Coatue’s Philippe Laffont: The Year of the Privates 6/25/25

0:00Bring in show music, please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Prolific technology investor Philippe Lafont, an early backer of Facebook and Netflix, is our special guest. In general, now you have to be a lifecycle investor. More shots on goal at the end is what you hope for. He says 2025 is the year of the privates inside the promise he sees in private companies building artificial intelligence. When the market goes up, then I'm definitely a public investor. But then when the market doesn't do well, I switch to, you know, venture and growth. And the electoral earthquake in America's largest city, digging into the results of the Democratic mayoral primary with CNBC contributor Michelle Caruso Cabrera.

0:49Basically, last night, a socialist won the Democratic primary in New York City. Mangali! Mangali! Mangali! What the stunning results mean for a new era of politics. Did you ever run for student council or anything? Part of my campaign was giving out free things. Plus all the rest of today's news that got us squawking. It's Wednesday, June 25th. Squawk Pod begins right now. Stand Becky by in three, two, one. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We're live from the Nasdaq market site in Times Square. I'm Becky Quick, along with Joe Kernan and Andrew Ross Sorkin.

1:34Very big day for the markets. Dow was up by over 500 points. S &P is now less than 1 % from an all-time high, and the Nasdaq 100 closed at a new all-time high yesterday. So we are looking at some very positive moves for the market moving back towards these new highs or at new highs if you're the Nasdaq 100. Check out Treasury yields. Of course, all of this happening with the backdrop of Jay Powell talking yesterday, and he'll be speaking to Congress once again today. You are seeing the 10-year at$4.29, the two years at$3.79. And then you've got oil prices. WTI was down another 6 percent yesterday.

2:08It saw its lowest settling point in about three weeks. The day before, Krug was off by about 7 percent. So you're talking about some massive pullbacks on the idea that there is the ceasefire in the Middle East. Right now, WTI is at$65.09 a barrel. Brent is at$67.90 a barrel. And then if you check out Bitcoin this morning, you'll see right now it is$106. Almost$107. Yeah, close to it. It's moving.

2:39Good morning. Good morning to you all. And welcome to this leader session of the North Atlantic Council. Go ahead. Yes. President, how is the Iran-Israel ceasefire going? Meantime, President Trump taking aim at the media following the U.S. strikes on Iran's nuclear program. In a post on Truth Social last night, Trump blaming CNN and The New York Times for what he called, quote, an attempt to demean one of the most successful military strikes in history. Both outlets, along with many others, citing an early U.S. government report that the American strikes only set Iran's nuclear program back by a few months.

3:14But in his social media post, the president claimed, quote, the nuclear sites in Iran are completely destroyed. Speaking in the Netherlands earlier this morning, this is how the president responded to a question about the damage report intelligence. The intelligence was very inconclusive. The intelligence says we don't know. It could have been very severe. That's what the intelligence says. So I guess that's correct. But I think we can take that we don't know. It was very severe. It was obliteration. Director General of the U.N.'s nuclear watchdog has said no one, including the International Atomic Energy Agency, was in a position to fully assess underground damage at Iran's key Fordow site.

3:54And the thing that I couldn't understand when you read at least the reports about it is whether they just were able to close off effectively the entrances to these things by knocking all of that down versus actually knocking, which seems to be at minimum the case, versus whether they were able to knock down the entire facility. Before the go-ahead and before it happened. You and I were talking about the bunker buster, whether it even worked. Whether it would work. And President Trump had to be convinced it was going to work. Whether it worked or not, I don't know, but it's a big ask. It's 300 feet down or whatever it is.

4:29So I think they went, they didn't do two. I don't know how many they did in each entrance. So there are three or four in each entrance. Like I said off camera, I haven't finished my direct assessment of that. I know nothing. As usual, I know nothing. The IAEA is really trying to get back in and be able to assess some of these situations. You are going to have to have somebody who comes in and takes a look at it. Is it possible that it was down so far that those actual structures survive? I'm certain that that is a possibility. Is it just a couple of months? I doubt that. I think Israel, before the United States did anything, I think Israel had degraded a lot of the facilities more than just a couple of months.

