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Transcript34 lines

[00:05]
A
We're practitioners and we go out, we talk to all the industry participants and the CEOs of these companies and the people making these decisions. And we just had our entire team down in Arizona for the UBS Tech Conference and met with pretty much the who's who of technology, you know, over that span. And it's not slowing down by any means. And for those that are skeptical, I would urge you to talk to the practitioners and, you know, forget about all the noise on Wall street right now and follow the data.
[00:36]
B
That was Denny Fish, Portfolio manager for the Janice Henderson Investors Global Technology and Innovation Fund. I'm Motley fool producer Matt Greer. Now, Motley Fool Chief Investment Officer Andy Cross and analyst Asit Sharma recently talked with Fish about the investing landscape, AI CEs and how to build a resilient portfolio. Enjoy.
[01:00]
C
Welcome to another Motley fool conversation. I'm Andy Cross alongside here senior analyst and advisor Asit Sharma. Today we welcome Denny Fish to the Motley Fool. Denny is a portfolio manager for the Janus Henderson Global Technology and Innovation Fund, and he also leads up the firm's technology sector research team, among many things, Denny, that I'm sure you do at Janice Henderson. Thank you so much for joining us. And welcome to the Motley Fool, Denny.
[01:23]
A
Absolutely. Thanks for having me.
[01:24]
C
Denny, it's great to have a chance to talk to you. And Asit, thanks for joining me because there is a lot of overlap and the styles and the stocks and the holdings as we look through the Global Tech and Innovation Fund, among many of the other holdings of Janice that you all have invested in over the years. And we've been big fans just in following along some of the most innovative investors that I know in the tech space. So it's great to have a chance to talk to you and maybe we'll just start off, Denny, with an overall thought on the markets and tech investing. We just wrapped up another great year for the markets, especially in large cap tech stocks. So maybe you can start off by giving us your thoughts on the investing landscape to start 2026.
[02:03]
A
Yeah, absolutely. We continue to be pretty optimistic about the tech market in general. I mean, the fact of the matter is kind of the most important decision investors could have made for the last 20 years, kind of starting 2005ish, was to be overweight tech. And there's a reason for that. The secular trends that we've experienced, it was cloud, social mobile, for example, that really lasted for almost 20 years, laid the foundation for artificial intelligence and probably, you know, even more profound than the dawn of the commercial Internet and what we've seen, you know, since kind of the late 90s. And so, you know, we have that powerful, the secular theme that's developing that we feel strongly about. You know, we're going to be optimistic by our nature, particularly given we take a longer term view. But also depending on where you're at in tech, I mean, if we rewind, you know, last year was a strong year for tech, you know, so was 24 and so was 23. Been, you know, pretty exceptional years, but it hasn't been a rising tide lifts all boats by any means. You know, if I was just going to describe what's happened the last three years is you were either on the right side of AI or you weren't, or you were perceived not to be. And so, you know, the AI semiconductor ecosystem has been really, really strong for obvious reasons. And that's because the fundamentals have been very, very impressive and earnings have gone through the roof. And so even though a lot of these stocks are up a bunch, you know, their multiples actually aren't up that much, you know, and in some cases their multiples are lower than they were a year ago because the earnings have come through. And I'll tell you like one thing that we do, we're practitioners and we go out, we talk to all the industry participants and the CEOs of these companies and the people making these decisions. And we just had our entire team down in Ariz, Arizona for the UBS Tech Conference and met with pretty much the who's who of technology, you know, over that span. And it's not slowing down by any means. And for those that are skeptical, I would urge you to talk to the practitioners and you know, forget about all the noise on Wall street right now and follow the data points and they continue to be pretty strong, you know. And so we expect the AI infrastructure ecosystem to remain healthy. You know, what's interesting is we did start to see divergence in the mega caps, right? And so when we started the year last year, you know, Google was dead in the water. Search was, it was trouble. There's secular issues. Meta was the golden child with Llama. Meta had a huge run the first six months. Google did nothing. And now Meta has been a terrible stock the last six months and Google is on their front foot with Gemini. And so we will expect things to continue to ebb and flow like that this year and see more dispersion, say for example in the mag 7. And then, you know, like software was terrible last year, okay. And the reason that it had a, just a really difficult time was because where, you know, revenue growth accelerating, you know, earnings going up a lot in AI infrastructure, you know, most of the mega caps continuing to show really healthy earnings growth. The software industry as a whole just kind of what it is, what it is and you know, without accelerating fundamentals and this perceived threat of AI disruption across both horizontal and vertical software. And so you've seen a really wide dispersion in the software sector in terms of performance. And so the way I would Characterize thinking about 2026, expect AI infrastructure to remain strong, expect the large caps to continue to do quite well, but more dispersion as we've started to see between them based on fundamentals. And then we actually are starting to get more interested in areas of software because it's underperformed for effectively three years relative to semis and AI infrastructure. And there are some businesses that are going to be just fine as we get to the other side.
[06:06]
D
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[06:37]
E
So Denny, I love that you led with sort of the vanguard of the investment into artificial intelligence. So the semiconductors, they've been the first initial push for investment. But as we look beyond the near term, obviously this is gonna flow into other sectors of the economy. Everyone's watching the AI data center build outs. For example, you've developed a really nice framework. I think it's called Enablers, Enhancers and End User. And this is also the framework that's employed by the Janice Henderson Global Artificial Intelligence etf. We'll just call it jhai, the symbol for short from here on out. But could you explain this framework and how you're using that to isolate companies that could have promise beyond just this year as we go to three year, five year and beyond periods?
