CNBC, Bloomberg, Yahoo On NVIDIA Stock, Micron Stock, SK Hynix Stock - NVDA Update

these sell-offs we're seeing in Micron Sandis, these have been the market leaders pretty much this entire year. I mean, these stocks have had tremendous runs. How concerned are you about these sell-offs and is there any read through here to a broader market still trading near its highs? Well, I I think whenever you have a a economy and a world really that's in transition, this is indeed the fourth industrial revolution, you do have to be expect and I think I talked about this the last time I was on with you, Brian, which was there is going to be a big summer chop. And so you've got the algorithms reading the headlines, the the hedges jump in, there's less liquidity because a lot of people are in the Hamptons and and that's a real thing. So, uh, I don't view it too seriously. When I look at a company like Micron that's now signing three-year contracts, has margins of 84%. Am I concerned that the margins are going to go to 70? The market will hate it, but this is what happened with uh Microsoft during during the launch of and and really the momentum of Azure. You know, there was a time when it was growing at 92%. Um, we the stock outperformed for a number of years after it began decelerating. Law of big numbers. So I think capex spending is a sign of strength. Uh I know the market disagrees with me. So uh debtf funded capex spending is another story. But you still have some of these mega caps that are generating tens of billions of dollars in free cash flow every year after spending um tens of billions of dollars. So I I think you you use it as an opportunity if you're a long-term believer. And u we we have a very low cost in micron. I'm not going to chase it here, but if it continues to deceler decline, we will in fact step in. >> Nancy, [clears throat] why do you like a Micron over SanDisk? >> I mean, it's it's just what we know. Um, you know, we're focused on US companies and it's it's a it's a name that we have watched and owned for a very long time. We're at a full position. So, uh, that that's there's no special reason. >> We are seeing large sell-offs in Micron and SanDisk. And on the one hand, Dan, I I get it. These momentum stocks, we got a little whiff of a Fed rate hike. Those names are going to probably unwind those gains. But I look at the fundamentals of both of these companies and it's hard to make the case that SanDisk is worth 30% less today than it was a month ago. >> Yeah. I think part of what's happened, look, the golden childs of this AI revolution, you over the last few months, it's memory stocks. I mean, a lot of times if you go to you you mentioned Cosby two years ago, someone would have to Google it. >> Now Cosby, New York City cab driver. >> We start our whole day with looking at the Cosby. >> Dude, cab driver coming here. He's looking at the Cosby. So the point is is that it just shows memory stocks have really been front and center. So I think you're seeing basically maybe a little bit of a rotation there. But then I'd argue on the other side, look at where like Nvidia, what's happened to that stock? Look at Microsoft. Look at, you know, you saw Buffett with Alphabet. I mean, look what's happening in terms of that name. So, I do think that we're going to continue. We've talked about over the years, like we're going to go through these rotations in this AI revolution as it plays out, but as you know better than anyone, it comes down to earning season. You have to show the monetization piece because right now it's just capbacks. natural monization piece as that plays out is >> I guess you'd say for us the big opportunity is the one that's lying in plain sight um which is Nvidia you haven't held that stock for a while we've held other names instead semicap equipment and things like that but Nvidia is a stock that basically hasn't outperformed the market year to date it's up only modestly in absolute terms it's trading less than 20 times forward earnings and the way we think about that is sure there's some re uh scope for margin erosion Sure, there's some scope to lose share to custom silicon, but they are still the deacto standard in the industry and to get a company that can benefit from secular tailwinds at that kind of a multiple we think it's pretty attractive. So you so just to reiterate as we're showing Nvidia down about two and a half percent there you're saying and a lot of people I anecdotally I hear are those who weren't early on the AI trade those who are not tech special I'm talking about just members of the public who weren't big on Nvidia in the first place are now going do you think now's the time and so I think they're going to to really listen to what you're saying here you say you've not invested in Nvidia historically but you've bought it recently because it's derisked. >> Yeah. Um, and it's not that we haven't liked Nvidia historically. It's just we felt there are better places in the AI ecosystem to invest. You know, the Taiwan semi that you were mentioning or the the semicap equipment companies. You're actually a little bit earlier to get into Broadcom as we saw a custom silicon that they manufacture taking uh taking share. But again, Nvidia is kind of the the elephant out there, the elephant in the room, you might say. And uh it's kind of odd, frankly, how much it's been neglected. He's really um you can see in the stock price volatility too. I think it's the sort of retail hot money has kind of moved on more to the memory trade. Um it's almost too big a stock to be swung by levered ETFs and things like that. So it's just kind of sitting there right for the picking. And I want to mention also I I have this sense and and maybe you do too or maybe it's just self-evident