Sunday Night Stock Market Futures Show: NVIDIA Bombshell

[00:00:00] Speaker 1: Thank you. Thank you. [00:01:00] Speaker 2: Wow. Can you hear me now? Muted like Jensen. Oh, my God. Okay, let's try that again. For some reason, it picked up on a different mic. And I guess since I do not do this every day anymore, it was on a different mic. I don't know why, but let's just get this out of the way. We got two guests coming on. Maybe three, maybe four. I don't know. Chris will be on. Matt will be on. I invited some other people on. We'll see if they're going to be able to come on or not. But if we didn't have enough to contend with, with the AI trade, with what happens with data centers, with Dan Ives being taken out of context, which I am going to address. The statement from the NVIDIA Board of Directors. The NVIDIA Board is initiating an independent investigation in light of recent reporting that founder and CEO Jensen has been the target of a foreign intelligence effort. Now, look, we don't know. We don't know what happened. I'm not going to jump to conclusions, but tell you what, I'm not going to be surprised if in 11 minutes from now, when the futures open for retail, if we don't get a downtrend, I would be shocked. Look, it's an unfortunate situation. I don't even know what else you can say about that. We are going to have to see how the markets perceive this. We saw Jensen's apology. We saw what he said. We'll see. We will see. This could go down hard tomorrow. It could be a nothing burger. I'm not sure where I stand on this yet. I want to get some other opinions. That's why I invited a bunch of people on. My initial reaction was, oh, this is no good. This could not come at a worse time. And I do want to touch on what Dan I've said and why I think it was taken out of context. So let me bring this up. Should have had this ready to go. Oh, we got somebody else who's going to come. So I guess we're going to get four tonight, ladies and gentlemen. I guess we're going to get four. It's going to be a round table discussion. Give me a sec. So we got a round table discussion tonight. All right. So Dan Ives, let's take a look at this. I do think that this was taken out of context. But Dan Ives has. Looks like he made a post. What did Dan Ives say? And video board announced it has opened an investigation to CEO Jensen's relationship with a businesswoman, Elise Hong, which media reports say could be a Chinese spy. This is a black eye moment for Jensen and will spark multiple congressional inquiries at a minimum and will create an overhang. Yeah. Yeah. Overhang, you can say, obviously say that. So I want to see the actual quote. Because if I remember correctly, he said that this would be peak growth in 27. Here we go. CapEx for big tech. Growth. Keyword growth. Will peak in 27 versus 28 or 29. Here's how I'm reading this. Keyword is growth. That does not mean we'll get a deceleration in CapEx year over year. We won't see an acceleration of additional CapEx if I'm reading this correctly. And that is where my mind goes when I see CapEx for big tech growth. Instead of growing 50%, 70% year over year, maybe it grows 10 or 20% year over year. I don't think that this was a problem. I think that what Dan Ives said was taken out of context. That is my own personal opinion. We'd love to talk to him about this. Now, as far as Jensen, couldn't have happened at a worse time. A lot of people are calling for an AI winter. There are some politicians that are calling for a ban. Some politicians that completely want it slowed. And then some other politicians that just want a better deal. And you know what? I don't mind what Josh Shapiro's doing. I don't mind what Gina's doing. I think ultimately, even though it is a period in time where it may seem gruesome with what seems like is happening with the market going down, with tech getting hit, maybe people are getting scared. But I do think that you're not going to be able to win another election if you lose jobs and you lose taxable revenue. Let's not forget. Let's not forget these data centers bring high-quality jobs directly and indirectly to districts. Not to mention revenue that is taxable. So, I think where I stand on this is a lot of politicians are going to talk tough. There's a lot of politicians that are going to have companies approaching them to work out deals. And there's going to be some politicians that absolutely want the AI movement to stop. I think that's a small faction of the elected politicians on both sides of the aisle. Look, this isn't a blue versus red thing. And I do think that at the end of the day, the unions, the constituents are not going to be very happy if data centers move from one jurisdiction to another because that would significantly hurt those communities. So, ultimately, I think that there's going to be some growing pains with working some things out and maybe the climate isn't as favorable as it was for the past two years. That doesn't mean that it's not going to be good. And I think that's an overhang that will pass quickly. And as far as that goes, I'm not too worried about it. Now, as far as Jensen, before everybody else gets on, I don't know. I don't know what the board's going to do. I'm not on the board. I would think that Jensen will still lead the company. It's going to be very interesting to see if they put Jensen on the earnings call in two weeks. But it's also what does BlackRock say? What does Vanguard say? What does State Street say? They're the largest shareholders. And I don't know. Once again, right now, it's just allegations about if this person is a spy, not if there is an affair. Obviously, we saw what Jensen said. But this is going to be a national security. And honestly, I would hope that there are inquiries. You know, regardless of how far they go, et cetera, et cetera. If there is no investigation, that would be pretty bad. So, yes. Do I want an investigation? Absolutely. Do I think it's going to materialize? Is it, has it been declared? I don't, yeah. I don't know if we can, I'm not declaring anything. I have not seen that the person is a spy. It is alleged. Okay. That is all I know is that it was alleged. Now, how far this goes is anybody's game? I don't know. But I don't think that they, look, regardless of what happens in his personal life, is this going to stop big tech from buying NVIDIA chips? I don't think so. I don't think that this is going to impact their sales at all. That doesn't mean it can't impact the sentiment of the company. And we're going to get some more information in the coming days. So, we're going to start bringing people on as they trickle in and have a big old conversation about this, everybody. So, let's get the first person. The founder of Shook Baby International, Matt Money. [00:10:44] Speaker 1: Steve, I want to thank you for my tardiness. I appreciate you opening up for me. I'm sure the people, you know, the 1.2,000 people watching you are very, very happy that you opened for me. For anybody that doesn't know Steve, Steve is a, I don't know, I can't keep up the roost, Steve. I'm sorry. Thank you. Thank you for waiting for my tardiness. Excited to be here. I'm excited to chit-chat. It's a good time. Well, we got Mr. 1.8. [00:11:16] Speaker 2: What? You got 1.8 over there, Steve? We got Mr. Patel coming. Are you smuggling viewers? Send them over here. We got Mr. Patel coming. And I think we got Tanner coming. [00:11:27] Speaker 1: Really? I just, I was on, I was on the drive home. I just finished basis points. Thank you once again for, for putting that out. I was at the gym. That's why I was tardy. [00:11:37] Speaker 2: Did you get to see Amit eat the cupcake? [00:11:41] Speaker 1: It was, I watched that the other day. [00:11:49] Speaker 2: Okay. Matches froze. Matt, I don't know. This guy can't afford good internet. I don't get it. He's looking up at the sky. It looks like he's whistling. What's going on here? These guys can't get internet. What's going on? Yeah. If you guys haven't seen basis points, Amit absolutely smashed, absolutely smashed the cupcake. And you know what? It looked delicious. I did not have one. Okay. I did not have a cupcake, but he said it was amazing. And I got to tell you the entire street smelled like a chocolate chip cookie. That's why I went in there to get the cupcakes. And it looks like Matt came back with a different internet connection. Tanner is here. Mr. Tanner. [00:12:43] Speaker 1: Oh, it's just got way better looking in here. I know. Relax. [00:12:48] Speaker 2: Got here. [00:12:51] Speaker 1: Steve. I mean, Rocket Lab is below 60 bucks. I can barely afford the internet bill. That's probably why he's coming in and out. [00:12:58] Speaker 2: Is Rocket Lab back at 60? [00:13:01] Speaker 1: No, it's below 60, Steve. [00:13:03] Speaker 2: All right. Before we get to gents, we got the futures. Close your ears. The bell's coming out, ladies and gentlemen. Because we're open for business. All right. We're open for business. The only thing that matters right now is where the hell Nvidia is. I don't think anybody cares about any other company on here. I'm a little shook. We're just going to do it by symbol. I'm not going to lie. I'm a little shook to see where the hell this goes. It's down three. I think it's going to go down eight. Oh, it's not down that bad. If we can stay above 175, I'll be happy. [00:13:43] Speaker 1: I didn't get to Tanner's. Tanner, I was just telling hot Steve here. I was just five, ten minutes into your breaking video that you put up. So if people haven't, they should queue it up after this. But I didn't get to hear your perspective. So I'm excited to be here in person to have you relay that to probably on the order of 3,000 people at this point. Because I know Steve's up at probably 2K. And yours is probably building right now to over 1K. [00:14:09] Speaker 3: I'm not streaming. [00:14:12] Speaker 1: Are you not streaming? [00:14:12] Speaker 3: No, I'm only in here for a couple of minutes. [00:14:16] Speaker 1: All right. Let's set. [00:14:17] Speaker 2: We just broke 180. [00:14:20] Speaker 1: Depression's kicking in. [00:14:21] Speaker 2: Tanner, you are the long-standing NVIDIA shareholder. You saw NVIDIA when I thought it was a bullshit company. Not a bullshit company, but you know what I mean. Yeah. When revenue was decelerating and I didn't believe in it. I thought the valuation was ridiculous. You saw it before anybody. You've been correct the whole time. Tell us your raw thoughts about how you're feeling and what you think this means. [00:14:49] Speaker 3: If Jensen leaves, I might have to leave. If this is just an affair, and I don't know what part you've covered since you've been live, but it's looking like it could be much more than an affair. If it's just an affair, things might be, quote-unquote, okay. He might not need to step down. It's unfortunate to Laurie. It's unfortunate to Jensen's family, and he definitely screwed up big. But I don't think that his customers, as you can see from the tweets from Elon, stuff like this, that they're not changing their tone with Jensen right now at all. For people that don't know, SpaceX is expected to be the largest purchaser of Nvidia chips next year, surpassing Microsoft. So that is important. I don't think that anyone is going to cancel their orders. I don't think that the financials will change in the near term. But Alice Wong is not just some girl that he had passed on by. This is an old executive at a company called Megaspeed, which is the largest data center and purchaser of Nvidia chips out of Southeast Asia. And there's been a lot of concerns dating all the way back to 2024 that Megaspeed was smuggling chips to Alibaba in China. If Jensen had any knowledge of that, I think that this bars into the frame of potentially treasonous activity. Because their relationship has been seen, they've been seen together even after the trade restrictions. So if this is just an affair and Jensen doesn't have to step down, I don't support the activity, but I would still be a supporter of Nvidia as a company. If he has to step down due to treasonous reasons and, you know, he faces bigger legal concerns, and the Democrats are definitely going to go after that. Then I, like, I'm very much a founder or a believer in placing my money where founders are at. But with that causes huge key man risk. And this is the definition of key man risk. So, uh, it could be concerning, but I'm not selling anything right now. [00:17:35] Speaker 2: All right. So, Matt, before you give your take, I'm going to read what Jensen, I'm going to put on the screen, what he wrote to the company. A message to our company. I owe my family and all of you an apology. I was unfaithful to my wife. My actions hurt her and our children. There is no excuse for what I did. I am deeply sorry throughout my life. My family has given me love and support. They deserve my honesty and loyalty. Instead, I let them down and damage the life we built together. I take full responsibility for what I did and the hurt I caused. And I accept the criticism that comes with it to my wife and my family. I love you. I know an apology cannot undo what I have done. I hope our family will heal. And that over time, I can earn back your trust. To my colleagues at NVIDIA, including those I have worked alongside for decades and to our board, partners, and shareholders around the world, you deserve better from me. Leading NVIDIA, this is the part I have a problem with. Leading NVIDIA is the privilege of my life. My responsibility is to serve you and be worthy of your trust. I have