00:00 Speaker A
If uh one is getting bored a little bit with the Mag 7, maybe they’re a little more cautious on it given the valuations they tread out, trade out. Where do they go? Are there under the radar tech names people can play that still get them exposure to AI?
00:15 Speaker B
Well, it’s interesting. I mean the AI trade itself is sort of evolved, right? So the initial push was into the pure uh picks and shovels. Nvidia of course being the massive winner. uh continues to be a winner there of course. Um but now we’re seeing it evolve, right? We just mentioned a moment ago a company like Sandisk. What’s now investors are saying is what memory do we need in order to actually run uh these large language models sort of in perpetuity. Um and that’s one of the reasons why stocks like uh Micron, Sandisk and others have done so well. So I actually think the trade is now evolving, not necessarily into the where the most obvious winners are. Uh what the big question mark is sort of what’s going to happen in the software space. Uh names like Service Now, Salesforce have sort of been disappointing in their ability to produce return on investment in their AI build out, um which is one of the reasons why, you know, a company like uh Alphabet was really the big winner last year because they’re the triple play when it comes to AI. You know, they have large language models, they’re a hyperscaler themselves, um and they can deliver that sort of in uh enterprise and uh consumer applications. Um so I think the trade is still is still on. Uh it’s going to be a little bit more volatile because investors are going to start kind of really being more discerning about that spending just as we saw uh with disappointments around Oracle’s build out because it’s going to be debt funded as opposed to funded from free cash flow.