Tech Patriotism & SPX Complacency: What It Means for Markets
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Welcome to the Wednesday edition of the Risk Reversal Podcast. I'm Dan Nathan, joined by Guy Adami. Guy, how are you? I'm well. I'm very well. Excited. Midweek. Lots going on. Lots going on. You know, I needed a little bit of a reset. You and I did market call yesterday, 1 p.m. Eastern. Then we did Fast Money together. And then I find myself on the set of MSNBC last night. And I felt like every time a mic and a camera was in front of me yesterday, I kind of sucked it.

And I don't know. Did you feel that vibe or no? No, I think you're always outstanding. So I'm not pandering. I'm not pandering for that. But guy, you know, other than our own risk reversal newsletter that comes out every day after the close, go to risk reversal dot com to get your copy in your email box every day after the close. I listen to a lot of newsletters or read a lot of newsletters. Do you read a lot of newsletters every day? Maybe from the CBC? I am a.

voracious consumer of the podcasts and the newsletters absolutely well i certainly am i get about 10 a day um and you know one of the things that kind of struck me this morning i kind of go through them before i get to some of the other reading were some stuff about this private markets ai startups and the valuations um i want to hit that with you for a second obviously we're going to cover a bunch of stuff in the public markets um but you know

Alex Karp, CEO of Palantir. Here's a company that now has a $300 billion market cap company. They're going to have $4 billion maybe in revenues. He's got a book out today and it's called, it's really interesting. I mean, I think it's one of those things where it's going to get

a lot of press. It's called Technological Republic, Hard Power, Soft Belief, and the Future of the West. And this is like, really like a manifesto about how we better get serious about technology and how we use it, right, for basically a whole host of, you know, national security issues. And he's basically calling on Silicon Valley. Now,

What's interesting, guy, about Karp is that he's not one of these folks that got behind Trump and, you know, like there's not a Doge guy and everything like that. He supported Harris. You know what I mean? So one of the things that I find really interesting, and you remember this last year, A16Z, the Andreessen Horowitz, they put out this American Dynastism thing and they were trying to kind of rally everybody up as a very much an American first sort of thing. Do you think this is the sort of book...

that and he's going to be on a book tour and talking this thing up that is going to resonate with a lot of people because some of the stuff in the end markets that they serve are not on the tips of a lot of Americans tongues right now. Well, it'll resonate with the people that are interested. You see, your question is, is it going to be mainstream enough to make a difference and to resonate with the people that need to hear it? And respectfully, I would say probably not. You know, I don't think if people are looking for a book to entertain them and to sort of

I don't know, easy read. This is probably not going to be one of those. It's probably one of those books, though, that everybody should at least take a look at and understand what he's trying to say. So unfortunately, it's one of those things where the audience that he serves is the audience he would serve in the first place. I don't think it's going to cast as wide a net

As it probably should. Now, with that said, you know, if he were to do the tour and to go into, you know, news agencies that potentially he's never been to, you know, maybe you'll get a little bit, you know, on the periphery. You know, maybe you'll start to infiltrate or get into markets that he would not have gotten into before. But unfortunately, the reality is probably not.

Yeah, and this is going to segue in a second here, but this is from that Bloomberg, and we'll put it in the show notes, the article, the newsletter. It said, And so, again, I think that makes a lot of sense. It is a warning that we should all hear. I saw a headline on CNBC yesterday saying,

where it said that the Chinese can make 250 ships to our capability of making one. Like, just think about that, right? And so, again, I just think it's really interesting. I got it. I'm going to read it. And I find it really interesting. Now, the segue. You know, it's interesting about that real quick. And this is a fascinating conversation. But, you know, whether it's their 200 ships to R1, let's say that's inflated. So let's cut it in half. And they're making 100 ships to R1, OK? And maybe that's more reasonable. I have no idea of it.

