Yeah, what about their business model right now? How much is it impacted, though, even if business is good, if they have to pay a lot more to borrow?

You know, maybe I'll start the discussion with this, right? The fact that you have to start talking about the solvency of any company, probably not a good place to start the discussion anyway, but, you know, I've been there right now.

Now, here's what I'll tell you, Corby.

A lot of the funding really comes from the backlog that they have.

And the backlog, at the end of the day, is backed by customers like Meta, Microsoft, OpenAI, and Tropic.

And they have been able to raise a lot of this funding at 5.5% using these DDTL facilities, for example.

What the market is focused on is a very small tranche of the debt, which is unsecured finance.

What are they seeing on the demand side then? And what are you calculating in terms of on their return of invested capital?

Is it good?

You know, the crease is non-existent.

I spent a fair amount of time on the device with the device.

What I'd say is I think it's a mix of hardware innovation and software as well that makes the speed very minimal.

You know, I think the fact that it has a matte finish inside, which is more glossy the way Samsung does, also dampens the depth of that crease that's there.

So I think in certain angles it's there, but people were having a very hard time trying to find it.

So I do think The crease or the lack of it, I should say, in the larger screen sizes will resonate a lot with folks.

So then what are you going to be looking for in terms of early telltales of demand?

What most stands out to you?

Yeah, I mean, listen, this is the second or third quarter in a row where Dell's almost putting the shock in our numbers in terms of how well AI is doing for them.

I think, listen, there are a couple of things that really stand out here.

The absolute numbers going up, $18 EPS going to $25.50, very impressive.

But I think the part that really should stand out to folks is the diversity of growth.

over here, while AI is the story and AI revenues are up 100% in the quarter, you're actually starting to see the traditional business, servers and networking, for example, up 122%.

And then storage, I would call out, accelerated pretty dramatically to up 26% versus up eight last quarter.

Is that kind of juiced its valuation? How are you viewing it set up here?

The quarter's good, it was solid, but it wasn't, like, gangbusters.

Yeah.

Um, see, I think, I think the valuation question kinda depends on two things.

One is what do you think about the rest of the world, right? If we remain in a risk-off narrative, Apple will continue to do well.

I think that's one part of it.

The other part I think that folks will try to focus in on this call is as Siri AI rolls out, does that enable Apple to sustain this 20% plus iPhone momentum growth that they've had into iPhone 18? If, if you can get faith that they can do 20% iPhone growth again next year, uh, I think the stock has a tremendous amount of upside where it's not.

I think fundamentally that's the part you wanna focus on is can iPhone demand hold up the way it is despite the price increases they may be implementing there.

And what are we looking for as, uh, sorta leading signals of whether that can happen? I mean, presumably people are gonna have to be aware of what Siri AI offers, and then that has to catalyze an energized upgrade cycle.

Or, or if none of those are your concerns, what would you be thinking about?

Listen, um, they all are concerns to some degree, right? And, the, the part I would say, um, you know, on memory input costs, I think Apple has the ability to pass on memory input cost increases to customers.

And in fairness, you and I as consumers probably won't face the brunt of it.

Your carriers will probably subsidize a part of that cost anyway, right? Uh, so I think they can manage their way through on that pretty well.

Uh, the iPhone cycle and supply chain, I think they do a much better job managing supply chain than anyone else.

I would actually argue and say this, the next couple of years, could be like the pandemic where Apple will actually pick up market share 'cause they're able to get memory and ship product while others are perhaps not able to do it.

Now, the stuff you worry about, right, the part I'd say, I, I would say I worry about is, is, is over time AI usage gonna be on a device that does not have a screen? Is the form factor gonna be fundamentally different than an iPhone, right?

What do you think about that, especially as they trade at 37 times?

In the sense of, you know, Ahmed, how are you seeing that, you know, sort of flow through over the past 12 months on server revenues and, you know, with AI as the accelerator and, you know, kind of where in particular has it maybe surprised you a little bit in terms of the speed and the scale of revenue outrunning units at this point?

