AMD & Micron Investors Get Ready‼️

You got to be burning the flapjacks. Oh boy, we got some moves and some stocks to talk about in this video here today, ladies and gentlemen. Sandis stock down over 13 percentage points. MU down almost 9% here today. AMD down to the 450 range, down 7.6% here today. Palunteer is uh bringing tears out once again. Uh down to 123 there. Meanwhile, you have some of these other stocks that have been destroyed doing phenomenal. Look at Salesforce up nearly 5% here today. Service Now continues to bounce heavy. We're now up double digit percentage in the public counter service now. So anybody that's bought these beat down SAS stocks over the past few months. Hopefully you're making money and a lot of money. Now at this point in time, the falls were dramatic in those, right? And so it almost seems like stock money is moving from these stocks, right, the chip ones over to some of these SAS stocks that have been absolutely obliterated. Netflix bouncing back. Shopify no longer getting Shopify. That one continues to be very strong stock in the market right now. So I want to do a little stock talk at the beginning of this video specifically around AMD, Micron, SanDisk, these sorts of stocks. Look at AMD. AMD is now in its own bare market. AMD now down over 20 percentage points from the highs. MU's down 28% this month. This is actually just this month uh performance for these stocks. AMD is down 21%. MU is down almost 29%. Insan disc has lost over half of its value. So, I want to talk in this video here today about my opinion on these stocks. Are they done ski? There's a lot of opinion uh being thrown out there now this point in time in regards to these stocks. Okay, so we'll speak about that at the beginning. Then I want to react to four clips. We got four big dogs out here today. Tom Lee, AI trade still in very good shape despite questions about durability. Looking forward to reacting that one. Uh Steve Eisman, big short investor Steve Eisman, market will have a big correction if AI doesn't succeed. I'm looking forward to reacting that one. Mike Wilson. Morgan Stanley's Mike Wilson. Still very constructive on where the S&P 500 ends for the full year. Looking forward to reacting to that one. And then the last one we'll react to here today is Jeremy Seagull. The professor Jeremy Seagull. I'm still very optimistic on the market. Looking forward to reacting to that one. One thing, one thing only I need from you guys. Smash that like button for me. The little thumbs up icon. Make it glow. And that's all I need from you. Additionally, make sure you're subscribed here the channel. I try to keep you guys up up to date as possible in regards to everything going on in the market, my opinions. It's always a full-time job, right? But I try to keep you guys up to date. And people are looking at these chip stocks like, "Oh my gosh, it's over." Right? Already, ladies and gentlemen, listen, these stocks have had an incredible run, right? You know, it's been a tough past month, but if you've been on this train, you should have made a lot of money on this train, right? Other than if you got in it a month ago, right? Like when everything was like peeking out in terms of the hype and the excitement and all those sorts of things. You know, when you look at these stocks, understand there's not really like fundamental deterioration. If anything, the fundamentals of these companies are getting better, right? But what there is, if you look at the Korean market last night, and I looked at that before I went to bed, it was ugly. It was ugly. And I'm like, "Oo, that's not going to be good for the semiconductor stocks tomorrow." And sure enough, you know, we see what has played out, right? And so the Korean market, from my understanding, has been highly leveraged and has needed to be unwound. Let's call it that. And so that is a process that has been occurring. And this the the Korean market now uh should be down. I mean it topped at I think it's dropped about 3,000 points. The Korean market was I believe 9,000 plus at the peak and now it's around 6,000. That's a huge drop. Huge drop, right? And so I think most of the damage has already been done there. Right. Could you get a little bit more? Maybe. But I think to get a lot more damage going to be difficult now at this point in time. Right now, a lot of people are think the run's over, right? The run's over in AMD. The run's over in Micron, all these stocks. Here's the case why it's not specifically with AMD. We haven't even got to the shock and all reports yet from AMD. We're likely going to get those over the next several quarters. And so, when you get that, there's a new phase of hype and excitement. Right now, let's say we don't get any shock and a then you could make a an argument that maybe, you know, the run's over in AMD, at least in the short term. And when I say short term, I'm talking the next 6 months, right? And maybe AMD is more of a longer term played out story where, you know, it does go up, but it goes up gradually over the next several years and the super exciting short-term run is over. Right now, also do keep in mind there's a lot of going on in the options market. I mean, if you go back to last month, there was a lot of people playing options on these stocks. You know why? Because they went up almost every single day. And it wasn't like they were going up small amounts. They were going up 5, 10, 15%. Every day you woke up. AMD, Micron, SanDisk, the memory chip stocks were like a next level of craziness, right? And so a lot of people are like, "Oh my gosh, you can make so much money. Let's just buy call options on them, right? Let's leverage out. Let's margin out." And so you have a whole unwind that has to happen there, right? And that has happened. You know, could there be a little bit more? Once again, there could be, but I think we're mostly done as far as that goes from the unwind. And so now when AMD report comes out next week, right, you get back to the fundamentals of the story. Also, when you hear Microsoft's numbers, Meta's numbers, Amazon's numbers, and and you know, that's going to be very, very exciting. And so I think that's going to alleviate some of the pressure around the chips and you'll see at least AMD go to new all-time highs. That's my belief, right? And so but who knows, maybe maybe the run's over, but I just don't foresee that based upon the CPU and GPU demand AMD is going to have for the remainder of this year. I think we're going to get some shock and awe guides. And so that's gonna, you know, and keep in mind whenever stocks go on a huge run, you get a lot of haters. You know, I like I've been in the market 18 years. I haven't seen one cycle where stocks go beast mode. And