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Alex Sacerdote

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2026-06-09
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2026-06-09
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  1. “Generally we like the high growth, and it was a mistake with Apple because in the first five or six years of Apple, it was awesome. I mean, it was our largest position. It would go 50, 70% a year, except for 08. And then we sold in 2012 when it got to sort of 50% of the US had a smartphone. And with Apple, they maintained their leadership position. It had a couple of years of underperformance. And then the multiple got low and they added several ancillary things. And then they also got to play in the application because they get 30% of the app. So they were able to compound very nicely, say, 20%. But the big years were in zero to 50% part of the curve.”

    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

  2. “When something gets to sort of 30, 40 percent penetrated, then you stop having exponential growth, which means the cell side catches up and there's no longer big beats.”

    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

  3. “And then therefore one or two percent penetrated, but then over time we realized it actually wasn't deflationary. If you talk to anybody now, they say if you build it yourself, it's about the same price. So that means the TAM was so much bigger. There's mega S curves and there's sub S curves. We've been lucky that we've had internet 1.0, mobile cloud, e-commerce, and now AI, which we can confidently say is the biggest and all these things build upon one another with the electric vehicle S curve, you have to pay attention to because we thought probably maybe forty to fifty percent of the cars would go electric, but it did hit a big wall at 10 or 15 percent. Usually the S curves go kind of all the way, but in this case for a variety of reasons it didn't. So you have to adjust and you have to stay on top of 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

  4. “Inflection. Now, the other nuance, it's not just, oh, it's taken off now, it's how big is this S-curve? How tall it is so you know when to sell, how long to hold on, because we're underwriting out two or three years, we have to know what the growth looks like thereafter. And these S curves can be dynamic. So when Amazon had AWS and it was a hidden line item inside of Amazon covered by retail internet analysts, we realized the TAM for this was the largest TAM in Enterprise IT ever because previously the TAM was routers, memory, storage, Dell, EMC, but they were doing it all. You want to know how tall the S curve is, so we figured out they were addressing six hundred billion of IT systems directly addressing that. And then we said it's probably going to be 50% deflationary.”

    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

  5. “Because there were so many barriers to adoption, the first smartphones, they were clunky, they didn't have touch screen, there wasn't a wireless data system, and then they were too expensive. There were five or six hundred dollars. Steve Jobs got the price to two hundred there was AT&T at a three G network. It was touch screen, it was so easy your grandmother could do it, and he built an ecosystem and made it simple. So all the barriers to adoption were eliminated, and then you rocket when those barriers are removed, that's the tornado of demand that everybody in the world knows they need this right away. And so that's the flip that happens. It happened with electric vehicles, the price was too high. Elon got the price to forty thousand. Range anxiety was there. He got the range to three hundred miles. The supply chain was finally in place so he could churn out millions of these things. That triggers 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

  6. “Amazon for AWS. We were getting it for free. The world doesn't think exponentially, and they're so focused on the next year or the next quarter. Very few people believe you can accurately predict two, three, four years out. But if you follow and understand the S curve, you know the moats and you know how to model, you really can predict these great things. So let's go to the S curve. So the S curve is crucial because every technology follows this pattern where it comes out. The smartphones were out ten years before the iPhone. The internet was out twenty years before Netscape. AI has been out hidden inside of these companies, but it wasn't until ChatGPT took it public and ignited what it was. So electric vehicles tesla went public fifteen years before 2019 when it went vertical.”

    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

  7. “Have an investment framework, it's S curve competitive advantage, and then underappreciated earnings power. And when you get the right part of the S curve, you get exponential unit growth. If you have a very strong business model, which in tech, there's so many of those for so many different types of moats, your earnings don't grow linearly, they grow exponentially, and that's the last piece. Invest when there's underappreciated long term earnings power, and very often the earnings can grow from one dollar to ten dollars, and it happens way more than you think, and it allows you to buy some of the best companies in the world for extremely low PEs. When we are buying NVIDIA in 2023, we were paying four times earnings. When we bought Tesla in 2019 for the carb, we were paying five times earnings when we were owning Apple, we were paying four times earnings when we bought Amazon.”

    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

  8. “And then we were able to upsize that from the seller to a $100 million block. The VCs are going to own and then most of them are going to sell. They like it that we'll own and own in the public market, which we did with Newbank as well, owned it for a long period of time in the public market as well.”

