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0:01 figure. So should you be piling into the big tech trade? Again, joining us now, Gene Munster, managing partner at Deep Water Asset Management. Gene good to see you. >> So good to see you John. >> If you still believed in Big tech when it was down then you're probably happy right now. But can you buy it given that there's some other things that are down a bit more? And arguably, you know, a lot of people were overweight to begin with?
0:28 >> I think the answer is you can't just buy the mag seven. You have to buy pockets of it. I think about some of that performance. What's going on with Google is really breathtaking. What is undergoing in terms of the shift from ten Blue Links? You cannot sleep well at night, just simply owning Google. And I think that the when you answer the question more holistically, there's still if you look at we looked at 20 different companies, tech companies and the reporting season and graded each of them.
0:56 And of the six mag seven, five of the six, we gave it an A grade. And so there's still this outperformance that you're seeing with the fundamentals. >> On. >> These companies. But that doesn't mean that the best opportunities to invest is necessarily with them. And so again, more of a targeted approach I think that companies like Nvidia, nice to see it return into the positive. But this company if I'm right, we're I goes over the next one, two, five, ten years. This company is still cheap and will still have strength. So John, you just you have to be strategic in terms of what you're buying. If you wanted to buy a basket, I would buy a basket of smaller tech companies, sub $500 billion and focus on those. It's probably where your bigger outperformance is.
1:41 >> Yeah, a lot to choose from, under $500 billion. I've been looking recently at names like Atlassian, which is at half of its 2021 highs. Zoom at $25 billion. Market cap is at a fifth of where it peaked out. And then there's DevOps names like MongoDB Pagerduty snowflake. They the charts don't look like people believe in them. But how much of a case is there to be made that some of these names are going to be decent I beneficiaries?
2:10 >> Well, there's a great case, and I think that that's the fundamental question all investors need to ask is just how transformative are going to be. And these companies, many of those that you just mentioned are going to have a meaningful benefit to that. There's a lot of conversations around it, but where the rubber hits the road, that central question to ask is how far along are we? And I think the answer is one way to look at that is to look at GPT in terms of the percentage of the online daily activity that uses GPT daily, and it's probably coming up. Around 20% of Google's population uses that daily. The point is that it's still relatively small, John.
2:48 And I think that when we think about this other class of companies beyond the big tech and think about the opportunity, if we're if we answer that question about how far are we in AI? And the answer is we're still early, as defined by the amount of usages today. Then you have, I think, a clear path where these companies will continue to grow higher for longer. And so we're at the point at deep water. I mean, this is even despite everything that's happened over the past two years, we still believe we're early within AI and still are at the bet