00:00You know, it wasn't that long ago where we sat at our desks the day of NVIDIA earnings and all
00:05of the literature is calling it a macro level event, such as the impact of a single name on
00:10the market. Maybe we're a bit flippant then, but Carmen set us up nicely, right, of the state of
00:15play. Is this a macro level event this Wednesday? I don't see it as that. I think it's still
00:22incredibly important given it's the largest stock in the S&P. And it does give us insight into what
00:27are the ordering patterns because you see all of that big tech investment that's gone through with
00:32the spending plans of Amazon, Meta, Facebook. Those are probably translating into some of the
00:37NVIDIA orders and it has big impact for the chips providers as well. So it certainly matters quite
00:42a bit, but I think it'll take a really big beat to see the stock actually move because expectations
00:48are so high. And that's kind of similar for the whole technology sector. We have valuations are
00:53very high. So it's got to be earnings that's really going to drive growth in the share price
00:58because it's hard to see those valuations going much higher. In the context of software, you were
01:03in the camp and we had this discussion last week with others that the sell-off we've seen, AI-related
01:08sell-off, particularly in software, has been indiscriminate. That word comes up a lot. What's
01:13your argument on that? So I think for a long time we've been saying we don't necessarily know who the
01:20AI winners and losers are. And it's kind of like investors actually decided to put their money
01:25behind that with the recent sell-off that we had. And I think people have realized that they don't
01:29necessarily know who those winners are going to be and just sort of indiscriminately sold a lot
01:34of the market. I think there will be software companies that can do incredibly well out of this
01:39because AI can dramatically reduce their costs to deliver programming. It can make things more
01:44efficient, reduce their expenses, deliver better experience. But executing all that is really
01:50difficult. And not every software company is going to be able to do it. Will you learn much from just
01:55earnings and fundamentals this time, Shanti? Could that be where investors decide to try and catch a
02:00falling knife, so to speak? I think it's hard to see people changing their minds so quickly only in the
02:06last few weeks. But the technology sector does move incredibly fast, as we've seen. You can have those
02:13moments like DeepSeq where everything seems to change overnight. But usually the sell-offs are quick and then it
02:19takes time to rebuild the momentum. Shanti, what is your view? What are you in rooms discussing that, yes, we
02:26are at this
02:26point where AI is going to eat software instead of software eating the world? Or do you think companies will
02:32ultimately survive this shift to be able to rebuild from within?
02:36I think a lot of companies will be able to survive it. I think the big thing we're looking at
02:40is how much AI is starting to impact
02:43industries outside of technology. And that's where valuations are lower. You're starting to see it come into
02:48shopping. You're starting to see it come into the wealth industry to make it easier to comply with
02:54regulations. Banking and finance, certainly. And I think that's where if some of those sectors can start to
02:59demonstrate that they're using the technology well and adopting it, then they'll really be rewarded.
03:06Tariffs. It's very hard to join all of the pieces of bad news, so to speak, together. But the tech
03:12sector's view on
03:13tariff policy uncertainty right now?
03:17I mean, I think obviously it lowers rates slightly on places like Asia, China, which helps some of those
03:24manufacturing bases. So maybe it marginally reduces some of their costs. I think the long-term trend of
03:30technology companies trying to diversify their production and having manufacturing in the U.S.,
03:35and Mexico, and still in Asia as well, going to India, I don't think that's going to change because
03:40people don't think the uncertainty is going to go away. And we still will probably have an
03:44unpredictable policy environment. So you want to be able to have all of your options open.
03:50Probably it helps unbalance some of the software, the things that are producing actual physical goods,
03:55but we'll see how long this rate stays in place. We could all change in 150 days, as we know.
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