Pence: NVDA "Pivotal Chokepoint" of AI & Likes MSFT, AMZN, GOOGL in Mag 7
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Entry $219.74 18 Aug 2026Current $223.67 09 Sep 2026Result +$3.93vs. index +2.4% SPY −0.7% over the same days
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…fficer, Pence Capital Management, thank you so much for being with us. So since you have Nvidia as a name you like, let's talk about it. I mean, they have a $350 price target. Do you see a lot of upside potential for Nvidia and if so, why. I do. I mean Nvidia still is the absolute choke point in AI. And they're absolutely essential to this growth which is still quite phenomenal. And when you think about it in most all these tech companies, what I'm liking is that the E is growing faster than the P. If you look at p e ratios, earnings …
I do. I mean Nvidia still is the absolute choke point in AI.
AI-extracted context "So since you have Nvidia as a name you like, let's talk about it." / "I do. I mean Nvidia still is the absolute choke point in AI."
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Entry $607.17 18 Aug 2026Current $536.15 08 Sep 2026Result −$71.02vs. index −11.0% SPY −0.7% over the same days
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…t missiles, replacing all the Thad systems and the F-35. So they have $230 billion worth of order backlog. That's three years worth of revenue. Show me a company that's got three years worth of revenue locked in with a government contract. That's probably one you want to buy. Understood. Okay, so we covered some of the names that you're watching in the mag. Seven. Let's get to semiconductor equipment and some of the other names that you like in the semi spotlight. Tell me about some of those names and why this …
That's probably one you want to buy.
AI-extracted context "Lockheed Martin has a monopoly on replacing all the Patriot missiles, replacing all the Thad systems and the F-35. So they have $230 billion worth of order backlog..."
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Entry $341.00 18 Aug 2026Current $331.01 09 Sep 2026Result −$9.99vs. index −2.3% SPY −0.7% over the same days
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…some of those names and why this AI build out. Because it's you have names that go beyond just the mag seven. Exactly. You got to have it's not just the mag seven. It's all the essential components of the mag. Seven and so you take a look, I kind of like the four that we want to talk about. I call that test, test, connect and see and what I mean by that, what I mean by that is when you look at Keysight technology, which, you know, they're up about 80, about 66% this year, they've got some volatility. They're going to be annou…
I kind of like the four that we want to talk about.
AI-extracted context "I kind of like the four that we want to talk about. I call that test, test, connect and see... when you look at Keysight technology..."
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Entry $404.29 18 Aug 2026Current $383.69 09 Sep 2026Result −$20.60vs. index −4.4% SPY −0.7% over the same days
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… tested. You don't want to build one of these data centers and all of a sudden have 1 or 2 faulty chips blow it down. So Keysight really works the testing of that to make sure when the chip goes in, it goes in. Right. And that's important. Then when you look at Teradyne, the same thing. Teradyne is a big a big tester of those things. And again, they're testing to make sure they're up 106%. I mean, it's an amazing company. And again, it's test equipment. So to make sure it works before it ships, and then you have Lumentum, which are light is the series. They're up like …
Then when you look at Teradyne, the same thing. Teradyne is a big a big tester of those things.
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Entry $873.31 18 Aug 2026Current $988.98 09 Sep 2026Result +$115.67vs. index +13.9% SPY −0.7% over the same days
And then you have Lumentum, which are light is the series. They're up like 130%.
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Entry $259.45 18 Aug 2026Current $252.40 09 Sep 2026Result −$7.05vs. index −2.1% SPY −0.7% over the same days
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…g at Amazon. They have the resources to spend a ton of money on R&D, Microsoft, a ton of money on R&D. If they're the biggest, you spend that much money on R&D, 2% of your sales, 2% of that much, you're going to come up with something. And I think those are going to continue to lead this. And then you have you have some other ones. I love when we take a look at a company like ASML, ASML makes, they're the only people that make that extreme ultraviolet light machine. And so they're absolutely. You can't have it's kind of lik…
I think those are going to continue to lead this.
AI-extracted context "When you take a look at Amazon and Google... major technology companies..."
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Entry $344.20 18 Aug 2026Current $330.65 09 Sep 2026Result −$13.55vs. index −3.3% SPY −0.7% over the same days
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…g at Amazon. They have the resources to spend a ton of money on R&D, Microsoft, a ton of money on R&D. If they're the biggest, you spend that much money on R&D, 2% of your sales, 2% of that much, you're going to come up with something. And I think those are going to continue to lead this. And then you have you have some other ones. I love when we take a look at a company like ASML, ASML makes, they're the only people that make that extreme ultraviolet light machine. And so they're absolutely. You can't have it's kind of lik…
I think those are going to continue to lead this.
AI-extracted context "When you take a look at Amazon and Google... major technology companies..."