fallen short of that responsibility. I am fully committed to NVIDIA and will work to earn back your confidence. To me, that paragraph is almost, I'm leaving, but maybe I'm bringing too much into it. Regarding the national security concerns raised in news reports, NVIDIA's board of directors has initiated an independent investigation. I support the investigation and will cooperate fully. I love our country and our company, and I'm committed to protecting NVIDIA and supporting America's national security. I am proud and grateful to be an American. My family bears no responsibility for my choices. I do. Please give them privacy. With that being said, Matt, what are your thoughts? [00:19:37] Speaker 1: Yeah, I don't condone it, obviously, but at the same time, I think Tanner's hitting it on the head, right? Is it more than just an affair, or is it actually treasonous behavior? I think it's tough, and I'm assuming that the independent board will go through. We've seen this happen at other companies, and unfortunately, or fortunately, depending on how you look at it, the CEO has to leave. But I think it all just depends upon the extent of what happened and what took place. I think regardless, taking a long-term view, I can understand where maybe Tanner's coming in and would love to have a conversation on this, about if he unfortunately leaves the company from a business perspective. And that, you know, I have no doubt in my mind that AI will continue to be massive. There will be a way to figure it out. Yes, there will likely be market cap value loss because of that action. Jensen's obviously been a huge proponent of NVIDIA and being able to get it where it is today. But overall, for me, selfishly, a lot of my investments are non-NVIDIA. I mean, yes, they will be impacted by NVIDIA in the short term, but I don't think anyone will stop being a customer, I think, as you so eloquently put it, Tanner. I think, you know, there might be more reliance upon TPUs, there might be more reliance on terrariums, et cetera. But I don't think that, you know, this will be a small squabble in the grand scheme of AI as a whole. But, of course, that means, unfortunately, that there's potentially an issue. That all being stated, I think, you know, in the meantime, taking the time to let the independent investigators do their thing and really report it. Right now, I think anybody, just like when any of these headlines show up, people are going to hop on it because it's a hot topic. And you're talking about somebody with hundreds of billions of dollars potentially misstepping, potentially treasonous sort of actions. People are going to step on that and try to get some sort of recognition or get the news out fast. And they might very well be right. It might have been treasonous behavior. I don't know. But I'm not going to point fingers and blame until it kind of goes through an independent assessment. And I do want to apologize. I was laughing not at the particular situation at hand, but the comments. One in Steve's chat, two on the side of the tweet. And then I'm also looking at something Amit posted two hours ago about Chris Patel, his wife, making Szechuan cucumbers. And Amit's comment on that was pretty hysterical. So that's what I'm laughing about. I'm not laughing at the Jensen incident. [00:22:32] Speaker 3: Yeah, I was laughing at the fact that you didn't have it in full screen. I am going to play something. Next time, fully scroll in on the comment that you were reading. So then we can't see the other comments that were on screen that everyone noticed. [00:22:44] Speaker 2: All right. So Trump has spoken. Now, I know there are some people in the chat that like Trump, some people that don't like him, and some people that are indifferent. I'm going to play it because I haven't seen it, and I want to see what he says about Jensen. I have a quote here. I have not spoken. Let's just play. [00:23:03] Speaker 4: Go ahead, Chris. The video is investigating Jensen Huang's relationship with a Chinese spy. Have you spoken to Jensen Huang today? [00:23:09] Speaker 5: I have not spoken to him about it. I just know he's a fine person, but you never know what is going on. I'm sure. I hope everything's fine. He's done such an incredible job. And so I would certainly hope that he's a fine person, in my opinion. [00:23:25] Speaker 4: In hindsight, do you wish that you had acted on the intelligence when you were briefed about the spy? I don't think so. [00:23:29] Speaker 5: I think he's an honorable guy. I think he probably has an excuse for it. You have to hear it. No, you can't do that with people. He's done an amazing job for our country. You know, we have the hottest country anywhere in the world. [00:23:45] Speaker 3: He kind of goes off now. [00:23:46] Speaker 5: Now, we did right after the election. I was not on the ballot. [00:23:52] Speaker 3: Yeah, he doesn't really talk about that. [00:23:54] Speaker 2: Don't care about that. But what do you expect Trump to say at this point? I don't think Trump is really in a position to turn his back on Jennings at the moment. Bill Clinton, what do you think about the location? Look, I'm just going to say it. I don't think anybody that I'm going to bring on tonight would condone this. I certainly don't condone it. That's a family thing between him and his wife and his children. At the end of the day, it becomes more than a family private issue if the woman ends up being what she is. What is being thrown out there that she is, we don't know. Now, regardless of what side of the aisle you're on, I would like to think that everybody would want an investigation to make sure. I know I want an investigation, regardless of how much NVIDIA I own, because national security goes above everything. And that's all there is to it. I don't care who it is. If you're in a position like that, and this happens, and there are allegations, I want an investigation. Now, I hope it is only an affair, as horrible as that is, and it doesn't bleed into state secrets, national secrets, anything like that. We have no idea what's going to happen. The fact that NVIDIA is holding a 180 is pretty crazy right now. I could have swore, I talked to several people on the phone today, I could have swore this would have been down a lot more right now. So the fact that it's holding 180, to me, is a breath of fresh air. [00:25:40] Speaker 3: Steve supports the affair? [00:25:44] Speaker 2: No. [00:25:45] Speaker 3: Okay. No, I don't think that many people are worried about trade secrets. I don't think that's the concern. I think the concern is whether or not he sold chips to Megaspeed to send over to Alibaba. That's the concern. And that, I mean, Culper Research did a whole report on this months ago, back in May, way before these allegations came out. And had Alice Wong as part, like, they had indicated a quote-unquote special relationship with Alice Wong way before any of this happened. It's very, that part is what I'm worried about. [00:26:32] Speaker 1: Well, I don't know. Sorry, please finish. [00:26:36] Speaker 3: No, I was going to say, the only thing is, is that we've known, like, because we've known about this all the way back since 2024, it does seem a little bit market manipulation-y that it came out now. Yeah. Because nothing's new now. This happened years ago. [00:26:52] Speaker 1: That's what I feel like. I said that to the Steve on the phone earlier. I'm like, look, like, is this just because when it rains, it pours, and everything's already in a wobbly, foggy situation with respect to a lot of these AI companies already going down so much that this is going down? That's, like, exactly what you stated. You think that two or three different people aren't helping manage Jensen's schedule, where this likely wouldn't have come out sooner? Like, I feel like that this is not something that is, I don't know. I'm cautiously optimistic that, unfortunately, yes, this is a situation that happened. But I'm cautiously optimistic from an investment standpoint, not much will transpire from this, unless there really was some sort of mischievous trader slash trading going on with China, which I would find very hard to believe. I mean, I don't know. If so, it'd be a very interesting, very interesting time in the market, just in general, because somebody could rise so much to a $5 trillion company, and also at the same time be screwing the United States. [00:28:06] Speaker 2: Well, I think we now know why Jensen was so quiet during the week. You had to have known this was coming out. [00:28:17] Speaker 3: Do you think he's going to be on the earnings call? [00:28:20] Speaker 2: How does he not go on the earnings call? I mean, could you imagine that? All right, so if he's not on the earnings call, I would say that is an indication that he's leaving the company. If he's on the earnings call, I think that there's a good chance he stays. I mean, what else could it mean if he's not on the earnings call? [00:28:39] Speaker 3: Well, maybe he just takes a step back from public relations like that. Like, Toby Lucky's not on the earnings calls. He's still the founder of Shopify. [00:28:52] Speaker 2: Yeah, but is Toby the CEO still? [00:28:56] Speaker ?: Yeah. Okay. [00:28:58] Speaker 3: Toby's the CEO, but he's not the president, and Harvey Finkelstein does all the calls and is really the spokesperson of the company. [00:29:07] Speaker 1: To be honest, I think a lot of companies should always have, I mean, look, Berkshire is an interesting story and case study as well, but I think a lot of people should always have, and I've seen places where this has worked and where it doesn't, succession planning. Maybe they do have succession planning in NVIDIA, I'm sure they do, they're a $5 trillion market cap, I would hope they have succession planning. [00:29:32] Speaker 3: I think the current succession, I apologize, I was just adding real quick. I think the succession that they talked about is that it might be his daughter, but she's kind of being in the ring for being the future CEO, but that's supposedly a long time away. [00:29:53] Speaker 1: But what title does she have now? [00:29:56] Speaker 3: She does, I think she does some department lead for robotics, something like this. [00:30:01] Speaker 2: So let's get Chris's opinion on what happened and what he thinks. [00:30:05] Speaker 1: Is this guy drinking wine? [00:30:07] Speaker 2: No. [00:30:08] Speaker 1: Okay, I was about to say. [00:30:10] Speaker 6: It's gin. I know not a lot of people in this day and age do drink gin, but I love Hendrix gin, so it's gin and a little bit of Red Bull. Well, a little bit of gin and Red Bull, not the other way around. Yeah, I think people need to give Jensen a little bit of grace on this one because, you know, you get to that point in life where things become very just standard. And the thing is sometimes, you know, you're riding high and then you have like these little problems with, let's say, your significant other. And it creates this gap in this vulnerability that some people can use to exploit and basically get in. And the part that sucks is that even if it just happens once, then that once can be used against you constantly. And I think the bigger challenge here for NVIDIA is not necessarily, you know, that Jensen cheated and all this other stuff. I think it's more what is Jensen in terms of being compromised and like how does that impact NVIDIA long term? Like, is this just he was having an affair? I think that would have been pretty bad, but it would have been like, OK, whatever. But this is like you were kind of messing around with a Chinese secret agent. I think the government may have a few things to basically say about that. And now here's the thing from what I've heard, the Trump administration knew for almost a year ago. Right. Like this is not something that just randomly happened. Like everyone is just discovering it like the government knew about this and let it happen, probably because, number one, from an intelligence standpoint, I don't think that you're supposed to reveal like, oh, we know that you're, you know, compromised. I think this is like let this play out as much as it can and we can pump her for as much information to see who her handlers are, who's actually like driving this and like what are their goals? And basically just string Jensen along the entire time and just say, yeah, you know, but but but basically know that everything that Jensen is doing to lobby us is coming from the perspective of someone who is compromised. So I don't know. I don't know where this goes. I feel bad for Jensen's wife, of course, because, you know, like no one wants to deal with that, especially after being married for 30 years, I suppose. Yeah. But, you know, you guys are all men like we've got we've got, I guess, ninety nine. [00:32:34] Speaker 3: I feel like I need to make a disclaimer before you say this. Chris is speaking for himself, but go ahead. [00:32:38] Speaker 6: Screw that. I'm going to talk about you, Flanders, because you're still a man no matter what you say. Men, we have a tendency that we are really good people, ninety nine percent of the time. All right. Like I would say ninety nine point nine percent of the time, but we have our own vulnerabilities at points in life. And a lot of times it comes when, you know, you have like a misunderstanding about something like I fight with my wife once in a while. It just happens. And sometimes it becomes really bad. Like we talk in a way that we shouldn't talk to each other. And a lot of times it's usually me that that