AMD & SOFI Investors we have Major Development‼️

Summary

In this engaging video, Jeremy Lefebvre breaks down the latest developments with AMD and SoFi stocks, discussing current market reactions and providing his perspective. The video covers multiple subjects including the risk of a data center bubble affecting Nvidia and AMD, and Robinhood's new banking ventures impacting SoFi. Jeremy critically analyses recent downgrades, competitive market positions, and future growth prospects for both companies, while also touching upon broader market trends and potential V-shaped recovery scenarios.

Highlights

• Jeremy dives into the recent panic selling of AMD and SoFi, exploring whether these fears are justified. 🕵️‍♂️
• The video discusses the potential impact of a data center 'bubble' on Nvidia and its ramifications for AMD. 💥
• Jeremy compares competition dynamics in tech stocks to beverage giants like Monster and Coca-Cola. 🍹
• Tom Lee's optimistic view on market recovery is shared, suggesting a V-shaped bounce back. 📈
• The analysis is grounded in broader economic contexts, including potential policy impacts on market sentiment. 🌍

Key Takeaways

• AMD's recent Wall Street downgrade has spooked investors, but Jeremy believes the stock remains a solid long-term buy. 🤑
• A false belief exists that AMD must beat Nvidia to be successful. Jeremy argues both companies can thrive independently. 🤝
• SoFi's stock is affected by Robinhood's banking expansion, but Jeremy sees this as an overreaction. 🤦‍♂️
• Investing dynamics are compared with Monster and Coca-Cola, highlighting how smaller companies can outperform big players. 📈
• The discussion includes future phases of AMD's growth, emphasizing their competitive roadmap. 🔮

Overview

Jeremy starts the video addressing the recent heavy selling of AMD and SoFi stocks, exploring if the current market panic is warranted. He emphasizes looking at the broader picture and long-term growth potential for AMD, particularly against the backdrop of recent Wall Street downgrades which he believes are based on outdated information. The comparison between AMD and Nvidia is likened to other industry competitions, such as Monster vs. Coca-Cola, to explain how both can succeed without one needing to fail.

Moving onto SoFi, Jeremy discusses the market's reaction to news of Robinhood's venture into banking services. He argues that the panic sell-off of SoFi shares was an overreaction, as the market often does with speculative news. This segment not only covers the banking competition but dives into investor behavior, reminding viewers that knee-jerk reactions to news can often be baseless and short-sighted.

The latter part of the video shifts to Nvidia and the potential financial and market implications of a data center 'bubble', integrating commentary from Tom Lee about market recovery prospects. Jeremy paints a picture of the current economic landscape, fuelled by trade and tariff uncertainties, and explains how these factors might set the stage for a significant market rebound, possibly leading to a V-shaped recovery later this year.

Chapters

• 00:00 - 01:00: Introduction to Major Developments The chapter discusses major developments in the stocks of AMD and SoFi, highlighting investor concerns and significant sell-offs in both stocks. It includes personal reactions and opinions on whether these developments are a big deal and analyses their implications. Additionally, the chapter touches upon the potential risks posed by a data center bubble, particularly how it could impact Nvidia.
• 01:00 - 02:00: Patreon Announcement and Offer The chapter is primarily about various financial topics discussed including reactions to recent news about AMD, Tom Lee's appearance on CNBC discussing a V-shaped market recovery, and the importance of staying informed about ongoing market developments. The speaker asks the audience to engage by liking the content.
• 02:00 - 08:00: AMD and Nvidia Comparison The chapter begins with a discussion about increasing subscribers on the channel, celebrating a new all-time high in subscriber numbers. The host expresses gratitude to the subscribers for their support. Following that, there's an announcement regarding a special April Fools promotion on April 1st for the highest tier of the host's Patreon. For one day only, access to the host's full stock market mastery course and related benefits will be heavily discounted from the usual $125 to $49. This promotion includes insights into the stocks being bought and sold by the host each week, along with access to a Discord chat.
• 13:00 - 18:00: SoFi and Robinhood Banking Services The chapter discusses financial updates and analysis related to SoFi and AMD. It mentions an upcoming deal set for April 1st and then delves into the current situation surrounding AMD, highlighting a recent downgrade by Wall Street. The downgrade emphasizes concerns about a potential widening gap between AMD and its competitor Nvidia. The news initially appears daunting, but is followed by a more detailed analysis.
• 18:00 - 27:00: Data Center Bubble and IPO Concerns The chapter discusses concerns in the semiconductor market, focusing on comparisons between AMD and Nvidia. AMD faced a downgrade from investment firm Jeffries, which highlighted a growing performance gap between AMD and Nvidia. According to Jeffries' proprietary benchmarking report, Nvidia's H200 outperforms AMD's offerings across various open-source models. This highlights investment and performance concerns within the semiconductor industry.
• 30:00 - 39:00: Tom Lee's Views and Market Predictions The chapter likely focuses on Tom Lee's views and market predictions, particularly related to technology and product comparisons between companies such as AMD. The transcript snippet highlights a discussion on AMD's MI300X product, suggesting it's not crucial for certain shareholder concerns and comparisons, reinforcing broader market predictive analyses and technology product strategies.
