately going to go. If you're in the camp where you believe that these companies
you know, Dan mentioned Comes like Palenteer. You think about some of the MAG seven, some of the small caps as well. If you believe that ultimately that that we're still early, therefore their their valuations are are going to be lower in the future because they're going to have faster earnings growth. And so that's I mean, is I mean, that's effectively what we're faced with is this question about the degree the pace of this and how it impacts.
If you look at NATA, just the numbers, like let's let's forget about that and forget about where we're going and just look at where the stocks are. They are trading higher than a normal if you look at, for example, the MAG seven kind of over the next twelve months trading around a twenty seven times multiple excluding Tesla, that's as a.
One hundred plus multiple.
But so they are higher, but it's not like easy high. As a reminder, back in two thousand, the Nasdaq was trained at one hundred times next twelve months. Now, the dynamic of the market's different today because these megacaps were not going to ever unlikely we'll ever see that hundred x. But I think it's reasonable that a twenty seven x on what potentially could be multiple years of fifteen twenty percent growth is positive.
Dan, how do you answer some of the critics who point out a lot of these companies, you know, spending hundreds of billions of dollars into this technology that is then getting you know, more circularly invested into the companies themselves. The idea that you know, open Ai and others are getting all this investment from companies that are going to be benefiting from their business, like the hyperscalers.
Yeah, but I would say, and G and I have talked about a bunge. I don't view this like a vendor financing circular financing late nineties that we both saw. I mean, my view is open Ai for every dour that they invest, every dour and video vest, they're getting ten, twelve, fifteen dollars back over the course of the next five ten years. And that's a bet that they'll meet because look, they're building out a new economy for consumers and new
economy for enterprises. So I don't view it as sinister red flag the circular financing concept to some extent, I view it as you want to be associated with open Ai, not away from them. And even though right now those stocks are you know, really have a huge sort of black cloud over them. It's like is it bad. No, it's actually good because they are at the epicenter of this AI build out.
Is it important, though, Gene, for open Ai to turn a profit in twenty twenty six to justify all this spend.
No, it has I mean, this is the beauty of everything that's going on is that you have very rational people that say profit is important, and there's other rational people that say it's just about building the framework. And so the key question about this cash burn with opening and we can talk about the rumor around this eight hundred and thirty billion dollars round that's rumored to be going on, but the key question ultimately is eventually call
it twenty thirty, can they be profitable? And part of that is to dance point like can they continue to raise money to fund this impressive expansion and impressive expansion I just want to put some numbers around it. It's one hundred percent growth expected next year, in the year after and the year after for the next three years. And so I think that when you think about the profitability question when it comes to Opening Eye, like that
that really doesn't matter. What matters is do they ultimately can they get enough financing? Can they raise enough equity to the tune of about one hundred to one hundred and fifty billion of the next three years to continue to build out to get to that profitability piece in twenty thirty And I think the answer is overwhelmingly yes. It's just too big of a prize. And you know, Dan and I are well ware what's going on in
the private markets. There's just a ton of investor demand to participate in this, and so they're going to be able to have the money to power through this cash burn that they're going to have for the next few years.
We're going to continue this conversation take an even closer look at the Magnificent seven stocks as this special New Year's Day Tech Hour continues with Gene Munster, Managing Partner, Deepwater Asset Management and Webbush Securities Global Head of Tech Research, Dan Ives on the special edition of Bloomberg Daybreak for the New Year. I'm Nathan Hager, and this is Bloomberg. Welcome back to the special New Year's edition of Bloomberg Daybreak.
I'm Nathan Hager, and even though markets are closed. On this first day of twenty twenty six, we got a high tech power Hour going. We're speaking with Dan Ives, global head of Tech Research at wet Bush Securities and Gene Monster, managing partner at Deepwater Asset Management. Dan, let's pick up where we left off in the last segment talking about some of the valuations, some of the financing that's going into these startups that are possibly getting into
really really big valuations like open Ai. Do you see that continuing when you know there is still so much competition along among some of these large language models that are competing with open Ai.
Look, I'm not saying that you won't have a bubble or maybe frof in ensuring the areas of the market over the next twelve eighty months. But to look at the core winners and to say that they're expensive and just kind of painted with a brush, I think's the wrong way to view it. Because my view is like, look, I have three to four trillion being spent next few years in terms of the build out to ripple effect. Every dollar spent on videoship, there's an eight ten dollars
multiply across the rest of the tech. So investors like they're looking non next one two years, they're looking beyond that to understand who the core winners are and will they grow into valuations. I mean it goes back to like, you know, if you go back to some of the Amazon days, some of Meta somewhere in video was twenty
twenty one two down twenty two, you know. I think that sort of the view in terms of this transformation that we continue to believe, like you only have three percent of companies in the US that have fully gone down the AI path, and for the first time globally in thirty years, the US is headed China when it comes to tech.
