AI Stocks Were Forced Down... Now the Money Is Coming Back

Something dangerous is really happening in the market and it actually is for our benefit. United States and Japan just did something that hasn't been done in over 30 years. That's right. Japan spent about $ 58 billion buying back its own currency, the Japanese yen. And while that happened for the first time in three decades, America did something that we didn't think it would do. It came in and bought about $10 billion of the Japanese yen. Now, Scott Bessant, I think, leaked the photo just to ease the market or do something. But a photo was leaked with Scott Bessant in a cabinet meeting saying, "Buy Japanese yen, 5 to 10 billion." And that signal something that caused the market a lot more pressure last week. And the yen, well, it fell to a four decade low. Now, trap, why is this all important? Because it all ties up into one thing. And so today I want to talk about four stocks that I think that we could really be taking advantage of, but also is the AI trade back on? I think it is. So make sure you like, subscribe, and help this video get to 2,000 likes, cuz this video is going to be the one of the ones that set us up to close the year out really, really strong. Let's go. Now, first of all, we talked about this before about the carry trade, and we understand what it is. If you haven't, let me just break it down before I get into these stocks. So the car trade is this. For the longest of time, the Japanese yen was really, really low. Had no interest rates. So people would get the yen, right? And then you convert that to American dollars and then invest in it, right? And then it would just cross back over. This is why your Forex investors make so much money. And I ain't going to lie, at first I didn't think Forex was real until I learned about the carry trade. And essentially, because the rates were so low, you can get all of that Japanese yen. And then once you converted and invested in the forex market, bring it to the stock market, you pay that off a little or nothing. But over the last year, year and a half, the Japanese yen has gone up extremely high. And now that has caused pressure because everybody who got those low rates on that entry rates on that yen now they became upside down because the yen went to, you know, 2% 3% and that got scary. So the QQQ hit a correction about last week. Not only did the HQ hit a correction, then the semis went into a bare market and then all MAG7 reported earnings except for Nvidia. Now, this is essential because a lot of things happened in this short period of time and we saw a massive June and July selloff. Now, July is typically the best month in the market. Well, we didn't get that. July sent us down the gutter, but let's talk about what happened. So, we already know about the young prodigy who turned 200 million into about a $55 billion fund. Well, him along with everybody else who were bullish on the memory stocks in the AI trade, well, they were using what's called leverage or margin cost, meaning they were borrowing money from banks and other institutions and those things stocks were just going up because it was a lot of fuel behind it. Well, when the Korean stock market started falling, because remember the Korean stock market is all AI stocks in all memory. Well, when they started getting liquidated and they started falling, then it's just everything happened that one time. Well, Leoport his fund started having to unwind because they was under so much pressure. Why? Because if you're long on a stock and the stock is going down and you're using margin, that 10xes how much that is going down. But he's also was short on software. sold Microsoft, Adobe, those stocks started getting up. So his fund was getting pulled from both ways. And I'm not here to talk about him. I just want to show you how the unwind happened. So now what happens is once you get to a certain level, like your bank is going to call, whoever get the money, they're going to say, "Hey, you're going to have to either add some more money right here or we going to have to sell those positions." Well, he couldn't get no more money. So he had to sell those position. And that was a flash warning to everybody who was overleveraged in the AI space. So when he had to sell, you had other companies come in like King Griffin. They come in and bought that book, his whole book that he had to sell to cover his back for pennies on a dollar. So imagine turning 200 million to 55 billion and then losing about 35 billion of it. Well, he's not essentially broke or poor. He's still a billionaire. Has a billion of the assets. But that liquidation put so much pressure on the market. And since then, we've seen the market bounce. And that is why I'm here to talk about today. Because while everyone else was spending more and more and more on chips, I want you to think about something. Companies like Microsoft, Meta, Amazon, like all the big dogs, they're spending billions and billions and billions of dollars on AI buildout. And one of the things we've been talking about is this, like Wall Street now wants to see where the money at. like you're spending all this money and even companies like Google who was going negative on their free cash flow, Wall Street wants to see the money and while they had great earnings, well, Wall Street still didn't see the money. And so because Wall Street didn't see the money, those stocks sold off. But here comes Microsoft and here comes Amazon. Microsoft the Azour grew revenue by 43% which is the cloud business which is also attached to the AI and it showed that AI they showed that their AI segment of their business actually making money and also their free cash flow reached $19.6 billion which is great for Microsoft. Now Microsoft didn't actually just stop spending money on AI or capback spend but what they did say was hey we're showing you that we're making money off the AI that we're spending. So that was really really good for Microsoft which initiated the initial buyback of stocks. And if we go into the reports, we'll see that last week after Microsoft reported earnings and Amazon, they had more tech buying than any other part of June and July, which is good. And at the same time, we had AWS Amazon reported earnings and their revenue grew by 37% year-over-year, roughly $42.2 billion. And it's the fastest growing rate in more than four years. Amazon is simply saying the same thing. Yes, we are spending money on AI, but here is the profits and it's showing. And that's what Wall Street wants to see. Wall Street wants to see are you making profits from all of this AI spin that you're doing. Now, they're the first two companies to show that actually some of the stuff is paying off. So, moving forward, we'll probably see some hyperscalers probably to scale back on the capex spin and start showing Wall Street here, we're making more money. And what that will do is help the stocks move forward because while providing that AI is making more money, Wall Street wants to see it. And so Google, Microsoft, well, they have cloud businesses and that's really good. Now, we saw Metafall really, really hard. Now, the thing about metaphing hard is they are still making money, but the thing about Meta is they don't have a cloud business. So, they got to show that there's opportunity for them to still start monetizing. And so I want you to understand something like the AI story didn't