SPEAKER_02 0:00

Forget the magnificent seven. We're in a parabolic seven world now. We're going to talk about why the market has gone crazy for a new group of stocks. We're also going to discuss longtime recommendation Marvell, which saw shares skyrocket after Kingmaker Jensen Wong called it the next trillion dollar company. We're talking about Google's next frontier of the AI arms race with an $80 billion stock sale, a difficult day for Broadcom shareholders. We're going to discuss listener QAs on Wolf, Nokia, Power Solutions, among many other stocks. And if you're looking for some fun summer travel, Eric is joined by MyWall Street's Emmett Savage to talk about their upcoming Woodstock for investors. This is Investicon taking place this August. All that and more in today's episode of the AI Investor Podcast. But how are you doing, my man? It has been a very busy week. You know, there's SpaceX IPO, there's Marvell, you know, mooning, there's Broadcom having a rough day. How are you doing, man? What's going on out there? Are you sleeping right now?

SPEAKER_01 1:14

I'm good. Speaking of Kingmakers, everyone on YouTube will be able to see Austin out in New York, moving and shaking. I hope you get us some good intel back. But we've got so much to talk about. Austin, I know I had said we really wanted to focus on kind of the 800V segment this week. There's just so much going on in the market. We're still going to get to that, but we did want to cover just everything happening because it's been such a busy couple of weeks. So we're going to be joined by Emmett Savage at the end of this. We're going to talk about InvestiCon, which is really cool. I think everyone should stick around for that to hear about it. Um, but as uh we alluded to in our last podcast, we also released our brand new AI ETF video. I did want to mention that. It's up on our YouTube channel right now. Once again, it's in the show notes. If anyone hasn't subscribed to our channel, we've gotten outstanding feedback from that. We talk about more than eight AI ETFs. And in the upcoming future, Austin, we're hoping to do, you know, one long-form video a month, or I should say a week that's going to be very different most of the time than what we're talking about in the podcast. So we're going to have how to invest in AI stocks coming up, a semiconductor 101 investing, how to invest in robotic stocks as well. I've been working on that for the YouTube channel. So I did want just before we get started, before we jump into it, mention we talked about that video last week. It is up on our YouTube. I strongly encourage everyone to check it out.

SPEAKER_02 2:39

I will double down on that. I watched the video yesterday and you did a characteristically excellent job. And I'm going to call this, I'm going to call this your dwarquesh phase. And for anybody, for anybody who listens to the Dwar Cesh podcast, it goes deep in the weeds, but it's a wonderful podcast. And he's recently shifted to more educational style Blackboard videos on YouTube. And they are wonderful. They're dense, they're wonderful. But this this is Eric's Dwarcache phase as he as he goes deep, 30 to 40 minutes on a trend or stocks and adds a lot of visual elements. So I encourage everybody to go check that out. But hey, the reason people are here is largely the AI portfolio. And I'm sure a lot of our listeners want to know about the furious rallies that we saw in AI stocks on Monday or Tuesday. And then many of the downdrafts that then followed on Wednesday or Thursday morning, which is when we're filming this. So let's talk about what's going on. Marvell up 40%, and then they're down this morning. Micron has had a continued furious run. They're down 7% as of this morning. Just what are we supposed to make of this? Is this the suddenness of this drop the sign of the top? Is this a normal heartbeat in this crazy jagged journey of wealth building we're seeing? How do you interpret this?

SPEAKER_01 3:48

And we'll get to the parabolic seven, which we'll play into this in just a moment. I love that branding, by the way. It's it's magnificent. Actually, it's replacing the magnificent seven. But Austin, this week, it is, as you said, it's been up and it's been down. We we've really seen the accentuated market. Personally, I know my portfolio, I had two of the strongest outperformance days I've ever seen on Monday and Tuesday. That's happening because of a lot of news from an event going on named Computex that's happening in uh Taiwan. But we're seeing now some selling on Wednesday and Thursday. Austin, this is healthy. The stock market's been going up in nearly straight line since the end of March. It's it's healthy to have these kind of speed bumps, you'd call that. You expect it. But what I've been watching this week, Austin, and the three main areas we're gonna cover on this podcast today. Number one, that Google News is really important because it it really illustrates what the next phase of the AI build out is gonna look like and how we get to this next level of spending. So we'll dive into that. Number two, NVIDIA's CEO, Jensen Wong, he's in Taiwan, he's moving markets. I want to talk about some of the key quotes from there because it's really important for the long-term direction of AI. And third, what I've been seeing this past week, when we first started hosting this podcast in late 2024, the question the then co-host David Hansen would always ask me was Is this really continuing to 2026? Well, Austin, we're sitting here in 2026, and now everyone's asking, can the growth continue into 2027? We've seen a lot of news this past week about certainty continuing to shift into 2028. So that's good news if you're an AI investor. So overall, choppy markets, but the headline is the overall trend continues to look very strong.

SPEAKER_02 5:40

And you know, one of the things for for anybody who wants extra credit, if you'd like to go back and listen to our episode on Oracle in late 25, I think it was August or September, I forget, when they had their crazy 40% share spike day. We had talked about in that episode that these the forecasts that a lot of these hyperscalers were making would require debt and lending, which is now starting to enter the arena today. So we had alluded to this, you know, maybe eight or so months ago, and we're now starting to see a lot of those debt deals enter the arena. So that new element that we had talked about a couple months ago, it's one of the big factors that we're seeing play out in the stocks this week. And I know we're gonna get to that in a minute, but if anybody wants to go back and listen to that episode when we had said, hey, this buildup cannot be funded from cash flow alone. Debt has to come here, it is now, if you want that additional context. But rebranding, I love a rebrand. I love a good reinvention. Parabolic Seven in the limelight. Uh, what's going on here? And what is this new cohort of seven stocks that you know is out with the old, out with the mag seven old, in with the new parabolic seven. It's a better, it's a better headline. What is this grouping and why why is it so exciting right now?

SPEAKER_01 6:43

By the way, I love the extra credit. You know, we we say we don't want to make listening to a podcast on investing tool like homework, but now we're giving extra credit as well. So some stuff. So it's extra credit.

SPEAKER_02 6:54

It's not homework, it's extra credit. It's just out it's just out there for the listeners who want to be teachers' pet. That's all. If you want the A.

