 Hey everyone, welcome to our podcast episode 26. I'm John Furrier, Dave Vellante. We actually do our weekly podcast. We look at everything that's going on. The text signals, we extract the signal from the noise. We're looking at everything. We're on location in Las Vegas for VMware Explorer. We're doing the pod, potting up from Las Vegas where we are doing theCUBE for three days at VMware Explorer, Dave. Dave, lots of text signals to extract this week. I mean, it's unbelievable. VMware is closing out, in my opinion, the biggest chapter in their company history. VMware, a tech titan, an iconic brand, closes its chapter of its storied historic run as an iconic legendary Silicon Valley tech brand inventing virtualization, changing the game, changing and reinventing enterprise computing. They will be in the Mount Rushmore of tech companies, in my opinion. This is going to close the chapter. As the new chapter emerges, we're Broadcom is going to take over and we predict we'll cut about $5 billion worth of fat off the company. Focus the business units on 18-month business plans right out of the gate. It's going to be run, run, run fast. Get the numbers, review the performance, and Broadcom will do what they do. Dave, they're going to do that story. And so much more. Arms filing for the big Atnastic IPO. That's going to be fun to watch. We talked about Intel last week. Maybe they could go out of business. Intel, under massive pressure. NVIDIA beats huge. And that's another factor on Intel. Again, supporting our analysis last week that Intel's not only in trouble, they could go out of business. Snowflake, beat a little bit. We're going to get into that huge story here. Do not pause this pod or leave the pod. Dave's got cutting edge analysis that nobody has, even on Wall Street. He's going to get into that. That's going to be kick-ass. Palo Alto Network's beat, but they're kind of a head fake according to others like Dave who were thinking, they were announcing on Friday and then they beat huge. So many thought it was going to be a head fake. So Hugging Face got financing. That's an AI world, massive funding, all the big names in there. Amazon, NVIDIA. Sales Force. Sales Force, four billion dollar valuation. AI madness continues. Dave, so many signals in this pod. And we're going to go as long as we can. We're going to get kicked out of this place. They're going to pull the plug on location. We'll get it all in. The signals. Big time news. News here. John, episode 26, we're halfway. Right. We're in person. Halfway of the year. Yeah, so the big news here, of course, the three big vectors, Broadcom, Multicloud, and AI. You know, John, I mean, look around, it's beautiful. They have the hub area. I mean, it's just gorgeous, the branding. Maybe the last time we see something like this. This is the last chapter in the history of VMware, as we know it. I mean, Broadcom is going to remake the company. I think VMware right now is poised. If they do what their story is executing to that story, they could go to a whole other level. Remember, VMware is supposed to go out of business when Hyper-V was a free hypervisor, because their core business, the hypervisor, the virtual machines, was threatened. They turned around and invented hyperconvergence or jump on the hyperverse wave. And boom, they got vSAN. They got killer products. And then they go to the next level. And then more stuff comes up. They got smart engineers. VMware is good. And this is a close of a chapter of an iconic Silicon Valley run. Startup, growth, takeover, drama with EMC. Joe Tucci gets a bargain for half a million dollars. Michael Delgis involved. Just this VMware cash cow and growth engine has a historical run. This is the closing of a chapter. And a new one opening. By the way, it could be another great chapter behind it, but it's not going to be the same. It's over and the new VMware is coming. It's going to be a much more focused company. As you said, they had product-led growth early on, where they were consolidating servers in the data center and saving tons and tons of money. It was actually amazing at the time. First time I ever saw virtualization in action. It was just incredible. And so that gave it a big, big boost. And then, as you said, Microsoft came out with Hyper-V. And everybody said, oh, VMware is screwed because Microsoft is going to give it away for free. Well, then VMware created the software-defined data center. They went on to storage. They bought NYSERA, do a networking. But then they went into the era of M&A growth. And when that happened, they got all these assets. And it basically confused the sales for me, confused in the sense that, OK, you got all this stuff to sell, go sell. And that was a new era. And they pushed and pushed and pushed and pushed. Not all of it was paying back. And now we're entering the multi-cloud era, the Broadcom era. It was very clear. Broadcom is going to focus the R&D on the core, vSphere, VMware Cloud Foundation, and multi-cloud. And we'll see about