Transcript:

CAROLINE WOODSTech is at a major crossroads and the biggest bull on the street is back. Dan Ives of Wedbush joins us for a tech check. Dan, great to have you back.

DAN IVESAlways great to see you. And I think actually we kind of have some matching, clothes to sort of deal.

CAROLINE WOODSI always have to wear color when I know you’re on Dan. I have to start by asking, for a check on your bullishness here, though, because you’ve been one of the most outspoken bulls on tech. But since we last spoke, we’ve seen this war with Iran. We’ve seen oil pushing toward or above $100 a barrel. And we’ve had tech stocks continue to be under pressure.Does any of that shake the bull case down?

DAN IVESWell, if this is a long dated prolonged in terms of, you know, as we go into, you know, late April, May into the summer, okay, then that’s something that, you know, could start to dent some of that growth. But for now, I mean, you you’ve known Trevor years. But if I focus just on geopolitical and that always sort of was the guiding factor to so much of, you know, our bullishness.

And we we’ve not been bullish on tech for much of the last 20 years. So I’m missing you have to be able to navigate this. That is ultimately going to be a contained issue. And it’s not stopping the AI revolution and everything we’ve seen from user conferences the last few weeks to all of our checks, I think you’ve seen, even on some of the numbers for companies that report Rubrik Oracle content near a few, it’s more emboldened in terms of what we see. I think we’ll see similar things in GTC from Nvidia next week.

CAROLINE WOODSBut can the AI trade power through all of that, or do we need a resolution before we see a turnaround in some of these tech stocks?

DAN IVESYou need to look I mean you need a resolution, you know, call it in the next few weeks. I think if it goes on further than I can tell, it being like a future proof this week and obviously talking to so many writers and, you know, in so many, you know, retail investors and I get it in very similar to when I talk to institutional investors, if this is something that lasts another few weeks, then all of a sudden goes to Geneva and get some sort of, you know, negotiation, then I think that’s something that’s very contained relative to the broader story.

But if you just I could take oil at 100, the jitters was already there in the tech trade. I mean, if you think about it, the AI goes trade anthropic. Everything we saw and saw for too big to fail. In terms of OpenAI circular finance, I mean, that was already kind of going into this. So it just added, well, it’s just a very nervous time.

But our bullish stance like it’s my view stocks make tech stocks make all time highs later this year. As long as this you know Iran conflict or war is contained into the next few weeks.

CAROLINE WOODSOkay. Outside of that though, there is also some new uncertainty in the AI space. With anthropic now battling the US government after being labeled this national security supply chain risk. Do you think that’s anthropic specific, Dan? Or does that raise red flags around the AI trade overall?

DAN IVESI think it’s anthropic specific. I also think, you know, it’s almost like be careful what you wish for, because if you take my anthropic, right? I mean, almost like AI alarmist or AI lama system, you know, in terms of everything with software or cybersecurity, you know, jobs that, you know, they’re going to eliminate, you know, where 50, 70% of the jobs.

And then ultimately they jumped on to the third rail of Penn Station. Bye bye. Battling with the Pentagon. And I think, you know, once they got label, what I view is like a scarlet letter right now in terms of the supply chain is same as Huawei. It’s a huge black eye for anthropic. I view it as very specific.

10th, Robert, because look, OpenAI came right in there and I think others would do the same. But it speaks to just the world’s colliding that you’re going to see in AI. But I don’t view this as some sort of impact outside just anthropic. And I think to some extent, the goose trade in saw for a while that was really caused by anthropic.

And I continue things most disconnected tech trade that I’ve seen in my career.

CAROLINE WOODSYeah. You’ve said it’s the most disconnected trades or one of the most disconnected trades you’ve seen in decades. What is the market getting wrong right now about enterprise software?

DAN IVESAnd I a that lambs are going to this to locate or basically destruct the software sector. I five talk to 6070 customers. The last quarter three four weeks feel more and more emboldened of our thesis that it’s going to be about the stack, the workflow, the install base is Elms have a role. They’ll get layered on top or wrapped in there.

But did you do anthropic is going to unseat CrowdStrike in cybersecurity. Palo Alto, Salesforce, ServiceNow. They work Monday.com, UiPath, AI. They’re going to be names that definitely, you know, are much more impacted. And the one trick ponies to get her. Yeah, but I think what the investors are getting wrong is this structural view that software done or, you know, seriously dented because of anthropic.