that you say you're positive on some industrial companies like Schneider or the HVAC company Train that have an AI data center benefit win from buildouts of power infrastructure. Those are both new holdings you say in the ETF. So you can again I I think it's going to become more and more you know easy to find ways that are not just in the memory names to play the AI trade. So, I wanted to mention that while also asking you why you're not invested in the memory stocks. >> Yeah. And to be clear, some of those power uh stocks, we actually started a new um power infrastructure ETF that focuses on those. So, Schneider also holding our international quality ETF. Um in terms of the the memory stocks, the issue for us with me the memory stocks is so much of their profitability is coming really through price. There's such a scarcity in the DRAM chips, the HBM memory chips that they're able to get kind of whatever price they ask for. And that's obviously great today for them, but that's not a sustainable long-term >> even if those prices are locked in, which is what the bulls say. They say yes, it's coming from prices, but those contracts are locked in for years at this point. >> Um, years, but not decades. And we're talking about a couple years. And there's a pretty, I'd say, unfortunate history about those long-term agreements in the semiconductor industry. They sound great and then you're often not able to enforce them. So, we're actually I guess we're patient investors and what we see will happen in a couple years is there'll be more capacity buildout driven by those high prices just like you would see in a commodity sector. And so, we want to invest in some of the companies like the semicap equipment companies that will be the beneficiaries of that. South Korea is cracking down on single stock leveraged ETFs after a slew of wild swings in Samsung and SKH Highix. Remember, their combined waiting typically sits between 50 and 60% of the entire Cosby. We're only halfway through July, but SKH Highix is already on pace for its worst month since 2008. In the first 12 days alone, Highix had eight days of 5% swings in either direction, including last week's 15% drop, which was its worst day ever. For context, the entire month of June and July only had 12 fivepoint swings and May only had eight of them. Let's bring in Tim Seymour. He's the CIO of Seymour Asset Management and a CNBC contributor. Tim, um, this is a point I think Rebecca Patterson was making the other day as well that this idea that you need to diversify away from the topheavy S&P 500 into international stocks. Well, you need to be careful that the international stocks aren't more topheavy. And this seems to be an interesting case of that. >> Yeah, the the MAG 3 outside of the US. So Taiwan Semi, SKH Highex, Samsung, a lot of investors, seriously be honest out there, folks. Did you even know who SKH Highex was three months ago and even though this is one of the biggest conglomerates in South Korea, it's a combination of SK Group, but also Hyundai Electronics, and it's got a very rich history of of technological uh innovation and whatnot. But again, the the dynamics that have had this be almost the tail wagging the dog of the market are extraordinary. And South Korea, by the way, with almost 30% between domestic and local pension funds and the state pension fund. Yeah, they have a lot of exposure domestically to this. Obviously, you talked about the waiting in the index. So, uh there's a lot of focus on what's going on right now. >> Well, let me put it put the question to you this way and and who wouldn't want to answer the following question. People [laughter] online are saying the bubble has popped. They they take th those data points I was just referencing and they say the AI bubble is popping. Get out of the way. >> Well, it it it's some of that is healthy, right? And again, talk about leadership. SK and Samsung absolutely led the move in semiconductors through the 50 days. So, if you look at the the socks or the SMH or whatever you're tracking to get uh the the the US dynamic, you can see that the Asian stocks actually led them through. And if you're investing in the United States, semiconductors have led the S&P for three years and have been a reason to own the S&P but obviously be heavy in semis. So that leadership and the loss of that leadership is significant. >> What would you do then? You know, especially forget if you're an international quote unquote investor, should a prudent investor make sure they don't have exposure to the Cosby, figure out whether Taiwan, what these other markets, if there's if there's any kind of landmines there to worry about. um what does it mean you know back here for the US >> right well as someone that runs an international ETF and we have exposure to Korea I devo my ETF I mean we're not you know we're not trying to time this we're trying to have exposure to the Asian tech story which I think that rotation into Asian tech and that includes to me uh China tech which is really underperformed and I think you know if you want to characterize what's going on with Alibaba and buetent these are not only uh open source models but these AI accelerator chips that are a lot cheaper and a lot less capex. So, I think you just have to know what you own. I think if you're trying for momentum, you've been in the right place, but I think there's still a lot of momentum in these trades. And I would be careful on how much you own. >> But meaning you think more momentum to the downside for things like the Cosby or those those areas. >> I think part of the the dynamic here is access to those markets. Access to the South Korean market hasn't been easy. So, these vehicles that get you access uh have leverage and are more