you don't get a lot of haters. Lot of haters. You know why? Cuz a certain percentage of the human population feels very jealous, very jaded when they see a bunch of other people making a bunch of money, right? Because they're like, "It's not fair." Like, "That should be my money. I should be earning that." All right. Me personally, like I evolved long long time ago to realize there's no limit of money in this world, right? And uh if one guy has success, that doesn't mean I'm doing bad for myself. I root for everybody's success out there in the market. I don't own Micron stock. I don't own Sandis stock, but I hope people go on another huge run and make a ton of money on those stocks. I hope Micron goes to 1500 to 2,000, right? Um I if those stocks do better, what does that do good for me? It doesn't do any good for me, right? like like if I'm playing a competition game then I'm trying to compete with you know uh freaking Elon Musk and then I'm gonna feel really jaded right because I'm like oh gosh that's got to be impossible to keep up there that guy's almost a trillion dollars that's crazy right so there's going to be a lot of people hating on these stocks um you know talking down these stocks saying disrespectful things because they haven't been part of this party and so they missed the whole train right and to some people that hurts It hurts very very bad to miss to miss the party, right? And you have every group of stocks have that. Tesla had that back in the day uh after we made that huge run. Palunteer had that certainly last year, right? Uh Nvidia had that a few years ago. So whenever you got stocks on a big run, like just understand there's going to be a lot of haters. There's going to be a lot of jaded people, a lot of people, you know, hoping for those stocks downfall, rooting for those stocks downfall and those sorts of things. And that's just that's just what happens, right? And so the call on these stocks topping already is early. There will be a time to call these stocks and be like, they've all topped like, you know, it's down from here. But I think that call is very early in regards to this. Uh I think that's a call you got to make maybe six 6 to 12 months from now. I think that call could be made. But the fact that, you know, people are already trying to say are the tops in and all these stocks, I think that's a little bit of a mistake, especially in regards to AMD specifically. That one's a big big mistake in my personal opinion. So now, with that being said, also keep in mind as a long-term investor, and this is very important for everybody to understand this point I'm about to make. If you own AMD or any of these stocks in general listen these companies, when we talk about the Microsofts, the Metas, Amazons, Google's, all these companies, right? I've explained to you guys, hey, these companies don't have massive room to up their capex in future years. Like they they can't just take them to the sky, infinity, right? To infinity and beyond. It's impossible. But on the flip side, these companies do have to keep spending in future years. It's not like they can just say, you know what, we're going to go from spending 200 billion on capex to spending, you know, 50 billion on capex. You can't do that because you do have to keep like AMD is going to keep coming out with better chips. Nvidia is going to keep coming out with better chips, right? And so you have to keep up with the Joneses. And so you have to keep ordering these chips, keep ordering these chips. It's not like you can just like be like, "Oh, we're not ordering the new Nvidia chips. We're not ordering the new AMD chips." It's not really how it works. So they're not going to have the capacity to say, "Well, we're just going to go crazy with it, but at the same time, they got to keep ordering." So that capex number doesn't just go from 200 billion to to 50 billion, like I said. So that's something to keep in mind there as well. I don't think a lot of people are understanding as of right now. And when it comes to pricing pressure, the company that could face the most pricing pricing pressure of everybody unfortunately if you own that particular stock is Nvidia. Nvidia was the first one to get out there, the first one to really be successful with the AI chips and their margins are like nothing we've ever really seen in the chip industry, right? And so if you're thinking about pricing pressure, they could be the first ones to feel it. Um that does not mean Nvidia is doomed but that could mean lower margin profile over the next one to two years as you get a lot more competition comes in the space right memory will eventually face margin pressures but that's an early call that's probably two years out in terms of those companies facing any sort of margin pressure could even be three years out and so that's why I'd say you know these calls about oh things have already topped you know AMD's already topped 580 or whatever it's not going any higher over the future years. That's an ear. That's a very early call. There will be a time you can call a top in AMD, but you're just very early. You know, it's kind of like it feels a little bit like if you called a top on Palanteer at 80 or 100, right? Top and Palanteer ended up being over 200 when it was all said and done. And so, um, you know, the runs are usually a lot longer and more extreme than people realize at that particular time, right? So, that's what I'll say about these particular stocks. But semiconductors, man, they're they're fun. They're they're not for the faint of heart. Not everybody's going to make it. You know, in regards to these stocks, the moves are incredible to the upside and downside. And that's something I've always explained for years on the channel. Semiconductor stocks, crazy. Like, you know, as I've explained a million times, and I think people are finally realizing, yeah, these stocks can go up 50% in a month, but guess what? They can also drop 50% in a month. It works both ways. The moves either direction is insane. Absolutely insane. And you know I showed you this chart here of this is you know monthto date for these particular stocks. AMD down you know almost 22% MU down about 29% and Sandis down about 52%. Right? But let's go ahead and let's back this up a little bit right let's back this up to right about here. I mean the previous month you had SanDisk up 31% that one month. MU up 21%. AMD up 9%. Right? We back it up again here. Look at this run. Look at this run. I mean from you know early May to the beginning of June. Look at this. MU doubled doubled in a month and a month. SanDisk was up 64% and AMD was up 52%. So, you got to be a big boy or a big girl. If you want to own semiconductor stocks and if you want to