AI Winners and Losers: Navigating Volatility in the Tech Sector with Rishi Jaluria
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Welcome to the Wednesday edition of the Risk Reversal Podcast. Yeah, you heard that right. The Risk Reversal Podcast, not the On The Tape Podcast. We are rebranding. We are streamlining our content. You're going to get Risk Reversal Pod Monday through Friday. It just comes directly into your podcast feed. You don't have to do anything. We're going to have a lot of the great conversations that we've been having before, a lot of the same contributors. So we appreciate you being with us here.

I have a great conversation coming up here. This is with Rishi Jularia. He is the senior software analyst at RBC Capital. RBC is one of the fine sponsors of this podcast. We're going to go over generative AI use cases in his coverage. We're going to talk a bit about CapEx and what we've heard from Microsoft and Google over the last week or so and how the market has reacted. We're going to touch a little bit on

buy side sentiment towards this secular shift. So great conversation with Rishi. Stick around. It's going to come right to you after the break. Will M&A pick up in 2024? Will this year mark the return of IPOs? Listen to Strategic Alternatives, a podcast from RBC Capital Markets to get fresh insights on the trends and market forces impacting deal flow across sectors and find out how companies and investors are preparing for a potential surge

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All right, Rishi, welcome to the Risk Reversal Pod. Thanks so much for having me. All right, we got three things to do here, and I think they're probably on the top of most investors' minds right now. We want to talk about generative AI use cases and CapEx. We want to talk about buy-side sentiment. I know you talk to a ton of investors, but we also want to hit a little bit of the vibe in the private investing market. I know you talk to a lot of VCs all the time.

Also, and then really what's next as we exit this Q4 earnings season? I think there's a lot of question marks, especially through the lens of the stock market and the price reaction to a lot of the earnings that we've seen over the last couple of weeks. So let's just start when I think about your coverage. Microsoft is probably one of the most important names that sits in the middle of this universe. It was one of the first beneficiaries in the public markets of this trend. If you want to go back to

early 2023. They reported earnings last week. They had already given their CapEx, threw it out there, I think, for the year $80 billion. They said half of it was going to be here in the U.S. We don't know what percentage of that is meant to be for GPUs versus infrastructure build and the like. Let's just quickly get your takeaway on Microsoft

and the commentary because the stock has been a huge underperformer over the last year. And the reaction to earnings last week, I think it was down 6% the next day, I think was not that surprising. If you just, I know you don't probably care too much about charts, but it's kind of just stuck in this range that it's been in over the last few months.

Yeah, yeah. Look, I mean, I think what happened out of this, and we can definitely talk CapEx with Microsoft as well, because that for some people is a little bit of a bright spot that we're having a little bit of a moderation of the growth of CapEx for Microsoft. And, you know, some of that in relation to DeepSeek and some of the innovation we're seeing out of there. But really with Microsoft, the reason the stock is being held back is we're seeing this continued deceleration in Azure. And unfortunately, they did nothing to calm those fears where Azure still has

So now it has some sales execution issues going on where salespeople were too focused on selling AI salespeople and partners and not enough on selling the non-AI or even the AI adjacent pieces. But the big bright spot out of this was really just how strong the AI revenue was.

Not only was AI and a $13 billion ARR growing, I think 175%, which is an amazing number and tells me Microsoft is in a league of their own. But if you actually do the math from the quarter on the new disclosures they gave, this tells us that the co-pilots, primarily Office co-pilot, is a $2 billion ARR business.

business. Before that disclosure, most people had written off Office Copilot as effectively being a failure. So I actually came out of this and said, okay, look, sales execution issues are what they are. They take a couple quarters to get through. But at the end of the day, what really matters is this is a company that is executing well on AI. They have a really innovative roadmap, and they're actually monetizing in ways that no other software company, I think, can do today.

So we're definitely taking advantage of the dip, but honestly, like the sentiment is being held back just because of the Azure growth right now. And candidly in a few quarters, it may not even matter. Yeah. But a $2 billion ARR for that business on a company that's doing $280 billion in revenue. You know, that seems like something if they're having sales issues, don't you think that's going to be this kind of push and pull over the next year? Because, you know, if there's not a lot of uptake by customers and, you know, I,

I remember, I think it was a couple quarters ago, also in your coverage, where Mark Benioff from Salesforce, he was really vocal about the uptake of Microsoft Copilots. I think he even said on CNBC, go ask people within Microsoft whether they are using Copilot. So I'm just curious, what are you hearing about their own use of Copilot? Because I also read a stat, this was probably a couple quarters ago, too, if this is a company that has hundreds of thousands of

of customers around the world, like under 1% are actually using Copilots, which also presents a huge opportunity. But I'm just curious near term if that's one of the reasons why you've seen this stock kind of stuck in the mud.