AI. They got a lot of work to do in AI. But the future is going to be much more focused with R&D at the core. Let's talk about this next chapter. Haktan came, was in-person. Some said he wasn't going to be here. He was here. And then he did the video. He didn't present. Just showed a video, a pre-stage video. But what's interesting is that, and you wrote a post on SiliconANGLE that everyone should go read, VMware's future, navigating multi-cloud complexity in January under Broadcom's wing, basically telegraphing what will happen with Broadcom taking over VMware. I think you nailed it. You have a graph in there that talks about the numbers. But I want to call something out on that to look at that number. VMware is a software company. Broadcom comes from a semiconductor route. You know they have computer associates, which is going to be a big help, by the way, for the VMware integration. In fact, they've got some CA people in there. That's going to be big. But revenue per employee is something that you pointed out in that chart. And Broadcom's got great numbers. Hardware companies talk revenue per employee, not profit per employee. So I think software staffs staff differently. So, yeah, so. But Broadcom is more profitable than VMware. So I'm just saying, I want to add a new metric to that. I'd be curious to see what the profit per employee, I don't know if they break that out, but it's hard. Will Ken Broadcom accept the software? Because sometimes you overstaff in software, Dave. Yeah, look, so, but, you know, VMware. That's what I'm saying. Just hold on for a second. Let me finish that point. More software, software looks different than hardware. Now Broadcom, they're not dumbasses over there. They're smart. The people over there that we talk to and we interview, they're all smart. Broadcom's got great people. That's why they're so successful. What they do with VMware, we're really very interesting to see how they handle this. Okay, but so Broadcom actually looks, their financials look more like a software company than a hardware company. You know, it looks like kind of the old Intel when Intel had the monopoly. Intel had like 65, 68, you know, 69% gross margin. That's what Broadcom's gross margins are. Now VMware, as a software company, has, you know, 80, 81% gross margin. Okay, fine. But when you look at EBITDA, I mean, Broadcom's EBITDA margin is 58%. It's more profitable than Microsoft, more profitable than Oracle. VMware is really profitable, a 25% EBITDA margin. But the free cash flow is insane. Broadcom has free cash flow margin, nearly 50% of its revenue. Think about this. They're a $34 billion company, nearly 50% of its revenue, 49% goes to free cash flow. Yeah, it's amazing. And VMware is 29%, which is really good. That's good, too. It's going to get better. But to your point, Broadcom's got 20,000 employees for $34 billion in revenue. VMware has 38,000 employees for $13 billion in revenue. So Broadcom's going to bring that into balance. That's where the math works. So you look at, that's the math equation right there. That's how you get to the $5 billion takeout of FAT. Now FAT, I use that term FAT, that's a pejorative term that means like people that aren't going to contribute to the new model. When I say takeout the FAT, I mean they're going to cut the FAT from a Broadcom standards. Broadcom's said from day one, they've never changed a word. They said they're going to do it. You called it out on the first post. We discussed it on the podcast, actually. They're going to do what they're doing and they're going to look at the numbers. They're going to get this thing as a humming machine. They're going to get this thing humming. They're going to tune the engine. They're going to get the cash flow up. They got the profit there. When they start making these changes with the fact that they're going to cut a lot of billions of dollars out, they'll give a billion dollars back in R&D, a billion back to the ecosystem. So there's still up three billion on the cut, but they're going to make it efficient. And so it reminds me of that movie in the Game of Thrones, the scene in the Game of Thrones, a famous scene where the running game where they got the bad guy says to the brother, run to your brother. And he shoots arrows at him, he's dodging. And he didn't, we're all yelling at the TV, weave. Serpentine, Shelley, weave. So the run game is going on right now. And what's going to happen with Broadcom is going to say, look it, we're going to cut all the fat. You guys got a great business here. The numbers are good. You pointed that out, run and show some numbers. So build a plan. Business unit leaders are going to build a plan. They'll probably kill centralized organizations, outsource that spin out what they don't like. But the core business is good. You have the infrastructure cloud business. That's the bread and butter crown jewels, end user computing, modern application with Tanzu. Those are awesome. And they got the edge coming up as a fourth model. They're going to run. And whoever can just keep the numbers up, they're going to keep going. Broadcom has no, I don't think they're going to discriminate that, I don't like this project. The story is great, Dave. It's going to be who performs on the business. 