AI Bubble about to burst? (Listen to 5 Investors who put REAL MONEY on AI | Podcast 1

0:06 Hi everyone. Welcome to today's video. And on this video, we are going to speak with actual investors who are putting money in the markets, specially on AI trades and AI-based investing. This is going to be a very interesting episode because we are going to uncover different perspectives about investing. I have special guests with me. So, number one, we have Shruti. She works in the US in Bay Area. So, she is at the heart of technological revolution that is happening. She understands tech quite well. So, that's one. Second, we have Kiran. He has worked with M7 and top seven companies in the world when it comes to tech. He lives in the US.

0:45 We are going to understand his viewpoint about investing. There is Dr. Parikshit. He is primarily an Indian investor who has started putting some money into the US markets now. So, he will also bring a different perspective. We have Ranjit. He lives in UAE. He recently moved to UAE, Dubai, and he has been investing money in the US markets now. So, we will see his viewpoint. And finally, we have Arvind who is a part of my team at Wisdom Hatch. We are all a part of a community called as Global Investing Community which I run. And through this community, I do share my experiences of investing with all of my investors. This chat is hopefully going to give you more insights about AI investments, where the markets are going, how the markets are shaping up, what the future of Indian markets look like. And this is going to be a deep dive. So, please watch this video till the very end. Over to the main video. So, hi guys. Welcome to the podcast, the first podcast that I'm doing with real investors. I'm calling them real investors because some of them are millionaires, right? They're already putting their money and going through whatever is happening in the market, good or bad. So, there is a lot of insights that we would hopefully be able to cover. I've structured the conversation into four specific parts that we will cover today. So, one is that we will talk a little bit about the investing journey of our fellow investors. We will talk about the fact that whether markets are going to crash because this theory keeps on coming up.

2:06 It has been coming up for the last, I don't know, couple of years now that hey, dollar gone, fall of empire, and now comparisons have started between like 2000 dot com crisis and 2026 crisis. So, we'll talk a little bit about that. I will give a hypothetical scenario that hey, if the market corrects by 20%, your port folios correct by 20%, what will you do? And finally, we will talk about India versus US investing. Where is it you're putting more money? Why are you looking at gold? So, this is going to be a very interesting kind of a discussion, okay? For context, these are all like esteemed members of like my investing community, right? And many of them would align with whatever I'm doing. And but I have pushed them to think a little bit contrarian, okay? So, hopefully, we'll be able to uncover those learnings.

2:54 These are real practitioners, real putting real people putting money behind the lines. So, this is not an average podcast. So, let's start with section one, right? And the first key question that I would try to uncover is that AI versus non-AI trades. If you have invested in AI, this is what your picture would look like. This is a very interesting graphic, right? And if some of you invested in this or in these companies, how much did you invest? What your overall portfolio has been like? So, we will just take like a couple of inputs here. So, Ranjit, Shruti, you want to go first? Recently, I have invested in Micron, Google as well. But I I I like they have run quite a lot and then I I felt after they ran that I was probably less invested there. But still, I think from a portfolio building point of view, like not investing everything that I have was a good choice. I think that's something that you should maintain.

3:53 Awesome. So, you did take the AI trade. Now, everyone is kind of thinking about the fact that he should we have bought more microns. So, how many of you are having that feeling? Micron, Intel. And how much So, so did any of you invest like more than 10% of your portfolio in any of these companies, by the way? No, I didn't do it. Okay. I'll pick up. Cool. Shruti, over to you. Yes. Um as far as portfolio construction, I mean, it's it's probably a factor of my living environment. I live in the Bay Area. So, every every friend of mine is either in Nvidia or AMD. So, as is So, um you have very healthy discussions around it. So, 70% of my portfolio was in the AI trade. The remaining 30% My husband works in healthcare. So, you know, I have knowledge about that. And Joby energy was all I think the previous podcast or whatever we want to call that. I think we spoke a little bit about energy, Akshat. So, energy was always a theme that I all I believed in.

4:49 And all of this AI infrastructure needs to run. So, Bloom Energy, Fluence Energy, these were names that I actually made a lot of money in. 70%, like I said, my portfolio was in memory. Um the M7. Um and photo photonics was also a big theme that I I think I caught on pretty early. So, held these stocks for at least 2 years now. They've given pretty good return. Um and I still continue to hold them. I sold a bit of my portfolio as a result of some of my options getting you know, I do weekly options trading. So, some of those got called. And so, I'm sitting on like 35, 40% cash. Not intentionally, but it is And there's just no entry point at this point right now. So, I'm moving to a robotics space sector and some private investments, VCX and things like that where, you know, you get exposure to SpaceX and Anduril and Anthropic, those kind of companies. Cuz it's just really scared to enter the market right now cuz everything is like, you know, parabolic rise. You don't It just feels like a bubble structurally. Something Yes, P is not very high. You could argue that, but it is really scared to put, you know, 40 grand, 50 grand into each of these stocks, cuz you don't want to take such huge losses. So, I'm sitting on a little bit of cash, but whatever is remaining invested is still in the AI trade and a little bit into the robotics. And as somebody who worked in the EV space, um autonomous vehicles is also a sector I I've invested heavily in. Okay, so that's wonderful, Shruti. And I just a very quick note, if you can if you guys can give me like a quick answer, and then I'll make a very interesting point about Palantir, right? This was a very talked about stock, the way it is happening right now with Micron, Intel, and bunch of energy companies. I'll just show you in a minute what happened with with Palantir, right? And maybe this will happen with a lot of AI companies going forward. So, this is something that I'm studying further. But very quick question, how much cash are you guys saving, right? As a for example, if you have invested 100 units of money in the market, how much cash you're sitting on right now? Yeah, I have around 25% cash saved.

6:51 And then the regular salary will be coming, so which which also adds up, but I'm looking to invest, but it's been like very hard to invest in this market. Anyone Anyone Anyone saving like less than 5% cash? Like so I am like so Would love to hear from you guys. I'm like I'm the most I From India, it is very difficult to invest in US. So, like you have that the first you put the money in the when you give that you buy this one, this is this should be part of your portfolio.

7:19 And like we can take a call after three or four days. The money get transferred in three or four days in dollars. And so I am I'm like that most of the my investments are in Meta and Microsoft only. And I'm seven totally I'm seven, because I don't want to track anything except for the bigger ones. So, I have less cash. Okay, there is a very interesting point that that Chamath has made regarding this. I'll show you that that snippet also regarding M7 investing. We'll discuss that.

