E247: Why Wall Street Is Wrong About AI w/ Dan Ives

Is traditional valuation dead for the biggest winners of the AI era? Or have investors simply been looking in the wrong place? In this episode, I talk with Dan Ives, Managing Director and Global Head of Technology Research at Wedbush Securities, and one of Wall Street’s most followed tech analysts. Dan has covered the software and technology sector for 25 years, becoming known for his bold, high-conviction calls on Tesla, Nvidia, Microsoft, and Palantir long before they became consensus. We break down why Dan calls Tesla the world’s leading “physical AI” company, why he thinks AI is the largest tech transformation in 40–50 years, what investors miss when they rely only on spreadsheets, and how his pattern-recognition framework helps him spot multi-baggers years before the herd.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  I've always viewed valuation more as you have to look out three, five, seven years to ultimately think where you think the market's going.

• 0:10Speaker 01

  Today's guest is one of the most influential tech analysts on the planet. Don Ives is the Managing Director and Head of Technology Research at Wedbush Securities. And for the last 25 years, he's been the person the world turns to when they need to understand what's really happening in tech.

• 0:28Speaker 00

  I remember in late 2022, meeting with like a ton of engineers, you know, just part of the work that we do. Talking about AI and where everything's headed. They have to say what we 22 yelling into an empty forest, right? But I was convinced like this was going to be the beginning in terms of everything Nvidia was doing of the AI revolution. Microsoft does the OpenAI investment for 10 billion. And I think we put a note out where like the AI revolution's begun. My whole view is like, it's not just about big tech. That was 23, 24, it's about who in software, who else in chip, the grid, infrastructure.

• 1:15David Weisburd?

  Dan, I've been excited to chat. Welcome to the High and Best Podcast.

• 1:19Speaker 00

  I'm so excited to be here and thanks for having me.

• 1:22David Weisburd?

  So you're one of the most well-known Wall Street analysts. You're famous for your calls on Microsoft, Nvidia, Palantir, and perhaps most notably being early on Tesla. Let's start there. So why are you bullish on Tesla today?

• 1:36Speaker 00

  Well, I mean, today it's because my view, along with Nvidia, it's two of the best physical AI disruptive players in the world. Look, I've never viewed Tesla going back, you know, a decade as a car company. I always viewed everything Elon was doing was disruptive tech. And then today, when I think about the AI revolution, I don't think there's a better play outside Nvidia. I'm thinking about the longer term AI vision, physical AI in terms of autonomous robotics than Tesla. And that's why I think it's $2 trillion and ultimately $3 trillion dollar market.

• 2:15David Weisburd?

  Maybe a dumb question, but how is Tesla and AI playing? Maybe you could unpack that.

• 2:20Speaker 00

  Yeah, I mean, to me, when it comes to true AI technology, I don't believe there's a better use case than autonomous. So I continue, it's my view that Tesla will dominate the autonomous world. And when I look out the next three, five, seven years, robotics, I think is just the start. But I think no one can match their scale and scope. And I think when it comes to miles driven and ultimately really viewing Tesla as much more of a of an ecosystem, that's how I've always viewed it, 10 million cars out there. I don't think there's a better AI use case than what I think about what Tesla is going to do over the coming years.

• 3:04Speaker 00

  And look, and I just say the last decade, you know, and I've covered tech, what, 25 years? There's no more emotional bull bear story than Tesla. And now it's about Musk proving it out.

• 3:19David Weisburd?

  You have kind of an art approach to your valuation as well as a science. And you kind of marry these better than almost anyone. How do you go about figuring out the intrinsic value of something like a Tesla? Is it a DCF analysis 10 years from now? Or just walk me through kind of your methodology.

• 3:36Speaker 00

  I've always said, right, like,

• 3:39Speaker 00

  if you focus just on one year, P year, one year valuation, Mr. Transformation Tech stock the last 20 years. So there's no doubt, like, I've always viewed valuation more as you have to look out three, five, seven years to ultimately think where you think the market's going. So look, I mean, Tesla would be a good example. Like, it's my view that, like, 20% of automotive is going to be autonomous by the year 2030. So when you think about Tesla today, just forget deliveries quarter to quarter and what they're doing. I mean, I could argue that Tesla's revenue today.

• 4:21Speaker 00

  Will ultimately potentially be double when you look out over the next six, seven years relative to the opportunity. So when I look at EPS, can they do 12, 15, $20 of EPS power? Yeah. So I don't view it today as just a stock trading at XXX times next year earnings. It's my idea, what is robotics going to be? What is autonomous going to be? Look, in Palantir's been a perfect example of that, right? Like the heaters heated at 12, the spies at 50, yelling from the mountaintops at 100. And I always say like, you know, the bears when they're in hibernation

• 5:03Speaker 00

  mode and the peanut millars, I mean, I like peanut more, but they can't see AI in spreadsheets.

• 5:10David Weisburd?

  One of the thought experiments that you told me is that you think about kind of freezing time, almost like private equity. You make the investment in Tesla today, you wake up in five years, what is it worth? Do you take kind of a private equity lens to it? Or how would you describe that?

