Holiday Special: 2025 Tech Trends with Ives and Munster
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Thank you so much for joining us for this special edition of Bloomberg Daybreak. I'm Nathan Hager. U.S. markets are closed for the 4th of July holiday. Coming up this hour, well, what a difference three months makes. Back in April, tech stocks were hardest hit in the stock market sell-off. Now, after tumbling in some cases more than 30% from record highs, names you know like NVIDIA, Microsoft, and Meta Platforms have helped power the NASDAQ and the S&P 500 worldwide.

back into record territory. So what will the rest of the year bring? We hope to answer that question in this special one-hour roundtable with two of Wall Street's most influential tech analysts, Gene Munster, Managing Partner at Deepwater Asset Management, and Dan Ives, Global Head of Tech Research at Wedbush Securities. Kind of becoming a tradition to have the three of us together. Thanks so much for being here. And I want to start with a look back at

at the last time we got together at the start of this year. Dan, you've talked about the time it's at in the AI party. So I want to remind you what you told us not too long ago on New Year's Day. First of all, there's after parties at 5 and 6 a.m. And then even in news...

you'll have some that fall by the wayside. But if you focus on the winners and keep the thesis, we're going to be talking about $4 trillion, $5 trillion markups, NASDAQ 20, 22, 25K over the next three, four, five years, in my opinion. So now here we are with talk of NVIDIA, maybe Microsoft becoming the first $4 trillion company. The NASDAQ's already at $20,000. So

What time is it now, Dan? Yeah, look, I mean, it was 9 p.m. in the party. Now it's 10 p.m. But that party goes to 4 a.m., as we've said, because this AI revolution...

It's just starting to hit its next stage of growth in terms of the use cases on enterprise, in terms of on the consumer. You think about physical AI, which obviously Gene's talked a ton about and will hit on. And that's my view. This is a fourth industrial revolution. This tech bull market, it's another three years ahead. And that's why I think it's get out the popcorn, get out the champagne. I don't see anything slowing it down.

So a slow-moving clock at the start of the AI party, potentially. Gene, let's remind everyone what you had to say about this at the start of the year as well. I like Dan's party analogies much more than my baseball analogies, but I'm at the third inning of this, and we think we're in the early stages of a three- to five-year bull market. And

I wouldn't, don't worry about the after, don't worry about the hangover at this point. I think you just embrace that this is as the substance will exceed the hype and we've got some great years ahead of us from the market. So that raises the question, is the substance exceeding the hype now, Gene?

I don't even think we're close to it. And I go back a couple months ago, we hosted an AI summit and we had all the leaders from the big private AI companies there. I mean, these companies are just geared towards evangelizing what's going on AI. And what surprised me most was they talked about the most compelling use cases of AI being coding and customer service. This is the same things that we talked about a year ago.

And the reason why that's so bullish, if I was going to refine what I said back in January, I would actually say we're in the second inning. And this commentary around from these leading AI companies that the use cases really haven't taken off, I think to me, it speaks to just how early we are.

And then you layer on top of that things that are going on with Zuck going out and putting these huge bounties. I mean, if you believe that he's competent and look at the money that's getting put behind this, I think we're still very early. So to answer your question, you know, is the substance there? It's just starting, but totally agree with where Dan's at and how the trajectory of this plays out over the next few years. Well, let's talk a little bit about

where the use case is going right now over the last several months maybe the last couple of years we've talked about all the spending that's been going on particularly by the hyperscalers in this space dan how do you see the use cases developing right now yeah and gene hit on some of them but i think the most important thing too is like for every dollar spent on an nvidia chip

We estimate there's an $8 to $10 multiplier across software, infrastructure, energy. That speaks to the ripple effect. And when you think about the use cases, obviously front and center of the messy of AI Palantir, I mean, we have upwards of 84 use cases today. You go back a year ago, we had less than five across retail, advertising, marketing, government,

And what's starting to happen is companies, 70% of the data they've never accessed before. That's why now for any of these install base, Oracle, Microsoft, Salesforce, ServiceNow, it's a bonanza because of the cross-sell opportunities. You know, Gene sees so much of the innovative companies also on the private side. And I think what you're also seeing now is like the innovation that's happening is

To me, it's the biggest thing that I've ever seen. And when I'm surprised, every time I'm in a factory floor, whether it's humanoids, robotics, autonomous, whether it's in the U.S., whether it's in Asia, it's just starting. It's a golden age for tech ahead. And that's why we say the bears in their hibernation caves, they can't see AI in the spreadsheets.

