You can’t put an agent in jail’: SailPoint CEO on who’s accountable for AI | Sozzi Unleashed

Just testing my uh grip strength here this morning. this little thing. I'm about two and a half weeks into doing Sazy Unleashed. And this thing is really helped me out like biggly. Is that the word? You'd be surprised what a $15 grip strength machine will do, but also reading some notes. And you know, I I really like have started starting the show on things that like amuse me that make me happy because if they make me happy, maybe they'll make you happy. Two things that caught me uh by storm I would say this morning. One, Nvidia now pretty much, not pretty much, I should say about has a market cap of a trillion dollars more than Apple. A trillion dollars more than Apple despite its foldable phone, Invidia. That lead is, it's almost hard to believe. I would have never thought about 10 years ago this would even be possible, but here we are. Also something that I never thought would be possible. This the iconic Warner Brothers tower in Burbank. No, it no longer holds water. It's just an iconic thing. Now getting the Sky Dance Corporation logo put on it after that deal is closed. Magic team in cries. David Ellison sending a memo to employees. That might be an iconic symbol, but this is our company now, peeps, and deal with it. Icon doesn't hold any water. Again, don't I think it used to hold 100,000 gallons of water or that's what I got online. That's what I pulled this morning. Uh, so interesting to see that. Also interesting to see that this has been a pretty amazing week. You just have to know where to look. This week has shaped up as one where high-profile tech stocks have rubber stamped their day with destiny. More on this this grip strength. I'm just loving this thing right now. Nvidia has reached a record high. AMD has reached a record high. Taiwan semiconductor has reached a record high. Microsoft knocking on the door of, you guessed it, another high. If this isn't a classic case of FOMO or fear of missing out, then maybe I need to retire today and start a YouTube show on how to grow the perfect lawn. I love tending to my plush lawn. I should just do that anyway because I love doing that. And here's the thing, this isn't just a FOMO moment in time around the AI boom. It is morphed into a FOMO period. You could see it in Wall Street analysts not hiding how they are excited or how excited they are about the AI boom related profit parade raging on. Check this out. Like I I get so many stats. I'm just finding this moment very fascinating. About 40% of the year-to-ate revisions to S&P 500 EPS estimates for this year are attributable to the semis and hardware industries. Per new analysis out today from Barlay strategist V-ne would be 2027 and the concentration becomes even more stark. Substantially 75% of the year-to-ate revisions to 2027 S&P 500 EPS estimates come from semis and hardware. A mouthful, but important stuff. If you are an investor, FOMO is running through tech stocks and analyst models on Claude. Wow, used to be spreadsheets when I did this. What a time to be alive and to make some money in the stock market. Estimates already going up for next year. We're still in this year. Ching ching ching. That's what the street is saying here right now. Where to begin? Because I got a lot going on here. Uh, I want to apologize to y'all first and uh, I won't do this often, but I'm going to do it now because I don't talk about Marll technology enough. I talk about Micron. I talk about Nvidia. I talk about AMD and Lisa Sue and all these folks, but I do not talk about Marll enough and CEO Greg Murphy who's been there, I believe, CEO since 2016 and has shaped the modern Marll technology. And Micron had an investor day yesterday. And frankly, Greg Murphy blew me away. He blew me away on what he had to say about the company's total addressable market. Uh that business is growing really significantly. He raised the total addressable market outlook for Marll up billions of dollars. The street loved to see that. Love that. But there was more. He also raised the company's outlook for billions of dollars, not just for their balance of it this year, but also next year. Very bullish. And here's what they had to say. Here's what Marll did. raised the outlook on strong AI demand this year, next year. He even suggested that this all this is going to continue until fiscal year 2031. I mean, this is a big big moment for Marll. And I talk about the demand visibility that AMD has, the demand visibility that Nvidia has, Micron has. Don't discount a company like Marll. The stock has gone up and to the right all through this year. I believe up over 200%. And it's because of this total addressable market for its chips are uh kicking major butt. It's a major chip seller into the data infrastructure space. It has business with uh Google and Amazon, even a Microsoft. It is a major player you're still probably not giving enough respect to. And you can see Micron stock, a Marvel stock is crushing it. Like I mentioned up and to the right, not yet back to its record high, but this investor day was so impressive. I got about eight analyst notes in my inbox today before uh I even got on my train at 4 a.m. The street is pushing estimates up much higher in Marll. keep that company top of mind for you because this has been a bankable name on all things Marville. I'm going to hit some charts. I think that's what I'm going to do. First up, weird charts I should say because I'm always spending a lot of time on X. I'm doing a lot of stuff and a couple things caught my eye and it's Micron operating income. I remembered I I have a lot of charts in my head. I got a lot of things going on. This one first