Breaking News Just CRASHED The AI Market AGAIN (Here's Why & My Plan)

All right, what's up everybody and welcome back to another Tuesday here in the stock market. Well, today was a bit of a mixed day in the market to say the absolute least to kind of underplay it a little bit because on one end we had an absolute smashing day in the market. Google up 2.7% Microsoft up 2% Berkshire Hathaway up 3% Visa MasterCard up the entire healthcare sector up consumer defensive up. I mean again a really dang on solid day on one end but on the other end the deep end the AI trade got absolutely brutalized ravaged today. Micron down nearly 9% Broadcom down AMD down 7.9% Intel down 5% Marvell down Dell down 9.6% Sandisk down 15% Palantir down 6% again a brutal brutal day to be an AI semis memory etc. So the market was all over the place today a bit of a wild day and you know what's funny I made a video on on Sunday I made a video I said uh this is going to be a very wild week in the market and people are like Tyler you say that every week. I was like all right we'll see. I think this is going to be a bit of a wild one and we'll fast forward a few days and you can see just how wild it is getting and unfortunately I think it's only going to get more wild from here. But nonetheless what I wanted to do for you all in today's video considering how chaotic the market has been today it's just break everything down for you. We're going to go over why some of the market is in the green today. We're going to talk about why the AI trade is in the red today because I do believe it comes down to some news that we got earlier this morning. I'll talk to you all about what I'm doing in my brain new portfolio the brand new $10,000 portfolio that I just started. Talk to you about what I'm doing in the $430,000 portfolio. I walk you all through what I'm kind of looking for tomorrow with these earnings reports from Meta and Microsoft just so that you leave today's video feeling at least caught up and ready to continue to wade through all this craziness. So we got a good bit to get into today and I don't want to keep it too long on a Tuesday folks. So let's jump on in. So let's start off with mm let's start off with the positive. Let's talk about why some of these stocks are in the green because I think it really comes down to three things. Or mostly two things. Let's go with that. I think it comes down to two things. One of them being a little bit of it. The other thing being most of it. So, when it comes to the smaller reason as to why we're seeing, you know, the majority of the market in the green today is because I actually think we are seeing some sort of rotation out of AI. I think people are selling their semi's, their memory, even some of their software plays right now and they're buying just anything else. Whether it be health care, whether it be consumer defensive, whether it's just de-risking in a Berkshire Hathaway or buying something safer like Microsoft and Google, it feels to me like people are rotating. And it's hard to ignore it when you're seeing the total volume shifting almost perfectly. There's almost a perfect volume balance shift from AI into some of these other places. And I think a smaller reason as to why you're seeing the market green today is because people are selling AI and buying other things. I think that's a small percentage. Let's call it 20 to 25%. What I think the bigger thing is though, the bigger reason as to why we are seeing the market in the green today is because of what we are seeing in the Iran situation. So, earlier this morning we saw um Donald Trump and the White House's energy shift a little bit. It seemed as if the the vibe that they had about this whole Iran whole Iran conflict kind of changed over the last 24 to 48 hours. Because you see, towards the end of last week Donald Trump was saying things like, you know, we will decimate Iran. There will be nothing left. We'll get rid of all their bridges, all of their energy plants. I'm talking full-blown wiping them off the map. That was just four or five days ago. Fast forward to this morning, Donald Trump does an interview and he's like, "Yeah, well, we'd love to work out a deal. We we want to talk to them. We're trying to get in contact with them. We don't want to escalate this too far. We'd love this to work out. I mean, we basically already have a deal. They just need to agree, right?" It was an energy change. It was an energy shift. And the market believes it. The market absolutely believes it. I mean, go look at oil prices. Oil prices have been absolutely collapsing. UK oil currently back at $81 from a high of $100. US oil currently at $79 from a high of $93. The market absolutely believes that the US actually wants to de-escalate this situation. And there could be many reasons as to why this is, but I think the reality is that this is going longer than they thought it was going to be. It's not having a great impact on the market. We're getting very close to midterms. The Fed is being put in a very weird position in which they may need to start raising rates soon. And 10-year treasuries are already at like 4.6% or something like that. I mean, the market's not in a great spot. And we know Trump wants to protect his portfolio. Trump's not going to let it go longer than he wants. And it seems as if the energy shifting a bit. And so naturally that is going to make people say, "You know what? Cool. Let's take a bit of a gamble. Let's take a bit of a risk. Let's Let's go a little risk on and let's toss some capital. Let's toss some cash into the market." And you're going to see a day like today. When you see oil prices falling, you're going to see the opposite reaction in the market