Gene, in terms of how these large language models are developing and the use cases that are being put out there, how do you see some of these companies like OpenAI, like Anthropic competing against each other? Is there going to be one winner? Are there going to be multiple winners?

I mean, from our perspective, I mean, again, keep the groundwork, the framework that Dan's laid out, like this is going to be bigger than what people can imagine. And in that case, you know, what is this at the core of it? It is that intelligence piece. And to answer your question, Nathan, I think there's going to be five kind of core models that essentially the West Western world is going to be run off of.

And those are those companies that we just that we know so well. There is a debate about is this kind of a race to the bottom? Eventually, once we hit general intelligence, does this AI, the powers, the insights going to become a commodity eventually?

and i feel very strongly that that's not going to be the case i think that as more and more of our world basically the world becomes dependent on these i think that there is pricing leverage and so to answer your question i think that there is going to kind of be five

key companies. There's going to be thousands and thousands, tens of hundreds of thousands of models, many of those large language models that are out there, but really five that are going to determine this. And you look at a company like OpenAI, you look at a company like XAI. I mean, these companies are going to be trillion dollar plus companies down the road. We're speaking with Gene Munster, Managing Partner at Deepwater Asset Management and Dan Ives, Global Head of Tech Research at Wedbush Securities.

Obviously, you guys, it hasn't been a straight line. We mentioned the sell-off at the start of the second quarter with some of the tariff rhetoric that came around there. Dan, were you concerned at all that when we heard some of these high tariff rates announced that the party was almost over for AI?

I thought Trump closed the party. The velvet ropes were gone. That was a dark few weeks. I'd say, look, in 25 years doing this, that was the darkest two weeks I've seen, even going back to the financial crisis and every other event, because that, to me, was the risk, especially when it comes to China and tariffs and the supply chain, that was going to cut tech off at the knees. Thankfully...

We've seen the administration step further and further back from the cliff. Cooler heads have prevailed. The adult in the room best is taking over. And I think that's a it's a very important stage and that the markets kind of gleaned will have much more of a digestible tariff rate and reciprocal tariff rate. But nothing that was essentially at the time going to be an economic Armageddon and glad and so happy that, you know, those days are a memory.

Is it just a memory, Gene, or could we see more hiccups down the road depending on how policy turns out in Washington?

Unpredictability is kind of part of the strategy today. And so we have to kind of go with that. I've over the past couple of months have had several conversations with former U.S. trade group, and they currently work with the Trump administration and help advise on that. And what's been very clear about this whole kind of back and forth on what's going on in the White House in particular is the center of gravity is the economy, right?

And we can look at all the different pieces around AI trade. We can look at what's going on in tariffs. But at the end of the day, the White House wants to maintain the economy. And so, Nathan, when I think about these

this crazy pendulum that goes on. I expect it to continue at some level, but as Dan just so accurately said, this cool heads will prevail because ultimately the economy is what matters most when it comes to politics, because that is how you get reelected. And I think that I'm not going to be swayed by that. And just one other piece related to kind of some of these unpredictable what's happened in terms of policy is,

The general view historically is that if the market pulls back, it's really difficult for one sector to continue to do well. Like, for example, you know, if there's NASDAQ goes down, it's really hard for the AI companies to continue to power forward. And whatever might cause that slowdown in the NASDAQ, whether it's high interest rates or whatever it might be.

But I actually am so bullish on AI. I think that it has the power for these companies to continue to move higher over the next three to five years, despite what is going to happen, what could happen with the overall macro. And I don't like being out on a limb that far. And the right approach is that AI is just much more impactful. Like Dan said, if it got cut off at the knees with trade, that's something that is...

That would have an impact. But assuming the trade piece stays intact, I think it's going to be really hard for policy to slow this AI train. Just to pick up on that point, so much of the policy decisions are driven by just the fact that this could be seen as an AI race between the U.S. and China. I mean, how do you see that playing out, Dan? Who takes the lead in this?

in AI? Is it going to be the US? Is it going to be China? How big a deal is that? The deep seek news that we saw just a few months back.

