00:00Ted, what adoption do you want to see in 2026 to help bring together this mismatch?
00:06Well, that's a great question. And thanks, Carolyn, for having me. And happy holidays.
00:10Listen, this cycle is probably the most robust I've seen in 30 years, 30 plus years of doing this.
00:17So the overall Jenny I infrastructure is not going to change. The spend is still robust.
00:25But in reality, you have the SOX up 42 percent. You have the NDX up 21 percent.
00:34And you have the IGV index, which is the software kind of index for software, only up 7.6 percent.
00:42If you look at beyond that, one step down, most of the performance in 25 has has been really focused on optical memory, quantum and some of the bigger semiconductor companies like Avago or Broadcom like NVIDIA and AMD,
01:05as well as some of the big cloud titans, Alibaba being one in China and obviously Google.
01:12With that said, going into 25, the street is really not looking around the corner of what could what you could see as it relates to headwinds.
01:25Right now we're in. Right now, I would just say we're in a market of that's really almost over exuberant speculation, a lot of complacency.
01:34So do you think some of the previous winners, the NVIDIA, the Broadcoms, the Microns are going to fare badly in 2026 or is it more we're going to pivot more into a software era?
01:44I think there's a that's a great question. And I think the right one when you have optical names up 300 percent, there is a worry about two things in kind of the semi food chain.
01:56One is pricing. If you look at Micron's last report last week, DRAM prices were up 20 percent sequentially, not year over year sequentially.
02:06We have a price issue. The other thing, if you listen to the Dell call a few weeks back, the CEO was very adamant that we're going to potentially run into some shortage issues.
02:19Now, is that in the ecostructure of Gen AI? Hard to say.
02:24But I think when I talk to portfolio managers that are managing a tremendous amount of of client money, the worry is that what worked in 25 may not work in 26.
02:37And if you look at the pivot to software in kind of that late 27, 28 time frame, it's probably worth worth looking at that area specifically on the agentic names and the security AI names, which have corrected recently.
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