Apple's Siri Bet on Gemini, SpaceX's $1.77T IPO, and Claude Fable 5's Hyperscaler-Neutral Launch

The handpicked topics for this week are:

1. Apple's Siri AI Will Run on Gemini, Closing Out Tim Cook's Final WWDC as CEO: At WWDC, Apple confirmed Siri AI will run on Gemini through a new billion-dollar per year, multi-year deal, while Apple's Foundation Model Cloud Pro runs on NVIDIA GPUs inside Google Cloud. The announcement marks Tim Cook's last WWDC as CEO before John Ternus takes over on September 1. Apple isn't building its own AI cluster or competing on CapEx. They’re betting that by owning the consumption layer, backed by access to health data and private messaging through iMessage, Apple will have a moat that compute spending can't replicate. (The Decode)
2. Apollo and Blackstone Close the Largest Private Credit Deal Ever Backing Anthropic's Capacity Expansion: A $35 billion deal, the largest private credit transaction on record, will fund Google TPU capacity tied to Anthropic's compute needs, with Broadcom backstopping senior debt tranches and Google backstopping lease payments. The structure treats compute as a lendable asset class and signals more than 20 gigawatts of demand still being built out through 2028. Circular financing among chipmakers, cloud providers, and AI labs has moved from a controversial practice to standard practice. (The Decode)
3. Intel's Foundry Wins Packaging Work on Google's TPUs, Not a Full Fab Deal: Reports that Intel landed a deal tied to Google and NVIDIA reframe what's actually being handed off. Intel gets the packaging work on over 3 million TPUs, the compute die stays with TSMC, and the I/O die is being negotiated with Samsung at 2nm. INTC rose 12% Monday. The deal represents a low-risk path for Intel to augment, not replace, TSMC, while raising questions about anti-competitive dynamics in the foundry market. (The Decode)
4. SpaceX Becomes an AI Infrastructure Company With a $1.77 Trillion IPO: SpaceX's IPO priced amid oversubscribed demand, with its valuation now reflecting not just Starlink connectivity and launch dominance but a newly material AI business, including AI1 orbital data center tests planned for late 2027 and a $920 million per month Google compute contract running through 2029. A sum-of-the-parts breakdown of the connectivity, launch, and AI segments lands well short of the trading price, with the gap largely explained by confidence in Elon Musk's track record of execution. (The Decode)
5. Anthropic Launches Claude Fable 5 and Mythos 5 Across Every Major Cloud: Anthropic shipped Claude Fable 5 and Mythos 5 with same-day availability across Snowflake, AWS Bedrock, Vertex AI, and Microsoft Foundry, pricing at $10 and $50 per million tokens. The hyperscaler-neutral distribution strategy lands ahead of Anthropic's anticipated IPO. The models represent a real step up in research capability over Opus 4.8, but they come with a significant change. Users no longer have the option to opt out of data sharing with Anthropic, a shift some enterprises, including Microsoft, are already responding to. (The Decode)
6. Is SpaceX a Once-in-a-Generation Entry or the Top of the Market? One side argues SpaceX represents a generational opportunity on par with early Amazon or Netflix, with interplanetary travel and off-world resource extraction as the long-term payoff that justifies looking past current valuation math. The other side argues this is peak euphoria: a company trading at roughly 95 times sales, propped up in part by circular investment from Google into both SpaceX and its AI segment, with a steep drawdown likely before any sustained climb. (The Flip)
7. The Chip and Security Trade Reverses From Broken to Bifurcated: The semiconductor sector posted its biggest single-day gain since 2020, with the SOX up 5% on Monday, June 8, as a prior selloff in names like Broadcom, CrowdStrike, and Palo Alto Networks fully reversed. Intel rose 12%, Marvell 10%, and Corning 7%. The rebound reframes the AI trade narrative from a broad breakdown to a split between winners and laggards within the same sector. (Bulls & Bears)
8. Oracle Posts a Record Quarter, But the Market Focuses on a $50 Billion Funding Plan: Oracle delivered record revenue of $19.2 billion, up 21 %, with EPS of $2.11, beating estimates of $1.89. IaaS grew 93 %, the fastest pace among hyperscalers, and RPO hit $638 billion, up $85 billion quarter over quarter, including $75 billion in AI contracts. FY27 guidance of $90 billion was maintained, and EPS guidance was raised, yet the stock fell 5% after hours amid concerns about Oracle's capital spending plans. Oracle's AI cloud backlog now exceeds those of AWS, Google, and Microsoft, built heavily on commitments from Anthropic and OpenAI. (Bulls & Bears)
9. Micron's Profit Trajectory Puts It in Google's Earnings Tier: Micron is projected to generate nearly as much profit in 2027 as Google, with Q2 revenue of $23.86 billion, up 22 % and beating estimates, and Q3 guidance of $33.5 billion in revenue, $19.15 EPS, and 81 % gross margin. The stock is up 776%, with Wall Street firms, including UBS, raising price targets. The open question is whether memory has broken its historically cyclical pattern given sustained AI demand. (Bulls & Bears)
10. Adobe Beats Across the Board, But the Stock Drops on CEO Departure and Freemium Pivot: Adobe posted record revenue of $6.62 billion, up 13 % and beating consensus of $6.45 billion, with non-GAAP EPS of $5.96, topping estimates of $5.81. AI first ARR tripled year over year to over $500 million, with total ARR reaching $27.1 billion, and FY26 guidance was raised. The stock still fell 5.5 % after hours, driven by the CFO's departure to Marvell and market concern over a strategic shift toward freemium pricing that delays near-term profitability. (Bulls & Bears)

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PATRICK MOORHEAD:

We absolutely know what we're talking about. Welcome back to Six Five Pod. We are episode 308. Daniel, I caught you staring at those guns. Boom, boom, boom. Great morning.

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DANIEL NEWMAN: 

I still can't believe how fat I was in all those preamble pictures, man. It's just like, I watch that intro every day and I'm like, God, I've been on TV a thousand times as not a fat ass. I think we need to update that intro. It didn't bother me for a long time, but it's like, God, I really had a perch going, man. It was a sad, my 30s were sad.

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PATRICK MOORHEAD: 

I don't know, man. You look good to me.

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DANIEL NEWMAN:

 But then again, we are both, we're both kind of pigs at the time.

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PATRICK MOORHEAD: 

So that was the ultimate fat pig. So I made a full term, but no, it is a great morning. Uh, hit a kind of modified legs and arms, right? Going out to the lake house this weekend and just getting ready for the pump. And I'm going to shame all of the other twenties, 20 something men out there. When I take off the shirt, get on the boat or the jet ski, I'm off. It's kind of the big reveal, Dan, because I really had it.