5:10And then, you know, you add in how many scientists are dead. Of course, did you see one guy yesterday that Israel said was dead? He was out partying with everyone in the streets. And obviously, I don't know, some IRGC guy who was obviously not dead. So once again, we got the fog of war and we got the fog of the marrow race. So we need an expert. Did you ever run for student council or anything? Did you? Did you? I did. I tried. And you know what? You would have appreciated this. Part of my campaign was giving out free things. No joke. Free pizza. Free pizza was part of my campaign. I'm not going to say it.

5:46I'm not going to say it. I was, if I had run, that wouldn't have been my thing. I would have been cutting back on everyone's benefits if I had run. Well, we now see what's on the winning end of this. Which I didn't, but that makes sense for you. You're giving away free things, buying votes. I'm telling people you're going to eat cake. Former New York Governor Andrew Cuomo, someone's here. That's why I said this. Someone who has run for office, who knows how sharp the elbow is. Michelle Caruso-Cabrera is here to talk about. Mamdani being the guy after Cuomo basically conceded to this gentleman.

6:25And state assemblyman. Tonight was not our night. Tonight was Assemblyman Mandani's night. Mandani! Mandani! My friends, we have done it.

6:46I will be your Democratic nominee for the mayor of New York City.

6:54No candidate is set to secure a majority in the first round of the city's ranked choice election. But last night, he did lead the vote count. And he had, as we're finding out, 44 % in a million votes. The biggest we've seen. It was very heavy turnout. Very heavy turnout. We have betting sites now. So nothing's a surprise anymore. Right. Because he moved ahead in those and in some of the polls. So I still thought it might not happen. So last night... I don't live here, so it's not... So the results aren't official yet, but basically last night a socialist won the Democratic primary in New York City.

7:31And generally in states or cities where you have one party that dominates the politics of a city or a state, whoever wins the primary generally goes on to win the general election. So right now the betting markets have that a socialist will be the next mayor of New York City when the November election. That's Zoran Mandami. He is an avowed socialist. When he first won his assembly seat back in the summer of 2020, the New York Times tweeted. They were tweets back then said there's a new progressive representing Astoria, Queens, which is the part of New York City that he is from or is living in.

8:09And he tweeted back at them and said, stop calling me a progressive. I'm a socialist. And back then he was running on defund the police, etc. He didn't say defund the police. Well, that's this time around. Does he know what that is exactly? Oh, I think he knows exactly what it is. So we want October 7th type things to happen here. Michelle, I heard somebody this morning, I think it was the managing editor of Bloomberg, saying that he has reached out to Jewish leaders in New York City and says that he wants to work with them. He's just pro-Palestine. What do you make of that? What do you think that means?

8:48So, yes, he's absolutely reached out more than we have seen other members of the Democratic Socialists. Very recently. Oh, yeah, very recently. But make no mistake, when you look at the Democratic Socialists, and you can go to their website and look it up, and their stronghold is New York City. They support the BDS movement, you know, the boycott and defund. They prohibit people from traveling to Israel. If they're going to be a member of the party, they won't get the endorsement. So, you know, this was a big issue in New York City. It was where did you stand on the state of Israel and its existence?

9:20So when you look at a map, though, and you start to then project out into where we'll be a couple months from now, the business community, as we learned yesterday when Kathy Wilde was here, I think her phrase was terrified. The feeling is terrifying. Do you think that the business, I imagine the business community, whatever you believe that means, will try to rally either around Cuomo or do they try to rally around Adams? I don't know. And then the second question is, is that a can something like that actually work insofar as clearly there is a group of people, a lot of people in this city. But the question is how many of them really who both like him and maybe maybe not like them.