volatile and less efficient. SK Heinik's listing on the NASDAQ is a big moment. I think that starts to uh unwind some of those that access premium even though it's traded at a premium or a discount depending on which day. I think some of that is slowly letting steam out of bubble or just a big trade. >> And let's talk about that rotation in AI stocks because some jitters out there after we heard from ASML and TSMC over the last 48 hours. The results were good, the outlook even better. So, what's ailing the sector? Stacy Rasman joins us right now to talk a little bit more about this. Managing director and senior analyst of US semiconductors over at Bernstein. What's going on, Stacey? Is this just the idea? We've had a huge runup in these stocks. High expectations, so we're just bound to be disappointed. Well, I think that's part of it. You got to remember, it wasn't that long ago that the the socks index, the sector was up 100% year-to date and I don't know, 140 or 150% year-over-year. It's now up only 67% year-to date. and it's kind of where it was trading, you know, a month and a half, two months ago. So, I I do think that, you know, things things did run up tremendously in in in front of all those and and now we're we're starting to see it come through. Again, you mentioned results from TSMC and ASL. I mean, the results were very very solid. Um, they're so strong maybe it's a it's it's getting harder and harder to to show even more upside where expectations were. Yeah, >> I'm not exactly surprised to see this this kind of be behavior just just given how far things ran. But yeah, in some you could argue it's it's maybe it's healthy. >> I would say if we'd gotten to this point like a little more directly through the year rather than like up and down, people would probably feel fine with it. Yeah. >> Um but just given the the magnitude of the run that we did see, especially last over the last, you know, month or two >> in front of us, I'm not entirely surprised to see this. >> Well, let's separate the short term from the long term. I mean, I'm looking at SanDisk now headed for what could be its worst week going back uh to April of last year. But long term, nobody seems to be counting out the AI trade, but they are sort of making it clear as our last guest did from Morgan Stanley Asset Management, the idea that there is sort of a a broadening out into other pockets. So whether it's the focus, relentless focus we had on GPUs, now the idea a lot of people more focus on uh the benefits of those folks who are making and selling those CPUs. Where do you see that long-term trade? uh most most of the upside. >> So actually so we've had this sort of rolling trade over the last six to 12 months. People have been playing the bottlenecks and the bottlenecks are the ones that are sort of rolling over, right? But um you know it started with you know the GPUs you know about a year ago right and and then it went to memory and then it went to semicap and and and then it went to optical and networking and power semis and CPUs and then even into the discreets and and everything more more recently is AI has gotten so big that it's sort of just dragging everything along with it and one at a time um these bottlenecks have kind of been hit and they've been they've been going and it's funny because like one of the biggest questions I've been getting is you know invidia and Broadcom, you know, the the guys that sell the compute and sort of the foundation of all this, they've actually kind of lagged. >> Mhm. Yeah. >> And I've gotten the question a lot, you know, like what what's going to get those working as investors been playing the bottlenecks instead. And you look in this kind of environment when when things are rolling over like at least on a relative basis, those ones that they've actually relatively outperformed during this this downturn. We've got, you know, semicaps and some of the memory stocks, everything that are down like considerably off the peak. Go look at where Nvidia is trading. like it's down a little, but it's not down nearly as much off off the peak versus some of these other ones that were more high-flying. >> And Cece, I do want to get your perspective on what's happening outside the US specifically. You know, you think about Taiwan, you think about South Korea, uh, more prominently there. Do you think that some of the the volatility that we're seeing there uh, has any bearing on what's happening in the US chip industry or is it idiosyncratic at this point? >> Well, I I mean, you got to separate the industry from the stocks, right? So the the the K you mentioned Korea that that's been volatile. You have to remember you got two stocks, your Samsung and Hinx that basically make up 60% give or take of the of the the Korean market. You've got a lot of retail investors there as well who have been levered up. They've been borrowing money to invest in these stocks. And so when you it it drives a lot of volatility and also causes a lot of pain when things roll over. Um so I do think that that's had some some sort of an impact on on things. it it it if nothing else it's just driven volatility um higher. >> Um you've just had a tremendous amount of concentration in some of those other markets. You don't quite have that in the US um fortunately. Um but these kind of general trends I I mean you know I'm looking at my my my chart here daytoday and you know all the stocks I mean we're we're moving you know five six 7% even more in a day right now and it it's starting to feel normal >> right >> which worries me a little a little bit. [laughter] Yeah certainly. >> I had David Bonson on the show this week, Cory. Now, that's a smart guy and we were talking about the chips. He says, listen, makes the argument. We