英伟达是一家伟大的公司，不会归零；尽管过去四次财报超预期后股价均下跌，但一旦宏观担忧消退，财报后可能会反弹。

What's going to happen with Nvidia earnings?

This is something to know though for companies like Nvidia. Markets expect that market is going or that Nvidia is going to beat expectations. And so the way you have to look at Nvidia is not oh Nvidia is going to beat earnings. It's that we already expect Nvidia to beat earnings. You know these are the earnings expectations. Okay, we expect those to be low. The market's expectation is earnings are going to come in here. But markets expectations are built on historically they beat earnings by X%. And so even if you miss like you could beat on guidance but you miss those market expectations stock craters.

So Nvidia just raised prices for their server chips by about 15%. And it's leading to expectations of oh my gosh this is going to lead to bigger margins at Nvidia. My expectation is a lot of those price increases are solely because of memory, which that makes people really bullish on memory, that higher prices can sustain for longer.

Now could that actually benefit Nvidia? That's another argument. I could make the argument that Nvidia could actually benefit from memory stocks coming down because they could keep uh GPU prices elevated but actually uh make more money because they're spending less on cost of goods sold for the memory supply. It's possible.

Uh yeah, I mean this is a hardware index. So I've got uh Nvidia, TSM, Broadcom, Micron.

you could end up getting Nvidia pull a massive rally here post earnings and and you know, once you get through Kevin Worsh and whatever, uh it ends up uh you know, skyrocketing again, you have your next hardware 2.0 rally. When Nvidia goes down 33%, it's going to come back.

But if it booms on, let's say, Nvidia earnings, it lowers the floor and you can kind of trail with it.

If Nvidia goes down, even if Nvidia goes down 80%. Just to be ridiculously extreme, it's not going to zero.

Obviously any company could go to zero, but you know I would say uh 10,000 3x leveraged ETFs will go to zero before a company like Nvidia goes to zero, right?

So that way Nvidia earnings come in and the entire semiconductor index rebounds because we get over some of the Kevin Worsh or Scott Besson concerns or Iran D-Day concerns and this puppy rebounds like it deserves to.

Best case scenario, you're allocated in such a way it doesn't matter if Nvidia goes down 80% because you look at it and go, "Whatever, it's on sale. I'll buy a little more. I know it's not going to zero." Nvidia is a great company.

Wait, I want to hear this. for Nvidia's chips. Full circle. Nvidia doesn't need to profit on the models themselves. It profits on everything that runs on them. The Grock chip going live today is the hardware half of that same bet. The speed layer for the open models Nvidia now wants to build itself. For all that though, look at the share price down about 2.5%. Stock just can't catch a bit. It's fallen wet for the seven straight days, its longest losing streak since September 2022. Down almost 7% over that stretch. As Missou's Jordan Klein put it in a note this morning, buyers are in just no rush ahead of Wednesday's night and Wednesday night's results. Why try to be a hero ahead of that print?

Uh, well, speaking of it, I mean, you're going to be talking a lot more about it between now and then, Christina, I have a feeling. But do we have any key expectations there in terms of of of what we'll all be looking at with Nvidia? Assuming as usual, they report a very strong number,

which is, see, you use the word assuming, right? The market already expects Nvidia to beat to provide these strong numbers. The market already expects the CEO to be extremely bullish saying that uh you know everybody's

which we spoke about just in the last hour and also why you saw uh price hikes you know reports this weekend saying they're going to increase prices for their systems anywhere between 15 and 17%. And of course the circular financing narrative that came up with that $500 billion uh initiative with those six finance years. You know I think the narrative that Jensen Wong and management will have to be on the call is just it's not about circular financing. This is us deploying our money in smart ways. We have a lot of money on the in terms of free cash flow and that is why we are very aggressive right now and acting. Keep in mind Nvidia concentrates their risk by uh accelerating their investments into these smaller companies. It's great when it goes up, but when it goes down, it's an accelerated risk. Now you have fewer orders and losses on your books.

Know what Nvidia built into the prior pricing. So, there's a lot we don't know at this point. Recall that that Jen Sinwang has said repeatedly that they

straight days, its longest losing streak since September 2022. Down almost 7% over that stretch. As Missou's Jordan Klein put it in a note this morning, buyers are in just no rush ahead of Wednesday's night and Wednesday night's results. Why try to be a hero ahead of that print?

But do we have any key expectations there in terms of of of what we'll all be looking at with Nvidia? Assuming as usual, they report a very strong number,

it shifts the risk. It shifts it off of Nvidia's balance sheet elsewhere. And that is most appropriate. I mean, not really because if Nvidia is taking stakes, they don't actually shift the risk at all. They actually amplify their risk. So the guy's wrong.

Generating roughly a billion dollars of free cash flow every two days. they have a responsibility to put the cash on their balance sheet to work. And if they're big believers in AI, like we are, and I'm sure they are, why not invest in the AI opportunities? So, sort of the classic eating your own dog food. I think the optics of circular financing, that is putting money into your customers to buy your product, it's not a great look. I I totally get that. But Nvidia has to put its cash to work. I think what would soften the blow for

You literally do not need to put your cash to work. You could literally sit on it. Damn. In buying back its own stock

and you expect them to do that. I do. I want to talk about the distinction between depreciation and the economic lifetime of a GPU because right now what I see is lots of Nvidia executives posting on social media about Vera Ruben being in full production at the same time like that KKR Black Rockck deal. They're trying to sell that this is a highly utilized cash flow generating asset for many years to come on older obsolete generations. How can both of those things be true at the same time?

I think they can be true because of the way the market evolves that the most leading edge applications, the most demanding will require the newest generation of accelerator and in order to be efficient, in order to have the best profitability, one wants to utilize the most leading edge tool because it will be more efficient. Basically, fewer tokens pulled. Uh however, we've seen that the older generations, the ampers, the hoppers are still being used. And so what what we're observing is the market's broadening in that the most leading edge applications, the most demanding applications will require the newest generation, but the older uh GPUs, the older accelerators have useful lives that could extend many years.

Simon, many of your industry colleagues, including our our team at Bloomberg Intelligence, expect to hear something about China. Does it matter to you if Nvidia can sell some kind of GPU into the Chinese market?

No, honestly, not not really because Yeah. No, it doesn't matter. That's when I went heavy on Nvidia and then I launched an ETF around pricing power chips.

