This is the LEADING player in digital advertising, CIO says

All right. Uh 248 almost the weekend everybody. The S&P is higher by 32 points. The Nasdaq uh also higher today, but it is down 2% on the week. The Russell 2000 is up 23 points as I speak. Bond yields are holding near their highest levels in over a decade. That is raising the cost of borrowing. It's been the story all week as investors are absorbing higher debt levels on tech balance sheets. Let's bring in Jason Wear. He's with Albian uh Financial Group and he is the CIO there. Jason, does the extent of this hyperscaler debt issuance concern you? We'll pull up a full screen. Uh you can see the hyperscalers Google Amazon Meta primarily, they've issued the the yellow uh bar on on the right $220 billion in debt so far this year. What is going to happen next year? >> Hi, happy Friday. Um, yeah, I think when you look at the chart, it's easy to get a little bit nervous, right? Because we're seeing this parabolic move, but we have to remember we're going from very low debt levels, very, very low debt levels of the last 10 years to what I would argue given the scale of the AI buildout and given the scale of revenues that these companies produce, given the scale of operating cash flow that they also produce, that this is just a contribution to the overall capital structure as opposed to some big debtfueled bubble that's going to explode at some point. We have to remember the fundamentals of these companies that are issuing debt are very good. The balance sheets are very strong. They are leading companies in their respective parts of the AI buildout. And finally, uh we have to remember that again when we look at the debt rates they're getting, they're very favorable because the market is telling us that these are very healthy companies. >> Okay, let's take a look at Google. Um it's been one of your stock picks on this show in the past and it does benefit from some of the lowest uh corporate borrowing costs. Is that why you like this stock primarily? Uh, you know, in the last 52 weeks, Alphabet's up 70%. >> Right. It it's not the thesis behind why we like Google. We like Google because of really three things. One, uh, they're the leading player in digital advertising, which is a secular growth story. Um there's a lot of talk around AI and AI is helping to make that business better but at the end of the day that is a mid- teens um type of growth industry and they are leading the way. Uh number two their cloud business is incredible in terms of the ability to capture both the huge TAM total addressable market but also take incremental share. Their uh cloud business grew 82% year-over-year last quarter. And then third, if you look at both YouTube and video and um Whimo and autonomous vehicles, we think there's a nice additional growth um tailwind in those businesses as well. And you can get the stock for a reasonable multiple. It's now trading back around 20 times earnings. >> So they're where their future is, driverless cars essentially. Nvidia, we have to talk about it. Um this will be the report of the week next week. Um and now the company is reportedly in talks with the South Korean chip startup. It's called rebellions for it could be a partnership, it could be an acquisition. Um, how do you read that report that Nvidia is willing to buy the best chips so it can maintain its market share? >> Yeah, I think that's part of it. I mean, when you have the kind of financial firepower and health that Nvidia does, you want to make sure you spread your bets out. You want to make sure that you're partnering with the right people. You want to make sure that you are acquiring bolt-on and tuckin acquisitions that make sense. And you want to of course make sure that you're putting together large um you know financing arrangements like we saw earlier this week with the biggest names on Wall Street to make sure that your customers can continue to build out what is a very strong uh infrastructure layer in AI. And so I think it's just anam it's a small piece of the overall Nvidia story. The bigger piece is, you know, are we still seeing demand outstrip supply and AI? We are by a multiple amount. I mean, it's 10 to one in terms of demand versus supply. And Nvidia's chips, their GPUs, both in terms of training and inference are the best in the game. And so, we still like Nvidia. Um, the story is interesting, but it's the it's not the bigger picture. >> Demand is still 10 to one at Nvidia. Wow. Um, and on the same day that Nvidia reports their earnings, so does Salesforce. So I want to talk about the software stocks. There is an article in Bloomberg today and it suggests that uh software companies hit by fears that AI will make their businesses obsolete are in this crisis of confidence and they're trying aggressive strategies to address those fears. What are some of these strategies and do you think they're working? >> I mean I think they're working now. You know if you look at Salesforce for example and we own Salesforce we've owned it for some time. I mean, the stock is ripped off of the mid June bottom. You know, we're at like we're pushing up against near-term overhead resistance here at the 210 level. And I think that's in part because the stock got too cheap and there's just this massive buyback happening. And that's part of the article that you're citing is part of the playbook has been we're going to buy back a bunch of our stock because we think it's way undervalued relative to the opportunity both in our core business and AI. And then the second piece of the marketing campaign, if you will, is they're trying to rebrand everything in their business, not just Salesforce, but so many other large SAS software companies as like being AI forward. I think Salesforce, the one we own, is doing a very good job of putting Agentic into a lot of what they're doing. They were fairly early in Agentic. It was like the fall of 2024 when they started talking about, so it's been two years. And we think Mark Beni off has a good um core business in which he can fold AI into. So we're actually bullish on that stock. Not every software company is going to be as successful as we think Salesforce will be, but that's part of the strategy. Let's up the buybacks and show that there's value in the stock. And let's talk a lot about how AI is going to help us. >> Jason, thank you very much. Of course.