President Trump was on last night with Elon Musk. They did an interview with Hannity and actually talked about that. And again, regardless of your politics, one of the things that he said, he, the president was, you know, there was a time where we'd be able to manufacture things and

in a much faster rate as opposed to now. And one of the reasons he thought was regulation. And I have no idea the reasons why, but your point is probably well taken. I mean, we're being out probably paced in terms of manufacturing and I guess this sort of race in the robotics era, right?

as much as we like to think that we're winning everything we're probably not yeah and i mean one of the huge issues is when you think about where do all the components of some of these robots or drones come from they come from china like a disproportionate so we've talked about supply chain as you know a really important kind of national security sort of issue we got a good taste of that during um covid but just wait until there's some sort of war that's not going to be fought with hundreds of thousands of people it's going to be autonomous drones which carp is just mentioning which

Here's the segue. Okay, so guy, in the last kind of six months or so, you remember about a year and a half ago, Sam Altman, one of the co-founders of OpenAI was tossed out, but then he came back in. Satya Nadella, the CEO of Microsoft kind of saved his tail. They had invested $13 billion in OpenAI.

And all these folks eventually who tried the coup, they eventually left and some others did. So all these like top researchers, all these folks that were literally running OpenAI have all started new firms. And you know, when you think about this, they're all pre-revenue for the most part, okay? These are some brilliant minds and then they've started these companies to do similar things.

to OpenAI or even more advanced sort of things, and they're having hundreds of millions of dollars poured at them at multiple billion dollars, in some cases tens of billion dollars evaluation. And I just want to go back to what OpenAI's mission statement was. And you got to remember also that Elon Musk co-founded this company, but it was a not-for-profit,

with $100 million. I want to say that was probably eight or nine years ago. So OpenAI's mission to develop artificial general intelligence that is safe and benefits humanity, which is really interesting. So that's the segue of what we just talked about. And so then I want to go right here to some of the valuations of these companies. It's truly astounding when you think about just how much, again, how much capital is being thrown at it.

Anthropic at tens of billions of dollars, a new one, safe, super intelligent, valued at $30 billion pre-revenue. I mean, it's insane, right? Thinking Machine Labs, this was a woman that was the head of research at OpenAI. That's also, you know, billions and billions of dollars, pilot, perplexity AI. So we spent a lot of time talking about, let's say, the fateful eight, the mag seven or whatever, and just kind of what they're doing in and around generative AI. But they are almost the picks and the shovels. When you think about the money thrown at

these companies that are racing towards AGI and then the things that happen after that, what do you think is going on in the private markets? Do you think that there is appreciation for the risk that's being taken right now? Because all of that capital that's coming from venture firms is somebody's capital. It's

pension funds, right? It's, you know, LPs and the like here. And I don't really hear a lot of that because you and I have never, ever seen an explosion in market cap and valuation like this that's under the surface. You know, we can talk about NVIDIA, but you've been saying this

It's been growing into its valuation. These companies are so far away from legit revenue, it's just kind of hard to kind of get your head around. Yeah, and the pushback would be the real risk is not throwing monies at these companies and not investing at these valuations because we've seen what the public markets can do in terms of the valuations that they're

And again, this has nothing to do with Palantir necessarily. But Palantir was a company that Alex Karp was telling his story five years ago. I mean, the story he was telling then is basically the same story he's telling now. The only difference is people are listening to him and maybe the world has changed a little bit now.

in his favor over that period of time. It's probably some combination of the two. So a lot of these people that are throwing money in the private markets will say, you know, we have to be in this game because if we miss a Palantir or an NVIDIA or any one of these names, we're going to be left on the side of the curb. Now, what's fascinating is maybe historic norms don't matter. I think they do. But you mentioned Palantir earlier in the

market cap, it's probably approaching $300 billion. As you said, as we're sitting here today, it's probably either side of $280 billion. And that's sitting on revenue of about $4 billion. If you want to be lenient and you want to be aggressive, you give them five. You can do that math, Dan. I mean, historically, companies don't trade even a smidge of those price to sales. Yet for some reason, people think it's different this time. And they somehow can grow into that.

