WEBVTT - Holiday Special: Tech Trends with Ives and Munster 0:00:01.800 --> 0:00:04.000 Thank you so much for joining us for this special 0:00:04.160 --> 0:00:07.800 edition of Bloomberg Daybreak. US markets are closed for the 0:00:07.800 --> 0:00:11.520 Independence Day holiday. I'm Nathan Hager coming up this hour. 0:00:11.760 --> 0:00:15.800 They correctly predicted the artificial intelligence boom that led to 0:00:16.040 --> 0:00:20.120 record highs for several tech companies this year. Now they're 0:00:20.200 --> 0:00:22.960 back to assess whether this high tech bull has more 0:00:23.040 --> 0:00:26.560 room to run or whether it's headed into bubble territory. 0:00:26.760 --> 0:00:30.120 Joining us for the entire hour our Gene Munster, managing 0:00:30.160 --> 0:00:33.880 partner at Deepwater Asset Management and web Bush Security, senior 0:00:33.920 --> 0:00:37.640 equity research Channalyist Dan Ives. Gentlemen, thanks once again for 0:00:37.720 --> 0:00:41.640 joining us for this special roundtable discussion on all things tech. 0:00:41.680 --> 0:00:43.479 And Dan, I want to start with you because you 0:00:43.600 --> 0:00:46.120 really have been out front on the bulcase for AI 0:00:46.159 --> 0:00:48.720 over the last well really a couple of years now. 0:00:48.800 --> 0:00:51.479 So here's what you had to tell us around this 0:00:51.680 --> 0:00:53.479 time last fourth of July. 0:00:54.320 --> 0:00:57.360 My opinion, it's a fourth in dust show revolution that's 0:00:57.400 --> 0:00:59.080 playing out in front of our eyes. 0:01:00.320 --> 0:01:04.200 This is the start of a new tech bull market. 0:01:03.840 --> 0:01:05.640 Which is why we think second half of the year 0:01:05.640 --> 0:01:09.680 at tech could be up fifteen, potentially twenty percent in 0:01:09.720 --> 0:01:12.679 a much broader rally because of what's happening from a 0:01:12.720 --> 0:01:16.560 growth perspective. I think it's AI is tip of the iceberg. 0:01:16.400 --> 0:01:20.560 And since then, the magnificent seven stocks tracked by Bloomberg 0:01:20.640 --> 0:01:24.880 are up fifty five zero percent on the total return 0:01:25.280 --> 0:01:28.920 it dan, can these make a cap tech names keep 0:01:29.040 --> 0:01:31.000 up that kind of momentum. 0:01:31.080 --> 0:01:35.839 Look, it's nine pm. Still in this party, this AI 0:01:36.040 --> 0:01:39.160 party that I believe goes to four AM. I mean 0:01:39.240 --> 0:01:44.600 this is the start of a two year tech bull 0:01:44.760 --> 0:01:48.600 cycle because it's something where it's the multiplier for every 0:01:48.760 --> 0:01:54.000 dollar spent on in vidio chip, there's an eight to 0:01:54.040 --> 0:01:58.240 ten multiplier across software, across infrastructure, across the rest of 0:01:58.240 --> 0:02:01.320 the tech. That's why this is a nineteen moment, not 0:02:02.040 --> 0:02:04.520 a ninety ninety nine movement. Get out the popcorn. We 0:02:04.560 --> 0:02:06.240 should detect will market continues. 0:02:06.760 --> 0:02:08.840 So let's bring you in on this gene. Here's what 0:02:08.919 --> 0:02:11.440 you had to tell us about big text potential this 0:02:11.520 --> 0:02:12.320 time last year. 0:02:12.960 --> 0:02:16.080 There's going to be some ebbs and flows in terms 0:02:16.120 --> 0:02:17.919 of the stocks in the near term, but I think 0:02:17.960 --> 0:02:22.560 that it will ultimately meet, exceed, will comfortably exceed all 0:02:22.560 --> 0:02:26.120 of the hype. And the hype is just intense. I mean, 0:02:26.360 --> 0:02:31.320 this universal optimism around it seems hard to believe, but 0:02:31.360 --> 0:02:33.359 I think it is. There is substance behind it. 0:02:34.200 --> 0:02:37.600 One year later, Gene is the substance still backing up 0:02:37.639 --> 0:02:38.000 the hype. 0:02:39.400 --> 0:02:41.600 It is and that's the part that Dan and I 0:02:41.720 --> 0:02:44.120 keep a close eye on as every quarter and in 0:02:44.120 --> 0:02:47.760 the middle of the quarters, tracking how these companies are doing. 