0:00 spk_0
Well, let’s move on to today’s question. Investors are divided on whether or not AI trade is currently in a bubble, but putting that aside for now, what will be the next big catalyst for technology trade? Lou, nice to meet you.
0:13 spk_1
Well, I think it’s more of the same, right? Significant revenue growth from Magnitude 7. Breaking this down, the company has reported more than 20% quarterly revenue growth in the first three quarters of this year. Nvidia’s report appears to provide more information. But for me, as I said earlier. I think the key is to assess the transition away from huge capital investments. The profits come not only from the chips, but also from the solutions into which these chips are put. Therefore, it could be 2026 before companies release open AI. What will that revenue and profit be like? What are other AI platforms generating in terms of revenue? Because for this to really work, for this to be a viable business model, I think I’ve seen statistics that say basically every Apple user has to be charged about $30 a month to use the AI, but that’s to be determined. I think AI platforms, and even solution providers, need to shift their focus from chip spend to actual revenue. We believe there are many opportunities for AI in the healthcare field. On the large-cap side, you have companies like Tempus AI that are using their testing business to develop very innovative ways to get people into the right clinical trials. I think we’ll find some innovative solutions there, but for now, as I said, I think it’s the same: more revenue, more chip sales, more names of AI utilities doing big deals with Mag.
1:25 spk_0
7. Jen, this is in your wheelhouse, but one potential trigger for the tech industry could be one more rate cut before you’re done.
1:32 spk_2
Literally, that was my thought process as we were talking. If we continue to monitor the economy, I don’t think the economy will fall into recession. This data is somewhat consistent with what we’ve been seeing over the past month or so on the private sector data side, but not much has changed at the time, and the Fed is on track for further rate cuts that will create tailwinds toward the end of the year and will help big tech companies that continue to be a max-even, show-me story.
2:01 spk_0
Brooke, um, what do you think would be the catalyst?
2:05 spk_3
I was reading some source notes this morning, and what we’re really hearing is one thing. We need to add two to this government shutdown. As Jen pointed out earlier, you also pointed out the Bank of America tariff mess, and the analysts say all this in their notes. He also said that if macro factors like tariffs and government shutdowns are not an issue, then once we have that data back we can kind of pivot and refocus on this issue. Support the AI spending cycle and, better yet, move that momentum forward so that investors don’t look sideways at all the other distractions going forward.