causes this this rift. But those those rifts happen. And then that gives an opportunity for outside people to kind of come in and influence it. And the thing is, it takes a very strong person not to be in a position where you have all of these opportunities to go out of out of the relationship and to be able to resist it. Now, of course, all of us, we're good guys, whatever. But honestly, do we really have the same opportunities as Jensen does for like a lot of a lot of like situations like this? [00:33:47] Speaker 2: Look, here's the reality. I don't think any of us condone cheating. Oh, we're fair. And if this was Jensen having an affair, it would be a horrible situation. Obviously, I don't think that the media would be making as big of a deal about it. The problem now is this is something that's going to be in the headlines. It could be an overhang. And depending on what they find, this could get pretty bad. If it turns out that what is alleged actually comes true, the question becomes then, as Tanner put it, does Jensen step down? What happens with the video? [00:34:27] Speaker 6: What do you mean alleged? I thought Jensen already apologized. [00:34:29] Speaker 2: That's not what I'm talking about. He's already admitted to having an affair. Right. I'm talking about if what is alleged about her being a Chinese spy is actually true. [00:34:41] Speaker 6: I mean, are you really doubting that she's a Chinese spy at this point? [00:34:45] Speaker 2: I don't know if she is or isn't. It has not been proven. [00:34:49] Speaker 3: I think... Guys, let's just get the accusations correct because this is the important part. It's not... I don't... She could be a Chinese spy. I think people think that he potentially passed along secrets. I don't think... No one cares about the secrets. I don't think their pillow talk was, oh, by the way, this is how we custom-made our chips. [00:35:07] Speaker 6: Tanner, it wasn't secrets. It was influence because what happened was she was part of this one company. [00:35:14] Speaker 3: Right. Yeah. And if they gave chips to Megaspeed and Megaspeed gave chips to Alibaba and Jensen was aware of that, that's leaning closer to treason. Is that treason? [00:35:27] Speaker 6: That was past the trade restrictions. No, no, no. I don't think there was a point where Jensen was giving chips directly to Chinese-like companies. It was like... It's whether or not he knew. [00:35:39] Speaker 1: If he knows, that's treasonous. I would say it's treasonous. [00:35:42] Speaker 3: Yeah. These are essentially chips that, you know, can help with weapon targeting. Like, this is not some small trade restrictions. [00:35:51] Speaker 6: You guys are Nvidia shareholders. So, you know what? You guys get a lot more say in all of this. I don't personally think it's treason. I think this is someone got honeypotted because the thing is, like, treason, you actually need, like, willful, like... Like, I personally don't think even Jensen knew that this was to the same degree. I think maybe she was like, hey, listen, you know, like, my company really needs a little bit of help, blah, blah. I don't think Jensen knew that she was affiliated with China-China like that. [00:36:18] Speaker 3: Yeah, but they've been all... The initial story is that they all went out together, and every time that they went out with Megaspeed executives, Alibaba executives were there as well. [00:36:29] Speaker 6: Oh, that's bad. [00:36:32] Speaker 3: That Megaspeed has a close relationship with Alibaba. The same Shell corporations that was involved with the SMCI... [00:36:40] Speaker 6: I did not know about that, Tanner. [00:36:44] Speaker 3: Culper Research has a great report out from May of 2026. [00:36:50] Speaker 6: Wait, then what is the Trump administration going to say about, like, we let this happen for a year then? I agree. Yeah. Pull this up, Steve. Ooh, that's not good. Oh, man. I mean, I... Sorry, this is all evolving information, so I have to... I don't know what to say. [00:37:07] Speaker 3: Culper Research put this out back in May of 2026, before we knew any of this. And they essentially claim that they're going short on NVIDIA because NVIDIA says that, you know, none of their revenue is coming from China. We think it's actually closer to 20%, okay? NVIDIA vouches for Megaspeed, its largest Southeast Asia chip buyer. They talked about how their balance sheet exploded from $33 million at the end of 2023 to $3 billion at the end of 2024 from a, sorry, unknown source here for fundable deposits received. Anyway, they go on to talk about how Apex Enterprise Solutions was... Their parent company was Alibaba, and they go on to talk about how these companies are all related. [00:37:59] Speaker 6: This is pretty damning, bro. [00:38:01] Speaker 3: That's pretty bad. Then they go on to talk about how CEO Wong is walking alongside Megastep at every single point. They're pointing at this guy, who was like one of the executives. This is Alice Wong. [00:38:12] Speaker 6: Oh, damn. [00:38:13] Speaker 3: He was saying how, this was way before this came out, they have a, seems to have a close relationship with Megaspeed's Alice Wong, who partied together in June of 2024, same month as Apex-Alibaba pledged that dined together back in May of 2025 after U.S. trade restrictions. [00:38:28] Speaker 6: Oh, no. [00:38:30] Speaker 3: Like, you guys don't even know the story. This is the story. [00:38:34] Speaker 6: I was looking at this from the lens of, like, just, you know, someone who got caught in a bad place and made a mistake. I had no idea that this was, like, serious. [00:38:44] Speaker 2: No, there's serious implications. Wow. And with the blue wave last week, you know, I won investigation. I think it's going to be 10 times bigger, and I don't think that this is going to let up. [00:38:59] Speaker 3: Jeez. [00:39:00] Speaker 2: But maybe it shouldn't, to be honest with you. [00:39:05] Speaker 3: Megaspeed was, um, there's been a couple probes of their business, and they said everything's fine. Um, but yeah, that's the concern, is, is this treason? [00:39:21] Speaker 6: Oh, my God. Not, is he sleeping with a Chinese woman? [00:39:23] Speaker 3: I don't care about that. [00:39:24] Speaker 6: I don't know. This is pretty bad, guys. [00:39:26] Speaker 2: Yeah, I don't think anybody, like I said before, I don't condone having an affair. But if this was just an affair with some other woman, it would be a much different conversation being had in the media right now compared to the conversation that's being had with this woman being alleged Chinese spy and everything happening. [00:39:48] Speaker 6: Some people in the chat are like, Chris, get your shit straight. Like, sorry, guys, this is all evolving. I had no idea there's additional stuff. Like, I was just purely looking at this from the lens of, hey, I think this guy cheated and he just got caught, and now he's got to be public about it. That's it. Like, I didn't think of it as, oh, my God, like, there's, like, super sleuth. Like, this is going back, like, three years and all this stuff. Because this is not new, right? This is like, this has been happening. [00:40:11] Speaker 3: This has been happening, but it was from a famous short report where a lot of this got blown over and people said, okay, well, you know what? You're, like, you're grasping at straws here. They're going to be very close with all of their partners. And then now the facts are coming out that, no, actually, they did have a very special relationship. What the heck is going on? But they, Megaspeed was probed before about, you know, are they sending chips to China and stuff? Supposedly, they weren't. And it's also the fact that the United States government did nothing about this also makes me think that this is kind of FUD-esque. [00:40:47] Speaker 1: Like, we're not going to get it. You think somebody that's rubbing shoulders with Donnie is going to go lay unscathed? Or, like, has treasonous activities? It would be a huge scandal, not just at the AI level, but also the White House level. I mean, these guys have been kind of literally holding, not holding hands, but Trump calls [00:41:08] Speaker 3: Jensen. And after the allegations, Trump said, hey, he's a good guy. [00:41:15] Speaker 6: Listen, this just crossed over from a moral conversation to an ethical conversation. Because now, like, ethically, I could understand morality. Like, morality is one of those things that, you know, we deal with interpersonally. But ethics is one of those things that kind of affects, like, the nation, right? [00:41:31] Speaker 2: Well, you got to think. BlackRock, Vanguard, State Street, they're major shareholders of NVIDIA. Where do they stand on this? Where is the board going to stand on this? Regardless of Jensen being the captain AI, he may get ousted over this. Because there's, you have to at least assume that key man risk is very real here. And he could end up having to step down. [00:41:54] Speaker 6: Man, he was, like, the cleanest guy in all of this, too. Like, out of all the people that you would have thought have been degenerates about this, the megalomaniacs, this guy was, like, the friendliest face on the planet. You would have thought Bill Gates was the cleanest guy, too, right? No, I don't think so. Bill Gates had his, like, shortcomings. He looked creepy, and everyone knew that he was, he, like, the way that he took apart Netscape and everything else, you could tell he was, like, an operator, right? It's the same thing with, like, Steve Jobs. Like, Steve Jobs or someone, like, plenty of people said he was an asshole. Jensen was one of the few people that was, like, everyone just came out and said, wow, Jensen Huang's such a great guy. You know, he's, I mean, I thought he was always a killer when it came to business. I never thought he was like this when it came to other stuff. [00:42:37] Speaker 2: Well, we broke below 180. Roy, we're at 178-71. What are your thoughts? [00:42:44] Speaker 7: Yeah, similar to you guys. It's concerning. [00:42:46] Speaker 2: Bad mic. Bad mic. [00:42:53] Speaker 7: Similar to you guys. It's concerning. You know, obviously, don't do affairs, guys. But it's, if it was just some random woman, no big deal. I don't know if I heard you say it, Tanner, but just, like, for clarification on Megaspeed. And, like, I agree with you, Tanner. Like, it's concerning just because of who this lady is. So, Megaspeed is Singapore-based. So, legally, the media can sell to Singapore. There have been allegations, like you talked about, too, but just want to make this clear to the audience. And for Chris, too, to catch him up. I know that you probably know this, too, Chris. I'm not, like, anyway. That, basically, this was the route that was happening was shipping into Singapore, which you then can sell into China as well. And Megaspeed's business did ramp up tremendously. So, yeah, just like you guys said, bottom line is, like, how involved was Jensen, which, obviously, relationally he was, and how much did he know? And so, if it was, like, hey, he was fully complicit in everything here, that's a huge, huge red flag, and he probably is going to lose his position at NVIDIA. I do think that, I guess, like, what may happen from this, too, is there might be a little bit different structure of NVIDIA. Even if it's, like, well, he didn't break any laws. Ethically, he was okay, morally compromised, and then there's some trust issues. They may do what some other companies have done in the past, where you have a different person that becomes a CEO or a president, and that president's more involved, like you were talking about, Chris, in Ernie's calls rather than the CEO, that he's still involved, that he's still there. I think that's the most likely outcome of this, but, again, like, it just depends on what comes out of this. I guess my question for you guys, obviously, the board needs to be and wants to be and has to be thorough with this, but they also don't want to take forever. This can't be, like, oh, yeah, over two years, so I'm kind of curious what you guys are thinking as far as when we actually see them release their findings. Is it something that happens this year, even, or are we talking about months from now? [00:44:57] Speaker 6: Roy, I think what's more impactful is now that this is out in the open, like, how much NVIDIA can sell to Megaspeed and all these Chinese companies, like, if this is a real thing, every one of NVIDIA's exports now are under question, no? [00:45:12] Speaker 7: Roy, I wouldn't say every one of them, but, yeah, certainly to Megaspeed in Singapore, there'd be a lot of scrutiny there. I also don't think, like, the report there from Culper is dated. The one thing that was for sure overstated was the percentage of revenue that was still going into China. I mean, that's just not happening. Plus, you see what – I would need to look and see what – you know, I don't know Megaspeed intimately, but it's not ramped in the same way as NVIDIA has as well. So, that's all going to be investigated, but, yeah, like, it may hinder – I don't think it comes close to 20%, but, yeah, if there were some, it may be some off the top. But the thing is, like, we need to remember, guys, NVIDIA is not limited because of number of customers. They're limited because of supply. They're supply constrained. Elon Musk, he will buy every VeriRubin chip that they ever can even imagine at this point, and they're not the only ones. And so, this is not something that is going to be impactful, I think, at all for their revenue, at least in the near