• 5:25Speaker 00

  Yeah, Dave, I think that's a great question. I think it's much more of that approach that I've always taken, even though like obviously a lot of investors know over time have disagreed with it. Because it's my idea, let's say, let's say a company like Palantir, that's going from a government, big data play, transforming to a commercial AI play. I don't think you could look at that in the next one, two years. You have to say, okay, their secret sauce, what do they build out? What's this going to look like in the next three, five, seven years? And that's always how I've looked at, you know, especially disruptive technology plays. And given where

• 6:09Speaker 00

  we are, right? I mean, we're in the biggest disruption phase in the last 40, 50 years in terms of AI revolution. And it's my idea, that's how you have to be able to look at these names.

• 6:21David Weisburd?

  And easier said than done to kind of have this mental benchmark in your head of three to five years, very hard to kind of survive the turbulence. How do you deal with the turbulence and basically surviving the ups and downs of the public markets?

• 6:36Speaker 00

  I could go back to like my two worst years in 25 years, oh eight and 2022, right? In terms of like, you're just given the macro and then the re-environment. It's, I think it's very easy as an analyst to just throw in the white towel. It's easier to kind of go with the pack, not fight sometimes the trends, stocks are selling off against you, but look, I've traveled three million air miles, 25 years. An advantage that we've had is that just being around the globe, you have such a sense in terms of like, what things look like in Taiwan? What customers are talking about in the Midwest? What are the technologies emerging?

• 7:20Speaker 00

  So it's my thesis that I've always built on is that like, I'm going to do the work. And even if stocks might not be reacting at that time favorably, or maybe even a quarter, right? Like we miss a quarter, like the company didn't crush numbers and maybe the stock, but our checks are telling us otherwise.

• 7:40David Weisburd?

  But if you think about the markets kind of gaslighting you, telling you that it's a bad stock and then your customers are telling you something else. So you have kind of almost this counterbalancing, constant feedback. You're, you're counterbalancing the market sentiment with kind of on the ground feedback.

• 7:53Speaker 00

  I'll give you like a really good example. Like, um, I remember in late 2022, meeting with like a ton of engineers, you know, just part of the work that we do, talking about AI and where everything's headed. They'll say, well, late 22, yelling into an empty forest, right? But I was convinced like this was going to be the beginning in terms of everything Nvidia was doing of the AI revolution. Microsoft does the OpenAI investment for 10 billion. Everyone's like, why would they do this? This is great. At that moment, we're like, and I think we put a note out, we're like, the AI revolution's begun.

• 8:35Speaker 00

  Then the emails that I got from institutional, which is I wouldn't repeat them here. What are you talking about? Create this? But that's a good example, like the, because I felt like the work that we did gave us confidence. That we basically put us, you know, almost like, you know, a stamp or sort of pole on the ground saying like, this is it. Things have changed.

• 9:00David Weisburd?

  I think of memetic and herd behavior, and I think of it as like different herds. There's like a Silicon Valley herd where certain things are accepted, certain things are paradoxical. There's like a public markets herd. And for example, like the public markets are much more later adopters, right? It's just a different, so saying something in the, when you're with your Silicon Valley friends could sound very different, could get you more isolated than with your public friends.

• 9:26Speaker 00

  Yeah, and then also I'd say like, it's the, it's also the role that retail has played in this market. I think the way a lot of people on the institutional side have like missed, you know, I think a lot of these stocks is that they've been caught up in their echo chambers from New York to San Fran to Connecticut. And they've missed some of the underlying trends that are happening in these. And you know, whether it's Robinhood or Palantir, some of the Nvidia moves or whatever. I, I think it's a good example where you have to have a good understanding of sentiment, whether it's Singapore or meetings in Florida. And also it's the work that we do in the field.

• 10:10Speaker 00

  I remember Palantir was selling off like massive after a quarter. Maybe I'm just from like $30 to like 23. I'm just giving an example. We're selling about around that. Everyone's like, that's it. Stories, I can learn from 12 to 30. This is it. But yet, like the work that we were doing at bootcamps for volunteer with customers. It was unlike anything I'd seen, you know, relative to the demand. So that was a moment where everyone's like, is this it? People are downgrading the stock. You're like, no, this is, we might have like missed the quarter from a timing perspective. This is a pound table bound moment.

• 10:52David Weisburd?

  When we last chatted, you said that your alpha is are things that are not in the spreadsheets, which is very surprising for public companies. What exactly is not in the spreadsheet?

• 11:01Speaker 00

  So as I'm talking to a customer and a year ago, they were, they thought AI was hype. They, they, they weren't allocating budget. It's a CIA. And today, after doing a bunch of demos, that customer is like all in. And now maybe it's a one or two priority in their budget. It's one, but, but that's important data. Like that's showing what's happening in the technology. So like if MongoDB misses a quarter and the stock's a disaster, but I'm hearing from customers and I'm in the work that we're doing at user conferences, we're realized that they have a unique mousetrap.

