The Compound and Friends: Tim Cook the GOAT? Snowflake earnings preview, the software comeback, reactions to Ed Zitron

Sourced by podcast-ingest on 2026-09-02. Auto-transcribed via AssemblyAI (universal-2, en). Speakers identified by AssemblyAI Speaker Identification using the per-podcast host/regulars hints; the resulting label→name mapping is in the frontmatter. Duration: 1h09m. Episode page: (not provided). Audio: https://pdst.fm/e/pscrb.fm/rss/p/traffic.megaphone.fm/TCP4949011491.mp3.

Show notes (from RSS)

Join ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for another episode of What Are Your Thoughts and see what they have to say about: Snowflake ahead of earnings and what the report could tell us about AI demand and the future of software. They also look back at Tim Cook’s incredible run at Apple, debate whether software stocks are really dead, discuss the sudden momentum crash hitting Wall Street, Clear Secure, and much more.

This episode is sponsored by Betterment Advisor Solutions. Learn more at ⁠Betterment.com/advisors⁠

Please take our 2026 audience survey ⁠HERE⁠.

Instagram: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://instagram.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://twitter.com/thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

LinkedIn: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

TikTok: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management.

The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information.

Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/⁠⁠⁠ Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

Josh Brown: I love it.

Michael Batnick: Turn my headphones out.

Josh Brown: You turn them. All right.

Michael Batnick: I just want to. It's our first time. It's our first time with me in our new Long island hideaway. Want to make sure everybody can hear me.

Josh Brown: The sound quality, is it good? It's good enough.

Michael Batnick: It'll get better. All right, we're going to work on the soundproofing. It's going to have to do. Hey, everybody. Welcome to an all new edition of what are your thoughts? America's favorite investing livestream. We do this every week, usually live at 5:00pm Eastern. With me, as always, my co host, Mr. Michael Batnik. Michael, say hello.

Josh Brown: Hello. Hello. I like your name today. It's very clever.

Michael Batnick: Look at me. So clever. Just a wash in cleverness. The chat is going off right now. Will you hear?

Josh Brown: Hold on. Before we get to the chat, I was thinking that your away message game must have been absolutely insane, but were you too old for that? Was that like, was that after your time?

Michael Batnick: What's an away message like?

Josh Brown: I messed email, remember? Like imessage back in the day.

Michael Batnick: Oh, I don't.

Josh Brown: Aim. Aim. Aim.

Michael Batnick: Yeah, I wasn't clever with that.

Josh Brown: Those were the original tweets.

Michael Batnick: Yeah, I was a big ringtone guy. Like if you called me, I controlled what song you heard as the ring.

Josh Brown: That was your thing.

Michael Batnick: That was my thing. And I was DJing. I was DJing my ringtones. All right, who's here? Georgie D. Is in the house. Chris Hayes, Magnus, some of the regulars. Super excited to see you guys. Thanks for. Thanks for being here live. We appreciate it. Michael, Skyrose says. Good day, everyone.

Josh Brown: Good day, sir.

Michael Batnick: Noah Turner. What up? What up? Yep, I know, guys, talking about football. Talking about why does everyone hate Nvidia. I didn't. I wasn't aware that that was a thing. All right, everybody's here. All the gangsters and gangster rats are in the house. We appreciate you guys. We have a sponsor tonight. Betterment Advisor Solutions. Michael, what do we need to know about Betterment Advisor Solutions?

Josh Brown: Well, every RA knows attention. You don't want to turn people away. You also don't want to require high minimums. And you want to help clients who are just getting started. Because that's where long term relationships begin. But here's the truth, Josh. Those simple accounts, they take a lot of work. We got account opening and trading, rebalancing. And before long, your staff and back office are underwater and trying to stay afloat. So that's why established reas are turning to Betterment Advisor Solutions. It's the Platform built for SE is right for segmenting your book and streamlining those smaller and simpler accounts. The onboarding experience is automated and paperless. The portfolio management is streamlined and tax efficient. The client experience, it's consistent and exceptional. Explore what segmentation can do for your from today. Lower your operational lift, but keep your standard of service high. All with Betterment Advisor Solutions. Your biggest regret will be not doing it sooner. Learn more@betterment.com advisors.

Michael Batnick: Thank you so much to Betterment Advisor Solutions for sponsoring the show. And full disclosure, we are not only sponsored by Betterment Advisor Solutions, we are a customer for one of our client service tiers.

Josh Brown: And full disclosure, I got accounts there.

Michael Batnick: So there you go. And it works. All right. Snowflake earnings coming and well all right, so there's a bunch of earnings. Palo Alto and Dell are already out today after the close and I think MongoDB and maybe you'll take a live look at those real quick for us. See if Dell is doing.

Josh Brown: Dell is flying up 8%. Happy we own that in Porterhouse. Mongo, it's got a head like a drive in movie theater. Mongo is getting Mongod. The stock is down quite a bit. What's this? What's the ticket here? Thank you, Josh. MongoDB. And what was the other one that you said?

Michael Batnick: What is the. The DB stands for database, I hope.

Josh Brown: Short down 13, down 12 and a half percent. And what was the last one, Josh?

Michael Batnick: Palo Alto P A N W. I

Josh Brown: don't think reported yet because it's literally flat. Unless maybe it's just flat. That could be two. Oh no, no, it's five o'. Clock. It's five o' clock stocks.

Michael Batnick: All right. Sean is saying Dell lifted full year guidance speed on top and bottom, net income up. Listen to this. 255% year over year. AI optimized server revenue 16.4 billion. That's up 100% year over year. Sean says MDB down 13%. They beat on both but did not give good enough guidance.

Josh Brown: Josh, before we get into Snow, which is obviously your beat, not mine, Snow, the stock has performed exceptionally well. S has Dell into the print and I feel like this is. This is an Adam Parkerism. Usually these stocks, I don't know usually oftentimes these stocks that are flying to the print foresee expanding margins and I'm guessing that's what you saw at Dell, sending the stock up 12 after hours. And obviously with the caveat that who the hell knows what Snow will do tomorrow. The market usually sniffs these out.

C: Yeah.

Michael Batnick: And a lot of people who think what goes up must come down or go to the roulette table and they see it hit black five times, they can't wait to put it on red. Those people, and maybe sometimes I'm one of them, should not be trading stocks into earnings. Because a lot of people that would see a stock up 10 points into an earnings report and say, I missed it. Like they already priced it in. And that's not actually what happens at all.

Josh Brown: No.

Michael Batnick: It could go up 10 and then go up 20.

Josh Brown: But also, you remember the ones that do fall? Those. You remember. Wow. 100. 100%.

Michael Batnick: Here's what I want to talk about. Snow. I bought the stock during the course of this quarter. I did not buy the low. That's not my, my thing. That's not what I do. I buy breakouts. And I got it. I nailed it. I'm still long. I am trailing it with a stop. If tomorrow night's report is apocalyptic, it's not going to bother me. I'll just, I'll be out. But I believe that snow has become on the DL, one of the most important layers of the whole AI layer cake. And I want to get into that a little bit tonight. The reason why we're previewing this name is because the last time they reported the stock fucking exploded, it went up 38% the next day. Did you know that? Do you remember that?