were talking Micron and some other some other names in the sector. He used the B- word. It's a bubble. It's a bubble. You obviously disagree with that, Corey. Why? So bubble refers to what you pay, right? Price is what you pay. Value is what you get. Bubble indicates that money is being spent willy-nilly here and that and that maybe it's unsupportable here. I don't see evidence of it being unsupportable. Now, look, I have a short book and in my short book, there are some companies that I think are liars, if not outright frauds. And there's some AI in there, but specifically, and we're going to see that when we see excitement about anything going on in the capital markets. We've seen it in housing in our in our recent memory. We've certainly seen it in technology in different booms. We saw it in in crypto. We we certainly see it in AI right now. But I I still see an underlying growth here. I see that that the technology is being used increasingly. Companies are finding value in the technology. Companies are certainly trying to extract more value. We have companies that are create that have been offering these things essentially for free uh in anthropic and open AI uh and others uh now starting to charge more for that as they start to prepare for IPOs. They want to show that they've got actually got some revenues coming in the door for these services that are happening. In the same way that we saw Google go public so long ago uh when they also were struggling at creating a revenue model around advertising and adwords and they hadn't quite figured it out. I'm not saying that anthropic is Google or that it's going to have the same kind of free cash flow generation. We'll see when we see some of the numbers and start to get a sense of things. But it is clear to me that there is value in the product. the people disagree with me, but I think there's value in the products and it's clear to me that the companies that are creating that value, the companies creating those products want to spend more to own these markets as they start to uh develop. >> Corin, when big tech reports, do you think we're going to hear them say yes, capex is moving higher this year and next? >> Absolutely. uh and we've seen it in every tech. Look, as far as the market goes, as far as the stocks go, selling May and go away has generally been really good advice. And I've never been good at either things. Well, I had my time in the Hamptons. I guess I was pretty good at going away for a short period of time, no more. But u uh the market reaction to the print, I cannot tell you what's going to happen here. But I can tell you from all of the companies that I talk to and I talk to CEOs of startups and big companies every single day, they're seeing the demand. They want to be there to uh handle that demand. They're trying to grow to be ready for that. And the market might not reflect that in the prices on any given day. But we when the businesses get bigger, eventually the stocks are going to catch up. >> All right. I hope you're all doing well today and staying calm in this market. Today was a rough day for many tech hardware stocks and some stocks that are associated with the data center buildout. Google traded lower due to some company specific news. There's a lot of news about multiple companies that we need to cover. So, let's get started. First, TSMC reported strong earnings, providing a bullish read through for overall AI demand. TSMC raised a 2026 growth outlook, saying it expects 2026 revenue growth to be slightly above 40%. TSMC CEO said demand was quote stronger and stronger and that it is stronger than the prior forecast. He expects the demand trend to remain very strong through approximately 2029 to 2030. He described the gap between leading edge demand and supply as being quote very big. In light of that strong demand, TSMC raised its 2026 capex to the range of 60 to 64 billion, which is up from the previously announced 52 to 56 billion. TSMC also announced another $100 billion investment in [clears throat] Arizona, which brings its planned US investment up to $265 billion. We also saw two ninometer revenue start to show up in a meaningful way representing 3% of wafer revenue during the quarter. As a reminder, Nvidia's Ruben Ultra, which launches in 2027, is expected to use TSMC's tuninometer process. TSMC said that the steep ramp in tuninometer production is expected to reduce its second half gross margin by about three or four percentage points. I think the announcements of higher capex and the pressure on second half gross margin are probably what caused the stock to trade lower on Thursday. Regardless of the short-term price action in the market, TSMC's results were very strong and their commentary regarding demand was very bullish. They see demand exceeding supply from multiple years. Also on Thursday, Bloomberg published a report claiming that Google's new Gemini 3.5 Pro is months behind schedule due to the tech falling short of internal expectations. According to Bloomberg, the problem is related to coding performance. Agent coding is becoming an increasingly important use case for enterprises. Open AAI and Anthropic are both very competitive in that area and at the moment Google doesn't have a competitive agent coding offering. We'll see what happens in the days ahead. But this story is what led Google to trade notably lower on Thursday. Let's cover some of today's memory news. First, I should mention that overnight in South Korea, the country's central bank raised interest rates for the first time in 3 years, which led to the Cosby trading lower overnight. I mentioned this because Samsung and SKH Heinix alone represent over half of Cosby's market value, plus margin debt in that market is near record levels. The