Tim Cook the GOAT? Snowflake earnings preview, the software comeback, reactions to Ed Zitron

I love it. Turn my headphones up. You turn them all right now I just want to know it's our first time it's our first time with me in in our new Long Island highway. I want to make sure everybody can hear me. The sound quality is good. It's good enough. It'll get better. All right we're gonna we're gonna work on the soundproofing. It's gonna have to do hey everybody welcome to an all-in-the-edition of what are your thoughts America's favorite investing live stream we do this every week usually live at 5 p.m. Eastern with me as always my co-host Mr. Michael Batnik Michael say hello hello I like your name today it's right clever look at me so clever just a wash and cleverness the chat is going off right now. Hold on before you get to the chat I was thinking that you're a way message game must have been absolutely insane but were you too old for that was that like what's that after your time what's in a way message like I miss email remember like I message back in the day oh I don't even aim aim yeah I wasn't clever with that those were the original tweets yeah I was a big ringtone guy like if you called me I controlled what song you heard as the ring that was your thing I was my thing and I was DJing I was DJing my ringtone it's all all right who's here Georgie D is in the house Chris Hayes Magnus some of the regulars super excited to see you guys thanks for thanks for being here live we appreciate it Michael Skyroh says good day everyone good day so a turner what up what up yep I don't know guys talking about football talking about why does everyone hate Nvidia I didn't I wasn't aware that that was a thing all right everybody's here all the gangsters and gangster rats are in the house we appreciate you guys we have a sponsor tonight betterment advisor solutions Michael what do we need to know about betterment advisor solutions well every RA knows attention you don't want to turn people away you also don't want to require high minimums and you want to help clients who are just getting started because that's where long term relationships begin but here's the truth Josh those simple accounts they take a lot of work we got a count opening and trading and balancing it before long your staff and back office are underwater and trying to stay afloat so that's why established RAs are turning to betterment advisor solutions it's the platform built for segment is right for segmenting your book and streamlining the smaller and simpler accounts the onboarding experience is automated in paper list the portfolio management the streamlined and tax efficient the client experience it's consistent and exceptional explore what segmentation can do for your from today lower your operational lift but keep your standard of service high all with betterment advisor solutions your biggest regret will be not doing it sooner learn more at betterment dot com slash advisors thank you so much to betterment advisor solutions for sponsoring the show and uh. full disclosure we are not only sponsored by betterment advisor solutions we are a customer uh. for one of our client service tiers and full full disclosure I got a counts there so there you go and it works all right um snowflake earnings coming well alright so this bunch of earnings palo Alto and del are already out today after the close and i think mongo d_b_ and maybe you'll take a live look at those real quick for us to see if it's doing delis flying eight percent happy with that in port house mongo uh. it's got a head like a driving movie theater uh. mongo is getting mongo the stock is down quite a bit uh. what's it's a ticket thank you Josh mongo d_b_ and what was the other one that you said what is the d_b_ stands for database i hope short down thirty down twelve and a half percent and what was the last one just palo Alto p_a_a_ w_a_ i don't think reported yet because it's literally flat unless maybe just flat i can be to i know that's five o'clock five o'clock stocks all right shown is saying del uh. lifted full-year guidance beat on top and bottom net income up listen to this two hundred fifty five percent year-over-year a_i_ optimized server revenue sixteen point four billion that's up a hundred percent year-over-year um. shone says m_d_b_ down thirteen percent they beat on both but did not give good enough guidance joys before before we get into snow which is obviously your your beat not mine snow the stock has performed a shot exceptionally well as has down to the print and i think this isn't this is an adam parkourism usually these stocks are usually oftentimes these stocks that are flying to the print foresee expanding margins and i'm guessing it's what you saw at del send the stock up twelve percent after hours and obviously with the caveat that who the hell knows what snow will do tomorrow the market usually sniffs these out yeah and uh. a lot of people think what goes up must come down or go to the real that table and they see it hit black five times they can't wait to put on red those people and maybe sometimes i'm one of them should not be trading stocks into earnings because a lot of people would see a stock up ten points into an earnings report and said missed it like they already priced it in and that's not actually what happens at all it could go up ten and then go up twenty but also you remember the ones that do fall those you remember well four hundred percent a hundred percent out here's what i want to talk about snow i bought the stock during the course of this quarter i did not buy the low that's not my my thing that's not what i do i buy breakouts and i got it i nailed it i'm still long i am trailing it with stop if tomorrow nights report is apocalyptic it's not going to bother me i'll just i'll be out i believe that snow has become on the dl one of the most important layers of the whole ai layer cake and i want to get into that a little bit tonight the reason why we're previewing this name um. is because the last time they reported the stock fucking exploded it went up thirty eight percent the next day do you know that do you remember that i do okay that was in may like literally came in beat raised guidance and then and then put everybody on notice here's what's really going on you want to do a gentics yet congratulations you're going to do it right here in the data warehouse you're not going to be duplicating data you're not going to be moving your data around to all these platforms the l_l_m_s are going to come into the snowflake environment and we this layer is going to be ground zero for the agenda future they have they told us last time they have over nine thousand corporate customers utilizing agentic workflows directly inside of snowflakes uh. data lake layer so this is not like their idea like maybe we'll do this they literally are doing it i see in the chat steven pickering snow and data bricks are structured data question mark okay i'm really glad you brought that up steven snowflakes biggest competitor is the data bricks and data bricks is growing twice as fast data bricks actually surpassed snow on product revenue last quarter for the for yes data bricks is growing sixty five percent versus snow's growth rate is like thirty two percent a growing twice as fast there's a reason why that matters and a reason why it doesn't the reason why it matters it's a battle between two different types of architecture snow is built on sequel sql these are rows and columns this is like how most data structure data is uh. lives in a lake and snow is the