CNBC Halftime with Brad Gerstner - January 6, 2026

0:00 Brad Gersonner. He is the Altimter founder and CEO and he joins us now. His first appearance of 26 with us and it's great to see you. Thanks for coming on today. >> Great to be here guys. Happy new year. You as well. so what was your thought about the Jensen Wong keynote? Your big takeaway. Was it a is it a needle mover in in any way? >> Well maybe just a comment first. I think that you know you just went around the the horn on the desk and I think everybody is is spot on. This is going to be a stock pickers market. It's not 2023 or 2024 where we were early in this super cycle and we were recovering from the pullback in 2022. you know, and remember last year wasn't straight up and to the right either. The NASDAQ was down to on Liberation Day in April of last year and ended the year up 20%.

0:46 and so I think there's a lot to be excited about as you look at this year. But as Venezuela reminded us over the weekend, as the Scotas decision on tariffs will probably remind us, there's certainly a lot of things we have to get through this year. But if we just look at the general operating framework and then I'll get to Nvidia, you know, lower taxes, we're in a rate cutting cycle, inflation under control, you know, earnings growth is is occurring. We've got this AI super cycle, this massive investment super cycle. We have this re-industrialization and bringing on reonshoring our national supply chains.

1:21 That's also a huge investment super cycle. So, the backdrop looks good. And then we have these companies that are all getting more fit, right? They're leveraging AI. This is tough for the employment picture, but it really does lead to this golden age of margin expansion. And I think what you heard from Nvidia yesterday was a lot more of the same, right? The consensus estimate this year, I think, is that they're going to grow earnings to about 65% maybe 30% in 2027.

1:47 You said it's an earnings driven market, so they don't need to expand multiple. The multiple 25 times earnings. It peaked in July of 24 at 41 times earnings. It troughed last April at 21 times earnings. Now we're at 25 or 26 times. So it's not a demanding multiple. And as a shareholder, Scott, I'm thrilled and happy just to sit here and let an incredible company generate earnings and let our returns come from earnings. We don't need our returns to come from multiple expansion in Nvidia.

2:19 Our biggest bet is in AI infrastructure. Nvidia, TSMC, Pinix, Samsung, Amazon, Microsoft, Cororeweave, Google. we think that we're still very early in the super cycle. People, it's hard to believe, but we're underestimating, right? Think about the total capex here, Scott. In 2023, these companies spent $150 billion on capex building out data centers. This year, over 500 billion. Then that's not speculative.

2:50 That is purchase orders. Those are buildings. That's power. That's stuff that we know is coming online. Chips that we know are going to get deployed. and frankly, they would buy a lot more if they could, but we just don't have enough powered shell in order for them to deploy more than the, you know, 6 gawatts in the case of Amazon that they're going to deploy this year. In the case of something like Coreweave, you know, we think there's an opportunity if they just deliver the numbers that we expect them to deliver this year. you think that the coreweave concerns are are overdone? Is that is that what you're saying? Because the market obviously had punished this name with some of the other neo clouds and there's questions about debt and you know you had almost a a same sentence conversation with there's the Oracle which is under some heavy pressure and you see the CDS blowing out and then you've got the core weebs that are in that group too. Is that overdone? Yeah.

3:41 I mean think about the way the market behaves Scott. It was all in and then all out, right? The babies get thrown out with the bathwater. All neoclouds get treated the same. You know, we were investors in Cororee when it was a private company. We've been investors you know, as they entered the public market and as it's pulled back here, we've added to our position. We're not adding to other Neoclouds. We don't think other Neo clouds are created equal. We think Coreweave stands alone in terms of its performance, the software that is built on top of the cloud, its execution capability, its strategic importance to Nvidia in terms of deploying Reuben, etc. and so we think it makes a really interesting opportunity. Now, let me be clear that's further out on the risk spectrum and the core of our bet this year is on things that we think are, you know, less spicy than that. the NVIDIA, the TSMC's, the Heinix of the world where you know they're absolutely critical to just making sure that the AI AI buildout continues.

4:38 >> Alphabet is is is another one that I that I want to discuss with you because it is one of your top holdings and I do recall the conversation that we had on this program where you like many others suggested that chat GPT was going to have a profound impact on this company's market share. It seems a lot of people, maybe yourself included, overestimated that. Is that fair to say? Do you you look you look in the mirror and say, you know what, maybe we got this one wrong. Because if you look at the stock, it's up 65% last year, defying so many of the expectations that many had.

