Carlson Sees 40% Amazon Upside, Rejects Eisman AI Deceleration Case

Carlson看好亚马逊40%上涨空间，反驳Eisman关于AI增速放缓的观点 沉重的人工智能支出正暂时压低自由现金流利润率，这与亚马逊2021年的物流扩张非常相似，随着企业云迁移的复合增长，这将为大型复合增长型公司带来超额运营回报奠定基础。 Carlson审视了他规模约150万美元的整个投资组合，为核心复合增长型公司设定了具体的公允价值目标，包括Mastercard（700美元）、亚马逊（350美元）、Alphabet（350美元）、Meta（850美元）、ASML（1,800美元）和Costco（800美元），并计算出该投资组合整体较公允价值存在累计17%的折价。他分析了亚马逊的盈利波动以及飙升的资本支出，认为负自由现金流只是通过AWS确保在企业AI和云基础设施领域占据主导地位所带来的暂时副产品。Carlson还评估了Anthropic的最新指标，援引巨额净留存率和暂时性短期算力支出来反驳Steve Eisman关于增速放缓的论调，并在最后对一名大学生连续两次错失价值百万美元射门的心理进行了剖析。 在自身约150万美元的投资组合中，Joseph Carlson估计其持仓加权计算相较于公允价值低估了大约17%，这意味着对应总体估值约为170万美元。 (22:54) 由于激进的AI基础设施建设，亚马逊公布的季度自由现金流为负340亿美元（过去十二个月为负470亿美元），尽管资本支出增加了两倍，其利润率仍触及负6%的疫情低谷水平。 (28:10) AWS营收同比增长39%至459亿美元，营业利润率为38.7%，管理层预计到2027年和2028年年增长率将重新加速至40%以上。 (33:13) Carlson反驳了Steve Eisman对Anthropic增长放缓的批评，强调其企业净收入留存率超过900%，并将第三季度利润率承压归因于一笔50亿美元的临时短期算力采购。 (37:05)

[9:52] Joseph Carlson: Mark Zuckerberg is willing to go through a period of pain to have a bigger, stronger company on the other side. [28:10] Joseph Carlson: Another way of looking at this is if Amazon was not pursuing this massive opportunity in AI, it'd be one of the most cash flow productive companies in the world. [15:28] Joseph Carlson: Costco is being treated like it's completely indestructible, which I think it probably is, but no company's perfect. [36:05] Steve Eisman: I think it's very very clear that Anthropic's revenue growth has slowed dramatically because of the end of token maxing. [20:50] Joseph Carlson: When a company has to trade off between gaining users or charging money, that's not as good of a situation. [37:05] Joseph Carlson: Most big businesses will want to use the proven boring company that follows all the rules that's the go-to industry standard which Anthropic has designated itself as.

[0:00] Welcome back everyone. Today on the [0:01] Joseph Carlson show, we just got through [0:03] Halloween weekend. Now, if you're like [0:05] me, the weekend was not the scariest [0:07] moment. It wasn't Halloween. The [0:09] scariest part of last week was watching [0:10] Google stock drop 12% after hours and [0:14] watching tens of thousands of dollars [0:15] vanish into thin air. Google lost around [0:18] $500 billion of market cap. Half a [0:20] trillion dollars vanishing. And then on [0:23] top of that, as I was releasing my video [0:25] going over Google's earnings, doing [0:26] analysis on everything that happened, [0:29] Amazon reported its earnings and dropped [0:31] 7% at the same time. Two of my biggest [0:35] companies were dropping like a rock. And [0:37] today, we're going to be looking at [0:39] them. In today's episode, I'm going to [0:40] be going over each company, where they [0:42] sit now with their current price, and [0:44] what my price target is for them. The [0:46] price targets are my fair values for [0:47] these companies, where I believe they're [0:49] worth today. So, I'll be going over all [0:51] of these and explaining my reasoning in [0:53] this episode. Now, of course, we had [0:55] Amazon report their earnings as well, [0:56] and I have to take a look at this. So, I [0:58] have lots of charts and graphs to go [0:59] over Amazon, as well as commentary, what [1:02] they said last quarter. There's a lot of [1:04] interesting things to review with one of [1:05] my largest positions. So, we'll be [1:07] looking at that. We also have Anthropic [1:09] releasing their earnings report for Q3. [1:11] This was something new, and we have [1:13] people like Steve Eisman talking about [1:14] this earnings report. He says it's clear [1:17] that Anthropic is decelerating and it's [1:18] becoming less efficient. But is that the [1:20] whole story? We're going to be looking [1:22] at Anthropic and what this means for the [1:24] larger AI story. And then finally for [1:25] today's fail of the week, we'll be going [1:27] over the tragic story of this college [1:28] student missing out on life-changing [1:30] money only by a couple feet. Now, before [1:32] we jump in, just a reminder, if you [1:34] haven't tried out my membership, which [1:35] is qualum.com, give it a try. It comes [1:38] with a risk-free trial. And the reason I [1:40] want you to try it out is because around [1:41] 70% of the people that do try it out, [1:43] they stay with it because they figure [1:45] out that it's awesome. You get access to [1:47] a ton of data, including all these [1:49] proprietary KPIs. We gather these [1:51] ourselves. We have KPIs that help you [1:53] understand the business at a better [1:54] level than just the financials. And of [1:56] course, we have a watch list, portfolio [1:58] tracker, advanced charting tools. We [2:00] have transcripts of earnings calls and [2:02] much more, including exclusive content, [2:04] an entire library of investment content [2:06] that you won't find on YouTube. For [2:08] example, I had a recent episode where we [2:10] discussed nine different stocks worth [2:11] looking at today. Another one was an [2:13] hour-long update on Meta going in-depth [2:15] on their most recent quarter. And then [2:16] on top of that, you get access to a [2:18] Discord community with thousands of [2:19] investors. And we discuss stocks all the [2:21] time. So, if you want to try that out, [2:23] the price is $10 a month where you even [2:25] get a discount if you commit to an [2:27] annual plan. Now, we start things off [2:28] today by looking at my price targets for [2:30] each stock that I own. This is every [2:32] company in my portfolio. And the price [2:34] target in this case is another way of [2:36] saying the fair value. the fair value, [2:38] meaning the intrinsic value of the [2:39] stock. See, there's the trading value. [2:42] That's what the stock price is today. [2:44] And that's driven by, in many cases, [2:46] sentiment and short-term emotions. It's [2:49] driven by algorithms, a momentum, and [2:51] there's lots of things that impact the [2:53] trading value of a company. So, every [2:55] investor should have the stock and its [2:57] trading value today, but then you should [2:58] have your own estimate of the real worth [3:00] of the company, your fair value [3:02] assessment, and that's what we'll be [3:03] looking at. And as just a warning, these [3:06] aren't perfect. These are judgment [3:08] calls. Basically, I'm looking at a [3:09] company trying to evaluate both the [3:11] moat, the financial future of it, as [3:13] well as things like the competitive [3:15] nature, what type of disruption risks [3:17] the company has. All of that is blended [3:20] down into my judgment of fair value. So, [3:22] there is no mathematical formula that [3:24] explains all of this. Part of it is [3:26] driven by a DCF, which is mathematically [3:28] built, but then a part of it is simply [3:29] my judgments on the moat and growth [3:31] potential of the company long term. So, [3:33] we'll start off with my portfolio. We're [3:35] looking at the stocks largest to [3:37] smallest and we have Mastercard, which [3:38] is now my largest position. Mastercard [3:41] is a $221,000 position. It has a a total [3:45] gain of 73,000. That includes mostly [3:47] capital appreciation and then a few [3:49] thousand worth of dividends. Now, [3:51] Mastercard is a company that's done [3:52] exceptionally well this year and over [3:55] the past couple of years. Today, the [3:56] stock is up 3.4% surging up to $660 per [4:01] share. If we look at the company [4:02] year-to- date, it's up 17%. [4:05] Outperforming both the QQQ and the S&P [4:08] 500. If we look at it over the past 5 [4:10] years, just the same. It's outperformed [4:11] both indexes by quite a large margin. [4:14] So, this is a company that I've talked [4:16] repeatedly about as being one of the [4:18] most boring companies in the market, but [4:20] one of the most phenomenal in the [4:21] market. Most of the financial metrics of [4:23] Mastercard are truly unbelievable. The [4:26] only company that really comes close is [4:27] Visa. For example, we look at the profit [4:30] margin. This number is just wild. It's [4:33] 47% profit margins for this company. [4:37] That's actually close to the gross [4:39] margins of Amazon. It's crazy. But this [4:41] isn't a whole review of Mastercard. This [4:43] is the valuation and what I believe is a [4:45] fair value today. Right now, the stock [4:47] trades at $659. And I believe the fair [4:49] value is around $700 per share. Now, [4:52] that's only around 6% upside from today. [4:55] So, Mastercard's actually a company that [4:57] I don't believe is that undervalued. I [4:58] think it's trading close to its fair [5:00] value and I value that off of a few [5:02] things. First of all, we have the PE [5:03] ratio on a Ford basis around 30. That [5:05] seems expensive, but you have to look at [5:08] the PE ratio in context with the [5:09] economics of the company. Mastercard is [5:12] a much better company than 99% of [5:14] companies in the world. Therefore, it [5:16] deserves a higher PE ratio. And looking [5:18] at the trailing valuation of the [5:19] company, it has recently gone through a [5:21] big resurgence and it has had a massive [5:23] price recovery. You can see that it was [5:25] trading at a very low valuation in mid [5:28] 2026, but it's since recovered and now [5:31] it's back up to its normalized PE ratio [5:33] over time. In fact, it's still slightly [5:35] below its median historical PE ratio. [5:37] Now, psychologically, when a company [5:39] like this resurges back from the lows to [5:41] the highs, you naturally want to take [5:43] gains. You want to lock in some of the [5:45] wins. You're relieved that the company [5:47] is doing well. And that that natural [5:49] tendency is just human emotion. But when [5:52] I look at Mastercard with clear eyes, I [5:54] see a company that is now back around [5:56] where it deserves to be. The company's [5:58] doing great. The last earnings report [5:59] showed continued strength. The mo I [6:01] believe is wide as ever. The company's [6:03] making record profits, and it's now back [6:05] to its historical normal medium PE [6:07] ratio. So, at $700 with Mastercard, that [6:10] leaves a little upside, but for me, it's [6:12] a hold. Now, next up, we have Amazon. [6:14] For this stock, it is now my second [6:16] largest position. It's at $182,000 with [6:20] $57,000 in the green. Now with Amazon, [6:22] it went through a roller coaster of a [6:24] earnings report. And this is something [6:26] that was really funny because right [6:27] after Amazon reported their earnings, it [6:29] fell dramatically. In fact, a lot of [6:31] investors were like, "Oh my gosh, the [6:33] stock is down 7%. What am I going to do? [6:35] Google just fell and now Amazon, the [6:37] market's getting crushed." But look at [6:40] what happened over the remaining week. [6:42] Over the past 5 days, Amazon is flat. In [6:45] fact, it's up just slightly. So, you can [6:48] see what happened here on the price [6:49] chart. They reported their earnings and [6:51] the stock fell 7%. Then the next [6:53] morning, the stock went up 3 or 4%, it [6:56] recovered part of the the loss and then [6:59] this morning later it went up another 3 [7:00] or 4%. Now it's bouncing between green [7:04] and the red based on the one week. So it [7:06] just dipped down into the red 06%. [7:10] But basically, if you had fallen asleep [7:12] over the past 4 days, you wouldn't even [7:14] be able to notice a difference with [7:15] Amazon's price. It would be just the [7:17] same. So, all of this emotional roller [7:19] coaster with the stock dropping and [7:21] coming back up is exactly what [7:23] short-term noise looks like. This is the [7:25] type of stuff you're supposed to ignore [7:27] and not factor into your investments. [7:29] Now, when I look at Amazon in [7:30] particular, I think that this is one of [7:32] the greatest companies in the world. I [7:33] think that Amazon is one of the most [7:35] structurally strong companies in the [7:36] world, and I really liked the most [7:38] recent earnings report. In fact, again, [7:40] later in this episode, I'll be doing a [7:41] deep dive into that earnings report. But [7:44] for now, my price target or fair value [7:46] assessment of Amazon is at 350, meaning [7:49] from today, I believe there's around 40% [7:51] upside in this company. It's one of the [7:53] best stocks in the world. I think it has [7:55] an incredibly wide mode, and I like the [7:58] growth. In fact, the growth was very [7:59] impressive. I didn't understand why [8:01] Amazon sold off as much as it did. The [8:03] bare case for it is incredibly weak, and [8:06] I think the company's future is as [8:07] bright as ever. So, Amazon I have at [8:09] 350. I think it's one of the best [8:11] opportunities today. We look at the next [8:13] one here, which is Google. Google was a [8:16] genuine disappointment of an earnings [8:18] report. Now, I went over it and I tried [8:20] to explain some context, so you can [8:21] watch the most recent episode if you [8:23] want to see that. But when we look at [8:24] Google, it's going to have the exact [8:26] same price target as Amazon. My price [8:29] target and fair value of Google today is [8:30] 350. That is the same as Amazon, but [8:33] because the stock is higher, Google has [8:35] less upside. It has around 20 plus%. [8:37] Amazon has around 40%. If you're [8:39] deciding between buying something like [8:41] Google and Amazon, I think that they're [8:43] both great opportunities, it's difficult [8:45] to say which one will outperform the [8:47] other. But right now, I believe that [8:49] Google does have a little bit more [8:51] challenges to prove in terms of the [8:52] story than Amazon. Google has to prove [8:54] that its ad revenue can hold up in the [8:57] face of all these AI agents. And I [8:59] believe that's going to be a little bit [9:00] of a damper on the story going forward. [9:02] Amazon, on the other hand, is so [9:04] structurally strong. AWS is so big, the [9:06] logistics network is so massive. I think [9:09] the story for Amazon's just a bit [9:10] cleaner. Now, with Amazon being way [9:12] undervalued and Google being [9:14] undervalued, you could ask why I'm not [9:15] buying these companies today. And the [9:17] reason why is because I already own [9:19] substantial holdings in these companies. [9:21] I'm already extremely bullish in my [9:23] positioning. I have nearly 200,000 or [9:26] 150,000 plus in these companies. How [9:28] much more do I need to have to show that [9:30] I'm bullish on them? Furthermore, in my [9:32] entire portfolio, which is around 1.5 [9:34] million, around 60% of my entire [9:38] investments are in around four or five [9:40] companies. That's already an extreme [9:41] level of concentration. So, I believe [9:43] it's better for me to diversify my [9:45] portfolio a little bit with