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Holy smokers. That ain't no dang jokers. What a day it was in the market here today. Public count hit a new all-time high right around $4.7 million here today. Up $166,000. Congratulations to anybody out there that hit a new all-time high today in your portfolio. Absolutely amazing to see. So, we got a lot to speak about in this video here today. Okay, we got to talk about some of these moves. Palanteer's move was insane. 30%. Where's Palanteer headed from here? Elf on a shelf. We got to talk about that one. And that one continues to be insanely strong. Honest with a big move. Few other stocks I want to speak about in today's video. Then we got to get into AMD. Okay. AMD. Listen, I'm going to show you my projections on where AMD is headed from here. We got a lot to talk about in regards to AMD. Okay. From there, I want to go ahead and react to Tom Lee. Tom Lee. 2027 could be one of the best years for the stock market, says Tom Lee, who looks like he was just told that it's illegal to have this much hair. Then we're going to go ahead and react to this one. Ed Yarni, equity markets have fabulous earnings momentum. Looking forward to react to this one. Ed Yarni looks like he was just told he cannot have dessert with his dinner here tonight. Then we're going to react to this one. Expect a volatile vacuum in the markets in August. This is interesting. Amy Woo. Okay, Amy Woo looks like her daughter just came home with a 98% on a test and she's like, "That's good, but why no 100%." And then we're going to react to Ross Gerber, who just looks like a situation. SpaceX is a compelling investment. Sell us on SpaceX, Ross Gerber. I cannot wait for this one. Okay, I appreciate you all for joining me as always. Thanks so much for being here. One thing, one thing I only need from you. If you haven't already done so, just smash that like button. We got a lot to get into here today. Subscribe to the channel. Make sure your notifications are on. It's busy times. We got a lot more earnings coming this week. We got Celsius, we got elf, we got a lot. Okay, busy times. Busy times. Appreciate you all for being here. Oh, by the way, description area, I got all types of fun stuff down there. If you want to follow me on Instagram, if you want to follow me on X, if you want to have some free workshops, if you want to apply to join my private group and get access to all my course curriculums, if you want to join my Patreon, it's all in the description area down there. Okay. Okay. So, let's get rolling here. Palanteer, listen. This move here today was ridiculous. 30%. 30%. But here's the deal with Palanteer. Okay, listen. Remember, Palanteer went into these earnings at a very depressed level. And so a move like this is is short squeeze, I call it, okay? where it's not like that's the whole reason the stock went up, but this stock, a lot of individuals out there, including some big famous names, had been shorting this stock, right? And they come through with Blockbuster earnings. And I don't mean Blockbuster, the one that went bankrupt. I mean just like amazing earnings, right? A++ grade. Like you can't get any better than that, right? The guidance was the one worry spot in the respect of they are expected to start decelerating the revenue growth rate. talking about like 83% revenue growth next quarter versus past quarter was like 93%. So that was the really the only thing you can really poke at in regards to earnings, right? So the move was insane. The stock was in a very depressed level. I mean, you know, it went into these earnings like in the 120s, right? Stock has an all-time high of pretty close to I think it was like 208 210. So that's a wide gap. And so the thing I'll say about Palanteer is is is exciting, but at the end of the day, it remains the same exact thing that I've been saying since last year. It's a rangebound stock, 125ish to right around 200ish. That's just what it is. And so it bounces. Everybody gets depressed about Palunteer. It goes down the 125ish level, right? Everybody gets super excited about Palanteer. It goes up to the 200ish level. My view on Palunteer is as far as a stock price goes, it's a rangebound stock. Fundamentals are going to keep getting better. Revenues are going to keep going higher, but it priced in a lot of this when we had that move last year to 200 plus. Like you're priced in a lot, right? Uh AMD had a great move here today, but we'll speak about AMD, right? ELF on a shelf continues to be redot. Remember, you could get ELF stock for $49 a share. Two months ago, two months ago, like June 5th, this stock was $49 a share. And now it's 87 and some change. It's almost a double now from the lows. Uh we still got a little ways to go. Not quite a double, right? What is that? An 80% gain from the lows. 85% something like that. Uh from the lows. That's an incredible move for ELF. So the stock remains strong. Obviously earnings are coming this week. You have to ask yourself, okay, ask yourself a question. Listen, is there something strange going on here? Why is El seeing so much momentum? Why is it seeing so much momentum? Does somebody know something about the numbers? Does somebody know something about the guidance? Are they about to bring up the guide for the year? Right? You have to ask yourself when a stock is that incredibly strong day after day after day after day, right? When it's up what 80% 85% whatever from the lows and I mean we could be approaching a double up here soon, right? That's dramatic. You have to start asking yourself, does somebody know something? Does somebody know something? Why is that stock just keep moving up day after day after day, right? And uh we'll find out if they know something pretty soon here, right? Honest. A big move here at day 6%. Listen honest stock exits this year $5 