The Stocks Quietly Beating Nvidia in 2026 | Stock Club 319

0:28This episode is brought to you by Google Chrome. Micron Technology is up 274%. Western Digital up 245%. Intel up 230%. All three are completely sold out for 2026. The hyperscalers are basically negotiating for access, not price. It's not how much will you sell this for us. It's how much can we buy? How much will you let us buy? Just take my wallet. Please let me out your stuff. Like selling water to people crawling through the Sahara.

1:02Welcome to Stock Club, the podcast where we find and discuss stocks that anyone can buy, many of which we believe will go on to grow your wealth. Investicon, folks, it's coming on the 27th of August to Dublin, Ireland. That's just a month and a half away from now, and our media push is coming very soon. the theme for investicon this year is top three investing ideas for 2027 and beyond from investing masters and there's a big media coverage coming with david gardner over the next couple of weeks we're under embargo so i can't share details of what's coming and where but what what i can tell you is that if you come to investicon you will leave the event with a wonderful new network new ideas and above all a short list of ticker symbols that you can add to your portfolio that very day so get in before everybody's talking about it prices have gone up but if you email brian at my wall street.com my colleague and brian's the ceo of investicon he might have one of the last few remaining discount codes it's going to be a great day in the market bar in sunny dublin but sunny right now we don't promise the weather is going to be good in august And in conjunction with the Aer Lingus College Classic American Football game, which this year is TCU, Texas Christian University versus North Carolina Tar Heels, I think they're called.

2:34As you can see, I'm all over it. But get your tickets to Investicon, folks. You will have a great day. Michael Manni, live from Baritz. How are you doing this week, pal? I'm good. I'm good. I'm recovering from the... We had a little sprinkling of a heat wave just the last two days. Oh, yeah, I heard. it was we had the full we had the biggest one which is like the hottest has been in france but then yesterday got up to like 37 um just for the day which is intense but but it's good yeah i'm getting really into the world cup now now now that we're into the knockout stages it's been great watching oh it's it's been a very enjoy a very surprising competition so here a question for you what's been your favorite match so far and i'll return the ball when you when you set it my way Well, I've adopted France, which is a very tough job for me to do.

3:22But their game, both the game against Norway and their game against Senegal, it was just so impressive. I don't think I've seen a more impressive front four, and that four is interchangeable on the left. But watching Michael Alisse play is the kind of effortless grace of a footballer where you just have to sit and gawp. And like, in my eyes, the best player in the world right now. So it is incredible. And that's why the Kylian Mbappe is flipping for fun. On the pitch with him. You're watching the man supply. I just think it's, they're incredible teams to watch. I got a serious flair, serious ability on the ball.

4:01Even like that Paraguay game was horrific, but it was the only way a team like Paraguay could, could have a chance against the quality of this French team. So it is, it's been great to watch and it's been, it's been great to get to adopt the best team. clearly the best team in the tournament so far. We'll see now how they get on. Well, they entered the favorites. Tonight against Morocco. Oh, yeah. When is that game? That's where when this episode goes out, it'll be tonight, Thursday night. Oh, yeah. So, fingers crossed. So, the score was what? So, we're, yeah. My family and I sat up the other night and it's the Argentina versus Cape Verde or they say Cape Verde on TV.

4:41Did you stay up towards that? but we stayed up to watch that the four of us were transfixed we kind of said let's give it a half an hour wouldn't usually be such late birds and between the extra time um additional time and uh we were sitting up till something like half two in the morning but it was unbelievable drama because irish people always vote for the underdog we cheer for the underdog and here's this tiny african nation you know we can claim cape verde as well like pico lopez pico lopez there at the back you know that's right yeah and our native colors yeah i mean it's a nation of something like 500 000 people and it went up to two all and they had argentina in a cold sweat yeah you could just see it on their face like come on they did not want to be knocked out by this virtually unheard of country let alone team so um i was cheering for the underdog but in fairness uh glad to see argentina get through i'm not that invested in any of the teams something messy moaning in Pico Lopez's ear and he's going back to Shamrock Rovers now this week.

