Chit Chat Stocks - Software Stocks Collapse; Jerome Powell Takes a Stand; Taiwan Semi's Capex Surge

Episode Date: January 16, 2026

The Investing Power Hour is live-streamed every Thursday on the Chit Chat Stocks Podcast YouTube channel at 5:00 PM EST. This week we discussed: (00:00) Introduction (01:15) The Software Apocalypse (21:36) AI and Software Development (30:30) Housing Market Insights (34:17) TripAdvisor: A Legacy Business in Transition (38:43) Viator Acquisition: A Strategic Move for Airbnb (44:38) TSMC's Growth and Market Position (52:34) Apple and Google's AI Partnership ***************************************************** Subscribe to Emerging Moats Research: emergingmoats.com  ********************************************************************* Chit Chat Stocks is presented by Interactive Brokers. Get professional pricing, global access, and premier technology with the best brokerage for investors today:  https://www.interactivebrokers.com/  Interactive Brokers is a member of SIPC.  ********************************************************************* Fiscal.ai is building the future of financial data. With custom charts, AI-generated research reports, and endless analytical tools, you can get up to speed on any stock around the globe. All for a reasonable price.  Use our LINK and get 15% off any premium plan: ⁠https://fiscal.ai/chitchat  ********************************************************************* Disclosure: Chit Chat Stocks hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to chit chat stocks, a podcast that helps you discover your next great investment. I'm one of your hosts, Ryan Henderson, and I am joined as always today by the one and only Brett Schaefer. Today, we've got our weekly power hour episode. We do these live on Thursdays at 5pm Eastern time. We do them live on YouTube. So if you ever want to ask us a question during the show, feel free to head on over 5pm Eastern time on Thursdays. Ask us any questions in the chat. And we will try to answer them for you. But we talk all things financial markets on these episodes. We riff on anything in the world of finance. And we have a lot to discuss this week. Software Mageddon is here. The SaaS apocalypse. My portfolio has certainly been feeling it. I'll talk about that a little bit. We have Jerome Powell versus really Bill Pulte, I think, but maybe Donald Trump. We also have a potential credit card rate cap, which we'll see. We'll see what comes of this. But it's put banks in disarray a little bit. And then we've got a bunch of other news as well. A little bit of earnings, Taiwan Semiconductor, Delta Airlines. Brett, where do you want to start? I think we can start with the software apocalypse, Ryan. I want to apologize to the listeners, anyone, including yourself, that is invested in software stocks because I'm finally getting interested. So that means the bottom's not in yet. Diving the bottom is very, very, very difficult.

Probably means another 20% more to come. I kind of had the feeling, hey, Adobe at 300, that is as sticky as it sounds. or as messy as it sounds, probably a better word. Hopefully their software is sticky. Yeah, it might have been a little Freudian slip there. Yeah, exactly, exactly. It feels cheap. So why don't you dig us through the numbers?

I know you compiled a lot of data. You have a very complex chart here from our friends at Fiscal AI. Drink, we already mentioned Fiscal AI three minutes into the episode. But yeah, what's the data here? Why is it down? Is it this cloud code stuff? is everyone going to be generating software now honestly i think that's part of it the uh yeah this might be a fiscal ai heavy episode but basically software stocks broadly have been

clobbered over the last week and really it's been a tough year in general and if you look at like the software etfs a lot of them don't actually reflect the returns that we've seen in some of the bigger traditional software as a service companies because a lot of the ETFs are market cap weighted and they're heavily weighted towards Microsoft and Palantir, which seems to justify gravity. So and those two have kind of propelled the ETF returns. But if you look at some of the big names, some of the darlings of the software industry, I'll go through a few of them. These are the last 12 month returns for i picked 10 stocks here but i think you could have gone through and picked a few more as well fortinet down 17 workday down 21 salesforce down 25 adobe down 26

and i think they're in like a 60 drawdown constellation software down 29 which used to be the the compounder the canadian compounder could still be but it's gotten a multiple rewriting docu sign little might not fit in with the rest of these in terms of quality but nevertheless that's an old flame that's another old flame right there that's 2020 2021 all over them zoom yeah so they're down 31 service now down 35 keep in mind these are just the trailing 12 month returns a lot of them are probably down even further from highs monday.com down 41 atlassian down 46 hub spot down 51 the some of these might have changed by the time this gets released onto the podcast feeds but there are a few here that i actually find pretty interesting so uh constellation software for

starters they now traded a forward pe of less than 20 times and keep sometimes when i talk about a forward pe there's a whole bunch of like it's non-gap because it's forward it's estimates non-gap the usually there's some big stock-based compensation adjustment you don't have that for uh constellation software they have had the flat share count i want to say for like since they're beginning up their existence them in tsmc it's a beautiful chart similar to oklo's revenue and some of those it's those the the exactly flat charts on fiscal ai to the pre-revenue companies that i'm shorting or tsmc and constellation software share cap i think to give you a breather there ryan we need to get someone on as an interview for constellation

software because that's a business i generally know what they do i've read their shareholder letters but there are people out there that know 10 times as much as us and follow them much more close i think this quarter we should definitely get someone on yeah i imagine listeners would want that as well the other one which is a current flame of mine adobe now trades at an ebit of roughly 14 times i believe after today's drawdown uh that is trailing either and i was backing into some assumptions they're probably reducing share count by about six percent to seven percent annually at the current pace of buyback so i find that pretty compelling and then service now the the price is still expensive here the

ev to free cash flow minus stock-based compensation because they've got a lot of sbc is like 60 times the this might be the highest quality sas company of the ones i listed uh at the top of the episode because they have probably close to the most insane customer renewal rate i've ever seen like if you look up their customer renewal rate it's been basic and it's on physical ai maybe i can pull it up it's another flat chart pretty much it's 98 99 every single quarter every year you still don't know what they do i'm gonna be honest never never never could figure it out let's see how the overview says enterprise cloud computing solutions that define structures consolidates manages and automates services wow okay i still don't know what they do but yeah a lot of people