king in sequel and the reason that's relevant is most large corporations that's how their data is structured the next generation which is more engineering so what who uses snowflake business analysts business intelligence people at large companies they interact with the sequel database that is hosted at snow engineers are different engineers interact in a machine learning m_l_ format versus sql and that's what data bricks is a_i_ native and everything is built in m_l_ and they are pitching that to the street when they go public later this year they're saying because we're built for engineers and not for business analysts at companies but we're built like for people that are actually developing a_i_ etc we have this is our edge m_i_ my very humble opinion based on everything i've read and people have talked to is that what both platforms are doing is copying each other so now you see data bricks trying to get more into sequel to sync up with all these companies in the way that they actually do things and uh. conversely you see snow going more heavily into machine learning so that they can challenge data bricks for unstructured data what is unstructured data or recording of this podcast is unstructured data it is not rose in columns we would feed this video and audio file into the a_i_ and a machine learning driven database would be the better after to pull out information, photographs, drawings, recorded conversations. This is unstructured data. The world of unstructured data is enormous and relatively untapped, whereas the way corporations have been keeping data for a million years, that's SQL and that's where Snow is the king. Put this chart up. This is the last one year, but I wanna draw attention to the fact that this stock is up 164% from the April low. It very much got caught up just like CrowdStrike, which I also own and many other software names in the SaaS apocalypse this spring. And obviously, when they put that earnings report out in May, they put an end to that bullshit fast. The stock again, the day after they reported, ripped almost 40% the best earnings reaction since it came public. And unlike many stocks that do the shooting star thing, it gave almost nothing back. It continued to ramp, and that is such a powerful signal for investors. So there's a couple of things that I wanna get to here, and then I'll take your questions or your reactions. The consensus for this quarter, product revenue, 1.48 billion, that would be 30% over your growth. Obviously, any upside on that, we know will be treated favorably. Adjust an earnings 45 cents up from 35 cents a year ago. There's a really wide gap between where the street is and what the company's own guidance is, which I find interesting. So I just told you that consensus is 1.48. Snowflakes own guidance after that Q1 report is only 1.03 billion. So the street is like half a billion dollars ahead of the company's guidance. Is that good or bad? You take that either way? Maybe they know that management is playing games and under guiding? Well, they beat by 300 million less quarters. So management definitely sandbagged. Can't fool me again. Okay, all right, I like that. The other thing I wanna get into on this, are here are the storylines. And this is when you learn a company and you're gonna hold the stock into earnings, you wanna sort of understand at a minimum what people are gonna be asking about on the call and what the company is gonna try to emphasize so that they get the positive version of their story out. So now the question is that AI inflection that we saw last quarter was that a one hit wonder or is that part of a new, so the company would say, no, you don't understand. We have now made the case to our customers that they can do the AI workflows and the agent stuff right here on our platform were inflecting. So that's a big open question. The guy running this company, Ramaswamy, formerly ran Google search. This is like a real guy that they brought in to replace Frank Slutman who was the CEO when they went public. The second thing we've talked about Coco here on the show, they used to call this the Cortex co-pilot, but all the customers say Coco, so they actually have changed the name. This is the key to the growth strategy going forward. This is the AI inference layer that lets enterprises run LLM and agent workflows directly with snowflake data rather than sending an out to an external provider. I think that the other couple of things here, so we want to hear about workloads in Coco and continue to see the momentum that we saw last time. There's an analyst at RBC who specifically flagged Coco as showing positive and accelerating momentum ahead of the print. The snowflake summit in June, that's like their user conference, was heavily Coco-centric and according to the analyst, a lot of the product launches and a lot of the conversation was about continued momentum here. They had a massive announcement with Amazon Web Services, a $6 billion commitment, but that's snowflake spending in Amazon. So that's not a revenue deal for snowflake, but they would not have made that commitment if they didn't need the compute is the way that the street took it. So the stock actually rallied on that announcement. Higher bar, again, the stock's up huge from its April lows. The average analyst price target is 317, which is actually lower than where it trades, even though there are some targets much, much higher, the average most analysts did not automatically come in at 400 because they had a great quarter last time. Last thing, the net revenue retention of 126%, is very healthy for a software stock, but it's not accelerating. So the bearish argument is, well, if AI upsells are working as strongly as all these product announcements suggest, why isn't the net revenue attention? So that's like xing out the churn. So it's growth of existing customers and new customers netting out any customers that have left. Why isn't that a higher number? If that number is 130% or better, so this is how you look at a SaaS company's progress, that's, I think that's gonna be upside for the stock. Couple of things. - No, no, no, no, you said less thing already. You don't get said less thing than a couple of things. And you already said Coco three times, so it's enough. - All right, the high target on the street looks like it's Jeffree's at 385. So that's not like crazy upside from here. And again, a lot of the analysts are clustering just below where it's currently trading. Okay, what are your thoughts on the importance of this story to the overall AI story and just seeing a software company completely jailbreak itself out of that whole SaaS apocalypse conversation? What are your thoughts? - I, all right, I don't know shit about snowflake. Obviously, you know a lot more than I do. But I do love that this was one of the inflection points for software where everybody said, all right, AI is not gonna be all things to all people. You actually can't do what you can do with companies like these. I don't know that this quarter like makes it breaks anything where I will bring the story back. But I don't know. I got no strong opinions. - Okay, well, I guess we're gonna find out tomorrow whether or not this company has two amazing quarters in it and it could repeat. I also wanted to mention Broadcom. - Is that, when's that report? - Also tomorrow, excuse me, also Wednesday. So, this is the last of the giant last. Is that my kids or you come from here? - That's coming from here. - Ah, all right. - That is the, that is the last of the tech giants and that's gonna be Wednesday. That's