Jordi Visser / VisserLabs
Agent Swarms, OpenAI Virus, And The Age Of Parabolic Volatility — Jordi Visser (1 febrero 2026)
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TL;DR
Research summary
▶ Software repricing and AI competition
The speaker opens with the year’s guiding thesis: be long scarcity and short abundance, while expecting large moves in both directions and high volatility in scarce assets. They are negative on software after weak charts in Microsoft, Oracle, and SAP, and argue that hyperscalers’ large commitments and rising remaining performance obligations (RPOs) may not turn into revenue as quickly as spending if data center capacity remains bottlenecked. They also see AI tools as intensifying competition: the speaker says Cursor rose from $1 million to $100 million in annual recurring revenue in 12 months, then describes canceling it, and cites rapid improvements in Claude and enterprise coding as evidence that software businesses must show they can adapt. They caution that even data analytics firms such as Palantir are exposed to sector-wide multiple compression, and agree that legacy software has a short window to convert RPOs to revenue.
▶ Market recap, metals volatility, and labor concerns
The speaker says most markets were up for the month despite volatility, while the S&P had barely moved for three weeks. They report energy, capital goods, and materials as the strongest year-to-date groups, and software as the weakest, down 12% year to date; the Russell 2000 was down 2.3%. Gold and silver had unusually sharp Friday declines after strong monthly gains, with gold’s month described as its best in 15 years. The speaker also notes a weak dollar, a Fed rate hold, and argues that rate action would require bad labor-market news ahead of payroll data. They cite announced job cuts at Amazon, UPS, and Oracle, falling wage growth, rising productivity and profit margins, and consumer confidence at a 12-year low on the same day stocks reached a record. These labor and economic interpretations are presented alongside the speaker’s acknowledgment that the Fed faces uncertainty.
▶ Manufacturing, industrial metals, and Brazil
The speaker expects manufacturing PMIs to rise, potentially to their highest level since 2022 if the referenced regional estimates hold, and connects that outlook to demand for scarce physical inputs. They argue that silver is also an industrial metal used across AI components, not only a precious metal, and point to similar parabolic price behavior in memory. Discussing critical minerals and raw industrial metals, they expect volatility and possible pullbacks, while maintaining that electricity needs and supply shocks support the broader copper-and-silver thesis; they also note that higher prices can prompt substitution toward other metals. The speaker strongly favors Brazil, saying it fits several themes for the year and announcing a forthcoming paper on Brazil and what they call the AI decade’s green computer arbitrage. They report that Brazil’s market had given back a little over 1% near the month’s end but was still on track for its largest rise since 2020.
▶ Energy preference and caution around AI IPOs
The speaker explains that higher silver prices may raise solar panel costs, potentially making solar expansion harder even as power demand remains important. Citing a podcast and a view that oil and gas stocks may be entering a boom phase, they say investors should be involved in materials and energy. They highlight a Chevron-versus-Salesforce trade, claiming it was up 45% that month, and say they expect the trade to continue higher; they describe software as being in the early stages of a rerating and power and energy as early in an advance. They say they now prefer energy over SMH for the year, while allowing that analog semiconductor names could double and that chip shortages may support further gains. They are less positive on Nvidia and Broadcom after their runs. The speaker views anticipated OpenAI, xAI, Anthropic, and SpaceX offerings as potentially saturating growth-investment demand and warns that AI and software-related deals evoke the timing of Blackstone’s 2007 IPO, while clarifying that they do not think the overall market is at a peak. Their stated positioning remains long commodities and industrials.
▶ Memory, chips, and AI infrastructure constraints
The speaker uses AI tools to connect reports about memory and electronics supply to investment ideas, citing claims that a major manufacturer had sold out its 2026 NAND flash production and that Samsung raised NAND prices by 100%. They describe memory as a long-term bottleneck for Tesla’s AI ambitions and relay Elon Musk’s comment that Tesla may need its own advanced memory fab and that chip production could limit growth three to four years out. They also cite Jensen Huang’s $85 trillion buildout figure, arguing that AI factories and edge computing will require many chips. The speaker cautions that memory stocks have already risen substantially and says they cannot imagine Micron more than doubling in the next two years in a best-case scenario, while smaller semiconductor and battery names could rise more; earnings growth would need to catch up to sustain moves. They cite SK Hynix revenue up 66% year over year, operating profit up 137%, and HBM revenue more than doubling, plus a large SanDisk earnings beat and guidance. They identify compute, power infrastructure, metals, and minerals as related beneficiaries, mention ASML and strong iPhone demand, and predict higher hardware prices due to memory costs, including a claim that computers in 2027 could cost triple current prices.