[07:23]
A
Yeah, absolutely, and I appreciate the question. So this product was officially commercialized to the public in August of this year, but I actually seeded this product back in August of 2025 so before the ChatGPT moment and actually went to our product committee at the depths of tech despair in 2022 to convince them that AI was going to be a Very, very profound technology shift that we were right on the cusp on. And my original thesis at that point in time was that there were going to be kind of three buckets of companies that were going to benefit from AI. And to your point, it's not just tech, you know, it's the broader economy. This is going to be very profound. And we were going to have phases of adoption. And so we created this framework of enablers, enhancers and end users. And what we mean by that is enablers are as the name suggests. So it's semiconductors, you know, GPUs, ASICs, foundry, semicap equipment, power producers, data centers, data center infrastructure. So kind of a mix of tech, energy industrials, kind of all the stuff you need to lay down to actually be able to train these models and then actually perform inference as we actually put these agents and applications into production over time. And then our view is there's another set of companies we call these enhancers. These are companies that were strong businesses before AI and AI is likely to make the businesses even stronger. But the fundamentals and the impact of those businesses are going to lag enablement. And so enhancers, I kind of think about software, for example. Companies that have developed really strong businesses, have impressive data moats, are critical to their customers, value teams or business processes, and then can embed AI in to those applications to enhance the value proposition to their customers. Also on the consumer Internet side, for example, you know, companies that have very incredible value propositions, but AI is just going to make their engagement stronger and make both their operations stronger as well, both from a digital and a physical standpoint. And that's what we mean by enhancers. I kind of think about software companies and Internet related companies in that bucket. And then end users, you know, pick your poison. It could be health care, it could be financial services, agriculture, insurance. And our thesis here is that there are going to be companies that are already leaders in their industry that are going to extend their competitive advantage because of their aggressive deployment of AI to not only reduce costs but also drive revenue lift. And we're big believers that we're going to see companies that are going to benefit on both sides of that coin. And that's why, you know, yes, why I'm optimistic about the market. I think there's a lot to be optimistic about because of what we could see with AI and what we expect is just over the fullness of time, our percentage of the fun that's in each of these buckets is going to ebb and flow based on where we feel we are in the adoption curve of AI and so that's why we structured the fund that way.
[10:40]
E
Yeah, I just wanted to follow up with a question on the lines and how they blur. So between enablers and enhancers, the idea that comes to my mind is Amazon.com is sort of enabler and an enhancer. Where do the lines blur the most when you're categorizing these companies?
[10:58]
A
Yeah, that's pretty much where it does blur. I would say the hyperscalers for example, because Microsoft is the quintessential enabler because of Azure. But then they're an enhancer if you think about what Copilot does for Office in their productivity suite and other applications. So those blur the line. But I think where the most valuable values being added right now to the companies is in the enablement phase, whether it's Azure or aws. And so I would consider those more enablement. But over time, clearly you think about a company like Amazon. We think about really what gets all the attention right now is the digital manifestation of AI. When we think about the OpenAI's anthropics and Geminis and how AI is being deployed, that's just the start. The physical manifestation of AI through robotics and humanoids, full self driving automation, things like that, that's going to be really, really profound for companies like Amazon that have a massive physical footprint with fulfillment and distribution and they should get a tremendous amount of efficiencies from that. And like I was talking about this idea of like extending durable competitive advantage. I mean Amazon has built up an infrastructure that is just probably insurmountable at this point. You know, just the sheer amount of capital it would take to replicate that. And then if you're able to do they've done for the last 25 to 30 years, which is just reinvest that incremental margin into making the business better. That's what we're going to see. And they're just going to continue to extend their competitive advantage on the physical side as well.
[12:37]
F
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[13:05]
C
Hey Denny, we are in the middle of the CES time of the year. So I just wanted to get some reflections on your thoughts on what you heard coming out of CES this week.
[13:14]
A
Yeah, I think the biggest thing is pretty much the biggest thing that we had last year, too, and that was Jensen's keynote. And the reason that is is because last year he laid out this idea of three separate types of scaling laws that were important to understand that were compounding effects on each other and why Blackwell was actually going to be able to support the continuation of scaling laws. And this year, it was all about the continuation of that. And now Vera Rubin, which is the next version of their GPU systems. And what's really important about that is these systems, they just get more powerful, but more efficient. And it's this whole idea of how do we continue to extend scaling laws while at the same time driving down the cost of tokens for those that are actually then using the models. And that's exactly what Ruben is expected to do. And, you know, Nvidia just continues to stack its lead in the GPU space. And I think that was probably the most important thing, just giving people confidence that, like, look, if you thought Blackwell was good, wait till