a, I mean, that's a big one for the AI infrastructure trade. Analysts are expecting 92% year over year on AI, ASICs and networking demand. So I think people will pay close attention to that one. I haven't really followed the stock as closely 'cause it's sort of looked just like Nvidia lately. - Similar, speaking of Nvidia, oh, no, Nvidia looks actually much healthier. One of the charts that we spoke about last week that Ed Zitron just steamrolled over was Nvidia's earnings net income over the last 12 months compared to Apple. And I said, holy shit, this is remarkable. And he goes, no, it's not, no, it's not real. It's all the markups. No, it's not, it's not the markups. We looked at operating earnings. It's the exact same chart. Operating earnings for Nvidia. What the business is actually generating. - So not this stake-in-in-threat that they marked up because the value is higher. - Real business earnings. It's just a remarkable story. So, all right, let's talk about Ed Zitron. So for those of you who don't know who this person is or why we're talking about him, this is a guy that to me at least came out of nowhere. I never heard of him prior to our episode. - I liked his early stuff. - So this guy did numbers on the Compendant Frets. 200,000 views on YouTube alone to say nothing of Apple and Spotify, like just on YouTube, right? - It's like another 100,000 on Spotify and Apple. - So it's a runaway trend. - So obviously, obviously it struck a chord. And if you missed it, he's uber, uber, bearish on AI and everything that's happening. So I have a few takeaways after like digesting what happened that I wanna share with you. But for us, just, these are like some quick thoughts on the episode and then I'll do my takeaways. All right, so, credit to Ed. He definitely came prepared, no doubt about it. He brought the Rockus. He had figures, he had quotes, he had article citations. Maybe too many quotes and article citations, but he had all of it at his fingertips. Like it was impressive. He definitely put on a show. It felt like debating somebody that was on the debate team. He was very good at it. And you did a great job too. He had an answer for everything we said. - Yeah, yeah, he did. So obviously, we all know the bear case and we know that it always sounds compelling. And he did, he did sound compelling. And Ed is obviously in the attention business and he's very, very good at getting attention. And I don't, I really don't mean that pejoratively. I'm not even like, I genuinely, that's what he's doing. He is in the-- - He's a public intellectual. - Yeah, okay. - So if he was an on the fence bear, nobody would listen to him. Everybody, I'm an on the fence bear. Everybody's an on the fence bear. Like everybody understands the bear case, right? So he, so he-- He has to come in like a tornado, which he definitely did, and I mean, I was unprepared for it. Like I said, I didn't even know who this guy was prior to the show. Okay. So take away number one. He has tapped into a real anger. So I think this is the big one. People are really, really sick of being told by people on the West Coast that their jobs are cooked. Ed is not shaping that narrative. He's riding the wave. And I think that he's very much like Trump in that sense. And when I say the comparison, all that I mean is he's the right person at the right place at the right time. Just like Trump didn't, right me, you could argue this. But I don't think Trump created a divide in our country. I think he exploited it. And I think that Ed is doing something similar and he's very good at it. Obviously an incredible skill. And by all accounts, he's built up a very large audience. He's catapulted himself onto all these programs in a very short amount of time. So he's definitely tapped into something real. All right, take away number two. He kept using the word mania. Like he kept saying it. I do not see a mania in the public market. I just don't. In videos training at 70 times phone earners, nobody wants to ometta, nobody wants oracle. Like I think the AI story is really played out. He's saying it's a capex mania. Let me if it's not saying it's a stock market mania. So if there is a mania, I think it's in Silicon Valley. And it's in the data center build out. And the news this morning about enthropic securing a $35 billion cloud deal with NVIDIA back lambda is another feather in his arrow. So I don't think he's wrong about that part in particular. They are definitely all the way in. Where I think he where he not I think where he loses me is two things. The tech is an impressive line. Come on. One of my biggest areas of disagreement with him. So I'm almost like what if like what if you just like when you said to him, like you would like explain to him like that you use it all the time and you do think it's a project. Yeah, for what? He was like a cost. Well, he didn't. He wasn't like no, it's useless. He was just like, well, they spend so much money. It better be good. Okay. So yeah. Okay. Fine. So so the tech is an impressive relative to the cost. All right. That you could debate. But to just say the tech is like it's not it's nothing. Come on dude. That's just that's not true. I also think that that's like saying in the iPhone in 2007 is just a phone. Now it's not the same thing. Okay. The iPhone was not hyped. The economy was not writing on the iPhone. But I feel like this is the final product. It's crazy. Yeah. Well, so I'm fortunate that I'm old enough to remember the original internet. And it was like, all right, AOL instant messages cool, like buying a CD on CDNow.com is cool. Buying a Harry Potter book on Amazon is cool. It was very clunky. Well, I wasn't like, oh my god, this is amazing. It's just like, oh cool. I could do, I could put my credit card in. Like downloading Pam and Tommy videos was cool. I guess stealing limb biscuits songs was cool. Like all of these things in the earliest version of them, it's just like, oh, all right, this is the thing I could do. I don't remember ever being like maybe the first moment I was like blown away by the internet was watching the Saturday Night Live lazy Sunday video on YouTube. It was the first YouTube video to go viral. I was sent the link by probably 50 of my friends, we would send links by email back then. But like, that's the first time, and that's 05. So I started interacting with Prodigy in 95, America online in like 96 or 97, Amazon 98. So imagine judging 2001. Imagine judging it as a final product two years after. So he kept saying like, guys, this is it. There's nothing behind this. There's nothing left. What? Yeah. We haven't entered the robot phase, which might or might not comment, who knows when. But who knows where this is going? You couldn't have foreseen the operating system that Apple was going to change the world with in 2007. How could you? So. Okay. Do you think, but do you think because his profession is sort of public speaking and blogging, and he's not inside of a company where he sees agentic workflows like actually replace tedious labor and like do you think because he doesn't have that as part of his current experience that of course he's underwhelmed by the technology? He's just like a chatbot. I think it's, it's an interesting choice to be commenting on the businesses of these companies without using the product at all, and that's weird. So what's interesting is we could, so you said to me like, what could, what could prove Ed wrong? And I did have a great answer. I think maybe the passage of time, and I don't know how much time we're talking about here, but