I will say someone a past guest on the show Casey Rosalillo of the what's her channel called Semiconductor Chipstock Investor Chipstock Investor

thank you they don't need the help but I will say it's a fantastic channel she was pitching ServiceNow so

a lot of other people as well at least some anonymous accounts on Twitter a lot of people like it here yeah let's see if Gemini can help me here ServiceNow automates and manages

digital workflows I think Like Fiscal.ai took it from Gemini. Gemini takes the information from Fiscal.ai. It's going to have the same summary of what the company does. Yeah, it kind of sounds like one big sort of system of record, I would guess. Okay. But if you have an actual 99% customer renewal rate,

unless they're just dropping prices every quarter, which they're not, that allows you to pay up a lot to acquire customers because that means they've got like 20 year lifetime values obviously that can change but using that churn rate backing into it you've got like extremely long lifetime values and i'm sure a lot of these enterprises it's a pain to switch but similar to oracle or something like that yeah that feels a little bit similar to that yeah i guess a couple lessons here in looking at the software first of all it's a good example of the pitfalls of the mantra pay up for quality you hear this all the time and it sounds good until it doesn't because things narratives can change really quick i mean it's amazing that

adobe is a battleground stock today like maybe not even a battleground stock people seem to hate it and think it's like ai is going to disrupt it five years ago 10 years ago it was considered like ultra high quality can't live without it software for their customers and it fetched a premium because of it but it's just it's a good example of even the high quality compounder like businesses when someone's being grouped into that camp that's probably not the time to buy it like when it's the high quality compounders just pay up for it no matter what you know like who cares what the earnings multiple is it's gonna grow revenue 20 a year for the century it's there's always i've found that pretty much

most companies other than maybe costco which seems to always fetch a premium i think we're just young enough where we haven't look at that long-term chart for both costco and uh not amazon walmart the earnings ratios are at a very very elevated level i still can't figure out why i can't think of a single business that has never that you can't look back and say there was a there was a point when the company struggled and there was a reasonable entry point valuation wise like uh i can't think of any company that's defied gravity multiple wise forever that's a fair point that's a good way to put it and if you look at adobe i pulled up their earnings yield historically if we go back 10 years ago maybe one percent one and a half percent and

now it's five and a half percent six percent maybe even higher because i think the updated chart would be even higher yeah five and a half percent exactly that is quite the multiple compression that you have to deal with everyone hates it now and maybe it's a good buy especially with this buyback we will see i'd love well i guess i just don't know the industry that well so i get a bit nervous buying into stuff because i go well i use canva sure maybe i won't use adobe ever and i don't i i really don't know yeah it kind of goes in my too hard pile still despite prices yeah my thinking here is that you are like and i i some people probably really think adobe's screwed uh i heard people in on x and twitter calling it the um i can't even remember

the name of the company but whatever before digital film before digital cameras came along they were digital i believe right or no or was that they were before digital anyway the the point is that people are saying this like it's a wave of innovation that's leaving that behind but and i use figma i use canva i use mid journey which is like the text to image ai image generation but if i went to work at an enterprise a big fortune 500 company with a huge marketing department you're gonna have to learn adobe's creative suite it's it's sticky it's a pain to switch the switching costs are really high and ninety dollars a seat at an enterprise level when you've got for professional marketing people isn't that high and you're probably blending it with the

adobe experience cloud to pull in a lot of the marketing to use the analytics that you get from the experience cloud on your customer base um and to leverage it with your creative suite so i just my gut tells me enterprises won't switch and i think that's that's kind of a safe assumption for a lot of products probably like software if you're if people use you on a daily basis Most enterprises aren't going to switch. I do think people like you and me, small businesses, user growth will probably be significantly slower, maybe even flat over the next decade. But let's say you get 4%, 4%, 5% revenue growth, slight margin expansion, call it 6% to 7% earnings growth, which is less than what analysts are expecting. If you pair that with a 5% buyback, you're getting good returns here. Yeah, I mean, you're getting 10% plus per share earnings growth. That to me, I think those are fairly safe growth assumptions. And the valuation looks good here. they're going to have to climb the wall of worry. We have a question here in the chat

as an entirely different topic, maybe a little less sexy, a little more political. Thoughts on the GSEs, Fannie and Freddie Mac. Are we experts on those businesses? No. But there's really something here that kind of takes into part the housing market, and maybe we can talk a little update on that. I've seen a lot of stuff, Ryan, that Austin, the South, things are looking cheap, so you might have an opportunity to make a little purchase there

at a reasonable price, finally. Apparently, these GSEs, Fannie and Freddie Mac, are increasing their allocations on mortgage-backed securities. Hundreds of billions of dollars is not a giant portion of the entire market, but it's supposedly going to narrow the spread between mortgage-backed security yields and long-term treasury yields, which will overall hopefully lower mortgage rates for individual homebuyers. The question was like, any thoughts on that? I would guess any decline in mortgage rates is going to incrementally increase buyers.