in which prices go a little bit green. Now, as you can see, people aren't taking that risk in AI because of of course sentiment in this news that we're about to talk about here. But nonetheless, we are seeing pretty solid performance today from especially things like Google and Microsoft considering the fact that there's a big negative stigma around hyperscalers right now. There's a negative stigma around Google, negative stigma around Microsoft and Meta and Amazon. People aren't feeling great about them. So the fact that they're up today, I think today it feels good. It does kind of concern me that we're seeing something like Microsoft pumping, moving upwards into its earnings. That's usually not a great sign, but I'll get into that in a little while. But nonetheless, that's why we are seeing the market green today across uh some of these different sectors. Now, when it comes to the AI trade, why is AI taking a beating today? Outside of just the fact that we are in a correction. Well, we did get two pretty important pieces of news today that I definitely think are worth talking about. Not that I think they're actually very important or significant, but they're definitely worth talking about. The first piece of news comes down to this report that came out that basically said that China would have homegrown DUV machines, which are like EUV machines, but a different version, and I'll explain that in a second. And the second piece of news is that Kimmy K4 is potentially coming, which threatens companies, frontier companies like Anthropic, OpenAI, etc. So, let's talk about what these two pieces of news were, why the market took them so negatively, why it caused the AI stocks to pull back, and whether or not I think it's something to actually be concerned about if you are an AI investor, okay? So, the first one. Headline number one, China is building its own chip machines. So, there was a report that came out saying that China has started making homegrown DUV lithography machines, the equipment used to actually print chips, a market ASML basically owns. Now, if you don't know what this means, it's super simple. So, in the world of AI, there are chips, right? Everyone knows this. There's GPUs, there's CPUs, there's memory, etc. These are the chips that basically power all of these LLMs and all of these AI models and things of that nature, right? Well, these chips are made by these machines, right? These very, very complex, extremely expensive, hundred million-dollar plus machines, right? There's a company named ASML. ASML is the one who makes basically all the machines in the world right now. They actually have a bit of a monopoly on it, and the machinery or the tech is called EUV, okay? Extreme ultraviolet lithography machines, or EUV. They have a monopoly on it. Well, China came out and basically said, "Well, we're creating our own machines called DUV lithography lithography machines," which is deep ultraviolet lithography machines. Now, in all honesty, I'll I'll say that. I'll get into that in a second. When it comes to these machines, the reality is, folks, the reality is DUV machines are almost like an outdated version of EUV machines, and they're not even going to be creating these at a capacity that could even remotely replace what ASML is doing anytime soon. But, the market didn't like it, and as a result, we saw things like ASML falling about 8% before closing down almost 6% because the fear is that if China builds its own chip machines, ASML loses its grip, and the whole Western chip equipment story is in trouble. That's the scary version of how this could go. And think about it, right? I could rationalize why people feel this way. If let's look at it from another perspective. Right now, there is a limited amount of chips out there, which is the reason why these companies charge such a premium for their chips, because people want them, people need them, so they're going to charge higher and higher prices to make as much money from them as possible, right? If a company comes out and starts pro- producing machines that can create more of these chips, it's going to reduce the scarcity of these chips in the market, which will drive premiums down. So, there'll be more of them, which makes them less valuable per per chip, right? Again, that's not going to happen because of this news. I'll get into that in a second. I'm trying not to get too far ahead of myself, but that's what people are running with. This idea, this fear that, well, there'll be too many chips, and it's going to drive down premiums, and it's going to kill the culture that ASML is creating, and etc., etc., right? So, people are super scared about the whole AI wave. Now, when you pair that with the second piece of news, which is that Kimi K4 is on the way from the Chinese lab Moonshot, it makes people even more nervous. So, if you don't know about this whole Kimi K situation, I'm not talking about Kim Kardashian. I'm talking about something called Kimi K3 and Kimi K4. So, there's a company out in China called Moonshot, which created an open-source um model called Kimi K3, which can allegedly, pay attention to what I'm saying, allegedly, do what Anthropic and um OpenAI are capable of doing, you know, with Claude and ChatGPT, but it can train these models at a fraction of the cost, 1/100 of the cost. And if that is the truth, which is a very big if, that would be very important to know, because, of course, it means that these companies who are training these models may not need nearly as much infrastructure as the hyperscalers are preparing to scale for, right? And provide for, right? You're not going to really need to see as much comp you needed in order to train up this model, which