other [9:47] opportunities than to continue piling [9:49] money in the same exact companies. Now, [9:52] next up, we get to Meta. Currently, Meta [9:54] is a $167,000 [9:56] position and around $18,000 in the red. [9:58] So the way that this stock has worked is [10:00] I bought into the company. It went [10:02] deeply in the red minus $40,000. Then it [10:05] jumped up with the release of Mu Muse to [10:06] around plus $20,000. So I was in the [10:08] green by a good chunk. Now I'm back in [10:10] the red by a good chunk. So this company [10:12] has just been swinging around from the [10:14] green to the red and now it's currently [10:16] in the red. But at the same time, all [10:18] I've seen is a company getting stronger [10:20] and stronger. Met is growing like a [10:22] weed. Their adoption of their new agent [10:24] tool, Muse, is getting widespread [10:26] adoption. I like management and the [10:28] decisions. I really like this company. I [10:31] I think it just has a great future and [10:33] investors should believe that Meta has a [10:35] really strong future with the new [10:36] products they're creating and how [10:37] they're enhancing their platform. My [10:39] price target or fair value assessment of [10:41] Meta is around 850 today, which is [10:43] around a 40% upside. So, I believe that [10:45] there is ample upside for this stock [10:47] today. I think that Meta is deeply [10:50] undervalued based on its own merits of [10:52] its strength plus just its cash flow [10:54] that it will generate over the next 10 [10:56] years. This is one of the most [10:57] generative cash flow businesses in the [10:59] world. Investors are so concerned on the [11:01] cash they're spending on short-term [11:03] investments in capital expenditures and [11:05] building out server farms. But that all [11:06] makes a stronger and better position in [11:08] the future. And Mark Zuckerberg is [11:10] willing to go through a period of pain [11:12] to have a bigger, stronger company on [11:15] the other side. So at $850, I believe [11:18] that this is another stock that is [11:20] deeply undervalued in my portfolio. The [11:22] reason that I'm not putting more money [11:23] into it is like I said, it's already a [11:26] substantial position. An 11% plus [11:29] weighted position already. I don't want [11:30] to keep adding to very concentrated [11:32] positions. Now, even with Meta at $850, [11:35] that would put the Ford PE ratio around [11:37] 26 26 1.5, which is not a crazy [11:40] valuation. Just means that Meta is being [11:42] valued as a good company, one that has a [11:44] really prosperous future. Investors have [11:46] bought back into the story. So, these [11:48] aren't incredibly aggressive bull cases. [11:50] I believe it's actually reasonable for [11:51] Meta to trade in the mid20s based on its [11:54] incredible growth. It's been growing [11:55] faster than virtually every big tech [11:57] company. We also look at S&P Global. S&P [12:01] Global today is my fifth largest [12:02] position, $141,000, [12:05] $33,000 in the green. Right now, it [12:07] trades at $475. The current PE ratio of [12:10] the company is 24 PE. And I believe that [12:13] the fair value of S&P Global is around [12:15] 550. That's where this stock should be [12:17] today. That's around 16% upside from [12:20] today and the company would only trade [12:22] at around a 25 to 26 Ford PE ratio. So, [12:25] it still wouldn't be that expensive. [12:26] Again, these aren't that aggressive, but [12:28] it shows that these companies have a lot [12:30] more upside left. And if investors [12:32] become less concerned about Agentic [12:33] Technology crushing S&P Global, which I [12:36] believe they will, we should see the [12:38] valuation multiple of this company [12:39] expand. Next up, we have Microsoft. This [12:41] is holding number six, $110,000, 56,000 [12:45] in the green. This one has been a a [12:47] really great investment. I wish I had [12:49] bought more Microsoft early on, but it's [12:51] always been a company in my portfolio. I [12:53] remember buying this stock around $200, [12:55] $220, telling investors I think it's a [12:58] great deal. And here we are at $500 plus [13:00] dollars, and I still believe the company [13:02] is undervalued, but this one I believe [13:04] is trading a bit closer to its fair [13:06] value. I put Microsoft's fair value or [13:08] my price target at 550, meaning it has [13:11] around 6 7% upside from today. Now [13:14] again, this isn't a definitive price. [13:17] It's not like companies reach your fair [13:19] value and then they stop right there. [13:20] But it's just an estimate of where I [13:22] believe this company is mostly worth [13:24] paying for. When I look at Microsoft, it [13:26] is no doubt a great company, but it [13:28] already trades at a 25 Ford PE ratio, [13:31] 1.57 free cash flow yield. It's had a [13:34] massive recovery this year as well. So [13:36] the stock is up 10% on the year. It was [13:38] going a lot lower with big cloud scare [13:41] and software scare. It's recovered a [13:43] lot. So, when I look at this one, I look [13:45] at the current situation and the [13:47] valuation, I think we're close to fair [13:49] value. At 550, I believe the stock will [13:51] continue to grow, but I don't believe [13:52] it's deeply undervalued. Now, we have [13:54] ASML. Massive winner in the portfolio. A [13:57] $110,000 position. 77,000 of that is [14:01] gains. Uh, this one has been a big [14:03] gainer in a short amount of time. I'm a [14:05] little bit biased with ASML. I think [14:07] this company is so unbelievably good. I [14:09] I think the Dutch have figured out [14:10] something that nobody else can figure [14:12] out. It's just when you read about this [14:14] company, it's a science experiment that [14:16] is unbelievably complex. Like nobody [14:19] else can really race towards this and [14:21] close the gap and invade their mode. [14:23] When I look at the company, it's traded [14:25] down a bit from its highs. Now, ASML [14:27] traded up to around $2,000 per share. [14:30] This is during the peak bullishness. [14:32] Everything was good. Since then, it's [14:34] given up a bit of the gains, working its [14:35] way down to $1,500 per share. Now, when [14:37] ASML got up to around $1,900 per share, [14:40] I trimmed 20% of the position. That's [14:42] what funded Door Dash and Uber. So, I [14:44] took some off the table, and I still [14:46] wanted to keep a large position in ASML, [14:48] and that's where we stand now. Now, when [14:50] I look at this company, there's the [14:51] mathematical valuation of it, which puts [14:54] it around $1,500 per share. But then [14:57] when I do my fair value assessment and I [14:59] factor in the strength of the moat and [15:01] how unique it is, I bump up my fair [15:03] value a little bit more. So, my fair [15:05] value, my price target is around $1,800 [15:08] per share. That's where I think the [15:10] company should trade around fairly [15:11] today. Given the influx of demand this [15:14] stock has, the impenetrable moat, the [15:17] one-of-a-kind nature of it, it's truly a [15:19] unique company. So, I believe it's a [15:22] little bit undervalued today. So, I [15:23] don't believe ASML is a massive deal, [15:25] but I believe there is still some upside [15:26] in the stock today. Next up, we have [15:28] Costco. This is a company that I've [15:30] owned