• 11:45Speaker 00

  Well, why would that not be just the opportunity rather than throwing the towel? And I'm saying like on the, I think as an analyst in the sell side, it's easier to just stay with the herd. Don't go against the grain. I've never dressed like that. I've never analyzed stocks like that. And I think that's been, look, I think that's been part of our framework, right? Like part of our DNA. And also like, I've learned like the most from our failures too. Like maybe like there have been stocks like over time, like we were too early.

• 12:29Speaker 00

  And then maybe lack the confidence. But yet, at that time, that was a huge momentous move opportunity. And I think I learned a lot of that, like, being so bullish and like, like, let's say when the Della came to Microsoft.

• 12:47Speaker 00

  You know, if you go back at the time, everyone's like, oh my, they should have gotten like an outsider, like Michael Dellum's giving examples like, you know, Chambers, whoever it was. And Della, I always viewed as the Yoda, like he understood, he understood the cloud better than anyone. But if you go back when he took over at 14, it was like, okay, like, it didn't at first hit. And there were maybe moments in there where we're like, okay, we're fully confident in our vision, but maybe we're not going to pound the table. And, and that actually was the time to pound the table.

• 13:28David Weisburd?

  You mentioned kind of how you dress and being outside of the herd. Is the dress a way for you to separate from the herd? Or are, since you're separated from the herd, you dress differently? What is driving what?

• 13:39Speaker 00

  It's kind of like, I've always dressed funky, so that's always like been there. But I do think like my, it's like a little symbolism too, like, because I'm not gonna, like, I'm not gonna like go to the beat of like a typical drone. Like I'll dress different, I could cower others think. But it's just like the way that I call stocks. Investors that have like followed me for, you know, decades, understand who I, they understand the way that we analyze, like, just like our ETF, right? They understand like how we pick stocks, why we pick stocks. And some could disagree. But I think over the years, like we've proven out our success.

• 14:25David Weisburd?

  I had Mike Maples, famous venture capitalist. And one of the things he really focuses on, especially early on, is kind of finding your true believers and finding your early believers and not focusing on the people that don't believe in you. How do you operationalize? You seem to have operationalized this really good. How do you avoid the noise? How do you avoid conformity? And how do you find your early, early adopters? I guess it's two different questions.

• 14:49Speaker 00

  Yeah, I mean, like, look, it's like, I found that like that one institutional side, right? Like, there's a lot of people that. Believed in me early, like, you know, that were very influential, you know, on the institutional side. And that, in those early days, gave me like a lot of confidence. And then I think ultimately started to realize like haters hate and to some extent understand the opposite side, like understand the bear argument like I would like that sounds like it's very important to engage in the opposite side to understand the differing view because actually it's helped me a lot.

• 15:31Speaker 00

  And I think obviously with social and retail.

• 15:37Speaker 00

  It's one where it's kind of like, I'm an open book. People love it, people hate it. But the way that we do things has been very clear in terms of our view of stocks, in terms of staying long and strong, in terms of our view of like just this, you know, basically 20 year tech bull market. My view of AI. So I don't, I just don't get caught up in like noise because it's also a confidence in like the work that we do.

• 16:13David Weisburd?

  How do you know when you're wrong?

• 16:14Speaker 00

  You know when you're wrong more from the, when the thesis changes, like when all of a sudden like let's say like I'll give you an example, it's like Adobe. Like as being very bullish in Adobe over the, like I was a believer that Adobe was going to be able to like pivot and AI was actually going to be like a talent for him. And then basically like after like six, nine months, a year, started to realize more and more from like customers and partners like.

• 16:48Speaker 00

  That wasn't right. Like it was actually the opposite. Like AI was going from like a tailwind to actually like a headwind. So, so that's a good example of recognizing like we are wrong. Maybe right, obviously on the call, but on the AI piece wrong, admitting we are wrong. And then all, you know, an ultimate taken out of our like, you know, our core AI index.

• 17:12David Weisburd?

  Essentially, a customer says something that breaks your frame of mind and then you start to build consensus on the bear case. You start to double click on the bear case.

• 17:20Speaker 00

  And also it's like not being, I think it's easy to where like, let's say like if you're a kid, if you have like your kid and your kid does something wrong, it's easy as a parent be like, oh, it's not my kid. It's the other kid, it's the parent, it's the coach. Sometimes you have to be like, okay, like, yeah, like it's my kid. Like I, you got the ownership and I think it's very easy with stocks. You can kind of like not listen to things that maybe go against your thesis and rationalize them. And I think that's the other thing I've gotten like a lot better over the years to understanding like that input.

• 18:02Speaker 00

  And being like, hey, I gotta like, this could be a red flag. Let me do more digging. Like I think Oracle is an example, like about like two years ago, like stocks going to like a really rough spot. Like I spent like a two days basically just like at user conferences, talking to customers. You know, it was one just to like solidify that my broader thesis, you know, was was right at the, at the foundation, even though the execution could be off from a time and perspective.

• 18:36David Weisburd?

  I like the end recent horror with strong convictions loosely held. So it's this idea of having very strongly rooted theories, but being willing to very quickly change it. And sometimes it just things change. A new C O comes in, they change their strategy. It's not that you were quote unquote wrong. You were right at the time, but the thesis has changed.