• 42:30 - 55:00: Potential V-shaped Recovery and Economic Outlook The chapter explores the potential for a V-shaped recovery in the economy and the economic outlook surrounding this. It shifts focus onto the technology sector, particularly discussing AMD's position in the market against Nvidia's advancements. The discussion highlights AMD's challenges in optimizing their solutions compared to Nvidia's more mature software stack, which is crucial for maximizing GPU efficiencies. The narrative suggests that this gap in performance capability might widen as system performance becomes paramount.
• 55:00 - 60:00: Stock Market Factors and Predictions Curtis downgraded AMD from a 'buy' to a 'hold' rating due to outdated information, adjusting his price target for AMD from $135 to $120. He noted a growing gap between Nvidia's Blackwell GPUs, which are already in full-scale production, and AMD's offerings. Furthermore, Curtis mentioned the anticipated release of Reuben next year, which could further impact this disparity.
• 60:00 - 61:00: Conclusion and Call to Action The chapter discusses perceptions surrounding AMD's progress in artificial intelligence and contrasts it with Intel's potential resurgence. The speaker argues that it is unrealistic to consider Intel as a significant competitor to AMD within the next few years, explaining that any notion of Intel's comeback is more relevant to discussions of the past rather than current or near-future scenarios.

AMD & SOFI Investors we have Major Development‼️ Transcription

• 00:00 - 00:30 AMD and SoFi stock. We have some major developments on both these stocks we got to discuss. We have some investors getting very freaked out in regards to SoFi and AMD here today selling off the stock heavy. They were my two worst performing stocks today. We're going to discuss and react to what's going on here. If it's a big deal, if it's not a big deal, and I want to share my opinions and perspectives on that. From there, I want to react to two specific videos here. First one up here, the risk of the rising risk of data center bubble and how it could infect Nvidia and this
• 00:30 - 01:00 will go back to AMD and we'll tie it all together. So I think that's going to be an important one to to react to. And then everybody's favorite bull went on CNBC about an hour ago. Tom Lee spoke about his views of the market and a Vshaped recovery. Okay, so several subjects to get into here today, folks. I appreciate everybody joining me. One thing, one thing only I need from you guys and you know what it is. I need you to smash that thumbs up button. And I hope you guys appreciate me keeping you in the loop on all this drama that is always out there. Okay, I appreciate you all joining me as always and thank you
• 01:00 - 01:30 for being subscribed to the channel. New all-time highest subscribers in the history of the channel. Appreciate y'all for being here. Also, we're only a few days away from the April Fools Don't Be a Fool. That is going to be on April 1st only for the highest tier of my Patreon. Full access to my become master stock market course. See the stocks I'm buying and selling each week. Discord chat access as well. Usually that tier is 125 to get access. It will be 49 bucks for that one day and one day only. So pin comment down there, click on that, fill out the form so we can make sure we send
• 01:30 - 02:00 over the deal when it does drop on April 1st. That's how you will receive that sale. Okay. All righty. So let's get into what's going on here in regards to SoFi AMD and then we'll react to those two videos. All righty. So what's going on with AMD? Holy smokers. This ain't no jokers. AMD just got downgraded by Wall Street. AMD in spotlight as Jeffre downgrades possible widening gap with Nvidia. I mean gosh, you hear that right off the the surface and you're like, gosh, this sounds horrible. Then you look at in the details and if you're a
• 02:00 - 02:30 little educated on the space, you're like, what are they comparing here? Huh? AMD was in the spotlight on Thursday as investment firm Jeffre downgraded the semiconductor company, suggesting the gap between it and Nvidia is widening. Okay. Our quote, "Our proprietary benchmarking report suggests real world throughput of Nvidia's H200 across a wide across a range of open-source models is substantially higher than AMD's
• 02:30 - 03:00 MI300X." What? Despite MI300X's higher advertised TF flop and memory bandwidth? First off, what are we talking about here? MI300. Like if you're an AMD shareholder, you care about the the next product that's coming that we'll discuss in just a moment. Like to be caught up in the whatever the 300 is versus H200, that that's that's an irrelevant conversation. That's an irrelevant conversation if we were talking a year
• 03:00 - 03:30 ago, 2 years ago, 3 years ago or something like that. That's an irrelevant conversation to to where AMD is going over this next couple years here. Like what are we talking about here? referencing Nvidia's Hopper line of GPUs which were released in 2023. A valid push back would be that AMD solution is not well optimized for the models we tested. But we view this as exactly the point. These results underscore the importance of Nvidia's mature software stack for managing GPU efficiencies and the gap will widen as system performance will become more
• 03:30 - 04:00 important. Curtis who lowered his rating on AMD to hold from buy. So he was he had a buy on the stock. Now he went to hold based upon this outdated information here apparently. Okay. Uh now he has a price target of 120 which his old price target was 135. Added that the gap is expected to widen between Nvidia's Blackwell line of GPUs in fullscale production. And that should continue with the release of Reuben which is set to release in the back half of next year. he added. Lastly, Curtis
• 04:00 - 04:30 said that AMD has made limited traction in artificial intelligence and there is expectations of a resurgent Intel. What? Okay, listen. If you want to talk about a resurgent Intel, you could talk about a resurgent Intel maybe in 5 or 10 years ago if that happens. But to even bring Intel into this conversation at all over the next few years is absolutely nothing but silly. Like, that's ridiculous. Okay, but to