0:02:47.880 --> 0:02:52.160 Is it ultimately exceeding meeting disappointing to what those bars 0:02:52.200 --> 0:02:55.600 are and it's so far it's just been exceeding really 0:02:55.639 --> 0:02:59.639 across the board in vidious numbers. Of course, is the 0:03:00.080 --> 0:03:02.720 bell weather. Dan talks about the chips piece, that being 0:03:03.120 --> 0:03:05.280 the front end of it and that multiplier effect, But 0:03:05.320 --> 0:03:08.120 that's where I'm focused heavily on, is just what's going 0:03:08.160 --> 0:03:13.400 on the hardware side. Micron had exceeded estimates guided inline 0:03:13.960 --> 0:03:18.799 for the for the September core for their August quarter, 0:03:19.240 --> 0:03:22.079 which in AI world that may be viewed as a 0:03:22.120 --> 0:03:27.080 slight disappointment, but it did include an acceleration in revenue growth, 0:03:27.080 --> 0:03:30.400 so it's going from eighty two to ninety percent. So, Nathan, 0:03:30.440 --> 0:03:34.920 this is all intact and my view that the substance 0:03:34.960 --> 0:03:41.240 will exceed the hype continues to be confirmed as we progress. 0:03:40.840 --> 0:03:43.360 Well let's talk a little bit more about in Nvidia, 0:03:43.480 --> 0:03:47.800 because obviously there's been so much attention on the AI chip. 0:03:47.920 --> 0:03:52.320 Darling Dan, You've called Jensen Wong the CEO, the godfather 0:03:52.600 --> 0:03:57.760 of AI. But godfathers often have targets on their backs. 0:03:57.800 --> 0:04:01.000 I mean, how big a target is in Vidia right 0:04:01.040 --> 0:04:03.040 now when it comes to the overall chip space. 0:04:03.160 --> 0:04:06.080 Look, they're a target, but it's their world and everyone 0:04:06.080 --> 0:04:08.600 else's pay rent in terms of where we are. I mean, 0:04:08.640 --> 0:04:11.240 they're chips, they're GPUs and we've seen this across the 0:04:11.560 --> 0:04:13.960 you know, across the board in our trips to Asia. 0:04:14.520 --> 0:04:17.760 It's the new oil, the new gold, and at the 0:04:17.800 --> 0:04:21.200 top of the mountain it's the godfather of AI, Jensen Nvidia. 0:04:21.400 --> 0:04:24.520 In that mount rushmore of AI, along with the Della 0:04:25.320 --> 0:04:28.599 and others that want to join. But this is they're 0:04:28.720 --> 0:04:31.599 miles ahead of the competition. It'll EBB and flow a 0:04:31.680 --> 0:04:34.160 year from now. I think we're looking at three four 0:04:34.279 --> 0:04:39.280 trillion dollars markaps Apple, Microsoft and Nvidia, And as Jeans 0:04:39.320 --> 0:04:43.120 talked about throughout the year, it's far through the trees. 0:04:43.279 --> 0:04:46.360 You don't get too caught up with sometimes the gyrations week, 0:04:46.400 --> 0:04:49.760 tweet quarter quarter, it's where this is all going well. 0:04:49.760 --> 0:04:53.320 We have seen gyrations just in recent weeks since the 0:04:53.520 --> 0:04:56.680 ten for one stock split for Nvidia. Gene, where do 0:04:56.720 --> 0:04:58.560 you see in Nvidia going at this point? 0:04:59.400 --> 0:05:01.880 I mean that's exact exactly that this is just gyrations, 0:05:01.920 --> 0:05:05.039 and it's I believe it's going higher. I think it 0:05:05.080 --> 0:05:08.480 could go materially higher. And it comes to a basic 0:05:08.640 --> 0:05:11.960 question that investors have to ask themselves, and it's do 0:05:12.000 --> 0:05:16.600 you believe if you believe that we're in currently a 0:05:16.720 --> 0:05:20.800 genitive AI inspired world that hasn't really taken impact on 0:05:20.880 --> 0:05:23.760 most of our lives, but a generitive AI inspired world, 0:05:24.120 --> 0:05:26.880 and if you believe that eventually that leads to artificial 0:05:26.960 --> 0:05:31.960 general intelligence, which is a light year ahead of genitive AI. 0:05:32.600 --> 0:05:35.800 And if you believe that superintelligence is somewhere on the 0:05:35.800 --> 0:05:39.520 horizon five to ten, twenty years on the horizon, if 0:05:39.520 --> 0:05:43.040 you believe that that is the future, which I hold those, 0:05:43.920 --> 0:05:47.760 then in Vidia is going a lot higher in Vidia. 