00:00 Speaker a
Does Malta think more broadly as someone who has studied the market for a long time, like Bonanza, whose investors are so excited about? If you're a company, you need to say you're going to spend and people are going to bid on your stock.
00:13 Malta
Yeah.
00:14 Malta
That's right.
00:15 Speaker a
Um, are they just historical, correct, Malta? And I just want, do you have confidence in it or what do you know, do you think it's all going to work? It will all be the end of the day and generate real material revenue and profits. Is that okay or no, are you worried? Where will you land?
00:30 Malta
Well, when you think about the subject of AI, this year there was encouragement that wasn't related to Capex spending. So if we're looking specifically at hyperschools and we're looking for
00:40 Speaker a
Those Cloud Giants.
00:40 Malta
Cloud Giants. And you're looking at the cloud revenue they're generating. That was a pretty meaningful step. Many of them are related to customers running AI workflows on their infrastructure. And that's a sign that there's really a demand from a wider economy that gives AI credibility. But when we talk about this idea about the idea that investors are really enthusiastic about spending AI and even the gesture of spending a lot of money behind AI, it should be a pause for us a bit because we know him.
01:06 Speaker a
What does it show you, Malta?
01:07 Malta
Well, capital expenditures, especially at these high levels, can be disappointing. They are not always in the perfect direction, perfect size, as you know. And in fact, historically speaking, when you see the Big K-Pex cycle, many of those companies are punished. Think about energy companies and part of telephone companies. It could be a real burden for some of these companies. And for them to get these investments right, they have a lot of expectations in the market, and that's not always the case.
01:29 Speaker a
So, if I'm trimming an AI, Marta and I'm rebalancing my portfolio, what am I rebalancing to?
01:33 Malta
Well, today's market and valuation opportunities do not have a large amount of valuations. Therefore, it is not just technology that is present at these peak rating levels. It is also a field that constitutes the end of industry, finance and spectral value. There are only two exceptions, at least in the US. They are related to healthcare and small caps. Currently, both of these areas have real issues. It doesn't seem like the perfect story for either of them. In healthcare, there are policy concerns, small caps, so there are weights from tariffs, economic questions, and are very economically sensitive. But that's the price for both. If you're looking at how you're doing
02:00 Malta
I think it's worth it, having a little exposure of that rating within my portfolio, healthcare, small cap is two places you can hunt.