I think I heard Dan talk about the idea of winners and losers here in the large language models. Gane, how are you thinking about winners and losers right now in that space?
Well, I think that there's basically four or five depending how you count Meta as the large language models, and I think that when there's this let me just take a step back, is there is a view that ultimately it's a race to the bottom, that these companies are creating intelligence and therefore they will that the pricing is going to go down to a level where we're going to have five losers. Essentially, they're going to spend all
this money. And our belief is that actually what you'll see is even though the pricing will come down, the value will increase to a point where the pricing. This gets back to this Gevins paradox that's been talked about for the past year or so, that yes, pricing comes down, but the value increases. Therefore, the usage increases that more than offsets that decline in pricing. And so I think that all these two different degrees are going to be winners.
One piece that is kind of like below the surface that doesn't get talked about as much as the personalities of the models, and the way we think about it is the world isn't doesn't run on one personality, and that's what these models are. They have personalities. You ask one model, you ask five different models, five different questions,
and you get slightly different answers. And so I think that there is something to be said about This isn't a political statement, but some models lean right, some models lean left. Organizations are going to want to build on top of models that align more with their personality, and so I think that that is going to create an opportunity. It's probably you're probably going to see a couple on the right and a couple on the left, and so it's hard really at this point to say, you know
which one is the losers. I think I look at it more of the conversation about them all being losers, about this race to the bottom misses the fun a mental point, which is, as value comes from the intelligence, people will pay out for it. I realized that that that is a bold statement, but I think that's the piece that is missing in terms of how these companies continue to how Opening Eye, for example, can be a choin and a half dollar company.
Well that's a really interesting idea, And I wonder Dan if that's something that you've thought about as well, whether there could be a scenario where companies are using multiple large language models as opposed to settling on just one look.
I think what Ginge just said there is gold, because that, to me, that summarizes the whole the crux of everything we're seeing in terms of this AI build out, Winners, losers. You could pick your open A, I pick your Gemini. Pick you know whether even in China some of the models there. To me, it's all going to be about
hyperscalers and the data that it's built on. That continues to be such a core piece of this AI, which when you do about the hyperscoalurs and the infrastructure, it's about the data the infrastructure to build out.
I want to talk about the theme that has really driven this market for the last few years, of course, that is the Magnificent seven, and take a look at where those stocks in particular could go in the next year. Gene, do you see the mag seven continuing to drive the rally all boats lifted together in that space?
I do think simple answer is no. I think that we're going to see some pockets. Some of them are going to outperform really well, and some of them won't perform as much. I mean, my sense is that the small cap piece is going to continue to be an important part. I want to be clear that I think you should own many of the mag seven. I think that they're going to continue to generate a better return
than just being in the queues, for example. But I think that there is a little bit of a dynamic when it comes to the mag seven, the two that I'm focus most on. This wasn't your question, but I do want to Highlight.
This is sure.
I'm kind of split in airs here in terms of how to think about the winners in the MAGS seven four for calendar twenty six. I think Apple I'm putting that as the top performer for the front half of the year just because I think there's going to be multiple expansion going into the new series, which is code named for the new Apple Intelligence, and they land that after being i think more or less viscerated over what's happened so far with AI, they land that the multiple
on Apple is likely going up. So I think that Apple's going to have be the best performing MAG seven through the first half of the year, and then if you look at the full year, I think Google is in a unique place just given you know, they're really doing a great job of taking this the search traffic and starting to find ways to get people to interact with their products more, which obviously more shots on that.
It's good for the revenue growth within search, and of course they've got their cloud, and so those are the two that I would focus on most. Again, I'm not it doesn't mean that the other ones won't do well, but I think those are the ones that will do the best.
Dan what are you looking at in the mag seven? Do you see winners and losers in there?
I mean Gene preaching to the quiet, like what did he say about Apple? And Look, and it's been a battle because they've essentially been invisible with the AI strategy. But now with Google when the DOJ, that queers a path for a bigger geminideal that comes out in the spring. And I think there's no multiple for Apple given because of AI with the biggest install based in the world, I could already add seventy five hundred hours to share. So I think I agree one hundred percent. And me
and Gene it's a very small Apple fan club. You stick together there, okay, all right? And then and then i'd also I agree with Google, but I think Microsoft, Look, I think Microsoft here is so over sold. Just feel like best is in the rear view mirror. It's now about Google, Amazon, They're in the enterprise, the enterprise market it's in that's Redmond's do me and I'm telling you, like to me, that's the one that I focused on. It just a table pounder here.
