Gene Munster

Managing Partner, Deepwater Asset Management

Investors' concerns about the AI trade

📅 Nov 04, 2026 BNN Bloomberg 8 MIN 83 VIEWS 14 SEGMENTS · 2 SPEAKERS

Gene Munster, managing partner at Deepwater Asset Management, joins BNN Bloomberg to provide a roundup on Big Tech earnings. +++ Subscribe to BNN Bloomberg to watch more videos: / bnnbloomberg Connect with BNN Bloomberg: For the latest news visit: https://www.bnnbloomberg.ca For a full video offering visit BNN Bloomberg: https://www.bnnbloomberg.ca/video BNN Bloomberg on Twitter: / bnnbloomberg BNN Bloomberg on LinkedIn: / bnn-bloomberg -- BNN Bloomberg is Canada’s only TV service devoted exclusively to business, finance and the markets. Subscribe for more: CTV News: / ct...

What Gene Munster said

Written from the verified transcript and checked against it. Every figure links to the moment it was said.

Gene Munster said the recent tech sell-off is driven by the 'academic side' of the market doubting that AI revenue growth will justify current valuations, while 'visionaries' believe the substance of AI will exceed the hype. He called the pullback a buying opportunity, favoring large companies like Apple, Tesla, and SpaceX, and also smaller AI infrastructure names via his ETF LUP. He predicted the AI market will grow 70% next year, above the consensus of 40%. He said Deepwater sold its Google shares six months ago, citing generative AI's negative impact on search monetization and the threat from personalized agents. He admitted being wrong on Microsoft, which guided 17-19% growth, but still expects a long-term decline in users. He urged investors to decide if AI's substance will exceed the hype.

Key takeaways

AI market will grow 70% next year, above the 40% consensus, based on hyperscaler CapEx.
Deepwater sold its Google shares six months ago due to AI's negative impact on search.
Microsoft's user base could drop 10-15% in two years, creating a growth headwind.
The pullback in tech is a buying opportunity, favoring big companies like Apple, Tesla, and SpaceX.
Personalized agents could grow from 20 million to billions of daily users, changing how people use Google.

Numbers and commitments

Figure	What it refers to	Type	At
70%	Expected growth of the AI market next year	guidance	4:15
40%	Market consensus for AI market growth next year	metric	4:15
17 or 19%	Microsoft's guided December quarter growth	guidance	6:54
10, 15%	Potential decline in Microsoft users in two years	metric	6:54
20 million	Current global daily users of personal agents	metric	5:00
500 billion	Market cap threshold for LUP ETF investments	metric	3:00

Chapters

0:00Market sell-off and academic vs visionary
2:49Buying opportunity and stock picks
4:15AI market growth prediction
4:36Google's challenges and AI agents
6:38Microsoft's growth and long-term risks

Questions asked in this interview

0:27What are investors so afraid of right now? What's happening?
2:49So, is it buying almost everything, or do you have to be really picky over here?
4:36What do you think is happening, and what should perhaps be the next steps about, you know, Gemini, their search integration with Google? Should it be monetized?
6:38Is Microsoft sort of actually safe from this whole AI disruption that you and I are discussing?

Akshay Tandon 0:00 ↗

Welcome back to Trading Day. I'm Akshay Tandon. Following Apple's results yesterday, investors now have a clearer picture of how the biggest tech companies are positioning themselves in the AI race. But after a wave of earnings triggered a broader tech sell-off, my next guest says the pullback is misplaced and presents a buying opportunity. Let's now welcome Gene Munster, managing partner at Deepwater Asset Management. Gene, good afternoon and thank you for joining us. Appreciate your time.

Gene Munster 0:26 ↗

Thank you.

Akshay Tandon 0:27 ↗

So, we just went through a massive wave of tech earnings. Apple yesterday, Shopify as of today, and the market sort of has panicked. What are investors so afraid of right now? What's happening?

Gene Munster 0:40 ↗

Well, there's this academic side of the market, and then there's a visionary side of the market. And the simple takeaway is the academic side of the market is winning. And what that academic side says is that for these companies to be successful, they need to have growth that is profitable, that's much bigger than anything we've really ever seen in the history of investing. And that just simply is unlikely. And that really started the conversation, let's say a week ago, two weeks ago, just over the past month, about how these cloud computing businesses, these neo clouds, will they survive? Will they get the proper funding to be around? And then what the impact is in the whole broader AI infrastructure if these cloud providers aren't going to be around. Elon said that 80% of them likely will not be around in the next five years. Then there's this domino effect that's negative all the way up to companies like Nvidia that, of course, provide the GPUs, the brains for these data centers. And so, the fundamental issue is that the academic side of the market just believes that this isn't sustainable, that the revenue growth simply won't present itself.

And just to kind of bring it forward one step here, this is where investors need to make a decision. Do you believe — and this is the basic question that all of your viewers should be asking — do you believe that the substance of AI, in terms of how it's going to impact our lives, will exceed the hype? I think even people who are bearish, the people who believe in this academic side, still would agree that AI is going to be transformative. The question is, will the substance exceed the hype? And I'm in the category that the substance will comfortably exceed the hype, that it's going to have much more of an impact. But that's why I think this is a buying opportunity. But your question was around what's been going on, and the most basic level is the academic side of the market has been winning here, and the visionaries have been losing.

Akshay Tandon 2:49 ↗

The visionaries have been losing. Okay, you're saying this is presenting a buying opportunity. So, is it buying almost everything, or do you have to be really picky over here?