SPEAKER_01 7:03

All right, all you teachers' pets out there. Um, Austin, I I this parabolic seven thing, it's kind of just a fun story, but we're starting to see some rebranding. Previously, we had the Magnificent Seven, and these brandings happen for signs of the times. The longer you invest, the more you're gonna see companies branded up. We had Fang. Everyone who was investing in the mid-2000s remember Fang.

SPEAKER_02 7:27

There was BRICS before then, right? There's always there, there was the nifty fifty, right? There's yeah, how many I've lost track of how many we have.

SPEAKER_01 7:36

There's not a lot. That was a good list, though. Um, and and it is always just a way to package up, you know, what the moment is. So I thought it was kind of illustrative that we are seeing some new branding right now for the shift away from the magnificent seven because it it is a moment when we are seeing massive movements in market cap. You look at the Magnificent Seven, it started that way in part because these were the largest seven companies. But today, Broadcom and Taiwan Semi, they're worth more than Magnificent Seven members like Tesla and Meta Platforms. As we discussed last week, Samsung, Micron, SK Heininx, all worth more than a trillion dollars. So Austin, the Parabolic 7, it came from one of the analysts on Wall Street. Unfortunately, I don't have his name right now, but Sandisk, Marvell, Micron, Intel, Dell, AMD, and Broadcom. Now, a few notes.

SPEAKER_02 8:28

What this this list this list reads more like the Comeback Kids. Every single one of these stocks. Comeback kids, I like it. Comeback kids is good. Every single one of these stocks had a brutal decade or more at some point. I mean, you know, how many of these stocks at some point have been left for dead over the last 25 years? So we need somehow to recognize that this parabolic seven is it's it's a reinvention group, really.

SPEAKER_01 8:49

Man, I you're you just did a better job than he did. Comeback kids is right. All of these stocks have been off the beam path. All right, we're we're beating the branding of Wall Street. You've heard it here first, the Comeback Kids. But Austin, I I do want to talk about the big idea behind this. When this when AI kicked off, the semiconductor industry was a $519 billion industry. When we started the show in 2024, it was a $631 billion industry. In 2025, it was $796 billion. Now, headed into this year, one of the largest industry forecasters, which is the WSTS, they forecast this year would go up to $975 billion. That's that's a lot of growth, Austin. That would have been nearly double as much as when AI had really kicked off in 2023. This week, Austin, they revised their forecast for this year up to $1.51 trillion. And it's hard to really put into perspective how mind-blowing this is. I've been investing for so long in semiconductors. A lot of these industry estimates are closely washed. I remember industry estimates coming in at $190 billion or numbers like that, below $200 billion, causing people to want to sell off semiconductor stocks. Austin, the revision that they just announced, the size of its $536 billion for this year. In the course of five months, they said, oh, we actually missed how much semiconductor sales there's gonna be by $536. That's bigger. That's 2023.

SPEAKER_02 10:26

That's bigger than 2023.

SPEAKER_01 10:28

It's it's bigger than the entire industry was. So this is part of what's going on right now, Austin. This memory market we see in that um in that branding of the comeback kids. I'm not giving it parabolic seven. We're we're taking it. We're taking it in that branding. It's got micron, it's got sand disk. Well, the memory market last year, Austin, was 230 billion. This year, the new estimates 804 billion. That's a growth rate of 249%. We've talked about GPUs, CPUs. The biggest thing in semiconductors has always been logic. The company is making these, it's now half the size of memory. So, Austin, this is this is part of what is causing this generational shift. Well, I wanted to put the numbers down how generational this is. You've heard all your life about Intel, you've heard all your life about companies like NVIDIA. The market is now three times bigger than it was when it started starting this year, but the forecast change. Why are semiconductor stocks? The the the whole index is up a fantastic amount this year. Why is that? Well, since the start of the year, expectations have jumped 50%. So, you know, Austin, this is this is part of what we're looking at. This is the background. This is Eric's big number of the week, if if you want to call it that. And what what we're seeing from this as well, beyond the parabolic seven, that's the headline. People going out and looking at Micron, looking at SK Heinex, looking at these companies that have suddenly become the most in-demand names for investors. But the broader background, too, Austin, SK Heinex this week, they said they're going to double their capacity by 2030. It opens up this next avenue as well. There's always a next in investing. And I really do think, especially the companies, the semiconductor equipment place, the companies that make the factories to make the chips are really the best risk reward in AI right now. I mentioned Anto last week. If there's a single stock I would want to buy today, maybe we'll recommend it next week when we come back. That's probably about where I'm looking right now because the seriousness of this chip demand, it's going to lead to a next level of building more supply. And then we're going to have other things like Elon Musk, wanting to build Terrafab, that creates even more incentives. So, Austin, it's just what is the moment today? Well, it's suddenly a semiconductor world. We've seen the first act of this play out with memory. There's continuing acts to play. So if you're one of our new listeners, we've had so many new listeners recently. We appreciate you joining in. If you feel like you've missed the party, um, we're going to talk about why this party is going to keep going on for a while. And we're going to talk about how we're setting up for the next phase of it in today's podcast.

SPEAKER_02 13:16

Yeah, I mean, and if people are wondering how it's going to be financed, we are just now hitting the leverage debt phase of this at scale, right? So there's a $38 billion TPU deal with Broadcom that we'll talk about. Berkshire's got $10 billion of Google. Actually, I think they upped that. I think I saw that they increased it a little bit over $10 billion in a private placement. So there's more money coming in. And uh speaking of money, talk about the comeback kid, Marvell. I I want to get your your reaction to Mark Marvell, because Marvell, I think it was maybe two months ago-ish. Um, it kind of got put in the penalty box. And the issue that we've seen with Marvell is that the company has always been perfectly positioned for this moment, and they have been chronically under-executing, right? They've had this layup where they've got an optics division. They're, they seem perfectly positioned as sort of like a one-stock basket play. Um, and they just the execution issues and inventory issues and supply issues have just that they've not been able to get ahead of that. However, now the stock is up basically 240%. Um, and Jensen Wong Kingmaker said it's the next trillion dollar company, and it jumped what, 30% and then 10% after hours. So call it 40% just on those comments. Is this 100% Jensen, or are people now waking up that Marvell is perfectly positioned, or is Marvell finally delivering on the execution shortcomings that they've had for the last few years?