Ruben gets here. Okay. And so, you know, so that was big. You know, CES is, you know, 15% in auto show too. You know, every year we continue to see more and more on the autonomous side. And I think, you know, you know, I'm in San Francisco and has spent a lot of time in Phoenix. And, you know, I've been. I've been using Waymo for a long time, and I don't get in an Uber anymore if I don't have to. You know, I love Waymo. It's an amazing experience. I've used FSD from Tesla. It's not nearly as good, but it's come a long way. Still a long way to go because of the path that Elon's taken with machine vision relative to Waymo. But I was just in London and drove around London in, in a car by a company called Wave, you know, which is funded by Softbank, Microsoft and Nvidia. And, you know, we cruised around London for 45 minutes. Driver didn't have to take the wheel one time. And London's pretty tricky, you know, and so I think that's another thing that investors are going to be getting more and more excited about. And. And, you know, so autonomous was interesting and we're starting to see more on kind of the humanoid and robotics side as well that people are getting really interested in. So, once again, I mean, they might have to change the name of CES to like cesai or something. I don't know.
[15:40]
C
I think they already have move of in that direction, right?
[15:43]
A
Yeah, exactly.
[15:44]
C
Austin was kind of joking with us on one of our podcasts, like, where's the consumer part to the ces?
[15:51]
A
Totally.
[15:52]
C
I can't imagine what the London cabbie, the upper wars they're going to make of driverless tech.
[15:56]
A
Oh my goodness.
[15:58]
C
When Uber came into London, it was a big deal and I can't imagine the disruption there. You know what's interesting with the ces, with, with Nvidia's pretty prominent show of their driverless technology than the reaction from Elon on.
[16:09]
A
Yeah.
[16:09]
C
On Twitter kind of commenting a little tongue in cheek on us kind of already doing that. It does start to another showcase of where you see so many of these giants start their frenemies, their competitors in one way, their partners in the other. And you know, you already seen it with the chip providers and Nvidia being big chip providers of the hyperscalers, the hyperscalers developing their own chips and making a lot of progress there, especially in Google and the tpu. So I found that very both entertaining, but also very insightful on kind of how Nvidia is thinking about building out their stack. Especially when you think about robotics.
[16:41]
A
Yeah, completely. And I think that's probably what investors underestimate about a company like Nvidia. I mean, it's just a GPU story right now. There is so much that this company is working on and the amount of cash that they're reinvesting back in the business to advance innovation in areas like, you know, robotics and autonomous driving and the number of investments that they've made in other companies that are also pursuing this. And what I also love about Jensen, if he sees something, he'll act decisively. And you look at the deal that they just did with Groq, Groq, which was actually founded by a guy by the name of Jonathan Ross, who was the original inventor of the TPU at Alphabet. And I've met with them several times over the years and was actually really excited for them to come public at some point and invest in them as a public investor. But unfortunately it's part of Nvidia now. So were invested that way. So in some ways now, you know, Jensen's cornering the market a little bit, you know, in terms of use cases through a deal like that as well. So it's a fun time to be in tech. There's a lot of change. There's going to Be a lot of competition. This is where I go back to. We're just going to continue to see more dispersion among the large cap companies based on who's extending their advantage and who isn't. And just look at Alphabet and meta and what happened in 2025. And I think we're going to see a lot more of that in 26, 27 and beyond.
[18:06]
C
Denny, how do you think about allocation in general? You have some very large allocated positions in both the AI ETF and the Global Tech and Innovation Fund and then you have some smaller ones. Just talk to us maybe roughly about your thinking around allocation strategies.
[18:20]
A
Yeah, we have this philosophy called resilience and optionality where we're trying to position, you know, 50, 60, 70% of the portfolio. Resilient, meaning these are companies we really think we could own for five years. Not saying we're going to, because things can change. We think the range of outcomes are not narrow but not wide. The returns are going to be high and they're innovative management teams and we want to get behind and we'll run those as big positions, strong competitive advantages. Good example. The head of our portfolio is tsmc. Right. I don't care what happens. I don't know if Broadcom wins, Nvidia wins, amd, whatever. Whatever happens, all roads go through Taiwan and now Phoenix because they're going to have like 12 fabs there. Right. And so you find things like that that you can get comfortable with, but then you got to find tomorrow's winners. Right. And those are generally smaller companies that have wider range of outcomes. And so we populate then the bottom portion of the portfolio with companies smaller position sizes and we're going to call that part of the portfolio more because we're going to be wrong. But the hope is we find enough of those companies that then graduate to resilient companies over time that can have a meaningful impact on the portfolio.
[19:38]
C
That's great. ASIT calls that his peanut shell strategy. I think Asit, to borrow a little.
[19:43]
E
Term from you, you gotta get started somewhere.
[19:45]
A
Yeah, exactly.
[19:46]
C
Danny, it's been a really wonderful, far reaching conversation and you share your many deep thoughts on tech and investing, your experiences in a. And we really appreciate all that we learned from you. Thank you for joining us here at the Motley Fool.
[20:01]
A
It was my pleasure. Thanks guys, that was great.
[20:03]
C
Thanks Denny, best of luck to you and the entire Janus team and we hope you have a great 2026.
[20:09]
A
Great, thank you. Likewise.
[20:13]
B
As always, people on the program may have interest in the stocks they talk about. And the Motley fool may have formal recommendations for against. So don't buy or sell stock space solely. I want you here. All personal finance content follows Motley fool editorial standards. And is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. For the Motley fool money team, I'm Matt Grier. Thanks for listening, and we will see you tomorrow.

