The Twenty Minute VCPredictions for 2026: Top Buy & Biggest Short | Why Salesforce Could Win & NVIDIA’s Challenges
EVERY SPOKEN WORD
75 min read · 14,859 words- 0:00 – 1:23
Intro
- JLJason Lemkin
I think we see four IPOs backloaded next year. SpaceX goes out first. Canva comes out of nowhere second. Databricks does it in the back half of the year because it's just time. Anthropic does it at the end of the year. OpenAI probably should have gone first, but it's burning too much. There's no ceiling on venture, which changes all the math and calculations. We haven't missed the boat because what agents can do, we've just started.
- RORory O’Driscoll
If unemployment ratchets up even two or three points, regardless of the reason, could just be the business cycle, you'll see a tech lash that makes what we're dealing with now an understatement.
- JLJason Lemkin
Society will be terrified of AI.
- RORory O’Driscoll
If the robots are gonna take over society, I want to be sure that I own the robots.
- JLJason Lemkin
Ready to go? [upbeat music]
- HSHarry Stebbings
Boys, it is the Big Fat Quiz of the Year. I don't know if you have this in America. The Big Fat Quiz of the Year is like a comedy show with Jack Whitehall where they do, like, a review-
- JLJason Lemkin
Oh
- HSHarry Stebbings
... of what's happened, and then they do your predictions for next year. And I thought that, you know, I, I could be the Jack Whitehall in this scenario, and we could do a review of what happened last, in the last 12 months, and then a look forward on 2026 and some predictions. And so we're gonna start
- 1:23 – 8:33
Founder of the Year 2025
- HSHarry Stebbings
with number one, the most important part of all of our ecosystem, the founders. Founder of the Year for 2025, who would you have as your founder of the year?
- JLJason Lemkin
I know what the product of the year is. The product of the year is Claude 3.5 or 3.7. Without this, we have no vibe coding. Without this, we have no Lovable, no vacations to Greece, no Replit, no Cursor that really works, no Gamma. None of these products, many of which existed for years, did not work until... We could debate when it was. They worked with Claude 3.5 at the end of last year, but they didn't real- they weren't great until 3.7 and then 4 this year, and 4 changed our lives. And you may not use it. You may use the outputs. You may use Agentforce, you know, which, which it's not all that. You may use Cursor, which is 90 per- still 90% powered by Anthropic. You may use Gamma or Replit or, again, Lovable for Harry. N- none of these products we use, this changed the way we deliver AI inside of products. It's not just coders. It changed everything else. So do I give Dario credit as CEO? I, I don't know. I mean, I, I, I don't love all his warnings about how 90% of the world's gonna be unemployed in several weeks, um, but he delivered, right? So I think you got... I, uh, without question, it, it is the software of the year. Do you give the CEO credit when, for the product of the year? Maybe not. I'm gonna anyway though. Rory?
- RORory O’Driscoll
Damn, 'cause, you know, I, I'm... God, I hate agreeing with Jason, but I'll just take a while to get there, 'cause first of all, he didn't answer the original quest, the whole product of the year. Focus on the founder of the year. Anyway, I mean, look, it's a... I mean, one, I'm gonna start with Harry. I'm gonna be grumpy today 'cause I hate these events. I hate these kind of wrap-up things. I think they're bullshit. So I will be grumpy the whole time, and I make no bones about that. Um, also doing two of them in one week, I'm gonna be-
- HSHarry Stebbings
He's grumpy too when we were waiting for you, and I'm like, "Rory." He goes, "Fuck off." [laughs]
- RORory O’Driscoll
So second, it's a second, so, so let's talk about that. You know, founder of the... The, the problem with... One, one thing about that, you know the Ballon d'Or where they pick the best football player, right? Or as we call it, or soccer as they do here in America, right? And you know, it's kind of one of those things where by, you know, every year it's kind of try and come up with someone else, but we all know it's Messi. You know, there's a 10- or 15-year period where it's just silly, or maybe it's Ronaldo. So I feel, you know, if you really... When we come to pick founder of the decade, founder of the blah, it's gonna be Elon. But so let's just leave that to one side, right? And just do the... I'll, I'll do this year, right? And then ex- as it were, exclude him from the year 'cause otherwise it gets boring. Um, I do actually come out exactly the same place Jason did, Dario. And I do think it's not just product of the year, but also what I like, I, I find the stuff about unemployment to be bizarre, and I think he's wrong, and I'll come back to that, but that's the CEO as pontificator. But on the CEO as business executive making a difference, I think he played a very steady hand. And by kind of going for the sensible play and, uh, the sensible party, he, um, to make a, another Monty Python reference 'cause it's been that kind of day, um, the sensible party versus the obviously the other party, um, he's cranked out the I'm gonna get profitable, I'm gonna be sensible. And you look at, you know, growth rate faster than OpenAI, convert valuation convergence even, even after OpenAI's potential new round at 800. I think he's played a great hand. So if you owned the, those stocks at the start of the year, this is the stock you'd feel most excited about during the course of 2025 of the kind of mega caps, of the great big eight. So I give him, you know, founder of the year again, which is different, as I say, than agreeing. I do not think we'll all be unemployed on Friday week. I think that's all nonsense, but we can come to that another day.
- HSHarry Stebbings
I'm gonna add two. One is a cheat 'cause she's not quite the founder, but I think Gwynne Shotwell running SpaceX.
- RORory O’Driscoll
I totally agree.
- HSHarry Stebbings
I think, uh, w- it's gonna be the biggest IPO of all time. Uh, I think her navigating pretty challenging times geopolitically with Elon's brand this year and navigating that so well and elegantly as CEO-
- JLJason Lemkin
Yeah
- HSHarry Stebbings
... is exceptional.
- JLJason Lemkin
I'll give you half my, four, four out of 10 of my chips back to you for, for that.
- RORory O’Driscoll
Yeah, that's a good call.
- JLJason Lemkin
That's great. I'll give you four out of 10.
- RORory O’Driscoll
That's a good call.
- HSHarry Stebbings
Thank you very much. And then I'm gonna surprise you with another.
- JLJason Lemkin
Yeah.
- HSHarry Stebbings
If your job as a founder is to build enterprise value and return a shitload of cash to your investors, are we forgetting that Alex Wang delivered phenomenally for his investors and provided a great outcome to shareholders? It's gotta be up there.
- JLJason Lemkin
And we got a... What do we get out of it? A video app? A video social network-
- RORory O’Driscoll
No
- JLJason Lemkin
... no one used?Listen, huge res- listen, respect, 100 out of 100 to him, right? 100 out of 100. It, it, like, founder dinner at night talking about, you know, at some posh London club talking about how, you know, the way to do it for myself, yeah. In terms of impacting the world, um, go- gotta be, you know, not quite top decile. This is sort of a 4X TVPI founder in terms of world impact, but, like, a 10X in term- a 20X in terms of returns, right? But world impact remains to be seen. The Machiavellian element of this pod, which should be the majority of it in a sense, th- that deserves to be in the above the fold, right?
- RORory O’Driscoll
Which? Gwen?
- JLJason Lemkin
No. Scale. Alex. I mean, just-
- RORory O’Driscoll
Yeah, yeah
- JLJason Lemkin
... just the sheer-
- RORory O’Driscoll
I hear. Yeah
- JLJason Lemkin
... the sheer returns.
- RORory O’Driscoll
Yeah. Punching above.
- JLJason Lemkin
Taking advantage of a moment in time, right? Um, leave the keys with the rest of the team done to perfection. You know, when we started this pod, I don't even remember what we called these, right? Pseudo hires. Rory was great at this.
- RORory O’Driscoll
Yeah. Yeah. I remember.
- JLJason Lemkin
Right?
- 8:33 – 21:27
Fund of the Year
- RORory O’Driscoll
I, I, I like it as an addition. I can totally see that. Vlad is incredible. Um, okay, we're gonna go number two. Fund of the year. Which fund deserves the title as fund of the year? You know, a- again, I, w- with the continual caveat that I despise this process, but I'm gonna answer specifically on the performance for the year. I think it's Index. Competent execution across multiple different exits, 'cause exits are the coin of the realm. The only fair way to measure things is did you end up owning a lot, having big ownership in big exits? And then you measure that for the year in which it happens. You don't try and account for other years, and then it's at least objective. And they had Wiz, which for the record hasn't closed this year, but was announced in March of this year, where they were an early investor. They had Figma, where they were the seed investor. And it's not an exit, but Revolut, where they just raised at 75 billion and they have an early position in. And, you know, also done by a number of different partners. You look at all those things. I just love... That's kind of... There's a lot of people talking about new venture models, and we'll talk about that in a second. Index just took that same old model, which I like 'cause I'm a boring kind of guy, and just executed to perfection. So I, I, I give them the nod for 2025.