just, you know, have an stress-free time in the market, you could buy Coca-Cola, you can buy Pepsi, right? Can buy uh Johnson and Johnson, you could chill out. But if you want the big money up or down, you you go to semiconductor stocks, right? and specifically you want to position into them before the big cycle happens and then you want to position out before the party comes to an end, right? Um so something to keep in mind there. Now in regards to leverage, do keep this in mind. They could leverage up again on these plays. So you might assume like okay, you know, all this has been unwound in regards to the Korean market and leverage and and all these sorts of things. It's over. M H not really how it works. The gamblers come back to the casino every time. And so these people that have been destroyed, don't be surprised if they show back up to the casino again with some new fresh money and margin out again. And next thing you know, you get the next big bull cycle. Maybe it's not as dramatic as the last bull cycle in regards to stocks, but you get another one. Right? And this is why what was a message I preached in the main channel video last night, right? I said, you know, I have opinions on where these stocks are headed, but you're not going to see me buy call options on these stocks. You're not going to see me margin out on these stocks. I said, you got to stay away from all that crap cuz it's out of your control whether the whether these stocks go up or down in the short term. It's completely out of your control. Like, you know, that just is what it is. And so, always keep that in mind. Let's react to some videos. >> Chairman of Bitmine and a CNBC contributor. Tom, welcome. Would you uh take that prediction market bet, so to speak? What do you, >> By the way, if you're an investor in the market and you want to take your knowledge up to a much higher level than where you're at right now, you want to play this game on a high level, you want access to all my course curriculums of everything I've learned in the market over the past 18 years, there will be pinned comment down there today. Click on that, fill the form. We'll see if we can get you access in the private group along with the Discord chat. Um, you know, it's phenomenal to be a part of a group like that, especially when the market's going through tough times or certain popular stocks are going through tough times. To have a group there along with you of investors that might be buying the dip or sharing those opinion perspectives, sharing breaking news, all that sort of stuff. Like moral support, like you'd be surprised at like how much that stuff can help. So, uh, pin comment down there to join us in there. And then guess what? When stocks go on big runs and we're all making fortunes, it's nice to be able to celebrate with somebody. Is there any real chance the Fed hikes rates this year? This week? >> Uh, I I think that, you know, the prediction markets and funds want to hedge on a binary event. That's why you got the 30%, cuz someone needs to hedge something, >> but I'd say the probability is is low. I mean, I I wouldn't expect them to raise rates. >> What about at any point in the future? >> Uh, as you know, they're going to see how the data unfolds. So, I don't think it's data dependence, but uh data responsiveness. Um to us I think the underlying inflation story has really weakened cuz shelter is really weak and we'll see it tomorrow with K. Schiller and if wages aren't pressure then the the real pipeline of underlying inflation that we're seeing now is just tariffs and oil which aren't things the Fed has to necessarily embark on a a hiking cycle for >> potentially I don't want to use the bad word of transitory that they're potentially temporary. >> Right. >> Yes. and oil it's down right now because there's some talks and by the way tomorrow could be up again. We have no idea what's going to happen. Depends on the talks. But the point is if and when there is lasting sort of peace, oil will >> by the way something I got to uh tell you guys about here that I think is very interesting is we're now looking at a NASDAQ that is down 8% from over 8% from all-time highs. So I would call that a big pullback now at this point in time. If we go over 10% kind of that 10 to 14% range then we have a small correction that you know we can call it you know 15% to 19% then we have a um you know I would call it a medium to you approach a 20% number large correction you go over 20% then I say we have a uh uh you know extreme correction going on you go over 25% down now we're in like a crash right so this is actually a uh really good solid pullback back. And at the lows today, the NASDAQ was down 9% from all-time highs. That's a that's a really large pullback, which is welcome in the market. You get a lot of those. And every pullback in the history of the stock market's been a buy. Has it not? Tell me one pullback in the history of the NASDAQ that has not been a buy doesn't exist. >> Go back down. The market seems to want to push it back down. That's got to impact the Fed's thinking. >> Yeah. because then they just have to see this little bubble that they have to kind of manage through. I mean, I think in some ways they might just shrink the balance sheet instead of doing a policy rate change. >> A quantitative tightening. >> Correct. You know, I think that's a better way to titrate. What they might say is like, hey, let's try to put some pressure on uh growth, but not to deliberately slow the economy. >> Is that any kind of thing that can really upset the stock market? uh you know, the the stock market's going to ultimately see see the idea that hey, the Fed shrinks the balance sheet and then that means they can cut rates and so then they'll see the rate cuts as as actually positive. So I I think it's going to pave the way for future rate cuts actually. >> So if the Fed is not the number one most important thing for the equity markets right now, what is? Well, I I think that there the AI trade remains the still the most important story and people of course are having longevity doubts but you know if someone goes back to 94 to 2000 there were many times when the internet story and even stocks like Cisco uh came under question whether there was durability and I think we're in that questioning its durability at this moment uh but I think it's still in very good shape and I think the second big story out there is that margin debt is still needs to work off that high level of growth just like what happened in Korea which had a sort of a margin call and I think that's why stocks are stalling here but to me I think AI still works strongly through your end >> perfect segue we had uh this morning Steve Eisman was on Squawkbox