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Dani's joins US now quietly dressed with web Bush technologies and security is starving.
I should say, so, what's the character of this pullback? There's fourteen kinds of a pullback. Which kind is this?
Look?
I think this pullback is it's real.
Look.
I view it as it's all related to what's happened in Korea right in terms of like the cosy what we've seen there. It's just this white knuckle moment that's going to be nothing more than breathering.
You go to China a lot.
The zeitgeist, without question is about China developing through deep seek and others.
Ninety percent of the efficacy of AI for one tenth the cost. Is it legit?
Warry No, because for the first time in thirty years, the US is headed China when it comes to TAP and the reality is it's not just from Nvidia to what we see with the models with Anthropic, to the hyperscalours, to the software comes like pound tier and others.
Look, could they do it cheaper? Yeah?
Are they winning on robotics. Are they winning when it comes to energy because of nuclear But when it comes to the AI race, I don't even think it's a question in terms of right now where you know US is versus China. And that's why I think some of those fears, and we've seen like the deep seek moments and some of the others, I think a lot of that are more fictional sort of fears.
Microsoft stock US off twenty three percent year to date, trades it twenty times earnings.
Talk to us about Microsoft here.
Look, it's I think it continues to be somewhere between a head scratcher to just a table pound. Their opportunity for in my view, very similar like when I think about Alphabet a year ago in terms of you like they were done. I was going to crush search. You know,
the DJ was going to break it up. Look, I think with Microsoft and the issue is just tied to open AI and right now, whether it's Oracle, Microsoft, I think being tied to open ayes and negive relative to anthropic being Golden that the case because I think anthropic relative to the model claud Golden Child best model out there. I think anyone tied to open AI right now that's
been that's been negaive for Microsoft. Two is look when you look at as your growth, it's been strong, but maybe not the overwhelming point where there's a view that Amazon and Google started narrow the gap coepile it clearly had stumbled out of the gate. So right now that is a penalty box stock that I think is ultimately five hundred and fifty dollars.
Does a penalty box stock have to have active management helping the stock here?
Do they do a share buyback?
I got a dividend growth five year dividend growth of ten point two percent.
Put some steroids on it. Is that what they have to do well?
I think that I think that Nadella and the team it's getting to a point here where they're gonna have to do something.
Look twenty one multiple pup to your point.
But then it goes back to like if you look at Apple, if I told you a year ago where Apple would be today relative to maybe some of the doomsday fears.
A lot of that was also like cook.
One of their mean pieces of successes that despite some of the bumps, and you know, the sort of roller course that they saw when it came to what they've done on the capital side.
I agree to that.
Come on, they're not pissing away money and an AI like everybody else does Microsoft have to adjust their timeline of spending on all this XAI?
Why I think the market's telling Microsoft, show us the execution, show us the growth, otherwise you're gonna have to get curtailed. And the market's saying that not just to Microsoft, but to Meta because for Meta, investors no longer want to see doggate the home type quarters when you're spending cap backs like that. For Google, they've succeeded massively, so when they do equity raise and things like that, investors are
fine with it. And now look, they have obviously lost engineers and others and with anthropic and that caused some of the sell off. But I just think now you're starting to see a separation in terms of you can just own the names as a broader trade. They each have their own sort of characteristics that are ultimately going to drive their growth.
Dan, I don't think we've spoken to you since SpaceX has been in the market. I'm not even sure what bush you're covering that stock, But what's the conversations, what are the conversations you've been having with clients about SpaceX here.
Look, I think it just like we'll see with anthropic and open AI. You know, it's it's something where it's been this juggernaut that one way or another, investors like it or hate it. It's definitely a huge conversation. I think the big thing is is that investors are more looking at it as a pro for what would be with an open AI or an anthropic or what it
says about the broader tech trade. And I think this is one where it's almost been investors of viewing it a little is a proxy and that states to what I think is important in terms of broader attack. Look, it's our view like in the AI revolution, whether it's space chips, cybersecurity. So this is gonna spread. You could talk about on the SpaceX side. I could even talk
about on the caterpillar side. So I think you're really seeing right now this AI revolution spreading to second or fourth riven and investors figure out how to own it.
Is Microsoft a software company, do you pull them together with salesforce and the accenture?
And I don't do that. They're like, how do they convey that to the public?
But other than the CEOs in wonderful interview on the Wall Street Journal the other day.
Look, it's really you have to show it in Azure growth. You have to show it in numbers that investors start to feel that Microsoft basically owned the enterprise is an acceleration story from a growth perspective, acceleration from what will ultimately be free cash flow. And I think right now they are lumped with salesforce, they are lumped with service.
Exactly what's the target price again on Microsoft.
Five fifty because to me, look and I just when I look at Microsoft, that continues to be the one meta in the penalty box for a good reason. Microsoft, I think, is way disconnected by what ultimately is from.
Yeah, exactly, that's like a bright, shiny green quote that you can't even constant. The rod alexis the rods and cones of my retina shot when he walks.
That's a Bill Cosby line.
I mean, the shirts Sportco combination today is particularly troublesome. But I don't know how you even got I think that's.
A kind of it's kind of like it's kind of like t K It's like Keen styles.
It could be it could be back, you know, back in the day, back in the day.
Real quickly, elon, does you.
Roll up Tesla into SpaceX?
Well, we've said eighty percent chance that Tesla ultimately gets bought by SpaceX because from Musk, it's about having all the AI under one ecosystem, under one control. It's also the and that continues to be our view as a data play.
Then how do you respond to a really, really competent people like Georgian Noble founder with Peter Lynch, a fidelity overseas, it's harshly critical of just the core financial dynamics of Tesla. How do you respond to somebody that esteemed.
What I'd respond is that there is pressure on Tesla to show robotaxis autonomous growth.
Stop.
You know, it's like show the actual numbers over the next set's.
Get to do that? Come on?
I ended up here with what's his ed? Who's our tech guy? Love Blood low Bloodlow ended up with that Luvelo. They're in three cities with like forty two robotaxis. Well, it's a starter project.
But ultimately it's the view that over the next two three four years, when it comes to autonomous and it comes to robot that Tesla will really be the one that kind of owns the market. Look market is basically saying like if you look at things today, you justify the valuation. No market saying, look around the corner. I'm gonna say where this could go two three, four years And to your point in terms of the skeptics, like that will determine if the bears will be wrong, and
I believe they will be. But it comes down to execution from Musk and Tesla.
I just had to take photographs of you know, it's just something that.
I can personally this, you know, this in a bow tie.
Yeah, for him, it would work. Would it would work?
I think it would work perfect.
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