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DANIEL NEWMAN: 

The abandoned lake house, the abandoned.

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PATRICK MOORHEAD:

By the way, we almost sold it. But a deal fell through. And now everybody wants to use it because they know if we don't use it, we're gonna sell. I mean, you know, it's hard to just have one home, Daniel, right? Just, you know, what are you gonna do?

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DANIEL NEWMAN: 

What do you have like five, eight? Amazing idea to have like, you know, many, many homes when you barely have time to be in any of them.

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PATRICK MOORHEAD: 

It's like what I did is I went a little nuts during the pandemic. And first of all, I was going to move out of my condo downtown here and decided, hey, I'm going to I'm going to just add stuff. So, you know, I literally bought I'm not going to say, OK, honey, I bought four during the pandemic. and four properties, but we use them all. But we're contemplating selling them all and consolidating because I don't like cash that goes out the door. But listen, We have a great show for you today. But before that, I want to remind you, the 6.5 is going to be at HPE Discover next week in Las Vegas, and also InfoComm 13th to the 19th. InfoComm. Whoa. Yeah, man. Infocom got a analyst of ours. I'm pretty sure you've got an analyst to go in there. Mel Melody brew will be shooting some, uh, shooting some videos last from the past.

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DANIEL NEWMAN: 

Yeah. Um, by the way, you're, you're, you're that shirt has some serious halo vibes, man. I am tripping looking at that thing.

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PATRICK MOORHEAD: Are you sure you just didn't do some shrooms this morning or something?

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DANIEL NEWMAN: I think you got one of those. You're wearing that, you know, that tight patterns with the high-res camera. I think I'm, I think I'm, I might be tripping. I will be pretty soon. Stay good, my man.

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PATRICK MOORHEAD: 

Hey, we have a show for you. We're going to talk about WWDC and what Apple's doing and AI. Google infrastructure investments, $35 billion with Blackstone, Apollo and Broadcom. We're gonna be talking about Intel, supposedly for the third time, winning Google and maybe a little bit of Nvidia. We're gonna talk about SpaceX. We're gonna talk about SpaceX twice. We're gonna talk about- As we're recording.

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DANIEL NEWMAN: 

As we're recording, it looks like the first trade will go.

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PATRICK MOORHEAD: 

There we go. I'm gonna see if I got my allotment. in there. I got Morgan Stanley pulled me in and I laid some cash out there. I've been seeing some really funny ones where somebody got allotted one share.

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DANIEL NEWMAN: 

I saw that too.

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DANIEL NEWMAN: 

Well, it was supposed to be huge. It was like, I don't know. I got so many calls the week before. And is this the swan song for Cook? And does he have to get AI right at WWDC? Is this the last chance for Apple? What role will Tarnas play in this event? Turns out, none. Yeah, it was an interesting one, Pat. I mean, I got to say, this was another one where I think the buildup was a lot bigger than the event itself. I think everyone knows the one item that was really important was that Apple creates the perception that it is going to make Siri the consumption operating experience layer for AI. So Apple's already seeded that it's not going to go big on CapEx. It is not going to build a cloud. It is not going to build a massive AI cluster and its own services. It's going to partner there. But Siri, in the consumption layer of AI, does happen on Apple devices. It's on your phone. It's on your iPad. It's on your Mac. I mean, obviously, PCs as well. But with the number of users of Apple devices, Apple's been able to basically stay out of the spending spree and still participate in AI by basically having the layer where people use AI. That's the story. So Siri has always My phone just woke up, so at least I know it's listening. Yes. You guys always had the opportunity to be the layer where instead of us opening the phone and going to an app, we could talk to our phone and have that contextual semantic layer. But the problem is, is it sucks. It doesn't work. There's like nothing. I mean, unless you want like a weather report or maybe like, you know, tell me the price of SpaceX stock when it opens up, maybe it would do that. By the way, maybe. And so, so basically the question is, is can they rebuild it ground up? I mean, and so they are apparently going to launch Siri AI. It's going to be powered by Gemini. There's a new billion dollar a year, multi-year deal. It's got Apple's AFM, which is, I believe, their Apple foundational model in the cloud. So they are trying to build these foundational, what do you call them, specialized models that live in the Apple private data secure world that are going to run alongside. But as a whole, Pat, And they sort of had a little makeup in some way, they're going to be using NVIDIA in this whole thing, because basically through their Google Cloud partnership. But like, as a whole, I just, I mean, to me, it's like, I don't know, nothing was super exciting. And everything's going to be proof is in the pudding. Meaning, I do think because Apple has the captive users, the captive developers, and that if Siri works well, I think they'll get users. I do think it'll actually be okay for them. But I just think that after Apple intelligence flop, after like multiple Siri flops, that I just don't know if the market believes it. And so I think my read here is some interesting ideas, nothing that really blew my mind, probably smart to be partnering with Google. But unfortunately, all the proof is going to be in the pudding, meaning what happens next? Does Siri actually improve? Do developers build things for Siri to improve and change the way people interact with AI? Because Apple's shot of being relevant in AI is all about people continuing to use their platform and their device and being that experienced player instead of having to go to six or seven different AI apps on your device.

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PATRICK MOORHEAD: 

Yeah, it's interesting. So big picture dialing out Apple, I think has, you know, two modes. I think the first one is iMessage that for at least the West is the de facto messaging standard. The rest of the world, they use things like WhatsApp and the Chinese, you know, use stuff like Weibo and things like that. That that is a mode. Another mode is Apple Health. And the other mode is These phones are good enough. I really don't want to put the work into moving all of my data and apps over, even though both Android ecosystem and Apple have tools to do that pretty easily. And fundamentally, I think what we've seen is the AI should be driven by the outcome that it provides. And the best outcomes have the best data. And that's one thing that I would say is Apple's moat. A new one here in the age of agents is it's AI and the type of AI. Right. I mean, if you look at, you know, what what we you know, the grand truth and how we really feel. I think can be looked at over iMessage, right? Like stuff that's in there, like every model and every service has access to your email and your calendar and through APIs and MCP, pretty much everything else. But Apple has access to your health. and has access to your deepest, darkest communications. It really, really knows you. And I think whether they're using Google's distilled model, and it was funny, Daniel, they never used the word distilled on stage. But the way that they described it is that these models were distilled. So I think Apple is going to do well. I think the early influencers who have access and who are putting the work in looks positive, right? But we will see, it's funny, even if Apple crushes it on this, is it going to make their company more valuable? I mean, right now they're almost as valuable as NVIDIA. Like, does that feel right to anybody? You know, NVIDIA's got, I think, a 600, a slight $600 billion advantage in terms of market cap, 4.9 versus 4.3, I believe. But it just doesn't seem right at this point. But then again, Apple's really being viewed on consistent cash flow and terminal value.

