Chit Chat Stocks - Zuckerberg's Superintelligence Team; 3 Stocks We Just Bought For Our Portfolios; What Will Be The Largest Company In The World By 2030?

Episode Date: July 11, 2025

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: (02:06) Delta Earnings and Consumer Spending Insights (08:01) Recent Stock Purchases (22:52) Taiwan Semiconductor: A New Investment Perspective (27:23) Predictions for the Largest Company by 2030 (33:27) Amazon's Subscription Revenue Growth (35:59) The Future of Alphabet and AI (39:57) Evaluating Major Tech Companies (44:43) Meta's AI Talent Acquisition Strategy (57:12) CoreWeave's Aggressive Expansion Plans ***************************************************** JOIN OUR NEWSLETTER AND CHAT COMMUNITY: https://chitchatstocks.substack.com/  ********************************************************************* Chit Chat Stocks is presented by TSOH Investing Research. Long-term equity research with 100% portfolio transparency.  Subscribe Today: https://thescienceofhitting.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  ********************************************************************* Bluechippers Club is a tight-knit community of stock focused investors. Members share ideas, participate in weekly calls, and compete in portfolio competitions. To join, go to ⁠Blue Chippers and apply! Link: ⁠https://bluechippersclub.com/ ********************************************************************* 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 Chitchat Stocks. Today we have another episode of our Power Hour. I'm one of your hosts, Ryan Henderson, joined as always by the one and only Brett Schaefer. We've got some fun topics today. Which company will be the largest company by market cap in 2030? Brett's got what I'd argue is some hot takes and I've got I think maybe a dark horse for that list as well. And then we're talking about recent buys. There's been, I think, at least a few stocks on my watch list slash portfolio that have been what I would call a discount. So I have been buying. So we're going to give a little transparency into some recent purchases that Brett and I have both made. And then we've got a whole other host of topics as

well. Autodesk reportedly dipping its toe back into the acquisition funnel going for, I believe, more than a $20 billion acquisition, rumored. And then we've got Delta Earnings, Meta, Poaching, AI Talent, Zuckerberg is building his super intelligence team. But before we get to all that, we want to talk about our friends at Interactive Brokers. If you're a regular listener to this show, then you know that we love international investing, and I'm guessing you do too. When it comes to international investing, no brokerage compares to Interactive Brokers, otherwise known as IBKR. You can easily trade assets worldwide using a multi-currency IBKR account in 160 markets,

36 countries, and 28 currencies with low fees. Compare that to your existing brokerage and its limited trading ability and high fees on foreign exchange. There truly is no comparison. Trade stocks, options, futures, currencies, and bonds globally with IBKR's unified brokerage platform. I wouldn't use any other brokerage for my investing needs. If you're interested in checking them out for yourself head on over to ibkr.com restrictions apply interactive brokers is a member of sipc brett where do you want to start we've got some do you want to save the fun topics for later into the episode or you want to get right into it well what are the fun topics i would say earnings are a fun topic but i don't think the listeners do yeah i don't know if

listeners are as excited for our take on delta's earnings as they might be for which company we think will be the largest in five years. But why don't we eat our veggies first? Maybe Delta earnings. We could also talk the Autodesk rumored acquisition in there as well. Yeah, let's do it. Delta earnings, pretty simple. It's always one of the first ones to report. So it can be a good indicator of what consumer spending is like. And they're such a large airline and they also have such a large credit card business that you can see the health of the consumer in some way, at least maybe the premium segment. So stock was up over 10% today. revenue was only up 1% in the quarter year over year on capacity up 4%. So tickets were down a

little bit. It looks like from my reading that expectations were quite low in the quarter. Here's a quote from them on the American Express remuneration. I can never say that they get $2 billion in revenue from their American Express partnership for credit cards. So that is up 10% year over year. So we're seeing the credit card business for them. The travel credit cards continue to take market share of their existing payments. You know, it's growing faster than overall revenue. They delivered their balance sheet, took down $2.9 billion in debt and finance leases. So they're coming out of the pandemic panic ever so slowly as they generate more cash flow. And they're still guiding and reaffirm their guidance of three to four billion in free cash

flow this year. Market cap, $37 billion. So expectations, I thought, were low going to the period they seem a little bit higher now that feels like a reasonable valuation for a leading airline you know 10 10 times cash flow something like that my general takeaway from reading it was that premium tickets are doing well the business overall is much better than i think what people feared a couple of months ago consumer's not dead yet ryan well take this into account i have been flying delta a little more lately so maybe uh are they in austin are they an austin flyer they are my uh resident west coast airline of alaska airlines has limited routes down here so delta is kind of the one i've gone with

but yeah the numbers it sounds like they're all right i i want to get your take on the airlines overall because the business model has changed we've talked about uh mileage programs on this show before but they are probably the most pivotal moment or adaptation of the airline industry maybe ever in terms of like changing the recurring customer nature of the business do you think these are investable businesses do you see yourself ever owning one of these airlines not not if it gets like cigar butt deep value type thing but owning one because you believe that it can grow at a solid rate for a long time i i think probably not the industry is just so tough but delta would be the one i'd want to buy one because they have that american express