Josh Brown: I do.

Michael Batnick: Okay. That was in May. Like, literally came in, beat raised guidance, and then. And then put everybody on notice. Here's what's really going on. You want to do agentic shit. Congratulations. You're going to do it right here in the data warehouse. You are not going to be duplicating data. You're not going to be moving your data around to all these platforms. The LLMs are going to come into the Snowflake environment and we. This layer is going to be ground zero for the agentic future. They have. They told us last time they have over 9,000 corporate customers utilizing agentic workflows directly inside of Snowflake's data lake layer. So this is not like their idea, like, maybe we'll do this. They literally are doing it. I see in the chat. Stephen Pickering. Snow and data bricks are structured data. Question mark. Okay, I'm really glad you brought that up, Stephen. Snowflake's biggest competitor is databricks. And databricks is growing twice as fast. Databricks actually surpassed Snow on product revenue last quarter for the first. Yes. DataBricks is growing 65% versus Snow's growth rate is like 32%. They're growing twice as fast. There's a reason why that matters and a reason why it doesn't. The reason why it matters. It's a battle between two different types of architecture. Snow is built on SQL. SQL, these are rows and columns. This is like how most data, structured data lives in a lake. And Snow is the king in SQL. And the reason that's relevant is most large corporations. That's how their data is structured. The next generation, which is more engineering. So who uses Snowflake? Business analysts, business intelligence people at large companies. They interact with the SQL database that is hosted at Snow. Okay, Engineers are different. Engineers interact in a machine learning ML format versus SQL. And that's what databricks is, AI native. And everything is built in ML. And they are pitching that to the street when they go public later this year. They're saying because we're built for engineers and not for business analysts at companies, but we're built like for people that are actually developing AI, et cetera. We have this as our edge. My very humble opinion, based on everything I've read and people I've talked to, is that what both platforms are doing is copying each other. So now you see databricks trying to get more into SQL to sync up with all these companies in the way that they actually do things. And conversely, you see Snow going more heavily into machine learning so that they can challenge data bricks for unstructured data. What is unstructured data? A recording of this podcast is unstructured data. It is not rows and columns. We would feed this video and audio file into the AI and a machine learning driven database would be the better application to pull out information. Photographs, drawings, recorded conversations. This is unstructured data. The world of unstructured data is enormous and relatively untapped. Whereas the way corporations have been keeping data for a million years, that SQL. And that's where Snow is the king. Put this chart up. This is the last one year, but I want to draw attention to the fact that this Stock is up 164% from the April low. It very much got caught up, just like CrowdStrike, which I also own and many other software names in the SaaS apocalypse this spring. And obviously when they put that earnings report out in May, they put an end to that bullshit fast. The stock again, the day after they reported, ripped almost 40%. The best earnings reaction since it came public. And unlike many stocks that do the shooting star thing, it gave almost nothing back. It continued to ramp and that is such a powerful signal for investors. So there's a couple things that I want to get to here and then I'll take your questions or your reactions. The consensus for this quarter, product revenue 1.48 billion. That would be 30% year over year growth. Obviously any upside on that we know will be treated favorably. Adjusted earnings 45 cents, up from 35 cents a year ago. There's a really wide gap between where the street is and what the company's own guidance is, which I find interesting. So I just told you the consensus is 1.48. Snowflake's own guidance after that Q1 report is only 1.03 billion. So the street is like half a billion dollars ahead of the company's guidance. Is that good or bad?

Josh Brown: Either way, maybe they know that management is playing games and under guiding will

Michael Batnick: they beat by 300 million last quarter. So management definitely sandbagged.

Josh Brown: Can't fool me again.

Michael Batnick: Okay, all right, I like that. The other thing I want to get into on this, all right, here are the storylines. And this is when you learn, when you learn a company and you're going to hold the stock into earnings, you want to sort of understand at a minimum what people are going to be asking about on the call and what the company is going to try to emphasize so that, you know, they get the positive version of their story out. So now the question is that inflection that we saw last quarter, was that a one hit wonder or is that part of a new. So the company would say, no, you don't understand. We have now made the case to our customers that they can do the AI workflows and the Agentix stuff right here on our platform. We're inflecting. So that's a big open question. The guy running this company, Ramaswamy, formerly ran Google Search. This is like a, this is a real guy that they brought in to replace Frank Slootman who was the CEO when they went public. The second thing we've talked about, Coco here on the show, they used to call this the Cortex co pilot, but all the customers say Coco. So they actually have changed the name. This is the key to the growth strategy going forward. This is the AI inference layer that lets enterprises run LLM and Agentic workflows directly with Snowflake data rather than sending it out to an external provider. I think that, I think the other couple of things here. So we want to hear about workloads in Cocoa and continue to see the momentum that we saw last time. There's an analyst at RBC who specifically flagged Coco as showing positive and accelerating momentum ahead of the print. The Snowflake Summit in June, that's like their user conference was heavily Coco centric. And according to the analyst, a lot of the product launches and a lot of the conversation was. Was about continued momentum. Here they had a massive announcement with Amazon web services, a $6 billion commitment. But that's Snowflake spending on Amazon. So that's not a revenue deal for Snowflake. But they would not have made that commitment if they didn't need the compute is the way that the street took it. So the stock actually rallied on that announcement. Higher bar again. The stock's up huge from its April lows. The average analyst price target is 317, which is actually lower than where it trades, even though there are some targets much, much higher. The average. Most analysts did not automatically come in at 400 because they had a great quarter last time. Last thing. The net revenue retention of 126% is very healthy for a software stock, but it's not accelerating. So the bearish argument is, well, if AI upsells are working as strongly as all these product announcements suggest, why isn't the net revenue retention? So that's like xing out the churn. So it's growth of existing customers and new customers, netting out any customers that have left. Why isn't that a higher number if that number is 130% or better? So this is how you look at a SaaS company's progress. That's. I think that's gonna be upside for. For the stock. A couple of things.

Josh Brown: No, no, no. You said last thing already. You don't get to say lasting in a couple of things. And you already said Coco three times, so it's enough.

Michael Batnick: All right. The high target on the street looks like It's Jeffries at 385. So that's not like, crazy upside from here. And again, a lot of the analysts are clustering just below where. Where it's currently trading. Okay, what are your thoughts on the importance of this story to the overall AI story? And just seeing a software company completely jailbreak itself out of that whole SaaS apocalypse conversation. What are your thoughts? I.

Josh Brown: All right. I don't know shit about Snowflake. Obviously, you know a lot more than I do. But I do love that this was one of the inflection points for software where everybody said, all right, AI is not going to be all things to all people. You actually can't do what you can do with Companies like these. I don't know that this quarter, like, makes or breaks anything or it will bring the story back, but I don't know. I got no strong opinions.

Michael Batnick: Okay, well, I guess we're going to find out tomorrow whether or not. Whether or not this company has two amazing quarters in it and it could repeat. I also.

Josh Brown: No, no, no.

Michael Batnick: Wanted to mention Broadcom.

Josh Brown: When's that report?

Michael Batnick: Also tomorrow. Excuse me. Also Wednesday. So this is the last of the giant.

Josh Brown: Is that my kids? Are you or you come from you.

