Pivot Predictions: Scott’s Big Tech Stock Pick, The Next Bailout, and President JD Vance?

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0:55I was right. I was fucking dead right. We predicted this. Scott, you and I predicted in March that we would see a deal like this. We predicted he would exit. As I predicted last week. As I predicted. I knew this day was coming and how it would go down. You did. You predicted it. I did. A new biography from Kara Swisher. And dot, dot, dot, I was right. But the thing is, I was right.

1:23Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And I'm Scott Galloway. Scott, we're here for your Super Bowl. our annual predictions episode where we look past some of our past predictions and make some new ones. Are you ready? So ready, yeah. Okay. You have a lot. I know I've got a few too, so listen up to both of us. Okay. We're starting things off on the subject of AI because we have to. We're obligated by legally to do so. First, let's listen to a prediction you made on last year's Prediction podcast. 2025 will be the year of a new duopoly.

1:58It'll be OpenVIDIA, OpenAI and NVIDIA right now control arguably 90 % of all traffic in AI, 90 % of the queries, 90 % of the queries of the processors that are powering those answers to those queries are those two firms. And so it'll be kind of the new Wintel and people start referring to it as the most powerful duopoly in the world. Well, interesting. That was absolutely true, except now it's code red at OpenAI how things have moved. And obviously NVIDIA is still on top, but facing some possible competition in 2026. Any thoughts on that? Yeah, I don't know if that was that provocative a prediction because it was already shaping up.

2:36The prediction I'm most proud of from last year is that every year I have a big tech stock pick. And last year I picked Alphabet and it's up 68 % since the prediction. But it was already sort of forming. But yeah, they continue to sort of be the duopoly. What's interesting is similar to Wintel, people are coming for them. Right. Very good point. Across, you know, on both dimensions, but especially open AI. And I like your analogy that open AI might be the Netscape of our generation. Yeah. I'm always waiting. Was it Netscape or Google? I think we're at that moment right now. It was Google for a little bit, but now it looks like Google's decided to be Google.

3:16And you were right about that stock pick. Great one. Okay. Time for both of us to have an AI prediction for 2026. Scott, you've got a prediction about AI stocks. Yeah, I think there's going to be a major drawdown, and it's because it all goes back to geopolitics. Essentially, Trump has adjusted tariff policy with China 17 times so far in the second term. I think they've pretty much had it with this guy. And they're now the closest thing they could get into short of a hot war. and so basically china is totally diversifying away from the u.s in terms of exports their export volumes are up 40 since 2019 while imports are only up one percent and over the same period the u.s share of china's exports fell from 17 to 10 and the reason that that sets the context here and that's i think china's about to go for the jugular here and i think that they're going to um massively engage in what I'll refer to as AI dumping.

4:10And that is these open weight models, including QN3 Max. These models are just much cheaper, lower power consumption, and everyone from Airbnb to other Fortune 500 firms are starting to recognize that these things are lower cost. And I think essentially China's going to say, okay, the fastest way to kick this guy in the nuts is that he's made a giant bet on AI, including the S &P and his entire economy on AI, and we're just going to start dumping AI into the U.S. market. And as a result, I think you're going to see a massive re-rating down. And also the harsh truth is these open-weight models coming out of China are getting to technical parity.

4:52And the fastest way to build a big business is to offer 80 % of the leader at 50 % of the price, and that's what they're doing. So I think you're going to see massive pressure are placed on open AI and other US-based models. And I think that's going to cause a re-rating down of these stocks. And even 80 % of A16Z startups use Chinese open source models. So anyways, I think we're going to see a massive re-rating down of the Magnificent Seven at the hands of AI dumping from China. Yeah, that means data centers go down the whole thing. Oof, ouch, watch out below. All right. Mine is in an area that I keep thinking about a lot.

5:33I've spent a lot of time thinking about it, which is robotics. And I think the combination of AI and robotics has not been fully plumbed enough. And I really do think that we are not paying attention to what all the innovations happening there is because we get focused on Elon's stupid optimist robots that are running around doing our laundry. I think in manufacturing and all kinds of areas, robotics are going to really start to become really interesting. Cars, I consider that robotics. The smarts of them combined with robotics is really where the big changes we're going to see in our society.

6:07I just do. I don't mean, again, a bot making your coffee, but it's not going to look like what you think. Because I think it's really hard, as many robotics people tell you, to make a hand work. And where we're focusing is so anthropomorphic that I think it's a mistake. I think there'll be robotics in lots and lots and lots and lots of things. And especially when combined with AI. In Korea, they have these essentially ectoskeletons now have AI embedded in them. And they work so much better. And so you can see it being applied all over the place. And these are braces. They look like braces. And before they were mechanical that would help you walk.