7:47 But let me get back to making the point right about Palantir, right? Because this is like a FOMO that is that is happening and you guys have also spoken about it. So now we hardly hear about Palantir, right? I mean, the company suddenly died out, okay? And this is this was basically the talk of the town. Like if you just go back maybe couple of months back, everyone was talking about Palantir, especially with like the fact that Iran-US war was breaking out and Palantir becomes the most important company. Michael Bury was shorting Palantir, etc.

8:17 Nothing honestly happened with the company, right? I mean, if you track the quarters, right? So you can see that the company has been posting exceptional returns, right? Hasn't had a miss. Yet the stock is down roughly 37-38% from its peak, okay? And if you study this technical pattern, right? This is definitely a downward sloping curve and this is valuation correction what is happening on the stock. Now Micron, if we take a look, right? It has gone parabolic, right?

8:43 Very similar to how it had happened for Palantir, right? It had gone parabolic and then there was a little bit of correction. So yes, even I invested like little bit of money on Micron, maybe 2 and 1/2, 3% of portfolio. AMD we invested 4-5%. All these companies have gone parabolic. I don't believe that it kind of makes sense to chase these companies right now, right? But definitely taking some profits out and leaving the option of reinvesting, right? Whenever the next correction or it falls to major support, that is going to be an important consideration. This is what I'm also doing. One very interesting point some of you made, for example, Shruti said that she's sitting on 50% cash, okay?

9:22 If she's investing 100 units of money, right? She's sitting on 50 units. I'm saying that I'm like less than 5%, okay? A recent case study that has happened right and here I have pulled some data for you guys, right? So this is a guy called Leopold Aschenbrenner, right? He ran a fund, right? It was and he has generated like 84% returns in 2025 and 61% in 2026, his fund. He was like fully invested in AI infrastructure built out. Warren Buffett, who sits on a lot of cash, okay? He has underperformed the market dramatically, right? Which is really surprising.

9:58 So, like I mean, the larger point I'm trying to make is that maybe like value investing in this type of an environment is pretty dangerous, so to say. Uh sitting on too much cash, we don't know when the you know, sort of next uh rally will happen. So, what I'm thinking about is that maybe it kind of makes sense to just keep on holding and putting more money in fairly valued companies. A lot of companies are there. For example, ServiceNow, Meta, Microsoft. These companies are fairly valued, one could argue, and not chase like high alphabets. But really, like a personal call there.

10:29 Uh second key question, right, that I will ask you guys is that um what about like the correction thing that people are speaking about, right? For example, if I just quickly show you, like this is a chart that I that keeps on popping up that hey, 2000 type crash versus 2026 crash is going to happen. Michael Burry had already shorted the market, right, earlier. Uh so, what is what is like your viewpoint? And more importantly, what is your strategy if a 20% correction happens in the market? So, let's start with Sriram.

11:02 Yeah. So, pretty much like the risk management is very critical when you do investing. So, like how I do is like at this moment I'm sitting on 25% cash. So, I will utilize it whenever I see good corrections. Like I have few stocks which are not at the right levels to buy. Like we can say Amazon, Google, like even Palantir, I would say it's not at right levels for me to buy. So, I'm I'm waiting for it to correct, like, for me I feel I'll make a good profit when I buy the stock at the right price.

11:37 I really don't care when I sell, but I prefer to buy it at the right price. Like, that's very important to me. So, so I'm just if if the correction happens, it's well and good. Like, I'll be able to invest more money and uh see how it goes. I play a lot with margin as well. So, margin rates in US uh with few brokers are pretty less, like Interactive Broker, the percentage is not that high compared to others. So, I do a lot of margin trading as well. So, I will use leverage as well when I see situations where I can invest. And so, what he's saying makes a lot of sense, right? So, what he's doing is that he's doing a a a kind of a mixed model, hybrid model, where he's doing value play, that, okay, I'll only buy it at good valuation. Till that time, I'll save cash. This is a good strategy to find a good point of entry. One quick question to you guys, specially like Shruti and Sriram, since you are have worked in the US, are in the US.

12:35 Some companies, for example, Tesla, right? It is being approximated that these companies are going to play a very important role in the build-out of physical AI layer, robotics, whatnot. Uh these companies, for example, if we just open the chart and try to see like what's happening to their price, okay? So, for example, if we pick Tesla, okay, so if we pick the chart, right? We'll see that, okay, it's roughly like trading at a 4-year old discount, right?

13:01 Roughly 4 4 4 and a half-year old discount. So, do you think that these companies are like still overvalued or have you started looking more closely into these type of companies? In US, breaking into space and breaking into automotive is almost impossible, and he's done both of it, which is impossible. Be it Neuralink, like I don't know. In general, I think fundamentally, he is capable of building any kind of a complex complex you know, breaking into any kind of complex industry and engineering marvels. He's He's done a lot and betting against him, I don't know if that's a good move. And today, some of the companies I interviewed with include robotics. A lot of my friends have gone into robotics companies and their optimist is on another league. Um so, if I was actually listening to a podcast today by Bloomberg Technology and recommend if you guys are interested in robotic space to to actually, you know, listen to it. It's on Spotify.

13:57 The his plan is to like release like a billion robots into the industry and our own CEO, Rivian CEO, has spun off a company called Mind Robotics cuz manufacturing is such a complex thing, especially automotive manufacturing, robotics manufacturing is extremely complex. And the more and more humans are involved in that in that process, there's a lot of errors, the reliability of your products go down. So, there's a lot of automation that's happening and you need robots and you need automation.

14:27 When I say robot, it's not just a humanoid form, I'm also talking about all the kind of, you know, automation related stuff. And Tesla is like another league, even autonomous driving. Everybody here, so we recently bought a home in in the Bay Area and we moved maybe like 10-15 minutes away, but in the peak traffic, just driving to office takes like 45 minutes and everybody who moved in this bought a home and moved in this area immediately switched into Tesla. They don't like Musk, all that is secondary.

14:53 They want to save time in traffic, they just put it on and just drive. So, the technology is already there. It's only the policy and all of that, you know, that those are the bottlenecks. So, autonomous driving, which is also in a form of AI and the humanoid robots, Tesla is there. As far as I know, Tesla is going to surpass, you know, all other >> Just to quickly recap what you said that hey, very difficult to enter automotive and the physical manufacturing part of it. Um combining the entire ecosystem.

