00:00 Matt
this CapX spending is is a real issue. I mean, we’ve been hearing for three years that we’re going to get this big return on investment soon. I mean, to give it another six months was what we were hearing in the summer of 2023. and we’re still waiting for it. Things are starting to uh pick up. We saw that with uh uh Google this week and their their the cloud revenues continue to outperform, which is nice. Uh but that is a concern, especially when you have uh some of the moves, I mean, you look at an AMD, which, you know, the the their conference went very well yesterday. Uh but the stock’s gone from 30 times earnings not even four months ago to 73 times earnings and sales it’s gone to to eight times sales or eight and a half times sales to 23 times sales. So those valuation things are are a concern too. So uh and it doesn’t surprise me that people are becoming a a bit more concerned about this situation and they’re going to see they need to see more, you know, show me a situation with the with the ROI.
01:31 Speaker A
Stephanie, I want to put that over same over reaction question to you. You know, I when I talked to Lisa Su, she told me demand for AI is extremely strong. I heard the same thing when I talked to Mastercard CEO this week as well. I heard the same thing when I talked to IBM CFO, they’re seeing customers buy more servers and AI equipment. It’s hurting their business, but nonetheless, they’re seeing it. Is the market just overreacting? When do these CAPEX investments get embraced by the street?
02:05 Stephanie
I think it’s going to take a while. I I don’t think that we should be waiting around uh for this year or even maybe 2027 because I I do think that it’s going to take a while for um some of the bottlenecks to free and when I mean by bottlenecks, I don’t just mean, you know, some of the physical bottlenecks that you have, but also just usage. Like we were still at the really early stages of usage. So if we’re seeing this kind of demand and building out for that, it’s going to continue to go on. So we’re we definitely like in Robinhood strategies, we’ve been underweight the Mag 7 for a while. They are some of them are starting to look less expensive, but um I I still think an AMD is like a a better buy despite the fact that uh, you know, as pointed out, Matt pointed out the the valuations are higher. I think that just means that earnings are going to be higher in the future and the valuations won’t look so expensive.