Summary5 min read

Motley Fool Money: Interview with Janus Henderson Investors Portfolio Manager Denny Fish

Date: January 25, 2026
Host: The Motley Fool (Andy Cross, Asit Sharma, Matt Greer)
Guest: Denny Fish, Portfolio Manager for Janus Henderson Global Technology and Innovation Fund

Episode Overview

This episode features a deep-dive interview with Denny Fish of Janus Henderson Investors on the rapidly evolving technology investment landscape. The conversation centers on the far-reaching impact of artificial intelligence (AI), sectoral trends, portfolio construction philosophy, and key takeaways from industry events like CES. Fish shares his nuanced framework for identifying AI-driven investment opportunities and offers a practitioner’s perspective on the changing competitive dynamics among tech incumbents and innovators.

Key Discussion Points and Insights

1. Current Tech Market Landscape and AI’s Centrality

Timestamp: 02:03–06:06

Fish underlines continued optimism for tech, emphasizing the importance of being “overweight tech” over the past two decades.
- “The secular trends that we've experienced … laid the foundation for artificial intelligence and probably, you know, even more profound than the dawn of the commercial Internet.” (Denny Fish, 02:11)
AI infrastructure—particularly semiconductors—has been a powerhouse of earnings growth. Not all tech has benefited equally; dispersion is notable.
- “You were either on the right side of AI or you weren't, or you were perceived not to be.” (Denny Fish, 02:36)
Mega-cap stocks like Google and Meta have seen divergent performance based on their AI strategies.
Software stocks have underperformed compared to AI infrastructure and semis, but there’s emerging interest as some may adapt well post-disruption.

2. The Enablers, Enhancers, End Users Framework for AI Investing

Timestamp: 06:36–10:57

Fish describes his three-bucket framework for AI-related investments:
- Enablers: Companies providing the essential hardware and infrastructure (GPUs, ASICs, data centers, power, etc.).
- Enhancers: Firms leveraging AI to strengthen existing businesses, such as SaaS companies and internet platforms.
- End Users: Industry leaders in sectors like healthcare or finance aggressively deploying AI to sharpen their competitive edge.
- “Enablers are … semiconductors, GPUs, ASICs, foundry, semicap equipment, power producers, data centers, data center infrastructure… Then enhancers … have developed really strong businesses, have impressive data moats … can embed AI... And then end users … could be health care, it could be financial services, agriculture, insurance.” (Denny Fish, 07:34–08:56)
Janus Henderson’s AI ETF (JHAI) balances these categories, dynamically shifting weightings based on where AI adoption is in its lifecycle.

Blurred Lines and Strategic Overlap

Timestamp: 10:39–12:36

Some companies—especially hyperscalers like Amazon and Microsoft—straddle multiple categories (enabler & enhancer).
- “Microsoft is the quintessential enabler because of Azure. But then they're an enhancer if you think about what Copilot does for Office…” (Denny Fish, 11:07)
Physical manifestation of AI (robotics, automation, full self-driving) is expected to be transformative for companies with major footprint, like Amazon.