• 18:53Speaker 00

  Stocks don't lie. Sometimes it's like, okay, like stocks telling you something. What is it telling you? And it's like, look, and I'll be a person that's like, are, if, if there was like a like almost kind of like a. A great way to like, sort of symbolize like our career. It would be like, great at picking this inflection point. Great at riding it. But probably like our fault is like not calling the top, right? Like it was like staying on too long. And I think that was maybe like the thesis, like, you know, there's many times on names where like we've kind of gone like this.

• 19:37Speaker 00

  Stay on. Okay, then eventually like, you know, you're right, but like it's hard when you're like on this part. Where it's almost like, you're like, okay, I should have, like, I, I should have gotten more cautious. Should. And I think that's something where it's always hard to see that, that inflection. And that's something that like, you know, we probably, we, we spent like a lot more time trying to find that. To make sure that we're not missing something and staying on stores too long.

• 20:12David Weisburd?

  You've been doing this for decades. Have you ever had a situation where the company became more profitable, more intrinsically valuable? And the market just never caught up to it?

• 20:21Speaker 00

  Yeah, man, I think there are.

• 20:24Speaker 00

  And there are like a lot of, but I think a lot of those examples were companies that ultimately ended up getting acquired by like private equity. Like a sale point or.

• 20:34David Weisburd?

  They may not have intrinsic value in public markets, but they still have intrinsic value.

• 20:37Speaker 00

  Most of those examples were companies like they got bought.

• 20:42Speaker 00

  And it was almost like the public market never recognized it. Whether it was like the managing team or the consistent execution or whatever. And then a lot of those companies ended up like getting acquired, either private equity or strategic. I think that's usually how that's played out. I feel like there have been some like, like I think Oracle is a good example where like, that was happening, I feel like a year ago. But it took the market time to catch up.

• 21:16Speaker 00

  Like Oracle would be a good example where those dynamics were happening a year ago, nine months ago. But only in this last six months is it truly caught up.

• 21:32Speaker 00

  I like another good example, let's say be like Google, like, look, I'm of view like, anytime someone says like this lawsuit, this anti-trust, this breakup, I'll always take like, if we were betting, I'll always take like, the over, like I always bet, I always bet like, this is gonna be a lot better than the fear. So Google is a good example. It was like, search is gonna kill, you know, AI done with search, the DOJ, it's gonna get broken up, like New York City cab drivers, Barris in the stock. But that was an example. I see what's happened in terms of like Google Cloud.

• 22:14Speaker 00

  I see everything Kering's doing. I see salespeople going from company X and Y. So that was one where it was like, dang, okay, we're not right. We're not right. Stock's telling you something. Like Salesforce, investors, like, you're wrong, you're up. And it happened.

• 22:31David Weisburd?

  One thing that I've learned from talking to hundreds of investors, founders and business leaders is that planning for the future isn't just about growing assets. It's also about protecting the people who matter most. Life comes with a lot of important milestones. Maybe you're buying a home, starting a family, planning for college, or simply thinking more intentionally about your financial future. As those responsibilities grow, it's worth making sure you protect those you love. Not sure what kind of life insurance you may need? Concerned about how much it may cost? Think life insurance is too complicated? Your local State Farm agent can help answer those questions. They can help you explore your options for life insurance and choose coverage that you can adjust as your family's needs change over time. Financial protection for your loved ones when it matters most. Learn more about life insurance at statefarm.com. Like a good neighbor, State Farm is there.

• 23:15David Weisburd?

  There's a famous John Maynard Keynes quote, markets can remain irrational longer than you can remain solvent. And for somebody trying to operationalize, being bullish on a single stock, what would your advice be to him or her in terms of the sizing? Cause if you do size it too much, it becomes difficult to execute. So any guidance on sizing and how do you build a portfolio of these positions?

• 23:38Speaker 00

  Yeah, I feel like it's almost like, let's say if conviction level is scale one, 10.

• 23:45Speaker 00

  And let's say by definition of your bullish, you're always going to be a conviction level like eight to 10. When you're like an eight, eight point five, you're scaling it still like toe in the water, toe in the water. But when it inflects from like an eight point five to like in the nuns, that's where you scale up. Like it's almost like, cause I do think. You're exactly right. Like it's so, it's easy where you can be like right, but your timing was wrong. And that and three box gets your coffee. So it's almost like trying to figure out like when it inflects. And just.

• 24:25Speaker 00

  That's like, there's, those are the moments to me where like the conviction level. It's, I think that's where you.

• 24:34David Weisburd?

  And the conviction and inflects, not the stock.

• 24:37Speaker 00

  Exactly. Almost separate from the stock. It's like.

• 24:40David Weisburd?

  You're not trying to, and you're not saying that you, you could pick inflection points in the stock. You're saying you know how to position yourself so that when there's a, I guess, catalytic.

• 24:50Speaker 00

  That's exactly, and now you might be like, when that happens at first, like the stock might go the wrong way. But I'm fine with it because like you, you have conviction now, that that conviction could be from like.

