YouSaid · the spoken record

Michael Cembalest

lines on the record: 64
first: 2025-05-29
most recent: 2025-05-29
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

“Hasn't been released yet, either even internally within Microsoft. So again, so some of these moats. I wouldn't underestimate the amount of time that NVIDIA is spending defending that moat. And improving its products and its energy efficiency so that they don't give a market share prematurely.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Two to three years, right? At that point, corporate adoption, which drives the training models, are supposed to be the overwhelming amount of what's going on. But again, Amazon claims to have been working on a foundational model, haven't seen it yet. Microsoft has actually kind of hinted that, oh, we've created our own foundational model. There was this great story recently. If you like AI, the head of the Microsoft AI group was basically told to pound sand by the open AI people when he was asking them to fully disclose how some of the new reasoning models worked. So Microsoft is working on their own foundational model.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“If an underwriting goes bad and you picked JP Morgan, Goldman, and Morgan Stanley, nobody's going to question you. If you pick a ranked 8 or 11 underwriter and something goes wrong, people will question you. So to some extent, the network effect and the motes that you guys are referring to. Nobody's going to get blamed for spending extra money to buy Nvidia products and wait for a long time until these other products have proven themselves. And so I think it's going to take a long time for that to play out. But yeah, eventually. This AI story works, we should be looking at 80% inference and 20% training.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“There are, you know, in the piece that we did last year, we listed all the companies that are trying to pick away the NVIDIA mode. But in the asset management business, Or when companies hire underwriters.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Now, he may backtrack again. You know, we'll see. But historically, whenever there's been a disconnect between hard data and soft data, it takes about 90 days for that to resolve itself. So some of the shocks that are seeping through the system are going to take until July or August to play out. One of the things I wrote earlier this year that resonated with a lot of people is the markets are the one that you can't deport them. You can't intimidate them. You can't arrest them. At the end of the day, the markets are going to be a binding constraint on what this administration can do and can't do. And that's actually a plus for investors because it means at some point. They're going to have to adhere to some generally Acceptable level of policymaking.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, the average tariff rate at the end of last year was something like two and a half percent. I'm using round numbers. Yeah. If you did all the math and you don't assume any import substitution at the peak of the kind of Lutnik cardboard cutout presentation, we were looking at a 25 all in Again, assuming no import substitution and things like that. Now we're back down at like 13%. So the market's like, wow, we dodged a bullet. It went from 20 something to 14. But 14 is still very high compared to 2.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I think they feel somewhat beholden to try to manage around some of the risks. Another thing I would say is I don't think the tariff story is done.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Locked them in for so long. I'm almost tempted to believe that the Fed essentially created this problem through financial repression. Tempted some bad asset liability managers at these regional banks to load up at low rates and feel some sense of actual responsibility for this mess because it was fed monetary and congressional fiscal policy that led to this mess. So positive explanation.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Now it only goes away if you go back to 3% or sub 3% on the 10 year. But we still have a banking system where many of the participants Went hog wild, extending duration on treasuries and agencies at a time of historically low interest rates because you had this deposit surge from all the Fed bazooka money. And that hasn't gone away. Now, the Fed has proven itself willing to provide whatever emergency facilities. I actually was personally against bailing out the VC depositors in Silicon Valley bank, you know, the average deposit balance in that bank was two and a half million dollars. I mean, it wasn't really a bank. It was something else. But they decided for systemic reasons to do it. They'd probably do it again. But that issue hasn't gone away. And the higher 10-year rates go, the more those losses get pronounced. So that's an issue that's kind of still out.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Sometimes I heard you in the introduction talk about narratives that come and go, and I agree with that totally. And one of the narratives that came and went but might come back is. There are still five to seven hundred billion dollars of unrealized interest rate related losses on bank balance sheets. That has not gone away.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Falling because the two to three entities, Mitsubishi as well, that are involved in this sector. Don't feel comfortable enough to go out and do a mega capital raise to double and triple the size of their production facilities for these kind of turbines. And that, I think, is going to end up being. Binding constraint for AI at some point. I just don't know when”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So that's why you go to GE for Nova today. We're happy to deliver you a plant. It's going to cost two times more than it did a couple of years ago, and we'll give it to you in five years”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Just in the last two years. Supply chains, and mostly a reflection of the fact that GE Vernova and Siemens and the other companies involved.