0:05:48.120 --> 0:05:50.640 If AI works, in Vidia has to work. 0:05:51.720 --> 0:05:56.040 Speaking with Gene Munster, the managing partner at Deepwater Asset Management, 0:05:56.320 --> 0:05:59.600 and Dan Ives, senior equity research analyst at web Bush 0:05:59.640 --> 0:06:05.320 Security joining us in studio Genus joining us via zoom, Dan, 0:06:05.440 --> 0:06:07.880 Where do you see the trajectory for in video? I mean, 0:06:07.920 --> 0:06:12.479 you've talked a lot about how the run seems like 0:06:12.640 --> 0:06:16.640 it has legs. What turns in video from the kind 0:06:16.680 --> 0:06:19.440 of growth that we've seen over the last several months 0:06:19.520 --> 0:06:21.680 to something more stability. 0:06:23.040 --> 0:06:27.159 I mean, the use cases are just starting, so when 0:06:27.160 --> 0:06:30.680 you look at numbers, the street is still behind where 0:06:31.279 --> 0:06:34.960 the demand and where numbers actually go. So we could 0:06:35.000 --> 0:06:37.200 go through intra court to people saying in type and 0:06:38.000 --> 0:06:41.479 stock sell off, but it all comes down to demand 0:06:42.200 --> 0:06:45.800 and we are still in from a baseball perspective, we're 0:06:45.800 --> 0:06:49.200 in the top of the second, bottom of the first 0:06:49.600 --> 0:06:52.520 in terms of where this is all heading, and they're 0:06:52.600 --> 0:06:55.640 the only show in town in terms of those chips. 0:06:55.960 --> 0:07:00.840 That's why I believe this is one where they continued 0:07:00.880 --> 0:07:04.799 to defy show numbers that I think are jaw droppers, 0:07:05.200 --> 0:07:08.400 and now the second, third, fourth derivatives hit across the 0:07:08.440 --> 0:07:09.080 rest at tech. 0:07:10.160 --> 0:07:13.160 Well, when it comes to that demand piece, Gene, I mean, 0:07:13.440 --> 0:07:17.040 can in Nvidia meet the kind of demand that we've 0:07:17.080 --> 0:07:21.640 seen from a lot of its enterprise customers. Can the 0:07:21.720 --> 0:07:25.640 suppliers that Nvidia relies on meet that kind of demand? 0:07:26.240 --> 0:07:28.120 The best thing The answer to simple answer is no, 0:07:28.960 --> 0:07:32.120 because everything that Dan's talking about that this early innings 0:07:32.160 --> 0:07:35.840 and we're just starting to build this infrastructure. Despite the 0:07:35.880 --> 0:07:39.120 breathtaking growth that Nvidia has had, we're just still early 0:07:39.760 --> 0:07:42.120 and we're going to see a whole new class. It 0:07:42.120 --> 0:07:43.840 has been the hyper scalers, We're going to see a 0:07:43.840 --> 0:07:47.880 whole new class of enterprisers. There's be industrial AI, there'll 0:07:47.920 --> 0:07:51.600 be sovereign aim from countries, and so they will start 0:07:51.640 --> 0:07:53.680 to be buying these chips, and ultimately I think it 0:07:53.720 --> 0:07:56.440 will be very difficult for TSM to keep up with 0:07:56.840 --> 0:08:00.320 in Nvidia's demand. It's a great thing for investors because 0:08:00.680 --> 0:08:02.800 of course, when they have good numbers and they say 0:08:03.080 --> 0:08:06.360 we can't keep up, that allows investors to kind of 0:08:07.040 --> 0:08:10.120 continue to maintain a lot of their optimism. And so 0:08:10.520 --> 0:08:12.840 I think it's actually okay that it'll be fine for 0:08:12.880 --> 0:08:15.640 the stocks that and video can't keep up with this demand. 0:08:15.960 --> 0:08:18.480 And I had a question for Dan, and you know, 0:08:18.480 --> 0:08:21.760 when I think about this kind of evolution and what's 0:08:21.800 --> 0:08:25.240 going on now is generitive AI, and then how would 0:08:25.280 --> 0:08:27.880 you I describe there's a light year gap between generitive 0:08:27.880 --> 0:08:30.800 AI and general intelligence, because this is where you and 0:08:30.840 --> 0:08:33.600 I we're focused. The reason why we're not worried about 0:08:33.679 --> 0:08:36.040 quarters is worth thinking two three years down the road. 0:08:36.600 --> 0:08:39.120 And how do you think about that piece of it, 0:08:39.800 --> 0:08:43.640 the general intelligence piece of it, relative or just in 0:08:43.720 --> 0:08:49.360 terms of the applications that could present themselves and the 0:08:49.440 --> 0:08:51.560 opportunity for wealth creation around. 