Michael Batnick: That's coming from here. All right, that is the. That is the last of the tech giants. And that's going to be Wednesday. That's it. I mean, that's a big one for the AI infrastructure. Trade analysts are expecting 92% year over year on AI, ASICS and networking demand. So I think people will, people will pay close attention to that one. I have, I haven't really followed the stock as closely. Does it sort of look just like Nvidia lately?

Josh Brown: Similar. Speaking of Nvidia. No, Nvidia looks actually much healthier. One of the charts that we spoke about last week that Ed Zitron just steamrolled over was Nvidia's earnings, net income over the last 12 months compared to Amazon, compared to Apple. And I said, holy, this is remarkable. And he go, no, it's not. No, it's not. It's not real. It's all the markups. No, it's not. It's not the markups. We looked at operating earnings. It's the exact same chart, operating earnings for Nvidia, what the business is actually generating.

Michael Batnick: So not this stake in Anthropic that they marked up because the value is higher.

Josh Brown: Real business earnings. It's just a remarkable story. So, all right, let's talk about Exitron. So for those of you who don't know who this person is or why we're talking about him, this is a guy that to me at least, came out of nowhere. I never heard of him prior to the, prior to our episode.

Michael Batnick: I liked his early stuff.

Josh Brown: So this, this guy did numbers on the compound and Fred's 200,000 views on YouTube alone, to say nothing of Apple and Spotify. Like, just on YouTube, it's like another

Michael Batnick: hundred thousand on Spotify and Apple.

Josh Brown: So it's.

Michael Batnick: So it's a runaway train.

Josh Brown: So obviously, obviously it struck a chord. And if you missed it, he's uber, uber bearish on AI and everything that's happening. So I have a few takeaways after, after, like, digesting what, what happened that I want to share with you. But first, just these are, like, some quick thoughts on the episode, and then I'll do my takeaways. All right, so credit to Ed. He definitely came prepared. No doubt about it. He brought the ruckus. He had figures, he had quotes, he had article citations. Maybe too many quotes and article citations, but he had all of it at his fingertips. Like, it was impressive. He definitely put on a show. It felt like debating somebody that was on the debate team. He was very good at it. And you did a great job, too.

Michael Batnick: He had an answer. He had an answer for everything we said.

Josh Brown: Yeah. Yeah, he did. So obviously, we. We all. We all know the bear case, and we know that it always sounds compelling, and he did. He did sound compelling. And Ed is. Is obviously in the attention business, and he's very, very good at getting attention. And I don't know. I really don't mean that pejoratively. I'm not even. Like, I genuinely. That's what he's doing. He is in the.

Michael Batnick: He's a public intellectual.

Josh Brown: Yeah. Okay. So if he was an on the fence bear, nobody would listen to him. Everybody. I'm an on the fence bear. Everybody's an on the fence bear. Like, everybody understands the bear case. Right. So he. So he has to come in like a tornado, which he definitely did. And, I mean, I was unprepared for it. Like I said, I didn't even know who this guy was prior to the show. Okay, so takeaway number one. He has tapped into a real anger. So I think this is the big one. People are really, really sick of being told by people on the west coast that their jobs are cooked. Ed is not shaping that narrative. He's riding the wave.

Michael Batnick: Yeah.

Josh Brown: And I think that he's very much like Trump in that sense. And when I say the comparison, all that. I mean, is he. He's the right person at the right place at the right time, just like Trump didn't. I mean, you could argue this, but I don't think Trump created the divide in our country. I think he exploited it, and I think that Ed is doing something similar, and he's very good at it. Obviously an incredible skill, and by all accounts, he's built up a very large audience. He's catapulted himself onto all these programs in a very short amount of time. So he's definitely tapped into something real. All right, takeaway number two. He kept using the word mania. Like, he kept saying it. I do not see a mania in the public market. I Just don't. Nvidia is trading at 17 times forward earnings. Nobody wants to own Meta. Nobody wants Oracle. Like, I think the AI story is really played out.

Michael Batnick: He's saying it's a Capex mania. He's not saying it's a stock market.

Josh Brown: So. So if there is a mania, I think it's in Silicon Valley and it's in the data center build out. And the news this morning about anthropic securing a $35 billion cloud deal with Nvidia backed Lambda is another feather in his arrow. So I don't think he's wrong about that part in particular. They are definitely all the way in where I think he. Where he not. I think where he loses me is two things. The tech is an impressive line. Come on.

Michael Batnick: That's one of my biggest areas of disagreement with him.

Josh Brown: So almost done.

Michael Batnick: Like, what if. What? Like, what if you just like, when you said to him like, you were like, explaining to him like that you use it all the time and you do think it's like, yeah, for what?

Josh Brown: Yeah, for. He was like a costume.

Michael Batnick: Well, he didn't. He wasn't like, no, it's useless. He was just like, well, they spend so much money, it better be good.

Josh Brown: Okay, so, yeah, okay, fine. So the tech isn't impressive relative to the cost. All right, that. That you could debate. But to just say the tech is like, it's not. It's nothing. Come on, dude, that's just. That's not true. I also think that that's like saying the iPhone in 2007 is just a phone now. It's not the same thing. Okay? The iPhone was not hyped. The economy was not rotting on the iPhone. But act like this is the final product is crazy.

Michael Batnick: Yeah, well, so I'm fortunate that I'm old enough to remember the original Internet. And it was like, all right, AOL Instant Message is cool. Like, buying a CD on cdnow.com is cool. Buying a Harry Potter book on Amazon is cool. It was very clunky. Well, I wasn't like, oh, my God, this is amazing. It's just like, oh, cool. I could do. I could put my credit card in. Like, downloading Pam and Tommy videos was cool, I guess. You know, stealing Limp Bizkit songs was cool. Like, all of these things in. In the earliest version of them. It's just like, oh, all right. This is a thing I could do. I don't remember ever being like, maybe the first moment I. But I was like, blown away by the Internet. Was watching the Saturday Night Live, Lazy Sunday video on YouTube. It was the first YouTube video to go viral. I was sent the link by probably 50 of my friends. We would send links by email back then. But like that's the first time. And that's O5, right. So I started interacting with Prodigy in 95, America Online in like 96 or 97, Amazon 98, like 2001.

Josh Brown: Imagine judging it as a final product two years after. So he kept saying, like, guys, this is it. There's nothing behind this, there's nothing left. What? Yeah, we haven't entered the robot phase, which might or might not come. And who knows when, but who knows where this is going? You couldn't have foreseen the operating system that Apple was going to change the world with in 2007. How could you?

Michael Batnick: So, okay, do you think. But do you think because his profession is, is sort of public speaking and blogging and he's not inside of a company where he sees agentic workflows like actually replace tedious labor. And like, do you think because he doesn't have that as part of his current experience that of course he's underwhelmed by the technology. He's just, it's just like a chatbot.

