Should You Be Selling Rips? | Investing with the Boys

Hinzugefügt: 2026-05-16

[00:00:00]There's a lot of people with one foot in the door, one foot out the door. And there's a lot of people who are like, I'm not going to participate this. I'm just buying software stocks, right?

[00:00:07]Which handed they will have that inflection point, right? It's going to happen at some point because some of these software stocks are selling at egregious lows.

[00:00:19]Ladies and gentlemen, happy bloody Friday. You got myself, Shai Balor, we got logical thesis, we got Sam Solid Report, and we are all looking at the screens just like you all. and she's like, "What happened? Can uh can Elon, can Jensen, can Trump go back to Beijing?" Because things were going great there. Now, they left and so did the all-time highs. But before we get into what's causing this, uh, how are you guys doing? I'll pass it to you, Sam, first. So, I would say that we were overdue for a pullback. Um, to be completely honest, I mean, I I look at the markets all the time, and I'm usually looking at it just to kind of get indicators of where we're probably going to fall next day, not because I'm looking to do a short-term trade, just because I'm prepared for any moves that I want to make the next days and like stuff I want to buy or whatever. Um, today was actually very interesting. Uh, we did see some followth through from what we were seeing yesterday, how you saw semiconductors basically fade most of the day. Um but software was fairly strong yesterday and we're seeing some fall through today which is good news because it's a bit of uh broadening out of the market which is very healthy for the market. Um semiconductors up like 76% year to date. So being down maybe like two or three or 4% on the day is really not that bad at all. Uh but yeah I'll kick it over to you Logical. How are you doing man?

[00:01:37]>> Um obviously a bloody day for me as well. I operate in this midcap space smaller midcaps and uh they are getting absolutely whacked. I mean, look, it's the first thing that people dump because they're not sure about it. But, I mean, I I just pulled up a chart of the S&P 500. Can't see it on the screen right now, but uh I mean, dude, we're above the 9 EMA. Like, we not even we didn't even come down to touch it. This just feels like we had an insane rally, historic rally, and you're getting a pullback and an uptrend on low volume, and like we're not even violating any MAS. Like, if you can't handle days like today, then you don't deserve the green that comes with it at the end. So, um, not really concerned. I think if I was to say point at something and say, "Hey, like, you know, this is kind of what's going on right now. I think we've been ignoring, uh, bond yields for a while.

[00:02:22]On the 10-year, you know, the 4.5% is a very, uh, distinct level where, uh, we've seen panic in the past. Like, uh, last year tariff tantrum lows, we saw 4.5% 10-year that kind of like broke things. Um, that signals basically a 5% 30-year uh, and we're above both those levels right now. So I think something that people need to think about from an equity standpoint is so there's two points I want to make. Uh from an equity standpoint when you know the risk-free rate is so high you got to throw that into discounted cash flow models DCFS.

[00:02:53]And in those situations um basically longer duration assets companies that aren't going to have cash flows today they're going to get f worse and worse uh discounted uh based on today's present value. So those are things that are going to get hit the hardest. So if actually I look up like SNDK today, right? SNDK is up 3% today, right? And that that's where you would think you would see actually a lot more pain. Um Micron is only down 5%.

[00:03:18]8x run in the last year. To me, that's actually it kind of makes sense because these are the companies that are seeing cash flows today. So they're actually the things that are going to hold up very good today in a higher rate environment. So it doesn't feel like necessarily things are breaking. I think in the past this 4 and a.5% tenure has kind of caused breakage but we got to ask ourselves like is that what's going to happen? Now we got PPI really hot this uh week and that's kind of telling you price inflations are really high and as a investor you have to understand that inflation is probably a headwind uh in most asset classes but think about equities stocks are probably the one thing that you do want to own in a higher inflation environment. Why?

[00:03:55]because as long as you know the consumer doesn't deteriorate or fall apart tomorrow um you know these these management teams are smart enough to have dynamic pricing models and they can keep their margins intact they can keep profits intact. So that's kind of what we're looking for is you know people talk about the 70s inflation and all that but it's like okay yeah you got absolutely crushed if you're holding cash that was not a better option like maybe inflation outpaced the return in equities but you held up a lot better holding equities uh than not holding them. So, anyways, I I'll pause there for my intro. Um, Shai, what are you what are you thinking today?

[00:04:30]>> I'm buying zero DTE calls. Alltime high.

[00:04:34]>> You're lying. You're lying. I mean, >> let me get Let me get some right now.

[00:04:38]>> No, I I felt like the Grinch all week when we were all talking. I kept saying like, I think there's a local top.

