85% Of The AI Boom Is Still Ahead Of Us | Dan Ives

Dan Ives is a partner at Yorkville Ives and one of Wall Street’s most-followed tech analysts. In this conversation, we break down what he saw on the ground in Korea and why he thinks the AI bears are wrong. We also discuss the potential Tesla and SpaceX merger, CoreWeave and AI debt fears, the midterms, interest rates, and where the stock market goes from here. ====================== Arch Public is an agentic trading platform that automates investment strategies across Stocks, Commodities, ETFs and Crypto. Whether you’re rotating into AI & Gold, allocating to the S&P 500, or accumulating Bitcoin, Arch Public executes your plan 24/7 without ever taking custody of your assets or funds. Sign up today at https://www.archpublic.com, and start your FREE automated trading strategy! ====================== Need liquidity without selling your crypto? Take out a Figure Crypto-Backed Loan, allowing you to borrow against your BTC, ETH, or SOL with 12-month terms, 8.91% interest rates, and no prepayment penalties. Or check out Democratized Prime (https://figuremarkets.co/pomp) and earn ~8.5% APY on real world assets. Unlock your crypto’s potential today at Figure! https://figuremarkets.co/pomp Figure Lending LLC dba Figure (NMLS 1717824). Loans subject to approval. Crypto collateral may be liquidated. Terms apply - see full disclosures at https://figure.com/disclosures/ ====================== Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/pomp ====================== 0:00 - Intro1:08 - Report from Korea & AI chip demand4:51 - Market sell-off & what the AI bears get right9:25 - Why Wall Street is underestimating AI growth15:06 - Midterms & data centers 16:46 - Rate hikes, CoreWeave & Oracle debt19:00 - What could slow AI demand?20:53 - Tesla & SpaceX merger33:06 - How investors are playing the merger35:52 - Market concentration, earnings & the bear narratives41:34 - AI agents & the future of investing45:22 - Political risk & a message to the bears

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• 0:56Speaker 02

  Take a trip to Korea, Taiwan, see what the demand looks like. And see if you come back here and you're still as bearish. I think that's the, that's the one thing I think a lot of times when I talk to some of the very, very bearish investors, I'll be like, have you ever been to Taiwan or Korea before? They're like, no, but. So I think that's the one thing I would say is that.

• 1:22Speaker 03

  What's going on guys? Today we have an excellent conversation with Dan Ives, the GOAT. He is here to tell us all about the AI trade. He's a partner at Yorkville Ives and he just went to Korea and he was on the ground. This is a report from the front lines of what he saw, where the demand is coming from and why all the AI bears, they are wrong. On top of that, we talk about SpaceX and Tesla. Is the merger going to happen? What are the ramifications? How should investors think about actually playing this? Then we get into what's going on with CoreWeave and what maybe Dan actually agrees with the bears on. Why he thinks that it's not as big of a deal as the bears believe. And then he takes a step back and he looks at midterms, interest rates and many of the other themes that are going to influence the stock market into the end of the year. I think you're going to enjoy this conversation. Here it is with Dan Ives.

• 2:04Speaker 03

  All right, Dan, you recently went to Korea. Let's get a report from the front lines. Korea seems to be one of the most important countries when it comes to the AI trade and a lot of the kind of momentum that's going on in the stock market. What did you find when you went there?

• 2:15Speaker 02

  I mean, memory, if I look at demand, it's probably up about 30% in the last four to six weeks. So to me, you know, when you think about the nervousness, the jitters you're seeing, CoreWeave, AI trade, it all comes down to like what demand looks like from a chip perspective. And I think memory, that's front and center. There's, you can name the amount of memory players on one hand and obviously Korea front and center there. And look, I just think what's happening here is investors are skittish on the trade, but the fundamentals are telling a much different story. And that's why I just came away from there even incrementally more bullish relative to demand. And I think what we'll see this tech earnings season, we've already started to see it,

• 2:58Speaker 02

  it further validates, I think, the AI story.

• 3:02Speaker 03

  So Korea is interesting because it does have a number of companies that are very important, but it also has the retail traders and they seem to be very enthusiastic. You're like a legend over there with the retail traders. Is that like a chicken or egg? Like you had to have the companies and then you get the retail traders? Or like, is it just, no, Korea generally is very kind of retail driven and they just happen to have these memory players?

• 3:21Speaker 02

  Oh, I mean, it's, I think it kind of goes hand in hand because the industry there, especially built around Samsung, SK, call it, you know, Hyundai, limited amount of companies. But they basically own the memory market and the, as more and more, maybe if you go back years ago, you'd have to look up Cosby on Google to understand what it is. Now today, like New York City cab drivers, like is the Cosby up or down? But that fed into the retail environment in terms of trading. There's so many finfluencers, so, because there, I mean, when you think about Korea, it's like K-pop and stocks, almost the equivalent of like the Yankees, right? You know, they're like, that's their passion.