15:25 Tesla has done that successfully, very difficult to replicate. Third, it is going sideways for the last 4 years. So, it's from a valuation point of view, you can always debate that, you know, it used to trade at like a PE of 600, 700. Now, it is down to like whatever 80, 90 PE. Uh how are you thinking about it from an investment point of view? Let me bring like Sriram in, Arvind in, right? I mean, Arvind hasn't had a chance to speak yet. And even Parikshit, right?

15:46 So, because he is in India. Uh And he is looking for like, you know, all these mega companies to invest in. So, do you guys feel that, hey, you know, okay, uh Tesla is like something that you would consider at this juncture or no? Uh like, I would not uh consider Tesla at this juncture because um uh from an automobile perspective, previously, they had a lot of moat. Like, when it was coming with EV vehicles. Now, every other big player is uh coming up with EV vehicles and uh their pricing model uh is uh now now they are into a price war, I would say. Like, uh who is getting a real good vehicle at a very economical price. Like, that's the war that is going on.

16:29 And uh the next play that I see for Tesla is the humanoid robots. Like, but uh I really don't see anything uh like an- any uh kind of a timeline when they will hit the market, something of that kind. And for me, when I do investments, uh like volume uh with which I buy stock, that's And the 400 levels, I feel it's pretty overpriced for me. So, I will not look to buy Tesla. Understood. Uh okay. So, let me bring Dr. Parikshit in, right?

17:02 And I have an another interesting question to ask that uh and I added the word doctor there because um health care has been doing really badly, right? For example, if we consider Novo Nordisk uh and a bunch of other like top health care company, health care hasn't really rallied. So, two questions for you. One is that are you investing in healthcare in the US or are you investing in India? How do you see healthcare evolving? Forget about like stock market, right?

17:26 Just generally like demand for healthcare, margins if you're seeing in like certain companies in India versus US. So, what's your perspective there? If I talk about India, the healthcare industry is going to grow. This is for sure because longevity is increasing. So, like after a period of around if you say 30 years or 40 years, we will be having more people with the age of 60 plus kind of. So, they will be requiring more more healthcare healthcare things as compared to what right now is required. If I talk about insurance, like 10 years back, we had more amount of cash patients as compared to insurance patients at our hospital.

18:13 But now insurance is penetrated till the third tier cities of India also. And after having this Ayushman Bharat and everything, it is even more penetrated now. So, insurance and healthcare in India is actually going to grow. This is for sure. And I am investing in healthcare in India, definitely. And in US, I don't have that much idea, but I definitely know there is one one hospital chain called United Healthcare and not much of the healthcare I think all of us invested in that. I think we're already up.

18:45 I yes. It was like a safer bet, right? So, just very quick point there Dr. Parikh. So, I you know, I mean this is something and I picked like Max Hospital maybe like three four years ago, right? So, I made very good returns on that. In fact, all the hospitals, yeah. But the issue that I see in India is then the narrative that you're speaking about, it's very evident, right? Kerala could you know, huge population and you know, healthcare like needed thing and all that. But the valuation at which all these companies are trading is just mind-boggling. I want to buy like more Max Hospital, but the issue is that the valuation at which it trades is just unreal. For example, when we bought like United Health, right? I mean, it's an insurance healthcare play. Margins are better in like US.

19:24 What not? We bought it at maybe like a PE of 14, 15, something like this, if I remember correctly. Very less PE, right? And now, of course, the company has gone up. We are up like 35, 40%. These type of opportunities are so rare to uh to uh scout in India that it's a valuation problem, right? I mean, the Indian market is very good. The only issue is valuation in healthcare. Otherwise, it becomes like an obvious pick.

19:50 Um so, yeah. So, but yeah, I mean, Even India is already a always a problem. So, always a PE ratio is more. So, that is what is happening in Tesla also. Now, Tesla Tesla has a PE ratio is high. Yeah. And the OPM is increasing or not increasing. That's it. So, we are not investing in Tesla, and we are investing in Meta and Microsoft. Um true, true, true. So, that's that's true. Yeah, Sriram, I think has to go make a point.

20:10 Yeah. So, I invested in Novo Nordisk uh when uh it corrected a lot, but I exited from it as well when I learned that um pretty much their patent on the GLP-1 drug is expiring. And uh what I heard was like many companies in India already doing reverse engineering, and they're coming up with the GLP-1 drugs, which will be pretty low price compared to what Novo Nordisk is selling. So, Isn't that that But, isn't that true for almost all medicines in uh Dr.

20:40 Parikshit? The reverse engineering happens in India. Till the time patent is there, that's okay. I'll just say just quickly uh kind of summarize the section. Okay, Tesla, little bit overvalued, high PE, maybe fine, maybe not fine. What I would personally look at is that I do feel that Tesla has an important role to play. There is a reason why it's going sideways for 4 years. Not It hasn't gone down like this, that 80%, 90% correction. Because people still believe in like the storytelling part of Musk and high barrier to entry that Shruti spoke about. So, I would be very keen to at least acquire a little bit of Tesla at some point, right? Not not sure when.

21:15 Um otherwise, like I mean the stock should have gone down, right? Because the entire bit was EV and the margins on EV just corrected like crazy, right? On on Tesla, but um the stock hasn't gone down dramatically. It has gone in side correction, right? Quick question actually. I just wanted to raise it. So, when talking about Tesla, so as you mentioned, it has not corrected so much. Maybe towards 2023, it had shown a shown a dip. At that point, I had acquired.

21:39 So, the price now doesn't still make sense cuz I knew that was the price and that's potentially when you can acquire Tesla. But in the panel end, because when you talk about, let's say robotics is definitely a good theme, like uh Shruti said, right? There is uh the battery side of robotics. So, you would be lithium batteries and whatnot, which has corrected massively since the entire EV hype. So, wouldn't it make sense to look at this theme then if robotics as a whole potentially can go up, EV can potentially come up as well? Isn't lithium battery battery players potentially something we can look at? Uh so guys, I mean honestly, like the way I would think about this is and everyone has a See, I mean when the sto- stock moves up, everyone has a story to tell, right? It's not as if that, you know, Microsoft or Meta are going to play less role in the evolving of AI, okay? They are like largest distributors of AI, no matter how you look at it. Uh but the story right now is that, you know, what?