downward price action overnight in South Korea contributed to the red action we saw in memory stocks on Thursday. Also on Thursday, Micron announced that they've completed strategic customer agreements with key tier 1 suppliers and ecosystem partners supporting the global automotive industry and automotive manufacturers. Micron announced seven of the companies that they've entered strategic customer agreements with. Those seven seas are part of the 16 seas that Micron announced on their most recent earnings call. I want to say something very important about this before I cover more of today's news. In recent weeks and even on Thursday, I've heard multiple people in the financial press speculate that the SCAs could be rolled back at some point and they assume that Micron's SCAS are the same as the LTAs of the past. This is a great example of something I've said in recent videos. Many market participants just blindly assume that this current moment is the same as the memory cycles of the past, and they're not even willing to consider the fundamental differences between the two. Listen to me right now. The 16 strategic customer agreements that Micron announced on their earnings call are structured very differently from the LTAs that we've seen from memory suppliers in the past. Historically, memory suppliers have used long-term agreements or LTAs to plan supply. However, those LTAs did not eliminate downside risk for the memory suppliers. The LTA of the past were generally planning forecasts. They were not unconditional multi-year purchase obligations. And so, in the past, under the old LTAs, pricing and volumes were periodically renegotiated as spot and contract markets changed. They were not unconditional purchase obligations, but now Micron's SCAS are take or pay. That means that customers must either take the contractually committed product or bear the financial consequence for not taking it. These agreements are contractual purchase obligations with minimum floor pricing and volumes locked in over multiple years. Most of the SCAS Micron announced on their earnings call extend through the end of 2030. And Micron expect half or more of their revenue to be under these SCAS once completed. Again, these SCAs are not the same as the LTAs of past memory cycles. They are fundamentally different. Unfortunately, some market participants are not willing to consider the fundamental differences between the two. The fact that large customers are willing to lock in supply over the next four and a half years tells us that this current moment is different from the memory cycles of the past, and it's likely going to last longer than the cycles of the past. Now, let's carry on with today's news. Chinese memory maker CXMT's IPO in China is reportedly seeing very strong demand with the retail portion more than 200 times oversubscribed. The reason this news weighs on memory stocks is because CXMT is expected to use the funds they raised from their IPO to increase memory capacity. CXMT is a big player, don't get me wrong. That said, as I've mentioned in recent videos, CXMT cannot fully satisfy the memory demand domestically in China, let alone globally, because the demand is so strong. There is simply not enough available supply for there to be a dumping situation that would challenge incumbent memory makers pricing power anytime soon. That's not something we should have to worry about for multiple years. But right now, market participants are extra sensitive to any news or rumor that they perceive as being a threat to memory makers pricing power. Speaking of CXMT, you may remember that reports recently suggested that Apple was trying to convince the White House to allow them to purchase memory from CXMT because of the shortages. And then today, US lawmakers announced they've sent a letter to Commerce Secretary Lutnik urging him to not authorize American purchases of memory chips from Chinese companies. We'll see what happens in the days ahead. If the Commerce Department were to ban American companies from purchasing Chinese memory chips, that would likely be perceived by market participants as being positive for companies like Micron, SKHix, and Samsung. I'm going to cover some of today's Nvidia news in a moment, but really quick, let me say something important about memory stocks. I see what's been happening in these stocks over the past few weeks. I understand the nervousness among market participants, and I understand why they're quick to declare a top in the memory cycle given what happened during the cycles of the past. Memory has been cyclical for decades. That said, I do think this current moment is a fundamentally different from the cycles of the past and that it's going to last longer than the cycles of the past. Despite all the short-term hysteria and leverage unwind happening in the market, the fundamentals appear to remain firmly in place. I'll give a couple examples that have happened just this week, even as memory stocks have sold off. Taiwan's PSMC announced that they're raising DRAM foundry pricing by approximately 45% in July due to strong demand and a lack of supply. IBM CEO published a letter to shareholders explaining why they released preliminary results early, saying that at the end of June, large customers shifted their budgets away from software toward things like servers, memory, and storage ahead of feared shortages and price increases. He's quite literally telling us where the money is going right now. Again, those two announcements were made just this week. And so, don't let the short-term volatility or hysteria for the financial press cause you to lose sight of the fundamentals. Now, let's cover today's Nvidia news. Nvidia announced that Japan's government, industrial leaders, and