[00:04:43]There's some personal indicators that le let led me to believe that, but also some technical indicators. I'm like, what else can cause this new leg in the market rally? I mean, you had the daily RSI at an 80 plus. The weekly RSI on the semiconductor ETFs at an 85 plus. And for everyone who doesn't know, it's relative strength index. Anything above 70 is overbought. Typically, when it's over 80, either a consolidation has to happen over a broad amount of time or a pullback to the 9-day EMA or 21day EMA, which is absolutely healthy. I think there is there has been a bit of a froth and I think that Cerebrris IPL was maybe the cherry on top of what that froth actually was because a company should not be trading at hundred billion dollars multi like valuation as the David vers Goliath killer against Nvidia when Nvidia is trading at 20 times earnings growing the same amount on top line but it's substantially bigger revenue base and they're actually only 20 times earnings when we're talking 200 times price to sale trailing 12 month price to sales for Cerebras. So I think uh there was maybe a gut check on like things are potentially running hot a bit. Um I will say this past week like alone like the media cover media intake from my opinion on stuff is substantially higher than it has been in recent times. And I do think that's because the broad attention now is coming to AI and chips. And that to me is like all right maybe things are going too hot if everyone is like now spotlighting it. I also think that um bull markets don't work in a linear way like that's I think a lot of people forget that uh we have multiple variables still left like logical was talking about the the yields like that is that's worrisome that's going to pressure any kind of long duration growth stock if inflation stays sticky and I think that um the bond market is one thing that brute forces Trump to doing something it's one of the few things out there uh and I think that that is going to affect the data center trade. I think that a lot of people forget that it's still we're in the largest industrial buildout of mankind. That's going to cause a lot of borrowing power and if we're in a higher for longer interest rate environment, a lot of these data center themes are potentially going to be strapped. I don't think that's the case obviously, but that's one variable. Second one is new fetch. I mean I know pal. Do you guys know WSH? I don't. I I I don't even know if I'm saying his last name correctly. He is a stranger to me. Uh, and I also don't know like what his reactions will be, how his Q&A is going to be. Like, it's weird. It feels like uh I made this comment yesterday. I forgot where I was at, but the Fed is like the reality TV show for a lot of our Finn Twitterers. Like, we watch it. It's like we don't know what's going to happen. We know the character really well. It's going to impact us in a positive or negative way. Well, our reality TV star Pal is now gone and we have a new um new head chief and now I don't know how he's going to react. I think he's going to be pro. I don't know if he's going to be uh have his own opinion or he's going to be a puppet uh or be bullish, bearish. Who knows?

[00:07:54]Either way, the market prices uncertainty and it's still an uncertain Fed chair and that with the fact that the biggest recovery V-shaped recovery in history or maybe in decades from April 30th, I mean March 30th to now, like it's been seven weeks of non-stop.

[00:08:15]So I think that frog needed Yeah. Go on, >> you know. Okay. So, couple thoughts on this. Like, can we just admit though that like, you know, I've seen all the charts of like a lot of these stocks going straight vertical, but they're also following the earnings. So, people are like pointing out like, oh, SMH is a bubble. It's like, dude, but the earnings are going up. And so, I think that's something that's kind of underappreciated right now. It's like yeah that's why that sector is working is because look you have like a trillion dollars a year of capex coming from these hyperscalers and that is flowing to the top line of all of these uh semiconductor hardware AI buildout companies and that's why those are the ones that are seeing all the love. big one.

[00:08:52]>> No, I think you're right, but there's crowded spaces in the market that aren't collecting earnings. Like I'm saying like optical for example, I'm a big bull on optical. I'm big bull of like a lot of these different pricing power bottlenecks in the semiconductor chain, but they're still based on a narrative that aren't fundamentals yet, but you're seeing backlog pipeline, all that. But you're right. I mean, I think the craziest transition in the market this year has been this the companies who proved that AI was real and was benefiting first wave. The NVIDIA's, TSMs, Broadcoms, all those uh even Palanteer like the market doesn't care anymore. They're moving on because they want to get the instant gratification for the next uh rerings going to be. And then it got kind of crazy at a certain point. And I think that that that's that's what I mean where like I think that we're going to go back to the adults of AI bits and we're going to have those names start getting the benefit of doubt of a multiple expansion while all the other ones might need a breather to consolidate because I'm looking my growth portfolio almost overwhelmingly all of them are overbought on the RSI and space and AI infrastructure the new new ones uh are just like whoa okay what else is going to have to be priced in the market to justify next lag but I don't know um What's your thoughts on this topic, Sam?

[00:10:10]>> So, I mean, I agree with Logical. I actually agree with points that both of you are saying. Um, I I I do think that out of all the companies that are out there, semiconductors are growing the fastest in terms of in terms of earnings growth.

[00:10:27]And like Logic was saying, that's what the market follows. It follows earnings growth. And the ironic thing is that these software companies, we saw earnings from Service Now. We've we've seen earnings from many of these software companies and they they are growing earnings but the market's like I don't care. I want to buy my Nvidas. I want to buy my microns. I want to buy all of these semiconductors which doesn't really make too much sense when you think about the fact that we are continuing to push all-time highs almost every single day. You would think there would be somewhat of a more broadening participation. I would personally like more participation and I think that is what we're seeing today. We're seeing a broadening out of part participation. I mean, the RSP is outperforming tech right now, which is telling you the market is broadening out to other parts of the market.

[00:11:09]>> Sam, real quick, sorry, but I just looked at the RSP's chart and I was very bullish on breath expansion as well as the next leg up. It just lost the 21 EMA. Not great.

[00:11:20]>> Yeah, just wanted to put that out there.

[00:11:21]>> Yeah, you know what? I see that right now this morning. Yeah, this this morning it was looking a lot better, right? If you look at how >> it was ridiculous. Sorry, I didn't mean to interrupt you. Go ahead.