• 25:03Speaker 00

  The up, like you're seeing more companies go for like the stack that the company, that this software company is selling. Or people are lining up for ship demand that maybe hasn't been reflected so much in numbers. Like that would be a good example of Nvidia in like late 22, early 23. Sometimes it's very easy, like the stock could go against you based on like macro, whatever it may be. But if your work tells you. That's where it's like you, and look, and you're betting on yourself at the end of the day.

• 25:40David Weisburd?

  You travel the world, you talk to many of the buyers. Are you ever having the buyers actually point you to a new stock that you might have never heard of?

• 25:47Speaker 00

  All, all the time, like. It would be like, there's been a lot of companies where maybe like, they weren't even on my radar, but they're coming up like in bake offs. I'm like, what? They're coming like, yeah, oh, like there's an example, let's say like, like InoData, small cap, best software company in New Jersey. Yeah, stocks like no one cares. Then all of a sudden, like in a lot of these AI, I'm hearing about them a lot. Like in a lot of these AI deployments, no one cared about and that was a good example.

• 26:30Speaker 00

  Like, you know, we started covering the stock and that, that's been one of our core, probably one of our best calls over the last whatever, six months. I think that's also where like, talking to so many people, whether it's investors, customers, partners, and traveling a lot, I think that helps you. It's very easy to like be in your own like echo chamber. And I think that's, that's sometimes like, I think that could be like a big negative.

• 27:00David Weisburd?

  There's this weird psychological phenomenon where you learn something and blows your mind and then your brain convinces you that now you know everything about the topic. So you're just constantly getting, getting updates to your brain in ways that are very kind of non, nonlinear. And then you still think that now you know everything. So there, there's this bias that human beings have that they know.

• 27:20Speaker 00

  You don't know what you don't know. Like I always view myself as like, I never had like hubris. Like I, I just, I'm always trying to like learn, right? So it's like, to me that is, I think, I think that's one of the keys too. And it's just trying to like learn about different things that maybe,

• 27:44Speaker 00

  you know, would just increase your ability to better understand the markets one way or another.

• 27:50David Weisburd?

  Last time we chatted, you said that you make yourself a conduit of information. What does that mean?

• 27:54Speaker 00

  As a conduit of information, we view ourselves as almost like very intertwined globally with investor feedback.

• 28:05Speaker 00

  And I think that's a big part of our value, right? Like when I'm marketing, no matter where it is, investors like, what's the sentiment on stock X? Why? Do you think a lot of people are bullish into year end? What about valuation? What are people talking about? And I think kind of information is like a big, it's a big role you play as an analyst.

• 28:30David Weisburd?

  I kind of look at as information bartering. We have conversations every day, three to four LPs, GBs. They're telling us information all the time. We're telling them market information and it's kind of like this positive sum. As long as you have information to give and as long as you're giving kind of at the margin more, people will start feeding you information. Now you have more information to give to the market.

• 28:49Speaker 00

  It was a part of it is like that also, like I'm very active in social, right? Like, you know, there was like in terms like social media, speaking a lot of conferences. Like I'm, you know, just by traveling, I feel like you have a lot. You're meeting like new people all the time, different perspectives. And I think that's helped us.

• 29:15David Weisburd?

  Mark Andreessen recently said that the top public investors that he knows, look at public stocks as having power law type aspects. So power law is when you're in tight, you have a portfolio of 10, one of them returns more than everybody combined to an order of magnitude. That was a little surprising to me, but if you look at Amazon's returns since IPOs and the thousands of Xs and Google, Microsoft.

• 29:43David Weisburd?

  Are there still power law returns in the public markets today? Or is this kind of a thing of the nineties and 2000s?

• 29:49Speaker 00

  Or today because of what's happened with the AI revolution. And I think how a lot of investors are maybe not even seeing the second, third, fourth derivatives that are happening. I mean, I go, that's a whole part of like, or ETF, like my whole view is like, it's not just about big tech. That was 23, 24, it's about who in software, who else in ships? The grid, infrastructure.

• 30:19Speaker 00

  And a lot of times like I'm looking for names being like, okay, could this stock outperform? And then there's, there's the rare names where you're like, okay, like no one cares about this.

• 30:33Speaker 00

  And I think this thing could be a four bagger, a five. Like, I feel like sometimes you know, when you feel like you uncover some of those. And what I love is like when sentiment is like so negative. And you feel like, you know, you feel like you've like stumbled on this.

• 30:58David Weisburd?

  It's quite common, especially smart or amongst smart people to think of second order effects. So you have, you now need AI. So now you need to build these data centers. Few investors actually think of third level, third order effects. And kind of even just, it's only two derivations out, but for whatever reason, investors don't think about that. Or it's, it's not commonplace.

• 31:19Speaker 00

  But it's even like.

• 31:23Speaker 00

  Like G for Nova, I call it as a power play. Okay. Like that's it are like I've AI 30. Like nebbishus, which is an infrastructure play there. Like Aqua, which is a nuclear play there. But David, this is the example, like, okay, it's like, I'm not talking about. Like we're talking about football, not the cookie cutter first 15 scripted plays. What are those like moonshot play? And it's trying to sometimes. See where the market is going that maybe at the time investors don't see. Like maybe even like if we're in a market now, everyone's like.