But I want to look at the pricing for Google really quickly. I just want to look at Google's debt and see what that's trading for on the secondary. Okay, cuz they raised $84.75 billion in and that was the upsized round in June. That was basically right at the SpaceX suckening pulling all that uh money out of the market. That's where they raised some good money. Basically timed it perfectly at the te peak.

Gus is asking biggest question is what pops the bubble. I have my eyes on anthropic. uh they they are very interesting uh because if their profitability doesn't accelerate uh then then we have a problem on on what we're underwriting a lot of data centers for, you know, especially under the Elon hype of, oh yeah, we're going to be able to charge $30 to $50 long term for these compute prices. Really? Are you really going to be able to

Okay. So, uh, let's go. Let's take a peek here. Okay. Where is I want to see what Google's trading for now. The Q's Q's are still slipping a little bit here. We're sitting at what are we at? We've got Yeah. down a buck four or 14 right now. Hood's green. Amazon's green. Palunteer's only down 169. Now I've got Bitcoin's almost at 80K. That's awesome. Okay. So, okay. Got it. All right. Now, what about the googs? And then I want to go hit Nvidia.

Okay, so this is up 14 now. It's still a little bit under where Birkshire acquired, which I want to say was 359 with some of the discounts they got cuz they, you know, that was announced somewhere around like the 370s range.

Um, okay. Let's go take a peek at that. And then we have a couple of those journal articles to look at. So Google's price Google after their suckening that was their sort of top because they issued at the end of May. It was like May 29th. Yeah, that was their final. Yeah, they sort of topped out on the 22nd. So I wonder how much writing was on the wall for Okay, the Google preferred. Here we go. So, the Google preferred was two $9.6 billion $50 par value, 6.25% mandatory conver uh convertibles. Oh, wow. They actually have a premium conversion price. Uh so they convert at 440 bucks. 444 to 440. I see. Okay. Either way you get converted though, it just depends on what ratio you get. So it gives some downside protection basically. That's a little complicated, but that is very interesting. Uh, that's an interesting way to raise money because Google's raising at 6.25.

SpaceX coreweave we know is somewhere at uh over 10%. And that we could see with the Wall Street Journal. Coreweave 10%. The financing. Yeah, that's this Cororeweave raises debt. And this is another thing that's interesting about debt right now is Coreweave has a junk rating. They're raising at over 10%. But they don't actually disclose that they're raising at 10%.

Okay. Let me pull up coreweave and then we'll be able to see that. Okay, so coreweave corewave coreweave corewave coreweave they have earnings report. Here we go. August 11th. So this is the coreweave earnings set. And if we scroll down to I should have bookmarked it, but somewhere here we're going to see their weighted average cost. And I want to say it's 9%. H I don't know where it is. Weighted average. No. 9%. Nope. 9%. Dang it. Let me see if I can find it another way. We'll find it. But I think this will be very important for seeing just how impactful all these the these uh rates are that are coming out. So Amazon, for example, I'm just looking at some of their bonds. Amazon issued bonds for 4.25. Those are a five-year bond, 4.25%. 25%. Their 30-year bonds are at 5.8. Oracle's raising money on a three-year at 4.5 and on a 10ear at 5.7. SpaceX is raising on five years at 5.35. So SpaceX is raising for more. Okay. I want to see some more of these. I want to see like coreweave. Yeah. Okay. Here's coreweave. So coreweave. Here's a fiveyear at 9.75 and then they sold it for a discount. So that's how you got over 10. That's interesting. XAI was issuing debt at 12%. So they actually got a big discount by merging or getting acquired by SpaceX. They reduced their cost of capital substantially. It's actually kind of smart. Meta on the five years raising at 4.5, but they're also raising 40-year debt at 6.4. 4. All of those become more expensive unfortunately as rates go up. So that also hurts the uh what's it called? Uh the outlook for these hyperscalers and spending Besson's meeting or press conferences in like two and a half hours. We're still bond yields bond yields right now. Fortunately, they're still all in the red in anticipation of Bessence call. So, that'll be interesting.

Oh, let's see them talk about the foldable phone here. Uh, is foldable phones, but it's actually double that in China, right? So, the vast majority of foldable phones in use in the world are in China. So,

Nvidia just posted this. Nvidia's Grog 3 now in full production with worldclass speed for agentic AI. This is obviously direct competition to Cerebrus.

Nvidia today announced that Grog 3 LPX is the interactive AI inference accelerator. That's a fancy way to say our cerebrous competitor. It's now in full production. An extension of the Vera Rub platform. The Gro 3 LPX delivers a major boost in AI inference by enabling ultra fast token generation for highly responsive agentic systems.

Okay, let's go look at the Nvidia deals. Nvidia's Grog 3 now in full production with worldclass speed for agentic AI. This is obviously direct competition to Cerebrus.

That's a fancy way to say our cerebrous competitor. It's now in full production. The Gro 3 LPX delivers a major boost in AI inference by enabling ultra fast token generation for highly responsive agentic systems.

Now coming up, we're going to get back to Nvidia as investors prepare for the Super Bowl of earnings season. Stock down 2% down for a seventh straight day. We'll have the details.

Nvidia earnings coming up. Nvidia earnings on deck Wednesday

post Nvidia earnings especially with Nvidia earnings on deck Wednesday

Nvidia competes with their growth product which they just announced is in full production. And so, you know, then you kind of get stuck and people just use the Nvidia product and the Cerebrus product doesn't go anywhere, especially if Nvidia can scale faster.

And then we still have the Nvidia announcement to look at because they just announced that. I think it's kind of strategic that why they're doing this right away, right before uh oh, with Nebius, the first to adopt.

let's now go on to Nvidia for a moment.

In Nvidia discusses perplexity investment at $30 billion valuation. Wow. Nvidia and Salesforce in the spotlight this week. Oh, good old earnings. Good old earnings.

While Nvidia costs are going up, memory chip prices are rising, raising the prices to maintain. Right. Right. Salesforce will be the same day as uh as Nvidia. That'll be very interesting.

Wall Street is counting on Nvidia to keep the party growing. Going growing and growing. Okay, let's go get let's try.

Elon Musk says SpaceX's first AI satellites provide powered by Nvidia will initially launch in the fourth quarter of next year and hit significant scale in 2028. This is not a surprise that this is just, you know, 2 days before the Nvidia earnings, you know, it's sort of like the Gro announcement.