100%. And remember, Broadcom also is going to have to delever. Just like it's done with all of its other acquisitions, it will identify opportunities where there's value to create cash. I have said that carbon black could be one of those assets. They could get probably several billion dollars for carbon black. And so that's one that I would watch. It's interesting to me, carbon black, I believe used to be under the NSX group. It's now separate when Tom Gillis went over to Cisco. I think they kept it separate. And I think they kept it separate for a reason to be able to track it. And I think, again, if it performs, great. They'll keep it if it's throwing off cash to the extent that Broadcom wants. But if not, that might be a candidate for delevering. But I would think anything's on the table potentially for delevering. Anything that doesn't perform in the next 18 months could very well be sold. I don't think Octan is going to suffer a big loss. I think after two quarters, they're going to look at the numbers, have a meeting, put people on a plan, you get two more quarters, fix it. Get to where you need to be. Here's all the resources you need. And I think it's going to be fun. It's kind of the run game. Go run out and run the business and see what you got. Now, I like to call this a chapter. So the chapter is closed because this is important. A lot of people are saying, Broadcom, where are you at Broadcom? Broadcom's a smart company. This is simply an emotional chapter turning. When you have a big change in life, you close that previous chapter, open up another one. So to me, it's very emotional for a lot of the staff here at VMware. I noticed that on stage with Raghu. It's half a prideful moment on one side and then uncertainty of Broadcom and the other. So I like to just say, look at this. Historic run as a company. Mount Rushmore of Silicon Valley, lower. Now the new chapter is opening, is being written. And the future is unwritten at this point. And I don't think there's any nefarious goals from Broadcom other than get the numbers up. So I think it's going to be interesting. I don't think it's going to be as bad as everyone thinks. I think, yeah, cuts are bad, but that's going to get the numbers in line. If the engine is going, the Prophet Dave, then VMware has a great opportunity. They simplify a lot of stuff. They kind of clean house a little bit. They're at the start line. The bell gets rung and the horse is going to start running. And the other thing is, Keith Townsend said this, I think he's absolutely right, is Octanus is probably looking at saying, I don't need to have all these people to support the customers. I want to focus our energies on R&D and the roadmap. Let the ecosystem support the customers. Let the consultants out there build their own businesses and share the wealth. He totally understands the value of that ecosystem. He said he's going to invest in that ecosystem. As we know from the late night crawls, the ecosystem is very excited. They're like, hey, I want a piece of that billion dollars. And so there's huge opportunities for consultants out there. Final point on VMware Explorer, before we move on to some of the other stuff that we're going to get into, is hugging face just announced financing. That basically continues to put an exclamation point on the fact that the AI madness continues. Big names are financing it. Amazon, Nvidia, Salesforce, hundreds of millions of dollars more. It's just incredible, great success. It points to the confidence and the enthusiasm for AI. Here at VMware Explorer and for VMware's a company, this whole generative AI thing is a gift to the industry, I think. And I got to say, there's always that expression that Pat Gelsing used to have. Never waste a crisis to make it an opportunity. Well, this isn't a crisis. This is a gift horse, Dave. AI just fell on the lap of the world. And the companies that are seizing it are doing well. And the ones that understand it are doing extremely well. The ones that are mastering it quickly are going to be the winners. So and the ones that are poo-pooing it, they're going to be out of business. I'm telling you, this is important. Even Ragu, who is super smart, highly respected software engineer, he's like a kid. When I remember I used to say, I wish I was 25 again, Dave, remember that? When we started talking about AI, everyone has that same vibe. It makes me feel younger. It's like a fountain of tech youth for older guys like us and experienced operating system developers or other develops. And it's for the youth, it's a clean sheet of paper to build new brands, new assets, new models, new companies. I'm telling you, AI is legit. Generative AI is going to have a huge impact. So VMware gets it. They're not AI