22:29 Okay, there are things that Meta and Microsoft require, which are like chips and which are like memory. So, therefore, these stocks will go up first. So, there is no head or leg to it as far as I can think of it, right? I mean, there is no reason why memory should go first over like something like iron, which is like energy built out of of that, right? So, our energy demand is suddenly spiking. This was the same narrative that was going on about gold, right? If you go back 6-7 months back, everyone was extremely bullish and trying to chase gold. Why? Because, you know, what? US has messed up all the other countries in the world.

22:59 And therefore, everyone will move away from the US and therefore gold is the default currency. So, therefore gold should go to immediately like, you know, 10x. Okay, so that's how people typically like run. So, what my thought process around this is that uh basically most of our gains will come at a market level that if the market US market or US AI built out is happening and it continues to happen, portfolio will do well, right? Maybe it will happen that okay, fine.

23:26 Uh uh three out of 10 stocks that we own might not do well first. So, that's the same answer that I would give to like battery. Right? So, sorry I took some time. Let's get back to the thread that we were talking about. Um the falling off or 20% correction in the stock markets. Right? So, people are comparing 2020 again this chart here. Right? Uh my editor will put it here. So, 20% correct So, sorry. Uh 20 2000 type dot com correction versus 2026 correction. Uh so, have you guys studied this topic? What are your thought process regarding the same? I think structurally where we are right now is not com- you can't compare that to 2000 to the dot com bubble every, you know, 2% 3% company had a PE of, you know, thousands. I don't think that's what's happening right now. So, structurally I don't think there are huge valuation corrections that can happen, but the situation is so volatile here. There is always something that go happens every 2 3 months something happens um and there is a uh there is a crash. I don't know if China uh decides to invade uh Taiwan or whatever Anything can happen. I'm just, you know, throwing things out there. Anything can happen. It always happens especially after this administration started. Every 3 months something happens here sometimes intentionally to push the market down. So, I am pretty confident next 2 to 3 months something is going to come out of thin air and things will correct. So, I'm just sit waiting on um waiting on an opportunity like that.

24:47 If you take like 5 to 10 years ago, things were a lot more predictable. You had bull runs that lasted 1 and 1/2 2 years. Here I feel like every 3 months there's a pretty significant or 10% 15% dip that has got nothing to do with the market itself. Um it's got more um to do with um macro events that are affecting the market. >> Let me show you guys something very interesting, right? So, Shruti made a point that, "Hey, you know what?

25:08 Previously, bull bull run used to be like, you know, very predictable that, okay, we'll have a bull run, then we'll have a bear run." Sort of. The argument I would make is that we have been in a constant bull run from 2008. Okay, so let me show you the graph. Okay, so this is very interesting, right? Because that will give you confidence to stay invested, and that will also kind of highlight the point why value investors investing has stopped working. Okay? Uh so, sorry, I'm in Thailand right now, so therefore this weird-looking 22550B comes and all that, but uh if you just look at this, you'll see that, hey, okay, this is uh 2008. Okay, so 2008, we have been in a structural bull run, okay? If you just take this graph right here, this is roughly 2008. And if you just plot, right? We have been something like this. Okay, so something like this, depending on which part of the axis you like you you take a look at. This is just constant going up of of charts, okay?

26:01 Uh why is this happening? Because at a macro level, right? The inflation has gone up crazy, right? Even now, I would make the argument that in the US, the inflation would be unreal. I don't know till what point the statistics is true. I was reading somewhere that suddenly like almost like 18% 18% people 18% जनता in US has become millionaires. It looked like fake data to me. I don't know if this is true or not, but this is unreal, right? I mean, if people are getting millionaires so fast, then point of being a millionaire is not that high, right? Or people are just feeling like, "Hey, you know what? A million dollars leads to nothing, right?"

26:36 Um so, yeah, so that's the point, right? I'll bring Ranjit and Arvind in. Very quick points, guys. What do you guys think about at a market level? Is the market going to like, you know, what is your fall strategy, right? I mean, let's talk about that. And in case the market corrects, Shruti, for example, is sitting on a bunch of cash. She'll be very happy if market falls. She'll get a reinvestment opportunity. But what about you guys, right? How much cash are you saving right now? And what in case the market corrects by 20%, what would you do? Yeah, generally I did not save a lot of cash until a few months back, but then Yeah, I just got a huge chunk of money which I which wanted to invest, but then by the time I could market got run up.

27:17 My strategy is to invest this this amount of money in somewhere, but at the same time I'm also doing options, so it makes sense for me to keep some cash to to take the cash secured puts. And and this is this is first strategy and then second I would say is like obviously the margin because I'm based out of UAE and the the borrowing rate is quite cheaper than India. So, if if the market corrects like 20% plus, then I would have probably go leveraged if I if I like have all the cash exhausted by that time. So, there might be temporary dips in the market due to narratives, but I don't see this as like a 20 2008 or 2002 kind of crisis.

28:11 So, I'm not convinced that it will dip more than 20%, so Let me take a very quick viewpoint from Arvind, right? And then I'll summarize this point, right? And give a important key takeaway what I think about this topic, right? Arvind, very quick. Yeah. All right, so for argument's sake, if you try to compare the dot com and now, the main difference is in the fact that there's proof of revenue, right? So, the big players who are actually making money from it are actually showing it in their results. For example, NVIDIA stated the result showing massive surge in data center revenue. At the same time, if you take dot com, these dot com players and all that, they were just building infra without real proof of revenue and the people who are actually the payers of this at that time were smaller companies. But now it is literally Alphabet, I mean like your M7, the ones with higher very high cash flow levels, right? So the the only thing that can actually potentially break this is like a the break in monetization, I would say. When it doesn't make sense how much infra has been built to compare it to what is a requirement there. When there's a gap there, that is when the questions will come whether this will emulate something like dot com. But we are not there, at least from a understanding of revenue side, right?

29:16 And now from a practicality point of view, yes, I sitting around on 15% cash right now, I'll definitely deploy that. And my extreme case situation is literally to move the money from India to UAE at the time. So I'm right now based out of UAE, which I did in Feb when I came in Feb, I was lucky enough to have moved the majority of my money and invest during the crash. But the extreme case is that, so I believe in US markets have much more better foundation, not in terms of economy, just the fact that the market will go up. So I just bring more money from India to US at that point and invest it there.

