Bloomberg Audio Studios, podcasts, radio news.
Dan I's joining us from quite a lumpar and of course with web Bush Securities. Dan, explain what you learn traveling to the Pacific Rim, I mean, if anybody can do this with AI, it's you. Why do you have to go there?
Yeah, Look, you have to have feet on the ground to be talking not just investors but companies. I mean, what's happening in Taiwan? What does memory look like in Korea? Are there shortages because of the straight the point? These are the things and we've talked about in the show for many years, like it's what I believe it is the only way you can navigate this environment to understand what demand looks like, and you know, trying to be understand some of the patterns that we're seeing.
What have you learned to clear rumors here? Is there's a filter down from one hundred and nine dollars barre of oil into technology.
Do you observe that?
Look, I'd say right now, there is one clearly sentiment it's a white knuckle environment for tech. But when you look at demand to supply in terms of just what we're seeing in terms of demand in Taiwan.
It's robust.
It's robust not just for n video, but it's robust for memory and for the components. And what that ultimately means is that's going to be bush for the hyperscalers.
And look, the backdrop is.
Obviously nervous, but you know, I just think it's very important in these environments to understand what the trends are because this will pass, and when it passes.
You know, tech stocks.
I continue to believe that's where you want to be positioned, especially in some of these sell offs that we've seen.
Dan, what's the conversation you're having with clients over there in Asia about some of the U I guess structural concerns about software stocks in general, software as a service stocks in particular. How do you frame that after your clients?
Yeah, well, I think that's it's as negative as sentiment as i've seen software, and not just in the issue, but I think there's just across the world that I've seen probably going back ten years or more, because right now there's no every investor. They're focused on Semi's hardware and no one wants touch software.
And I continue to believe that is.
A massively disconnected narrative from the reality of what we're going to see in the use cases from Microsoft to Oracle, Salesforce to service Now, and I think we're going through one of those periods here where these stocks are on massive seal in my opinion, relative to where we see them heading as part of the AI revolution.
So how do you try to differentiate between potential winners potential losers in the software space? Dan, how do you step back and assess that.
Yeah, I think to some extent, i'll call it a go AI ghost trade in terms of anthropic and some of the worries about that these LM models anthropic in particular is going to basically unseat software. So I think I have to separate between Are there some companies that could be at risk? Yeah, of course, like to some of the pure please but when you look at install based in trench stack players like Salesforce, Service Now, Oracle, Cybersecurity,
crowdsright pal out though. Look, we talked to the customers, how are they going about architecture, how are they building these use cases? And that's where Pollunteer again again continues to also stick out positively from.
Qualmum Permanlasia Dan iives with us, thrilled he could be with us to get our Monday I started Dan Paul SWEENI taught me this MSFT equity EE, which is the earnings and estimate screen for belaguered Microsoft forward twelve month
PE twenty one point two six. I mean, I know you're gonna tell me it's a bargain, it's a broken record, But we really want to understand, Dan ives the durability of their margins down the income statement, given these shocks into Q three, into Q four, into the first quarter of two thy twenty seven, is it possible to guestimate that?
Look, I mean when I look at Microsoft right now, we're talking about multiples in a free cash flow basis and on earnings that we haven't seen you going back eight years, ten years, you know, relative to where I believe, and I think from a margin perspective, it's ultimates free cash flow type of growth that's going to be in the mid to high teens next two to three years or higher than that. It all comes down to ten percent of their base have upgraded or gone down the path for AI.
If we're ten percent.
Right, this is a five hundred to five point fifty stock. We're base case, right, it's six to six fifty. That's that's how I think it continues to be the most disconnected stock in tech period.
Right, Paul, the debt load three point it's just backbreaking.
Hey, Dan, talk to us about cybersecurity here. How do you think about cybersecurity in the world of AI, because it just seems like, boy, the risk could be just exponentially higher.
Yeah, Paul, the budgets are going to increase from five percent of it to ten percent next two to three years. Because the surface area if every person has any if every person has five agents working out there for enterprises, that's just going to expand the surface area. So what that means cybersecurity the budgets that much more strategic. That's not going to be unseated from anthropic or open AI.
It speaks to our CrowdStrike, pow out, checkpoint rubrics like these are names that are gonna have massively bigger opportunities than they do today.
But it's another example that.
The AI gohost trade is a black cloud over the sector.
So Dan, what are some of your channel checks in Asia? What are they telling you these days? What are you learning over there?
I mean if you look demand, the supply quarter of a quarter is accelerated, and that's not and that's really because you're seeing more and more enterprises go down this path. And I think what you're seeing is the deals are getting larger. You're seeing shortages when it comes to memory and components because it's a memory supercycle that's going on.
And what that speaks to our view, we're in year three of an eight to ten year build out and despite all the white Knuckles are seeing with Iranic, that's not changing that this fourth and Dush revolution's happening.
I got to get one question in here, Dan Briefest here on some of the parts on Apple, given their global plan of manufacture.
Look some of the parts in what I views like a worst case scenario three twenty five. When I think best case scenario, I mean we're looking three seventy five to four hundred, And it just looked on this is one like obviously they were way to the game of AI.
They couldn't do it internally. Now they'll they'll all by not.
Putting cap backs hours they ultimately won by accident. And I think Gemini is going to be the sort of pillar there and the consumer AI revolution is going to go through Apple, and that's why this is the name. Seventy five, two hundred dollars will ultimately be the upside as they monetize AI. This is another one just you know, massively sell off based on what we're seeing in terms of the environment.
It's safe travels, Dad, safe, safe travels for all of us. A team observing misterizes with Wedbush. Of course, you've seen him with the industry acclaim