I'm not so sure. But in terms of the private markets, as you just said, I think there's a real fear that if we miss this boat, you know, we're going to be left standing on the shore waving goodbye to everybody else that's on it. Yeah. I mean, but to your point also, this stock is up 65% on the year and this is not railing against it. You know, I'm...

really intrigued about Alex Karp. He doesn't seem to be like one of these kind of showmen out there. He's kind of heads down. Like you said, he's been telling the same story for years. The market has just come around to it. I think if you asked him, does he appreciate the fact that his stock is trading at 78 times sales? You know what I mean? Probably

Probably not because there's only really one way to go when the fever breaks. And, you know, we spent a lot of time talking about the concentration of the excitement of the generative AI trade over the last two years in Nvidia. I think what's going on in Palantir is almost far, far worse, especially at this stage of the game. You know, when you think about the Mag 7,

has really cooled out a little bit. NVIDIA is only up 4% on the year. Most of the other names are down on the year other than Meta. There's a good chance at some point this year, Meta could be down on the year. And so my point is, is that these two pools of capital, these levels of excitement, they're very...

closely aligned in my opinion, you know? And so if you start to see these private market valuations, you know, take a dip at some point, you start to see some down rounds because the push out of the, you know, whatever these guys are trying to realize, people realize it's going to be further along or it's going to take longer. That's the sort of thing I think knocks the sentiment in the public markets. But again,

Well, listen, real quick, I mean, not to go with role revisionist history, but think about the top tick in WeWork, however many years ago that was, right? And that was SoftBank. And you remember this stuff a lot better than I do, but I think they invested it like a, was it a $50 billion valuation or something like that? I mean-

That was a top tick and that was a bit of a frenzy. And then obviously the fever cooled in that space and you can see what happened. So, you know, we've seen this, I think, over and over again. I think we're seeing it more so now in the private markets because, first of all, there's this new growing burgeoning space that everybody's excited about.

And there are a lot of companies that are capturing the fancy based on what we've seen in the public markets. And a lot of people with a lot of money saying, you know, we have to, we by almost by definition, we have to be in this game. And it's like being at a roulette table. You know, a number is going to come up. You just better have enough chips

on that roulette wheel to sort of when it hits, you know, you have one of the numbers. And so, and I think to a certain extent, that's what's going on. That is the VC model right there, right? Like they expect 80% of the companies that they invest in to fail, but it's that kind of handful of companies that go,

and go parabolic. You know, your WeWork is such a good example, guys. So in 2019, SoftBank invested at $47 billion. A lot of that was about a founder who is telling a story. And by November 23, the company was valued at $4.

Think of the capital destruction there. But there's also another interesting thing that I think is a through line to where we are right now in the private tech market. WeWork, if it was conceived last year and people were excited about this idea of co-working and everything like that, right now in this environment where...

money is just chasing generative AI, this company would be worth so much less than it was worth, you know what I mean, at the time of investment because investors don't care. Like think about it, you're telling me right now if WeWork came out, you know, in another iteration, if there's no generative AI and there wouldn't be any generative AI narrative around it, people would not care. I mean, think about it, right? Left for dead. So that's also something I think to focus on the concentration of the attention of

of investors because all these consumer facing things, if you don't have a story that's linked to the stuff that's hot right now, you don't have a story. You know, it's getting siloed like this huge funnel at the top is getting all siloed down to a very narrow region of a sector that people are excited about. And by the way, it's probably not paying attention to and rightly so to other sectors that might have

not equally interesting stories, but interesting stories of their own that are sort of being left on the side of the road. Now, with that said, I think it creates a lot of valuation inequity or valuation sort of skew. And you're clearly seeing that in the public markets. But you know what? That's worked now, Dan, for a really long time. So it's hard to sort of cast dispersions, which is not what you're doing. And it's hard to sort of throw rocks at this because it works. The problem is,

And we've all seen this. When it stops working, it stops very quickly. And things, as you know, I mean, they go up in this grinding fashion, but they go down a lot faster. And that's true with individual stocks. It's also true with valuations, I think, in private companies.