is the exact sort of thing that happened with deep seek, you know, late last year. And so, whenever this first came around, which I can't remember exactly how long ago this was, it was either 2 weeks ago or 3 weeks ago, the market freaked out because it was worried like, "Oh my goodness, Moonshot is going to put OpenAI and Anthropic out of business." Whatever. The market kind of moved past it, somewhat forgot about it. Fast forward to today, Moonshot announced that they were going to be training its a next giant model, Kimik 4, which would be the follow-up to Kimik 3, which already set off a deep seek style panic when it launched. So, as a result of this, the same fear is back. People are worried that cheap, powerful Chinese AI making all the expensive US spending look pointless. Basically, all of this capex is being spent for no reason. So, people are worried and people are concerned and they think Kimik 4 is going to be the downfall of the frontier, OpenAI's and Anthropic's, etc., etc. So, when you pair these two things together, they're the same piece of news kind of in just different ways. Cheap Chinese technology putting out the fire that is the AI trade. That's this narrative that people have grasped onto. And I could see why people would feel this way, but the reality is that they're thinking more emotionally and not rationally. Because the more research you do on these things, more you realize like, "Yeah, there is potential for this to have an impact, but it's not going to be this whole down with the empire sort of situation like the world is pretending it is." People are just emotional, okay? Because let's look at the facts. When it comes to the machines, the DUV, right? Deep ultraviolet lithography machines. The plan, if this is even true, the plan is that they will create about five machines this year and maybe 20 next year. Now, I want you to look at that in comparison to the total amount that the industry actually uses. Five to 20 is a rounding error. Five EUV machines could disappear and people wouldn't notice for a little while. And not literally, right? That's obviously billions of dollars, but you get the point. 5, 25, it doesn't really make a difference. And analysts covering the story flat-out said it's not the real threat that people are making it out to be. Their point is that building one machine is not the same thing as running it 24/7 for a full year in real production, because that's the hard part and it's years away from even being a real threat. So, the market sold ASML and other related companies within this whole Western chip narrative on a threat that experts are actively waving off and saying, "No, this just doesn't hold up." Right? And so, yes, it can have some sort of impact, but when you look at the actual technology, DUV versus EUV, these companies who are making these chips, they want the most up-to-date, highest model, best thing possible for best bang for their buck. And they got billions of dollars to spend cuz all your cap ex spenders are giving them all their money, right? So, they're buying the best stuff, the newest stuff, the stuff they trust. Their switching costs will be insane to absorb and adapt some sort of new thing. And sure, maybe there's a world in which it's not your current chip makers. Maybe there are new chip makers that will come around adopting the DUV machines and that will, of course, increase the supply of chips. Maybe, but again, that we're talking years down the line for this to even have an a dent in the market. This is like you go into a Chinese a Chinese restaurant in the mall and eating three three scoops of food out the plate. They gave you a pile of food that big, baby. That's not doing anything. It's not making an impact. Not yet, at least. Not yet. So, with the DUV thing, I look at this and I go, "Who cares?" Now, when it comes to the Kimi K4 thing, people are seeing this also in the wrong way. They're looking at this in the wrong way. First of all, first of all, what we have to assume is that Kimi K3 and Kimi K4 will be capable of at scale training at a 1/100 of the cost. I think think likely that it'll end up in a more deep seek certain sort of situation where it comes out where it's like, "Yeah, it doesn't really work like that." It doesn't really work like that. These are all words. But let's say hypothetically it does. Let's say hypothetically it does. One, that could still be good for companies like Nvidia because they're using Nvidia's Blackwell chips. So, they're just going to become a new customer of Nvidia anyway. But two, I'm a part of the community of people who believe that as we see, if we see, and eventually as we see these training the training for these models getting cheaper, I think it's just going to encourage more people to use it. And I think that increase of demand is going to outweigh the premium that's currently being charged because it's so expensive. I think it will be a net positive. There will be negatives. I think it'll be a net positive. So, it's one of those situations where I'm like, I don't even believe the stats behind Kimiko 3 and what Kimiko 4 would be potentially capable of doing at the cost that they're saying. But even if it is true, I think that increase in um uh like what's the word? It's affordability will make demand just go up and usage go up and token cost go I think I think it's just going to go up. Right? So, it's one of those things where I think one way or another, it's all about the way you perceive it. It's all about the way that you look at this. And I'm choosing to look at this from more of a perspective of uh I think you guys are overreacting. And so, when you look at these two pieces of news on the surface, I