Yeah, absolutely.

You know, I'll start this with saying, I don't think it's an AI trade.

This is an AI investment cycle.

And it's a fundamentally different way to look at this.

But this is investments being done for the long run.

It's not a trade by any means.

Anybody besides Amphenol, and you can certainly talk about that name, but any sort of favorites within this sort of infrastructure world that you'd want to be kind of pointing to that you think are really jumping out at you right now and may still be underappreciated?

So w- what are the expectations?

Yeah, I mean, listen, uh, all these memory names have gone parabolic in the last three months, if not longer than that.

So we do think it's more profit-taking, especially into the Micron print.

Uh, you know, I think expectations really into the print is, can the cycle continue, and how long can it continue, right? So this, this...

I think what folks will focus on, gross margins, for s- for example, a good way to figure out if pricing's still going well, right? So something in the 81, 82% range, people care about.

The other part I would say is, uh, you know, companies have generally talked, uh, on the memory side about capacity being sold out for calendar '26 already.

Uh, the question you wanna hear from companies now, and Micron tonight, will be is '27 sold out as well, right? So how far is this selling out happening right now? As I say, gross margins, commentary around how far is HBM DRAM capacity sold out will be critical to listen to, to watch for as you go forward.

Is Micron reacting to the data points that we're really getting from the Mag 7, those who are spending the money, or is its earnings report itself going to be a key piece of information for that narrative?

So do you think after this little kind of one or two day drop that the valuations are looking better or you still want to wait to see how it plays out?

Yeah, absolutely.

Our valuations looking better heavily depends on how you want to, you know, anchor these things, right? On a historical basis, I would say, you pick Dell, you pick HP, these are at the higher end of the valuation ranges, if not above the high end period, right? So from a historical basis, you're still at the north of the high end of the valuation ranges now.

If the discussion is going to start becoming that, hey, the AI spend, which has been dominated by hyperscalers, is starting to parlay into enterprises.

So enterprises have to upgrade their network, their storage, their server, and everything else to get AI ready.

Then, Mike, this might be the start of a very different cycle that's more enterprise heavy.

And in that case, you could see these stocks continue to work higher.

What are you expecting to hear about their A.I. strategy on Monday?

Wow

... with the networking boom bat again right now.

Uh, [clears throat] listen, I think there's two things happening at Cisco and probably at a broader ecosystems level right now.

Uh, one is you've seen the AI infrastructure tailwinds, right? So as the hyperscalers are adding more capacity, Cisco's benefiting by selling them silicon solutions, their optical solutions, and so on.

That's a nice business.

It's went from five billion to nine billion.

The bigger excitement I would argue, Kelly, with them is gonna be as enterprises start to future-proof their campus, their networking solutions to become more AI ready, you could see a very long tail of demand tailwinds of upgrade cycle at Cisco, uh, which could really drive multiple years of double-digit, low teens kinda top line growth for this company.

W- what's going on? Some bad blood between them and OpenAI?

Uh, how are you thinking about that in terms of the valuation and what it captures?

Yeah.

Um, listen, up until yesterday at least, or before this, uh, print, my take was it's the only tech stock that's trading under 20 times earnings that's not broken, and it's attractive for that reason alone.

Now, if the narrative becomes this is starting to catch the momentum of not just AI for hyperscalers, which the $9 billion does, but also that enterprise tailwind where enterprises have to start upgrading for AI.

That would imply that, hey, perhaps this company can grow 10 to 15% structurally on the top line, 15% plus on the bottom line.

If you can get that kind of momentum going, then, you know, I think a $6 earnings power and perhaps a mid 20 PE w- is probably the right place for the stock to end up being, and that'll put a bull case on the stock into 140, 150 when it comes to there.

They also announced a restructuring plan and as part of that, uh, Amit, um, there are layoffs, less than 4,000, but I'm wondering what that restructuring, in your view, allows Cisco to do, what it allows it to do maybe more efficiently.