it's, it's, no, it's September, got, dude, gap profitability, gap profitability at Anthropic and OpenAI or even just the path to gap profitability. Even if they say it's going to take us eight quarters, but we expect gap profitability eight quarters from today, and then as we get closer, they get closer, it's going to be really hard to make the case that he specifically made, which is the entire edifice is being held up by the, by the spending plans primarily of two non-public, non-profitable startups. And he's right about that, but as he becomes less right because these companies figure out, all right, we're charging for token or we're doing this, we're doing that. His bearishness on Microsoft might never get cured because specifically, he's talking about how shitty their products are and how fundamentally non-competitive GitHub co-pilot will be with the next generation of LLMs, like that you might never cure. His bearishness on meta, there might never be an answer to that, but his bearishness on like AI is it a sustainable investing theme. I think that anthropic and open AI, doing trillion dollar plus IPOs and laying out a roadmap to profitability would probably have to force him to change his thesis about why it's all going to crash. Well, this is almost too perfect that you could see this continuing on for the next couple of years and it's 2009, Josh, and it's the 100-year anniversary of the start of the Great Depression. And you damn well know if this is a bubble that doesn't burst before then, those articles write themselves. Listen, I'm really glad that we did that episode for a couple of reasons and I'm curious if you agree. The first reason is obviously most of the people we have on are constructive to super bullish. It's not that we never have bears on, it's that there aren't- Most people aren't bearish, yeah. They're out of the business, the bears are writing books now, the money has been taken away, it's a 17-year bull market, if you can find a credentialed bearer with assets under management and a functioning business, I'd love to talk to that person, I don't know who they are anymore, and I don't talk to Twitter people. So that's number one, so it was a nice change of pace. Number two is that we look at the like-to-dislike ratio on the analytics of our YouTube videos, not because we're judging the guests individually, but in this particular case, it is so polarizing. Like, let's just say like to the audience hate it because 200,000 views is a lot, so they couldn't have hated it that much, and it turns out 95% like likes, and our average video is 97%. It's not that far, so people that disagree with him enjoyed the debate. And frankly I would have them back in a year, let's see what's changed. Maybe he's changed, maybe we've changed, maybe the NASDAQ has blown up, and he's fucking right, like, I don't know, if he's right, he's not allowed back, if he's right, we're closing the channel. Anyway, I think the audience is our audience is awesome, you guys. And my personal opinion is that our audience is capable of balancing two opposing thoughts in their heads at the same time. I don't think our audience wants us to just mindlessly cheerlead for every ticker that's going up. I do think that they like when there are opposing points of view, and makes it just makes it a more interesting conversation. The last thing that I'll say is, I think the most credible bear case that he made is that prices will come down, companies will find a way to lower its costs, and matter of fact, Uber just wrote about that, let's draw down please. So they show, remember Uber, like, blew through their AI budget in March or April? All right, weekly adopts, there we go, great job, thank you. What is this? Well, Uber wrote this, they wrote a post two days ago, I think, called running a software factory efficiently at Uber scale. The shonen figure won from February to August, 2026, weekly active youth across all the authentic offerings, across all of our employees, grew 7x, and weekly agent requests grew 9.4x. Meanwhile, our total AI spend has relatively stable license April due to optimizations across the board. Look at the chart in the bottom. So they're making the point that they're still spending a lot, but it's becoming more routine or it's becoming more efficient the way that they spend on compute. So they just found a better way to more efficiently do what they're doing. If they're driving down the block, they don't need to take a Ferrari, they could drive a Toyota. So they said cost per 1000 mile of a cross is down almost 34% from its peak, and cost per session is down 52% from its peak. They said this is unsustainable. We have to figure some other shit out. Let's go open source whatever they did, and it's working. Yeah, the reason these harnesses are now so popular, and there are lots of them, and everyone's talking about them, and we just saw one get bought for $10 billion, and another one get bought for $7 billion. The reason why the harnesses are so popular is because this is you bring what your project is, and you lay it out, and it selects the model or models that make the most sense for that use case, dollar-wise. Of course, that's where this is going to go. Like somebody sets up this layer where it's like, "Tell us the project. We'll tell you how to get it done, and we'll pair you with the right models based on the cost, the efficiency, and the specificity of the project." And so that's why these harnesses have become so popular, because not everybody is oversized where they have enough engineers to make these determinations themselves. Josh, before we move on to Tim Cook, the thing that I'm coming back to, and again, I don't know shit about this topic, any more than anybody else does, but from somebody on the outside, I think a useful framework for what's happening is everybody keeps saying there's a shortage of compute, they're not making it up, and where are we in the adoption curve of AI in daily life in corporate America? We're nowhere. We are nowhere. I really don't think the transformation has even started to begin. So I think there are some companies that are further along than others in general. I think if you took a meeting with the CEO of Goldman Sachs, he would say they're like so deep in it, but then if you got the CTO of Goldman Sachs drunk, he'd be like, "Yeah, I'm just I'm just the announcing shit." So I think there's some there's absolutely some element of like if you run a major public company and you're not acting like you have an AI strategy, you have a problem. But that may not be the reality behind closed doors. So I think some companies are further along than others, but everybody's acting like they're like three sheets to the wind, like ready to go, and look our tiny little business, you know, we're not a Fortune 500 company, but I'm in a meeting every two weeks with our AI committee and our outside vendors, and I'm just getting updates, and we're making progress and we will not be at the Vanguard of this, but our data lake, what data we're pulling from what sources, how we're using it, what's permissions, which employees are allowed to use. Like all of that is getting figured out on the fly, and it's painstaking because we're a financial firm, so there's like a compliance roadblock in front of every step that you want to take. Thank God, but like it's moving, like we're doing a little bit more, it's not a revolution, it's every two weeks. Oh we could do this now, we could do that now. I would imagine that's what it's like at any growing company. And the point that I'm making