Josh Brown: I think it's, it's an interesting choice to be commenting on the businesses of these companies without using, using the product at all. I think that's weird. So what's interesting is we could be. So you said to me, like, what could, what could prove Ed wrong? And I didn't have a great answer. I think maybe the passage of time and I don't know how much time we're talking about here, but it's, it's

Michael Batnick: no, it's September, dude. Gap profitability. Gap profitability at anthropic and open AI or even just the path to gap profitability, even if they say it's going to take us eight quarters, but we expect gap profitability eight quarters from today. And then as we get closer, they get closer, it's going to be really hard to make the case that he specifically made, which is the entire edifice is being held up by three companies by the spending plans primarily of two non public, non profitable startups. And he's right about that. But as he becomes less right, because these companies figure out, all right, we're charging per token or we're doing this, we're doing that his bearishness on Microsoft might never get cured because specifically he's talking about how shitty their products are and how fundamentally non competitive. GitHub copilot will be with the next generation of lens like that. You might never cure his bearishness on Metta. There might never be an answer to that. But his bearishness on like a. Is it a sustainable investing theme? I think that anthropic and OpenAI doing trillion dollar plus IPOs and laying out a roadmap to profitability would probably have to force him to change his thesis about why it's all going to crash.

Josh Brown: Well, wouldn't it be. This is almost too perfect that you could see this, this continuing on for the next couple of years. And it's, it's 2029, Josh, and it's the 100 year anniversary of the, of the start of the Great Depression. And you damn well know if, if this is a bubble that doesn't burst before then those articles write themselves.

Michael Batnick: Listen, I'm really glad that we did that episode for a couple of reasons and I'm curious if you agree. The first reason is obviously most of the people we have on are constructive to super bullish. It's not that we never have bears on, it's that there aren't fucking people left.

Josh Brown: Most people aren't bears.

Michael Batnick: Yeah, they're out of the business. Like the bears are writing books now. The money has been taken away. It's fifth. It's a 17 year bull market. Like if you can find a credentialed bear with assets under management and a functioning business, I'd love to talk to that person. I don't know who they are anymore and I don't talk to Twitter people. So that's number one. So it was a nice change of pace. Number two is that we look at the like to dislike ratio on the analytics of our YouTube videos. Not because we're judging the guests individually, but in this particular case, Ed is so polarizing. Like, let's just see. Like, did the audience hate it? Because 200,000 views is a lot, so they couldn't have hated it that much. And it turns out 95% like likes and our average video is 97%.

Josh Brown: Wow, wow, wow.

Michael Batnick: Not that far. So people that disagree with him enjoyed the debate and I would frankly, I would have him back in a year. Let's see what's like, let's see what's changed. Maybe he's changed, maybe we've changed. Maybe. Maybe the NASDAQ is blown up and he's fucking right. Like, I don't know

Josh Brown: if he's right, he's not allowed back.

Michael Batnick: We don't know bad if he's right, we're closing the channel anyway. I think the audience is. Our audience is awesome, you guys and I. My personal opinion is that our audience is capable of balancing two opposing thoughts in their heads at the same time. I don't think our audience wants us to just mindlessly cheerlead for every ticker that's going up. I do think that they like when there are opposing points of view and makes it. Just makes it a more interesting conversation.

Josh Brown: All right. The last thing that I'll say is I think the most. The most credible bear case that he made is that prices will come down, companies will find a way to lower its cost. And matter of fact, Uber just wrote about that chart on Please. So they show, remember Uber, like blew through their AI budget in March or April. All right, Weekly adoption. There we go. Great job. Thank you. So Uber wrote this. They wrote a post two days ago, I think, called running a software factory efficiently at Uber scale. As shown In Figure 1, from February to August 2026, weekly active users across all the gentic offerings across all of our employees grew 7x and weekly agentic requests grew 9.4x. Meanwhile, our total AI spend has relatively stabilized since April due to optimizations across the board. Look at the chart on the bottom.

Michael Batnick: So they're making the point that they're still spending a lot, but it's becoming more routine or it's becoming more efficient the way that they spend on compute. What is the case that they're making?

Josh Brown: So they just found a better way to more efficiently do what they're doing. And if they're driving down the block, they don't need to take a Ferrari. They could drive a Toyota. So they said cost per thousand model requests is down almost 34% from its peak, and cost per session is down 52% from its peak. They said, this is unsustainable. We have to figure some other shit out. Let's go open source. Whatever they did. And it's working.

Michael Batnick: Yeah. The reason these harnesses are now so popular and there are lots of them and everyone's talking about them and we just saw one get bought for 10 billion, another one get bought for 7 billion. The reason why the harnesses are so popular is because this is. You bring what your project is and you lay it out and it selects the model or models that make the most sense for that use. Case dollar wise, of course, that's where this is gonna go. Like somebody, somebody sets up this layer where it's like, tell us, the project will tell you how to get it done. And we'll pair you with the right models based on the cost, the efficiency and the, and the, the specificity of the, of the project. And so that's why these harnesses have become so popular, because not everybody is uber sized where they have, you know, enough engineers to make these determinations themselves.

Josh Brown: Josh, before we move on to Tim Cook, the thing that I'm coming back to, and again, I don't, I don't know shit about this topic any more than anybody else does. But from somebody on the outside, I think a useful framework for what's happening is everybody keeps saying there is a shortage of compute. They're not making it up. And where are we in the adoption curve of AI in daily life in corporate America? We're nowhere. We are nowhere. I really don't think the transformation has even started to begin.

Michael Batnick: So I think there are some companies that are further along than others. Like, in general, I think if, I think if you took a meeting with the CEO of Goldman Sachs, he would say they're, they're like so deep in it. But then if you got the CTO of Goldman Sachs drunk, he'd be like, yeah, I'm just, I'm just, I'm just announcing shit. So I think there's some, there's absolutely some element of, like, if you run a major public company and you're not acting like you have an AI strategy, right, You're. You have a problem.

Josh Brown: Yeah.

Michael Batnick: But that may not be the reality behind closed doors. So I think some companies are further along than others, but everybody's acting like they're like three sheets to the wind, like, ready to go. And look, our tiny little business, you know, we're not a Fortune 500 company, but I'm in a meeting every two weeks with our AI committee and our outside vendors, and I'm just getting updates and we're making progress, and we will not be at the vanguard of this. But our data lake. What, what data we're pulling from what sources, how we're using it, what's permissioned, which employees are allowed to use, what, like, all of that is getting figured out on the fly. And it's painstaking because we're a financial firm, so there's like a compliance roadblock in front of every step that you want to take. Thank God. But, like, it's moving. Like we're doing a little bit more. It's not a revolution. It's every two weeks. Oh, we could do this now. We could do that now. I would imagine that's what it's like at Any growing company. And the point that I'm making is I made this point on TV today, actually. No one's going to go backwards. No one's going to be like, ah, we gave it a shot. Rip it out.

Josh Brown: It's.

Michael Batnick: It's very unlike. It's very unlike the Metaverse in that way where people very quickly reversed. It's very unlike crypto. We had all these flurry of announcements and deals and we're gonna do a joint venture and we're gonna partner with these guys and we're gonna tokenize it. And then like that stuff got quietly walked back because a, it doesn't work and be nobody wants it. This is not that nobody is going backwards. They may have to take a few steps sideways because they got the strategy wrong. But nobody is saying, all right, we took a look at this AI stuff. We don't need it.

Josh Brown: Right?

Michael Batnick: I. And even if they were, no one would say that out loud.

Josh Brown: Tim Cook. I agree.

