Assertion Not checkable as stated
Sacerdote: AI coding tools represent a $500B market opportunity
“And if you think about how many coders there are in the world, twenty million, you've got a half a trillion dollar market just from coding alone.”
Prediction Not checkable as stated
Sacerdote: Enterprise AI adoption will reach 15% within four years
“You're gonna go from 10 bips to one, to two or three percent, to five percent, to 15% in the next four years”
Prediction Not checkable as stated
Sacerdote: Top two or three AI foundation model companies will maintain dominance
“There's like, 50 companies trying to do that, and they all have fallen away, and two or three have emerged at the top. And there's a lot of reasons to think they will continue to hold their position.”
Prediction Not checkable as stated
Sacerdote: AI market will reach $3T to $5T
“You know, we just said cloud, you know, maybe cloud's eight hundred billion. This might be, you know, we now think three to five, but there's higher risk, higher reward.”
Disclosure
Whale Rock sold almost all application software and went net short
“We basically sold almost all of our software, almost all of our application software. We still have one or two small ones, but entering this year, we were actually net, net short, and it really helped us in the first quarter.”
Assertion Not checkable as stated
Sacerdote: Supply chain is 30% short across DRAM, NAND, and PCBs
“We're already short, you know, the DRAM market, the NAND market, the PCB, we're already, like, 30, we're 30% short all these things as we are now.”
Prediction Not checkable as stated
Sacerdote: Stalled Frontier AI Models Will Spark Race to the Bottom
“In AI, if Anthropix sort of hits a wall and stops improving, or open AI, then the open source models will catch up. And then it might be a race to the bottom, and it might be, you know, it won't be good for the stocks, probably. It could be good for the chip c…”
Opinion
Sacerdote: Underweighting mega-cap tech is betting against the digital economy
“In tech, the leader usually grows bigger and wins and develops very high market share quickly, and there's great competitive advantages. And they're also selling around the globe, so this is going to lead to massive profit pools and massive market caps, and it…”
Insight
Sacerdote: Mega-cap tech offers massive alpha over generalist portfolio managers
“I think there's tremendous alpha in the largest cap, because if you think about it, a small cap, it just takes one person to figure out it's good and move it up, but it takes a hundred people, a hundred diversified PMs to realize Google's not a loser, it's a w…”
Assertion Supported
Sacerdote: Anthropic has 14 to 15 million daily active users
“Anthropic has something like 14 or fifteen million DAUs.”
Assertion Not checkable as stated
Sacerdote: Anthropic has only half the compute capacity it needs
“Anthropic has half of what they need right now”
Disclosure
Sacerdote: Whale Rock passed on Anthropic at a $60B valuation
“We actually, we had a look at the sixty billion dollar round, and we didn't do it. We didn't know the company as well, and we The gross margins were negative, and frankly, we hadn't seen coding explode the way it had.”
Disclosure
Sacerdote: Whale Rock bought Nvidia in 2023 at four times earnings
“When we were buying Nvidia in 2023, we were paying four times earnings.”
Insight
Sacerdote: Exponential growth ends once technology hits 30% to 40% penetration
“Generally, you want to when something gets to sort of 30, 40% penetrated, then you stop having exponential growth, which means the sell side catches up, and there's no longer big beats.”
Assertion Supported
Sacerdote: Celestica holds 50% to 60% of cloud Ethernet switch market
“And they have, like, 50, 60% share of the cloud ethernet switch market, which is a crucial market for AI, because AI is incredibly network intensive.”
Prediction Not checkable as stated
Sacerdote: Transitioning GPU rack scale-up to fiber will 2x–3x Corning's market
“Eventually, that'll be done over fiber. When that happens,
That two to three X's Corning's opportunity.”
Assertion Supported
Sacerdote: The global unicorn market is bigger than the UK and German stock markets
“We are in this period where the unicorn market is bigger than most stock markets in Europe. Maybe even combined. It's definitely bigger than Germany. It's definitely bigger than the UK.”
Disclosure
Sacerdote: Whale Rock bought a $100M secondary block in Stripe in April 2020
“I get a call from him during COVID in April of 2020. We knew a lot about Stripe. We didn't have the full financials, but we knew enough that at that valuation, I think it was thirty five billion, we knew they had, they disclosed we had over half a trillion of …”
Disclosure
Sacerdote: Whale Rock bought Tesla in 2019 at five times earnings
“When we bought Tesla in 2019, for the car S-curve, we were paying five times earnings.”
Assertion Partly supported
Sacerdote: Celestica was the sole supplier for Google's TPU servers
“Celestica's heritage was IBM supercomputing, and they kept all that talent and skill, and then we noticed they were the sole supplier of the Google TPU server”
Insight
Sacerdote: Semiconductor Analysts Missed AI Boom by Ignoring Foundation Models
“Frankly, if you're just a semi-analyst, so many semi-analysts missed it because They didn't see what was really happening at the foundational model layer.”
Insight
Sacerdote: Application layer typically emerges three to four years after platform infrastructure
“We think the application layer, well, A, it always comes later. So, you know, the first three or four years of the iPhone, and then the applications really took time. So maybe it's just starting.”
Disclosure
Sacerdote: Google is one of Whale Rock's largest positions
“We beloved Google as well. It's one of our largest positions”
Insight
Sacerdote's 'tripod' framework drives Whale Rock's investment conviction
“I call it the tripod. When I like something, And then my analyst likes it. And then somebody who I really respect also likes it. That's three legs of the stool can really help the conviction.”