- JLJason Lemkin
I'll give you two. Rory's right. At, at the end of the day, venture is ruthless capitalism. You have to judge folks on either present or, or coming returns. That's it. Um, but there's also, uh, multiples is another way to judge firms, right? Even if the absolute ones won't be high. And then we are part of social media. There's aesthetic. What is the most aesthetically successful CEO or, or fund? I'm gonna, I'm gonna vote for Neo. I'm giving Neo my vote. Neo, if you look at aesthetics, let's look at aesthetics. Um, first money into Cursor, okay? Calshi, Cognition, okay? Pretty hard to do for someone that, you know, 24 months ago seemed to be having weird arguments with Gary Tan on Twitter, okay? Um, and then takes that, um, and re- relatively hustle, literally hustles his way into Cursor, hanging out at MIT, giving programming tests himself. M- probably, actually, I think being the second investor in Cursor, but maybe the first pseudo in- institutional investor. Putting his own 5 million into Calshi out of his own pocket. Um, maybe his absolute returns will not equal Index's or not, not equal the average GP sitting at that... Where's that, where's that fancy office, Harry, next to Horsely where I saw Index when I was there? What's that spot?
- RORory O’Driscoll
By Burlington Arcade.
- JLJason Lemkin
Whatever it was-
- RORory O’Driscoll
With a golden sign
- JLJason Lemkin
... it's very nice where Index is, right? So maybe, maybe, maybe Neo isn't gonna... All that hard work won't, won't equal one, uh, one nice nine-figure, uh, managing general partner check-in index. But from the aesthetics of venture, I give Neo a vote, and I also give it a vote because, you know, sometime in, in, in AI time, 12 months ago, it seemed like YC had won the accelerator race, right? Now YC since then, ironically, like the Bay Area, has pulled away even further, right? But Neo, South Park Commons, so, there's so many others that are exciting. HF0. And so the rebirth of the accelerator and the fact that Neo got so many hits so quickly, um, I would say I, I'm, uh, I'm, I'm impressed with Index. I'm a little jealous of Neo. So Crandum's... And Crandum's my second vote, notwithstanding the European bias here. Um, those are my top two votes for the year.
- RORory O’Driscoll
And Crandum because expand
- JLJason Lemkin
Uh, Trade Republic just did a deal at 15 billion. There was that little one... I mean, I'm tired of talking about the lo- the lo- the Lovable. Is there an E in that one or not? I can't remember, right? Klarna wasn't bad. It might not be, uh, a Revolut, but that was a pretty good one this year. And what I mean is their, their, their ability to s- I mean, obviously it's a global fund, right? But their ability to do pretty darn well in Sweden and project power. I mean, Harry, you're, you're the Euro- you're the head of everything and the head of European. But for me, as a, as a Yank with some European investment, I think Crandum, I don't think it's a quiet giant, but pretty impressed. I mean, you could-
- HSHarry Stebbings
Listen, Cra- Crandum have, uh, created a phenomenal premier dominant brand that is rivaling Index and Accel in a way that very few people have done in the last few years.
- JLJason Lemkin
100%. That's why they get number two on my list. That's why that's number two.
- RORory O’Driscoll
I'm re- I'm really worried that Harry's gonna start on his Europe is Ubu- Europe Uber Alles chant now that we have two of the top names being from Europe originally. I just don't wanna listen.
- HSHarry Stebbings
I'm actually gonna break them down. Seed, you've got to put Hummingbird up there. Hummingbird on billion to one make over 800 million. That is phenomenal.
- JLJason Lemkin
Yeah, that was the third on my list. I just thought it was an obvious choice, Harry, so I didn't include it. But that was actually f- I, I did my, some homework. That was third on my list right after Nio and Crandum, then came Hummingbird. But it w- I just felt it was obvious.
- HSHarry Stebbings
100 million fund returning 800 million. They were the first ever investor in Lovable. Kraken continues to be a great company where they were a very early investor, and then they did have a 3 billion accident delivery this year.
- JLJason Lemkin
Wait, in all, uh, for, for sure it makes the list above the fold. In all seriousness, 100 to 800, is that what you said?
- HSHarry Stebbings
Yeah. It's 100 fund and they made 800 on it.
- RORory O’Driscoll
Yeah.
- JLJason Lemkin
Okay. Uh, wait, the, the fund did 8X net?
- HSHarry Stebbings
Yeah.
- JLJason Lemkin
Or the partners made 800?
- HSHarry Stebbings
No, no.
- RORory O’Driscoll
No.
- HSHarry Stebbings
The fund did 8X.
- JLJason Lemkin
The fund. Okay. Honestly, I don't want this show to go forever. I don't feel like that's, I don't feel like, uh, I, I would get full kudos from my LPs for that performance today. H- honestly.
- RORory O’Driscoll
Oh, give me a break.
- JLJason Lemkin
You laughing?
- RORory O’Driscoll
What?
- JLJason Lemkin
You're, you're laughing? H- honestly, because my anchor is the same as Nio, is the same as Initialize, is the same as South Park Common. I, I'm not in the top, uh, the, the very, very top group of my peers. I would have to do 8X to even, like, get, get to speak at their AGM. Seriously. This is funny. If we did, if this was the start, if this was the first pod of this series, I wouldn't have said it. Okay? And there's no F-ing way. But in the age of AI, if you're a seed fund and you bought 10% of Cursor, and Nio didn't get 10%, if you got 10%, 8X would, would seem like a rou- like you, you, you would, you would invite those guys to dinner.
- HSHarry Stebbings
Jason, I get you. I'm just, I'm the one getting in trouble for irrelevance, and he's saying one deal returning 8X a fund isn't enough to be cool to speak at an AGM. So my se- my seed is Hummingbird, my Series A is Benchmark. I'm sorry, Manos, Sierra, Firework, Ligora, Cerebras, LangChain. My word, that is one killer fund. [laughs]
- RORory O’Driscoll
Yes, I agree. And if... Yeah, yeah. Because I think what's interesting about them as an early-stage fund is a lot of folks have wrestled with h- how to win in this market, and have internalized that one of the, quote-unquote, "easiest" way to win is have super big funds and just deploy, you know, lots of capital at the late stage and make the math work. And what I find super impressive about that fund, which I think is the 21 fund, is they've stuck to their knitting and still have compellingly good overall returns by just doing the thing that they do. And a l- in a, in a way, it's a little like my comment on Index. It's like, because that's the milieu I live in. I just always impressed with people who just stick to what they're doing and just do it well enough to make it work and not get distracted by... You know, the, the horrible thing is getting distracted by a different strategy, trying to do it and failing when the thing you did worked. And I think it, it, it points to another bias I have, and I think this, all these comments make it, which is I think in venture there's a lot of strategies that can work done well. I think the mistake is often to say, "Oh, X strategy works and Y strategy doesn't." The truth is, X and Y strategy both work if done well and neither work if done badly, right? I mean, you can, you have, you know, Benchmark who've killed it just doing Series A's and Seed and A, exactly what they said they'd do 20, 30 years ago. You've got firms like Andreessen who've killed it by getting huge and making 15X on a late-stage fund. There's lo- Turns out there's lots of ways to make money, you just have to be good at doing it, right? And as you say, and Hummingbird doing it by, you know, by, by their own statements, picking psychologically damaged human beings and backing them to the hilt. I mean, it's, it, it's, it's a, it's a wonderful, wacky world. And all have worked.
- 21:27 – 28:35
Breakout Companies of 2025: Who Made the Biggest Impact?
- HSHarry Stebbings
All righty. Back to the company side. What is the breakout company of 2025? Whose year was made in 2025?
