Data-center stocks PLUNGE on fears of new restrictions

[00:00:00] Speaker 1: NOW, MY NEXT GUESS HAS BEEN A FAN OF THIS AI TRADE FROM THE VERY START. HE'S MADE YOU A LOT OF MONEY. WE NEED HIS HELP RIGHT NOW. RAY WONG, CONSOLATION RESEARCH FOUNDER, CHAIRMAN, PRESIDENT, CEO. ALL OF THE ABOVE. SO, LISTEN, IT'S NOT JUST TEXAS, BUT TEXAS IS AT THE TOP. YOU'VE GOT GEORGIA, YOU'VE GOT OHIO, YOU'VE GOT PENNSYLVANIA. AND IT'S NOT JUST BIG COMPANIES, RIGHT? YOU'VE GOT A LOT OF FIRST-TIME DEVELOPERS. THIS IS A MASSIVE TRILLION-DOLLAR ECONOMIC PROJECT IN THIS COUNTRY. HOW DO YOU FEEL ABOUT IT NOW? [00:00:25] Ray Wong: I'M A LITTLE WORRIED IN THE NEXT THREE TO SIX MONTHS, WE'RE GOING TO FIGURE OUT WHAT REGULATION IS GOING TO WORK, BECAUSE EVERYONE MADE THAT A CAMPAIGN PROMISE. THERE'S THAT DYSTOPIAN VIEW THAT AI'S COMING FOR US, AND PEOPLE FEEL THEY CAN STOP IT AT THE DATA CENTER LEVEL. THE REALITY IS, IF YOU'RE WORRIED ABOUT AN ENVIRONMENT, THAT'S NOT AN ISSUE. IF YOU'RE WORRIED ABOUT THE WATER, IT'S SELF-CONTAINING. IF YOU'RE WORRIED ABOUT ENERGY AND POWER GRIDS, THEY'RE INVESTING BACK INTO THAT INFRASTRUCTURE. BUT THAT MESSAGE NEVER GOT THROUGH. AND SO JUST LIKE WHEN WE WERE LOOKING AT NUCLEAR BACK IN THE DAY, THIS IS A PROBLEM. AND ALSO I WOULD EQUATE THIS TO FRACKING. [00:00:54] Speaker 1: YES. IT GOT THE SAME TREATMENT AS FRACKING. NOW, WE'RE LUCKY WE WENT THROUGH WITH FRACKING. GASOLINE PRICES, FOLKS, DOUBLE, TRIPLE WHERE IT IS RIGHT NOW, BECAUSE THAT'S WHERE IT WOULD BE IF WE DIDN'T HAVE THE FRACKING MIRACLE. THAT BACKFIRED. I HOPE THIS BACKFIRES. IN THE STATE OF TEXAS, YOU STILL HAVE A LEGISLATURE, THOUGH, THAT'S RUN BY REPUBLICANS. COULD THAT SORT OF MITIGATE ANY POTENTIAL DAMAGE THERE? [00:01:12] Ray Wong: IT WILL. BUT I THINK, YOU KNOW, AS A CITIZEN, YOU WANT TO HAVE SOME CONTROLS. YOU WANT TO KNOW YOU'VE GOT SOME LOCAL POWER IN TERMS OF APPROVING A DATA CENTER. YOU DON'T WANT THE STATE TO TAKE IT OVER. IF YOUR TOWN WANTS TO DO THE DATA CENTER AND GET TAX REVENUES, YOU SHOULD BE ABLE TO GO DO THAT WITHIN YOUR TOWN'S REQUIREMENTS. [00:01:26] Speaker 1: THE GOVERNOR-ELECT IN TEXAS, SHE HAS A LOT OF ANIMOSITY. I SAW THIS ONE GREAT INTERVIEW WITH HER IN THE NEW YORK TIMES WITH THE TECH GIANTS. AND OBVIOUSLY, ELON MUSK PUT A LOT OF MONEY INTO THE STATE TO GO AGAINST HER AND HER PARTY. THIS POLITICAL ANIMUS, DO YOU THINK THAT WILL PLAY A ROLE? [00:01:42] Ray Wong: I REALLY HOPE NOT, BECAUSE WE'RE IN A WAR WITH CHINA FOR AI CAPACITY. AND IF WE HAVE THE BIGGER PICTURE AS A NATIONAL SECURITY ISSUE, WE SHOULD KNOW THAT THAT'S GOING TO BE THE CHANGE. LIKE, WE'VE GOT TO BUILD 