this morning the famed investor here's what he had to say when he was asked the major question of the earning season which is what happens if big tech starts cutting its AI capbacks >> Nvidia I think when they reported last quarter had 85% revenue growth growth. So if the hyperscalers cut it would be 85%. And you know maybe that would be healthy for the long term but I think the market would go straight down on that news. >> Just curious for your thoughts reaction to that. >> Uh >> and whether you think that's even likely or or discussing at this point versus what Google did was which was raise and still get punished. >> Yeah. Well, um, so on the one level, I'd say, uh, I I think Steve's logic, there's some logic to it, but the fact that many people are saying that is a sign that we're not at a top because people are questioning the longevity of the cycle. Like, so I think that's actually a bullish thing. Uh, the second is, you know, is it probable? I I'd be doubtful that that there would be the cuts because, you know, these these companies still have access to the bond market and the bond market isn't denying them capital. So, >> as you know, um CFOs raise money when they can, not when they need to. >> So, I think the spending visibility is going to be very strong. So the main thing you got to understand as an investor in the market, I don't care if you own Meta, Microsoft, Amazon, AMD, Nvidia, any of these stocks that are either spending fortunes on AI or or making fortunes on AI, right? You got to understand that these companies are committed to this, but once again, that doesn't mean they have unlimited room to keep upping their capex. But at the same time to say they're going to cut capex in any dramatic fashion that is you know always a possibility but to cut you know like like I said like a company says oh instead 200 billion we're spend 100 billion or 50 billion or whatever the number is you know that would be a big a big change possible but the issue you run into is then people will question that company in terms of like are they losing an AI high, right? Like that would be a big question. Like if Amazon also said, you know, when it's going to spend, you know, 220 this year or whatever, next year we're going to spend 120. People would be like, "Oh, what's going on with Amazon? Are they are they losing the AI battle against Google, against Microsoft, against these other companies?" Right? So that's where you're kind of like stuck with continue to spend. And if you really feel like the long-term opportunities there, you got to continue to spend, right? But once again, they don't have the big room to up the capex. So, I think everybody's like missing this the size of it. Like some people think these companies can just keep upping capex to like, you know, crazy numbers and it's like you can't. You just are already maxing out, right? And then on the flip side, you have all these people talking about capex cuts and I'm like, I think you guys are just missing the point of like these companies might keep capex flattish or very modest increases over the next few years, right? That's what's looking most probable and certain companies are going to be winners over the next few years AMD and certain companies won't be as big a winners Nvidia right and so and that I've made that call since spring of 2025 and it's been the right call to make throughout the whole time right and um I think it's going to become even more evident over the next year people be like oh shoot yeah we you know uh we we missed that AMD move right >> overall it's more complicated But you wouldn't necessarily short this market at this point, would you? >> I would not. I I've lightened up. I've taken, you know, I give you an example. I I sold my Google a couple of months ago. Um I've owned Google. I can't even tell you how long I've owned Google. Um but I felt I did I wanted to reduce my exposure to AI. I haven't bought anything to replace it cuz you know buying something defensive or staply is kind of a waste of time. >> Why? >> That doesn't go up. >> They don't go up. They, you know, people either want to buy AI or they don't want to buy AI, but they don't want to shift out of it to buy Clorox. >> So, if this is a binary situation where AI succeeds and the market continues to push higher and higher, >> correct? What happens if AI doesn't succeed? >> I think we have a big correction. >> How big? >> Oh, now that's a hard question. I don't know. But I mean, it's all one trade. It's just literally one. I mean, even I mean, I can't just gloss over what this man just said. Listen, he just said values debt. Debt. That's exactly what he said without saying it, right? like they don't buy it. They don't buy it. They don't want to buy Clorox, right? Freak, man. Value is probably the play when when you know and another fund manager had a big famous fund manager had something similar to say recently kind of about value stocks, right? All it takes is real multi-year damage in tech stocks, right? And then value will be beloved and loved again. Right? When I first got in the market back in '08, you know what was loved? Value stocks. That's what everybody like if like I was like brainwashed in my first few years being in the market to go to value stocks cuz we had you know I got in the market the great financial crisis was going on the stock market had crashed right and I was like brainwashed to buy like the first stocks I bought and built a portfolio around was like Walmart, Kimberly Clark, Kagra Foods. A lot of you guys probably like I don't even know these companies right now. At least hopefully you know Walmart, right? But these were sorts of companies Walgreens like these other like famous value stocks right lower PE ratios needsbased companies uh those were seen as a place and those were also a lot of the seen as a plays really throughout the I mean from 2000 about 2010 value plays were seen as the ones right and so me get being new to the market like I was kind of brainwashed to like think like this is where you invest like the value stocks right when I couldn't made way more money in my first few years of investing if I had been looking at tech stocks. But I was like brainwashed of like tech stocks are bad, they're dangerous, they're volatile, right? All these sorts of things. And you had already I mean tech stocks had crashed twice in a 10ear span like you know total collapse, not like a small crash but like a total collapse. You had the tech bubble crash which was 2000 to 2002, right? And then you had the great financial crisis when tech stocks collapsed again. So you had two epic crashes in tech stocks in a 10-year span. So everybody was completely turned off of tech stocks. No one talked