6:42Now AI helps decide how you do it. And I think they're nothing short of miraculous. And so that's where you're going to see some, that's my area in AI is focusing in on its applications in a wide range of different products across robotics. All right. I love that. And just to add some texture to that, I think where you will see shareholder gains from AI won't be in AI. It'll be an AI application specifically autonomous, specifically Waymo. And as you said, the chocolate and peanut butter of AI and robotics, specifically Amazon, and we'll come back to that. Yeah, absolutely. And they have been early to that, by the way.

7:18OK, next category, business. Scott, let's listen to a prediction you made back in April. I think you're going to see in the next one or two weeks a cadre of Fortune 500 CEOs, Republicans stand up, business leaders stand up and say, OK, enough already. While you all claim he's playing 4D chess, at this point, we're worried he's going to start eating the pieces. not so much although jamie diamond sort of yelled at maria bartiroma the other day but not so much yeah um yeah i don't have any comment they really have turned out to be profiles and non-courage that's really something i thought i just don't and i still don't get it quite frankly i still don't understand they're starting a little bit what's the point of having all this money And if you don't nod to the principles that got you this wealthy, I don't, I just don't, I don't get it.

8:12I don't understand it. These guys are bulletproof. Why are they, what are they worried about? Yep. Agree. I think it's just one of the most disappointing things you've seen here. I think it surprised everybody, a lot of people. Anyway, you've got an investment prediction here and then I have one. Go ahead. You mean my stock pick? Yes. So my big tech stock pick, every year I pick a big tech stock pick. And my stock pick this year is, and when I say outperform, if AI throws up, everything's going down, folks. What I'm saying is this stock will perform better. That might be down 10 instead of down 50.

8:45But my big tech pick for 2026 is Amazon. on. It's been an underperformer year to date. It's only up 7%. And also its revenue per employee is down 28 % versus up 49, 56, and 62 at MetAlphabet and Microsoft respectively, because they've made massive investments that have not yet yielded payoffs in, see above what Kara said, robotics. But what you're going to see here is that they've started laying off employees. I'm not saying that's a good thing, but Google's laid off 2 ,500 Meta, 4 ,600 Tesla, 14 ,000. Amazon's laid off 18 ,000. And what's just so striking is that Amazon is predicting it can double the revenue in its retail group, which is as big as top line revenue business with no increase in employees.

9:35And I think the chocolate and peanut butter of AI and robotics at Amazon is huge. And Amazon is really the Ford of the 21st century. And that is over several years, Ford was able to take the time to manufacture a car down 90%. And Amazon, just since its acquisition of Kiva Robots, has been able to take down click to fulfill or to ship down by 80%. And if you want to talk about your prediction around investment robotics. Here is the number of operational industrial robots. China has 2 million. The U.S., excluding Amazon, has 400 ,000. Amazon has a million operational industrial robots. So Amazon has two and a half times the number of operational robots, industrial robots, is the rest of the nation combined.

10:33So they have made an enormous bet, And typically more margin expansion from Amazon has come from its media group where you have it forced to advertise or from its cloud group. But you're going to see a margin expansion at the hands of operational efficiencies from robotics and AI in its retail group. It's also, I don't want to say cheap right now, but reasonably priced. It typically trains at a P multiple over the last five years of 58. Now it's at 33. and its enterprise value to EBITDA is usually 23 and now it's 17. So in sum, I think it's fairly, it's a fair value right now. And I think you're about to see the mother of all margin expansion at the hands of AI and robotics.

11:17So my big tech stock pick for 26 is Amazon. So Amazon, it is really interesting. There's a lot of IPOs coming up. We've talked about them, SpaceX, a bunch of others. And I think that's all very interesting, but you talked about about that there was a lot of worry about the stock market declines a couple of years ahead of the decline, right? I just feel like with this midterm election coming up, we may have a more of a stock market downturn before that. Like, I don't like to call these things. I'm not an expert in this way, but the investors feel very fragile, it seems like, and anything affects them.

11:56And I know it's been a surging stock market. It really has sort of against all the odds and all the deficits and every, it seems to like ignore that, but I don't think it could ignore it for two or three more years. I think sometime in 2026, maybe right after the midterms, which I think everyone needs to be paying attention to, obviously, this year, we may start to see like maybe the stock market not being so good for Trump. I think that has helped buoy him. And as you said, if China does things like you were talking about, you're going to see where you're going to see the declines are in these tech companies.