Michael Batnick: Is Tim Cook in the conversation for best CEO of all time?

Josh Brown: In the conversation? Yeah. I. He's not on my Mount Rushmore, he's on mine.

Michael Batnick: I'm gonna make the case. I think he's a better CEO than Steve Jobs. I would not say.

Josh Brown: Yeah, yeah, okay.

Michael Batnick: I would not say he's a better inventor.

Josh Brown: Right. Obviously.

Michael Batnick: Or product creator or creative in general. I would just say I think he's the best CEO of all time.

Josh Brown: Right, man.

Michael Batnick: Numbers are on my side.

Josh Brown: Right man. Right time.

Michael Batnick: That's. Isn't that always the case though?

Josh Brown: Sure, but he could not have got. He could not have gotten them to where they got. And maybe Steve Jobs, had he still been alive, would not have taken them to where they are.

Michael Batnick: Notice I very, very specifically did not say best founder I noticed of all time.

Josh Brown: Go ahead.

Michael Batnick: Because I agree with exactly what you just said. We're saying chief executive officer of a public company. Here's my case. This quiet, unassuming, gray haired man who came from a COO role, basically counting widgets in Asia for the massive logistical lift of selling millions and millions of devices every year comes in when Steve Jobs passes away. I specifically remember the tech press at that time. He's a bean counter. He's a logistics guy. That's not what this company need. You know, you could just imagine on Wall Street. I remember Jeff, Jeff, Jeff Gundlock at Stone Conference. Maybe somebody asked him about Apple.

Josh Brown: Oh, he's a buy natural gas short Apple. Remember that?

Michael Batnick: Yeah. And the magic man is gone. Right. Like, like they'll never, they'll never Be able to continue the glory of Apple without Steve Jobs. That was very common. That's what most people's assumption was. People sold Apple. Oh no. Steve Jobs, it's just gonna be a device company. Right. So there's a lot. And Steve Jobs set this company up for success because of this idea of having all the products surrounding a software ecosystem and they all work interoperably. And he understood all that. Way ahead of his time, the icloud, et cetera. But anyway, these were really big shoes to fill this. This is a 13x increase in the value of each share of Apple. Think about a 13x increase on what was already the largest market cap in the world or one of the largest market caps in the world at that time.

Josh Brown: Was it like 400 or 500?

Michael Batnick: What was it 2011? So whatever it was, it was in the hundreds of billions. Yeah, he 13x did. He launched the watch, he launched the AirPods. I'm not saying he sat in a workshop and built them himself. Jony I've was there. Obviously it's a ridiculously deep bench of talent, but he. That's under Tim Cook's watch. Steve Jobs died before the AirPods. The AirPods are a category killer. Category killer. The Watch everywhere. Nobody was excited about either of these things when they came out. But you can't stop buying them.

Josh Brown: The Watch Send fossil to zero. Basically, yeah.

Michael Batnick: He fought off Carl Icahn and Carl Icahn almost did his prime. Not Carl Icahn now in his 90s. Carl icon in 2012 but didn't care.

Josh Brown: Like I didn't. Didn't he get what he wanted? He wanted dividends and buybacks.

Michael Batnick: I think he wanted way more. And he settled for a massive buyback. Icon only wants return capital. Shareholders sell things off. Apple had nothing to sell off, so he just wanted them to. Carl was right. It was the right thing to do.

Josh Brown: That was an interesting time. Back out the cash. Remember that for a year. Back out the cash to go cheap. Apple was.

Michael Batnick: It was 2012. In 2012 the stock was selling at 12 times earnings and if you backed out the cash, it was closer to 10. They had a. They had a substantial treasury of cash that they were holding T bills in banks all over the world. And the most. One of the most famous employees of Apple was the guy who sat in a windowless office in Nevada, Treasuries, managing the treasury position by the only company,

Josh Brown: only company I've ever seen where for a year people said, back out the cash. I've never heard that put on any Other company.

Michael Batnick: There was so much. There was so much cash. Anyway, fought icon off, gave a little whacked him. Ended up. Ended up working tremendously for shareholders, which I will demonstrate with the chart in a minute. Navigated the political winds in China, India, Europe and all over the world better than any large company, tech company CEO has been able to do. They like him in Europe. They like him in India. They like them in China.

Josh Brown: China, yeah.

Michael Batnick: Made friends. Made friends with both President Trump and President Xi. Made very good friends. Think about this. With the ruler of China and the ruler of America, the two most important markets for Apple somehow walked that tightrope, navigated those relationships, and those are make or break relationships. If you are Tim Cook, you gotta get Trump right, or else he's going to tariff you into the stone age. He did it. I think he made a crown for him or something. He gave him an I crown. I forgot what he did. Also perfectly managed Apple. And Apple is important on two levels. It's the number two market for smartphone sales for Apple, and it's where all the manufacturing is being done. And somehow, in the midst of two separate tariff wars, was able to walk that line. It's unbelievable how good he is. And by the way, that's his job now. He's stepping back from CEO. He's going to be executive chairman. And he specifically said in his farewell letter, I am going to manage the political relationships that are important to Apple and its supply chain. Like, he's going to still continue to do that. Which a lot of guys would just sail off into the sunset. Openly gay CEO before this was more common and more accepted. This is the CEO of a Dow component. I mean, coming. I should. Coming out of the closet. Yes. Like declaring that. That he's gay, but everyone kind of knew that he was. Again, it's not as impressive today as it was maybe 10 or 12 years ago. It's a big deal. It's a big deal. 2,700% Total return for shareholders. So that's inclusive of dividends From August of 2011 up until yesterday, his last day. I don't know. How many companies do you think have been able to do that? How many CEOs? 15 years. And think about his starting point. He's already got Berkshire as a shareholder and he's already one of the largest market caps in the world. And he still oversees a tenure of 2,700% total return. Put this chart up for me, guys. This is not market cap. This is the stock price. The value of the stock plus the dividends on. Unbelievable. I'm sure There are other CEOs who have done something like it that I'm not thinking of right now, but can't be a lot on the list. Chart off. How about this? $4 trillion in added market cap under his tenure. No CEO other than Jensen, nobody else put this chart up. What you're looking at here is Apple market cap added since Tim Cook became CEO. Per year, $287 billion per year.

Josh Brown: That's it.

Michael Batnick: Per month, $24 billion a month added per week, per day, per hour, per minute and per second. He added $9,000 every second of the last 15 years. Shout to chart, kid. Matt and Sean, who really outdid themselves for the show tonight. Almost done. Michael, put up the next chart. On the left, Apple share price change. We just went over. In the middle, change in market cap 12. 26%. And on the right, this is the change in shares outstanding. So this is the buyback. They shrunk the float by 44% in 15 years. Unbelievable. Next chart. Apple's growth since 2011. Services, 1200%. Revenue growth in the. In the Tim Cook era. IPhone, 422% growth. Gross profits up 418%. Net income, 400%. Revenue up 331%. Next chart. These are margins. Gross margins are up. This is a consumer technology play. Nobody in a million years ever thought this would be possible. They think of this like toaster ovens. Gross margins up 820 points during Tim Cook's tenure. Holy shit. Look at net margins. Look at operating margins. Next chart. This is by product revenue. The red is the Mac, the pink is the iPad. Services, light blue. IPhone, dark blue.