SPEAKER_01 14:36

There's a few things that are happening right now for 24-7 Wall Street Comeback Kid Index constituent Marvell. See how I just ran that up right there? We own it. No one else can take it. Um, yeah, like you mentioned, Austin, the stocks up 237% year to day, but all of those gains have come since March 30th. So it's it's an absolutely frantic rally. They report earnings last week, and it was we were we were filming our podcast right as it started. It was kind of nothing special, but we do have the stock storing, as you mentioned. It's largely on uh Jensen Wong in uh Taiwan, calling Marvell potentially the next trillion dollar company. So let's unpack a few things on this. One, NVIDIA had recently invested $2 billion in Marvell. It benefits Jensen to speak well of the company. So I I think you can't really separate that.

SPEAKER_02 15:28

Second, and and there's there's precedence here, to be clear. He's not, yeah, you know, I'm sure he loves all his children equally, so to speak. But he did the same thing. What was it, synopsis and cadence? He has got an investment in. I mean, NVIDIA has been, and they've got money with Intel as well, right? Like NVIDIA has been putting money into this entire industry. So just in case people hear them are like, oh, NVIDIA's investing in Marvell, that's not unusual right now. Nvidia's, you know, cast two dozen stones out there, you know, not stones, lures, into promising companies in this industry. So that's not really unique for them right now.

SPEAKER_01 15:58

And I I like their strategy much more than when they were investing in all the uh neo clouds and and giving this impression of essentially creating this related party. They're much more doing suppliers right now, which I would personally prefer that strategy. But Austin, another thing we need to note that 40% jump, that's not exactly healthy, right? This is this is a platitude on stage. Marvell is now worth as much as Toyota, Wells Fargo, or Shell. I mean, would you ever see those companies jump a fraction of that on some kind of high praise? It it you need to take a step back and say this this does feel very frothy. But the other side of it, I did want to talk about. It is at an event that's happening right now in Taiwan, which is Computex. Um, I I feel like I'm saying that really weird, but I can't help but say it differently. He was on stage, Jensen Wong, with Marvell CEO, Matt Murphy, and they spoke a lot about the next bottleneck being infrastructure. Now, a few key points that Murphy made, one of which was um kind of this copper wall that we're running into. And Austin, we've talked about it a lot on this podcast in various ways, but networking speed has to increase in the AI age. And every single time that it increases, this copper wall becomes closer and closer. Essentially, as speed increases, the length of the copper cables can carry data, it's gonna be cut in half. And every single time this happens, it's not just a 2x increase for the amount of optical connections that are gonna be needed, it's a 10x increase. So after these comments were made, Marvell has a lot of its interconnect portfolio. It rose for that reason. The entire optical space rose. Momentum, coherent, applied optical electrons were all up between 10 and 20 percent. The background to this, Austin, is that the reports are that NVIDIA went to the optics supply chain and they're asking for a 20x increase in capacity. Now, the industry from reports is gonna deliver closer to 12x. This gap between those two, if NVIDIA's planning is correct, maybe presents some opportunity that's analogous to memory. But Austin, the the bigger picture out here, a lot of the best investing ideas you can draw in a crayon, right? We start with this idea that compute demand is gonna be insatiable. We started this podcast in late 2024 with a simple idea that everyone was underestimating AI because there's gonna be more breakthroughs. It's gonna create intelligence that's gonna have nearly unlimited demand in the future. And there will be ups and there will be downs, but it's going to lead to the shift where computing is the most dominant resource. It is, in a way, the new oil, right? And if you see that playing out and you look into the future, we've explained why optics are coming. We've been talking about this since the beginning of the podcast, since late 2024. It should be obvious. It shouldn't be two CEOs on stage talking about this change, anything, but it shows people aren't looking into the future. The market is not perfect. It is not perfectly ingesting this data. And when this data comes out and is presented in a way that is front and center to millions of people at something like a keynote, we see reactions like these stocks moving 10 or 20% a day. So this won't be the last time we see something like this, Austin, because the opportunity is clear around optics that we have a fundamental constraint in the technology preceding it. We have a massive growth opportunity. And this is what people are realizing as we're moving to these increasing networking speeds. So we've recommended obviously lumentum's up over a thousand percent, coherent, something like four to five hundred percent, applied optoelectronics. We've we've taken those big swings in Austin. As they got very expensive for new listeners out there, we continue adding. That's why we add to SemTech this year, Actron, Air Test Systems, which are all up, I believe, over 100%. So, you know, if people feel like they've missed this, yeah, there is a lot of frothiness in the optics market. We'll talk about that. But there's always continuing opportunities. There's always something new in the supply chain. And, you know, we'll continue looking at that. So if you're new and you're saying, oh, I think I missed this, um, this is going to be a trend that follows across the next decade with new winners and losers. So that's that's really kind of my takeaway from this conference.

SPEAKER_02 20:54

And is that view enough for you to pull Marvell out of the penalty box? Uh, or is this a case of I'll put you on the spot a little bit here. We started this segment talking about Marvell and their share price you know spike. Is the strength of this tailwind and trend enough for you to pull them out of the penalty box and say the trend is so big they they can't but help but do well? I mean, this feels a little bit like I mean, Marvel and Intel are both amazing and technically advanced companies, but this feels a little bit like they're lucky at the right place at the right time.

SPEAKER_01 21:24

I where I would see Marvell today is more something. I'm very glad that, you know, there there's been some other news. There's there's some reports that they're gonna get into Google's TPU complex, which we'll cover later. Um they they've had some good things happening in the background, but with where they're valued today, it might be something in the future that I would suggest. Hey, we've got some new optics recommendations. If you already have um too many holdings or you don't have cash, perhaps I would consider funding it by selling some Marvell to buy these new opportunities. So it's at this moment, it does seem Relatively richly priced to me. That being said, for anyone who bought it when we first recommended it and now has enjoyed these gains, uh, you more than deserve them because it has been a roller poster ride. Yeah.