Interesting because it does seem like there is a pretty more heated competition in the cloud space as well, Gene, how are you looking at that? When it comes to the competition between Microsoft, Azure, Google Cloud, and Amazon Web Services, I think the bar.
Is lowest with AWS just because the growth has been lowest, and you know, they just haven't seen that breath taking into the thirty almost forty percent growth that Azure and Google have experienced more recently off of a bigger number because their market shares more so, it's it's harder to grow at those rates. But I think that I mean, this is, uh, you know, not the cleanest answer, but I think all of them are going to do well.
I think if you go back to kind of where Dan and I are at in terms of just the broader build out that's going on, if if that in fact does happen, all of them are going to benefit the one. There's a contrarion piece in me that wants I like what Dan saying about Microsoft. I agree that that's definitely it's a contrarian on the top pick. Therefore it probably happens. But the contri piece around AWS is that that they end up being kind of the surprise to go back to, uh, they had their AWS event.
The CEO of AWS said that they may even have the exact his exact quota. I was just looking up this morning on December fourth. This is Matt Garman. He said, demand keeps skyrocketing or only speeding up that infrastructure build out, so uh, you know, halfway through the quarter, three quarters, two thirds of the way through the quarter. He says that it's probably a good sign for ws D.
And your reaction to that, I mean, look, I agree, and I'd almost further and say, I think one of the biggest surprise as we go into twenty six, I think it's going to start off with Jensen's keener at CEES, you know, which will be at is just about the overall
demand that's accelerating across the whole universe. And I think that's something where investors, I think are underestimating the scale and scope of what this is going to look like and also going to have a huge impact not just on earnings, but I think even on increased capbacks and on accelerate monization of the AI theme going in twenty twenty six, Gene.
Are these hyperscalers going to have to continue to find ways to cut costs to keep up the hundreds of billions of dollars they're spending on AI.
Well, I think if I think they will try to continue to cut costs, a lot of it is because they're they're they're using, they're eating their own products, they're implementing more. Think about how much they're using, whether it's micro Soft to Meta and Google. In terms of code creation today something like more than half is now generated
by machines. So but you know, do they have to to grow this if you just some really high level math here, but think about the average mag seven excluding teslas generating about one hundred billion per year in free cash flow, and so they're spending call it you know, that's by the way, that one hundred billion includes them spending fifty seventy five billion a year on infrastructure, and so they can increase by twenty thirty percent and still
be bringing home fifty seventy five billion dollars. And so they're a long way away. And that's I think one of the big differences that we're experiencing today versus twenty five years ago is the cash flow generation. They can just keep feeding this machine and so inevitably investors do care in the near term about earnings. Look what happened with Meta. Meta just said after their September quarter that next year the expenses were going to grow faster than revenue.
They have very upbeat commentary about revenue and the stock I forget what it was down fifteen to twenty percent over a short period, and so they do care in the near term. But the reason why I stress that near term, I think the long term investors will have a sense like this money is going to good use. And even if they're and they've got plenty of money,
to continue to invest in the business. And most importantly that's the right thing for them to do, because if they don't make those investments, obviously it poses them at some bigger existential risk longer term.
We're going to keep this conversation going on the Mag seven and more of the big tech sector as we continue this special New Year's Day edition of Bloomberg Daybreak with a look at another big piece of the Mag seven that would be the Tesla coming up. I'm Nathan Hager, and this is Bloomer. Thanks again for being with us for this special edition of Bloomberg Daybreak. Markets are closed for the New Year's Day holiday. I'm Nathan Hager. Wrapping
up our special high tech roundtable. We have been spending the full hour with Dan Ives, global head of tech research at Webbush Securities and Deepwater Asset Management's managing partner, Gene Monster. We could keep this conversation going for the entire day, but we got to wrap this up. Starting off, guys with a stock that I know both of you
follow very closely. That would be Tesla. Both of you have made some pretty bold calls on the electric vehicle maker, but does it continue to be driven by the evs headed into twenty twenty six, Dan.