for a long time in this portfolio. [15:32] It's one of the OGs. I've owned it for [15:34] so many years and currently it's an [15:36] $89,000 position. The majority of that [15:38] coming from gains. So, it's $55,000 in [15:40] the green. When I look at Costco, I [15:43] believe the stock is overvalued to some [15:45] degree. So, right now, it trades at [15:47] $1,000 per share. I think it's worth [15:50] around $800. That's my fair value. Now, [15:53] at $800 per share, Costco still trades [15:56] in the high30s, around a 40p ratio [15:58] instead of the 45 or 46 that it trades [16:00] at today. So, it's a more reasonable [16:02] valuation, but it's still expensive and [16:04] premiumly priced in my fair value [16:06] assessment at $800 per share. My fair [16:09] value assessment of the company is that [16:10] it's around 22% overvalued today. And [16:14] that overvalued is even with a fair [16:16] value assessment that is very generous. [16:19] $800 per share still prices Costco as a [16:21] premium company that's at a high [16:23] multiple. So, this is a very premium [16:26] price. Costco is being treated like it's [16:28] completely indestructible, which I think [16:29] it probably is, but no company's [16:31] perfect. And if Costco does show any [16:33] weakness in any category, the stock will [16:35] have a little bit of multiple [16:37] compression. So, although I believe this [16:39] one is overvalued by 22%, I'm still very [16:42] slow to sell it. I may take gains in the [16:44] future if it continues to march up from [16:46] a,000. Now, next we have Netflix. [16:50] Netflix is my ninth largest position. [16:52] This one used to be a much bigger [16:54] position in my portfolio, but Netflix [16:56] stock has fallen massively down around [16:58] 50%. This is nothing new for a Netflix [17:01] investor. I've been through massive [17:03] rises and falls with Netflix multiple [17:05] times now. So, I have a little bit of [17:07] history with this one. Regardless, we're [17:09] still in the green on the company by [17:10] around $10,000. It's a 29% weight of [17:13] return in it, but it is getting closer [17:15] and closer down to my cost basis. I've [17:18] continued to add to Netflix, so I've [17:19] risen my cost basis over time because I [17:21] believe strongly that Netflix is [17:23] mispriced. Currently, it trades at $62 [17:25] per share. I believe the fair value of [17:27] the company is around $100, which would [17:29] be around a 60% increase in its current [17:32] price. So, based on that, Netflix is [17:34] dramatically underpriced. But that comes [17:37] with a caveat here. These price [17:39] assessments are based on the company [17:41] being successful. Now, some of you may [17:42] say that's crazy to have a $100 fair [17:46] value assessment on Netflix, but keep in [17:48] mind earlier this year, in fact, just in [17:51] April, Netflix traded at $17. [17:54] So, it's not like I'm pulling prices out [17:56] that this company can never get to or [17:58] that there's no chance of it ever [18:00] getting to this price. It's been there [18:02] multiple times. In fact, just a year [18:04] ago, it was at $115. What's changed in [18:07] that time is the narrative behind the [18:08] company. Narratives can quickly change. [18:10] If Netflix just has a couple quarters in [18:12] a row where investors become more [18:14] confident in their strategy going [18:16] forward, investors will repric the [18:18] company. It'll quickly move from a 17 [18:20] Ford PE ratio back to a 25. That could [18:24] happen in a short amount of time. Now, [18:26] there's no guarantees. Netflix could [18:28] also go lower. It could go to $40 per [18:29] share if they continue to have slowdowns [18:32] and deceleration. So, a lot of this will [18:34] count towards the next couple of [18:35] quarters, but I personally think that [18:36] this one's a great opportunity. Next up, [18:38] we have Texas Roadhouse. I bought this [18:41] company specifically because I went to [18:43] Texas Roadhouse over the course of [18:45] years. I noticed it was always packed. I [18:47] noticed that the food was always [18:48] fantastic. The staff was always great [18:51] and the value proposition to the [18:53] customer is al always really good. So, I [18:56] used that knowledge as well as an [18:57] opportunity when the stock sold off [18:59] during COVID to enter into a position. [19:01] Now, it's become a very large position. [19:03] Well, it was a lot bigger, but I trimmed [19:05] some of it. So, it's now a $54,000 [19:07] position. $46,000 in the green. This is [19:10] a bit misleading because I trimmed off [19:12] 50% of this holding. So, it grew to a [19:14] $100,000 position. I decided that I [19:17] didn't want a restaurant to make up that [19:18] much of the portfolio. Regardless, Texas [19:20] Roadhouse is a fantastic company. It's [19:23] trading at 186 today. There's concerns [19:26] about beef pricing and commodity [19:28] inflation, but I believe that Texas [19:29] Roadhouse will navigate that better than [19:31] any of its competitors, which creates [19:33] that really strong traffic growth in the [19:35] company. We have KPIs that track this [19:37] over time and it shows that the weekly [19:39] average sales for the company continue [19:41] to rise. They're now making $177,000 [19:44] in sales every week on average. When I [19:47] was first buying this company, it was [19:49] less than 100K. So, really impressive [19:52] growth there. I really like what I see [19:53] with this company. But in terms of my [19:55] fair value, I believe it's worth today [19:57] around $200 per share. So, it's around 5 [20:00] 6% undervalued. I don't currently see a [20:03] massive disconnect in the price. Next [20:05] up, we have Moody's. My 11th largest [20:06] position, $53,000, $12,000 in the green. [20:10] With Moody's, this is another one that I [20:12] believe is very close to its fair value. [20:14] I have it at $500 per share. So, Moody's [20:17] is like 1 or 2% overvalued based on that [20:19] estimate. Now, that doesn't mean that [20:21] the stock won't do well. The fair value [20:23] in this case is a reference for where I [20:25] think it's worth paying for and buying [20:26] more of the stock. Right now, I'm [20:28] holding off on Moody's because, well, [20:30] it's at a 28 Ford PE ratio. Even though [20:32] the company is very strong, it's had a [20:35] nice recovery recently. You could have [20:37] bought it earlier this year at $400 per [20:39] share. It was far more disconnected. So, [20:41] there's been lots of opportunities to [20:43] buy this one, but the price has recently [20:45] spiked up. The valuation gap has closed, [20:47] and I think it's around fair value [20:48] today. Next, we have Dualingo. This one [20:51] is holding number 12, a 2% weighted [20:54] position. It's $33,000 total holding, [20:57] $13,000 in the red. Dualingo currently [21:00] trades at $135. [21:02] I believe the fair value today is around [21:04] $200, which is lower than my previous [21:06] fair values on this company. The reason [21:08] that it's lower is because, well, [21:10] Duolingo hasn't performed as well as my [21:12] expectations. The growth slowed down a [21:14] little bit steeper than I expected. User [21:15] growth has been encouraging, but [21:17] Dualingo is now compromising their [21:19] monetization to try to get user growth. [21:21] When a company has to