Gerstner notes internet multiples expanded from 23x to 33x in 2020, mirroring 2018 Q4 contraction without COVID.
“If you look at the multiple expansion that's occurred, it's almost the identical mirror image of the multiple contraction that occurred in the fall of twenty eighteen. In Q4 twenty eighteen, we didn't have COVID.”
Gerstner reports Altimeter's software index expanded from 11x to 14.5x and internet index from 23x to 33x.
“I feel obliged to do that. We started the year in our gross software index at 11 times. Now we're at about 14 and a half times two year forward.”
Gerstner reports software multiples expanded from 11x to 14.5x and internet from 23x to 33x in 2020.
“We started the year in our gross software index at 11 times. Now we're at about 14 and a half times two year forward.”
Gerstner argues markets correctly priced digital transformation arc despite initial concerns after 50% bounce in May.
“What it has been slow in pricing in is how dramatically different the arc will be for many of these digital businesses. I remember having conversations with Rich and many others in May.”
Gerstner expects more multiple compression in public markets over next three months despite Tiger's activity.
“You can believe the next three months that we're likely to have more multiple compression in the public markets. Right?”
Gerstner predicted every one percent move in ten-year treasury causes 10 to 20 percent drawdown in growth multiples.
“Right? And for every 1% move in the ten year, you've got a 10 to a 20% drawdown in growth multiples.”
“He said to me, the IPO market is slow in volume terms for lack of supply, not lack of demand. And I've been making this case that the IPO window is wide open.”
Gerstner warns Nasdaq at all-time high amid slowing economy, light earnings, and AI disruption.
“And the backdrop is that the economy is slowing, earnings are coming in lighter than people expected, and AI is creating more disruption, creating more uncertainty than we expected.”
Gerstner reports S&P earnings excluding Mag Seven came in below expectations with quarterly shrinkage.
“in the quarter, if you back out, you know, mag seven, we're coming in, below expectations. Right? You're actually seeing earnings shrink on a quarter over”
Gerstner explains last four weeks of market decline through rising uncertainty driving up discount rates and risk premiums.
“So think about what we just talked about. It's all uncertainty. Yeah. When uncertainty goes up, discount rates go up, risk premiums go up, multiples come down, markets come down.”
Gerstner explains recent market decline as rising uncertainty increasing discount rates and compressing multiples.
“When uncertainty goes up, discount rates go up, risk premiums go up, multiples come down, markets come down. That's that's the explanation for the last four weeks in the market.”
Gerstner frames $500 billion tariffs plus $1 trillion Doge spending cuts as $1.5 trillion total government austerity.
“At the same time, Elon and members of the House and Senate are talking about cutting a trillion dollars of government spend. So one way to think about this is 1,500,000,000,000 of government austerity.”
Gerstner argues successful government austerity means short-term pain for markets by withdrawing liquidity from economy.
“I think ironically, what people are not yet bracing for is that the success of austerity, the success of balancing the budget, the success of Doge, likely means short term pain for markets.”
Gerstner reports NASDAQ moved 30 percentage points in sixty to seventy days from trough to recovery.
“It's a 30 move in about sixty or seventy days, which is extraordinary even by the historical patterns that we've seen over the course of the last five years.”
Gerstner views recent selloff as healthy, notes NVIDIA now trades below 20x his 2027 estimates.
“I think it's healthy. We're taking some of the air out of the bubble. There's a wall of worry that stands in front of us. NVIDIA now is trading below 20 times our 27 numbers.”
Gerstner warns $120 oil will hurt markets if Iran situation isn't resolved in three to four months.
“A $120 oil will take its toll on the market if we don't solve that over the course of the next three to four months.”
Gerstner announces Monday's historic joint NYSE-Nasdaq opening bell from Oval Office, first time in history for account launch.
“I'll be at the White House on Monday for a historic joint bell ringing where the New York Stock Exchange and Nasdaq are coming together for the first time, and we're gonna ring the opening bell, a joint bell from the Oval Office for the first time in history, marking the celebration for the launch of these accounts.”
Gerstner says no need to change regulatory approach mid-race as America is winning across AI stack
“@sundeep 🎯🎯🎯 - no need to change regulatory horses mid race - America is winning. Closed, open, chips, ai stack all winning. 🇺🇸🚀”
Gerstner praises Databricks for stacking S-curves and defining markets over a decade as a shareholder
“@alighodsi Truly legendary. I have watched Ali & team brilliantly stack S curves for a decade. Nobody could touch their execution. Their growth & success was not a single product. They didn’t wait for markets - they took risks & defined markets. We are grateful shareholders. 📈🫡”
Gerstner congratulates Deirdre Bosa on her decade at CNBC in San Francisco
“@dee_bosa Good luck. And congrats on a grt decade!”