partnership, which I think is quite profitable for them. And the spending on those cards, the relationship they have there, it seems like it's an exclusive relationship. They're the only airline that partners with American Express. And you have that combination with all the travel rewards, airport lounges, stuff like that, that people really enjoy. Besides that, I think there's better stocks out there. There's better companies I can own in my portfolio. I really like following the industry because it can be a good harbinger on you know labor stuff with all the people that work for these companies travel as a whole consumer spending credit card spending so i think it's fascinating to look at but i honestly look at delta to track as my leading indicator for how

american express's quarter was and that's why that's the one thing i look at first when opening up their results it's oh someone wait we have a comment here have you looked into ryan air that is maybe number one but i remember looking at that business and thinking well where's all the cash flow yeah no it's a fair concern yeah and it's always i think uh the ceo of ryanair i'm blanking on his name uh uh o'leary yeah yeah michael o'leary um anyway he he basically says like the airline industry is always two to three years away from its next like catastrophe like uh i don't think i don't think you use that specific word but like downturn and it's it's so true it's so unpredictable the you never know what's going to cause some sort of a slowdown it could be a

supplier issue it can be uh covid it can be i don't know you name it there's always going to be some problem and the economics are just so tight it's so hard to squeak out a margin i will say maybe the at least in america there's there's not a lot of incentive to build a new airline like from a private like if you're a startup i don't think we're seeing a whole lot of airline startups these days, because it's such a tough business to be in. Logistically, it's a nightmare. And at this point, there are some advantages to being the incumbent because you've got the massive cardholder base and people don't want to switch. But I did see some comments in the chat. We can maybe touch on some of those before I get to the Autodesk acquisition. Someone's talking

about remitly here uh i actually saw brett you talking about this yesterday as well maybe this is a good time to revisit actually i have a look at our notes here so why don't we uh move into three stocks that we're buying this week because uh maybe that was a little tease there do you want to alternate here give a little pitch we both have three stocks that we've bought recently give a little background on what you bought why you bought it okay yeah we can start with remotely i added to it when it fell close to about 18 a share i think it was cheap um i think there's a stable coin narrative out there perhaps i think there's a immigration crackdown in the united states narrative that could be impacting them uh i'm not exactly sure why the stock has

fallen so much. I like the business. I don't have the exact numbers in front of me, but their exact PE right now doesn't look too attractive. But if you look at where they're trading on, and I'll try to pull up their market cap right now on fiscal AI, I think the market cap's about just a tad under $4 billion. They're doing, and I'll make sure to get the exact revenue number here so we kind of go through the basic math. Okay. Yeah. $3.8 billion in market cap, $1.36 billion in trailing 12-month revenue. Let's say they can get to $1.5 billion fairly soon, given that they're growing revenue at over 30% year over year. I think they can get to $2, $3 billion within the next few years fairly easily. Probably $3 billion within a couple of years is no big deal given the

market share gains they're going to take. If we look at their unit economics, I think if they stop reinvesting so much in customer acquisition, stop reinvesting in product development, which they're building a lot of new financial services, including this small business one that they just launched. And if they, yeah, essentially if they tap down on their spending in general, which has trended downward, it's going to be a slow churn, but they can get, I think fairly easily given the unit economics, 20% profit margins, $3 billion with 20% profit margins, I think is $600 million in annual earnings. So compare that to market cap of $3.8 billion. We can get well below $10 times earnings fairly soon. And there's a huge runway left to grow. So I like it. I'm not making it

my entire portfolio. I would never do that. That's not the type of investor I am. I think that's just highly stressful and things can go wrong. It's not a risk-free investment, but I like it here. It's one of my largest positions and I'm very, very bullish on their long-term prospects. You got a chart here, Ryan. I can't really see what it is, but what do you got? Yeah, so there have been some concerns over stock-based compensation at the company. So this is stock-based compensation compared to free cash flow over the last 12 months. And a lot of people say you can't value it on cash flow. There's so much of that going to stock-based comp.

Any company, for the most part, that's at sort of this age, which I think, remitly, is probably 10 to 15 years old, and they were VC-backed, private for a long time, came public, I believe, three or four years ago, you're going to have a spike in stock-based compensation. Your equity has become currency, and you can use it at the company, and it's going to happen. But as long as you can be confident that, A, they're not being so – they're not totally oblivious to it, that they are managing it and they're using it as a tool for compensation, it's not an issue if they can get to being a really profitable company. And in this case, they're doing $365 million in free cash flow. We're seeing that basically turn now because a year ago, a year and a half ago, they were not profitable. They invested heavily following their IPO or SPAC or whatever it was. And they had raised a bunch of cash from it. They were willing to be unprofitable during that period. They leaned up. We're seeing the operating leverage now. Stock-based compensation, I think a lot of people, especially new investors, look at it as the boogeyman. They're trying to hide expenses in SBC. That's not the case for good management teams. They're just using it as a tool to make sure that their employees are well-incentivized, and they're using it as a part of the compensation program. Companies can manage that well. I think