Josh Brown: I know, I know.

Michael Batnick: It's something Gore category.

Josh Brown: How do they do $30 billion of sales in the iPad?

Michael Batnick: It's unbelievable because it's a forever product. You just. You replace them, you get another one, you get another one, you get another one. People have it built into their lives. Their workflows finally attracted Berkshire Hathaway and Buffett larger and larger investments. It's the biggest investment win in the history of Berkshire Hathaway and Warren Buffett. They have never made more on any other investment they've ever made by a factor of multiples, not by a little bit. That's during Tim Cook's tenure. And then the last thing I want to do here, think about all the stupid fucking shit people yelled at Apple to do over the years. Sometimes you should be judged on all the things that you don't do.

Josh Brown: Totally agree.

Michael Batnick: Okay, so here's a Partial list because in the interest of time. Never bought a Hollywood studio.

Josh Brown: Never started a streamer.

Michael Batnick: Yes. Never bought a streaming platform. Never bought a film library. Never bought a social media network by Snapchat. Buy Twitter.

Josh Brown: Right. Right.

C: Move.

Michael Batnick: Do something. Poking with a stick. Never did it. Thank God. Could you imagine Apple having the police, the comments on a social network. Never did it. So smart. It seemed so dumb at the time. The conventional wisdom in 2013. How are you on a social network? You're nobody. Microsoft port, LinkedIn, Meta. Facebook. Bought Instagram. Okay. What do you mean you're not doing it? Didn't do it. Never started a car division. Got close. Project Titan. They almost did a deal with the Koreans and started making cars. Didn't do it. Thank God. No data center. Capex Chase. Never did it. Never bought in no large language model R and D. Never did it. No disastrous M and A. Would they buy company from Dr. Dre?

Josh Brown: They bought Beats for 2 billion.

Michael Batnick: Right. No disastrous M and A. You have no idea the restraint that that's taken. Think about having $300 billion in cash for 15 years and not doing a deal. Not think about that restraint.

Josh Brown: Very impressive.

Michael Batnick: Very few flops. The Vision Pro.

Josh Brown: That's it.

Michael Batnick: They. They tidied it up.

Josh Brown: Yeah.

Michael Batnick: The YouTube preload.

Josh Brown: Right.

Michael Batnick: We're going to put you to. On the iPhone 3.

Josh Brown: Yeah.

Michael Batnick: Like very few of those. So, so few that I can count them on one hand. Didn't ruin Lord of the Rings like Amazon Prime. Never took a beloved property and put it through the streaming platform. Meat Grinder the way Disney did with Marvel. Right. Okay. Greenlit theatrical release for the Formula One movie. Massive hit. Killers of the Flower Moon.

Josh Brown: I liked it.

Michael Batnick: Brought Ted Lasso into the world. Made us all smile and love each other for a minute. That stupid show that I don't watch. Anyway, listen, I know, I know there's a very competitive Mount Rushmore spot to get. I'm trying to think of who I would put above him, and I'm really struggling. Who is the best CEO of all time? How is it not this guy?

Josh Brown: I think. I think it's Bezos, but whatever. There's no need to denigrate Tim Cook's track record. He's done. He's done a great job.

Michael Batnick: No one's denigrating.

Josh Brown: He's done a fantastic job.

Michael Batnick: No, I need you to glaze him a little bit more. If anything, you just.

Josh Brown: You just did all the glazing, so.

Michael Batnick: Not in your Mount Rushmore. Who's all right? Bezos. Who else?

Josh Brown: Buffett. Fine.

Michael Batnick: Thanks in part to Tim Cook.

Josh Brown: I, I would see Walt Disney.

Michael Batnick: I'm seeing Walt Disney in the chat.

Josh Brown: No, no, no, no, no. Steve jobs. He's top 10.

Michael Batnick: Yeah, I put him above Jobs. Okay, Jamie. I'm seeing Jamie Diamond. I don't hate that. I'm seeing Elon. I don't hate that.

Josh Brown: Jensen.

Michael Batnick: Jensen. All right, Jack. No, no, Jack Welch.

Josh Brown: Sorry, Jack Welch, for that joke.

Michael Batnick: Harvey Weinstein. All right, now we're moving on. How'd I do?

Josh Brown: You did great. You made it. You made a conveyor.

Michael Batnick: Oh, I should probably disclose among Apple.

Josh Brown: Well done. All right, let's talk about the software bounce. Maybe it's not dead yet. Maybe just mostly dead. As Billy Crystal said, let's. Let's go through some charts. So, yeah, semis have kicked the out of software. We all know this. This is a chart from the summer of June 2025. Software IGV is down, down 2%. Semis have doubled over the same time. So yeah, it's been a bloodbath. But what's so remarkable, and we'll get to the SAS apocalypse in a second, what's so remarkable about this entire run is that earnings estimates didn't flinch and they didn't have to look at this throughout the amazing insane drawdown. And it was insane. I don't know what the final numbers were. If Workday fell 70 and Salesforce fell 50, whatever it was, it was an absolute bloodbath. And we said it at the time over and over. Shut off please. We said it over and over that the market doesn't care about Adobe's all time high in earnings because the market doesn't believe it's sustainable. The market was wrong, it just was happens. The market was wrong and you got a hell of a snapback bounce. So two snapshots in time from January 1st through through the end of February. So for the first two months of the year, software underperformed semis by 40 freaking percent.

Michael Batnick: I don't think it's ever happened before, do you?

Josh Brown: In the history of this data, I don't. Probably not. And then since then, remarkably since then, software made a comeback. So for the first two months there was a 40% spread and then for the next, whatever it is, I don't know, five months of the year, six months of the year, software has actually outperformed ripping. So as we know, it's not all names, there's winners and losers. Market is still sorting through it. So check out this chart, John. Skip the next one. Go to the software rebound. So chart kids Showed the average composite of software winners and losers since the low. And in the winter category, Salesforce and a bunch of other names that I probably should have had handy before because I don't know all these names. Some of the losers. SoundCloud, MicroStrategy.

Michael Batnick: Wait, wait. The dark blue line is the stocks that haven't come back correct. Software. So oracle's in there. MicroStrategy.

Josh Brown: So what could be in the winners? Of course, the cyber security names. Crowdstrike and Palo Alto. Holy cow, Mike.

Michael Batnick: I don't. But I don't see Adobe on this list because it's in the middle.

Josh Brown: So this is the top 10 and bottom 10.

Michael Batnick: Got it.

Josh Brown: So we weren't like select names. Chart off, please. So. But even like Duolingo, which was like in the epicenter of you're dead. You are so dead. Nobody needs you. Who the hell needs software to teach me how to language like AI all day? I don't know. I don't know what this company's going to be in a year or two from now, but holy. With a rebound. So I love seeing this. I love seeing the consensus be so wrong. I love seeing the opportunity for value investors to step in and say, you don't understand. You guys are totally, totally drunk. And speaking of that, a great example of this. You and I were looking at Schwab when the announcement was made of Hazel. And we said, whoa, this was like the Galman amnesia effect that we identified.