I first off just want to say, I mean I could listen to Gene I've had some sour pats, kids and media tabernet, I costendim talk tech the whole day. Yes. Now then now with that said, look Tesla, they're entering the most important year ever autonomous and robotics, weave thirty cities, web robotaxis, you know, in twenty twenty six, and this
is the year AI revolution comes to Tesla. And I think when it comes to physical AI, the two best physical AI please in the world on Nvidia and Tessa, And I think now musk Wartime CEO and really is going into the next such an important chapter in the Tesla story.
A great way to describe him as a wartime CEO, I think gene because Elon Musk has been through a lot just throughout twenty twenty five, between the political moves and coming back to Tesla with the renewed focus. Where do you see tech going in twenty twenty six?
I think you know, Dan summed it up. It's about the robo taxi, It's about autonomy. I mean, that's those are the headlines that are going to be of most focus. There is the question like I think that's what matters most. There is a question like what happens with deliveries. I don't think i'd be curious Dan your take on this. I don't know if investors really care if they beat
the numbers a little bit. But just for some context, this is as of a week ago, the shoot was looking for sixteen percent delivery growth for calendar twenty six. I think it's probably going to be more like flat to up five percent. A little bit of a miss there, and again when you start talking about some of these negative things misses the point. I agree with Dan's highest level, which is one of the best positioned physical AI companies full stop. But I do wonder. I'll stand, like, do
people care let's say deliveries. Let's say they missed deliveries for twenty twenty six. Does it matter?
I mean, this should be like going to carb going to Miami for the water. The point is you're you're focused on autonomous and robotics. That is the focus of deliveries. Look, Gene, there's a stabilization, and nasal investors want to see your bobs. It continues to still be very depressed. But I think as long as you see a steabilization and you're seeing that, that's fine enough. But you own the stock beers about Thomas and robotics.
Indeed, I do own it. Yeah, and that's well said. I think the stabilization piece is really important. One other thing just to kind of play for it. So who knows my senses, they're probably going to be a little bit too high for the you know, for the for calendar twenty six, But I don't think it really changes
the big picture. Like when I see what Ford did at the end of twenty twenty five, basically, what was it a two and a half billion charge five and a half billion charge, these these bees and the becoming all noise at some point. But the reality that they're taking this big step back. I ask a question like, if they want to participate in autonomy is and they're
not investing in the EV piece. Are they envisioning I don't know the answer to this, but are they envisioning a world where it's like hybrids are going to be autonomous? I think that is not the world. I think it's going to be all electric. But I think when you look at what's going to happen with the delivery numbers this year, beat them or miss some, the stabilization is
really important. I love that perspective, Dan. And then the second piece is like just look at the big picture, is that these other carmakers they're not only nowhere to be found when it comes to autonomy, but they're they're running towards profitability at giving back for the cost of the future.
Yeah, I look, I agree.
I The one thing I'd say is like, you look what's happening. I mean, like, GM's handler a lot better than Ford, but if you look what Ford's done, they're basically thrown in the white towel. In the extent to Jean's point you're gonna have to eventually see when it comes to autonomous they're gonna ultimately I could see Tesla at a point partnering with some of the big US auto makers as they ultimately go down this past.
That would be an interesting idea. But I'm curious, Gene just to go back to a called Dan made earlier about robotaxi in thirty cities. I mean, we've seen Elon Musk set deadlines and let deadlines go quite a few times over the years. Does Tesla need to expand robotaxi to that extent to keep investors satisfied?
I just love that Bowld call.
They don't need to get there, and I guess is Dan's sense is the same. They don't need to get to that level to satisfy expectations in the movie the stock higher. So at a point of reference there in two cities today. They recently in Austin went to no safety driver, but there's also no customers in there either,
and it usually takes three to six months. I've recently done some deeper work in terms of how the approval process works in terms of local municipalities up to the state level, and it is the state's playoff of each other. And so to Dan's point is that they, let's say three six months from now, they start to get some good feedback in terms of how they're doing without a safety driver in the car. Other cities will use that
to quickly turn it on. And the beautiful thing about Tessa's model of courtse is they can turn it on in a heartbeat. I mean they can build these cars at thirty thousand a piece. That's for like a Model Y autonomous and eventually the cybercab and Waymo just can't do that. I mean they're at one hundred thousand plus.
In the time we have left with Dan Ives, global head of Tech Research at web Bush Securities and Deep Water Asset Management spnaging partner gene Monster. I want to look outside the mag seven to some of the other big techs that you guys follow, what we should be looking at in twenty twenty six as we think about this sector. Dan, I'll start with you, which companies are you really focused on in the new year to outperform BOK.