Remitly has done that so far, at least over the last year. I wouldn't worry too much about it. And look, for some industries, for some company cultures, and for some employee bases, which for them is software engineers, they are in the city I live in, their headquarters is in Seattle, you're competing with Amazon, Microsoft, and a few other of the larger companies that can offer you very attractive and stable stock-based compensation packages. is if you want the good talent, you're going to have to pay up with stock. And that's just part of the equation. It doesn't mean that the business is bad. You just have to factor that into the equation. Like, okay, I look at the valuation. If I'm going to do true valuation work, not back in the napkin math on a podcast, I'll probably factor in a little bit of dilution going forward. But given that they're now cashflow positive, we can also offset that in your model. They're going to have the cash to either buy back or return in dividends and as you saw on that chart

stabilizing not too big of a concern but that may be a bit too long we got five other to get to so ryan what's your first one i think someone actually called it out in the chat so what's that know you too well what are the first one on your list ah yeah they it looks like they did call it So yeah, so for me, I mean this is kind of up the same alley as Remitly. I've been buying shares of Wise. They're still listed on the London Stock Exchange. I'm actually buying the OTC version, which is kind of annoying because I'm – Are they on the AIM on London?

I honestly can't remember, but I paid like a – It doesn't matter. It doesn't matter. A lot of the thesis is similar in that just digital remittances overall are growing and people are looking for digital solutions to transfer cash across borders. Remitly is basically a really great software layer on top of the existing correspondent banking system, whereas Wise is actually going and building out its own infrastructure. And that's not like I own Remitly and Wise, and they're basically the same size in my portfolio. And I think both can do well. I think if you build out really slick user interface, user experience that's lower cost than the alternative solutions, in this case, Western Union, which is that I'm talking about Remitly here, you can attract a lot of customers.

And they've done a really good job of that. On Wise's side, they're playing a different game. They want to be the low-cost provider, and they want to keep the cash as much as they can in their account. And here's the part where the stablecoin argument doesn't make sense to me. If I send money across borders using Wise, there is no cost if it's going Wise account to Wise account. So let's say I get paid on Wise. I've got the money in there. I can earn high-yield cash in that if I'd like, and I can spend with it.

i'm paying zero zero money there's no off-ramp in that case so i'm not paying any commissions right i can spend that stable coin pitch right where if it's stable coin a stable coin it's free but you have to offer him yeah and it's instantaneous so to me i i really don't see why and crystal carmen the ceo of wise has said basically like until i see proof that stable coins can be more effective than what we're doing we're not gonna like really work yeah or invest in it and i i honestly think they're right they they can replicate a lot of the same stable coin functionality by send spend all on the platform earn interest you i really think you can replace kind of a lot of the the legacy bank accounts um and attract a lot of customers doing that i think

that i have some problems with their user experience a couple times but maybe it's not as slick as remitley in some cases but overall they are the low cost provider for most most corridors so yeah i've been buying them that would be my my first one we have a comment here that says wise adr is highly traded at least like adian they kind of remind me of each other in terms of strategy and culture yeah if you like adian the culture at wise is similar okay number two for me because we had other topics we want to get to add a little bit to nintendo at twenty dollars a share uh not very much remitly was larger you know percentage wise but what i saw with nintendo and it's honestly i've traded around them a little bit uh it's not what i typically

like to do but earlier this year i trimmed my position but when we got back or after the switch 2 launched, and we saw the huge amount of demand and the huge amount of sales on the hardware, the record unit sales in like a four-day span, along with the launch of the new Mario Kart game. I think the thesis is getting each quarter continually de-risked, and I think it's even at a higher price than it was. I think it's up 50% over the last year. It's less risky to buy today than previously.

i still think it's cheap and when i kind of dipped at least the adr dipped sometimes it trades wildly because of some foreign currency stuff seem cheap yeah that's it nothing nothing to add pretty simple just wanted to buy another high quality company yeah how long would you say you've been buying nintendo now oh when did we first get into it 2020 2020 2021 yeah yeah oh late 2020 2020 early 2021 yep yeah now 2021 didn't end up being good returns after that but keep doubling down on a good business and had to be patient but it's worked out well so far and i think i'm still confident in our bet ryan we're felt i was ahead on like the timeline for the full year of going from 15 to 30 by the end of the year we're a little behind now but i still

am confident that 30 is in reach by the end of this year hey i'm rooting for it all right my second company is adobe after reading the figma s1 i bought like a tracker position of adobe i think three months ago at the same price i bought it at two days ago uh maybe a little longer the after reading the figma s1 i i don't i really think people are overrating the competitive landscape there are like okay let's say you are an enterprise and for a long time long time you've been using adobe xd i think it is and indesign those are the two like when you think of adobe's overall product portfolio i think there's like 30 40 apps that people all across the enterprise are using let's say you're using xd or indesign and someone else in the company's using audible i

think that's what it's called adobe audible uh oh god so many so many adobe premiere confused adobe photoshop you name it and then there's probably the other aspects maybe you're using the sort of their DocuSign competitor. Maybe you're using some of the experience products as well. Just because you start using Figma and the design department starts using Figma, that doesn't mean you cancel your bundle. Typically, you're paying for the entire Adobe Creative Suite. And if you still have people that depend on Photoshop, Premiere, audible whatever it is there it doesn't make sense to downsize or maybe like all i'm saying is basically new seats for figma or even market share gains for figma does not directly equate

