So, a lot of the talk around Nvidia has

been around circular financing. I think

it's also interesting to talk about it

in the context of what its portfolio is,

right? Because it is pretty unusual

for a large publicly traded company to

invest in other publicly traded

companies, including some of those that

are its clients. Um should people be

following the Nvidia portfolio and

investing in it for themselves?

>> Well, absolutely, Julie. I think what's

happening here is Nvidia is trying to

support the ecosystem and they're

investing in two ways. They're first

trying to support their suppliers. So,

anywhere where they see any sort of

bottleneck or something where they think

that this could be something that uh

will be really important to their

uh their build-out, uh they're investing

there. So, from that perspective, those

usually end up being very good

opportunities. And then on the other

side, they're trying to support

customers or people that are buying

their chips. And that's a little bit

more debatable, right? So, here is here

companies that maybe are not able to

secure financing on their own uh and

with Nvidia's support, they're going to

be able to get better credit terms. So,

I think if you're going to be following

what Nvidia is doing, I think the

telling tale is a little stronger uh on

the supplier side uh rather than the

customer side.

>> Um and you know, incidentally, at least

some of what Nvidia invests in is an

overlap with what you invest in um in

your in your ETF. And I've actually

created um recreated the top 10 holdings

in your portfolio, if I had them right,

on our Alphaspace platform here. A lot

of them are in these sort of optical

components companies, but you also have

the likes of Arm in there. You have

Coherent, which we mentioned. We have

Lumentum, which also uh just reported.

And also, if you take a look at the sort

of year-to-date performance for many of

these, you know, even if they've had

some more recent volatility, the

year-to-date performance, as we're

showing it here, has been pretty darn

good. The The white one here is

Coherent, which has been really an

outperformer

this year. So, how do you think about as

you said the suppliers are where you

want to be? Clearly, you're in the

suppliers. Um talk to me about that

thesis, which is you know, the sort of

like picks and shovels have been popular

for a while now. Where are we right now

in that cycle?

>> Well, Julia, what's been happening with

the picks and shovels is the bottlenecks

are shifting from some place to others.

So, it used to be going into this year,

memory was a big bottleneck. Going into

next year, we think optics is going to

have the same sort of dynamics is

equally cyclical to memory and there is

not enough supply. So, companies are

going to have to rush to add supply, but

they're not going to be able to add it

just in time. So, this is why optics is

one of the the trades we really like.

Capital equipment is another area. So,

as memory, as CPU capacity needs to get

added, you're going to see the semi cap

equipment names benefit. So, companies

like Lam Research,

uh KLA, those supply the equipment. So,

that's another area that this cycle is

just turning because companies are just

starting to invest rather than something

like the GPUs, they're we're already few

years into that that cycle.

>> So, okay. So, when you say they're

investing in this, so are we already

seeing these types of companies, whether

it's optical or the semi cap equipment,

are they already increasing capacity

with the anticipation that they're going

to see that I mean, they've already seen

a a bump in demand, but with the

anticipation that that's going to last?

>> Absolutely. So, for optics specifically,

most companies are planning to double

their capacity this year and then double

it again next year. But, what we're

seeing from demand, it could actually be

seven to 10 times bigger. And this is

because on top of their traditional

business, this used to be like telecom

suppliers with fiber optic cables, on

top of that, you have the data center

side, which has already been playing

out, but now optical components will

find their way into the servers

themselves for scale-up applications,

and it's an entirely new market that

didn't really exist before. So, this is

why the demand is growing 7x while the

supply is struggling to keep up with

even doubling every year. And yeah, this

is a trend we see across the board. So,

semicap equipment will be the companies

that provide the equipment for this

doubling of capacity.

>> Um obviously, you're well aware of the

sort of um

questions or concerns about this whole

cycle. There was an interesting um piece

this morning by a macro strategist at

Bloomberg named Simon White, who said um

he pointed specifically to the new

Nvidia financing structure, which it's

partnering with a bunch of Wall Street

giants to potentially put 500 uh billion

dollars out there in the system to try

and finance um more of this compute. As

he said in his piece, and he he was

drawing parallels between this and the

subprime housing crisis and AIG's

financing schemes in particular. And he

says, "In the housing crisis, increasing

financialization artificially boosted

demand, muting the signal from the

underlying market that there was already

too much supply in the aggregate. House

prices fell nationwide for the first

time since the 1930s, an event not

factored into any models."

So, do you have any concerns during this

cycle that because of the enormous money

being poured in the system, if there is

a change in demand

on the from the end user, that it will

be masked?

>> Well, Julie, absolutely. If there is

decline in demand when we have all the

supply coming in, these industries are

cyclical. So, this is why tracking the

demand side is so important. So, we talk

to companies either on the private side,

the public side, trying to assess how

much demand actually is there. And there

is also a way to track the spot pricing.

And right now, what we're seeing is

actually the opposite trend. So, people

are not necessarily chasing like with

housing, the difference is that people

are buying the doses and investments or

flips. Here, people are not really

flipping GPU capacity. They are buying

it for their internal needs. So, what

we're seeing with pricing

>> you could argue with most houses you're

buying it for to live in it, right?

>> Well, but when you see the big booms,

usually it's exacerbated by investment

type activity, right? So, it's not

necessarily like people didn't buy 10

houses to live in, right? It's really

going to be more driven. Like the

bubbles are more driven by investment

type activities, right? Same thing here,

if you start seeing companies that are

maybe like contracting GPU capacity and

they don't have the buyer, that would be

a concern. But as of right now, we see

more buyers for that capacity that need

these chips to to to use.

>> And what about the idea that the GPUs

that are already out there at data

centers are not at full capacity

utilization in many cases?

>> Well, that's something that is going to

change over time and that's basically

where we see a lot of opportunities here

today. So, companies that provide ways

for better GPU and CPU for that matter

utilization are really going to benefit

here. So, any company that So,

Cloudflare is one example where like

they have a a broad network of CPUs and

they help companies that want to build

AI applications use the CPUs

efficiently. So, these type of companies

are really going to benefit and I think

over time we will see utilization

increase significantly.

>> So, you talked about optical, you

stopped talked about semi-cap equipment.

Are there any other areas that you think

are I mean, it seems like

these areas are in general pretty well

understood, right? So, are there

anything Are there any other bottlenecks

that you see coming down the pipe that

would perhaps are not as anticipated

yet?

>> Uh well, I think the the optical

components is relatively newer and

semi-cap equipment is relatively newer.

CPUs as well, I think are not as well

understood.

We just that cycle just turned with AMD

and arm. This is why we own a arm. I

think as you see the agentic AI build

out, the AI agents will require a lot

more CPUs per GPU versus the data

centers themselves. So or model

training. So I think what we're going to

see is exponential increase in CPU

demand. So I would say from the data

center trade definitely CPUs, optics and

semi cup equipment are the places to be.

And then broadly speaking, we are very

excited about the space theme. I think

that's going to open a lot more

opportunities and new markets whether

it's defense, whether it's

communications or data centers in space

themselves. I think that's another

interesting idea to put on the radar.

>> Bonnie, good to see you. Thanks so much

for coming in.

And we also by the way just showed you

data from Yahoo Finance's Alpha Space

platform. That's a new professional

grade financial platform featuring

advanced charts, real-time news,

customizable investment research and

more. You can access all of those tools

by using the QR code on your screen.