5:16 >> Yeah. I mean, I listen, hand it to Sundar and and the team over there, Demis, and how they've navigated this transition over the course of the last year. you know, listen, I I think we were appropriately critical that they had moved too slow. They had allowed Chat GPT to gain the consumer advantage and and and Chat GBT today still has upwards of 900 million weekly average users. Its engagement is super high. They're still the market leader. So, that criticism remains, but Gemini is on a tear. The model has improved dramatically. The rate of innovation has improved dramatically at Google. And so, you know, listen, one of my heroes in the business, Stan Ducken Miller, right? He's like his his greatest strength is he forgets the last shot.

5:56 You have to have mental flexibility in this business. I always said Google was the greatest business in the history of capitalism, but they needed to get their act together when it came to AI. Well, they got their act together at the end of 2024. It showed in 2025. We were happy to be shareholders. you know, we continue to be shareholders in Google. Now, the the multiple has expanded a lot. So, they have a lot to continue to prove.

6:18 But one of the things I think that the story was at the end of last year it was all about TPUs and how the TPU is going to take out you know the GPU. I think what people will gain an understanding of this year first Google is a massive consumer of Nvidia GPUs right not only for its own workloads but also the workloads you know in Google cloud. I think people will appreciate the fact that you know the TPU while while it has some advantages is not going to produce the token efficiency that Reuben and the Reuben family of chips is going to produce. the numbers that we heard yesterday Nvidia remains the farway leader in terms of perf per watt the amount of performance or tokens you can get for a fixed amount of power into a data center. You know, the other name's Amazon, which has done next to nothing, which I think has surprised a lot of people. I have shareholders routinely on my desk, who talk glowingly about the company. Josh, I you're one of them, aren't you? Do you have something for J for Brad on on Amazon or or any of the other names that we're we're speaking about?

7:27 >> Yeah, Amazon's actually about to challenge its early November high and I think the stock finally breaks out. It's been a very long consolidation. Part of that is the leadership transition. Part of that is they're selling groceries and it's a little bit of a cloudier story versus a company that's purely operating data centers. Put all putting all of that aside, the investment in Anthropic seems to look really smart. Brad, Anthropic has a really unique position in enterprise AI companies that are actually using AI, not not sitting on conference stages talking about it. And AWS, I think, is the beneficiary of about $5 billion worth of anthropic spend. That number probably goes higher.

8:11 I'm curious, do you think Amazon makes a play to acquire Anthropic before it can go public? And would that even be possible considering the fact that Alphabet is also on the cap table? >> Yeah, great great points Josh. I would say first hand it to Amazon. The investment and the backing of Anthropic early has proved to be incredibly wise. hand it to Anthropic. You know, we're also investors there. the leadership that, you know, they came from behind and now you know they are doing an incredible job in co-generation in enterprise. they've stayed focused you know in terms of the efficiencies that they're driving on both training as well as inference they're using tranium they're using TPUs now remember they announced a huge deal with Nvidia and Microsoft that I think can be upward worth upwards of $50 billion this year in terms of Nvidia so this is also now very much an Nvidia house I don't think that they're going to acquire them principally because I don't think Daario and the founders of Anthropic want to sell the business are willing to sell the business. I think there are a lot of people who would buy Anthropic if that was the case even at these very lofty valuations and you've read all the rumors in terms of the latest fundraising round and valuations which are which are quite high for these businesses. but the core when I look at Amazon super cheap okay super cheap AWS is absolutely accelerating this year. One of the reasons it's going to accelerate is because they're powering up you know four or five gigs worth of data centers and they're going to put Nvidia chips in those data centers along their own chips. They were underinvested in Nvidia course the past few years. It hurt them because their customers were demanding more. I think they write that ship this year. I think they're going to continue to drive efficiency in that organization. Remember when you employ hundreds of thousands of people AI is going to deliver efficiency particularly in those management ranks. and then there's a, you know, there's a lot of conversation about a deal in the works with OpenAI. I think this is the year that everybody does deals with everybody. I think that Anthropic's going to be on all the clouds. Open AI is probably going to be on all the clouds. You're probably going to have a lot of cross investment. you know, in all of these platforms over the course of the next 12 to 18 months, both Anthropic and Open AI will come public would be my guess. that's certainly what I would encourage them both to do.