5:42It's an unreal story. It really is. Did you see that he got messaged on LinkedIn to play for the Cape Verde national team? That's the only way they access this fellow. You're joking. The might of the machine. It's like, please accept my invite. I want to invite you to play for You can do a job at CentreVac. In fairness, it's a classic recruitment story, just in a different context. it is so what do we do what do we talk about this week mike so we we've done this now a few times uh we're six months into the year so i think it'd be good to look back and take the opportunity to kind of take take a take a retrospective i suppose on the first uh first half of the year uh it's been a very solid start to the year at least on paper maybe it doesn't feel like that for certain people depending on what sectors you're in but overall the market's up all the three major indexes are up between nine and 11 percent uh which is very much that's great for six months that's awesome yeah i'm very much continuous of last year very concentrated in the ai names and the chip makers um but what's really interesting what i found interesting because i remember we did this episode it was late last year or early the start of this year and so i'm trying i'm trying to kind of verge to to give a different slant because we're going to be talking about the same companies uh as the best performing companies i'm pretty sure the big winner is when we did a whole podcast exactly um yeah so i'm gonna open up with something that kind of has nothing to do with the best performance stocks uh so it's the magnificent seven now an awful lot of concern in recent times last two years was around micro concentration at the top we had the seven trillion dollar plus companies amazon apple google facebook microsoft nvidia tesla they made up at their peak i think they made up 34 of the entire s &p 500 so there's a distinct lack of breadth um These seven names were dragging up the overall market.

7:33That rang an awful lot of alarm bells for a lot of people. It's actually flipped now so far in 2026. So for the first half of the year, the S &P 500 is up 9.5%. The S &P 493, the rest of the companies, apart from Magnificent Seven, they're up over 14%, with the Magnificent Seven up paltry 2%. They've gone from propping up the market to dragging it down. So Microsoft, Facebook, Tesla, they're all down for the year. NVIDIA and Amazon are up slightly, but trailing the market. And then Google and Apple are the only two of the seven that are outperforming. And I think there is a sense of irony to this.

8:11The fact that the Mag7 are being punished for the outsized CapEx spending, which is fueling this entire AI rally in a sense. You know, it's their money that is being pumped into these companies that are doing well. and we're punishing these companies for spending money on the companies we're selling to buy the other ones does that make sense oh yeah but i think well i mean it doesn't but yes i understand yes yes uh so i think it's a good lesson in just the cyclical nature of markets in general these seven companies are all we could talk about for a very long time if they underperform the fear of them underperforming you know they're going to take the entire market down with them and here we are and it's just simply not the case at all we've rotated out of them we've rotated into new names so So we'll see how this plays out.

8:54There's definitely some buying opportunities among them, I believe, in terms of long-term investors. You're looking at companies that are trailing. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply.

9:27Need a hiring hero? This is a job for Indeed sponsored jobs. Other stocks, other chip makers in cyclical industries. Now, obviously, this is not a normal cycle within cyclical industries, but there are companies underperforming that have been for a while that are going to be much, much bigger in 5, 10 years time. and could be an opportune time to buy. Who knows? But yeah, I just think it makes an interesting counterpoint for the 10 stocks I'm about to discuss, which are the best performing stocks of the S &P 500 for the first half of the year. So I'm going to talk about 10 worst performing stocks.

10:02That's the one thing we agreed on, SNAK, yesterday. And I'll list them, and I'll probably describe why the worst three did so badly. But what I'm going to try and do on my bit is pick from those 10, which I'm going to go with four, have the best chance of a recovery because when people see something has been destroyed it might suggest there could be value to be found and there's four that i quite like yeah 100 so do you are will i go for the 10 best performing first or the best we started with the good news first or the bad news first let's start with the good news let's get everyone in the mood so go for it you've got the mic what what are the top 10 performing stocks yeah in the s &p 500 year to date.

