00:00 Speaker A

According to the Bank of America Global Fund Manager survey, Long Mag 7 is one of the most crowded trades on Wall Street. But, my next guest has some alternative ways to play artificial intelligence. I'm going to bring in Dan Newman who is the Futurum CEO. Great to have you here back in studio with us.

00:15 Dan Newman

Hey Brad, good to see you.

00:17 Speaker A

So, let's talk about this because a lot of people have already piled into Mag 7, but you believe that there are other places that are non Mag 7 that they could find some exposure to generative AI and this broader kind of thesis that's driven the market for the past two years.

00:30 Dan Newman

Yeah, I mean there's been nothing that has, you know, deemed more attention than AI. You've seen just the news in the last couple of days, whether it's Microsoft wanting to, or sorry, meta offering hundreds of millions of dollars to potential researchers to join their AI talent team. Or, you know, you saw Marvell came out yesterday with the custom AI Silicon roadmap and their stock is popping, we'll probably talk a little bit about that. Um, but you're seeing it really across the board. And then of course so many people have kind of felt like, well, did I miss Nvidia? And so the the question I get asked most by, you know, by clients, by the by retail investors and why we basically launched the Futurum AI 15, which is the extended list beyond is what else is out there besides maybe Nvidia, Microsoft, and meta? What are the plays, you know? And so, you hear about kind of what are the difference difference makers? So for instance, uh, companies like Avago, you know, Broadcom. Um, you know there's a $500 billion TAM, we believe, in the next four years for custom AI Silicon.

01:52 Speaker A

Yeah.

01:53 Dan Newman

Um, Nvidia's going to get a lot of that, you know, Nvidia gets 92% of that market right now, we believe. Right. But they're not going to keep 92% in our opinion. They're probably going to fall to maybe 80%, 70%. So it still means Nvidia, by the way, can triple to $300 billion. There's going to be $100 billion that's going to go into custom. And so we have Avago, for instance, at as our number two name to play, because that $100 billion opportunity, that sits with the Google custom chips they're doing, sits with custom chips that companies like Open AI are planning to do. So that's one of the plays. Of course, you're seeing, uh, Brad, TSMC. TSMC, you know, people think about it as a foundry, and of course, it's a very big name and there's a lot of dollars invested in it right now, but people don't always make that connection that whether it's Nvidia making chips, meta making chips, Microsoft, and Amazon doing their custom chips, all of them are dependent right now on TSMC. And as much as I think the US needs a strong Intel, we aren't there yet. So, right now, TSMC has all the pricing power. So it sits at the very top of our list. And then there's some eclectic names, I'll pause here, but basically there's eclectic names like Oracle, that we put on there. You saw what a pop they've gotten, but they've absolutely nailed this AI transformation and they're in a perfect position. And just yesterday, XAI and Oracle made a big announcement together that they're going to be using X Oracle's infrastructure to train XAI models.

04:11 Speaker A

Right.