AI Integration and Stock Fears

Texas Stock Exchange

• Rick Wurster · The Charles Schwab CorporationBullish

  Texas Stock Exchange will grow as capital and companies move to Texas, while NYSE and Nasdaq remain strong.

  Schwab is a secondary listing on the exchange and an investor in it. Wurster says there is a lot of capital and money moving to Texas, and companies are relocating there, so he expects the exchange to expand over time. He does not expect the NYSE or Nasdaq to go away, and says they will be hard to unseat.

  “Well, I think it'll be a lot bigger. We are there as a secondary listing. We're also an owner, an investor in the Texas Stock Exchange. There's so much capital and money moving to Texas.”at 11:34

CoreWeave

Across the shows: 21 speakers in other episodes, 4 bullish and 22 bearish calls, past 30 days

• Dan Ives · Yorkville Ives & Co.Bullish

  CoreWeave's selloff over debt and CDS fears is a false narrative and a buying opportunity.

  Ives compares the selloff to the earlier SaaS apocalypse. He acknowledges some issues as rates rise, and notes the rise in CDS spreads and worries over debt. But he argues that demand and backlog are strong, so the fear is overdone. He thinks recent selloffs in these stocks have been a buying opportunity.

  “I view it similar to SaaS apocalypse earlier this year. I'm not saying there's not some issues in terms as rates go higher, but given the demand, given backlog, I think this is ultimately a false narrative.”at 32:32

Apple

Across the shows: 22 speakers in other episodes, 12 bullish and 7 bearish calls, past 30 days

• Dan Ives · Yorkville Ives & Co.Bullish

  Apple, with 1.5 billion iPhones, will be the toll collector on the consumer AI highway.

  Ives says investors underestimated Apple's position in consumer AI and that it could be late to the game. But with an installed base of 1.5 billion iPhones, it will collect tolls on consumer AI as that starts to play out. He cites its recovery from being flat eighteen months ago as evidence that this thesis is working.

  “investors underestimated that on the consumer AI revolution, Apple could be late to the game. But with an installed base of 1,500,000,000 iPhones, they're gonna be the toll collector on the consumer AI highway.”at 35:41

Canadian Natural Resources

• Molly Pirori · Yacktman Asset ManagementBullish

  Canadian oil sands are lower-risk than Gulf or Permian drilling; Canadian Natural is a bullish holding.

  Molly argues oil sands take much of the risk out of the oil business because the resource is already on the surface and does not have to be drilled for or speculated about. She cites over 20 to 30 years of success and 30 to 40 years of proven reserves ready to mine. She adds that producers can choose when to mine and time maintenance capex to oil prices, which improves the IRR. Yacktman owns the stock, so she frames it as an investment they make.

  “Canadian Natural Resources, the company we invest in, that takes a lot of the risk out of the oil business. Because you've got this giant oil sand. There's nothing that you have to drill for or speculate about.”at 39:10

Taiwan Semiconductor Manufacturing Company

Across the shows: 4 speakers in other episodes, 4 bullish and 0 bearish calls, past 30 days

• Molly Pirori · Yacktman Asset ManagementBullish

  TSMC's foundry business is a scale business and Molly has great respect for the company.

  Molly calls TSMC's foundry work the most precise manufacturing on the planet, citing the difficulty of producing two-nanometer chips. She says they love the foundry business because it is a scale business once a company is in it. She says the question is how to play it without losing your shirt, and she answers by pointing to Samsung instead. This suggests she sees TSMC as a strong business but does not hold it, and she does not state a stake.

  “We have a lot of respect for TSMC. We actually love the foundry business because you've got... It's like a scale business. Once you're in it...”at 42:15

Samsung Electronics Co.

• Molly Pirori · Yacktman Asset ManagementBullish

  Samsung is a cheaper, de-risked way to own AI foundry scale than high-multiple peers.

  Molly says Yacktman likes the foundry business because it is a scale business and the most precise manufacturing on the planet. Rather than paying high multiples for TSMC, they invest in Samsung, the number two foundry business, which is building four new foundry plants, including one in Taylor, Texas. She says Samsung lets them participate in producing AI chips. She notes labor is the hardest part of the Texas build-out, so skilled workers have to be brought in from abroad to train local staff. Yacktman owns the stock.