washing, but they're being very smart about saying, we're bringing AI into everything. We're not going to AI wash. We're going to AI wash anything. We're going to just start building it into stuff. And that's what I like about VMware. Again, they're smart. They might get a little bit bloated because they're a people-centric culture, but they make things happen. So I hope Broadcom will brace that culture in this next chapter and make sure that AI is in there and do what they can do best, integrating their chips into the software. So Hawke Tan has said, the analysts will ask him about AI, how he looks at AI. He looks at it as just another workload. So he's not like something that necessarily is going to get monetized directly, although it is going to provide a platform for more sales of the core. And I think that's going to be the key. So I don't see VMware being an AI company, per se. I see them being as infrastructure to support AI workloads. So I think it is a rising tide that lifts all boats. And then the other big thing is their multi-cloud strategy. They are betting that multi-cloud is new incremental growth and Tanzu is a key part of that. And so, you know, we... By the way, one thing that happened is we just, for everyone knows that the senior executives at VMware are endorsing SuperCloud. They've said it multiple times. They're not going to go out and just put it on their literature, but they are on the record, on theCUBE, and in the private hallway conversations and the meetings. They're endorsing it. They think SuperCloud is the runtime aspect, the multi-cloud. Yeah, and Tanzu is the glue there, but, you know, we're going to have to see adoption or that may be on the chopping block, but anyway, I know we got a tight time there. Let's get into the earnings. So, arms going public. We'll talk about that next time. Let's get into the snowflake earnings because, and Palo Alto Crush, again, congratulations to Palo Alto Networks, but you have some great content analysis here. So, just so everyone knows, we have a really strong research team. We don't always tout our own horns, but we're pretty much the best at some of this stuff. And what Dave is going to deliver is it comes from the community, it comes from our data, it comes from the team, and Snowflake, Snowflake obviously knows that too, but Dave, present your research results from the earnings that happened yesterday, by the way. Okay, so real quick, I just want to say, quick on arm, everybody's anticipating this IPO because it's going to go out. Maybe it's a $60 billion IPO and video was going to buy them for something like $43 billion. The reason people are excited about it is because it'll hopefully open up the IPO floodgates, but I'm looking at the F1, and I'm not blown away, frankly. They're not growing. I mean, they're $2.7 billion last year and revenue $2.7 billion this year. So we'll see and 58% of its revenues comes from like five or six customers, so highly concentrated. And so we'll see. And then Nvidia, before I get to Snowflake, blew away its revenue and earnings forecast. It beat by $2 billion. So it was 100% growth, but the $13.5 billion, they guided next quarter to $16 billion, which the consensus, John, was like $13 billion. So they're on fire. Here's why I bring this up. The market was down today. If Nvidia is blowing away earnings like that and the NASDAQ can't go up, that is a bad sign. So we could be in for more tech headwinds. Speaking of which, Snowflake announced the data that we have. Hold on, before we go to Snowflake, Nvidia, what's your assessment there? Because obviously Jensen was here at the event we saw him live on stage right here in theCUBE. What do you see as the problem there? Two years ago, we wrote a post how Nvidia plans to own the data center with AI. And in that post, our premise was there was going to be a massive shift from general purpose workloads to AI workloads. And like a huge, huge percentage of the data center, like 30% is going to shift. Jensen and the call Wednesday. We wrote this two years ago. Jensen and the call Wednesday said, you're seeing it, it's in action. We're seeing the shift from general purpose computing to what he calls accelerated computing, which we called AI, okay? So that, we called that two years ago, by the way. You don't just say, I like AI workloads. You actually did research. By the way, by the way, by the way, the valuation of the company was around 300 billion at the time, it's about 1.3 trillion now. So hopefully some people got in based on that analysis. And so, but speaking of headwinds, so Snowflake announced, they beat earnings, they beat consensus by maybe two and a half points. Their operating margins were better, their free cash flow margins were better. They talked about Q4 momentum, but there's still a lot of caution. And the stock was down today, the stock was down 5% today. And- I mean, hardly a bellwether. That's not a bellwether. A bellwether would have moved the market the other side. So what's going on? What's