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Let's take it to the public markets here. Yesterday on the market call, Guy, you and I were talking about the S&P 500. We were talking about really how little progress it has made in two months, right? And it's been a little bit volatile, especially after that Fed meeting on December 18th. But it really got back on its horse. It made a brief new high, I want to say, in mid to late January. Here we are. We're back towards those highs. And I think what you and I were discussing yesterday is if you took the S&P 500 and

name off of that chart because it's lower left, upper right. And there have been periods of consolidation and then breakouts and the like here.

It's not a bad looking chart. You know what I mean? Now, you could talk, well, the S&P at 22 times, we've had two years of 25%, you know, performance, you know, earnings growth has been double digit is expected to be double digits again, this year, maybe 13%. So maybe all of this AI, once it starts getting into other sectors in the markets or other, you know, parts of the economy, that's going to be great for productivity. And maybe it's a new paradigm. It's a new era where, you know,

20 times earnings is, you know, the old thing. And going forward, maybe we get settled with 22, 23, 24. Thoughts here because, you know, a lot of folks seem pretty well invested here. There seems to be a lot of complacency. You know, you've brought up a 15 VIX, which seems like complacency. What do you think here? We're coming out of earnings season, and now it just seems like tariff headline, tariff headline, tariff headline. Listen, all of last year, so 2024, obviously I fought the market, you know,

pretty much the entire year. There were a couple times last year where fighting the market was right, but there were few and far between. And you know what I knew and

And what I thought I understood in terms of passive investing, I clearly didn't understand to the fullest degree. And what we learned at the end of last year was a trillion dollars found its way in the ETFs and mutual funds, which was a record. And, you know, what does that mean? It means money flows into the market regardless of what's going on in the world and basically regardless of what valuations are.

Passive money has no interest in valuations. It doesn't matter. It finds its way into the market. And that's great on the way up. And I think to a certain extent, that was the driving force behind a lot of the move. In terms of the complacency that you talked about, well-

It goes back to, again, passive investing because if that money is going to flow in, yeah, you're going to have sort of down days, but they're going to be, again, few and far between. And those volatility spikes are going to be muted and somewhat mitigated by the amount of money that, again, finds its way into the market, which is why I think in an environment where the VIX should be significantly higher, we're seeing a VIX that's probably trading just north of historical levels, which is probably historical, maybe 13.5, 14, and here we are mid-15s.

With all that said, and you know this almost better than anybody, the volatility in an individual names over the last few weeks has been magnificent, both to the upside and the downside. And they're not small companies. These are tens of billion dollar market cap companies that are moving up and down 15 and 20 percent.

on the back of earnings releases, something that I think in a 15 and a half, 16 VIX environment, you should not be seeing, yet you are. So the question I think people have to ask themselves, are we too complacent? And are these big moves in individual names sort of a tremor before we see sort of the aftershock in the form of the overall VIX? That's really the question. And I think a lot of it, if you really want to go down the road, is predicated on what happens with interest rates and what happens with the employment picture.