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Entry $481.63 18 Aug 2026Current $491.65 09 Sep 2026Result +$10.02vs. index +2.7% SPY −0.7% over the same days
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…ant. There's two characteristics. You're either brilliant and do one thing really, really well, or you're big and you spend a ton of money on R&D. And so now you're looking at Amazon. They have the resources to spend a ton of money on R&D, Microsoft, a ton of money on R&D. If they're the biggest, you spend that much money on R&D, 2% of your sales, 2% of that much, you're going to come up with something. And I think those are going to continue to lead this. And then you have you have some other ones. I love w…
Microsoft, a ton of money on R&D.
AI-extracted context "...Microsoft, a ton of money on R&D..."
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Entry $1,802.98 18 Aug 2026Current $1,729.52 09 Sep 2026Result −$73.46vs. index −3.4% SPY −0.7% over the same days
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…ompany like ASML, ASML makes, they're the only people that make that extreme ultraviolet light machine. And so they're absolutely. You can't have it's kind of like this. You can't have AI without Nvidia. You can't have Nvidia without TSMC. You can't have TSMC without ASML. So you get all of these essential companies that that are going to have a complete bid to them. I know you had micron on your list as well. And just AI subscription and AI adoption and how it just continues to grow. So you're a big believe…
You can't have TSMC without ASML.
AI-extracted context "You can't have AI without Nvidia. You can't have Nvidia without TSMC. You can't have TSMC without ASML."
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Entry $413.41 18 Aug 2026Current $435.36 09 Sep 2026Result +$21.95vs. index +6.0% SPY −0.7% over the same days
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…s. I love when we take a look at a company like ASML, ASML makes, they're the only people that make that extreme ultraviolet light machine. And so they're absolutely. You can't have it's kind of like this. You can't have AI without Nvidia. You can't have Nvidia without TSMC. You can't have TSMC without ASML. So you get all of these essential companies that that are going to have a complete bid to them. I know you had micron on your list as well. And just AI subscription and AI adoption and how it just continue…
You can't have Nvidia without TSMC.
AI-extracted context "You can't have AI without Nvidia. You can't have Nvidia without TSMC. You can't have TSMC without ASML."
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Entry $940.76 18 Aug 2026Current $1,027.77 09 Sep 2026Result +$87.01vs. index +9.9% SPY −0.7% over the same days
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… You can't have it's kind of like this. You can't have AI without Nvidia. You can't have Nvidia without TSMC. You can't have TSMC without ASML. So you get all of these essential companies that that are going to have a complete bid to them. I know you had micron on your list as well. And just AI subscription and AI adoption and how it just continues to grow. So you're a big believer to make sure that people are invested in this way. All right. I look at it this way. If you're not investing in the future, you won't be part of it. Okay. Dryden Pence, Chief Investment
I know you had micron on your list as well. And just AI subscription and AI adoption and how it just continues to grow.
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Entry $665.00 18 Aug 2026Current $605.08 08 Sep 2026Result −$59.92vs. index −8.4% SPY −0.7% over the same days
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… really fast. And the technology that does that becomes essential. And then the last one that we've talked about, and we can circle back to any of these, if you want to go deeper, is, is, is Teradyne. And you know, our Teledyne rather, and Teledyne is they're really the eyes of AI. It helps, you know, we're just scratching the surface on robotics and all of these other things. So these are companies and it's like 31% this year. But I think this one is one that has a lot of room to run, because it's essential to the vision of AI. And we think about how it's changing and evolving. Because one of the things you talked about was as AI, the chips become bigger, larger, more expensive, more manufacturing. It requires more testing. Exactly. So it seems pretty simple to y…
Teledyne is they're really the eyes of AI. It helps, you know, we're just scratching the surface on robotics and all of these other things. So these are companies and it's like 31% this year. But I think this one is one that has a lot of room to run, because it's essential to the vision of AI.
AI-extracted context "...and the last one that we've talked about... is... Teledyne is they're really the eyes of AI... But I think this one is one that has a lot of room to run..."