We've actually seen that in the month of December. I think NAR, which is the National Association of Realtors, said they had a record month in December of the last either two or three years. So we're finally seeing activity pick up. And I think of right away a company such as The Real Brokerage, which I've covered, uh on the newsletter in the past year where they are a you know a brokerage but they're

they're cloud-based and volume is going to drive their revenue volume is going to drive their real estate agents that they work with their earnings which the real brokerage is going to take a cut and if we're going to see a reversal of okay we had a huge freezing of the market in real estate and if mortgage rates normalize, I kind of get the, how would I say it? There's always those real estate bulls that are telling you the market's about to unlock. And they kind of describe it as a coiled spring right now

where it's multiple years of people stuck in a place they want to sell. And then when they eventually do, it's going to be a huge jump in home sales. And I kind of understand that that could happen because there's a lot of people that are waiting for slightly lower mortgage rates. And I think 2026, especially because this government, this U.S. government wants mortgage rates lower.

I think this could finally be the year that housing activity picks up. Yeah. Yeah, I could see the case for it. I mean, when you actually think about the last three, four years since the, or I guess maybe three years since the rate hike cycle, it's pretty astounding how housing has held up. Like you would think that because home prices are, were already not that affordable. And when rates spiked, they became even less affordable.

and you still saw at least out of the big home builders that i was looking at you still saw pretty good buyer demand it wasn't any like they were all underperforming their expectations but it wasn't like they fell off a cliff and i think a lot of that just probably goes to the fact that there needs to be an increase in supply but like to your point yes mortgage rates there seems to be a lot of pressure from this administration to drop to get rates to come down so that more people are buying homes but at the same time the you could see less supply come online from new builds if you stop having institutional buyers which is the flip side that this administration has talked about is they want to take that

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trading game today. If you're interested in checking them out for yourself, head on over to IBKR.com. Interactive Brokers is a member of SIPC. Yeah, that one might be a lot of bark, no bite. We'll see what actually happens there. Same thing with these. I was reading about the defense companies talking to each other about the buybacks. And I think a lot of them just said, just ignore it. We're just going to pretend like that didn't happen. The government's going to forget about it a month from now we're gonna run our businesses as normal i think maybe one factor that's not getting uh nominal home prices down is that adjusted for inflation in real terms we are seeing i mean it's significantly lower than 2022 and even going back to 2006 it's bare like real

home prices uh it depends on what you know metric you're using what data you're using so it can change a little bit but generally real home prices are barely up from 2006 just slightly it uh so i think inflation might be playing a role here i've been i've been doing some house tours down here in austin which was certainly a hot market coming out of covid i would not say this is a buyer's market now it's number one i think i think i've heard number one you and you in west florida a lot of inventory on the little zillow surfing that i do the other part is it's kind of funny talking to realtors sometimes uh because when they show up all of them say the same thing well rates rates are coming down uh rates will be coming down finally they make it

sound like it was like well they say this gets out of the way you know so he's like it doesn't matter if you buy now rates will come down you can refinance i've been seeing here in the same commercial since 2022 there's um it's it's like a baseball commercial for the local baseball team so they played 100 times and it's always marry the rate or no sorry i'm getting completely wrong it's about car lending it's marry the rig date the rate it's the same thing for like cars versus houses they've been running the same commercial think about how ironic it is for a three-year car loan they've been running the same commercial for the past three or four years no changes whatsoever so you're right it has been many years of everyone expecting the same thing to happen

year after year after year maybe 2026 is we don't find fully unlock the market but this is kind of a step change from unfreezing everything yeah yeah it could be the uh this kind of leads into the pal um pal v polty uh debate as well but before we get to that i do i want to close the loop on software real quick just to go back to that a lot of this seems to have stemmed from the claude code advancements i mean it really dates back to the uh probably all the way back to the chat gpt launch but the concern with a lot of these businesses i'm thinking about monday.com specifically but a lot of these like task management or crm solutions in people seem to think that a lot of enterprises let's call it a 50 billion dollar

company with 5 000 4 000 employees somewhere in that ballpark are going to be building from scratch and stop buying from outside vendors or there'll be an increase of that i think that's it's really far from the truth like i just don't see that playing out and people i i'm seeing all these anecdotes that people are like oh yeah no our developers can just vibe code that that crm we don't need salesforce anymore it's and i remember people were saying this about stripe like oh you're getting fed up with your payments processing fees like just vibe code a payments processor and it's like it's only going to take like five devs two to three months to throw something together especially with claude okay you think they just set it and forget it

the you you then have to maintain that forever like these things break all the time and it's probably a worse i guarantee you five devs on your team that this is not their focus could not vibe code a stripe or a payments processor with equal feature compatibility so everyone else that uses that system or relies on it's going to be pissed it's probably not going to have the same uh payment authentication rate so it's going to be headwinded revenue and the kind of the list goes on this is i'm using payments processors here but it's the same for task management software everyone that uses money.com is going to be pissed when you rip and replace for some terrible solution that five devs built and forgot about because what happens when stuff doesn't

work you go back to the vendor so it just to me it's costly to maintain these things and a lot costlier to add more and more developers to maintain these things than to just pay for a vendor or at least price compare to you know like most of these industries are competitive salesforce has competitors i think you can go out and you can look around and price compare but i think it's very and that would be the headwind to me that that's a realistic headwind to software is that pricing power is not as high because AI has lowered the barriers to entry for competitors to come along.

But the idea that people are building all this in-house is like insane to me. And if that really is the narrative, I think that'll get disproven over time. Yeah, we'll see. I don't have a hard take on the industry, but the market looks, it looks cheap. It looks cheap.