  “So you invest in Samsung, which is the number two foundry business on the planet. And it's actually coming online in Texas, just a few miles up the road from us in Taylor, Texas, and they're building actually four new foundry plants right now.”at 42:27

Defense

• Bob Hormats · Kissinger Associates

  US must strengthen its military as deterrence, since military power is needed to reach diplomatic outcomes.

  Hormats says the US needs a strong military and may need to spend more on it. He argues the military rarely gets you to the end game alone, but it strengthens your capacity to get a negotiated outcome. He points to China building up its navy, army and space forces, and says it is watching whether the US has a credible military and the will to use it as a deterrent.

  “...the military aspect doesn't get you to the end game in most cases. You need to use the military to strengthen your capacity to get the right diplomatic negotiated outcome.”at 23:30

• Bob Hormats · Kissinger Associates

  Cheap drones and AI let small countries and individuals wage asymmetric warfare previously reserved for major powers.

  Hormats argues the world has moved from great power against great power to a world where small states and individuals can do real damage. Argentina in 1982, Iran, Ukraine's use of drones and the Houthis are his examples. Drones and AI, put in the hands of malefactors and bad states, can cause significant damage.

  “...enable countries that were not major powers before... Even Iran was not a major power before. Others can use them.”at 29:21

Asset managers, brokers & exchanges

• Rick Wurster · The Charles Schwab Corporation

  Fee compression across the industry is good for clients, and Schwab has led in cutting fees.

  Wurster argues that falling fees, such as the move from mutual funds to ETF-structure products, put more money back in clients' pockets. He says Schwab has been at the forefront of bringing fees down and has some of the lowest passive fees in the industry. He therefore sees the compression as a positive, since it fits the firm's client-first model.

  “I look at that and I look at it as a good thing because it's putting more money back in the client's pockets.”at 5:35

Private markets for individual investors

• Rick Wurster · The Charles Schwab Corporation

  Retail investors should get the same private-market access as institutions, delivered thoughtfully with advice.

  Wurster says privates have long been a source of diversification and return enhancement for large institutions, so retail investors should be able to access the same investments. He wants that access delivered carefully, so clients know the risks and the products fit their allocation. Schwab's retail alternatives platform requires a professional conversation before access.

  “I believe retail investors should have access to those very same investments.”at 8:44

Russia & Ukraine

• Bob Hormats · Kissinger Associates

  Europe cannot replace US military technology and satellite intelligence for Ukraine.

  Hormats says Europeans can play a bigger role but lack advanced systems such as Patriot missiles and Tomahawks. They also lack the satellite intelligence the US provides to Ukrainian forces on the battlefield. He concludes there is no substitute for certain American military assets and intelligence, and the US is in a difficult spot because its own stockpiles are not as strong as they should be.

  “The difficulty comes in the fact that they don't have or make some of the advanced technologies like Patriots and Tomahawks... there's really no substitute for certain types of American, military assets and certain types of American intelligence and particularly, satellite intelligence.”at 19:01

US global standing & alliances

• Bob Hormats · Kissinger Associates

  US diplomacy is weakened: State Department morale is low and experienced diplomats are sidelined.

  Hormats says institutional expertise is not helping current US diplomacy, and morale at the State Department is very low. Many capable, experienced people have left. Career diplomats with decades of regional and country knowledge are not being called on, even though they would be loyal to a new administration and could help with long-term negotiations with Iran, China and Eastern Europe.

  “I think morale in the state department is very low. I think a lot of very good people who were there are no longer there.”at 20:15

US–China relations

• Bob Hormats · Kissinger Associates

  US should both compete with and engage China, as in Cold War arms control talks.

  Hormats says there are areas where the US needs to engage China. He points to the four or five arms control agreements signed during the Cold War, because both sides recognised the dangers of escalation. He says the US can and should compete with China, including by strengthening its basic research, but also work with it on shared risks.

  “I'm still of the view that there are areas where we need to engage in China... we had four or five arms control agreements while the Cold War was going on because we both realized that there were dangers to each of us.”at 24:55

AI regulation & safety

• Bob Hormats · Kissinger Associates

  US and China share an interest in curbing dangerous AI, so cooperation is needed despite rivalry.

  Hormats says AI brings risks to both sides, including rogue users, autonomous systems that escape their sandbox and open-weight models that let people tamper with AI. A few actors can have an enormous impact with AI, unlike the two-actor Cold War. Since the problem is global, the US has to deal with China, even though the two disagree on much. Both sides see a need for stronger defensive capabilities.

