Thatcher: NVDA AI "Tentpole," META & MU New Value Stocks, SPCX Long-Term Buy

a look at the tech trade best positioned stocks within the trade right now. Joining me Ted Thatcher president over at Bright Lake Wealth Management. Ted great to have you on. I'm so used to talking to you in the morning. Nice to see you in the afternoons here. And thanks for joining us from the sea floor. We haven't gotten to talk about Nvidia together. So let's talk about Nvidia and how it relates to the broader tech conversation right now. Can we finally put to rest the argument that we are in an AI spending bubble? You know, Marley, my view certainly is that I think you can put that to rest. You see Nvidia, of course, it's been called so many different things, but basically it being the tent pole that holds up the broader AI trade. I mean to say that they beat last week is, I think a really serious understatement. You have to be confident in the AI trade now. So much has been made of this question. Are we getting ROI on the AI trade? I think you could look at Microsoft Google Amazon. Obviously Nvidia is a piece of that. And so I think you have to say we're confident that the market is getting the answer. It's looking like that it has wanted so long here. And it starts to say okay, well where do we go from here? What questions do we have on the horizon? And that's really going to be, you know, of course, what we have to think about going forward. So where do we go from here then? Ted, you posed the question. So now I would love for you to answer it. We've got AI passing its latest test. What is the biggest risk to the market going forward then? You know, whenever I think about this question, I start to say, okay, well, where does the market see uncertainty? And fundamentally right now, I think coming away from last week's Jackson Hole meeting, there's questions at the fed level. So what's going to happen with interest rates? I think we have to have some conversation about U.S. Treasury yields and yields across the globe. And then finally consumer pressure as well. All these things tie together, though in the conversation about the election season we are approaching. And so when I look at where all these things are affected, most correlated, it comes down to one word. And that word is what's going on with oil. We saw more headlines this on again, off again, you know, conflict in Iran has forced oil back into the conversation. And so long as this conflict stays kinetic, the markets have to pay attention. And right now, I believe that's what's driving, you know, obviously the volatility that we're seeing today. And it certainly is kinetic and it's complicating the Fed's path forward. Right. We're going to get the jobs report on Friday, which could perhaps ease it could perhaps make it more complicated. But you mentioned Jackson Hole. We got a hawkish signal in the commentary that we got here. But you have a slightly more contrarian view to the consensus. We watched the fed watch tool, and I'll refresh it. As I'm saying this, it was about 66% last I looked pricing in a hike. It's about still about 66% here. We saw that move higher. You disagree with that. You foresee a more neutral path. Ted, what is leading you to be in the neutral camp versus joining the majority? Who believes a hike is on the way in September? Yeah, I definitely am bucking the consensus view here. I think the CME has just a 10% probability between now and the end of the year of no hike. But the reason is, is because the the inflation that we're seeing that Warsh continues to point to, and I think rightly point to, is driven so much by a supply constraint, of course, in the oil markets, because that is very directly solvable with a resolution in Iran. I believe that we won't ultimately see a hike just because of a supply constraint when it comes to oil. I think that that would be putting the fed, too, at odds with the consumer and put too much pressure on the labor market with where it sits today. I think the labor market is healthy, but we've seen some cracks, obviously, to your point. We'll see more this Friday. And a big driver to this upside, Ted, has been the earnings that you talked about. And when we got this show Me quarter we got great results here. As we look at I was just looking at the ten year. I mean we're at 4.77. We've got the 30 year above 5%. If we've got long term yields staying elevated here and being so reactive to the upside, how much are we going to eventually see that then pressure some of these equity valuations. Even if we see earnings stay strong. You know, I think when it comes down to where we see valuations, obviously cap rates and interest rates have effect on the multiple that we get. And what we see on these big tax. Now I do think that that could bring down the ratings. But you know if the market's going to rate them lower fundamentally it still comes back to earnings long term. And so so long as we're still seeing profits grow, even if they don't grow at such exponential rates as we've seen in the last two quarters. I'm bullish on big tech. Again we might see some rerating, but that doesn't necessarily mean the companies are any less fundamentally strong. And so I actually would say, you know, maybe as another contrarian take, actually, I don't believe that we're going to see the 30 year stay as high as many have, you know, significant concerns with so long as we get that oil price down. I think, again, so long as that happens, there's a path that's a lot more stable. Interestingly, you