Jeff Wang
speaker
190 appearances
1 recordings
1 series
first heard Oct 2024
last heard Oct 2024
Jeff Wang’s voice in public audio — every appearance, attributed to the second.
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Appearances
But the way we invest in the semiconductor hardware companies is we can be long NVIDIA because I do think NVIDIA has the best position. And whether or not NVIDIA has 100% market share in three years like it does today, I don't know. But it will still have very, very good market share.
And so if you believe the market is growing, I don't know if data center, you know, GPU spend is a hundred billion or 200 or 300 billion, but we can go long Nvidia. And then we can short a bunch of the companies that I think don't have the depth of moats that Nvidia has. So if you think about some of these server hardware companies, for example,
where I think they're going to get beat up on gross margins because NVIDIA now has a reference design. You have a smaller shrinking pool of customers that are getting more sophisticated that are going to do their own server design. So that's how we've chosen to play AI. And I do think there is overinvestment risk, but we can be hedged on that.
You know, we haven't because I don't know that these ultimately are better businesses after, right? So what you know now is that there's an incredible amount of demand. That demand is growing at very high levels. But if I'm talking about a power electronics company or a company, a construction company that builds data centers, let's say there's incredible growth over the next two years.
That's gonna attract incremental competition. Are these really great sustainable businesses with deep moats? I think they're okay businesses. I think the stocks may work over the next two years, but in year two or three, do I still want to own them? And I just want to think about these things as a long-term investor. I don't want to be trading in and out of stocks as quickly as I can.
That's a great question. For Klarna, I think Europe matters, but is incrementally mattering less because they have broadened the business. They did a terrific job of expanding the business into the US and other markets.
So I think for Klarna, it matters less, but I do think if you are any company that can go global, you start in Europe. Europe is a very nice prize, but I think the best companies will want to go global and they want to go after the US opportunity. It is, you know, the US is still probably, it is the largest opportunity for software companies.
It's probably the largest opportunity for FinTech companies. You know, if I look at most software companies, you're probably two thirds kind of US Canada in terms of revenue contribution and then one third everything else. So you have to succeed in Europe if you start out there, you're a European company. But man, the US is a pretty big prize.
I think it's already happened. It's already happened.
I think it has to. It has been more difficult for us to say invest in Chinese companies. And it's not just the macro, right? It's these companies have become less transparent with us over time. We appreciate less money. what's going on internally. So I think about a company like PDD. I think it's a great company.
I don't know what's happening there in terms of why they decide to tank the stock, because everything that we see on the ground is still very positive for PDD. And so those things, I think, do give me pause in terms of not appreciating what's going on internally in those businesses.
It has to. I mean, the level of just pure entrepreneurship, the level of just the founder quality, how smart and aggressive they are, it's just remarkable. I just don't think that goes away. I mean, if you look at...
But I think the best Chinese companies, like the best European companies, will also go global. So PDD has gone global.
I'm optimistic. Overall, the market, what it has created is it's created great consumer companies, great financials companies. I think what we haven't yet seen is great technology companies, in part because some of the best technology founders come to the US. But I'm optimistic. I just caught up with a couple of the GPs on the Peak15 team last week.
I think what they're seeing on the ground, I mean, I've been impressed, for example, by what Zomato has done. The stock price chart there is incredible. And to be able to go from the level of burn that they were doing early on to now really turning that into a profitable business. I think one of the things that we've seen in India is that that brutal level of competition that you saw
Actually, in the US, right, too, you saw in the US in the zero interest rate environment that has subsided in India as well. And so that's allowed companies like as a model just to become more profitable, better businesses.
With Doug, first of all, Doug's an incredible human being. So he's so good at building trust. He's always generous with his time. I can get him on the phone no matter what continent he's on. He's traveled the world with me to meet with LPs. So I can tell you what Doug likes to eat in every city. If you get him to Boston, he will absolutely crush cherry stone clams.
He's just someone that you want to go with to war with on their side. Second, Doug has what he calls a great sniffer. Just incredible commercial instinct. He's always listening out, keeping those ears open, looking for what's working and connecting the dots. Doug is exceptional at that. For Michael, I'd say Michael has superpowers that I will never possess. He's got an incredible nose for talent.
He's a terrific communicator. He's even an accomplished painter now. So one thing that I've learned from him is to borrow his superpowers as opposed to trying to develop them on my own, right? which is really a lesson in teamwork, except that Michael is the star player at almost every position on the team. Michael still helps me write my quarterly letters to this day.
I recall flying out to Ottawa to meet Toby at Shopify with him. And Michael walks out of that meeting and just says, look, Jeff, just squat in that investment and just set an alert for yourself if Toby ever gets hit by a bus. His nose for talent, I can borrow. The second, I'll tell you a quick story here. Who's got a better nose for talent, Mike or Doug?
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