10:03Right. That makes sense. So let's clarify for the viewers, because you mentioned Andrew Cuomo. He lost the Democratic primary. So why are we talking about him in the general? Because New York State has this particular election law where you can have another line on the ballot. So he has another line on the ballot. Andrew Cuomo will be on the ballot in November under a different party called the fight and deliver party. This is a very common practice to have several lines. So you can walk in and vote for your choice of a candidate sometimes on three or four different different parties. What a stupid system.

10:37You know, I don't judge it. I just live in this world. And so the current mayor of New York City, who clearly didn't think he could win the Democratic primary, also has a line. So we're going to have four people on the ballot in November. The question is, you can have a line of the ballot, but are you going to run? So Andrew Cuomo said last night he was going to look at the numbers and decide what he's going to do. He's already raised a ton of money. And the question is, can you raise that many millions more after having lost the Democratic primary? We'll wait and see what the business community does, what former Mayor Bloomberg does.

11:13We have a Republican, a perennial candidate, Curtis Sliwa, who's going to be on the Republican line. You know, this is a city that is quite, you know, anti-Republican. So I don't think he's going to have much of a shot, but we'll see. What I will say is that the betting markets do think that the person who picks up the most gain from this is the current mayor of New York City, Eric Adams. But let's see a few polls. What do the betting markets say? Right now, it's 75 % that Zoran is the mayor of New York City. It's early. Remember, it was less than a week ago that they thought Cuomo was in the lead, right?

11:48Until the last poll came out, and that's when the betting markets switched. Is there a wild card, dark horse, somebody who could emerge and get themselves still on a ballot that we don't know about? No, that ballot is set. That ballot is set. We know what the ballot is. The train left the station there. The train has left the station. Are you? Well, you know. Do you have a hat to throw there? I mean, you've got a platform that's similar to his that you ran on, that you said free things, right? When he was in the street council. When you're well known. You think I got a shot? I'm ready to, I don't live here, but I'm ready to consider.

12:24You know what? You'd be my controller. No, but you know what? I don't want to go here, but Gotham. Have you seen what Batman is up against in Gotham and what the guy running for mayor is up against? That's what it reminds me of. They're taking Wall Streeters and make him walk out onto the ice in the East River and then they fall through. I mean, there is a class warfare that's going... So what's happened here, I think is... The eat the rich type... There's a division within the Democratic Party in New York City and New York State, and it's emblematic of the division that we see nationally. How far left does the Democratic Party want to go?

13:07In Chicago, they tried to save it. Of all people, the Chicago Tribute tried to save New York from itself. Oh, the New York Times told voters not to vote for the social media. The New York Times said yesterday, they said his joyful campaign brought new voters into the fold. Yes, but then they said, but please don't rank him on the ballot. They said they weren't going to endorse anybody, and then they said, you know. Kathy Hochul did not endorse anybody, and I wonder if she's regretting that now. I don't know. So you are all in on Cuomo? I was all in on Cuomo. You were all in, and you still are.

13:44I'm a registered Democrat. I'm a centrist Democrat in New York City that has been trying to push back the left. Not very successfully, I've noticed. I just wonder how, so why did Catherine Wilde say that Adams is, she thinks he's going to end up being mayor? Well, it's possible. It's possible that if there's enough voters out there who say, okay, they don't want somebody that, because now in the general, you get a lot more centrist Democrats, right? Who comes out in the primary? Hardcore voters, mostly the hardcore left when you see the turnout. The problem is if you have both Adams and Cuomo running, do they split that vote and do you split the ticket?

14:19Yes. What is a different group of people? I mean, to the question you asked me before the show began, you said, did you vote yesterday? And I said, I didn't vote because I'm actually not a Democrat. I know you laughed at that. I did. I chortled. I'm not a registered Democrat. It was more of a chortle. I was not voting. More than a chortle. I got you. You were a registered independent. But here's what you have to understand in New York City. That doesn't mean you're an independent. It means you're a member of the independent party, which is an actual party. I understand that. But the point, though, is that there's a lot of people in this city who didn't vote yesterday.