• 04:30 - 05:00 take things further, I need to kill off this point before we talk about MI350, MI400, cuz that's where we're about to go. Okay, I need to illustrate this point very importantly. Okay, there's this false belief that in order for AMD stock price to do well over the next few years, in order for AMD to do well as a business model over the next few years, there's a false belief that AMD has to beat Nvidia. And
• 05:00 - 05:30 it could not be further from the truth. Nvidia does not need to have all their chip linement uh lineup, all their software better than Nvidia to be an insanely great investment over the next three, five, 7, 10 years. That's not the way this works. You got to understand Nvidia's $178 billion market cap that we're trying to get that to a trillion market cap over the next 5 years. Nvidia is a nearly $3 trillion market cap
• 05:30 - 06:00 that's trying to go to a $10 trillion market cap over the next decade or half decade. Right? These companies are at totally different phases in regards to their growth cycles, in regards to their numbers, their positioning in the marketplace. AMD is like the the much smaller company who's coming in and starting to grab little bits of market share here and there, right? That no one really notices yet, but it will stack up over time. Nvidia is the dominant company. Everybody knows they're the dominant company. They're the most wellpositioned company. We all know
• 06:00 - 06:30 that, right? AMD is the guy that's coming in like, "Hey, I have something to offer you as well." And it might be just as good as this other company, maybe some ways better, maybe some ways worse depending upon the situation, but my product is much more affordable than their product over there, right? And so, yeah, the the whole belief that, you know, and it's so silly. It would be like me saying like in order for Monster to have been a great investment over the past 20 years, Monster would have to be selling more drinks than Coca-Cola.
• 06:30 - 07:00 Doesn't work like that. Monster has been a way better investment over the last 20 years than Coca-Cola. Despite Coca-Cola being way more successful, having way more revenue, having way more pro profit, Monster Stock's been way better over the last 20 years. And then I could take it a step further and say, well, you know, that means Celsius can't be a great investment over the last 5 years because Monster is going to do way more revenue, so Monster is winning. Also, totally false. Celsius stock has
• 07:00 - 07:30 massively outperformed Monster stock over the last 5 years despite Monster winning. Monster does way more revenues and way more distribution, way more profit than Celsius. And Celsius's returns have dwarfed Monster. So there's it's not how it works, man. Like people that think like, oh, this one company has to win and this company has to lose. No, AMD does not need Nvidia to lose in order to win. Not the way this works at all. And it's never been the way this works. If you look at the last 10, 15
• 07:30 - 08:00 years of AMD stock and Nvidia stock, right? Like gosh, they both have come a long way. Look at where Nvidia's market cap was 10 years ago. Look at where AMD's market cap was 10 years ago. Did one company have to lose for the other one to win? No, they both won. And I wouldn't be surprised if they both continue to win over the next decade. and you'll look at the next 10-year performance and my guess is AMD is going to far have vastly superior returns than Nvidia over the next 10 years and that's
• 08:00 - 08:30 fine but that does not mean Nvidia lost. Okay? Just like for Monster to win doesn't mean Coca-Cola has to lose. For Celsius to win, it doesn't mean Monster has to lose. Right? You know, just because Costco's successful doesn't mean Walmart's not successful. And just because Walmart's successful doesn't mean Costco's not successful. You say, "Well, they both sell toilet paper. They both sell paper towels and they both sell drinks and and food and well, there's enough to go around. There's enough to go around." Okay, so
• 08:30 - 09:00 that's the first important point. Second important point that I need to take apart in regards to this analyst here is MI 350 AMD's next generation AI accelerator series expected to launch is honestly probably launching right now and they're probably getting that into some more customers hands right now and will be in mass likely over the summertime and then into the fall time. Right. Featuring CDNA4 architecture, 3 nanometer process node, up to 288 GB of
• 09:00 - 09:30 HBM3e memory, aiming for a 35fold improvement in AI inference. Remember, there's a difference between training and inference, right? Training has been a what has been super important the last couple years here. Inference is what arguably is going to be a lot more important over the next decade. Okay, performance compared to the MI300 series. A 35fold improvement in AI inference. Now, think about that for a moment, right? We're not talking about a slight like, oo, the chip's going to be
• 09:30 - 10:00 a little bit better than the old one, like, oo, it's a little bit. No, 35fold improvement. You got to be flipping my flapjacks. Not a small improvement, right? And so when we we're comparing anything to to, you know, the MI300, I think it's just silly in my personal opinion. You you like the 350 is what everybody's ordering right now, what all the big customers are ordering. And that's where we're going to see AMD's revenue take off starting this summer and then into the fall time and winter time. And so like MI anything comparing
• 10:00 - 10:30 MI300 is just old news. That's old news, man. And then we're moving on to MI400. AMD also plans to launch MI400 series in 2026 which will feature CDNA next architecture. Right? MI400 should flip everybody's flapjacks even a lot faster than than obviously the 350 series is. Right? And so that in my opinion is what we really need to be focused on here. Not the 300 series like like like if they were talking about this a year ago or 9
