Navigating Market Volatility With AI, Entertainment and Value Plays

**SPEAKER_1** (0:00)
Let's welcome in our next guest, Thomas Martin, Senior Portfolio Manager over at Global. Thomas, thank you so much for your time. Happy Friday. So what were your biggest takeaways on the week?

**Thomas Martin** (0:09)
Well, happy Friday to you, and thanks for having me on the program.
Yeah, I know when you have the market up at all time highs and really kind of a little bit of a breakout from the sideways movement we saw starting at the end or at the June, you're kind of looking for things to happen. And we did get a lot of interesting news, like you said, that was affirming on the AI trade, whether it was from the frontier models and the pricing that was going on there, and also in terms of what they thought their revenue run rate was going to be. I mean, that supports the whole thing, which is the data centers and the picture shovels and the memory, etc. So the news just keeps on coming in being very good. But how much can the stocks react when we're already at or near all time highs?

**SPEAKER_3** (1:00)
Some of our old adages failed us this year with the sell in May and go away. Everyone seemed to be confused about what month we were in. That didn't happen for us. Now we're coming into a time that's generally, usually seasonally weak in terms of the second half of August sort of kicking off that week period. Are you anticipating that will hold true even though some of our other historical patterns have not this year?

**Thomas Martin** (1:27)
Well, it could be. I mean, there's so many things. Everything's different every year. And so this year we have all the things that are going on as we continue to figure out what's happening with AI. And then we have, of course, the price of oil and what's happening in the Strait of Hormuz, which is just, it's just moving day by day.
And I think that it throws off some of those seasonal patterns.
We have the expectations of the midterms coming up. That's embedded in those seasonal patterns. So I think that we can see some, with the market at highs, we can see some of that happening in the market, where we could see some weakness until we get closer to that November date.

**SPEAKER_1** (2:12)
Well, at least we've got confirmation that your backdrop, Thomas, is not AI because I could have sworn I saw a dash hound or something running down the stairs just a minute ago. Maybe they have something to say about these markets. But I do want to dig into your stock picks. One of those being Palantir, is it? I mean, that had a pretty good week last week at what? 40 percent, but it seemed like this one was more of a consolidation type week. Walk us through why you're looking at that one.

**Thomas Martin** (2:39)
Well, this is one we've liked for a while and of course, it came out of the box and went up very, very strongly to valuations that everybody knew were very, very high. So it needed to consolidate and it did. So even though it's up strongly, it's still down for the year, although it's getting close to back to even. But as they report their numbers, you can see what they're trying to accomplish is coming through.
Companies are moving from the experimentation stage, not companies, but everybody who's using AI is moving more and more away from experimentation into making commitments. And that came through in their last quarter. And really seeing the need for being able to meet consumers, to be able to use AI that they don't have to share with other folks and share their data and their security, that importance is really starting to be recognized.

**SPEAKER_3** (3:41)
And Thomas, you also brought another pick that I don't think I've actually talked about on the network, but everybody certainly knows about it. You brought Sphere Entertainment. So walk me through how you're looking at Sphere right now.

**Thomas Martin** (3:52)
Well, so Sphere is great in the sense that it's just such an icon, as you can see.
And this is a new venue. There is nothing else like it currently in the world. And I think there was a lot of thought that maybe this wouldn't work and that it wouldn't be able to make money, they wouldn't be able to monetize, it's too expensive, et cetera. And the business model has proven to work. And they can grow really in a couple of ways. So right now, they're showing movies, they're in The Wizard of Oz, in there, that's sort of a day-to-day revenue bringer-inner.