New AI Superagent Dashboard Race, SpaceX-xAI Acquisition Analysis, Tech Stocks That Stand Out

0:13Welcome everyone to the information's TI TV. My name is Akash Pasricha. It is Thursday, February 12th. We have got a lot to get to today. First up, a recent sell-off in software and wealth management stocks fueled by mounting AI fears is Rattling Investors. We will break down whether those concerns are justified and highlight the names one tech investor is watching right now. Plus, as anxiety builds across the software sector, companies are racing to defend their turf, rolling out their agentic AI tools in the process. Our Microsoft reporter breaks down what they are launching and who is actually gaining traction.

0:52It's also been a headline-heavy week for Elon Musk's XAI, with two co-founders departing. And speaking of XAI, Silicon Valley is gearing up for the big potential SpaceX IPO. We will speak with one SpaceX investor to unpack the latest developments. And finally, the co-founder of Robinhood joins the show to discuss a new startup that he has been working on. It's going to be a fun show, so let's get right on into it. The software stock sell-off and also the sell-off in certain wealth management companies has been rattling markets. To help us understand the investor's point of view in all this, I want to bring on Nancy Tangler, CEO and CIO at Laffer Tangler Investments.

1:32Nancy, welcome back to the show. It's great to have you here. Thanks, Akash. Good to be here. So, Nancy, what is the vibe right now among investors in public tech companies? I mean, we've seen a lot happen in the way of earnings. We've seen a lot of movement. What's your mood right now? Yeah, well, I mean, it's never easy. You know, this reminds me a lot of the DeepSeek sell-off, and then it was exacerbated by tariffs. And so we just did a quick analysis and went and looked at all of our tech names from DeepSeek to Liberation Day and then after. And 201, except for ServiceNow, every single one of the names that we own sold off dramatically during that initial period.

2:15And then we're up somewhere between, you know, 30 to over 100 percent between Liberation Day and the end of the year. So if you believe that this is a transformative technology, AI that is, and that there are other transformative technologies right behind it, robotics, quantum, space, and then we count nuclear as kind of a transformative event, then you want to use the weakness to add to names, which we did last Thursday. Which names did you add? We added to Apple as the sort of treasury bill allocation within technology, so defensive kind of plods along. We added to Microsoft, and we added to Palantir in the tech space, and then we added to GE Vinova and Eaton, and then some consumer discretionary names like TJX and Ulta.

3:07Now, you talked about service now. I wonder in the arena of enterprise software companies, because those are the ones that we've been talking a lot about on this show, and we've gone through some of the data here. I think the median multiple now for the enterprise software companies right now on a forward revenue basis, something like three to four times right now. You know, do you think it's oversold? Which names do you think are oversold? Yeah, well, I think, you know, you look at the percentage of the tech names or the MAG7, however you want to calculate it, as a percentage of the S &P, it's gone down pretty dramatically.

3:48But the earnings growth and the earnings contribution has gone up. So if investors think that this market is going to go up without technology, that's just wrongheaded. So we do own the hardware names, and we like a number of those names as well. So think, you know, NVIDIA, think AMD, Broadcom. Those have been names that we've owned and continue to like. I think Cisco presents an interesting opportunity here because it was a beat, beat, and a raise in guidance. It was just a small decline in margins, and it was due to memory prices. So margins, I think, declined to 67.5%. I think this is the algos driving the trading narrative and then the hedge funds jumping in.

4:33And so when we get in these periods like we did during DeepSeek, you wait and then you step in and add to names, which we were doing Palantir at 88 in the DeepSeek period. We added to Teradyne back then, which was down over 25%. We added to Palantir, I'm sorry, NVIDIA at 108, Palantir at 88, and Tesla at 240. So those are generational opportunities or at least once in a few years opportunities. And so we will continue to do that because we think that we're in a transformative economy that is going to change the way we live and work. Help me understand Cisco right now. We haven't talked too much about them on the show.

5:17You mentioned the earnings results that the company has posted. Broadly speaking, I mean, talk to me a little bit about what the narrative is around Cisco, where they're excelling, and where there could be challenges for them. So it's an old tech name. I mean, you know, remember, it was the poster child in the 90s of overvaluation. I think it was trading at 100 times. I was managing money then. And it was a nutty period because the circular investment was being driven by debt. Now it's being driven mostly by cash, free cash flow and cash on the balance sheet. So what hurt Cisco then is unlikely to hurt them now, which is, you know, the bankruptcy of their underlying customers, which was then.