trade off between [21:23] gaining users or charging money, that's [21:25] not as good of a situation. So, my fair [21:28] value of this company had to be notched [21:29] down a little bit. And I'll give an [21:31] additional warning. This company's [21:33] reporting earnings tomorrow. So, it [21:35] could change. I could look at the [21:36] earnings report tomorrow and say, "Wow, [21:38] that looks really terrible. My fair [21:40] value of the company's going down even [21:42] more." Or it could look really [21:44] encouraging. My fair value could be [21:45] boosted upward. So, this one is right [21:47] before we get a lot of additional [21:49] information that's critical in doing the [21:51] fair value. So, that $200 reference is [21:53] with a great deal of caution. Uber's [21:55] another newer position in the portfolio. [21:58] $24,000 position, 1,800 in the red. It's [22:02] less than 2%. So, this is one that I'm [22:04] looking for opportunities to add to, and [22:06] I've considered adding more to Uber, but [22:08] they're just about to report earnings [22:10] this week as well. Uber's earnings could [22:12] come out really good and the stock could [22:13] pop, or it could cause investors to even [22:15] have more concern, which would cause a [22:17] price decrease. So, if I want to put [22:19] money in Uber right now, I believe I may [22:22] do like half before and half after, but [22:24] the safer move is to just wait until [22:26] earnings, and that's likely what I'm [22:28] going to do. So, this is another one [22:29] where I say it with some level of [22:30] caution. My fair value of Uber is $90. [22:34] It currently trades at 66, which means [22:35] we have around 33% upside in the company [22:38] based on that fair value. Now, again, I [22:41] want to wait until the earnings report [22:42] to give a full assessment. When the [22:43] earnings report comes out, I'll adjust [22:45] what I believe the company is worth [22:47] based on what I'm seeing with its [22:48] progress. But based off of what I see [22:50] today, I believe that Uber offers really [22:52] good value shares in today's market. [22:54] Lastly, we have Door Dash. Smallest [22:56] company in my portfolio today, $23,000 [22:59] position, 1,600 in the green. And I have [23:02] a very similar thought on Door Dash. I [23:04] think that these companies both have [23:05] enormously high upside. For example, my [23:08] fair value of Door Dash is 250. And if [23:10] you look at the PE ratios and valuation [23:12] metrics today, it won't look like it [23:14] makes sense because it's at a super high [23:16] PE ratio. But you have to know how these [23:18] companies work. They do not focus on [23:20] optimizing for earnings today. These are [23:22] in land grab mode. They want to get the [23:24] biggest networks possible. So some [23:27] investors are focused on the short-term [23:28] next 12 months PE ratios while [23:30] management doesn't care about that. [23:32] They're not optimizing for costs or [23:34] expense and operating margins. They're [23:35] they're optimizing for growth for land [23:37] grab. And we can see that with Door [23:39] Dash. They just recently signed an [23:41] agreement to buy Instacart. That's a [23:43] massive agreement. Instacart would give [23:45] them an avenue to continue growing into [23:47] retail from restaurant delivery. So, [23:49] it'd be a massive benefit to Door Dash. [23:52] And again, this will throw off some of [23:54] the metrics in the short term, but it [23:55] will make this a massive network [23:57] company, which they can then leverage [23:59] and really drive margins and operation [24:02] efficiency and all of that. So, when I [24:04] look at this company, I believe it's [24:05] worth $250 today. that makes it around [24:08] 33% upside. Now, overall, when you look [24:10] at my entire portfolio's fair value [24:12] assessment for each company and then you [24:14] weight them by the position size, that [24:16] means that my portfolio in aggregate is [24:18] around 17% undervalued today based on my [24:21] own assessment. So if all of my [24:23] companies were to go exactly to their [24:25] fair value assessment, meaning that all [24:27] the companies that are undervalued went [24:29] up, the companies like Costco went down, [24:32] all of them match their fair value [24:33] assessment perfectly, my portfolio would [24:35] be at around 1.7 million. Now remember, [24:37] these are just my price targets. They're [24:39] not my full valuation. I have other [24:41] content and I have exclusive content [24:43] going over my DCFS for each company [24:45] every single month. Now, moving on, we [24:46] get to Amazon's earnings report. The [24:48] stock reported last week and it dropped [24:51] immediately after its earnings report by [24:53] 7%. So was down after hours and [24:55] investors are very concerned. Then the [24:58] stock recovered about halfway the very [24:59] next day. And then the next market day [25:01] after, which is today, the stock is [25:03] about flat from where it was before the [25:05] report. Now, Amazon is still a company [25:07] that I believe is very undervalued. And [25:09] I want to go over some of the [25:10] financials. So we're going to be looking [25:12] at what's been going on with this [25:14] company. First of all, we look at the [25:16] revenue. Here's a chart going over the [25:18] revenue growth over time. And I want to [25:20] zoom in on some of this to show you. So [25:22] we have right here where we're at with [25:24] this most recent quarter. It grew by [25:26] 15.4%. [25:28] So this is the growth rate over time. We [25:30] look at it over the past couple of [25:32] years. This is September 2023. It went [25:34] up to 12% down to 10%. And then the [25:37] growth rate started to increase 12%, 13% [25:41] 14 15 up to 16% and now at around 15 [25:45] 1.5%. So when I look at this, Amazon's [25:48] actual growth rate is really good. This [25:51] last report was great. This company's [25:53] growing fast. For a company as big as [25:55] Amazon, it's still growing above 15%. [25:58] Like that is crazy. And of course, a lot [26:00] of this is driven by the AWS. Now, when [26:03] we look at the future analyst estimates, [26:05] this is going out the next eight [26:06] quarters, the next two years. We have it [26:09] stabilizing around the 15.5% [26:12] mark. It'll dip down in about four [26:14] quarters, then it will speed back up up [26:16] to around 17.8%. [26:19] The reason that it's going to be growing [26:20] that fast is AWS is growing bigger and [26:22] bigger. It's making up a bigger portion [26:24] of the company. Looking at this on a [26:26] more full timeline, this is what it [26:27] looks like. We have Amazon's growth [26:29] going up every single year at an [26:31] accelerated pace. Amazon just recently [26:34] did 797 billion over the trailing 12 [26:37] months. So, it's at a run rate of around [26:40] $800 billion. Amazon will be the first [26:43] company to have a trillion dollars of [26:44] trailing 12 months revenue. Unless, of [26:46] course, SpaceX catches up and surpasses [26:48] Amazon. That's what Elon Musk says. But [26:51] Amazon is already very close. By the end [26:54] of 2028, it'll likely have well over a [26:56] trillion dollars in trailing 12-month [26:58] revenue. The run rate of revenue, or if [27:00] you extrapolate, the last quarter will [27:02] be much higher. When