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DANIEL NEWMAN: 

Definitely not burning. It's got all the optionality, dividends, free cash.

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PATRICK MOORHEAD: 

Yeah.

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DANIEL NEWMAN: 

NVIDIA still does too, because they're not, you know, NVIDIA is probably the one that's more interesting to me that it's being treated that way. Because like, you know, I can understand the hyperscalers, all the free cash flow, but anyways. Yeah.

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PATRICK MOORHEAD: 

By the way, I do see, I do, I do, you know, you brought up the NVIDIA thing, but so the spat between NVIDIA and Apple goes back, I think 10 to 15 years where there were some graphics cards that broke. And, you know, Apple wanted full payment for it. And NVIDIA said, no, we can't do that. It'll destroy our company. Apple ate it. And then there was just a grudge match that went on. And I do think it's interesting. It shows the value of NVIDIA in the ecosystem that they finally just punted. I do believe there's an ASIC on the roadmap being delivered, you know, back end by Broadcom, maybe even help on the front end of it. It's probably a giant, giant NPU based. I wouldn't be surprised to similar technology that will allow Apple to, you know, lower the cost. But I think that Apple's gonna be fine. Even if it sucks, it's gonna make no difference to, I know it's not all about the stock price, but sometimes that's the only, one of the only value that you can measure, I guess, next to market share.

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DANIEL NEWMAN: 

Sentiment follows price. Yeah, for sure.

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PATRICK MOORHEAD: 

Yeah. All right, enough of this. Enough of this client computing garbage. Let me talk a little bit about the cloud. It does, I'm just kidding on the garbage, by the way. I love, each new.

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DANIEL NEWMAN: 

You're basically a PC guy and a device guy.

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PATRICK MOORHEAD: 

That's actually Anshul. So I've given that given that to him. But I'm very much I'm an age, I'm whatever is hot guy. Okay. That's the way I explain it to one of my clients. They're like, what do you do? Right? What do you actually advise on? I'm like, well, pretty much everything and anything that's hot. Hey, let's go into the second topic here. Enough, uh, bloviating, you know, I think we're 14 minutes in and we're, um, you know, we, we, we checked off the first time, maybe not 14 when the show started, but we've been, bloviating up front. Second, OK, I think we touched on this during one of our six fives. Maybe we didn't, but I think I remember this. We hit it maybe in an earnings piece, but thirty five billion dollar Apollo and Blackstone deal, the largest private credit transaction. What are they going to buy? Google TPUs for Broadcom. The interesting thing is you've got Broadcom backstopping the senior debt and Google backstopping the leases. So to put this in normal terms, this is essentially a Google TPU neocloud. Right that they're going to create here instead of invidia putting up the money it's it's broadcom putting up or at least at least the backstop and capitals coming from apollo and blackstone so. Interesting stuff here. And I think first of all, a couple changes here. Capital stack treats compute as a lendable asset class right now. And I think that is very, very interesting here. You know, we used to call it blasphemy or what's the word circular financing. Well, it's kind of mainstream now when you've got Apollo and Blackstone coming into this. So circular financing goes mainstream. I also thought the, you know, that this is not the full Broadcom 20 gigawatt AI platform. Hawk on his last earning call essentially said that this XPV platform with Palo and Blackstone and the other investors is targeting more than 20 gigawatts to compute through 28. And I guess the final note is this, Daniel, I'll just, I'm going to say it before you say it, the insatiable demand for compute rears its head, and this time a $35 billion deal.

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DANIEL NEWMAN: 

I don't have a lot to add here. I mean, this is all very creative ways to give Anthropic more compute, Google's TPUs to spread their wings and move beyond pure use for Google and Google Cloud. It expands Broadcom's scale of the TPU business. It just, you know, I mean, Look, it's investable so long as the last leg figures out how to make money from all this stuff. I mean, that's the investability of this. The maths, nobody really wants to do them, but the 50 billion per gigawatt in, and it's the 10 to 30 billion per gigawatt out of usable, consumable tokens per year. So if you spend 50, and it's three, four, five, six years of useful life, and you can generate 10 to 30, you can start to do the simple math of what the tokenomics look like. So I think as we're starting to figure it out, that's that's what's happening here. So if you can spend 50 and make 80 or 90, that's a good investment. And people are looking at it that way, except for those dummies. the dummies, the bubble bears, the ones that don't think any… I still don't know what their thesis is anymore. Are they going to put it back in the bottle or are we just going to go back on infinite intelligence? I mean, the only thing I can figure out is that math thing is like tokens become so cheap. that you can't generate enough revenue out of the compute. But I think what we're seeing now is this new exponential curve being created of layered intelligence. You got the highest intelligence, we can call them ethos or whatever next comes from open AI. I think token costs for the absolute frontier level of compute will continue to rise. I think that's going to get more expensive. But I think you're going to say like for this basic everyday task that someone that wants to know where their subways sandwiches are from DoorDash, they're not going to need to use meet those for that. They're going to use Sonnet or, you know, or plan or, you know, so anyway, we don't need to dig into that now. But this is all economics here. This is business.

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PATRICK MOORHEAD: 

All right, that says it all. It's just business here. I heard some people comparing this to the railroad build out in the way these financing deals and I think the railroad thing worked out pretty well for the West.

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DANIEL NEWMAN: 

I like trains better overseas. I think they've done better. Yeah.

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PATRICK MOORHEAD: 

Well, I mean, we built our high highway system and had a ton of oil. So we chose, we chose individuality or we're getting shoved into a cattle car.

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DANIEL NEWMAN: 

So, yeah, I like that. I like that. I don't, I don't ride a lot of public transit.

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PATRICK MOORHEAD: 

You don't?

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DANIEL NEWMAN: 

I don't. All right. Well, my boonie dude, there's nothing available where I live. So, you know, and like when I go to New York, people are getting stabbed in Penn station. So no, no, thank you. I will. I will go ahead and take an Uber.

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PATRICK MOORHEAD: 

I know you're always flying your plane from your house that has a runway to come pick me up.

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DANIEL NEWMAN: 

I have a chopper spot that takes me to the runway. Come on, man.

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PATRICK MOORHEAD: 

No, I got you. No, it's a good place. You're right up top of that big Hill. Dan's, by the way, Dan's, uh, Dan's pad is sweet. It really is. He looks down upon all these, uh, $20 million homes. Like he's like, he's the Lord lording over his subjects. I look up to them, not down, just to be clear, but you are physically looking down like you're let's just, okay. Can we agree you're at the very top of the hill?