    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

  9. “And so that was our first one. We weren't really known for privates. I've got a friend who's involved with a venture firm that has tremendous amounts. And I talked to him about it and I said, let me know if you ever want to sell some. And then I get a call from him during COVID in April of 2020. We knew a lot about Stripe. We didn't have the full financials, but we knew enough that at that valuation, I think it was $35 billion, they disclosed we had over half a trillion of TPV. And we knew that Audien's take rate was twenty five or thirty bips, and we knew stripes was forty or fifty. And we knew how many employees they had, so we could kind of get at the profitability. It turned out the take rate was higher. It turned out they were being modest about their TPV. It was much higher than the five hundred fifty it was closer to the one trillion. It was much better.”

    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

  10. “Management teams a year, and about ten or fifteen percent of those are with privates. And then we kind of focus in on the companies that we really want to learn about and find ways to meet with them, get involved in the rounds. Our first one was Stripe. We had a large investment at the time, this is 2017, 18, 19, and 2020, we own Audion, which is a fantastic payments company, and they're a next-gen cloud payments company taking from world pay and the cloud modern payments was 5% of total eighty trillion dollar market or what have you, but you can invest an Audion unless you know Stripe like the back of your hand. But when we ask them about Audien, we ask about Stripe and we realize this is Coke and Pepsi. We said, we got to find a way to invest. And I finally got to meet the Collison Brothers in 2019.”

    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

  11. “where we use clawed code to scour the internet for all the feedback we could about the coding market and what their products were good at, where they might need to improve. And we also did our whole overview of what the coding market would be. They welcomed us into this round, and then we stayed close with the CFO. It's been great to build a relationship with them. And I think we punched above our weight in terms of the allocation. So that one was a total home run. We are in this period where the unicorn market is bigger than most stock markets in Europe, maybe even combined. It's definitely bigger than Germany. It's definitely bigger than the UK, even before we invested in private. The first one was 2020. We have to know these companies and you really have to know them now because sometimes they're the biggest companies in the space and have huge impact. So we do two to three thousand face-to-face meetings 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

  12. “We got to know the company. One of our analysts knew people in the finance group there. We had a look at the $60 billion round and we didn't know the company as well. The gross margins were negative. And frankly, we hadn't seen coding explode the way it had. And one thing about public markets is you get to know companies over a long period of time and you can kind of invest on your own schedule. Then I got a chance to spend some time with Dario. I started to realize these guys, their management team is excellent. The focus, the dedication, they had almost no turnover, the quality of code, and then the business plan was really starting to play out. It's one thing to grow from one hundred to a billion, but it's another to do nine. And then so we reached out to the company as much as we could. They took a meeting with us. We did a ninety page power.”

    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

  13. “To 15% in the next four years and kind of a light switch this year went off in the enterprise where everybody realizes they need to do this now and do it fast. But it's still internet 1.0 when it's like you knew you needed a website in 1998, but it's like hard to build that website. But this is coming together fast. And so the enterprise AI or enterprise application AI market is less than 1% penetrated. And we talk about S-curs. We call this an L-curve just straight up will take this to the infrastructure. We're at 10 basis points of people really using AI. And there's not enough compute in the world. So Anthropic has half of what they need right now. And that's before this huge take-up. Mark Andreessen said in the next four years, one thing he's sure of. There's not going to be enough compute”

    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

  14. “How that feeds back through. But if you think about it, 200 or I don't know how many 800 million people are using AI, they're just using AI 1.0, which is like a search engine on steroids. But now with these new primitives where you have clawed on your computer linking it in, then you build skills, and then they're going to build true AI bots. Big corporations are going to build much larger. But where are we in terms of the amount of people doing that? I mean, Sunder said it's 10 bipolar of the world. So Anthropic has something like 14 or 15 million DAUs, probably a small portion of those are truly doing AI the way you can do it. So that 10 BIPS, its classic S-curve where these are the tinkerers, and then it's going to go to the early adopters, then it's going to go to the early mainstream, but you're going to go from 10 BIPs to one to two or three percent to”

    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

  15. “Ponopoly or whole ecosystem of products around the API. So you've got the SDK, Claude for Co-Work, Orchestration Layer, and all the tools, they call it sort of a harness, which is the software around the API that gets the most out of the model. This was one of the things we saw with AWS really early on in 2013 was, oh, people thought it was a commodity server up in a warehouse big deal. They saw this was a new way of doing computing, so they invented all these products that they could see before everybody else that slowly built lock-in. The other way we think about this is where are we on this S curve? And we have this infrastructure layer. which we think is 10% penetrated. And by the way, we think it's still one of the best ways to play AI. And we'll talk about 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

  16. “MacLeod's generally its commodity they're selling you servers and storage. They have a lot of software on top and there is stickiness to it. But in the AI models, everyone thought it would be pure commodity, but there's tremendous differentiation within. There's different training methods and different skills that they're good at. And a lot of people have routers that switch in between, which sort of makes it sound like their commodity, but Anthropic, they're very good for anything that has to do with private equity and finance. Google is very good for ingesting PDFs. There's a lot of differentiation, critical IP, which is a great competitive advantage. Many companies have come after the coding franchise, and Anthropic has been able to keep ahead. The other thing that's good about the foundational models and anthropic is it's not just the API or the model. They're building a whole.”