I look at companies [27:03] like Amazon and Google, they're both [27:05] growing very fast. Google's growing [27:06] obviously faster, but Amazon is working [27:08] off a much larger base. And then you [27:10] have the segments of the business, which [27:11] AWS is growing super fast. So, we look [27:14] at the revenue and operating margin. One [27:16] interesting thing about Amazon is the [27:18] operating margins continue to go [27:19] upwards. The retail business of Amazon [27:21] is getting more profitable, higher [27:23] margin, more efficient over time. It's [27:26] already a profitable business. It's [27:27] already very, very good. But right now, [27:30] they have over a million robots within [27:32] their warehouses. So, it's highly [27:34] optimized within the warehouses [27:35] themselves, the logistics centers. [27:37] What's not fully optimized is the last [27:39] mile delivery. We still have a lot of [27:41] humans doing that, people delivering [27:43] packages. And I believe the next step [27:45] that Amazon will do is that last mile [27:47] delivery. You'll have cars that drive [27:48] themselves, robots to get out and [27:50] deliver packages. Seems crazy, but [27:52] that's going to be a real thing within [27:53] the next 10 years. We'll have drones [27:55] that deliver packages as well, and it'll [27:57] be far more optimized and efficient than [27:59] their current business. So, even with [28:00] this massive revenue base, which a lot [28:03] of it is lower margin, the margins of [28:05] this will go higher. And any margin step [28:07] up in a company with this much revenue [28:09] is substantial. The reason investors are [28:11] still concerned is because Amazon is [28:13] taking all the profits from their retail [28:14] business, all the profits from their [28:16] advertising business, all the profits [28:18] from AWS, and they're funneling that [28:20] into massive capital expenditures. The [28:23] free cash flow has swung deeply into the [28:25] negative this last quarter because of [28:27] how much they're investing in their [28:29] capex to build all these data centers. [28:32] They know that this is a one [28:33] ina-lifetime opportunity. Amazon is [28:35] investing probably more than anybody at [28:37] this point, even more of the big tech [28:38] companies. And their most recent quarter [28:40] was $34 billion in the red in free cash [28:44] flow in a single quarter, which is just [28:46] incredible. It is incredible the amount [28:48] of money this company's investing. Now, [28:50] when we look at the history, you can [28:51] paint a better picture here. Amazon [28:53] generates negative free cash flows [28:55] during large investment cycles. The one [28:57] that they had here in late 2021 and [29:00] early 2022 was building their massive [29:03] infrastructure for logistics. Remember [29:05] when Amazon said, "We have so much [29:07] demand because of COVID and more people [29:08] shopping online. We're going to double [29:10] our logistics network." Well, that's why [29:13] the cash flow went negative. They made [29:14] those big investments and that was [29:17] costly. It also caused the stock to sell [29:19] off. When investors see the cash flow [29:21] going negative, it puts a lot of price [29:22] pressure. But then on the other side, [29:24] when they came out of that investment [29:25] cycle, you can see what happened. The [29:27] free cash flow started to trend back [29:29] positive up to $50 billion. Now, I [29:32] thought the free cash flow was going to [29:34] go to 70 billion and hundred billion. In [29:37] fact, my predictions at the time in [29:39] early 2023 was that Amazon was going to [29:42] produce more free cash flow than any [29:43] company on planet Earth. But those [29:45] predictions were wrong because AI became [29:48] more of a thing a lot faster than most [29:51] people predicted. AI demands enormous [29:54] compute. Amazon saw the early [29:56] indications of demand in their compute [29:59] business and instead of optimizing for [30:01] cash flows, they said, "We have another [30:03] incredible opportunity. We need to [30:05] change gears. We need to change lanes [30:07] and we need to go and capture this [30:08] opportunity." The opportunity was [30:10] expensive, but that is building AWS into [30:13] the largest cloud hosting, largest AI [30:17] provider. So, their cash flows steadily [30:19] tick down as they ramped up their [30:20] investment into capex. Once again, uh [30:22] the calculation throws this way down. [30:24] Now we have minus $47 billion in free [30:27] cash flow over the trailing 12 months. [30:29] To give you a look at the margins of [30:30] their free cash flow, this is what it [30:32] looks like during investment cycles. It [30:34] goes down to -6%. [30:37] Climbed its way back up to 7 and 8% when [30:39] they're starting to optimize for [30:41] profits. But then when they go back into [30:43] their investment mode, they throw it [30:44] right back into the negative. We're [30:46] right down to where it was in late 2021 [30:49] at minus 6%. If we look at the free cash [30:51] flow margin paired with their capex over [30:54] time, this shows an interesting picture [30:56] as well. For example, the green free [30:57] cash flow margin was actually going up [30:59] as they were cooling off in their capex. [31:01] Then when they went through the first [31:03] capex cycle, that free cash flow margin [31:05] goes down like crazy. And then it starts [31:07] to go back up again as they they take [31:09] their foot off the pedal. But then as [31:11] they ramp up the capex once again [31:12] dramatically, even more this time for [31:15] AI, that free cash flow margin goes [31:17] down. But one thing that I'll point out [31:19] here is the amount of money that they're [31:21] spending on capex has like tripled. So [31:24] it's gone up dramatically and the free [31:26] cash flow margin is only close to the [31:28] lows of where it was late 2021. Which [31:31] means organically Amazon is a much more [31:33] cash flow producing company. Another way [31:35] of looking at this is if Amazon was not [31:38] pursuing this massive opportunity in AI, [31:41] it'd be one of the most cash flow [31:43] productive companies in the world. you [31:45] could basically take out all this money [31:46] that they're spending on capex that [31:48] would be returned to the investor in [31:49] cash flow. They'd be producing well over [31:51] hundred billion in free cash flow. So [31:53] this is all a deliberate decision. [31:55] Amazon is seizing a massive opportunity [31:57] where they believe it will be worth it [31:59] and they believe that it will justify a [32:00] higher return. Historically, this has [32:02] always been the case. And historically [32:04] with Amazon, analysts have always been [32:06] concerned. Anytime they're they're [32:08] seizing any big opportunity, they're [32:10] expanding anything that's expensive, [32:12] investors are a little bit apprehensive. [32:14] When we look at the earnings per share, [32:15] this is where we get to another chart. [32:17] Like many of the big tech companies, the [32:19] data itself is accurate, but it's [32:20] misleading without context. Amazon's [32:23] earnings per share did go up [32:24] dramatically over the past year, but a [32:26] lot of that was because of anthropic. [32:28] When you factor out anthropic and you [32:30] look at