plus in my opinion, right? And I think we're on trajectory to get there. I wouldn't be surprised if after this earnings, we go deep into the fours and maybe we already get to the fives here sooner rather than later, but we'll see. Celsius earnings are coming out. That one that one you're not getting any tells in regards to like does somebody know something or something like that. The stock's actually been weak. So if anything you can say does somebody know something that numbers aren't going to be there or something like that because that stock's been very very weak. So I think everybody can learn a very important thing about SoFi. Okay listen you look at those earnings. Unbelievable earnings right? Unbelievable earnings they reported. stock goes down to $15, which is over a 50% downside move from the all-time high it reached last year of what 30 plus 32 or whatever and the earnings were just unbelievable. Those moves are not lasting. Stocks over time end up fun following the fundamentals, right? And so it made no sense why that stock went down, but it did go down. And ever since then, it's been coming back very strong. I mean just in the past few trading days SoFi stock is up what 20% or so just in the past few trading days if not over 20%. Like that happens quick and so at the end of the day SoFi's fundamentals are heading in the right right direction. Service Now remains hot. Salesforce remains hot. Those stocks continue to see momentum here. So very excited about those ones overall. Uh Whirlpool got to look at those earnings. Looking forward to seeing what they have going on. You know, you're going to get a lot of people kind kind of coming into stocks like Whirlpool and RH thinking about the thing I've been talking to you guys about for the last 6 months about housing bottoms this year and housing comes back to life over the next several years, right? And so I think some people are trying to get in that trade move, whatever you want to call it, position in before it happens because there's a lot of money to be made there. Like you could make a double up or a triple up if if if what I believe plays out, right? Let's say housing comes back strong over the next three years. A stock like Whirlpool could go from, you know, it was trading at 35 bucks here recently. It can go from 35 bucks to 70 bucks like that. And you get a double up just like that. And then, you know, you get another move to 100. And so, but that's if that that plays out. If housing remains dead, then that is what it is, right? But outside of that, Cheesecake Cheesecake Factory remains redot American Express. Oh, American Express and inside the private group. Uh, you guys were asking some great like a great question. Several of you asked a phenomenal question around P ratio and my expectations. Uh, I just answered that inside the private group. That was a highle question, man. You guys made me proud. Like, I was reading that and I was like, I'm proud of you guys, man. You guys are on a high level. Like, dang, that was good. That's a good freaking question what you guys asked there. So, I'm very happy with that. Um, other than that, Nvidia is showing showing some strength. Keep in mind, remember that stock was topped at 200 plus last year. So, it's not showing like incredible strength, but it is showing a little bit of strength here in regards to Nvidia. And I think the AMD results give Nvidia investors a little bit more comfort. And then obviously you got Musk hyping out Nvidia and the SpaceX partnership and all that gives a little bit of like you know comfort in regards to that in the short term. So just something to keep in mind there. Okay. All righty. Let's get to the big dog. A m listen. The income statement was an A++. This is amazing. You know 50% revenue growth year-over-year. Cost of sales up 16%. Total cost of sales up 15%. If your total cost sales up 15% but your revenue is up 50%. Guess what? Your gross profit is going to go to the moon. And that's exactly what happened. Gross profit over doubled year-over-year to $6.2 billion from just over $3 billion the same quarter last year. Gross margin up to 54% from 40%. The the only question is now how high is that gross margin going to go? Are we going to head into the 60s? Right? That's really the only question at this point in time. R&D was up 33% year-over-year. That's a much lower number than revenue. That's a much dramatically lower number than gross profit. So that's good. Marketing and GNA up 41%. Much lower number than revenue and much lower than gross profit. So that's good. Total operating expenses only up 32%. I mean, so we're talking about 18 full percentage points less than revenue was up, right? And you know, a mile and a half from how much gross profit dollar was up. So, and then they also had other income of 510% there. Net income grew 163%. Good numbers, man. Really good numbers. Now, keep in mind, income taxes actually hurt the company this year. So, they had income taxes last year. They had like a benefit, an $834 million benefit last year that did not have that benefit this year. They had to pay income tax of $252 million. So right there, that's over a billion dollars of hurt in the quarter versus the previous year, right? And despite that, net income was still up 163% year-over-year. So just something to keep in mind there. And then as far as diluted EPS, that was up like 190% or something crazy like that. Like so the it's an A++ like amazing numbers all around, right? This is what you want to see. You want to see your revenue skyrocketing with your gross profits dollar up even at a faster clip, right? and you want to see your net income at up even a faster clip and you want to see your EPS up at even a faster clip. That's perfection. That's A++ there. Right? Now, despite that stock moving down here, right? Listen, it comes