3. Reflections from CES and the State of AI Innovation

Timestamp: 13:05–16:40

Nvidia’s advancements (Blackwell to Vera Rubin GPUs) are sustaining and amplifying AI’s scaling laws—raising both efficiency and power.
- “These systems, they just get more powerful, but more efficient…how do we continue to extend scaling laws while at the same time driving down the cost of tokens…” (Denny Fish, 13:28)
Autonomous vehicles and robotics are becoming prominent, with experiences in Waymo, Tesla FSD, and other innovators showcased. Fish highlights the coming impact on urban environments and mobility.
- “I don't get in an Uber anymore if I don't have to. You know, I love Waymo. It's an amazing experience.” (Denny Fish, 14:18)
“It’s a fun time to be in tech. There’s a lot of change. There’s going to Be a lot of competition.” (Denny Fish, 17:12)

Competitive Dynamics and “Frenemies”

Timestamp: 15:57–16:40

Collaboration and competition among major players are intensifying (Nvidia, Google, Meta, Tesla), especially regarding chips, AI models, and robotics.

4. Portfolio Construction: Resilience and Optionality

Timestamp: 18:06–19:38

Fish explains their allocation strategy: anchor the portfolio in "resilient" companies (reliable, innovative, competitive advantage) and maintain smaller positions in high-upside, higher-variance "optional" bets.
- “We have this philosophy called resilience and optionality where we're trying to position, you know, 50, 60, 70% of the portfolio. Resilient, meaning these are companies we really think we could own for five years…” (Denny Fish, 18:20)
- TSMC cited as a core resilient holding—“all roads go through Taiwan and now Phoenix”.

Notable Quotes & Memorable Moments

On Practitioner's Insight vs Market Sentiment:
“Forget about all the noise on Wall Street right now and follow the data points and they continue to be pretty strong.”
(Denny Fish, 03:27)
On the Shifting Fortune of Mega Caps:
“Meta had a huge run the first six months. Google did nothing. And now Meta has been a terrible stock the last six months and Google is on their front foot with Gemini.”
(Denny Fish, 04:07)
On Nvidia’s Industry Positioning:
“What I also love about Jensen [Huang, Nvidia CEO], if he sees something, he'll act decisively… So in some ways now, you know, Jensen's cornering the market a little bit.”
(Denny Fish, 16:45)
On Portfolio Construction:
“You got to find tomorrow's winners. Right. And those are generally smaller companies that have wider range of outcomes... The hope is we find enough of those companies that then graduate to resilient companies over time.”
(Denny Fish, 19:16)

Timestamps for Important Segments

[02:03] – Tech’s last 20 years and the significance of secular trends/AI
[07:23] – Introduction of Enablers/Enhancers/End Users AI framework
[10:39] – Where categories ‘blur’ and hyperscalers’ dual roles
[13:14] – Key themes and innovations at CES 2026; Nvidia’s lead
[14:18] – Real-world experience with autonomous vehicles
[16:09] – Competitive overlap between AI and chip giants
[18:20] – Philosophy of “resilience and optionality” in portfolio strategy

Summary in the Speakers’ Tone

Denny Fish delivers an optimistic, data-driven perspective on the tech investment landscape. He balances excitement over AI’s evolving power with a clear-eyed look at risks and dispersion among winners and laggards. The conversation, rooted in practical engagement with innovators and CEOs, gives listeners a toolbox for understanding where to search for value as AI adoption spreads throughout the economy—and how to structure portfolios to participate in both today’s strongholds and tomorrow’s breakthroughs.

Conclusion

For investors who want to ride AI’s transformative wave, Denny Fish’s frameworks and experience offer both strategic clarity and inspiration. From semiconductors to software enhancers, and from “resilience and optionality” in portfolios to the dawning age of robotics, the insights here bridge practitioner reality and long-term opportunity.