term, anytime soon. [00:46:11] Speaker 2: Right, and look, Q3 numbers are in the book. We know that it's going to be a phenomenal quarter based on what every other company put up. Likely, forward numbers are going to be good. The problem is sentiment. The problem is narrative. This could have the most phenomenal numbers and do nothing but go down. This is a company that could not break out after three incredible quarters. And now you're going to have an overhang and the potential of a narrative forming about Jensen being ousted, what really happened. Even if everything gets cleared, this could be very rocky for the next 6 to 12 months. We have no idea. I fully expect them to put up triple-digit growth on this earnings report, and I don't think it's going to matter. I think there's too many things right now, and NVIDIA is becoming, unfortunately, I hate to say this because normally I'd be the person saying, I'm about to go throw a lot of cash at this and buy the hell out of this because it is too undervalued. I think it's a good sign that it is holding steady around 178, but there's a lot that can come out. And let's just play it out. What if what comes out is the worst-case scenario? Is there any way the board can allow Jensen to still be the CEO? And if the answer is no, what happens then? Not about the architecture, not about future generations because they already have the blueprints, but what happens if Jensen steps down? Do people lose faith in NVIDIA? Do people sell NVIDIA? Does it create a big sell-off? Tanner already said that he would consider exiting. I got to tell you, I would consider exiting probably, and I think a lot of people. So you're talking about the potential for a huge event, and what does that mean indirectly for other companies? Does that create pressure for a downward movement in the market? Like, this has huge implications. [00:48:21] Speaker 6: I think the problem is the narrative would shift meaningfully negative towards NVIDIA, because then what happens is people will be like, well, when is Jensen getting fired? Is he getting fired? And so that uncertainty is going to discount the multiple. Even if the numbers are really good, it becomes like, well, he lied about this. What else is he going to lie about? And is he going to be around in six months? And so I think there's going to be people who are, like you guys just said, probably exit. You know, because at the end of the day, when it comes down to it, you're not just investing in the company, you're also investing in its leadership, you know, and that leadership gives you a certain level of confidence. And if that confidence is broken, sorry, that's just part of the investing, you know, game. So the question is, who would they put in place then? Who would they replace them with? Who's got enough credibility over at NVIDIA that could steer the ship correctly? [00:49:20] Speaker 2: Man, I got a crazy idea. You guys aren't going to like it. Elon Musk? No, no. And I shouldn't even say it because it would never happen. I don't think it would be allowed to happen. Goldilocks scenario. You have NVIDIA buy AMD and let Lisa Sue run the whole ship. No, that would never happen. What are you talking about? That's what I say. It would never happen, but that would be the best case scenario. [00:49:50] Speaker 6: That would never happen, dude. She's built up AMD from the ground up. She's not going to just fold like that. She's a cousin, baby. Getting it through antitrust would never happen. I know, but I'm just saying. I don't think that's true, by the way. I don't think. She's not the founder, right? [00:50:08] Speaker 2: No. [00:50:09] Speaker 6: Of AMD? No. She took over AMD when AMD. Dude, I had bought AMD bonds that were yielding at the time. AMD was like $1, $2. I bought their bonds that were yielding almost 10%, 11% in 2012. I should have bought the goddamn equity, but I probably never would have held it. But the point is, dude, she took over AMD at the worst time in life. AMD was about to go bankrupt. [00:50:34] Speaker 2: It was so bad. They had to do a lease back of their headquarters. Sell it and lease it back to raise capital, not to go under. [00:50:43] Speaker 6: Yeah, I mean, the bonds were trading at severe distress back then. Dude, AMD was literally the only value that AMD at the time had was just the name AMD and maybe some of their foundries at the time because they did have a foundry business. But Lisa Su came in and cleaned up the whole thing. So she might as well technically be the founder of AMD because this new version of AMD is all her. [00:51:08] Speaker 7: I actually think that there is somebody that might do something like that. And I think it's GameStop. They'll do half stock and half cash. And there we go. [00:51:18] Speaker 2: Let Ryan Cohen run it. Well, this is right now. We're almost back at 180. I can't wait to see what happens tomorrow. [00:51:34] Speaker 6: By the way, let me just show people the chart for AMD so people see like, holy crap. [00:51:39] Speaker 2: Oh, can you not remind me? I mean, Chris, you know how much I had of AMD, right? I do not. I had 7,800 shares at an average of 337. Oh, let me see. And I exited in 2015 or 2016. [00:51:59] Speaker 1: We wouldn't even know, Steve. [00:52:01] Speaker 2: I mean, just like Chris said, I would have never held it. So it doesn't matter. [00:52:05] Speaker 1: Yeah. [00:52:05] Speaker 6: Check this out. AMD in 2010, like right here, $2. She took over CEO around this time right here. Since then, it's almost, what, like 400x? [00:52:20] Speaker 2: It's insane. But NVIDIA is back over 180. Maybe the market has more confidence than I do at this point. [00:52:30] Speaker 7: Well, the good thing going for NVIDIA is like, obviously, like the product is an insane demand. And you, by the way, as good as AMD is, you don't see smuggling allegations like this for AMD. You don't. You don't see SMCI's CEO break the law for AMD. It's the product is there. The demand is there. And then the valuation already for NVIDIA is smashed to bits. If it's trading at like 50 times forward price to earnings, that would be one thing. So like, yeah, it's obviously in the worst case scenario that, you know, he is complicit and everything. That's not good for the stock. That's not good for anybody. That's not good for the ecosystem. But it's a very different scenario than if we were trading at very elevated levels. [00:53:12] Speaker 6: You want to hear something funny? My brother and me, we were talking about this, right? And he was like, because me and him both own Broadcom. I was like, he's like, man, what about Broadcom? Do you think Hawk Tan probably cheated on his wife? I said, no one is trying to buy no NVIDIA black market Broadcom chips. That's the one benefit of ASICs that they're designed specifically for an application. So you can't just take Broadcom chips and take them to China. Like, no, you got to, you got to actually make them specifically for a task. So I said, we don't got to worry about that. Even if brought, even if Hawk Tan was having an orgy with the Chinese, he couldn't sell it to them anyway. Because they don't want them like that. [00:53:52] Speaker 3: Yeah, I was going to say, I don't think in the short term that NVIDIA would feel any pressures if Jensen left. I think it's the long term, you know, leadership plays such an important role in making sure that all their suppliers are running at breakneck speeds. There's been so many times, there's an amazing book called Thinking Machines about Jensen Wong and his leadership there. And there's been many, many times in the history of the company where something has been told that it's, you know, not physically possible. We just can't do it. And, you know, as a leader, he's staying up in the late hours of the night, trying to get the engineers and their suppliers and TSMC to essentially do the impossible. And he's been making the people around him do the impossible for 34 years. That's the part that's irreplaceable. It's not that Vera Rubens won't sell or Rosa Feynman, like all that stuff's already benchmarked. But to make a company go from $46 billion in revenue to $106 billion, like he's breaking law large numbers here. Like he's finding supply where no one thought you could find supply. That sort of thing, I think, is irreplaceable. And so I'd be very hard pressed to believe someone else can do that. And that, I think, would put real pressures on a stock. [00:55:16] Speaker 2: If what you said is true, would it put pressure on Micron and just everything else down chain? [00:55:26] Speaker 3: No, because I think the need for chips doesn't change. But like Chris said, you know, maybe it's Broadcom, maybe it's AMD, maybe it's whomever. Maybe it's MediaTek. But memory is super needed. And then if there's less, you know, competent chip designers, which, I mean, most of the engineers, like no one's changing at NVIDIA. But memory is actually a little bit of a solution to a lack of chips. So, you know, more amounts of memory can actually lower inference costs. So I'm curious if this is actually less of a negative to Micron than people are assuming. I think it might actually be a positive. [00:56:07] Speaker 6: I shouldn't say this, but I'm going to say it. The funniest reply to one of my tweets about this whole Jensen thing was someone said, two longs don't make a right. I don't know why I found it so fucking funny. I don't think that's funny because, you know, Alice Wong, Jensen Wong, two longs don't make a right. I know Steve's trying to, he's laughing right now, but he can't admit it. [00:56:35] Speaker 2: I can't believe you just said that. Roy is frozen. And Roy turns his camera. [00:56:41] Speaker 6: Roy is so, he's laughing at the inside. [00:56:43] Speaker 3: No, no, his camera's frozen. [00:56:47] Speaker 6: Come back, Roy. You can laugh with us. There you go. There's the smile. [00:56:50] Speaker 2: Jesus. And he left. He's frozen. He just got disconnected. And now he's back. Okay. [00:57:00] Speaker 6: I was drinking coffee and spit my coffee out when I heard that. [00:57:04] Speaker 2: Jesus. All right. So where do we go from here? NVIDIA is still over 180. That's a good sign. Who do we, who do we have this week that matters for AI? Anybody reporting this week or are we waiting to next week? [00:57:20] Speaker 3: Or are we even nebius? [00:57:22] Speaker 2: Neoclads. What does this mean for the neoclads? [00:57:25] Speaker 7: Well, both of those have tied, very closely tied to NVIDIA. So, you know, they've been under a lot of stress and it's not good for them. I'll just say that. It doesn't really change the story. Why does it have any effect? Yeah. Just as far as like the narrative. Like there's no, I don't think it's material to the actual underlying business, but like for the narrative and stocks move short from the narrative too. So, but yeah, I'm not too concerned about either. Like, especially like we, well, we did see last week with IRON. We saw this with Riot. We saw this previously with some others, the smaller players. As the market still is, even for the neoclads, willing to give a premium or at least a boost and have it hold at those levels for very good results. And both just like NVIDIA, but even more so, or it just been ridiculously sold off and slaughtered. So a lot of negativity is already priced in. How much more can they go down? I guess it can go to zero, but I mean, that's not happening. [00:58:24] Speaker 3: Did you see that, what was it? What's the name of the company that got bought by Semi Analysis? The Substack company? Anyway, they put out a report on shorting Nebius, but then they just changed it the other day to shorting. They said, oh, we're taking it back. We actually want to short IRON instead. [00:58:50] Speaker 7: Yeah. Which at these valuations... It's a Trini Research. Thank you. Oh, yeah. Yeah, I'm taking what they say on certain names with the greenness. Although, they do like, for whatever reason, Core Weave. So I like that. [00:59:04] Speaker 3: I don't think there's a single person that thinks any of these NVIDIA customers are going to cancel orders based on... [00:59:20] Speaker 2: It's not about canceling orders and it's not about revenue growth not being there. It's about sentiment on the company and just sentiment in the trade and the overhang if Jensen is asked to leave. There's a lot of unknowns. [00:59:40] Speaker 1: Yeah, I think where I stand on this is it's going to be an interesting time. And what I hope is that whatever internal investigation is done is done with haste and it's not something that lingers. I think it would be the disservice to the shareholders for this the last months because, you know, hopefully as well, I mean, for the benefit of the United States, I would hope that they would even come forth and say, look, we've done a background check. We see zero issues because I don't think this is just as specifically a like a single NVIDIA sort of company. Like, I think this does also include, you know, national security. So I would hope that it's, you know, there's also an opportunity for the United States to say, look, we've we've investigated this thoroughly as well and we don't see any issue. I would find it hard pressed to believe that anybody getting that close to Trump would have not gone through some sort of security background check or and also regularly. Like, if you think about it, a lot of these people selling and trading stocks at Morgan Stanley or Goldman, et cetera, have to go through compliance reviews. You mean to tell me that they're not continuously