as no surprise to me, right? This is exactly what I thought would happen if they reported this number, right? And I talked about this uh, you know, on X here today. If you guys follow me on X, I recorded a little video this morning after I got up, right? I said, "If they come through with a guide that is anywhere remotely close to what analysts are expecting, the stock's going down big, right?" And I said, you know, if it's anywhere around like 13 billion, it's not going to be good. And sure enough, the guide came in 13 billion. And so that was not what I was excited for. That's not what anybody was excited for. We needed to come in at 14 billion plus. If we came in at a guide at 14 billion plus, that stock reaction would be, you know, let's say the guide was, let's say instead of 13 billion, it's 14 billion guide. The stock would be up about 8% after hours right now. If we had come in with a banger, a $15 billion number, right? That was the big number that I was like, "Oh my gosh, AMD is going crazy." If we come in, if they came, if Lisa Sue came in with 15 billion, that stock's, you know, 625 tomorrow, the stock probably exits a week at 650 plus. That's what we're talking about. But we needed to come in with a $15 billion guide. We just didn't come in with that, right? We came in at 13. And so, no, do keep in mind, listen, they're going to likely beat the numbers, right? They're likely going to So, they're saying 13 billion potential 13.3. They'll probably come in higher than that. So maybe they come in at 13.5. Maybe they come in at 14, right? You know, they like to beat numbers at AMD. We do know that. But still, like you wanted to get that crazy guide, right? And then come in and beat that crazy guy. So you wanted to see that like $15 billion number and then they come in at like 15.5 or 15.7 next quarter, something like that. So yeah, you know, so the stock being down doesn't surprise me given the guide, right? That just is what it is. the whole the whole quarter was all about the guide just to be quite honest. Now, where's AMD stock headed from here? Right? We know where it's headed in the short term, right? Uh back into the 400s. But where is the stock headed over the next several years where you got to zoom out a little bit, right? So, these are my projections for AMD over the next several years, right? My base case just a fancy way of saying what I actually expect for the company. I expect revenue growth to be a little stronger than Lisa Sue is expecting, right? So, I'm thinking revenue growth of 40% on average per year, right? Keep in mind right now they're growing 50%. And that number is actually going to get significantly bigger as a percentage number over the next few quarters here. But over the years, right, keep in mind that the raw numbers will get tougher and tougher, you know, as they get bigger and bigger. I'm expecting 40% on average, right? 55% net income uh growth on average under my base case. That gets them to net income margins of 34% which still isn't even remotely close to the ballpark that Nvidia is in. Right? you put a 2530P on the stock, it's still a thousand plus stock in a few years from now, right? Uh maybe even a $1,200 stock. Under my bull case here for AMD, I have the stock going to $1,500 to $2,000 come 2030. So that would be dramatic upside from a stock that's in the $400 tomorrow, right? And so, you know, that's where you kind of got to zoom out a little bit. You got to zoom out a little bit in regards to this situation. bare case would be they underperformed not only my expectations severely but they underperformed Lisa Sue's expectations severely, right? Uh that'd be a bad situation. Then compounded annual growth rate. You know, we talking about the stock come 2030 is like a 600 and maybe a $700 stock. That would be pretty bad, right? Like no one no one wants this to be a $600 or $700 stock a few years from now, right? Given that it's, you know, 500's today and tomorrow's probably in the 400. So, h I mean, it's the one good news I'll say is at least it's a buying opportunity for people that are looking to want to own AMD over the next several years. And so, you kind of got to zoom out. At the end of the day, AMD is growing like a beast, right? Um we're going to have the big flipping happen here where AMD's revenue growth rates are going to start out stripping Nvidia's revenue growth rates. So, that's exciting. But man, you know, I really want to see at least a $14 billion guide, but the 15 would have been the crazy number and it come at 13. I'm like, h so it is what it is. It is what it is. All righty, let's react to some Wall Street >> Capital as well as a CNBC contributor. It's August 3rd. I'm glad to have you here and I'm glad to have you here at 6:00 a.m. Um, just to get your comments, I thought in July last time you were on, you shook me because you said that we could have before ending the year much higher that we could have a what was the draw down? You said it I could have gotten to a six handle on the S&P based on the numbers you were talking about. >> Yeah, something that'll feel like a bare market, you know, 10% kind of draw down. >> That's what you thought it was. not a good month in and for July and you said that it was even for what you were expecting it was not as positive as you were thinking but it the averages didn't do that the there was a day where the Dow went down 12250 who knows what's going you know that was an AI unwind for that hedge fund to to explain it doesn't matter what caused it get down what 7200 nowhere near six >> no or maybe 73 how low did I I'm I'm just off the top of my head Is that enough now? >> Uh well, you know, I think August is a month to recover what how June and July have been sort of flat months, but earnings have >> earnings estimates have gone up a lot. So the stock market's kind