5:59We don't think that's going to happen now. I mean, just as an aside, Google has$126,$130 billion in cash on their balance sheet, which is more than most countries. Microsoft has$89 billion in cash. And so we think that the market's overreaction to the CapEx spend is an opportunity for us. And Cisco is one of those. They are benefiting on the networking side of the AI build-out. And they purchased Splunk a number of years ago, which is a software company. They have integrated it very effectively. And we think we think you just, I mean, it's a 10 to 12 % earner. We think you own it. It's not our largest holding, but it's a holding in our value portfolio.

6:45You talked a little bit about some of those companies that are working on further out technologies. You talked about space, you mentioned energy, nuclear, also in that equation. Of course, that's a little bit closer. you know, depends how you frame some of these technologies, which bets they're working on. But I wonder how you think about valuations for these types of companies. For a lot of these companies, and I think maybe space is a bit of a better analogy here, although you look at Fusion too, and you could also make the bet there that that's also a moonshot technology. You know, how do you think about valuation here for companies that don't have a lot of revenue, And then there's a lot of R &D.

7:31And you could say the same thing for quantum, too. Yeah, you could. Yeah. So our portfolio, we have a thematic portfolio that invests in these themes. And what we've done is we've taken the leaders and we've made them at least 50 % of the portfolio. So in quantum, the leader would be IBM. Then we have enablers. That would be coherent in Honeywell. And then we have the speculative names, IonQ, Rigetti, and so forth. So that's how we're putting the portfolio together. It's knocked it out of the park since we launched this strategy on September 30th of last year. So we think that that's how you do this because you want to mitigate the speculative risk, but you want to participate.

8:15Right. And in addition, you want to have stability in the underlying portfolio. So I think, I mean, some of our, you know, investing is about being mostly right, Akash, and it's painful. So you kind of live in, as a PM, you live in this sort of perpetual state of dissatisfaction. It goes up, I should have bought more, it goes down, I shouldn't have bought it. But effectively, what we're trying to do in our portfolios is be mostly right. I'm with you. Nancy, the question I'm trying to sort of get your perspective on here is whatever the valuation ends up being for a fusion company, for a quantum company, for a space company.

8:55There are – there's a lot of fundamentals that you could look at. But ultimately, if the company doesn't have a product yet or the product is still 10 years away, I mean, it's a lot of narrative-based investing. And so I guess my question is less about the portfolio allocation and it's more about you as an investor looking at whether it's a$100 million company, a$100 billion company. How do you even land on a number? Yeah, no, I get it. So valuation in this kind of a transformative period, even though I'm a value investor by training and we run a value strategy, in this particular space, what you have to do is you do have to buy the narrative and make sure that you have quality management teams.

9:39So for many years, I didn't get Amazon. They had no earnings. How could you buy a company that has no earnings? But since the IPO, Amazon's up 250 ,000%. So the question you have to ask yourself was, when was it overvalued? When was it too late to get in? And so if you believe in the transformative technology, valuation becomes less important in the near term, and it becomes much more important in the long term. So Tesla would be another example where we were kind of mortified when he went on the Joe Rogan show and was smoking pot on the air and sleeping on the factory floor and firing the C-suite and had a non-independent board.

10:20And so we took a double and sold it, and then it went up fivefold. So with these kinds of names, you have to, I think, believe in the underlying fundamentals, X, the earnings slash valuation. And the management team, too. I mean, you know, I think the dots that are connecting in my head is we have a lot of early stage seed investors on the show. And there, I mean, it matters almost exclusively who the founders are of the company. And I guess what I hear you saying is it's not so different just that the company is public. There's a little more money in the mix. There's obviously technology, but you have to believe in the people running the company.

10:59Nancy, I want to thank you for coming on. It's a great perspective as always. That is Nancy Tangler, CEO and CIO of Laffer Tangler Investments here on TITV. One way software companies are defending their turf is by launching their own agentic tools as quickly as possible. And the net result of that is that a lot of these enterprise software companies are starting to step on each other's toes. My colleague Aaron Holmes published a good chart and story on that topic today, and I want to bring him on to talk all about it. Aaron, welcome back to the show. It's great to have you here. Hi, Akash. Happy to be here.