29:45 All right. So guys, a very quick point regarding like the 2000 type crash versus 2026 crash that people are predicting. So as Arvind said and some of you said that the current rally is backed by real revenues, real earnings. So this is there, one can always debate that evaluations of Tesla, what it should be, that is always there. But bottom line is that this is not like euphoric levels, okay? This is what we can agree to generally. This is one.

30:10 Second key point is that people are saying that we are in year three of a 15-year AI build out. So in case this AI thing picks up, it's going to be huge, okay? So the chances of missing an upside is much higher than a downside, right? So that is there. Of course, there it will come with volatility, but this is an important point that you need to factor in. Uh this is two. Third is the level of expenditure and the uh kind of an arms race which is happening on AI, right? For example, one can always debate that, okay, you know what, okay, robotics is going to be built first or energy is going to get built first or uh distribution via meta will get built first, whatever.

30:48 Like but the bottom line is that this is still participating in AI built out. And this is our structural risk that America runs. For example, if America does not back companies like Intel or Donald Trump made the announcement that you know what, we are backing Dell now, okay? And we are waiting like you know, Oracle now. Why is he doing it? Because he understands that the government needs to participate, especially the US government needs to help out like private players in order to win the AI race because China is already doing it. There is a reason why BYD can manufacture electric vehicles cheap. So this war is not stopping till the time the government is financing these companies, it's unlikely that this spending on AI is going to stop. So therefore, like this argument that we are in year three, four of AI built out, it's very important. Four strategies that you can use now because if you look at QQQ, here you can look, it is at an all-time high.

31:38 Natural response comes that you know what, I'll save cash now. Now this is something that you can do, right? If you're an Indian investor now and you don't have the option of going to the US market immediately, you're not finding too many opportunities, save maybe like 20, 25% of your cash. Whenever next correction comes, you can deploy. This is one strategy. Second, what Ranjit is doing, right? So Ranjit is based out of Dubai, right? So he can write like cash secured puts.

32:02 Shruti can write cash secured puts, right? Cash secured puts, what's the meaning? It simply means that you're committing to buy the stock in case it falls to a predetermined level. So this is something that you can do. Sriram spoke about the fact that he does leverage plays, okay? Now this is complicated for me to explain, but basically people can take leverage in case they are fully invested in, for example, I do take leverage, right? In case the market completely collapses, I'm happy to borrow money from IBKR or a bunch of other brokerages and invest, okay? This is a strategy that I'm adopting right now. But there are a bunch of companies which are discounted.

32:33 For example, according to me, Meta, Microsoft is discounted, health care segment is discounted. Uh these are not trading at crazy PEs, okay? And crazy valuations by any stretch of imagination. So, this can be kind of done, okay? Okay, so now next section that we will speak about is has to do with the overall M7 play, right? That how these companies are expensing money, what their future looks like. So, I let me quickly summarize. Uh so, basically what Sam is saying is that, you know what? These companies uh used to be asset light. For example, Microsoft used to run like a software model, right? And uh it was a very asset light model. So, because the company was so light on assets, uh basically it used to have like very high operating profit margins.

33:14 But unfortunately now, because of the fact that these companies are building AI, right? They are making so much infrastructure investment, uh they are sourcing, for example, energy needs. See, in order to run a data center, you need energy. So, now they have to go and book this demand for energy from a bunch of companies and pay them premium. So, companies like Microsoft, they are going to expense a lot of money in terms of AI building out infrastructure and managing it. So, as a result, they will become uh more asset heavy, like factories, right? That will bring the profit margin down, which is not great for investors.

33:47 So, what's your viewpoint on this? Okay, so overall, if you if you look at the US markets, if you take any kind of uh S&P 500 or any uh technology ETFs, like you see M7 stocks will be the majority in most of them. And whenever you see any rally, it's because one or the one or the other stocks in M7 it it really goes up. So, like right now, uh like uh I would say uh AI is really uh shifting the technology sector, like uh the I would say the hardware is a new software. Like that's what what I would say.

34:25 Uh pretty much uh because uh with uh so many LLMs, like Claude and all of it, uh coding has become pretty easy. Like uh so like uh previously big companies used to have a lot of uh like uh I would say tribal knowledge or uh moat, but I really don't know how that moat will exist in future for many software companies like especially SAS. So, future more or less uh is more about uh the AI infrastructure uh how people are able to leverage it and uh earn more. So, especially the hyperscalers, their focus is more on building mega data centers, uh where they can really kind of a build an AI ecosystem uh with vertical integration to do multiple things. Let me refine the question there. You made a very interesting point that hardware will become the new software. So, one of the key features of software was that it was very high profit uh kind of a game for these companies. So, do you think that companies that are controlling this AI hard- hardware will have massive margins, right, going forward? If yes, why? If no, why not?

35:41 Right? So, this is the same question that I'll throw at Ranjit and Shruti as well because they are from that same field, right? And I'll take you your three viewpoints. So, are you talking uh specifically about the semiconductor chips or just the hardware overall? Hardware. So, let's talk about M7 companies, right? Uh for example, Microsoft, right? So, do you think that a company like Microsoft uh Azure is growing at a rapid pace, right? Which is AI cloud. It will throw a bunch of money in terms of managing this AI hardware, right? And uh do you think that that will still be a high operating profit margin game for Microsoft?

36:14 >> It will be. It will be because uh previously like uh if if you look at the quarterly earnings of uh pretty much the M7 companies like Amazon, Google, and even Microsoft, the majority share of the revenue is coming from cloud. Like uh uh from cloud whether it's AWS for Amazon, whether it is uh Google uh for like cloud and even Azure for Microsoft. Now and also with respect to this AI play, they are collaborating a lot and investing heavily with the big LLM players.

36:49 Like Anthropic, whether it is OpenAI and like pretty much so that they use their infrastructure pretty much for different AI related work. Like like if you see AWS pretty much most of Anthropic models run on AWS. And Amazon has a kind of a big stake as well in Anthropic. Like and even Google pretty much does the same like Microsoft has taken OpenAI. So overall these are far-sighted vision which these companies had and they started investing in them.

37:28 And at this moment I would say what AI can do, the use cases that have been identified I would say are just 5%. Still still there is a lot of scope which we really don't know how the AI will really help. >> So let me let me quickly summarize what I understand from you. So like I mean correct me if I'm wrong. So one thing that you're saying is that you're saying that companies like Microsoft, Meta who are making all this AI physical infrastructure play, they are far-sighted we might not be able to see what they're exactly doing.