Loading summary

Transcript34 lines

[00:05]
A
We're practitioners and we go out, we talk to all the industry participants and the CEOs of these companies and the people making these decisions. And we just had our entire team down in Arizona for the UBS Tech Conference and met with pretty much the who's who of technology, you know, over that span. And it's not slowing down by any means. And for those that are skeptical, I would urge you to talk to the practitioners and, you know, forget about all the noise on Wall street right now and follow the data.
[00:36]
B
That was Denny Fish, Portfolio manager for the Janice Henderson Investors Global Technology and Innovation Fund. I'm Motley fool producer Matt Greer. Now, Motley Fool Chief Investment Officer Andy Cross and analyst Asit Sharma recently talked with Fish about the investing landscape, AI CEs and how to build a resilient portfolio. Enjoy.
[01:00]
C
Welcome to another Motley fool conversation. I'm Andy Cross alongside here senior analyst and advisor Asit Sharma. Today we welcome Denny Fish to the Motley Fool. Denny is a portfolio manager for the Janus Henderson Global Technology and Innovation Fund, and he also leads up the firm's technology sector research team, among many things, Denny, that I'm sure you do at Janice Henderson. Thank you so much for joining us. And welcome to the Motley Fool, Denny.
[01:23]
A
Absolutely. Thanks for having me.
[01:24]
C
Denny, it's great to have a chance to talk to you. And Asit, thanks for joining me because there is a lot of overlap and the styles and the stocks and the holdings as we look through the Global Tech and Innovation Fund, among many of the other holdings of Janice that you all have invested in over the years. And we've been big fans just in following along some of the most innovative investors that I know in the tech space. So it's great to have a chance to talk to you and maybe we'll just start off, Denny, with an overall thought on the markets and tech investing. We just wrapped up another great year for the markets, especially in large cap tech stocks. So maybe you can start off by giving us your thoughts on the investing landscape to start 2026.
[02:03]
A
Yeah, absolutely. We continue to be pretty optimistic about the tech market in general. I mean, the fact of the matter is kind of the most important decision investors could have made for the last 20 years, kind of starting 2005ish, was to be overweight tech. And there's a reason for that. The secular trends that we've experienced, it was cloud, social mobile, for example, that really lasted for almost 20 years, laid the foundation for artificial intelligence and probably, you know, even more profound than the dawn of the commercial Internet and what we've seen, you know, since kind of the late 90s. And so, you know, we have that powerful, the secular theme that's developing that we feel strongly about. You know, we're going to be optimistic by our nature, particularly given we take a longer term view. But also depending on where you're at in tech, I mean, if we rewind, you know, last year was a strong year for tech, you know, so was 24 and so was 23. Been, you know, pretty exceptional years, but it hasn't been a rising tide lifts all boats by any means. You know, if I was just going to describe what's happened the last three years is you were either on the right side of AI or you weren't, or you were perceived not to be. And so, you know, the AI semiconductor ecosystem has been really, really strong for obvious reasons. And that's because the fundamentals have been very, very impressive and earnings have gone through the roof. And so even though a lot of these stocks are up a bunch, you know, their multiples actually aren't up that much, you know, and in some cases their multiples are lower than they were a year ago because the earnings have come through. And I'll tell you like one thing that we do, we're practitioners and we go out, we talk to all the industry participants and the CEOs of these companies and the people making these decisions. And we just had our entire team down in Ariz, Arizona for the UBS Tech Conference and met with pretty much the who's who of technology, you know, over that span. And it's not slowing down by any means. And for those that are skeptical, I would urge you to talk to the practitioners and you know, forget about all the noise on Wall street right now and follow the data points and they continue to be pretty strong, you know. And so we expect the AI infrastructure ecosystem to remain healthy. You know, what's interesting is we did start to see divergence in the mega caps, right? And so when we started the year last year, you know, Google was dead in the water. Search was, it was trouble. There's secular issues. Meta was the golden child with Llama. Meta had a huge run the first six months. Google did nothing. And now Meta has been a terrible stock the last six months and Google is on their front foot with Gemini. And so we will expect things to continue to ebb and flow like that this year and see more dispersion, say for example in the mag 7. And then, you know, like software was terrible last year, okay. And the reason that it had a, just a really difficult time was because where, you know, revenue growth accelerating, you know, earnings going up a lot in AI infrastructure, you know, most of the mega caps continuing to show really healthy earnings growth. The software industry as a whole just kind of what it is, what it is and you know, without accelerating fundamentals and this perceived threat of AI disruption across both horizontal and vertical software. And so you've seen a really wide dispersion in the software sector in terms of performance. And so the way I would Characterize thinking about 2026, expect AI infrastructure to remain strong, expect the large caps to continue to do quite well, but more dispersion as we've started to see between them based on fundamentals. And then we actually are starting to get more interested in areas of software because it's underperformed for effectively three years relative to semis and AI infrastructure. And there are some businesses that are going to be just fine as we get to the other side.
[06:06]
D
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[06:37]
E
So Denny, I love that you led with sort of the vanguard of the investment into artificial intelligence. So the semiconductors, they've been the first initial push for investment. But as we look beyond the near term, obviously this is gonna flow into other sectors of the economy. Everyone's watching the AI data center build outs. For example, you've developed a really nice framework. I think it's called Enablers, Enhancers and End User. And this is also the framework that's employed by the Janice Henderson Global Artificial Intelligence etf. We'll just call it jhai, the symbol for short from here on out. But could you explain this framework and how you're using that to isolate companies that could have promise beyond just this year as we go to three year, five year and beyond periods?