- RORory O’Driscoll
There's lots, first of all. I mean, b- and I'm interpreting, just to be clear, 'cause you and me, well, you're basically saying at the start of '25, we, no one had barely heard of these things, and oh my God, in '25 they kind of c- so it's not the OpenAI, the Anthropic, it's the... Yeah. So I think there's a ton, and it's really interesting. You know, to, just to pick a few, I think OpenEvidence in the kind of AI medical space really nailed it. I mean, what they do is... I mean, one of the things we saw stepping back when we looked at a lot of these academic research pa- um, academic research search engines is y- if you look at people looking up papers, about 60% of that traffic was doctors. Doctors are the biggest single demographic of people who wanna look up a recent academic paper and find out a result. And I remember we were looking at some of the broad horizontal science search engines and thinking, "Hmm, that's interesting." OpenAI, OpenEvidence didn't just think it was interesting. They very wisely focused on that space and said, "Look, doctors, even ordinary GPs, sometimes they have a patient with spec- an obscure question. They wanna know what the latest research is on XYZ." This perfectly lends itself well to an LLM-based application. They built that product, totally suited for the target audience, and they went from nothing to 500,000 doctors out of about a million in the US in the space of one year. Obviously, the revenues followed. Why does the revenue follow? Answer, because you have doctors typing into a search engine, "My patient has this obscure disease called blah, and I need help to find out what's going on." Who wants that real estate? The drug company who makes the $40,000 orphan drug that only has 10,000 customers in the US with that disease, and now you've put up your hand and said, "My patient is one of them." It's a perfectly targeted business. I mean, it's a, it's a great business. They're expanding, doing a lot of other things now on top of that, but it's just one, and it's just come from nowhere because it, it hit the need perfectly, bought on the need for the cons- the specialist search side, which is the doctor, and then totally on the need of the advertiser side, which is the drug company. Perfect product.
- HSHarry Stebbings
My patient is Irish. How do we solve this problem? [laughs]
- RORory O’Driscoll
Um, well, you lot put us in prison or conquer our country or give a shit for 800 years. That's how you solve it, but it didn't work.
- HSHarry Stebbings
[laughs]
- RORory O’Driscoll
As I told you, I'm grumpy today, Harry. Sorry, Jason, you're up.
- HSHarry Stebbings
Jason, what do you think?
- JLJason Lemkin
Okay, I'm gonna give you an answer that first you're gonna say doesn't qualify, but I think when I fully answer, you'll agree with me. Mine is Databricks, and I will tell you why. Of course, we talked about Databricks. I went back. We did a SaaStr Annual during the coron- during the pandemic in 2021. We were the only event... event in the entire ba- California Bay Area that I know, know of. We did it. We- And it was pretty fun. It was all outdoors. And Oli came, okay? And, and, uh, you know, he just came over. I, uh, yeah, I didn't even know much about Databricks, and he did this deep dive on everything. I went back and looked at it. Nothing was about AI. It was about a hint. It was all about [laughs] managing cloud compute and data, data. And to be able to ride the AI, like, our job, every founder that's listening to this and every VC, every Menlo, right? The job was to ride this torrent of AI if you're not an LLM. Your job this year, if you're an LLM, your job was to do more LLM, right? To get 3.7 out so you could change the world. If you were a, a B2B company, however you broadly describe it, your job was to ride the greatest wave of our lifetimes. And, you know, Snowflake's, uh, it's all definitional, right? Um, but Snowflake's AI revenue is pretty small. Its agentic strategy is just starting. And Databricks rode this to now they're both at 5 billion, and Databricks is growing and accelerating at 55% growth. If we had to have Canon of the Year for who rode the AI wave and utterly changed the trajectory of the company, it would be Databricks, even though obviously they were successful before. But JFC for this one. So that gets my ... Th- that's because this was all of our jobs, right? This was a job of, of, uh, and, and as VCs too, right? As VCs too. That's our job. If you didn't ride that wave this year or as a founder, you get a D minus.
- HSHarry Stebbings
I think that's a good answer. Mine would be ElevenLabs. I think when you look at what ElevenLabs have done this year, scaling to 400 million in ARR, standing off competition from OpenAI and any of the other incumbents-
- JLJason Lemkin
It's a crazy good one. It deserves to be above the fold.
- HSHarry Stebbings
Yeah.
- RORory O’Driscoll
It is an excellent one.
- JLJason Lemkin
There's a two by two of best of breed, which is hard to win at in AI, right? 'Cause it had to be best of breed to win, right? And then, um, and there may be cases where this isn't true, but for us, ins- utterly insane value. This is what sometimes people miss. How did ElevenLabs go to 400 million in a year, right? Like, when we were at, we were in SaaStr London a couple weeks ago, um, we need to do all the voice of God for 200, 100 speakers or whatever we had. And, um, and, you know, that used to take two weeks, and you'd have to pay someone maybe a couple grand, and they wouldn't do some of them, and they'd, they'd, they'd mis- mispronounce Stebbings, and it was terrible. W- w- Amelia, Amelia literally filed up, uh, fired up ElevenLabs the morning of the first day when you have other stuff to do, and just had ElevenLabs do it all. Trained her voice. I- she's used ElevenLabs before, but she couldn't find it. She retrained her voice, like, in two minutes, and it did all of them perfectly. I mean, that... And that was 30 bucks. 30 bucks instead of 2,000, and it was done in 10 minutes instead of two weeks. That is why these apps are blowing up, because it's not the little step function we got before AI. $30 in 10 minutes versus $2,000 in two weeks, t- you know, j- j- I don't even care exactly what it costs at that level, right? So, yeah, that one counts.
- RORory O’Driscoll
One of the things I love about a lot of these companies is it's a go-to-market that gets, that empowers individual users to grab the technology and, just as you say, get shit done, right? I had a, you know, you had a boring job of ca- you know, recording 200 names, and now you just type it in and away it goes. And I think that th- that's, I mean, many of these, I mean, actually, all, I have a bunch of other breakout products, I mean, and they're all the same. It's like at the app level, which is where I think most of us focus, um, it's really just about getting in the hands of individual users and just having it explode. I mean, you, I'm amazed you guys didn't throw out your favorite, you know. I mean, the fact that you're gonna get your breakout product of the year and not mention Lovable and Replit, I'm kind of disappointed in you guys, right? Come on. I mean-
- JLJason Lemkin
I think it's, I think it's, I don't... Listen, uh, for me personally, it was the breakout tool of the year, right? It was where I spent 200 hours. In terms of impacting the world, I think we're gonna see next year. I don't think either, any of these, any of these prosumer vibe code apps had a material impact on the world. Um, uh, but it, it's just because it's early. Like, we, no one built, no one built, uh, uh, uh, a game-changing B2B app with, with nine figures of revenue on Lovable or Replit. I do believe it will come. Like, I, I, I was h- beyond skeptical of vision when I started the journey. Now it's clear it will. But if we're talking about human im- impact on the world, um, those guys have just started. Like, they're just at the very beginning of, of the journey. So I'm not giving them, they're not gonna make it above the fold on my list for that.
- 28:35 – 35:36
Biggest Surprises of 2025
- HSHarry Stebbings
I found this next one a hard one. What was the biggest surprise of 2025? What did you look at the news and go, "Oh my gosh, I can't believe that"?
- RORory O’Driscoll
That's easy. I didn't. The talent wars, the fact that everyone would tear up everything to get shit. In retrospect, it's obvious, and I'll talk about that in a second, but wow, Meta's willing to just give s- a dude 100 million bucks to show up. Meta's willing to buy a company for $14 billion and say, "Give me the people. You know, you guys keep the company. See if I care. And you guys can give the, that 14 billion back to yourselves and then let the company be a husk. See if I care again," right? Um, you know, Nat and Daniel have a venture fund. No. Um, we should just buy that too, right?
- JLJason Lemkin
[laughs]
- RORory O’Driscoll
You know.
- JLJason Lemkin
Crazy.
- RORory O’Driscoll
And, and it's, th- th- they were the biggest, but they weren't the only person doing this. I mean, you had the whole Google Windsurf saga, right? That the entire convention on why people buy companies, how other employees get treated, how much a human can be paid to do a job, got thrown out of the window in the space of six months. Blew me away, right? And yeah, as I say, in retrospect, I mean, the logic that someone has unveiled is pretty compelling, which is if you're spending $73 billion on CapEx, spending $5 billion to make sure that the people using the CapEx know what they're doing probably makes sense. So you look back and you go, "It shouldn't have been surprising," but at the time you're like, "Wow." I mean, remember, the, it was incredulity about the money and also incredulity about the, the damage to the, quote-unquote, you know, social conventions. That to me, I wasn't ready for that this year.
