Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Gene Munster joins us now really pleased with that, of
Speaker 2: course with deep Water asset management, Jane, What is the
Speaker 2: moment we're in? Paul Swede and I did important AI
Speaker 2: seminars for aniog Run and Man Deep Sing yesterday with
Speaker 2: Adobe with Salesforce, there's Nvidia earnings in the rest. You've
Speaker 2: been doing this forever. What moment are we in in
Speaker 2: the next year in American technology?
Speaker 3: We're in what is going to be the most I
Speaker 3: think exciting year and innovation over the last fifty years.
Speaker 3: And it's hard to really put language on it to
Speaker 3: capture what the concept of infinite intelligence or close to
Speaker 3: infinite intelligence at almost no cost means for humanity. And
Speaker 3: so as someone who has bet around for the Internet
Speaker 3: and saw the boom and bust of that, I think
Speaker 3: this is going to be more significant. And I think
Speaker 3: that next year, if you think about the markets, I've
Speaker 3: been talking about this three to five year bull market,
Speaker 3: and so I started talking about that about a year.
Speaker 3: So we're going to say we got a two to
Speaker 3: four more years. It's going to end in a spectacular
Speaker 3: bursting of the bubble. But I think next year, from
Speaker 3: just a broader market perspective, I think we're going to
Speaker 3: see another incredible year, and I think that it's driven
Speaker 3: by substance around AI going from a build out to
Speaker 3: starting to move to more applications. We saw a little
Speaker 3: bit of that with Snowflake today. Of course we've seen
Speaker 3: most of the excitement around the hardware, including Nvidia, but
Speaker 3: I think we're going to start to shift to slowly
Speaker 3: see more performance in software specifically. But just I'm just
Speaker 3: really excited to be alive at this time in life.
Speaker 3: It's just a really special moment.
Speaker 4: Hey, Gene. When I talk to people about AI, I
Speaker 4: often quote you because I remember talking to you maybe
Speaker 4: eighteen months ago on this program, and you put into
Speaker 4: cont into a kind of a framework of a compendium
Speaker 4: of kind of where you view AI relative to say,
Speaker 4: the Internet to electricity. Can you just review that for us,
Speaker 4: because it's so powerful to give people a sense of
Speaker 4: how you view the potential impact of AI.
Speaker 3: So a zero to one hundred scale, and one hundred
Speaker 3: is the most impactful, most transformative. But at twenty five,
Speaker 3: I would put mobile at about thirty five forty. I
Speaker 3: would have the PC, the Internet at fifty and obviously
Speaker 3: these all build on themselves, but if you look at
Speaker 3: them as a standalone, So the Internet is fifty, I
Speaker 3: think AI is probably ninety and electricity would be one hundred.
Speaker 3: And I think AI would be greater than electricity if
Speaker 3: not for the fact that you need electricity to run
Speaker 3: these machines. Of course, but this is a big deal, Paul,
Speaker 3: And you know there's that's a lot of hype. There's
Speaker 3: a lot of hype in that. I think the substance
Speaker 3: will exceed that hype.
Speaker 4: Yeah, but you're gene when someone like you makes that analysis.
Speaker 4: A lot of people like myself, we pay attention here
Speaker 4: as we try to get our minds around AI. What's
Speaker 4: the next step here? At it feels like we're we're
Speaker 4: so early innings on this, but it feels like we're
Speaker 4: now at the discussion point where the.
Speaker 1: Next step is one of your kids needs in mac.
Speaker 4: He's a new new laptop with the so you know
Speaker 4: that's the next step this weekend exactly. Gee, are we
Speaker 4: at the point now where we really have to make
Speaker 4: the use case for AI applications? Maybe the return on
Speaker 4: all this investment that we've seen.
Speaker 3: I don't think we're at that point. I think we're
Speaker 3: going to start to see some of that next year.
Speaker 3: And that has been the hesitancy around this whole AI
Speaker 3: trade is that the I think the skeptics would say
Speaker 3: that we just really haven't seen those incredible bread taking
Speaker 3: use cases yet, but they will ultimately come. And I
Speaker 3: think that what we saw with the Nvidio earnings last
Speaker 3: night and secifically this demand, I mean, this is incredible.