10:42And just to remind our listeners, by the way, Mike, that we're talking in a ring fence of 500 companies, not the entire market. So you're not going to talk about the top 10 performers. It's the top 10 performers in the index. So this is for the first six months of the year. We're nine days after when this episode comes out. I know the top limits. Returns are absolutely absurd. So go on. It's an endless conversation about the Sandisk, number one, up over 700%, 717%. Micron technology, the big miss for me from last year, it's up 274%. Western Digital up 245%. Intel up 230%. Seagate technology up 222%.

11:23Dell Technologies up 207%. Marvel technology up 205%. Applied materials, 157%. Corning, 153%. And Flex, 146%. Now, we had this episode, I think we did it for the top performing stocks of 2025. And four of the names of the top five were in the same position pretty much. Sandus, Micron, Western Digital, and Seagate, wasn't it? Yeah. So it's just continuation really of the same trends that are there. And the backlog, I suppose, like the only non-chip name in the top 10 is Corning, which is you know it's still an ai bet it's basically glass and fiber production which is going into data centers so even though it's not to do with memory and storage and silicon it's still very much in that same bracket of just feeding this ai infrastructure build out um that's pretty stark i suppose like the semiconductor etf smh it's up 65 percent while the software ETF IGV is down 12%.

12:30Like that's 77 % difference. That's wild. You know what I mean? For companies that are in the same, like they're under technology when it comes to, you know, they're all in the NASDAQ. Like this is, they're not a million miles away. Oh, that's true. They're all in the NASDAQ. That's an interesting observation. Even Corning, which as you glanced across, or you there um it is a product i think on in most people's pocket they they were famous for coming out with a rather cool product years ago called gorilla glass for the front of smartphones um and it kind of i was at the time put forward as its name implied was super tough glass uh which you really do need on smartphones so but it is amazing that that name that brand corning its tickers GLOW or GLW has been on my radar for 30 years.

13:27I've been watching that share on off for 30 years. And here we are. It's now in the top 10. All those super relevant, dominates a niche. But then all the others. It's amazing as well to me that Dell and Intel are on the list. Dell, Intel, Western Digital, Sandus. This is my thing. And it's all about the physical components of this AI build out. it's nothing to do with the application it's nothing to do with software that's why i feel even though the and we're going to get into the numbers that back up the performance and back up the stock like almost justified the stock rally it does still seem i think maybe bubble it is a bubble i don't think there's any denying that but it's very cyclical um because of such a bottleneck here and it's just a bunch of physical necessities involved in this ai build-up beyond just obviously the NVIDIA GPUs, the most constrained of any of them seems to be memory and storage.

14:21So storage capacity is now like a highly constrained resource. Do you know what I mean? It's like communists back in the day, you have to go for your rations. These multi-trillion dollar companies are having to go up to these companies being like, can you give me whatever I can take? Like for an AI model to run, it needs access to massive amounts of data. These are stored on solid state drives. So this is Sandisk's business. I thought it'd be good to go through the top three, just to kind of explain why memory in particular is absolutely dominating performance on the market so far for all of 2025 and so far through to 2026.

14:59So Sandisk sell these solid state drives, SSDs, and it literally cannot make them quick enough. It's got a$42 billion backlog. Its gross margins are sitting at 78 % now for a cyclical manufacturer. unbelievable and because it's a very specialized manufacturing process that takes months its competitors can't really get up to any kind of comparable scale at all so i just thought it would be interesting to go through the last few quarters of sandisk's uh sandisk earnings to give us a yeah just to give us a glimpse of the scale of kind of how fast things are happening there so for night right now it's q3 of fiscal 2026 for them they're slightly different reporting structure So Q3 of 2025, they had$1.7 billion in revenue.