- JLJason Lemkin
One is just that there's just no limits to the exit value of tech- of s- of startups.It just changes the whole industry. It's- we've talked about it. It, it has changed so much since we started this podcast. But, um, the idea that we, we will have a trillion-dollar IPO next year, maybe two. We might have two trillion-dollar IPOs, that getting in at, at Anthropic at, uh, 100 million or 80 million or whatever was the deal of the century from a risk-reward outcome. The fact that, uh, whether... Who knows where the future goes, that, that so many of these folks, Lovable could go from two to eight or six in, in, in, in weeks. Uh, and so can, so can, uh, so can Harvey. Um, that, that, that, that, that, that, that these weren't one-off step-ups in valuation, that these were... That, like, that is, um, that, that's, that's the biggest one. Um, it was unexpected. So that's the main one. The, just that there is no, uh, for the moment, for the moment, there is no ceiling on venture, which changes all the math and calculations. You know, uh, when I go back, I was thinking in the earlier days, when I started in, investing, I remember Byron Deeter came up to the old Saster office. By- uh, you know, ran the cloud practice at Bessemer. And he said, "I'm here to mark up your investments, Jason. I'm here to mark up your investments. I want you to give me your top one or two, y- and I will mark them all up." And I thought that was the greatest deal in the world. I'm gonna invest at 10 or 12, and Byron's gonna invest in them at 50, and I will be a genius [laughs] because I got in first. I thought that was all the game was in venture, because I would walk in at the end of the year and I would have a 3X and a great IRR, and Byron was the sucker because he had to e- enter at 50 and 70. And, and maybe that was tr- true at a brief moment in time, but not really, right? Now the sucker is, is find- wasting all the energy to have smaller ownership anywhere on the journey when you could have put in either nine figures or significant ownership later. It just changes the whole calculus. And I literally, the, um, what's the, like, what is it, Fuse Energy in, in Europe? That one just did it at five billion. Here's the classic one. You know who that was led by? Lowercase. So maybe the, the, the greatest, uh, seed investor of several generations ago, Chris Sacca, right? Now, he, he put a lot of money into Twitter and others, right? But he sniped deals at s- at three, four, five pre, is now leading deals at five billion. That, that, those are different times, aren't they? So that I, that I didn't foresee. Um, and maybe I'm rambling. The other one, just as a vibe coder, is autonomy plus reasoning. I, I started this year as an AI, uh, want-to-believer but skeptic, 'cause I couldn't get anything to work at the start of the year. I launched one agent that was a digital version of me that people loved, but all it did was parrot me back with AI. People loved it. It was used 100,000 times in, like, 30 days. But, um, JFC, what agents can do now, like, uh, it's still a great... Y- you haven't missed the boat as investors. We haven't missed the boat because what agents can do, we just started. Out- outside of parts of coding, we just started. So those are my two, those are my two.
- HSHarry Stebbings
Mine, super simple. The, the three days when Windsurf was being bought by Cognition, and I interviewed Varun the day before.
- JLJason Lemkin
I remember that, yeah.
- HSHarry Stebbings
And it was like, what the hell is happening? Are they being bought? Are they not being bought? OpenAI were buying them, and then they're not, and then it's lo- what's left? And that was a bizarre moment. And then NVIDIA investing $100 billion into OpenAI and the start of the circular deals was the most bizarre for me.
- JLJason Lemkin
Yeah, well, the, the, the overall just not g- all of us giving up on caring about things like circular deals.
- HSHarry Stebbings
Mm-hmm.
- JLJason Lemkin
We've all stopped caring. We don't care. If, if it drives the stock price up, great. If, if it marks up my fund, great. [laughs] It's just the way it is now.
- RORory O’Driscoll
You won't care until you do, and you'll look back and go, the first ones were sensible. And it's like everything in finance. It, it kind of goes back to the other thing you mentioned, Jason, which is the, yeah, you're right, the surprise of the extent of the upside. You know, how big these things can be, right? And I, I agree with you. I think that is probably the biggest change in venture zooming out over 20 years. You know, right, the, the, the, both that the mark- but the markets themselves became bigger, and the end results became as, yeah, the outcomes became bigger. And then on top of that, because they were held for longer as private companies, more of that bigness went to the, went to the venture sector versus the public markets. You know, that is the overwhelming economic story. You know, technology as a percentage of the GDP shot up, and the percentage of that technology that the venture business grabbed shot up, right? Now, uh, the, the, the, the, the converse comment is, and I'll talk about this later, is that we still don't know is the calibration quite correct. And until we see some of these $500 billion-plus deals get done in the public markets and, and find that equilibrium price point in a very different, more liquid market, we won't know are all these marks correctly. 'Cause typically, what happens with exciting financial innovation is it works, it works amazingly, and it overshoots. And one of the interesting thing on both
- 35:36 – 39:21
Predictions for 2026: Top Performing Tech Stocks of the Year
- RORory O’Driscoll
some of these valuations and frankly on some of these round trip deals will be, have you pushed a good thing too far, and does it blow up in your face? And we'll, we'll, we'll talk about that later.
- HSHarry Stebbings
Well, we're gonna move to predictions for 2026 then, Rory. Um, one of my predictions is that you're gonna continue to think that every question I ask is shit, and all I do is hope to one day meet your bar of question asking. But that, that will be our year in 2026, Rory, I promise, okay? I'm gonna go home on, on holidays-
- RORory O’Driscoll
You gotta start as you mean to go on then, 'cause I'm not a fan of the 2026 question, so go on.
- HSHarry Stebbings
Oh, good. [laughs] Well, there we go, Jason. He's in a really good mood. [laughs] No, I hated 2025 questions, and 2026 are worse. Well, you, you said you didn't wanna be negative, so I'm starting on a positive. Number one, what's gonna be the best performing tech stock in 2026?
- RORory O’Driscoll
How the hell... I mean, the best... Okay, let me ask, uh, I'm gonna pick on you. What was the best performing tech stock in '25?
- JLJason Lemkin
Ooh.
- RORory O’Driscoll
If you don't know the past, how the frick are you gonna predict the future?
- JLJason Lemkin
Do you know the past?
- RORory O’Driscoll
I do, 'cause I checked this morning.
- JLJason Lemkin
[laughs]
- RORory O’Driscoll
Right? Um, and-
- JLJason Lemkin
What was it?
- RORory O’Driscoll
Watch this. Um, so literally, if you rank every stock in the US and vaguely defined as tech, and don't put a market cap filter, you know, a, a very small one, cut out 200 below, Planet Labs, Bloom Energy, Opendoor, Oklo, and Seagate. Top five performing stocks this year, right? And that's why your funny little non-recognition phase, Harry, shows... The thing is, 'cause what, what you were really asking that is of the big caps. Obviously, of the big caps, the NVIDIA and Google nailed it this year, and the others were roughly flat. So that's a more boring answer. But it's always, you know, if you're gonna ask what the best performing... That's why it's such a bullshit question. The best performing tech stock typically is a smaller stock that ra- all of those stocks are more than a 3X year-on-year. And, you know, I know some of them. I mean, look, Planet Labs, gotta love that company, especially as space starts to take off. You know, they do, you know, satellites in space for imaging. It's kinda popped to about 5 billion this year. Um, Bloom Energy, I know about that as well. Opendoor, we had 'em on. It's been, you know, we'll see, TBD on how it goes, but the guy can make the stock jump. And then Oklo, you've got fusion. And then Seagate, which is the fifth best performing stock, now you're on the first AI-centric story, which is obviously, it... And it's, to Jason's point, it's co-attached to, you know, if they're spending on AI, they're spending on everything to do with AI, even, God bless, some hard disks. So you look at those five names, utterly idiosyncratic, fairly unthematic, right? And, you know, you're not gonna get there with some kinda tops-down analysis. So if you can barely, if you can barely nail the past, the best performing stock of '26 is a bridge too far for me. So no, I don't like your question, Harry.
- JLJason Lemkin
[laughs]
- RORory O’Driscoll
Sorry.
- JLJason Lemkin
I'll, I'll, I'll tell you what I think. Um, yeah, I, I, I will bet that the top six public B2B stocks, at least three of them are in the top six next year. Um, and if we go back, like, let's go back to 2024. Two of the top performing were AppLovin and Palantir, okay? AppLovin up 700% in 2024. We all thought it was crazy, right? Um, and then this year it's up 124%. Still, still, um, actually better than my fund. I didn't go up 124% this year. Um, Palantir, number one performing of this B2B group that's public, 2024, up 340%. And so my point is, I'm not a, I'm not an expert. Maybe I've got the math wrong. It's possible I have the math wrong. But my point is, I don't think the
- 39:21 – 41:50
B2B Stocks to Watch
- JLJason Lemkin
mac- I'm gonna bet, not being a public company guy, not being a hedge fund guy, not being Steve Cohen, that the trends aren't gonna change much next year. Like, the mobile ad trends fueling AppLovin. So I'm gonna bet Palantir, Cloudflare, Mongo, Shopify, CrowdStrike, and Snowflake. Those are the big boys. Not the, not the hyperscalers. Those are the big boys in B2B. There's gonna be some shifts, okay? Shopify is getting some interesting headwinds, but it's slow to AI. Mongo started, had a really rough patch this year, right? And then blew up in the back half of this year. So I think this top six is gonna go up and down, but let's ma- the PCMSCS. What, what did we... We used to call them FANGs, and we, we stopped caring, right? Um, my PCMSCS, PCMSCS, Palantir, Cloudflare, Mongo, Shopify, CrowdStrike, Snowflake. I'll, I'll bet you 10 grand three of them are in the top six of this cohort at the end of next year.
