Contexto
“So for us, in short, it's the second and third order winners. You think about a data center, it starts with a hole in the ground. So we're investing in Vulcan Materials, which is a toll booth on America's concrete.”
Salesforce, Workday, ServiceNow, these are these are good companies... I think the seat license model is just gonna be under a lot of pressure.
Contexto
“So, you know, Salesforce, Workday, ServiceNow, these are these are good companies... I think the seat license model is just gonna be under a lot of pressure.”
Salesforce, Workday, ServiceNow, these are these are good companies... I think the seat license model is just gonna be under a lot of pressure.
Contexto
“So, you know, Salesforce, Workday, ServiceNow, these are these are good companies... I think the seat license model is just gonna be under a lot of pressure.”
Salesforce, Workday, ServiceNow, these are these are good companies... I think the seat license model is just gonna be under a lot of pressure.
Contexto
“So, you know, Salesforce, Workday, ServiceNow, these are these are good companies... I think the seat license model is just gonna be under a lot of pressure.”
Transcrição Completa
Our next guest believes markets are still digesting
the largest CapEx surge in history driven by demand for AI compute. Todd Ahlsten, Parnassus Investments,
chief investment officer and portfolio manager is with us here in San Francisco on set. I
wanna start with with the signal, I suppose, that comes from that report Rachel just gave.
Anthropic has a real revenue number and an updated ARR number, and lots of different names
are moving this morning. Chip names, those that are invested in it, other software names. Why
do you think that is? Well, thanks for having me, Ed. And after
thirty one years of being in the business, we're just at a stage now where the
the physical world just can't keep up with the digital world. That's creating incredible bottlenecks, and
that's widely known. And I think now you're seeing this wave of liquidity. And then we
saw NVIDIA last week with the 500,000,000,000 announcement, Anthropix, SpaceX, OpenAI. So we're basically hitting the
stage where a wave of liquidity is stoking demand into these shortages and bottlenecks, and that's
creating incredible excitement. But for investors, we have to be careful to not get too swept
up in that and then look at the second and third order winners down the road
to make sure we're balanced and not getting ahead of our skis on beta in this
in this investment landscape. I've got questions about the NVIDIA news from
last week. $500,000,000,000 where six Wall Street firms go and find third party capital. And what
I wrote about in my column this morning is there is a difference between depreciation and
the economic life of a GPU. Now as an investor, how do you model the economic
life of a GPU and decide how to raise money against that? Well, clearly, they're causing an asset class to
be built and financed again with that wave of liquidity. Believe that that it can be an asset
class of its own? I think it can, but one of the
things will be the duration of the innovation. We're gonna see incredible new architectures. We know
that memory is in an incredible bottleneck right now. And so I believe that people are
racing so hard today. It's hard to reengineer these networks. But, Ed, we have to think
about three, four, five years from now. We could be rearchitecting and compressing memory and having
new structures that what's the durability of these asset classes? The next two to three years,
I think it's very in the potentially in the bag. Five to ten years, there's gonna
be tremendous change. And so I think we have to be a little careful on the
risk and the adjusted return you're gonna need to participate in these markets if you're a
longer term investor. Alphabet has looked to the equity market, and
it's looked to the bond market. And so far, everyone seems pretty sanguine about that. How
do you feel about the the activity, but also what you see as being investor demand
in response? Yeah. It shows we're pushing into the more
riskier part of the cycle. So initially, when the cash flow was all out of hyperscalers,
you could you could capitalize that. Now we're going debt, equity markets. We talk about crowding
out. We have a a large national deficit, and we have homes to fund for, the
population. So we're getting into that more, risky part of this infrastructure investment. Doesn't mean we
there's money to be made. It's just we're at a stage where it's riskier. In the case study of the $500,000,000,000 with
NVIDIA and the six US investment firms, NVIDIA would say, like, there's a degree of separation
because it is those six firms channeling third party capital, not NVIDIA's own capital. But there
is still the circular financing debate. And and for you as the CIO, like, where does
that show up, that concern? Well, when we look at it, we wanna
make sure we're thinking ahead of the game and where we can participate as investors in
the trend without taking on all that leverage and risk. So for us, in short, it's
the second and third order winners. You think about a data center, it starts with a
hole in the ground. So we're investing in Vulcan Materials, which is a toll booth on
America's concrete. We own Linde, which these purified natural gases, these are fifteen year take or
pay agreements. And so when you think about Linde, they even help send rockets to space
with industrial gases that are very pure, fifteen year agreements. And we think about companies like
Hubble and GE Vernova that these things start with atoms to electrons to energy. So we're
thinking about the more five, ten, fifteen year bottlenecks. And that's where I think as an
investor, if you wanna sleep well at night, you kinda look ahead where the infrastructure will
go, and that's the long term bankable asset class, energy, power, electrons, industrial gases, aggregates, materials.
Those physical parts of AI are gonna be long bottlenecks in our opinion, and we can
actually underwrite the durability of those for a longer period. When you look at NVIDIA, where there is
a more direct circular financing concern is where it is investing its own capital into a
project or campus where the party leasing the compute is a customer of NVIDIA's. But they're
still investing in the same areas that you've just listed. Do you feel good about that
or or otherwise? We think Jensen's incredible. We love NVIDIA. We
also like companies like AMD Right. Which has great technology. Their Helios four fifty ramp is
is looking really promising, and they're basically showing up with a whole range of compute. And
they're not is competing with our customers as much. So that's a company that we think
is very well positioned in compute. If you want FPGAs, CPUs, which are much more important,
GPUs, and other, you know, embedded options. So that's another way to look at it where
they're not as involved in the circular financing, but has incredible compute. Todd, you've listed some very
interesting names that are being presented with an opportunity in the build out. What about those
names that are most at risk of disruption, particularly in the software space? Yeah. So, you know, Salesforce, Workday, ServiceNow, these
are these are good companies. We all have friends who work there. These are are have
been great companies, but I think the seat license model is just gonna be under a
lot of pressure. You see that the token usage, and the minute you see an anthropic
revenue number, that's coming out of somewhere. Expected today's OpenAI. You're seeing Google Gemini. So I
think the squeezing and the and the pricing out of that seat model is gonna be
very risky. And so we wish them well. They're good companies. I just think the long
term bankability of that is gonna be challenging.
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