SpaceX in partnership with Nvidia has designed a space optimized Vera uh Revenuven uh Envy Link 72 system for launch to orbit in Q4 of next year with significant scale in 2028.

That sounds good. And then of course, uh, you've got Nvidia replying with a little clap emoji. So, it's like, hey, Elon's got to pump it up before uh before uh before earnings. I I think that the space compute thing is, you know, a little ahead of schedule and it it's being hyped a little ahead of schedule. Put it that way.

Micro processor made by Nvidia powering Moscow's AI drones. That's not good.

I think at the end of the day, as long as earnings are hanging in there, and they are, and I think this week we have Nvidia on Wednesday and then we have the Fed speaking on Friday. I think Nvidia is going to be the bigger story. if they can prove that story continues and especially what they're saying memory chip and how that's affecting their demand and their customers affordability. I think that's going to be a lot more important than what the Fed says or doesn't say because people want clarity.

Do you agree though that Nvidia is the the biggest story this week? Because you don't expect

And I'll just add real quick on on the Nvidia side of things as as Courtney and Steph just both both argued and I would agree, everyone expects them to beat raised that the the quality of the of the earnings report in that sense is not really a question. The issue was going to be around as as Steph alluded to the what we'll call the circular financing and the the funding of the AI infrastructure.

I imagine what she's going to say is the company's position is we have all this money. We generate a ton of money and we are seeding our future and the industry's future for the next however many years.

And look, the stock's been on a six-day losing streak. It's down again. And that was after a nice move higher. So, it maybe complicates the story for investors a bit going into Wednesday because investors right now are just hesitant what's going to be that next major catalyst to move the stock, which is maybe why they're not getting in.

Uh Dan mentioned it, the numbers at this point really aren't the story. Beat assumed across the board. We know that demand surging, lead times have stretched from 6 weeks a quarter ago to nearly 40 now. Wall Street actually wants is specifically in the guide, the first real read on how fast the new Reuben chips are ramping the next iteration.

Then there's also the margins. Nvidia told customers it's raising AI server prices as much as 17%. It's reported that uh driven by soaring memory costs. The question is whether that protects its mid70s gross margins. You can see on your screen which is estimated to decline in Q3 maybe even more or if memory still eats into it.

Watch too also for the Vera CPU a new multi-billion dollar line as AI agents take off. And then to your last point all of you on the panel hanging over it is the circular financing debate. Nvidia is bankrolling the same customers who buys these chips. Like it's up to $15 billion backs stop for an OpenAI data center in Ohio. That's just one example.

Speaking of our guy Jensen

drained by the ability to finance this build out and what he's doing is alleviating that finance constraint so that he can grow uh as big as the the TAM actually is right as talked about in our previous I think Wall Street banks and private equity firms providing financing based on the expected cash flows that will be delivered from these GPUs. In some ways, Nvidia is kind of becoming the central bank of AI.

Yeah, we've made that reference as well that they're that Jensen's powered, right? You have asset back financing and Did I shift gears for a second to tell you what's so brilliant about what Jensen did here? That's a Steve Jobs line.

Unlike the activity of animals which are observed, outputs of LLMs are not a reliable guide of what might be going on underneath. This is because the training of models requires feeding to them trillions of words of human produced language.

These contain countless accounts of consciousness and how humans convey feelings to each other. Right. The sum total of this training is I don't know what the heck that word is. That's crazy. I think it like to me my my takeaway generally in this that LLMs are really good at replicating us because they're trained on us.

Okay, so let's see here. LLMs over time, what do they say? Biological traits they score lower. All right. Not so useful. What is this? Don't care about the seafood shack.

Local business group sues mom Donnie over plan to open municipal uh grocery stores. That's interesting.

All right. Let's see.

Excuse me. Oh, yeah. Okay. Here we go. local business group sued Manny Coalition blah blah blah will put us out of business basically. Well, yeah, I mean that makes sense. The government's basically going to loss lead this escalated US Canada threatened diesel prices man getting a little boring.

What's going on? Okay, where's the entertainment? Go look at them sticks again. We'll have to start talking about mold again. Still down 80 bips on the cues. Okay, so Bloomberg, what is this?

Musk sees SpaceX's orbital data center launch near end of 27. I mean, his time frames are always a little funny, but I'd like to see what they're talking about.

Broadcom credit risk soarses on mega debt financing. Yeah, it's always debt financing. Uh, let's see here. Okay, this is interesting. Decreases in home values due to general economic conditions can lead to an increase in meritus and non-mmeritus construction defect claims.

Interesting. I mean, that's not a surprise. And I also got some trends here on the warranty reserves and how they've sort of been moving. And pop those up really quick. So, okay, let's throw this up on screen and then we'll go to the SpaceX one.

So, that was here housing. It gonna work. Oh, not yet. Come on. There we go. Wall Street Journal on construction defects. Okay, perfect. Now I can put the picture in.

Okay, perfect. So, basically, Wall Street Journal has a story on increasing construction defects related to mold. Uh I pulled some data and found uh warranty reserves and uh acred liabilities including litigation reserves litigation reserves uh rising.

Uh there is there is a link between uh values going down and uh more lawsuits. And then let's just throw in my my thesis. Why is this happening? Okay.

Okay, then I want to see the SpaceX store and then we can always summarize the housing one. Cool. Just put my notes somewhere. Okay. So, what's going on here with SpaceX?

So this is the Groke announcement and then Musk, you know, wouldn't shock me if Jensen is like, "Hey man, can you give us a shout out before earnings?"

Public approval of Iran war falls to 31% and Trump's approval sits at 33%. Oh, that's interesting. Pretty low. So, let's go to let's just go see what else is going on out there.

Times Trump the tariffs. We saw this. Go see what some of the institutions are saying in a moment, too.

Okay, see what we got over here. >> Very viciously. >> Is there a level in the 30-year yield that would cause the Fed to move in? Because you're saying the market's in control. How does the Fed react then?