the Ford estimates, it paints a [32:32] more fair picture. For example, you have [32:33] the one-time anthropic gain making the [32:36] EPS bounce up and then when that works [32:38] its way out of the estimates, you can [32:39] see it fall back down to its normal [32:41] path. So, if you kind of chop off that [32:43] top part there with Anthropic, you get [32:45] more of an idea of how much Amazon's [32:47] actually growing their earnings per [32:48] share. Overall, when I look at Amazon, I [32:50] see the story of a company that could be [32:52] producing massive amounts of cash flow, [32:53] and indeed it is for its own core [32:55] business, but instead of directing it [32:57] towards investors via buybacks and [32:59] dividends, it's directing it towards [33:01] massive investments. They believe that [33:03] AI is an investment worth seizing. And I [33:05] agree with them. If you don't, then you [33:07] won't invest in Amazon. It's not the [33:09] company to hold. But I do agree that [33:11] this is an opportunity. For example, we [33:14] look at Amazon's business segments over [33:15] time. If I filter down to just AWS here, [33:18] we can see that it grew by 39%. Now, the [33:21] street was looking for like 40% or 42%. [33:25] But this is really fast. AWS is massive. [33:28] And growing by 39% year-over-year is [33:30] incredible. It did $45.9 billion in [33:34] revenue. AWS is so massive. It continues [33:37] to grow at such a fast pace and it will [33:39] continue to accelerate. While it's [33:41] growing, the margins are also holding [33:43] up. So AWS's margins are now at 38.7%. [33:46] So it's an incredibly fast growing, [33:48] super profitable business. Amazon knows [33:50] it and they want to invest more. AWS is [33:53] such a monster of a business, it's hard [33:55] to put these numbers in context, but [33:57] they expect AWS's growth to go from the [33:59] 39% to more than 40% year-over-year in [34:02] both 2027 and 2028. So, not just a nice [34:06] bump up over the next couple of [34:07] quarters. No, they think it's going to [34:09] grow above 40% for two years, two full [34:12] years. And Andy Jasse says on the call [34:15] that he believes it could become the [34:17] trillion dollar a trillion dollar [34:18] revenue business within 5 to 10 years, [34:21] which is insane. He's not talking about [34:24] all of Amazon. He's talking about just [34:26] AWS becoming a trillion dollar revenue [34:28] business. When he framed this [34:30] opportunity, he mentions that Amazon is [34:32] not just an AI business with its AWS. It [34:35] is around cloud migration. Remember, [34:38] even prior to AI, Amazon was growing AWS [34:40] at a fast speed. He notes that roughly [34:43] 85% of global IT spend remains on [34:46] premises. So there's more people that [34:48] could migrate their compute to the [34:50] cloud. He described 10 to 20 year [34:52] transitions in which the balance could [34:54] shift to cloud services. With 85% of [34:57] global IT still on prem, Andy Jasse [35:00] believes that the majority of that will [35:01] shift over to oncloud over time. This is [35:03] like a big secular trend, similar to the [35:06] shift of cash payments to digital [35:08] payments over time for Visa and [35:09] Mastercard. In this case, he believes [35:11] that AWS is the Visa. It's the company [35:14] that people are going to go to when they [35:16] eventually shift over from on-prem it to [35:18] cloud because cloud has an enormous [35:20] amount of benefits that on premise [35:22] doesn't. Overall, I like the earnings [35:24] report. I think the Amazon should be [35:25] higher today. Now, moving on, we get to [35:27] Anthropic releasing their third quarter [35:29] numbers. And there's a lot of debate on [35:31] whether these are good or bad. The good [35:33] news is Anthropic is still growing very [35:35] quickly. It grew 45% quarter over [35:38] quarter. It continued to grow at a super [35:40] fast rate in terms of even the customers [35:42] that they gained. Um, but there was some [35:44] disappointment with Anthropic not making [35:46] money in the third quarter. In fact, it [35:48] went into the red. And we have [35:50] commentary from people like Steve Eisman [35:52] pointing out why this is a bad thing. He [35:54] says growth is decelerating and the [35:56] company's becoming less efficient. Let's [35:58] listen to Eisman here. [36:00] >> But there's enough there's enough [36:03] information about what those third [36:05] quarter numbers are that I think it's [36:08] very very clear that Anthropics [36:11] revenue growth has slowed dramatically [36:14] because of the end of token maxing. [36:16] That's what those numbers make extremely [36:18] clear because in the second quarter [36:21] which is the numbers that are that are [36:22] in the perspectus revenue growth [36:25] sequentially was 147%. [36:27] >> And revenue growth in the third quarter [36:29] was 45%. And the company became less [36:31] efficient. [36:33] >> So [36:33] >> when you say the company became le less [36:35] efficient you mean what? [36:36] >> If you take the revenue and you divide [36:38] it by the compute and infrastructure [36:40] expense the ratio on the second quarter [36:42] was 2.08 08 times and the ratio in this [36:45] third quarter was 1.7. It had gone [36:48] straight up until we got to the third [36:50] quarter then it came down. So I think [36:52] the end of token maxing has had a has [36:54] had a big impact. [36:55] >> Now I like Steve Eisman a lot but I [36:57] disagree on a couple things here. One of [36:59] them is the whole weight that he gives [37:01] to token maxing. I think there's just [37:03] too much weight on that. That was like a [37:05] meme or a trend but companies are [37:07] spending more today than ever on tokens. [37:10] So they weren't token maxing six months [37:12] ago and now every company's like [37:14] stopping its spending on AI. That's just [37:16] not happening. The net revenue retention [37:18] rate, meaning how much the same customer [37:20] spends on Entropic year-over-year, has [37:22] risen by over 900%. Now 130% is super [37:26] good. So like security companies aim for [37:29] around 130% net revenue retention. [37:32] Anthropic has 900%. And even though [37:34] that's starting from a smaller base, it [37:36] has a lot of growth. It shows that when [37:38] companies install Anthropic and they use [37:41] it throughout their services, they find [37:42] more reason to use it next year than the [37:44] previous year. And I don't see any [37:45] indication that they were token maxing [37:48] and now they're like getting rid of [37:49] tokens. Uh, every company's going to try [37:51] to optimize and make the most out of [37:53] their their usefulness of AI, but I [37:56] don't see any evidence that they're [37:57] slowing down their use. I I see it [37:59] growing every single year. Now, I like [38:01] Steve Eisman and I agree with some of [38:03] his general concerns here. Anthroic does [38:05] face competitors, so the growth will [38:07] naturally slow. And he mentions that the [38:09] growth slowed in Q3 compared to Q2. [38:11] Well, that's true, but also growth [38:14] growth will always decelerate. Growth [38:16] can't go up 100% year-over-year forever. [38:19] Like, anthropic is not going to grow its [38:21] revenue double every single year for 10 [38:22] years. It would be bigger than the [38:24] entire GDP