00:00Just break down what is amid geopolitical tensions amid concerns over Iran and the conflict. We're still seeing tech managing
00:09to catch a bid today.
00:11Yeah it's a it's a real turnaround from what we saw to start the year in terms of the massive
00:16sell off driven in part by uncertainty from the introduction of AI what that would do to
00:24traditional software companies traditional software stocks. In April we really saw the first constructive tape for the software indices and
00:34moving higher still lower than the broader market but performing quite nicely. I think this is really where we're going
00:40to start to see a shift from kind of AI panic and uncertainty into AI execution and more discernment among
00:49investors around who's really going to be the winners the beneficiaries from AI and who may
00:54struggle to perform as we go into this new era. It's interesting we have earnings still coming thick and fast
01:01and when we're thinking about Palantir has been the eye of the storm in many ways of whether or not
01:05it's a software exposed stock and AI is going to manage to upset it in terms of competition coming from
01:10the frontier model makers or if they're able to plow their own path.
01:14And look the numbers were again extraordinary but the earnings are down. We're seeing Shopify also lower. How are you
01:20discerning who is able to retain a moat.
01:24Yeah. So there's there's a few things that I look for. First is enterprise adoption. So are you selling more
01:33to the SMB or are you selling more to the enterprise in enterprise software.
01:37Rip and replace is hard to do. These are projects that have been budgeted budgeted years in advance of implementation
01:44timelines take a long time.
01:47You have a lot of services wrapped around that. So you can't rip that overnight things that are easier to
01:52deploy.
01:53You may be able to turn on a dime a bit more adopt some of the newer technology that's coming
01:58out of the foundational lab.
01:59So that's one. The second is you mentioned Palantir and there's a real rotation into the defense tech sector, particularly
02:07those names that have a software angle to them.
02:11So what is, you know, defense tech hardware now software getting a lot of focus.
02:16And I expect we'll continue to see a lot of tailwinds there, given where you start in kind of the
02:21geopolitical landscape and the money that is pouring into national security and particularly a new way of doing business and
02:29defense technology.
02:31Let's talk about the other theme about as we see more efficiency being sought by these companies.
02:37Unfortunately, that often means job cuts. Some of it comes with the view that it's because of AI that we're
02:44disrupting the labor force.
02:45Do you believe when we're hearing the latest out of Coinbase, 14 percent of workers to go PayPal going to
02:51be letting go thousands of workers?
02:53Is this AI washing? Is this just a different kind of focus from fintech, for example?
02:58You know, there's there's a couple of interesting trends going on there.
03:02One, you definitely see investors pushing more towards profitability.
03:07The ratio of growth to profitability has changed over the past year with a focus on profitability matter, mattering more
03:14than ever.
03:15And certainly looking for ways to make cuts that drive that profitability businesses are going to do that regardless of
03:22A.I.
03:22But yes, A.I. is also going to displace certain types of tech workers.
03:28But there is going to be a new opportunity that opens up.
03:32One area that I'm really bullish on is the services sector that is going to emerge around A.I. adoption,
03:39implementation projects.
03:41Again, some of these are hard to figure out.
03:43How do I want to put those in place?
03:45What are the security measures I need to have when I'm implementing A.I.?
03:49And that's where you're going to see a big services push.
03:52And that requires some labor to do as well.
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