[00:11:30]>> No, no, it's all good, dude. I mean just you're to kind of zoom out a little bit, you know, instead of just looking at the action today. Um because I do kind of dive into pretty much all the time frames. I do think that secular themes are still in play here, right? You've seen the memory thing build up. Shai, I know you and the futurum equities team uh futurum group team as well as myself, we've been very bullish memory from the bottom, right? The unfortunate part is that I left that trade too early, but you know, you guys held on, which is great. And then all of us started pounding the table on CPU shortage, right? You guys were bullish Qualcomm for a long time. I was bullish ARM. And look what happened there. We got the confirmation that there's a CPU squeeze.

[00:12:17]AMD is sitting pretty much near all-time highs. What does AMD do? AMD not only focuses on GPUs which gave them their push before but they also have a big CPU sector in competition to Intel and that's what we saw right it's literally like bottleneck to bottleneck to bottleneck to bottleneck and there are sometimes where some of these bottlenecks get a little bit too far in my opinion but I still do think that given the fact that all of this capex is supposed to be accelerating into 2028 I don't think it's over right so the going up every day certainly wasn't healthy, but I just I failed to see and what Logical was saying before is that we haven't even back tested any significant moving average even on a weekly scale, right? So, if we're not looking at the daily, let's look at the weekly. Even that hasn't happened, right?

[00:13:06]Unfortunately, we are overbought, but consolidation doesn't mean you're going to get a bare market. Consolidation could cool things down and go sideways for a little bit, and that could be your cooling off, right? And a lot of people have this recency bias that It needs to go back to March, right? This is the same thing that happened last year. This is like textbook the same thing that happened last year, but this is to a much faster degree, but we basically had our bottom in April with the tariff tantrum. We were like days away from that for this one. For this one was like March 31st or something, right? That was the bottom. So what, like a week difference, we're following the same playbook over here, right? You have a man-made disaster caused by basically one person in this entire world. And it's mostly through tweeting. In this case, it was a little bit it's pretty bad. Okay, I don't want to get into politics, but the thing is is that there is a massive amount of underweaiting and offsides positioning in the market, right? If you look at other indicators as far as sentiment goes, people are cautious. You look at other other indicators in terms of absolute positioning on the future scale, they have never been short the NASDAQ as much as they are today in terms of futures.

[00:14:15]If you look at the NAIM exposure index, which is >> Wait, is that true? People are People are short the NASDAQ right now.

[00:14:21]>> No, they're not short. They're they're the most short, right? So, they could still be long, but they are the most >> Okay. The sorry, the least long they've ever been in a long time, right?

[00:14:31]>> Oh, so they're sitting on they're sitting on the sidelines essentially is what that >> pretty much sitting on the sidelines.

[00:14:35]They're going long like IWM and stuff, right? So, that is probably the issue here is that there's a lot of skepticism about this, right? How do you reach bubble peak territory if not everyone has their foot in the door? Right?

[00:14:48]There's a lot of people with one foot in the door, one foot out the door. And there's a lot of people who are like, I'm not going to participate this. I'm just buying software stocks. Right?

[00:14:56]Which handed they will have that inflection point, right? It's going to happen at some point because some of these software stocks are selling at egregious levels on a historical valuation basis.

[00:15:05]>> But software stocks have been historically expensive for a while and they've deserved that premium, but now they're getting that premium taken away.

[00:15:12]Go ahead, man. Sorry.

[00:15:13]>> No, no. I think that's a good time to position uh to pivot towards software.

[00:15:16]But before we get into that, like I I fully agree for people who think that we're getting back to the March levels.

[00:15:22]You're delusional. I think that the center of gravity is still AI infrastructure and that is not going away anytime soon. This buildout's connected to so many different parts like the power data centers, transformers, cooling, chips, like networking. There's a dozen different parts of this buildout that are experiencing uh multiple bottlenecks because the world is trying to build hundreds of billions of dollars of AI infrastructure at the same time right now. That's going to create an insane amount amount of demand across the physical economy and that demand is going to support earnings for the companies that are actually supplying that buildout for years to come. I think right now it was just what is the market going to use to justify some kind of pullback like from the cues going from 720 or 715 to 700 I think it was the inflation print or maybe the Fed path what's the Fed path going to be with Wash coming in or some kind of multi-week digestion period of like factoring in too many positive down headlines on the China earnings whatever it might be uh either way or now it could be the the yields and potentially a possible ray hike narrative. All I know is that AI infrastructure is the center of gravity and if we do get some more pain that is where everyone needs to put their chips towards because that is proven over and over again that is what is happening right now.

[00:16:45]>> Go before I want to go to before we go to software uh couple points I want to make. Sam mentioned the NIM number which is basically like active managers long exposure and that thing fell from like 95 to 71 as of the update yesterday which is insane. Just so you understand what that means. Uh we had a a print of 60 when we were at the March lows. So people are very underweight equities right now from a historical perspective.