• 32:04Speaker 00

  Nvidia, OpenAI, like, is this a bubble? Like, does this remind you of thing, you know, froth, like maybe risk off in the near term, whatever. See, I view it differently. For me, it's like, if somebody covered tech stocks in the 90s, I compare it dramatically different. Relative to the use cases, the spending and everything I see. And I view times like when there's like sell offs. As maybe just times to just further my conviction. In, you know, in, in, in tech names that I think are mispriced. My, my reputation's been built, not when stocks go from here to here.

• 32:47Speaker 00

  Do like in that my Shih Tzu or Terrier could be the genius. It's when stocks are going like this and everyone's jumping ship. And you're like.

• 33:01Speaker 00

  Like, you know, these are the opportunities.

• 33:04David Weisburd?

  Do you judge yourself kind of as a venture capitalist would based on your big outliers? Or are you kind of looking at your hit rate?

• 33:12Speaker 00

  It's a combo. It's my hit rate, but also a lot of times it's like my outliers, like my moon shots. Like, was I right? Like, and I take it very personally in terms of what I'm doing. Like, when I'm in an airport and some random person comes up to me and they're like, "Thank you so much. Because of you, I invest in this." Or if I'm in Europe and someone's like, "My grandpa invested in..." See, I view it much more like personally. This is not like client and just numbers and whatever money you make, whatever. I take it much more personally because people are putting their confidence in me.

• 33:55Speaker 00

  And I take that as a very heavy weight beyond just like a job.

• 34:02David Weisburd?

  Why is investing in the public markets like batting three hundred in baseball?

• 34:07Speaker 00

  It's hard to outperform.

• 34:10Speaker 00

  The alpha and the information flow is so hard to find things on the edges. So when you think about like batting three hundred, you know, and ultimately if you bat three hundred over a career with some other stature in Cooperstown, because I think it's about information flow. Like, I think it's just like harder and harder to distinguish, differentiate, and also the timing of things. Especially in a market that's become so global, right? Like, I mean, today, if I just think about today already, I've talked to investors from Korea, Middle East, New York, California, South America.

• 34:52David Weisburd?

  One of the keys to your success is you believe you could push buttons on a stock. And you said that you could push buttons on Tesla. What does that mean? How does that help you generate returns?

• 35:02Speaker 00

  Tesla is one where I feel like when you, when you have a big following on a name, I feel like you can, you can help.

• 35:18Speaker 00

  You can have change narrative.

• 35:21Speaker 00

  And I think Tesla is one where like it's very important to like, make sure the narrative is right because I think as an investor, it's very easy, just as an example, like if you look at the last year, so let's just say like you looked at Tesla's

• 35:36Speaker 00

  numbers. So all you know is just their quarter, what they report and what street numbers have done. You'd right now think Tesla's stock is 200 bucks.

• 35:49Speaker 00

  But instead it's whatever 430. Cause it's about the narrative. It's about the focus on Tesla is about

• 36:00Speaker 00

  the future, about autonomous, robotics, you know, and, and, and really them become much more of an AI play over the coming years. We view ourselves as very important in a lot of these names in terms of like the measure, the narratives, right? Because I believe that's where the growth is. And I think it's very, it's very easy where a lot of names become very combative. You have a thesis and you have a mouthpiece. And you have to be clear about that. I mean, look at Palantir as an example, right? Like

• 36:41Speaker 00

  the last hundred eighty hour, whatever, a hundred seventy hours of the stock move. People have just followed it every time valuation, whatever it may be, like it's a services company. And they just, and that's created the opportunity.

• 36:58David Weisburd?

  When you say push buttons, you're able to contribute to the public discussion on the stock, you're able to influence the board. What do you mean exactly?

• 37:08Speaker 00

  Yeah, like let's say like, like from a board perspective, like I felt like the board needed to get a new pay package to Musk. I think there was also a ground swell among a lot of investors I was talking about. So we put out basically like a three point note for the board, what they need to do in Musk. Now again, like, I think that message was well received. The board ended up, you know, whatever, a month ago doing that stuff. But that was a good example. Like, that was an overhang in the stock. Like Musk needs to be with Tesla. He needs a new package. He needs to get 25% ownership. Investors want more XAI and they want that ownership.

• 37:52Speaker 00

  So also it's like, it's playing a role in that way. Like it's trying to like weigh out what ultimately I believe is important, not for me, but for the story.

• 38:05David Weisburd?

  You mentioned Palantir. I was invested five years before I went public. I had to sell via lockup because of our provisions, but you were right on Palantir. And specifically, I just want to go back because oftentimes people change the narrative in retrospect.

• 38:19Speaker 00

  Oh, I know. Yeah.

• 38:21David Weisburd?

  At the time, everyone was saying it's not great because consulting, it's masquerading around as a tech company. What did you see that other people didn't see?