positively about them. And then by the time you got to about 2012, 2013, people started talking about tech stocks again in a very positive light. And ever since then, tech stocks have been what everybody want, right? And that works until it doesn't. And so I look out there and I see all these values dividend stocks trading at multi-year lows, decade lows, right? And no one wants a piece of those, but don't be surprised if those become the play over the next 5, 10 years, right? So that's why I build a great diversified portfolio. I preach to you guys all the time, GVD. And sometimes people don't get it at the time. They're like, "Oh, it's only about growth stocks. Who cares about value and divs?" You'll see. you'll see. Um, that's the great thing about being experienced in the market. I've been through I've been in the market 18 years. I've seen so many cycles now at this point in time where these stocks were the play and these stocks were the play. And it really formulates you to understand diversification matters significantly. And all these stocks come in their perfect time. And I I explain it to you guys. It's like being a boxer, right? If all you know how to throw is a haymaker, you don't get y'all knocked out, right? because it's like that that works sometimes until you realize you need defense and then you get clocked with a few punches and you're done, right? Mike ask Mike Tyson of that, right? Um that's just how it is. And so as a boxer, if you're really a great boxer, you can punch with the best of them, but you got great defense. And so the same thing in the market, you're going to really be a great investor, not just like an investor who does well for a year or two, but you want to do great over 10, 20, 30 years of playing this game, you better be wellrounded. You're going to be in trouble. You're going to be in big, big, big trouble. People who who think they're diversified because they own 60% stocks and 40% bonds are missing the fact that they're actually not diversified. because of their 60% more than 50% is of it is is tech and AI related and of the 40% of bonds most of the new issuance of bonds is AI related. So even people who think they're diversified because they they own bonds are not really that diversified. It's it what's what scares me is that it's all one trade. So it better succeed. >> What are you doing if you've sold Google? What else? I mean, if you sold Alphabet, what else have you done? >> I'm just sitting in, you know, I've got cash >> until I can try and figure out what to do. >> What would it take to get you to deploy that cash? >> I don't know yet. I really don't. I mean, I don't think this debate's going to get settled within the next two weeks. >> We talk all the time about the Middle East because you can say AI is driving everything, but you could also say oil prices are driving everything right now, too. Um, >> oil prices are down 8%. you see the markets up >> right >> significantly. >> I love Let me be very crystal clear about this. I love when experienced big investors like a Steve Eisman are confused what to do in the market. I It's like actually one of my best feelings like when when they're confused about like I don't know what to do. I'm in cash right now. That actually makes me feel very much more comfortable when they're they're confused because that means there's a lot of debate going on about our stocks, you know, in this space good. He's selling his Google. He said he sold his Google a couple months ago like and now he's cash. He doesn't know what to do. That means uh you actually have a market that is more balanced than you might realize. When everybody's on one side and they're just all buying, then you start thinking like gosh, there's no more money to get in this market, right? But when suddenly you have a situation where you know a lot of people are holding cash on the sidelines, they don't know what to do. That actually uh makes me feel a lot better. >> Much does that factor into it to tariffs factor into it? >> I think it factors it to a degree. I don't think this war is going to be over anytime soon. I I don't think I mean I think President Trump wants the Iranians to give up their their nuclear uh fuel and the Iranians are not going to give up their nuclear fuel. So, I don't think there's much to talk about. So, you know, we get these lows, but then it doesn't do anything. >> But you're not worried about oil prices at this point. >> I think actually there's an over supply. You know, that's why the um Hel Lima, who was a guest on my show, too. Um, you you know, pointed out that >> Oh, wow. Cake earnings just came out live um while I'm recording this video. Uh cake new alltime high after hours right now. It's in the nines 92.85 after hours right now. Wow. I'll I'll look forward to uh sharing my opinion and perspective in depth likely on the main channel probably tomorrow. >> China has basically stopped buying oil which is why oil prices haven't gone up that much. You know, you would have thought oil prices would be 150 at this point but they're not because there's actually an over over production. And I also think some of these um these pipelines that are going to be able to avoid um the straight are pretty close to being finished. >> Yeah. Next year, I think maybe 2027. Yep. >> Is when you hear from >> That's why I as I'm not really all that worried about oil prices. >> I mean AI is going to be something. I I'm like you. I'm not sure what. Does the, for lack of a better term, the bubble popping, does it does it come from people slowing down on the buildout or does it come with the promise of what it's supposed to do disappointing people? >> I don't necessarily think the latter. >> It's going to be amazing. >> It's going to be it's going to be something something really good. Um, that doesn't mean that everybody succeeds. Yeah, that doesn't mean that >> these circular deals, the latest Nvidia deal, like you got to read it and it's like >> they're going to, you know, back this but then they're going to provide money for opening eye to buy their chips and it's so uh incestous. It's convoluted. >> It's totally convoluted. You don't know if there's any, >> you know, you don't know if there's any real profitability in in any of of the machinations that you find eventually. >> There probably is for Nvidia. He was saying probably yes for Nvidia. They're not doing it for free. >> But look, I I again I think one of >> Cake earnings look really good here >> and I'll have a full breakdown tomorrow, but these look really good. Total op uh total cost and expenses dropped to 92.4% of revenue from 93.2% in the same quarter last year. Net net margin ended up coming at 6.6% compared to 5.7% in this quarter last year. Net