of planet Earth if that [38:26] happened. So, it's kind of a given that [38:29] it's going to decelerate. And we saw [38:30] that deceleration happen. But what we [38:32] see is still incredibly strong growth. [38:35] Growth in customers, growth in net [38:37] revenue retention, meaning the same [38:38] customers are spending more. Growth in [38:40] the number of customers. So his his [38:42] thoughts about token maxing like this is [38:45] some type of trend. People token maxed [38:47] six months ago and now they're not doing [38:49] it anymore is really not shown in the [38:51] numbers. Uh most companies are using [38:54] anthropic now more than ever. They're [38:56] not just you using it wastefully. Uh [38:58] they're using it efficiently with their [39:00] business. They're trying to optimize [39:01] costs, but they're using more and more [39:03] of it. And that shows up in the net [39:04] retention rate. It shows up in the [39:06] numbers of Enthropic. Their same [39:08] customers are paying them more every [39:09] single month, every single quarter. And [39:11] I believe they'll continue to because [39:13] when Enthropic gets into a business, you [39:15] find more and more use cases for it that [39:17] are more efficient than the way you were [39:18] previously doing things. The tokens get [39:21] further leverage because the models get [39:22] cheaper, you can do more, which means [39:24] you want to use it more. The other thing [39:26] that he points out is that the company [39:28] became less efficient. and he gives a [39:30] ratio of how much revenue they made to [39:32] how much they spent on compute expense. [39:34] And although that's technically true by [39:36] the numbers, they were less efficient, [39:38] it also leaves out a very important [39:40] piece of detail, which is this most [39:42] recent quarter from Anthropic, they did [39:44] $5 billion of short-term computing [39:46] expense. What that means is that [39:47] Anthropic typically has like five-year [39:50] long contracts for computing or longer, [39:52] meaning they want a partnership. They [39:54] get a heavily discounted rate because [39:55] they're agreeing to a long-term [39:56] contract. if they get an influx of [39:59] demand, they will in some cases pay for [40:01] expensive short-term compute. And they [40:03] did that this last quarter. That was $5 [40:05] billion. So when you factor out these [40:07] one-time expenses like a a charity [40:09] expense compute, it makes the number [40:12] look far more efficient than the [40:14] headline number. So I think the ratio [40:16] there is a bit misleading. Now, I'm not [40:18] investing in Anthropic. I don't plan on [40:20] buying the IPO immediately. I'll look at [40:22] it as a potential company, but I do [40:24] still believe Anthropic is an incredibly [40:26] strong company. It is going to be harder [40:28] to swap out Anthropic as an AI provider [40:30] than other alternatives than people [40:32] think. Most big businesses will want to [40:34] use the proven boring company that [40:36] follows all the rules that's the go-to [40:39] industry standard which Anthropic has [40:41] designated itself as. Most companies [40:44] don't want to go with some type of third [40:46] option from an open-source AI that they [40:48] don't really know how it works. It's not [40:50] as proven. It's not as trusted and it's [40:52] not as good as the leading ones. There [40:54] are going to be some instances where [40:56] that's used, but that won't slow down [40:57] Anthropic, I believe, to the extent some [40:59] people think. You can look at it like [41:01] Linux. Linux took a huge share of [41:03] servers. Tons of things run on Linux, [41:06] but lots of people still use Microsoft [41:08] even though there is Linux available. I [41:10] view it very similarly to Anthropic. [41:12] Open weight models will put pressure on [41:14] pricing and expansion of companies like [41:16] Anthropic, but I don't believe there'll [41:18] be a full replacement at all. I think [41:20] that many of the people super cautious [41:22] about Anthropic, they're going to watch [41:24] their revenue decelerate and point to [41:26] evidence that the AI boom is slowing [41:28] down. And while that's true, it doesn't [41:30] mean that Anthropic is overvalued or [41:31] even a bad company or that it's having [41:33] problems with competition. Revenue has [41:36] to decelerate. It's growing too fast to [41:38] maintain. There's no way it can grow 50 [41:40] to 100% per year. It's just not [41:42] possible. Now, moving on, we get to the [41:44] fail of the week, which in this case is [41:46] a viral clip. This is from Pat McCaffy [41:48] and it's a competition where he selects [41:49] one college student to kick a football [41:52] through this field goal and it's [41:54] supposed to be like an easier kick. I'm [41:56] not exactly sure the distance. So I [41:58] don't know how difficult this actually [41:59] is. It looks relatively difficult like [42:02] you actually have to have a good kick [42:03] but completely doable by a [42:05] non-professional. Now if he makes the [42:07] kick he gets $1 million. Now this is a [42:10] college student. A million dollars is a [42:12] lot of money for everyone, but a college [42:15] student having the opportunity to make a [42:17] million dollars if he just kicks a [42:19] football through that field goal is [42:20] crazy. So, let's see what happened. [42:24] [screaming] [42:27] He just misses it. Now, after this kick, [42:29] he just looks so incredibly [42:32] disappointed. Obviously disappointed, [42:34] but you can just see him dying inside [42:36] after missing that kick by only a few [42:38] feet. Then he's offered a second attempt [42:40] at making the same shot. So attempt [42:43] number two, he gets set up and we have [42:45] the kick. [42:47] >> He's got it. [42:49] >> It's another miss by like 2 feet. Now [42:52] logically, when I think about this, he [42:54] didn't really lose anything. Like he's [42:56] not down any money. This wasn't a [42:57] gamble. There's no real downside to it [43:00] because he just had the opportunity to [43:02] kick two two hits and if any of them [43:04] went in, he won a million dollars. Which [43:06] it sounds like a great opportunity. [43:08] sounds like something we would all want [43:09] to do. But the fact that he missed by [43:11] such a small margin, it just leaves you [43:13] with the impression that like he should [43:15] be close to it or he should get some [43:16] money and he doesn't get anything. So, [43:18] he's going to be thinking about this [43:20] probably for the rest of his life. What [43:22] would have happened if I made that shot [43:24] or the second one? Where would I be? [43:27] What would I have done with that money? [43:29] You know, that's a type of thought that [43:30] I feel like can eat you alive if you let [43:32] it. [snorts] So, this is one of the most [43:35] oddly positive things. Like, it was only [43:37] an upside thing. He really didn't lose [43:39] anything, but at the same time, it it [43:41] seems like it could be emotionally [43:43] devastating to some point. And I think [43:45] overall, it's just a huge fail. It's [43:47] just hard to watch. I had a difficult [43:49] time watching this. It seems like an [43:51] incredible disappointment. That's going [43:53] to be it for this episode. Hope you [43:54] enjoy. See you in the next one.