YouSaid · the spoken record

Alex Sacerdote

lines on the record: 73
first: 2026-06-09
most recent: 2026-06-09
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“He was modest, he was whip smart, he was wise, he was also known as a great investor, which isn't the most common thing at a lot of investment banks. He also was on their commitments committee and kept him out of a lot of tougher situations. And he was very warm and people could go into his office with problems and he handled it with grace, whether it's a personal problem or a work issue or what have you. And he just had this soft way and he also had a great sense of humor. I'm so lucky”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Worked with them that's not easy running a fun. We never raised our voice. And he was just an amazing mentor to so many people. And when he passed away, I got so many letters from people who said, Your father was just such an influence on me, was such a gentleman, he was such a great mentor to me. I just feel so lucky to have worked with him. And if I could be half the person that he is, I'd be completely winning.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's definitely my father. I was super lucky my father graduated Cornell doubly electrical engineering, pivoted to Wall Street, and had a great career at Goldman Sachs. He ran corporate finance in the eighties and then ran private equity as chairman in the nineties. He was just whip smart, but he had such humility and was such a great gentleman. When I started Whale Rock, friends and family, he was the first call, but he said, you know, I've been at Goldman for forty one years. How about I come and join you? I'll be the gray hair, I'll be the oversight, I'll be the chairman, you do what you do, you build the firm in Boston, build the team, run the money some money. And we got to work together for six years until he passed away in 2011. But I just feel so lucky to have.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“We call it the whale rock learning machine, and it's a group of ten highly experienced individuals. Warren Buffett reads books and we read books and we read blogs. In tech, you got to go out and talk to people so we do $2,500, three thousand face-to-face meetings with management teams, Munger and Buffett talk about compounding knowledge. We've been compounding that knowledge for 20 years. There's changes to the team, but broadly there's a lot of consistency to it. Andrew and Michael have been with me for 18 years and the average experience level on the team is 10 or so years. And that includes some of the newer people. That research engine can support all these products. And it's the same people that do publics and the private. So we're not going to scour the world and turn over every AB, but when we see something that fits in our system, we're able to act on it.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“We like your odds on that. And so there is alpha to be had there. And then as an asset category, it's great because these companies by definition have wonderful moats. And maybe they're not the super S curve, but sometimes they are. I mean, NVIDIA sure is. And TSM is really levered to it. And Hynix is extremely levered to it. And ASML is levered to it. We're four months into that one.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Future, most endowments are betting against this because they're completely underweight this. I think there's tremendous alpha in the largest cap because if you think about it, a small cap it just takes one person to figure out its good and move it up. But it takes a hundred people, a hundred diversified PMs to realize Google's not a loser. It's a winner. And can we figure that out before 95% of those generalist PMs, and we've been able to do it?”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“They have been massively underweight, the largest tech companies in the world because they have a lot of privates, they don't have a ton of public, and then maybe half the public is international. And then of their public bucket, there's a belief that there's no alpha in large cap. So the underweight large cap and they have a lot of small and mid managers that are stock pickers because it's intuitive that large cap can't have alpha. And then in their hedge fund portfolio, even if it's long biased, they're not going to have 15% in NVIDIA and all these other things. We realize that people are worried that there's these big companies. This is just a product of the digital economy in that in tech, the leader usually grows bigger and wins and develops very high market share quickly and there's great competitive advantages. They're also selling around the globe. So this is going to lead to massive profit pools and massive market caps. And it's just going to happen in the”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the first 15 years, it was a long, short fund, and we want to be focused. And if you defocus, that can be hard. So we grew that and we got that to the scale that we wanted to. We're 20 years old, maybe 10 years in, people started to ask for a long-only product sometime in maybe 2015 we formalized that we might be doing privates and so we gave investors option to opt in or opt out and you could do 15% or 25% so we didn't break the seal on the privates until 2020 we just think there's a huge structural underweight of the largest tech companies in the world we also realize that a lot of our performance over the years was from some of the largest companies whether it be Apple or Amazon or Tesla and so a lot of our largest pools of capital endowments or what have you they realized”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the great things is just the friendships I've built with so many smart investors. And frankly, Philip Fisher said part of his process was get to know a good ten or fifteen like minded people around the country and share ideas. They're great friends to make a lot of been on your podcast. You develop good friendships and then you share ideas, talk ideas. It's important that it's a two-way street. I call it the tripod when I like something. And then my analyst likes it. And then somebody who I really respect also likes it. That's three legs of the stool can really help the conviction.