• 10:30 - 11:00 months ago like I'd be like okay like that makes sense they're talking about that right now. to be doing any tests on 300 series now when we're we're already onto the game of 350. Come on, man. Well, you're way behind in regards to that right now. Additionally, remember, we just are about to exit inning one of AMD getting back to growth, right? The company had basically no growth for a long time. We just are about to exit inning one of getting this company back to growth. We're about to go into inning two, and inning two is going to be
• 11:00 - 11:30 substantial. We're talking revenue is going to start going up by the billions of dollars on a year-over-year basis. We're talking about growth rates are going to accelerate massively. And so the next several years are going to be very fun in regards to AMD stock. And so, you know, the moral of the story is here in regards to AMD is right now this stock is an incredible buy. Incredible buy. For anybody that has a a multi-year outlook, right? If your outlook is the next 3 weeks, the next three months, who
• 11:30 - 12:00 knows where AMD goes? Who knows where the market goes and Trump tariffs and blah blah blah, right? And what analyst is going to come out and downgrade AMD tomorrow. But over the next 3 years, I like AMD and I like their prospects and I think they're looking really good. And I think we'll look back and there'll be a lot of investors that made tens of thousands, hundreds of thousands, or even millions of dollars in the stock. We'll see. Maybe I'm wrong and Lisa Sue fails and just can't get it done. But based upon the products I'm seeing,
• 12:00 - 12:30 based upon how I see the the acquisitions they've done recently, everything's coming together here. And and the best part is the story is only going to get better in my opinion when it comes to AMD over the next several years. Like it's just going to get more exciting, more exciting like and then you're going to get it eventually you'll get to a period of a hype cycle around AMD and things can turn fast in the stock market. like you could get in that hype cycle a year from now. It's not like you got to wait 10 years for it to get I wouldn't be surprised if you know
• 12:30 - 13:00 once AMD starts posting some crazy numbers probably this summer and then into the fall. Don't be surprised if a hype cycle starts in AMD and by that time stocks long gone, right? Never mind if you're back into a risk market at that particular time, which there's a decent probability we could be back into a risk market at that. Oh my gosh, you'll be flipping my flapjacks there, right? So, so what's going on with SoFi? Well, what's going on with SoFi actually has very little to do with SoFi. So, basically, yesterday Vlad over at Robin
• 13:00 - 13:30 Hood showed off some new things that Robin Hood wants to do, right? Including adding, as you see the the headlines here, Robin Hood keeps adding services. Banking and wealth management are the latest. Robin Hood is moving into banking services with luxury perks per perks such as sameday cash delivery. Robin Hood unveils plans for new banking products. Right. Boom, boom, boom, boom, boom. So they're moving into banking territory, right? Which this has people very worried about SoFi because SoFi
• 13:30 - 14:00 operates in the banking space, right? Robin Hood CEO sees Amazon like subscription model as path to loyalty and financial services. And so Robin Hood CEO Vlad is bundling more services into the company's $5 a month subscription service. Listen, and I believe they mentioned Costco as an inspiration here. I think it's a great move for Robin Hood. Great move. I I I have nothing bad to say about Robin Hood in regards to the situation. I think it's a natural next extension for them. I don't know how successful they'll be.
• 14:00 - 14:30 Like it's one thing to announce something, it's another to be super successful at it, right? Cuz you as a company, you can launch a million different things, right? You know, like if I recall, you can get your eyeglasses at Costco, can't you? Can't you get your your eyeglasses at Walmart? Right. Does everybody just go to Walmart and Costco to get their eyeglasses? I don't think so. Right. You know, you can get water at Costco and Walmart. Does
• 14:30 - 15:00 everybody go get their water at Costco, Walmart? No. Actually, a very extremely small percentage of the population does. And so, like, people get all caught up in the short-term stuff and like, oh, Robin Hood announced this and they just think like, I don't know, everybody in the world's going to go sign up and start using banking products that are with Robin Hood. No, I'm not leaving my bank. My wife's not leaving her bank. Like, 99.9% of the people watching this video right now, you're not leaving your bank to go over to Robin Hood and use their banking services or their robo advisors
• 15:00 - 15:30 or whatever that they they announced. Okay? None of that stuff. That does not mean it's not a good move for Robin Hood. It's absolutely a good move because they're just in a market share game. They're trying to get little bits of market share here and keep adding more and more. At the end of the day, Robin Hood's goal, I mean, they have a few goals, but one of their big goals is they want more and more assets in Robin Hood, right? The more assets they have, the more products and services they can sell you. It's a natural extension. Okay? Now, with that being said, that gets into SoFi, right? Because there's a
• 15:30 - 16:00 belief like, "Oh my gosh, Robin Hood, like, you know, and it's really a one-day belief, but it's like, oh my gosh, Robin Hood's announcing banking related products. Oh my gosh, this is the end of the world for SoFi." Well, what if I told you that SoFi allows you to invest through it? What if I told you you could invest in stocks, ETFs, IPOs, all types of things, you do even do automated investing through SoFi? What if I told you that?