[00:17:10]So one people are absolutely sidelined or they've raised a ton of cash recently which may be fair. we might get a you know quick correction here and maybe they time for that but um two on the AI side and AI infrastructure side look we had what was it Google cloud put up like 60% growth or something ridiculous like that we have AWS call basically you know this is the first print we had where and the first earnings call we had where you know think about what happened with claude claude went from like 1 bill ARR to $44 billion of ARR recently that's an insane amount of demand you're getting companies coming out left and right talking about they've used their entire budget for compute already and it's May right there's more than half the year left so this is happening um these companies that were investing these high capex like a year ago we were saying like uh I don't know 100 billion of capex dude that sounds like a lot this is probably going to be a mistake we're we just saw the first quarter and the first guides saying that hey like compute demand is absolutely insane you're now we're starting to get validation that the capex that these big tech company CEOs were putting out there was not crazy. It is actually now we're starting to see ROI and so I think you're not going to one this is probably going to continue for a few more quarters at a minimum just to be able to see this acceleration. It's like these compute businesses these hyperscaler businesses are getting that second you know wind that they had from way back when. This is the second time like this decade now. So um you're not going to get like the first sign of ROI from this capex to be the last sign. like you're probably going to get more quarters of solid growth acceleration and it's just going to continue to validate the capex thesis. Um, and sh I just want to give you flowers, man, because uh you were calling the AI agent stuff over a year ago when nobody was really talking about it and no one could actually envision this thing and you know we'd be on these streams all the time and it was just like now you absolutely see it with Claude and Anthropic. I see it in my daily work. I'm using you know I'm running like three to five agents at a time. It's it's insane. So, I think um you know, just seeing it firsthand, I think, you know, it's hard for people to have a negative opinion uh or at least for me to take their negative opinion seriously if they're not actual users of what Claude is doing. We're not talking about going on chat and saying, "My tummy hurts. What happened?" No, no, no.

[00:19:23]This is like these things are carrying out tasks that used to take me days. Um and it can do it in minutes. I mean, like super tedious, complicated tasks and I just explain the context. Here's some data. Please do it for me. And it's like, "Okay, here you And it's like, whoa, this would have taken me a lot of time. Okay, go ahead.

[00:19:39]>> No, I mean, you're you're right, cuz I think that people we forget that we're in a bubble, like all three of us, like in our fin bubble, whatever you want to call it, that people think of AI in the vast majority of the world as consumer chat bots. I think like when we were talking about Gentic AI end of last year, I was just like, "Wow, AI is really graduating to acting, reasoning, and planning in the real world real world." And that's going to be a substantial tailwind for so many semiconductor companies because consumer chatbot that's just training models, guys. That's like that's why Nvidia had all the spotlight. But now once you become like AI agents, it's all about the inference. the inference is good enough is perfectly fine to have all the like the model quality frontier models and all these different things and I think that right now we're just like in the beginning of that phase where everyone is experimental and that's why anthropics ARR is just ballooned because everyone's reading about it like all right let's dip our toes in right now and I think that I do think that the ARR is a bit juice I don't know when the recurring nature of these ARRs are actually becoming a reality of All right, what's the actual recurring deployment of all this money rather than just like companies exploring the potential application? That might be in a year, two years, who knows when that's going to be. But I think that's the benefit of the doubt that Enthropic is experiencing. But that's also why I want to pivot to software because I do believe that software this balance is purely a bounce from depressed levels.

[00:21:09]Like I don't I think it's just an oversold bounce than a full leadership rotation away from the hard side of AI.

[00:21:16]And the reason I say that is because you need the hard set of AI to really get to get more mature for the supply and demand to even out a bit or even just having inference costs going substantially lower or just having enterprise AI budgets expand drastically more so that software can be part of this like experimental budget. And also I do think that AI features need to become more margin accretive. Right now I think it's a lot more of a headwind.

[00:21:44]it's going to be for the rest of the year. That's why my base case is more software is going to be a summer 2027 store maybe end of next year only because there can be only so many so much underneath the spotlight of these IT budgets and right now you need to build you go towards everything towards the companies supplying the AI rather than the companies that are going to be deploying it and eventually that pivot will change but I don't know what's I'll pass to you Sam like what's your take on software or logical >> sorry I'm going to pass to Sam in one second but I think it's very true to say that. Um, you know, I think Sam, you're, uh, Can you mute real quick? I think it's I'm getting a lot of feedback. Um, so, um, yeah, that helped. Thank you. I think that, you know, we're seeing these compute budgets explode, and I agree with you. I think, you know, CTO's and CFOs at companies are probably sitting there thinking like, okay, like, I absolutely need these clawed compute tokens, etc. Um, maybe I need to cut my budget somewhere. So, that's why you're seeing layoffs. You're seeing operating.

[00:22:43]Look, it's it's a one for one. It's like a it's a zero sum system.