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“advertising and ad tech which is historically a terrible industry, but Michael and Sam really figured out the Apolevin story before anybody and they followed it when it was private. They know all the competitors. They know all the intricacies of terminology. And Sam went to the Las Vegas app advertising conference and we went to Con and we talked to scores and scores of people so did the work on the model and developed a great relationship with Adam Ferrogi. He's one of the best managers out there. I don't see AI doing that.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“On those things quickly, but it can't pick stocks for you in any kind of a way. I will say that if you're an analyst who's good at the blocking and tackling, there's a role for that, but you need to have obviously the insight on top. So we're now like using AI to write notes or review the quarter. And those notes are much better, but there better be a really good paragraph on top, which is the wisdom. What does this mean? How does this deal with our thesis? What changed? Don't just be a reporter. So the AI can be a great reporter. It can't pick into the future. The job that the guys did on Appleven two years ago, I think we got two of the best ad tech guys. I knew ad tech. I started actually nearby here in New York at an advertising startup and after I did banking, my new internet advertising.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would like to say that we're so advanced in our AI systems that it's a huge change, but so far it's helping us get up to speed and we have a handful of great apps, but it's not supplanting the job of the analyst, and so much of what we're doing is we're meeting with as many companies as humanly possible. We're developing relationships with the management teams that we cover. We're talking to the competitors. The system we use is right out of common stocks and uncommon profits, which was written by Philip Fisher in the 1950s. And it's the scuttlebutt approach. It's growth investing. It's get out there and talk to suppliers, customers, competitors, looking for the key characteristics of these leading companies and really developing conviction in them. Now, if it's a new complicated area like ABF substrates or PCBs, we're able to get up to speed.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“And a little bit dangerous, but there will be great application companies built. We really were watching Brad Taylor at Sierra. Brett was CEO of CRM. He wrote Google Maps. He was CIO of Facebook. He's building this fantastic company called Sierra. We're not involved. But that's where the rubber hits the road. Will he be able to turn this into a huge company? And he's doing quite well, and we'll see. It's a matter of timing when these things really start to come into their own and prove their sustainable. It usually doesn't start in the first three or four years. It comes a little bit later.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, A, it always comes later. So the first three or four years of the iPhone and then the applications really took time. So maybe it's just starting. To date, we found that area to be pretty risky because where does the foundational model end and where does the application begin? Can the applications build enough of a moat where they can fend off and build businesses in that? We thought we would see it in some of the incumbents, a CRM, and they're starting and maybe just a matter of time, but we really haven't seen it in the enterprise world. There are some very good startup application companies out there, but the ecosystem's not clear. When we started, the ecosystem and ships was clear. When we started the foundational model ecosystem wasn't clear, now it's clearer to us. And at the application layer, it's still kind of unclear.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“That could be a risk. Another thing is if one or two of the players falters and loses its position and can't compete, that could be like a lot of compute that they don't need in the future. Now, if AI is so big, somebody else will suck that up. And we saw that with Oracle canceled a big deal and then Meta went right in. But let's just say Meta decided not to be involved with AI. Hey, we can't keep up. It's just going to be a waste of our resources. We watch that very carefully. In general, we see more companies truly going after this. And even Microsoft going trying to build their own, those are some of the key risks.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Another risk is that if AI slows down in its improvements, I think there's a whole lot of AI adoption to happen even if the models didn't improve. But Jensen said this years ago when he was talking about his graphics chips if good enough is good enough, I won't have a business. Every year he made the graphics a little bit better and people always wanted the best. In AI if anthropic sort of hits a wall and stops improving or open AI, then the open source models will catch up. It might be a race to the bottom and it won't be good for the stocks probably. It could be good for the chip companies. The chip companies don't care who wins. So that's another positive and they'll benefit Jensen really wants open source to take off. It's all he kept on mentioning at his last GTC.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“One thing that bothers me is there's a lot of negativity in the general population about AI, and there's a lot of negativity in some aspects of the government, you know, I think Maine just banned data centers and only 20% of the people are optimistic about AI and potential for negative regulation. But I do think kind of the genie is out of the bottle.