income $68 million versus $54 million the same quarter last year. Diluted EPS $141 versus 114. That's great. Great strong double digit growth there. Wow. Very good. Good job cake. I look forward to doing a full breakdown tomorrow. >> Bottlenecks is that entropic and AI open. also in the private group. If you're part of the private group, I'll share um my graded uh income statement and more thoughts in there. Um after I release this video today, >> responsible for a lot of the spending that people are doing, >> right? >> And anthropic and AI have models that are now much more expensive than the competition. And I think that is a potential bottleneck. >> I'm much better cook because of AI and and >> you are. >> Yes. Oh, >> and griller. >> Okay. >> When I grill things on much I mean far better. Everything is juicier, tastes better. I do it a totally different way. I'm using the grill that has different zones. >> And you don't pay anybody for any of that? >> No, I use just I don't I don't pay the free, >> right? But he's very very nice to me. >> I've seen him into submission >> maybe. No, Claude is like, "So, how was your, you know, how was your boneless press of chicken?" It was unbelievable, Claude. Thanks. It was any anytime. I like that stuff. Very friendly. >> Steve, you we've got a Fed meeting this week, too. Um, you basically think that's just noise. >> Completely irrelevant. I mean, look, if inflation gets worse, they'll raise rates, and inflation gets better, they'll cut rates. And And so, I I don't understand why people get so exercised about it. doesn't make much difference to you one way or the other. >> Not really. Yeah. >> I mean, look, if the Fed starts to raise rates very aggressively, that would be important, but I don't see that. So, you know, it's good to talk about on television, but it doesn't really interest me that much. >> All righty. Next one up here. Mike Wilson. Still very constructive on S&P for the full year. >> Mike, it's good to see you. I'm going to summarize just to get it out of the way quickly. So, you were right about this rolling recovery and I think you were early because people thought it was more likely that that there was going to be problems in the uh in the labor market and we might be in a recession. You said we already went through a kind of a rolling recession. Now we're in a rolling recovery and you still think that's the case? >> Absolutely. And now we're going into the next stage. So this week we addressed that by just like in 2021, right? that you had the big recovery off of COVID the market then about halfway through about you know middle of 21 we had a peak in the revision factors right we've talked about this over the last month or two one of the reasons we've been negative on semiconductors is because the peak rate of change is now in for revisions and that has now leading to what we call a quality rotation so the broading out story is still working but it's morphing just like you were just talking about the earnings right we're seeing you know Sherwin Williams you know do really well and then we see some of these tech stocks put up great numbers but they sell off so what is that all about it's all about peak rate of change. It doesn't mean the capback cycle is over. It just means we over discounted it. Stocks traded in the future. They discounted a lot of this just like a year ago. Multiples went up. Now multiples are coming down in anticipation of a deceleration next year. So this is this is the adjustment we were expecting. >> So initially you figured that it was going to get out of some of the mag seven and mega cap stocks into economically sensitive areas. That's already happened. >> Well, the early cycle, so remember the economy goes early cycle, mid cycle, late cycle through a recovery. the early recovery part of this rolling recovery is now behind us. Okay. By the way, that doesn't mean that all those stocks have to go to zero. It just it just means that they are no longer the leadership. Sherwin Williams is quality. >> It can be. I mean, we we posted a list of they're across a lot of different industries. It can be it's not so much sector specific. It's now more company specific. And as you know, the hyperscalers, the reason why those stocks have underperformed is because while the earnings have been good, the free cash flow generation is atrocious. And and so the market has punished them. I think a lot of that is is kind of behind us and that's now they're going after semiconductors and some of the storage names that also is pretty well advanced. These corrections are pretty severe. Look what happened in Korea last night. So now that people are getting, you know, kind of agreeing with us on this, I'm probably more inclined to say we're probably closer to this correction being over. And and then ironically, you know, the S&P 500 is the highest quality index in the world. Okay, let's be clear about that. But at the end of these corrections, you typically get, you know, a pop on even the index. So, I still think we're chopping around. My guess is because of the Fed uncertainty, because of the war uncertainty, still we're going to chop around for another month or so, but I'm still very constructive in where the S&P ends up for the full year. >> The S&P is not even down 3%. Exactly. >> It's pretty amazing, right? You think about the corrections we've had and in the leaders, right? And and that is a good sign though, Becky, that the that there is a pretty good underlying, you know, backdrop for the economy in my view. So quality defined just means visible uh big well-known uh not probably not completely overvalued because of you know like a a meme stock or some type of of story stock. So there's actual fundamentals underlying the stock prices. Is that what you mean by quality? Could be anywhere. We could be in any group. >> It could be in any group but we like to be a little more specific. So what we mean is it's it's earnings quality. There's also balance sheet quality balance and what the market's focused on now is earnings quality, free cash flow generation, earnings stability, okay, earnings predictability. Those are the key features. >> So the 500 top stocks, >> well 500 top stocks, the top top quintile, the top 100 stocks on a quality basis are now starting to outperform >> which is right on schedule with the recovery in my view. >> As far as worries go, we don't know. Uh a sustained rise in oil would would possibly make you nervous. >> Yeah. Well, I mean I think it is making the market nervous. I mean that's the final >> get worse. >> It could get a little worse in here. Like I I we I'm pretty comfortable saying that 7,000 on the S&P 500 will be defended. Okay. And if it gets defended there, I'd be