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“And there's different kinds of geothermal. The most interesting kind is where you're going really deep and you're accessing like supercritical fluids whose heat is comparable to nuclear power. But that instrumentation has to be able to withstand very high heat. You have to use plasma drilling bits. I think there's opportunity for expansion of geothermal, but their long-term industrial projects, it'll take a long time to do, not a quick fix. And the other thing, too, is, and this is amazing, I've been very focused on the rising cost of wind and solar power. And I should have been paying more attention to it. I turned my head the other day. The cost of a natural gas combined cycle turbine has gone from 1200 per kilowatt to 2,500, like more than double.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Originally said three million dollars a megawatt when it hit 20 the plug was pulled. So, the most recent example of such efforts in the United States failed when the budget hit 6x.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't believe that you can, from going from one reactor to four reactors or six reactors, develop the kind of learning curve that would result in exponential cost declines. And so I'll wait until I see it and I don't think we will, but I would love to eat my hat if Oklo or some of the other public companies or private companies are working on this can deliver a small modular reactor. In anywhere of the zip code of the original projections. And just as just one last thing, as a reminder, the new scale.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Third point. There's no industrial project on Earth that is more capital intensive than nuclear power. And so when nuclear power first started to become popular in the late 60s and early 70s, the goal was, how big can we make them because we want to spread some of the sunk costs over the most megawatts we can build? The notion that you want to shrink a capital project to make it more efficient makes no sense to me unless you can completely commoditize them. The mistake I think people are making is that there has been an incredible learning curve in solar polysilicon panels to lesser extent in wind turbines, both onshore and offshore. And the best example is lithium-ion batteries, best example of a learning curve you've ever seen. But that's because millions and tens of millions of units are being produced.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“depending on how you want to define what small is that have been built in China and Russia and the costs have been multiples of the original projections and the timeframes have been much longer so failure even in places that have success building Here's what”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so the easiest one is nobody's built one. That's a good answer. In the United States, one hasn't been built. Point number two, there are three or four of them.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“So if you were listening to the really bearish voices at the time, they would say too soon to invest, there's a giant tidal wave of bank failures coming. But the KBW or whatever index you want to look at bottomed in advance of all of that. And the same thing happened during the S&L crisis. Stocks bottomed way before all the defaults eventually took place. And if you then take the seven post-war recessions in six out of the seven of them, equities bottomed before you even saw an upturn in payrolls, industrial production, housing, credit card delinquencies. And so as an investments person. I have to act our clients and our investment committee to be willing to take risk when you look out the window and everything looks terrible.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“The number one thing, more than anything else, and we have 30 topics we're going to show and some of them are in there kind of for humor or sarcasm, but the number one investment lesson was equity's bottom before everything else. And so does credit and so does high yield, and so does real estate. In other words, asset prices, bottom. So far in advance of the related fundamentals. For instance, during the financial crisis in 2009. Bank stocks bottomed when only 10% of the ultimate bank failures had taken place.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm definitely somebody that has taken advantage of massive quantities of information and research, right? It was a lot harder. I used to have to go to the Mid-Manhattan research library. To find things. And I used to go and you pull out microfiche and then you would go and you would try to, you know, you put in a quarter and they would let you print it. I mean, it was hard to get historical data back then. And I'm a data hound. And so the way the world works today is much easier for me to draw parallels. I've also learned a lot of lessons in investing for all these years. I was the chief investment officer just in the private bank for a long time. And so I've learned a lot of lessons and we're in the process of putting together a 20 year on the market retrospective. And it's amazing to go back and publish some of those pieces and see what we learned at the time.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
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2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, yeah, no, the biggest problem with heat pumps is the fact that while it's more efficient, you're buying electricity instead of natural gas and per megajoule of energy, it can be, depending on the state you live in, three to four times more expensive. So it's great for the climate. It's just economically challenging. And that's why I think some of those Rocky Mountain Institute and Green Tech Media Forecasts are way too aggressive because I think these transitions are going to take place over a much longer period of time. You've heard the chaos. Now you can see it”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. Again, I know all of the sources and rigor of their work. And so I think we will need. Seven or eight percent additional electricity capacity for generation over the next decade or so electricity consumption in the United States has been roughly flat for 20 years but before that it went up a lot the issue back then was we were meeting it with nuclear and large natural gas plants it's a lot harder today because most of the country is going to try to do it with renewables which is just very difficult and I'm also for reasons I wrote about in our annual energy paper I'm a skeptic of small modular reactors great idea on paper very complicated in terms of execution”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Are extremely efficient and measured by something called a coefficient of performance, which is the units of heat you get per unit of electricity you put in. And so there's three components roughly equal, right? So data centers. Electrification of heating, electrification of transport. The wide-eyed, you know, kind of fairy tale projections of the Rocky Mountain Institute and Green Tech Media People. Are looking at 20 to 25% growth in electricity demand over the next 10 years. I think that's way too high. Adding up those three components. The lower end is closer to like five to seven percent. BNEF, which I think does very good work on these topics, is somewhere in between.