monitoring the people that surround the president of the United States and others in his cabinet? So I don't know. Maybe that's maybe that's me thinking too logically and having too much trust in our government. [01:01:17] Speaker 3: But I would be surprised person that has a relationship with the White House. [01:01:23] Speaker ?: Yeah. [01:01:23] Speaker 3: Being the White House quant. Yeah. [01:01:25] Speaker 1: I have trust in the White House. [01:01:30] Speaker 6: Am I bringing this up, Chris? Yeah. This is the best use of AI ever. Check it out. Some new movie. Come on, man. No. Why can't you show it? Steve, come on. [01:01:43] Speaker 2: No. [01:01:44] Speaker 6: Why? [01:01:45] Speaker 2: It's so wrong. [01:01:46] Speaker 6: It's not wrong. Come on. Just show it. [01:01:49] Speaker 2: No, it's wrong. Come on. [01:01:52] Speaker 6: Come on. [01:01:53] Speaker 2: No, move on. It's so small that I couldn't see what it said. Steve, just make it a little bigger. Okay. Just come on. Just show it. No, I know what it says because I caught the glimpse. That's why I took it off. It's nothing bad. Come on, man. I'm not doing it. Chat. Chat. Come on. It doesn't matter. I'm not doing it. [01:02:11] Speaker 7: On what Matt said, I think that that probably is another layer that's definitely needed here is for there being an investigation from our government into this as well. Probably, like you've said, they're already aware. Now, that'll add another layer. So, this investigation needs to be a bipartisan panel. That way, people aren't like, oh, Trump is corrupt and he's just lying to protect his buddy. And, of course, you played the clip briefly of what he was already saying. But, yeah, bipartisan panel looks and says, hey, we've looked and it's not good, but it looks clean. There's no violation, no treason or anything like that. But, yeah, it'd be wild if it is. Now, Tanner, if the company is handed off to, like, a Tim Cook type of operator, do you think it's just, I mean, obviously, it's not going to be the same as under Jensen, but how big of a drop-off do you think that there's going to be? Like, is it going to be immediately, like, in, like, two or three years that we see them become a laggard in this space or do they have enough talent there? I don't know them nearly as well as you do. [01:03:12] Speaker 3: Yeah, I mean, I don't know, like, it's so hard to tell, like, what the percent that Jensen is a part of it. There's strong leadership throughout the whole company, but, bro, I would not feel comfortable without Jensen. He's been here for 34 years or whatever it is. Like, it definitely, it would change my mind about investing in the company. And it's not that I believe that the AI space is dead. I would just put it into other names. Like, you know, maybe I'd increase my position in Broadcom or, you know, in some of the other plays. [01:03:48] Speaker 6: But what did you guys think of this weekend with all in that said that the neoclouds were cooked because of this Democrat Congress that's likely going to hinder progress? And the chances of funding for these newer plot projects is going to be a lot more challenged. And the permitting situation is going to delay and that delay is going to cause a lot of the neoclouds to suffer and give the hyperscalers like the pole position to decide who gets inference and who gets training and who gets compute. Say that again. What's your question? So the all in podcast, one of the things that they spoke about was the hyperscalers right now who have access to all of this compute are now sort of going to be in kingmaker mode because these new permitting projects that a lot of these neoclouds like nscale and, you know, what does it call? [01:04:45] Speaker 3: Don't give the credit to the all in podcast. Give the credit to Matt. He was there first. Was he really? Oh, yeah. [01:04:50] Speaker 6: So Matt, Matt gets, Matt gets points. But the point that they were trying to discuss was that the hyperscalers would ultimately be the beneficiaries because they can decide who the next, you know, who to give their compute to, whether to keep the resource to themselves or to, you know, upcharge the, you know, the hyperscalers and the compute becoming a lot more like, let me take it back from saying the compute already in the ground compute is going to be very, very expensive versus anyone who's like, oh, yeah, I want to build this data center. It's going to cost you way more because of one, the permitting process is going to take longer. The amount that you have to pay to, you know, get the permits is probably going to go up. And then there's going to be all sorts of time issues that you have to deal with in order to get something across. You've got this union labor issue with Texas governor speaking about that, which might delay things even further. So the point is, whoever has already boots on the ground, like, and you know, like, like permits already, they're going to benefit. And the thing is, most of that compute seems to be the hyperscalers right now. [01:05:59] Speaker 3: Yeah. If you can pull this up, Steve. [01:06:01] Speaker 6: So look at Matt. See, Matt's happy because Matt is loaded to the boat. [01:06:05] Speaker 1: No, I just, I just, I just saw somebody's comment in the chat saying gin, Chris is the best Chris. I don't know. That just made me giggly. [01:06:14] Speaker 6: What's your favorite gin, guys? Do you guys drink gin? No. Any of you? Hendrix. Come on. None of you. I'm the only one that drinks gin. [01:06:25] Speaker 2: So Tanner, did you watch All In yet? Yeah. Okay. So what did you think before I get my take? [01:06:33] Speaker 3: Well, I agree with that, but I also don't think that the U.S. is the only place to build data centers. So, um, I think you can find some exceptional names outside of that if you want to play purely the, the compute game. Whenever you're investing in Amazon, Google, Microsoft, like all of these names, you are being diluted via the other businesses. Now those are good businesses. I'm not suggesting that, but the fastest segment of growth in Google's business right now is Google Cloud. Nebius, I got to keep harping their name here. They're potentially one of the biggest builders in Europe. Um, they've got partnerships in Japan. They've got partnerships in the Middle East. They seemingly are passing by every single concern that people have around getting, uh, capital. Um, you know, investment grades, the only area that people are investing in or the long-term agreements that people have, like, like whatever direction that you want to point out to say, oh, this is why you can't invest in the NeoClouds. It's seemingly that Nebius has the answer. So, um, I do agree that they are extremely strong names to invest in. Um, but Nebius is there too. I really like that company. [01:07:46] Speaker 6: If CoreWeave drags and, um, and Nebius down, I think that would be a point where I start buying Nebius. Cause I think that among all of them, I think Nebius is like, but what do you mean? That's going to survive. [01:07:58] Speaker 3: Huh? What do you mean? Start? It's down like 50 something percent. [01:08:01] Speaker 6: Yeah. But I don't have any right now. Even at 50 percent, 50 percent down. I don't have any. [01:08:06] Speaker 2: What do you think about, uh, why don't you take your victory lap about what you said and give us your synopsis before I give mine. [01:08:14] Speaker 6: Wait, did you guys hear Dr. Crossroad? Dr. Crossroad, what did you say? [01:08:19] Speaker 7: I said, I wouldn't blame Corey much on that. Um, it's, it, you know, it's every single NeoCloud got hit and CoreWeave. I know that the bonds have come into focus and that was the main thing with Corey, but it's not just a Corey thing. It's across the NeoCloud thing. You know, that's what Matt is, it was isolating in his post is not, Hey, CoreWeave is in trouble. And so it's going to cause ripple effects. And just like Tanner said, like, I do think Nebius, like, I'm not arguing with you. I think Nebius has the highest execution. I think that there's been way too much premium put into that in the past with Nebius, which is why I was focused more on CoreWeave last week. The only thing I bought was Nebius just because their positioning, um, they're able to raise, uh, but like, even with iron, like we had earnings, I don't know if you saw this, Chris, but 90% premium in over five years at 23 million per megawatt, um, is incredibly attractive. The old compute, incredibly attractive. CoreWeave and Nebius are, oh, I've also excelled to a point that you almost have to put them in a different class from the NeoClouds with the regulation and permitting, especially Corey. That's actually where they've excelled 51 sites up. They've had a total of two delays. One was weather only. And the other was a combination of weather and regulation. They have excelled with this, uh, as much as I, I have, you know, not appreciated the CEO's communication with shareholders. And, and I'll call that out. They do a great job with regulators and permitters. And in, in Texas, like the last thing here, there's a lot that are into here in Texas. I do think that some that are further downstream, the guppies, as Elon Musk calls them, which iron, Nebius, Corey, they're not guppies. They're going to survive and they're going to do just well. Nebius, probably the best in the current environment, just to be frank. But the Corey also doing quite well too, but here in Texas, uh, between 28 to 33% of the capacity in 2027 is being built here in Texas. And so, uh, we've seen like Matt's here in Texas as well, uh, with the incoming governor, mayor, you know, it's a, she, and our platform is actually more conservative and more open towards data centers than some of the Republican candidates. The Senate is still in Republican control. She has stated a number of times she doesn't hate data centers. She wants them. Yes, there are some additional costs that are going to be passed on, like you said, regulation and unions, but there's still a lot of things to work out. And there's a board here that oversees these things. Most of those board members were appointed by governor Abbott, regardless. So like in all the things that are already permitted are also going to be able to take place. There will also be a wave of permitting here at the end of December under governor Abbott. Regardless, basically Texas is going to build a ton. And that's, that's a third of the data centers. And that continues, which I think that it certainly will be like, it's, what are we talking about? Like a little bit taken off the top, but yeah, Nebius, CoreWeave, they're going to be fine. Hyperscalers are positioned very well too. Like just, but yeah, the inscalers, those are the guys that are maybe in trouble. [01:11:05] Speaker 3: You're right. I agree with you, but there is still concerns that CoreWeave is seeing, like raising costs of capital, not just for their new capital that they need for, you know, because of their backlogs, but also if that debt comes up for refinancing, because these deals are extremely long, that those prices, at least right now, look to be much higher than where they originally signed them. Nebius is the only one that had, like, doesn't even have that concern. Like, have you looked at the market cap to enterprise value or just a way of looking at net cash or net debt on CoreWeave or, or, um, Oracle or any of these businesses versus Nebius? Nebius is unbelievable. And then in, in the last quarter, they raised an additional $9 billion of, of, of debt. Who else can even do that? Partnering with banks like Citigroup, not partnering with NVIDIA and getting direct, uh, you know, capital from them, like what Nscale had to do. [01:12:10] Speaker 7: What do you guys do in an environment where you have 90% prepayment at 23 million per megawatt in five years. Okay. But iron is like the worst in terms of quality, uh, out of these. And what we've seen is when Nebius is like, Hey, we're getting this kind of deal and we're doing these things. And Corey says this with the older units, the A100s, like that's not just a, Oh, this company is special. They're the only ones maybe slightly better or slightly worse, but the reality is it's demand that's driving that side of the equation. So again, you have to do get, you do give up some margin. You do give up some of those, you know, economics, if you're going to get 90% prepayment and not every customer can do that. But I'm just saying the demand is such and what happened with the election night will enhance that. I mean, it doesn't enhance the demand, but it changes the supply side, uh, whether it's, you know, a small percent or whether it's 10%, whatever it is, which again, drives up the price, which benefits all of these. Now benefits some more, I'm not saying that, but I'm just saying it. And also core weave is there's, there is one or two of their loans that are interest only, but the rest, they're actually paying down the debt too. So this is not a question of them getting to a point where they have to refinance at 2031 at higher rates. Very unlikely. I mean, that that's not the loans that they have. [01:13:24] Speaker 6: But Roy, the challenge that I think people are having with regards to core weave, that they're not with, um, with Nebius, but the market is treating them the same. In my opinion, which is why the market is wrong is that core weave from what I'm seeing. They did not sign the greatest of rates when it came to the, the build out, right? So they estimated an X amount and they're going to basically