15:45Q3 of 2026, they had$6 billion in revenue. Q2, so last quarter, they had$3 billion in revenue. So they double revenue quarter over quarter. They're up 250 % year over year. They're up 97 % quarter over quarter. Their gross margins have gone in the space of a year from 23 % to 78%. This is all why their operating expenses have gone from$380 million to$450 million. So that is all just profit, pure profit. It is nuts. Operating income went from$2 million last year to$4.2 billion this year. It's just absolutely beyond belief the speed at which this company has just absolutely taken off. cash flow has gone from 220 uh 220 million last year to 3 billion this year it's absolutely nuts and it does justify how crazy this stock's taken off obviously it came from the spinoff from western digital um which does i suppose like western digital read the tea leaves saw the demand here and said this company can go out and be better on its own and get a better valuation and it did just that uh for micron similar story just in a different font there there are only three companies in the world that make high bandwidth memory chips at any type of scale.

17:03So the other two are both Korean, SK, Hynex, and Samsung. So this is the kind of the ultra-fast memory that physically sits next to AI accelerators to feed them with data. All three are completely sold out for 2026. The hyperscalers are basically negotiating for access, not price. It's not how much will you sell this for us, it's how much can we buy? How much will you let us buy? Just take my wallet, please let me out your stuff. Literally like selling water to people crawling through the Sahara. It is nuts. And then what's really noticing, what's really funny about this is Western Digital is this like old school, it's like hard disk drives.

17:40But this demand bottleneck has trickled the whole way down. So this old tech company, it's been around since the 60s, 70s. Because people can't get solid state drives, SanDisk is running out and can't make them quick enough, the price is too high. Data centers still need to store this data. So they've gone to the old school storage as well for like, you know, the petabytes of memory, all these models run out. So Western Digital is completely sold out too. And then its biggest clients are essentially reserving its future production like years ahead. So this bottleneck has kind of come down to, for all three, I think people not anticipating this level of demand.

18:21So it's hard to scale manufacturing up and then just the clients at play as well. So it's Amazon, Microsoft, Meta, Google. They're all desperately need this stuff to fund their own AI ambitions. And it's a very small data. It's a very small bottleneck. I keep using the word bottleneck. Very small bottleneck where memory sits. And there's only a few players in play. It's a very specialized manufacturing process. Yeah. And you can't, it's not just throw another production line on the end of the factory there, Mick. It's complex. Exactly. It makes me reflect on the fact that, you know, if you're an owner, manager, leader of a business, stress comes in very many forms.

19:04One is people don't want the stuff we're selling. The other side of the coin is too many people want everything we're doing and are prepared to pay for it for five years in advance. And that's just not even fair because you can't buy the stuff we're going to build in 2030. We haven't built it yet and we don't even know what we want to charge. it's it's it's a different kind of stress and you know it's pure quality stress but it's it's it is there's no denying it's above it's 100 % above it's always been memory has always been a cyclical industry you can go back and look through like micron's historical chart and if you cut out the straight up this at the end you'll see there is a a boom bust cycle of sorts i guess the question is just is how long how long does this last like my concern would be as well we just mentioned the level of clients they have the resources at their disposal i know it is a completely complex process or they will be doing it themselves already but obviously microsoft amazon google they don't want sandisk to have 78 gross margins they don't want to be paying that much for a company you know so they will be looking for a solution to this bottleneck too so do that what do with that information what you will i'm certainly not rushing in to buy at these levels i feel something has to give but again it's all about timing it's like uh george sorris's famous quote about a bubble is when you see a bubble he goes in just making sure he can get out at the right time that would that would be my my prognostic on the whole thing is that this memory particularly is 100 percent peak peak peak at the cycle but how far can that grow it's nice to reduce macro themes into easy formulate um and kind of digestible idioms like for example our friend david gardner founder of the matthew and a vip speaker at investicon says what goes up must go upper and he's right insofar as on the macro picture over 30 plus years of him picking stocks he's picked companies that have been on a blind tear that logically the thinking mind goes well that can't keep going when very often it does um the tired and overused example that i've used over the years is when he was saying buy amazon 20 something years ago after had gone up 20-fold in value, and I thought he was nuts, and he was very sane.