10:32 I think retail investors should have a shot at investing in the two most important AI companies in the world. we're happy to be investors in all of them. I think that Amazon, you know, it frustrated a lot of investors last year. It didn't perform. I think 26 is a year that they could have a real breakout. >> Joe's got something for you, Brad. >> Hey, Brad. You know, we talked about this being a more discerning tactical market. When you talk specifically about the AI trade, you had the advantage in 24 where it was universal. You could basically go anywhere as you turn the calendar to 26. Where's the sweet spot?

11:07 Because I wake up this morning. I own Train Technologies. I own Vertive. We hear from Jensen Wong last night. Well, maybe data center cooling is not going to participate in this story. Utilities down so far year to date. Software names not really participating. So, do we have to think a little bit differently at 26 about the sweet spot investing around the AI halo? You know, I don't know. Our our our portfolio is he heavily tilted toward AI Infra, and we're up you know, three 3x what the market's up so far this year. So, I mean, we're ear we're early days in the year. I think it's doing just fine. It pulled back at the end of last year. That's why we leaned into it more aggressively. Listen, what did Jensen Wong say on the stage? He must have said it 15 times. Demand, demand, demand. We We're here in Silicon Valley.

11:58 I will tell you the single biggest problem every company has is how do I get my hands on more thinking tokens? How do I get more capacity? The demand is off the charts. It will continue to be off the charts. Let me just step back for a second. We we we've said this before. All software and all compute in the future must think. That means it's no longer pre-ompiled software, dumb software that's just running on a CPU.

12:25 The entire compute stack of the world forever more has to be accelerated because it has to produce tokens that can be intelligent otherwise enterprises are not going to buy it. Okay, that is a massive change. That's not training a model one time and and then we're done with it like everybody thought in the deepsek scare moment at the beginning of last year. Okay, the truth is when Jensen came on my podcast and said we we're going to 1 billionx inference, he said that a year ago. He was understating the amount of inference token generation that we were going to need. The world is going to be supply constrained on inference compute. As far as the I can see, it was part of the inspiration. We were also investors in Grock. We're investors in Cerebras.

13:08 Nvidia bought Grock because in Cerebras and Grock have now demonstrated the world will buy all the tokens they can produce because they're producing fast inference thinking tokens. that is something that's not even baked into the cake of what I think Nvidia is going to be able to deliver in terms of increased productivity this year. And so when I look at it, I would just say Joe stay the course, right? The world is going to ring their hands just like they did in the early age stages of internet, early stages of social and they're going to say, "Oh, we have too much of this or we have a deepse can do all this with." No, the fact of the matter is every single major enterprise in the world, this is no longer the Mac. This is every sovereign on the planet that has to build sovereign capability when it comes to AI. This is every major enterprise on the planet. I will tell you it's incredible to look at the growth curves of companies like Rock and Cerebras.

14:01 Every enterprise in the world is buying fast inference tokens off of them. And so the TAM the total addressable market for AI is every business and every consumer. We haven't seen anything like that since the internet itself. And so I understand why people say, "Oh, Nvidia's up 12x. It can't go up anymore." Hell, I remember coming on here in 2023. The stock had doubled. It had gone up 2x. And everybody was saying, "Sell it. It's gone up 2x. It can't keep continue to go up." It's gone up 12x since January of 23, but the earnings multiple is lower.

14:36 The earnings have grown faster than the 12x stock performance has grown. And so that's what you have to keep your eye on. I think it will continue to be a market leader. Nobody works harder than that team. But listen, hand it to Lisa Sue at AMD. I saw what the the the MI450. If she can deliver that with the specs to Open AI, you know, she rebooted that company. She's placing a huge bet. I think, you know, there's going to be a lot of stress on that. We don't own it today. but, you know, that they're going to make a run at it. I think a lot of these custom AS6 are going to make a run at it. But I think the shot that was across all of these bows from Jensen yesterday was if you're coming after the king, right, you better have something a lot better. He just improved his inference performance by 5x, not even including Grock, which I think will give him, you know, another huge boost. He improved training performance by 3 1/2x on Reuben chips. Now, let me just put that in perspective. It means you can get the exact same performance you get out of Blackwell for 1/ifth the cost, right? That's better than Moore's law.