  “On AI, there are a lot of risks that affect both sides. Rogue users of AI, autonomous AI that goes out of its sandbox... we do share a common interest in avoiding these dangers to our systems, to our societies.”at 25:35

Open-source AI models

• Bob Hormats · Kissinger Associates

  Open-weight AI models let people tamper with AI in ways that can be dangerous to systems.

  Hormats lists open models and open-weight models as a source of risk. Because they can be modified by anyone, they give people a chance to meddle with AI in dangerous ways. He ties this to rogue users and autonomous AI that escapes its sandbox, and argues that defensive capability on both sides must be stronger.

  “You have open models. You have open [weights], which give people a chance to meddle with AI in ways that can be very dangerous to our systems.”at 25:53

Middle East & Iran

• Bob Hormats · Kissinger Associates

  Iran cannot be solved by military force alone; a reasonable negotiated outcome is needed.

  Hormats says the US does not understand Iranian culture well enough. Iran's leaders are determined to protect their system and believe their own lives depend on it. He would support tough military action but does not think it alone can solve the problem, so a negotiated settlement is needed. He is not optimistic about Iran.

  “I would certainly have very tough military action, but I would not lead myself to conclude... that you can solve the problem only with the military. There has to be some kind of negotiated outcome that's reasonable, but the military might get you there, but it won't solve the overall problem.”at 28:03

AI chips & semiconductors

• Dan Ives · Yorkville Ives & Co.

  Memory chip demand is accelerating 30-40%, the best barometer for the AI build-out.

  Ives returned from Korea and says memory chip demand has accelerated 30-40% over the last 60 and 90 days. He sees that as the best barometer for AI, since it shows the build-out is accelerating. He expects this to show up in hyperscaler earnings and relative to the broader market.

  “memory, if I look at chips, we've seen demand accelerating at 30, 40% over the last sixty and ninety days.”at 33:04

AI: overall outlook

• Dan Ives · Yorkville Ives & Co.

  The AI build-out is only in the third inning, with demand outweighing rate concerns.

  Ives acknowledges investors are nervous about rates, but says he focuses on demand. He says demand signals show the AI cycle is only in its third inning. He points to NVIDIA, the hyperscalers, Palantir and memory stocks as evidence that the puzzle fits together.

  “The rate issue, I get the nervousness. I'm focused on demand, and demand's telling you we are third inning relative to this AI game.”at 33:30

US stock market outlook

• Dan Ives · Yorkville Ives & Co.

  The tech market will make new all-time highs despite rate and debt-raise pressure.

  Ives points to strong demand across NVIDIA, the hyperscalers, Palantir and memory stocks. He says that demand supports the tech market, which will reach new all-time highs despite the pressure from the 10-year yield and debt raises. He focuses on the demand story rather than the rate concerns.

  “I just believe this is the tech market that ultimately will make new all time highs despite obviously the pressure that we're seeing in terms of the ten year and some of the debt raises.”at 34:16

AI infrastructure & data centers

• Dan Ives · Yorkville Ives & Co.

  Assumes 5-10% of data centers will be voted down, mainly from political pushback before midterms.

  Ives builds 5-10% of data centers being blocked into his model, citing political pushback, especially heading into the midterms. He says there are 800 to 1,000 data centers in the pipeline. For each dollar of capex he sees a $67 multiplier relative to the rest of tech, which he says remains central to his AI thesis.

  “We assume five to 10% of data centers will ultimately either get voted down... especially if we go into midterms, that will ultimately... push them further down.”at 34:39

International equities

• Molly Pirori · Yacktman Asset Management

  South Korean stocks are cheap; government reforms should unlock the long-standing Korean discount.

  Molly says the Korean discount has persisted for about thirty years, and the Korean administration is making specific moves to unlock it. Yacktman can buy Korean companies such as Hyundai Mobis and Samsung at prices that de-risk the investment thesis compared with paying high multiples for similar competitors elsewhere. The argument rests on valuation and policy-driven re-rating. Yacktman invests in these names.

  “the Korean administration's making very specific moves to get that to be unlocked. But we're able to own, you know, Hyundai, Mobis, or Samsung... for a price where... the risk in that investment thesis is de risked in a huge way relative to paying high multiples”at 44:06