That’s why it’s a good trade. And I think that continue what the market’s getting wrong.

CAROLINE WOODSNow that we’ve seen a lot of tech sell off though outside of some names like SanDisk and Western Digital Seagate micron those names is software still the biggest laggard opportunity in tech right now.

DAN IVESYou know I don’t think talent I don’t think tech. It’s hard for tech to work without software because right now the consensus trade on Wall Street is you own Sammy’s, you own hardware, you can’t talk software. But that does sound functional sort of balance for the overall tech trade to work. And that’s why, you know, I think the bottoming event will be viewed as an anthropic event that they did a few weeks ago when they introduced her AI agent, because I think that was the one where you realize the bully that you were worried about.

Everyone’s had six, six, 300 pounds squats, 1,000 pounds is 5 to 80 pounds.

CAROLINE WOODSSo that was the bottoming event. What do you see is the bottom of the tech trade though. Do you think the worst is behind us or does it get worse before it gets better.

DAN IVESWell you never know obviously just given macro and just the nervousness and everything we see. But to me as long as this is a contained conflict, that’s gets to some sort of off ramp in the next few weeks, I think this is views a bombing event where, you know, the stocks go higher ultimately in March. And to to me, like I said, I think tech would make all time highs in terms of what we see probably by the summer.

Look, it speaks to the view like whether it’s private credit, Blue Owl, you know, I GU trade worries about secure financing. I just think it’s a check by check. These companies, you know, really checking the boxes. I mean, look, Oracle huge step in the right direction. OpenAI raising money. You know, another huge step in the right direction.

CAROLINE WOODSBut Dan you know you mentioned Oracle a huge step in the right direction. And we did see Oracle shares pop. They’re lower today but still higher on the week about 3% but more than 50% off the highs. But it didn’t do enough to revive the whole software trade. So what’s it going to take.

DAN IVESOkay I think it was just I’ll call like a baby start to show in it. Karen, I think the main thing is just investors, like they’re frustrated because they and Simon is Asian. So you have and outside of pound here you have really Simon’s Asian on the software trade MongoDB was disappointing. And look Salesforce you with you with the off quarter numbers like Salesforce Palo Alto a again good.

But it kind of furthers that narrative. You need to see as you go into your call in like late April or May, you need to see these earnings and software. They start to see some monetization in the use cases to, you know, are, as a security conference, very huge, obviously biggest security conference in the world when that happens in San Francisco in a few weeks.

And then very important terms, denouncement the data points. You know, maybe some things that come out of there, you know, could there be M&A in the next few weeks in software. And that’s also important. That’s all part of buying. But a lot of it is a psychological. You use the risk score from software where, institutionally speaking, to do not enter zoom.

But I think that’s the wrong view. Good idea. As the software winners.

CAROLINE WOODSOkay. Well you you were out with a note not too long ago saying the top ten tech names to own during the geopolitical jittery backdrop were CrowdStrike, Palo Alto, Checkpoint Software, Microsoft, Palantir, Planet Labs, Apple, Voyager Technologies, Vijay, Salesforce and ServiceNow. Who is the clearest winner if global tensions remain elevated.

DAN IVESAnd I like to that list I give you, I would sort of the rhyme or reason. Like, first of all, I think some of the large tech names continue to be in terms of like valuations and just more. See for names. If I look like Apple, Microsoft doing as good examples, I think cyber security I think we saw with Rubik’s is a good example.

I think that’s one where that’s probably going to be the area that’s the most, I think, disconnected relative to that ghost train. That’s where CrowdStrike, Palo Alto, among others. Palantir. I mean, we were just today I become, you know, you know, yesterday in Maryland. I mean, that’s why it’s hard to walk out of there negative. Like, you know, like when you walk out of there, you’re like, they’re just beginning what’s going to be really a transmission on just a pound tier.

But the whole space and I think they just have a solution no one else has. That’s why Palantir, I continue to view this is one where I think it’s going to grow into $1 trillion mark next year. I get it, we’re going through this white knuckle period and, you know, good is bad. Bad is worse. But I just I keep focusing on my CapEx deals.

I get accelerated what the environment looks like. And that’s why I’m just not one that gets caught up. We can have the two in the morning. Look how was doing in geopolitical. As scary as it is, if I just if unless you think this is going to be prolonged it doesn’t change reduces.