No, I think that's exactly right. Like people had written off Office Copilot entirely. And to be candid, the first iteration of the product was not very good. You know, even if you talk to Microsoft employees internally, they would have told you that, right? Like the promise was there, but the tech wasn't. I think the November release actually changed a lot. The November release was a big refresh. The product got a lot better. I think it'll continue to get better. I think what people forget is

Microsoft has this long track record of coming out to market with products that are half-baked, right? Think about the first version of Microsoft Teams. It was pretty terrible. Look what they did to Slack. First version of Power BI, garbage. You know, look what they did to Tableau. I'm dating myself here, but even think about the first version of Microsoft Office.

paled in comparison to Lotus 1, 2, 3 and Lotus Notes, and they became a monopoly in this space. And I think Copilot is going to follow that same thing. One more point, because you talk about kind of Microsoft and their own use of these tools internally. One of the reasons they're able to actually talk about margin improvement this fiscal year, in spite of all the CapEx investments and all the R&D they're putting into GenAI,

is because they're using all of these tools, right? Whether it's GitHub Copilot, Office Copilot, some of the customer service stuff, all internally, and that's driving a lot of operational efficiency on the bottom line.

So where do you expect there was a kind of gross margin decrease year over year? Not much, right? Like, I don't know, 75 basis points or something like that. So that's the leverage you're talking about on the other side of this thing after all the spend, the uptake, maybe kind of streamlining sales a bit better. That's what you're pretty optimistic about here as it relates to Microsoft?

That's right. I mean, gross margin pressure is always going to be there because these genii workloads are really, really expensive. That's okay, because over time, you should be able to charge a lot more because of the amount of efficiency you're getting out of it. But yeah, I mean, the fact that they're able to expand overall operating margins in spite of all of this, I think is pretty incredible.

All right. Let's talk about Salesforce for a second. Also, in your coverage, you rate the stock a buy as you do Microsoft. You know, and we just talked about Benioff a bit. You know, there's this whole debate about co-pilot versus agents. Maybe frame that for our listeners a little bit, because if you're telling me that co-pilots aren't there yet, agents suck.

certainly are not there yet, but Benioff is kind of leading the charge on this. And maybe he has, you know, a few hundred billion dollars in reasons to do so. Yeah. And look, I mean, from my perspective, that line between co-pilots and agents is going to get blurry and blurrier over time. Co-pilots, right, think about something that you still have to control and say, do this, and that'll give you something, do this. And agents, I would think about as being more autonomous, right? And they can connect different systems and they can kind of do things on their

own, still human intervention is a big part of that. But those lines are going to get blurred. If you think about the most widely deployed case of Gen AI today is software development. You want to co-pilot when you're actually writing software. You don't actually want...

want AI to write the entire software for you, but what you do want is the co-pilot there. And then the agent piece is for like co-testing automation, all that kind of stuff. And that's where I say these lines are going to get blurrier and blurrier over time. A lot of this stuff is shifting towards an agentic world anyway. Mark Benioff is an amazing sales and marketing person. He's done a great job getting that message out there. But remember, Microsoft is doing a lot of this stuff in agentic AI as well.

HubSpot's doing a lot in agentic AI. So Salesforce is not the only game in town when it comes to agents.

Yeah, let's talk a bit about OpenAI for a second because I want to get to DeepSeek and I think that ties into the CapEx also. How are you feeling about this relationship between Microsoft and OpenAI? It's such an interesting one when you think about how Satya Nadella, for all intents and purposes, saved Sam Altman's job over there at OpenAI. I want to say, you know, what was that, November of 2023, if I think about that correctly here. So, you know,

there's just been a lot of reports and even like some of the stuff that we hear from Satya that this relationship, you know, it's one of convenience right now. It's one of, you know, they have 13 billion reasons why as far as investment standpoint, but Azure is a huge, huge part of that also, right? And then you see this sort of situation with DeepSeek,

in this R1 model, which is coming right at OpenAI, it's open sourced. I think Microsoft has to be thinking about, okay, how do we go down a dual track, if you will, with some other technology? Does that make some sense, Rishi?