Gene Munster 3:00 ↗

Well, you need to be picky, but I think some of the biggest companies are probably some of the best-positioned companies, like Apple, Tesla, SpaceX. I think those companies are going to be particularly big beneficiaries here. We talked about the importance of capital. As these companies start to fight for more capital, the bigger companies are going to be better positioned to do just that. And so, I think you need to own a lot of these bigger companies more broadly. Yeah, I think that's — there's also a lot of the littler companies. We have an ETF, the ticker is LUP. Now, we invest in companies that are 500 billion in market cap and smaller. Most of those are related to the AI trade. Those are companies that are like doing a lot of the infrastructure, less well-known names, but I think they're also just generally well-positioned. And I just want to try to put some numbers around this. When I talk about owning the big companies and then also owning maybe a basket of small companies — that was my point, a basket of small companies. One way to think about this, and if we want to kind of mark this down, I'd love to come back and join in a year and see how this prediction plays out.

7 more exchanges in this transcript

Cite this transcript

APA, MLA, BibTeX

APA

Munster, G. (2026, November 4). Investors' concerns about the AI trade [Interview transcript]. BNN Bloomberg. CEOInterviews.AI. https://ceointerviews.ai/interview/3194199/

MLA

Gene Munster. "Investors' concerns about the AI trade." BNN Bloomberg, 4 Nov. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/3194199/.

BibTeX

@misc{munster2026_3194199,
  author       = {Gene Munster},
  title        = {Investors' concerns about the AI trade},
  howpublished = {Interview transcript, BNN Bloomberg. CEOInterviews.AI},
  year         = {2026},
  month        = {nov},
  url          = {https://ceointerviews.ai/interview/3194199/},
  note         = {Speaker-attributed transcript with timestamps}
}

▶

Key Quotes (2)

“There's this academic side of the market, and then there's a visionary side of the market. And the simple takeaway is the academic side of the market is winning. And what that academic side says is that for these companies to be successful, they need to have growth that is profitable, that's much bigger than anything we've really ever seen in the history of investing. And that just simply is unlik”

▶ 0:40 CONTROVERSIAL POLICY

“The basic metric that people are looking at is how big is the AI bringing to be next year. The market thinks it's going to be 40% bigger. This is based on hyperscaler CapEx spending. I think it's probably going to be 70% bigger, much bigger than people realize. If that in fact is the case, then big companies and small companies alike should benefit.”

▶ 4:15 POLICY

Mentioned in this interview

Apple AAPL: Mentioned as one of the best-positioned companies to benefit from AI.

Tesla TSLA: Mentioned as one of the best-positioned companies to benefit from AI.

SpaceX: Mentioned as one of the best-positioned companies to benefit from AI.

Nvidia NVDA: Mentioned as providing GPUs for data centers, affected by cloud provider survival.

Elon: Quoted as saying 80% of neo clouds likely won't be around in five years.

Google: Deepwater sold shares; AI overviews monetize less; agents threaten search.

Microsoft MSFT: Guided strong growth but faces long-term user decline from AI.

OpenAI None-OpenAI: Mentioned as offering Amiee, Grokbot, and Dots, which Google must respond to.

Earlier, on the same topics

“The simple answer is yes. I think that if you had to sell one, it would be Microsoft. And just to put some context on that, typically when you're believers in a theme like an AI theme and you have a company like Microsoft who has a lot going on in AI, when you see the pullback that we've seen this y”

buying opportunity · Jul 27, 2026 at 11:41 →

“The hyperscalers, the four big ones, have basically guided to about 60% capex growth for calendar 26. If we look at the numbers for calendar 27, the street's at 10%. And a year ago that was the case and then they ended up being 60%. I don't think that 10% number for calendar 27 is going to be 60%. I”

Apr 08, 2026 at 7:31 →

“I'm feeling good about it for two reasons. Number one, I think that the guidance that they gave for the September quarter, which recall was revenue growth of 9 to 11%, the street was at 12%, triggered a 9% sell off in the stock. I think that guidance really was much better than what people what the ”

Aug 10, 2026 at 1:01 →

“I think the this is we're going to kind of get more into the I guess the the leaves of the tree or the trees versus the forest here because we know what the forest is I think on on that front some of the specifics I think we're going to hear more about custom silicon and I think that there are impac”

Dec 18, 2024 at 1:34 →

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About Gene Munster

Gene Munster, managing partner at Deepwater Asset Management, has appeared frequently in financial media over the past two months to discuss the AI investment cycle, tech earnings, and product launches. He has characterized the current market as a debate between "academics" and "visionaries," arguing that the academic perspective—which questions the profitability and sustainability of AI spending—is currently dominating investor sentiment. Munster has pushed back on this view, stating that AI infrastructure spending is likely to grow more than market expectations, and he has pointed to usage growth of personalized AI bots as evidence that the technology is still early in its adoption curve. He has also commented on specific companies, saying that Meta's Muse bot represents the company's future and that Apple's foldable iPhone Duo could account for 10% of iPhone sales over time. Munster has also weighed in on Tesla and SpaceX, discussing Elon Musk's comments about a potential merger between the two companies. He said the probability of a combination increased after Musk mentioned it on an earnings call, though he noted that any deal would require shareholder approval. In other appearances, he discussed the AI safety debate following a meeting between the Trump administration and AI executives, describing the outcome as positive for the AI trade while noting that safety concerns remain unresolved. He has also predicted that a major security breach in the next six months could boost AI security companies.

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