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“You know, not until very recently, because it was a negligible part of overall electricity consumption, you know, sub 1% until a couple of years ago, and has been growing slowly. There are three big components to this electricity story. One's AI, another one's electrification of transportation, you know, EVs. And the third one that people should focus on because it's just as big, is the potential for electrification of winter heating in homes, office buildings, and industrial locations. One of the hardest things when you break down energy consumption, an enormous amount of it, enormous amount of fossil fuel consumption is used for heat. Some of the heat around a Is used at temperatures below 200 degrees centigrade. And that's where heat pumps.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“of legislation that differentiate. And so there's just a lot of math involved in really understanding what the impacts are.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“I never did it because we have to use Dobbs Kitchen, you tend to slam face first into the ice. A lot of CEOs are skitching right now on this administration because they thought that what they were going to get was deregulation, oil and gas pipelines, and lower corporate tax rates. That's what they were supporting this guy for. And they come out of the gate with deportations and tariffs and the productivity shock supply side agenda got put in the back seat for a while. They appear to be wanting to get started on some of that stuff. And I think we can talk about it. It'll be interesting to see if they can get the constitution pipeline reinvigorated, which would bring Marcela's shale gas to the northeast. But in the beginning, because so much of the first stuff was tariffs and deportations, a lot of focus on that. And tariffs in particular require a lot of work. There's 12,000 HTS codes across 200-something countries, and they came up with a batch.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“I mean, it's hard to say, right? I mean, the tariff, the whole tariff drama took enormous amount of time. Because I would say that a lot of CEOs, and I've described this recently, is I went to college in the Boston area and every time it snowed, some of the local kids would come out. And when there was a lot of snow and ice on the road, they would hold onto the back of trucks and go skitching. And I had never heard of skitching until I saw people doing it.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Because people would be willing to. To pick it anyway. I don't know. I think obviously tools, OpenAI, I personally love perplexity, but I use them when necessary. And I wouldn't bet against Google's generic market share for search until you actually saw them beginning to lose market share. It reminds me for the last 15 years people have been talking and screaming about the end of the dollar as the world's reserve currency. And every year we look at the data on the sheriff Foreign Exchange reserves invested in dollars, the share of corporate and equity debt issuance in dollars, particularly offshore, the share of swift transaction payments, and the dollar share of all these things, BIS, intercompany bank loans across border, the dollar share is kind of unchanged.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“So you have to set it up yourself. People pick Google anyway. So you could actually argue that Google is overpaying Apple for the default status on their devices. That's interesting.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, but this is the kind of thing where I would continue to just look at their market share. You know, for a while, Bing was taking a run at them. Yeah, that's right. Then nothing really happened. And okay, so in Europe.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Think about this. You have certain applications that are so reliant on not there being a millisecond of lag that they'd be willing to pay more for power and proximity than to have cheaper power that has just a tiny bit of lag built into it.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“machine learning and generative AI. One of the most fascinating ones is look at Palantir, right? I mean, Palantir is taking a run at the large defense contractors primarily through its nimbleness and better application and understanding of the intersection between generative AI and defense weaponry. And, you know, for everybody that thinks about data centers, the massive concentration of data centers in Virginia and in the PJM ISO region more broadly is a very clear indication of just how the national security and defense stuff is tied into generative AI and who their big users are. If that didn't matter, there would be a lot more data centers built in the Midwest where 20 to 30 percent of the time electricity prices are actually negative.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“I think the big guys are going to wait. But in a whole bunch of other industries, not necessarily there's plenty of room. But look, you're seeing these unicorns all the time that are chipping away at different aspects.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“I think that's a sign of somebody This is audio, so you can't see my eyes rolling. But that's a sign of somebody that is willing to kind of change horses when necessary.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“He has demonstrated a mental agility to Pivot as well earlier this year. And I'm not going to make a value judgment on this, but I was struck by him saying that he needed to reinject a dose of masculinity into the country.