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DANIEL NEWMAN: 

I'm at the, I've climbed the hill and now the crabs in the bucket are trying to drag me down.

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PATRICK MOORHEAD: 

I mean, the biggest decision you need to make is like, am I going to drive the McLaren, the Ferrari or the Lambo? Right.

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DANIEL NEWMAN: 

Yeah. Now we're just making stuff up.

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PATRICK MOORHEAD: 

All right. Let's uh, all right, let's go to the next topic. You outed me on the number of homes I have.

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DANIEL NEWMAN: 

You outed yourself. I just sort of dug into it.

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PATRICK MOORHEAD: 

All right. Okay. That's fair. Let's jump into the next topic. Intel foundry, the information as reported that Intel has a deal with Google and Nvidia. Hey, is this just a retread Daniel of news or is there anything else here?

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DANIEL NEWMAN: 

Yeah, I don't think this one requires tons and tons of time. First of all, the source is one I don't tend to take super seriously. The other is your Pat's law of everyone's talking to everybody is actually only seeing it's proliferating more and more these days, right? Um, you know, whether it's memory, whether it's die, whether it's, uh, IO, whether it's back end front end, all these things like we're basically, everyone's trying to figure out what's available and where they can get some. Um, Intel has done well with packaging for a while, and I think it was understood there was a number of packaging deals that Intel had won. I think. this one has been circulated a number of times. It was also sort of a little bit of a pushback, right? Because I think a few of the banks came out afterwards and said, yes and no, right? Like, yeah, there's something happening here, but it's not Intel making TPUs. It's Intel getting the packaging part of the deal. And I believe Samsung is getting Iodi and then TSMC obviously still very much involved. But I think right now this is just, there's just not enough capacity. I mean, the insatiable demand for AI is creating limited amount of capacity to build enough chips. So if Intel has packaging with eMed that it can offer and they can get Samsung to do IO and they can get TSMC on logic, the bottom line is we're going to see this until everything hits 100 percent sold. Yeah, um, I just I just don't know what what what these stories and you know Because you and I are intel bulls. Although I think some guy tried to come out and say you're not a bull I was reading this and i'm like I was thinking about replying and I looked i'm like This isn't people with a lot of followers. I just don't want to get into the mud here and start creating but like We've both been very bullish, just to be clear and on the record. But there is a certain amount right now where you look at the success of second, third, fourth players, and you have to look and say, is the success due to operational excellence, product, and performance? Or is the success due to the fact that right now everybody's trying to find a way to make what they're selling? And I still think right now it is more the latter than the first. It doesn't mean that this isn't going to be the opportunity that defines pivot to excellence. Again, we're still very early with 18a and 14a, and we just don't have enough market proof yet that Intel packaging would be completely at parity or superior in any way to what TSMC is offering. But having said that, I think it's going to be a moment, and I think Intel is going to get deals like this and more deals like this until it absolutely reaches and sells out everything it can make.

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PATRICK MOORHEAD: 

Yeah, those are good comments here. So first off, the whole rumor of Intel doing packaging for Google and NVIDIA is old news. I asked Codex how many times the press had reported on this before. It came up with six.

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PATRICK MOORHEAD: 

Pretty good.

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PATRICK MOORHEAD: 

You and I were both quoted in the Wired article about that. Sharon wrote that one. And anyway, so that's old news. And the other discussion, I appreciate you bringing that in, is this whole idea of the base IO die. So in a distributed architecture, like in a non-monolithic package, non-monolithic design, you have to have something that connects the different chiplets together. on the package. And essentially, that's an IO die. And the IO die can be N minus one, N minus two. In fact, even global foundries used to do the IO die for AMD when it came out with some of its first disaggregated design. So yeah, I mean, what you're seeing is the low low risk paths to not replacing TSMC, but augmenting them. And if you're going to do low risk, do the packaging, do the IO die. When you get into actually doing the wafer, that requires a completely different cell design that has to be closely and tightly coupled with the process that the foundry provides. So Uh, the Google and Nvidia thing was a complete nothing burger. I really tried to find something new. The only like you put a gun to my head and said, Hey, what was different? It was, they used the word order. Intel has an order, but I'm pretty sure that Lipu on, on his last earnings call had to explain why he was making bigger investments in packaging. It's because they have an order anyways. Um, well, he did tell us that I think it was, I think it was at that Cisco.

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DANIEL NEWMAN: 

Hey, I summit, he said, watch our, basically he said, watch the CapEx. He said, we're not going to come out and tell you about our 14 day orders. What you're going to do is you're going to see, it's going to show up if we're spending more, it means there's, there's, there's deals.

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PATRICK MOORHEAD: 

That's exactly, that's exactly right. So, hey, let's move to pretty much what could be the most exciting IPO of, I don't know, the decade, the year.

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DANIEL NEWMAN: 

Every IPO combined for like five years or something.

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PATRICK MOORHEAD: 

Yeah. So I do a little victory lap on here. I don't know what your answer was on the street, but she asked me, what do you think this is going to go out at? And, you know, I really thought through this, like they were trying to get 175, right. But then, then it's solidified at 135, but that doesn't mean that doesn't mean anything until the final price gets set. It ended up being a 135. So anyways, is 175. Yeah.

DANIEL NEWMAN: 

The indicative opening right now is going to be 175.

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PATRICK MOORHEAD: 

Yeah. Oh, interesting. Yeah. The question I was answering is what that first… Yeah.

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DANIEL NEWMAN: 

What's the price set at? What's the price set at? I just mean like that oversubscribed demand. you know, is actually leading to a, what looks like, you know, a big uptick on the open. And it could be, by the way, before we're even done recording here, not for you listeners, we're not live, but before we're done recording here, the first trade could take place. Could, yeah.

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PATRICK MOORHEAD: 

I just keep trying to see if my E-Trade allotment went through.

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DANIEL NEWMAN: 

Did you get your one, Eric? Did you get your one?

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PATRICK MOORHEAD: 

Yeah, you know, I think I think I went for not 1000 shares, but I think 800 shares I did a bit on. But if I get, you know, 10 shares will be happy, but I'm annoyed that I haven't seen anything back from my broker. By the way, E-Trade is owned by Morgan Stanley and they did a lot of the underwriting for this. So what kind of business is this, right? I mean, essentially you're looking for orbital data centers. you're looking for disintermediation of Telco. And I watched the video this morning, the live feed from SpaceX headquarters with Elon. And I got to tell you, man, I was freaking stoked. I was proud to be an American and just, just, I can't believe we do this stuff. And talking about interplanetary travel now, I don't know if interplanetary travel actually, you know, kind of translates into market cap or something like that. But SpaceX doesn't have very big revenue, but they just had a huge pop like Google's basically a billion dollar a month compute contract. is pretty crazy and even Anthropic came in and put some money on the table as well. It is interesting, you're looking at 95X sales to price ratio that just seems, I don't know, I don't know why people are afraid to even talk about this on X. I saw some folks saying, I can't say anything about this. And I don't quite even understand, like, are they going to be punished by somebody or like, what do you think that is, Daniel? I don't know.