Full Transcript
investment officer, Pence Capital Management, thank you so much for being with us. So since you have Nvidia as a name you like, let's talk about it. I mean, they have a $350 price target. Do you see a lot of upside potential for Nvidia and if so, why. I do. I mean Nvidia still is the absolute choke point in AI. And they're absolutely essential to this growth which is still quite phenomenal. And when you think about it in most all these tech companies, what I'm liking is that the E is growing faster than the P. If you look at p e ratios, earnings are growing faster than prices are. Nvidia is like 22. Take a look at a company that's growing as fast as they are, with the earnings growing as fast as they are and having a forward p e of 22. So I think I would agree with Bank of America on this. Yeah. And Bank of America actually said that this call here is because of the $105 billion investment commitment to with open AI. That's one of the reasons along with many others just the shift and the commitment that that Nvidia is showing the benefits of AI. We're waiting for the monetization. But this just shows the trend overall. Is that right? I think so, but when we talk about AI, you've got to remember, you know, 56% of the companies in America now have an AI account and they're paying for this stuff. And and of those, 71% of them are showing increases in labor productivity. So when you think about and then like maybe only 7% of them say that they fully integrated. So you, you see this huge opportunity for AI integration, and we're still just building out this infrastructure. And Nvidia and many of these companies are absolutely essential to that. So I think you've got a very strong continued push in what's going on. Because in the end, if AI is increasing labor productivity, people are going to buy it. And if it didn't increase labor productivity, it'd be just an interesting, you know, parlor game. Or do you feel like they're being so I mean, this is not a Bank of America segment, but the price target. We could discuss that. Where are you really 50% upside really when they call 350 it's a 219 or so. It certainly shows an aggressive move. I mean, they're not saying 250. Do you really think that some of these tech names can move 20, 30, 40, 50%? You have a slew of names that we're going to be discussing in here. I mean, you have Nvidia and Microsoft, two of the sort of the big names that people know and like, are those the kinds of names that can move 20, 30, 40, 50% when, when earnings are moving 20, 30, 40 and 50%, which is happening. Yeah. Then the price of the stock has record earnings are going to be record record stock price you had. I mean, another one you had in there was LMT another big name in your in the big names we know. And then I want to get to some of the details on the equipment. But you know, mention that one too. Sure. When we took Lockheed Martin, when we talk about that one, you have to recognize the world is not going to sing Kumbaya. We know that. I mean, wars are here. They're always going to be here. And Lockheed Martin has a monopoly on replacing all the Patriot missiles, replacing all the Thad systems and the F-35. So they have $230 billion worth of order backlog. That's three years worth of revenue. Show me a company that's got three years worth of revenue locked in with a government contract. That's probably one you want to buy. Understood. Okay, so we covered some of the names that you're watching in the mag. Seven. Let's get to semiconductor equipment and some of the other names that you like in the semi spotlight. Tell me about some of those names and why this AI build out. Because it's you have names that go beyond just the mag seven. Exactly. You got to have it's not just the mag seven. It's all the essential components of the mag. Seven and so you take a look, I kind of like the four that we want to talk about. I call that test, test, connect and see and what I mean by that, what I mean by that is when you look at Keysight technology, which, you know, they're up about 80, about 66% this year, they've got some volatility. They're going to be announcing earnings and stuff. But when you've got 28% revenue growth you've got earnings adjusted earnings growth 42%. But you know AI has to work. And for the chips to work they have to be tested. You don't want to build one of these data centers and all of a sudden have 1 or 2 faulty chips blow it down. So Keysight really works the testing of that to make sure when the chip goes in, it goes in. Right. And that's important. Then when you look at Teradyne, the same thing. Teradyne is a big a big tester of those things. And again, they're testing to make sure they're up 106%. I mean, it's an amazing company. And again, it's test equipment. So to make sure it works before it ships, and then you have Lumentum, which are light is the series. They're up like 130%. And when you, when you think about the technology of moving information between chips and factories and stuff like that, all of this is going over fiber optics. It's really fast. And the technology that does that becomes essential. And then the last one that we've talked about, and we can circle back to any of these, if you want to go deeper, is, is, is Teradyne. And you know, our Teledyne rather, and Teledyne is they're really the eyes of AI. It helps, you know, we're just scratching the surface on robotics and all of these other things. So these are companies and it's like 31% this year. But I think this one is one that has a lot of room to run, because it's essential to the vision of AI. And we think about how it's changing and evolving. Because one of the things you talked about was as AI, the chips become bigger, larger, more expensive, more manufacturing. It requires more testing. Exactly. So it seems pretty simple to you. You bet. Because you think of how much money you're spending on some of these chips. You want them, how much money you're selling them for, right? You want to make sure that your product works. And so the companies that test them become essential to this process. When we think about some of the other areas, you know, you talked about cloud and what we're seeing with names you had in here. By the way, in addition to the ones that we talked about, Microsoft and Nvidia, you had some of the other big names like Amazon and Google. What were your thoughts on those? Because you talked about, you know, the records that you're seeing there too? Well, I think when you take a look at Amazon and Google, I mean, major technology companies are really, they're either going to be big or brilliant. There's two characteristics. You're either brilliant and do one thing really, really well, or you're big and you spend a ton of money on R&D. And so now you're looking at Amazon. They have the resources to spend a ton of money on R&D, Microsoft, a ton of money on R&D. If they're the biggest, you spend that much money on R&D, 2% of your sales, 2% of that much, you're going to come up with something. And I think those are going to continue to lead this. And then you have you have some other ones. I love when we take a look at a company like ASML, ASML makes, they're the only people that make that extreme ultraviolet light machine. And so they're absolutely. You can't have it's kind of like this. You can't have AI without Nvidia. You can't have Nvidia without TSMC. You can't have TSMC without ASML. So you get all of these essential companies that that are going to have a complete bid to them. I know you had micron on your list as well. And just AI subscription and AI adoption and how it just continues to grow. So you're a big believer to make sure that people are invested in this way. All right. I look at it this way. If you're not investing in the future, you won't be part of it. Okay. Dryden Pence, Chief Investment
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