Yeah.

Um, so are they supporting the re-rating story that we have been seeing play out?

Yeah, I mean, you know, I'll, I'll start with Western Digital, right? I think the numbers have been, to your point, off the charts good over here.

Now, in fairness, they're not a whole lot different than what Seagate said, right? So you almost had this previewed already.

They're great, but they did not surprise any further than what Seagate did, right? So I think there's a bit of an adjustment there.

Uh, you know, SanDisk is interesting.

I actually think these numbers at SanDisk are, A, not only are the numbers itself strong, 80%-plus gross margins.

I like the fact that they have better, and I would argue more structural, uh, gross margin upside than, uh, Nvidia does right now.

How firm is that commitment in terms of if memory prices, for whatever reason, come down within the time of the commitment?

So from a fundamental analyst standpoint, just how important could they be, and how kind ... what kind of performance can we expect given the things that we've seen out of AI so far?

Yeah, absolutely.

Um, listen, i- if you look at AI deployments right now, and I almost feel like it's becoming a bit of a game of, you know, whack-a-mole, finding the next bottleneck and trying to solve for it, uh, we, we think memory, um, you know, be that DRAM, be that NAND or HDDs over time, uh, is the ultimate bottleneck when it comes to AI inferencing.

And so as you see more dollars shift from training to inferencing, uh, we think investments in memory will have to go up more dramatically.

And to the extent that happens, you know, I think at a name like SanDisk, for example, our call is, you know, they could end up doing 125 to 130 of EPS power.

And if this is less cyclical, a little more secular, not all the way, but if it's more secular, then at 125, 130 earnings power, the stock's rating at seven to eight times earnings, I get it's had a huge move up.

Uh, but the move up has really been more driven by EPS going up.

Amit, if we are demand, uh, driven and supply constrained, the ... one of the first things I think of is what that affects in terms of pricing, right? So average selling prices for some of these memory type products, is there gonna be a continued tailwind for those ASPs, so to speak, because of the supply bottleneck and the continued demand?

I know that you've been listening to our conversation, but I'm just wondering, you know, why is it different this time around? Why is it no longer a boom and bust cycle for these names? Is that cycle gone? I mean, do you think that there's a re-rate? Whenever somebody says there's a re-rating or a super cycle, I feel like that's maybe the top of the trade.

Fair enough.

I will try not to say this time is different in the discussion now.

Listen, and I think the answer to what you're saying is different depending on are you talking about DRAM, NAND, or HDDs, right? They all have a different cadence to it.

On the HDD side, Seagate Western...

It's a little bit easier to see you have a duopoly between two companies, Seagate and Western Ditch, and they both are absolutely committed to not adding supply.

It's also nice that they both are U.S.-traded companies.

Why did this just happen over the last few months? And why did so many investors miss it until recently?

Talk to me a little bit about the Apple iPhone and what it is about this particular cycle that is going to lift Apple heading into December.

Yeah, absolutely.

I think part of what's attractive about this iPhone with iPhone 17, beyond the fact there's good features here, it's the very simple reality that you had a very big iPhone purchasing cohort in 2020, 2021, kind of the pandemic years.

And as these phones are four or five years old, they end up in a natural upgrade cadence.

I'd say that alone is going to provide some really good momentum for iPhone 17.

You're probably adding some more tailwinds to it with the fact that in North America, for example, carrier promotions are much more aggressive today than they were last year.

So that's certainly making it a little bit cheaper and easier for folks in the U.S. to buy their phones versus before.

How has Apple been able to navigate the tariff impact?

I'm wondering if there are many notes where you actually think about things in a probability or if that's just the nature of this sort of business.

You know, Melissa, I'd say it's really the nature of this business.

And, you know, I will concede that there are a range of outcomes.

Near term, it all looks good.

And certainly the stock is reflecting that.

But eventually, right, I mean, the two things I think people will have to wrestle with longer term on Corby, one is Corby makes a fundamental assumption in their entire business that the useful life of a GPU is five to six years.