Speaker 3: I've never seen a story like this. They did twenty
Speaker 3: one billion in revenue in two thousand, calendar twenty two,
Speaker 3: they'll do call it one hundred and forty billion in
Speaker 3: revenue next year. There's nothing been anything like this. And
Speaker 3: when you see that, what they're doing is they're building
Speaker 3: the infrastructure. Was still largely in this building infrastructure phase, Paul.
Speaker 3: But some of these breadthaking applications that will change basically
Speaker 3: all forms of our life. I think we're going to
Speaker 3: start to see those a little bit later next year.
Speaker 3: Specifically to this concept of agentic AI came up a
Speaker 3: lot on the Nvidia call last night, But this idea
Speaker 3: of these agents going out and actually getting work done
Speaker 3: for us, I think that's going to be the big
Speaker 3: change how we're all going to interact with these eight.
Speaker 2: First single work Gene Munster with US year right now,
Speaker 2: folks thrill these with US, Danis with US earlier as
Speaker 2: we look at technology in America, Monster with deep water
Speaker 2: asset management, Gene Monster. I look at the Apple A
Speaker 2: and R used to be part of the cell side racket.
Speaker 2: Loved to Piper Jeff for years ago in Minnesota, but
Speaker 2: g okay, I got forty buys.
Speaker 1: But the fact is they got eighteen holds. I got
Speaker 1: Apple in a trading range. Since June, it's buttressed up
Speaker 1: now near new highs.
Speaker 2: I assume Gene Monsters thinks Apple's going to break out.
Speaker 2: How is it going to break out? What will be
Speaker 2: the catalyst at the top of the income statement or
Speaker 2: on downward.
Speaker 3: It's going to be at the top, and it's it's
Speaker 3: going to be either later this fiscal year, kind of
Speaker 3: the June quarter ish of next year, I think is
Speaker 3: a potential breakout or in fiscal twenty six. And I
Speaker 3: think it's inevitable that this happens. And to put some
Speaker 3: numbers around it, what that breakout is is that the
Speaker 3: streets looking for iPhone growth in fiscal twenty five to
Speaker 3: be around six percent and for fiscal twenty six a
Speaker 3: pretty similar number. I think that that can be ten
Speaker 3: to fifteen percent. And ultimately all this talk about AI,
Speaker 3: the vast majority of people still don't use AI. And
Speaker 3: if you look at the number of chat GPT on
Speaker 3: a daily basis, this is probably about one hundred and
Speaker 3: fifty million, two hundred million people. If you look at
Speaker 3: Meta's products, that's about three point two billion Instagram and
Speaker 3: so this is still a fraction of the use. But
Speaker 3: what is special about what Apple is doing is taking
Speaker 3: these tools and just making them accessible to everyone. And
Speaker 3: I think that, well, today those features really don't light
Speaker 3: up your life. I think that as they roll more
Speaker 3: of them out, it will become more clear to people
Speaker 3: that they have to upgrade.
Speaker 1: John Tucker does AI on your iPhone? What six? Does
Speaker 1: it light up your life? BlackBerry? Do they hear features?
Speaker 2: John Tucker's Jean Jeane, John Tucker's back with a palm pilot.
Speaker 4: Hey, Gene, if you ever see that if I were
Speaker 4: to put together kind of an ETF for AI, because
Speaker 4: I'm trying to get some exposure to AI, but maybe
Speaker 4: I feel like I've missed the Nvidia trade. Are you
Speaker 4: asking for one of your kids emailed in for one
Speaker 4: of your kids, I need a basket of AI? How else,
Speaker 4: how else are you thinking about kind of getting to again,
Speaker 4: this is really seminal shift in technology, Paul.
Speaker 3: I'd be remiss not to mention. We have an et AF.