though, Micron is now generating more operating income than Amazon and Meta over the trailing 12 months. Back to what I said at the top of the show, I would have never expected this to happen a decade ago. I mean, Amazon and Meta Micron more trailing operating income than these iconic companies. But here's the chart and shout out to my man, my team over there, or the team over there at Kifin making this one happen. This is an amazing chart, but it goes to show you how far Micron has come and how important its memory chips are in this market. So important that it can pretty much charge whatever the hell it wants. And that's why it's seeing a lot of operating income. And that's why in a few weeks, you're probably going to see a big stock buyback plan from them once the chip axe restrictions live. Fire up the next chart. We're going to keep it going here. Next chart. Tech dominance over EPS growth. This is another good one. Zero Hedge, an old hand on X. I've been following Zero Hedge for many years. This is just and I have a full story on this now on the Alifines homepage. You can check it out. Uh it's quite informative because I wrote it. Uh you can check this out. Really Micron and Nvidia are really going to dominate the earnings growth in the S&P 500 this year. And I wouldn't be surprised if you could see if that continues again. If I'm here 3 months from now and we're talking about it for the fourth quarter, we're talking about it next year. Micron and Nvidia dominating earnings growth. And then you have Meta, you have Alphabet, some of the other big players in the space. But I will call out this too. Look how less important the likes of a Chevron, a Boeing, an Exxon, those old industrial companies, those old economy companies are how less of important they are to the S&P 500 earnings growth. Big moment for Micron Invidia. And number three chart, Metacapex, Meta Capex, very interesting here. And this isn't new per se, but it's always good to zoom out uh on on a company's financial results. And I would be s I was actually surprised by this. uh Meta is now spending or on pace to spend 50% of their revenue on capital expenditures. Of course, Meta amongst a lot of the other hyperscaler companies spending billions of dollars on all things AI and this is where it's showing up. Now, in the best possible case for for Meta, this actually is around the peak and then it starts to level off and slow down. That is the magic moment for the likes of Meta. Once they're earning more revenue uh and the capex is coming down, that's when the profits really start to flow. That's when the free cash flow story comes back to a meta and a lot of other hyperscalers. That's when the company could out there and show faster earnings growth. Interesting chart uh really clearly and I think uh Finance Jack, shout out to Finance Jack. I follow him on X. Uh Zuck is all in on AI and that is very much uh top of mind and that backs it up. And now we are we're back on an old hand and it's McDonald's and it's a company that I've blasted pretty much since we've debuted this show and I'm going to continue to blast them because they deserve it. There was a story shout out to the Bloomberg team uh talking about how franchises are bing at spending $800,000 to remodel their McDonald's locations. This is part of the company's uh $8.5 billion dollar I believe plan they put out a couple weeks ago at their investor day in Chicago to remodel their restaurants and according to the Bloomberg reporting franchises are bing because they are concerned and $800,000 I mean when you have a McDonald's franchise you are essentially a small business owner so to ask for you to ask these small business owners who spend $800,000 plus to remodel their location at a time where traffic is weak at a time when it's unclear traffic may turn around is not exactly going to be met uh quite well by McDonald's franchisee. So McD the story uh that Bloomberg is talking about and they're right to reporting this uh because it's something that Guggenheim analyst Gregory Frankfurt brings up too as well. To turn that traffic around McDonald's, you have to get better restaurants. You have to take the the technology and the new experience that McDonald's corporate has cooked up, no pun intended, at their Chicago headquarters and get that into the franchise locations. And if that doesn't happen, it's not likely that McDonald's is going to be out there growing traffic. And I was looking at Greg's note before I get to uh the real star performer of this little this little bit. Uh he's not expecting same store sales in the US to turn positive again until next year. And even then, he only sees about a 1.9% same store sales increase. He sees the third quarter negative in terms of US same store sales and the fourth quarter negative -2. Those two results are not going to get McDonald's stock working up and to the right again, even though it has plunged. And now really uh we're at that moment and we're going to give it uh we're going to go to bear hibernation with a little line little line and I I forgot to do this. I forgot to do this last week and I'm writing that wrong. We're going to put our second member on the Sazi unleashed wall of under Performers. And like I said when I unveiled the initial member yesterday in Nike Seal Ellen Hill, I take no great pleasure in this. Uh it's not something I want to do. I'm a happy smiley guy. Uh, I don't like this board. I hope it goes away. But the second member on this board, you see Elliot Hill roll the dice. Fire it up, guys. It's McDonald CEO Chris Kamchinsky. So, we now have two members of the Sazzy Wall of Underperformers. It is McDonald's CEO Chris Kamchinsky. The stock price has gotten crushed this