[00:22:46]>> Human it's humans for computes. That's what >> it's humans for compute but it's also software budgets for compute. It's any budget for compute. Anything is up to like be cut right now. So I think AI is absolutely being prioritized because the potential is 10 times that of like your some random SAS that you have like people are going to start really being critical about those budgets. Um so yeah for the software side you really need to be able to see I think what you've said is like acceleration in the revenue that they're getting a tailwind from AI rather than a headwind. What were you going to say? 100% but before I pass this Sam I also want to indicate from the conversations we're having CEOs are now part of IT budget conversations that is a brand new thing before it used to just be CIO CTO's now CEOs are part of it and that creates so much scrutiny for these CIOS and CTOs because now they actually have they have to monitor the dollars now because their boss is essentially over their shoulders watching on what they're doing totally different dynamic but yeah Sam pass it to you >> no I I agree with you on that one I remember because I worked I I've worked in IT my whole life for pretty much two decades. And one thing that was always that I would always criticize on sometimes is that in certain companies the CIO or basically the head of IT or all technology department, he would report to the chief financial officer or the CFO. And it was like that's the worst decision ever because the CFO isn't a tech guy. So he he probably understands somewhat you know how important certain tech is but like he should be reporting to the CEO right that that the tech and innovator of the company is supposed to report in the CEO to explain to him the understanding for all the spending not to be scrutinized by fitting into a budget right it is supposed to have the biggest budget in almost any single almost any company because it's that important we are a techled world and then now like yeah they now yes the CEO sees the budget but now it's under the whole scrutiny of the entire company and not just justifying the spend. Right? So that's where it's like it's not the other way around where it's he's explaining the tech. It's the other way around where the CEO understands how important it is because he's hearing it from everyone in the entire world including Nvidia how important it is that we do drive the spend toward it. And now other departments like you're saying are getting scrutinized for their budgeting to cut. And that's the reason why we're seeing so many layoffs. People have to understand the layoffs are not coming from AI engineers or coding engineers or whatever or maybe they are but most of the cutting is coming from administrative tasks that have been automated or going to be automated or moreover from they from departments that just were completely bloated from 2021 2022. You saw the same thing happen with uh with XYZ or Block, right? Like they hire they went on a freaking hiring spree and yeah, they had a massive cut ahead of staff, but look, they hired so many people so many people in like all the way up until 2024, right? So that's understandable. However, I think the whole notion with like, all right, well, software is dead. I I think it's kind of overblown at this point. However, I don't think software is gonna get back to those excessive premium levels that we've been used to for the last three years.

[00:25:56]>> Not all soft. Some of them will, but not all software.

[00:25:58]>> Yeah. Not all software. But I think specifically the ones that focused on small business and medium-siz businesses as clients, right? Look at Monday.com.

[00:26:07]As bullish as those numbers were, we have to remember that monday.com most of their business is small and medium-sized businesses. So, if you think of creating an app on your own, like a noode app using claude or whatever, you're not going to create your own tool for CRM in a an enterprise company, you're going to buy the vanilla shelf product to make sure that's all compliant, security updates, and everything. And that's what you're going to get. If you're in a small business with like 30, 50, or even 100 people, you could probably save a lot of money by building your own thing.

[00:26:36]And is it really going to be that important? Like, I'm just I'm not trying to give like a a solid scenario of how it's going to be. I'm saying that this is this is what these smaller companies are thinking. They they are cutting costs and one way to cut their cost is hey let me just create my own application or let's just buy a cheaper application or something because we don't need to pay money.com all this money. Go ahead.

[00:26:54]>> Well I I think it's which companies are outcome oriented. I think monday.com like if you invest in money.com like do you really see an ROI on a return um on that spend? Probably not. I think that right now like I can promise you guys it budgets for software will be higher in five years than it is today. So that tells me alone like by itself software is a great place to buy the dip in if you pick the right names because this is just a short-lived fear on a weird in between on everyone's paying up for the hard side of AI and waiting for the soft side of AI to finally prove some numbers. But if you like dig into the reports every single quarter, you're going to have a list of names on like you're seeing clear proof that there's a reaceleration happening from AI. I'm sorry, but at this point, if you're a software company and not really seeing any kind of reaceleration on any major KPIs like net dollar retention rates or backlog, RPO, any of those numbers, I'm going to put you in the bucket of like you are in tight watch that if you're not experiencing any kind of bump right now, you might be a victim to Gen AI or Gen AI vulnerable.

[00:28:06]So I think that software if you pick the right names like Palanteer clearly like what what we're just talking about right now the C seuite conversation I mean like every CTO and CIO their neck is on the line right now if they don't deliver on AI in the immediates or se benefit from it they're going to get fired I don't remember another a previous time where one specific seuite that was handling that kind of u bucket under an organization was going to be uh on under this much spotlight. So guess what they're going to do? All the sea sues they talk to each other. They know Palanteer is the guaranteed value creation color consulting company operating system whatever you want to call it where they actually provide you dollars that you save by perfectly customizing what your organization needs. It costs a lot of money, but it's worth it for that comfort of like you're going to benefit from AI right now and not in the like one, two, three years experimental phase where you might strike out and then eventually go to Palencier. But guess what? If your competition went to Palier right now, you're kind of you're falling behind and who knows what that's going to be now and the rate of change is so exponential with AI that what advantage they had than you could have had if you joined Palanteer. I think that that is like Palanteer is kind of benefiting from a lot of this experimental and anxiety and paranoia phase that's going to continue. But if you look at the stock, I mean, Palanteer is at 134. It's still expensive, guys. I hear you. But it's cheaper than Apple. It's cheaper than a lot of these other names on a PG ratio for the next three years. And guess what? I think they have a monopoly in what they do. That's why um a PG of 2.5 is in my opinion fair if you have such a monopoly and a secular growth theme with plenty of runway and nobody knows the ceiling when Apple's at 2.6 and you have like uh the Amazon telecoms. But >> I'm going to I'm going to just be a little I'm the local Palunteer bear here. Um I just think it's an LLM rapper and I think their real mo is that they have defense contracts. I I don't buy a lot of the the words that they use about like what's the word they they use ontology or something like okay I think any smart smart like startup can kind of figure that out in my view I'm not really I don't think they have proprietary technology is what I'm trying to say and so I think >> I don't agree with that >> yeah that's fine um I think Apple trades at what it trades at is because it has more resilient cash flows as a as a brand yeah so I think that's what it is that's that's why there's discrepancies people Buy Apple for safety, not for growth.