▶ AI’s economic impact, adoption, and security risks
Discussing an interview with Demis Hassabis and Dario Amodei, the speaker says Hassabis remains cautious about AI-driven scientific creativity and places true ASI or scientific breakthroughs more than five years away, while both describe a medium-term jobs issue and unprepared governments and organizations. The speaker argues that rapid AI progress makes long-duration assets harder to value, favors liquid investments, and expects high volatility in scarce assets, including the possibility of 50% pullbacks. They see agent swarms as a security and financial-system risk, arguing that defenses may lag the arrival of increasingly capable models and agentic workloads; they contrast this with Bitcoin, which they believe is better prepared for AI agent swarms than banks, while acknowledging that quantum-risk timelines for Bitcoin are contested and range from a few years to several decades. They predict AI token use will rise sharply with agentic workloads and cite AI-assisted coding, science collaboration, and a driverless freight network as signs of adoption. They also describe a gap between intensive AI use by some people and non-use by others, and repeat Bill Gurley’s advice that aggressive use of AI in one’s field can help protect a career.
▶ AI fluency and investment research demonstrations
The speaker says a webinar series is in development and urges children to become frequent AI users, presenting repetition as a path to fluency and AI as a partner for exploration rather than merely an answer tool. They describe human creativity and context-finding as ways to generate and filter ideas. As an example, they connect Meta’s reported $6 billion multiyear deal with Corning to an optical-fiber bottleneck, which they say is emerging alongside memory constraints and rising data traffic. They describe using an AI research workflow to analyze that deal, producing a five-page report and a list of 15–20 names assessed for technical signals, evidence of optical-fiber exposure in recent earnings, and estimate revisions. They also demonstrate asking Claude to model how Microsoft’s financial outlook might change with rising RPOs and data center bottlenecks; the tool generated an Excel file with estimates and numbers that the speaker says can be checked against market estimates and reviewed with analysts. The speaker says the workflow took about three to five minutes for the Microsoft model.
▶ Bitcoin, volatility, and closing views on crypto assets
The speaker says Bitcoin remained quiet and its chart still looked poor, making it difficult to buy as a short-term trade without a small initial position and a stop. They nevertheless believe Bitcoin will be part of the investment picture later. They argue that assets such as silver, Micron, and Corning can remain flat for years and then move parabolically, while reiterating a preference for energy and materials over the Mag Seven, which they see facing RPO, debt, and IPO-related headwinds. In closing, the speaker says they have developed a new view of NFTs as potentially useful in crypto’s utility layer alongside stablecoins and real-world asset tokenization, rather than primarily as digital art or collectibles, and ends by saying they plan to discuss the topic further.
Full transcript
[0:00] All right, still on the road now in Los
[0:03] Angeles.
[0:04] Uh, lot going on again. Let's try to get
[0:07] through it. Uh, software collapse,
[0:11] weekly recap. Um, silver and gold
[0:14] collapse on Friday. Uh, Fed holds, job
[0:17] picture, PMI set to rise.
[0:21] We'll go through the industrial metals,
[0:23] Brazil. uh this open a virus continues
[0:27] to spread and I think it remains a story
[0:30] uh for the rest of the year. Swarm risk
[0:33] from AI agents, the corny meta corning
[0:35] metadal and Bitcoin remains asleep. So
[0:39] I'm just going to keep running with the
[0:40] theme. Uh you want to be long scarcity,
[0:42] short abundance for the entire year. Get
[0:44] used to these parabolic moves higher and
[0:47] parabolic moves lower. Uh daily
[0:50] volatility and things that are scarce is
[0:52] going to remain on the high side. You've
[0:53] seen it with a lot of assets during the
[0:55] month and also on Friday. Uh in the case
[0:59] of software, Gavin Baker put out another
[1:02] thing and again I I posted too. The
[1:05] beatings continue. I use Claude in
[1:08] Excel. Blew me away. I'm going to show
[1:11] some of that later on in this, but um
[1:13] it's really hard to not get negative on
[1:16] the software side. And then Microsoft
[1:18] comes out and the chart looks horrible.
[1:21] Um, you know, at least you still have an
[1:23] upward sloping 200 day moving average at
[1:25] this point, but you've broken below, by
[1:28] the way, on the charts for the week. I'm
[1:29] doing this on Friday,
[1:32] uh, before the market is closed. Uh, so
[1:35] there's a couple things. The prices
[1:36] aren't exactly going to be in where they
[1:38] are, but give or take 15 minutes, unless
[1:40] something big happen uh, in that 15
[1:43] minutes. Just know that these are not
[1:44] the actual closes for the month, but you
[1:47] can see the charts negative on
[1:48] Microsoft. Um Dan Ies who's been talking
[1:52] up Microsoft even kind of has his new
[1:54] price target a little bit lower but I
[1:56] think the story and this is really
[1:57] important um is really here they had
[2:01] massive RPOS
[2:03] so this is kind of like the story for
[2:06] Oracle but here's the thing that I said
[2:08] my issue for these companies the
[2:11] hyperscalers that are spending the money
[2:14] is that if they're depending on the
[2:16] cloud revenue they're depending on the
[2:18] data centers is being built and the
[2:20] bottleneck's not happening. We have
[2:22] massive bottlenecks that are going to
[2:24] continue and this story is going to make
[2:26] it difficult for them to be able to get
[2:27] the capacity at the same pace that
[2:29] they're spending the money. So that has
[2:32] implications for buybacks. It has
[2:33] implications for a lot of them and I
[2:35] just think at this point the uncertainty
[2:37] over when these companies will actually
[2:39] get the revenues just continues to grow.