[07:23]
A
Yeah, absolutely, and I appreciate the question. So this product was officially commercialized to the public in August of this year, but I actually seeded this product back in August of 2025 so before the ChatGPT moment and actually went to our product committee at the depths of tech despair in 2022 to convince them that AI was going to be a Very, very profound technology shift that we were right on the cusp on. And my original thesis at that point in time was that there were going to be kind of three buckets of companies that were going to benefit from AI. And to your point, it's not just tech, you know, it's the broader economy. This is going to be very profound. And we were going to have phases of adoption. And so we created this framework of enablers, enhancers and end users. And what we mean by that is enablers are as the name suggests. So it's semiconductors, you know, GPUs, ASICs, foundry, semicap equipment, power producers, data centers, data center infrastructure. So kind of a mix of tech, energy industrials, kind of all the stuff you need to lay down to actually be able to train these models and then actually perform inference as we actually put these agents and applications into production over time. And then our view is there's another set of companies we call these enhancers. These are companies that were strong businesses before AI and AI is likely to make the businesses even stronger. But the fundamentals and the impact of those businesses are going to lag enablement. And so enhancers, I kind of think about software, for example. Companies that have developed really strong businesses, have impressive data moats, are critical to their customers, value teams or business processes, and then can embed AI in to those applications to enhance the value proposition to their customers. Also on the consumer Internet side, for example, you know, companies that have very incredible value propositions, but AI is just going to make their engagement stronger and make both their operations stronger as well, both from a digital and a physical standpoint. And that's what we mean by enhancers. I kind of think about software companies and Internet related companies in that bucket. And then end users, you know, pick your poison. It could be health care, it could be financial services, agriculture, insurance. And our thesis here is that there are going to be companies that are already leaders in their industry that are going to extend their competitive advantage because of their aggressive deployment of AI to not only reduce costs but also drive revenue lift. And we're big believers that we're going to see companies that are going to benefit on both sides of that coin. And that's why, you know, yes, why I'm optimistic about the market. I think there's a lot to be optimistic about because of what we could see with AI and what we expect is just over the fullness of time, our percentage of the fun that's in each of these buckets is going to ebb and flow based on where we feel we are in the adoption curve of AI and so that's why we structured the fund that way.
[10:40]
E
Yeah, I just wanted to follow up with a question on the lines and how they blur. So between enablers and enhancers, the idea that comes to my mind is Amazon.com is sort of enabler and an enhancer. Where do the lines blur the most when you're categorizing these companies?
[10:58]
A
Yeah, that's pretty much where it does blur. I would say the hyperscalers for example, because Microsoft is the quintessential enabler because of Azure. But then they're an enhancer if you think about what Copilot does for Office in their productivity suite and other applications. So those blur the line. But I think where the most valuable values being added right now to the companies is in the enablement phase, whether it's Azure or aws. And so I would consider those more enablement. But over time, clearly you think about a company like Amazon. We think about really what gets all the attention right now is the digital manifestation of AI. When we think about the OpenAI's anthropics and Geminis and how AI is being deployed, that's just the start. The physical manifestation of AI through robotics and humanoids, full self driving automation, things like that, that's going to be really, really profound for companies like Amazon that have a massive physical footprint with fulfillment and distribution and they should get a tremendous amount of efficiencies from that. And like I was talking about this idea of like extending durable competitive advantage. I mean Amazon has built up an infrastructure that is just probably insurmountable at this point. You know, just the sheer amount of capital it would take to replicate that. And then if you're able to do they've done for the last 25 to 30 years, which is just reinvest that incremental margin into making the business better. That's what we're going to see. And they're just going to continue to extend their competitive advantage on the physical side as well.
[12:37]
F
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[13:05]
C
Hey Denny, we are in the middle of the CES time of the year. So I just wanted to get some reflections on your thoughts on what you heard coming out of CES this week.
[13:14]
A
Yeah, I think the biggest thing is pretty much the biggest thing that we had last year, too, and that was Jensen's keynote. And the reason that is is because last year he laid out this idea of three separate types of scaling laws that were important to understand that were compounding effects on each other and why Blackwell was actually going to be able to support the continuation of scaling laws. And this year, it was all about the continuation of that. And now Vera Rubin, which is the next version of their GPU systems. And what's really important about that is these systems, they just get more powerful, but more efficient. And it's this whole idea of how do we continue to extend scaling laws while at the same time driving down the cost of tokens for those that are actually then using the models. And that's exactly what Ruben is expected to do. And, you know, Nvidia just continues to stack its lead in the GPU space. And I think that was probably the most important thing, just giving people confidence that, like, look, if you thought Blackwell was good, wait till Ruben gets