[00:30:41]>> Sam, respond to the Palunteer things.

[00:30:43]I'm I'm curious on your takes. Everyone knows my I'm super bullish on Palunteer.

[00:30:46]I want to I want to gang up on Logical, too. So, >> no, I'm not g his his is candid and I think a lot of that revolves around their premium valuation. Um, a lot of that is priced in, right? They they're expected to have excessive earnings growth for a long period of time. That's what they're expected to be at today. That's a reason why they're trading at I don't even know how many priceless sales or EV forward sales, whatever it is today. Don't get me wrong though, that that was an amazing quarter. Um, but is Palenter going to go back to $200 anytime soon? I it that really is a more of a question of the the actual software as a whole sector. Like if software bounces back here, Palunteer is probably going back 200 bucks. But I do think that its performance is basically pinned on how well software as a whole performs. Like if Microsoft goes back to $500, Palanteer is probably going back to $200 or Yeah. $200, right? So I think that's what it is. So now as far as like the valuation justification for Palanteer, like look, if you're buying Palanteer here, I I would think I I can't really give advice, but if I were buying Palanteer here, it would have to be for long term. Like I would not buy this and plan to hold and hoping it's going to go back to $200 in the next few months.

[00:31:57]like I'm not going to make that bet right now because the riskreward for me Palanteer to go from being expensive to super super super expensive doesn't really make sense to me. I do think that in terms of software there are way more companies out there right now that are that are likely more than not going to get jacked by AI anytime soon. And a lot of that is in cyber security and you've been seeing a lot of relative outperformance in cyber security stocks.

[00:32:25]Every single time Palo Alto trades down to 10 times EV EV sales forward, they always get bought up. And then why is that? People thought that buying Cybarch was probably one of the worst deals that they've done before. That was probably one of the best deals they did because they literally took the leader in identity and security and they integrated that into their already expansive ecosystem.

[00:32:47]>> That was a very smart move. If you Oh, go ahead.

[00:32:50]>> I think I think people love the move.

[00:32:52]They didn't love that price tag. And also, it was them waving their white flag that they have to acquire their way in towards becoming that network platform play. And I think that's what people was like, "Oh, okay. This is maybe a Salesforce 2.0 strategy."

[00:33:05]>> I I I don't think it is. I mean, they're still growing like around 20% and they're very profitable, right? And they're still expanding their earnings.

[00:33:10]So, I I don't think this is necessarily a Salesforce play where whatever they have right now isn't working. I think it's just that Powo Alto and Nesh Aurora, the CEO, he wants to make sure that he has the entire platform for cyber security. Um, yeah, I apologize if I'm having mic issues, guys, but yeah, no, I'll cut it off there because I know there's a lot of people in the audience who are like asking questions and stuff.

[00:33:34]So, we can we can talk whatever you guys want or we can jump into the Q&A.

[00:33:38]>> Let's do questions. Again, I'm like a complete noob of this stuff, so I don't even see the questions. I don't know how you could admit. Uh but me >> two page open.

[00:33:45]>> Oh that that probably helps. Um okay that's a good point. Let me just do that real quick. Is there any question that comes because we're hopping off. We have a hard stop at 10 minutes. I want to leave like a good amount of time. Is there any specific question that pops up first that you want to >> So someone asked about the robotics theme. Um I think this is a very candid theme to invest in right now because I think one the excitement is there. I mean, you had Brett Adrock who Adcock, I think that's his name, who's the CEO of um Figure AI, like they just did like a 247 live stream of their robot setting up packages. And I remember seeing this same robot, or maybe it's a different robot, a different model, whatever. It's an older model doing this like six or months or a year ago. And that thing was like so rigid, like its moves are weird, and it was like only moving its arms.

[00:34:35]Today it's like dude you could just go you could you could deploy like a thousand of these into an Amazon warehouse and they just do the whole thing right that you could probably pay a lot of people to do and yeah the cost might be a lot upfront but over time these things don't need sleep they just need to recharge and that's it right like I I think that this is probably an underestimated sector even though it's ran quite a bit I do think that for the long term and I already do have robotics exposure here even through something even through not if It's not through Synaptics, which I know a lot of us already own, but I >> I think all of I think all of us own that that one.