get an X, but the cost to build is going to be a lot more. And the unit economics don't make a lot of sense versus in Nebius, they've signed deals, but those deals are actually very attractive, but they're both being put into the same bucket. That's, that's what I'm seeing. Is that. [01:14:04] Speaker 1: I don't, I don't disagree with you, Chris. I just want to ask, do we know for a fact that they're costing more or is that a speculation that they're costing more? [01:14:12] Speaker 7: So the way that these deals are typically structured is that at the time that you have this project that you've announced, then you take on debt versus this known take or pay contract, which is why they have these longer terms. Because if you have a loan that, or if you have a contract that's shorter than the loan, that's a much higher rate. And so that's the way that they established. Yes. Because of the signing of the timing of the signing, not because of quality or anything else, but just when compute was trading at a lower price, that's when they locked up a lot of these. That's true. It is at lower rates, but still a creative it built into the contract of these loans as well. They talk about the minimum as a spread that there'd be make be making on these. But as far as the actual supply, they also sign those agreements. Now, for some, and because there's a lot of different supplies, there are some things that shift around. But for instance, when NVIDIA mentioned, I think it's a month and a half or two months ago, that they said, hey, we're going to raise the prices of Vera Rubens. They don't do that like instantly. They say that they're going to raise prices starting in January. And so anybody that's buying over the next few months, they're locking up that supply and that contract at a certain established rate. It's not that they're like that these companies, especially on the level of Corey the Nebius, are like, oh, man, we forgot that we need this. Let's go out to the memory manufacturers and get that now on the spot market. That's not how it's done at all. Now, there are some components that for sure, and it depends on the contract that are built into and like, OK, depending on what's happening, this percentage amount. So maybe you're seeing like a couple of percentage taken off, but like that's, yeah, the reality is if demand is going up for all this and then also the cost underlying it as well, those things rise in equilibrium. It's not that CoreWeave is going to get blown up. The bigger danger for CoreWeave is that they have to slow down the rate of their build out because they can't raise as effectively. They still can. They still have all the money they need for the next year for all the building that they planned. And that was before they did two additional raises, and I really hope they didn't tap and be at the market because that would be really egregious. But if they do that, then we have an equation where CoreWeave, the upside of CoreWeave is less attractive because they have to slow that down. They're not going bankrupt. That's not the reality. But, you know, they may not be able to be that largest player in Neocloud space, which they would have been otherwise if it wasn't for this. And that's really the bare case there. Other than, like, memory prices collapsing because they have some of the supply agreements that have a floor rate attached. But that's not the environment we're in on that one. [01:16:43] Speaker 6: I mean, and some people are saying, Chris, you don't know the numbers. Well, guess what? You guys don't know the numbers either because this is one of those things that's hidden behind their contracts, right? They don't exactly publish like, hey, this is what our contract looks like and this is what it is. But the bond market is looking at these numbers because they actually have information, especially if you're a debtor. They're going to say, I want the numbers. Every bank is going to know exactly what CoreWeave is expecting to get and what the cost of buildouts are. And the banks are saying, no, we're not going to give CoreWeave this amount of money unless you're basically covering all of this additional risk. If you look at the other hyperscalers, not hyperscalers, the neocloud, like I said, Nebius can borrow at a lower rate. That alone, in my opinion, should give us an indication as to, okay, the banks don't trust CoreWeave as much as they trust Nebius to get big back. [01:17:34] Speaker 7: Those are senior convertible notes. Those are a completely different animal than just tapping into the senior notes directly. Now, we don't know for sure. A lot of these are project-based financing. So it depends on who is in the back end. And so, for instance, the large project that's tied to Meta, they basically had the SOFR, the Fed Overnight Funds Rate, with a spread. And that was a very small amount of spread because they were able to tap into that. Do you know what that spread was? Pardon? Do you know what that spread was? I think it was 2.5%. So it was really attractive. It was investment grade. But regardless, three weeks before the bond prices really started spiking for CoreWeave, they did a massive, I think it was a $4.2 billion raise. So unless we think something meaningfully changed in three weeks with CoreWeave, which is hard to believe, or the underwriters just were like drunk and just not paying attention or bribed or whatever, or that there is Enron-level fraud here, it's hard to look at this and be like, okay. So bonds, as you know, Chris, are incredibly illiquid. And there's a lot of reasons why somebody might want to get out of those fast. Certainly, CoreWeave, I mean, that is an issue with CoreWeave. And it is going to make hard for that specific style of debt issuance to be done in the near future. It is an overhang. But it's not, I wouldn't say it's just because CoreWeave is terrible and Nebius is great. Nebius, I think, is a higher quality, but you pay for that quality cost. And I'm not anti-Nebius. It's my second largest holding for Neocloud. So it's smaller than CoreWeave. [01:19:09] Speaker 3: I don't think you're anti-Nebius. And I'm not anti-CoreWeave. But everywhere I look, whether it's, okay, you know what, CoreWeave locked up a lot of their compute too fast. That was their decision. Like, that's part of the execution. Nebius has an opportunity to lock up their compute all the way into midway through 2028. And they're choosing not to, right? SpaceX is not locking up their compute. They're adding, like, part of that is allowing them to charge at higher rates and staying closer to spot. Now, none of them, CoreWeave or Nebius, is nearly pricing where SpaceX is. But there is a difference between CoreWeave's average contract value and Nebius in terms of the per megawatt. CoreWeave, obviously, larger. And people need to give credit to how fast they're setting up their data centers as well. Maybe that's because of co-location. Maybe that's going to affect margin down the line. But there is a lot of nuance. I think a lot of people are very quickly judging CoreWeave and saying how fast they're going to go under. I mean, very few companies. They set up more data centers in terms of megawatts than SpaceX last quarter. Like, who can say that? [01:20:23] Speaker 6: Now, the margin profile will be very different. That's not the question where I'm asking. I'm asking, why is Nebius down as much as CoreWeave is, even though Nebius has a stronger business? [01:20:34] Speaker 3: I think people are pair trading. I think they're trading them the same. [01:20:37] Speaker 6: Exactly. And that's the opportunity, right? That's why I'm buying Nebius. [01:20:41] Speaker 3: I think the opportunity in the CoreWeave sell-off is not CoreWeave. I think it's Nebius. [01:20:47] Speaker 6: Exactly. That is the point. That is exactly what I was going to say. [01:20:50] Speaker 7: Well, the other factor, too, is Nebius should never have been trading where it was trading. As far as highs, it should also not, in April, have been at 70. It also shouldn't be where it's at right now. The market always overreacts. But when you are trading at a premium and that narrative begins to soften, that's when you get pummeled. We've seen that time and time again with stocks, especially this year. Also, like, one quick thing, since both have earnings, and Steve, you and I talked about, Corey, specifically, and you mentioned backlog is something that's a key focus. We need to be careful reading too much into backlink numbers, especially for Nebius, but also for Corey of this earnings, because, again, both of these companies are shifting more towards shorter-dated contracts. And so if you sign a contract for three months or six months, even at high, you know, $50 million per megawatt unit economics, that doesn't make much of a dent in terms of adding to your backlog. And, in fact, you might even see backlog begin to reduce if this demand in these unit economics continue to play out over the next few quarters, because they're shifting so much more into that shorter term versus a contract that's, you know, $25 or $30 million per megawatt over three to five years. So it's something that the market might just stupidly react to. I think it's a little bit too early, but I think next quarter is really the one where we start to see that softening of the backlog. But the market's going to read too much into it. It's just saying, hey, shorter-duration contracts is what we're doing, because the demand is there. We're seeing that. [01:22:12] Speaker 3: I think as a group, we should all look at SpaceX. [01:22:16] Speaker 2: That's not a bad idea. You guys heard what Chamath said on All In About SpaceX, correct? [01:22:23] Speaker ?: Yep. [01:22:24] Speaker 2: I think he raises a very good point. The 90-day clause on that Anthropic deal, Elon could very well pull a Kingmaker move right now and send Dario a letter saying that he's going to cancel it in 90 days and that they have two options. One, when he puts all the compute up on the block, it'll get signed at spot by pretty much any, take your pick, Amazon, Alphabet, Microsoft, even OpenAI, Meta. They'll all take the compute. Or Dario can come in with a new contract at X rate, and overnight, Elon will be able to double or triple his compute revenue from Anthropic, because the reality is if they say no, good luck competing with OpenAI or Gemini. And Alphabet is probably loving this because if Elon goes to open market, they'll probably outbid everybody just to screw over everybody and make Gemini have just as much, if not more, compute. It's a really interesting situation that SpaceX is in from a compute standpoint. [01:23:34] Speaker 3: Well, I thought that thing that Chamath said was a little like, I agree. You know what? Maybe you can hurt Anthropic or something like this, but it's not like their whole compute is lying at SpaceX. I think at the end of the year, they're expected to have 3.5 gigawatts and 260 of that, 260 megawatts. Is that SpaceX? Like, it's not going to bankrupt their company if they... [01:23:57] Speaker 2: Nobody's saying bankrupt, slow them down. [01:24:00] Speaker 3: No, I know, but it's not like they are in control of their whole compute. [01:24:02] Speaker 2: It's not their only one, but it's a large share of compute backed into one company. [01:24:08] Speaker 3: Yeah, but like less than 10%. [01:24:10] Speaker 2: Still a large share of compute. [01:24:12] Speaker 7: This is why they either need to build it themselves, which they're doing some, but it's really why the coreweeps and nebbuses are very attractive because they don't have the competition that you have with all the other hyperscalers for the most part that have their own LLMs that are competing. And we can launch SpaceX into that too. Oracle as well. Like Oracle, you know, they're going to be able to get compute with something. Like the one thing though with Elon is we need to remember the Democrats had a massive sweep and as much as they hate Trump, they probably hate Elon more. And they, some will resort to just nefarious allegations, tricks, who knows what, to try to do anything that they can to slow Elon down. Now, I'm skeptical whether that works or not, but there might be some overhang that you're under anticipating as it relates to Elon and Elon companies just because of what happened with the terms. [01:25:01] Speaker 2: Matt, what do you think happens with the launch this week with SpaceX? You know more about this than pretty much all of us. [01:25:07] Speaker 1: What do you mean launch with SpaceX? The Starship? [01:25:11] Speaker 2: Yeah. The double catch or whatever it is. I think they're trying to get everything. [01:25:17] Speaker 1: Yeah. I think they're trying to just make it a fully reusable vehicle. They're slowly making more and more steps. And, um, you know, I think with respect to the regulatory environment that we're in, uh, I never really thought this a year ago, but. The, the closer and closer we get to CapEx and inflation with, with respect to the data centers, um, and now the regulatory potential hurdles, uh, this is beginning to look more and more like terrestrial data centers are becoming more costly. And that's just going to make, uh, the, the potential for, for space data centers more of a reality. I'm not saying it's going to be, but I encourage rocket lab to, to look at what Google and what SpaceX is doing in terms of being able to test it. I'm not saying it's going to be viable, but if we really demand's not going away. Like every day I wake up, I've had this conversation with Tanner. I've