I like the theses here. probably tough for people to keep buying it feels easier sitting on the sidelines going oh i'll nibble after it's down 50 and there's the the meme of the guy all bloody next to him like oh i've been here for three years man but it's definitely interesting at the moment i think um you even have constellation software that was a supposedly unbeatable business they're getting taken out to the woodshed as well yeah the one thing i will say is there's not like a lot of these are in big drawdowns they're still not cheap a lot of them are still 30 plus times earnings uh and if if you do think there's going to be slower growth 30 plus times earnings is not that cheap but there

are a few here uh constellation software adobe where the headline multiples are starting to look pretty attractive okay we can't talk software forever as in questions here that i think can relate to the Jerome Powell video. And I wouldn't call it a scandal yet. It's a simmering story that could potentially blow up if things develop. But let's see. Tyler asks, do you think Powell will stay in his governor role until 2028, even though he end his chair role? I don't know. And I don't think that matters. There's another question. If the Senate won't confirm a Fed chair do you think powell will stay in the chair role yet that could turn into a huge political football if they decide to do that if an investigation is ongoing into any criminality

around the what is it the the remodel the expensive remodel uh but that leads into some notes i have on powell's video first these are a couple questions i have thoughts on the video can Besant, the Treasury Secretary, keep Bill Pulte in line. I think we might need to mute him permanently. Pulte just causes trouble for investors, the economy, a lot of stress and unneeded stuff. From what I was reading, it seems like Pulte and whoever the prosecutor is, i think it's that old fox news host honestly janine piero could be wrong no no expert on this all this stuff but they basically went rogue and did this without any sort of coordination and it would make zero sense really to me to mess around with powell and turn this into a

whole political scandal when his term is about to end in a few months so i don't understand the motive and i yeah those are my thoughts what what did you think ryan no i think you're right i think like if i were trump i would be disappointed that this happened when it did uh especially if he didn't know about it i i got a feeling he had to know about it but you could have just let it go let his like uh run end and nominated someone that you thought was going to favor more your policies or just lower rates like you want but now i think this raises a good point like people are going to be questioning the politic politicization it's a tough word tough word the politics involved in whoever the next nomination is so it

i watched this video and first of all i think powell i like powell he's the man he's a true he's a patriot i think he is and to the question of would he stay in the chair if he had to until they nominate someone else i think he would i would not he it sounds like it's taken years off his life frankly it looks like it's taken years off his life when i watch these videos he seems like just he's pretty old he's not you're true you're right you're right so exhausted all the time yeah to be fair 72 years old but yes the before and afters are quite stark yeah i mean guess he's been been there for a long time but it's just it's so infuriating like it's a guy is genuinely trying to do his job like whether you like him or not he's trying to do his job

he's i and poking him more and more and calling him like oh he's just trying to hurt me politically like that's only if i were him i'd be like all right now i will like now let's try to raise rates but he's still just kind of stuck to his math basically yeah i mean he took it yeah he took it it's he took an oath to serve the american public it's it's a tough situation i hope it simmers down as an investor but my only thought of what i can control is diversifying away from the united states because when you combine this with all of the fiscal spending we're gonna we had a question here that i really don't know how to answer with any conviction do you guys think uh basically a gun to your head recession or expansion in 2026 i'd probably say expansion

because of all the fiscal stimulus that the government is trying to push through this year especially along with the data center build out just makes a lot of sense and the fact that again we once saw that this quarter that the banks say consumer spending is adequate. But back to the point, it feels to me like the dollar is going to depreciate. It also feels like there's more risks of an inflation reacceleration with a lot of the things coming down the line, a lot of the proposals, a lot of the spending, a lot of the basically monetary and fiscal things. We're lowering interest rates. We're going to try to pump stuff out. I mean, there's just all of these proposals as an investor it makes me want to diversify outside the united states

that's that's all that's all i'll say any other thoughts ryan before we go to the next topic no i feel the same way and part of it is valuations are just expensive here that's the other like that makes me want to look elsewhere and i will say i did that this week a little teaser here bought two stocks all right this is more of a buy now i gotta go verify but i bought mercado libre i know i said i wasn't going to do it right after it jumped on the venezuela news but i thought it still looked cheap anyways and i bought c limited honestly don't know the c limited business super well i'm getting i'm getting through the uh 20f at the moment and i think i might just end up selling it it's very complicated yeah well it's more yeah i thought it was more of a vertically

integrated e-commerce player than it is uh a little more team than amazon huh i didn't know that yeah it seemed it looks like they're trying to build that out but that's not the same as having a logistics advantage like trying to make a logistics advantage it's not the same as having So I might end up selling that, and they have a lot of loan exposure. Yeah, so it could get messy without you knowing, kind of Southeast Asia, stuff like that. We have a comment that says, Melly, would MercadoLibre see limited? I think that's Topicus and Coupang are great ways to diversify outside of the States. I would agree.

I'm someone that likes MercadoLibre, don't own it. It definitely could, and then Coupang is one of my largest positions as well. Yeah, I think, hey, I'm in the middle of Mercado Libre market right now. They're home country. Mercado Pago, I honestly think it's so entrenched here with payments. Think of it like the payment terminal plus your credit replacing credit cards for so many people. It's almost like Venmo meets Adyen meets Clover. I don't even know how to describe that.