[00:35:11]>> Yeah, all of us own Synaptics. So, there's also other plays that have to do with integrated circuits in robotics that are out there and I do have secondary exposure through that, but I'm also looking for additional exposure into robotics. Um, but yeah, I think that was the that was the question on that one. Do you guys want to answer anything on robotics? Yeah, I mean robotics is the greatest TAM of mankind's history. The next theme I think that it's the biggest question isn't if on robotics being a beneficiary for shareholders, it's when. I think nobody really knows when that addressable market is going to actually become some kind of expansion for specific infrastructure players. I think that you already got signs that the first phase was obviously training compute. That was like 20 24 and 25. This is all about inference compute. I think the third phrase that is starting to compound right now with some videos and you're seeing some commentary on uh Jensen this year was heavily on physical AI. The physical AI deployment is going to be where the compute comes out of the data centers and into all these autonomous systems operating in the real world real world. So I think that a AI agent is like a brief appetizer what that's going to look like and your robotics is the next expression of that that's going to be like wow. So if you think that right now all these bottlenecks are happening because of inference due to uh a gentic AI just wait into the physical AI part.

[00:36:36]That's what makes this so exciting. Like I love that we saw that Tesla has the Optimus production starting in Fremont and sometime this summer. Uh it's like a million unit per line. I think that there's a lot of like commercial deployments at BMW and like a lot of there's a lot of different industrial robots plays like the figure one you just talked about. So like I think that um the cost curve is probably the biggest thing to watch out for on the physical AI beam. I think that needs to collapse a lot faster than people uh want to admit. I mean I think it was like 150k per unit two years ago. I want to say right now it's 25 to 30. So the moment that the labor substitution math works in favor of industrial scale, I think that's like the Chad GBT moment. But I really don't know if that's going to happen this decade.

[00:37:24]>> Can I can I just say on the on the robotics side, I think everyone's looking for like that robotics player and obviously we have names in like edge computing with like, you know, synaptics and they can get into robotics, but I think people are just looking for a pure play, but let's be real, it's all more of the same trade, right? Because it's going to be using a lot of inference, uh, which is going to use a lot of data centers, which is going to use a lot of, uh, energy. So frankly, like if you're going to get long AI agents and like robotics are just kind of like the next level extension of this into the physical world, realistically, you're still just going to need that same level of infrastructure probably times 10. So you know, that's actually going to probably provide the tailwind for these companies to actually continue to grow for the next like decade rather than like go on.

[00:38:08]>> It's Yeah. And it's Nvidia and it's also it's sensors, guys. like all these like the nervous systems of robotics like there's so many different components of companies who benefit from sensor robotics and all these little things that you never think about like the eyes of like a robot the ability of getting information and doing something with it.

[00:38:26]Uh there's so many different components of it that I think there's niche plays right now in AI but in physical AI is going to really broaden out Synoptics like we we're all in it. You guys know my opinion like it's a Chinese company for me so I'm like it can't be too big.

[00:38:39]I'm like don't love that. Um, I also think that China is way ahead, way further along than people anticipate for robotics wise, physical AI wise. And I think that they've always proven the ability for cost per components on any kind of large product like that is going to force everyone else who has pricing power to be, oh, maybe it's not as much pricing power because the China alternative is substantially cheaper.

[00:39:02]Uh, anything you want to do? Next question.

[00:39:06]Um, someone's asking about >> by B by B by B by B by B by B by B by B by B by B by the way Sam your your mic is way better now so whatever you did keep that up >> someone's asking about Micron I mean I guess my thoughts on Micron is that it's memory stock and they're asking about contracts so I you know when you're I guess when you Roger you probably have some input in this one when you're thinking about buying options or buying premium on stocks that have basically 800 times like you're those contracts are priced that that momentum is going to continue and I would be I would have a word of caution for buying options especially with the market all the way up here.

[00:39:49]>> Um I usually focus more on shares so that you don't have to worry about but also you can hold shares long draw down and it would be an absolute one to one value in terms of the underlying price when you're dealing with options. it could be stagnant for like the next three weeks and you would still lose money based on the day. Anyways, I didn't want to do an option, but I just wanted to get to that question. I I I think I think I think days like I think days like today are exactly what we need in the market because there's like the late chasers that get uh punished and specifically they get punished if they ended up opening up options after huge rallies cuz like if you own shares and Micron's down 5% it's not a big deal but if you own calls a month out or a week out and like you get a minus 5% day those things are absolutely crushed. The theta is already bad it's burning and it's working against you. Uh but you know 5% move is very substantial. So look I agree. I think one I I run leverage in my portfolio. I have leverage now, but it's via margin and I do and I don't recommend that for people just so I'm clear about that. But uh I don't have any options. So what I do is instead what I do is I I lever up shares and I I find that owning shares especially after such a rally is just a much easier and palatable thing because you know if if I take a 5 10% loss on a position you know cuz momentum gives up or something it's not a big deal um on like a 4 5% position but if you take like a 2% 3% position in calls and they end up taking a 30 50 70% haircut I mean you get absolutely crushed and that that's how you give back a lot of performance. So, um I I think shares make a a lot more sense, especially after this. And I'm I'm not saying for Micron specifically, that was just a general comment. I think with Micron though, uh it's just sorry, one last thing is like it's a cyclical stock. It will always be a cyclical stock. I think that people will kind of ex extrapolate what's been going on. And it is possible that they have more resilient revenues with like their contracts that go out a few years further. That's that's probably true. So maybe it just means that this cycle goes on longer, but I I think eventually it'll come back to kind of like a a hot potato moment and that could be a year from now, two years from now. I'm I'm not saying it can't double from here. Uh I'm just saying that eventually when we kind of meet that demand or hey actually like you get a deepseek moment or something where it's like hey we don't actually we found a way to be more efficient about memory these things get absolutely crushed because they just built out all this capacity unlocked all this stuff and you maybe those contracts are still in place for a couple years but eventually they uh will will pace out. So anyways go ahead.