2,000 MORE DATA CENTERS. CHINA'S TRYING TO BUILD 500 MORE DATA CENTERS. IT IS A WAR FOR COMPUTE CAPACITY. AND THAT'S WHY WE'RE WINNING IN AI. [00:01:59] Speaker 1: BIG MONEY THOUGHT, MAYBE I WAS JOKING AROUND, BUT I'M NOT SURPRISED CHINESE STOCKS ARE UP BIG TODAY, PARTICULARLY THEIR TECHNOLOGY NAMES, RIGHT? ANYTHING THAT SLOWS US DOWN IS A HUGE WIND FOR THEM. AND I JUST WISH THE AMERICAN PUBLIC UNDERSTOOD THIS IS A NATIONAL SECURITY ISSUE AS MUCH AS ANYTHING ELSE. [00:02:14] Ray Wong: YOU'RE ABSOLUTELY RIGHT. THAT SEESAW EFFECT IS THERE. PLUS THEY'RE HOPING THAT TARIFTS ARE GOING TO GO DOWN WITH THE TRADE WAR WITH CHINA. THEY'RE HOPING THAT WE APPEASE WITH CHINA. BUT RIGHT NOW WE HAVE CHINA IN A REALLY GOOD SPOT. [00:02:23] Speaker 1: WE REALLY DO. WE SHOULD NOT LET UP THE PRESSURE, I DON'T THINK. IN THE PAST YOU'VE TALKED ABOUT SOMETHING LIKE NEBIAS, COREWEAVE. THEY'VE BEEN HAMMERED PRETTY GOOD. DO YOU STILL LIKE THEM? I MEAN, WOULD THEY BE BUYING HERE? IF YOU HAD FRESH CASH, WOULD YOU BUY THEM OR WOULD YOU WAIT TO SEE HOW THINGS ARE RESOLVED? [00:02:41] Ray Wong: I WOULD WAIT FOR HOW THINGS ARE RESOLVED, ESPECIALLY ON THE NEBIAS SIDE BECAUSE OF THE PERMITTING THEY'RE GOING TO NEED. THEY'RE MUCH SMALLER. THE COREWEAVE SIDE, IT'S A TWO-YEAR WAIT TO SEE WHEN THEIR BONDS GET CALLED. BUT THEY CAN BUILD CAPACITY FAST ENOUGH. AND THAT'S WHAT I THINK PEOPLE ARE GOING TO BE LOOKING FOR. BUT THEN, OF COURSE, AT THE END OF THE DAY, I ACTUALLY LIKE THE HYPERSCALERS BETTER. WELL, LET'S TALK ABOUT THAT. [00:03:00] Speaker 1: YOU SAY YOU'VE GOT TO BUY THESE HYPERSCALERS. THEY'RE UNDERVALUED. THEY'VE GOT A LOW COST OF CAPITAL. AND THEY DO HAVE THE POTENTIAL TO MONETIZE CAPEX. LET'S START WITH THAT BECAUSE THAT'S BEEN THE KNOCK. YOU'RE SPENDING TRILLIONS. WHEN ARE YOU GOING TO MAKE THIS MONEY BACK? [00:03:11] Ray Wong: IT'S A GREAT QUESTION. WE HAVE THAT QUESTION WITH AMAZON AND JEFF BEZOS FOR YEARS. HERE'S THE DEAL. THE ENTIRE AI TRADE, IF YOU LOOK AT CHIPS, WAS UP 223%. THE INFRASTRUCTURE TRADE WAS UP 100%. HYPERSCALERS WERE DOWN 1.052. HYPERSCALERS ARE NOW YOUR VALUE TRADE. [00:03:28] Speaker 1: SO IT'S INTERESTING BECAUSE JUST TO REFRESH, FOLKS, WE'RE TALKING ABOUT AMAZON WHEN THEY INITIALLY WENT PUBLIC. JEFF BEZOS DIDN'T PLAY THAT QUARTERLY GAME. HE SAYS, I'M NOT GOING TO GIVE YOU WHAT YOU WANT, WALL STREET EVERY QUARTER, BECAUSE I'M BUILDING SOMETHING. THAT MEANS I'M GOING TO TAKE LOSSES. THE STOCK PAID A PRICE INITIALLY, BUT IF YOU BOUGHT AND HELD IT, YOU WOULDN'T BE WATCHING THE SHOW, OR YOU'D BE WATCHING IT FROM A YACHT. YOU LIKE THE CHIPS. ON THE CHIPS SIDE, RIGHT, I