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Jan Gavin's done a great job. People weren't comfortable with it. It's harder to do than it seems. And a lot of these companies, their charts are up, so it's scary. Can I buy? And then you also have to have the holistic view because if you don't have conviction every time with NVIDIA over the last four years, it's, oh, they had a great year. Oh my God, it's got to be a bubble. And then they had another great year and it's like six months of marking time. It's got to be a bubble. This is like getting out of hand. This is pretty scary. The bare cases are not totally without merit, but if you can see the whole picture and understand how these things are unfolding and gain conviction in that, frankly, if you're just a semi-analyst, so many semi-analysts missed it because they didn't see what was really happening at the foundational monolayer and how this broader picture. So it helps to have the big picture. It helps to have”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's like, why does the casino teach people how to play blackjack? It's really hard to do. You have to be comfortable investing. I've been doing tech for 20 years at Whale Rock. We've got a team that's been doing this, covered many cycles. No one's paid attention to hardware and chips at all. So all these newbies coming into it.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“We did this presentation in twenty twenty four where we listed everybody's market share and then I asked Claude to plot it to a thing. And it actually didn't get it right because what it didn't get is the rate of change. So the rate of change is important. And that's incredible too because you go from 10% to 30% and your growth rate accelerates and your margins accelerate. So rate of change is very important.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Everyone's overwhelmed, but in the power supplies, every NVIDIA ship, or rack, uses fifty to one hundred twenty five percent more power that drives the ASPs of delta and advanced energy. I can't believe these stories when I hear, I'm like, wait, so your ASPs are going to like go up 40% for the next four years in a row and it's higher margin. The broader picture is the AI demand if we're right with this L curve, we're already short. The DRAM market, the NAND market, the PCB, we're already 30% short all these things as we are now.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“The wires, you need like 10x. The wire has to be so much thicker. So that's creating huge growth. And where the real kicker comes in is when you do scale up, that's connecting every GPU in the rack to the other ones. That's done over copper. Eventually that'll be done over fiber. When that happens, that two to three x's Corning's opportunity. So you just have at every layer of the rack.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to be a great cycle. So we see that up and down the supply chain. You find these companies like, I mean, corning, they make the fiber. They've got some ridiculously high share of the fiber that I was reading this Microsoft data center they just built, there's enough fiber to circle the world four and a half times in that one thing and their fiber is thinner and more bendable and can be specially manufactured to the exact specs and its higher margin and it's the fastest growing part of their business. In networking there's scale out which is connecting all the server racks together then there's scale across which is connecting the data centers together and when you want to build one of these huge clusters and you can't get all the power in one place for training you want to wire them together”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Very few PCB suppliers that can make this, there's all kinds of complexities in there. Then we also own elite materials which makes the leading ingredient, which is copper clad laminate, which goes into these boards, the PCB units are growing, the layer counts are rising, so you've got like a fifty to sixty percent keger just in the units, and then the ASPs are rising, and then the gross profits are rising, and your visibility, which used to be, hey, we'll call you next week if we need you to like, hey, we need you for the next four years to be like designing this roadmap with us. You've gone from a five percent grow or the low margin to a 35% forty, fifty top line Kager for the next four years with rising margins. On top of that, there's shortages of everything.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Lot of other people tried to do it and fail, and so they've retained that position, then it also turned out that the Ethernet market in the old days you would go from 100 gig to 400 to 800. It would be a seven-year cycle to upgrade. Now they're upgrading every year. That's really hard to do. Then there's a whole software layer, the open source Sonic layer. The guys at Celestica invented or some of the people that wrote that open source software. They work very closely with Broadcom. What we thought was just a great growth driver turned out to be great competitive advantages, and they have like 50, 60 percent share of the cloud ethernet switch market, which is a crucial market for AI because AI is incredibly network intensive. And then even something like the printed circuit board, a regular server, you need 10 layers. These AI server, you need a 40 layer.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“And then we noticed they were the sole supplier of the Google TPU server three years ago. The stock was trading at eight times earnings. And then they also had this whole business of selling Ethernet white box, which is code word for commodity white box Ethernet switches into the clouds. It turns out these are excellent businesses. Not only do they have tremendous growth, but to do an AI server, it's liquid cooled, it's running so much hotter. It's two or three hundred thousand dollars piece of machinery, whereas an old server was five thousand dollars. So if it breaks, you just throw it away. If this thing breaks, the whole thing goes down. So you become a commodity-like supplier to selling a critical part on it plane, you'll never get swapped out. It turned out they were quite good at liquid cooling.