know, so many have made huge points, I think, properly to point out the weakness in U.S. treasuries right now and the risk that the bond markets are pricing in. But when you look around the globe, Marley, you're not seeing a whole lot of strength elsewhere. I think it's interestingly sort of a pragmatic, you know, I guess, opinion to say that the U.S. sort of becomes the most eligible bachelor, if you will, in the leper colony at that point. And so it might be a little bit silly, but I think that that's ultimately what the markets will end up digesting. I like that the most eligible bachelor in the leper community, you know, being the being the best of the worst is still the best at something. Let's stay with this contrarian angle though, because you got another one here. There's so much conversation about the U.S. consumer and running out of money, and how they're having to tighten and tighten and tighten. We had fed President Hammock just talking last week about how concerned she is about the huge uptick in spending and households running low on funds, and how the fed needs to act sooner than later. You actually disagree? So how healthy do you view the consumer as being? Ted. Yeah. I mean, when we look even at the Michigan sentiment report coming in at 51 last week, I think 51.7, perhaps, you know, you start to say very quickly, okay, the consumer is under pressure, the consumer is under pressure. And I think that the reason people are pointing to this is because they have good data to back up that belief. And it is absolutely their I wouldn't say it's not there, but what I am most interested in when I look at where consumers are today, is their behavior. I look at what we saw with Lowe's, with Home Depot, with Walmart's earnings over the last couple of weeks. And the story that I see with the consumer is that the consumer is simply being more thoughtful about where they're spending. They're not going in financing, you know, to to kind of look at Home Depot or Lowe's, that big $30,000 kitchen remodel. You know, costs for credit are expensive, but they are still buying. They are still looking for value. Again, we could point to Walmart's earnings there. And so I think that the consumer is more durable than we're giving them credit for. Just look at their behavior. All right Ted. So with all of that as the backdrop and some of your against the consensus views, where do you see opportunity right now? Great question. I would point to a couple different names. Marley. You know, of the big techs, I like to watch them pretty closely. You know, obviously we've seen a little bit of a rally here coming out of earnings season. But where I see most value is actually in a name like meta. It kind of had this, you know, gray cloud over it with all the legal and government risk. I think that getting some of those settlements through is actually going to be a real nice new change for the stock. Obviously, there's a lot of humanitarian, you know, and real life stuff that goes with that. But from a shareholder standpoint, I think that it gives Facebook a nice upside. So that's a name that I definitely see value in microns. Another one we've talked a lot about micron, but there's so much pent up demand and that bottleneck of Dram and HBM high bandwidth memory. We talked about the CapEx spend. We expect next year. There's only a few names that can produce the enterprise chips necessary. Micron is on that list and expected to get a large portion of that spend. And then finally Uber actually Uber. Interestingly, I think the market is sort of pricing in some existential risk when it comes to, you know, I'll say autonomous vehicles and robot taxis and all this. I think that what I love about Uber is that it has distribution. And I believe that that's a defensible moat in the marketplace. And so I think that you'll actually see the, the robotaxis and the autopilots actually come into that network. Also secondarily on Uber, it's become an absolute cash cow growing 30%, their adjusted EBITDA over 30% the last 12 months. And I see you're also bullish on space X, but I want you to walk me through at what levels you're bullish at because I know it is not where we currently are. Yeah. You know obviously space X sits around $140 a share. Today. I become more bullish at a lower valuation. Today it's about $1.8 trillion valuation. I like it more at about a 1.3. That would be closer to $100 a share. And with, you know, if investors are looking to buy space today and own the company, look, it's an incredible technology. I don't talk to many people that aren't interested and bullish even on the future of the company. And I stand in that camp. But if you are buying today, I think you have to be conscious of two things. One, make sure you're systematic with your approach to it. Entry points matter so much in stock holdings. We can talk about that, but I'll leave it there for now. Secondly, if you are buying today, make sure again you understand what you're buying. The way the banks, you know, Morgan Stanley and Goldman price this IPO and we're close to the IPO price. It was giving credit to the management team and Elon credit for two full years of execution pricing it such that the profits and the revenues we would expect two years from today, you're not going to get the multiple or a reasonable multiple looking at, you know, today's profits and today's revenue. You have to know what you're buying. Ted, morning or afternoon. Always great to have you on. Really appreciate you bringing the insight to