00:00 Speaker A
In terms of your picks for the second half of the year, Dan, you’re looking at Nvidia, you’re looking at meta, which you mentioned already, you’re looking at Microsoft, which is trading at a record again, you’re looking at Palantir, Ditto, and you’re looking at Tesla is the other one. Tesla I feel like is like one of these things is not like the other, certainly in terms of the stock performance at least, but just briefly here for the second half of the year, why are you focusing on on those five?
00:52 Dan
Because I mean ultimately it’s each phase of what I think starting to play out, of course, Nvidia, not just 4 trillion, I think it’s the path to 5 trillion market cap. And then you look at on the hyperscaler side in terms of Microsoft, meta leading on the consumer, Palantir, I think that’s a trillion dollar market cap in the next two to three years. And Tesla I’ve used the best AI playing along with Nvidia because at times worth a trillion dollars is a story. It all comes down to those that focus on valuation. You know, they’ve missed every transformational tech stock the last 20 years. And I always say, like the bears when they’re in hibernation mode in their caves, they can’t find AI in the spreadsheet.
02:29 Speaker A
I mean, David, I would ask as well though, on the flip side, I guess I’ll put this to both of you, David, I’ll put this to you first. Given how heavily heavily weighted these companies are in the S&P 500, why shouldn’t investors just buy the S&P 500? They still can participate in a lot of the upside from these stocks because they are so heavily weighted, but they also get maybe the cushion of some of the other stuff. David, how do you think about that?
03:22 David
So, I guess the way I would think about that is first off I agree, you’re generally right. You’re probably going to do very well if you own the S&P 500, and if you don’t own these names individually, that’s not the end of the world. But do you really need to own the large airlines, which have never made money over decades on net? Do you need to own the large automakers that aren’t Tesla that are incredibly difficult businesses with enormous pension liabilities? I I think conceptually you do want to own a lot of those names that are in the S&P 500 that are showing great free cash flow growth, great dominance within their industries, great products that are making people’s lives better, but you don’t have to really own some of those companies in the S&P that are in much more competitive industries.
04:56 Speaker A
And Dan, what about you?
05:01 Dan
I mean, I think that I think David, great way to put it. I put it another way, I’d just say, I want to own the Ferraris in the left lane going 100 miles an hour. I get everyone to a while, you’ll get a speeding ticket. But I don’t want to own the minivans in the right lane going 45 miles an hour with a broken radio. I’d rather be in the left lane on those. And that those to me, that’s where you stick in big tech, and that’s why I think it’s get the popcorn out. It’s going to be a very exciting second half.