the underlying condition? But same thing with Nvidia. Nvidia is a bellwether. I think the market can't move, that the tech can't go up on Nvidia's earnings. We have to get into this. You know, when can it go up? All right, now let's get into Snowflake. So here's the data. Snowflake is interesting. And this is yesterday's earnings call. No one got this. No one's even talked about it or reported it or even highlighted this next- But we, and it's not just me, it's our team. It's the whole, you know, collaboration we have. So you and George were at, and Stretch A, Rob Stretch A were at Databricks. I was at Snowflake with George, Sanjeev Mohan, another part of our Cube friends. And we talked to customers and they said to us at the time that they're doing a lot of their data engineering and their data prep outside of Snowflake because it's too expensive. And we're like, hmm, that's interesting. Databricks obviously crushed their announcements. And we started to dig into that and a couple of other data points here. One is the ETR data shows that customers, and this really surprised us, when customers are asked, what's the number one bill that you're most concerned about in cloud? It wasn't EC2 compute. It wasn't storage. You know what it was? It was database. And we said, holy crap, I wonder if there's a lot of Snowflake customers in there because Snowflake bundles AWS costs into its revenue. Databricks doesn't. So Databricks appears less expensive and maybe is less expensive. So people are doing their data prep outside of Snowflake. Combine that with the new data that we have that shows there's a 38 to 39% overlap in Snowflake accounts that also have Databricks. Okay, so because of that high overlap, the large customers are I think doing their prep, their data prep based on the information we have outside of Snowflake and that's muting Snowflake's growth. I talked to Frank Slutman about this. He said, Dave, it's cheaper to do it inside of Snowflake because you get the whole benefit of all the governance and you don't have to go outside to do all this other stuff. But still, I think customers see it as more expensive. The other thing that we uncovered is starting in January, AWS sales reps really started to push Databricks. Why? Because they don't get paid as much for Snowflake because Snowflake bundles in EC2 and S3. And you get the marketplace too. And you get the marketplace. But so they're saying, wow, we're gonna push Databricks. Why? Because we get paid directly for the compute and the storage. And so those two factors combined, we think are a headwind for Snowflake and we're digging in more. We're gonna do a breaking analysis tomorrow. And by the way, we're gonna bring in one last point, two last points, we're gonna bring in Google. Snowflake said on the call that their Microsoft relationship is getting better. But we know that Google and Snowflake are not like Amazon and Snowflake. Most of Snowflake's business is Amazon because Google wants a BigQuery to go. Somebody told us, I won't say who it is. I'll tell you privately. Somebody once said, if AWS owned BigQuery, Snowflake would be a small company. So that's interesting. Right? BigQuery is a good product. So you're gonna hear more about that next week at Google Next. So that's kind of new and breaking analysis that we have. Dave, that is great analysis. That is being on the grid, being on the balls and strikes. It's like, as analysts, our analysts firm and keep it going, it's kind of like, we're the umpires calling balls and strikes in the game with instant replay at every camera angle. And the other guys are playing, you know, stand up. Well, and that overlap with Databricks accounts is something that we really have to pay attention to because if there continues to be that much overlap, it's gonna be very convenient for customers to do that data prep and do that data engineering and cleansing in a Spark tool chain versus doing it inside of Snowflake. So Snowflake has to communicate to customers that if it's true, the TCO of doing it inside of Snowflake is actually better. But they haven't made that case. I think that research you just put out is what I call the new research in analyst relations. There's a new layer that's forming above the analyst relations market and just under the financial analysts. Because the financial analysts can't go the industry level to the depth, but they know the numbers. You're doing the numbers, we're doing the numbers and we know the industry. We can connect those dots. This is a new area that no one's doing on. So I want to give you a shout out. That's the great analysis. You and Rob and George and the team. And our friends at ETR, I want to say one more thing about that. The other thing that Snowflake said in the call is that their large customers were basically consuming, remember it's a consumption model with Snowflake. They were consuming to their commit. In other words, you commit to a one year or three year deal. They weren't over consuming. And so our friends at