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DANIEL NEWMAN: 

I don't know what I will, what I, what I, are you done?

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PATRICK MOORHEAD: 

I'm done.

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DANIEL NEWMAN: 

What I would say is one, this is one of the most exciting transformative companies that you or I will probably see in our lifetimes, bringing together satellite connectivity, bringing together space. actually sending rockets to space, reusable rockets to space. And then this AI story, which I think people are still trying to sort of decide what to make of it. I had a little TV appearance yesterday. I was with Brian Sullivan on CNBC, and we talked, and he and I did some real-time numbers together. So I had my equities team put together kind of like a what, how the business is valuated, and then what's the founder effect of Elon. And so we looked at the connectivity business, 13 billion run rate, but about 8.3 in profit. So much more profitable than Tesla, for instance, 50% growth. We looked at if we put a 35 times even a multiple on it, that business is worth a little less than 300 billion. Then we looked at launch, the launch business, 4.1 billion in business. It's only growing 8% though. This is a small, specialized, unique and incredible business. And, but, you know, we basically gave it a 30 times sales because they have 85% of the market. And we're basically saying, let's give it like the biggest premium we could kind of justify, rationalize. And then we, looked at AI. And then AI now, again, this only changed, by the way, in the last week. I mean, it was actually a huge loss maker with almost no revenue. Now it's a $26 billion annualized business. We gave it eight times sales on the contracted revenue and came up with $210 billion. So anyway, the bottom line is this math out to like 600. If we were a little more generous, we could maybe get to 800. But then we basically put a three X multiple on a lawn and he's proved it over the years that Tesla has been able to maintain evaluation far above its its contemporaries across. the Mag 7, like by order of magnitude, three to five times. So the market valuates his founder, it's Elon, he knows how to sell the future. Even when the business from a, there is no fundamental way to measure this and say this is worth what it's trading at. But because of the things it does, bringing all this together and then putting Elon on top of it, it's justifiable and the market will prove it. I will give one last point though. I genuinely believe this thing will fall to closer to a trillion in market cap before it will ultimately rise back to five. I just don't see a situation in which there's not some exit liquidity here, where there's not a lot of investors that have 100x or 1,000x their investments here that are going to say, you know what, great company. I'm going to take some gains here. I'm going to let it fall back down. And they'll probably invest again, because again, he will get there. It's not like this is one where I can say, I'm not criticizing the business. I love the business, but I think you can love a business and actually still admit that it might be a little bit overpriced.

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PATRICK MOORHEAD: 

Sure. I mean, look at GameStop, right?

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DANIEL NEWMAN: 

I don't love that business, but yes.

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PATRICK MOORHEAD: 

Oh, well, some people do.

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DANIEL NEWMAN: 

But I've even, I mean, I've even said that now about Intel and people give me shit about it, but I was like, look, when Intel was trading under book value, it was an obviously amazing buy. Now it's trading at five times the multiple of Nvidia and you're going, great, it's a great company with a great future, but it might need some time to grow into those numbers. Like it's okay that it might not immediately stay at 100 to 120 times, even infinitely. So I don't know, it's, people are weird that they get so worked up about that.

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PATRICK MOORHEAD: 

Yeah, I mean, I always keep my investment strategy pretty clear, which is by the top, low by the top, you know. Anyways, hey, let's move forward here. Anthropic brings out a new model, the mythical fabled Fable five, Daniel.

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DANIEL NEWMAN: 

Yeah, you did. I read your story like it was nothing but like crap for you. You and Anthropic have a weird thing going because like everything you try to do with Anthropic seems to not work.

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PATRICK MOORHEAD: Listen, a lot of it does work, but of course I'm not going to talk about any of that. I'm just going to talk about the shit that doesn't work, but it's like Apple.

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DANIEL NEWMAN: 

You're the get off my lawn guy. You know, Pat's the get off my lawn guy.

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PATRICK MOORHEAD: 

Well, it's more like I give you a lot of money and I'm very personally like, I know it like the back of my hand. It's why it's like me being hard on Apple. Right. And when they did the rug pull Daniel, uh, on, on me where they said they weren't nerfing it, my own son, who's a fricking developer at, at Nvidia and, and codes the crap out of everything told me it's not nerfed. It's, it's, you know, the CLI isn't, uh, Um, yeah, I kind of got pissed off when they came out later and said, we nerfed this thing and, and then moved it forward. And then they tried to put a price, you know, a secret price move in there that they ended up pulling back. And anyways, I know you're reading on this topic, a little spicy about that.

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DANIEL NEWMAN: 

I know, sometimes I know you think my feed's annoying, that I'm in your feed all the time, but I see your stuff too. The moral is, is like, this thing is really good and really powerful. I put it to work on some knowledge work. I have been very impressed. I think when you sort of step back and you look at for 200 or even a thousand a month, the level of productivity and intelligence we're getting, I think it's incredible. I mean, I think all of these things are pretty incredible. What I will say is there is a sort of a human problem of how we put all this intelligence to work to create more value. And now what's obviously been the step up basis of expectations as all these things have become table stakes. Right. Like, you know, I'm you know, what used to be a. four hour day for someone to create you a PowerPoint deck is now like two minutes. And what I'm saying is at some point we would have paid someone like 1000 bucks to create this deck for us. And now we're like, I'm pissed because it didn't do it perfectly on the first try. It's a it's a weird phenomenon. But like, But overall, I mean, I will still say, I know you're, you know, because again, I think there's a lot of good stuff out there about the model and the pricing, and it's going to be more expensive. It's going to be limited in access. They're going to make a tier for this. You know, there's a lot going on with token pricing. There's some things going on. I just want to say this about Anthropic, because I really do admire the quality of the stuff they've built. But this company, I think Saks is absolutely right on. Like this company has used regulatory capture and fear to create this unbelievable market cap and I shared something about this earlier in the week as I said basically every time Dario comes out and has this here's our new thing it's going to disrupt everything in data everything in SAS everything in security market cap. from the public markets moves to the private market valuations of his company. It has absolutely been to his benefit to play this game in the public about you know about AI and all the dangerous aspects of it to look like he's and it's a perfect way for him sort of an You know, I mean, he doesn't look scary. He looks like he's like your nerdy neighbor to come out and act like he's just a good guy that's helping society. But in the process, he's been like he's like the polar opposite, smart, diabolical versus where Sam has just been so egregiously diabolical that the market doesn't like it. So awesome model. You know, again, there's enough out there. I recommend you play with it between now and June 22nd. if you're a max user because they're making it usable, and then you're going to start paying. But I really do think what's happening now is intelligence is scaling up exponentially, and we're going to have to start paying some real prices for tokens. This is where we're going to start to find out what the real elasticity and demand curve looks like for the highest end and leading edge frontier models. But so far, everything I've asked it to do, I feel has been a step up basis from Opus 4.8.