• 38:30Speaker 00

  Well, first of all, I started off like massive AI, whatever it was like $12 or $15, $13. Well, first of all, it was my view of CARP. Like, I'm also a believer, whether it's seller, Microsoft strategy or in the Dell and Microsoft to CARP, I think you're betting, you're betting on the leaders. Like you're betting on Jensen and Nvidia. So I'm a huge fan, huge believer in everything CARP is doing.

• 38:58David Weisburd?

  Is that also not, not, uh, not in the spreadsheets? The leadership is essential. There's no line item, right?

• 39:05Speaker 00

  It's like AMD, I would take this past year, AMD is a disaster. Dude, Lisa's shoe, if she's flying airplane, I'm in 3A drinking a cab, feeling really good.

• 39:17Speaker 00

  So then there's other managing teams that I would spread like losing both away from that stock. They're so bad. So I do think that's something that you have to have a very good sense for like which managing teams to bet on. Proofpoint, okay, like Gary Steele. I remember when I met Gary Steele, Proofpoint, like this guy's all famous. Like he might be the best CEO of a small cap manager I've ever seen. Proofpoint ended up becoming like a forty bag or whatever, but it was betting on Gary Steele and now is it spoke. I do think that that's important.

• 39:59David Weisburd?

  One of the most mispriced things in the public markets is founder led companies. Because there's this three month quarterly reporting now that they're trying to change that to every six months. But this disconnect between playing for a quarter and playing for eternity or forever long the founders alive. It seems like it's not priced in. Is there any credence to it?

• 40:21Speaker 00

  Yeah. And also I think founder led like CEO, you know, there's, there's all differing views, right? Like sometimes like you need maybe other managers come in and they can go to chairman or whatever, because they could actually lead it. Other times, you know, they're the ones to actually lead the vision. I always think sometimes like companies get to a certain scale, especially at times like when companies go from like 500 million to a billion. Even software, that's like a huge whip. And, and there's a lot of management teams where like, okay, you know what? They were great to get them to there. Now it's like, it's time to, to hand, you know, hand over the, the reins, right?

• 41:06Speaker 00

  So, but that's why to like not in the spreadsheets. Like I think that is something.

• 41:14Speaker 00

  Like I think in this job, having like EQ is as or more important than IQ. I don't know how much it's neat, you're born with it or taught, but sometimes like sitting down with individuals being like, is this someone I want to bet on or not? And I do think like some of like the best investors, they have just their genius level EQ.

• 41:45David Weisburd?

  Said another way, the IQ is in the spreadsheet or the numbers are there. The EQ is almost inherently not on the spreadsheet.

• 41:53Speaker 00

  That's like, that's like a really, really important thing that I think gets overlooked very often.

• 42:00David Weisburd?

  People will fact check me, but I believe the first time that there were super voting shares in this founder class was Google when it went public. Now Alphabet.

• 42:09Speaker 00

  I think you're right.

• 42:10David Weisburd?

  Mark Zuckerberg has since done that. Obviously Elon has a lot of control. Do you think net, net, that's a good thing? And how has this kind of 20 year experience played out?

• 42:20Speaker 00

  I think it's, I actually think it's a great thing for those companies. Like in other words, like I could say sellers done very similar things in micro strategy. Again, that's another, because look, it's like you're betting on that pilot to fly the plane. If you get too caught up investor boards, rep quarter to quarter, makes some missteps. So I do think like, in order to have like a wartime CEO, like a Zuck or a Musk or, you know, a seller. I, I do think you need that because I think it's very easy to get caught up in gyration. Boards and other investors.

• 43:03David Weisburd?

  It's like an insurance against an activist short-term takeover. So said, said another way, and it's not only that activists can't come in. It's that the team knows that activists can't come in. So therefore they could plan for the long term.

• 43:15Speaker 00

  I think that's right. And I think like, like if you look like what Zuck's though with Meta, go back to like Metaverse. That disaster quarter in October, stocks 85 bucks. It's like, it would have been very easy to like, should we change course around? And then what is he like bam bam bam change course and the rest is history.

• 43:40David Weisburd?

  It's very easy to criticize Zuck, but he has been managing Facebook truly and Meta truly like a startup. What does that mean? Taking large, big bets in every cycle, knowing that maybe 50% or maybe even one third of them will play out. But if similar to the recent bet on AI, if that that winner is going to be kind of a power loss. So he's like, he's like investing hundred or 200 billion dollars almost on a venture like bet, which is extremely bold. And I think rationally is the right thing to do, even though many, the first couple of times you'll be wrong and everybody will ridicule you. And then on the third, you'll be a genius.

• 44:19Speaker 00

  Exactly. But then if you don't have that structure, it's hard to do that.

• 44:25David Weisburd?

  If you could go back to 1996, when Dan Ives graduated Penn State, what would be one piece of timeless advice you would give yourself to either accelerate your career? Or avoid some of the mistakes?