Meets Square. Kind of, it's all that wrapped in one. it's and it's all from your smartphone i think that new bank is going to have a tough time if they enter this market because it's so entrenched and that should i think get people bullish on mercado libre you know it's not as big as brazil or mexico from a population standpoint but it's it's entrenched that's for sure um the one thing i've heard and i think brian stoffel gave me some uh sense of security around this is i always worry that i think something is the amazon of blank like oh it's the vertically integrated e-commerce player in south america or in brazil

or in argentina and i'm worried that that's not right like that's not an accurate description of what it is and brian stoffel or i think it might have been you honestly was like like it's kind of exactly what you think it is yeah well i mean if you talk to anyone in south america and you like hey where do i buy this you know especially as a foreigner you don't know exactly how all the local shops and stuff work and they'll go well you can maybe get it here but it's easier on mercado libre unfortunately foreigners can't get an account you have to have like a local almost passport number id number but i honestly wish i had an account so that's some good anecdotal evidence all right do we want

to shift gears a little bit here small cap of the week or an interesting one okay then let's go Taiwan semiconductor because hot stock today and I think it's helping the entire hardware market as well so my small cap of the week I was asked last week to do Zeta which is an advertising ad tech player looked into it and i wasn't i'll just say i wasn't loving it i

could have kept digging but i as i was researching said i also found trip advisor which i found way more interesting and really liked it so first of all thank you to alex morris tsoh investing for uh writing this up and inspiring my research here trip advisor for those that don't know is a uh legacy travel company with sort of a hidden gem under the hood so gen x and boomers will know trip advisor we're maybe a little bit young for that yeah we're right in the we're in the in between where i guess viator is kind of for us maybe but um yeah so when most people think of trip advisor they probably think of the legacy trip advisor website where you go and you plan your trip and then a trip advisor they redirect you to hotels or an online travel agency or

something like that um and then trip advisor collects referral fees from those uh merchants or hotel providers basically so most of their referral fees come from booking holdings and expedia but that business is dying uh like i said they're basically a middleman between like google and hotels i think alex morris described as click arbitrage basically they're paying to show up as high as they can on the search rankings and they get they get paid a little bit more for the hotel referral um google's trying to go no click with their ai answers so that's kind of cutting trip advisor out and then the otas are trying to go direct to the customers through mobile apps so on both sides they're getting squeezed this business has gone from 1.3 billion in revenue

to 850 million in revenue over the last decade so probably goes to zero too yeah and i would guess that the runoff gets even amplified from here third point yeah and they're trying to i think they're trying to downsize this business they're cutting marketing spending cutting employees all that on the other side they have viator which is now their largest revenue contributing segment and so that's why i say kind of sort of your classic good company bad company however and the only thing that's given me pause as i was doing this research is this is one of those iac like amalgamation spinoffs which i've gotten burnt on a number of times when i try to do this good company bad company thing match group it was like yeah tinder

sucks, but Hinge will take care of it. The cash flow runoff from the big brands, it really hurts in the short term. Anyways, Viator itself looks like a really attractive business. You can think of them as, I know this is kind of an ironic analogy now, but the Airbnb for experiences, and I say that because Airbnb is going into experiences. They actually executed the best and the fastest on getting the experience's supply. I've looked at both platforms for certain things, and Viator has 10 times the supply in most markets now. That's probably the biggest threat.

Can Airbnb catch up? Maybe, but they've just been a bit lackluster in that regard for their entire history, and I don't know why. Yeah, I kind of would say wait and see on the Airbnb threat, but maybe maybe uh maybe they buy it spin it that's honestly isn't it are you they have a third segment right you spin out all three of these let airbnb take it out and maybe get a two three x return from here i think a lot of these businesses maybe not trip advisory you kind of just let that run for whatever cash you can but the uh the fork is their third business

it does like 200 million in revenue and it's actually profitable competitors and this that's just like a restaurant reservation systems it's very popular in europe it's like the resi of of europe i guess um they there's been a lot of private equity buyouts in that space apparently at big multiples compared to what people are i guess you could assume giving the fork but and i don't know kind of a funny name but anyway the uh viator it probably makes more sense in european language just maybe better in spanish french and italian yeah viator seems like a logical acquisition candidate for airbnb it's probably not too expensive and if they're really trying to make into a push into experiences this is one of the quickest ways to acquire some supply

the whole business overall and by the way viator 22 revenue growth rate since 2019 so it's growing quickly just turn the corner towards profitability and it seems like they can continue to scale margins it's got a 1.6 billion dollar enterprise value in total they're due 2 billion in revenue they're currently doing 340 million in adjusted ebita i know roll your eyes Oh, but even if you strip even if you strip out the stock based comp, it's like 220 in adjusted EBITDA minus stock based compensation. the it's five times enterprise value to adjust ebitda at the moment the concern is there's basically all these um uh headwinds at tripadvisor which is going which is the most profitable business by far which is going to lead to headline multiples looking really expensive

i hate to say it but i'm interested and i know iac has burned me a lot but i i can't help but That meme, you're going to do that meme? The one from Arrested. It might not have worked out for them, but it might not have worked out for me, but maybe it will this time. They're in a 10-year drawdown, 80%. Let's look at the max one.

90% since 2014, and it's cheap by the dip. I think three years ago, they were doing $400 million in operating cash flow, which is like a third of their valuation fourth we have a comment here that says we have a comment here that says

time to keep an eye out for that strategic review 8k I think there's already been rumors about it the company has said they're exploring options which is what women say when they're breaking up with you along with executive teams they always use

very formal speech to kind of What exactly are you doing? We're exploring our options. What does that mean? You're trying to get bought out. Yeah. You're trying to change ownership. Yeah.