I think it does, right? Like, I think Microsoft's preference is still to work very closely with OpenAI, not only because there's obviously the investment and co-innovation going on there, but really OpenAI is still leading the edge when it came to this, right? You know, DeepSeat came out, everyone was suddenly, you know, scared about all this stuff is getting commoditized.

And then open AI comes out with all these new announcements, right? Obviously they pulled forward some stuff, but you look at what you got out of Oh three mini Oh three mini high. You look at the kind of, um, you know, deep research capabilities that they announced. I think it was Thursday, Friday last week. Um, I mean, they're, they're once again, way ahead of the game and ahead of everyone else, uh, R one, you know, there we can, we can quabble about like how much they use open source, how much they train on open AI data. But I think the fact is they did bring some innovation to the table, uh, as it comes to, you know, uh,

thinking multiple words at a time, the distillation process, doing things in a more resource efficient manner. And I think this is ultimately good for all of AI, right? Like there's innovation from there that open AI can learn from. And I think anything that brings down the cost of doing inferencing and reasoning is good for software because that lowers barriers to entry in the P times Q equation. It massively drives up

the quantity, even if price comes down. And we were talking a little earlier about use cases. The more the use case discovery can go on and people can discover new ways in which to use Gen AI and find those killer apps for themselves, the more it kind of accelerates that flywheel of Gen AI adoption. So I think ultimately, in spite of how much the markets deep seek in the innovation there is good for everyone in AI.

Yeah, it's kind of a shot across the bow also for maybe some of these U.S. names that, you know, maybe thought they had a bigger lead against the Chinese than they did. And maybe that does spark innovation. I think one of the narratives, you know, initially when you saw NVIDIA close down 17% last Monday, it seemed a bit of a panic, especially given how positive the sentiment was.

was in the name, but it was also a very crowded trade. It was one of the very few ways, I think, to play this secular shift from a pure play standpoint. But I want to go back to this kind of notion of CapEx and because the flip side of that whole argument was that a lot of these US hyperscalers were going to have to actually spend more now just to kind of maintain their lead despite some of the benefits that you might have seen or the innovations from DeepSeek.

And it struck me, we're recording this on Wednesday morning prior to the open, and I know you don't cover Alphabet, but the stock is down 8.5% or so in the pre-market. Now, the stock did rally off the lows from last Monday, that kind of deep-seek panic, about 10%, right? So it's round-tripped that entire move. So for all intents and purposes, no harm, no foul, except that moves like this give us a sense of where investors –

heads are at, right? And so here's a company that surprised massively to the upside. I think they were expecting $55 billion or a little less in CapEx for calendar 2025 and they announced somewhere, what, 75, 78 or something like that. So you see, just like in Microsoft, you see a deceleration in growth in Google Cloud and much bigger CapEx and investors immediately hit the sell button. So give me a sense of that psychology. I know you talked to

a lot of buy-siders, a lot of investors. Does this make sense to you over the last week or so since we've seen DeepSeek, Microsoft's earnings, now Google, and then in a couple days, we're going to get AWS? This is a pretty fascinating 10 days for this trade.

Yeah, no, you hit on something that I think is really important, which is the amount of volatility we're seeing in the market, to me, is not normal. Companies with trillions in market cap should not be moving up and down 10% on no news or on earnings, but CapEx is higher than expected. These are not normal moves, right? And I think that tells you we are in the very, very early stages of Gen AI. And what I think is interesting is sentiments on all of these can flip on a dime.

where one day a company is hands down a huge AI winner, then they're a loser, then they're a winner. You've seen Salesforce kind of play jump rope with that for a while. Now they're kind of, most people think about them in the winner's bucket. Microsoft, right, for the longest time, they were a hands down winner. Now people are kind of saying, oh, are they just like everyone else? And then I think that's holding the stock back.

And, you know, I think that's happening with all of these names where there's just not a lot of that long-term patience. But guess what? I think that creates a lot of buying opportunities for people who are willing to cut through the noise and recognize that if we're in the early stages of this wave, it requires investment. It requires innovation. You know, if you buy the right innovative companies, I think there's a big opportunity to outperform.