SPEAKER_02 22:12

And while you know, this is a show about investing. We we cannot give personalized advice, but if somebody wants to maybe leave the upside potential in a Marvell, but they want to capture some of the gains that they've got, you could consider something like a trailing stop loss order. You know, if you're like, well, maybe this is the beginning of a big run. People are looking at what you did on optics and they don't want to hop off that train too early. So maybe they maybe you put in something like a trailing stop loss to lock in any of those gains if you want. You had discussed um Google raising more money for CapEx. Now, this is incredible. Google, Google and Apple have sort of vied for most impressive money printing companies on earth. Um, I mean, the amount of cash that each company generates is absolutely mind-bending. And yet, even a company that generates, I mean, Google feels like it's like the Federal Reserve in terms of how much money they generate. It's it's incredible, right? And yet, even Google is now at their limit of what they can invest. So they uh are raising $80 billion for more CapEx. So they want to spend $190 billion and this year and significantly more next year. So why this extra $80 billion billion? What is it going to? Um, any conclusions we can draw from this? I mean, other other than now debt is entering the arena, like we talked about.

SPEAKER_01 23:21

Yeah. And you know, these companies might be more credit worthy than the Federal Reserve in some ways. Uh I I saw, I think NVIDIA was issuing some debt that had uh lower yields than federal. So I think that just kind of an interesting thing.

SPEAKER_02 23:37

That happened a couple times in the last decade. I forget the company. Microsoft had one, I think that was Microsoft was below T-bills at one point. Um scary idea, scary idea. But we're we're not we're not macroeconomic doomsday, doomsday or here. We are we are optimists, we are investors and we're optimists looking at artificial intelligence. So talk to me about this $80 billion specifically for Google. Why are they doing this? Does it change anything for you other than just, or is this just reaffirming that this like 2030, you know, between now and 2030, this build out is just continuing to go ballistic?

SPEAKER_01 24:08

Yeah, I think this is extremely material news. Google, they want to issue 190 billion in capital, or they want to spend 190 billion capital expenditures this year, and they've already said it's gonna be significantly higher. Next year, Austin, if we break down the numbers, the problem is their net income's 174 billion this year, so they're already outstripping it, 213 billion next year. Their cash from operations, if you just want to look at total cash, that's 212 billion, 252 billion next year. So maybe that gives a little bit more wiggle room, but they're effectively at their limit. So there's a couple pathways. You go to debt markets, but there's been some changes in debt markets that maybe make that a little bit less desirable. Or a lot of people miss this one, you can issue equity. When a lot of people look at what pathways they only see the debt, they don't consider the equity raises, especially with where share prices are right now. So Google or parent company Alphabet, they said we're going to raise 80 billion mostly for CapEx. There was some other uses for it. The the headline is it's already oversubscribed multiple times from what I've seen. And as you note at the beginning, Austin, Workshire Hathaway, the the uh heir to Buffett's empire now that he has stepped aside as CEO, they are taking $10 billion. And you said it might even be more than that. I haven't seen this news, but that is a massive stamp on credibility. So, Austin, a couple points from this. Number one, this does show well, how are you going to continue growing this compute pie in the years to come? Well, there's a few pathways to it. Hyperscalers spending more, they're at their limits. How are they gonna do that? Well, if there is this insatiable demand for their equity, that creates a pathway for them. Number two, you're gonna have companies and enterprises more directly buying, and that's what NVIDIA is spoken about. But again, this just continues to show this pathway that everyone says this is already so big, how can it get better? There are more avenues than people believe. Second, Austin, it just puts another focus on who the Google suppliers are with their commitment to continue spending, the growth rates in their cloud computing. We talked about this in the past, but I'll review them one more time. Broadcom is the largest play in their chips. There's also MediaTech, which is a Taiwanese company who might be taking some share. We'll we'll talk about that in our next segment. Marvell, there's been reports that they're in conversation with Google, which is part of their rise. Um, then Lumentum, which is supplying circuit switches, Celestica, which is a ticker CLS, something I personally own. It's a top 10-ish position for me. Um, not on the portfolio, but very levered towards this build-out. And then we have uh TTM or TTMI, which is another very specific play to TPUs. But often the key here is you can go out and you can look at the stocks that are levered to Google, which is how most people will look at this. But for me, the bigger picture is this shows right when people are saying these companies can't spend more, it shows that there is an insatiable demand for equity, which all of a sudden opens the door to much larger spending plans. And and all of a sudden you can see how these companies get to their 27, 2027, 2028, 2029 spending plans.

SPEAKER_02 27:38

Um, and the the Broadcom TPU deal is kind of interesting. I think it was um so Matt Levine or Matt Levine did uh on Money Stuff did a did a good column on this. I um if anybody again wants any extra credit there, teachers pets out there. Um I I think what's interesting about this one is there's the Broadcom structure is roughly that they are backstopping it. So they're guaranteeing the purchase of the chips if something falls short. And and the implication there is they're saying we believe that these chips are going to be so valuable regardless that we will backstop the value of them and agree to buy them at a pre-agreed upon price if you know X, Y, and Z doesn't pan out. So basically the the now to some extent they've got to talk their own book, right? They obviously endorse the products that they build, but that's a huge vote of confidence to say, like, we believe that these chips are going to be so valuable that in the future we agree to, you know, basically be a put option on them. And if that sounds risky to you, it shouldn't. Because remember, very recently there were some questions. I think it was Michael Burry had all these questions around like depreciation curves of chips. And Google basically came out and they're like, yeah, we're still using chips from six years ago at 100% capacity on YouTube. Like we have no, like, if anything, the depreciation curves on the useful life of these chips is longer than we anticipated. And all these old chips we were using, we can offload to these other functions. Like we have insatiable compute demand. It doesn't just have to be AI. So there is a really strong, very recent precedence here that old chips are still significantly valued. Look at Intel, right? Being able to sell out their old CPU inventory at a premium. So uh Broadcom backstopping seems a little bit like talking their own book, and it is, but there's strong precedence that it makes sense and that they just see what the last few years have shown us. Even old chips are very valuable.

SPEAKER_01 29:20

Yeah, and that's an important point to make because the architecture of chips and the architecture of how AI itself functions has really opened up a longer pathway. Gavin Baker, who I talked about last week, he was talking about how you can use functions for these chips in ways that extends their useful life much further than before. Sometimes, you know, these people who are these permanent bears and always looking for the wrong things, they they tend to get really granular to only look at one point and they they miss the big picture. I do think that's probably happening a little bit with Burry. And hey, things can change, but if you are in the details, the the technical side of AI in the past year has been a lot of reasons to extend the life of chips. And Austin, that makes debt more attractive as well, right? Because yeah, so that that is another catalyst.