Michael Batnick: It's funny how you said it in real time. If I know this is wrong, right, Then a lot of this other stuff has to be wrong. And what a call. What a call.

Josh Brown: So on that day, Schwab stock fell 7%. Chart on, please. Schwab stock fell 7% just on that day alone. And it continued to drift from 105 a share down to 85. It was in the storm for no reason.

Michael Batnick: We were at future proof in my. In Miami.

Josh Brown: It was great timing for us. Now we're on the other side of that. Shout to Jason and the entire team for getting bought for $4.6 billion by Vanguard. And how stupid is the market sometimes, Josh? So down 7.4%. Schwab is on a day where an

Michael Batnick: announcement altruist launched the hazel tax toll and it's Wall street joke.

Josh Brown: And when the credible threat comes, this is a legitimate potential threat to Schwab. The fact that Vanguard is now in the game and is now saying, all right, we're ready to. We're ready to battle. And the Stock only fell 2.6% tells you so much about how the stock market functions.

Michael Batnick: Raises two questions. You accurately said, well, I know Schwab selling off on the launch of a AI tax tool for advisors. I'm an advisor, so I know for a fact that this is nonsense. You were dead right. And then you extrapolated that. You said the gel man and amnesia. It's this thing where an expert on a certain topic reads a newspaper article, they know for a fact it's wrong, but then they turn the page and they read 10 more articles and don't make the leap that, well, if there, if that's wrong, then there's probably a lot wrong. Okay, so you said that in real time and that was amazing buying. It was early because it was March and I think these stocks bottomed in April. But it was an amazing call because probably for every vertical software company there were experts in those fields saying this doesn't make any sense. And I think we said that about the cybersecurity stocks, software in real time. It was amazing call. Do you think we will continue to see examples of this where we have these one day spookings because anthropic launches something and they, they take some of these stocks the cleaners. Or do you think the market has now moved past that ability to be spooked?

Josh Brown: I don't think it's going to be like it was in the spring of 2026. I think that environment is over. Can there be days where something, something comes that's truly revolutionary that we don't see coming for sure, but that those days of announcement, whack, gone.

Michael Batnick: Okay, so now that Vanguard has acquired altruist for $4.6 billion, where do you have me on the Rushmore of wealth? Tech early stage investors.

Josh Brown: This is.

Michael Batnick: Am I in the three spot?

Josh Brown: This was not early. Stop it. Credit to you, but this is a growth. This is a growth investment.

Michael Batnick: Am I a generational talent in early investing in pre IPO wealth? Tech companies are my generational talent.

Josh Brown: You are a generational talent in regrowing your hair, without a doubt.

Michael Batnick: Okay. I, I almost think I'm like a King Midas in this space.

Josh Brown: You do have some big winners.

Michael Batnick: All right, congrats to Jason. Let's. Let's end there. I would also point out in the best stocks in the market list, we finally have software stocks. CrowdStrike, Salesforce, Pause beta Dog.

Josh Brown: Pause Pause. Salesforce. Salesforce. Yes.

Michael Batnick: The literal eye of the storm.

Josh Brown: Salesforce.

Michael Batnick: Best stocks in the market.

Josh Brown: Now I. Is this, is this like a, Are these a Salesforce Going to make a new high. I'd be very surprised because what's not a week high? Fine, great. I love it. Fantastic. What's not going away is the looming threat of. No, no, no, no, no. You're not just increasing my cost by 12% a year just because that's over. And that was a big part of the game.

Michael Batnick: People like that. They made that, they did a partnership with Anthropic made everybody feel better. Claude Force.

Josh Brown: It's great. Yeah, please.

Michael Batnick: Palo Alto Networks, Fortinet and Atlassian Team, those are all software stocks on the list of the best stocks in the market. And we, that could be zero, guys. We don't have like a quota per sector and for a long time it was zero and now it is six. So think here real quick. Fortnet put this up. I mean it looks, looks amazing. Cybersecurity salesforce look. I mean, I don't know like gapped, gapped out of it. This is what's called a breakaway gap. It's a long base that dates back to January.

Josh Brown: This will fill the gap.

Michael Batnick: Okay. But it's a breakaway gap for now

Josh Brown: and I love it.

Michael Batnick: Gapped out of, out of its 200 day moving average too. Here's CrowdStrike. I think it's the best stock in the world this year. It's definitely in the running. Definitely my best performing stock that I own right now. I mean it's such, I mean do you know that they just announced after the close a deal with, a deal with Nvidia. Like they launched something with Jensen. They, Jensen's got an LLM called Nemotron and they used it to build, to build cybersecurity. First LLMs with CrowdStrike that came out at 415 today. So you can read that release if you're interested. What was the last one? Palo Alto. Well, I mean looks, looks amazing. I don't, I don't even know. I don't even know like what you could really say these. So these are software stocks on the best stocks the market list. Oh, momentum crash. Is there a ton to say? Sean made this chart. We'll do the chart.

Josh Brown: What is this?

Michael Batnick: Okay, this is the rolling 51 day average of momentum versus the S&P 500. We have just experienced one of the worst 51 day periods for the momentum factor ever. Coming on the heels of the best 51 day period of all time. And I think the message here is that factors and investment styles, just when you think you figured out oh, this is how you beat the market, the market Very quickly reminds you just when you think you have the key to the lock, they change the lock. Like you will never find a style or strategy that always works. And just when you think you have the Holy grail, it's going to go so hard against you, you won't believe it. And if you can't get used to that, this is not for you. This game is where you're looking for like what's the thing that consistently works? You will lose and lose and lose punctuated by periods of extreme wins. That's right, you have. And if you're gonna play, if you're gonna play that game, you gotta, you gotta live with that. Let's put this, put this breadth dashboard up.

Josh Brown: All right, So I just wanted to say a few things before I make the case for something. There's, there's been some selling going on. I don't know if you noticed this, Josh, but look at the, look at the percentage of stocks making new 52 week highs. Ain't nothing happening outside of energy. There's really nothing. And there's.

Michael Batnick: We're digesting.

Josh Brown: There's a bunch.

Michael Batnick: There's.

Josh Brown: There's a decent amount of stocks making 52 week lows. A lot of discretionary names. 9% of discretionary names. A lot of them look like Las Vegas Sands win Carnival Cruise. And chart back on.

Michael Batnick: Are the, are the utilities jumping out at you?

Josh Brown: Utilities look terrible. Look at the four week lows. I mean this is not nothing. 51 of industrials are at four week lows. 47 of real estate, 34 discretionary at 71 utilities. So there's, there's some selling going on and it's okay.

Michael Batnick: Change in character.

Josh Brown: All right, let me make the case before I make the case. I've had a couple of really bad make the cases in the past couple of weeks that I want to, that I want to call myself out on floor and decor. I said basically that I don't think interest rates could hurt the housing market anymore. Little did I know, little did I know that they were about to go on a fu tear. So Florent decor is down 17% since I made the case. I did own the stock. I sold it. I lo. I took a 4% loss on that, which is fine. Is it, Is there a good risk reward here for the next year? I don't care. That's not what I'm doing.

Michael Batnick: We don't look at stocks on, on the 52 we low list.

Josh Brown: Don't care.

Michael Batnick: Interested in that.