21:34But we're looking at these companies now, and being so reductive just feels wrong again. No, completely. Like, do we think Sandisk? Makers of the tiny wee little, you know, like what do you call it? Like stamp-sized cards. Storage drives, yeah, exactly. Yeah, it looks like a stamp made out of plastic and metal that you stick into your GoPro. and a few other bits I'm sure like that it's up 717 % he said I mean that's crackers so far this year since January it's up 8 fold we should do up a timeline of when we mentioned Sandisk on the pot and like from the first time we mentioned it probably maybe this time last year a bit further back to now and every time it's like Jesus growth is crazy obviously can't keep it up blah blah blah and it is just what goes up must go upper to the nth degree it is nuts and like none of that is sustainable but jesus christ if you got in when we first mentioned it if we have brains in our heads and we were and we were buying then but uh yeah it is it's nuts it is the dominant story and yeah it's just complete like the thing is the demand is there do you know what i mean and until it's not yeah what else can it do but go up so are you when you look across that those 10 names surely at least one of them will keep going we just know they will but do you have you a sense as to which one has the greatest momentum upward where there's still a decent track his uh um runway to go it's tough to decipher because they're all so similar in that they are it's the same except for corning yeah but yes and know because corning is still on the same tail one as all the rest you know it's it's the only yeah it's the only non-chip stock but it's very much part of the ai infrastructure build-out so totally money investors money has moved into anything that quote-unquote makes ai and has been sucked out of anything that might be hurt by ai as my list is going to demonstrate in a moment yeah uh if i was to pick out one i suppose the story might be cleanest for intel just in a sense of the U.S.

23:51trying to domesticate semiconductor manufacturing and the over-alliance on Taiwan, the geopolitical issues around Taiwan as a whole, what could happen in the future. So with that sense, I think that if Intel doesn't manage to mess it up itself, it should become one of the most important U.S. companies. Yeah. But it's proven in its history that it's been mismanaged to a point that, you know, there's a lot of execution risk in saying that. But the company should become. Yeah, that would be one that I could see continuing on. Whereas I feel like something has to give with just this pure. When it's time to scale your business, it's time for Shopify.

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25:12The sun is breaking. Exactly. please. You know what I mean? I don't know how I was describing but calling it a bottleneck for the 11th time. More sand discs, please. More sand discs and throw in a few microns on restaurant digitals while they're at the register. And we're going to be back here in six months talking about, do sand us up another 400 %? Can you believe it? Yeah, well, there you have it. So, well, I give you a blast of the bad news. Yeah, I can imagine where they're coming from, but go for it. Well, you know it because as much as the cash has gone in, it comes out of other places and i'm going to go from 10th place up to first so at neg 43 having lost 43 of its value from that ring fence of 500 companies and in 10th place is in the company called lidos in ninth place we've insulate down 44 percent lululemon a name known to all down 44.6 percent Gardner, the IT people, or the famous Gardner magic quadrant, down 45%.

26:16The Tradesk has halved in value since January. Cognizant, providers of outsourced IT services, and usually with a whole army of PhDs over in India, is down 51%. Accenture is down just touching 52%. Boston Scientific is in third from the worst place and it's down 53%. CoStar Group, owner of homes.com, which is kind of competitive to Zillow, is down 55%. And in biggest loser since the year began, top spot is Intuit, who do accounting and QuickBooks and that kind of software. So as I said to you, I decided to talk about the top three worst performers and why they've been hammered. And maybe of more interest, I think, to our listeners, the four from that list I just made, or sorry, that I just read from, that I believe are most overdone, as it were, the ones that might improve the most.

27:21But it's tough. It's tough to make that call. But let me start. The easy bit is black and white. The three worst performers. Intuit down 58.4 % and its collapse because it is a collapse in six months is a combination of real genuine miss operationally. But it also, as you've kind of touched on, as we've just said, a bigger narrative shift. It made company admitted that its 2026 tax season did not go as expected. Yeah. And it lost price sensitive DIY tax filers. and they said that that's through TurboTax. Yeah. Yes, TurboTax revenue was well down. And that alone triggered a 20 % one-day drop in the share price.