11:33What were the big questions that you set out to answer with this story? Yeah, so I mean, I think as we've discussed, we've seen basically every tech stock getting crushed in the last couple of months on sort of nebulous fears that their businesses will be disrupted by new AI products from labs like OpenAI and Anthropic. A lot of that is hypothetical, but at the same time, we are seeing those companies increasingly compete for the same customers in a variety of arenas. So with this story, we really just wanted to map out all of the current products that each company has rolled out that do directly compete, both including AI agents, but also, you know, the tools around AI agents that could theoretically change the ways that their customers interact with software.

12:18So the chart that you guys had in the story, which is a great one, you sort of segmented it into four categories, browser-based agent, computer use agent, agent builders, and then agent management dashboard. let's leave out agent builders for the moment, because I think that one is pretty intuitive. But what are the other three categories? Yeah, so essentially, there's a couple things happening here. I mean, the main one is that foundation models from labs like OpenAI and Anthropic and Google are getting better at using a computer in the way that a human would. And essentially, that means that, like, instead of the agent needing to connect to applications with an API or with, you know, specific code, they can just kind of look at a computer screen in the way that a human does and, you know, intuitively use any application.

13:05So that has sort of blown open, you know, what is possible for AI agents to do with other tools, with other pieces of software. And as a result, we've also seen, you know, all of these firms like ServiceNow, Salesforce, Microsoft start to build similar agents that rely typically on the models from OpenAI and Anthropoc that they say can, you know, do even more white collar work, whether that's in areas like HR or IT, finance, or pretty much anything in the gamut of, you know, work that is done on a computer. So let's zero in on the definitions here. So computer use agent, what is that? So that's the type of AI agent that can essentially see your computer screen and, you know, move the mouse around, click on things.

13:52And I think the breakthrough case that we've been hearing about here is Anthropics Cowork, which also powers products like OpenClaw that have been going viral. And essentially, people are now directing these products to do things like organize all of their files, move data from an Excel spreadsheet into a different format, do online shopping for them, book reservations. I think a lot of the enterprise use cases are still a little bit more hypothetical. and, you know, Anthropic has said that that type of tool is only available in a preview. But at the same time, we are seeing all of these firms kind of race to convince customers to use their own versions of these computer using agents.

14:34Okay. So that's computer use agent. And then a browser-based agent is sort of like a computer use agent, but only within the browser, essentially. So it can only take actions within the tabs that you have open, I guess. And maybe it has the side panel type of thing. That's right. And it's sort of a stepping stone to computer use agents. I think it's also a little bit more constrained and not going to change any code on your machine and not going to reorganize your files. So it might be a little bit easier for enterprises to adopt something like that. Right, right. And then agent management dashboard, that obviously makes sense.

15:10So you have to figure out how many tools you have deployed and stuff like that. One broad question I had for you, Aaron, with all this is, Do you think that it's likely that, you know, one or two companies win out in each of these categories? Or is it sort of likely that these companies persist with having products that essentially replicate what their rivals are doing? So I think really what the battle that we're seeing now is over basically owning the interface that human employees at a company will use to interact with software. And what companies like OpenAI are now putting forward is they're saying, we are going to own this dashboard where you will open up ChatGPT and direct all of your different AI agents to carry out tasks in applications like Salesforce, Jira, ServiceNow.

16:02You won't actually need to open those apps. We'll just have our AI agents do it for you. So that doesn't mean that all of those other application providers would necessarily lose all of their revenue. but what they would lose is the relationships with customers. And, you know, essentially, OpenAI and that vision would become the central place that every business uses or that human employees use to interact with other applications. And so that's why we're now seeing, you know, Salesforce and ServiceNow and Microsoft all say that actually we are the best place to have this agent dashboard. And we want to sort of own the layer where you're managing and orchestrating all these agents.

16:40And I think that's really where we've seen a lot of this competition start to ramp up. Great. Well, Aaron, I want to thank you for coming on. That is Aaron Holmes, our Microsoft reporter that also covers all things enterprise software here at The Information. As SpaceX approaches its IPO, everyone is paying close attention to any news around it, whether it's applying to the FCC to put one million satellites in space or buying XAI. There is a lot that investors have to consider. I want to bring on one investor who already has a stake in the company. Joseph Olagno joins me from Buttonwood Funds.

