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