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PATRICK MOORHEAD: 

Yeah, I do think it's really good at research. And I will put it that. And aside from having some tool call issues that I had, I really like it. And you know what? If it had a 1.5x perf option like Codex does, I'd be using that. I moved every one of my major things over to Codex. But when it comes to research, man, it's just like, It's untouchable. You want to do spreadsheets and financial analysis. I prefer codex on that, but it's pretty good. You know, I think that the signals, first of all, this was supposed to be the AGI model. It is not AGI at all. Okay. And I haven't even heard from even developers that say this was a, this is an absolute step up. rock and step up versus 4.8. So I would give a wah-wah about this whole thing. And even some of the biggest investors from A16Z who were saying, I've seen AGI, right? Kind of pumping this next model going in. One thing, Daniel, that you didn't cover that I think is very important is the data um yeah rules around it essentially uh with all previous models you had the option to not share data with um with anthropic you are forced to share your data with anthropic and i don't know if this is going to be on a permanent basis or it requires this to do better management of, oh, you're doing searches or you're building things you shouldn't do? Because it was always blocking certain types of queries that were truly dangerous. But does this pertain to a different type of segmentation of models? What I know for certain, because They already said is you're not going to be able to get, you know, for $200 a month, which is the package that I'm on. I also got, I also have a CLI per token. as well, you won't be able to get this in your $200 a month package. So there will be a supersizing of that. And I think the token cost for CLI is evident of that. So yeah, the data thing is very difficult. And even companies like Microsoft said, we're not going to be using this inside. And that's not because Microsoft doesn't support Anthropic, they do. It's basically that they don't want Entropiq to have proprietary information that could bite them down there.

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DANIEL NEWMAN: 

So good discussion there. By the way, per million input slash output tokens. What I will say is that's still a lot cheaper than perplexity. Was it like 200 bucks for like 20,000 tokens?

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PATRICK MOORHEAD: 

It depends on who you pick. If you're picking the highest end tier, yes. The good thing is that if you want to use a less expensive model, any model from anybody, you can use it. Daniel, let's move into the flip. What are we debating today? What are we debating today? We are debating SpaceX. Is it a once in a generation entry or a 1999 internet bust where it's at the absolute top? Let's flip the coin. Oh, imagine that. I got this a once in a generation opportunity. Me and my one share here completely supports that. So let's dive in here. So first of all, I even said this on the street, this is a once in a decade opportunity here. And, you know, the entry point is important, but it's really about what is going to happen from here. If you, you know, we had talked a little bit about our earlier segments where Futurum Equities had kind of modeled out, you know, what the company just based on terminal cash flows would be. And then you talked about having the Elon effect. Uh, there being a three acts, I buy into that wholeheartedly. Look at that. I didn't have to do the work. I just copied what you said, Daniel. Let's see how you can talk your way. You better go ahead. Yeah, no, but if you look at the different, like, how do you value interplanetary travel? Like, like, how do you do that? I was watching CNBC today, and there were discussions around it. And they weren't immensely creative. But you know, it's travel. I think the conversation was, you're gonna go and you go to the moon, you're gonna take a selfie. Right. But it's going to be travel. It's going to be essentially exploration. You know, instead of spending 20 grand to go to the Amalfi Coast or something, you're going to hop on a rocket. You're going to you're going to hit the moon. And then there's going to be this industry which is going from the moon. to other planets and monetizing this. There will be mining, will be a business. And then you've got, okay, I know that's kind of far out there, but that's really where Elon's head is. And this morning when he was talking about, you know, how he was proud about this, he didn't talk about the internet connectivity, right, with Starlink, which by the way, I've got three subscriptions to that. He didn't talk about XAI, he didn't talk about models, he didn't talk about being a neocloud. He just talked about interplanetary travel, so we need to take that very seriously. Um, so, um, anyways, the, I think the 1999 parallel cuts both ways. Right. I mean, we, we had a lot of investment in dark fiber, uh, in carriers, essentially, uh, setting up the, uh, the railroad or the highways for, for the future. So, yeah, there was a bust. Uh, there was a boom. Uh, but in the end, if you look at the companies that were born in this age, I mean, companies like Amazon. companies like Netflix. And I know Apple wasn't born, was born earlier, but they really got their groove on during this internet generation with the iMac. In fact, it was the product that brought them back. So anyways, that's kind of my long-term thesis. on here. So that's my case. This is a generational opportunity and an amazing, amazing investment.

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DANIEL NEWMAN: 

Yeah, I mean, no doubt we've we've absolutely found the top. This is the this is the blow the top off moment. Probably no way we don't go down from here. 95 times sales, you know, unprofitable company, you know, and then you look at not just this, you're gonna have another trillion dollar open AI, unprofitable. Anthropic trillion dollars, unprofitable. Liquidity is not infinite. So what happens is, you know, this liquidity is going to be great exit liquidity for all these early investors that are going to get 2, 4, 10, what did they say, 4,000 newly minted millionaires today from SpaceX? You'd be happier for it. Love capitalism. But they're not at fault for this valuation. They just did the work. I think 10 new billionaires. I think it's something like 10 or 11 new billionaires. So this is a big moment. Having said that, nothing makes sense. I absolutely, fundamentally cannot make sense of these numbers. We talked about it earlier. You've got a company that if you give them the best valuation for some of the parts, maybe 600, 700, if you try to say, OK, 85% of space launches, By the way, only a handful of billions of dollars. If you look at the Starlink business, you know, basically they're gonna what? It's a race to the bottom of buying out an entire industry of telcos. Now, you're gonna sell service at what premium? I mean, can you actually make enough money on satellite? And then the AI business, it's basically power and shell with some GPUs in it. And you're charging an ultimate premium. And of course, Google, the buyer, had a little bit to gain there as a huge investor in SpaceX. So this was, Talk about rounded circular bullshit This was one of the biggest ones ever to prop this ipo up by putting numbers into xai Which is a massive loser using grok. I'm sure i'm not Anyway, this one to me. I mean look ilan's a great. Uh, a great storyteller and and and in 10 years I think everyone could rationalize it just like his cross-country autonomous drive of the mid-20 teens He got there eventually, and the same thing's going to happen with his orbital data centers. There's so much to figure out there, and we're not even close. He's saying a gigawatt next year. It'll be a gigawatt in a decade. Come on, man. Bottom line here is this thing is blow the top off. Absolute insanity chasing value, exit liquidity for early investors, dumping on retail. I hope that the retailers out there have a five or 10 year patience to get their returns on this investment, because this thing's going to go down before it goes up.

