Altimeter Capital CEO Brad Gerstner on AI trade: I happen to think volatility is good

Core Insights - The tech economy is experiencing a significant transformational phase, with companies like Nvidia adding nearly $200 billion in revenue over the past three years, contributing 100 basis points to GDP this year [2][9] - Volatility in the market is seen as a natural part of early phase shifts, with historical parallels drawn to the early internet super cycle [10][11] - Current valuations for major tech companies, including Nvidia and others in the MAG 7, are not indicative of a bubble, with Nvidia trading at 23-24 times fully taxed earnings for next year [3][4] Company Performance - Nvidia's revenue has surged from approximately $30 billion to over $200 billion annually, with expectations of a run rate of $100 billion by the end of next year [14][15] - Google has made significant strides in the AI space, with its new Gemini model being competitive against ChatGPT, indicating a healthy competitive dynamic in the tech sector [5][6] - The partnership between Broadcom and Google to develop TPU7 is expected to enhance Nvidia's performance, showcasing the interconnected nature of these tech giants [15] Market Dynamics - The current environment is characterized by a "wall of worry," which helps prevent market bubbles, as companies navigate through volatility and competition [2][3] - There are over a thousand companies in Silicon Valley valued at over a billion dollars, indicating a competitive landscape where not all will succeed, reflecting the process of creative destruction [12] - The tech sector is poised for a productivity boom, with companies able to achieve more with less, driven by advancements in AI and technology [9] Investment Strategy - The recommendation is to diversify investments across leading tech companies, including Nvidia, OpenAI, Google, and Microsoft, to capitalize on the ongoing super cycle [5][15] - Limited leverage is advised in investment strategies, particularly concerning volatile assets like Bitcoin, which is viewed as a speculative investment [16][18] - The potential for Bitcoin to gain utility in the financial system is acknowledged, but it is emphasized that it should be treated as a risk asset in investment portfolios [20][22]