• 4:03Speaker 02

  And I think it feeds a market where the volatility, it may be overstretches on both sides. Right now, I just think it is like way detached from fundamentals. It's the sell-off in Korea is eye-popping and I, I continue to believe like the Cosby will make new all-time highs when we go into next year.

• 4:24Speaker 03

  Now, K-pop and stocks, pretty good tagline for them. Sounds fun. Is the sell-off driven by leverage? Is it driven by just the skittishness in retail investors? Like what is the driving force?

• 4:36Speaker 02

  I think, and you saw that E-Slice, which is a small Neo cloud. When that IPO came and, you know, it was down 30% and that kind of feeds into the whole narrative with CoreWeave and just Neo cloud. Look, I think part of it is definitely leverage in the system. I think the other thing is, is that you saw just so many retail investors that have sort of piled in. And Korea for many years, like that market really did nothing. So part of it is just almost being discovered, that market's being discovered globally. And that's the difference too, is that Cosby now has really become, I think, a big conversation among global investors. But I think maybe it got overstretched on the upside.

• 5:21Speaker 02

  It got way oversold now on the downside and it's just, they're sort of navigating a new environment. Because the reality is like, look, Micron trading what, five times earnings? You got SK now listing also dual on the, on the US. I think that's actually the start of Korea today's memory. But I think it's going to expand over time to much more from Neo clouds to software, to what I view as like the broader ecosystem.

• 5:47Speaker 03

  So if we take the lessons from Korea, we bring it to the United States. We saw the sell-off and people were freaking out. They were predicting Black Monday. I mean, just crazy, crazy stuff, right? And what I maybe saw as the turning point was, I think, one or two Fridays ago, the S and P put buying was second highest in history. NASDAQ, third highest in history. The second everyone kind of goes all in on the consensus put buying. You're like, well, what if the stock market goes up? And everyone's got to rush to cover. Basically what happened, right? Now, that doesn't alleviate the concerns around some of these CDSs blowing out or the CoreWeaves of the world or whatever. So like, there's price and then there's the fundamental, you know, worries. What do the bears have right? Or like, are there anything that they're saying that you're like,

• 6:31Speaker 03

  hey, you know what? Actually, we do need to watch that. That there is some risk there.

• 6:35Speaker 02

  Yeah, I think, look, with yields going up, there's no denying that that puts more pressure. Because about 20% of the build out is going to either have to be debt funded or some sort of, you know, equity convert rate. So there's no doubt. Does that raise the cost cap? Of course. So they're right, I think, directionally in terms of that being an issue. And you saw that with CoreWeave. I think where they're wrong is even when you look at CoreWeave, the debt that they're taking on relative to their backlog is minuscule. And that's what Jensen always says, like, they're almost healthier today than they were six months ago or a year ago.

• 7:18Speaker 02

  I think it reminds me a lot of times, like very similar like SaaS apocalypse earlier this year. It's almost like a SaaS apocalypse moment, narrative for infrastructure. Now, I also think it comes down to like the bears, a lot of the naysayers, the last, and a lot of them have been consistent the last three, four years. You can be negative when you're on Metro North or in the 20th floor in New York City office building. But when you see it like I do globally, in Taiwan, in Korea, with the hyperscalers, the capex dollars, they're happening. So in other words, like for every dollar spent in capex, five, six dollar multiplier across the rest of tech.

• 8:00Speaker 02

  It goes back to my view, like, Stre is underestimating earnings 15, 20, 25% next 12 to 18 months. But as that plays out, I think that's what sends the bears back in the harmonization. It's the fundamental stories. And we saw with SpaceX, we've seen with Meta, we see, we'll see with the hyperscalers. That continues to be my view.

• 8:22Speaker 03

  What's interesting is the stocks are getting cheaper, yet people are getting more bearish. Like that blows my mind that that's happening.

• 8:30Speaker 02

  Because I think there's just the narrative, like the standard dinner, pool lounge or four char, like, you know, like 20 minutes in after the, how's everything? It's like, oh, could this be a 99 bubble moment? It feels like it's got, but then my whole view is like, let's just go back. Like tech companies are trading at 30 times revenues now, 21 times earnings and getting cheaper. And the use cases are further getting built out. It's getting more validated. And even when you talk about on the consumer side, that's why Apple, Rocker Gibraltar way at Stock Exchange, because markets telling you, they will now start to monetize the consumer piece.