- RORory O’Driscoll
Jason, which three would you put in there?
- JLJason Lemkin
Well, I, I mean, listen, I'll, I'll answer it for fun. But if you think about... What's interesting is these top six, right? If we slow it down, Palantir, Cloudflare, Mongo, Shopify, CrowdStrike, Snowflake. They're all teasing, they're all leaders in slightly different elements of this AI f- of this AI phase, right? Um, Palantir's got AI for defense and government. Cloudflare owned, right, how, how we, how we deploy the internet. Um, Mongo looked like it was gonna be a database loser in AI, right? With Superbase and everyone came roaring back. Shopify is, is e-commerce, which is different. CrowdStrike security, right? And Snowflake data and Data Lake. So now you're making me bet on a macro trend, right? Uh, how could I bet against any of them?
- RORory O’Driscoll
What about-
- JLJason Lemkin
[laughs] They're all, like, really g- the reason they're in the top six, I think, is those are... I, I'm not gonna bet that e-commerce is gonna s- e-commerce had a record year. We don't even talk about it much on this show. E-commerce is on fire. Um, so...
- RORory O’Driscoll
You could, you could do exclusion. You could go, actually, Snowflake are gonna continuously be cannibalized by Databricks. And you could say-
- JLJason Lemkin
But Snowflake re-acceler- here's the thing. Snowflake is not gonna catch Databricks, I don't think, in terms of... But it re-accelerated in the back half of this year. Even Snowflake re-accelerated. Mongo reacc- so this, this re-acceleration, and also this maiming we talked about on the prior show, this is super important going into the n- so I think the folks that are, that are re-accelerating at the end of this year that have figured out their AI tailwinds, I'm sure not gonna bet against them in 2026, because I think these tailwinds are gonna accelerate for at least two, three, four quarters, right? In fact, I'll go the other way. The ones that underperformed this year, right? We could go from the bottom up.
- 41:50 – 54:50
Why Salesforce Could Be the Buy of 2026
- JLJason Lemkin
I think Sno- Salesforce might be the biggest beneficiary next year, and I'll tell you why. Because it has, it is... Like, you have to also... The, we, we can go through the ones that, that, that declined the most this year, and you have to be honest. Are they at least tapping into AI tailwinds? For real or for pretend, or is it performative? Are they claiming they have AI revenue like Adobe, but, but it's really an AI product, but not revenue? What I, what I know is gonna happen with Salesforce, this isn't even a prediction. I just don't know how it's gonna work out. I believe half of their customer base want to buy an agentic product that works tomorrow. Like, they may not wanna buy another, yet another cloud. They may not wanna buy your da- they may not wanna buy Informatica, okay? I don't know if they wanna buy Informatica. But when their rep calls them up and says, "Listen, Agentforce is crushing it now-We can get rid of 200 people in your sales team, 100 of your marketers, 100 in field support with AI, and it works. You're gonna see attach rates like we've seen in coding, like everybody's gonna wanna buy that agent force. So if these are bets that we... Now we gotta squint at the bottom. Who's doing that? Or who's quietly giving up, like maybe an Asana is? Like, I don't know.
- RORory O’Driscoll
I- it's funny. I, I think those are such different bets. The first is, is your momentum bet. They're all killing it in terms of momentum, and what you're saying is the momentum continues. And, you know, that'll be true until it isn't, 'cause what you're not taking into account is-
- JLJason Lemkin
But I think the AI is gon- I don't mean to interrupt, but I think the, the... it's not just momentum, it's this AI-
- RORory O’Driscoll
Agreed. Agreed
- JLJason Lemkin
... it's this AI inflection. Right?
- RORory O’Driscoll
That's what I mean, the AI moment. What you're basically saying is, if I look... I mean, now I'm gonna try and be a public investor f- which is not my thing. If I look at factor investing, if I talked about the first list, you're saying is all these are gonna do relatively well up until the moment that the AI, i- if the AI kinda lift starts to recede or even the rate of change starts to decline a little bit, and then they'll all whomp down 'cause they're way over their long-term valuation, any kind of meaningful long-term valuation multiple. So as long as it's all working, Palantir will keep compounding, and at some point, someone's gonna look up and say, "Oh my God, 70X? Shit, I should panic." Uh, and, you know, so it's pennies in front of steamrolls. The Salesforce bet was a super interesting one, and, you know, it could apply to a number of them 'cause it's totally different. They're trading at all-time lows on a revenue multiple, five, five and a half times revenues. And I totally agree, and it's why we're talking about this stuff. All they have to do to lift that puppy, you know, 20, 30% is maybe this recent acquisition they did, Quantified. You know, co-attach 20% of their customers to the product, grind out a year of, you know, getting that co-attach up, and suddenly, you know, you buy that stock and, you know, you're less likely to get a 3X, but you're more likely to get a 20% lift, and you're not taking the valuation risk. Those are very different bets. 'Cause, you know, in a, in a world where, you know, the juice goes out of the market and the high flyers collapse, you know, at five and a half times run rate revenues with 30% cash flows, Salesforce could go down 20%, but it's not gonna go down 60, right? So those are just very... it's just interesting. They're very different bets. I mean, it is fun to... 'Cause you're right. One of the, I didn't talk about it in the pod- one of the disappointing investments in the public markets this year has been traditional SaaS, right? I mean, I own a lot of Salesforce. It's down 30% on the year. You know, m- uh, HubSpot, we, we were lucky enough to be early investors. You know, stock's down on the year. Across the board, you know, the Asanas of this world, all of those guys. And they're now at rates and valuations where all you have to do is get a bit of a lift [chuckles] and you can outperform. You know, it's almost the antithesis-
- JLJason Lemkin
That's the question. So I look at the bottom six. The bottom six I have GitLab, Atlassian, Adobe, Monday, BILL and HubSpot. HubSpot, BILL, Monday, Adobe, Atlassian, GitL- and you kinda have to look at those six and say, [smacks lips] "Are they talking AI or have they j- or are the tailwinds real?" I'm worried about most of those six, that they talk a lot on social media and Twitter, but it's not enough to have an AI product. You have to have the co-attach that Rory talks about. You have to have something where someone's gonna go in and pay as much or more for your core product for this agent, right? And that... I think people will pay $100,000 a year for a Salesforce GTM agent. Whether Atlassian can pull this off or Adobe, um, or, or folks I love, Monday, BILL and HubSpot, I don't think they've proven it yet, so I don't know. I'm not being critical, but they haven't seen an a, a, a lift, right? An attach lift. And, um, that's the one I worry about for next year.
- RORory O’Driscoll
I think in different ways they can. I, you know, I was on the board of BILL for many years.
- JLJason Lemkin
Yeah.
- RORory O’Driscoll
I think Rene's a really talented entrepreneur.
- JLJason Lemkin
The, as good as they get.
- RORory O’Driscoll
I think there's a lot they can do, and they'll be doing it.
- JLJason Lemkin
But have they?
- RORory O’Driscoll
I think it's-
- JLJason Lemkin
[laughs]
- RORory O’Driscoll
They've done some of it. They've started to do it on the... I think actually, interestingly enough, yes, they've done it on the, um, invoice recognition and kind of the back office. I also think there's a lot you can do, frankly, on the broadly financial management in the kind of stuff that Ramp does, where they're coming at it from less on the card side, more on the ACH side. So I think there's a ton they can do there that's AI first, but not just AI. There's other uplift trends they have.
- JLJason Lemkin
Oh, for sure.