I think the deep seek, that was a scary moment. But the reality is, is more came out about that in terms of add a few commas to what they were spending. And next gen NVIDIA hardware they were using. Everyone recognizes there's only one chip in the world fueling this. And it's the godfather of Jensen NVIDIA. You'll have other moments like that. And China is not just going to sit there on a treadmill. They're going to continue to narrow the gap. I actually think that's positive.

Because it's a shot across the bow at U.S. big tech. And I think you're seeing an acceleration since deep seek. But that's an important moment. And I think what Gene said is such a great way to sum it up in terms of what's happening. This is just an unrivaled period. And if you become myopically focused in some of the headlines, you miss something.

What's really a fourth industrial revolution that we're living in? You know, if all of us investors can channel that superpower of just looking at the end game here, which is effectively...

Most parts of the world are going to have a profound impact from AI. If you can stay focused on that, I think you can create some wealth over the next three to five years. And we're going to keep this focus going as this special one-hour roundtable on the high-tech industry continues here on Bloomberg Daybreak with a focus particularly on some of the biggest names in the MAG-7. So stay with us.

as this special edition of Bloomberg Daybreak continues. It's 20 minutes past the hour. I'm Nathan Hager, and this is Bloomberg. Every business has an ambition. PayPal Open is the platform designed to help you grow into yours with business loans so you can expand and access to hundreds of millions of PayPal customers worldwide. And your customers can pay all the ways they want with PayPal, Venmo, Pay Later, and all major cards so you can focus on scaling up.

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Welcome back to this special edition of Bloomberg Daybreak. U.S. markets are closed for the 4th of July holiday. I'm Nathan Hager, getting you back to our high-tech power hour. Dan Ives is with us, Global Head of Tech Research at Wedbush Securities.

as well as Deepwater Asset Management Managing Partner, Gene Munster. Gene, I want to focus a little bit on specific names in the MAG-7. We've been talking about NVIDIA, so let's talk a little bit more about this powerhouse in the AI chip space. There's been talk about it getting to a $4 trillion valuation. We've seen some analysts calling for up to a $6 trillion valuation. Where do you see NVIDIA going into the second half?

So, at the end of the day, what NVIDIA comes down to is what's the growth going to be in calendar 26. And so the street currently has estimates for about 25% growth. That's a step down from about 55% in calendar 25. And so,

I believe that this ultimately that NVIDIA is going to grow probably somewhere between 30, 35 percent, much faster. And this narrative that you just can't rely on hardware when it comes to sleep well at night for investors. I think that narrative is going to each quarter be proved wrong.

And the reason is that if we are as early as we believe in this whole AI transformation, and there is a cost and energy advantage of using these NVIDIA chips, even ahead of custom silicon from these hyperscalers that they're building, that the world is going to continue to depend on NVIDIA. So I'm a believer that ultimately the stock continues to move higher, that this on a valuation basis is still, despite the big move that we've had, one of the most attractive large cap tech companies.

Yeah, it's been breathtaking, Dan, seeing the outperformance that NVIDIA manages to put out there quarter after quarter. Do you see double digit percentage growth for this company continuing into quarters to come? Look, I think, and Gene hit on it a little earlier.

I think there's a better chance of me batting in front of Aaron Judge than these numbers being real. In other words, I think NVIDIA, these are sandbag numbers that the street has. They're probably going to beat anywhere from 500 to 800 bps. And I think that's the reality is that the street is underestimating growth because there's only one chip in the world fueling this. And the sovereigns and the rest of the world haven't even started down the path.

That's why when I look at NVIDIA, $4 trillion, they get into the first in that club, and then Microsoft gets in. Then the path to $5 trillion, ultimately $6 trillion, because this is just the start. Gene talks about second inning. I talk about 10 p.m. and a party that goes to 4 a.m.,

There'll be headlines. There'll be riz. Stocks will sell off. But that's why we're going to be talking about NASDAQ 22,000, 25,000. And when we're doing this again at one point, we're going to be talking about NASDAQ 30,000 over the coming year. That's where this market's going. Does it depend for NVIDIA, Gene, on the company diversifying its customer base, getting that sovereign business to get it there? Can it depend just on the hyperscalers?