28:07And then multiple security fraud investigations into its pricing disclosures. So when you're down, the boot came in and bad things got worse. But it is an AI story. It definitely is. Now, the one thing I'll say about that is that I think Intuit is one of, if not the highest, um, spenders on lobbying of any public company in the U S I did not know that. Yeah, now I might. How do you know that? So this is the whole thing. I was like, they're a huge beneficiary of the U S taxism and the DIY taxes, which is kind of a broken system in a sense so they're trying to perpetuate a broken system and this is where i think ai does have an ability to democratize a lot of things in that things that are intentionally ring-fenced ring-fenced and made more um difficult to do for the beneficiaries of certain companies or certain industries or whatever else like as in if you uh if you sell a house in ireland or you buy house and every person who's ever done that they all solicitor three or four grand do you know they just have to pay that or yeah fear that it is the cost of getting the job done and that that is the thing that like doesn't really add a lot of value but it's just one of these necessary additional payments and i think that's where stuff like ai can come in and bring power back and that's where i would fear in terms of jobs is that are you not actually adding any value are you just benefiting from a somewhat broken system and that's that's and i i have intuition sorry turbo tax i'm not sure about the rest of into it but turbo tax has one of those examples of a company that's benefiting from a broken system in that the diy test system in the u.s is kind of nuts really um it is pretty nuts but we're now looking at a world where you can turn to whether whether it's Claude or ChatGPT, and probably get it to handhold you as you upload screenshots of whatever it is that you need to do for Uncle Sam to do your tax returns.

30:21Exactly. We're here to, we're here to for, I mean, we're arguing the same point. So we're kind of now like this guided software, as it's known, where you log in, it guides you through a process. Like that moat that they had is just being obliterated by everyday AI. um goldman sachs downgraded intuit to a cell they said growth could slow from about 14 at a moment to five to ten percent because all these ai native competitors are emerging not only people who just sit down and type into gpt what it is they're trying to achieve but new five-person startups who are doing something uh that is a good substitute and intuit responded with a 17 workforce cut and an eight billion dollar stock buyback which does signal it's meant to say i just so it's one of two things when a company does a buyback ideally it should be only done because they can see nowhere else better to put their eight billion dollars cash but on the more cynical side they want it to be seen and that uh you just can't discount that um but the underlying numbers like 10 % revenue growth, 55 % EBITDA margins.

31:35They haven't actually deteriorated, but stock is being priced for disruption. Yeah. And just as SanDisk is being priced for perfection, so too is his intuit being clobbered. And 27 of 34 analysts, who generally you and I don't pay a whole lot of heed to, but 27 out of 34 are saying it's a buy. So it's been thrashed, but they're buying back 8 billion. They have a brand. I think in America, everybody knows QuickBooks. We're not there in Ireland. It's not such a part of our day-to-day fabric. So that's the first. In second place, CoStar Group, down 55%. They're a basic commercial real estate data business.