And they actually just bought... There was two red flags here. One, it's technically a long-time descendant of IAC. Bit of a red flag, in my opinion. The other one was it was a part of the Liberty Complex, which... Ooh, that's a double-dipping. Yeah. And Greg Maffei is on the board, which...

Look, whatever you think of these people, it seems like they always make out like bandits with good pay and shareholders are left holding a bag. That's what it's felt like in recent years. Sometimes they do okay. So, yeah, sometimes they do bad. Can you guess? Can you get close to IEC share price right now? Give a guess. I have no clue because I don't remember what it was when we were here.

Okay, okay. It was 40. It's pretty much where it was when it crashed in 2022. It hasn't gone much of anywhere. that sounds about right based on what about match group they had what about match group oh match group 35 31 and 60 30 31 dollars and 60 cents hinges actually becoming a decent i know i said this five years ago it's becoming a decent piece of the pie i know if they buy back enough stock like the market will become small enough they'll

trade at a cheapest enough earnings ratio to finally be reasonable? Is that this year? Maybe. Maybe. All right, folks, before we move on, we need to tell you where we get our data. Fiscal.ai. Fiscal.ai is the complete stock research platform for fundamental investors. I use the platform pretty much every single day. You'll see the charts in our podcast. You'll see it in our newsletter. This is our one-stop shop for stock research. They've got up to 20 years of financial data on all companies globally, including the largest company-specific segment and KPI data set on the internet. That includes metrics like Duolingo's daily active users, Oracle's backlog, Rocket Lab's revenue per launch, and literally millions more data points. They've

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explore the service today and find your next great stock by going to emergingmodes.com the link will be in the show notes let's talk uh and actually good business here want to talk taiwan semiconductor sure so stocks up big they had another blowout earnings they had a huge capex guide which just flows through to the entire well maybe we'll talk bubble watch after this too because I have a serious bubble watch and a, I don't know if you clicked on the link, but I think maybe one of the best ones we've ever had. But let's talk TSMC.

Eat the veggies first. Q4 operating margin was 54%. Remember, this is a manufacturing business, so that is just absurdly strong profit margins. That shows the pricing power they have in their monopoly-ish, pretty much monopoly position. 25% revenue growth in US dollars Q1 gross profit margin guide of 63% to 65%

which is growing which means, I put a question mark here but it pretty much guarantees that they're flexing their pricing power muscle to their customers so the Apples, the NVIDIAs, the Broadcoms the advanced micro devices, everyone they're guiding for 30% revenue growth in 2026 off of what I think is at least a $100 billion base

so just really absurd growth. And they're guiding for starting in 2024. So it was higher than this guide the last two years, but through 2029, 25% compound annual revenue growth. That's kind of what they're seeing at the moment. And they're looking at, again, this is from their customer order book, $52 billion to $56 billion in capital expenditures in 2026. That's why everything semiconductors is rallying today you see asml up and all that market cap is now 1.47 trillion dollars could this be the largest company in the world by the end of the decade what do you yeah the revenue guide is outrageous it really is uh like 25 percent revenue annual revenue growth from here over the next five years would be insane uh i wanted to highlight this

piece of the transcript from uh cc way who's the ceo of taiwan semiconductor and it's kind of funny uh i don't think he speaks perfect english so some of this repeating thing on the call the calls are terrible i'm gonna say i've never listened i just read the transcripts but some of it kind of reads funny as you could probably imagine but it reads very like just brutally honest, it sounds like. So here's the quote. Someone asked him, are you worried at all about overexpanding capacity if AI demand drops? Which, great question. And he says, you are essentially trying to ask whether AI demand is real or not. I'm also very nervous about it. You bet, because we have to invest $52 to $56 billion for the CapEx. If we don't do it carefully,

And that would be a big disaster for TSMC for sure. So, of course, I have spent a lot of time in the last three or four months talking to my customers and then my customers' customers. I want to make sure that my customers' demand is real. I talk to the cloud service providers, all of them. Their answer is, I'm quite satisfied with their answer. Actually, they show me the evidence that the AI really helps their business. So they grow their business successfully and he or she in their financial return.

this is the part that kind of is working for us you know what I saw this was one of those tweet headline aggregators so don't take it for fact could just be a rumor that and this maybe reflects more Microsoft software prowess at the moment

that Microsoft is spending 500 million dollars a year on Claude on Anthropic interesting Amazon could get a little earnings re-rate i know just from the mark up there last the last sentence here i find hilarious uh of his quote he says i also double check their financial status they are very rich

yeah that's true i'm sure that's a lot of money do they does he need to like talk to them to figure out that they have 100 billion on the balance sheet you know what it was also happening at the same time maybe they timed it for the earnings I'm not exactly sure but probably not but the US and Taiwan have clinched a trade pact they're eliminating tariffs

I'm guessing Taiwan Semiconductor was all these big companies negotiate away from it you have Tim Cook come into the Oval Office with some gold plated iPhone and then oh boom no tariffs for you uh 500 billion dollars in taiwanese commitment to the united states i believe in half of it is

going to be in u.s manufacturing so i think 250 billion dollars in total probably on top of that old 100 to i think 150 billion dollar number from tsmc and it's all going to expand i believe to 12 manufacturing plants in northern arizona or north of phoenix so northern phoenix i saw that some of the land prices in northern phoenix just skyrocketed and tsmc's had to go to auction for some of these things so if you like one of the best lucky investments of the last few years is if you were someone in northern phoenix and you just happen to own an acre of desert or a couple acres of desert and hey now my land's actually valuable instead of 50 years from now when the city expands out there actually this company from taiwan wants to spend 200 billion dollars to build