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PATRICK MOORHEAD: 

Man, you are the master of talking out of both sides of your mouth. That was good.

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DANIEL NEWMAN: 

Yeah, thanks. I mean, it is a simulated debate, everybody. So when all the X people get really pissed off, just remember, I could argue the other side even better.

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PATRICK MOORHEAD: 

Yeah, you know, I think this is a good 10-year investment. I really do.

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DANIEL NEWMAN: 

I just think you buy, you know, if it goes down by more, I mean, just buy it and hold it. I mean, Elon knows how to, to create durable forward earnings multiples that exceed a market at a large scale.

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PATRICK MOORHEAD: 

Yeah. I wonder if, if You know, you can't always go on history, but I'm wondering with each success that Elon has, are the odds better that the next one will be a success or worse?

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DANIEL NEWMAN: 

Look, I think there's a lot of demand. People wanna be in these companies. These are like the most transformative companies of our lives. This would be like getting, you know, people are seeing this as like the opportunity to getting in Apple earlier, getting into Google earlier, you know. But all I'm saying is the history of IPOs is, you know, you look at Facebook. I mean, I think it was drawn out 55%, you know. And a lot of IPOs like Robinhood, it was 90% draw down from its top, post IPO before accelerate. So all I'm saying is like people have to have enough rational mind to be able to consider the fact that buying today may or may not be that important. Yeah, there's a very low probability that it will go straight up and never come back to you almost all the market almost always gives a second chance, almost always. And by the way, most of us as investors, I know you and I don't talk about this as much as I do, and my podcast was shy, but you all stand there and you scream, God, I wish NVIDIA didn't go up so fast. And then it's now pulled back for like six months. Like how much did you buy? How much did you buy? Or like when Micron dropped 20% over two days last week, we'll hit on this and bulls and bear, like, did you buy more? Cause it was so cheap and it was gonna only go higher. It's like, I don't know. There's like a mental, disconnect that happens to us that when something starts going down, we cannot remember that just a week ago, we thought it was just, you know, so sad that we didn't buy more at those lower prices.

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PATRICK MOORHEAD: 

That's right. Good stuff, Daniel. Yeah, go into bulls and bears. You spent your entire week in New York City. So let's let's dive in here.

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DANIEL NEWMAN: 

Yeah.

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PATRICK MOORHEAD:

All right, Daniel, you spend entire week in New York pretty much going on every single show.

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DANIEL NEWMAN: 

Every time I hit on other things, buddy, that, that I think you're going to be, you're going to be happier about than that. Okay.

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PATRICK MOORHEAD: 

Do you do other things there? Okay. That's good.

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DANIEL NEWMAN: 

No media media is like the smallest amount of time that I spent there. Okay.

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PATRICK MOORHEAD: 

So yeah, I guess we're gonna call this the week's tape. I mean, man, we had chips dying on Friday and coming back and then selling off got Iran, we've got CPI, we've got clear on the deck for for SpaceX. I mean, Daniel, parse through all of this market madness.

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DANIEL NEWMAN: 

Look, last Friday we had an ugly day and then we had another ugly day earlier this week and we had a couple of big days. We're getting this kind of chaotic volatility that I think is, people are not sure what to attribute it to. So you get an ask, is this the end of the, I'm sure you did. Is this the end of the chip trade or is the AI trade breaking down here? No, it's not. What's going on? I don't know. I mean, we had inflation skyrocketing. We have a, president that's going to bomb the shit out of Iran on one day and then not the other. Literally yesterday I was sitting in the green room at CNBC. The market was falling, falling, falling, falling, falling, falling. I know I'm bragging a little, but while I was sitting in the green room waiting to go on, all of a sudden it went from being up 200 to being up almost a thousand points. I'm sitting there going like, but no news had been announced.

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PATRICK MOORHEAD: 

Yeah.

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PATRICK MOORHEAD: 

Nothing to add. You ripped that. Yeah, we're a little late. We're a little late. We're way, way behind.

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DANIEL NEWMAN: 

Well, I mean, it's just so much good stuff. What's next?

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PATRICK MOORHEAD: 

No, really, let's jump into Oracle. We had a triple beat. We had a beat on revenue, non-GAAP EPS, and they met expectations on FY27. And they even raised FY27 non-GAAP EPS. And of course, the stock crashed. Well, why did the stock crash? It was all about the funding, the additional $20 billion in funding that they were going to go out and get. So this completely makes sense. I mean, the numbers were pretty amazing, right? You had IAS at 93% growth, which they are the smallest, the hyperscalers, but they are at the highest growth. very, very expected. Just kind of like you've got Google Cloud is the number three who is next in line for growth. And, you know, the EPS raise, I think there were some questions about being lower quality than the headlines, right, and include Ampere and Bloom one-timers that were worth you know, 80 cents, 80 cents on the profit line. So the headline was good. The double click wasn't wasn't incorporated nearly as much. But in the end, it all comes down to the story, the $50 billion debt and equity plan, not not 20.

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DANIEL NEWMAN: 

Yeah, look, fascinating. This company has built a AI OCI backlog that's bigger than AWS, Google or Microsoft at this point. I mean, it's just incredible. People weigh heavily on the open AI backlog, but that actually is a common symptom of all their backlogs have some serious anthropic or open AI numbers in them. you know, this is a company that's going to be somewhat rated on their ability to convert margin. They clearly have the early indications that they have been winning on price. So they're making big investments and they're trying to win on, you know, sort of added services that will come later, whereas the other clouds make more money on every dollar that they have. But I think that was a very premeditated approach that they were going to go win share, they're going to go buy market, and then they're going to find ways to add more value and continue to uptick on the margins. People don't like the equity raises. They just, I call it the free cash flow mafia. And yes, they're every bit as bad as the bubble bearers, but like the free cash flow mafia continues to only see the inputs. This is just, it's a weird phenomenon that they cannot understand that these factories are going to create revenue. Or there's just no trust that they're going to create revenue. And of course, when you have companies like the Mag7 that have just created so much cash flow for so long and suddenly they're not, how much do you value their ability to pivot and stay relevant? Because if they did nothing, I think the risk is even higher. But would people reward that? And I guess to some extent, Apple's the proof point that they have continued to reward a company for almost doing nothing for like five years straight. Anyway, that's it.