understand why you might go, "Ooh, that could be a little concerning." Once you start peeling back the layers though, you go, uh this isn't really that big a deal. But it does go to show how irrational the market really is and how over-leveraged the market has gotten. I mean, go look at what happened to the Kospi. The Kospi is a great example of what happens when you have an irrational market that's over-leveraged. An irrational over-leveraged market is dangerous. That is a violent mixture and it's the reason why the Kospi, which is of course South Korea's composite, can fall nearly 11% today. Look at what's happening. South Korea is one of the most over-leveraged markets in the entire world, maybe the most over-leveraged per capita market in the entire world. It's built on South Korean finance and investment like traditions right now are seemingly built on the idea that like margin is leverage or okay. It's like a norm. And you're seeing all of these stories and all of these things about it. It's pretty dang on crazy. And it's a part of the reason as to why people are getting smashed. You're seeing the cost coming down and wiping out all of these traders. Margin calls everywhere. Liquidations everywhere. People getting battered. And what once was a cost be sitting at $9,100 is now sitting back at $6,000. I mean a nasty pullback. Now 28% in just the last 30 days. This is a great representation of how irrational and overleveraged the market is. And that sort of irrationality and that sort of overleverage is the exact reason as to why on a day like today where we get two pieces of news that aren't even really all that bad, you have Micron falling 8%, AMD falling 7%, SanDisk down 12%, Dell down 9%, right? It's the exact reason as to why you see this sort of day. And I am glad to see a little bit of recovery, right? Even while I'm making this video, you know, in video recovered a little bit. Broadcom's recovered a little bit. But still, I mean this is a ridiculous sort of reaction to this news. And I think it's a part of the reason as to why I'm personally out here actively hunting for opportunities in this sort of market. And I'll get into that in a second. Now, with all of that in mind, right? One thing that I do also want to mention as I'm about to show you here is that this is probably not going to stop, right? So this sort of irrationality and this sort of like um emotion that we're seeing in the market is probably not going to stop at least this week. Because what you need to remember is that tomorrow Microsoft and Meta both report. They're going to be reporting their Q2 earnings. And of course, these are two of the biggest AI spenders on Earth. And they're pouring hundreds of billions of dollars into AI. Meta is doing it more for their own use. Microsoft is doing it for uh of course Azure, which is their cloud platform. They're renting a ton of that compute to some of these major major companies. And this is going to have a direct impact on the AI trade as a whole, okay? And so it's not going going And then as soon as this ends tomorrow, we're going to see the FOMC meeting where the Fed's going to decide if they're raising interest rates and some people are pricing in some sort of um surprise hike possibly. Then you go into the next day after that, you have Apple and Amazon both giving their Q2 earnings and Amazon's the biggest hyperscaler in the space. So, it's only going to get worse. And it doesn't mean that the prices are going to crash, I just mean that the volatility and the emotions are only going to get worse at least through the rest of this week. And so again, when I told you all Sunday this is going to be one of the wildest weeks you've seen, I wasn't bluffing. All right? I wasn't bluffing. So, what am I doing through all of this with, you know, the Iran situation and oil and all this news? Well, I'm actually going in and I'm looking for opportunities, okay? So, when the market sells great companies on news that doesn't hold up, that's not a threat, that's divergence. And you guys know me, I'm always looking for a divergence. Divergence means the value of something is either staying the same or going up, but its price is going down because the market's irrational. That gap between the price and its value, that's the spread I'm looking for, that's called divergence. And so, what I'm personally doing is I'm going in and I'm buying. As you guys know, I recently started up a brand new hyperscaler portfolio where I'm building positions in things like Google, Amazon, and Microsoft and yeah, I'm buying. I bought some today as you can see in the Discord, I deployed $300 today. I'm doing 300 tomorrow, 300 Thursday, 300 Friday, $1,200 this week getting deployed into the $10,000 portfolio. And I'm going to probably deploy another three or $4,000 into the individual um public portfolio as well because in moments like this in which, you know, the market is pulling back and we're seeing people to news that's just not that big a deal, especially in these AI companies, guys. I use it as an opportunity to buy. I will almost always go against the grain. When people are freaking out and scared, I get excited. And I'm not going to go down the cliche cringy Warren Buffett quote, but you know the one I'm talking about. You know the one I'm talking about. These moments where people are emotional and freaking out and irrational for no And I don't want to say no reason, but mostly no reason, great opportunity to buy. So, that's exactly what I'm doing. I'm hunting for opportunities to purchase. Now, I'm taking it in stride. I'm not going all in today. I'm not going all in tomorrow. Remember, we have major earnings reports coming. Microsoft and Meta tomorrow, Apple