• 44:40Speaker 00

  There were a lot of times earlier in my career where like, whether it was like,

• 44:48Speaker 00

  you know, not getting jobs or maybe even at jobs, like, you know, different failures where it was very easy to like, let that get you down. You get caught up in it. The thing that I would tell like myself back then would be embrace the failures. Let them make you better and and it's belief in yourself. Like it's just like all the success that you've had, right? Like, I'm sure if you went back like 20 years and showed what you're doing there, you're like, whoa. But part of it is that like, it's a learned behavior. And I think for me, it's like, once the, once like the bell went off or be like, look,

• 45:34Speaker 00

  stop like getting focused on like, you know, failures you've had and let them get you down. Cause it's a true story. I'm at FBR, like, you know, in Freedom Billings Ramsey, you know, that was a core part of my career.

• 45:52Speaker 00

  I remember I initiate on three companies and.

• 45:58Speaker 00

  I'm like so excited like, you know, it's like, maybe it's like two thousand two or something like that. And three companies in the next three weeks, they all go down fifty percent and they they were all buy rated.

• 46:16Speaker 00

  And I remember I'm sitting there stuck in like Pittsburgh airport on a Friday and I'm thinking, I'm thinking like, what am I going to do for my next career? You know, because like disaster blowups. My head is sales the time John Billings calls me and he's like, you're you're gonna let this conviction? Just go, who cares if the stocks were and they all pre nounced negative. See, you have conviction, that's what makes you. And he was like a Vince Lombardi type feature of that weekend. Like I wrote this like crazy piece like, this is like temporary, these companies get bought. It's like, you know, he just comes in the thesis.

• 46:56Speaker 00

  And actually over the next, like, I think nine months, all those companies got bought and they became like all of them were like four fat baggers. But that was like a defining moment in my career where it's like, just stop like, stop feeling sorry for yourself if you're wrong and and just have conviction in yourself.

• 47:17David Weisburd?

  It's not just the failures, it's having people around you that interpret the failures in a certain way. The exactly example is actually a pretty interesting one because he essentially tarnished his reputation for five, six years, even though he had made the right probabilistic bet in order to do what's right for for Meta. And if he had been around people that were very herd like or insecure, they may have said, well, you've made these two wrong bets. Don't do the third one. But who you're surrounded with is as important as your own mental state.

• 47:48Speaker 00

  And for me, just being on Wall Street twelve of years, like, there's like thousands and thousands of analysts, like, they just like, you know, they disappear, like, you know, like the wind or whatever, right? So it's like, I've been lucky that like I like F, you know, FBR and then like a web, but it's like I always like worked at places where like, they understood who I was and they gave me that. Time for the calls to to play out. But maybe if I was like at different firms that didn't have, they didn't understand like this folky dresser and like, you know, they just the looks at stocks differently or whatever, then maybe like, you know, like it never would have, never would have worked, right?

• 48:32David Weisburd?

  Is there something in your childhood or background that allows you to be kind of out of the herd and eccentric?

• 48:40Speaker 00

  Part of it is like my dad always said, like, people are always going to be better looking, wealthier and smarter. Just accept it. Like there were certain things like growing up in like Long Island in the eighties, right? It was just like, I think that was like a great place to grow up and just like living like in my household. It was one where it was like, just be your own self. You like, so I think that was like a big thing where like it rooted back to like those days.

• 49:11David Weisburd?

  What would you like the audience to know about you, Wedbush, or anything else you'd like to share?

• 49:14Speaker 00

  Wedbush, obviously, you know, doing great things from a tech perspective in terms of AI. You know, we have our, our IZETF, which is, we've been super excited about launch in June. That's something really good because that gives investors the opportunity to, to basically build AI. And then, you know, very similar to the theme, we recently became chairman of Orbs, you know, ECO, which is a company that's really focused on Sam Altman's world. You know, I think Sam's gonna be a great partner, everything he's done. And there's gonna be a single sign on for the AI future. You know, I think authentication is gonna be more and more important in terms of human proof. And look, for people to know me, like, I do a lot of different things. The clothing line may be a little different, but it's all centered around

• 49:58Speaker 00

  the AI revolution. Like, it's my passion for where that's happening.

• 50:03David Weisburd?

  A mutual friend told me to ask you about Snowmilk and your clothing. Tell me about that.

• 50:07Speaker 00

  So, um, Snowmilk, you know, an awesome designer in Williamsburg in Brooklyn. They came to me and wanted to do a collab. So we did a Dan Ives collab at danivesclothing.com. And look, this is something where I have like so many people. And these are for men, women, for whoever.

• 50:26Speaker 00

  Different colors, funky designs. We start off with shirts. We're going to go in sweatshirts and hats. And it's been great work with them and the demands have really, uh, it's been, yeah, obviously a lot higher than I ever thought.

• 50:40David Weisburd?

  Well, Dan, you're truly a one of one. I've never met anybody like you. And I'm so lucky to have spent time and, and, and looking forward to continue this conversation.

• 50:49Speaker 00

  No, and I'm just happy that you invited me and all the success that you've had. And it's great to be out on here.

• 50:55David Weisburd?

  Thank you, Dan.

• 50:56David Weisburd?

  That's it for today's episode of How I Invest. If this conversation gave you new insights or ideas, do me a quick favor. Share with one person you networked who'd find it valuable, or leave a short review wherever you listen. This helps more investors discover the show and keeps us bringing you these conversations week after week. Thank you for your continued support.