17:14Joseph, welcome to TITV. It's great to have you here. Nice for having me. So I want to start with the XAI acquisition. What did you think of it? We expected it, to be honest with you. I was surprised when SpaceX first announced that they were going public and they hadn't already announced that they were going to merge. And A little strange timeline there that they announced the merger two weeks after, or a couple of weeks after they announced that the space sector is going public. But we did expect it. It does make sense. The synergies there, and it was not something that kind of shocked us. What synergies do you see?

17:53Well, putting data centers in space, if Elon Musk can pull this off, we won't be the only one doing it because of the efficiencies in cooling and energy from the solar is so substantial that after you offset the cost of putting these satellites up into space, they become extremely efficient. So I think you'll see many other companies follow suit. So now we've had folks on the show here talking a little bit, though, about how SpaceX, you know, as a business, it's it's increasingly operatingly efficiently, you know, camera, but the exact financials here. But I mean, the the the narrative really is that XAI is losing money hand over fist.

18:41And you're adding that to an asset that was very much en route to generating a lot of cash in the long run. I mean, why does it make sense to you? And by the way, not to mention, I mean, we have XAI. You've got five or six of the co-founders who have left the company, and there's a ton of turnover. Does that not concern you? Yeah, I mean, look, XAI was burning about a billion dollars a month in cash, and I do think that that's one of the reasons why Elon decided to move it into SpaceX, because I think it would be easier for him to raise capital for XAI when it's part of SpaceX. and SpaceX was cash flow positive to, we believe, from what we hear.

19:20Obviously, we can't look under the hood, but we're hearing about$9 to$10 billion annually. So, you know, you take a company that's burning about$12 billion cash, you move into a company that was actually generating almost that much in free cash flow. So, you know, but look, all these AI companies are, you know, in the beginning are burning substantial capital, and XAI was behind the curve a bit, you know, as far as when you compare them to Chad or Anthropoc. So in the beginning, you're burning a lot of capital. And when you do, if your revenue leapfrogs next year and the year after that, that burn will come down dramatically.

20:01So I think Elon's betting on that. And I think that he felt that if he stayed private, access to that capital would be extremely difficult for them, especially since they're so far behind the curve. I mean, I just, look, if I was a SpaceX investor, I would have thought that SpaceX going public alone, SpaceX staying, just SpaceX, not SpaceX AI. I mean, I think it would have been a better business, no? Well, look, we have positions in both of my funds. So we have positions in SpaceX and - So to you, it doesn't really matter. Look, you know, they put a valuation of$200 billion, extra dollars on it by putting them together.

20:39So to me, obviously, the synergies, if that is true and the company really is truly valued now at$1.25 trillion, you know, it does, you know, obviously it's a bump up that valuation for our RLP. So we're happy about that. We'll see how it plays out in the IPO. You know, I'm talking about the IPO. They're anticipating, you know, the combined companies to be about$1.5 trillion. You know, you have Starlink in there that obviously is generating a lot of cash. And, you know, I do think that, look, like I said, if anyone could pull off putting data centers into space, it's going to be Elon. If that happens and he does it and he can do it efficiently, it's a game changer.

21:20Walk me through the math in your mind of how SpaceX is going to be able to get one million satellites in space. We've had some analysts on the show talking about how big a lift that's going to be. And I think the number that he gave us is that there's only something like 25 ,000 satellites floating around the planet right now. So, I mean, I'm sure you've done some numbers in the background here. How do you get to a million in space? Well, there's going to be a lot of other third-party providers that'll be not just SpaceX putting satellites up in space and sending their own rockets up. There's going to be a surge of other public companies, by the way.

22:00I think you'll see a bunch of other IPOs of private companies right now. Right. But I mean, SpaceX has applied itself with the FCC to put 1 million of its own satellites in space. Yes. It will be their satellites, but they don't have to put them up themselves. They can outsource that to the other. You know, Rocket Labs is putting up satellites for Blue Origin, for example, for Leo. So I do think that there's going to be many rockets going up, and there'll be a daily occurrence. Okay, okay. So you don't actually think SpaceX is going to own the entire stack of getting all these rockets to space?