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PATRICK MOORHEAD: 

Yeah, we attended their analyst day in, in Vegas, or at least I did. And I think people should all go back and look what clay rolled out, right? It was very, you know, there's four classes of investments that they're making. And oh, by the way, here, here's when they need to commit the real money. It's funny. There's real money and building pads and and getting energy and power. But quite frankly, until you put the equipment in there and the NVIDIA GPUs, that's where the real expense is. And you only do that at the very end. So I think the risk is a lot lower. And I explained this in an interview this week. It just comes down to, are you glass half full on AI or glass half empty? And it's kind of a religious conversation at this point. Okay. Hey, let's, uh, let's move to the next micron. You know, you consistently do your victory lap. I told you. So every time we talk about, uh, micron here, so what, what, what's going on?

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DANIEL NEWMAN: 

It was just a, it was just a little bit of a wild hair that I had that I was looking at. And then by the way, like totally viral and not necessarily, um, you know, not necessarily. 100 percent right. All I said was that, you know, it's just crazy that Micron is going to generate like 100 plus billion dollars in profit next year, which makes them puts them in the same category is kind of where Google is, you know, on an earnings basis. And people just loved it. I guess the debate is whether it's cyclical, whether this is lasting. But you've got a company now that's being traded like it's cyclical. And you've got a real question mark with the strategic relationships that Jensen's running around with SK, possibly listing here in the US, the run that memory has had, yet the fact that it's still. So this is just a quick hit. I just think it's just funny that you suddenly have companies that are able to put off this incredible amount of income in this space. And the idea of whether or not it's a cyclical dollar is actually, I think, having to be questioned right now. Like, you know, is there any reason this company can't continue to make these profits for another decade? I don't know. It was just it was a it was a fun thought, but it got like a million views.

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PATRICK MOORHEAD: 

So, yeah, it was crazy.

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DANIEL NEWMAN: 

I'm here to create controversy.

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PATRICK MOORHEAD: 

But I don't understand, though, about Micron and memory in general, is that If the reason that NVIDIA isn't going up is this terminal cash flow and people think that their growth slope as a percentage is declining, why should memory makers keep increasing in value if they're going to get hit with the same thing? Right. Is this is this XPUs or are, you know, NVIDIA's flatline, you know, terminal flatline on revenue growth percentage at the expense of XPUs?

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DANIEL NEWMAN: 

I've come to the conclusion that there's really no sensible way to justify the valuation. You know, if SpaceX is worth two trillion and NVIDIA is worth like 50. Yeah, if you're using the same sort of, you know, maths to try to figure out how to evaluate it. So, you know, markets are not always rational, dude. That's this is exuberance in some ways, even if, you know, we can agree we love these companies.

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PATRICK MOORHEAD: 

Yeah, it's interesting. The big debate. I actually have a finance degree. You might not even recognize that based on the way that I talk on this show, but there's a lot of debate on, you know, are markets rational or not? And I think long term they probably are. But anyways, I think right now we're just debating the short term. All right, let's dive into Adobe here, Dan. I mean, net net, you know, revenue was a beat. Non-GAAP BPS was a beat. ARR was a beat. Revenue raised. Non-GAAP BPS for 26 raised. Q3 Guide beat. And of course, the stock absolutely tanked. Okay, of course. It makes sense. So a couple things going on here. First of all, market got spooked on CEO leaving and going back into semiconductors. That's one. And number two, this idea of leaning into freemium, which means pushing out profitability, even though the numbers looked I mean, that's the story. And I think, Dan, you and I have talked a lot about this ebbs and flows, SaaSpocalypse on, SaaSpocalypse off, right? You've got ServiceNow, Salesforce, and a couple other folks who came kind of booming back. But here we've got a new model. And a new model that comes out and, you know, I saw people vibe coding slack, of course, and it just, you know, the cycle goes, goes on again. So one thing I told in an interview this week, like how long like, Like, well, why didn't you say to look at the SaaS stocks? I said, because the volatility that's going into that is exceptional. And this emotional distance between what the numbers show with what the belief system is on AI replacing on it, that gap is way too big. And it's like, well, why would you like, why would you go and buy that right now? The volatility is just way too volatile at this point. And then the other side of the mouth is like, yeah, pick something less risky, like semiconductors.

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DANIEL NEWMAN: 

Yeah, I mean, look, the, the, the SAS apocalypse is surely not showing up in numbers yet. Yeah, it just isn't now. The Market has proven that this is probably not a trade that you have to be early on, that you could probably wait to see where a bottom takes place. The re-rating, I think, is real, and that there is a distrust that these premium multiples that software has enjoyed will ever fully emerge. I like to kind of call it what Palantir calls its ontology layer. These companies are all going to have to figure out how they do that to make AI more valuable, where it's not self-serve and use, but it's just not showing up in actual adoption and usability. Every enterprise doesn't want to become a software company. They don't want to engineer all their own apps, but they do want to build their own abstractions and AI has made that entirely possible. How you view your data has become much, much different. And then again, all SaaS is not the same. And so Adobe falls into a category that I think people feel might be more replicable with AI, whereas like a Snowflake or a Datadog, these sort of pure data for AI layers feel a lot less replicable. And so there's even going to be a reckoning potentially of the SaaS ecosystem where you're going to start to see it kind of bifurcate across different types of software that right now it's kind of large. It's largely been the baby out with the bathwater, like just everything's bad. But that tends to happen during secular transformative periods of time. So again, this is good results. The CEO, a CFO that you mentioned, went back to went back to Sandy's, went to Marvell. He actually left AMAT at the bottom and joined Adobe at the top. So

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PATRICK MOORHEAD: 

There's a there's an interesting man after my own strategy

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DANIEL NEWMAN: 

And just telling you that did happen. So I know we're kind of at time. I got a meeting going on right now. But dude, good show, man. Good show. Good day. Good week.

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PATRICK MOORHEAD: 

Yeah. Hey, thanks for everybody for coming in. Final shout out to Marvell. Congrats to Matt and Chris out there. So many doubters. They got added. The S&P 500 got a Monday hit of 10 points. And the whole communications plus a little bit of XPU is is make sensor. Hey folks, thanks for tuning in. Have a great week. Hit that subscribe button. Be part of our community. And thank you for putting up with my face. I had some dermatology work done. I should have apologized in advance, but I'll apologize in arrears. Have a good one. Take care.

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