>> Well, first I think the 30-year while it's valuable for a lot of long-term investors to model their portfolios, the 10-year is the really the most important rate to look at. That's if you are a CFO today, that's what you're looking to model your business projections. If you are an investor, that's what you should be looking for. So the 30 year, I think, is is not the right rate. I would argue the 10 year is the right rate to look at to figure out where the economy is really going in the longer term. When you think about kind of what these long-end rates are saying, what are bond investors kind of telling everyone about inflation and about the macro environment right now? >> So, first of all, bonds investors should be really satisfied today.

>> They have been chasing spread. They've been really effectively trying to figure out if spreads widen or contract to earn their their outcome or yield. And the rates resetting give them some comfort. Now the downside of that for bond investors is they have very little to work with. Now yields are so com the spread is so compressed that if you pick the wrong credit you will have losses on the credit side and that makes it very tricky to be a bond investor right now. So the end investor is much better off. The fixed income managers have to be smarter in this environment to pick the right credit. So it's a different different situation now in the marketplace.

>> Does that create maybe a little bit of stasis? I mean, we had the head of PGM's business, fixed income business on last week and he said something similar. He got a quip that, you know, he's a credit investor who hates being a credit investor right now.

>> Yes. Yeah. >> You are so right. And then I would I would expand that Roma to say the credit market is not just public fixed income. There's a very very large and growing private credit market. And so from my standpoint, I would look at credit across both public and privates. And I know for for the longest time people have to choose between one or the other. I would say this is not the time to choose between one or the other. You pick the liquidity you want, you pick the risk level you want, and then you can you can find value everywhere.

>> Well, can I push back on that because I mean, let's just fold in all of this debt issuance that we're seeing surrounding the AI trade because that definitely seems to be competing to a certain extent uh with uh basically any other sort of uh fixed income asset right now. uh is that something that will sort of uh rightsize itself in due time or is this going to be a longerterm story where as long as these issuers are I mean they're coming to market with with with issues that are bigger than some of these treasury auctions.

>> You you are absolutely right. We are seeing a complete rerating of how large our credit markets can get. Um, our public credit markets have always been large, but the private credit market got very large and now you see a lot of crossover credit happening. You could argue where it's going to be sourced from. At some point, you get to a natural capacity limit of how much credit could be issued, but right now they're all rerating. And they're rerating because you have these borrowers who have never borrowed before. So, they are not leveraged. They're not under stress. And that's allowing the market to expand today. They will hit their natural limits and like any credit cycle you will see stress but that is not for today.

>> Talk about those limits though and kind of when principal expects to hit exposure limits to single names to names that haven't been raising and now suddenly are raising billions.

>> Our view is in certain parts of the economy you are at that limits. You know, there's a lot of talk about AI and AI is is not just a credit issue or a stock issue. It's an economy issue and there are parts of this economy that are going to get resized because of the AI effect. And so from our seat, you have to look at credit in the context of where the economy for that particular sector is getting resized. What might have looked well 10 years ago doesn't make sense now from a limit. And we have to constantly think about the flywheel effect. Are we

>> I always think it's interesting when the suits start getting on saying, "Oh yeah, you know, we got to be a little more conservative with the debt. You know, we've been a little too aggressive with the debt 10 years ago. Bring on the debt today. There's still opportunity, but we're going to be a little more conservative." Yeah. Yeah. Yeah. Whatever. Clown show. >> Corporate debt issuance. like the bigger things that can really

>> Oh, they're talking about debt issuance, too. >> But that's where they're much more concerned about what's happening with things like the national debt right now. That's getting a lot harder to swallow. Those huge numbers that are coming out there and I think that's probably going to have more of a weighing. But I think

>> think at the end of the day, as long as earnings are hanging in there, and they are, and I think this week we have Nvidia on Wednesday and then we have the Fed speaking on Friday. I think Nvidia is going to be the bigger story. if they can prove that story continues and especially what they're saying memory chip and how that's affecting their demand and their customers affordability. I think that's going to be a lot more important than what the Fed says or doesn't say because people want clarity. I think the one thing we know from work to this point is he doesn't want to give that much information. People just need to get used to that.

>> Well, I just wonder if he's now in some respects forced to give more information. Don't forget it's not a news conference. It's no Q&A. It's a speech. And we remember when Chair Pal gave his speech right before the rate hike regime was 8 minutes. So who knows what we're going to get.

>> I've argued on the show AI is a much bigger story than the Federal Reserve and I've I've made that case. I'm certainly not alone, but I made that case for a year or two. I'll just add real quick with respect to Worsh everyone's focused on the forward guidance side of things. If there is going to be a surprise from him this weekend, it's going to be him, I don't want to say feeling the pressure, but choosing to respond to the demand, not for forward guidance, but for some call.

>> So, Jackson Hole starts on the 27th, but Wars speech is actually the morning of the 28th. How interesting. She is right. Uh, the agenda comes out on the 26th.

>> and how that's affecting their demand and their customers affordability. I think that's going to be a lot more important than what the Fed says or doesn't say because people want clarity. I think the one thing we know from work to this point is he doesn't want to give that much information. People just need to get used to that.

The reception is on the 27th. Wsh delivers the opening speech on Friday and then you get like the interviews and panels and all >> regime

>> guidance. I'm not telling you today, this is what he was saying. I'm not telling you today where I'm going to hike or cut, but I feel like I can give you the ideas in my mind on what the mechanisms are to get us from point A to point B. Rick Reer agrees with the reforms that Chair Wars is talking about making and even he last week when he was sitting here says the market does need a little bit more so maybe that it can settle down.

>> was 8 minutes. So who knows what we're going to get. Do you agree though that Nvidia is the the biggest story this week? Because you don't expect

>> They need better tools to figure out the accuracy of inflation, right? Because that's the other thing that they're focused on. It can't just be core PCE. He's looking at a lot of various different metrics. Looking maybe at the trailing three month. That's what Rick Reer also talked about. The trailing three month is 1.6% 6% in CPI. So, there's other ways to look at inflation and I think that's what they're going to try to say. And I just think it's too early, Scott.