here. Okay. And so, you know, so that was big. You know, CES is, you know, 15% in auto show too. You know, every year we continue to see more and more on the autonomous side. And I think, you know, you know, I'm in San Francisco and has spent a lot of time in Phoenix. And, you know, I've been. I've been using Waymo for a long time, and I don't get in an Uber anymore if I don't have to. You know, I love Waymo. It's an amazing experience. I've used FSD from Tesla. It's not nearly as good, but it's come a long way. Still a long way to go because of the path that Elon's taken with machine vision relative to Waymo. But I was just in London and drove around London in, in a car by a company called Wave, you know, which is funded by Softbank, Microsoft and Nvidia. And, you know, we cruised around London for 45 minutes. Driver didn't have to take the wheel one time. And London's pretty tricky, you know, and so I think that's another thing that investors are going to be getting more and more excited about. And. And, you know, so autonomous was interesting and we're starting to see more on kind of the humanoid and robotics side as well that people are getting really interested in. So, once again, I mean, they might have to change the name of CES to like cesai or something. I don't know.
[15:40]
C
I think they already have move of in that direction, right?
[15:43]
A
Yeah, exactly.
[15:44]
C
Austin was kind of joking with us on one of our podcasts, like, where's the consumer part to the ces?
[15:51]
A
Totally.
[15:52]
C
I can't imagine what the London cabbie, the upper wars they're going to make of driverless tech.
[15:56]
A
Oh my goodness.
[15:58]
C
When Uber came into London, it was a big deal and I can't imagine the disruption there. You know what's interesting with the ces, with, with Nvidia's pretty prominent show of their driverless technology than the reaction from Elon on.
[16:09]
A
Yeah.
[16:09]
C
On Twitter kind of commenting a little tongue in cheek on us kind of already doing that. It does start to another showcase of where you see so many of these giants start their frenemies, their competitors in one way, their partners in the other. And you know, you already seen it with the chip providers and Nvidia being big chip providers of the hyperscalers, the hyperscalers developing their own chips and making a lot of progress there, especially in Google and the tpu. So I found that very both entertaining, but also very insightful on kind of how Nvidia is thinking about building out their stack. Especially when you think about robotics.
[16:41]
A
Yeah, completely. And I think that's probably what investors underestimate about a company like Nvidia. I mean, it's just a GPU story right now. There is so much that this company is working on and the amount of cash that they're reinvesting back in the business to advance innovation in areas like, you know, robotics and autonomous driving and the number of investments that they've made in other companies that are also pursuing this. And what I also love about Jensen, if he sees something, he'll act decisively. And you look at the deal that they just did with Groq, Groq, which was actually founded by a guy by the name of Jonathan Ross, who was the original inventor of the TPU at Alphabet. And I've met with them several times over the years and was actually really excited for them to come public at some point and invest in them as a public investor. But unfortunately it's part of Nvidia now. So were invested that way. So in some ways now, you know, Jensen's cornering the market a little bit, you know, in terms of use cases through a deal like that as well. So it's a fun time to be in tech. There's a lot of change. There's going to Be a lot of competition. This is where I go back to. We're just going to continue to see more dispersion among the large cap companies based on who's extending their advantage and who isn't. And just look at Alphabet and meta and what happened in 2025. And I think we're going to see a lot more of that in 26, 27 and beyond.
[18:06]
C
Denny, how do you think about allocation in general? You have some very large allocated positions in both the AI ETF and the Global Tech and Innovation Fund and then you have some smaller ones. Just talk to us maybe roughly about your thinking around allocation strategies.
[18:20]
A
Yeah, we have this philosophy called resilience and optionality where we're trying to position, you know, 50, 60, 70% of the portfolio. Resilient, meaning these are companies we really think we could own for five years. Not saying we're going to, because things can change. We think the range of outcomes are not narrow but not wide. The returns are going to be high and they're innovative management teams and we want to get behind and we'll run those as big positions, strong competitive advantages. Good example. The head of our portfolio is tsmc. Right. I don't care what happens. I don't know if Broadcom wins, Nvidia wins, amd, whatever. Whatever happens, all roads go through Taiwan and now Phoenix because they're going to have like 12 fabs there. Right. And so you find things like that that you can get comfortable with, but then you got to find tomorrow's winners. Right. And those are generally smaller companies that have wider range of outcomes. And so we populate then the bottom portion of the portfolio with companies smaller position sizes and we're going to call that part of the portfolio more because we're going to be wrong. But the hope is we find enough of those companies that then graduate to resilient companies over time that can have a meaningful impact on the portfolio.
[19:38]
C
That's great. ASIT calls that his peanut shell strategy. I think Asit, to borrow a little.
[19:43]
E
Term from you, you gotta get started somewhere.
[19:45]
A
Yeah, exactly.
[19:46]
C
Danny, it's been a really wonderful, far reaching conversation and you share your many deep thoughts on tech and investing, your experiences in a. And we really appreciate all that we learned from you. Thank you for joining us here at the Motley Fool.
[20:01]
A
It was my pleasure. Thanks guys, that was great.
[20:03]
C
Thanks Denny, best of luck to you and the entire Janus team and we hope you have a great 2026.
[20:09]
A
Great, thank you. Likewise.
[20:13]
B
As always, people on the program may have interest in the stocks they talk about. And the Motley fool may have formal recommendations for against. So don't buy or sell stock space solely. I want you here. All personal finance content follows Motley fool editorial standards. And is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. For the Motley fool money team, I'm Matt Grier. Thanks for listening, and we will see you tomorrow.