I mean, eventually, no. But I think over the next couple of years, there's still much more to spend, much more spending than people anticipate from the hyperscalers.

And yes, we have those other chapters. Dan mentioned the sovereign. That's a huge deal. I mean, governments are going to be dependent upon AI companies, industries. But to answer your question, Nathan, eventually you do have to kind of move beyond that. The move isn't just the reason why there's still more room to go is that these hyperscalers recognize that the demand on this is growing exponentially. Just to quickly frame in one example of how demand is exponentially growing is

If you look at GPT usage, they give it on a weekly basis. The pace that it is accelerating, it's doubling in shorter amounts of time. So when you have this kind of hockey stick, they need to keep up with that. That means that the need is accelerating. They're not making progress towards getting their arms around it. And so, yes, we still have a few years left. Yes, eventually they need to go beyond the hyperscalers, but I don't think investors need to worry about that.

Are there certain risks that investors do need to worry about, Dan, in terms of NVIDIA? I'm thinking about keeping up with the demand for those Blackwell chips, innovating even further on some of the highest tech AI chips that NVIDIA puts out there. Can it continue to keep up with that demand?

Look, they're a risk. I mean, China is a risk, right, in terms of the trade negotiations to make sure because of the H-20 chip that got restricted, they're not handing Huawei $8 billion a quarter. So to make sure they're able to sell into China, that is a risk because the reality is China is just sitting still.

The supply demand right now demands supply still 10 to 1. So they have to continue to keep up with that. And that is a risk as well. And competition is going to come, you know, from AMD and others and across chips. But the reality is there's only one Jensen. He, along with Nadella and others, understand the AI revolution better than anyone. And that's why there's only one godfather of AI. He's wearing a black leather jacket. His name is Jensen.

We're speaking with Dan Ives, the Global Head of Tech Research at Wedbush Securities and Gene Munster, Managing Partner at Deepwater Asset Management. Let's move on from NVIDIA to Microsoft because it does seem like these are the companies that are in the race for the $4 trillion valuation potentially. Microsoft has been really aggressive with the AI spend, cutting costs to do it as well. They've gone through thousands of job cuts recently.

over the last few months. Gene, what do you make of the strategy under Satya Nadella over at Microsoft? I mean, they're doing a great job of being there early, of course, and also navigating a changing relationship with OpenAI.

And the way this all kind of plays forward is that if you look at the growth rates that the street's expecting for this year, next year, last few quarters, it just hovers around this 11, 12, 13, 14 percent. It's really a tight range. And so at the core, what they're doing right is recognizing that they can increase the value of their products by injecting AI into it. They're the first with Copilot around that.

And it's something I think for the negative is you're not going to see an acceleration of Microsoft's business to grow like 25%. That's not going to happen. But what you will see is a company that's just going to continue to knock it out quarter on quarter on quarter on quarter of this kind of low double digit growth. And when you do that, investors sleep well at night. That's good for the multiple.

How do you view, Dan, the evolving relationship between Microsoft and OpenAI? It has been interesting to watch over the last few months. Look, Nathan, I viewed it, it was a training wheel situation with OpenAI and Dell and Microsoft going back to early 23. Training wheels are off.

Nadella, he's taking Microsoft down the side of a mountain and not looking back. The point is that they're just in the next stage of the AI revolution, and they are in the backyard of Microsoft.

So when I look at open AI, that would be called competition, site partner. But I don't really concern myself with that, just given where Microsoft is, and they are just gaining more and more momentum. I mean, to give you an example, we think, based on all of our survey work, for every $100 a customer spent with Microsoft in their lifetime,

There's now 40 to upwards of $50 for every $100 they've spent from AI monetization opportunity. That basically speaks to almost another Microsoft being built within Microsoft. And that's why the market is recognizing further and further that stock. Gene, of course, there's so much competition in the cloud. Microsoft Azure, you've got Amazon Web Services, Google Cloud as well.

How do you see that competition shaking out? You know, I think that the competitively, if you think of like market share, you're going to see AWS continue to lose share. I mean, this is just a math game, essentially. AWS is growing high teens. And if you look at Azure and Google Cloud, it's kind of high 20s, low 30s. And so there's just a math game going on there. But ultimately is that these three are in just such a great position to

There is one dynamic that I haven't quite figured out how to factor in because these are like the pressure points. And of course, Amazon trades on that AWS number. Google has a big impact on how Google Cloud does.