SPEAKER_02 30:10

Yeah. And um, you know, I don't want to get too stuck on this point. You know, we are the AI investing podcast, but remember there's ways chips can be used beyond artificial intelligence, right? It's not, it's not just are these chips good for training or inference, right? As we're seeing in Google's case, you can offload chips to other things like uh Gmail or serving ads or YouTube or other functions, right? Like it we are talking about commute, uh compute beyond artificial intelligence, narrow, you know, not that it's narrow at this point, but we are talking about demand needs for compute beyond just the industry we're talking about here, which makes these chips more useful. Anyway, I'm beating a dead horse. Now, after that point, though, uh, which you know, we believe Broadcom is one of the most impressive companies in this space, the market at as of the this filming appears to disagree with us on, and the company is down a lot. Now, it's down 14%. I think it was pre-market. Market's probably opened since we started filming this, so I don't know where it is now. Um, this is as a result of earnings. Broadcom has gone on a huge run recently, though. So, you know, if if you if you zoom the stock chart out six months, 12 months, you know, the stock's still up huge. What is the reason that they are down so much?

SPEAKER_01 31:19

Yeah, often, so I'm looking, they're down 15% today.

SPEAKER_02 31:25

So about the same as what they were pre-market.

SPEAKER_01 31:27

Yeah, you know, we we talked about in a recent episode Cloudflare. Um, they had released earnings, they had run up more than 20% of their earnings, they were down 20% the next day. I said they just didn't release that wow thing everyone was waiting for in terms of some kind of guidance or some kind of big number that wasn't necessarily baked into consensus. So they lost that the next day, and a lot of people panicked. What's happened since? Well, the stock's up 40% since the the days after earnings. So I think we're looking at something relatively similar here. The reason it's down, we were hosting a live blog on 24-7 Wall Street. If anyone wanted to go to our site and read it, they they didn't update their visibility. Um, they they had said in 2027 they were looking at in excess of $100 billion in AI sales, excuse me, with so much big stuff happening. Wall Street was wanting to see them update that number. But you know, Austin, a lot of companies aren't going to update guidance every single quarter. So I I I don't think that's necessarily a large judgment on them. Another factor that caused this is there is some concerns that they are losing market share to alternatives uh like media tech and the fact that they're not increasing their guidance shows that that's actually happening. Overall, Austin, at the end of the day, I think what happened in the call when I was listening to it, the CEO of the company, Hot Ken, he often saves big quotes. And when he gives them out, we've seen Broadcom go from 5% after earnings to plus 20%. It's happened multiple times. He didn't have that yesterday and people were expecting it. But I think he's saving it. And what he kept alluding to on this call often was that they're basically now booked out for 2026, 2027. And where they have visibility into is 2028. Another quote from this past week was OpenAI's CFO Sarah Fryer. She was on, I think it was all in podcast, but she said basically compute through the end of 2027 is sold out. So this is a point I was making at the beginning of this podcast, Austin, that as much as people in earnings are looking for a quarter to quarter, there will be some lumpiness, especially a company like Broadcom. They make custom engagements with these companies that's not always going to deliver smoothly. The big picture is what is the long-term trend. And what I think Broadcom's setting up for is that they're going to increase enough that they'll see probably more than $30 per share in EPS in 2028. At today's prices, around $400, that leaves them trading for about 13x, where they next have visibility into. That's a pretty reasonable price, Austin, especially for a company with the growth rates that they have. So I think this is an example of the market reacting to something that happens quarter to quarter, trying to read into some areas. I think this will be resolved in overtime. I'm not especially concerned about Broadcom. That being said, it is big. It's it's now before today started, it was the seventh, I think, sixth or seventh largest company in the world. We're seeing the same thing with NVIDIA. When you reach these sizes, movement isn't as dramatic. Um so you know, it's it's a company. If you're expecting them to see astronomical gains like they had in the past, um, they they probably don't deserve to be in that parabolic seven group. They're they're they're not as uh you know explosive at this point. They they are much larger. But what they can be is they can be probably an outsized position, especially if these uh the sell-off continues. You know, if if Broadcom in the coming weeks uh sold off another 10 or 15%, I would say that is a great place to park their money at the valuation they're at.

SPEAKER_02 35:19

Speaking of companies trading for crazy valuations to next 12 month uh cash flow, I see Microns down about 8% today. They're down below $1,000 a share. Can't believe I'm gonna say that something's a you know, uh, a scream and buy at $1,000 a share when it was like $100 a share two years ago. But you had talked about the same dynamic where you think the forecast, you think they're gonna do four, like was it $400 million? Roughly, we had talked about it.

SPEAKER_01 35:42

Well, it was $400 billion in cash flow.

SPEAKER_02 35:43

Sorry, I said million. Yeah, billion, billion in cash flow next year. So at that anyway, so uh hopefully we're getting a uh a second look at some really incredible companies with visibility into a lot of cash and a lot of revenue for the next 24 months. Um market doesn't like it. Um, but as you have discussed many times on this podcast, occasionally, you know, we get these opportunities, we get these fear cycles. Uh that happened in Deep Seek, we had a sell-off in the tariff uh situation, we had a sell-off, I think it was in March of this year. Those dips are actually where you made some of your best investments. So uh you gotta look through the clouds. Talking about a little bit more clouds, uh, Credo. So you just, you know, Optics has been your baby for the last two years. Um, but this is a company that um sold off after earnings and largely on what gross margin concerns. And this was one of the one of the things that has happened in this space, and we should expect this to correct at some point, is that as all these bottlenecks have formed and this, you know, people need these parts for infrastructure at any price, the few companies that are able to manufacture them are able to command absurd gross margins and markups. So then the question becomes you know, can these companies maintain their 80, 70, 60% gross margins going to the future as we they build supply to meet it? So that's why gross margins is a concern here, because this bottleneck created this gross margin explosion for the few companies that could deliver. So we're seeing gross margin guidance for a decline on Credo. Is that bad news? Are they losing their pricing power? Or is this the fact that they're now manufacturing so much that their gross margins are going to come down a little bit, but they're still going to make significantly more money because of the supply growth?