had this conversation with Steve and probably Chris as well. Um, Roy, you're hearing it now, but I'm sure you've heard me say it. Uh, I wake up every day and use AI more and more. And I'm sure many of us, especially with, uh, people now getting into Muse and Muse kind of being like a second coming of what chat GPT did, you know, two years ago, three years ago. I feel like the, the demand is far from going away. So if we are limited from a regulatory environment perspective, uh, and, and the townships aren't giving the permits to build these data centers, two things need to happen. You need to have more, uh, efficient GPUs, which I think happens in time, but there's only so much speed at which you can go. And more as law is more as law. Um, you know, you can't go faster than, than, you know, what the logarithmic scale will let you do. And maybe you get above it a little bit, but I'm sure over time, as it has been observed for the past couple of decades, like you're going to hit a, an asymptote and it's, you know, you can't really beat the equation. Uh, you're, you're working as fast as you can or two, you, you have to find some way to build more supply. And unfortunately for right now, the supply is going to hit a bottleneck, not just necessarily because of regulatory, but just the amount of turbines and everything that needs to be supplied. And as well as the infrastructure just nationwide, I think it's going to, and, and, and the money, you know, it just costs more money. So I don't know. I think it'll be a good step in the right direction for, for SpaceX to be able to land this because the potential tonnage to space. will drastically drop. And for a while it was getting to a place where the ton to space was, I forget what it was, you know, tens of thousands of dollars to, to get some, like a single kilogram into space. And I don't necessarily know unless you get it to, to single thousands of dollars, if data centers in space will, will make sense. So, uh, yeah, I, I think in order to keep that going, um, and, and, and give us the supply that we need to be able to, to continue and keep spot prices down. I mean, I, you know, I think that this is necessary, but another thing could happen as well. I think Chris, Chris iterated it earlier, like on demand compute has been going up because of this, and I'm sure it will continue to go up in case, uh, compute needs are, are still growing and we can't get the supply up there. It might just make sense to say, you know what, we, we don't have the access to get these permits. We have to send stuff into space to be able to get anything. And so it might make sense regardless, even though the economics might be worse. Sometimes it's not necessarily about the economics. It's about actually getting it done. And if you don't have the land and you don't have the permits, even though it might be on less economic than doing it in a terrestrial space, if you can't build, you have to take any means necessary because people are going to want it. [01:29:08] Speaker 6: The one argument that the all in guys were making, um, that made a lot of sense was that, you know, there's other countries out there that would love to build these data centers. And so I think that that is a real possibility that if the U S environment becomes too restrictive, there are other countries that are going to be very happy to bring them on. The only challenge that I don't think that they explored was the uncertainty around those specific countries and their political system as well. So imagine you take $50 billion, you build this, you build this mega data center in the, in some country. There's a lot of countries there that are saying, please bring the data centers, please bring the data centers. And they turn around and they say, no, this is our property. Now we're going to nationalize this. What are you going to do then? That's literally, what are you going to do? Send the U S army to go, you know, take a data center. And they're like, no, like that's a problem, right? That's what a lot of the oil companies are hesitant on investing in Venezuela because they don't know if the rule of law is going to stick out long-term. Now, the amount of money that you're spending is enormous. So there's very few countries that have all three things that you need to actually build a data center out there and make it work. Number one, they have to have an abundant supply of energy, you know, like, unfortunately not everywhere on the planet has a resource like Texas does with all the natural gas that we have. So energy is going to be a main bottleneck. So number two, you've got a political system that's welcoming of the data centers and can guarantee that, that, that, that, you know, that utilization is not going to eventually turn into nationalization. And then last but not least, it can't be in a place where it's like next to a war zone, like the middle East right now, right? Where you can build a data center and now you have the Iranians attacking them, attacking data centers. So there's that security aspect that you have to provide. And then last but not least, you have to also have the country not be compromised by the Chinese, because imagine you build a data center and the Chinese have access through a back door to those data center assets. Then you're another problem. So there's a lot more to it than just, Hey, let's build outside of the country. You know, there's probably a lot more risk there. [01:31:22] Speaker 3: Does China now have an asset within Jensen Wong? [01:31:26] Speaker 6: I don't think so. I think we just need to give the guys some grace, man. [01:31:31] Speaker 7: Well, on that note, guys, thank you for letting me join the panel tonight. I am going to head, but it's nice to see the market not actually overreact for once. We'll see if it does in the morning, but love you guys. You're the man. [01:31:44] Speaker 1: Good seeing you, brother. [01:31:46] Speaker 7: I'm also headed out. [01:31:47] Speaker 2: Thank you, guys. Thank you for joining. Really appreciate it. [01:31:51] Speaker 3: Good luck to the NVIDIA shareholders tomorrow. Yeah. Let's hope everything blows over and we can get back to focusing on what the guidance is, not what his, you know, romantic choices. [01:32:06] Speaker 2: Yeah. Well, NVIDIA is at 180. This is definitely better than what I had expected, Larry Tanner. And look, I think that there's a lot of things going on. We've had a lot of discussions this week about a lot of things. And one of the things I keep coming back to is nobody's going to be able to stay elected if they lower their revenue base for taxes and if jobs leave. I think there's a lot of things going on. I think there's a lot of bark right now. And there are definitely people that want AI banned and AI to slow down. I think cooler heads really are getting the best deal possible for their towns and constituents. I don't think that any elected official can afford to have data centers leave, either go to a more favorable state or overseas, as Chris pointed out to, because let's be realistic. Unions have a lot of power. Constituents have a lot of power. Tax base has a lot of power. You can't have jobs leave for other areas and expect to have a good outturn. So I'm not necessarily too worried about that. I think there's going to be a lot of posturing. Maybe there are some things that change that companies have to adapt to. Maybe there are some taxes that come in. Sure. I can completely see that. Do I think that this is going to be a moratorium on AI? No, I don't think it is. This is much different than what happened with student loans. This is much different than COVID error moratorium. And I also think that people understand if we put a moratorium on new data centers and that goes through, we give adversaries the ability to catch up. Whether they can or can't is neither here nor there. We put ourselves at a disadvantage and also from a tax revenue base. At this point, I think the AI trade is going to be fine. And I think Dan Ives was taken out of context. As I said before, Matt and Chris got here because he said he thinks growth peaks in 27 rather than 28 or 29. Not that CapEx decelerates as in goes backwards. So instead of growing at these multiples every year, year over year, maybe we only grow at 10% or 20% or 28, whatever the number ends up being. But growth peaking is not the same thing as CapEx going backwards. So I don't know. [01:34:45] Speaker 1: If you're not able to get the capacity in the ground, the on-demand compute is going to go through the roof. And so while I think the growth and capacity might go down, I don't think the CapEx, because things are still going to be at a large cost. I don't know. I'm still trying to wire my head around it. [01:35:11] Speaker 2: Well, Matt, you're right on that point. I mean, this is bullish Amazon, Alphabet, Microsoft, and Meta because of how much online capacity they have. So this benefits them the most out of everybody. And SpaceX, because it makes their compute so much more valuable. Because if we're not played out for some reason, let's just say we do get a big slowdown. Makes everybody's compute more expensive, more valuable, et cetera, et cetera. So you're 100% right in that aspect. But Dan, I've said growth peaking, not decelerating, as in going backwards. So we've been growing at huge multiples on CapEx year over year. Maybe we don't next year. Maybe it's only 20%. [01:35:56] Speaker 1: Who knows? But does growth pertain to capacity or does it pertain to revenue? [01:36:01] Speaker 6: CapEx dollars is what he was talking about. I think we need to look into SaaS again. I don't care what anyone says. I think SaaS, there are still a lot of great companies that are oversold. I don't see any economic moats being destroyed by AI yet. Everything like, I don't know if you guys saw the thing with, not ServiceNow, with Salesforce about their AI agent. I know, Steve, you probably have some commentary on that, about the traction that they're getting on some of their new products. I mean, AI is actually going to be a tailwind for a lot of these SaaS companies. So a lot of people who are saying SaaS is dead, SaaS is dead. I'm looking at this and I'm saying a lot of, huh? [01:36:44] Speaker 2: They're crazy. [01:36:45] Speaker 6: Yeah, it's like the amount of demand out there for the application level layer of AI seems to be growing at a much faster pace nowadays. And yet the market is still on this AI is going to disrupt SaaS narrative. And I think that there's still a lot of value in SaaS names, even though some of them have run up quite a bit since their mid-year lows. So, I mean, some are still over, like some have gotten to the point where they're overvalued now. Like all the cybersecurity names, I was doing research on that and I'm not going to touch any cybersecurity name. Screw that shit. [01:37:22] Speaker 2: There's only one cybersecurity name that I will touch. And it's one that I already own. It's called Cisco. Cisco, okay. [01:37:29] Speaker 6: Yeah. [01:37:30] Speaker 2: I think what I said at the beginning of the year is going to hold true. Maybe it was last year when I said it. Ultimately, I think the small and mid-cap SaaS companies are in a lot of trouble and they're the ones that are going to disappear. Enterprise-level SaaS is fine. And we are not going to see, my opinion, ServiceNow, Salesforce, Workday, SAP. When I say enterprise-level, that is what I am talking about. I think that people have a misrepresentation of what they do because they don't utilize the price. And how sticky those environments are and what the ramifications of companies leaving those environments are. And what the implementations of a new product is. The learning curve. There are so many things that unless you've actually worked with it. And look, Matt has said that he has used certain products. I'm not going to say which ones. He can say it if he wants. And he can talk to what it would be to move to an adjacent product. Chris has been very vocal about a product that he uses and what it would be like moving to an adjacent product. I've been very vocal about if you are a large-scale business or a midsize business with a minimum of 500 employees into the thousands and tens of thousands, whether you're using SAP Workday or Oracle, the likelihood of switching is very low. And then the ramifications just from an organizational standpoint of going to your C-suite and making the recommendation and then having the implementation stall. A lot of people, you have to remember, they want job security. There's a lot of job security in not getting those phone calls and everything working. And I think that a lot of people forget about that, as well as a product that works well and does everything you need and is bringing on AI. Every one of these products is bringing on their own version of AI, and you're going to be able to use it for so many things. It's going to create productivity. And I think that what Chris and I have said about the application level being the host for AI agents, you're not going to do a lot of this type of work, at least for, I'll say, financials for accounts payable, accounts receivable, GL, all that stuff outside of your ERP system. You're going to utilize the ERP system agents to do everything inside that environment because you have SOC 2 compliance. You have SOC 3 compliance. There's a lot of stuff with compliance. And then you start talking about HIPAA and healthcare. You cannot use a product that has been built by a couple of engineers that don't have the right security protocols. You