Do you worry, though, about the pull forward? So again, we just talked about all the spend. We talked about, at least for now, the limited use cases that are going to find their way across enterprise. And I think the Microsoft story about sales, the focusing too much on this versus their traditional products, that push and pull is going to go back and forth. If they've overbuilt

They're going to have to, and there's limited use cases for a lot of their customers, they're going to have to go back and drill down on the stuff that they basically have been trying to steal from Peter to pay Paul. They'd love to be able to tell this story, how they're upselling their existing customers to these new co-pilots, but that's going to come at the expense

of other licensing, you know what I mean, that goes on. So I just worry about the pull forward, and especially if we are as early as folks like you think, then there is going to be digestion phases, there's going to be slower economic times that cause a pullback in spend, which will basically, if these companies are more interested, and I say the companies, the hyperscalers, in asking for forgiveness from investors,

than permission, then there's going to be some big downward moves at certain periods. And so you think about the multiple expansion that we've seen for the names that are apparently best positioned, that makes me a little nervous if we are on the cusp of, let's say, an economic downturn or a digestion phase for this secular shift.

I think you're exactly right. We are going to be dealing with air pockets from time to time. There's no getting around it where right now Microsoft is saying they're capacity constrained. There might be a point a year from now where they actually have excess capacity. Right now, the good thing is Microsoft has a very fungible architecture and there's a lot of tools they can do, but this is going to be a problem that I think all the hyperscalers are going to face.

They could be at a situation where they have too much capacity and they have to figure out what do they do with that. And there's certain points where they are at excess capacity. We're all learning this together, right? Of like, what's the right level? Is there going to be an AI winter that happens? You know, is that going to drive down the price of GPUs? There's a lot of debates we need to have. By the way, one debate that we're not having that I think we may need to have a few years down the line is, are we going to have to go through transitions

There's already talks of business model transitions of do we have to shift from subscription to consumption, pay more for usage rather than on a per seat model, especially if you get so much more efficiency out of Gen AI.

There's a whole other story of, do we have to see companies fully re-architect their software to be AI native, just like they had to do that with the cloud? So I think these are a lot of conversations and we're all going to learn this together, but it is going to create air pockets. That's what happens during every technological wave is there's air pockets, there's winters. Overall, if you buy, I think the right innovative companies, you're going to outperform over the longterm, but I totally get what you're saying.

Yeah, so a couple months ago Satya Nadella was on Brad Gerstner and Bill Gurley's podcast and they asked him specifically whether he was still chip constrained. He said, "No, but I'm power constrained." So when you think about this build, hundreds of billions of dollars, and we're going to get to Stargate in a second here, that a lot of these hyperscalers and companies like Meta have been building, at some point if they overbuild, the demand's not there and they have power constraints.

I wonder how the market is going to treat that because the power dynamic of this is something that's outside the purview of many tech investors. And the more I read about the need for power and everyone's like nuclear, nuclear, nuclear, it is not easy to turn on

those reactors that have been shut down for 40 years. And, you know, so I just feel like that that's a trade, you know, everyone's excited about nuclear, but if that is the thing that bridges the gap between this capacity build and there's the demand, all of a sudden, if you're power constrained, that also could lead to a huge, you know, valley of discontent as it relates to this sort of thing. So curious on that, because I'm sure you're getting a lot of investor questions about power.

Yeah, no, you're absolutely right about that, right? And, you know, power was a constraint before. It might be liquid cooling down the line. It might literally be like not enough labor to build up data centers. There's always going to be pockets of things. It's not always just going to be GPUs and data centers themselves. And so, you know, these are things that we have to pay really close attention to. And these are things that we're collaborating with our other colleagues at RBC who cover all those sectors, who cover power, who cover liquid cooling, data centers.

to really kind of get ahead of these, right? And it's hard to, but that's exactly what we're seeing. Imagining a better future is the first step. Investing that future with Betterment Advisor Solutions is the next. Whether you're launching your own practice, looking to streamline client onboarding, or just searching for efficient ways to scale your firm, Betterment is here to help. They automate to make tax optimization simpler. They provide support to make administrative tasks easier. At

At Betterment, they're building innovative technology all for anyone who's ever said, I think I can do better. So grow your RIA your way with Betterment Advisor Solutions. Learn more at betterment.com slash advisors. Investing involves risk, performance not guaranteed.

Imagining a better future is the first step. Investing that future with Betterment Advisor Solutions is the next. Whether you're launching your own practice, looking to streamline client onboarding, or just searching for efficient ways to scale your firm, Betterment is here to help. They automate to make tax optimization simpler. They provide support to make administrative tasks easier. At

At Betterment, they're building innovative technology all for anyone who's ever said, I think I can do better. So grow your RIA your way with Betterment Advisor Solutions. Learn more at betterment.com slash advisors. Investing involves risk, performance not guaranteed.