to churn for adobe and i think a lot of people just automatically assume oh there's a lot of competitors popping up that means churn for adobe i don't think that's the case maybe it puts a little bit of a limit on some pricing power for the bundle. But in general, enterprises are sticky. I think they continue to have best-in-class products across a lot of features. Not everyone, like Figma, I think is probably better than Adobe XD and InDesign. And Canva has won across solopreneurs and small and medium-sized businesses. But I think they're going to continue to grow seeds. Every time I've seen a setup like this, where there's a company that's been considered high quality for 30 years. And all of a sudden the narrative changes on them and they start

buying back a ton of stock, which is what Adobe is doing. I think they're buying back roughly 8% of their market cap right now over the last 12 months. That to me has always resulted in positive returns. And so I like it here. It's not a huge position, but I've added to Yep. And for anyone that's wondering, EV to EBIT down to 19, EV to free cash flow down to 18. All right. My last one, and I don't think there's much explaining I need to do. Maybe I'll just use it as a tease to go listen to one of our other episodes. It is an initial position in the real brokerage. This is a small and micro cap that was my latest research report. And I liked it a lot. It's not a huge position, but I think it's one that's high risk, high reward, disruptive

company i did a full hour research podcast on them a couple of weeks ago i think at this point and i'd recommend people go listen to it if they keep growing as they have and they keep taking market share within the brokerage platform space the stock will do quite well all right ryan what's your last one and maybe it actually is gonna lead into another one of our topics here because i I think a press release that came out today will make you quite happy as a shareholder. Yeah, I bought a starter position in a little-known company, Taiwan Semiconductor. I think they're actually the – it might be the seventh-largest company in the world right now, seventh or eighth. Seventh or eighth, I think.

Yeah, something like that. Top ten. It's just they seem to have such an advantage in manufacturing. And I will say, generally new to the semiconductor industry. I actually read a really good primer from Oppenheimer from 2008, but it's still very relevant today. And they actually talked about sort of the whole industry, the different elements of the supply chain. And they talked about Taiwan Semiconductor and kind of how they differentiate themselves from a lot of the other pure foundries. And they're just way ahead of the game. I think that continues to be sort of a positive feedback loop from them or for them. Positive feedback loop for United States investments too.

Yeah, I like this company a lot. I wish – yeah, I wish I owned this one. Revenue, if you want to know, they do monthly revenue. monthly revenue for june was up 27 year over year i think that just came out today and that is on top of 33 growth a year ago and reminder this is a company that does 100 billion dollars in annual sales that's the demand right now is unbelievable for the end demand is unbelievable and every time i think about the semiconductor industry taiwan semiconductor is a choke point they they end up being like it feels like all roads back all roads lead back

to taiwan semiconductor um so yeah i finally just bought a starter position i'll continue to read up on them hopefully get uh a little better understanding of the advantages and more of the competitive landscape but yeah my thought is if you like if you like nvidia you gotta like Taiwan Semiconductor. They're basically their only supplier. My takeaway from the TSMC and the Delta report and some of the other consumer trends out there, I know there's some macro stuff that came out today. I always forget the exact terminology, but in general, it kind of fits under this is the current economic trends of the last, call it six to eight quarters, ever since the 2023 turnaround and the interest rate and when inflation peaked and when interest rates were you know to stop the

hiking cycle and we've kind of done this pause and slight drop you see these trends persisting with ai spending consumer spending is fine people are traveling a lot and we keep getting all these reports you know macro bears saying the next shoe is going to drop it hasn't happened yet it may happen in 2025, but it just shows that timing a recession call like this, even if you felt like it in April, that it was almost inevitable, something like myself, you really should just still stick with buying high quality companies, reasonable price, having a two to three year time horizon, and don't try to make any macro forecasters. Even one of the best venture capital investors of all time, Peter Thiel, had a terrible track record trying to be a macro

hedge fund manager. And I think they probably had people much smarter than us working in there on their team. Okay. Which company will be the largest in 2030 by market cap? Before we get to that, I want to talk about the TSOH Investment Research Service. TSOH is run by recurring guest and friend of ours, and actually a listener favorite as well, alex morris inside his research service subscribers get access to six high quality stock research reports per month including initiation reports as well as regular updates on current tsoh holdings and watchlist stocks plus there is 100 transparency of the tsoh stock portfolio coverage includes companies like airbnb celsius which had some interesting uh industry

data come out this week as well. Roblox, Netflix, and many others. TSOH is a premium research service. If you're serious about investing, this is like outsourcing a professional analyst. We read his write-ups every week. And to be totally honest, I lean on him for quarterly coverage of a lot of the stocks I own. And I will also say this, I read a lot of sub-stacks, blogs investing newsletters alex has a unique ability to simplify things to simplify complex theses into getting to basically like what are the most important questions to ask for this company and right now i'm wasting our time exactly that's what i find when reading yeah his write-ups are phenomenal honestly um so if you're interested head on over to the science of hitting.com the

link is in the description again that is the science of hitting.com brett which company will be the largest in the world by market cap in 2030 okay i did basically a gut check one through three no palantir is not on there sorry palantir crazies it's not gonna happen here's what i want one two three uh this is just what i think most likely to the third most likely one amazon two alphabet three comedy we just talked about taiwan semiconductor manufacturing what are your thoughts so my dark horse for the largest company in the world in 2030 is taiwan semiconductor But as I was thinking about that, if they're going to get there, it's going to require continued demand for NVIDIA's GPUs, which likely means NVIDIA is going to remain above them. What about Amazon and Alphabet's in-house chips?