But what does as we hear more from Nvidia about a cloud business, their cloud businesses are starting to build that out. What does that mean? And ultimately, does Meta get into a cloud type of business? I still believe Apple also is in a great position to it blows my mind away that they don't have a competitor to that and they have secure this great relationship around consumer data. They've done so much with iCloud and backup, and I think that there's an opportunity for them to get there.

And to say it in a more simple way is that these companies are in a great place, but this is still such a juicy market. I think you're going to see more competition from the likes of Apple and Nvidia and Meta on the cloud side. Interesting point. Dan, how do you see the cloud business shaking out among all these Mag7 names? And how does AI play into that?

Look, I think AI is the catalyst because you still have less than 50% of workloads that are in the cloud today. And also more and more, they're hybrid environments, which basically means these enterprises that have Azure, GCP from Google, as well as AWS from Amazon. So hybrid environments, it actually creates more and more demand

across his AI stack because the use cases are all being built in the cloud. So that's a huge opportunity for Google, and Kurian has obviously taken that mantle. You look at Jassy, what he's done on the AWS side, more and more I think the market's going to recognize that

Even though they'll see chairs, Gene said to Microsoft, the opportunity when it comes to AI, that just gives them more and more monetization. So it is a rising tide that lifts all boats, although the one at the top of the mountain continues to be Microsoft.

Interesting. Gene, speaking of some of the headlines, we just got the headline this week when it comes to Amazon that their warehouses might have as many robots now as they do humans. Does that play into some of the use case, not just for Amazon, but across industries? Is that where things are going here in terms of AI? Yeah.

This is like watching a glacier move and everyone can see it happening. We saw it five years ago, I guess 13 years ago when they bought Kiva. And we knew that they were going to do more. We knew that this was a massive opportunity for Amazon because they got the lowest margins of any of the big tech company. And they have the most opportunity because they've got over a million, they're hitting out a million robots right now. They've got 1.6 million total people online.

call it 1.2 working in their fulfillment centers and doing delivery and so i think that um you know we've seen this happen when you put it together if you look at their operating margin amazon's operating margins right now are up around 10 11 percent that record highs

But you're going to see those just continue to inch higher. Robots don't get sick. Robots don't ask for wage increases. And I think that ultimately this idea around Amazon being a margin expansion story based on robotics is going to become kind of a center theme on the Amazon investment case in the years to come.

Stay with us. We're going to talk even more about robotics with two of the names that both of you follow probably closest of all. I want to talk about Tesla and Apple on the other side of this break as our special edition of Bloomberg Daybreak, the tech edition, continues. It's 37 minutes past the hour. I'm Nathan Hager, and this is Bloomberg. ♪

So you can focus on scaling up.

When it's time to get growing, there's one platform for all business. PayPal Open. Grow today at paypalopen.com. Loans subject to approval in available locations. For enterprise organizations, managing all your food needs is a tall order.

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Thanks for being with us on this special edition of Bloomberg Daybreak. I'm Nathan Hager, and U.S. markets are closed for the Independence Day holiday. It's time to wrap up our high-tech roundtable. We've been spending this entire hour with Gene Munster, Managing Partner at Deepwater Asset Management and Wedbush Securities, Global Head of Tech Research, Dan Ives. Dan, whenever we talk, I've got to talk about Tesla. There's been so much drama around this stock this year.

Do you look past it? How do you look past it? Look, it's been and obviously, you know, knowing and covering Musk from the beginning. I mean, this has been a soap opera, right? Because the BFF situation, Musk and Trump, it's now turned into a junior high school friendship gone bad. And this enemy situation that continues to be the overhang because Tesla is going into its biggest chapter growth, autonomous growth.

But especially when it comes to cybercab and robotaxi, our team was there in Austin.

The last thing you want is Trump being more hawkish when it comes to the regulatory landscape around autonomous and Tesla. Now, look, I ultimately believe it will settle. And at the end of the day, Trump needs Musk. Musk needs Trump. And Tesla continues to be, especially on the autonomous side, the best way to compete with China. But with that said, it's like you have to get you. And Gene always talks about this as well. And this is so great.