Let's talk about the Stargate for a second here, because it looks like they're trying to cover a lot of different parts about this infrastructure build. And so just to recap for our listeners, it was an announcement between Masa-san from SoftBank, Larry Ellison from Oracle, Sam Altman.

from OpenAI at the White House. President Trump was there. It looked like there was not a lot of there there, to be honest with you. They're talking about committing hundreds of billions of dollars over the next four years, a new entity that is basically just going to build out infrastructure. You could guess who's doing what. MASA is going to be putting up the money that Elon Musk almost immediately, I think, tweeted out afterwards. They don't have the money, which

I thought was pretty fascinating. But that's the sort of headline. That's the sort of performative sort of stuff that you really do see in and around a bubble in the investment world, in the technology world. I'm just curious, like, you know, a lot of that capital was also committed. You know, Oracle had already been talking about their infrastructure bill.

build. Sam Altman had been talking about trillions of dollars to be spent, you know what I mean, on this sort of thing. So just curious about that announcement, because I know Oracle is in your coverage, but here's a company that is having fast growth in AI, but off of a very small base. I think it was like $2.5 billion on a $15 billion number in their last quarter. And let's be frank, you know, the investors were not particularly excited about that. And this almost seemed like somewhat of a defensive move on Oracle's part.

No, I think you're exactly right. Like a lot of Stargate was not net new or stuff that had been pre-committed or things we knew about. It was very much, you know, we want to bring this out here, have the right people. There's obviously a political angle to it as well. And that's ultimately what I think it was. Right. And initially people were saying, oh, why is Microsoft part of this? Not part of this. But then you kind of drill on. You're like, this doesn't really impact Microsoft at all. Right. And for Oracle, right.

because I'm glad you brought up OCI. Remember, OCI, their Gen AI kind of play is a lot of, they have access capacity when everyone else's capacity constrained. They have a lot of GPUs that they're getting from NVIDIA because it's in NVIDIA's best interest to prop up OCI.

Um, and, and they're, they're able to, you know, they're, they're well levered to training less soda inferencing and reasoning and fine tuning. Um, guess what? As we start to see all these innovations of how do we do those things in a more resource efficient manner, which deep seek is accelerating. That probably spells bad news for Oracle to be completely honest. Um, you know, at, at certain point, like access capacity can come back in house for Microsoft. They've told us they want to do that.

You know, you just said something I think is really interesting, and it kind of brings me back. You just dated yourself a few minutes ago about Lotus and Lotus Notes and the like here. But, you know, when you think about, you know, the kind of companies that were powering, you know, the explosive growth in the late 90s of the Internet, you know, it was obviously a lot of fiber, but it was also...

a lot of data center and a lot of servers, which is not too different than when you think about this time now. And it brings me back to all the vendor financing that Sun Micro was doing, right? And then at one point in the year 2000, someone jammed up

one too many banner ads and the whole thing came crashing down and it took years to kind of work its way through. Now, all of that technology for the most part was pretty early. They laid the groundwork for what was an amazing 2000s period where you had internet and then it kind of converged with the cloud and then we had mobile and social and all that sort of stuff. And here we are 20 some years later and it looked like it was just a

like a really nice glide path to, to where we are. Right. And when you think about Nvidia, they've done a really good job of propping up a lot of their customers. When you think about it, they've been investing in, you know, from a VC perspective, um, in the field, but a lot of that has to do with the fact they're investing in these companies and they're turning around and buying their, uh, GPUs. And then obviously, uh,

you know integrating into their software platforms and the like so when i think about that and then i think about how the trade broadened out at some point in the first half of last year so think about it this way nvidia you know had gained three trillion dollars in market cap because of where they sit in this ecosystem amd joined the party micron joined the party okay it's from the component standpoint and they've all round tripped the moves and they're actually probably lower they all kind of doubled in the first half of last year then they've round tripped the moves so

Then think about Dell and Supermicro. So the server makers, they had this amazing run. They've roundtripped their moves, right? Look at, I mean, so, and now you see the hyperscalers, you know what I mean, that are sort of weak on this. I see most of the pillars of the trade kind of slowing down a little bit. So my question specifically to you, you mentioned HubSpot before. Where are some of the other opportunities that you think are underappreciated by investors right now?