• 16:00 - 16:30 Does that mean the end for Robin Hood? Gosh, and everybody's going to use SoFi. No. But it's smart move for SoFi. It's smart that they allow that, right? So, some people can use that. If they want to invest through SoFi, they can, right? And give SoFi an ability to, you know, at the end of the day have more customer data, have more assets on the platform, those sorts of things. And so, just because SoFi allows you to trade stocks, does not mean, oh my gosh, everybody's going to switch their Robin Hood accounts from from Robin Hood over to SoFi. Doesn't work like that. It's just
• 16:30 - 17:00 a good strategic move. And so the ridiculousness today with people selling off SoFi stock is very immature and is very uneducated on how the stock how stocks work, how companies work, and really how business fundamentals work. Cuz just cuz you announce something does not mean every like Amazon tomorrow could come out and announce they're going to have a full suite of banking products. It does not mean everybody's going to go switch to Amazon to use their banking products. It's not the way this works. Okay? So just ridiculous, right? And when it comes to SoFi, this
• 17:00 - 17:30 company's had a incredible growth trajectory. They should continue to have an incredible growth trajectory over the next several years, right? Anthony Notto just has to always get the company through recessions out to the other side and and you know, boom in in the good times, right? But at the end of the day, if Sovi doesn't hit their numbers over the next few years, it will have nothing to do with Robin Hood. That will be like Anthony and SoFi like didn't execute well. If this doesn't happen, it'll have nothing to do with Robin Hood. So the fact that people were freaking out over Robin Hood today is ridiculous. But you
• 17:30 - 18:00 know it nowadays nothing surprised me in the stock market. So I'm not surprised that the stock was down 6% today because everybody was freaking out over you know uh Robin Hood. Oh my gosh, they got some banking products. Oh my gosh, so silly. Okay. All righty. Next up here, the rising risk of data center bubble and how it will affect it in Nvidia. And this is important to tie back in with AMD and then we're going to get into that Tom Lee video there. So looking forward to that. I trade fall apart and you're probably gonna get a pretty darn
• 18:00 - 18:30 good sentiment barometer related to the core IPO which comes tomorrow. We get more details tonight after the bell pricing size, but there are already some speculative, you know, reports out there about what might happen. Leslie Picker is following the money for us here. Um, and it feels like the money might be changing, the dynamic might be changing even as we have this conversation here, Les. Oh, it's changing very rapidly. Scott, I've been speaking with sources close to this one all morning. It sounds like final final decisions around the
• 18:30 - 19:00 deal have not yet been made. Uh, basically, we haven't seen this refiling of an S1 that indicates a downsized offering, but there have been conversations. By the way, this Cororeweave company, if you're wondering like what are they talking about here? What's this Coreeave? It's basically like a data center company. You can uh, you know, basically rent out the chips. They have a massive amount of Nvidia chips. specifically Nvidia is also an investor of the company. I believe they own 5 to 7% or somewhere in there of this core weave company from what I
• 19:00 - 19:30 remember. And so um that that's what this core company is essentially. And so the IPO was really hyped a few months ago, but since the whole AI excitement and since we kind of gone risk off in the market now, like people are not very excited about it with investors about a potentially smaller deal here. the $40 per share number that's out there as it pertains to Nvidia's willingness to anchor the offering with a 250 $250 million order at that price. That's according to a person familiar with the matter who I spoke with earlier this morning. Nvidia already owns 6% of Core
• 19:30 - 20:00 Weave, which would be have been diluted down to 5% after this offering. There's also a call scheduled after the market closed to determine the official official price tag. But at $40, Coreeave would be pricing 15% below the marketed range. The company and some of its selling shareholders are planning to offer 49 million shares according to the S1 although that number could be reduced of course if there isn't enough demand. Coreeave provides software and cloud services to manage AI infrastructure. IBM, Meta, Microsoft, Nvidia, and OpenAI
• 20:00 - 20:30 use Core Weeaves technology. And while its revenue has skyrocketed from just $16 million to $2 billion from 2022, over the past two or three years, its losses have widened. Some analysts have suggested that creative accounting has led the company to showcase higher gross margins than they actually enjoy. Uh and of course we've got just this whole backdrop of market volatility, concerns around the AI supply chain, concerns around data data centers as we saw from
• 20:30 - 21:00 Josai earlier in the week. None of that is good news for a company that's marketing itself in this world uh while it's on the road. got. Hey Leslie, I just you know when when you think about red flags in a large this is going to be the biggest IPO of the year unless I guess SpaceX or Stripe come out of nowhere and and decide it's time. So when you look at the largest IPO of the year and the and the first thing you're hearing the day they're going to price is downsize the size of it. So red flag
• 21:00 - 21:30 one, red flag two, their number two customer is Nvidia. Um, and Nvidia gets a ton of their revenue by selling GPUs to them. So, it's a related party transaction on steroids. And now we're hearing that we need Nvidia to take down even more equity size in the deal. Again, not great. Um, $10 billion in debt, negative6 billion in free cash flow, negative $900 million in debt income. Microsoft articles on Bloomberg pretty much every day now. Uh, walking
• 21:30 - 22:00 away from this, walking away from that, lesser spend. um like these are this is not the cloud through which you want to cut through and price a deal. So I want to ask you like um are these the things that you're hearing as you report on the story? Like is everyone kind of starting to realize that these are what the red flags are? I mean especially in this current market environment, you have a very sizable deal. It requires a lot of demand to get the to get the deal done. Um, and then when you add on top of that
• 22:00 - 22:30 what's going on in the market, that's a risk in and of itself, all the uncertainty that's out there, I think going into this deal and why it ultimately decided uh to come out when it did because that that also begs the question, why even go public in this market at all? I think at least people close to this deal believed that the AI trend and the AI story was strong here. But when you kind of dig beneath the surface, there are some issues as it pertains to uh you know defaults that have been reported uh or at least um you