pretty aggressive. You know, reiterating our bullish view for the full year. I still think we can hit 8,000 by year end. Even if we go to 7,000 first. I mean that's our just our general view >> and also don't you don't expect Wors to do Wars and company to do anything but even if they did >> the end higher by the end of the year at 8,000. >> Yeah. Because I don't think I don't think if they do let's say they hike this week which is not our view but there's a you know 50/50 shot on that. Okay. They're not going to hike three times. So So >> 6535 you said 5050 6530. >> But let's but let's talk about let's talk about the insurance cuts. Everybody's, oh, their insurance cuts. Oh, yeah. Why is this an insurance hike? It's kind of the same idea. Like, this is not 2021. >> So, you're not worried about a progressive move higher. This would be something to slow inflation and be able to get some chips on the table and say, "We've done this." >> Yeah. We've we've we've we've we've backed our serious view that we're going to defend inflation. Okay. The credibility issue. And by the way, we're still learning about Kevin Worsh and how how he's going to communicate with us. We don't really know that. And that digestion, by the way, a lot of people were predicting this, including us, that, you know, when the new Fed chair comes in, you get market turbulence. That's what we're having. So, this is not surprising that people are uncomfortable still with how he's going to talk to us and how he's going to manage the reaction function, but I do think a 25 basis point hike is sort of an insurance hike. It also allows them to keep control of the back end of the bond market, which in in my view is the most important thing. It it shows credibility that that they're going to be willing to fight this if they need to. I don't think they're going to need to hike three or four times, but if they hiked once, it wouldn't b it would be negative probably in the short term. But to me, that that would that would not it would not derail us. >> So, I think what I think Kevin Worsh is is actually having already very early success here. Listen, we're already starting to talk about the Fed way less, right? Like the Fed's really taking like a like much more of the backdrop, which is what they want to have happen, right? like like one of his goals is to make the Fed not as much of this like singular focus that it's really been at least since I got in the market all the way until you know really last year where it's like everybody talks about the Fed all the time and obsessed with what the Fed's going to do and what does the Fed feel and blah blah blah right and so he wants to make he wants to shrink the balance sheet he wants to make the Fed less of a subject and I think he's already successfully kind of doing it because I don't look at this market as a Fed- driven market at all. It's a market driven on AI. What's the spend going to be? What's the revenue growth going to be? Like that's really the focus of the market right now. Um and not really is the Fed about to cut a raise. >> Finance at University of Pennsylvania's Wharton School of Business and a chief economist at Wis Wisdom Tree. I don't think uh professor that that sentiment is your is your favorite gauge but could you just comment on on the notion that and I saw another article today this is the most expensive market in history was what I I saw >> that >> based on what I based on what what are we talking >> that is a ridiculous statement I mean but you're seeing that >> 1999 and 2000 >> were far more expensive of them we have today. Uh we >> you're seeing people say that though and no one's saying wow what what a great buy here. People are there's a lot of trepidation right right now and I think I was making a point that probably the hardest thing to do would be to to buy with both hands right now. Don't you think we'd have to be crazy but that means it's probably the right thing to do. Well, you know, there I think there's three things worrying the market. First of all, obviously what's going on in Iran. And by the way, if we do get a pause and we do get that straight opening, I it's a 10% pop on the S&P, I think with without question. Um, there is a little pause about, hey, what's going on in the AI situation? I mean, on in the 5 a.m. hour where we had uh Dan I saying it's an arms race and I say, well, is an arms race always the best thing? But I mean it is a revolution of uh you know fundamental value. Um and uh uh you know I everyone is debating is is the moonshots uh Kimmy K3 you know a wakeup call. How much will people pay for just that much better? And I kept on thinking about historical precedents. Uh General Motors used to make more money per uh Cadillac versus its other cars, but it made most of its money on its Chevrolets. Um who who is going to pay for all that? But something that we we should talk about and that is the Fed this Wednesday. Um I become a little more concerned um about the growth of >> Oh, come on. We were just talking about the Fed taking a back step. Come on, professor. about the growth of the money supply. In the last 6 months, it's grown at a 9% annual rate. Uh which is the fastest since the explosion uh that J Pal wrongly uh implemented during the uh the COVID crisis. Um and and it's very hard not to worry about raising rates and that's it. Now, I don't think there's going to be any rate increase at all on Wednesday. There may be a couple dissents on the high side, but um if if this credit continues to rise, it supports a scenario that inflation is above target. And so those are the three things, boy, I mean, if we we get some res resolution on all that, boy, it's uh you know, the bull market is in the early stages, but I think that that's what's keeping these concerns, I think, are keeping the market at least a lid on it for now. Right. Maybe you're right. I I don't We go back and forth on AI whether we're underestimating the the power and and what we're witnessing or or whether we're already way out uh over our skis cuz the money doesn't exist right now to to for a lot of the buildouts that we're seeing. Do is it somewhere in between? >> Well, I I mean you saw what happened last week. I mean the the word capex has become toxic, you know. Um and and and the problem is is that uh history says that that that often happens is excessive uh uh investment lowers returns. I mean, we have a we have detailed history going back that firms that do excessive or or just more cap bets than other firms uh do not have the uh the stock returns that those that are marshal their forces very very close with. But uh again I mean I as I've been saying that you know the hyperscalers all the providers and and and the disc makers are