Nvidia will launch the world's first national AI infrastructure. Nvidia is to partner with Notra to build the Nvidia Vera Rubin AI factory with 13,750 Vera CPUs and 27,500 Reuben GPUs to deliver 140 megawatts of data center capacity based on Nvidia's DSX platform. The initiative is being supported by Japan's Ministry of Economy, Trade, and Industry and will help strengthen Japan's ecosystem across manufacturing logistics healthcare and more. Japan will be a very important market for physical AI as the government has stated that they want Japan to capture more than 30% of the global AI robotics market by 2040. Also on Wednesday, Nvidia published a blog post highlighting how Japan's enterprises and startups are building specialized AI with Nvidia's Nematron open models. As I've said previously, Nvidia being the leader in open-source models should lead to a very advantageous situation for Nvidia in the future in which many AI applications are built upon Nvidia's own models. Open models drive greater consumption throughout the ecosystem. Greater consumption leads to greater compute demand. And of course, Nvidia sells the compute. Nvidia also published a blog post introducing new Jetson Thor computers. The new T3000 and T2000 modules are based on the NVIDIA Thor architecture and they enable mass market robotics and edge AAI applications at scale. It's not a coincidence that Nvidia recently changed their reporting framework and separated edge computing as its own market platform. Edge computing is a relatively small portion of Nvidia's business today, but it should grow notably over the coming years as physical AI ramps and real-time inference at the edge becomes increasingly important. Nvidia is positioning themselves to be the underlying foundation supporting physical AI. As mentioned earlier, right now, market participants are nervous about how long the memory makers pricing power will last. On top of that, there's a notable margin unwind happening in South Korea where memory makers Samsung and SKH trade. That is not helping the price action here in the US. As I've said previously, based on what I can see today, I expect the world to be compute constrained at least through the first half of 2028, possibly longer. I also think it will likely be multiple years before memory supply catches up to demand. Therefore, I think it's reasonable to be bullish on memory makers such as Micron and SKH Heinix for at least the next 1 to two years, possibly longer depending on what happens. That said, these stocks will be volatile as market participants are nervous due to the historical cyclicality of the memory business. It appears that we have a market sentiment problem, not a fundamental problem. If memory makers report great results, some market participants will think that the cycle is peaking because the results are so strong and can't get any better. Just look at what happened to Samsung after it recently reported operating profit up more than 1,800% year-over-year. The stock traded lower because of what I just mentioned. And on the other hand, if expectations run too hot and memory makers slightly miss expectations, then there will be some market participants who think that the peak is behind us and that the cycle is starting to roll over. It's unfortunate, but that's where we are right now when it comes to market sentiment regarding the memory makers. But again, I view that as a market sentiment problem, not a fundamental problem. Do not let short-term volatility cause you to lose sight of the fundamentals. These stocks are going to be volatile. Therefore, these stocks are not for everyone, and that's okay. I don't know when or where this current sell-off ends. That said, given that the fundamentals remain strong and demand continues to vastly outpace available supply. I view dips as opportunities for investors to responsibly add to positions in small increments. That does not mean that it's time to back up the truck and load up like crazy. That's not at all what I'm saying. What I'm saying is that I think it's reasonable for investors to consider gradually dollarcost averaging into the stocks that they want to own and to do so in small amounts. Dollar cost averaging in small amounts over a long period of time can be a great way to gain exposure without having to deal with a bunch of stress. If you buy and the stock moves higher, great. You have exposure and you're up on your position. If you buy and the stock moves lower, then you still have cash available to buy the dip at lower prices because you didn't buy it all at one time. I'm not a financial adviser and so I cannot tell you what to do. I'm just sharing some thoughts that I think may be helpful for you to consider. If you need help with your unique situation, consider reaching out to a certified financial professional who can help you with your unique circumstance. Looking ahead to next week, we have the start of Hypers scale earnings with Alphabet earnings scheduled for Wednesday, July 22nd. Meta and Microsoft both report earnings on July 29th, and Amazon is scheduled to report earnings on July 30th. Overall, I'm expecting strong capex guidance and commentary from each of the major four hypers scale companies. Let's briefly cover each of them ahead of earnings. As for Meta, I'm expecting them to announce strong capex guidance. I know there was a bunch of hoopla on July 1st after Bloomberg reported that Meta was developing plans for cloud business. Some days after that report, Zuckerberg clarified that they do not have excess compute. It's just that some of the deals are very attractive and Meta could charge a premium if they rented out a portion of their capacity given the constraints throughout the industry. Meta also recently announced they