year. It's gotten crushed the past year. It's gotten crushed the past five years. It's gotten has underperformed brutally versus the S&P 500 and Dow since Chris got named as CEO in November 2019. And I am just not putting people on this list for the sake of doing so. I'm going to list out the reasons. There we go. Huge stock price performance underperformance results in the US have hit the skids this year. I just told you that the team at Guggenheim is looking for two more quarters of negative same source sales from this company. That's after a disappointing result in the second quarter. And the last but not least, no indication year end will be materially better than the first half of the year financially for McDonald's. And I'm now at the point I wonder if the first quarter of 2027 will be any better than the third quarter or fourth quarter for McDonald's. So Chris Kjiski, the second member of the Sazi Lee Wall performers. Like I said with uh Elliot Hill, I hope Chris comes off this uh I hope McDonald's turns it around. I hope Nike turns it around. But right now, these two are the two bros on my wall. And I would say both of them deserve that position because they have been doing a good job. Let's get to a CEO who has been doing a good job. No stranger to my show. That's Mark Mlan, Salpoint CEO and founder, fresh off of investor day. Mark, good to see you. >> Brian, so good to be on your show. Thanks for having me back. >> So, uh, Investor Day gave a big keynote. This comes at a really at a critical moment for the security industry. >> Lots going on in our world. Ryan, >> what what are what was your message to investors? >> Well, I think what everybody's figured out is that this AI revolution, evolution, whatever you want to call it, is here to stay. It's it's sweeping through the industry. Literally, I think every seauite and boardroom is trying to figure out how am I going to bring value to my organization. And with everything from the Mythos moment to the recent hugging face uh event, we've got kind of a counterbalancing concern of the risk associated with these things. So, uh, in a metaphor you and I have talked about before, in a race car metaphor, we've got the business with its foot on the gas and the security teams with their foot on the brake trying to make sure they don't go so fast that the industry or the uh, the company, excuse me, has some kind of negative event out of these things. >> Have companies already lost control? >> They're on the edge in that race car metaphor. I think they're up on two wheels, right? I think there's some folks that are trying to go pretty fast and they they have some concerns that they really have a good understanding of what it is that they have out there and can they keep it safe as they go fast. >> What mistakes are they making right now? >> Well, we have a simple little three-part metaphor we like to talk about three-part, you know, kind of mantra which is discover, govern, and protect. You know, the biggest problem companies have today is they literally don't know how much of this is out there in their environments, right? they've they've got their their employees using chatbt or claude or various tools and and agents that are being given to them by the big software vendors like Salesforce and Service Now and these are good things but but the organizations responsible for keeping things under control and safe don't even have a good inventory don't have a good visibility across everything they now have in their environments and we always say you can't secure what you can't see. So they got to discover they got to find all these things and they're going to have to continuously find them because these agents are going to keep coming into the environment. They've got to put good governance and controls around them. We've seen the government start to step in. Various regulatory bodies going, "Look, I need human accountability." You know, it's great that we use this technology. Some human has to take responsibility. We have a short little phrase, Brian, we say, "You can't put an agent in jail, right? If something goes wrong, some human has to be accountable. The government's been focused on the capabilities of what these models can do." Now, I think we're starting to shift to we need to understand the accountability of who's responsible for what happens with these models. Of course, >> to your point, you can't put you can't put an AI agent in jail, at least not yet. Well, I'm sure we'll be creating some form of digital jails at some point. But how do you get rid of them? I mean, who >> where's the kill switch? >> Big term in the industry, kill switch. You went right there. There's this big concept in the industry, and that's in our protect mantra, right? We talk about discover, govern, and protect. The ultimate protection is a kill switch. But we're also beginning to try to get folks to understand there's a danger in an unsophisticated kill switch. some of the folks that are out there, you know, kind of propagating the idea of a kill switch don't actually have very good visibility to what it is that might actually be going ary. It's a terrible analogy perhaps. It's sort of the idea of like if you if you know there's a bad guy over there in the crowd somewhere, you don't want to just shoot into the crowd trying to get the bad guy and take out a bunch of good people, right? You need to be very clear and precise as to what exactly is bad and make sure you don't do harm to the good things that are happening. So the concept of a kill switch is great as long as you have a precision and a clarity of what exactly is wrong or what could be wrong and and focus only on that one bad thing. >> Should how do you hold accountability