>> and she's going to be here in a second after you're finished, but go ahead, finish your phone. I'll bring her. >> Let's bring her in. U Christina is is waiting anyway to uh to talk to us. And look, the stock's been on a six-day losing streak. It's down again. And that was after a nice move higher. So, it maybe complicates the story for investors a bit going into Wednesday because investors right now are just hesitant what's going to be that next major catalyst to move the stock, which is maybe why they're not getting in. Uh Dan mentioned it, the numbers at this point really aren't the story. Beat assumed across the board. We know that demand surging, lead times have stretched from 6 weeks a quarter ago to nearly 40 now. Wall Street actually wants is specifically in the guide, the first real read on how fast the new Reuben chips are ramping the next iteration. Then there's also the margins. Nvidia told customers it's raising AI server prices as much as 17%. It's reported that uh driven by soaring memory costs. The question is whether that protects its mid70s gross margins. You can see on your screen which is estimated to decline in Q3 maybe even more or if memory still eats into it. Watch too also for the Vera CPU a new multi-billion dollar line as AI agents take off. And then to your last point all of you on the panel hanging over it is the circular financing debate. Nvidia is bankrolling the same customers who buys these chips. Like it's up to $15 billion backs stop for an OpenAI data center in Ohio. That's just one example.

>> That's where this um I'm going to pull it up. This uh there was a section of the all-in pod that drove me nuts because Sachs just laid out this data that I just thought was not right and I think it's worth talking about. and then you get like the interviews and panels and all

Uh let me go find it. Okay. Oh, I found it. Okay. That's Yeah. Where they also talked about the DSPs and all that. Okay. So, this is the like a week ago one.

Let me see here. This was Yeah. nine days ago. Okay, let me pull this because this is like the foundation of what's going on with hyperscaler spending and we need to find 40. Let's see where in it they specifically talked about 100

See if I can find that. That was finance plans. How the market can all fall apart. Yeah. Okay. Here we go. >> because investors right now are just hesitant what's going to be that next major catalyst to move the stock, which is maybe why they're not getting in. Uh Dan mentioned it, the numbers at this point really aren't the story. Beat assumed across the board. We know that demand surging, lead times have stretched from 6 weeks a quarter ago to nearly 40 now. Wall Street actually wants is specifically in the guide, the first real read on how fast the new Reuben chips are ramping the next iteration. Then there's also the margins. Nvidia told customers it's raising AI server prices as much as 17%. It's reported that uh driven by soaring memory costs. The question is whether that protects its mid70s gross margins. You can see on your screen which is estimated to decline in Q3 maybe even more or if memory still eats into it. Watch too also for the Vera CPU a new multi-billion dollar line as AI agents take off. And then to your last point all of you on the panel hanging over it is the circular financing debate. Nvidia is bankrolling the same customers who buys these chips. Like it's up to $15 billion backs stop for an OpenAI data center in Ohio. That's just one example.

>> value. laid out this data that I just thought was not right and I think it's worth talking about.

It was see. Come on. Overbuild. Okay, I will find that. Where they also talked about the DSPs and all that. Okay. So,

Oh, but I can't. No, it's impossible to find. Oh, whatever. I might just not reference it, but it was it was in this segment. just slipped together. That'd be a disaster for everyone. It's just that you get a glut of compute and you get an overbuild.

>> That's it. You get an overbuild. Yeah. nine days ago. Okay, let me pull this

>> And in the same way that we had dark fiber after the com crash, if you had dark GPUs, that'd be a because this is like the foundation of what's going on with

>> Okay, so that's at 103. But where does he mention? hyperscaler spending

So that's at 103. Call it 20. and

Uh where does he mention the 100 ARR we need to find 40. Let's see where in it they specifically talked about

>> outcome? Because it is so hard to gear. Did I shift gears for a second to tell you what's so brilliant about what Jensen did here? 100

you know, no >> but where's the finance plans. How the market can all fall apart. Yeah. Okay. Here we go. was it's impossible to find. Oh, whatever. I might just not reference it, but it was it was in this segment.

the 100 ARR Nvidia is bankrolling the same customers who buys these chips. Like it's up to $15 billion backs stop for an OpenAI data center in Ohio. That's just one example.

what Jensen did was so brilliant it's because the numbers are getting so billion dollars of capex the company just raised hundred billion and it can grow uh as big as the the the TAM actually is right it's removing that constraint so for just to take one example Elon wants to add somewhere around six to eight gigawatts next year. We know that that would cost3 to400 billion dollar of capex. The company just raised hundred billion in its equity and debt offerings. So obviously they would have to go out and finance that somehow. And as we talked about on our previous episode, the simplest way to finance it would be to get seller financing from Nvidia, especially given that the payback period could be as quick as one year. So now Jensen is creating the you could say the line of credit using these big banks using these big private equity shops and he's making that available and that's going to now benefit all of these downstream purchasers.

But that's still not where my Elon comment is because he buys the 100 ARR uh hook line at sinker. run rate? We talked about this ax a bunch will end the year between 100 and 120 billion dollars. This is an extraordinary ramp up of revenue that we have never seen in Silicon Valley uh at a $2 trillion valuation. Obviously, you all can do the math, but it's 16 to 20 times sales, which is a segment of what space that might be.

thought as you know Elon said that they were expecting right so if all of a sudden there are too many people racing to provide this compute of compute and you get an overbuild and in the same way that we had dark fiber after the dotcom crash if you had dark GPUs that'd be a disaster for everyone especially if you built out your compute infrastructure expecting a spot price of $30 to $50 a watt as you know Elon said that they were expecting Right. So if all of a sudden there are too many people racing to provide this compute and now there's an over supply and the market crashes that'd be the risk factor. In a weird way all the political headwinds I think ensure against that outcome because it is so hard to build data centers for all the reason we said there's a whole

this is an argument that has been circulating as well. I personally think they're these companies hedge by building in multiple places on purpose to avoid that panic hysteria hoax going on that actually it's those political headwinds I think will almost guarantee that there's not an overupp relative to the exponentially growing demand. So

that's really helpful and he's comparing that to exponentially growing demand. Hopefully it does actually grow exponentially.

There will be a pileup of companies behind it because Anthropic they're making 100 billion per gigawatt. No, they're not. That's the line I've been looking for. Found it.

So they're not they're making you know that was a sort of fatal flaw uh because right now they're expected to have what 64 billion so call it ARR now uh annualizing uh one month after Claude right so we get this explosion in Claude in Q1 so we get a $64 billion uh ARR annualized ARR run rate.

Current gigawatts uh one to two disclosed. Okay. Capacity 5 gawatt. Oh, there are multiple 5 gawatt deals. I think there are two 5 gawatt deals. What deals are they doing? Anthropic secures. Google, Broadcom, and Amazon. Right. So, that's what it was.