Yeah. And you hit on something really important. We've talked about this kind of waterfall of Gen EI benefits where it starts at, you know, the hardware layer semis, and then it goes to like the hyperscalers, et cetera. And, and really, I mean, this is why I'm so bullish on software long-term, right? Cause it's one thing to say, okay, you have the picks and shovels and you have

all the infrastructure, but really where I think the value ultimately gets created is at the application layer, is in the software companies. And going back to your internet analogy, where did the longer term value accrue to internet? It was Amazon, it was Netflix, it was Meta, then Facebook. That's where the value accrues. And I think the same thing is going to happen with software. It's the companies that truly innovate around Gen AI and create net new opportunities, open up

market opportunities that just didn't exist. And so HubSpot's definitely one. I think they're innovating a lot around this space. MongoDB is another one. NextGen database vendor, I think they're disrupting Oracle. I think they're doing, they have a great position for net new generative AI applications. One that's, I think, under a lot of people's radar is actually Intuit.

right? The tax prep and accounting company. Guess what? These services, intensive industries like tax prep and accounting are ripe for disruption from Gen AI. I think Intuit is doing some really interesting stuff there where, you know, we're probably not that far away from having literally tax agents or accounting agents built on Gen AI, closing our books for us or, you know, filing our taxes for us. That's a huge opportunity that I think the market is not appreciating today. Well, yeah. And I was going to say that, you know, MongoDB, Intuit,

they're not trading well. You know what I mean? They're trading below levels where they were a year ago. And it seems like a lot of investors are just being attracted to those bright, shiny objects. And that's why I kind of asked the question in a way, because it's like, where are investors not looking? And, you know, a lot of folks are saying that enterprise software is going to be a huge beneficiary of this once the kind of groundwork ends.

as laid and I think that's what's going on. And maybe the hyperscalers pain, if that's the kind of trade over the next six months to a year is going to be the gain for some of these enterprise software companies. Okay, so we just went over some of these names that you're kind of focused on, some of these kind of verticals within software that could benefit. And these are things that I think investors are going to have to continue to dig on or listen to folks like you who are trying to find those next opportunities.

Where are you most excited about innovation in this field? And it could come from the private markets or names in the public markets right now, because I guess that's the next leg. If you think about the shot across the bow that we just talked about as it relates to DeepSeek, I think for folks that are in the field that are actual builders or at these companies that are competing in the like, and there's plenty of them, if you think about from Anthropic and OpenAI, and there's just a lot going on here, Mistral,

You know, all of a sudden now you have this Chinese competitor that a lot of folks that's open source, that a lot of the rest of the world is going to be really focused on. And, you know, I'm sure you saw this. You know, I saw this by last Thursday. Perplexity had already integrated R1 into their offerings as it relates to the model. So where are you excited about the innovation that is coming in this field? I guess from names or companies that we're not kind of focused on. And are there ways to play them in the public markets?

Yeah, no, absolutely. Look, I think what's interesting is when we talk AI, everyone's focused on efficiency and cost savings. But where I get really excited is net new use cases, because this goes back to every technological way we've had. It's an unlock. You can do things you couldn't do before. And I think there's this line of thinking of incumbents benefit because they have data. But what happens if there's a reimagining, right? It's not like

we're going to add agents onto a CRM. But what if we rethink what does a CRM look like? What do we rethink what a database looks like? And, you know, I think some of the companies that we talked about earlier, like HubSpot and MongoDB, I think are well positioned, but guess what? There's a lot of innovation in the private markets. You know, I think there's some really interesting companies that are very under the radar, but one opportunity that we haven't talked about

is actually vertical software. Because these LLMs are a blank canvas. And if there are opportunities for companies to bring domain expertise, to bring kind of that vertical specific data and verticalize these, I think there's a huge underappreciated opportunity.

There's some interesting private companies, but in the public sphere, there's three names I would point to. One is Guidewire and Property and Casualty Insurance. I think they're doing some interesting things there. Second one is Clearwater, which is software for asset managers. I've seen some really interesting innovation out of them. And then the third one is Viva, which is software for pharma companies, biotech and pharma companies. I think these are three companies that are super interesting, high-quality businesses.

but have a very underappreciated long-term Gen AI opportunity that no one's paying attention to today. Those are great, just kind of highlighting those verticals and you can kind of draw a line to their customers and how they might benefit from using these services, you know, and that could be the next leg.

of this trade. Well, Rishi, I really appreciate you being here. I hope you'll come back once we've got all the earnings and the guidance out of these names, and we'll kind of do a little bit of a look back of that Q4 period. And I guess most focused on Q1 guidance and guidance for 2025. So again, best dressed man in all of software sell side coverage. That is Rishi Jalaria. Thanks for being here, man. I appreciate it. Thank you. Thank you so much.