if you like this quarter from Palanteer

and should you ride this momentum?

>> You know, I think you should. Um, even

my 14-year-old son was was buying this

stock ahead of earnings, right? Um, what

I love about this quarter is that it was

the cash flow that proved this is a

profitable company. When you look at

free cash flow, this is very different

from the Palunteer that we saw a few

years ago. Um, this just goes right

after Microsoft last week showing

there's a great return on invested uh,

you know, all the AI centers, all the

chips, everything. And now we're seeing

that software, I mean, if you just look

at the government stuff, it's through

the roof, but we knew government

contracts were going to be enormous.

What I love to see is I like to see that

US commercial sector just going higher

and higher. So outside of hedge funds

blowing up, outside of momentum just

dropping, I think you can be long with

Palunteer. Just remember it's a high

multiple stock and it's all about this

beat and raise beat and raise, but right

now it's a bit unstoppable. Omar, how do

you even value a company like uh like a

Palunteer? I mean, it's trading at 85

times forward earnings. I mean, it's

it's a discount to its historical

average of around 195 times. Like these

are big multiples. What do you do with a

company like this?

Yeah. Well, you know, normally what we

do with Evaloid, you know, precisely the

growth trajectory and it's not

necessarily just about one quarter. It's

really more about, you know, their

outlook. It's about their earnings

projection. And and in many cases,

particularly for these kind of AIdriven

companies, we basically look at where

their profitability is going and and and

I think in in this particular case, the

return on investments and return on

equity seems to be going in the right

direction. I think a lot of what happens

is you have to separate growth companies

from the rest because at the end when

you're looking at investing in growth

it's really more about you know how you

see that EPS growth going relative to

what you expect for your ROIs and I

think in this particular case what has

transpired especially with all AI

related stocks is that a lot of the

adoption that we all fear was not going

to happen seems to be proven incorrect.

In other words, you know, a lot of the

AI adoption that everybody was was

talking about, you know, at the end of

last year, it seems to be happening. And

I think these companies, these software

companies, these developers continue to

profit from it.

>> Omar, that's a really great point. And

Brooke, I'll put that one to you because

as we've gone through this earning

season, of course, the hyperscaler

earnings last week, big cloud numbers

out of Amazon. Microsoft crushed it. Uh,

Palanteer crushed it. Raised outlook.

We're going to have AMD earnings today.

They're going to crush it, too. This

narrative coming into earnings season

that AI wasn't being monetized, that it

was peaking in terms of demand, none of

that has proven true.

>> Yeah. The AI jitters, the fear that the

return wouldn't be worth how much all

these companies are investing within AI

was the major worry among so many

analysts heading into that. And now

we're been hearing some relief so to say

from so many on the street saying that

right now what we saw was that there is

this parabolic US demand for AI

solutions. That was what one DA Davidson

analyst had wrote in a note this

morning. And and I think really the

proof is in the pudding here. We're

seeing this demand really come to

fruition here. We're seeing the proof

points that Palunteer's CEO, Alex Karp,

had pointed out. And I was mentioning to

you, Brian, this morning that this

really was somewhat of a a rally cry on

the earnings call last night, saying,

"Don't stay on the sidelines. Get in.

Get in on this momentum." And it seems

like the proof right there, especially

as Lee pointed out, we got that US

government uh revenue jumping 90% to 809

million for the three months uh through

June 30th. And so really the proof

points are coming to fruition here, sort

of pushing away that fear that Wall

Street had that we won't necessarily see

the return. But I think the big question

will be will SpaceX really, you know,

step up to the podium here and and prove

this ongoing proof points that many are

putting out this quarter. Lee on on

Palunteer. This is a stock that

historically people have ignored the

valuations on. They ride the momentum.

But if you're looking at this Palunteer

quarter, is this now your justification

to get back into other Momo names, those

other momentum stocks like a Micron,

like a SanDisk that have been absolutely

hammered the past month?

>> You know, I think that's a great

question. You want to go back into the

degenerate gambler trade. And I think

that right now, if I was just a day

trader and I was just screwing around

for the next month or so, I'd probably

think the coast is clear. Let me tell

you what bothers me about momentum.

Nothing about earnings. Earning season

is great. You're going to have to have

an external shock. You're going to have

to have oil matter not to ride this

momentum. Oil doesn't matter. You're

going to have to have the Fed not raise

rates or make some suggestion that

inflation's going to come and get you.

And we're not going to see that until

September. And so I think all the things

that we're concerned about killing

momentum outside of more hedge fund

leverage going, you know, and blowing

up, you're going to have a, I think, a

decent August because it's September

where rates may start to matter. It's

September where oil may start to matter.

Between now and then, what do you have?

If you have bluebirds and lemonade and

everybody telling the tale of guidance

couldn't go higher, earnings couldn't be

better. And if there's any companies out

there that don't just in the slightest

bit dazzle us, they're going to go down.

>> Omar, have you been dazzled by this

earning season?

It's been amazing just to see especially

because the first quarter was very

strong and I think having these you know

beginning of the second quarter earnings

being so strong you know continues to be

supportive of you know just the idea of

the capital spending cycle that we all

talk about at the beginning of the year

seems to be proving you know that in the

earnings numbers. So this uh big

question that everybody had of the

amounts of capital expenditure and how

much that was going into different parts

of the market you know seems to be you

know driving a lot of these earnings

field. Uh on the other hand you we also

see that the consumer spending continues

to support you know continuous growth

for these earnings. You know it's kind

of interesting when you look at you know

GDP nominal GDP growth that is very

correlated to earnings growth and that

seems to be proving correct again

despite all the noise and all the

volatility that has gone into that. So a

lot of that resilience of the US economy

is actually now you know going into

earnings growth and that has been I

would probably say surprising for most

of us but you know very very good uh as

we go into the second part of the year.