You have to just navigate through headlines. He follows through the trees. You deal with muster Trump. It's a BFF situation gone bad, but it doesn't change our bullish view that O'Thomas is worth a trillion dollars alone to Tesla stock.

How do you see the integration of XAI with Tesla affecting things? Does that play into your bull case as well? Yeah. I mean, look, my view is down the road. There's a good chance that it all gets integrated into one holding structure from XAI to X to Tesla, you know, maybe even a piece of SpaceX because that's all part of, I think the broader vision, especially when it comes to AI. So, yeah,

This is one where sentiment continues to be very negative on Tesla. But I believe when it comes to pure physical AI, the two best physical AI players are NVIDIA, Tesla, when you come out with automates and robotics. The sentiment matters, though, doesn't it? And Gene, I'd like you to weigh in on this as well, whether the brand has been tainted too much over the last few months.

I mean, it's taken a huge hit, but people forget is something else. And it's pretty clear that Elon's trying to strike some middle ground. And I think that if you fast forward a year from now, I think the whole brand damage thing is going to be in the rear view mirror. And at the core, the numbers this year are going to be ugly. The delivery numbers for the full year are going to fall below where the streets at. They're probably going to be down 10%, something like that.

but we're going to see a nice bounce back next year because the brand damage is going to go away. We're probably going to grow deliveries 20% that new, more affordable model. Yes, we lose the tax credit, but I think when you put all this together, we're going to see some nice growth next year. And, and ultimately when we talk about the psychology about this for investors, it's,

is that this autonomy thing, I don't think people can even begin to grasp. I have a hard time beginning, I think about this all day long, how big of a deal this is in terms of autonomy. And I just want to highlight one piece, a maddening piece to me on this is why do legislators slow the adoption of this? These vehicles are infinitely more safe than human drivers. Humans are amazing drivers when they're not distracted, but that's becoming more and more difficult.

And so at the end of the day, I think that we're going to see these autonomous systems. There's really two companies that are there. And I think that if you fast forward 26, 27, 28, yes, it will take longer than you think. But eventually, I think the psychology around Tesla is going to be anchored in that autonomy, physical AI. And like Dan said, there really is two companies that are going after that.

Sticking with you, Gene, let's turn to a stock that you, of course, follow very closely. That would be Apple. It's been kind of an interesting year for Apple so far. A lot of underwhelming sentiment, I think we could say, coming out of the latest Worldwide Developers Conference. Now the news just this week that the iPhone maker is thinking of going outside its ecosystem to power the AI-backed Siri. How do you view Apple right now?

I think this is going to be a great back half of the year for the stock. It seems like I'm disconnected from reality, but a couple of things to consider. Number one is the bar for AI couldn't be lower for Apple. They basically went on a media blitz right after WWDC, Federini, Jaws went out and said, it's not going to be till spring of next year till you see anything in substance with the new Siri.

And then second, if you look at the iPhone numbers, they're looking for, the street's looking for 1% growth this fiscal year, four next year. And let's come back to where we were a year, year and a half ago. Remember, 39% iPhone growth in 2021.

That's a massive year. You're going to get some of those upgrades. I think they actually beat the iPhone number. The street's looking for a flat iPhone in the September quarter. I think the guide that they're going to give when they report the June quarter is going to be a positive, and I expect the stock to respond accordingly. We're speaking with Dan Ives, the Global Head of Tech Research at Wedbush Securities, and Gene Munster, Managing Partner at Deepwater Asset Management.

Let's talk about some other big names in the Mag7. Meta Platforms. There's been all this talk about the super intelligence team that Mark Zuckerberg's putting together. Gene, what do you make of that?

It comes back to you think that Zuckerberg is competent. I think he is. I think he understands where things are going. And what I make of it is it's a tell how early we are in this AI, that they are recognizing that there still is a lot to be, a lot to happen here. And what's at stake? I mean, we're talking about 10, 50, $100 million bounties. I mean, these make pro athletes look like chump change, some of their pay packages.

And the reason what we make of it, Nathan, is that if in fact these tech companies are competent and they're recognizing investing in individuals that are worth $100 million bonuses, I think that that really speaks to the bigger picture. So when I see what's going on with their metas and their superintelligence,

I just think I just can't stop but thinking about the big picture about what's at stake here with AI. It is really interesting, though, Dan, to see, you know, meta platforms making this big high profile move around staffing up on AI. And then just to go back to the conversation about Apple maybe looking outside its own ecosystem to power its own AI. Yeah.