of a coiled spring and then we had a huge deleveraging as you're talking about because of the AI unwinding Korea's policy makers panicking. So I I think the markets could actually rebound strongly this month. Like maybe we get to 7,800. >> This month the 7,800. >> Yeah. For the S&P. >> Is that forecast for the 10% draw down still intact? >> Yes, it is. >> Yeah. So >> can't you take that off the table? Just Will you do it for me? Say it doesn't have to. No, I'm kidding. Um so we get to 7,800 maybe a 10% draw down then close the year above 8,000. >> Yes. Yeah. I think because as we start to look at 2027, there's a lot of the clouds that are heading this year kind of lift. You know, the SpaceX unlock will be behind us and the market testing of the new Fed will be behind us. So, I I think and then of course there's already been a leverage unwind. So, I think 2027 could be one of the best years for the stock market. >> And you think part of the >> Whoa, whoa, whoa, whoa, whoa. We might have a big disagreement of opinion here. Listen, >> I don't want to call myself a bear. for 2027. But but we have to admit here, right? The biggest stocks that really move the market are the big techs, right? Meta, Amazon Google McDougall Nvidia those sorts of companies, right? All this spending is really going to start hammering those companies hard in 2027, right? and it's going to really start hurting their earnings. You're seeing a little glimpse of it right now, even in these most recent numbers. And Meta got hit the worst, right? Profitability is literally going down for them now at this point in time, despite revenue rising considerably 28%. Meta's numbers are going to get worse before they get better in regards to profitability. And then I think it's going to catch up with Amazon with how big Amazon spend and the depreciation cycle coming for Amazon there, right? And Google, McDougall. So, I think you're going to have a 2027 will be scary from a perspective of like, oh my gosh, everybody's going to realize this spend is actually starting to significantly hurt EPS. That's going to be the realization that I think will set in in 2027, which then people, there's already been a lot of questions about like the spend and like those sorts of things, right? And people look at AWS numbers. I like, okay, we're giving Amazon a pass for now because the number is really exciting. Google's getting a pass for now 82% cloud growth rate. But remember, you got to comp these numbers next year. That's the situation. You got to comp these numbers next year, right? And then so you're going to have a lot of you're going to have much more serious questions because it's not going to just be a question of are you getting an ROI on this? It's going to be oh my gosh, you're starting to severely damage your earnings per share because of this. That's a that's a much more serious conversation than are you going to get a positive ROI on this? are your products going to be successful when you start actually damaging the earnings per share then you start questioning the the multiple on the market right and so that's going to be something that has to play out next year and I don't think that's being taken serious enough and so like I said I don't want to call myself a bear for next year but that's something you got to take serious right then compound this with Nvidia Micron the memory chip companies right AMD like all these companies are you know market caps are growing growing growing probably will continue to grow as this goes on, right? But once those companies earnings per share really start getting hit and you start having those serious push backs and questions about what are these companies earnings per share going to look at like a year from now, two years from now, right? Then people are going to start thinking about like are these companies going to spend as aggressively in future years? And if they don't, what's that mean for Nvidia's numbers? What's that mean for Nvidia's margins? What about for the memory chip companies? Right? What about for AMD? You're going to start having all those conversations. So then you could have a situation where all the tech stocks are like like no one wants a piece of any tech stocks because there's like so much worries about semiconductor. So like I said, I'm not going to call myself a bear, but I'm just like those are these are serious things that I don't think a lot of people are taking serious enough right now that next year people are going to start looking at and be like, "Oh, shoot." Right? So food for thought in regards to that >> positive sentiment this month is going to be um cooler inflation data. >> Why? Why? Oil's back up. >> Yeah, oil's up. And you know, we still have the tariffs working through. So those are hitting the CPI numbers, but the real driver of inflation historically has been housing and wages. and housing has really disinflated. You know, we've had 3 months now of declining home prices. So, you're taking out one of the biggest weights for inflation. And then I think wage inflation is really muted. I mean, we'll find out this Friday. >> Hey, Tom, I I just want to ask you what you think of the Liupole Dash Brener situation and the idea that he was highly leveraged four times had to unwind this stuff. How much of that played into what you were just talking about with South Korea and the panic that happened there? How much of that was because he was selling that portfolio at the same time? >> Uh I think it was a big factor. Um because as you know Korea is basically two two companies Samsung and he so it's memory and semis. >> Um he of course had a very large following. So, not only was his leverage on his $45 billion, let's say it was leveraged 150 billion, >> but there was a lot of money piggybacking on his trade. So, I think in some ways, uh, you