• 22:30 - 23:00 know in the FT about some of the the covenants that they had as it pertains to their debt. Now this three founders sold 500 million worth of stock. We just found out from the S12, that's also not like the best sign ever, that when the the three founders, the largest shareholders who have all the votes, right, have sold half a billion dollars worth of their own stock uh within the months leading up to the IPO, like that's not that's not that's not a great story either. All of those things are concerning, especially for an investor that's looking to take on an untested a
• 23:00 - 23:30 new issue into the market. It's a a business model that they don't really have much in the way of comparing currently to Pure Plays right now. All of that is concerning and sometimes you have to offer a discount in order to get people on board. Whether $40 will do the trick, whether downsizing the amount of shares that they're offering does the trick. I mean, this is a company that has a lot of debt. So, they do want to maximize that primary issuance to get more uh money to get more cash to pay down some of their debt loads that would be beneficial for them. Being public
• 23:30 - 24:00 would be beneficial for them regardless of the price. Whether that is ultimately uh you know achievable here is uh you know the question. Yeah Leslie, you let us know the very latest as you get it. Appreciate your So there's all those issues and another issue they didn't talk about there that would scare me from this one um on top of everything they just spoke about but I do think it's worth addressing here is with a company like this. What did they mention specifically there? huge amount of debt already on this company and in order for
• 24:00 - 24:30 them to buy all these Nvidia chips and build out data centers. What is it? It's extremely expensive. So, they're already saddled with a bunch of debt. They lose a bunch of money from what we just heard there. And it cost them a bunch of money to expand, which means what for you as a shareholder? You are likely to get diluted and diluted and diluted. the company's probably, my guess is, going to raise a lot of money over the coming years, right? And anytime the stock pops in any way,
• 24:30 - 25:00 they'll probably dilute on your back. And so to get gains in the stock, any sustainable gains in the stock for the next many years is probably going to be extremely difficult. So I don't want to say the company's never going to be a buy. Maybe someday it is a buy, but that's might be a long, long time from now, just to be quite honest with you, right? because you know likely delilutions coming or they're going to have to add even more to the debt pile which means the interest expense is
• 25:00 - 25:30 going to be even greater. It's not a it's not a good situation man. No bueno no buenoing on that and following this for us very closely watched IPO for so many different reasons guys as it relates to the current state of of the AI trade. You look at the deepseek day was kind of the earthquake that got everybody oh what was that shaking up this trade. Um Joe Sai's comments the other day got everybody really thinking
• 25:30 - 26:00 about the data center side of it. Some of the stocks most directly related to that. Um the data center stocks the power providers to the data centers they've been they've traded terribly. Um, and now you wonder is the IPO and the lack of a truly successful offering certainly to the degree that it was once thought to be um, is that the straw that breaks something? It ain't good in the story. It reminds me of the snow of
• 26:00 - 26:30 snowflake IPO from that. Okay. Which was not fatal. Was not No, it's great company Snowflake. Just the timing. It came right at the end of 21. Can we talk about the timing for a second? Just for a second before we answer your question, Scott, you know, remember Monday we were talking and I'm not being facitious here. We were talking about the potential for a face ripper rally. Not all of us believed it, but I think, you know, if it we had it, right? We up 5% from the bottom. Yeah. I mean, but we were talking about we were talking about it on Monday potentially
• 26:30 - 27:00 continuing. I didn't think it would, but if it had, I don't think we'd be talking 4 days later about downsizing this very important IPO. And I do think it's very important. We know there's been an IPO uh bust here that that we haven't had enough of them. And I'm very long financials and I'm looking forward to that happening. But I'm not I'm not quite ready to give into the overall pessimism that I feel kind of brewing about the AI trade about IPOs. I don't think this IPO doesn't sound like it's going to do. You're looking to buy more
• 27:00 - 27:30 Nvidia, right? You are. But that stock can't get out can't get out of its own way. But at the same time, all the reasons that we just discussed, I I got it. And those are to me more technical reasons when I look at the fundamental reasons. And of course I'm looking at you Josh. You know I see a stock that's trading at 24 times forward earnings. And I really don't question that much the 50 50% earnings per share growth that we're looking at this year. You think that Nvidia has been trading lower for technical reasons. It's been all about fundamentals and it's been one thing after another. Okay. Okay. When I
• 27:30 - 28:00 was saying technicals, I meant the technicals of this week just being up, down, tariffs, and who who knows what's coming out of Washington. Regarding the fundamentals, I actually think the fun fundamentals are very much stronger. I don't think deep seek is some death nail here. It moves them from large language learning model training to inference where they probably Here's the way it's going to be. Here's the way it's going to be. And I'm a I'm a long This is like the godfather of Nvidia. I'm long. I'm not I'm I'm not I'm not negative on Nvidia long term. I'm telling you what I think the risk is
• 28:00 - 28:30 right now. This is the part people don't understand. Last summer, a press release went out from Blackstone gloriously announcing this massive infrastructure investment that they were making. And this is where the money comes from. When when you hear the breathless reports that Coree has acquired 300,000 GPUs, where the hell do you think they got the money to do that? They're getting the money from these huge pots of wealth management capital that's going into AI infrastructure funds. And Blackstone's
• 28:30 - 29:00 not alone. Everybody has one. It's the hottest product for people in my seat to be selling to their clients. It's billions and billions of dollars in debt financing so that Coree can buy all this Nvidia product. That's great. Here's the here's the rub. If for whatever reason the demand doesn't materialize fast enough to please the investors, then all of a sudden there's less money for the next AI infrastructure fund and the next one and the next one and all of a sudden Coreweave doesn't have the capital to