• 9:13Speaker 02

  Look at Meta as another example, like the reason that that is because of Muse and because me and you have talked about like narrowing the gap versus an Anthropic OpenAI. And the view where Anthropic went from two trillion to a trillion and a half. Look, the reality is, is that it just goes back to SpaceX and the narrative that SpaceX was going to suck up all the liquidity in the market and that was going to be a sort of, you know, this black swan of it, but it wasn't. And I just think we're going to have to continue to like fight narratives in this market. But it goes back to like, this market will be like flying from New York, California, and you hit a crazy thunderstorm over the Midwest.

• 9:56Speaker 02

  Someone next to you think they're going to crash and they're texting their relatives, you know, where their stuff is in their, you know, in their drawers. The other person's watching Netflix drinking Cabernet. The point is like this market, you're gonna go through these moments, but you cannot have the panic and the narrative, just like SaaS apocalypse, circular financing, I think dictate your investments.

• 10:21Speaker 03

  What are the things that when you're talking to your friends at those dinners and they're worried, what are the like two or three anecdotal conversations that you've had where you're like, well, so and so told me X and so that doesn't, you know, I'm not worried.

• 10:36Speaker 02

  Yeah. To me, the thing that I, that validates for me is like, A, it's seeing where the demand is in Asia, because that is the telltale sign. Like that's no different than like getting a grade on a test. That's, you could have worked hard, that's the great, that shows where the demand is in terms of the supply chain. And two, when it comes down to like, when I talk to CIOs, I talk to so many enterprise IT and you're seeing it, the AI use cases, they're multiplying by the day. And you see that more like a Palantir specifically, you see with Snowflake specifically, terms

• 11:20Speaker 02

  on the software side, that now speaks to like the next phase of this AI, the monetization, the use cases is now starting to play out. But it, but it takes time for it to happen. It doesn't happen overnight. So when you go from the capex piece to monetization, where there's a gap in there and we're kind of, we're getting toward the end of that gap where the monetization is going to play out. And I think that, that to me, like, it speaks to what I told you. It's like, six months ago, someone told you oil is 105, 110, and the 10 years at five and Warch is hiking rates. They, you say, where's S and P? And they probably say 65, 6800.

• 12:05Speaker 02

  And instead, you know, it's upwards toward where I believe it will be 8,000 this year. But I think that the market's telling you that the growth is being underestimated by the street.

• 12:15Speaker 03

  Why, why do you think that happens? It's just hard for people to wrap their head around that it could be this good?

• 12:19Speaker 02

  Cause, cause we've never been in something like that. So like when I go to dinner or when I'm like with so many investors, whether it's here in New York or around the globe, it's like, well, this reminds me of 98, this reminds me of 07, this, because it's snake been because of what happened. This core weave is the, the build out is very similar to the, you know, to when fiber was getting built out in terms of the late 90s and, you know, ether and some of the, so there's a lot of those comparisons. But this is different because the data centers are getting built, the use cases are there. It's big tech funding it with a trillion dollars in the balance sheet, three or 400

• 13:03Speaker 02

  billion a year of free cash flow. And that's why like with Jensen being like more of a calming force, where you've seen the Dell and others, we've never been through this. You can't explain to me, be like a naysayer that like 30% of cars in the next three, four years are going to be autonomous. You can't explain like in terms of physical AI, the concept of SpaceX and Tesla and why they're going to merge. And then it comes down like first time in 30 years, the US is ahead of China when it comes to tech, which I also think the nervousness is around the midterms. And if there's a blue wave, Hokel type moratorium, could that put a huge dent on the AI revolution? I think that's.

• 13:48Speaker 03

  Do you think that could, do you think that could be a dent?

• 13:50Speaker 02

  I, I think that's definitely like playing into it, that narrative, like the worry like, okay, then all of a sudden, like if you have a blue wave and the Senate is, and, and House is overtaken by, by Democrats, that'd be hugely negative for tech and AI, which I think at first blush, I would agree. But as we've seen, as this plays out, it comes down to like, a lot of that bark could be worse in bite. And the reality is, is that if we slow it down based on regulatory or moratoriums or whatever, the biggest winner is China. And the reason China market, if you looked up disaster, you'd see a picture of the China

• 14:30Speaker 02

  market the last year is because US technology is years ahead of China. And I think that's, that, that's what the market's telling you.

• 14:42Speaker 03

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• 16:12Speaker 03

  Really one ask, maybe one argument I would make is, once the midterms actually occur, regardless of who wins, we just know who won and therefore, okay, cleared for takeoff. You know, we kind of head back up because people then are like, I have certainty around what is going to be the playing field for the next two years.