is, I made this point on TV today actually. No one's going to go backwards. No one's going to be like, ah, we gave it a shot, rip it out. It's very unlike, it's very unlike the metaverse in that way, where people very quickly reversed. It's very unlike crypto. We had all these flurry of announcements and deals, and we're going to do a joint venture, and we're going to partner with these guys, and we're going to tokenize it. And then like that stuff got quietly walked back because a, it doesn't work and be nobody wants it. This is not that nobody is going backwards. They may have to take a few steps sideways because they got the strategy wrong, but nobody is saying, all right, we took a look at this AI stuff, we don't need it. Right. And even if they were, no one would say that out loud. You'll talk time, Cuck. I agree. It's Tim Cuck in the conversation for best CEO of all time. In the conversation. Yeah, I, I, he's not on my mouse more. He's online. I'm going to make the case. I think he's a better CEO than Steve Jobs. I would not say you know, yeah, okay. I would not say he's a better inventor, right? Obviously, or product creator or creative in general, I would just say, I think he's the best CEO of all time. He was right, man, numbers are on my side. Right, man, right time. That's, isn't that always the case though? Sure. But he could not have got, he could not have gotten them to where they got. And maybe Steve Jobs had he still been alive, we're not have taken them to where they are. Notice I very, very specifically did not say best founder. I noticed of all time. Go ahead, because I agree with you exactly what you just said. We're saying chief executive officer of a public company. Here's my case. This quiet, unassuming, gray-haired man who came from a COO role, basically counting widgets in Asia for the massive logistical lift of selling millions and millions of devices every year. Comes in when Steve Jobs passes away, I specifically remember the tech press at that time. He's a bean counter. He's a logistics guy that's not with this company. Need, you know, you could have just imagined. On Wall Street, I remember Jeff Jeff gunlock at a zone conference, maybe somebody asked him about Apple. Oh, he's a by-nature gas short apple. Remember that? Yeah. And the magic man is gone. Right, like they'll never, they'll never be able to continue the glory of Apple without Steve Jobs. That was very common. That's what most people's assumption was. People sold Apple. Oh, no, Steve Jobs. It's just going to be a device company, right? So a lot and Steve Jobs set this company up for success because of this idea of having all the products surrounding a software ecosystem and they all work interoperably and he understood all that way ahead of his time, the iCloud, etc. But anyway, these were really big shoes to fill. This, this is a 13x increase in the value of each share of Apple. Think about a 13x increase on what was already the largest market cap in the world. One of the largest market caps in the world at that time. Most of like 400 or 500? What was it? 2011. So whatever it was, it was in the hundreds of billions. Yeah. He 13x did. He launched the watch. He launched the AirPods. I'm not saying he sat in a workshop and built them himself. Johnny Ive was there. Obviously, it's a ridiculously deep bench of talent. But that's under Tim Cook's watch. Steve Jobs died before the AirPods. The AirPods are a category killer. category killer. The watch everywhere. Nobody was excited about either of these things when they came out. The watch can't stop buying them. The watch sent Fossil to zero, basically. Yeah. He fought off Carl Icon. And Carl Icon almost did his prime. Not Carl Icon now in his 90s. Carl Icon in 2012. But didn't he get what he wanted? He wanted dividends and buybacks. I think he wanted way more and he settled for a massive buyback. Icon only wants return cap of the shareholders sell things off. Apple had nothing to sell off. So he just wanted them to. Carl was right. It was the right thing to do. That was an interesting time. Back out the cash. Remember that for a year. Back out the cash that got cheap Apple was in 2012. 2012. The stock was selling at 12 times earnings. And if you backed out the cash, it was closer to 10. They had a substantial treasury of cash that they were holding tea bills in banks all over the world. And the most one of the most famous employees of Apple was the guy who sat in a windowless office and bought treasuries managing the treasury position. By the only company I've ever seen where for a year people said back out the cash. I've never heard that put on any other company. It was so much. There was so much cash. Anyway, Ford Iconov gave a little whack to end it up. Ended up working tremendously for shareholders, which I will demonstrate with the chart in a minute. Navigated the political wins in China, India, Europe, and all over the world. Better than any large company tech company CEO has been able to do. They like him in Europe. They like him in India. They like him in China. - China, yeah. - Made friends, made friends with both President Trump and President Xi. Made very good friends, think about this, with the ruler of China and the ruler of America, the two most important markets for Apple, somehow walked that tight rope, navigated, those relationships, and those are make or break relationships. If you're a Tim Cook, you gotta get Trump right, or else he's gonna tear a few into the Stone Age. He did it. I think he made a crown firm or something. He gave him an eye crown. I forgot what he did. Also perfectly managed Apple, and Apple is important on two levels. It's the number two market for smartphone sales for Apple, and it's where all the manufacturing is being done. And somehow in the midst of two separate tariff wars, was able to walk that line. It's unbelievable how good he is. And by the way, that's his job now. He's stepping back from CEO, he's gonna be executive chairman, and he specifically said in his farewell letter, I am going to manage the political relationships that are important to Apple and its supply chain. Like, he's gonna still continue to do that, which a lot of guys would just sail off into the sunset. Openly gay CEO, before this was more common and more accepted. This is the CEO of a Dow component. Coming out of the closet, yes, declaring that he's gay, but everyone kind of knew that he was. Again, it's not as impressive today as it was maybe 10 or 12 years ago. It's a big deal. It's a big deal. 2,700% total return for shareholders. So that's inclusive of dividends. From August of 2011 up until yesterday, his last day. I don't know how many companies do you think? I've been able to do that. How many CEOs, 15 years, and think about his starting point? He's already got Berkshire as a shareholder, and he's already one of the largest market caps in the world. And he still oversees a tenure of 2,700% total return. Put this chart up for me, guys. This is not market cap, this is the stock price, the value of the stock, plus the dividends. Un-un-believeable. I'm sure there are other CEOs who have done something like it that I'm not thinking of right now, but can't be a lot on the list. Chart off, how about this? $4 trillion in added market cap under his tenure. No CEO, other than Jensen, nobody else. Put this chart up. What you're looking at here is Apple Market Cap added since Tim Cook became CEO. Per year, $287 billion per year, that's it? Per month, $24 billion a month added. Per week, per day, per hour, per minute, and per second. He added $9,000 every second of the last 15 years. Shout-to-chart kid Matt and Sean, who really outdid themselves for the show tonight. Almost done, Michael. Put up the next chart. On the left, Apple's share price changed. We just went over. In the middle, change in market cap, 1,226%. And on the right, this is the change in shares outstanding. So this is the buyback. They shrunk the float by 44% in 15 years. Un-believeable. Next chart, Apple's growth since 2011. Services 1200% revenue growth in the Tim Cook era. iPhone 422% growth. Gross profits up 418% net income 400%. Revenue up 331%. Next chart, these are margins. Gross margins are up. This is a consumer technology play. Nobody in a million years ever thought this would be possible. They think of this like toaster ovens. Gross margins up 820 points during Tim Cook's tenure. Holy shit. Look at net margins. Look at operating margins. Next chart, this is by product revenue. The red is the Mac. The pink is the iPad. Services light blue, iPhone dark blue. I know it's done for category. How do they do $30 billion of sales in the iPad? Un-believeable. Because it's a forever product. You just replace them. You get another one. You get another one. You get another one. People have it built into their lives, their workflows. Finally, attracted a Berkshire Hathaway in Buffett, larger and larger investments. It's the biggest investment win in the history of Berkshire Hathaway and Warren Buffett. They have never made more on any other investment they've ever made by a factor of multiples. Not by a little bit. That's during Tim Cook's tenure. And then the last thing I want to do here, think about all the stupid fucking shit people yelled at Apple to do over the years. Sometimes you should be judged on all the things that you don't do. Totally agree. OK. So here's a partial list, because in the interest of time, never bought a Hollywood studio. Never started a streamer. Yes, never bought a streaming platform. Never bought a film library. Never bought a social media network. Buy Snapchat, buy Twitter. Right, right, right. Move, do something. Poking with a stick. Never did it. Thank God. You imagine Apple having the police, the comments on a social network. Never did it so smart. It seemed so dumb at the time. The conventional wisdom in 2013. How are you not on a social network? You're nobody. Microsoft bought LinkedIn. Met a Facebook bought Instagram. Like, what do you mean you're not doing it? Didn't do it. Never started a car division. Got close. Project Titan. They almost did a deal with the Koreans and started making cars. Didn't do it. Thank God. No data center cap X chase. Never did it. Never bought in. No large language model R&D. Never did it. No disastrous M&A. Would they buy company from Dodge? Be it right. They bought beets for $23 billion, right? No disastrous M&A. You have no idea the restraint that that's taken. Think about having $300 billion in cash for 15 years and not doing a deal. Think about that restraint. Very impressive. Very few flops. Division Pro. That's it. They tighted it up. The YouTube preload. We're going to put you two on the iPhone 3. Like very few of those. So few that I can count them on one hand. Didn't ruin Lord of the Rings like Amazon Prime. Never took a beloved property and put it through the streaming platform Meet Grindr, the way Disney did with Marvel, right? OK. Greenlit theatrical release for the Formula One movie. Massive hit. Killers of the Flower Moon. I liked it. Brought Ted Lasso into the world. Made us all smile and love each other for a minute. That's a stupid show. Then I don't watch. Anyway, listen, I know, I know this is a very competitive now Rushmore's spot to get. I'm trying to think of who I would put above him and I'm really struggling. Who is the best CEO of all time? How is it not this guy? Well, I think it's Bezos. But whatever, there's no need to denigrate Tim Cook's strike record. He's not a great job. He's not a fantastic guy. No, I need you to glaze him a little bit more. If anything, you just did all the glazing. So not in your Mount Rushmore, who's-- All right, Bezos, who else? Buffett. Fine. Thanks to Tim Cook. I would think Walt is-- I'm seeing Walt Disney in the chat. No, no, no, no. Steve Jobs. He's Top 10. Yeah. I put him above jobs. OK. James, I'm seeing Jamie Diamond. I don't hate that. I'm seeing Elon. I don't hate that. Jensen? Jensen. All right. No. No Jack Welch. Sorry. Jack Welch. I'll try that joke. Harvey Weinstein. All right. Now we're moving on. I'm moving on. Listen, I did-- how'd I do? You did great. You made a-- you made a compelling-- Oh, I should probably disclose I'm long, I'm long apple. Well done. All right, let's talk about the software bounce. Maybe it's not dead yet. Maybe just mostly dead. As Billy Crystal said. Let's go through some charts. So yeah, semis have kicked the shit out of software. We all know this. This is a chart from the summer of June 2025 software. IGV is down. Down 2%. Semis have doubled over the same time. So yeah, it's been a bloodbath. But what's so remarkable-- and we'll get to the SaaS apocalypse in a second. What's so remarkable about this entire run is that earnings estimates didn't flinch. And they didn't have to. Look at this. Throughout the insane drawdown. And it was insane. I don't know what the final numbers were. If workday fell 70% in Salesforce, well 50, whatever it was, it was an absolute bloodbath. And we set it at the time over and over. Trot off, please. We set it over and over. That the market doesn't care about Adobe's all time high in earnings because the market doesn't believe it's sustainable. The market was wrong. It just was. happens. the market was wrong, and you got a hell of a snap back bounce. So, two snapshots in time, from January 1st through the end of February, so for the first two months of the year, software underperformed semis by 43%. I don't think it's ever happened before to you. No, in the history of this data, probably not. And then since then, remarkably, since then, software had made a comeback. So, for the first two months, there was a 40% spread. And then for the next, whatever it is, I don't know, five months of the year, six months of the year, software is actually outperformed. Ripping. So, as we know, it's not all names. There's winners and losers. Market is still stored and throw it. So, check out this chart. John, skip the next one. Go to the software rebound. So, chart kids showed the average composite of software winners and losers since the low. And in the winner category, sales force and a bunch of other names that I probably should have had handy before. Because I don't know all these names. Some of the losers, soundcloud, microstrategy. Wait, wait. The dark blue line is the stocks that have and come back. Correct. The software is so oracles in there, microstrategy. So, what could be in the winners? Of course, the cyber security names, crouched like in Palo Alto, holy cow. But I don't see Adobe on this list because it's in the middle. So, this is the top 10 and bottom 10. So, we weren't like select names, chart off please. So, but even like DuoLingo, which was like in the epicenter of your dead. You are so dead. Nobody needs you. Who the hell needs software to teach me out of the language, like AI all day. I don't know where this company is going to be in a year or two from now. But holy shit, what a rebound. So, I love seeing this. I love seeing the consensus piece are wrong. I love seeing the opportunity for value investors to step in and say you don't understand. You guys are totally, totally