Tech Tour 2025: AI Forever Short Videos

Dominic Rizzo:

So almost all of our GDP growth really needs to come from productivity. And if you go study electricity, what did the electricity do to global productivity? It added roughly 1% a year to the global GDP statistics for 32 years. I think AI is going to beat that handily. I mean, 1% a year for 32 years I actually think is a low bar for what AI can do. And why is that? It's because AI is a one-to-many technology, right? It leverages our capabilities.

The area that we're seeing it most right now is in digital semis, right? Where is this showing up in the stocks and the revenue? It's in digital semis. And why is that? It’s because the compute processing of AI—we've talked so much about it being so high and the compute intensity being so high.

Dominic Rizzo:

Look, I always take a step back with technology. I say, OK, where are we with valuations? The global technology universe is trading at roughly 25 times earnings today. Historically, that will peak at 26 to 28 times earnings. So we're at that upper end of the range, but we're not nearly at the extreme levels that we saw during the ’90s, where you would see over 30 times earnings. And you know, I have the saying internally: You know, AI has the potential to be the biggest productivity enhancer for the global economy since electricity. Productivity-enhancing technologies are usually accompanied by speculative bubbles.

Our job is to navigate speculative bubbles responsibly through an investment framework. I don't see a speculative bubble today. I see names that are at the higher end of historical ranges, but not absurdly expensive. When I look at demand drivers, software, we talked about agentic AI. When I look at semis, core auto industrial potentially bottoming, smartphone, PC potentially bottoming, accompanied by the strength of AI chip spend, internet getting very high ROI on this capex. You put it all together, and I actually think it’s a really nice outlook for technology for 2025.

Anthony Wang:

Yeah, I agree. I think that, you know, a lot of strength has been really driven by earnings growth and not valuation. So that's, you know, the “Mag Seven” looks reasonable to me. And then, I think that you've got the kind of bouncy compounders continuing to look good and grow. If we get a better accelerated economy, that should be a tailwind. As well as the stuff the Accenture’s, that IT services have been really kind of depressed because of weak economic data. As well as broad-based semis, that should also be good.

So, I'm optimistic. I know we're going on year three of a really strong tech rebound, but I think just given everything that's happening in AI, I do think that can prolong this cycle.