• 16:27Speaker 02

  Well, I think there is a lot of uncertainty because no matter what you read online, social, put on TV, it's all data centers, because data centers have become one of the biggest talking points in terms, I'd say on both sides to some extent when it comes to AI and it comes to broader elections. But then as it actually plays out, as we know in politics, the talk is a lot different than the reality. Because then if you're a senator in a state and you ultimately try to, you know, vote down data centers, then those data centers move to other states that are friendly and that's where the jobs go and that's where the tax dollars go. So I think some of this is the uncertainty and then look, a lot of it is just, it's fear

• 17:11Speaker 02

  of unknown, but there's no doubt like Democrats by definition are much more cautious on the data center build out, definitely more, you know, I think aggressive in terms of talking, you know, um, you know, toward what we see in terms of this build out, AOC, Bernie Sanders, some, you know, obviously the more, you know, the, the left side of the party. But that's, that is playing into part of what we're seeing here.

• 17:42Speaker 03

  When we go and we look at, um, interest rates in particular, you mentioned if Warch was hiking interest rates, then the stock market would be lower. He did hike interest rates and the stock market went higher. What do you read into that?

• 17:54Speaker 02

  Well, I read in that humans needed to kind of, to something saying like send a shot across the bow. The bond market was saying he had to raise and he raised. But it also speaks to like, why are rates going up? Like, why is there inflation? Okay, you could say oil and other, but a lot of it is because we are in, in unprecedented fourth industrial revolution, AI capex boom, that's US tech funded. So I think part of it there comes down to like, okay, you could have another hike on the horizon, but unless you think the 10-year is going massively higher Jimmy Carter style,

• 18:36Speaker 02

  like a 50, 75 bit, maybe 1% of data centers, that would impact half a percent. But it's not, that's not going to significantly slow down what we're seeing. So I think you have to put it all in context, but I think it just, it creates jitters and you see it in the core weave, CDS, you see it in Oracle. I think Oracle and Core Weave really being poster child in terms of those two names, taking on a lot of debt.

• 19:07Speaker 02

  Disproportionately to build out what they need to do. But for them, it comes down to like, that's what they've chosen. Hyperscalers are clearly in such a better position because of their capital situation, because it's just, you know, just obviously their, their install base. But for a lot of these companies, like specifically the Neo Clouds, like this is what they need to do. I still believe you need more Neo Clouds. Jensen talked about that today. I mean, that speaks to our view, like, demand will be much more than supply. I know I did the gardener, there, there was some commentary in terms like the Neo Clouds, things like that.

• 19:48Speaker 02

  Look, it's what makes a market, but I'll bet against the negative narrative here.

• 19:55Speaker 03

  I mean, what would slow down demand at this point? It's, I, I, I don't know. You're smarter than me, so maybe you know something that would slow down demand. But every time that one of these products gets released, Grokbot is amazing. Instinct is amazing. Muse is amazing. Now Anthropic shows up with their, you know, persistent personal assistant type AI. It's amazing. And we, inside of all of our companies, I mean, we see it. We are using AI for video editing. We're using it for coding. We're using it for growth analytics, for SEO. I mean, every single aspect of our businesses, we're using this stuff. And frankly, I think that people who, six months ago, were like, I know about AI. I'm basically using it as like a Google replacement. Now they're headfirst in the deep end. Give me more of this, right?

• 20:40Speaker 03

  How do I, how do I now implement this across everything I do? We're not, you know, Albert Einstein over here. So we, I take us as a, a indicative of other companies, but also five years from now, the people who aren't the early adopters, they're going to be doing the same stuff. And they're a way bigger group than what's doing it today.

• 20:57Speaker 02

  I mean, you've talked about tokenization prices as they come and the models ultimately become more commoditized, which that enable the gates open up more to AI. The, the reason Muse is so important is because that's mainstream for the consumer. And I just think like physical AI hasn't even started today. So it speaks to my view, like we're less than 15% through where we are. And I believe like, we don't have the equilibrium until 2029. So as you go into that scenario, the market will grind higher.

• 21:39Speaker 02

  And I think continue, numbers will continue to move up despite these sort of white knuckle moments that definitely cause a lot of jitters.

• 21:50Speaker 03

  Let's talk about Tesla and SpaceX. To me, this is the story. Elon Musk, I mean, he's had a massive week. He had earnings, he had a flying car. He launches now one out of every two rockets launched in the world come from SpaceX. And now there is not only talk of, but confirmation from Elon and the team at SpaceX, that there are special committees at both companies who are looking at it. I think the phrase that was used is it's like tap dancing through a minefield to try to get this done.

• 22:20Speaker 02

  We're supposed to give my regulatory.

• 22:21Speaker 03

  But they definitely want to get it done.

• 22:23Speaker 02

  Oh, it's, it's a matter of when, not if, in my, in my view. Because first off, like, okay, so now just say strategically, why? One, it's data. If you think about Tesla today, the data that they would bring into the SpaceX story, in a, for SpaceX trying to become a hyperscaler, that would turbocharge their ambitions and their ability. Two, cross pollination engineers. It's, I mean, you already see, you saw in the Roadster and others, but that, that I think is very important.