know, the unwind and even last week >> was due to a lot of funds being aware that he might have been in trouble. >> That's an interesting whole situation there. Edward, make of it. Where's this market going? >> It's going higher. Uh I mean my my year- end forecast is 8,250 and all of a sudden that looks fairly conservative. It's uh only 6 1/2% away. Uh I think uh we've got FIMO what I've uh previously previously discussed with you and that is fabulous earnings momentum. Uh that's really what it all comes down to. I mean, we've got uh plenty of things to worry about uh in the Middle East with the Fed uh and uh yet u the economy continues to for perform extremely well. It's resilient and we're seeing that in earnings. >> You're comfortable where earnings estimates have gone. I mean, if that's everything according to you, then that's everything about what risk lies out there too. Well, uh, I I do watch analysts earnings consensus very closely because I think that's really what's being discounted in the market, their outlook for the rest of this year going into next year. And, uh, that's called forward earnings when you take a time weighted average of this year and next year. It's an all-time record high. Uh, I think it's going to hit over $400 a share by the end of the year, which will be the expectations for next year. Uh, take 400 times 20 and you got 8,000. uh a pretty reasonable estimates. I think earnings are going to be somewhat better and the valuation multiple may be higher. So uh I'm feeling pretty comfortable with that. Yes. >> You had you had said in the I don't know maybe in the last week or or so that that tech had looked tired. It certainly looks like it's awake again now. >> No, actually on on on Sunday I put out a note saying that information technology was on sale. Uh so maybe that was an old note but uh obviously you got to stay on your toes here with this market but I actually pointed out that some conductors were cheap that the overall uh information technology sector was trading at the same multiple as as the overall market and that's unusual because growth stocks usually trade much better and when you look at u S&P 500 and information technology it looks nothing like what we had back in 1999 and and 2000. So all all of a sudden all this talk about this being a a tech bubble is kind of thrown out the window. >> I mean there was that note out today from the gentleman at Citadel Securities who who suggested you know we we worked off our our on our own the excess that was in the market. Now we're primed for a reset. No no no end to the fundamentals. Sounds like you agree with that. >> Absolutely. I think that uh it is all about earnings. uh the valuation multiple came down because earnings went up and investors felt kind of nervous about those uh earnings numbers and they weren't paying up for it and they actually took some profits. Now they're regretting it. They're jumping right back in. >> You like the broadening story? >> Absolutely. Uh we've been recommending market weighting information technology since the end of last year and and I think on balance that's actually worked out reasonably well. We've been recommending overweight financials, industrials, and healthcare, and that's worked out very well. >> Yeah. So, you go through interesting times in the market and and if you want to know where money's moving next, my opinion is where money's going to move next is if you look at the last few years in the market, right? It's been all about tech stocks ever since that bottom in 2022 in the fourth quarter 2022, right? All about tech stocks. You know, it was about the AI recovery. Nvidia led it first, right? Then Meta started coming back to life and Amazon and you can go through the whole list of them and everybody ended up going up dramatically, right, in in regards to tech and it's really been the play and all the excitement about AI and the spend and all those sorts of things, right? And so my view is I wouldn't be surprised if we have like a conclusion of that this year essentially. And I wouldn't be surprised if we move into a new age market over 2027, 2028, maybe even in 2029 where it's not all about tech stocks. And I believe there's a potential where those could actually take like the backstory, right? It doesn't mean those stocks are doomed and they're all going to crash. It just means like they are they become like not as exciting next year and after for a few years. And I think then you move to uh companies that sell like physical goods, right? Which have not been the play for years now at this point in time, right? Smaller cap stocks, more midcap stocks and you see more and more momentum there. And you're already starting to see glimpse of that as a of that this year, right? Where some tech stocks, Meta is a good example, uh are very weak. Nvidia, I think it's a good example. Nvidia topped last year 200 plus, right? And you look at it today, it's what 211, 215, whatever. It's like that's, you know, for Nvidia like what's going on there, right? And so I think you're already starting to get some glimpses of this like move to Russell, move to MIDIs, uh, move to companies that sell, you know, physical goods and are not necessarily like tech companies. And so that's where those parts of my portfolio that I've been adding over the past year or two, I think, will really benefit in a way that they haven't benefited for years, right? And so I think there's there's several stocks that come to mind when I think about like that next run and they're not tech companies and so something to keep in mind there. All right, next one up here. Expect a volatility vacuum in the markets in August. >> Derivative strategy from RBC Capital Markets and Amy this earnings season has felt a little more volatile. Has it played out that way in the options market too? just I