00:00Well, the biggest debate in markets, specifically in the AI trade, is earnings durability.
00:07Because if you look at multiples for PE Magnificent 7 at 25 times, they are not really expensive, right?
00:15So the question is really, can they sustain at these levels?
00:19And honestly, I think there is a healthy debate to be had.
00:23I understand the occasional worry that surfaces about kind of, you know, like all this spending.
00:30It's starting to look like previous tech booms where adoption and revenue return took a lot longer than expected.
00:38But I am also seeing evidence of very fast revenue ramp.
00:43You look at the AR for Anthropic, for example, but they're in private right now for now.
00:48But even in public equities, if you look at the earnings increase, you look at margin, especially incremental margin, still
01:00significantly higher than operating margin,
01:02which means that the discussion of, you know, the return on capital versus cost of capital, the answer is still
01:09very, very clear.
01:10I think we're still early on in this AI transformation.
01:13So even though there is a healthy debate to be had, I am still overweight.
01:19The last thing I would say, though, as well, is that there is huge dispersion in this space.
01:24Yes, you look at the eye-watering return of tech, of Magnificent 7, of some of the names.
01:30But actually, if you construct baskets of, you know, shortage seller versus shortage buyer, the dispersion, the return is even
01:38greater, right?
01:39So this is a space to be selective and active.
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