these these advanced manufacturing facilities yeah i wonder if there's investors out there looking for like land adjacent land that could be used for data or someone comes in it's probably a slice or a drop in the bucket of their overall spending costs and they go over to the auction they have some people and they're like all right just drive up the price for tsmc i'll give you a little cut i could see i mean that's illegal but you definitely could see that stuff like that happening humble brag here i am up 50 on my tiny little taiwan semiconductor position hey buffett sold way earlier than you remember when he bought at the absolute low that's right sold right away yeah you think that was him yes he mentioned at an annual meeting

it was him he's like i bought and then i got nervous about the geopolitical situation a month later something like that so he sat on it and he was like i don't want to deal with this hey the old man's not afraid to change his mind he recently did an interview didn't he with becky quick i think it was pre-recorded but yes new video footage has come out yeah he says things like live the life you want to live it's fine i don't think it's worthwhile watching i bet he doesn't love getting questions about like how should i live like he's like well i researched stocks for 16 hours a day and played bridge he's i bet he's just has like a list of platitudes he's like just trying to be happy live the way you want to live uh people yeah there was a lot of news

going around about how he was he said he's still hunting for a hundred billion dollar deal or was before he retired and i was like yeah that's that's not news he always is yeah yeah and people are like i got an idea for you nvidia like yeah you could i'm sure i don't know if he's heard of that company yeah well i don't i feel like there's some insurance that he could some insurance companies that would interest him these days maybe maybe he just doesn't care anymore but there's been a huge sell-off in the medicare space maybe he just well they bought united health remember oh that's right so yeah maybe they'll increase the position there i don't know if they maybe for the political stuff they want to get associated with health

insurers as a wholly owned subsidiary i'm not i'm not sure but hey they seem to like it a little bit at least yeah also there it seems like that's a anyone who owns or runs the medicare companies is hated by a lot of people it seems that's true that is true google and apple let's do it yes yes well this is another one you have a larger position in alphabet i have a unfortunately psychological position that is up 100% and doesn't impact my personal portfolio. But Gemini and Siri is really a pretty basic announcement. I think it's very understandable. Apple is going to be paying Alphabet what is reported to be about a billion dollars every year to have Gemini power Siri. Now, a billion dollars is not that much in the grand scheme of things for these companies,

But my question is, is this not a moat erosion staring us in the face? Can Apple not, do they not have the expertise to do this themselves? Because they're the ones that came out or maybe acquired it, but then launched Siri over a decade ago and they have no AI LLM capabilities at all. Seems like they can't do anything. This was a moat erosion issue five years ago. Siri has not been. Confirmation, confirmation.

This was not baked into the valuation, I am sure, and it hasn't changed the valuation since. Siri, what just dropped the ball, man. They were the first to market, from what I remember, with a product like this, and it's been unusable for 10 years. Would you rather have them be Apple and probably spend nothing on it and just kind of let it go? because they do have cost discipline on that operating expense line or would you rather have them been amazon and have a slightly better product and spend 100 billion dollars to nowhere i guess at least apple in this case maybe get a better roi i don't but it's kind of awkward that they've just left it there like it's just linked it's this horrible product just lingering out

there like you would think they would feel concerned to have their company attached to a product like this and and the other issue is like if you don't have a sense of how to solve for it here's the part about llms is there's an endless amount of cases to solve for on an llm like and that's i assume i guess siri's not an llm but the should be this makes sense pay a little bit give it to gemini i i still don't necessarily understand the monetization angle from apple's perspective but convenience i guess there's no no i yeah i guess your point there here's here's what i would be concerned about i've been told for the last decade and i think it has been true for the most case that the iphone is the best real estate in the world and companies need to

pay a privilege to be associated with this is why google pays so much to have google search be the default this is why the app store has insane fees now alpha or apple is going to google or alphabet or whoever and saying look we need gemini or series terrible you we need your capabilities with us and alphabet has much better negotiating leverage there's just such a mode erosion to me it's just again it's plain as day and if you imagine five to ten years from now if on the smartphone or whatever device you're using if AI is the center point

of these smartphones if that's like the key focal point for everything and it goes through Gemini who has the power in the relationship I think it slowly goes to Alphabet yeah but maybe you could have said the same thing about Google powering search on

on the iPhones for the last 20 years i think it's different yes this is your op like think about it with cloud code chat gpt all that stuff it's more of your base level operating system for hardware yeah more like windows almost at least in my mind why do you think apple chose to go with google over open ai because open ai stole all of apple's employees in ai so i do wonder if sam altman has a bad relationship with a lot of the other tech executives i would guess so yeah i would think so he's a little bit elon musky where people are like oh yeah i like him or

like oh screw that guy there was a this is unrelated but i when i listened to that reed hastings interview they were like he served on facebook's or maybe he still does serve on meadows board and i i he must not because this comment was like kind of a fu to mark zuckerberg it was yeah he doesn't anymore yeah yeah he was like well you know i admire the fact that zuckerberg's willing to like focus on really sidetracked bets like it's very audacious and it's it's amazing how he doesn't he doesn't get buy-in from shareholders and doesn't care and he's like and he's willing he like kind of backhanded complimented him was like yeah you know it's amazing how he just wastes shareholder dollars on some of these like big home moonshot

bats like crypto and stuff yeah yeah there's no way you're still on that board speaking of zuck that leads to bubble watch this is a serious one related to all the tsmc and that quote you had there ryan mark zuckerberg had a post on threads you know i still have that power it's just i'm gonna make i'm gonna post something on here and everyone everyone's gonna see it because i control this uh it's kind of long but i'll read the first two sentences today we're establishing a new top leddable initiative called meta compute they love initiatives don't they they just love new projects new names and he says meta is planning to build tens of gigawatts this decade and hundreds of gigawatts or more over time how we engineer invest and partner to build this infrastructure will