drunk. And speaking of that, a great example of this. You and I were looking at Schwab when the announcement was made of Hazel. And we said, whoa, this was like the gamma and amnesia effect that we identified. It's funny how. You said it in real time. If I know this is wrong, then a lot of this other stuff has to be wrong. And what a call, what a call. So, on that day, Schwab Stock fell 7 percent, Tronon, please. Schwab Stock fell 7 percent just on that day alone. And it continued to drift from $105 a share down to $85. It was in the storm for no reason. We did a future profit in Miami. It was great timing for us. Now we're on the other side of that. Shout out to Jason and the entire team for getting bought, but for $4.6 billion by Vanguard. And how stupid is the market sometimes, Josh? So, down 7.4 percent, Schwab is on a day where an announcement. So, it was altruist launched the Hazel tax tool in a joked Wall Street. Joke. And when the credible threat comes, this is a legitimate potential threat to Schwab. The fact that Vanguard is now in the game and is now saying, all right, we're ready to battle. And the stock only fell 2.6 percent. It tells you so much about how the stock market functions. Raised two questions. You accurately said, well, I know Schwab selling off on the launch of a AI tax tool for advisors. I'm an advisor. So, I know for a fact that this is nonsense. You were dead right, and then you extrapolated that. You said the Galman and Amnesia is this thing where an expert on a certain topic. reads a newspaper article. They know for a fact that's wrong. But then they turn the page and read 10 more articles. And don't make the leap that. Well, if that's wrong, then there's probably a lot. Okay. So, you said that in real time. And that was an amazing buying. It was early because it was March. And I think these stocks bought them in April. But it was an amazing call because probably for every vertical software company, there were experts in those fields saying, this doesn't make any sense. And I think we said that about the cybersecurity stocks software in real time. It was an amazing call. Do you think we will continue to see examples of this where we have these one-day spookings because anthropic launch is something. And they take some of these stocks to the cleaners. Or do you think the market has now moved past that ability to be spooked? I don't think it's going to be like it was in the spring of 2026. I think that environment is over. Can there be days where something comes that's truly revolutionary that we don't see coming? For sure. But those days of announcement, whack, gone. Okay. So now that Vanguard has acquired Alchewist for $4.6 billion, where do you have me on the rush more of WealthTech early-stage investors? Am I in the threespot? This was not early. Stop it. Credit to you. But this is a growth investment. Am I a generational talent in investing in pre-IPO WealthTech companies? You are a generational talent. You are a generational talent and re-grown your hair without a doubt. I almost think I'm like a King Midas in this space. You do have some big winners. Congrats to Jason, let's end there. I would also point out, in the best stocks in the market list, we finally have software stocks. Crowdstrike, Salesforce, Paus, Salesforce. Salesforce. Yes. The literal eye of the storm. Salesforce. Best stocks in the market. Now, is this like a, are these, Salesforce going to make a new high? I'd be very surprised. Because what's not going away. Is that a 50-week high? Fine, great. I love it. Fantastic. What's not going away is the looming threat of, no, no, no, no, no. You're not just increasing my cost by 12% a year, just because. That's over. And that was a big part of the game. People like that they made, that they did a partnership with Anthropic, made everybody feel better. Claude Force. Love it. It's great. Yeah, please. Palo Alto Network's Fortinet and Atlassian team. Those are all software stocks on the list of the best stocks in the market. And we, that could be zero, guys. We don't have like a quota per sector. And for a long time, it was zero. And now it is six. So think, here, real quick. Fortinet, put this up. I mean, looks, looks amazing. Cybersecurity. Salesforce. Look, I mean, I don't know. Like, gaped, gaped out of it. This is what's called a breakaway gap. It's a long base that dates back to January. This will fill the gap. OK, but it's a breakaway gap for now. And I love it. I love it. Gapped out of it. Out of it's 200, they're moving average, too. Right. Here's CrowdStrike. I think this is the best stock in the world this year. It's definitely in the running. Definitely my best performing stock that I own right now. It's the numbers. I mean, it's such. I mean, do you know that they just announced they have to close a deal with, a deal with Nvidia? They launched something with Jensen. Jensen's got an LLM called Nemotron. And they used it to build cybersecurity first LLMs with CrowdStrike. That came out at 415 today. So you can read that release if you're interested. What was the last one? Palo Alto. Well, I mean, looks amazing. I don't know. I don't know what you could really say. So these are software stocks on the best stocks in the market list. Oh, momentum crash. Is there a ton to say? Sean made this chart. We'll do the chart. What is this? Okay. This is the rolling 51-day average of momentum versus the S&P 500. We have just experienced one of the worst 51-day periods for the momentum factor ever, coming on the heels of the best 51-day period of all time. And I think the message here is that factors and investment styles. Just when you think you figured out, oh, this is how you beat the market. The market very quickly reminds you. Just when you think you have the key to the lock, they change the lock. Like, you will never find a style or strategy that always works. And just when you think you have the Holy Grail, it's going to go so hard against you, you won't believe it. And if you can't get used to that, this is not for you. This game is where you're looking for, like, what's the thing that consistently works? You will lose and lose and lose. That's right. If you're going to play that game, you've got to live with that. Let's put this bread dashboard up. All right, so I just wanted to say a few things before I make the case for something. There's been some selling going on. I don't know if you noticed this, Josh. But look at the percentage of stocks making new 52-week highs. Ain't nothing happening outside of energy. There's really nothing. There's a decent amount of stocks making 52-week lows. A lot of discretionary names, 9% of discretionary names. A lot of them look like shit. Let's make it. Sans, win. Carnival crews. But try it back on are the are the utilities jumping out at you utilities look terrible look at the four week lows I mean this is not nothing it 51% of industrials are at four week lows 47% of real estate 34% of discretion. It's 71% of utilities. So there's there's some selling going on and it's okay Changing character. Hmm. All right. Let me make the case before I make the case I've had a couple of really bad make the cases in the past couple of weeks that I want to That I want to call myself out on Floor into core. I said basically that I don't think interest rates could hurt the housing market anymore a little that I know Little that I know that they were about to go on a FU tear So flooring decor is down 70% since I made the case. I did on the stock. I sold it. I law I took a 4% loss on that which is fine is it is there