• 23:04Speaker 02

  Three, for Musk to have all the AI technology now under one hood, like all under. And then as a shareholder, Tesla has been a major underperformer this year. The reason is, is they got from an EV player to what I view as an AI, in terms of optimist, autonomous, you know, really the future. The stock, I think in a deal, it would have to be five to 550 in terms of the price for Tesla to get this done.

• 23:38Speaker 03

  So it's like a 30 to 40% premium, give or take from where we are now.

• 23:41Speaker 02

  Because I couldn't see a deal happening sub $500 price. And you could argue, you know, you'd have to go further into where Tesla will be in terms of justifying that.

• 23:55Speaker 03

  And the thought process here is that a higher price alleviates a lot of the like conflict of interest because it's very hard for the Tesla shareholders to argue. We didn't get, like it was a sweetheart deal because we got paid 30 plus percent more than what the stock was trading.

• 24:09Speaker 02

  Well, now also apart from a Tesla perspective, from a Tesla shareholder perspective, it's like, look, as the stock's been underperform because they're transitioning and from an EV player to an AI player, all the capex, don't focus on deliveries. It's all about the future. And that is the right strategy. But the stock is, I wouldn't say artificially depressed, but it's depressed because right now it's an investment year.

• 24:34Speaker 03

  I'm surprised it's not higher.

• 24:35Speaker 02

  But, so, but I would go back to like, even during like, let's say the Twitter saga, there were so many points where I'm like, I'm not an arb, but Musk is gonna buy Twitter despite antics, but yet the stock was trading way below where I think, you know, it ultimately ended up happening. This would be a similar situation. There'll be those that would say regulatory, given Tesla and China, how would you then have that in SpaceX, given national security? Depending on what happens politically, I mean, there'll be a line of regulators, you know, I mean, it would almost be a pretty significant line trying to like poke holes

• 25:19Speaker 02

  in this relative to, you know, is it too big? Are there concerns?

• 25:25Speaker 03

  It's probably the biggest merger in history.

• 25:27Speaker 02

  Yeah, because when you think three and a half trillion, if it actually happens, it would have to be between four to five trillion as a, and then you could argue, once it happened, the SpaceX would have a line to be the biggest company in the world.

• 25:44Speaker 03

  So really you have the largest merger in history between two of the most disruptive innovative companies in history, run by probably the best entrepreneur, definitely of our lifetime, if not one of the best in history. And so all eyes are on this thing.

• 26:02Speaker 02

  And then add in, just as a little like cherry on top of the sundae or Game of Thrones, or however you want to think about it. Then obviously Musk being so like politically involved, especially in the midterms, taxes and others, that goes back to like, okay, you, do you get this done during Trump administration?

• 26:22Speaker 03

  I mean, he has to.

• 26:23Speaker 02

  No, so, so you have basically, you know, call it a year and a half, two years to get this done. It speaks to why like, you hit the clock, it's time to do it. But also SpaceX is behind, if you think about where SpaceX is, Microsoft, Amazon, Alphabet, SpaceX, relative to being a hyperscaler. Oracle's trying to do it with debt. Market doesn't like that. And you see Oracle's stock basically go down every day. SpaceX, massive where they are with Starlink and just the broader, you know, just when you think about the AI.

• 27:02Speaker 03

  On this point in particular, I mean, people almost, uh, it's like a hand wave when it comes to Musk, because I think he's become so polarizing. But to me, if you think of SpaceX two years ago, and you asked, what does SpaceX do? Unequivocally, they launch rockets.

• 27:19Speaker 02

  Sure.

• 27:21Speaker 03

  If you ask 12 months ago, they launch rockets and they have this internet thing that looks interesting. You ask today and you just look at whatever Q2 results, is it AI company? That happens to have rockets?

• 27:36Speaker 02

  Totally.

• 27:37Speaker 03

  I mean, he has completely transformed this business in 24 months and he owns what used to be Twitter. He owns what used to be Cursor, right? He's got the SpaceX business. He created Starlink from scratch. Like, you're like, dude, this guy took one of the best companies in the world and was basically like, this is too small. I need to go bigger. And now is in a market that he feels like is exponentially larger and more valuable, and it's working.

• 28:04Speaker 02

  And when you think about Starlink, whether it's like on the carrier side, the threats, even think about what's happened like on the airline industry, like good luck being on like your dial up Wi-Fi Delta when you're in Starlink on United. So the point is like, yeah, how many, how many leave, you know, membership on Delta, whatever, go, go to United? So I'm just trying to explain like, he has that wand, but it's clear where it's all aimed at. It's trying to make this into the true AI behemoth. But it's hard to do that without Tesla.