0:08:51.640 --> 0:08:54.280 Yeah, it's a great question. And look, Gene, I think 0:08:54.720 --> 0:08:58.000 from everything, all the work we've done around the world, 0:08:58.160 --> 0:09:02.079 we think about sixty two percent of data that's never 0:09:02.120 --> 0:09:05.960 been able to be cracked or used by enterprises and 0:09:06.040 --> 0:09:10.480 ultimately by consumers is now going to get unlocked and 0:09:10.520 --> 0:09:13.120 you're going to have on the consumer side hundreds of 0:09:13.160 --> 0:09:17.319 apps while them through Apple. That is how most consumers 0:09:17.360 --> 0:09:19.280 are going to interact with AI in a way that 0:09:19.320 --> 0:09:22.760 they couldn't even imagine today. Enterprise is the same thing. 0:09:22.920 --> 0:09:25.840 As much as it's scary sci fi twenty first century, 0:09:26.600 --> 0:09:30.360 I think the reality is is that enterprises are finding 0:09:30.559 --> 0:09:34.960 massive use cases ROI, and that's why we believe there's 0:09:34.960 --> 0:09:38.679 a lot of these companies ten hours in earnings could 0:09:38.679 --> 0:09:40.560 be fourteen to fifteen. 0:09:41.280 --> 0:09:45.280 In terms of the advances that we could see. It 0:09:45.360 --> 0:09:47.480 raises a lot of questions when you talk about a 0:09:47.559 --> 0:09:50.360 leap from the kind of large language models that we're 0:09:50.360 --> 0:09:54.040 seeing now to this general intelligence. That raises the questions 0:09:54.040 --> 0:09:59.280 about whether artificial intelligence is advancing too fast for companies 0:09:59.320 --> 0:10:03.800 and people to keep up with the moral questions as well. 0:10:03.880 --> 0:10:07.960 I wonder how Gene you think about some of those questions, 0:10:08.080 --> 0:10:11.240 as a lot of these big tech companies do try 0:10:11.520 --> 0:10:15.240 to get to some of these massive leaps that used 0:10:15.280 --> 0:10:17.880 to be science fiction, but do seem like they're becoming 0:10:17.880 --> 0:10:19.439 that much closer to science fact. 0:10:20.440 --> 0:10:23.040 Yeah, the numbers are supporting it, just in terms of 0:10:23.600 --> 0:10:27.040 the breath taking expansion and intelligence of these models. Just 0:10:27.080 --> 0:10:30.520 to put some perspective around it, Open AI GPT three 0:10:30.800 --> 0:10:34.960 had about one hundred and twenty billion parameters. They haven't 0:10:35.000 --> 0:10:38.760 given the numbers for four to oh, but it's estimated 0:10:38.800 --> 0:10:40.800 to be about a trillion. And that's kind of a 0:10:40.840 --> 0:10:42.959 simple way to think about how smart the model is 0:10:42.960 --> 0:10:44.440 is to look at the number of parameters and so 0:10:44.520 --> 0:10:47.240 think of this as it's over a period of a year, 0:10:47.320 --> 0:10:51.200 it's getting going almost a ten x improvement and intelligence. 0:10:51.200 --> 0:10:54.640 So these are kind of growth curves that are that 0:10:55.040 --> 0:10:59.840 we haven't seen. Makes the Internet growth look JV and 0:11:00.160 --> 0:11:02.760 I think when it comes to the pauses, Dan and 0:11:02.760 --> 0:11:05.920 I have talked about the benefits, the benefits for what 0:11:06.600 --> 0:11:09.959 companies to continue to build into this, and I think 0:11:10.000 --> 0:11:13.000 it's I appreciate your point about how can this be? 0:11:13.320 --> 0:11:14.880 You know, what are the negative sides? And I would 0:11:14.920 --> 0:11:18.680 just my view is this. You can debate a lot 0:11:18.679 --> 0:11:21.600 of angles around how can this be negative or positive? 0:11:21.640 --> 0:11:25.600 I think the one piece that cannot be debated is 0:11:25.679 --> 0:11:28.440 it's going to get harder for people to distinguish what 0:11:28.640 --> 0:11:33.040 is truth and fiction and all the ramifications around that. 0:11:33.120 --> 0:11:35.280 I think you can You're going to see more tribalism. 