• 29:00 - 29:30 buy more GPUs, which is where Nvidia really at the end of the caboose of that long train I've described, that's where they finally come out and say, turns out um we may not have much more demand for the next version after Blackwell as we thought we did. Uh everything's still great, but it's a little bit of a dial down. How do you think Wall Street's going to take that calmly? Disastrously. Well, and here's the thing. Nvidia is
• 29:30 - 30:00 going to be right with their vision of where AI is going. In the same way that all the companies laying broadband and fiber were right 25 years ago, the timing, all that fiber was worthless until YouTube came along in 2005. It took a long time to find a use for all that dark fiber. That's the worry here. Boom. 100%. And um and as I've talked about many times, the ri the whole risk with Nvidia is not the long-term risk with Nvidia. It's really around 2026 and 2027 numbers. That's what the whole risk
• 30:00 - 30:30 is in regards to Nvidia stock. What are those numbers looking like? because a lot of people are still expecting really strong big growth rates, 25 30% revenue growth in 2026. I don't know if they got that. I'll be honest with you, I don't know if they have that. And then what does that mean for 2027? Like let's say they're talking about, man, you know, growth's going to be tough in 26, you know, and by the way, you won't hear about this really until like back half of this year anyways, but let's say
• 30:30 - 31:00 they're like, hey, we might only grow 10% next year or something like that. Then people are looking at 27 and like uh is growth are we going to go negative in regards to revenue in 27? So that's the sort of questions people start asking, right? And that's that's a tough spot Nvidia is going to be in for honestly at least a year or two until we kind of get through this whole situation and and out to the other side and people can become more because right now the bottom line is Nvidia's in a growth deceleration cycle and that's not likely
• 31:00 - 31:30 to end. If anything, that's going to get more extreme over this next, I would say, you know, year, right? To me, Tom Lee, as I bring you into this conversation, uh the head of research at Funst Strat and a CNBC contributor, um because he's talking about animals in hibernation, not not animals dying. It goes back to this idea of uncertainty around things like trade and tariff policy and the fact that as of right now in the midst of that uncertainty perhaps companies are sitting on their hands
• 31:30 - 32:00 before they start to make any kind of future investments. So if that's the situation, how much does getting some sort of certainty uh now frame uh the investment thesis for for how you for how you position yourself moving forward? Well, I think that's exactly what's happening now, Morgan. Um, first in 2018, which Michael was talking about, this the spike in the VIX
• 32:00 - 32:30 or the collapse in investor sentiment or consumer confidence, that all happened around February 2018. So really, that coincided with that first low that was made um in 2018 and the market began to stage its recovery. Um, I don't blame any business or investor for saying, "Look, there's so much uncertainty. I can't make a decision." I think that's why Rick Reer is talking about animals in hibernation. But as we start to think about the second half of this year, first of all,
• 32:30 - 33:00 we've already had the collapse in sentiment. We've we've seen 850 billion of cash raised over the past year on money market balances. And then in the second half, we were looking for possibly tax reform, which really propelled stocks in 2017. So, I think that the odds of a V-shaped recovery in stocks that come after April 2 is just extremely high because we've already sequenced a lot of the panic that people saw in 2018. I think it's already taken place. Okay. So, two things I'll push
• 33:00 - 33:30 back on, you know, in regards to what Tom Lee said right there. The first is in regards to taxes, right? Here's the thing. in regards to taxes moves that Trump and and the administration try to make in regards to helping taxes, right? That won't really positively start affecting things until 2026 and maybe 2027. And I think the moves they make there are going to be very small compared to the first go round. Trump 1.0 I think was was, you
• 33:30 - 34:00 know, pretty good tax cuts in many ways. This goound, I don't see nearly as big a numbers and so I don't think you're going to get as much help. Second thing I'll bring up is he does he does reference 2018 and 100% and I have obviously talked about 2018 many times on I think here on the reaction channel but certainly on the main channel financial education right and the thing you don't understand about 2018 yes we had an absolute banger rally in the spring and summertime complete V-shaped recovery off of the lows that we hit in early 2018. But the thing people forget
• 34:00 - 34:30 is I can tell you late 2018 we got smashed. So, so you know, if we do have a V-shaped recovery in the spring and summer, don't assume we won't get smashed even worse in the fall time. That does not mean that's guaranteed. No two years ever play out the same, but I'm just bringing that as a point because that's what we actually witnessed in 2018. So, if you want to reference back to that, don't forget about how 2018 ended. It ended ugly and 2019 was actually a very, very good
• 34:30 - 35:00 year. But just something to keep in mind. So, what would you be buying right now? Uh well to us um I think exhibit A for a V-shaped recovery is going to be Tesla because it's it's really been one of the most controversial stocks and it's been caught in that sort of political mastrom of uh Doge and Elon Musk's involvement in the White House and I think it's you know it's already recovered more than 15%. But I think if Tesla is leading us into this balance that's a bull case for Mag 7 to be the group to own in the next
• 35:00 - 35:30 few months. So you like so you like mag 7 even though we've been talking about things like cash burn at I I actually don't I don't actually so traditionally traditionally mean the last 5 years Tesla Nvidia 100%. You want to talk about you're going through a V-shaped recovery, look to Tesla, look to Nvidia. I actually don't believe that this go around. I believe that if we do see a V-shaped recovery, I think the stocks that will be leaders will not be stocks like Tesla and Nvidia cuz Tesla's got a million questions about it, right? So
• 35:30 - 36:00 fund managers aren't going to feel comfortable investing super heavily in Tesla, at least in my belief. And then secondly, Nvidia's got a lot of questions about what 2026 2027 growth rates. So I wouldn't be surprised if those ones actually lagged if we did have an actual V-shaped recovery. and you saw stocks like MATA, maybe even stocks like Google lead us up, Amazon lead us up and actually be the leaders. So, I think we're in a different dynamic right now than we have been over the last 5 years. And that's kind of a little bit of a changing of the guard when you go through a rally like this.