Can these two names that had been so big just a couple of years ago, can they play catch up with some of the others in the space? Well, I think they can because it all comes down to install base and resources and developers.

When you look at meta, Zuckerberg is basically what's called a wartime CEO in terms of what he's doing. And I think going to more and more monetize. When you think about consumer AI revolution, not enterprise, with NVIDIA and obviously the hyperscalers, consumer AI revolution runs through Apple, meta, and Alphabet. So I just view it as it's all just about making the right strategic moves. Sometimes you're late.

But because of the install base and all that matters that you end up being right. You lose the first, second round, you win the last 10, you win the match. Right. And I think that's sort of where they are. And I think that's why I continue to include them core. You know, we've used the Ives AI30 in terms of really who the winners are when it comes to AI.

Interesting to think about the consumer case for artificial intelligence. When you think about what it's doing in terms of productivity, how companies are thinking about their job structures, that sort of thing. When in the consumer space, we've seen a lot of interesting videos, pictures, images that...

might potentially fool people down the line as well. Gene, talk a little bit about how you're thinking in terms of an analyst of this space about how AI is shaping up for the consumer.

It's a tale of two cities. I mean, there's what's going on with AI. I agree with Dan's view about Cupertino and all things run through when it comes to consumer area, what Apple's doing. But I think there's another piece to it that isn't necessarily an analyst piece to it, but more of just like a human side to this.

is I think what we're going to see around consumer and AI is going to be a massive acceleration in terms of what we saw with social over the last 15 years in terms of how it changes, I think, humans' ability to engage in the real world. And in other words, when I think about all the good things that are going to happen, and I want to make sure that people understand how

the positive force that I think AI overwhelmingly will be. But on the consumer side, I do, I fear that we are, that the ability for the machine to just hit that video exactly at the right time when you're vulnerable to keep watching more and more of them. I think that that's a piece that really we haven't as a society come to grips with in terms of how powerful this is going to be.

In our last couple of minutes, Dan, I'd like to get your thoughts on outside the Mag7, what you're looking at in terms of opportunities in the tech space. What are some of your favorites?

Yeah.

And look, and I would just say, like, to me, outside MagSem, like, cybersecurity is going to be a huge beneficiary. CrowdStrike, Palo Alto, Zscaler, you know, being our favorites there, you know, especially as more and more moves to the cloud. It's led by, from a use case perspective, what I believe probably the best

software use case out there is Palantir, and that's a trillion dollar markup in the next two to three years, as well as names like Snowfleet, MongoDB, and others. You focus on who are the second, third derivatives of AI. And how about you, Gene? What are you looking at outside the Mag7? Where would you steer clear as well?

Well, I got, I mean, within this one's a $6 billion market cap, but box as in not drop box, but box. And the, this is a company that's growing at 7% next year, 9% this year.

But what they're doing around basically talk about the consumer side of it, basically taking your consumer, all the files that you have and be able to use an agent on top of it to ask, you know, where different things are insights around the data that you have. So I think that's one we own it in our fund that is it's off the beaten path that we're really bullish on.

as far as where to avoid um the rising tide is so powerful i don't have a good answer to that and i think that maybe set a different way my biggest concern about everything that's going on is i have a hard time coming up with a concern and that concerns me if that makes any sense yeah and so um i think that you know to bet against the names that dan and i spend so much time with i mean the broader theme this rising tide uh i would i would stay with the trend

Are there any that you'd steer clear of, Dan, just quickly? I mean, to me, it's some of the legacy players, the Ciscos, the HPs, the Dells. I view them as shared donors. So those are the ones that we're definitely less positive on.

All right. Well, we'll leave it there until next time. Thanks so much to both of you for being with us on this special high-tech-based edition of Bloomberg Daybreak. Gene Munster, Managing Partner at Deepwater Asset Management, and Dan Ives, Global Head of Tech Research at Wedbush Securities. Thanks to you as well for taking time out on this holiday. I'm Nathan Hager, inviting you to stay with us. Today's top stories and global business headlines are coming up right now.

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