0:11:35.640 --> 0:11:39.000 I think people just because you're going to get progressively 0:11:39.000 --> 0:11:42.480 easier to get fed what you want to hear. And 0:11:42.559 --> 0:11:45.600 so I think that that side's the most actually concerning 0:11:45.640 --> 0:11:48.080 part of me. And just think about like global stability 0:11:48.640 --> 0:11:50.560 is just how AI is going to be used to 0:11:50.559 --> 0:11:53.160 influence how people think. I'm not worried about robots shooting 0:11:53.160 --> 0:11:55.800 people up or anything like that. I think it's this 0:11:55.960 --> 0:11:59.040 is just about how AI influences how we think. 0:11:59.240 --> 0:11:59.360 Now. 0:11:59.360 --> 0:12:01.200 I want to get deep into those questions as we 0:12:01.200 --> 0:12:03.520 get deeper into the program. But Dan, just to close 0:12:03.520 --> 0:12:07.000 out this segment, I mean, we've seen these massive multiples 0:12:07.000 --> 0:12:09.760 for in Nvidia and other companies like it in terms 0:12:09.840 --> 0:12:13.240 of you know, the levels the valuations that they're trading at. 0:12:13.520 --> 0:12:16.440 Is that a new normal, these kinds of massive priced 0:12:16.440 --> 0:12:18.960 earnings ratios that we're seeing for companies like in Vidia. 0:12:19.120 --> 0:12:21.520 I mean, that's been what we've talked about. It's a 0:12:21.559 --> 0:12:24.920 new normal. I think how many have missed this. They 0:12:24.920 --> 0:12:28.599 go back to their historical DCF spreadsheets while they're in 0:12:28.640 --> 0:12:33.120 their hibernation moons bears. It's a new error. 0:12:33.480 --> 0:12:36.160 And we'll continue this roundtable discussion with Dan Ives of 0:12:36.200 --> 0:12:38.840 Webbush and Gene Munster of deep Water Asset. Is this 0:12:38.920 --> 0:12:42.400 special fourth of July edition of Bloomberg Daybreak continues. It's 0:12:42.440 --> 0:12:45.320 twenty minutes past the hour. I'm Nathan Hager, and this 0:12:45.360 --> 0:12:59.000 is Bloomberg. Welcome back to this special edition of Bloomberg Daybreak. 0:12:59.040 --> 0:13:01.680 I'm Nathan Hager. US markets are closed for the fourth 0:13:01.679 --> 0:13:03.960 of July, but we're breaking out the fireworks for a 0:13:04.040 --> 0:13:07.360 high tech power hour. We're back with Dan Ives, senior 0:13:07.400 --> 0:13:10.760 equity research analystic wet Bush Securities, and deep Water Asset 0:13:10.840 --> 0:13:14.520 Management's managing partner Gene Munster, and guys, we've been talking 0:13:14.559 --> 0:13:17.280 a lot about Nvidia for obvious reasons. I want to 0:13:17.320 --> 0:13:20.080 get into some other names. Though with exposure to the 0:13:20.120 --> 0:13:23.120 AI space, there has been a lot of talk about 0:13:23.240 --> 0:13:26.800 Tesla as a potential AI play. Dan, I know you've 0:13:26.840 --> 0:13:29.120 been bullish on this stock for quite some time. How 0:13:29.160 --> 0:13:32.080 important is artificial intelligence going to be? Though, when it 0:13:32.120 --> 0:13:34.520 comes to Tesla's longer term growth. 0:13:34.200 --> 0:13:37.320 It's the wingepin to the bull case because I've never 0:13:37.440 --> 0:13:41.280 viewed Tesla as an auto company. As a car company. 0:13:41.280 --> 0:13:44.880 I viewed a disruptive tech and when we think about 0:13:44.920 --> 0:13:48.160 autonomous and FSD, even when some of the things are 0:13:48.200 --> 0:13:52.720 happening in China the next five, eight, ten years, the 0:13:52.760 --> 0:13:55.360 biggest bowl case for Tesla is I could argue it's 0:13:55.360 --> 0:14:00.360 probably the most undervalued AI name in the market relative 0:14:00.440 --> 0:14:03.480 to use cases. That's what we're focused on. It's very 0:14:03.480 --> 0:14:06.440 easy to focus on. Okay, they missed deliveries by x amount, 0:14:07.200 --> 0:14:11.439 that's far as through the trees. We were focused on AI, FSD, 0:14:11.640 --> 0:14:15.960 autonomous and I know gene Is does a ton of 0:14:16.000 --> 0:14:17.679 work here, a ton of great work in terms of 0:14:17.720 --> 0:14:21.920 autonomous FSD, and I think this to me is a 0:14:22.040 --> 0:14:25.360 new It's really going to be in transformation that we 0:14:25.480 --> 0:14:27.320 see in the auto industry. 