a good risk word here for the next year? I don't care. That's not what I'm doing. We know look at stocks and on the 52 week low list. Don't care Also, hi it. I made the case for let's let's try not so these are horrible calls Hi, it has gone straight down since I made the case for it and hi it and Marriott and a lot of the travel all the travel names They look come in they they try to please they look pretty shitty and also this is pretty normal like these stocks I've had a very good run, but they do look pretty bad I I was up in Delta and now I'm down and I might I may got stopped out. It happened quick So all of them you're right like all did this. Hi it went from 207 down to 160 just right through the 200 day like it wasn't even there in LOL I guess it isn't even there But okay good for longer term investors, but that's not what we're doing here. At least that's not what I'm doing So I wasn't in the name to begin with but terrible make the case although I did make the case for XBI now is ago But here's my next one anyway, but here's my next one. I'm doing a Josh. Yeah, like me now from a next trip If you like those you're gonna love this, so I bought I bought clear yesterday not a lot This is a very speculative stock the ticker is while you these are the things that airports that you walk past and they get you Cross the line faster. They're trying to get my money. They're trying to be a biometric Identity company and I was reading a profile of this is a profile of Bill Miller This is a bit of my study. No, did you so this is a bit of my email? I emailed in these this is in barons I emailed in these are so we're after you know It's fun. Go ahead. Sorry. I said thank you for doing this story about like where are they now about Bill Miller? because a lot of times the media just always retired. Let's move on and these guys still know a lot of stuff Let's get it. I said thank you to Andy. Let's get him on the show He is extremely like not traveling anymore Well, let's go to Baltimore. We'll have some crab cakes Anyway, so it's funny. I read this today. This is a bit of my on my tab since August 21st when I saw it and I read Miller owns a few stocks besides Amazon such as biometric security company clear secure Where he had been on the board. He said quote? I'm one of the larger owners It's still significantly under price. That made me feel pretty good. Bill Miller not a bad investor next chart So we've got 21 straight quotas of revenue growth They're even on margin past a key metric for them. They were targeting 35% of the IPL It's now 36% and carrot saving and becker who I spoke first. I first spoke about her chart off Please I first spoke about buying her stock which I never did when I did in March of 2025 I think it was she was on Patrick, I showed him his podcast and I said this person is incredible I should invest in her and I never did I should have because the stock is up a decent amount sense, but she said on the call Last week, we found it clear with the profound conviction that proving you are you are you securely privately and instantly Would one day sit at the center of how Americans live work and travel for a long time. It was a vision Now it is our reality clear as the trusted secure identity company and after 16 years of building our identity platform clear travel and clear One we have never been stronger or better positioned it feels like day one around clear because it is Driving, but she said we ended this quarter with almost 44 million total clear members driving bookings of $296 million and free cash Flow of $189 million 33% bookings growth and free cash flow is up 60% year over year and they also Did announce a deal after the closed yesterday with crash strike So the company is relatively small seven billion dollar market cap very volatile I bought a little today and I am probably going to add to it over the years So I love stories like this where there's this whole new use case for all this data. They've collected Endpoint security is like the most important part of One of the most important parts of threat detection for crowd strike for Palo Alto like Permissioning and identifying users and who is really who and who's supposed to have access and That's the frontier for cyber security in the age of a gentick and I love I've also learned something about you You do when you get excited about these off-the-beat and path stocks that are not in the index and people don't even know that they exist Or people know the product, but they weren't aware it was trading you get you get these things right like iMacs was Monster home run for you. It's not in the S&P They're not a lot of analyst coverage. So I've learned not to ignore when when you get a spidey Tingle thank you about a stop like this. So I'm gonna add it to my screen. I'm gonna start following this one all right Let's make the case. I mean mr. Chart. What do you got all right? We'll finish with a mystery chart I already did I already forget I might not even know. I think I know what this is This is this is Palo Alto Very close saw crash strike. Yeah, well done second guys You took the numbers off of this thing and you so I want to point out a couple of things Yeah, I'm long and I'm not pumping. I'm not telling you go buy it right now This thing just split four for one and made a new high immediately like I have very rarely seen a Stock under this level of intense accumulation as what we've seen with Crouch strike this year I think it's not that they're gonna be the only cyber player But the market has decided that they are the furthest ahead in AI related cyber security and it is probably the scariest time To be unprepared from a cyber security standpoint and chart back on Look what they were doing to this stock in March in April during the SaaS apocalypse I don't even think people were doing this deliberately Selling it down here. I think it was in all these stupid baskets and ETFs and when you press sell on the ETF The authorized participant is out there selling the stocks They don't care about the company's growth rate. They have to sell the stock to mimic the index such a good point There will always be Opportunities in panic that was one of the biggest panic scepter-wide panics. I've ever seen I was part I wasn't like let's buy software But I did know that this one was stupid in real time and you didn't you didn't you knew not to sell Yeah, well, I'm never I mean, I'll probably never I shouldn't say never I will probably never sell this one Because I just think it's like oxygen you literally cannot not Spend money on cyber security and in the AI age the amount of surface areas for threats are Multiplying like it's exponential. How much more dangerous this moment is than five years ago And I know it and this company seems to have figured it out and I believe in them and Holy cow what they were doing to this stock and it we're talking about March April like it's a million years ago It's like 10 weeks ago Right. It's unbelievable. What was going on? All right, that's that's enough That that's the show for today guys. Thank you so much to everyone who joined this live in the chat We appreciate you. We love you guys. We miss you when we're not here tomorrow is Wednesday You're gonna get an all-new animal spirits with Michael and Ben definitely look for that on on the compound Network here on YouTube or listen to it on Spotify and Apple and Dunkin and Ben will be back. We will be back at the end of the week another big guest another amazing show on deck Keep it locked. 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