14:50Because they couldn't. because they couldn't. Okay. And therefore, where this all lands later is a different story. What's the normal in the mayoral election? It's piddly. It's piddly, isn't it? What is it? You're talking about the general? Yeah. I think it's going to be very high. It is piddly. I was focused on last night's numbers. We got a million voters last night, which is very, very high. So it could be high. So I think it's going to be high. But normally, it's like less than a million people elect a mayor. It's very small. Yeah. It's out of 8.8 million people. You've got to remember, there's a large percentage that can't vote because they're not citizens.

15:21Like if you go to certain parts of Queens. 2021, about a million people voted. What do you mean they can't vote? A million people voted last night. Oh, that's right. There's a different president. So they can't vote now. They said there's a million New Yorkers voted in 2021. That represented 23 % of registered voters. They're down to only one vote. So 23 % is what. 23? There's only about 4 million registered voters. I often haven't paid attention to the numbers in the general because the general just doesn't matter. Yeah. Often. Maybe it will this year. Whoa. Oh, I'm sorry. 4.7 million people were registered to vote in New York City in 2021.

15:53Florida, I mean, the weather, the ocean, it's nice down there. Just say nationally, what we've seen in certain parts of New York City is that parts of the city that used to vote Democratic, they get so disgusted with the Democratic Party for moving so far left, they end up voting Republican. We saw that in certain parts of Queens in the last mayoral election. I don't, you know, I'm out of here at nine. But for people that live here, I don't think it's great, is it? It wasn't my choice, Jim. It wasn't your choice. That's as much as you'll say. Okay. Thank you. Good to have you here. A lot of fanfare when you showed up.

16:28Oh, thank you. As you know, it will. Cheese will be next. Coming up next on Squawk Pod, our guest is Philippe Lafont, the billionaire who started multi-strategy hedge fund Cotu in 1999. He was an early investor in Facebook and Netflix. And today, in his public and private investments, he's betting on AI, even if innovation means a shift in employment. I'm optimistic that at the end, as the price of things goes down, more people create companies, more people become entrepreneurs, and we sort of square things up. But there's a lot of change that takes place there, breaking down of old guards along the way.

17:07For sure. Lafont is usually heads-down investing, so he rarely does interviews. And this one is exclusive to CNBC, so stick around after this break.

17:25This is Squawk Pod. Up and Andrew, Q. You're watching Squawk Box on CNBC. I'm Andrew Ross Sorkin on this Wednesday morning, along with Joe Kernan and Becky Quick. We've got a huge lot, a lot of things to cover, a lot of ground to cover with our next guest. We're very excited about it. The markets, the Fed. why he's excited about private markets, AI, some very provocative views about Alphabet, which, by the way, didn't make his fantastic 40 list, and so much more. An exclusive with famed tech investor Philippe Lafont. He's the founder and portfolio manager of Cotou. It's a tech hedge fund, a private markets investor,$55 billion under management.

18:01Some people think of you as a venture capitalist to some degree these days. What do you think of yourself as, actually? What are you anymore? The winner of the AT &T Pro-Am. That's what we just heard. is what he thinks of himself. That's true, but I don't think that's what my investors would care about. Yeah, they might not like that. You're too good. Your name is on the wall? It is, it is. It's supposed to be on the wall right there next to Rory McIlroy. For me, to be on there, I'd have to change my name to Philippe Lafont. There you go. Yeah, congratulations. But what are you these days? Because you're doing a lot of things.

18:33When the market goes up, then I'm definitely a public investor. But then when the market doesn't do well, I switch to, you know, venture and growth. But I think that in general now you have to be a lifecycle investor. Sometimes you have a new idea. It's a small little company. Then you miss it as a small company. You try to invest it again. You miss it as a big company. You invest within on the public side. I think more shots on goal at the end is what you hope for. I said at the beginning of this, and I've teased it a couple of times, because you put together a fascinating deck from your East Meets West event, which is an unbelievable thing that you put together, about what happens to the MAG7.