32:18And they own CoStar and LoopNet. And as I said earlier, Holmes.com. And it's been quite healthy. Q1 Revenue grew 22.5%. EBITDA doubled. but the problem child in their portfolio of businesses is homes.com its residential marketplace which was built as a kind of a bet against zillow who are the my home.ie of america but i mean they're ginormous you can see every property and what it was sold for so homes.com went up against zillow and management has pushed a timeline for homes.com to become profitable out to 2030 which when you're in 2026 feels like a million years away and investors bulk that i suppose funding years more of cash burn uh like 550 million dollars net investment in 2026 alone uh for payoff to just keeps receding and going further and further out so you're you're talking if that isn't bad enough then there's a proxy fight an active activist pressure um and its removal from the mazdeck 100 which triggered you know forces selling it from index funds so basically the sentiment went very negative yeah um so it's it's more of a it's a very stagnant housing market in the u.s as well where mortgage rates are kind of stuck at this high level there's this the u.s housing market is kind of mad too because people can lock in basically 30-year mortgages um whenever whenever they want so over covid what a bunch of people did was lock in like two and a half to three percent mortgage rates which now makes that house impossible to sell because you're you're trading that for you know whatever you're paying two and a half percent to going up to six or seven percent so there's a lack of houses being built there's a lack of houses being kind of sold and bought again and it's it was there it's one of the most difficult um difficult housing markets for a first-time buyer in the history of the u.s with all these is that so with all these combinations of lack of supply high mortgage rates that haven't really come down we're looking at you know the consensus is potentially a rate hike by the end of the year at this stage with uh persistent inflation so that's all combined to hit obviously costar hit the hazard market in general but costar would be one of the big uh the big sufferers from all that too so it is interesting very good point and i'll just touch on the third biggest loser boston scientific another old-fashioned brand yeah you know that hires half ago i say again it hires half ago it's not a fact boston scientific i think it's the it's got to be the number one employer in Galway.

35:07If it's not, it's up there anyways. I'm entirely fine about that. You should plant out in East Galway. Boston Scientific's problem is guidance whiplash. Nothing else. It started 2026 guiding something like 10 to 11 % organic growth. And then they cleared their throats, went back to the mic and said in April, well, kind of 6.5 % to 8%. That's a big cut. And then in May, oh, it's a big cut. To drop from circa 10 to 11%, they more or halved it from to about six and a half percent then in late may a few weeks back they admitted their watchman which is a heart implant franchise and was previously a star growth driver for the business would be roughly flat sequentially through q2 and q3 because patent patients shift towards combined procedures rather than the standalone watchman implants and then when you on new competitors from Medtronic and Johnson & Johnson in electrophysiology and in regulatory delays on its$15 billion penubra acquisition.

36:10You get a stock that's just been slapped, crashed. Management have kind of miscommunicated, overpromised, you might say, or demonstrated that their ability to forecast revenue is not outstanding if every few weeks they're going to egg, is what we said. We didn't mean that. So it is kind of being priced for this structural deceleration. I suppose, yeah. As opposed to. Yeah. But the underlying business isn't really broken. Cardiovascular revenue is still up double digits in Q1, but the company really did trade at a premium. But now it certainly isn't. So anyway, they're the ones that have been beaten up the most, but I thought it would be kind of fun to just give a shot at the four.

36:58i think would most recover and i spent a good while trying to pick four and then i uploaded the list into our ai system and said rank these and there was only a very small overlap um but i went with my list my list so here's the four i think are going to recover the most i'll do this real quick i think boston scientific is going to is the one out of the list i think it's the one to market just as being too dramatic and as i said it got hammered because of one product line this watchman heart implant uh which is expected to flatline if you excuse the expression for a couple of quarters but the rest of the business is doing really good and it's growing in a healthy clip and the majority of analysts are screaming it's a buy and their price target suggests there's something like a 65 to 70 upside if the buy analysts are are right and yes there is competition from retronic and j &j as i said but it really is a fight over a burgeoning market like his market share fight which shows they're in a healthy market as opposed to the category is dying and some like unlike some of the other ones on the list of the top 10 worst there's no big open question mark hanging over it we're talking a multi-year bet uh that might just pay off and then there's just one metric this watchman volumes that will get fresh data on every quarter so i think boston scientific has been oversold that would be my company that's you know going away anytime soon does it no no the second one i picked was insulate and this one has the strongest numbers of of the the 10 full stop it just has the best numbers revenue was up 34 last quarter profit more than doubled uh and they're still guiding 20 plus growth this year none of those numbers for you and me mike would scream that the business in trouble but what actually tanked the stock was a kind of run of bad luck style events there was a product recall which is never good but it is an event it's not a enduring problem if a company recalls a product then it's ugly for that time but the market is a short memory and it was a court case where uh they'd won getting overturned so it was a court case they'd won getting overturned on appeal and general nervous nervousness about weight loss drugs eventually shrinking the diabetes device market so they kind of there were things outside their window and analysts are overwhelmingly bullish um even more so than boston scientific um and the one thing i'd actually watch is a rival pump coming to the market that could really change into its near-term monopoly and ease into its really healthy margins but um that's kind of next year's problem i think right now the market has trashed it down unnecessarily so that'll be the second one i think looks a little overdone to me um third i'll go with intuit and this is a really interesting one because we're all watching businesses about under the will ai wreck the show or not and you know i i don't think the numbers are showing that it's really in trouble.

