KKM Financial’s Jeff Kilburg on buying the 'net' names

>> WELCOME BACK. THE NASDAQ HITTING ANOTHER RECORD HIGH TODAY. DESPITE THOSE RISING TREASURY YIELDS, TECH IS THE SECOND BEST PERFORMING SECTOR THIS YEAR AFTER ENERGY. BUT OUR NEXT GUEST IS STILL FINDING OPPORTUNITIES WITH SOME OF THE HIGH FLYERS BUYING THE NET TICKERS AT THE START OF Q4. THAT MEANS ARISTA, CLOUDFLARE AND FORTINET. FORTINET, BY THE WAY, IS UP 130% YEAR TO DATE. LET'S BRING IN JEFF KILBURG, FINANCIAL'S FOUNDER AND A CNBC CONTRIBUTOR. JEFF, NOTHING BUT NET. YOU GOT ALL THE NET NAMES. IS THAT JUST FOR FUN OR WHAT? SO YOU THINK CYBER IS THE WAY TO GO FOR Q4? >> WELL, I THINK THAT NOTHING BUT. NET PHRASE IS ACTUALLY JUST A WAY OF LOOKING PAST THE AI DIRECT HYPERSCALERS. AND WE HAD TO FIND A WAY TO PARTICIPATE. AND I THINK IF YOU LOOK AT ARISTA, YOU KNOW, YES, IT'S UP ABOUT 58% YEAR TO DATE, BUT THIS IS A COMPANY WITH 50% OPERATING MARGINS. AND WHEN YOU THINK ABOUT ALL THE MONEY IS BEING SPENT BY THE HYPERSCALERS ON THEIR GPUS, THIS IS THE NETWORK. THIS TIES IT ALL TOGETHER. SO THEY'RE NOT GOING TO CHEAP OUT IN MY OPINION. AND THAT'S WHERE THERE'S OPPORTUNITY. BUT THIS IS THE ONLY OF THE THREE NET NAMES. THIS IS THE ONLY ONE THAT'S ACTUALLY BELOW THE CONSENSUS TARGET PRICE OF 242. SO IT'S ABOUT 20% UNDER THE OTHER ONES ARE NOT. BUT IF WE SHIFT GEARS INTO FORTINET, YES, WE DO OWN CROWDSTRIKE. AND YES, WE OWN PALO ALTO NETWORKS. BUT WE ALSO WANT TO OWN THIS BECAUSE THE FACT IT'S UP, IT HAS THE ABILITY WITH A FORWARD P E OF 53 TIMES MOVING FORWARD, YOU'RE GOING TO SEE MORE AND MORE MONEY BEING SPENT ON CYBER. SO THIS IS JUST A DIVERSIFICATION. WE ACTUALLY OWN PALO ALTO NETWORK AND OUR CENTRAL PORTFOLIO. WE OWN PALO AND CROWDSTRIKE IN OUR GEAR ETF. BUT WE WANT TO OWN THIS HERE AS WELL BECAUSE THAT DIVERSIFICATION AND LAST BUT NOT LEAST CLOUDFLARE. I'M GOING TO COME UP FOR AIR HERE BECAUSE THIS HAS A FORWARD P E OF GUESS WHAT. KELLY ALMOST 300 TIMES. >> I WAS I WAS STILL IN THE HIGH ONE 100 246. WE'RE SHOWING. BUT AGAIN, THE POINT IS IT'S HIGHLY VALUED. WE'LL SEE WHAT ACTUALLY HAPPENS WITH THE EARNINGS WHEN THEY COME THROUGH. QUICK CODA ON THAT. WHY DO YOU THINK AND HOW DO YOU THINK IT CAN GROW INTO THAT VALUATION. >> WELL I THINK IT'S THE CROSSING GUARD RIGHT. SO IT'S GOING TO HELP YOU AND ALL THE INTERNET TRAFFIC. IT HAS THE ABILITY TO CONTINUE TO GROW. IT DOESN'T MAKE MONEY. LET'S BE CLEAR. AND YOU KNOW, I DON'T LOVE COMPANIES THAT DON'T MAKE MONEY. BUT YOU'RE BUYING THE NETWORK, THE CAPABILITY, THE MOVING FORWARD. BUT I THINK WHEN YOU LOOK AT, YOU KNOW, HOW IT KIND OF COMPARES WITH THE $350 PRICE TARGET, WE'RE ABOVE THAT. SO IT IS A LITTLE OVERRUN. BUT HERE AGAIN TODAY IT'S UP ANOTHER 4%. SO CAN'T STOP WON'T STOP NOTHING BUT NET. >> YEAH IT'S NOT PROFITABLE 240 TIMES P E. BUT AGAIN IF THEY. I'M STILL HAUNTED BY THE EARLY NETFLIX DAYS WHEN IT LOOKED SIMILARLY LUDICROUS. EARNINGS BROADLY WERE KIND OF KICKING OFF THIS WEEK. WHAT ARE YOUR EXPECTATIONS? ANYTHING YOU'D REALLY BE KIND OF BETTING ON ONE WAY OR THE OTHER? >> WELL, WE'VE TALKED A LOT FOR THE LAST COUPLE OF MONTHS, AND THAT'S BEEN MY CAUTIOUS OPTIMISM ON ALL THE DIFFERENT HEADWINDS. YOU KNOW THE TEN YEAR AT 5.3 AND CRUDE OIL STILL AT $90. YOU WOULD HAVE THOUGHT I WAS CRAZY A COUPLE OF MONTHS AGO. BUT THAT'S THE OFFSET. IT'S THE STRENGTH. IT'S THE ROBUST COMPONENT OF THE EARNINGS SEASON. SO WITH THE FORECAST RIGHT NOW OF EARNINGS PER SHARE YEAR OVER YEAR GROWTH OF 29%, THAT'S REMARKABLE. THAT WILL BE THE THIRD CONSECUTIVE QUARTER OF OVER 25%. SO THAT'S THE OFFSET WE'VE TALKED ABOUT. PUT IT IN CONTEXT, KELLY. THAT TEN YEAR AVERAGE FOR EARNINGS PER SHARE YEAR OVER YEAR GROWTH IS 8%. SO I WASN'T A MATH MAJOR AT NOTRE DAME. BUT NONETHELESS, THIS IS