Right. Like if those take off, that can probably help too. so that's the only world here's another here's another pushback on nvidia taiwan semiconductor i think will maintain pricing power to nvidia but i don't know if nvidia will be able to maintain this extreme pricing power to end customers if supply keeps normalizing does that make sense or am i yeah but if supply doesn't like if they're it's so circular so if they are the ones that are able to increase their own supply like if i really think in 2030 nvidia gpus the leading edge will still be really sought after if they can increase supply that's that means it's taiwan semiconductors new fabrication facilities in the u.s and japan are probably running at full steam

and and producing that much more chips that's probably still pretty good for nvidia it's not maybe that maybe they don't maintain the same amount of price but they could make it up potentially in volume i don't really know the price versus price versus uh supply issue that well on the gpu side because everything they always say we're supply constrained yeah they like saying that the i think the thing that holds back tsmc and where i think amazon and alphabet but have a much higher chance is they're just not that from a revenue standpoint, they're just not nearly as big as these companies today. And the reason I like Amazon, this might sound simple, but their revenue base is so high and they have two huge runways still

left to grow. You have continued market share taking of e-commerce overall, the retail in the United States, it's still under 20%. They keep maintaining their market share. And the fact that They have finally made this almost holy grail delivery network. Tons of automation in the warehouses. Times are really fast. You get your basic goods same day or next day across the whole country. Now they're expanding to rural areas as well. You have a huge amount of operating leverage that will come into that over the next five years.

And I think – the way I thought about it is what companies do I think will have the highest operating income in 2030? I think one will be Amazon. Two will be Alphabet. I think you're probably right with Amazon. The other thing with TSMC is the new fabs aren't going to be as profitable as their ones in Taiwan. the with amazon yeah i think they will continue to surprise investors with how profitable they can be people continuously think of them as okay it's retail that you know there's a captain margins here but with all the automation and the fulfillment capabilities and the really high

margin businesses that they've built on top of it unless they choose to continuously lower costs i think they're really like their underlying profitability is probably a lot higher than people realize with amazon too did you know amazon prime or amazon subscription services revenue is the single largest consumer subscription business in the world i did not i did not what about youtube do they not break that out youtube ads would be lower youtube ad revenue would be lower now if you lump in premium maybe it's higher but it's hard probably not because youtube they say what is 50 billion dollars in total and that's concluding ads so you're so what is the number for amazon subscriptions let me double check it right now

and i i think the that segment has still a lot of pricing power not an infinite amount because they've taken a little bit but if they raise it to from now until 2035 to 200 a year to keep up with inflation and as they've added all this you know same day next day delivery that's much better than you know second or deliveries in two days you could easily go to 200 yeah what does that say on your tweet here yeah for anyone that doesn't know ryan runs the fiscal ai uh twitter account this is consumer subscription revenue of the biggest that i could find so uh costco membership fees do about five billion dollars in revenue every year walmart membership fees actually does six billion i don't think i didn't realize that walmart has more membership fee

revenue than costco spotify does about 14 billion netflix 39 billion i could have added youtube in here that'd be i think just under netflix in terms of ad revenue and then amazon subscription services revenue was at 44 billion for 2024 the largest what what uh of these which one has the I don't want to say fastest growth rate because you'll – probably Spotify is the easiest one to say fastest. Of Spotify, Netflix, Amazon, which one is larger? But Spotify is so low. Amazon has grown the quickest. Has it over the last decade?

Yeah. Look, we've got the – okay. By the way, all this data, I'm sharing this for anyone that's listening. It's all available on Fiscal.ai. Use our link, Fiscal.ai. fiscal.ai slash chitchat amazon has grown its subscription services revenue which is the biggest in the world 29 a year since 2015 the second closest would be spotify's premium revenue at 25 a year it's just that yeah it's astounding and to think that that division probably has a

lot of pricing power from here that just yeah it goes to show the sheer size and impact of amazon overall here's here's something uh tyler brought up in the comments about what's going to be the largest market cap he said i'm not thinking enough about multiple expansion to take over for a five-year period you know it's not that long to 2030 now alphabet is the most capable of doubling their multiple while still growing earnings i think that's a good point and it brings up another question that people had they asked ryan are you more or less comfortable today than when you bought google uh or alphabet i think a couple months ago i'm more comfortable that's probably another guess for me is that the multiple on

google slash alphabet will change by 2030 my guess is it will they will be seen as an ai winner by that time because gemini rocks for developers from everything i've heard from the team at fiscal ai it's powering so much on the development side i think on their google io event they said they of 7 million developers building on Gemini 2.5. So you have cloud developers and consumer. I mean, we've seen the MAUs on Gemini are growing quickly too. I like it. You put in that Google One subscription. 400 million, I think. Yeah, it's growing well. I like using the product. I use both Gemini and Google search depending on what I'm looking at. And it feels to me like I've only had it for a couple of months on that $20 a month subscription that also has some other things on