0:14:27.040 --> 0:14:30.240 Well, gene is that central to how you see Tesla 0:14:30.480 --> 0:14:31.840 right now. I mean there have been a lot of 0:14:31.880 --> 0:14:35.880 promises over the years from Elon Musk about how the 0:14:36.000 --> 0:14:40.760 data that Tesla's been able to collect from drivers over 0:14:40.800 --> 0:14:44.280 the years is going to feed into artificial intelligence potentially. 0:14:44.320 --> 0:14:46.600 Do you see that paying off anytime soon? 0:14:47.160 --> 0:14:49.720 I do. I think it's going to pay off faster 0:14:49.840 --> 0:14:51.800 than what people expect. I think we're going to have 0:14:51.800 --> 0:14:55.480 a GPT moment when it comes to autonomy and you 0:14:55.520 --> 0:14:57.920 look at the broader auto space, this has kind of 0:14:57.920 --> 0:15:00.360 been a surprising year where there's been more investment. Late 0:15:00.440 --> 0:15:03.560 last year we saw companies pairing back, some of the 0:15:03.560 --> 0:15:05.760 big auto pairing back in their investment and autonomy. We've 0:15:05.760 --> 0:15:09.840 seen more increases this year from some of the traditional ones. 0:15:09.880 --> 0:15:13.840 But that said, Tesla still is far and above making 0:15:13.880 --> 0:15:18.000 the most investments in this and really, as Dan mentioned, 0:15:18.040 --> 0:15:21.720 this is really the central opportunity to invest in Tesla 0:15:21.840 --> 0:15:24.440 is around what they're going to do with autonomy and 0:15:25.120 --> 0:15:26.880 what I think is beyond So, Nathan, I think it's 0:15:26.880 --> 0:15:28.720 going to come earlier than what we think. My prediction 0:15:28.880 --> 0:15:34.200 is that if you're probably seven eight years old today, 0:15:34.600 --> 0:15:36.920 you're never going to have the need to drive a car, 0:15:36.960 --> 0:15:39.480 So I think within the next five years. I think 0:15:39.520 --> 0:15:42.520 it could be as early as two or three years. 0:15:43.000 --> 0:15:45.040 The legislation piece is going to be the big one 0:15:45.320 --> 0:15:47.160 holding this up. And then one other piece to the 0:15:47.200 --> 0:15:49.760 Tesla AI story. We're gonna hear more about it obviously 0:15:49.840 --> 0:15:52.520 on August eighth when they show their three new vehicles, 0:15:52.560 --> 0:15:54.520 and FSD is going to be a big part of 0:15:54.560 --> 0:15:58.480 that lineup. But one other piece is related to optimists. 0:15:58.520 --> 0:16:00.920 And it's almost like, I don't know how you feel 0:16:00.920 --> 0:16:05.000 about this, Dan, about when you talk about optimists with investors, 0:16:05.360 --> 0:16:09.200 it is if there's a sense like you almost lose 0:16:09.280 --> 0:16:13.120 credibility to say that it has real potential because it 0:16:13.240 --> 0:16:16.840 just seems so far far down the road. If something 0:16:16.880 --> 0:16:21.040 good happens in Optimists, the stock doesn't move. But I 0:16:21.040 --> 0:16:23.120 think that's another big piece. I love your take, Dan, 0:16:23.240 --> 0:16:26.480 just on like, is optimists something that an investor should 0:16:26.520 --> 0:16:27.520 care about today? Yeah? 0:16:27.560 --> 0:16:29.840 Exactly Jane's point. If I bring that up in an 0:16:29.920 --> 0:16:36.480 investor meeting, it's like the laughter just starts, Well, how 0:16:36.520 --> 0:16:38.080 could you even talk about that? Yeah? 0:16:38.120 --> 0:16:39.840 I mean, because a lot of the thing is that 0:16:39.960 --> 0:16:41.840 you know, there have been a lot of promises over 0:16:41.880 --> 0:16:44.640 the years for Elon Musk that autonomous is going to 0:16:44.680 --> 0:16:46.920 pay off, There's going to be a ROBOTAXI. Obviously there's 0:16:46.960 --> 0:16:51.720 the August eighth uh unveil that we're expecting, but there's 0:16:51.760 --> 0:16:54.880 been a lot of expectation over the years and not 0:16:55.280 --> 0:16:58.960 as much payoff arguably that many investors