SPEAKER_01 37:21

Yeah, and I'll be relatively quick. I know you've got a hard stop here, Austin. We do want to get to a couple listener questions. The key point here is Credo was one of our earliest, biggest winners. Um, they they've been a little bit of a laggard relative to some other stocks recently because some concerns, most of their exposures towards copper. People want to see if they're going to get um filling growth with optics as well. Uh they they had some great quotes on this earnings call around a future moving towards a 50-50 revenue split for copper and optics. I was pretty happy with the call overall. Austin's up 145% since March 30th. It's pretty normal to give back some gains. It's a little bit like what we're seeing with Broadcom. So, overall, I was pretty happy with some color from management. And uh I had said I was a little um, I need to do some more research on credo when we did our full portfolio review, maybe six or seven podcasts ago. Um, the main area I was focused on was are some of these new growth markets going to see momentum? It looks like that's playing out. So it's very encouraging.

unknown 38:27

Yep.

SPEAKER_02 38:27

Um wonderful. Well, Eric, yeah, you mentioned I have a hard stop, but let's, you know, we've always said this is a community. So let's carve out a couple minutes for the community here and see if we can't get a couple of QA questions answered before we have to separate. So uh you had a couple questions on power solutions. Um so if if for anybody who's out there asking questions, please continue to ask us questions. Spotify, on X, on YouTube. Uh, you can email us, contact at flywheelpublishing.com or questions at twenty four sevenwall street.com. I think we'll get either of those. So uh we can't always answer every question, but we do our best. So let's look at this from on Jaff Green was on Spotify, and they said, Thank you for the excellent podcast, Eric and Austin, listening to you weekly now uh from near London, England. Hey, maybe he can come uh see you uh and uh at the conference in August. For a future episode, please can you give your latest perspectives on power solutions?

SPEAKER_01 39:21

Yeah, well, this was uh PSIX. We might have accidentally cut it off there. Um it was trading for around $100 a share. It's taken two major blows. Two quarters ago, a margin collapse, it's most recent quarter uh guidance collapse. Austin, the big picture behind this company itself, we have a significant gap right now. We've talked about this behind the meter. Um, there's there's not gonna be enough power in the grid, so companies are gonna basically need to generate their own power on projects. The problem is there's massive permitting delays across these behind-the-meter projects. It looks like we're only gonna have three gigawatts of behind-the-meter projects constructed this year. Next year, it could be up to three times that, but it's probably gonna be lower. You know, you expect if you've got permitting issues, it's it's gonna continue. Um, you know, in total.

SPEAKER_02 40:12

I I want to pause on that real quick. This this actually feels to me, I'm curious to get your thoughts here. This feels like a perfect time to actually pick up something like this because you have talked about the like it's significantly easier for these data centers to generate power locally than it is to plug into the grid where you run into all of these community objections or the community the grid isn't built to provide the level of electricity you need. The Trump administration has been very vocally in support of behind the meter and saying if these data centers are going to be built, they need to bring their own power. So these permitting delays, probably inevitable to some extent when you have projects of this scale. But behind the meter is clearly where these data centers are going to have to generate power. The administration has said as much, uh, though it's significantly harder and significantly longer with more permit delays to try and work with the existing grids and the communities that they power to try and get the level of demand you need. So this this is still a trend that we want to be invested in, and these temporary permitting delays are hopefully giving us an opportunity. Um, but sorry, keep going.

SPEAKER_01 41:13

No, I I think you're right. And that's where the decision really comes down to, Austin is um this is a stock that could easily rally, if we sold it today, it could easily rally 150% to next year because we are in more of an air pocket right now, um, rather than the space not necessarily being compelling. On the other side of the coin, I had recommended this specific stock less because I liked the company itself and more because I like the position.

SPEAKER_02 41:43

Right. And there's other plays. There's Caterpillar, there's Generac, there's Power Systems, there's other ones as well. I think there's another, sorry, there's another like local power generation company that I forget about, but there's there's eight to twelve of these.

SPEAKER_01 41:57

Yeah, so I I think there's a few options. Do you want to exit this market uh entirely? I don't think I want to do that. Do you do you want to sell this and buy something else, or do you just want to buy incremental companies? I think we'll cover that more in a future episode. I'm not gonna I'm not gonna make a decision today whether or not to sell this or not because I need to think of the totality of the market. But um yeah, I I think the bottom line is what you said. I I think behind the meters still a very positive trend. It's it's mostly right now that it is something that permitting's been difficult. That's kind of expected. And uh we're we're in a little bit of an air pocket, but I don't think this changes necessarily the long-term trend. And and if other companies in the space are selling off and we have an opportunity, you know, that's that's probably gonna be where we're we invest.

SPEAKER_02 42:47

Yeah, I I like this corner right now, and I think we're getting a rare window into and and I don't know how every company does their revenue recognition here, but it would not be unusual for these permitting delays to basically just just reduce the revenue that we're seeing reported now. But it but it's it's baked or inevitable once we can get on the other side of those permitting issues. But more research needs to be done, not a full endorsement. This is just a trend that makes sense to have exposure to, I think. Uh and moving on, Eric, we had several questions on Nokia between Twitter and Spotify. Uh Nick Odell said, love the podcast, longtime follower. We made some great money together. Nick, we're just getting started. Stick around, please. Uh and then they said, uh recently, when every FinTwit was posting screenshots, I took some profits on some of your ticker recommendations and rotated into power management. So a good segue from the topic we're just discussing. They've got uh Eton in here, GE Vernova, uh PWR, um Vertiv. So they and then they said, I'm bullish on Nokia, BlackBerry, uh, ALMU. What do you think? It would be nice to get your deep dive on these speculative buckets. I'm also grabbing some NVTS and Wolf on the pullback on May 27th. So uh a lot in there, a lot of tickers. I don't think we're gonna be able to get to all of them, but we did get a lot of questions about Nokia lately. So, what can you say about that company?