Let's write that down. So, capacity, I've got 5 gigawatts coming from Amazon. And then I've got another 5 gawatts coming from Google and Broadcom who's now taking on debt to kind of sort of, you know, make that happen. Okay, so that's our annual run rate right now in billions, which sort of implies

Current gigawatts at 1 to two. So, best case rev per gigawatt 64. That's best case scenario. Um, worst case rev per gigawatt would be the lower end. So, that would just be, you know, 64 divided by two, right? And then so if you take the midpoint which is potentially more realistic. So midpoint rev per gigawatt is actually probably somewhere around 64 divided by 1.5. That's just taking the midpoint. That's probably closer to their ARR but after co-work explosion, right?

So, how sustainable is that? But markets as you just heard from Sachs, right? Sax buys uh Hookline and Sinker 100 billion ARR per gawatt. uh enough to pay Elon's 30 to 50 billion per gigab. Uh most expect the break even or I shouldn't say the break even. Uh most expect the stabilized revenue or I should say cost per gigawatt to be closer to 8 to$14 per. So hence there's a big multiple and it's like if this is right if Elon's if this is correct and this is correct uh very bullish uh very bullish this would then be neutral to bearish right and then obviously over supply would be even worse cuz that's not over supply pricing that's like neutral pricing. So this would be even worse uh returns. So that's the question. That's the danger you want to avoid. And based on Anthropic's current numbers, we're at 42 in revenue. Okay? That's not enough to pay for 30 to 50 in cost. That's why you lose money. That's why I actually agree that the anthropic IPO is so freaking critical.

So I think that's uh that's really useful uh information and and why like people are on pins and needles about this anthropic IPO as a catalyst.

Hyperscalers have lined up 2.6 billion of future spending. Yeah, that's crazy. And it's a lot of it is to service this data that we just went through. Samsung HBM was up 122% quarteron quarter, suggesting HBM revenue to rise 80% quarteron quarter. Nice.

We saw the Bloom Energy. Nancy Pelosi. Good old Nancy Pelosi. So, this is about Wy. This is JP Morgan. JP Morgan Fed chairs open remarks on Friday morning. Jackson Hole blah blah blah often not marking move in. We'll see about that.

Standard deviation of daily changes in the 2year is around five bips. Yeah. Uh that's in the daily changes. Okay. Daily. Well, whatever. Uh let's see. The Fed chair's opening speech typically addresses bigger pictures for monetary policy. That's fair.

It just it all comes down to a surprise. So, we did this analysis and you know our analysis indicated it all comes down to the surprise factor. If we go into Friday expecting limited action, just like JP Morgan says here, the the risk is uh a hawking. The risk is hawking uh and a surprise, you know, the pants get put on so to speak. Let me see where we made had the note the data on that. That would be fed in the meet Kevin app. August 20th, four days ago. Where did we talk about here? A history of surprise jholes. Dovish surprise in 2025, hawkish surprise in 2022. And so when you get the hawkish surprise, that's when the market really has a poopers. So, you know, I don't think we'll get it, but there's always a risk of that.

Specifically, the after effects of the pandemic forced the chair pow to communicate sizable shifts blah blah blah could resemble the more muted grain span years. What? Look at this. With chair war skewing forward guidance, this year's market response could resemble more of the muted green spare years. Right, right, right, right. So that's why nothing uh is the base case because uh everyone is convinced will get no forward guidance uh and then he'll move on. Uh makes sense because that's what Trump would want right now too. And it's kind of like a puppet game like you know see no evil uh speak no evil about like what actually is going on.

What about over here on WSH? This is Morgan Stanley's summer negative momentum in equities has continued uh pullback and treasury yields follow those uh sizable announcement yeah last week and the reversal ongo oil price rise 12 month Brent futures hit a two-month high on Friday, which isn't far off the peak from May. So, expectations of oil prices of those higher oil prices put upward pressure on yields as well. Right. Conflict is said to stay in headlines. more or if memory still eats into it.

not worried about this. Where is the dollar? A mortgage back security. Well, that could lead to a car crash. But actually, this is why I think it's the anthropic IPO is really important for the market is getting those quarterly earnings and be able to see their numbers every quarter. I think it'll become probably the most important signal that the entire industry has. He's so right. Why? Because you got all these people out there saying that AI is a bubble. This capex is not justified. There won't be an ROI. And everyone's going to be looking to Anthropic's quarterly earnings as the pace car. Not just them. It'll be them and OpenAI and SpaceX, but you'd have to say that Anthropic right now is the pace car. And they're going to be looking to them to see if the demand signal is there. And if there's a hiccup or a wobble, you know, it'll show up on the brakes. Everyone in the chain, everyone. And I think the anthropic S1 is kind of going to make that clear. I will find it because there's a part where he kind of hookline and sinkers sinker sort of absorbs. Oh, I found it. Oh, okay. It's right after the 103 part. Ah, okay. Okay. Okay. Okay. Okay. Okay. Oops. Where did I just put it? What did I just do with it? It's all right. No problem. Got it. Okay. So, it's about 104 in. So, I got to write the times down when I write these notes in the future. I don't have to refind it. Uh, tweet they get sent overseas. I'll tell you where all of a sudden there are too many people racing to provide this compute and now there's no and the market crashes. Sure. against that outcome hysteria/hoax te that there's not an overupp that Jensen did

So, where's the Elon par? Dang it. All right. My last look, but I'm pretty sure should be able to find it. Ah, is it here?

Okay. All right. I think uh 109. Let's try this.

Let me see really quickly. Google, Broadcom, and Amazon. Right. So, that's what it was.

Okay, how else are things going? Q's still a little bit of that bleed kind of expected before all these big catalysts. Although that, you know, Besson announcement wasn't nothing for brah.

All right, we go throw another coffee on and turn my tea on here and then we'll summarize some of these things and kind of keep looking. Okay, hold on a sec. So, what is this? Samsung HBM was up 122% quarteron quarter, suggesting HBM revenue to rise 80% quarteron quarter. Nice.

Okay. Yeah, we heard about Bessence's end of the week threat, which is really just to kick down the road again. That's their classic nonsense. Let's kind of see what else is going on here.

Let's see. Anything in the wire services? Not really. After the best meeting, we really haven't gotten any kind of juice here. just approval numbers. That's boring.