become a strategic advantage it's going to be led to other people blah blah blah do you know how much hundreds of gigawatts is i saw your tweet so yeah i do but it's uh honestly i see these things and i see people quote gigawatts and it all of this just means nothing to me like you think it's not happening darren never gonna happen it just feels like a who can say the biggest number battle and there's no timeline on these things so like maybe they could build tens what first of all what is tens of gigawatts tens of gigawatts let's pull up that list a hundred is that yeah and let's see i want to put it in context to the size of a country what tens of gigawatts is it's high hundreds is like the size of germany their entire country i'd be shocked if they built 100 gigawatts

of capacity or do they build do they launch meta cloud once they overbuild so i've heard that they have a lot of demand like people have asked them if they're going to like sell compute it's a nice backstop i guess like if if they can't fulfill their all if they have over if they're over supplied have too much capacity on compute it's nice that people have asked for this but i think if they were going to do it they would have done it five years ago yeah you're probably right it just makes you think alphabet is in such a better position yeah i mean they the thing is not that much has changed between now and a year ago with google

just narrative they've got like 15 market share instead of five yeah yeah gemini's gotten better but a lot of that stuff was visible a year ago like the they had the distribution they had uh one of the highest performing models they had all the money in the world to throw at it they had great tech talent i don't know like it it's weird how now it feels like a no-brainer and then everyone thought it was like dying price tries narrative okay we gotta close out your line or what do you remember libra libra yeah and they got changed to something else it was gonna save el salvador or something like that yeah i didn't i didn't hear about the pivot speaking Speaking about crypto, I got a press release that I'm just going to read.

I'm going to start it off here. January 15th, 2026, Bitmine Immersion Technologies, the leading Ethereum treasury company in the world, announced a $200 million equity investment into Beast Industries. Bitmine also implements an innovative digital asset strategy for institutional investors. quote mr beast and beast industries in our view is the leading content creator of our generation with a reach and engagement unmatched said thomas tom lee chairman of bitmine beast industries is the largest and most innovative creator-based platform in the world and our corporate and personal values are strongly aligned we're excited to welcome tom lee and the bit minus new board blah blah blah this is their support is a strong validation of our vision strategy and growth

trajectory and provides additional capital to achieve our goal to become the most impactful entertainment brand in the world, and here's the kicker, we look forward to exploring ways to further collaborate and incorporate DeFi into our upcoming financial services platform. And right now, Ryan, as we're recording, the Bitmine shareholder meeting is being live-streamed on X. And in Q1 of this year, Bitmine Emerge, I know this is a lot, they will be launching Mayvan, Made in America Validator Network, a dedicated staking infrastructure for bit mine assets okay when i sell my business i want the best tax and investment advice i want to help my kids and i want to give back to the community oh then it's the vacation

of a lifetime i wonder if my head of office has a forever setting an ig private wealth advisor creates the clarity you need with plans that harmonize your business your family and your dreams. Get financial advice that puts you at the center. Find your advisor at IGPrivateWealth.com. Hear that? It's your money calling. It wants a promotion. Elevate your savings with the Scotia High Interest Savings Account. Always earn high regular interest rates that grow the more you save and invest. Conditions apply. Visit ScotiaBank.com slash H-I-S-A to learn more. Scotiabank. You're richer than you think.

That's it? That might be the most... It's one of the best press releases I've ever seen, yeah. I guess you almost have to... If you're a business that technically does nothing, if you don't create anything, you don't provide any value, you might as well lean into it. You might as well make an equity investment in Mr. Beast.

like just do do the craziest thing you can because if the whole if your business is being a meme stock you might as well take it up a notch like take it as far as you can because there's no point now like if they turn around and we're like we're going to start making stuff they're investors they're buying five percent of the ethereum worldwide ryan this is a really important business you know what's hilarious at least micro strategy strategy sorry we had a premium to nav for like years this company went public in i think july or the announcement was in july went public maybe in august something like that they're already trading at a discount to nav so the business model's already broken in less than a year

yeah 14 billion dollar market cap yeah I think count me out people forget well yeah count me out yeah as well I think with the market just inching higher every day

people get lulled to sleep of the craziness out there I did a fiscal AI screener anyone can use for free it's a good way to check out the product market cap above 100 million dollars excluding biotech price to sales above 100 there are 71 companies out there with a price to sales

above 100 outside of biotech that's quite sizable what was the market cap above what about 100 million 100 million 100 million yeah okay yeah no that's insane like i mean no company should trade at 100 times sales yeah uh we got a comment here any thoughts on grab since it's in a recent drawdown nothing yet but if you're looking to which i am as me talking to myself here if i'm looking to diversify outside of the u.s that would probably be one of the stocks in my at the top of my list to go revisit and uh recommendation to all the listeners if you're interested in that business we did do a full deep dive on it a while back if i were researching it i'd probably go back to my own notes that's what these episodes are for uh yeah e-commerce the grabs of the world

seem like good bets all right ryan any anything else before we close out we're going over time here i think that's gonna do it all right let's hit the disclosure i want to get out of here we are not financial advisors anything we say on the show is not formal advice or recommendation ryan i or any podcast guests may hold security discussed in this podcast may have held them in the past and may buy, sell, or hold them in the future. Thank you, everyone, once again. And we'll see you next week.