It continues to be you know, MESSI AI pallunteer in terms of front and center on the use cases. But I think you're going to see Snowflake, Mango, dB, those are going to be some significant performers. I like when I look at the infrastructure and NEBIS that continues to be a name that Richud bullsh on, Iron Iri e n That's one where it's also a power play along
with ge Veranova, It's one of our favorites. I think you have to focus on the second third fourth derivatives cybersecurity, crowdstrikes another one front and center along with Powell out there.
Interesting because a lot of those running into the same kind of potential criticisms in terms of valuations. I'm thinking of Pallenteer in particular. Ge what do you think of some of what Dan's talking about there and what companies are you keeping an eye on that could outperform?
It all makes sense, and you know his he'll forget a day or he just knows infinitely more on some of those companies than I know. And when I think about kind of the expectations around some of these, and I mentioned Apple and Google on the mega cap and then it'll be kind of fun we maybe we can play this sound.
By when we joined in the middle of the year, how this is going.
But I think that the small cap index, which we'll just use the PSCT as that it is going to outperform the cues. And so that's kind of the sub five hundred billion dollars. Still believe you should own the mega caps, but I think you're going to see better performance from some of these small caps in twenty twenty six.
You keeping an eye on some small caps, Dan, okay.
I mean there's a handful of small caps, you know, specifical on like cybersecurity. I think there's number names like Tenable Qualis. I think there's a number of names that on the power side that could be super interesting. Names on the software side like PEGAS Systems. Look, I think you look at like as Gene said, second, third, fourth derivatives across AI. That's where I think some of these, you know, gold maybe at the end of the rainbow could be interesting.
So does that point to the idea that we could see something of a rotation, like there's been a debate on in the broader market within big tech, maybe a rotation or a broad dig away from the magnificent seven names into more of the tech space, Dan, Or is that something you're thinking about.
I think it's a broadening out. But it's still going to be led by big tech and led by the core AI revolution names, but it's it spread to second, third, fourth derivative, and you're gonna see that spreading out. And I could argue even you're gonna have an AI ripple effect to financials or healthcare, a broadening of the market. But do remember text no lef Lean one hundred miles an hour in a Ferrari. I'd rather have that, Yeah, you'll get some speeding tickets rather than being in value.
You in the right lane forty five miles an hour with a bumper sticker saying Mike kez nanotuonent in third grade.
So still with a very polish call on the tech sector, Gene, where are you when it comes to that kind of thinking about big tech in twenty twenty six.
I'm still just thinking about that bumper sticker, big deck in twenty twenty six. I think that it's I think you should own some big tech, And I mean, this
is what kind of makes some fun. I mean, Dan and I on the exact same page at the bigger picture here, there's a little nuance that I have related to some of the small cap and we'll see how ps CT does relative to the cues and companies, you know, smaller ones, smaller and cool one hundred and fifty billion dollars a risk of networks or very on the power cooling side. I mean, these companies have had just breathtaking moves.
But if we're right on the bigger picture here of how much infrastructure is going to be put into place, those companies like that should do well. And I think that's going to be a positive for the small cat trade.
And Nathan, I would also just say, I, you know, and I just keep trying to figure out, besides the AI revolution, how do we get Gene to wear a pink sports shock. That's something that we have to we have to just we have to figure that out. We only should.
Let's we need to come up with some like market number. Then people will say, well, that's going to be the peak of the market, but I'll purchase a pink sport code at We'll figure out that number, Dan and be back to Nathan.
If Dan ives and Gene Munster switch wardrobes, we will know that we have gotten somewhere in the.
Text, right, I think you'd recognize either of us.
But seriously, not to end this on a downer, but just quickly before we let you guys go, what should investors avoid like the plague in the tech space in twenty twenty six, gene Monster Just quickly.
Well, I guess I'm just so optimistic about how early we are. I'm reluctant to pick kind of a avoid like avoid like the plague. I think we'll see how this plays out when the companies go vertical and in short amounts of time, then we could maybe have evaluation.
But I'm not.
I just don't have anything on my list.
All right, Well, we'll end it there now, but again, always a pleasure getting you guys together this time of the year. That's Gene Monster managing partner Deepwater Asset Management and dan Ives Global Ahead of Tech Research at web Bush Securities. Thanks to both of you for spending the entire hour with us, and thanks to you as well for bringing in part of your new year with us. I'm Nathan Hager, wishing you many happy returns tech or
otherwise in twenty twenty six. Stay with us Top stories global business headlines coming up right now.