are expanding their Hyperion data center in Louisiana from 2 gawatt up to 5 gawatt. Last earning season, Meta CFO said that they continue to underestimate their compute needs even as they've been ramping capacity significantly. Plus, Meta Super Intelligence Labs just recently launched Muse Image, Muse Video, Muse 1.1, and a new model API. Meta is not dropping out of the AI race anytime soon, and I expect their capex guidance to be strong. As for Alphabet, I think they're also likely to report strong capex guidance. Last earning season, Alphabet CEO said that they're compute constrained and would have had higher cloud revenue if they had more supply to meet demand. Also, Alphabet's CFO said on the earnings call, quote, "We expect our 2027 capex to significantly increase compared to 2026." As for Amazon, I'm also expecting strong commentary and guidance regarding capex. Amazon CEO Andy Jasse spoke at length last earnings season about Amazon having very high confidence that they will monetize the capacity they're bringing online. As a reminder, AWS is monetizing new capacity as soon as it comes online. Last earnings season, Jasse said, quote, "The faster AWS grows, the more short-term capex will spend." And then on July 1st, AWS raised GPU rental prices by 20%. And they made that decision based on supply and demand. In other words, demand is very strong and outpacing available supply. As Jasse said last earning season, the faster AWS grows, the more they will spend on capex. AWS is clearly growing and so I expect strong capex guidance from Amazon. Now, let's talk about Microsoft because I think this is the most interesting of the four this earning season. I want to remind you of a few things. First, Microsoft will be reporting results for the end of their fiscal year, and so they're likely to provide commentary on the earnings call regarding capex over the next 12 months. This is going to be a very important earnings call for the entire AI ecosystem. As a reminder, last earnings call, Microsoft guided fiscal Q4 capex at $40 billion. They also told us that for calendar 2026, they expect to spend $190 billion. Again, that's for the calendar year. And so calendar 2026 would include the third and fourth quarters of fiscal 2026 as well as the first two quarters of fiscal 2027. And so if Q3 capex was 31.9 billion and let's just assume Q4 is 40 billion as Microsoft guided that leaves $118.1 billion that Microsoft intends to spend in just the first two quarters of fiscal 2027. That would be an average of roughly $59 billion per quarter, much higher than their capex so far. What's the reason for that increase? There are two reasons. First, Microsoft is investing heavily in additional capacity for their cloud business. And secondly, Microsoft stated earlier this year that they want to have their own state-of-the-art models in-house by 2027, and they're going to need a lot of capacity to do it. As I said repeatedly ahead of Microsoft's last earnings report, I thought their capex guidance was going to be notably higher than what many market participants were expecting. That turned out to be correct. Now, I'll be completely honest, I don't know what they're going to say on the earnings call regarding capex over the next 12 months for fiscal 2027. If I had to guess, given the fact that they need additional capacity to compete on cloud, they need to have enough capacity to train their own state-of-the-art models and also what we're seeing in rising component costs, especially in memory. I think we're likely to get strong next quarter capex guidance. But I just want you to know that market participants main focus as it relates to capex is what Microsoft will say about capex over the next 12 months in fiscal 2027. That is what will likely have an impact on the stocks of companies like Nvidia, Micron, SK, Heinix, the Neoclouds, and many others. There's some important nuance in Microsoft's AI strategy. And so, we need to listen in to the earnings call to get a better understanding of what's going on. If I could only listen to one earnings call from the four major hypers scale companies this earning season, I would choose Microsoft's. What they say about capex over the next 12 months will likely determine how tech hardware stocks trade the next day. Overall, I'm expecting all four of the major hypers scale companies to report strong capex guidance and important commentary regarding AI monetization this earning season. I don't know what's going to happen in the short term, but from a long-term perspective, I am very confident that Nvidia will be worth much more in future years than it is today. When Jensen was on the Lex Freedman podcast not that long ago, he was very seriously raising the possibility of Nvidia becoming a $3 trillion revenue company in the near future. If that happens in the coming years, then it is very plausible that Nvidia could one day be worth tens of trillions of dollars in market cap. That might sound crazy, but that's what Jensen is implying when he raises the possibility of Nvidia becoming a $3 trillion revenue company. I guess the question at that point is what multiple the street will be willing to give Nvidia. I don't know the answer to that question, but I truly do think that Nvidia will be worth much more in future years than it is today based purely on the fundamental growth of the business. Based on everything I'm seeing, the world is still computed and I expect that to continue at least through the first half of calendar 2028. In a computed environment, developers will use whatever viable compute they can get their hands on. Today, there are no GPUs that are sitting dark due to a lack of demand. like there was fiber sitting dark due to a lack of demand at the height of the dotcom