- RORory O’Driscoll
You know, I'm-
- JLJason Lemkin
And I've been a BILL cust- customer-
- RORory O’Driscoll
Absolutely
- JLJason Lemkin
... since day one. But the question is, can they dramatically lift ACV, pricing, deals for it? That's where I worry about some of... As a BILL, as a happy 100 NPS BILL customer and super fan of Rene since we started together as founders, I don't know, but I'm worried some of the ones that didn't grow this year, it's not that they won't be a- amazing AI products next year. It's that they can't charge more for it, right? And that's why Notion, to me, was... It's not on this list, 'cause it's not, but Notion was the biggest surprise of this Uber group for me, because I didn't think they could charge this much for their agent. I don't ev- a- a- and I, I sort of get it, but I didn't think people would pay 50%, twice as much for Notion to talk to their Notion. Um, but I get it now.
- RORory O’Driscoll
And I'd love to know. And one of the things that I talk to another big executive of a large multi-billion dollar revenue SaaS company, and, you know, one of the things I've learned to look for, and I'd love to know the data from Salesforce, 'cause it wasn't a Salesforce executive, to be clear, is, you know, you're seeing this AI revenue, but what's happening is it's being bundled. And, you know, you're, you know, you're attributing value to the AI product, but separating out what is your core product, what is your A product, is tricky, right? And some folks are getting a little bit of revenue lift that looks like it's coming from assigning dollars to AI, but really it's, it's the core product. And then the scary thing about that, just to be clear, is if you break apart your product and you price the AI product separately, and then a year from now the customer says, "Oh, I'm not gonna keep that AI product, but I still love your core product," but you've gone down 10% in pricing to go up to add 20% uplift from the AI product, you could have a nasty renewal cycle. So you've gotta not just-Sell the product, you gotta deliver the value. And I think all-- it's all gonna come down, and we said, uh, all these things, it's gonna come down in the end, deliver the value. I think the opportunity is there for most of these companies, or at least the ones that I know well. I don't-- I'm, I'll, I always ask, it'd be interesting on-- Actually, kind-- I was gonna say on the to-do and personal planning side, the Asana's is, well, not as clear. But actually, as I think about it, there is a ton you can do in terms of managing personal productivity with AI. So the opportunity's there for all of them. I think that, I think that, as we said last week, the difference will be the executives who can see a way to getting it done.
- JLJason Lemkin
I mean, to me, the worst one, uh, Harry, I, I know you want to stay on track. I'll just have two comments. So one, the worst offender is Adobe, okay? Because Adobe announced they had 5 billion of, quote, "AI-influenced revenue" this year. That-- listen, let, let's be kind. It's, I'm sure it's true. I'm sure they're using Firefly and generating images with AI. But to me, it don't count unless it's net new bookings, okay? So if you, if you're gonna hide in your tower or at your end-of-the-year meeting, your planning meeting, and say, "Hey, we cr- y- we grew 8% this year," is the bad news [chuckles] scale. The good news is half of our revenue was AI-influenced. I mean, that's table stakes, right? That-- so to me, Adobe gets the worst score. To me, if, if it's, it's private, if I have the numbers right, and Notion hit 50% growth at 600 million this year, I think what they did, the only thing that makes any sense to me, the re-acceleration, is they got people to pay 20 bucks a month per seat for their AI offering instead of 10, okay? And I will say, the other day, um, one of my portfolio companies shared a Notion, a board update with me, and it didn't have the AI on it, and I couldn't talk to it. I'm like, "This, this sucks." Like, I can't use Notion without AI as, as a 10-year customer, whatever I am. It just, it is worth the 2X, and that's the one that so many B2B companies want to do this. They want to double their pricing for AI, but Notion might be one of the very few that earned it. It's very hard for, it's very hard for a HubSpot or, or, or Atlassian or others to just double their pricing to use their AI. We just expect it to be free like Adobe. We just expect it. Like, w- I have to pay t-- but somehow Notion pulled it off [chuckles] . I might be wrong, but I just don't see any other way they did this. I don't see any other way they did this other than to get people to go from the $10 a month plan to the $20 a month plan. It's the only way I could see the math penciling out for AI.
- RORory O’Driscoll
Yeah, and you've gotta be hard-nosed about two things. One, delivering value, so you can't bullshit yourself that you're not delivering value. And then you gotta be hard-nosed with the customer, making them pay for it. And you're exactly right. Actually, I'm thinking about this now in the context of another one of my companies that, you know, mid-stage, 100 million plus or minus, unveiling AI products. And you're right, it's very easy to slip into the, "Oh, this is good. We'll give it to you in the base package." And that's just not gonna move the needle. And you're exactly right, Jason. You gotta say, "No, this is really good. Here are the different quantum of value we're delivering you, and as a result of that, you gotta pay more." And that dynamic, which I'm thinking of a specific private company I'm working with at the moment, but that is the dynamic that everyone from Salesforce on down has to be dealing with. Not just AI-influenced bookings, but actual here's the extra. I totally agree. Because if all that happens is you take your same revenue line, you bundle in a whole bunch of AI, you don't expand your revenue, congratulations, you've reduced your operating margins by 10%, right? And I agree. I, I, I, I m- my suspicion is Adobe is one of the worst offenders there. But yeah, that's, that is the challenge. It's, it feels like it should be doable. I think it's a great example of Notion doing it, but that is... Like, if-- Now, the interesting thing is, going back to, we started this question about stock for 2026. If someone like Salesforce or ServiceNow can figure that out at scale, right, you just get such operating leverage. It's wildly hard. But I, I agree with you. There's almost every Salesforce customer saying, "Oh, please, God, integrate this shit so I don't have to deal." And damn you, you haven't.
- JLJason Lemkin
Yeah, I think, and I think what's gonna happen for-- Here's the thing that I, I know is true, right? So, so 2025 was the year there was coding, but it was also the year of support. Support went from not, w- once, once Claude 3.5 and 3.7 came out, just like it, vibe coding worked, so did AI support. It just didn't work before. It wasn't good enough, okay? It was the same issue. It got so good, um, and that, that benefited a few leaders a little bit, right? It, it, it, but, but, um, when it works... Now, Salesforce is like a seven-cloud company, but when it works in 2026 for s- for, for GTM, every Salesforce customer is gonna want it. Every customer, you know, Mark came on this pod with us earlier this year, right? And he talked about how they had, what? A billion, million, 100 million leads at Salesforce they didn't talk about. The only problem is that Agentforce takes time to deploy, and it's just getting going. But when they can turn that on, do you think... I, as we said on the pod, every single Salesforce customer is gonna want that product when it can be delivered quickly. Would you like, "This is, this is another $100,000 a year, but our agent will automatically go after all the customers your team didn't follow up with." Sign me the F up. And so that is a bet I will make for next year. Um, the, the flip side is, you know, if you ask me the biggest failing of this year we talked about, I want to say in 20 swings, going to Rory's point, it was the copilot. The copilot was the worst of all worlds. We're not gonna put it in our base product. We're not gonna make the core product better, but we're not gonna provide so much value, like a Notion, that you want to pay for it. That was, that was the cynical whiteboard of January 2025 that failed up and down the B2B board was the, was the expensive copilot [chuckles] .
- RORory O’Driscoll
I think that's a great... Yeah, I mean, starting, let's be honest, with Microsoft.
- JLJason Lemkin
Yeah, it wasn't enough value.
- RORory O’Driscoll
It wasn't enough value, and I think that's, that's gonna be the... I think the biggest risk when you're, and I think it's interesting we're kind of dissing on Adobe, we're d- kind of way dissing on Microsoft, we're dissing on Salesforce. I think what they all have in common is they're just so big. And the bigger you are, the easier it is for you as the supreme leader to just get told that it's good three, four, five levels down. And unless you're hands-on on the product and really brutally honest, you know, you, you're just gonna fall for that maybe it'll happen, and, a- a- and you're gonna end up not delivering value. And I think just-Being really on that
- 54:50 – 1:01:40
Google, Meta, Apple, NVIDIA, Microsoft: Buy One, Short One
- RORory O’Driscoll
is key.
- HSHarry Stebbings
Google, Meta, Amazon, Microsoft, Apple, NVIDIA. Buy one, short one for 2026.
- RORory O’Driscoll
Google, NVIDIA. Just to be-
- HSHarry Stebbings
You'd buy, you, you'd buy Google, you'd short NVIDIA.
- RORory O’Driscoll
Yeah. Because at some point, if the CapEx cycle continues and we're all still spending, I mean, NVIDIA does fine, but I don't know if, unless-- I, I don't know at this point do they need continued acceleration of the CapEx cycle. Google has upside. If the CapEx tide goes out, um, NVIDIA is gonna be very heftily priced and, you know, Google still has its business and can gradually roll out AI in a more pa- measured fashion. Oddly enough, Microsoft and even more so Apple and definitely Amazon, they, they are kind of meh in the middle on the AI cycle. They're not getting any lift from it. Uh, oddly enough, even Microsoft, obviously they're open AI investment, but, you know, they wisely, in my view, have pulled back from doing some of the marginal data center stuff. So they're like meh in the middle. Apple's meh in the middle to the downside. Amazon, meh in the middle to the downside. So you're kind of taking a what hap-- If you wanna play the how do you think about AI CapEx in the next couple of years, those are the two that are interesting.