22:37I mean, they have a stack, but they're not going to get it. Contract them out if there's a rev share there or not. I'm not quite sure how they're going to work that out, but I do think that there's going to be a lot of rockets going up on a daily basis to get to that number. I mean, I think right now, I think SpaceX has about 9 ,600 satellites in orbit. Blue Origin, for example, of LEO only has about 190. They just got the approval for another 3 ,000 or so that I think they're going to be putting up in the next year. Right. Great. Well, Joseph, I want to thank you for coming on. That is Joseph Olagno from Buttonwood Funds here on TI TV.

23:26Continuing our space coverage, the co-founder of Robinhood has a new project that he has been working on. Baiju Bot is the founder and CEO of Aetherflux. It is quite the departure from the stock and crypto trading arena that he was playing in originally. Aetherflux is focused on creating a solar farm of sorts in outer space using satellites. To help us understand what exactly that means, I want to bring on Baiju to talk all about it. baiji welcome to the show it's great to have you here thanks for having me on what is aetherflux explain it to us yeah so i started the company with a concept of building power grid in space so what does this mean the idea here is is that low earth orbit is this unique environment for building consumer electronics applications because you can fly one of the cheapest forms of power production solar and also the environment is one where oftentimes consumer grade electronics work So you can actually operate relatively low cost devices in this environment.

24:22And the idea here is that this is one of the new untapped sources of power for humanity. We started out with this mission to actually beam power down to the ground for military bases or places where there's no existing power grid. And we're now spending the majority of our focus on using this concept for powering orbital data centers, which, you know, as we've all witnessed, there's a lot of talk about recently. Okay, so this is a slight pivot then, because I think the way you described this a year ago was using the satellites to bring the power back to Earth. Now the focus of the company is basically not on Earth at all.

25:00It's very much the orbital data centers that Elon is talking about. You're trying to power those with these solar satellites in space. yeah so so the concept is actually to build orbital ai data center satellites so this this exact concept where you take the chips and you put them directly on the satellites in space okay yeah so you so you are now firmly in this arena of building the data centers in space correct correct okay walk me through that pivot that feels like a bit of a pivot from what the company initially set out at what was the process like getting there yeah so we we joke around in internally that it was a pivot, but we never lifted our pivot foot.

25:42So you're not traveling. No travels. We never lifted our pivot foot. The thought process is actually very closely related between where we started and where the majority of the company's efforts are, whereas the original concept, we were trying to beam power down to places where there's no existing power grid. The sort of like the basic concept or the rationale for switching to orbital data centers is if you can actually use the power directly in orbit where you're generating it, you don't have to incur the transmission losses because transmitting power from space to Earth, you'll lose a significant amount of power on the journey.

26:24and it's useful in places where there's really no alternative, but for applications like AI, you need as much power as you can get. And based on everything that we've been working on, the space environment is actually one that's uniquely well-suited for this application. Then we can talk about that a lot more. So where are you at in your development now, technically speaking? Yeah, so we have two missions that are going to space this year. The first one is going to be demonstrating the power beaming application. our team is actively working on doing things like internally testing gpu performance in space environments so simulating that earth simulating all the challenges with what it's going to look like in space and sort of going down the path of designing what that future system looks like so we'll have a lot more to share on this but we're targeting sometime in the first half of 27 to have GPUs in orbit that will be the building blocks for building a much broader deployment of this technology.

27:25And what is your timeline then? What do you think is the timeline for getting, you know, let alone any compute, you suggested, you know, getting GPUs in space. So that is any compute whatsoever. But then there is the question about how much compute there is to actually make a dent in the data center shortage on Earth. I mean, you know, what is the timeline for that in your mind? I think we'll start to see this be a more significant sort of application of space in the next five years. Hopefully a little bit sooner, but I think that's roughly the range that I have in my mind. And I think that's actually...

28:04So five years from now, there will be enough compute in space to make a dent in the demands on Earth. I think it'll start being useful for meaningful compute applications within the next five years. Yeah. I think the overall pie is going to grow so substantially in that time. But we actually think that within the next five to 10 years or so, ideally a little bit sooner, the advantages of doing this in space, I would say from our perspective, one of the big advantages are once you get the technology up and running and you sort of work through all the technical challenges. and making it do what it's supposed to.