top of it which is nice for the google bundle i think it's worth it if you're researching something it can be i think quite helpful for for 20 bucks a month it actually helped me uh let me i know we talked about that coupon as a little side note that coupon announcement of the intelligent cloud i did some sort of queries into gemini and i figured out with this korean uh newspaper that i couldn't find over a google search there is a one billion dollar incentive from the korean government to build ai gpu clusters and they're looking for a korean company to do that so this is why coupang is hyping up and starting their own ai intelligent cloud business because they could get what looks like a nice 1 billion dollar customer commitment from the korean

government so for anyone that follows that story go get that government revenue yeah i i would say i'm more confident now than when i initially bought google and the primary reason i think the price is up a little bit since i bought it but the primary reason is just that they have been pretty a they have improved on the ai uh outputs from from what i've seen the the actual ai responses are better but they've actually been really thoughtful and uh pragmatic about the way they've rolled it out as well i i've gotten to the point now where i'm i'm wishing that i got more gemini responses as opposed to the google search results this is actually it's been so eye-opening how how much better sometimes the llm response is than a google search

i really actually i don't want to scour through a bunch of lists i want you to do that for me i don't want you to scour through a bunch of paywalls like go find that go find that data yeah now is that legal is that going to be deemed illegal we'll see um there's some yeah legal stuff that is probably too boring to talk about on this show what are your other picks are you going tsmc or do you have any other thoughts because from what we've talked about the three largest companies today that have a i think above three trillion maybe apple's kind of been sliding uh but essentially three trillion or above apple microsoft nvidia would they make your list or not apple would not i'm pretty confident about that one unless somehow they they come out with a new

iphone and by new iphone i mean a new product line that rivals the iphone right a true hardware innovation yeah i don't think microsoft will be up there they i i think google has probably some of the most opera google and amazon probably have the most operating leverage from here in the next five years and microsoft's high multiple too i think it's close to 40 google is already the most profitable company in the world and they and i'd argue they have operating leverage from here so i'd say google one amazon two tsm tsmc3 wow similar list and you know what i don't own either of those companies but i i'm trying i'm shying away from large companies uh let's see we have a comment here that says yeah if they break up google then it can't be the largest company but

maybe some of the parts could get there technically it wouldn't be anymore and they said they made tesla's full-size driving looks like a sham with waymo yeah waymo's looking good as well but i saw projections that they're going to have two billion dollars in annual revenue by 2030 so that's Really still a decade-long play that could turn into a good cash cow for them. But by 2030, it's not going to be a material. Okay, question. Yeah, Alex says, you already mentioned it, but if they break up into parts, then it can't be the most profitable. I think I've asked you this before.

But if that does happen, what segment, subsidiary, division would you most want to own? Google Cloud. I think it's actually the one thing I worry about with Amazon is it seems like Google Cloud is from their capabilities. They've built a better infrastructure for the AI world. I am nowhere near an expert, but this is what I've read from experts talking about this. And I'm just extremely optimistic. You mentioned the developer stuff. google cloud doing very well uh if they got a cash infusion on during a breakup and they can

just reinvest in a ton of data centers the tpus if you combine that in there boom it could be much much larger in 10 years i think i might own youtube if if if i had my choice of all of them because you make a good case for google cloud and i think they are probably the most likely to grow the quickest but among all of this ai discussion it's it's in the last three to four years because everyone thought search had the biggest moat in the world now it's been called totally into question it's really going to show gone to show how big of a moat youtube has how collecting all that that video repository is

there's nothing like it and you really it's hard it's impossible to match yeah yeah even tiktok and instagram have been insane balance sheets they can't really match it uh those are still fine businesses i think uh tiktok's got its own problems politically but yeah i agree youtube's a good business i i'd just be curious to look at what their income statement actually looks like i think it's more similar to a spotify than anything else and the margins are going to be fairly low, but that isn't, you know, on the price, whatever the price is, you just factor that in. Do we have, we're going to move to another topic. Do we have any other advertisements to get to before we talk Meta's super intelligence team? Let's mention Blue Chippers Club. Blue

Chippers Club is a tight knit community of stock focused investors. Inside this community, everyone gets to share, break down their portfolios, pitch stocks, receive feedback, and participate in weekly calls this i've said this before blue chippers has been a longtime sponsor for this show and it really is it's hard to describe how valuable it can be to have a true community that you bounce ideas off of i'm not just talking about people that you tweet at once or twice but to have actual calls to talk to people about ideas sort of face-to-face digitally. I think it just makes a huge difference

and Blue Chippers is trying to build that exact community. So if you're interested in joining, head on over to bluechippersclub.com and hit apply. Again, that is bluechippersclub.com. The link will be in the description. Do we want to mention the Autodesk acquisition?