40:10I think we're waiting to see it, and it hasn't come to fruition yet. The only thing that's happened so far is that the market has re-rated the stocks. So with this new potential threat, you don't deserve your valuation like you used to have, which I think makes fertile ground for buyers. If you're really bullish that they aren't going to get disrupted, you're coming in at very attractive valuations for a lot of these businesses. so entirely and i have spoke my thoughts earlier when i was saying it did an eight billion dollar buyback and i said look there's two lenses under which you could you could view this one as there really are allocating capital as best they can the other is somewhat of a cynical move but eight billion dollars is a huge check the company's backing itself with an outstanding buyback and and so i wouldn't call investing in intuit now a slam dunk uh like the first two i mentioned But there's still an open lawsuit, for example, on how they handle pricing disclosures.

41:12And if AI tax tools start to steal customers next tax season, then that bear actually has come into the room and we're kind of going to be maligned and it's going to be, it's not going to be pretty. So I did think Intuit was overdone. It's a stock we've watched on my Wall Street since the launch of our very first app. It was one of the, what we call the showroom. It was when we said like, this is great business for the long term. And, you know, I'm still in that camp. but the fourth one mike um as i i know usually i only go three but i have to give accenture a an honorary mention because the client is pretty easy to pull apart once you separate the pieces um some of it is just bad timing there's trouble in the middle east as we know u.s government has spending cuts um stuff that should fade on its own um profit and cash flow both grew last quarter so So the core engine isn't really in bits.

42:06It's not broken. Some of it is a very genuinely fair worry. New bookings dropped 13 % in one quarter. Management admitted clients are pushing out big deals till next year, which if it's true is good. I mean, it just means it's deferred revenue. That bookings figure would concern me now because with those kind of service businesses, their clients are locked into contracts for the here and now. So today's numbers, these quarters numbers are going to be fine, but next quarters, what's going to happen? Are they going to get out of contracts, whatever else? I imagine the consultancy business as a whole is probably a net negative with AI and the ability.

42:51that people can DIY it. Companies can DIY it. Their abilities have become commoditized somewhat. And not to say that they don't provide any value, but there is definitely a concern there around show me the value you have provided instead of don't worry about showing me fancy slides. I can go do that now myself. I got an email about, yeah, and they're masters of fancy slides. I got an email there recently regarding Accenture's share price and the title was it is it a falling is it a fallen angel or a falling knife and in the email they they didn't quite answer the question but it was the question raised and and i just read a quote which i'll just regurgitate here and it's from the ceo um in her q3 uh 2026 conference call her name is julie sweet and what she said was i also want to give you context on two factors that impacted our results this quarter first room we were impacted by the conflict in the middle east we saw revenue impact of approximately 100 million dollars compared to our expectations second a couple of our large managed service opportunities moved into financial year 2027 for company specific reasons now i kind of said all of that a few minutes ago um but if it's true and and uh that's where our human judgment comes in it feels like a business that that will kind of correct but i totally agree to point when you just stop reading facts figures statements pr and just think is accenture a business that will grow or decline as a consequence of ai it's very hard to say well it's going to grow i mean kind of mirrors our conversation that we've been having about investors in the market in general where money comes out of here and goes into ai and i if you think about it if you think about it from a lot of these businesses are going to have to go create AI budgets out of somewhere.