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“And a lot of the encroachment that people were looking for hasn't happened. So Meta's AI spend is primarily focused on maintaining an impenetrable mode for other companies that might otherwise want to compete with their core business. And that's how they see it, which means that you basically will want to look at top line free cash flow and other profitability metrics for the company as a whole to understand the benefits of all that spend. I think. Investors are right to be skeptical. It's only three years ago that they took a ton of money, put it in a pile, and set it on fire”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“And here's how I would articulate that. If you go back three, four years, there were these really interesting sell-side presentations that talked about. Well, Google's going to try to compete with Apple here. Apple's going to try to compete with Nvidia here. Nvidia's going to try and compete with OpenAI here. And guess what? A lot of those moats are still in place.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, when you try to understand that, what you learn is that meta basically considers itself a generative AI company. And that everything they do and the success of all of its algorithms and social media tools maintain their market dominance because of how well they function and the way that they function is because they're driven by AI. And I agree. I think they thought that the open source LAM model would be. An indirect profit center as people built tools and applications on top of it. And it seems like they're stepping away from that right now. A year ago, that was the kind of message you were hearing and not so much right now. but they think they would say our town.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“On the face of it, that should be negative for the big pharma companies. But because they can play around with all sorts of discounting mechanisms and distribution arrangements, a lot of which aren't super public, the actual impact on their margins so far has been somewhat negligible. So there's an impenetrability to parts of the way the healthcare system function that drives me a little bananas. That said, Large Cap Pharma and Biotech right now are among the cheapest sectors if you compare price to book to projected ROE or something like that. We have this giant map of all the sectors and subsectors and industries and where they trade relative to price to book and ROA and ROE. And healthcare is cheaper. But it would normally make me want to dive in and kind of come up with an”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, and I usually get airlifted into things that are a pain. Like I became for the asset management business and even for the broader firm, I ended up being our COVID point person. And I put together a medical advisory committee of biophysicians and mathematical epidemiologists and people like that from La Jolla Institute of Immunology. And so I get airlifted into things. I would say, oddly enough, of all the sectors and subsectors I can think of, the one that drives me nuts the most is healthcare and managed care. Because, you know how they snuck this provision into the energy bill three years ago where the government can negotiate drug prices finally after never been able to do that?”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Of these companies, as long as the cloud revenue and the AI revenue specifically are growing at 50% plus, and as long as the free cash flow margins don't fall below some critical level, I think the markets will still feel okay about it.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“The surveys are asking them explicitly for generative AI how much money are you saving? And most of the answers are still in the lowest category. Zero to 10% by far. And then it's the above those levels have fewer responses. We're still in the exploratory phase here, and I don't think we're out of the woods. And there may be a day of reckoning at some point. I think because of how absurdly profitable these companies are, the markets are...”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. And usually it has to do with faster throughput and call centers with less people. Stuff like that. Faster customer acquisition, fraud reduction, right? For big banks like JP Morgan, generative AI, one of the huge potential payoffs is identifying serial defaulters and mortgages and credit cards and things like that. So what is interesting is that among the best surveys that are done.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Very discreetly, and we had a chart. I published a piece on this on May 13th. And Microsoft's the only company so far that's really explicitly telling you how much they're earning. And those numbers are growing at a pretty rapid pace from a low base, but they're earning a lot.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“But we had McKinsey surveys. You have Baines surveys. You've got census surveys. A lot of which were pointing in the same direction, which is that corporate adoption has been accelerating, particularly over the last six months. And CEO surveys. I mean, there's too many of them that are all telling you the same thing for them to be wildly off the mark. But again, that doesn't tell you how much they're willing to spend on it, right? You know, everybody might enjoy. Lollipops, but that doesn't mean they're going to spend a lot of their personal income on them. Then the question is how much are the big hyperscalers starting to earn on AI? And so far, Microsoft is really the only company that's disclosing it”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So there's multiple stages to this. The first stage was understanding how much the hyperscalers were spending. And once we looked at those numbers, we were astonished for the reasons you're mentioning, concerned, right? I mean, there's not a lot of examples. If you look back at cable and airlines and casinos, when you start seeing R&D and CapEx as a percent of revenue go to 20 to 30 percent for a sustained period, you know, usually that's turned out bad. We said here, okay, what's going on here? The next thing to look at was signs of corporate adoption. Now, there's nobody that hates McKinsey surveys more than me.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source
“Actually, if you go back even further in either 2001 or 2002, there was a guy named Harry Markopoulos. In Boston, and he wrote a piece basically saying Bernie Madoff is a fraud. That's right. It's a Ponzi scheme. And he sent it to the SEC. And they kind of poked around and did nothing.”
2025-05-29 · Odd Lots · Michael Cembalest on Why AI Is the Stock Market Bet of the Century · IDENTIFIED FROM THE TRANSCRIPT · source