Speaker 3: The ticker is LOUP. It is frontier Tech, and it
Speaker 3: basically gives exposure to AI themes that are outside of
Speaker 3: the megacap. So if you're looking for some smaller companies
Speaker 3: like Verted, for example, that does cooling, it was mentioned
Speaker 3: on the call, these are the sub kind of two
Speaker 3: hundred billion dollars, So I have to mention that LOUP,
Speaker 3: But I would say that more broadly, I still think
Speaker 3: we're in a period where the hardware piece, this is
Speaker 3: a conturing view. I think the hardware trade is going
Speaker 3: to continue to be stronger than expected over the next
Speaker 3: several quarters, and then, as I mentioned, kind of exiting
Speaker 3: end of next year. I think you know what we're
Speaker 3: seeing with Snowflake. I think you're going to see more
Speaker 3: and more of that in software land kind of later
Speaker 3: next year. But that's kind of how I think about it,
Speaker 3: still in the hardware piece and then moving to software
Speaker 3: later on.
Speaker 2: Okay, loup up to thirty five three five up thirty
Speaker 2: five one year trail.
Speaker 1: Robinhood, you're number one holding. How do you have? Robinhood
Speaker 1: is part of AI.
Speaker 3: So what they're using is as part of how they
Speaker 3: assess risk with customers.
Speaker 1: They use AI.
Speaker 3: They also use AI as a means to go and
Speaker 3: generate new customers, so for doing outreach. So they've been
Speaker 3: pretty they've been proactive at doing that. So it's companies
Speaker 3: like Robinhood is. Another company that we looked at recently
Speaker 3: to add to this was like Krispin Green. It sounds crazy,
Speaker 3: but they have a big robotics initiative going on. So
Speaker 3: it is these companies that are studying to implement AI
Speaker 3: kind of under the hood.
Speaker 1: Interesting.
Speaker 2: Gene Munster, don't be a stranger. We'll feature them on
Speaker 2: single Best Idea today. You know, I look at this, well,
Speaker 2: why don't you get one more into Gene Monster.
Speaker 4: We got time here, Gene, we got gin I'm gonna
Speaker 4: hold them on here. Hey, Gene Snowflake, I am looking
Speaker 4: at Snowflake stocks up twenty five percent? Can you tell
Speaker 4: us what Snowflake does and why the stock is up
Speaker 4: so much today?
Speaker 3: So, what Snowflake does It's called a data warehouse, which
Speaker 3: means that you take data. It could be anything from
Speaker 3: structured data inside of a business. Structured data would be
Speaker 3: data that is in like an Oracle database, and it
Speaker 3: warehouses it so AI models can train on it. It
Speaker 3: basically makes data more accessible and usable for training. So
Speaker 3: that is what they're benefiting from is just more training
Speaker 3: and more enterprises starting to use this. Their biggest competitor
Speaker 3: where they've been losing share, the reason why the stock
Speaker 3: has not done well before today. It's called Data Bricks,
Speaker 3: and they have a data lake where you can just
Speaker 3: throw in PDFs and Excel documents and just throw a
Speaker 3: bunch of data into this data lake and then it
Speaker 3: organizes it for you. But that's what's going on with Snowflake.
Speaker 1: Jane.
Speaker 2: First question to Eli Greenfield yesterday at Adobe, is all
Speaker 2: this fancy gene monster dan ives talk.
Speaker 1: Is it going to take our jobs away from us?
Speaker 3: Well? As an asset manager, I think that that's a
Speaker 3: very real potential. I think it's an ANALYSTI it's a
Speaker 3: little different. At deep Water. We launched an affiliate company
Speaker 3: a few months ago called Intelligent Alpha, and it basically
Speaker 3: is machines picking it's just machines picking stocks. Is an
Speaker 3: et F L I v R livermore, but I think
Speaker 3: it is. It's something I just mentioned that in context too.
Speaker 3: It's one of two things is going to happen. Either
Speaker 3: it's going to take our jobs. As an asset manager,
Speaker 3: I would say for you and Paul and your team,
Speaker 3: you need not worry. One of the things that AI
Speaker 3: won't take away is community and empathy, and that's things
Speaker 3: definitionly that can't be done. And I think that's what
Speaker 3: you guys bring every day.
Speaker 1: Well, we have community, do we have empathy? Lisa? I
Speaker 1: don't you know to stretch you know, it's like.
Speaker 2: Pushing the envelope here a little to its gene Monster
Speaker 2: hugely valuable.
Speaker 1: We get a huge response when he's on.
Speaker 2: We love these days where we tag team, you know,
Speaker 2: the trenches cell side of Dan ives with what.
Speaker 1: We do with Gene Monster. That's great.