I wonder how the JPY is doing. Let's go look. USD. Oh, yep. Deteriorating as well. 159. It's almost back to 160. Bessent couldn't do that either. Ohay. All right, let's listen over here. I'm going to go get some coffee and I'll listen in as well.

Connecting the two brands audiences with benefits like redeeming built cash for credits that can be used towards Equinox experiences. Pleased to say joining us here in studio 2 is the CEO of Built Anker Jane and Equinox Group executive chairman Harvey Spac. Great to have both of you back here on the program.

I mean this is great. It's our first time doing this together. This will be fun. It will be fun. Thanks for having us. Well, well, I know how uh great Equinox smells on the inside. What What does built smell like now? No, in all seriousness, uh talk to me.

By the way, in every movement at a built apartment building, we should probably give you an Equinox eucalyptus towel as a moving. Smell them on the street. It's walking by an Equinox. You know there's an Equinox. Leave now. I'm good. It's better than the Abberrami smell in high school. Wow. All right. Well, there you That's That's a All right. Let's start. Let's get serious now. I But I am curious though, Anchor. I mean I mean we talk about the partnerships you have obviously apartment buildings, airlines, hotels, restaurants. Uh why gems?

I mean look, yeah, built today represents one in four apartment buildings across the United States. And when you move into a new home, you're resetting some of the most important lifestyle decisions that you have. It's what's your new pharmacy, what's your favorite go-to restaurant and bar? Where do you park your car? And one of the biggest decisions everyone makes is what's my new gym? And so when we thought about what's the gym that we want our members to connect to and have our concierge be able to coordinate your training sessions, your spa, your workout classes, I mean, there's really no place better than Equinox.

I I I certainly understand what you get out of the partnership with Equinox. Harvey, I'm going to kind of pose the same question to you because I've always looked at uh Equinox.

All right, I'm back. How to get the coffee in a quick little bite. Okay, so where do we stand? Well, we need to talk about the sacks, the mold. What's this? Wapo. Um, seniors making six figures reach over a third of all social security benefits. Wow. Well, I mean, you paid into the system for your whole life. Um, all right. We saw the Bloom Energy. Nancy Pelosi. Good old Nancy Pelosi. Splash of Bailey's in your coffee. All right. What else here? Uh, let's go see what these suits are saying. Let's see here. So, this is about Wy. This is JP Morgan. JP Morgan Fed chairs open remarks on Friday morning. Jackson Hole blah blah blah often not marking move in. We'll see about that. Standard deviation of daily changes in the 2year is around five bips. Yeah. Uh that's in the daily changes. Okay. Daily. Well, whatever. Uh let's see. The Fed chair's opening speech typically addresses bigger pictures for monetary policy. That's fair. It just it all comes down to a surprise. So, we did this analysis and you know our analysis indicated it all comes down to the surprise factor. If we go into Friday expecting limited action, just like JP Morgan says here, the the risk is uh a hawking. The risk is hawking uh and a surprise, you know, the pants get put on so to speak. Let me see where we made had the note the data on that. That would be fed in the meet Kevin app. August 20th, four days ago. Where did we talk about here? A history of surprise jholes. Dovish surprise in 2025, hawkish surprise in 2022. And so when you get the hawkish surprise, that's when the market really has a poopers. So, you know, I don't think we'll get it, but there's always a risk of that. Okay. So, what else? So that's a nothing burger. Specifically, the after effects of the pandemic forced the chair pow to communicate sizable shifts blah blah blah could resemble the more muted grain span years. What? Look at this. With chair war skewing forward guidance, this year's market response could resemble more of the muted green spare years. Right, right, right, right. So that's why nothing uh is the base case because uh everyone is convinced will get no forward guidance uh and then he'll move on. Uh makes sense because that's what Trump would want right now too. And it's kind of like a puppet game like you know see no evil uh speak no evil about like what actually is going on. Okay. All right. What about over here on WSH? This is Morgan Stanley's summer negative momentum in equities has continued uh pullback and treasury yields follow those uh sizable announcement yeah last week and the reversal ongo oil price rise 12 month Brent futures hit a two-month high on Friday, which isn't far off the peak from May. So, expectations of oil prices of those higher oil prices put upward pressure on yields as well. Right. Conflict is said to stay in headlines.

Vid earnings have been a big macro event in their own right with reactions on par with jobs reports and CPI. Wow, that's an interesting comparison to make. But in most recent quarters, the positive earning surprises haven't been as big as we saw in 2324 after each of the last four Nvidia earnings. Nvidia price actually fell the next day.

Salesforce and Nvidia in two days. Those will be really fun to see. This weighs heavily on the growth sector like these chip names, not Nvidia per se, but uh I think that has a lot to do with it.

This is by the way now a little bit of a a tangent a tangential discussion on Nvidia. We'll listen to part of it and we'll keep getting uh in about one minute we'll hit a little bit on the payback periods and then we'll get down to the actual signal for the artificial intelligence.

I'm going to fast forward this. Gavin basically suggests that Nvidia is giving a 25% residual value guarantee to some of their customers which has been publicized and that there's an opportunity for them to potentially take uh you know some revenue share if revenue is above a certain level. basically a way of continuing this circular financing to make sure that cloud companies like you know Neb Nebius or otherwise can can continue to expand their buildouts and in other words buy more Nvidia chips.

And as we talked about on our previous episode, the simplest way to finance it would be to get seller financing from Nvidia, especially given that the payback period could be as quick as one year.

That's why SpaceX is then able to pay 30 billion to Nvidia for chips for the buildout. That's why Nvidia is able to

You know, 30 billion might very well just be the GPUs, but realistically, that's probably going up to closer to $40 billion on the latest generations of GPUs.

Nvidia's gone down four out of four of their last earnings after earnings despite beating expectations. It's not Kevin Worsh. It's not Nvidia earnings.

That's why Nvidia is able to pay TSMC and Micron and SKH Heinix and all the way down. It's a little funny when we get into this circular financing, but let's listen to Sax's reply

that the TAM is getting constrained by the ability to finance this build out. And what he's doing is alleviating that finance constraint so that he can grow uh as big as the the TAM actually is, right? It's removing that constraint.

So for just to take one example, Elon wants to add somewhere around 6 to 8 gawatt next year. We know that that would cost3 to400 billion dollars of capex.