might be looking for. 0:16:59.040 --> 0:17:02.040 But I would I think agree but also disagree because 0:17:02.080 --> 0:17:04.480 the point is, there was a point where if you 0:17:04.640 --> 0:17:09.240 said Tesla's going to be producing a million units per 0:17:09.320 --> 0:17:14.080 year exactly, and gen Gene remembers, they'd be like, wow, yeah, 0:17:14.119 --> 0:17:16.320 you must drink a lot of rose or had a 0:17:16.320 --> 0:17:19.439 good Friday night. And now we're coast to two million, 0:17:19.920 --> 0:17:23.000 and look at profitability when and today how much free 0:17:23.040 --> 0:17:25.920 cash are they general relative to when they were losing money. 0:17:26.359 --> 0:17:29.159 Now you could argue that maybe I'm looking at the 0:17:29.600 --> 0:17:31.920 trees for the forest here. But you know, there has 0:17:32.040 --> 0:17:35.000 been some reporting from Bloomberg Green in recent weeks that 0:17:35.080 --> 0:17:38.199 Tesla looks like it's on track to lose you know 0:17:38.320 --> 0:17:41.320 something that's been a bragging point for several years, it's 0:17:41.440 --> 0:17:46.520 electric vehicle market majority in the US. Gene just to 0:17:46.600 --> 0:17:51.680 that point about Tesla as its you know, base business 0:17:51.680 --> 0:17:55.120 of electric vehicle manufacture, how much is it at risk 0:17:55.240 --> 0:17:58.560 of letting the competition eat into its market share? 0:17:58.960 --> 0:18:02.280 I think competitions in a much worse spot than people 0:18:02.440 --> 0:18:06.159 understand right now. And I mentioned some of the step 0:18:06.240 --> 0:18:08.840 forwards that some of these traditionalels have made around FSD 0:18:09.400 --> 0:18:11.520 in the past six months, But if you look at 0:18:11.560 --> 0:18:14.199 collectively what they've done over the past year, absent what 0:18:14.320 --> 0:18:18.840 Volkswagen's recent investment in Rivian, they've taken five steps back. 0:18:19.400 --> 0:18:22.800 They want to protect, largely protect their gas business, and 0:18:22.920 --> 0:18:25.680 making an electric car is different than making a gas car. 0:18:25.920 --> 0:18:29.480 This is the difference between making a lawnmower and a supercomputer. 0:18:30.040 --> 0:18:32.600 And I think that what you will see is, even 0:18:32.640 --> 0:18:35.280 though there's been some improvements in market share here and there, 0:18:35.520 --> 0:18:40.199 their ability to scale at a profitable rate is going 0:18:40.280 --> 0:18:42.960 to be challenging, and ultimately I think it's a catch 0:18:43.000 --> 0:18:46.720 twenty two. I think Tesla is going to end up 0:18:47.240 --> 0:18:51.119 with twenty twenty five percent market share of cars in 0:18:51.160 --> 0:18:53.080 the US. It's down from where it's at today, but 0:18:53.200 --> 0:18:56.280 that is unprecedented kind of market share. One in four 0:18:56.320 --> 0:18:59.120 cars to be Tesla. But I think the reason why 0:18:59.160 --> 0:19:01.960 is it will be the best car for the best 0:19:02.000 --> 0:19:04.879 price given the features, and I don't think other car 0:19:04.920 --> 0:19:06.680 companies are going to be able to largely keep up. 0:19:06.800 --> 0:19:09.680 You're talking about total market share, not just EV's. 0:19:09.480 --> 0:19:10.320 Total market share. 0:19:10.359 --> 0:19:10.679 Correct. 0:19:10.680 --> 0:19:15.320 I think that is I'm talking ten years down the 0:19:15.400 --> 0:19:18.159 road here, but I think that that is something again 0:19:18.240 --> 0:19:21.240 because they can scale at a profit way. The consumer 0:19:21.440 --> 0:19:24.320 brand matters in cars a lot, but ultimately they want 0:19:24.320 --> 0:19:25.160 the best value. 0:19:25.560 --> 0:19:28.640 Speaking with Gene Munster of Deepwater Asset Management and Dan 0:19:28.720 --> 0:19:31.760 Ives of web Bush Securities, and just to wrap things 0:19:31.840 --> 0:19:35.480 up a little bit on Tesla, Dan, do you feel 0:19:35.760 --> 0:19:40.000 like the company is back on track with Elon Musk 0:19:40.040 --> 0:19:46.440 after all the rigmarole around x formerly Twitter, the pay package, 0:19:46.640 --> 0:19:50.120 the reincorporation, all those questions that win Elon Musk's way, 0:19:50.240 --> 0:19:53.040 Is Elon Musk still the guy for this company? 