12:30So I just feel like there's going to be a lot of volatility around the companies that you talked about in the first place. All right, Scott, let's go on a quick break. When we come back, more predictions.

12:46Okay, so you may have heard. New York City gets a new mayor this week, 34-year-old Democratic Socialist, Zoran Mamdani. Mamdani's election was one of the biggest wins for the left in 2025. But since then, he's been quietly going about a new task, trying to make sure his sweeping campaign promises can actually happen. An agenda that will freeze the rents for more than 2 million rent-stabilized tenants. Make buses fast and free and deliver universal childcare across our city. I'm a little skeptical about how he's going to get everything done. I think that's what a lot of people are. Promise so many things.

13:24Free buses, you know, housing and all that. Promises, promises. Can this new kind of politics succeed? Or is this from Donnie's high point, the days before he gets into office? On this episode of Today Explained from Vox, we sit down with New York City's Mayor-elect and ask him directly, is he for real? That's this week on Today Explained. Support for this show comes from LinkedIn. If you've ever hired for your small business, you know how important it is to find the right person. That's why LinkedIn Jobs is stepping things up with their new AI assistants so you can feel confident you're finding top talent you can't find anywhere else.

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15:35Okay, Scott, let's talk politics. I'm not sure we could have predicted most of the mess that was the 2025 politics. We did okay. We did get one thing right about a certain breakup. Let's listen to what I said in November of 2024. I think these people can't coexist together in the same room for much for too long. Trump likes the attention and Elon likes the attention and there's only so much attention to go around. And I had a cold end. Let's hear what you had to say on the matter in February. I think Doge is going to be over and done by the end of the year. Okay, we got that one right. We just did.

16:11We just knew it. Yeah, but they saved$2 billion. Yeah. No, he saved nothing. He killed people. He's about to unwittingly, and I'm not saying he meant to do this, but he will probably end up on some lists along with Stalin, Pol Pot, Hitler. People will start to aggregate lists. I don't know if Trump or Musk will be on that list. But when you look at the hundreds of thousands of people whose fatality or death can be directly linked to a lack or a cutoff of USAID, they're going to end up on some of those lists. Yeah. And I think we got the Doge thing right. They're still there. Some of them are still there.

16:44But, you know, you know, look, it's fine to want to save money and be more efficient. But the way he did it was so ham handed and cruel and and pointless. I met some USAID people last night at an event and they were doing astonishing work. And it was all soft diplomacy, you know, soft power and stuff. just the damage he's done because he's such a like demented addict of some sort. It was really, really stupid. And I think he just wanted to break, like me break thing, bye kind of thing. And it wasn't thoughtful. There's a thoughtful ways to figure out how to be more efficient. And he didn't use none of them.

17:19And it was inevitable that he would fight with Trump. He'll still be hanging around the basket because he's such a toxic figure and Trump will use him as he wants. But Trump certainly, if only if he has use for him will he be around. Okay, I've already made one politics prediction for 2026. Let's play a clip as a reminder. I don't know. I feel like we're going to have President J.D. Vance by the end of 2026. I get it, but he is the vice president. You think this ends his presidency prematurely? Yes. Well, I still think that. So I can see him being impeached in Congress. Chris, he would need 66 votes or 67 in the Senate.

17:58I don't mean like that. You think he resigns? I think he's sicker than we realize. I think he's very robust looking, but I think there's all manner of, I've seen more and more doctors like this. I don't know. Look, his family stuck around for a while being, his dad stuck around for a while with dementia. That's for sure. But I do think there's, I just, I don't know. I just feel like I think they're going to try to give Vance an attempt to be president. And I think that I think that they'll run out of reasons to keep him there. And I think if he loses badly in the midterms, I think that's he's no longer useful, let's just say.

18:38And so I don't mean killing or anything like that. I just think he's old. He's just old, Scott, as you said. Biology is undefeated. OK, Scott, give us I have one more. Well, actually, I'll do mine. I would like to see in politics the shutting up of tech CEOs everywhere. I mean, when have we seen, like, can you imagine the head of Lockheed behaving like Alex Karp did in that recent New York Times thing with our favorite Canadian, Andrew Ross Sorkin? He looked demented screaming on the stage. Did you see that performance? Yeah. What was going on there? Well, they thought he was on cocaine. I have no idea.

19:13He looked crazy. That's all I know. Like, who knows? They were making all kinds of cocaine jokes. But he is not. I don't believe that. A little of the Bolivian and marching powder. No, I just think he's just like that. A little of the devil's dandruff. My experience is he's just like that. And now you're getting a fucking taste of what I've had to listen to over the decades. But I think these people, like, if I see Jensen Wong in his stupid coat anymore, like, when do we, when was the head of Lockheed around all this time? When was the head of, like, these people need to sit down and shut up for a little while.