mean what markets and Amy this earnings >> so listen I was in New York City uh a few weeks ago right and I'm trying to figure out I never seen any customers at these things and and I'm like how do they make money I'm serious like how do they make money with all those little carts on the corner and whatnot you know I walked that whole Manhattan area right time square went by Time Square like a billion times you know I walked that whole Manhattan area down to Central Park back back walking all over the I've never seen any customers any of these little corner things selling pretzels and selling these I don't know whatever they sell hot dogs and blah blah blah and I'm like how do they make it? I'm really genuinely curious like how do they how do they make it cuz I never like >> am I like in the middle of the night do people go to that like I'm trying to figure that out really >> has felt a little more volatile has it played out that way in the options market too just I mean watching the shares after hours you see some really big hits and some really big misses. Yeah, I will tell you, you know, specifically when you look at an Amazon and when you look at a Microsoft, their one-day earnings realize move was the largest on record. So, you know, pulling it back to all the previous quarters, I think it was plus 15% and plus 17% respectively. But overall, when you look at earning seasons, specifically as it relates to the hyperscalers, they're beating these implied moves that are happening on options. And that's historically not the case. Typically options tend to overpric the earnings move and then they underrealize. We're seeing the opposite this time. >> The the hyperscalers though we're not judging them the same way that we used to. This is this is an evolution that's taking place. >> It's it's an evolution. It's not the hyperscalers you married. You know they're becoming different people. You're you crisis. Maybe they're having an existential crisis. But look, two big things. when you spend that much capex uh and and then you issue that much debt, they're far more uh rate sensitive and they're far more sensitive when you think about that negative free cash flow. So, it's not the same beast and because of that, there really is a volatility regime shift and how volatile these stocks will be going forward that was not the same as the past. >> What does that mean just in how in terms of how we judge them and how the market judges them? So last weekend, one thing I wrote going into this week's earnings was I think a lot of these implied moves that we're seeing are underpriced. And that tended to be what occurred especially among the hyperscalers. I think that will be the case going forward because you think a lot about these baskets that the quants have on these factor baskets. I actually was updating our own highquality versus lowquality basket. And I said, "Hey, you know, a lot of these hyperscalers, they aren't going to make it into these highquality baskets anymore. If one of your bogeies is you have to be really free cash flow positive, and they're churning and they're spending so much money, they're dropping out of these baskets. You're really rethinking how they fit in the factor world. And on top of that, they're shifting that volatility routine. >> Does that mean their investor base is shifting as well? Is it a different investor who's kind of coming in?" I I think right, you know, I think it's a >> Google, Amazon, Meta, Microsoft. I would say a pretty high probability they're all free cash flow negative in 2027. Pretty high probability. Slowmoving ship in the sense that people have them. They're such large concentrations. But when you start to change that volatility regime, you one, you'll have new people coming in, but two, you might have people leaving who are targeting certain volatility bands. And so those things are shifting. I think next earning season will look more similar to this one than past ones in that those option implied moves have to start picking up from where they were. Joe was just asking the question um in the last in the beginning of the show, have we made it through the volat volatility factor or the frothy factor in the markets? just the concern about AI has that kind of played out at this point or not. >> So yes and no. I think near-term froth you did get a lot of shakeout just because of what occurred with situational awareness last week one of our monitors. So absolute skew inversions essentially the absolute count in the S&P 500 of how many stocks where the call implied volatility is outweighing the put andly volatility that high is around 80. We're sitting about 50 right now. So about average levels that tells you froth has been sucked out of the market. However, as we get past this earning season, August tends to be a volatility vacuum and then we hit into midterms. I would expect some of that to reoccur. >> There will be a season two. They're working on it right now. Probably the producers and the writers, showrunners, and everything else. Uh I I would imagine that, too. >> I think there'll be a season two, Joe. >> There will be a season two. Yeah, we sometimes like it it takes a long time. Was Severed. It was like three years hopefully. Uh >> Severance. >> Severance. Severance. Great show. I was like sever severance. It was like three I I forgot what happened. >> Yeah. >> Um >> the rewatches. >> What else should we watch as we kind of move out of earning season into the dog days of summer, maybe start heading towards fall? >> So, we were on a client marketing trip these past few weeks and what I thought was interesting is people are starting to bring up midterms fairly early and here's a context in which they're bringing it up. It's not about consumer sentiment. It's not about these high gas prices, inflation. It's a lot of anti-AI