if there is a breach at a large company today and you know we see them all the time. Who's accountable for that in this AI world? >> It it's something we are rapidly trying to sort through I think as an industry and certainly the regulators and governments around the world are starting to wrestle with this issue. I think at the end of the day, one of the things that that our heritage as an identity vendor, Brian, in the enterprise set is to say you need to always understand who has access to what and whether that conforms to your policy. Well, now the who is kind of who and what has access to your information, right? Like the people and the agents and there needs to be clarity that any agent is ultimately acting on behalf of some person in that organization, right? Even this idea of autonomous swarms of agents doing whole business processes, some person in that organization has put that process in place for those agents to go solve a business problem. They have to be held accountable if that process leads to a bad outcome. >> Stick them in jail. Stick them in jail. >> Well, I'm afraid that's what's going to happen is one of these things is going to lead to some actual human going to real jail, not some agent going to fake digital jail. And that's when companies are really going to wake up to the risks that they aren't managing very well today. Mark, my week started off by reading a uh good political uh story uh interview with Sam Alman and he said he said uh we should be accepting and I'm just paraphrasing accepting of the risks from AI. Is that acceptable to you? >> This is the same guy that says we might kill all of humanity in 10 years. I don't know if I like his way of thinking about risk very well. Um I I I think at the end of the day we have to accept that there's some risk when you're trying new things. I mean any good business person will tell you you don't make forward movement without taking some calculated business risk. it it's always this trade-off of how much risk for how much reward in business, right? But I think what we're all feeling like today is I don't even know how to manage the risks I'm taking with AI unless I understand what these things are doing and whether I do have controls, right? If I know I have some controls and something does start to veer off course, I can quickly correct it. You know, Brian, just as an aside, we did some pretty deep analysis of what happened with Hugging Face and there's a lot that's been written about what actually went went off the rails there. The truth is there were multiple identity security failures. Like we see that through our lens and we see multiple times where the agents got beyond their their limits. They asked for permissions that they shouldn't have been given and were given them. Like in our simple, you know, taxonomy of things go wrong when people or or things agents have access to things they're not supposed to. That's what happened. They got access to things they weren't supposed to have access to and did bad things and they didn't even know they were bad. Hey, when when we see Sam make comments like that, Mark, uh I mean, they're clearly not acceptable, but but can you also say this guy's not taking this stuff seriously? >> Well, I think the challenge, you know, we've said this for years, unfortunately, the people that build functionality for business applications or consumer applications, risk is not the first thing they think about. Security is not the first thing they think about. That's why we have a security industry to kind of make sure we kind of put safety around how things are getting done. even in Satia Nandella a number of years ago said look we've got to make kind of security designed in and and there's been forward movement of having folks that build solutions and applications think more about security but at the end of the day that's not their first thought and I think what we've just seen in these last few months is that wasn't the first thought of these frontier models they were pushing forward for capability and and and the solutions to to problems they were seeing and they weren't thinking about security that's why we've seen so much issue uh when these things weren't under control and now we're going to have to have the security industry frankly come around it and say you need these kinds of controls to move fast but safely. >> You know Mark, you've spent decades in this industry. Shouldn't you be like lock shouldn't Dario and Sam be calling you and you just hang out in a room and and why aren't they calling you and you guys working hand and glove and it's not just point. It's your competitors. Go in a room and make all this stuff safe, man. >> Well, you nailed it. I think we're getting to a point very quickly as I said where the government has been kind of leaning in on hey we need to get engaged here and they've been thinking about what are the capabilities of these models and I think what we're saying is security in this case of these non-human identities we call them agents and machine identities and all these fancy terms really what we've got to get to is some person or group of people have to be clearly accountable and responsible for what they're doing because we can't have a situation as we've joked about with agents going to jail you can't have a situation where oops sorry my agent broke in and stole your stuff, but it's not my fault. Nobody's going to accept that. The court systems aren't going to accept that. Regulators aren't going to accept that. So, we're going to have to quickly, I think, swing and and the folks that have built these models weren't thinking primarily about enterprise business applications, I think, when they built them, right? So, we're