- HSHarry Stebbings
Surely your Apple would be the, the, Bunny, failed AI. I mean, Apple has failed across all elements in terms of integrating AI.
- RORory O’Driscoll
It has, and as yet, the stock's held up and, and... Look, I, I, I, I, I own a lot and I sold some this year, right? To me, that's a different one of-- I mean, t-to me, that's one-- The question there is how long can you continue to trade at a premium multiple when your growth rate is less than 10%, albeit your EPS is growing more, right? And, you know, you're trading at an all-time rev multiple or PE multiple high, and there's no catalyst. But I don't think it's an AI c- I, I, I don't think that they'll sell a whole ton more if they had some great AI. I think they'll do marginally better. Um, so yeah. So, but I, I, I, I think there's risk in that stock. If I was just answering on a standalone basis, just looking objectively at what I did, I sold some of my Apple and I didn't sell any of my Google. That's Rory speaking with his facts.
- JLJason Lemkin
You're a fool to invest against NVIDIA for 2026. Uh, and I think you are arguably a fool to invest into Amazon in 2026 for a simple reason, just a simple-- I d- I didn't say 2027 or 2028. It is not enough time for all this competition to come online. It is not enough time for everyone-- Everyone's trying to do a TPU now, right, their own version. Amazon's got theirs. Google, uh, OpenAI has its own team. Everyone's trying to get out from the, the, the, the ama- as Rory keeps pointing out, the massive NVIDIA tax they think they're paying. It's just natural to design out your most expensive component. It's just natural. It ain't gonna happen in 2026. There is not enough time for-- There just-- It, it-- There's not enough time to produce enough GPUs and TPUs to get them into data centers that don't exist. And I don't-- And I'm not a public company expert, but I don't believe that public companies look as far into the future and as thoughtfully as we think. So I don't think we're gonna have any down quarters, um, unless AI stumbles. And I also don't think all the great things Amazon is gonna do, Amazon stock's only up 2% this year i-if, a-and I think they're gon- they will be the underperformer next year for the same-- There's just not enough time. But 2027, I don't know, like, the pace of... But you just, but you just can't make semiconductors from scratch that, that compete with NVIDIA in weeks. This is not software. Like, you can't launch Base44. This-- There's no Base44 of GPUs. [laughs] It just doesn't exist.
- RORory O’Driscoll
What do you think the biggest risk-- I think that's very thoughtful, but I think the ti- and I, I didn't like the question when Harry asked it 'cause I think the time-- Look, it's always the truth about, um, shorting, that's why I don't do it, right? You can be right in conceptually and just wrong on timing, and then you're just definitionally wrong. Whereas if you're long, you just hold, and in the end you can be right. It's why shorting is such an incredibly hard way to make money. And buying puts, which is basically the coward's way of shorting, which is what I would do, is an even shittier way to make money 'cause you also pay more to, for the privilege of your bet, right? So again, Harry, back to your comment, I hate your questions. But to get a useful one out of it, Jason, what do you think is the bigger risk to NVIDIA? A, continued massive demand for compute, but other people introduce competing TPU products, um, to their G- or GPU products in the case of AMD, and it was market share erosion; or B, erosion of demand such that the continued explosion in demand tapers off because the investments overall get cut back. Which of the two is the biggest risk?
- JLJason Lemkin
I-- Listen, I believe there, there's no risk other than some existential power risk because the only real risk here, uh, that I can see, l- uh, I'm only so smart, is that OpenAI can't give them $100 billion to buy their chips. But in-- But good news is NVIDIA's gonna give them the $100 billion, so that risk off the table, right? Um, a- OpenAI has taken the position that growth in, in compute, growth in GPUs, growth in just power, is one-to-one correlated with revenue growth. They, they put this out. It's one-to-one. So they're like, "Yes, I need $100 billion, but I can prove to you q-- this is cor-- whether it's correlation or causation will be the debate. I can prove to you there's a one-to-one correlation that if, that historically, if you give me $100 billion to buy compute, I will generate $100 billion in revenue," right? The market is gonna solve for that problem in 2026. So, and I, so I think everyone should feel pretty good about their 401Ks.
- RORory O’Driscoll
I think you could be right. I mean, look, the breaking news in the last hou- uh, 24 hours was another 100 mil- billion. Jesus, million, billion. Wow, I gotta be careful, Rory.
- JLJason Lemkin
[laughs]
- RORory O’Driscoll
For OpenAI, which obviously, I mean, Tomas had mentioned, you know, keeping an eye on the Oracle CDS, you know, swaps. My guess is a lot of the risk goes out of that deal if OpenAI gets another $100 billion. And you're right, this thing keeps-- As long as the protagonists who believe it should keep going keep getting moneyIt will keep going, right? And UI, OpenAI is the prime protagonist, the prime believer in the more CapEx equals more intelligence. And if they get another 100 bill in UI, bets are on for another 12 months, which would take you back to Harry's comment. I don't think you'd try and make a clever market timing position yet. The tell's not there.
- JLJason Lemkin
Yeah, and we can make fun of these circular deals, and they should be, they should be made fun of. But NVIDIA's gonna take its, you know, what? Almost 100 billion of free cash flow a year, and it's reinvesting it aggressively, thoughtfully, strategically. It wants other partners. It can't do it all on its own. But it is gonna lubricate this, this, this, the, all of this business model in 2026 as much as it can. As much... It is not, it is, it is aggressively... Th- th- that, leaving that cash on the balance sheet does it no benefit.
- 1:01:40 – 1:07:48
IPO Speculations: Who Will Go Public in 2026
- HSHarry Stebbings
All righty. So Jason, I can assure you one thing with my next question.
- JLJason Lemkin
Yes.
- HSHarry Stebbings
Rory's gonna hate it. Uh, he's gonna hate it, so I, I assure you this.
- JLJason Lemkin
He's gonna like this one. He's gonna like this one. That's my bet.
- HSHarry Stebbings
Which companies, of the mega companies speculated, will go out, go public in 2026?
- RORory O’Driscoll
This is an interest- Okay, I don't hate this question.
- JLJason Lemkin
[laughs]
- RORory O’Driscoll
Because, um-
- JLJason Lemkin
See? I win
- RORory O’Driscoll
... you know, I, I don't hate it, um, because it's a legitimate question in an area where we... You know, think about it. It's, it, it, it's... I mean, you know, you have the two AI companies, OpenAI and Anthropic. You have, I mean, just taking the hugees. You have Databricks, you have Stripe, and then you have the big one of all, SpaceX. I think Stripe least likely. Take it off the table. My gut would be Anthropic gets it done. It's a more manageable bite size, right? I think one of the interesting questions on both SpaceX and OpenAI, and actually all these in general, and we kinda hinted at it last week and then I just saw a really good information article, is the bankers are finally getting to grips with the problem of how do you take a company public at plus or minus a trillion dollars? You know, raise 50 bill at 5%, and what do you do with the other $950 billion in terms of lockup, in terms of generating demand? And I think they're beginning to internalize that. Look, in a hypey market, all three can get done at the high water marks or beyond, but that's a lot of demand that you have to create, and there's a lot of shares to follow it, right? It's not like... And then this is very ill-thought-out, but it's like if you think about some of these other high-priced story stocks. The story stocks that are worth, you know, 70 times revenues or 20 times revenues, the Palantirs, the, the, the Teslas. The way that happened is people bought in, re- a lot of retail bought in early, made out like bandits and believed. They have real believers on the table who are in the money, right? And they've got a lot of people, "I'll never sell my Tesla." It's gonna be tricky to take a new company out starting at a trillion. No public investors made money on it. A lot of the, the, the institutional money is already in it, and maybe n- and institutions are ruthless. When they hit their price target, they'll be sellers. So they're beginning to wrestle, I think, quietly, with the problem of what do I do when I take my company public at a trillion dollars? I raise 50 million. There's a 50 bill- 50 billion. There's a 50 billion float. It bounces around like crazy for six months, and then $950 billion of stocks are available to trade, many of whom have been into stock for 10 or 15 years. Hmm. Could be tricky. And I think finding a way to get that done will preoccupy the mind. Probably one of them gets done because just, you know, there's gonna be a lot of brainy people going at it. But it's a interesting banking problem that we've never seen before. I mean, it's one thing to take Aramco public with... The other big one, Aramco, but where it's priced, you know, not at an excessive price. It's priced at, you know, boring PE multiple, right? When you're taking... If you really are taking something public at 30, 40 times run rate revenues, you have the growth rate in the case of OpenAI to justify it, but you have the burn. You don't quite have the growth rate in the case of SpaceX, but you do have the profits and a unique market position. Neither is, quote-unquote, "crazy," but you're gonna b- you are going to be generating... You're gonna have to generate a huge amount of demand for a highly priced, risky stock that hasn't traded. So I don't know if all... I don't, I don't think all three get done. I would be surprised. I don't know which. I think it'll be idiosyncratic. And if OpenAI gets their 100 billion in the next few weeks, they can exhale and take a whole year off from capitalizing.