and Amazon the next day. We also have SoFi tomorrow, which is important for my SoFi holders out there. So, there's a lot going on, okay? There's a lot going on. And what I don't want to do is deploy all my cash today and get a better opportunity tomorrow or Thursday or Friday. No, I want to have an adequate amount of capital available throughout the entire week so that no matter if the market goes up or down, I'm capable of building into these positions and feeling comfortable knowing that I am getting it at the best price possible at that time, right? So, no, I'm not going in and just going all in right now, but I'm definitely making moves. I'm definitely making moves. And I think the people who are out there looking to acquire things like maybe a Micron or an AMD, your time could be coming. Your time could be coming. I mean, I talked to you all about it on the live stream earlier today, but just look at what's going on, you know? You look at your HCI, your Hill Conviction Index. We're currently sitting at a minus 1.73 on Micron already. A great reset. It's already entering into that buying territory on the Hill Conviction Index. Same thing goes for AMD. AMD sitting at a minus 2.79 on its HCI, on its Hill Conviction Index. And of course, if you don't know what this is, it's very simple. It's just a meter that is available over in the Tyler Hill Toolkit. I'll link it down below. Basically, when the price goes down, the meter goes down. And as it enters into the bright green territory, this is historically some of the better times to buy. When it goes up into the red territory, this is historically some of the better times to sell. Again, you can access that with the link down below. And what you can see right now is we're diving. They're diving right now into the green territory. Still have some room to go. Still easily could continue to fall here for AMD. Could continue to fall for Micron. Nvidia's not even falling anymore today. So, could still continue lower, but I think that opportunity for accumulation that everyone's been asking for, I think it's presenting itself either now or can come in pretty soon. Wouldn't be going all in. Again, I could see Microsoft or not Microsoft. I could see Micron continuing a bit lower from here. But all in all, I think we're getting to the phase of this pullback where people start getting irrational, and that is usually a great time to be looking for purchase opportunity. So, I'm feeling good about Micron. I'm feeling good about AMD. I'm feeling honestly good about Nvidia. I love the fact that Nvidia is maintaining this golden zone right now, showing some strength, showing the market like, "Hey, just because I'm in a downtrend, doesn't mean you're going to push me around and bully me. I'm still here and capable of finding support when needed." And that is exactly what you want to see for a stock that you want to bottom sometime soon. And sure, Nvidia could fall through this, come back down into its breakdown target territory, fall to 183, 176 before trying to recover. Yeah, so I'm not saying that the bottom is in. I'm just saying they're showing great signs of strength, and they're showing great signs of resetting now that they're getting these irrational capitulations like we've seen today. And just like we're seeing the market performing well, I think the AI market could try to catch up and correct itself sometime soon as well. So, only time will tell, and I'll keep you updated, but for me, I'm accumulating. I'm going in and I'm building up these positions, especially in my hyperscalers. Whether or not we got earnings coming up or what, I don't care, because you know, when I look at something like a Google, if I can buy a Google at a macro buyer's zone when my HCI is at a minus 3.5, guess what? I'm going to. When I can go in and buy a Microsoft when its weekly HCI is currently at a minus 1.14 and it's at a macro golden zone, I'm going to. When I can buy an Amazon with its eat weekly HCI at a minus 2.06 and it's at a golden zone, I'm going to. And if they pull back, cool, I'm buying more. Because in the long term, these sorts of moments, this sort of irrationality in the market is exactly what presents opportunity. And that's the opportunity that's allowed me to build up a portfolio publicly that's up nearly $60,000 this year. It's the reason why I have other accounts that I've mentioned to you all and showed some of you that are up anywhere from 100 to $200,000 over the last six or seven years, and it's the exact reason why I think these portfolios, even like my small hyperscaler portfolio, this $10,000 trade, is probably going to end up being up 5, 10, 15,000 dollars over the next few years because of my ability and willingness to go in on moments like these. So, I'll keep you updated as it all does play out, but there's a lot going on and I know it can feel very overwhelming. So, if you do feel like you're maybe falling a bit behind, you need a bit of extra updates or whatever, subscribe to the channel, turn on notifications. I'm going to be going through all of it with you. I'm trying to go live every day Monday through Friday that I possibly can. I'm trying to make videos for you every day Monday through Friday. Tomorrow for example on Wednesday, I'm going to be live for like 3 hours going through the Fed's decision, going through Microsoft's earnings, Meta's earnings, SoFi's earnings. We're going to do it live, okay? So, if you have been enjoying the video, like the video, subscribe to the channel, turn on those notifications. And I can't wait to see you all in the next one. Peace out. Oh, make sure go get that toolkit by the way. Very, very useful. See you all in the next one. Bye everybody.