ETR are running the data to see if that overlap is potentially even higher within large accounts, because that again, that would be a negative for Snowflake. So again, it comes back to, Snowflake has to make the case that it actually can deliver greater value and lower cost by doing all that data prep and data engineering inside of Snowflake. It has not yet convinced customers in our view. So ARM has great analysis. Thank you. I think Snowflake, I mean, I don't think they're hurting. Oh, so love Snowflake. I mean, that's where they're gonna bring AI to that data. That's the thing that VMware doesn't have the data. Snowflake does. So they can quote unquote bolt on AI and succeed. Instantly. Right, yes. Databricks is already there in AI. Snowflake, Jensen said we are gonna like supercharged Snowflake. Yeah. And the thing about the Databricks and Snowflake in particular and Databricks, they had that lake house. They were so smart by building that lake house model because now the lake house data lake is the AI lake, right? AI is, that's where the AI will thrive. And the learnings that come out of the data iterations just as a flywheel. And I think. Yeah, you were there. I mean, provide your analysis. You guys said great analysis coming out of there. Well, I think there's a lot of, first of all, Databricks has a lot of, they showed a lot of demos of what I would call, I won't call them vapor where that's an old term in the old school. But they were showing early code, but it was good code. It was great code because they showed what they wanted to show that they could use the data to give the customers not only the enthusiasm to continue to use the data lake and the lake house, but to also get them confident that they could actually be successful. Okay, the combination of enthusiasm and confidence is the highest form of attitudinal win in marketing and Databricks laid it out. Snowflake won that early on. But the thing about Snowflake is, if they don't flex their structural tech product, platform with the market needs, if they misfire on say an assumption like data costs from moving costs of data around, that could hurt them. And if I'm a customer and if the perception that I'm going to pay more, or I don't know what's around the corner from a cost perspective, if I can't see it, I don't understand it. It's easier just to be, take the nerves away and go to Databricks and do the prep there. So I buy the logic and I can see someone doing that. That's bad for Snowflake. And if they might have made it up on new logos, okay, the upbeat was for new logos, that's new business, I buy that too because it's a growing market. So the question is, will Snowflake be the place where everyone does their AI work? Okay, that's the question, or is it going to be the analytical engine? That to me is what we discussed between the two events during that data week was, you had one was highly efficient on data analytics, Snowflake, operational, all that data cloud stuff that they're doing, A plus capability, Databricks like, no, no, no, we got that and we want to do more of the developer, data developer. And I think, man, it's a tough call because it's like, you know, they're not really competing. Well, if those are the two positions, they're kind of like picking the sides of the street and this may be some crossover in the middle. The overlap might have gotten bigger with AI, but it's going to be very interesting to see if that overlap with Databricks and Snowflake expands more. So in your analysis, I want you to ask and see if you find that overlap number, how big that is and where it was. We'll keep an eye on that. And it is a marathon here and there is room for both, but you don't want to give a company too much of a lead. So while this is maybe tactical, the long game here for Snowflake is what they're doing with Snowpark. They announced 400 new Snowpark customers and their application development environment, they've got supposedly, I think the number is five or 600 applications to build apps on Snowpark. So that's a catalyst and then things like Unistore coming in. That's where they're bringing in transaction data to work with the analytic data. That could give a tailwind as well in future quarters and Q4 is coming. If you're watching our pod, we're on location at VMware Explorer in Vegas in two minutes, four minutes, they're going to shut down the hall. A big thing is going to come to the last minute. We're going to go until they pull the plug, Dave. We can get more content to get out here, but normally we're doing it at our offices remote, but we're together in person because we're in Vegas with VMware Explorer, a phenomenal event, again historic event in our opinion, Nvidia stock. Palo Alto. So I was going on the earnings. Nvidia, Snowflake, check, check. NetApp beat expectations, but the stock was down. We had great sessions with NetApp here. Nvidia actually came on the cube with NetApp, okay? Then Amazon was on with NetApp. NetApp is just a survivor, man. That company