can't do it. So I think SaaS is going to come back. I think there's a lot of interesting names and a lot's undervalued. But one thing SaaS has taught us and what makes me worried about NVIDIA right now is how unfair stocks can get treated because of the narrative and how much people discount the future cash flows, even if it's a BS narrative that is not supportive with the current earnings that are showing growth. So I do think SaaS is a good buy here. [01:40:58] Speaker 1: Yeah, I just want to highlight that things are going pretty green overnight now, whereas some things were mixed. Looks like things are kind of turning around. You got Google up 1.2 percent, Microsoft up 1 percent, Amazon up 1 percent. Palantir up 1.2 percent, Rocket Lab, still going to zero, but temporarily up 1.6 percent. [01:41:23] Speaker 6: What do you guys think of Reddit? Because I'm doing research on Reddit right now and the numbers look way too good. [01:41:32] Speaker 2: I loved it. I was a shareholder. I made some money on it. My shares got called away. I don't know how I feel right now, only because of all the stuff coming out with Alphabet. I haven't looked at it since the latest quarter, so I can't – I did like it. Now I think it's a harder investment. I think AppLovin is the easier one. If you went through the quarter from AppLovin, man, did that CEO kill it and just fry everybody. [01:42:01] Speaker 6: Yeah. I think Reddit – like I did a price target on Reddit from here, and it's like every number that I look at gives me like a 200 percent return on a forward basis. Like it's pretty bad. It's like the amount of cash flow these guys have, the amount of margin that they have. It's like they're trading at – they're trading at a multiple, which is disgusting compared to where they should be trading at. Just based on its cash flows right now. Not even like, hey, I'm projecting X amount of growth or whatever. And the thing is like in terms of stickiness, Reddit seems to be – it's a community-based like platform. It's not like you could just switch away. It's like people's personal identities are built into Reddit to some degree. I don't think you're going to give that up anytime soon. And I think the value of that is that – yeah. And the other thing that I'm – if Google, let's say, turns their back on Reddit, I am almost – I'm almost 100 percent certain that Reddit could probably get a deal, a massive deal with Anthropic or with OpenAI. And get like some level of exclusivity, which would make them even more powerful. [01:43:16] Speaker 2: Well, there's one thing I know about Reddit. You can't vibe code away community. No, you can't. And they have one of the stickiest communities out there. You could theoretically use Facebook for a lot of things. You could use other products for a lot of things. People who use Reddit live and die by it. And that was one of the very interesting things for me. [01:43:35] Speaker 6: Yes. 100 percent agree with you. You cannot vibe code of a community. 100 percent agree. 100 percent agree. The amount of time that it takes to attract users, it takes time, right? It's not like – imagine right now trying to replace Facebook. You know what I mean? It's not going to happen because there's – everyone and their mother is on there. Reddit kind of is the same thing, in my opinion, where there's just so many people that are on there that are so – and it's so sticky. So I don't know. I think Reddit is worth looking at, especially if your time horizon is more than like the next few months where I think the narrative around Google and all that stuff ends up like screwing them in the short term. But I think longer term, Reddit could do extremely well. [01:44:26] Speaker 2: And QXO. Don't forget. I got a new position. Tomorrow night, I want to do QXO for Inside the Numbers. Okay. Great. [01:44:34] Speaker 6: They're reporting on the 12th, right? [01:44:36] Speaker 2: What? They're reporting on the 12th, right? They are, and I've been buying it last week. [01:44:41] Speaker 6: Me too. Me too. [01:44:42] Speaker 2: Oh, you're a shareholder now? [01:44:44] Speaker 6: Options holder. [01:44:45] Speaker 2: Oh, Jesus Christ. [01:44:47] Speaker 6: Because, Steve, I did the math – [01:44:49] Speaker 2: They're probably so cheap. [01:44:50] Speaker 6: I did the math on their integration and what their EBITDA is going to look like two years from now. I don't think people have done the math yet. [01:45:00] Speaker 2: No, they haven't. [01:45:01] Speaker 6: That's the problem. [01:45:02] Speaker 2: And top build wasn't even in the past quarter's revenue or EBITDA. [01:45:07] Speaker 6: Yeah. So it's like you're buying this with expensive shares. Yeah, that took on debt. But you're buying this with expensive shares. So basically, that's very value accretive. And then you just look on a forward basis, like in two years, what the multiple is going to be, how much EBITDA they're going to generate. And then you've got the tailwind of possibly the Democrats and Republicans both having bipartisan consensus that affordability is the main gap right now, which means that interest rates, if they come lower, QXO is one of the main beneficiaries from two ends. One, the debt that they have on the balance sheet that they used to acquire becomes cheaper service. And then on top of it, the consumer has lower interest rates, so they're actually out there buying more, renovating more. They have more equity in their home that they could play around with. And everyone who's been deferring maintenance, they end up going into hardcore maintenance mode. And then all of a sudden, the demand for building products goes up. And you've got Brad Jacobs cutting all the costs over at all three of these companies and raising their EBITDA in the future. So it's like part of it is like a numbers thing, but there's also like a good story behind it. And then there's also like a macro lens angle to this as well, right? So you've got like all three things as this is an inflation hedge, like where basically if you think inflation is going to come down, this is a good one to buy. You know, if you think housing is going to become an even more important thing now that we have a new Congress, right? That's going to be another thing that pushes demand. And then like if you don't believe in any of those two, you have the leadership of Brad Jacobs who saw that, you know what? There needs to be some consolidation in the space, bring some efficiency and raise the, what is that thing called? Raise the profitability on this company. You're basically getting sort of like a three angles of attack and you're getting it at a price that's way below the IPO price. Not IPO, merger price. [01:47:08] Speaker 2: Yeah, it's a very interesting company and we can go over everything tomorrow. It's a, it's, I think one of the best deals and it's an anti-AI play also. Yes. Which is interesting in this environment. [01:47:22] Speaker 6: Agree. I think anti-AI plays are the way to go right now. You know, could be. Yeah. [01:47:28] Speaker 2: Matt, any other things you guys, you want to hit on or Chris, anything you want to hit on before we go to all the messages and then sign off? [01:47:37] Speaker 1: Just noting that there's a lot of people reporting this week, CPI this week. There's a lot of cool things going on this week. Rocket Lab reports tomorrow. So you guys can catch me live on that. You won't see Steve anywhere near that. [01:47:52] Speaker 2: I hope it goes to a hundred though. [01:47:54] Speaker 1: I hope it does too, Steve. Cause then I'll, I'll just move in with you. [01:47:57] Speaker 2: And listen, you can buy me dinner when you're in New York. [01:48:00] Speaker 1: I like that. I like that. It goes to a hundred. [01:48:03] Speaker 2: Yeah. If it goes to a hundred, otherwise I'm buying. [01:48:06] Speaker 1: Oh, I don't know. I'll fight you for that. For the check. I'm trying to think if there's anything else. Isn't Zeta tomorrow too? Zeta's tomorrow, right? [01:48:18] Speaker 2: Wait, hold on. Yes, it is tomorrow. But why, why Elon? Why? Great news. I don't know if this is true. Okay. No, this is, um, I don't think this is true. Elon's now. Is it FUD? I think it is. Talking about if Iran uses a nuke against any country. Where is Elon? That's from his official account? No, no, no, no, it's not. Wait, what does it say? I think it's BS. I think it's BS. But there are reports that Iran has launched a missile strike on multiple Israeli military bases. Not sure if this is real. Freaking X. You never know what's real anymore on this. [01:49:11] Speaker 6: No, you can't, bro. Everything is so, like, breaking. And then you look at it and it's like, it's like three years ago. [01:49:17] Speaker 2: Right. Yeah. Unreal. All right. Thank you, everybody, for being here. Nolan, thank you. Basis Points was awesome. I got to tell you, Amit absolutely destroyed those cupcakes. Destroyed them. [01:49:36] Speaker 6: You guys need to rename the podcast. To what? It's called, well, for me, it's on my playlist for doing housework podcasts. So basically, anytime I'm doing work around the house, I'm in the backyard, I'm like, okay, I need to listen to something. I'm like, all right, time to turn on Basis Points. [01:49:53] Speaker 2: There you go. [01:49:54] Speaker 6: The one with Neil, Neil Detto was great. It was good. I hope you guys have him on again. He was awesome. He was really good. [01:50:00] Speaker 2: Yeah, he was great. Yeah. Thank you, Wayne. Mateo, time to come clean about your own allegations. It will fly under the radar, though, after the news storm. [01:50:09] Speaker 6: Damn, Mateo, what have you been doing, bro? What's going on? [01:50:12] Speaker 2: Everyone should sit tight. He is out as CEO, but it will be fine. NVIDIA chips are the best in America. If that were the case, why didn't Amazon collapse when Bezos left? Yeah, there's just not enough information right now. Everyone on this call, but at 140, be real. [01:50:34] Speaker 6: Maybe. Maybe. Maybe. [01:50:37] Speaker 2: Maybe. [01:50:38] Speaker 6: There's a certain level of risk, bro. [01:50:40] Speaker 2: People that leave NVIDIA position now are foolish. AI is not going anywhere. AI is not going anywhere. There's just a lot of things to unpack with this. I read all the fundamentals, but forgot. Hawk to angle. [01:50:53] Speaker 6: Hawk to end. I think that's what you meant. [01:50:55] Speaker 2: I would hope. Jensen took international relations to a new level. Okay. Thank you, everybody. Really appreciate it. Chris and I will be back tomorrow. We'll be talking QXO, and I'm going to give a quick breakdown on Zeta. I am expecting a big quarter out of Zeta. I am expecting the 21st beat and raise quarter. If you go through the video I put out this morning, it's a very short one, about 10 minutes. Salesforce bought an adjacent company, and at the valuation, it would make Zeta valued at 45. There's a lot of good things happening there. I think they absolutely crush. Rocket Lab, Matt, when is it? Report? [01:51:40] Speaker 1: Tomorrow. [01:51:41] Speaker 2: Rocket Lab tomorrow. Hopefully, Rocket Lab crushes. Thank you. And then we got the neoclouds this week. A lot of movement this week. [01:51:49] Speaker 1: I do want to state there has been some chat, and I haven't spoken on this publicly, about what happens to next decade in potentially venture global as well. Once again, just like how we're talking about with the data centers and neoclouds, it depends what's actually been permitted. And so I think there's a difference between a greenfield, brand new, never installed train like Alaska LNG for what's happening with post-midterms and it being more blue nowadays than it does for, say, a next decade Rio Grande LNG, which is about to start up phase one of the facility. So I think there's a difference. It's not to say that there won't be delays potentially in train 6, 7, 8, 9 plus, but I still think at the same time there's a difference between something like Alaska LNG going through and some of these other facilities that have yet to actually start getting sanctioned versus an expansion and a build of other facilities that are already pre-installed. So I think that's the same thing, and I think that's also potentially the way that you see some of these already installed data centers going through as well. Maybe renovations or maybe renovations or abilities to make the existing facilities more efficient than, say, building new greenfield ones. Maybe a more looking at where there's currently A100s, and instead of letting them continue to go off in time and provide lower, less revenue per hour sort of capital and service, then they might go back and replace it with GB300s or something like that. That allows you to increase the total output per space. It's very comparable to, if you think about it, me looking at storage units. If I were to look at storage units, I'd look for super single unit modular stuff, but when you go around town in New York and other places, all these storage units are 6, 7, 8, 9 stories because you have only so much space. So you can't continue to build outward, so I wouldn't be surprised if you see more of that in the data center space and maybe more so retrofitting existing data centers rather than continue to build new ones. [01:54:29] Speaker 6: All right. Steve, call me after this for QXO options. [01:54:33] Speaker 2: Yeah, yeah, yeah. [01:54:34] Speaker 1: To the men. [01:54:36] Speaker 2: All right, everybody. Thank you for being here. We'll see you tomorrow night. Hopefully, Jensen doesn't completely screw us.