38:00 Uh A B um by the use case of AI is still being discovered. Maybe they have discovered 5 10%. So maybe like I mean for example once Meta or Microsoft make all these investments, they'll be able to utilize that capacity multiple times for multiple tasks like ChatGPT once like some other system another like 3 4 5 6 and they'll will spread out the cost. So, therefore, hardware becomes a new new software. So, that's an interesting theory, right? So, let me let me bring like uh Shruti as well, right? So, very quick points, guys. Um I think they will cuz when when they're pouring so much money, like, you know, even like they're doing kind of uh investment sharing with like SK Hynix or uh or Samsung to build out all of this infrastructure cuz today supply is constrained. And when uh when they're signing, they're signing 10-year 15-year contracts. So, they're basically um uh trying to lock supply for 15 years. Today, yes, that feels like 1.5x the cost of 2x the cost. But that that is the price they're going to pay for the next 15 years, right? So, in the long term, I agree with what Sriram said. This is a long-term game, and it is not expensive when you look at it that way. Uh it is more expensive for them to not secure supply and be out of the race. So, I will I will I'll just quickly uh like, you know, sort of introduce the concept of power laws, right? All of us know about this.

39:13 Basically, what has started to happen, and this is reflecting in the market also, that uh most of the money is being made by the top companies, right? For example, Nvidia makes like crazy amount of money. Then you have AMD, which makes much less compared to Nvidia. Uh because Nvidia is a top dog, okay, so to say. Right? Same uh has happened with the M7 companies, that they made crazy ton of money compared to the remainder 493 companies on S&P 500. Now, this power law is going to get stronger. That's what I'm seeing, right? So, Agent AGI. Right? Now, what Agent AGI allows you to do is that, okay, there is one Shruti, right? And she used to manage a team of let's say 500 people, right? Now, 500 people are not required. Maybe 10 are required. So, one Shruti manages 10 people. These 10 manage, like, you know, one, two, three, four, five, six, seven, eight, nine, 10 the critical functions within a company. Now, this allows companies to go out and create a bunch of uh customer-facing things, okay? For example, a classic case study could be smart homes, right? Right now, smart homes are being used by extremely rich people. Why? Because the cost of producing a smart home is very, very expensive.

40:15 Or automating that system or building a, you know, standardized design, etc. is very complicated. Smart home requires a lot of technology. Maintaining it requires a lot of money. So, that's an Agent IKEA application. One could argue that, "Okay, you know what? Um you use Agent IKEA to manage manage these type of stuff." So, a lot of customer-facing applications will come, which ties into the point that Sriram was making, that we have only uncovered maybe 5% of AI.

40:37 Okay? And um yeah, that's where we are going with the market. So, this hardware cost, what these guys are picking up right now, it will get spread over a bunch of applications. That might might not happen. So, okay, let's start discussing the last section. Uh here is like an important clip that I'd send you guys, right? I don't know if you guys got a chance to watch it. It does seem like there's so much optimism. Stars are aligned, especially with Trump saying, "You know what? The war is ending." Why should we care? And do we care? Not really, because I think that yes, uh we care if oil prices were to really go parabolic. But I think that the big story, and that's very clear even from the opening remarks from your team, is that this is all about AI. Right? That's what's really driving markets around the world. If you look at even relative performance, um it's all about AI. So, just stepping back a bit, that something similar happened last year, which is that we were all obsessed with tariffs on the news front. And yet, tariffs did go up, but people forgot about that story because it was superseded by the AI boom. The amount of capex which is happening as far as AI is concerned.

41:42 Something similar is going on this year, which is that yes, oil prices have gone up. Uh they have settled at a much higher plateau, even after the decline over the last uh day or two. But, the AI boom is just so much bigger that it's swamping all other effects. If you watch the entire interview, I'll link it in the description comment box, right? So, two, three points right before we start discussing this aspect in context of India.

42:09 Uh so, one point that he's saying is that, "You know what? AI boom very powerful, right? It has eclipsed all the negatives that have happened in the economy like slower GDP growth, high oil prices, war, tariff war, actual physical war happening. All that is eclipsed by the spending that is taking on AI. So, capex spending. This is an important word that he has spoken about. Uh India is missing out, right? And foreign investors are pulling out of India, right? And bunch of fund managers have also made this point that foreign investors are very angry with India, right? For a bunch of different reasons like high taxes, this and that stuff. In short, Ruchir Sharma is saying that India has missed out on the AI spending, that capex spending, and which is not leading to like any movement in the market, okay?

42:53 So, this is what he's saying, right? Um he says a lot of things, right? And he is wrong about most of the things, right? Now, I have a theory that if you speak things with an accent, then people believe you, okay? So, yeah, it's it's good to ignore them. No, I'm just kidding, guys. Uh but he's like like most economists, he's wrong, right? So, like my wife is also an economist, right? So, I know like but see, putting money on the line and performing is very different from giving economic theories, right? Up up until a while ago, bunch of different people like right from Ridham Desai to um to um to Ruchir Sharma were speaking very positively about the Indian economy.

43:30 Suddenly, tune has changed, right? Not of Ridham Desai, but at least of Ruchir Sharma. Uh so, how do you guys think about it? If you are investing money in India, how much should you be investing? Some of you might not be investing, so I'll not take your viewpoint there. Uh so, let's start with uh Parikshit because he is invested heavily in India, right? I am also invested in India. Arvind might be invested in India. So, let's start here, and then we will If you guys, Ranjit, uh Sriram, and Shruti, if you want to make additional points here, I'll bring you in, but let's start with Dr. Parikshit here. Uh yes, Akshay.

44:01 So, I am out of 100 units of money, the 60 is in India, and 40 is in the the US. So, in the 60 part only the major chunk is around like if I say out of that 100 units in India, the major is like 70 to 75% I have in only Nifty 50. Mhm. So, because I I do options in Nifty. So, it because I have I don't like to track much of the stocks. I track very limited stocks.

44:33 So, Nifty is the one and I believe that Nifty can't go zero or Nifty can't go too much down also. Not more than 10-15% correction. So, one is this. Second is I have healthcare stocks. So, I I like my strategy is normally I buy a lot. So, So, like I invest like this key suppose the lot price is this much. So, that much amount of stocks I always try to have. Mhm. Easy to track so that and some stocks only. I normally like my portfolio doesn't have not even 15 stocks I have. Let me Let me Let me Let me ask you a separate question. Do you think that India will benefit or Indian stock market will benefit from the AI boom that is happening in the US? Because AI boom is happening in the US. That's what Ruchir Sharma also said, bunch of other people said and it is happening, okay, right in front of our eyes.