- HSHarry Stebbings
Come on, Rory. Put a bet down. I'm gonna put a bet down that Anthropic will go out and SpaceX will go out, but Databricks won't, OpenAI won't, Stripe won't.
- RORory O’Driscoll
That's probably where I'd go, too. Though the most cogent argument against going public, I was rereading the Ashlee Vance biography of Elon Musk from 2015. It's a really good read now 'cause it's 10 years on and you can... He actually called some things very interestingly. But there's an appendix to it where Elon does this really good post about why we're not gonna go public at SpaceX right now, why being public is a pain in the ass, and why it's just really hard. It was a really good post, and I read it and I thought, you know, one of the smartest first principle thinkers on the planet. God, he really had a good argument against being public. So if he's going out, it's, must be purely 'cause, you know, cost of capital.
- HSHarry Stebbings
June next year, SpaceX goes out. Money on.
- RORory O’Driscoll
Okay. I mean, yeah. Do you think it goes out at one and a half? I'm, I'm not gonna bet.
- HSHarry Stebbings
No, I don't think it does until... I think it goes out at one, one to-
- RORory O’Driscoll
Okay. We'll see. But-
- JLJason Lemkin
Jason, what's, what's... My question is who's gonna go out?
- RORory O’Driscoll
I think you're right on Anthropic, just to be clear.
- JLJason Lemkin
I think we see, I think we see four IPOs backloaded next year, okay? Um, I think it's, this is the order. Um, SpaceX goes out first, probably as early as makes sense with the summer dynamics. Um, Canva comes out of nowhere second because it's not that AI first, so now it's timeThe AI story is not perfect, but the numbers are there. It's got the numbers. Do it now. Otherwise, you risk look- looking obsolete. Get it done. Canva's number two. Databricks does it in the back half of the year because it's just time. It's just a- it's just another finance... It's the Series M. Databricks is just the Series M. They do it. Anthropic does it at the end of the year to go first, and because it's the simpler way to solve their capital needs, and because there's no downside other than the headaches of being public. OpenAI probably sh- should have gone first, but it's burning too much, so this is sometime mid '27, so that one's just, uh, below the line. But I bet SpaceX, Canva, Databricks, Anthropic all next year in that order, more or less. Um, and it's roughly consistent with what they've said publicly, the limits that they've said. So that, that's... I've, I've, I've proven with Harry I'm always, uh, too optimistic by a quarter or two, or sometimes two years, but I think this, that makes... I think this makes
- 1:07:48 – 1:12:43
The Impact of AI on Employment
- JLJason Lemkin
sense.
- HSHarry Stebbings
I love it. Is there one more question, boys, that you want to choose for 2026 predictions, or do you want to annihilate me again, Rory, on my choice?
- RORory O’Driscoll
No.
- JLJason Lemkin
I've got one.
- HSHarry Stebbings
Yeah, go on.
- JLJason Lemkin
By the end of 2026, does r- real AI-driven unemployment show up in the numbers, the federal numbers, the real numbers, tracked b- not just by what tech people are shouting on X. C- can we really track an impact on unemployment by the end of next year? Because this will be a massive change to society.
- RORory O’Driscoll
I think there's two separate questions in that, because you made a statement I don't agree with.
- JLJason Lemkin
Well, reduction in employment. Help me. Uh-
- RORory O’Driscoll
Hang on. You-
- JLJason Lemkin
Maybe I've got the wrong version of the term, Rory
- RORory O’Driscoll
... you made a statement that... Y- Let me tell you why I disagree. This is important. You made a statement that if it can be actually tracked, then more heat will come on the issue. I disagree. I think that the mere fact that... Look, unemployment ticked up, first comment. Separate comment, all the AI executives talk about there will be an impact on unemployment. It doesn't matter if it's true or not. It's interesting from an economics perspective, and I'd love to have the discussion, but I think politics doesn't work that way. Politics isn't sitting there, humans aren't sitting there going, "Well, let me see the long-term correlations and look at the BLS data by subgroup to figure out it's this." All they'll know is two things. Unemployment's ticked up. It ticked up this month. B, those guys who are building AI are saying that they're causing it. They're, like, admitting the fucking crime. So I predict if unemployment goes up for any reason, tariffs, random bank events, you know, whatever, big company goes bust, the drumbeat against AI, because you're the guy, will go up, because they've kind of confessed to the crime. They're like, it's like, "We did it. We put you all out of a job." So almost regardless of whether it's true or not, unemployment going up will be a backlash event for AI.
- JLJason Lemkin
For sure. And, and-
- RORory O’Driscoll
And I didn't see it as clearly until I started to speak. But now that I think about it, yeah, you've put yourself out there. You've said, "This is gonna change everything, and we're gonna make..." And you said, "Oh, government, you should deal with this." [laughs] And if unemployment tick... I mean, remember, remember how scared we all were in '09 when unemployment was ratcheting up? Or 2020 when COVID unemployment was ratcheting up? If unemployment ratches up even two or three points, regardless of the reason, could just be the business cycle, I think you'll, you'll see a tech lash that makes what we're dealing with now an understatement.
- JLJason Lemkin
I, I'm with you. I would just add onto it, um, I think your point that they've already admitted to the crime is, is, is, is, is very important, right? I also think there's this... W- Like, when the CEO of Walmart is saying, "Every job will change, l- lay off-"
- RORory O’Driscoll
Yeah
- JLJason Lemkin
... like, like, but that's also signaling. There's, like, there's a lot of things going on when the CEO of Walmart says, "Here, there's a lot to unpack."
- RORory O’Driscoll
Right.
- JLJason Lemkin
And so I agree with everything you said, but I think there's also an intellectual argument we're, we're also waiting to see. I wanna see the numbers. I wanna see if this is really true. It doesn't really matter if, if Cursor got to 27 billion with 300 employees. It, it doesn't really matter. It's not gonna impact McDonald's and the service economy. I think when we can really say, "Oh my God, we lost half a million jobs last month in November 2026 due to AI," I, I do think, and not to be... I do think it will change our society even more. Even though they've admitted to the crime, I think this will accelerate it. When there's hard numbers at the top of The New York Times and The Wall Street Journal, assuming we still read anything at the end of next year, I, I, I think it will become every dinner table conversation for real. Every single dinner table conversation.
- RORory O’Driscoll
Interesting. I think that the good news about-
- JLJason Lemkin
We'll be terrified. Society will be terrified of AI is what happens too.
- RORory O’Driscoll
Society will be terrified. I think the, um, good news would be, as investors, at least the deals were working. 'Cause my fear is that the, the, the-
- JLJason Lemkin
Great. We'll all be on Elysium together. The three of us will be on Elysium
- RORory O’Driscoll
... yeah, yeah. My fear is that the-
- JLJason Lemkin
Harry will have the biggest house on Elysium with his funds. Rory will be living good. I'll be, like, a couple smaller house away from the park, but we'll be up in space.
- RORory O’Driscoll
It's... I remember someone succinctly describing their objective as follows. He said, they said to me, "If the robots are gonna take over society, I wanna be sure that I own the robots," right? [laughs] It's a good plan.
- JLJason Lemkin
Elon even said that literally. Elon said it literally.
- RORory O’Driscoll
Yeah?
- JLJason Lemkin
Yeah.
- RORory O’Driscoll
Oh, did he? Um, I've heard the-
- JLJason Lemkin
Yeah. He said, "I, I wish I could slow down robots and AI, but because I can't, I'm all in."
Episode duration: 1:12:54
Install uListen for AI-powered chat & search across the full episode — Get Full Transcript
Transcript of episode 39uduGOufNA