0:19:53.119 --> 0:19:56.000 I mean, look, Tesla is Musk. Musk is Tesla. So 0:19:56.040 --> 0:19:58.720 that's why went everything that in terms of that twilight 0:19:58.840 --> 0:20:01.680 doing that we saw in Delaware with the compackage, even 0:20:01.720 --> 0:20:05.159 though shareholders approved it. The point is that we're not 0:20:05.280 --> 0:20:08.880 talking about Tesla being a trillion two trillion dollar markap 0:20:08.880 --> 0:20:11.280 without Musk. I mean, you're talking about what I'd argue 0:20:11.320 --> 0:20:15.880 Meyer and d Albert Einstein of course has flaws, has issues. 0:20:15.920 --> 0:20:18.720 We all know it in terms of what comes with musk. 0:20:19.520 --> 0:20:23.800 But when you look at autonomous, you look at when 0:20:23.800 --> 0:20:26.760 you actually go through the factories, when you go through Austin, 0:20:26.840 --> 0:20:29.159 you go through free Mont, you're in Nevada and you 0:20:29.200 --> 0:20:32.240 see the actual battery factor. You go to China, you 0:20:32.280 --> 0:20:34.239 have a different perspective what they've been able to do. 0:20:34.320 --> 0:20:36.080 And then you look at all these other EV players 0:20:36.119 --> 0:20:40.080 that have fallen. It's a graveyard. Because they talk a game, 0:20:40.320 --> 0:20:44.560 big game, but as Gene said perfectly, the reality is 0:20:44.840 --> 0:20:48.120 so much more difficult. And I think even in Detroit 0:20:48.160 --> 0:20:50.440 they figured it out with Mary and what Farley's seen 0:20:50.520 --> 0:20:53.439 as well, how hard is to produce evs profitably. 0:20:53.640 --> 0:20:55.520 I want to shift to another company that both of 0:20:55.520 --> 0:20:59.240 you follow very closely, that is Apple, And just to 0:20:59.280 --> 0:21:02.040 stick with the RT official intelligence theme as well, we've 0:21:02.040 --> 0:21:07.040 got Apple Intelligence rolled out at the latest Worldwide Developers Conference. Gene, 0:21:07.080 --> 0:21:09.479 I know you follow this company very closely. Is Apple 0:21:09.880 --> 0:21:11.400 back on track when it comes to AI? 0:21:12.160 --> 0:21:14.280 They are? And this is just going to be the 0:21:14.400 --> 0:21:17.320 sleeper AI story of the next three to five years, 0:21:17.840 --> 0:21:21.000 and the AI piece isn't going to start impacting, probably 0:21:21.200 --> 0:21:25.199 start until the December quarter. The streets having some nice improvements, 0:21:25.440 --> 0:21:27.879 going from three four or five percent year VIR revenue 0:21:27.880 --> 0:21:30.400 growth in the next few quarters seven percent next year. 0:21:30.720 --> 0:21:32.480 I think that number is going to be closer to 0:21:32.520 --> 0:21:35.680 ten percent plus revenue growth for twenty twenty for calendar 0:21:35.720 --> 0:21:42.040 twenty five. So I think that effectively. And Dan, I've 0:21:42.040 --> 0:21:44.280 seen your work on this. I think you've been just 0:21:44.280 --> 0:21:47.680 spot on just as this is the best consumer facing 0:21:47.840 --> 0:21:49.800 AI company. I think that's the language that you've used. 0:21:49.840 --> 0:21:52.480 I agree with that. I think that when you think 0:21:52.480 --> 0:21:54.919 about AI, a lot of the attention goes to Nvidia 0:21:55.000 --> 0:21:56.639 kind of on the build side. When it comes to 0:21:57.200 --> 0:22:01.800 consumer AI, Apple is best positioned, I think, to bring hardware, 0:22:01.920 --> 0:22:05.840 software services. It's their taglines. But it's true too, nobody 0:22:05.840 --> 0:22:08.960 brings it better together better. What that means is the 0:22:09.040 --> 0:22:14.040 average person who today has little exposure to AI will 0:22:14.040 --> 0:22:17.120 have a lot of exposure as this gets weaved into 0:22:17.160 --> 0:22:19.720 the fabric of Apple's products, and that's a revenue opportunity 0:22:19.760 --> 0:22:20.200