Josh Brown: Also Hyatt, I made the case. For let's throw this chart on. So these horrible calls. Hyatt has gone straight down since I made the case for it. And Hyatt and Marriott and a lot

Michael Batnick: of these, all the travel, all the travel names, they look, come in.

Josh Brown: They, they turn off. Please. They look pretty shitty. And also this is pretty normal. Like these stocks have had a very good run but they do look pretty bad.

Michael Batnick: I, I was up in Delta and now I'm down and I might, I may get stopped out. It happened quick. So all of them, you're right, they all did this.

Josh Brown: Hyatt went from 207 down to 160. Just right through the 200 day. Like it wasn't even there. And lol, I guess it isn't even there but okay, good for longer term investors. But that's not what we're doing here. At least that's not what I'm doing. So I wasn't in the name to begin with but terrible. Make the case. Although I did make the case for XBI and that was a good.

Michael Batnick: But here's my next one anyway.

Josh Brown: But here's my next one. I'm doing it. Josh. Yeah, like me now for my next trip.

Michael Batnick: If you like those, you're going to love this.

Josh Brown: So I bought, I bought Clear yesterday. Not a lot. This is a very speculative stock. The ticker is. Y ou these are the things at airports that you walk past and they get you across the line faster.

Michael Batnick: They're trying to get my money.

Josh Brown: They're trying to be a biometric identity company. And I was reading a profile of this, this is a profile of Bill Miller. This has been in my. So this has been in my emailed.

Michael Batnick: I emailed Andy, this is in Barron's. I emailed Andy Sower after.

Josh Brown: You know what's funny?

Michael Batnick: Sorry. I said thank you for doing this story about like where are they now about Bill Miller? Because a lot of times the media just oh, he's retired, let's move on. And these guys still know a lot of stuff. I said thank you to Andy.

Josh Brown: Let's get him on the show.

Michael Batnick: He is extremely like not traveling anymore.

Josh Brown: Let's go to Baltimore, we'll have some crab cakes. Anyway, so it's funny, I read this today. This has been in my, on my tab since August 21st when I saw it and I read Miller owns a few stocks besides Amazon, such as biometric security company Clear Secure where he had been on the board. He said, quote, I'm one of the larger owners. It's still significantly underpriced that made me feel pretty good. Bill Miller not a bad investor. Next chart. So we've got 21 straight quarters of revenue growth. Their EBITDA margin passed a key metric for them. They were targeting 35 of the IPO. It's now 36. And Carrot Saban Becker who I spoke first. I first spoke about her Chart off please. I first spoke about buying her stock, which I never did. When I did in March of 2025 I think it was she was on Patrick O' Shaughnessy's podcast and I said this person is incredible. I should invest in her. And I never did. I should have because the stock is up but decent amount of sense. But she said on the call last week we found it clear with a profound conviction that proving you are you are you securely, privately and instantly would one day sit at the center of how Americans live, work and travel for a long time. It was a vision. Now it is our reality. Clear as the trusted secure identity company and after 16 years of building our identity platform, Clear Travel and Clear One we have never been stronger or better positioned. It feels like day one around Clear because it's is driving, she said. We ended this quarter with almost 44 million total clear members driving bookings of $296 million in free cash flow of $189 million, 33 bookings growth and free cash flow is up 60% year over year. And they also did announce a deal after the close yesterday with CrowdStrike. So the company is relatively small. 7 billion dollar market cap, very volatile. I bought a little today and I am probably going to add to it over the years.

Michael Batnick: So I love stories like this where there's this whole new use case for all this data they've collected. Endpoint Security is like the most important part of one of the most important parts of threat detection for CrowdStrike for Palo Alto, like permissioning and identifying users and who is really who and who's supposed to have access to. And that's the frontier for cyber security in the age of agentic and I love I've also learned something about you. When you get excited about these off the beaten path stocks that are not in the index and people don't even know that they exist or people know the product but they weren't aware it was trading. You get these things right? Like IMAX was a monster home run for you. It's not in the S and P. There's not a lot of analyst coverage. So I've learned not to ignore when when you get a Spidey tingle.

Josh Brown: Thank you.

Michael Batnick: About a stuff like this. So I'm gonna add it to my screen. I'm gonna start following this one.

Josh Brown: All right, let's make the case. I mean, mystery chart. What do you got?

Michael Batnick: All right, we'll finish with a mystery chart. I. I already did. I already forget. I might not even know.

Josh Brown: I think I know what this is. This is. This is Palo Alto.

Michael Batnick: Very close.

Josh Brown: Crowd strike.

Michael Batnick: Yeah. Well done. Second guess we took. Dude, we took the numbers off of this thing and you. So I want to point out a couple of things. Yeah, I'm long and I'm not pumping. I'm not telling you. Go buy it right now. This. This thing just split four for one and made a new high immediately. Like, I have very rarely seen a stock under this level of intense accumulation as what we've seen with crowdstrike this year. I think it's not that they're going to be the only cyber player, but the market has decided that they are the furthest ahead in AI related cybersecurity. And it is probably the scariest time to be unprepared from a cybersecurity standpoint. And chart back on. Look what they were doing to this stock in March, in April, during the SAS apocalypse. I don't even think people were doing this deliberately selling it down here. I think it was in all these stupid baskets and ETFs. And when you press sell on the ETF, the authorized participant is out there selling the stocks. They don't care about the company's growth rate. They have to sell the stock to mimic the index.

Josh Brown: Such a good point.

Michael Batnick: There will always be opportunities in panic. That was one of the biggest panic sector wide panics I've ever seen. I was part. I wasn't like let's buy software. But I did know that this one was stupid in real time.

Josh Brown: And you know, you knew, you knew not to sell.

Michael Batnick: Well, I'll never. I mean I'll probably never. I shouldn't say never. I will probably never sell this one because I just think it's like oxygen. You literally cannot not spend money on cyber security. And in the AI age, the amount of surface areas for threats are multiplying like it's exponential. How much more dangerous this moment is than five years ago. And I know it. And this company seems to have figured it out and I believe in them. And holy cow, what they were doing to this stock. And it's. We're talking about March, April, like it's a million years ago. It's like, like 10 weeks ago.

Josh Brown: Right?

Michael Batnick: It's unbelievable what was going on. All right, that's. That's enough. That. That's the show for today, guys. Thank you so much to everyone who joined us live in the chat. We appreciate you. We love you guys. We miss you when we're not here. Tomorrow is Wednesday. You're gonna get an all new Animal Spirits with Michael and Ben. Definitely look for that on on the compound network here on YouTube or listen to it on Spotify and Apple. And Duncan and Ben will be back. We will be back at the end of the week. Another big guest, another amazing show on deck. Keep it locked. We'll see you soon.

C: You know those tiny back to school emergencies that somehow become your problem? That's why I love Uber Eats. You can order school supplies, snacks and lunchbox essentials for $5 or less. So when your kid casually drops, I don't like peanut butter anymore. Or I need five green highlighters for a project due tomorrow, Uber Eats has you covered. Get everything you need for back to school today from your favorite brands, Aldi and staples on UberEats. Order now ends. 97. $5 or less before taxes and fees. Select items only. Availability varies. See app for details.