45:23 Important question is that will Indian stock market benefit from this? That's the point, okay, sir. What's your theory? My take is it is less likely. The more most of the money will go to the US. What I have What's the concrete data if you have studied anything? Like I I have not studied that much, but like I would like to say the investments are not there in India as compared to what there is in US. The CAPEX is not there in India. That is what I know.

45:48 Okay. All right. So, that's fair enough, right? Okay. Shruti, anything like I mean Do you feel that uh India would benefit from like AI boom which is happening in the US? Would the benefits migrate to India? That's the important kind of point I'm trying to investigate. Harsh V Ram, right? If you want to check in. If you look at India, Akshat, like I would say India is really good with adoptions. Like we may not be good with inventions, but we are good with adoption. Like we saw that with IT boom, like with the dot com which happened, like IT services like we did really good with IT services. Uh let me let me like even like you know narrow it down. So for the arbitrage in the previous technology run was cheap labor, right? I mean Indians and Philippines were providing cheap labor. They were saving like cost for American companies. Now with the AI in play and the fact that AI can learn from another AI application, whatever, however that model kind of runs, do you really require like the intervention of human labor comes down. So of course like the money flowing to India and Philippines will go down, right? So where is that next layer of adoption, right? Which would kind of benefit India, right? That's what I'm getting at. For example, you made the point that hey, we have only discovered 5% of application of AI. Going forward, there will be a lot more applications and India might play a direct part. But as of now, I'm just trying to understand what those applications might be because if you can't see that, no one is going to bet on those things right now, right?

47:13 So yeah. Like at at this moment, I would say like especially with there may be small one or two person IT shops that will come up which which can do the IT services. So that that can be like a kind of a niche, like very few people, like three or four people companies which will be formed, which will be able to scale up and do the job which may be run with 50 or 100 people or 200 people. Like those kind of small like uh that's the use case that I'm seeing right now.

47:48 Uh we don't know what like there can be some gig work that can come out of India using AI. Like a lot of gig jobs uh uh can come up where they will leverage AI to do most of the work. So guys, uh one one quick framework that I will suggest in terms of thinking about is that always figure out who the paying customer would be, right? I mean, in the IT boom, the customer was very clear, right? Fortune 500 companies like and all this, and they they had like real requirement and it was a labor arbitrage model.

48:15 Now, unfortunately, even I can't see like uh the clear use case of AI to what like I mean if something gets developed in India, right? From an AI point of view, okay, fine. Uh uh who would pay for those services? That is the primary problem that I'm seeing. For example, like I mean, let's just work with the perplexity or Claude subscription model, right? If you have to sell a $20 subscription model in India, how many people do you think then do you think that India is a bigger market or US, right? So uh that's the thing, right? I mean, we just don't have customer for that, right? So and if we don't have customer, why would companies go and build out these things? So this is my primary trouble right now with I'll just add one potential to your point, Akshat.

48:55 So uh again, so I agree with the point that direct value add is almost not existent in India right now. One potential side is of course that where US companies come and set up things in India. This has happened a lot over the last 2 years, right? Because of the real estate and pure leasing that perspective. But if we go from the same BPO route, what is happening now is in consulting, say what would happen before is US companies would hire companies who have branches in India, use the cheap labor to be able to charge much more higher billables, right? The same model what is happening now in this happening in real time is that they're expecting multiple domains to come under the same person. So let's say you have one person who was purely in uh consulting side, right? Just modeling and all that, and the other person is in software. Now, the same person is expected to do both tasks. So in a period this is happening that they do training now where they're literally telling you, see, you're no longer just a an associate or a consultant, you are literally part of the tech team as well. So they give, let's say, Snowflake, something like that, right? They give to the software.

49:53 It's like a wrapper that works along with your existing work and you're able to do both. So, your cheap labor in India is still beneficial in that way. You're just cutting down on how much resource you need, but the value add can still come from India. Okay, so that's kind of again a kind of a labor arbitrage model that you Absolutely. I think India for now still only has that, right? To provide because R&D wise, as someone had mentioned, there's not enough coming out of India to be able to build the amount of spend that you have to undertake for such AI adoptions are very high. So, barrier of entry comes from the early days. I don't know if you guys watched the Nikhil Kamath and Bill Gates podcast where Bill Gates is like, you know, it's too late. You can't India cannot make LLMs, right? At the end of the day, LLMs are going to get commoditized. We're already seeing that happening. If there is anything investable in India in the AI space would be the physical infrastructure itself cuz building it in India, energy, all of that would be cheap. And but there's the whole data, you know, issue where people don't want the data to go out of their country. So, the data centers will become very country specific. So, for all of the data for within India to get computed has to happen within India. It's It's a small play. It's not like you're building data centers that are like as big as cities, but that's kind of the only space, you know, the batteries might You need energy storage, you know, because in India electricity is still not very reliable. So, that might be a play.

51:15 Whoever wins the you know, like the data center deals and the battery storage deals. Maybe that's the market. It won't be pure play AI. Like it's There is It's too late at this point. I don't think India will ever be able to produce cheap energy. So, that thing is gone, right? And in India, energy cost is very high, right? So, I don't think we can have we can be like Mongolia, for example, BTC mining used to be a very big thing, but it never happened in India at scale.

51:40 Why? Because energy is very expensive and it will continue to be very expensive. Real estate is very expensive in India. So, that's not going to work out right in India. In terms of data storage etc. right? I mean we have for example just a statistic here is that almost India is in the next 4 to 5 years almost 85 billion dollars are going to be spent on AI built out right in India. And almost 65 70 billion dollars will be spent by M7 of the US. So they will control data.

52:08 They already control data, right? So I mean for example we don't have a system like It's like Digiyatra, right? I mean you guys are willingly giving data. Right? So I mean it's like useless, right? So I don't think that that's going to help out, right? But I do feel that India might become like a very important center for medical tourism, right? Especially like if high-end surgeries can be done because the liability on health care is very less in India, right? I mean for example if an operation goes wrong hypothetically in US the hospital could shut down because it messed up. I don't know if that happens in India. I don't think so.