is, kids never, it always does well. I tell you, NetApp is just a great management company. I love that company. They're like in my mind, like VMware. They have a spot in my heart, the Silicon Valley startup. Splunk was once a Silicon Valley darling, now they're kind of sliding away. They're stock surge on strong earnings. So they've been belt tightening. They've got the new CEO. I'm speculating that Splunk is probably going to be taken over by private equity. I'm not sure. We'll see, but I'm hearing rumblings. Autodesk, surprise analysts with better than expected earnings, Zoom beat earnings, and Hex is fully a forecast and the stock is rising as a result. And they're dragging everybody back to the office, which is quite ironic. Splunk is a weird company right now in my mind. Don't know what's going on there. They are clearly posturing, in my opinion, from the scuttlebutt is it's private equity bound, okay? And we know our friend Fitzy over there, Charles Fitzgerald platform model. He hates private equity deals. He thinks it's bad for the economy, bad for tech business. And we'll see what happens with Splunk. ARM files for an IPO. Palo Alto Networks. So Palo Alto, so this was really interesting. Fortinet missed earnings and the stock was down like big. I mean, you want to say 20% the next day. And then Palo Alto, Hex announced that they're gonna announce earnings on a Friday afternoon. So when the analysts saw that they're like, oh shit, that's bad news. So the stock dropped. Well, Palo Alto blew away its earnings. Well, today's Thursday. No, this is last week. Oh, last week, okay. So I was gone to the wedding, right? This all happened. I'm watching on my phone and I'm like, wow, how bad can this be? Well, they blew away earnings. People were shocked. And then Hex was like making jokes about it, like making Friday jokes. Like, ha, ha, I faked all you guys out. Which, again, if you announce earnings on a Friday after the close, you don't announce typically good news while they did. And then the stock rocketed on Monday. But I tell you, tech right now, after Nvidia's earnings, if tech can't have a good day after those earnings, that says to me we're getting pretty toppy here. And so people are really, really concerned. So coming into the fourth quarter. I think the market is going to be continually interesting and weird. Again, the AI hugging face got massive valuation. I think we're in trouble today. A lot of these, we've been staying on the pod for a while. I've been claiming that companies are going to start falling out of the sky multiple pods ago. And then since I said that, VCs have been writing these blog posts, setting the table for the fact that they're not going to fund their companies. They're doing the, there we go. There it is. It's, get out. Ha, ha, ha, ha. We're not, we're not going anywhere. We're not going anywhere. We're staying. We're not, we're not going anywhere. We're not going anywhere. Pull the plug. We're going to go to the end. Kick us out. They're going to have to drag us out. We can't, they can't believe us. Startup, startup market has been challenged unless you're on the right side of history with the AI. If you're a general AI company and you have data, you're going to be doing extremely well. If you're a platform, if you're a tool that's relevant, you're going to get funding. Other than that, it starts to struggling, Dave. And, and, and it's going to be great to see what happens because there's no M&A market for soft landings or AccuHires. So it's a buyer's market right now from a startup going, looking for that AccuHire. Hey, buy my team. And there's not enough growing SaaS companies that could actually do the AccuHire because if they are growing, they're usually AI and it's a mismatch of skills. So you, they want to get, and again, these AI companies don't need all that talent. So again, it's a very weird startup market right now. There's the has and have nots. I like Michael Dell says. I haven't seen anything like it before. Like Michael Dell says, sometimes a hard rain, you know, it's nice because it cleans the streets. So let's see, they're in my ear, John, they want us out. So are you going to buy on the ARM IPO? I mean, I, you know, I'm not like overly excited about it. People were asking me, you know, should we buy, you know, the open? And I would never, by the way, I don't ever think it's a good idea to buy IPOs at the open. I think you always get a better opportunity to buy in. It's almost always the case. I don't, you know, to me, I mean, this company is like, I love the business. I love the fact that they have a license model. They got like 98% gross margin, but it's not a growth business. And it's changed the industry. And as the soft banks going to make, you know, it was great trade for them. It's too bad that Nvidia wasn't able to capture them from a US competitiveness standpoint. But, you know, I'm not overly excited about the IPO. I love the company. I think it's great that they're going to now be in the public