You had a tweet yesterday that Autodesk loves to make bad acquisitions. Is this another one of those? i guess i i don't remember ptc's business that much but they it's just a rumor right now i think ptc was probably dropping the rumor just so they can get another bid potentially what's the price gonna be do you did you see anything on that no price i actually went back through our show notes that we did on uh we did an episode on ptc a while ago and i actually we we thought pretty highly of the business overall they are primarily they have like 10 different software products

but it's primarily cad stuff so computer-aided design software and then product life cycle management software so a lot of uh and typically those two go hand in hand so a lot of the companies that use their product lifecycle management solutions also use their cad solutions so i don't really think there'd be that much like customer overlap necessarily with autodesk i could be wrong on that um but yeah basically 21 billion dollar market cap probably jumped now. PTC has a $21 billion market cap. Autodesk has a market cap of $67 billion. That's probably down since the market hates when Autodesk does this kind of stuff. It's a third of the size on the market cap basis, and it's also a third of the size

essentially on a revenue basis. My only concern here, I guess this kind of applies to both companies. But revenue growth has been a lot worse than I thought. Now, it's higher margin revenue today than it was 20 years ago. But since 2005, Autodesk has grown revenue at 7.6%. Annually, PTC has grown at 6.4%. I just would have thought those figures would have been higher. But obviously, high margin cloud-based subscription revenue is going to be a lot a lot more profitable than than selling sort of one-time licenses so i i have no idea whether this will be a good acquisition or not my gut tells me paying a premium for a massive business that's very similar to yours you know it's probably not going to work out or you're going

to pay too much but we'll see yeah about some of my thoughts too these are great it's a great industry from unit economics moat perspective which is engineering design architecture construction software but they don't seem to be that companies that are really run that well for shareholders yeah no that's about it you're 100 right and it actually i maybe i'll share this chart but it makes me realize how much money how how difficult it might have been to buy some of the software companies that were going through the cloud transition because if you actually look closely from 2014 to 2017 both companies revenue was down like 30 10 20 percent for both those companies over that time frame the cloud transition took a long time for both

these businesses obviously that's why the that's why the buying opportunity showed up you had to look deeper into what the subscriptions look like and just see that the accounting was masking that the business was doing just fine and was going to go on a nice growth run but buying today maybe not so much tyler in the comments brings up a good point unrelated this is about the meta super intelligence team but we talked about how google's so promising from their ai perspective but if meta hires every every ai engineer i'm not sure google's going to be able to build anything same goes for every company i don't think they have every engineer but yeah that does seem to be their strategy so meta is poaching a lot of ai talent from other technology players for what

it's calling their meta super intelligence lab they are paying them major league sports salaries in the tens of millions annually from what is being reported first thought is if there's like a thousand of these engineers and super genius scientists around the world that are going to drive advances in this industry and keep you in a lead or create the new product systems don't really know how to describe it and this industry is going to be worth trillions of dollars from what they all believe i would think these people are still underpaid because of how valuable they can be um at meta alexander wang who they bought from scale ai uh who was the founder there and then nat freeman who's the founder of github they will lead the meta super intelligence lab

apparently eight core researchers from open ai have joined meta and they also tried to acquire of the SAFE superintelligence team, which is led by a guy, his name is very hard to pronounce, who was the chief scientist at OpenAI and one of the legends in the industry. He's some of the inventors of the core technologies a while ago. This didn't work out. I guess they weren't able to get him. I think this guy probably doesn't need the money. So he just wants to build his own thing and see what he can do. They also just got the leader of Apple's AI division. don't know if that's bullish or bearish but and then a few players from google and deep mind i think if you're looking at alphabet you can see that they got a couple of people from there but

the the leader of that division may be the number one ai talent in the whole world uh i don't know if i'm saying his name right but demi hasibis he is the founder of deep mind he's still there it seems like they have quite a strong team. Long story short, they have tried to poach everyone. I have a tweet here from past guest Rehard Jark, who follows the big tech companies, some of the best on the whole internet and has some fantastic long form tweets around that. He said, apparently Zuckerberg tried to poach Apple's AI chief with a $200 million comp package for reference apple ceo tim cook makes 75 million dollars a year might seem crazy but given how valuable these people can be in this ai race and one thing i thought about after reading or

ben thompson at strategy had this idea is that unlike a lot of the other technology you're not technology unlike 15 years ago where amazon was chasing one path microsoft had its own business. Google had its own business. Meta had its own business. Apple had its own business. And there was some overlap on a Venn diagram, but you weren't chasing the exact same goal. In this race, everyone is chasing the same thing, which is making it hyper-competitive, especially when they have these rich balance sheets. So why is Zuck doing this? I think the logic is pretty simple for him as a capital allocator or CEO. He looks at them and they they have instagram whatsapp and facebook and they have the same wonderful proprietary data

sets as alphabet tons of stuff to train on you know similar to google google search gmail youtube he asked why are our ai models not good why are they behind and then he just goes it's probably our workers therefore i should spend as much money as possible to acquire the workers that can actually build and copy what Alphabet and OpenAI have. I'll let you go and talk, but the questions I have is, do you believe this is a smart move? How does it make you think about the other big technology players? My big takeaway is you should be more bullish

on the growth of OpenAI and Alphabet after seeing this because it seems like they're the two leaders, along with Anthropic, in the space. yeah i don't really know what to think of it i have thought it was hilarious how you know how like when an athlete gets traded from one team to the other there's like trade announcements via tweets and they've been doing that for for these who is the guy adam schefter and and whoa well he retired oh yeah uh the guy now is shams i think it's his name there needs to be that guy for for business acquisitions yeah yeah the one thing i would worry about is all of these people

have been leaders at their own companies is it gonna be like ego centric like there are people going to struggle with is there going to be sort of a power struggle yeah who let me give an example of a sports analogy you understand who won the champions league this year not real madrid the yeah but it is the it It was PSG, right? Yes. And they had the three top players in the world a couple or five years ago, and they didn't win. It is a problem with super teams.