The 10-year guy has bounced a little bit off that 4.5 sort of level. It really never had the trajectory to the downside. I don't think anybody was like, this is going to 4.25 and straight to 4. We've had some kind of hawkish commentary, obviously, from the U.S. Federal Reserve. And so it really feels like the idea of a sustained rate-cutting cycle, at least in this year.

is not happening for all this uncertainty in around trade and tariffs, and then what that means for inflation and the like, even with maybe some of the tensions in Europe as it relates to Ukraine and Russia, maybe in the Middle East, some of the calming of that sort of stuff. You would think that that would put downward pressure on energy prices, right? But we still have seen the 10-year kind of hold firm here. We get this question all the time. And if you think that

Higher interest rates are some form of a headwind to equity valuations. Let's just say growth comes in a bit slower than some people expect because we've had this breakneck sort of environment over the last few years. Then you start saying to yourself, where's the opportunity? Most of these S&P targets are up from here now with a 6,100 S&P or something like that.

up 7% from here. A lot of folks are saying single digit returns. You know, in my mind, unless there's some new twist with the AI trade, I can't really see the S&P ripping, you know what I mean, up 20% on the year, but maybe we're in that kind of 1999 blow-off phase. But

my question, I guess, to you is, what would you rather dollar cost averaging, right? If you were kind of a little bit nervous about kind of after the gains that we've had over the last three years or so from the lows in late 2022, are you going for the NASDAQ 100, where 10 stocks make up 50% of the weight, or in the S&P 500, where those same 10 stocks make up 30% of the weight?

Yeah, I think given the choice of those two, for me, it's the S&P 500. And the only reason I say that is because at least you're casting a wider net and you get a little bit more diversification. And by the way, historically, if you go back and look, that's probably been the right bet as well. So, you know, given the choice between the two, it's the S&P 500. But again, your point is well taken. We had Stephanie Link on the Risk Reversal podcast last week that dropped on Friday. And, you know, she's been one of the most –

outspoken bulls over the last few years and has been correct. And, you know, she is less enthusiastic this year. There's still a level of enthusiasm that she has, but far less than she's had over the last few years. And, you know, that's somebody that's been very right. And when she starts sort of looking at things and saying, you know, I'm not expecting nearly the same amount of returns this year, I think you have to take notice. So,

There's a lot of reasons to be encouraged by what we're seeing, without question. There's a lot of enthusiasm, a lot of optimism. I get it. There are a lot of reasons to be really scared, and those reasons come in the form of valuations. And you can look at seven, eight, nine different metrics that we talk about all the time, and I would say the majority of them have been flashing red now for the last six months. But again...

As we also say, those metrics are not timing indicators. But what it means is, in my opinion, the market has less and less room for error. And to a certain extent, you have seen it on the off day here and there. I mean, you go back to August 5th, you mentioned December 18th. There have been a couple of days where, whoa, what just happened? And you can see the potential for the down move. But again, those moves have been very short in duration and have been scooped up by, again, that earlier thing we talked about, the

passive flows that are very, very aggressive. - All right, let me ask you this though. And I've made this point on numerous occasions, I wanna say over the last year or so when we felt like the NASDAQ had been getting a little bubbly in around this theme, right? And so I brought up the fact that Tesla

Nvidia, Meta, and Netflix all sold off more than 70% or so from their highs in 21. No one thought that could happen. I mean, think about those names, right? And think about other than Tesla, what they've done since then. Let's focus on Meta for a second. This is now a 1.8%.

trillion dollar market cap company. It still has a valuation based on, you know, I guess forward estimates that people feel pretty comfortable about. I think that the use cases for the investments that they've made in and around generative AI have been apparent. They might look differently six months from now, a year from now, relative to say, let's some of their competitors

competition in the space, how they are getting leverage out of their investments. Right now though, Guy, on an adjusted basis, earnings growth is 9% expected in 2025, 15% next year. Revenue growth expected to be 15% this year and 14% next year. It trades at 28 times earnings this year, 24.5% next year. Gross margins, flattish in and around 80.5%.