THINK YOU LIKE SOME OF THEM. I KNOW AMD IS THE NAME. THEY REPORTED AN AMAZING REPORT. THEY'RE PROBABLY GOING TO NOW FINALLY, AFTER TWO OR THREE DECADES, PASS INTEL IN THE NEXT QUARTER. THE STOCK HAS HELD UP PRETTY NICELY. [00:04:03] Ray Wong: IS THIS A BUY? YES, IT IS. LISA SUE AND TEAM HAVE DONE A GOOD JOB. IF YOU LOOK AT THEIR Q4 ACCELERATION AND INTO THE NEXT 2027, THEY'RE GROWING. THEIR REVENUE IS ACCELERATING. SO YOU'RE SEEING THE COMBINATION OF GPU AND CPU WITH EPIC AND INSTINCT CHIPSETS ALL WORKING TOGETHER ALONG WITH THE HELIUS AI DATA CENTERS. [00:04:20] Speaker 1: SUPER MICRO. OH, MY GOODNESS. SO I GOT TO BE HONEST, RIGHT? I HAD THE STOCK. I BAILED OUT WHEN THEY ARRESTED THE CEO. USUALLY THAT'S A SELL SIGNAL. IN NORMAL TIMES. IN NORMAL TIMES. IT WENT TO 17. THERE IT IS. I SOLD. AND ALL OF A SUDDEN IT WENT BACK UP. THEY JUST HAD A GREAT QUARTER. THE STOCK POPPED US DOWN A LITTLE BIT, I GUESS, IN TANDEM. BUT THIS IS A BUY ON ANY KIND OF WEAKNESS, YOU THINK? [00:04:42] Ray Wong: IT IS A BUY ON WEAKNESS. YOU WANT TO GRAB IT WHILE YOU CAN. PART OF THE REASON IS THESE SPECIALIZED CHIPS, WE'RE SHORT ON CAPACITY IN GENERAL. AND THEY'VE GOT CAPACITY. [00:04:55] Speaker 1: AND IT POPS REALLY NICELY, BUT ROCKETLAB HAS HAD SOME ISSUES. THIS NEUTRON ROCKET, IT JUST KEEPS GETTING DELAYED AND DELAYED. THERE'S A HUGE -- A BUNCH OF PEOPLE WHO REALLY LOOK AT THIS COMPANY AND THE CEO. THEY'RE FANS. I'M A FAN. [00:05:09] Ray Wong: SHOULD WE BE BUYERS OF THE STOCK? I THINK YOU SHOULD WAIT FOR THE FIRST ROCKET TO GO UP IF YOU HAVE ANY JITTERS. IF YOU'RE A BELIEVER, THEN YOU SHOULD GET IN WHILE IT'S LOW. [00:05:17] Speaker 1: ALL RIGHT. LET'S TALK ABOUT THE ANTI-AI TRADE. APPLE, THAT'S A NAME YOU TOLD US TO OWN. IT'S DONE EXTRAORDINARILY WELL. AGAINST ALL ODDS AND AGAINST THE HIGHER PRICES AND THE LOWER MARGINS, IT STILL KEEPS GOING UP. [00:05:31] Ray Wong: WHAT'S DRIVING IT RIGHT NOW? THEY'RE FORECASTING SALES INCREASES FOR THE HOLIDAY SEASON. THAT'S PRETTY INCREDIBLE. SERVICES HAVE TAPPED OUT, BUT THE NEW MACBOOK WITH THE TOUCH IS SOMETHING FINALLY EVERYONE'S ASKED FOR THAT'S GOING TO BE OUT THERE. PLUS DUO, LOOKING AT DUO SALES, THEY'RE SOLD OUT TO Q1. [00:05:47] Speaker 1: SO I'M OUT OF TIME, BUT I DO WANT TO GIVE YOU PROPS. BECAUSE WHEN YOU CAME ON AND YOU TOLD US YOU WERE BUYING WALMART, I THOUGHT YOU WERE A LITTLE NUTS. I THOUGHT IT WAS EXPENSIVE THEN. I JUST GOT TO SHOW YOU, MY MAN, THIS IS ABOUT A COUPLE MONTHS AGO. YOU'VE DONE EXTRAORDINALLY WELL AT THIS. ARE YOU HOLDING? I'M HOLDING ON WALMART. GREAT STUFF, RAY. WE NEEDED YOU BIG TIME TODAY. APPRECIATE IT. THANKS.