19:42Like, seriously. They just can't stop making giant asses of themselves almost continually. And so I would predict they need to shut up. They won't, but that's what I would like to happen. What is your prediction for, you have an interesting one about the predictions market. Yeah, so, well, one, I think the next bailout is coming. There was a bailout of the banks. Actually, that was a good idea. There was a bailout of the airlines, which was socialism and stupid. We should have let them go out of business. all these airline CEOs who used all their excess cash flow when things were good to do stock buybacks and collect$150 million in compensation.

20:16And then COVID hits, and we're all in this together. And they got bailouts. But the next bailout is going to be the bailout of Sam Altman, Jensen Huang, Sachin Nadella. Basically, the S &P is now 40%, the Magnificent 10. Trump is only able to get away with the shit he's getting away with because the S &P is up 13%. So his entire presidency in our entire economy is now one big giant bet on AI. There is no way they can keep up with these expectations. So what they will do is come to Washington hat in hand and they will call it something else like a CHIPS Act. And they will have government backed debt purchases of these chips and these data centers to prop up an AI market.

20:57Can we get Jensen Long's leather coat in exchange? I should have it. It's about to become a multi-trillion dollar leather coat. But, I mean, every industry now, the energy industry, 10 % of the earnings call mentioned AI. Financials, one in five earnings calls are now talking about it. And also, if you look at the biggest tech stocks, from peak to trough, Alphabet was down 65%. Microsoft, 70%. Meta lost three quarters of its value from 2021 to 2022. Apple lost 83 % of its value in the dot-com implosion. NVIDIA lost 90 % in dot-com. Amazon lost 95 % peak to trough. The problem is if these companies do what these companies do in a volatile environment, the economy goes into a tailspin and Trump is no longer allowed to bomb or to murder people in the water or send in a mass secret police into American towns.

21:52So he will decide to prop up this industry with what is effectively a bailout that will be positioned as growth. But essentially, the next bailout is coming. Polymarket and Calci, I just can't get over how genius these businesses are because you have the ultimate marketing. And that is whenever there's a big decision to be made or a big issue, we're starting to look at what these companies think because they leverage. Except they can be so game, Scott. I'm so nervous about the gaming aspect and kind of the sick ass. Like, let's bet how many kids have died in this shooting, that kind of stuff. Well, oh, no, there's bigger concern.

22:29Well, okay. First off, let's look at the opportunity for insider trading. It's getting down to, will this pitch be faster or slower than 90 miles an hour? So, okay, Eric Adams. Will Eric Adams drop out of the race in the next seven days? And they say, oh, no, it's three to one, he doesn't. If I'm Eric Adams and I'm eventually going to drop out, why don't I raise 10 million bucks and drop out the next day and as a severance payment, collect$20 million? dollars. I mean, it's just, and the unfortunate thing is most of us don't have access to this insider information. So we are on the wrong end of a trade asymmetrically.

23:04And also when states legalize gambling, and this is, it's not really gambling. I like these things. I don't, I can't decide if I like these things or I don't like these things. I agree. I agree. Some of it's really interesting. At the same time, I'm like so easy to game, so easy to go sick, right? Well, and again, it's attempting to legitimize gambling. You're not investing here. You're gambling. But at the same time, I just appreciate how powerful these businesses are. Also, I'm going to start incorporating either Polymarket or Calci data into a lot of my media. I just think it's fascinating what the wisdom of crowds thinks.

23:39And if you look at these things, they are fantastic prediction engines. They usually get it right. Or now. You know what I mean? I feel like the Russian mob is like, how shall we handle this? Well, okay. Along those lines, the majority of the bets in the New York mayoral race came out of the Middle East. So you don't think they're going to start using it? Because if you say Mom Donnie is up 95%, that is really good for Mom Donnie. Yeah. And so why wouldn't you weigh in and start manipulating these things? Anyways, and— Pay attention, people. There is. And also just the downside. First off, my mom was a docent at the Bellagio Hotel and she used to come.

24:20I love that word docent. Go ahead. She used to come home armed with these fun facts. And one of them was kind of sad is that gambling has the highest suicide rate. So one in seven men who gamble are addicted. It's got the highest suicide rate because if you develop an addiction to meth, people start to notice and they weigh in. You can leverage your home, spend your kid's college fund, and nobody knows. And people feel as if they have no way out. In addition, bankruptcies go up by a third the moment a state legalizes gambling. So there are some real externalities here. But having said that, I am fascinated by these markets.