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Unit growth It's requiring tremendous innovation that means every aspect of the server memory which used to be a pure commodity this high bandwidth memory is stack ten chips on top, input outputs or ten x what they were before took Samsung for years to do it and it's a critical piece and then that is constantly upgrading so they've got to be working with NVIDIA for three or four generations in advance. We had this with Celestica. Celestica was a contract manufacturer. This has been a disaster industry since nineteen ninety nine. It went all offshore to China. It was commodity, but they hung on heritage was IBM supercomputing and they kept all that talent and skill”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Would take seven years. And when you do switch in the first year, it does take some innovation to get to 10 gig and it would create a little cycle, but then it would commoditize. Now you go to AI. The workloads are growing ten X every year, and they're pushing every single aspect of this hardware to the physical limits of what it can do. Not only are you creating tremendous unit growth, but we call it the decommoditization of the hardware industry. I met with Sean Maguire like three years ago and he said, I wish I could come back and be a hardware hedge fund. Because all the companies are public and they all have powerful IP, and Sequoia made some of their best investments back in the hardware day with Apple and Cisco and others. And we're in this renaissance of chips. So not only do you have tremendous”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“For the past forty years nothing has changed in the data center, even with cloud, Intel X eighty six became the data center chip sometime in the nineties, and compute grew in the cloud era, and compute workloads grow twenty five to forty percent every year, but Moore's law is improving at that rate. It didn't require tremendous innovation, and there really was almost no growth in hardware for years and years and years, and the whole industry basically commoditized every part, every chip, every part of the server, the printed circuit board to the memory, to the enclosures, to the networking, there was no innovation. You would go from one gig to ten gig.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Still early in our thinking here, but even maybe work day or HR systems or the big systems of record, the agents may be running on top of them, it's good and bad. I mean, CRM is going headless or they're making a headless version, and that's the bear case too, that you get relegated to just being a database. There's a human interface to it. Then they need to make the AI interface, which is no interface. It's just them going right into the data. You lose that customer interaction, but if the agents are going right to CRM and doing the work inside of CRM, that will solidify CRM, so you won't have to think it's going away.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Be 60. That's a great place to look because you've got exposure and you've got a strong market position. Problem with software is their AI's one or two percent at this stage and it's a long way to go. One thing we are picking up though now lately and this is half baked, but AI could make some of these software platforms more important because what's the first thing you do with Claude? You plug it into Slack. If that can become a key repository that will make Slack a permanent fixture within the organization. And so maybe the next wave of AI will be these agents that use tools and they might operate inside of the existing incumbent software tools to use them like a human being would.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“The valuations are very high and everybody knows they're under pressure. Some people are tempted to buy these, but the AI coding tools are just getting better and better. We'll have to wait and see. We're watching these software companies very closely to see if they're getting any revenue that can change that trajectory, but it's hard because if you're a company like Salesforce, you've got 40 billion in sales, you might have 500 of ARR, seven hundred of AR of AI. So you've got this huge base. Now maybe this starts to work, but it takes a while. In software, there's the rule of 40, which is your growth rate plus your operating margin. And if you have 20% growth rate, 20%, that's good. What percent of your sales are AI thirty percent? And what's your market share in that category, say 30%?”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Might not have the right people internally to do that. Then, of course, there's the risk of you can build it yourself. The bulls will say, well, they're never going to build their own ERP system. And that's probably right. And it is true that old tech is very sticky. Mobile video games didn't hurt console games, and the tablet didn't hurt the PC, and the smartphone didn't hurt the PC. There's a lot of integrations and work that goes into these software. That's all true, and companies do like to buy. They don't like to build themselves that much. That's all true, but you can imagine a world wherein one, two, three, four, five years, you could have a brand new AI native company going after each one of these very strong incumbents, and if their data advantage could get obviated, it might be easy to take it out and put the new one in with.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“And so that hurts on seats in terms of them building their own apps. If you want to be optimistic, it's taken them a while to do that. We talked about how early the primitives of AR. So maybe they have just taken a while to get to something they can commercialize, but they might not have the right people. It's a different selling motion from selling a fixed system versus if you're installing something that does human work, you got to be right at the side to make sure it's really getting done. So you need the FDE.