52:45 So that is like a low-risk kind of an environment. A lot of rich people can flow, right? For example UAE cost of health care is very high. Now if you have to get major surgery done, right? People will typically go to India, right? For for that. So there is a very important play to be made. So Dr. Parikshit are you looking at like some companies or do you know of any companies that is doing this type of work in India who might benefit from this AI kind of a thing here?

53:12 Akshit, one one thing I would like to comment here is one of the barrier in medical tourism is language. Number two, AI being used in medical health care is like whenever we have such a disease or such a thing which follows a pattern then AI can come into play. So there should be a pattern even better than being picked up by a normal human being or normal doctor or easily being picked up by them as compared to what it used being picked up by by a human doctor.

53:47 So, that can come into play. So, in the radiology services, the work which used to be done by five doctors in a day now is being done by one or two doctors. This is being said right now. So, as Sriram said earlier that hey, we have only discovered 5% of the applications so far of AI. Hopefully, there will be more. Um okay, so this is uh so we are running out of time. So, um just as a consolidation point, uh it would um be good that um you know, I mean, we can just uh sort of give our final words, right, on on this. So, I'll just share my viewpoint about the entire podcast.

54:22 Number one, I hope you guys got a lot of value out of it, at least heard about different perspectives. Accordingly, you can discuss what needs to be done next. Uh we started talking about the market correction bit, that hey, can the market correct by 20-25%? See, we are in a structural bull run, as we spoke earlier, right? Uh I don't think that's ending. AI is only going to expand that further. That does not mean that volatility will not be there. There can be 20-25% drop at any time.

54:48 Uh keep some cash reserves. Uh we spoke about four-five strategies along the way that you can use, depending on where you are at. Uh Sriram made a very interesting point that uh we have only discovered 5%, 10% of applications now. The hardware cost of AI will get spread over different applications that will be generated with time. We also discussed about the Indian market. Is it really missing The short answer seems like a yes, right? And uh So, yeah, waiting for value in the Indian market, that's when we are going to invest. Uh that's what I'm personally going to do. As a fun end to the conversation, right? Uh maybe it's not a bad idea to just speak about like a few things that we are bullish about, right? If anyone wants to talk about that, that hey, starting like Monday, are you going to put like some money somewhere, right? So, what those bets would be? Just a very quick fun topic. This is not an investment advice.

55:38 I'll go first. I would take like some contrarian plays, right? For example, healthcare software, right? So, these would be my top picks for the next couple of years, right? Where I would be putting more money. I'll slowly aggregate it, but I do see value here, right? So, something like ServiceNow, something like Meili, right? Is a very good company. I would uh probably pick that. So, which is which is not in focus right now. So, that's the area I would kind of trigger. I would also try to aggregate a little bit of gold, okay? At every fall, right? So, these are things that are not being talked about right now.

56:09 Um I would be very keen on that. But, yeah, over to you guys. We'll just do a very quick round robin thing, right? So, Ranjit, anything just uh 20-second answer. I think uh one of the things that we are missing out uh in the AI thing is the the the requirement of the data, like uh you need to store large amount of data, process them. Uh so, here the companies like um uh Databricks um or Snowflake might come into the picture. So, maybe in future I don't know whether it's it's from the one day, but maybe in the future I might look Let's talk about like 2 3 year, right? I mean, that's a cycle that we would typically be there. So, I do feel that software is in a good 2 3 year cycle now, right? It's it's at a decent value with the use case of agentic AI that that would probably be my top pick top pick now one of the top picks now, so.

56:56 So, you're saying so, Snowflake here. Yeah, yeah, I think I think definitely within 2 3 years these companies should uh see some some traction because uh the companies will need to store data and then process data. So, here um they have a scope. Meta and Microsoft because these are M7 number one and they are they are at good valuation. They have good operating profit margin. Apart from M7, if I'm going is uh ServiceNow and United Health. That's it.

57:24 Because of the same following points. OPM is good and their valuations are good. Technically also they are at good value. For me, no photonic they have run up. I think I'm I'm looking at autonomous vehicles, all the pick and shovel companies that enable autonomous vehicles. I think we're at that inflection point where AVs become going to For example, Joby. No, Joby is I wouldn't say Joby is in the AV space. Yes, they are doing autonomous, you know, flights to replace all the helicopters and things like that for defense and stuff like that, but I don't think that anyways, I'm getting stocks through the companies. I won't put more money there. I'm thinking more like lidar companies, even for robotics for that matter, you know, Ouster is a very good example. It dipped a little bit.

58:07 They they have great lidars that is being used in all of AV. So, I'm looking into lasers, lidars, and, you know, any all the other pick and shovel companies that support robotics and autonomous vehicles. I think those will do well. I'm actually like kind of a 95% invested in AI, like in AI infrastructure. So, I'm focusing now on some cybersecurity stocks like CrowdStrike, Palo Alto. So, I'm waiting for them to come to right levels to buy. Like I'll not buy anything on Monday, but I'm just tracking these companies, cybersecurity stocks.

58:44 Got it. Yes, yes, cybersecurity is good. We in fact picked a little bit of stake, made a bit of profit in the last couple of weeks. Got it like for example, Palo Alto has run up quite a lot right since the time we bought it. Problem with cybersecurity is that it will always trade like a software stock right and it will be at very crazy all the time. So, hard to pick the valuation right. So, yeah. Like every other week we are seeing Claude is releasing, Anthropic is releasing something related to cybersecurity. This sector is getting hit hard. So, I'm just waiting for one more announcement. Yes, final words.

59:16 Yeah, so the same Yeah, I would say robotics is definitely one thing and as I had mentioned, the lithium seems like something to dive a little deeper into because given that we expect some kind of change to come in plus they have actually undergone a correction and maybe a bit on the tokenization side. So you have your coin base and whatnot, right? Because just purely in the sense that they are primarily into Bitcoin and this thing right now, but stable coins are also coming into effect mode. I believe US also and Trump is also looking at some bill around this. So potentially another high since we're also looking at growth investing as a whole as I agree with what Akshat mentioned that value investing of course once everything dies down and the economy instability comes into picture, value investing makes sense. But for for now we still need to go for a high risk sort of investing. So something around this line of uh tokenization and stable coins make sense. Thanks guys. It was a pleasure. I hope this conversation was uh useful and thanks so much for joining. Uh hope people like this episode, right? And if they do, right?

60:15 Then we'll continue the series um to learn from real investors, right? how they are thinking about their portfolio.