Now, I want to go back to 2021 to the lows in 2022. The stock lost 77% of its value. Since then, it's up 700%. So my question is that maybe it's different this time, right? This is the way investors are thinking about things.

why is the stock up 700%? Because what's coming in the future, right? Not about what they've done so far. And so, you know, I don't think 28 times for a company growing like that, who's not seeing expanding margins, who's going to have a lot more competition, right? Whether it's in serving ads and how they monetize ads and the like here, because like, for instance,

a Pinterest. Maybe that's the next Nvidia. Maybe they build a better mousetrap about serving ads. They start taking share, you know, that sort of thing. And I'm not saying that Pinterest is ever, ever going to compete, but that story just caught a little daylight here of late. And so no one can figure out what's the thing that's going to, you know, kind of push an incumbent off that pedestal, but that's,

This seems like one that everybody's in the boat here. And I'm not telling you to short it, and I wouldn't short it here, but it just seems too neat. And you know what I mean? There's too much consensus around the name. You sent me an article earlier in the week about how maybe Facebook's use of AI and the margins they've been enjoying on the back of it

maybe it's not as long lasting or maybe it's not as robust as the market seems to think, given the stock run, number one. Number two, now you mentioned the downdrafts we've seen. We've seen them before and you correctly bring up Amazon all the time. A stock that at one point lost, I think almost, if not more than 90%

of its value. People forget that. And NVIDIA is a name that a few years ago, you couldn't give away when it traded down, I think, pre-split $103 or so. And a lot of people were talking about sort of the demise of that company and how they were sort of left on the side of the road. So it's not like we haven't seen this before. And in terms of investor dollars, people are going to where the perceived sure thing is. And right now, the last three quarters of Facebook

given the margin improvements suggest they are the clear winner in terms of their use of AI. But by doing so, as you just correctly brought up, you know, you've probably bid it up to valuations that historically have not made a lot of sense. So,

It's a tough game right now. You know, you have a lot of dollars chasing very specific stories, as you mentioned earlier, in the private markets, but in the public markets too. And those handful of names which dominate continue to dominate. And as much as people want to say the broader market has been broadening out,

It's really not when you really look and examine underneath the surface. It's still the same 10, 12 names that have been the driving force behind the S&P. Yeah, no doubt. But there's some stuff that is not nearly as big from a weighting standpoint, the S&P 500, that caught your eye or catches your eye. Let's make a hard turn. We talked about it to start off Fast Money last night, but it was Homebuilders.

And so when you look at Toll Brothers, they reported last night, I think disappointing on almost every metric. I think they're trying to put a little bit of lipstick on a pig when they talk about the supply demand sort of environment. If interest rates aren't going down meaningfully anytime soon. This stock is trading, closed yesterday at 122. At that point, it was already down 26%.

on the year from an all-time high that was made in late November. So here we are down at 112. It's down 10 bucks today. So if it were to close here, it's down 33%, trading very near 52-week lows. What is that saying to you about the U.S. economy? And again, we can cherry pick. We can take every bad report and focus on that and try to extrapolate what that means for employment and this and that or whatever. But this one seems to be a leading indicator.

Well, I'm glad you brought that up because I think what we're seeing now, if you go through the Toll Brothers names and you just mentioned the metrics, they were not good. And obviously, Toll Brothers serves the higher end

consumer, right? And you've seen a sequential decline in terms of their average selling price, which is a bit of a warning sign. Now, people will look at the home builders collectively and say, valuation is compelling. You do not trade the home builders on the back of valuation. I think you trade them on a couple of different things. I think interest rates, obviously a big part. And then I think you have to have a view on the employment picture, which by the way, looks fantastic right now at a 4% unemployment, but below the surface,

They're things that are concerning. So if you look at that and say, wait a second, maybe the high end is starting to inflect a little bit here. That's something we need to watch. By the way, you're also seeing it in terms of the retailers and you've been seeing it for the last six to nine months. I mean, just look what's going on in Walmart and Costco, for example. I mean, they are winning in an environment where they obviously should be winning, but they're drawing down from a much higher end consumer, which historically they never had. Then you start connecting dots. Okay.