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“The new way of software is like a jet engine or frankly the transporter from Star Trek. It's so revolutionary changing that it feels like it has to be disruptive. If it's not disruptive now or right away, the software companies have another problem, which is their list on the to-do list or priority list of any CIO has fallen a lot. So even if AI is not going to be disruptive, they're spending it on anthropic tokens because there's faster ROI there. Second, if they're spending all that money over there, it pushes on the budget, so that hurts them. Third, a lot of software companies were able to raise price every year. And now they're probably nervous about doing that. Fourth, we'll see what happens with. Jobs because they're smart people on both sides of that, but we are seeing some companies really gut their job. Freeze hiring.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Years ago, we might have had 40 or 50 percent of our portfolio in software. And early on in our April 2023 webinar, we said definitely invest in ships first, but at the application layer, initially we thought these companies are huge, they have huge sales forces, they can take these AI APIs and build products, and they have the data, this is going to be amazing for software. Pretty quickly, we realized their AI products were not very good. They weren't moving the needle. Nobody could charge for them. We basically sold almost all of our software. Entering this year we were net short. It really helped us in the first quarter. There's so many layers to this. I mean, the old way of software is like using pen and paper, or it's like a horse and buggy.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“But they have gazillion eyeballs there. Things do shift. We have this charts that we almost do for all of our pitches. On the internet, the leader goes bigger, faster, and wins. Most of the time the leader gets at Shopify becomes the leader, just keeps on going. Amazon the leader keeps on going. SaaS company XYZ, you get the lead at Compounds on itself. And another thing is you need to be big. Another is scale. You need to compute. And you got to pay for the compute. So there's only so many people that can do that. Those are some of the modes that we think are now showing up in this business. Now there are some exceptions to that rule, usually with the paradigm shift AOL, and then dial up went to broadband and they didn't make the change. Netscape came out early, and it wasn't as strong of a business model. And if you talk to anyone in the valley or any startups, they'll tell you that they're building on top of these three.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“And the other thing that anthropic and open AI could have is anthropic now that they're leading in code, they set that code back onto their model and it's this concept of the recursive improvement. And if you look at the pace of their innovation, it's accelerating. Maybe they can have this liftoff stage. OpenAI, they were focused on so many different other sectors. They're starting to do better in enterprise and their coding tools good, and they're starting to see accelerating growth on that side. And then, look, the consumer franchise, it looks like enterprise right now is much better because you and I were willing to pay a lot because it's replacing human beings. Now, consumer, maybe you can get advertising, but maybe they would pay for a clawbot type assistant if you could make that perfectly well for them.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“They're going to have escape velocity and scale. And what was scary for OpenAI and Anthropic fighting these big companies like Google was they had these huge cash cows, and to both of the management teams credited OpenAN Anthropic, they were able to work in these super capital intensive industries and find ways to raise capital. And certainly with anthropic, with their 10x sales growth and their fundraising ability, it looks like they've reached escape velocity. So now they have scale.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of all the S curves we've done AI is by far the most complex and the fastest changing. We have to keep in mind that there are risks. The rewards are the highest because we're talking about a market in the trillions, maybe clouds eight hundred billion. This might be, we now think three to five, but there's higher risk, higher reward. But let's just say with anthropic now, it looks like they have critical intellectual property. Generally, they've been able to maintain their high market share in code. Number two is they've built a strong brand for enterprise to where go talk to any CIO and the first thing they'll say is clawed.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“But if your name was Rim, Pom, Nokia, HC, LG, Motorola, I can go on forever zero zero zero negative negative negative negative. And that's what we saw at the foundational model layer where there was like 50 companies trying to do that, and they all have fallen away. And two or three have emerged at the top. There's a lot of reasons to think they will continue to hold their position.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Things before the rest of the world. One of our high points was we pitched Amazon for AWS at twenty thirteen at the Robin Hood Investors Conference, and we said the Bulls have no idea what they're sitting on. Amazon's won the war before it even started, and at that time we said there's Coke and there's Was big enough to last, and we could see they had a seven year lead, so first mover is important, then they became a whole ecosystem and a platform. Then they got scale. So they were ten times the size of everybody else. Nobody can invest in the R&D to catch them. But you're right that if you don't have a competitive advantage, you can be in the best S curve of all time.