• 28:45Speaker 02

  And I think also it's hard for him to run Tesla, run SpaceX, two separate companies. And I think that that also pleases him.

• 28:57Speaker 03

  He, he is notorious for, he's taken the SpaceX and, or sorry, the Tesla engineers at times and been like, I need you for a week. Come over here and help me fix this X, you know, Twitter thing. Or SpaceX engineers, like I think if I remember correctly, the SpaceX engineers at one point went to Tesla or Tesla engineers went to SpaceX and they were looking at the manufacturing lines and they were like, oh, you screwed this up. We'll fix it over here. And there's like some knowledge transfer. So he's already using what he's learning at different companies to help.

• 29:28Speaker 02

  And it's one of the, me and yours about shortages of engineers. That's actually one of the enticing things for engineers, that you could work at, but then also you could work with SpaceX. It's, it's actually, it's a unique.

• 29:41Speaker 03

  Yeah. The, the other aspect is, um, so he has, you know, if you kind of think a full stack, let's maybe just paint the picture of where this could go.

• 29:48Speaker 02

  Like the vertical.

• 29:50Speaker 03

  So I think about, okay, you got launch capabilities in the rockets. So now you can do Starlink, other payloads, but Starlink. So I can beam the internet down. Maybe from a space data center.

• 30:02Speaker 02

  Data center.

• 30:03Speaker 03

  So I got my space data center. Now I'm beaming the internet down. When the internet comes down, do eventually do they have a phone? Maybe, who knows? Then what do I do on the phone? Well, now I have all the AI capabilities in terms of cursor, Grok, Grok bot, you know, etc. And then, oh, by the way, all of that intelligence that is being run through their entire system is then also going into your car, the humanoid, the specialized robotics, like you're talking about a business. I mean, I hear people saying it could be a $10 trillion business. I want to respond and say, why so bearish? Like this thing, why can't this thing be a $100 trillion company?

• 30:41Speaker 02

  They would have, they would have something that no one else had. And it would the satellite piece, especially when you think from a data perspective, that's the huge advantage because data is the new oil, new gold. And that's why Musk recognizes this is the time to go after this. But then you just take a step back, you talk about like core weave concerns, CDS, the whole thing. Then think about like what's happening with like gigawatt GPU data center build out capex, what you're hearing. These are not, when these are companies talking, you can't just dismiss it.

• 31:21Speaker 02

  Because eventually A leads to B leads to C with D, but that's bullish for Neo Clouds, memory, chip, Nvidia, among others.

• 31:32Speaker 03

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• 34:25Speaker 03

  Do they buy SpaceX because they think that the combined entities of this will then lead to this huge company? Do they wait till there's an announcement? Like, how do they kind of navigate knowing that everyone's got a different strategy? But like, what are you hearing?

• 34:37Speaker 02

  Well, right now, Moose are buying SpaceX. Like that's, that's how in the initial quote unquote trade is to buy SpaceX, not just because of this, but because of what we see fundamental. The, from a, from a buying Tesla perspective, I think it's one, investors want to see like, not just Musk talking, but now it's actually see some sort of deal. And I think that's something that continues to be, when they were the biggest opportunity, it's by Tesla stock because for a stock that's at 370, 375, whatever it is, to what I believe will be probably 500 in a deal.

• 35:23Speaker 02

  That's something that will shift quickly as investors look to that piece.

• 35:29Speaker 03

  I own Tesla stock. I do not own SpaceX stock right now. And I put out a piece where I said, look, these are the five reasons or whatever as to why I own Tesla stock. And number five, I wrote this last, I think it was last year. Number five was SpaceX Tesla merger. And at the time, I think people were kind of like, ah, that's like a, a throwaway. And I don't know, I didn't have more than 50% confidence, but it was like, hey, this is like a upside cherry on top. It happens, whatever. Now? I don't know. That might be the number one reason to buy Tesla stock is because a bunch of other people are going to start speculating that it's going to run into.

• 36:06Speaker 02

  It's an 80 to 90% chance that this deal happens.

• 36:12Speaker 03

  So. And it'll run up to the decision point. And so if it's at 370 today, maybe it's 420, 450. And then if for some reason it doesn't happen, there's still a bunch of appreciation that's occurred leading into it.

• 36:25Speaker 02

  Totally. So, so my view is that this is one, like the market still skeptical and you see that in the price. That there's a huge disconnect relative to what I, you know, we talk about 80% over the last year that this is going to happen, but now it's like, it would have to be something anomalous for this not to happen.

• 36:46Speaker 03

  I agree. I'm going to read you a couple of statistics. I just want your reaction to it. So Phil Rosen over at Opening Bell, he wrote, "The 15 largest S and P 500 companies make up 46% of the index's total market value. The top 10 largest holdings are 40% of the index." Does that worry you?