interest rates seem to be on the rise not good the employment picture maybe it looks better than it truly is not good and maybe the higher end is starting to inflect i mean that's all negative for home builders so i think people were surprised at how well they traded over the last couple years i think they can be equally surprised

and how poorly they trade for the next few months. And I do think that to a certain extent is a tell on the consumer and then obviously the broader economy. Yeah, if you're long homebuilders, it's probably hard to sell them now, you know, the sell off in a couple of months. But I cannot imagine an environment guy where they start to take off again. As long as interest rates stay here, mortgage rates where they are. So again, that's an interesting one to keep an eye on. You mentioned Walmart reports

tomorrow. Okay, that's Thursday pre-open. We detailed some stuff yesterday on the market call. Five and a half percent implied move in either direction. That's a big move for a stock like Walmart. We know it's had this

massive run over the last two years or so. I mean, it looks like parabolic, right? Is there something in your mind that could come out from a commentary standpoint, you know, slightly worse than expected results and maybe, you know, soft guidance that really could be extrapolated to some of this other stuff that we see? We just talked about home builders. Maybe it's the autos, fear of tariffs that could be inflationary, you know, all those sorts of things. I feel like Walmart could be as important as NVIDIA next week.

I agree with that. And so the metrics that I'll look at is inventories, what type of inventory build, if any, do they have? And that inventory build, if it happens, is it against what kind of sales growth year over year? So I'll look at that. I'll look at this average selling ticket, like what's their average item selling ticket? And then obviously same store sales. So all those things are interesting.

Again, but Walmart, which has been an incredible story, I want to be crystal clear. I mean, that too has gotten itself to a valuation historically doesn't make any sense. So they need to continue to see the margin expansion they've enjoyed. Probably, again, a lot of it on the back of AI. They need to see the continued sort of drop down from the higher end consumer. I think now almost 70% of their customer base has...

has an average income north of $100,000, which again, $100,000 is different today than it was five years ago. I understand that, but still, that's something that they really historically have never seen. Those things continue to need to happen in the trajectory that they have been happening,

or you're going to see a probably a pretty meaningful sell-off in the stock, which is not an indictment of the company at all. They've been operating extraordinarily well. It's more an indictment on the valuation that it's gotten itself up to. Yeah. So on January 2nd, 2024, the stock was trading at $52. Yesterday, it closed at $103. I think the all-time high was like 105. So I actually think

And again, you've been right to point out that's your line. That's a that's a guy a dummy thing. You've been right to point out. But you have been correct to point out the benefits that they've gotten in e-commerce, which has helped their margins based on some of the investments that they've made in generative AI. But I actually think it's a risk here, guy, at this valuation. I think it's a risk after the stock has gone up 15 percent year to date without any specific news one way or another, because it's

If they don't continue to show those sorts of benefits, I think that's when you probably take a few turns off from a valuation standpoint. So to me, I think what they have to say is going to be really interesting. And tomorrow when we record our risk reversal pod that's going to drop Friday morning, I think we're going to know a lot more. And I think that's going to be a really important piece of the puzzle.

Looking forward to it because, you know, Walmart, it's become, you know, almost as important as some of these technology stocks if you think about it and you think about

the tell in terms of the economy, the consumer and a host of other there and their use of AI. Yeah, no doubt. All right. Well, we covered a lot of ground here today. Hopefully we didn't lose you guys in that private tech in the conversation in around Alex Karp's new book and some of the stuff that's going on in generative AI. I think that's something you really want to keep an eye on, especially if you're not

investing in the private markets. I think there's a lot of really important implications. I think you do too, Guy. To what's going on in the public markets, we've got a couple great pods for you. Good friend Imran Khan, former COO at Snap. He is a hedge fund manager, Pro-Am Asset Management. That's going to drop tomorrow. And then you and I are sitting down with David Zervos. He is the head strategist at Jefferies. That's going to drop on Friday morning. Guy Dami, good pod.

enjoyed it we'll talk to you later folks thanks everyone