change. It just things happened. So you had a perfect storm. You had the war that got intensified. You had the huge unwind of people being overlevered in AI. You also have a new Fed in place who the market has to understand what he has going on. I just feel like that gave us great opportunities. And so you also had SKH Heinix who missed earnings. So all of those things happened at one time. And so the young boy became a sacrificial lamb to show it, hey y'all need to stop overleveraging the AI and just let it run. And so I think that we have room to run. And so one of the things I told my community and I just want to take a second if you want to come join the Patreon. We do buy and hold and we do swing trading and leap trading. So, we do buy and hold where we break down two companies every week and I talk about pricing points from a fair value perspective, what it's worth, what the comp what the market is trading it for, and two times when I would get in. The first time is when I would start a position, last time when I would load the boat. And we put two of those out every week. But also, we have tiers when it comes to swing trading. And we do classes. We do charting classes and trade audits. So, if you're interested in that, come join the Patreon. We definitely want to see you a part of that. Let's move forward. We know that June and July were just massive months in the market, but I told my community I think August is truly going to be a bounceback month. Now, I want to say this and I want to preface what I'm saying by saying this, like a lot of damage was done to the AI and the chip trade, right? In the memory trade, stocks were down 20, 30, 40, some even 50%. Here's what I will say when I double back on it. Nothing fundamentally changed. These companies still are needed more than ever, right? And so I'm looking at it like this perspective because the story never changed. This makes a perfect buying opportunity. And now let me get into the four stocks that I want to talk about. So the first company I want to talk about is Seagate, the AI warehouse. Right? Every AI model creates enormous amounts of data. Right? Think about chat GPT. Before it can answer a question has to be stored. books, videos, images, medical records, financial documents, internet data, training, user conversations, it all has to live somewhere. And that's where CA comes in. Ticket symbol STX. They manufacture highcapacity hard drive or known as HDD. And they're used in hyperscala data centers. So every new AI model needs more data, more backups, more archives, and more enterprise storage. That's where cloud companies keep buying these things and that actually gives companies like Seagate a moat because very few companies can manufacture enterprisegrade watch this HDD at scale. So essentially it's Seagate. Now they have a competitor which is Western Digital but I want to put the focus on Seagate because it's an amazing company that I think we should take a look at. That's the storage part of it. The next company we should look at I think is ARM. They become the AI blueprint company because ARM doesn't make chips. They design the architecture. That's right. Think of them as the architect. So Nvidia, Apple, Amazon, Qualcomm, like they all get licenses to use ARM CPU designs. So without ARM, many AI chip companies never get built. And that's why CPUs matter because everyone focuses on GPUs, which is not bad. But every AI server still needs CPUs to run their operating systems, schedule workloads, feed GPU's data, manage memory, coordinate networking, and execute nonp parallel just task, right? And so the GPU is the race car and the CPU, look at that as more of the pit crew, right? So, when it comes to AI growth, every AI server shipped almost almost certainly y'all needs CPUs in there based on ARM's architecture. And that's why ARM collects royalties across the whole ecosystem. I like a company that collects royalties cuz that's free money, right? And the world's most valuable CPU intellectual property and that becomes extremely difficult to replace. So, STX and ARM. The third company I like actually is Intel and because it's more of a comeback but most importantly they're backed by the government. So Intel isn't leading the AI accelerators. Nvidia owns that race. Intel matters because of manufacturing. The CEO is trying to rebuild Intel into a worldclass foundry while continue to develop CPUs and AI related products. And that's why foundaries matters right because AI is exploding and everybody has a manufactured chip that they want made. And so today, think about it. TSMC dominates. Samsung competes and Intel wants to become the third major global advanced foundry, especially here in America. When TSMC is dominating so much, we don't want to rely on that company, which is why we know 100% why America and the government is backing Intel. Now, government also wants more chip production outside of Taiwan. Again, we don't rely we don't want to rely on that. And so if Intel can execute this well, it could become an important supplier for advanced chips manufacturing, which I like for sure. My fourth company on my list is one that cannot be replaced. It's ASML. They might be the most important company in the semiconductors next to TSMC. Why? But you'll understand what I'm saying is ASML builds the world's only EUV lithography machines. And without these machines, nobody manufactures the newest AI chips. Not Nvidia, not AMD, not Apple, not Broadcom, not Qualcomm, none of them. So what is it? Imagine printing billions of microscopic transistors into silicone. Right? Like ASML builds the machines that perform that printing at extraordinary precision. Each EUV machine costs hundreds of millions of dollars and contains more than 100,000 parts. That's right. And they're almost huge like an apartment building. They're among some of the most complex machines ever built. And that's why ASML is needed because every generation of AI chips require these small transitions, right? And they need better power efficiency and they just need higher performance and that only happens through what ASML does. So without ASML, there's no cutting edge AI chips. And if we believe in AI the way we do, then this company is in a league of its own. No competitor even offers commercially anything equivalent to what this company does. Now you think about these four companies and you put them together. There's so many other companies in the AI race that are needed. I'm just looking at these four right now. But also runners up could be Broadcom and al also KAC. So these are just some of the things that I'm looking at moving in. Now I actually think that the AI race I think it's back on. I don't think it will be as like massive of downtrend as it was before. But here's some of the things that we're fighting. We also know that September is around the corner. So, we got to be really careful right there. And we also know that midterms are right there. We usually get a big draw down in September and right before midterms. So, I want you to be careful here, right? And not rush into the game. Don't go all in because we not at the beginning. Take your time. Taking your time put you in position to kill it on the next leg. Remember this game is about patience and seizing the opportunity, not trying to be first. It's your boy the Wall Street Trap. I hope this video helped you out a lot. Like, share, comment to this and salute.