19:14This is sort of a public markets issue, but really a private markets issue because you think that this whole thing may ultimately turn over. Yeah, absolutely. You know, you look at the MAG7, it's been so popular for a while, and I felt like this year maybe is a change. And if you remember a few years ago, the MAG7 was called the FANG Index and then the FANG++. These indices change. And we were thinking, like this year, there's some Mac 7s that have worked out well, some that haven't. Is it the change of the guard? And you think this is it? I think this is it. I think that with AI, it's sort of this big new wave.

19:48You know, we're sort of ushering out of the era of cloud and SaaS into the era of AI, and there's going to be some changes. So who are the half a dozen winners that replace them then? So we looked at the, let's say, top 25 companies and what happens to them every five years. and some of them just drop out. They run fast, but they don't run as fast as the others. Then you've got some new IPOs that come in. Is OpenAI going to be part of the Mach 7 of the future? Is SpaceX going to be part of the Mach 7? And so we try to recombine the index and imagine what's, we're here today, NASDAQ 100. What's a NASDAQ 100 five years out?

20:25And who's on it then? Okay. I knew, I thought you were going to ask me who's not on it. Well, we can do who's not on it. By the way, Alphabet's not on it. Tell us why. You know what I did? I just thought some of the big companies are going to be amazingly positioned. Microsoft is going to stay on it. And maybe today it's a$3 billion company, but let's say doubles in five years. It could be five or six billion. Oh, trillion. Trillion. Yes. Sorry, of course. Trillions. Then we added Bitcoin. We thought of Bitcoin as a company. Today, I think Bitcoin is$2 trillion. And we're like, well, could it get to also$4 trillion or$5 trillion?

20:59Obviously, Bitcoin is not a company. be like saying if gold's a company but i thought it was interesting as a new asset right market market cap two trillion is so big involved in bitcoin you know i've not gotten involved with bitcoin and i wake up every day at three in the morning and i'm like why am i such an idiot what have i been waiting for not being involved in it and it just goes up and up in the past i think this is interesting the retail investors they were much faster at getting involved with Bitcoin than the institutional ones. And I always thought Bitcoin's amazing, but it's double or triple the volatility of the Nasdaq.

21:35Nasdaq's already pretty volatile. Why do I need to deal with this added volatility? Recently, Bitcoin, when it went down during the tariff, only went down as much as Nasdaq. So it seems the volatility as an asset class is coming down, which I thought was pretty interesting. Okay, so but given your sort of thesis, do you say to yourself, even at this point in the ballgame if you think it's going to double or triple and going to be part of the Nasdaq 100 if you would think of it as a company? Yes, I have to think about it. That you should own it now? Yes, I have to think about it now. Do I own it now?

22:06Do I own it tomorrow? In a few days. But every day, I do think, why do I not own it? And I think to be a good investor, it's not just like owning the obvious stock, but sometimes you have to change your mind and you have to just say, well, I made a mistake and I'm changing my mind and maybe Bitcoin will be that. How do you come up to that valuation? Is it as a percentage of gold's market cap or something? So I thought like the market cap of the world, the net worth of the world is, I think, 450 to 500. Equities are, let's say, 120. Gold above and under the ground is 20. And then Bitcoin is 2 trillion.

22:44And I was like, OK, well, 2 trillion, let's say it represents half a percent of the net worth of the world. Could it go to one or two? Some people say, oh, Bitcoin's going to be 100 trillion. I'm like, okay, that's not, you know, maybe a bit of an aggressive estimate, but could it double over a period of time? And then we talked about the de-dollarization of the world, the end of U.S. exceptionalism. So those would be some of the reasons. Hey, Philippe, you mentioned that because of SaaS and cloud kind of not being as powerful, that's why some of these companies are going to move out. We've had other people who have come in and said the Mag 7 is not going to be as strong in terms of an investment vehicle because they now have to spend a lot of money on things like AI development that they never had to spend before.