Yes, you make a good point. The sports analogy, for any of our listeners that aren't sports fanatics, when people build a super team, egos can start to get in the way. and i'm just thinking like if you were the chief ai scientist at apple and you've got someone that had a similar role at google and you've got competing ideas on the best way to do things i just imagine that might be now maybe they're all getting so i would imagine that that would be a difficult environment to work in but maybe they're all getting paid so much money they just don't care and they'll just push their egos to the side it makes me more bearish on meta's ai prospects for sure it makes them look super desperate yeah it makes me more bullish on open

ai and alphabet seems like they have yeah that's exactly exactly it uh tyler in the comments said is ryan a cowboys fan now i hope not honestly ryan is more of a soccer fan in general so that's the one sport he follows so yeah it doesn't matter to him we have a question on copart and autonomous driving i don't sorry no comments there interesting it is i vaguely know the business but they are one of the biggest in terms of like salvage yards if i'm not mistaken and uh sort of a sort of a big moat around there and it's kind of a unique business but if who are some of the companies that get hurt by self-driving insurance companies might be smaller if the holy grail exists and accidents collapse

yeah the the insurance companies would be smaller anything related to the insurance auto shops auto zone uh o'reilly maybe oh yeah you might be right but it's a long time you know it's it's going to be a very long time until they fully replace everything think about waymo is growing exponentially but i think they have a thousand cars or something like that uh i think anything related to repairs insurance or that supply chain would be impacted it's just going to be a much smaller business oh and tyler says auto oems sales could go down a ton yeah yeah that's true if now if it's just us if they somehow find a way to just have licensable software to the oems maybe they're all right and they can continue to make their

cars and people will continue to buy them but yeah and if it just replaces taxis the existing taxi and ride sharing network that's a small part of driving bubble watch we've got a little bit of time left what did you find this week well it's a core it's a core weave core scientific merger or acquisition so core weave which is the high-flying cloud computing ai startup buzzword happy company you should have seen this press release it was talking ai hyperscaler data centers gigawatts everything you wanted to see from any narrative based company so they're acquiring a company called Core Scientific for $9 billion, approximately an all-stock deal. This acquisition, here's a quote, this acquisition will help CoreWeave verticalize its data center

footprint to future-proof revenue growth and enhance profitability. Through this acquisition, CoreWeave will own approximately 1.3 gigawatts of gross power across Core Scientific's national data center footprint with an incremental one gigawatt plus of potential gross power expansion. They're using their stock as currency to increase their data center capacity. This is a smart way maybe to skip on CapEx plans and spending. You're using your inflated stock price to acquire this instead of spending money off of your balance sheet. Is it good for shareholders at that price? Maybe, maybe not.

The stock quickly dropped and is down 25% from all-time highs. all the jargon confuses me but it seems like a merger for more power more computer chips more data center capacity and no one is thinking about roi that's what that's all i take away not a one not one roi discussion it's we are going to race and get as much supply of data centers electricity computer chips essentially until we match demand i think you're probably right they probably are not thinking about roi the my guess is that they're thinking whatever we'll figure it out after or they think it's such a no-brainer decision to increase capacity that the roi has to be positive this of all the ai beneficiaries ai companies i don't know if any company is as

is taking as big of a risk or as big of a jump to try to benefit like yeah i think they're planning what was it like 40 billion in capex 20 billion versus 5 billion revenue this year so investing really investing ahead of planned growth 20 billion dollars in capex 9 billion dollars in stock fueled acquisition capex essentially uh yeah you're right this might be the smarter alternative relative to just building it out yourself especially if there's things are already functioning but yeah it just feels so risky like it's aggressive yeah aggressive the i mean i can sound like the boy who cried wolf but the way this is going eventually there will be oversupply because no one is thinking everyone is thinking look at even

these rational big tech companies they're just thinking supply supply supply just grow at all costs eventually that hurts you eventually like we're not going to cover the right let's just take it too far we're not going to cover the entire earth and data centers eventually there will be too much if we continue not thinking about what roi is and matching demand you're just going to build build build build build and some people say there's unlimited demand that to me sounds like a boom bust cycle getting ready to form now i'm going to benefit as a consumer because there's going to be a plethora of cheap ai tools for me but these stocks such as core weave are highly dangerous to buy hot just it interests me not one bit as do i know

where it's going to be in three years no no idea it could be zero could be a 300 billion dollar company yeah i'm fine missing this one if it ends up well i think the answer here is by the commercial air conditioning businesses true honestly if you believe that data centers are just going to like there are going to be so many data centers coming online over the next 10 years honestly air conditioning might be might be one of the biggest beneficiaries i think we're running up on time here brett unless you have any other parting thoughts nope nothing else that is going to do it thank you to everyone for tuning in thank you to our sponsors ibkr the tsoh investment research service blue trippers club and fiscal ai for make giving us all the data that we need

for these shows specifically fiscal ai in that case um and thank you once again for tuning in want to remind everyone that brett and i are not financial advisors anything we say or discuss on this podcast is not formal advice or a recommendation. We may buy, sell, or hold any of the securities discussed in this podcast. Thank you again for tuning in and we'll see you next time.