By coinnews 
00:00 Speaker A
Maybe to start, Brent, kind of a bigger picture question I had for you, because I think when a lot of investors, Brent, they think of your coverage universe, they think of software names. They think, okay, these are these are relatively tariff resistant, but there can be kind of downstream effects because of all the uncertainty, Brent. Maybe maybe it’s longer sales cycles or smaller deal sizes. I’m just curious whether you’re picking up on any of that in your coverage universe.
00:47 Brent
It’s a good question and a complex question because it’s not an easy answer. I think part of the challenge in software right now is really around the stage of maturity. And I think you’re seeing this in Salesforce today is software had this great 20-year cycle as we think about the transition from on-prem to cloud from license to subscription software. And we’ve really treated these software companies as pure growth companies. But the cloud market is maturing, as we kind of enter a whole new wave of software investment going into AI. And I think it’s been a bit challenging as we think about the right multiples, the right valuations we’re willing to pay for what is now looks like more traditional software, mid-teens, low teens growth rates, in some cases high single-digit growth rates. That’s signs of maturity, frankly. And I think that’s what’s driving the movement, interest in the software sector, more so than I would say tariffs. Um, I think this is still a pretty resilient group, but the growth that we saw, let’s say, three years ago, 40, more than 40 public cloud software names growing over 40%. If I look at that profile of 30% growers in 2026, there’s zero. So very different growth profile today in the software landscape than there was, let’s say, three years ago.
03:41 Speaker A
Well, and Brent, let’s bring it back then to Salesforce, because it is seeing more growth in that one area, right, the sort of AI area, but that area is still a pretty small slice of the overall pie. So is that enough to be an impetus for people to come in and buy the stock?
04:24 Brent
Eventually, yes. But if you’re a growth investor
04:34 Speaker A
How eventually, I guess, is the question is part of the question.
04:50 Brent
Yeah, it’s a really small part of the overall business. Growth still overall slowed in the quarter. If you look at where growth was at a year ago, and the one part of their business where you’re seeing AI show up, which is their platforms and other segment, that grew from like 12% to 14%. So seeing a slight acceleration in one of their segments, clearly not enough to drive an acceleration overall. Could that happen next year? Possibly. More likely than not, it could be two years from now before you see it having a much more material impact on the growth profile. But recall, these are similar things that we saw at Microsoft 10 years ago. We saw this about eight, nine years ago at Oracle with OCI. It takes a long time for enterprises to adopt these new technologies before it really starts to drive a reacceleration in a mature business. And that’s what Salesforce is now. It’s a mature software business.
06:17 Speaker A
Brent, you have a number of buys in your coverage universe. If I was asked to Brent, boil it down, give me one you like the most here, Brent. What would you tell me?
06:46 Brent
The interesting thing is we have had in the last 45 days since the April lows, a big spike in the software index IGV over 25% bounce here. So a lot of our favorite ideas have moved. Um, but I would say the one that still has room to run is a company called monday.com, MNDY. This is a billion dollar plus ARR business, billion dollars in cash, 25% plus grower, 25% free cash flow margins, long runway for growth. This is a company that has custom app and workflow builder tools for the masses. They’re selling into large organizations that in some cases will deploy this across 80,000 seats, and they can also sell this to a small business. So really broad, broad market opportunity here, but if you’re looking for growth and profitability, monday.com is one of our favorite highest conviction growth ideas, and it still has room to run.
08:25 Speaker A
Brent, it is always great to see and to have you on the show. Thank you for joining us, sir.
08:36 Brent
Absolutely, thanks for having me.