The conversation revolves around the market's performance and the recent IPO of Arm Holdings. The speakers, George C of Annandale Capital and Anthony Zachary of Virtus Zevenbergen, discuss the market's resilience and the factors contributing to its rise. They highlight the role of expectations and the impact of the Arm IPO, which was over-subscribed and saw a significant rise on the first day.
They also touch on the broader market trends, noting that the resilient consumer and better-than-expected economic conditions have contributed to rising sentiment and market multiples. They emphasize that long-term investors should focus on the fundamentals of the companies to dictate investment outcomes.
The speakers also delve into the Arm IPO, discussing the company's future in AI and its role in the emerging AI era. However, they question whether Arm's growth will be in CPUs, GPUs, or AI systems, and suggest that investors should be cautious and consider the company's valuation.
Finally, they advise investors to think about what could go right when participating in IPOs, rather than what could go wrong, as optimism around technological change and new behaviors could dictate a company's success.
1. The market is showing solid gains across the board.
2. The market is currently halfway through September, and it's almost exactly where it was at the end of August.
3. The mortgage market has proven to be very resilient.
4. The ARM IPO today was a classic Supply demand imbalance situation, with demand for IPOs and very little supply.
5. The ARM IPO was over-subscribed and had a dramatic rise in the first day, showing a lot of health in the market.
6. The broader truth driving the market higher and keeping it here is the resilient consumer and better than expected economic conditions.
7. The ARM IPO is expected to have a big role in the future of AI.
8. ARM's bread and butter is still CPUs, not GPUs or AI systems.
9. ARM's valuation is in the ballparks of electronic design automation companies like Cadence Design or Nvidia.
10. To participate at this level, investors need to believe that ARM is bigger than the smartphone processor market and can evolve into a cloud computing and automotive technology provider.