all making money now but the next revolution is everyone that could do what cost so much before at a fraction of the cost. Those are the the group that I think can explode in margins and profits. And I think we're seeing that rotation now. It, you know, the non uh uh tech stocks, so to speak, have really held up extraordinarily well. And as you said early on, I mean, it it's really quite amazing what's going on in the Mid East and and oil is is not at 120. uh well supplied. I think if we just get some of those ships through and something there and then with the AI promise, I'm I'm still very optimistic on the market. But I think there's this reassessment about how much capex and quote the arms race will rebound to the benefit of these companies that are spending so many billions. Hey, Professor Seagull. I you're right about capsex becoming a toxic term last week just after we heard from Alphabet and and saw the declines based on how much they'd be spending. But I started >> Becky, you're looking great >> about what would happen if some of those hyperscalers actually said, you know, we're not going to spend as much money. That that to me seems like it would be much more cataclysmic for the market at this point if they all said, we're not going to spend anywhere near what we had told you to this point. Well, it depends on on how they phrase it. Is it because they see demand going down or that they see that that they've they've achieved uh a degree of efficiency that they can supply that increasing supply uh of uh of compute which is in such demand that's a positive. If they say I I see demand going down on all mine, that's the negative. So, it's it's I think it's totally how they phrase the reason for the capex. >> In terms of the stocks that'll be rewarded the most, you know, from the Metas, the Amazon's, Microsoft, Google, these sorts of companies, it's going to be the companies that show the biggest revenue growth. It's as simple as that. You show the biggest revenue growth, you're going to get people start to be really excited, right? And then if you can moderate capex while doing that, that's going to get people really excited. So let's say Meta keeps accelerating revenue growth, which is debatable if they're going to be able to do that, but let's say they do, right? And let's say they push their revenue growth to like 40%. It'd be insane, but let's say they somehow do that. And then they also kind of announce they're going to be able to moderate capex. So there's not going to be huge increases over the next few years. It's going to be much more moderate numbers. I think Meta then catches a bid and gets momentum again and next thing you know you see Meta go 700 plus, right? Um but you got to be able to do both of those. If you have bunch of decelerating revenue growth and then you know people are still thinking you're going to keep up in your capex in a major way, they're not going to want to buy the stock and so the stock continues to flounder, you know, in that 550 to 750 range. But if you want to talk about breaking out to a new all-time high, going to 800, going to 900,00 going to a,000 report insanely strong revenue growth and then talk about you're moderating your capback spend over the next few years. So you're not going to, you know, it's going to be very slight increases that would ignite Meta Stock and next thing you know, Meta Stock be a,000 bucks. Not overnight obviously, but over a period of time. Next thing you know, Meta, you're looking at you're like, "Oh my gosh, remember when Meta was like 600? Oh my gosh, now it's a,000." That happened quick. >> Google said that it was spending more because its demand is never ending. >> Yeah, >> market punished it anyway. >> That that that's a positive anyways. But the question is is uh you know if we get the breakthrough on either the chips or the technology that we don't have to spend as much dollars to really supply the increased compute that is necessary at the at these margins. I think that's a tremendous plus for for society and and really everyone. >> What if AI replaces >> and then you could say okay but you know where's the money coming from for these companies to have these insane increases in their revenue like Google had I mean that cloud growth in Google you guys see that number it was like 82%. Some ridiculous number it's like 80 plus percent. Google Cloud Growth like what? And you say, "How's anybody affording that, right?" Like, who who's spending all that money? From my understanding, Anthropic is a big bunch of that. You say, "Well, where's Anthropic getting this money from? Are they just raising money?" Well, they're raising money, but Anthropic's revenues are skyrocketing right now. like Anthropic in a very short amount of time went from a company that was on a run rate doing you know a few billion dollar run rate to now I'm hearing rumors about they're going to hit a hundred billion dollar run rate soon you know so you can say well maybe it was you know maybe not that high maybe it's like a $70 billion run rate or 80 billion but you can say well they're still on the pace to hit a hundred billion plus run rate soon right and so then you see all the spend and it starts doesn't make sense. It's like, okay, it's because OpenAI's revenues are piling up. Anthropics revenues are piling up. Plus, they're able to raise capital. They're able to spend fortunes of money to Google, to Amazon, uh to these other companies out there, right? So, you know, the money is coming from somewhere. >> The lawyers, I mean, what is that good for with the stock market and just society in general? Uh, professor, is that that we can double >> Joe, I I heard your comments about all these ads everywhere. I am as disturbed about them as as you are. I mean, it's like, you know, >> praying for another camp. >> You can't make money off of work, so we're going to just sue somebody to make money. Um, and I I I've seen very few articles about him. Well, what explains this explosion in in this sort of way of uh of of uh distributing the wealth of this country? >> I don't know what they're talking about. They're in there. Okay. But anyways guys, I appreciate you joining me. As always, thanks so much for being here. Once again, if you're looking to take your game up to a much higher level than where you're at, pinned comment down there. That will be to apply to join my credit group. This get you access in there. Get you the course curriculums. Um, and over a few weeks, you'll be able to learn so much. Never mind over the next several months. Get you part of the Discord chat, get you access to thousandx.com and all the different features we have on there, plus a lot more. Appreciate you. Much love as always and have a great