Is that truly going to hold up or is it going to be much lower, right? And depending on how you end up there, it has a huge implication to the business model.

Middlemen don't usually have the upper hand when it comes to setting price.

And how much pressure are they going to be under, you know, in terms of Apple intelligence and incorporating AI and what has at least thus far been sort of, I think critics would say, a lackluster effort when it comes to that part of the market?

Yeah, listen, Apple intelligence hasn't really lived up to expectations.

At the same time, I tell you, I'd not say there's a large number of consumer AI products that are really out there right now.

End of the day, when it comes to iPhones or Apple products, in every survey we have run, the top two reasons why people want to buy a new iPhone is their battery life is really bad or they need a better screen.

That's typically the two reasons.

AI and Apple intelligence tend to be the fourth or fifth reason why they want to buy it.

So it needs to improve.

Can you talk about when that would hit the numbers, so to speak?

So does a sinking tide lower all boats? That's a nice way to define it, sinking tide lowering all

boats.

Listen, tariffs are going to be a lot of headache.

I think the biggest issue you have with Apple or anyone else that's making a hardware product is the heightened uncertainty that you're causing to the whole ecosystem, right? Mathematically, it's fairly straightforward.

It costs about $600 to make an iPhone, give or take.

you put a 25 tariff you might have to pay an extra 150 dollars that is still cheaper i think to pay the 25 tariff then actually trying to do the human lift of shifting not just the assembly to the us which maybe by some process you could but really moving the entire supply chain is where you think i think you end up with a lot of bottlenecks over here right and if you're apple I think the map might still be favorable with saying, I'll just pay the 25% tariff, ideally nothing, but I'll pay the 25% tariff, versus trying to shift the entire production and supply chain base to the U.S.

What do you have to believe to think that Apple's dead money here?

For you to believe Apple's dead money, I think the worry people have is Apple's implicitly re-rated on three things in the last five years.

I'm not sure which is more interesting here, the stats that we got on the AI-related outperformance or the fact that despite that, the revenue still, you know, is a beat but not a dramatic beat.

Yeah, you know, it's all a sign in the right direction, which is, you know, growth for Cisco, for example, is up double digits and aggregate for the first time in a while up 11 percent.

And for what it's worth, the core networking business actually went from being down a couple of points in the Jan quarter to being up seven, eight percent this quarter.

So I think you've seen the underlying mechanics show some acceleration on the traditional enterprise networking business.

ai you know listen it's they actually got to the target of a billion dollars a quarter ahead of time but a billion dollars on a 50 billion dollar revenue run rate it's two three percent revenues right so i think ai will show up but the message out of this i feel is more the traditional enterprise networking recovery continues to hold up rather well for them

Are these comparable in the sense that they're both benefiting from tailwinds that are helping some of the older line names? Is that just true in general, or is this their strategies playing out to the extent where you think this improvement – might be really sustainable even beyond these current price targets?

Yeah, I mean, Johnson, IBM has gone from trading at 10, 12 times earnings to 25 times earnings.

So we've seen a really good rereading there as IBM has really moved into a more higher value, higher margin business over time.

What is the one thing you think or two things that investors have been getting wrong about Apple to start the year?

Yeah, listen, I think the biggest thing that's been weighing on Apple right now is this worries around what's happening in China from a demand perspective, right? And if Apple is starting to lose its advantages in China that they've had, and do they get caught in the crosshairs with the political tensions, right? So I'd say China demand has been the big worry.

The other one probably has been that the rollout of Apple intelligence has been slower than expected, and perhaps You haven't seen the killer app yet, right? So I think those are things that are worrying folks right now.

You know, what I think that misses is all the goodness that's happening in Apple, right? So while China, I will concede, is weaker than expected, but that's a broad smartphone statement, not an Apple statement.

Emerging markets are sounding really well, and Apple is picking up a fair bit of share.

don't account for a lot today, but the growth rates are very strong.

So that's going well.

Is that the right way to think about it?