Could be. Could be. See a lot of the assumptions that have been layered in here. Okay. Politics will stop overbuilding. Token growth is exponential and the payback period could be as low as one year. That those are huge assumptions. And you know the payback period is related to that 30 to50 billion of of revenue that Elon wants to pick up from compute.

Maybe it'll happen but look at the assumptions that are built in. And when you see the assumptions then you can kind of make the determination like okay we getting closer to uh you know the toppydoodle law.

They actually well Sachs comes up with a very similar thing that I've been harping on for a while in terms of the potential top uh and how to measure it. And it comes after 3 minutes of yapping from Gavin and the others. And it is right at 109. I'll play from about here.

Yes. If Anthropic slams on the brakes, there will be a pileup of companies behind it because Enthropic, they're making 100 billion per gigawatt.

No, they're not. Okay. Again, this is where David Saxs reads the crap on X and I don't think he's putting his critical thinking hat on. I think he's scrolling on X too much. They're not making hundred billion of ARR right now. Annualizing out the last day of July, they're at 65 supposedly.

Okay, we don't know if that's just because of the co-work explosion. We don't know uh if that's going to last, if that's going to get whittleled away by openweight models. We don't know. But David Saxs here just literally told you they're making a hundred billion dollars. That's enough to pay Elon's 30 to 50. But they're not. They're making on one or two gigawatts of compute, they're making about 6465.

Now, what's the problem with that? Well, the problem with that is they have massive compute coming online. What I also wrote over here that I didn't talk about yet is they have 5 gawatt coming from Amazon and another 5 gawatt coming from Google and Broadcom.

Now, not all of those 10 gawatts will get built. But even if half of this gets built, that's another 5 gawatt, which is 2 and a half to five times as much power as they have now. So, is their revenue going to be able to scale to keep making what they're making now this many more times over? Well, according to David Sachs, demand is exponential. So, in that case, sure, why not? But that's not what we're seeing. We're not seeing exponential demand. We're seeing declining second derivatives on token usage. There's still really big numbers. But that's a concern.

Okay. If compute, that's why they're able to pay SpaceX say 50 billion a gigawatt. No, they're losing money. They're not able to. They're losing money.

You know, a spot price for compute. That's why SpaceX is then able to pay 30 billion to Nvidia for chips for the buildout. That's why Nvidia is able to

the buildout is going to be way more than and this is the other problem. The numbers compress so much more than what David Sachs is saying and and is fine. Maybe maybe the exponential ramp will come but it's not 30 billion that you're putting into the buildout. That's the problem.

You know, he's telling you, oh, they're making a hundred and they're going to spend 50 to Elon and Elon's going to give 30 to Jensen and everybody's going to win. But the reality is Elon's probably spending, you know, 50 for the entire data center, right?

We forgot that there are other components to the data center. It's not just the Nvidia GPUs, it's the CPUs, it's the memory, it's uh the flash storage, the hard drives, uh it's the server racks, it's the building or whatever else. And this hundred billion dollar figure is not validated. It's not what reality is right now.

The put option of, you know, we'll call it the liberal put or put liberal. It's probably backwards. Uh, and then again the exponential. We can see there's a lot of sloppiness in this presentation from Sachs. And it's a little disappointing, but whatever.

pay TSMC and Micron and SKH Heinix and all the way down. It's the entire food chain. So if there's like a wobble, if somebody slams on the brakes,

if the pace car slows down, the whole is going to feel it. But it's still better for those numbers to come out on a quarterly basis. I think it's such in a vetted gap compliant way.

So Gavin, as we're sort of saying here, there's a kill switch, there's a break, whatever you want to call it. Is there enough space? Is there enough distance between the cars to

and the people behind it? Blah blah blah. Okay, so we've gone through that. The the whole point here is Sachs has just given a very clear heads up and we've talked about this as well, but it's nice to hear it from another point of view.

They're calling Anthropic the lead car and if they slam on the brakes as seen by quarterly earnings, everything else crashes in. Then of course there's this little bit of a debate of like, well, how much lead is there? You know, how much of a heads up or whatever.

This is why probably one of the biggest catalysts is not Kevin Worsh. It's not Nvidia earnings. Nvidia's gone down four out of four of their last earnings after earnings despite beating expectations.

It's the S1 that drops for Anthropic. The S1 for anthropic will be the most critical element of whether or not we are in a bubble and spotting the bubble and understanding some of these different numbers that I gave here will be really helpful for you to track what's going on.

I'm not saying anybody's right or wrong. Well, I guess I kind of am because we're not at a hundred billion dollar runway and and Saxs I'll say mistakenly said that they are.

Um maybe that's what you know finid is projecting by the end of the year. Okay, but that wasn't what was said. But whatever. Uh it's fine. It gives us the tools to look for identifying where we are.

Does Anthropic get to hundred billion dollars by the end of the year? Uh how much more compute is coming online relative to how much they have?

How are tokconomics improving or disimproving? How are the open weight models affecting Anthropic's ability to raise revenue? Honestly, almost all of this information is going to come to us from Anthropic public filings. It's even more critical.

Honestly, the SpaceX filings weren't really critical. We kind of knew that SpaceX was going to lose money handover fist. Like, it was just a matter of like how bad was it going to look. The anthropic ones are really going to be the first look at a leading frontier lab.

That's going to be insane. We'll be covering it a lot obviously in the course member live streams and the alpha report. Make sure to join us there at meetke.com. Use that coupon jhole before the Jackson Hole event and lock in uh lifetime access to our uh alpha membership uh courses on building your wealth, buy sell alerts. Check it all out over at mekevin.com.

Okay, cool. So that's sacked. Now, let's do a short little breakdown on the mold. The mold. The mold. The mold. The mold. I think the mold thing is very interesting. Maybe not other Maybe other people don't think it's very interesting, but I think there's some value here. all right, let's pop this up.

Home inspections on shoddy real estate and construction defects are taking off. And in this video, we're going to break down what this means for you. Should you avoid ever buying real estate? Should you be deathly afraid of mold? What about these Tik Tok videos of new construction homes getting torn apart by home inspectors? What is actually the bottom line? And how do we learn from this? Let's get into it. First, we have to, of course, start by watching at least one or two Tik Toks on this construction defect trend. Let's start with this one right here. This is America's best builder. This is the builder that makes $40 billion a year.