sentiment. So, you know, we sat down, the client across from me said, "Look, what do you think about this moratorum that Kathy Hokll's put on on data centers?" And so, it's interesting to see this divergence in sentiment that you're seeing in the US that's not necessarily there in China. And the question we've been writing about, which I don't have a great answer to, is this a political thing or does it become a incumbent versus not incumbent thing? We don't know how it will play out, but when anti-AI sentiment is something that happens in midterms, it ends up being more of a market story just simply because of the concentration that you have in all these names. >> I mean, you might also have the states versus the federal government in in some of these issues, too. The federal government has been mostly handsoff. The the rules they've talked about, the regulations at this point are voluntary coming from the White House, but then you get a real big push from the not my backyard, and that may be more of a local story. It's interesting because one of my notes was was literally called nimi not in my backyard. So the point being on a federal level obviously we have stakes in we want to pursue we want to beat China. There are these reasons for doing it but at the same time you don't want the data center to be what you're staring at from your bedroom window. And so there is this dichotomy and this tension between what's occurring local local versus on a federal level. And I think that tension will probably start to break out more in midterms. >> Yeah. You know what? This is actually really interesting cuz I just saw something yesterday in my city. In my city I live in. Uh they just cancelled a data center that was supposed to be built um behind the mountains there and I don't know why. I couldn't find the reason why it was didn't go through. It was like something that was supposed to happen and so it's not happening. And so yeah, I don't know. It's interesting. It also reminds me he's talking about midterms politics. If I recall, T-Man's in my city today, too. I think he's over by my old house if I recall. All right, next one up here. SpaceX is a compelling investment. Ooh, this is going to be fun. Much uh usefulness it is to even go through some of the numbers on a quarterly basis backwards looking. Uh I know a lot of investors are looking to figure out kind of whether Starship sort of uh fulfills that promise and whether what's going to be attached to these rockets presumably uh whatever sort of servers and other sort of uh orbital data center type of equipment are going to be along for the ride sometime soon. >> Well, I think it's going to be sooner than what people think judging from the last Starship flight that we saw, which I I would consider pretty successful. And and when you look at the size of this thing and the fact that they're now getting it in and out of space without exploding and landing pretty well into the water, um we're pretty close to having a re reusable massive rocket ship. Other than many of the Oh, whoa, whoa. Hold your horses one flipping flapjacking moment. Listen, pretty close. Could be years away. Okay? Like years away. We've been pretty close on solving full self-driving for years and and yet we're still not there. So like pretty close is like dude that that could mean we're still 5 years away, 10 years away. So that's just ridiculous. Like you can't say things like that when it comes to technology like this. >> The technology challenges that they still face to get this to work, let's say, over and over again in scale. But just the fact that they've gotten this far is very encouraging and I don't think people should doubt whether or not this is actually going to happen. It's just when >> Yeah. U and I think that seems to be the consensus and we've certainly seen some degree of a proof of life with regards to that ship. The question though becomes uh in terms of monetizing this further beyond just being sort of a a taxi service if you will uh into space. How much of this gets monetized by SpaceX itself with regards to what it's able to put there and that flows back into the company for its own uh for its own coffers? >> Yeah. And I thought it was interesting because I thought the most important announcement from SpaceX was their deal with Nvidia to build these, you know, they're calling Star Mine uh data centers in space. So really, they're putting the hardware pieces together to do something that's never been done before. Listen, that's all just for branding. Give me a break. Which works because they have Starship and they have >> Oh, I feel bad for people that believe this. It's all just branding. Are you kidding me? >> Starlink. So, by putting the data centers in space, it really adds a whole new element of what can be done through Starlink as far as not only just connectivity and internet access, but also uh sending and receiving data. So, it's a it's a very exciting, you know, idea or premise to be able to do this. And only SpaceX can do it. And I think that's what makes this investment compelling isn't really what it's doing today, but what will this look like in 5 years? And it could be pretty damn impressive. >> Were you surprised that they would make that announcement on uh with regards to Nvidia and using those Reuben GPUs? >> I I wasn't surprised because they have a very close relationship with Nvidia. What I'm surprised about is how rapidly they're moving forward with the development of these satellitebased data centers which you know obviously has never been done and is techn you know the the challenge from a technology perspective is massive. So, so you know, they're moving forward full speed ahead and and I think it's a, you know, a really exciting prospect and and it's a high-risisk investment because obviously all these things could