going to have to quickly see how the industry comes around this amazing technology. Nobody doubts that it's amazing, but we need to guard it and and control it at least at the level that people feel like they can proceed safely. Against this backdrop, have you seen your business accelerate? >> We have because people are starting to figure out what is not what is not in place that I need to protect myself. And it's not any sort of leap at all, Brian, for people to see these agents as a form of an identity. You know, we've been kind of leaders in the identity security market since it was defined as an identity security market. And people say, I guess I need someone who understands identity and access and how identities get to data. That's what we've been doing for two decades as you said and at the end of the day how do we apply those concepts to these agents that are going to be at much higher volume move at much higher speed than humans ever could? We need great systems that understand those relationships of of identities to data and protecting that access to data and that's what we do so well and and customers are kind of knocking on our door pretty pretty loud right now to say please come help us with this. >> Mark, good to see you. Hope to see you in person next time. I appreciate you hopping on. >> And my goal, Brian, is to stay off your wall. I just That is my mission in life. I'm gonna stay off that wall, man. >> You're not going on the wall. You're not going the wall, but I appreciate it, man. Thank you. >> All right. Great to spend time with you. Thank you. >> Can I make it up? There we go. We're not putting Mark on the wall. Not even this doing the same job as those other two guys on the si unleash wall of underperformance. Guy's crushing it. Uh I want to go to Target uh for my uh freestyle here on Unleashed. And this new story that hit from Bloomberg, it's a couple other places too as well on the new attire for Target store workers. Uh they're you can they can wear a visor. Uh they're getting an apron. I don't have the new uh retail ensemble to try on for you. But this is uh not the real story on Target. The real story on Target is signs of a reinvention. Now the stock is run very aggressively. You can see some of the new outfits over here. You know, there I go right here. Some of the new Target outfits actually looking quite fashionable. I mean, I'd wear them on a leash. I mean, Target, send me one of these. I I'll put one on and put on the set over there. Uh, but the real story is this. And you're you're thinking, well, Brian, Target stock is is really rocking, you know, and there's more going on here be behind the uh other than the outfits. And you would be right. Now, a couple things here that I am seeing with Target. The company has started to fundamentally improve its business. And unlike the two executives that I have on the Sazi unleashed wall of underperformers, Target is in fact improving uh how much its grocery business is uh as a percentage of the overall business. Uh they're improving what's being sold in the aisles. I do think it's a little funny though that you're being asked if you're a grocery store employee in Target to wear an apron. There's no deli section at Target. There's no meat section. You're not cutting things. It's all prepackaged stuff. So maybe a little silliness on the part of Target there, but still some of the reasons why you're seeing the stock rip higher. Can't get any worse than the past two years. I mean, Target's new CEO, he's doing some good things. Maybe he will make the Sazy Unleashed Wall of Titans. CEO Michael Fideli is a man on a mission. He has come out blasting this year. Started reinvent the home department, the food department, and there are signs that is working. I saw it in the second quarter. You might see it again when the company reports in a few weeks, but third quarter. Store updates are leading to quick and improved results like I just mentioned, and share purchases. Watch this one. Uh Target has not been repurching its stock in the past few quarters because of pressured results. That is likely to restart in the back half of the year. Could be a nice tailwind for the company. All right, if you are looking for a reminder on why you are so bullish on Elon Musk's SpaceX, zoom in on the latest trends for Starlink adoption. I got my hands on some fresh data on this front from Deutsche Bank and it's pretty impressive. Exiting September, the global consumer subscriber count for Starlink is estimated to be 13.5 million, or should I say 13.5 million. Starlink reportedly had about 370,000 net subscriber additions in the month. North America led with 5.5 million subscribers, representing 40 41% of the total mix, and added 126,000 subs during the month. In terms of reach, Starlink is now available in 205 countries, exiting September, compared to 200 in August. It expanded its coverage by four countries in Africa and one country in Asia. This is SpaceX shares have taken off again and have their sights set on overtaking two heavyweight tech titans in the trillion dollar market cap club. The market cap on SpaceX now stands at 2.26 trillion just shy of Taiwan's semiconductor at 2.5 trillion and Amazon at 2.76 trillion. SpaceX shares are up 64% from their lows on August 3rd. Wild ride. They have gained 16% in the past month alone. About 80% of the sellside analysts rate SpaceX a buy or strong buy per Yo fines alpha space data. Within the past two weeks, we have gotten bullish notes from Morgan Stanley, Goldman Sachs, and Evercore ISI. Starlink is at the heart of all this analysis, and the stock price liftoff reflects it. Stay unleashed. Heat. Heat. N. Heat. Heat. Heat. Heat. Down. Down. Hey. Hey,