CAROLINE WOODSOkay. But I can’t be as upbeat when you look at your of compared to walking out of it. Yeah

DAN IVESKnow it. But but but that’s why it’s a, it’s a, it’s a white knuckle environment. And I think you have to be maybe like on the risk curve if you think about means you’re going to be bullish on you have to be like I think maybe a little more defensive in tact, specifically with some of the bigger names.

But it also goes back to software because like, look how these software names have sold off so dramatically. That’s right. Then there’s like value names in stock. Even I go can name like checkpoint. A good example.

CAROLINE WOODSOkay. So Dan just before we wrap up and before we get to our rapid fire round, you said the geopolitical turmoil and the surging oil has to have some sort of revolution resolution in the next few weeks. If it doesn’t and we check in, will that be the first time that I’ve ever talked to you that you’re not bullish from here out?

DAN IVESWell, again, it’s I’m not going to do like, you know, some others and predict what’s going to happen in the next two years or with that. But the whole point is count I do is like everything that we would have hoped fundamentally is happening. You actually accelerate relative to CapEx. But you you can’t look at this in isolation.

You need, you know, resolution for risk on and you can have oil in triple digits and then all of a sudden be sitting there saying, like, you know, it’s up and to the right for tax. I mean, that’s it’s important in terms of the macro story. And we need some sort of resolution off ramp in the next few weeks.

CAROLINE WOODSOkay. All right. Well we’ll check in in a few weeks. But before we let you go, we of course want to play a rapid fire game of this or that with you. Are you ready, Dan?

DAN IVESYeah. It’s good.

CAROLINE WOODSAll right. Here we go. Semis or software from here.

DAN IVESSo offer

CAROLINE WOODSDescribe the current software market in one word.

DAN IVESArmageddon.

CAROLINE WOODSDo you have better software a dip Salesforce or ServiceNow?

DAN IVESI’d have to say ServiceNow because McDermott.

CAROLINE WOODSWho was just here on the floor today, most misses.

DAN IVESMcDermott’s the government. McDermott’s too good.

CAROLINE WOODSIf only he was still here, I would, I would pass along the message most misunderstood mag seven.

DAN IVESI’d say, Tessa, just given the lack of respect in and valuation toward it, ultimately will be autonomous and optimistic.

CAROLINE WOODSMost mispriced tech stock on the board.

DAN IVESYes. Microsoft AI leadership, Google, Gemini are open AI.

CAROLINE WOODSAnthropic or the white House.

DAN IVESIn terms of who wins.

CAROLINE WOODSWhose side are you on?

DAN IVESAnd I don’t take I look, I don’t take sides, but I would just advise jumping on a third rail of cancellations. Probably not a good thing.

CAROLINE WOODSOkay. All right. Biggest tech winner over the next three years.

DAN IVESPLtr know memory apps.

CAROLINE WOODSMemory upside. Micron or Western Digital?

DAN IVESI think micron.

CAROLINE WOODSFirst mag seven to cut CapEx.

DAN IVESI don’t think there’s going to be a cut in CapEx this year. I think CapEx will ultimately be accelerated from still where it is. You will maybe flow into a slower growth into next year. But I don’t think this is one of those, like the cutting cap back start to happen.

CAROLINE WOODSOkay. Who’s the most at risk of falling behind in the Mag seven race?

DAN IVESBook. We’ve talked I mean Apple given I. Which is why it’s so important that you don’t keep doing Siri. I why the Google Gemini deal is so important. But that’s it’s a very important times and I think they’re going to be extremely successful. But this is a very a key moment that okay.

CAROLINE WOODSIf a retail investor asked you today am I too late to the AI trade, what would you tell them?

DAN IVESI’d say it’s second and third innings and just don’t you know, it’s don’t let the haters get you down. See the forest of the trees.

CAROLINE WOODSIf the party doesn’t end until 4 a.m., what time is it on the AI clock right now? Dan.

DAN IVESLook, it’s 1040 5:11 p.m., but we always said there will be times the cops come to try to break up the party. The glasses on the dance floor and the DJ starts playing music. We always said in that party things rap and maybe, you know, the cops are there with lights around right now. But again and then.

CAROLINE WOODSAll right. Yeah, you said that. Glasses on the dance floor last time we chatted. So, the party continues, but, party at your own risk here. Dan, I’m.

DAN IVESNot a nonalcoholic party right now.

CAROLINE WOODSHahahahaha! Dan Ives of one verse. That’s why it’s not fun. Thank you so much. Always a pleasure.

DAN IVESAppreciate it. Great.