fail, but on the other side, it's a high reward investment if they succeed. And so, I think investors need to weigh both of those uh cases when looking at the stock today. But considering it's trading below the IPO price, individual investors who want to buy the stock certainly are getting it at a discount compared to everybody else. Um let's talk about the AI uh business obviously created after you merge XAI uh with uh SpaceX. Um we should point out they're also saying in the release that they do plan to close the cursor merger uh sometime this quarter in the third quarter. Uh this has been a bit of a drag and it seems like there were a lot of investor. >> We should start building Teslas in outer space too and like start flipping flapjacks in outer space. Like why not? We'll just do it all right. that would have liked to see SpaceX uh go public uh with just the uh the launch business and the connectivity business and not necessarily XAI. Are you comfortable with maybe what his vision is for how Xi XAI fits into all of this? >> Well, I've been sort of XAI is a painful thing because I sort of think Tesla should have owned XAI and I I I know Elon didn't want Tesla to own it because he didn't control Tesla. So well he does but shareholder-wise and so Xi is a part of SpaceX but the way I look at it is Elon is really good at building factories and AI and XAI is going to be successful whether they use the compute or sell the compute and so the fact that um SpaceX or XAI is investing you know billions of dollars into building these data centers it's going to pay off one way or another because the demand for compute is so much larger than the supply of compute and Elon's super good at this. So, you know, I think investors are so short-term minded to be worried about capex during this incredible technology peri boom period, we would need the capex to be spent if we're going to be competitive. And that's exactly what SpaceX is doing. And I think if you take XAI out of the business, yeah, it's more profitable. It's easier to sell on the short term, but on the long term, you're missing one of the great opportunities to be able to provide compute from space, which is actually, you know, potentially massive as far as an opportunity. So, you know, I I think it should be part of SpaceX and investors just have to be patient and let this stuff play out. Uh Starlink coming in uh 12 million uh subscribers at the end of the second quarter. It's only profitable business. Uh the company says it has RPO for Starlink of $66 uh for the most recent quarter. Uh I mean this is kind of the the one part of the business that doesn't really have to prove itself. Uh I am curious as to whether there is a growth story for Starlink or has it already sort of matured. >> Oh no. I mean Starlink is just beginning in >> Yeah. This was this this actually that's not a that's a bad miss right there because this is the one business that you got that's actually successful. And so the fact that that missed is like okay our one successful business missed >> so many ways. You know Starlink is a critical system and and pretty much everybody in America should have it as a backup for their internet access as a as a fire survivor of the Palisades fire. Starlink saved us. You know like without Starlink I can't even tell you what would have happened during that fire. So it's a literally a life or death critical system and you should have it as your backup internet. So there's a massive market even in America that doesn't have Starlink and and when you talk about globally it's it's huge. But there's another element to Starlink that people have to understand which is the military element to Starlink which is one of the reasons Ukraine is having so much success with their drone attacks all throughout the country of Russia is because they now have Starlink satellite antennas on the drones and same with the US drones. And by doing that, it gives us a guidance system that's global, that can be managed anywhere in the world, and it creates a weapon that is almost unstoppable. And we're seeing this right now in real time. And this is due to Starling. So the military side of Starling is only also just begun because we haven't even built that many drones yet. Like if we're going to be prepared for the future of combat and war into the 21st century for real, Starlink is going to be just a critical element to our military and our success in this new autonomous, you know, military world. So Starlink is just at the beginning. Whether it's, you know, internet service on a boat or a backup service at your house or putting it on a drone to go blow up the Wild Berries factory in Russia, this stuff works incredibly well. and and I just there's no competitor. >> Um I mean, oh, I want to watch this video inside the home of the YouTube's biggest finance creator. That looks like a banger video. I want to watch this video. I rank the best stocks you should buy right now. That looks like a banger video, right? Okay. SpaceX, in all seriousness, is a stock a buy. Answer: Absolutely not. You going to be flipping my flapjacks? No. Of course not. It's not a buy. Someday it might be. It's Someday it might be, but it ain't today. It ain't today. All right, guys. appreciate you for joining me. Hope you enjoyed today's video. Uh, once again, linked in the description area down there. I got a bunch of fun stuff. Want to follow me on Instagram? Want to follow me on X? I got that down there. You want to join the private group or apply to join the private group, that's down there. Want to join my Patreon, that's down there. Free workshops, that's down there. All types of goodies, all in the description area. I'm going to try to keep you guys up to date with everything going on. And man, we got a lot going on out there. Appreciate you. Much love and have a great