• 36:00 - 36:30 Microsoft and all of the capex investments and worries about a bubble in AI spending. By the way, I I actually don't think Microsoft would be bad. I think Microsoft would actually help lead a V-shaped recovery as well. And the reason being is if we're talking about Microsoft's cutting back on capex and cutting back on spend, people are going to look and they say, "Okay, like if we've already seen Microsoft peak spend here in 2025 and they cut back that spend over the next few years, guess what that means? We know Microsoft just
• 36:30 - 37:00 makes more and more money every year, right? So all that means is then Microsoft's going to be able to buy back crazy amounts of shares 2026, 2027, 2028 and just take ridiculous amounts of shares off the market which then helps boost what EPS. I mean in some ways um you know it's been a self-amplifying downturn, right? Because we've been worried about AI as a bubble and and and the core IPO at a time when we have tariff uncertainty. So I I could see it as a very convenient reason why investors have actually avoided Mag 7
• 37:00 - 37:30 and it's been the the group that kind of really led the downturn. Um but it is a cyclical trade too because I think once investor confidence returns and they're going to start to buy stocks the mag 7 are not only the best companies but they're the most liquid and they've really derated. On top of that I think you know financials and industrials look attractive as well. What do you think it takes to see that reversal in sentiment? And we talked so much about when sentiment gets negative enough, it becomes a contrarian buy signal. So if we're there now, then what
• 37:30 - 38:00 are going to be the catalysts to start to shift that confidence again? Well, I think the focus right now is on April 2. So I think the market has a lot of myopia around getting tariffs and tariff clarity, but we know that tariffs are just one part of the administration's goal. you know there is reducing regulatory cost and then there is extending tax cuts. I think as investors start to think about that for the rest of the year that gets them quite excited and and of course we have I think we have a lot of what I would
• 38:00 - 38:30 call spooled energy. You know investors can't stay this bearish. The VIX can't stay this anxious. There is a lot of firepower and dry powder on the sidelines and I think businesses can't stay cautious forever. I mean once they know know the ground rules I think they're going to actually start making decisions. Yeah. So in regards to you know a few subjects there right April second so if you're talking about let's go on a V-shaped recovery here and let's be this market in spring and summer right uh okay so yeah if April second
• 38:30 - 39:00 comes out and it's not as scary as people thought boom that gives us the first leg of that major V-shaped recovery right now obviously if it comes out way scarier we can reverse and go the other way but let's say April 2nd comes out and it's like h Trump wasn't that bad. Okay, we we made it through that, right? Boom. That starts leg one of the V-shaped recovery, right? Leg two of the V-shaped recovery would then come from earnings. Earnings start to come out midappril and then we start in the
• 39:00 - 39:30 gauntlet of earnings in the back half of April into May. And companies don't need to come out and raise guidance or anything like that. They just need to come in, meet expectations, maybe slightly beat expectations, and not take down guidance. If that happens, you get leg two of the V-shaped recovery, right? And then as we go throughout the spring and into the summer, if we don't see the recession, right, that will give leg three of the
• 39:30 - 40:00 the rally essentially. And so you would then have a massive V-shaped recovery in the spring and the summer, right? Then comes fall time and then we got to figure out okay where where are companies earnings looking into the holiday season and you know what's going on with recession Doge all that stuff and then we'll reook at all that where's the Fed going and then you know and then we can see what happens in the fall. But if we're just talking about the spring and summer there there is the setup. I can see how we could actually have a V-shaped recovery in the and actually go back to all-time highs and past all-time
• 40:00 - 40:30 highs in regards to all the stock market indexes. you you if if you if what I just laid out for you happens, boom, you're under new all-time highs come come, you know, September and October and then and then we'll see if another fireworks show emerges, right? All righty, guys. Appreciate you joining me as always. Thanks so much for being here. Remember, the most important day is not April 2nd. It is April 1st. We're doing the one-day sale on the highest Patreon tier I have. That is full access to my become a master stock market course. See stocks I'm buying and
• 40:30 - 41:00 selling the Discord chat access there in the Patreon as well. that that tier is usually 125. Access for that one day will be 49.