• 37:06Speaker 02

  It would worry me if the spending and what we see was not spreading. So like when Rosen does that a year from now, that stat will be much more diversified. It might be because it's the big companies spending. But now when it comes to like software, infrastructure, energy, cybersecurity, that will now take place over next year.

• 37:31Speaker 03

  So it's kind of a broadening of, of the stock market holdings.

• 37:36Speaker 02

  But I think it's healthy because now, because it goes back to like the multiplier effect. For every dollar spent on Nvidia chip, every dollar of capex goes throughout the rest of the tech, you say the rest of the economy.

• 37:54Speaker 03

  The next one is Mike Zaccardi. He writes that 13% of S and P earnings are in, 88% EPS beat rate. What do you think?

• 38:03Speaker 02

  I mean, I think we're going to see, and Zaccardi, he has great stats. That speaks to like investors underestimating the scale and scope of this, what it's going to look like. We still have a very healthy economy that you start to get some piece in the Middle East through whether it was after midterms in some way, whatever in the game poker. You actually start to stop the hikes and you actually get holds to ultimate cut.

• 38:33Speaker 02

  Who like over the next 12, 18, I just believe this market is set up to rip higher relative to earnings and what we see in the capex cycle.

• 38:43Speaker 03

  I think it definitely into the end of the year, there's a lot of strength. We'll see, but.

• 38:47Speaker 02

  But look, but that's, we always talk about bears, like the bears that I've called 10 of the last two downturns, the catastrophes, usually they come out on Saturdays on social media.

• 38:58Speaker 02

  No, because it's true, because a lot of times like bulls are like watching football with their family touching grass. And the bears are talking about like some catastrophes open for Sunday at 6pm.

• 39:09Speaker 03

  You didn't hear, October 19th is a Monday. It has to be Black Monday again.

• 39:12Speaker 02

  So it's always, but actually it plays into some of the narrative because you have like, when you think like, you know, Peter Tuchman, Einstein talks about this all the time. With the millions and millions of new retail investors that are in this market, that maybe they're in their twenties or thir- they're not experienced to go back what happened 15 years ago. So when they get scared, they think they have a thesis, but these narratives, that's why, whether it's like bubble, core week, circular financing, geopolitical, whatever it may be. But it just goes to my view, like it's what makes a market.

• 39:54Speaker 03

  I think Andrew Ross Sorkin's 1929 book coming out had way more influence on people's thinking than we all give it credit for. Excellent book, incredibly well done. I learned a ton.

• 40:09Speaker 02

  Sorkin the goat, of course.

• 40:11Speaker 03

  But there's a bunch of people who they kind of take like little tidbits from it. And they're like, oh, of course 1929 is going to happen again. And so it's like, there's all of this kind of like influencing of a generation. But to your point, there are a lot of people who they weren't around in 2001. They weren't paying attention. They have no clue what 2000, 2001 felt like. They just hear somebody who frankly is older, claims that they lived through it. And they're just like, well, it must be the same thing.

• 40:39Speaker 02

  But that's also why I actually, a lot of investors, I think some of the best investors that I know, they've been through whether like 87, dot com bubble, financial crisis, like front and center, you know, in terms of being through that. Because I think what it does is that it gives you, it gives you like the history and like you have the scar tissue. That makes you also understand how different this is. But narratives, they matter. And in this market, you can't just dismiss them.

• 41:19Speaker 02

  And I think that's just the reality of like this, we're going to continue to be like fighting narratives in this market. It could be like deep seek one moment, core weave another. Memory stocks, circular fin- it's going to continue to be that.

• 41:37Speaker 03

  Lance Roberts has a chart that shows the S and P 500's PE to profitability ratio has declined toward the low end of its range since 2006. And that suggests that valuations are less stretched relative to corporate profitability. What do you think?

• 41:53Speaker 02

  Oh, I mean, I think it speaks to my view that like productivity is going to continue to increase. Profitability could skyrocket over the coming for companies. But also it goes back to like, these are, like when you look like corporate America relative to debt loads, it's a healthy economy. Which AI is just going to increase productivity, but like me and you have talked about, it will create more jobs over the next five years than it takes away.

• 42:30Speaker 03

  So one of the things that I've been thinking a lot about, you know, we're building Sylvia. And Sylvia is this personal finance focused AI agent.

• 42:37Speaker 02

  Congrats.

• 42:38Speaker 03

  The, the part that becomes very interesting is when it comes to estate planning, tax mitigation, like true personal finance stuff, very obvious why you'd want to use AI. AI is great at navigating complexity. And in our case with Sylvia, if you have personalized insights versus Googling, how do I get my tax rate down? Much more valuable, right? So somebody going to Sylvia.com is coming for an AI agent focused on personal finance. Makes sense. Then I hear tons of people, you can imagine how many days, times a day I get pitched. When can Sylvia invest my money? When can the AI autonomously, I just give it, you know, it's like the joke, hey Claude, make me money, make no mistakes, right?