domain. And I, you know, we're very, very high on arm and the whole ecosystem. But as far as a business model, I think it's, frankly, I think it's going to be overpriced if they go out at $60 billion. Yeah, we talked last week about Intel's prospects. Arm, you know, Intel, that whole thing is just... Well, so disruptive to Intel because it's basically this license model. They don't make anything. They use TSMC. Their wafer volumes are 10x those of x86. And so they're killing it on the economics. All right, what's your ranch section this week? Lena Kahn's not in the news, so we can't... No, my ranch section is... Okay, so Broadcom, they got approval from the EU Competition Markets Committee. And the US FTC just chose not to comment. Instead of saying, yes, we approve, they just let the statute of limitations or whatever you call it expire. So they approve by not saying anything. All right, so that's like, just a... That's a big fuck you to big tech. We're not even going to comment. We're just going to let you hang out and wait. And then after the deadline expires, well, I guess by default, that means we've approved it. So, I mean, that's just so rude. It's so anti-business. What's the fine Broadcom would have to pay that they just do the deal? No, they've essentially been approved in the US now. They just got to wait for a couple of APAC countries. And so the US has essentially approved it because they didn't comment, which is just so anti-business, in my opinion. They should have approved it well in advance and let, and signal to the rest of the world that this is a good deal. Instead, they don't, they say nothing. So, yeah, yet again, FTC rant. My rant is on the spectacle that was the Republican debate. Trump didn't show up. And so they had all that up there. Mike Pence was there. You watched it. It must have been so bad. I watched the highlights after dinner last night. It was bad. It was just comical. The Republicans just got to get their shit together and clean house, get rid of Trump. Don't let him in. He didn't show up. So it was bad. Nikki Haley looked pretty good. I'm getting told we had to go. I thought the Santas wasn't that bad. I mean, so again, Rama Swami aces the VP in a bunch of comments. It was just, it was just, it was just ugly. Vivek, is he angling to be VP? I don't know. Trump's VP? He's just trying. He aced the interview. He's basically interviewing for the VP job. Yeah, I mean, Dave, episode 26, we're on location. Go to SiliconANGLE.com. Check out all the news. Go to thecube.net. Kind of tired day three here. We're winding down. We're going to take a break. I'm going to pop out tonight back home and the Bay Area. And then I'll be in the office tomorrow. You're taking a red eye back. Yep. And we're going to do breaking analysis tomorrow. George and I are going to do, we're going to do a snowflake deep dive and a Google Next preview. You know, one thing I want to, I want to, they're going to boot us. I want to say one more thing before we get booted out. The hall's closing. Please make your way. You can hear that. Get off the cube. You and the cube. You and the cube. Get off the cube and get off. Okay. Before we sign off, I just want to say one thing. VMware and Ragu, but we've known for years. He wasn't the CEO before. That Kelsey here was before. Paul Maritz got it right in 2010, our first ever cube with the stack. He bought a bunch of stuff up there. Spring was one of them. You had apps up there, but he had it right. His architecture was right. It ended up playing out. Paul Maritz was a visionary ahead of his time. Great. But we've known Ragu for years. The guy's smart and to see him up on stage, it was a moment where the Silicon Valley chapters closed, I mentioned that earlier. It was nice to see all the VMware folks who have been around for a long time. The OGs, they're proud. Okay. And they're proud of the company they built. And they got engineering, right? So we met a bunch of the engineers at the exclusive event we went to, talking with some of the engineering. They got good stuff going on. VMware knows distributed computing, okay? And I think Broadcom has a plan. I've said this, people said I'm crazy, but I think Broadcom is going to integrate from the Silicon, because we know what Amazon is doing in the cloud. You get the Silicon integration up, the Silicon angle for them is, integrate Silicon up into the software, get VMware to be that super cloud layer, and then just enable modern apps, and IoT and Edge and just kick ass, and Broadcom could pull it off, and because their ecosystem of customers, their OEMs, win. And by the way, just on Raghu, that's a nice big payday for him, I don't know, 50, 60 million, for a guy who really deserves it, and a good guy, maybe, that's good dough though. All right, episode 26 is a little bit shorter than usual. We're leaving Las Vegas, baby, we're heading back, great day, good to see you, good shot, get the crew here, ace job, thanks for going late, shout out to the crew, great job everybody.