SPEAKER_01 44:03

Yeah, no, yeah. They're up a lot here to date. Um, I think they're up 157%. So it's gonna attract attention. Uh anytime a stocks up that much, I wish we would have recommended it. But we we definitely have some misses. Corning's a company I've long been familiar with, covered for years on um Molly Fool. Um they're pretty clearly uh beneficiary when you know what the long-term trend is. Just a little bit of a whiff on that. My my fear on Nokia, they they've got some great assets, they have an old acquisition that's very valuable, they've got general networking expertise. But you know, Austin, this is a company that's looking at probably 49 cents. Maybe they beat that number, but in expected earnings this year from you know 40 cents last year. Um, but but they're valued pretty richly after this running. So, what I think we need to do is we're going to look at some of the conglomerates, something like Corning, uh Nokia, uh, we'll get some other companies in there and and just kind of do a broader comparison of the space to see where some value is. We brought on, if anyone follows me on Twitter, Jorge Aragon, who is doing some research for us. And what I'm gonna do is have him look at this category this week, put some research together, and we'll share it in a future episode along okay, are there opportunities in some of these larger conglomerates, uh, whether in optics or other parts of the semiconductor chain?

SPEAKER_02 45:30

You know, I actually didn't know that you were having him do that research. And I have to say that totally warms my heart. We've talked about how this is a community and we want, you know, you want to put this research and advice out there to the world. And Jorge is someone who was a longtime listener, has now started writing for 24-7 Wall Street. I love his content. I think he does a very good job. And now, look, he's also providing research for the podcast. So look at us, look at us all all under this big family tree here. I love it.

SPEAKER_01 45:52

Um maybe, maybe Austin too. We could we've got a couple more questions. We had one on Wolf, we had one on uh, I don't know if it's cyber's or sievers. I was gonna answer. Maybe let's move that to the next podcast, and uh, we can quickly, you know, preview what you had alluded to earlier with the uh segment with Emmett Savage, and we'll close up this week's episode.

SPEAKER_02 46:10

That sounds great. And the benefit of doing an episode every week is there's now more room to answer these questions on next week's episode. So, Eric, uh thank you so much for the time. I know you're gonna uh play the segment from Emmett right now, so we'll just leave it at that and we'll transition to your interview with Emmett.

SPEAKER_01 46:24

I am now joined by a very special guest that is Emmett Savage, who is the founder of My Wall Street, and we're going to talk about an event I spoke at last year, Emmett. It was a total blast. It's Investicon. You're doing it again this year. I'm going to be there in Dublin, Ireland. Um, but you've got a really exciting lineup. So let's just talk a little bit about the background of InvestiCon, and then we can kind of work our way into why this might be something uh, you know, a lot of listeners in the audience might be interested in.

SPEAKER_00 46:55

Thanks, Eric. Great to see you again, and I'm absolutely delighted to hear you're coming over for what is actually year one, because the one you attended last year we called year zero because we weren't sure if we'd ever do it again. But thanks in large part to you and the unbelievable calls that you made uh in the AI Gold Rush, one year on uh that segment alone has paid for the attendees' tickets. But anyway, so this is year one, and I'm the co-founder of my Wall Street here in Dublin, Ireland, and for years we were having members' events, and they were getting bigger and better and more fun and more rambunctious, and then we decided it's getting a bit boozy because in front it's in Dublin and Ireland. We had one in this huge bar, and honestly, it was like an Irish wedding by the time it was done. We had uh Bill Mann over and we had a lot of great speakers. So that was the My Wall Street event. So about a year ago, uh, or just a little over a year ago, my co-founder went into the Erlingus Guys, the Irish aviation carrier, because they have an American football, just known as football to you guys, uh game here in Ireland called the Erlingus College Classic. And at that time, uh, it all kicked off a few years ago where Navy played Notre Dame, and then there was a few more games. So last year we collaborated with those folks to launch InvestiCon, and that's when I got on the phone to you, and I got on the phone to a couple of other master investors, and we filled the historic floor of the Irish Stock Exchange, we exchanged ideas, we gave when I say we, you and I and our fellow guests gave our top three stocks for 2026 and beyond. Well, it was a great success, we're doing it again. It's on on August of this year, the 27th of August 2026, and we're holding it in the Market Bar, which is renowned for being the most fun bar in Dublin. And Dublin is known as the bar capital of Europe, and Europe is well, you know yourself. So we have a great historic floor, we have some incredible speakers, and we hope to fill the place. And tapas will be handed out during the day, uh, and of course, all the other things that you wash tapas down with. So that's Investicon this August 2026. But we could just see that people love stock investing. That's your listeners, my listeners, they just want to hear tickers of businesses that are gonna go north, and that's what we're there to deliver. So every speaker is gonna uh give their top three ideas for 2027 and beyond.

SPEAKER_01 49:36

Yeah, and I mean, as you mentioned, I I've been to any number of investing conferences or events. I'm in the industry, I'm just gonna be asked. Most of them are boring. This is anything but, as you notice, number one, it's in the market bar. It we're gonna be able to hang out, you're gonna be able to talk with a lot of people. Number two, your lineup's incredible this year. You know, um, I'm speaking obviously for people in the audience. I I hope they liked me and and would like to hear more about my favorite stocks, but you also have David Gardner, my former boss, one of the most legendary investors in the world. Bill Mann, the CIO of Motley Fool Asset Management. You have the CIO from Texas Christian and Peter Slager, who runs Compounding Quality, one of the biggest, um, you know, one of the biggest newsletters in the world. And yourself, Emmett, I should say you're no slouch with an absolutely incredible track record that includes no shortage of hundred beggars that you've held. So this is just an incredible group of people. I, you know, I am speaking, but I am also extremely excited to be able to hear about. So one of the reasons we're sharing this with everyone today is because this is in August. Um, for some people, that could be a trip across the pond, if you will. But you know, I know that we have listeners in Europe as well. So, you know, planning ahead, if this sounds interesting, is at investicon.ie. Um, you know, Emmett, so what what are what are a few things that you're most excited about for the event this year?