[00:42:10]>> No I mean the business setup for Micron's extremely strong. It's going to probably continue for quite a while. I mean AI is pulling HBM and DRAM like NAND at storage all at the same time and the capacity is just tightening while the rest of the DRAM market is just consuming more wafer capacity which is why Micron has had in most the most one of the more insane runs the past two years especially on an earnings expansion that I've seen they went from a um a commodity memory name to a cleaner AI beneficiary name but just know that the risk it's still undervalued in my opinion I but I wouldn't say the risk and reward is as easy as it was entering this year and that's the most obvious statement to say but like it's the weekly RSI is still 80 plus the thesis is still there but for an options or to get into a contract for me I like to get into an option that the market's pricing in type A when I think it's type B I think it's universally known now after the massive move that memory is a bottleneck so I think that there isn't really that much new information I think the only variable now left and if you want to buy a memory micron contract fact is the durability of the cycle. I think that end of the day for if you want to own it for years and years and years that's tricky because this is still a component price business where pricing is heavily shaped by the supply demand cycles that logical was talking about. It's also there's a ton of customer concentration risk with this kind of name and the moat is more of an oligopoly than true platform pla power. So, I don't remember the last time we've had like three different companies that are component companies, SKH Highex, Micron, Samsung that are going to be trillion dollar companies. So, that alone tells me I'm like, okay, it could probably go up more, but for fresh capital, I just don't see the benefit there. when there's other names out there that uh like a Marcato Libre for example that like there's companies that are investing into ecosystem and modes but they're getting penalized because the instant gratification isn't there due to opportunity costs those are where I like to get a rerating especially with SoFi like SoFi is getting penalized right now for higher for longest interest rate environments uh and which is ridiculous in my opinion but also it's just >> it's a no fintech problem like I think anything that's not correlated with space and AI infrastructure is getting forgotten. Every it's a vacuum demand right now to those two spaces. So that tells me, okay, I get it. These are the two places that everyone wants to be because they see the massive TAM and opportunity, but doesn't mean the rest of the industries out there are just going to die off. It's just the intentions focus on those two spaces. So I rather buy options and contracts and leaps elsewhere when the business is still executing. The stock stock price is just bored. Let's just say that. Um, but yeah, wow, we ran out ran out of time, guys. Uh, sorry, we should have left for more Q&A. Uh, this this was fun.

[00:45:04]>> Yeah, we should do this again. Uh, last time you guys saw all three of us, I had uh less gray hair. Um, we had a lot more experience. I mean, lot less experience.

[00:45:14]>> Kid on the way soon.

[00:45:16]>> Yeah, Papa Shai in a couple weeks. So, >> we'll see. Fourth guest on here soon. I know.

[00:45:23]>> Spitting up uh spitting up some uh software plays over here for the audience to do.

[00:45:28]>> Well, Sam, I have to figure out what stock like what stock I want his first buy to be. Did you remember your first uh stock that you bought for your kids?

[00:45:36]>> I bought my son Nebius. That was the first stock I ever bought him.

[00:45:39]>> He He's way older than when Nebius, like the Russian Nebius, like five years ago.

[00:45:43]>> No, no, no, no, no. It was the first stock I ever bought.

[00:45:45]>> Oh. Oh, then. Okay.

[00:45:46]>> I bought I bought him Nebius. Like it was because I still I still remember that post. It was after you got married and you were like, "As a wedding present to my wife, I bought happiest." And I was like, "God damn, she's probably very happy right now."

[00:46:01]>> She is. It was after the Microsoft deal, $70. And uh I snuck that by when she was getting a massage because she was not letting me be on my phone the whole time on our baby, our little honey. Anyway, we digress. U any final words, Logical?

[00:46:16]>> No, just uh stay the course. Uh don't let one day kind of scare you. There's going to be pullbacks. There's going to be corrections. Um I would look at the weekly chart if you feel that the daily looks bad. Like earlier we said, you know, the RSP has uh violated the 21 EMA on the daily, but on the weekly it's still above the 9 EMA. So, you know, wait till you actually start losing trend before I mean there are risks out here for sure. Um but it feels like still a pretty good year for equities, especially coming off of that correction we just had in March, which just happened by the way. So typically you don't and and you're getting earnings revisions up. Uh the AI story is very well intact and accelerating. So um yeah, I would love to see more rotation and breath expansion. I would love that's kind of what my eyes on next. So anyways, >> I mean that's all I I hope more pain.

[00:47:02]Final words from me.

[00:47:04]>> Um short the VIX, buy zero DT calls.

[00:47:09]>> No. Uh listen guys, cash is useless until you need it. So if today was like a gut gut punch in the morning when we were down 2% and you have a little anxiety that's a good tell of like maybe take some chips off the table and that's fine. Take like it's not the worst thing to prof like take some profits off like doesn't make make you a bearish makes you logical thesis.

[00:47:32]>> Well said. All righty guys.

[00:47:34]>> Thank you.