15:41 He's doing that every 12 months. The guy doesn't sleep to keep up with them. Not only do you have to come from behind, you have to somehow figure out a way to run faster. I think it's going to be very hard to do. So, I think the shot across the bow, it becomes very hard for these custom AS6. if you're Open AI or you're meta and you're building a custom ASIC to compete with these guys, it it just got a lot harder yesterday. so we'll see how that plays out. but I think in technology from my perspective, listen, software is trading at a a two decade low multiple, less than five times forward revenue. Why? Because people don't know what the future looks like. Internet's trading at low multiples today. and all of this is because we're undergoing this massive transformation. I think there will be a lot of interesting software companies and internet companies. Snowflake's one that we own that that will come through on the other side accelerating.

16:31 Snowflake's accelerating its revenue this year. It's a beneficiary of AI. But that is the skepticism that exists in the world. The place where there is no doubt in my mind we're going to consume everything we produce is around AI infra. Joe has a new move that I want to get to as well. And you did, Brad, make a call with us in June of 2024 at another period of uncertainty with software. See what you think. Now, I have a specific question for you, which I'll ask you next.

17:00 You just saw we are poised to get that first close ever over 49K on the Dow. So, it's a pretty good start to the year. Let let me ask you about software more specifically. I know you and Joe were just talking about it, but I referenced a call that you made to me when we were sitting out together in San Francisco in June of 24. And at that period of time, software had had a pretty interesting period of underperformance like it is now. Last year, the IGV is up 5.5%, SMH up 49, chips over software, right? That that that's where things seem to be at that point. You told me that the smart money was buying software that you in essence had thought maybe a bottom was in. Is this another one of those moments?

17:45 You know, it it it's a good point, Scott. I'm sitting here looking at my my my software multiple chart. Look at that peak in 2021, right? We're almost 17 times forward revenue. Today, we're at at about 4.2 times. So, we're at a generational low in terms of the the multiple for software. And let's let's really just peel back why, right? There's a belief in the world today that I can just go to claude code or I can go to codeex at OpenAI. I can tell it what I want and I can literally have it build a customer relationship management system for my business in about an hour, right? And so why do I need to buy a bunch of seeds from, you know, a licensed software company? And to be sure, this is forever going to change software. It already has. But not all software is created equal, right? There are applications which are easily displaced that I think are going to be displaced and you see those multiples coming down lots of big names that were down 20 30% last year and we saw that coming so we didn't own those names but there are other companies that we own and love like data bricks and snowflake that are actually accelerating >> why are they accelerating >> they are the data substrate upon which enterprises are building agentic solutions so when you talk about using cursor to go build yourself an application. Where do you think it sits on top of? It sits on top of that substrate that Snowflake or that substrate that data bricks has built.

19:10 So, we think the world is getting it wrong by treating all this stuff the same and throwing it all out. and so we'll see. These guys have to deliver. And so, I expect we're going to see meaningfully accelerating revenues out of those companies, continued accelerating revenues, durable revenues, AI beneficiaries, and I think the AI beneficiaries will be rewarded. But I think for the other companies, you know, they have to prove that they are AI durable. Remember this. Why do we talk about 10 or 15 times forward revenue for software? Whatever made that valuation metric makes make sense. The reason we we treated it like that is we said these are subscriptions. They are guaranteed.

19:47 It's almost like Netflix. So therefore, they deserve a very high terminal valuation in your discounted free cash flow. Now what happens when that future gets thrown up in the air and you say I don't know if these things are going to be that durable if companies are going to need those subscriptions the multiple right the discount rate goes up and the multiple compresses dramatically that's what you've seen happen now here's what I would say now is the time to go sniffing in software 90% of the consensus is correct 90% of the companies that are down deserve to be down find the 10% that got thrown out with the bathwater find the 10% % right that are going to benefit from AI. Maybe it's a Samsara, maybe it's a Snowflake.

20:28 And I think those will be very good returning stocks this year. so you can't treat all software equal, but there's a lot that deserves the pullback you know that happened. And I think that's forever changed. >> Wow. 90% deserve deserve to be down. I mean that's a profound statement. We will leave it there.