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is doing 30 billion in sales, or Amazon had so much scale and then got it quickly. So they got a Walmart size scale advantage in five years versus 40 years for Walmart. So you can have network effects, scale, you can become industry, standard, you can be a platform that people build on top of. You can have critical intellectual property, which was what Qualcomm had. You couldn't make a phone without paying them, or ASML has critical intellectual property. You can't make a chip without their lithography. You can also have brand, and brands very important because Google, Amazon, they got to grow. They never had to advertise. Elon's never had to advertise for anything, and cost to acquire versus lifetimes the whole business model. Almost all the companies I mentioned have all of these rolled into one. Sometimes we can notice these”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, a lot of people were worried about tech because they thought there was so much disruption you could never trust a company to be long-lived asset. What we found over the years is some of the competitive advantages within the digital world are more powerful, if not equally or more powerful than in the offline world. You've got the network effect that was so powerful for LinkedIn, Facebook, Alibaba, you name it. Then you can become an industry standard. Oracle and Bloomberg are the industry standard. Oracle charge a lot and there's free versions, there's open source Oracle, but they had all the database administrators. They had all the software that was tuned to work with them. They basically had a chokehold on the relational database market forever. You can get to scale very quickly because these S curves grow and all of a sudden.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“You look for the S curve, then we do an exhaustive study of everybody with exposure in that area and try and find the one with a very powerful competitive advantage. And a lot of people didn't like tech. Warren Buffett didn't like tech because he couldn't predict the future. Yeah. And so the S-curve is our map for looking in the future.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“And then it really started to take off. Those takeoffs maybe because sass is like the dishwasher and because cloud is going to be plugged in, it meant that yet it was growing, but it was sort of a 30 to 40, maybe a 50% growth rate. But what's amazing about AI is you just, at least with consumers or even business, you just open up the browser and it's there. And so that's why we're getting this straight up. And I think there's enough runway in the near term going from 10 bipolar really using it to two to five or whatever, which is going to cause it to keep on going straight up. This we call it a backwards L curve. So it's really pretty exciting.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Covered Internet of Fidelity. My first stock was Amazon. That's a whole other story, which is a lot of fun. But I also did B2B internet. And there was a whole huge bullcase on that. The underlying infrastructure wasn't in place for B2B to happen. Ultimately happened 20 years later with SAS. That is a risk with AI in that these big companies are very security conscious, can be slow to move. There's a lot of cultural issues with AI where you really need a few evangelists to push it through the top management needs to push it through, but then the IT is saying this is risky. And that happened with cloud too. That was one of the big things with cloud where everybody was afraid it's unsecure to have your data in the cloud. And then we saw the CIA do it. And we saw Capital One and we talked to the Capital One CIA. He said it's more secure.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Some time with him, he said white out the chart. It's all about the future. So it's okay to miss, but what helps about the S curves is sort of how long it goes for. Then there's the slope of the S curve, which is important. And a lot of people think, because we're in a modern world, everything's so fast, but there's a lot of factors that determine the pace of the adoption. And we commission this gentleman Horace Dadu, used to work with Clayton Christensen to go look in history, and we have the big S-curves on our wall over the last hundred years. And the radio S-curve was one of the fastest ever. It took seven years to reach like 100% penetration, but the dishwasher S curve is like that because it needs to be plugged into the back end. B2B stuff can take a long time because it needs to be plugged into the existing systems. Consumers generally tend to go.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“VMware thirty years ago where they virtualize a server, there was standing room only and you could just see the corporate demand just beginning and with AWS, we went there and their grand ballroom was completely packed. And that was a nine o'clock and a ten o'clock the grand ballroom was completely packed. Eleven o'clock so you could see the demand exploding before it happened. We look for all kinds of clues and there's a whole pattern recognition that happens. And by the way, it's okay to be late. It's okay to miss the first one, two, three years in a lot of cases because if the top of the S curve is half a trillion, the growth can go on for a long time. So you don't always have to be right there. It's okay to miss the first hundred percent. Peter Lynch, I started at Fidelity and he loved to mentor the kids.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source
“Andy Grove says, When you have strategic inflection points, you can't trust the data. And strategic inflection points are about intuition, anecdotal evidence. I love this book called The Tao Jones. The creative side where it's visual, it's connecting the dots. We invested in the mobile video game S curve for so long the screens were small on the phones and the processing power wasn't good. So you had all these casual games, but then I was in China and I saw this little 12-year-old boy with a huge phone and he was like playing a awesome video game. I'm like, oh my God, it's now coming to the phone. So it's visual enterprise is hard because you can't see it. Smartphone you can see, oh my God, I got it. It's amazing. With AI, there's some intuition there. But enterprise, you don't really get to do that. We go to the Gartner IT symposium thirty thousand American CIOs go there. We saw this happen with Splunk, where that used to be an amazing data base company in their room where they were explaining was like standing room only. And we saw that with.”
2026-06-09 · Invest Like the Best · Alex Sacerdote - How to Invest Through Technology Cycles - [Invest Like the Best, EP.477] · IDENTIFIED FROM THE TRANSCRIPT · source