    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

  17. “One to nine, yeah. One to nine. Yeah. And then the numbers were like nothing we'd ever seen before, 100 to a billion on the way to nine. But when we did it in August of 2025, nobody had any idea what 2026 could be. The second big unlock lately is that Claude Code has gone to almost completely agentic. You had Andre Carpathi and Linus Torvalds, two of the smartest people encoding, and they completely flip-flopped, and Carpathi said last year's code tools could write twenty percent and eighty percent would be handwritten. That flipped when the latest model came out, and now he hasn't written a line of code except in English. And not to mention the pure unlock that we're going to get for the people that never knew how to code. So just coding alone has completely. taken off, one difference between”

    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

  18. “If you do the math comes out to twenty or thirty thousand dollars a year, and if you think about how many coders there are in the world, 20 million, you've got a half a trillion dollar market just from coding alone. And mind you, that was on seven, eight, nine month old technology. We could see just on the coding market alone that Anthropic had a tremendous opportunity ahead of it. So we made the investment at the one hundred eighty valuation. We said, and I think they were hoping to get to a nine.”

    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

  19. “The early versions of the models were good, but there was a lot of negative feedback from corporates. And could they be truly agentic? In twenty twenty five, the first Claude Code and the coding tools really began to explode. You saw the first gem was like Microsoft copilot, which is like twenty dollars a month. And that could sort of improve your grammar of coding, maybe find a bug, maybe make a block of code like a paragraph, and then Anthropa came out sometime in the middle of the year, and it could do so much more. And it started to get to this point where it could run agentically, and the coding market just exploded. And then we started hearing people who could use it unfettered. We heard that, you know, even within anthropic at that time, people were spending $100 a day on tokens.”

    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

  20. “You're 80% close to the top of the benchmarks, going from 80 to 85 is a huge unlock. The open source guys they don't have as much compute so they can come close to the leading edge, but they can't leapfrog it, and then they kind of falter. Meanwhile, the scaling laws and other means of improving the models, the feedback loops, etc., we saw that there was a very strong runway, and everyone we talked to close to the industry saw that the scaling laws would continue. We developed this thesis that it would be a three horse race. The big kicker was code, and this is the true unlock of AI. In the first few years, we knew AI would be big, but we were skeptical also. We made large investments because we knew the training would be there, but we weren't sure how much revenue might come and if it could truly replace labor.”

    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

  21. “Basically, their effort faltered and they had to do a total reboot. In the meantime, anthropic kind of was this dark horse candidate, the startup, they focused really purely on the enterprise. OpenAI had kind of won the consumer, and then Gemini can never be counted out beloved Google as well. It's one of our largest positions. So it really started to look like a three horse race and somewhat of an oligopoly. Very similar to how the cloud market evolved, where three companies underpin the entire SAS cloud and have really excellent businesses. And then we also were aware of the open source risk. From China, we started to get comfortable that the quality of the tokens from the leading edge were superior.”

    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

  22. “two or three years we started to get more clarity on how the foundational model layer would evolve and at the time two or three years ago there were sixty different companies going after it openAI was kind of in the lead and we did a webinar in april twenty twenty three and we said look this might be a winner take all it might be a total commodity because there's open source players it might be a race to zero or it might be an oligopoly where there's three or four leading players and what we saw over the following three years was that almost all the startups fell away and died and then some of the largest companies in the world including Amazon and others and meta amazon never really showed up we'll see what happens with meta but they came in strong”

    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

  23. “When the gun went off with OpenAI, ChatGPT in november twenty twenty two, we immediately took the firm and did a massive deep dive with our ten person team. Anytime you have a new compute paradigm, there's a new stack, and that creates new winners and losers on the old stack. Now Jensen talks a lot about it, but its power at the bottom, chips at the bottom, the clouds, and then the foundational models, and then the applications on top. And at that time, this was 2023 early, we said, we want to be in the chips and the infrastructure first. And not only do they get the demand first, but we know who the winners are. And no matter who wins above, which we weren't sure at the time, we know we're going to need tremendous amounts of compute. And we did a deep dive into that, which we can talk about 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