bubble. Back then, companies were laying fiber in the hopes that use cases and demand would eventually show up. Today, we are seeing the complete opposite. As I've said many times, when market participants compare this AI revolution to the do-com bubble, they ignore the fact that the internet is already here this time. This means that mass adoption of the technology and new use case development at scale are immediately possible. We don't have to wait years for it to show up. It's already here. The world is computed, which means there is not enough supply to satisfy demand. New capacity is utilized as soon as it comes online. The hyperscalers are monetizing capacity as soon as it comes online. Each of the hyperscalers spoke about being supply constrained on their most recent earnings calls. Alphabet CEO specifically said that they are compute constrained and would have higher cloud revenues if they had more supply. Additionally, many of the clouds are building out into contracted demand. They're not blindly building in the hopes that demand will eventually show up. No, they are building out because they have signed contracts and in some cases significant prepayments from their paying customers. This AI revolution is fundamentally different from the dotcom bubble and 2026 will be a pivotal year for the AI industry. Thanks to the rapid adoption of Agentic AI and the proliferation of agentic systems in the world's leading enterprises, the leading AI labs revenues are surging right now. Agentic coding and the implementation of agentic systems in large enterprises are new use cases that are increasing inference demand significantly that subsequently is increasing compute demand. The rapid adoption of agentic AI is why we're seeing an inflection in inference demand. It's why we're seeing the leading AI labs revenue surge. I wish both Anthropic and Open AAI were public so the public could see the ramp in their revenues. Anthropics ARR has surpassed $47 billion, up from $9 billion just at the end of 2025. Open AAI is growing rapidly as well. I think the leading labs surging revenues may be the initial proof point that grabs market participants attention and causes them to realize that there will be a clear ROI on AI infrastructure. I think the leading labs surging revenues will also help assure investors of the longevity of Nvidia's growth since these labs revenues are directly tied to compute. If they had more compute, they would have greater revenues. It really is that simple. Demand is not the problem. The problem is a lack of supply to meet the demand. As I've said previously, I expect the world to be compute constrained at least through the first half of 2028, possibly longer. And so regardless of what happens in the short term, it's important for long-term investors to remain focused on the fundamentals, maintain a long-term perspective, and remember that we are only in the early stages of Agenic systems being adopted at scale. This will increase compute demand significantly. And after that, the next surge in compute demand will likely be fueled by physical AI. We're no longer talking about digital agents performing digital tasks. With physical AI, we're talking about physical AI agents performing physical tasks in the real world. NVIDIA CFO has called physical AI quote a multi-t trillion dollar opportunity and the next leg of growth for Nvidia. This industry will fundamentally transform society and Nvidia has positioned themselves to benefit massively. Nvidia sells the hardware for the data centers where the models are trained. They offer omniverse where the models are taught and tested and NVIDIA also sells the hardware that allows ondevice real-time inference through Nvidia AGX allowing robots to have intelligent interactions with the real world even when they are not connected to a data center. Notice that Nvidia is taking a holistic platform approach to physical AI and they're embedding themselves as the underlying foundation supporting all of it. Over 2 million developers are already building on the Nvidia robotic stack and this is not getting enough attention. As for production ramps, Blackwell Ultra has ramped quickly and remains in high demand. Reuben is on track to launch in 2026. Then we're expecting Nvidia Gro 3 LPX in the second half of 2026. Later on, we're expecting the launch of Reuben Ultra in 2027 and Fineman after that in 2028. We have a clear data center product roadmap stretching into 2028. And Jensen believes that AI infrastructure spending will reach 3 to4 trillion annually by the end of the decade. That means Jensen is expecting growing AI demand and an expanding total addressable market underpinning all of this. I don't think we are anywhere near any type of bubble bursting type of event. With all of this in mind, I seriously think that Nvidia still has plenty of runway ahead of it and I think this company will be worth substantially more in future years than it is today. At least that's my view of the situation. Quick note before I wrap up. All of the compilations on this channel are edited by Finn Vid with original structure and commentary. Occasionally, the same edits appear elsewhere on YouTube. If you're looking for the original version, it's always here on this channel. Thanks for watching, Finn Vid. I appreciate your support. Remember to stay calm in this market. Remember to maintain a long-term perspective and do not make any hasty or irrational decisions. With all of that being said, I hope you all have a great rest of the day. And I'm curious to hear your thoughts about Nvidia in the comments below. Please leave a like on this video so more people will see it. And while you're down there, please consider subscribing. It's free and you can always change your mind.