SPEAKER_00 51:04

Well, without blowing smoke at you, I'm truly excited by what stocks are got you're going to tell the room. And as you know, what we try and do is make sure that we come up with ideas that are we're just not thrown around everywhere. So all the speakers are going to come up with their their hidden uh favourites, if you will. Um, so I'm really excited about yours, and I'm not gonna even ask you until we're live on stage, but also I think um the man with the crystal ball, David Gardner, who has called out some of the most amazing investments at the most incredible time. He told the entire Motley Fool subscriber base to buy Amazon in 1997, he told them to buy Netflix in like 2004. Like, this guy has a crystal ball, so I want him to bring that with him. So I'm very excited to hear what David uh what David, the fearless David Gardner, uh tells us to buy because he is the creator of rule-breaking investing. He wrote a book about it, he lived it his 30 plus years of investing. So I'm very excited about David. You meant Bill Bill Mann is just one of the most um intellectual investors I know, and the guy is just an outpouring of intelligence and also wit and charm. So I'm really excited to see what stocks he has paid, he's gonna pick for us. And as you said, Peter Slagers. Peter Slagers, there's a lot of investing newsletters on Substack. There's a whole pile of them. I think there's like 400 newsletters, and Peters is ranked number one by audience size. Um, uh Jeff Bezos is one of his subscribers. So, like he um he is someone who has developed a methodology in isolation of the rest of us. He's a Belgian former asset manager who developed a method for finding stocks that's almost like it's analogous to the country Japan. You go to the Japan and you realize these guys have arrived at the same point as us, but they took an entirely different route. Um, every little thing in Japan is different. Well, when I look at the way Peter Slagers has uh researched and found stocks, we're all on the same path, and he's discovered some amazing companies in his specific methodology. So I'm I'm really excited. You know, we could have picked the phone to anyone to come and join us, but I'm really happy with who we've got uh coming over to Dublin this August. And you know what, folks? For those in the United States, I'm sure you know Ireland is the 51st state. It's like it's a little bit of America that floated off in the other way.

SPEAKER_01 53:37

It's the Hawaii, it's like the other Hawaii, and the attitude And you get to meet people in the middle, you get to go to a football game during it too. There's oh yeah, you know, the college football classic, right?

SPEAKER_00 53:47

So uh and we have uh a bunch of tickets under the desk, and um and no one will be stuck for a ticket, put it that way. And it's there's tail tailgating is new as a new thing to me. And last year I went tailgating, and I can see the appeal. Why did why why did I not know about this? But last year, InvestorCon was kicked off by our head of state. So um just as the head of state of America is the president, our head of state is known as the Taoiseach, which is the Irish word for prime minister. So, our prime minister at the time, um Simon Harris got up in front of a room full of CEOs, and I was down the back eating sandwiches, laughing, chatting with the CEO of Uber and eating finger food and drinking beer. And I hear up on stage our head of our head of state go, and I'm delighted to say that in collaboration with the Erlingus College Classic Football Game, I can announce the an unveil Investicon, which will be held. And I'm I'm like, I'm nudging the guy going, shh, I want to hear that. So we're gonna try and get our head of state to do something similar this year, which is an easier ask than trying to get you don't just ring up the White House and go, hey, can can Donald Trump kick off my event, please? But in Ireland, you have a better chance. I think we are a little bit smaller.

SPEAKER_01 55:06

I think it's the first event I've ever been at kicked off by a head of state. So that's a that's a pretty cool trivia fact there. I mean, I I will say too, I'm just looking at the numbers, you're talking about the stocks and the value you get from this. Last year, uh I had featured Vertiv, um, which I I have recommended on the podcast, but that's up over 160% in a year. And that was the kind of featured stock I was discussing at this. So, you know, you look at you look at what you're getting, and you know, for anyone who's looking at joining Investicon, number one, it's not expensive at all for an investing conference. Um, you you are not doing this to make money, that's for certain at the way you're pricing it. But number two, you look at the ROI from it and being able to have a room full of the top investors sharing their top ideas. Products like this normally sell for thousands of dollars, let alone being able to meet people. Now, I'll throw in a little extra as well. You know, for anyone who's an AI investor podcast listener who wants to come to this, shoot me an email as well if you are attending. If enough people are joining, we'll we'll do something on the side in addition to Investicon where we can meet up for a pint or uh, you know, a lunch or something and be able to just, you know, talk about stocks and and get to know each other and just doing a community event. So, you know, I will add that as well, just because this is such a neat event you're putting together. I I wish there could be more of these in the world, but I think to a degree they're not because the amount of work you're putting into this relative to the value, this is truly a passion project for you. Oh, it is entirely. Just because of what you said, how much you love this type of event.

SPEAKER_00 56:45

Well, thank you for noticing that out because what I'd love to do is build a south by southwest for investors, and those people who take a stake and back us now by buying a ticket will always have first refusal on future tickets. Um, and that especially goes out to your listeners because it's it's an honor to have you there. It's not a short journey, but I do know to touch on the point you made, anyone who who attends is getting access to a really special network, not least of all to you and to the other guests.

SPEAKER_01 57:17

And so let's let's one more time before we before you hop off, sharing the details. How do people get to the website? What's the information? And we'll also put in the show notes for everyone, but let's let's talk about for just a minute.

SPEAKER_00 57:29

So a minute on that. The website is Investicon, I-N-V-E-S-T-I-C-O-N dot ie, which is an Irish top-level domain. So dot i e. Investicon.ie. The event is an all-day event on Thursday, 27th of August in Dublin, Ireland. And I'm really looking forward to seeing you, Eric, and your listeners there.

SPEAKER_01 57:52

Well, I'm looking forward to being there, Emmett. Any anything else you want to add before we go?

SPEAKER_00 57:57

Um, buy two tickets.

SPEAKER_01 58:01

Well, that's a great way to close it. Thank you for it. Check check out the website. I would love to personally be able to meet some of our listeners here. We're we're having Emmett on because this is truly something we believe in. Like we said, this this isn't about making money. All all the cost for the tickets just goes back into putting the production on. This is part of this building a community. Um, especially, and like I said, you're gonna have other people like David Gardner here, one of the most influential people in how I personally invest in the world. You're gonna have Emmett, one of the greatest investors with the greatest track records around finding these hundred bagger stocks, and you're gonna have someone like a William H man. I can tell you what, I have gone on trips to any number of places with William H. Mann for our work. He is he will not be boring, I will tell you that. It will be an entertaining talk, and and that is that is the one promise that you don't get at many other investing events. So if if you haven't been to one, um if if you have an opportunity to make it out there, I know it's far for people from America, but that's why we are talking about this point. If you're in Europe, it's it's a much shorter trip. We would love to have you there, and I would love to hear from anyone making the journey. So, Emmett, we we thank you for the time. And and uh once again, we we hope everyone listening will get a chance to uh chat personally with you at InvestiCon as well.

SPEAKER_00 59:21

Thank you, Eric, and thanks to your listeners too. And I'll see you in August, pal.

SPEAKER_02 59:27

The AI Investor Podcast is for educational purposes only and should not be considered investment advice.