• 43:21Speaker 03

  I'm now starting to see a couple of different iterations of this. I've got a friend who he's built something called Benchmark AI. It's pretty interesting what they're doing there across all these different models. And they're really creating more like index type exposure. I've seen people who are trying to day trade with it. There's companies like autopilot out there, right? All these different players. How does that change the market valuations? And kind of we're talking about AI from like a productivity standpoint or changing the workplace. How are you preparing or talking to clients about, okay, as AI starts to make some of these investment decisions or it becomes more pervasive inside of the investment committees or the investment teams? Do things change or is it actually just, no, they just make it easier for humans to make these decisions?

• 44:02Speaker 02

  I think it's a combination, like I think it does, it helps the investment process. Just given the amount of data and complexity. I always think it's going to be some sort of combo, human as well as AI. It could help like almost like in screens or based on preferences and risk. But I could argue over time, it creates more of like an efficient market.

• 44:27Speaker 02

  And I view, I view it as a positive, like you know, it's like I, I think also it's embracing technology. It's no different than like being there in the eighties saying what happens when like, you know, electronic trading comes in. So I think it's one like more people are going to embrace it. And I think ultimately it's actually going to get more investors in the market, which I view as positive.

• 44:54Speaker 03

  And it is funny because I was recently talking to one of the large fintech companies. And they were saying, look, at the same time that JP Morgan and all these different kind of legacy organizations, they're shutting off access for agents to come on their platform. They're not allowing the agentic transfer of money, trading, et cetera. This fintech and its peer set, they're racing to how do we open everything up? How do we create MCPs? How do we let the agents do as much? Robinhood and Coinbase both have now like a kind of segregated account. So, you know, if you've got a hundred grand in your account, you can take 25 of it and put in the agent's account. And then the agent can go wild in there. And it almost feels like we're seeing whatever crypto was or, you know, these other technologies.

• 45:40Speaker 03

  Now people have to decide, am I pro agent or anti agent? And that's going to separate kind of winners and losers going forward.

• 45:46Speaker 02

  Well, and also I think part of it is like regulatory guardrails like that. Because especially when you start to deal, as you know, like in such a regulated industry and you're dealing with people's money, I think there's just, there's such a high bar relative to some of the regulations and from, you know, from cybersecurity to bad actors, things like that. But look, it's like, it's changing the landscape, but I don't view it as a negative. I view it as a positive.

• 46:17Speaker 03

  When, when you came back from Korea, did you walk by Starbucks and see two dudes fist fighting?

• 46:26Speaker 02

  It's, you know, it's funny because especially like when you're like, I, I find like being in Korea, being in Taiwan, like you, and then you come back here. There, there's a difference than what it used to be, right? In other words, like now you actually see, you really feel like techno, the innovation cycles happen in this country. But I think it's just one where it's exciting, you embrace it. My biggest fear is that the political landscape, I don't care if it's red, blue, gray, whatever, like slows down innovation in this country.

• 47:11Speaker 02

  Because if that happens, China wins. That's not even a debate.

• 47:17Speaker 03

  What is your message to the bears? Maybe we'll end with that.

• 47:20Speaker 02

  I mean, the message to the bears is,

• 47:25Speaker 02

  try to, you've, a lot of the bears have missed every transformational growth stock the last 25 years. Because they don't, like whether it's valuation or catastrophism or sneak bitten.

• 47:38Speaker 02

  Take a trip to Korea, Taiwan, see what the demand looks like. And see if you come back here and you're still as bearish. I, I think that's the, that's the one thing, I think a lot of times when I talk to some of the very, very bearish investors, I'll be like, have you ever been to Taiwan or Korea before? They're like, no, but, so I think that's the one thing I would say is that it's rooted, you have to understand what the demand and why this is different. I'm a lot of the bears so smart, they have great points on certain areas. And there could be like, there are always going to be losers than the winners, but you cannot paint them all with the same brush, just like SaaS apocalypse

• 48:23Speaker 02

  with a lot of software stocks, you know, called 60% up from lose.

• 48:28Speaker 03

  All right. Where can we send people to find you online?

• 48:30Speaker 02

  Yeah. So dives tech on X, LinkedIn, hit me and look, it's just good, this is, it's a time to, you know, just have a flashlight in a tunnel type vibe. So it's always good to be doing this. Thanks for everyone who was reaching out.

• 48:44Speaker 03

  Flashlight in the tunnel is pretty good, right? All right, guys. We'll see you next time.