[2:40] So you have to be wary about the
[2:42] spending. And here's the chart of
[2:44] Oracle, which is the orange line and led
[2:46] the way lower. But Microsoft is now
[2:48] following it. It may not be following it
[2:50] for the debt reasons, but it's
[2:51] definitely following it for the revenues
[2:53] down the line reasons. Uh this is SAP
[2:56] out of Germany. This problem in software
[2:58] is not just a US thing. This is a global
[3:01] thing. software to me, as I'll keep
[3:03] saying, if you're spending your time
[3:05] trying to pick the bottom in these, you
[3:07] don't make money picking the bottom in
[3:09] these charts unless you have a long
[3:11] enough time to wait for this to bottom.
[3:13] Uh, and I'm not really sure that the
[3:14] multiple compression story is the only
[3:16] thing. As someone again who uses this
[3:18] seven days a week, all day long, there
[3:21] is not a single hour of the day where
[3:22] I'm not using AI unless I'm in a meeting
[3:24] or in some kind of exercise class.
[3:28] The ability of building things and
[3:30] competing hurts at least the growth
[3:31] rate. You can sit there and debate me on
[3:33] all the things that I've highlighted in
[3:35] the last few weeks, but the charts are
[3:37] speaking as SAP plunges on cloud backlog
[3:40] myths. Again, this whole backlog of
[3:43] cloud, I just think it's an issue. Now,
[3:45] Palanteer has been brought into it.
[3:46] Palanteer definitely benefits from the
[3:48] data analytics, but when you have
[3:50] multiple compression happening across
[3:51] the software space,
[3:53] they're not immune to this. even if the
[3:55] stock ends up going higher in in in the
[3:57] future, you could go back, you know,
[4:00] significantly and still be up a lot
[4:02] since uh uh since the beginning of 25.
[4:05] So, just be very wary in these names.
[4:07] And when you get this kind of story, the
[4:09] only reason I'm putting this up there is
[4:12] when there's good news, and these stocks
[4:15] fall a lot, not a little, they fall a
[4:17] lot in charts like that. Uh that's a
[4:20] problem. So, good news being bad
[4:22] reaction, not worth looking. I I think a
[4:24] lot of people this week uh tried to fade
[4:26] Chimath who's been continuing to pound
[4:28] the table on on the SAS side and again
[4:31] legacy SAS has a short window to convert
[4:34] RPO to revenue. Completely agree. I
[4:36] don't understand why this is such a
[4:38] complicated thing other than people's
[4:40] egos thinking that they can pick the
[4:42] bottom of something. There are better
[4:44] games to play here. But I think the
[4:45] issue is going to be can you be safely
[4:48] being long Western Digital at this point
[4:49] when it falls violently on on earnings?
[4:52] Can you be long silver? When it falls
[4:54] violently, unfortunately for these
[4:56] parabolic charts on the upside,
[4:59] they're just going to have extreme
[5:00] volatility. They're not going to be able
[5:01] to be a software name that you can sit
[5:03] in without having to worry about it. I
[5:05] wanted to bring this up because just
[5:06] remember this was February 2nd of last
[5:09] year. There's a new kind of coding I
[5:11] call vibe coding. Elon Musk giving his,
[5:14] you know, I think software is dead.
[5:16] Remember, he is really uh been vocal
[5:19] about this. So again, everyone wants to
[5:20] fade. Elon Musk as well. Here's the
[5:23] facts. Cursor, most people had not heard
[5:27] of it. February 7th of last year, just
[5:29] five days after
[5:32] Andre Carpathy put out the vibe coding
[5:34] thing. So five days, Curser went from
[5:36] one to 100 million ARR in 12 months.
[5:39] Fastest SAS to achieve this. This week,
[5:42] just canceled cursor. End of an error.
[5:45] kind of crazy, but I would have paid
[5:46] like $2,000 a month for it only a year
[5:48] ago.
[5:50] That's what I showed you in terms of the
[5:53] time frame. So, I just asked Rock, "What
[5:56] does this mean? Does this highlight the
[5:57] speed of competition for things built on
[5:59] code where AI can replicate and prove
[6:01] the wave of cursor cancellations you're
[6:03] seeing, especially the pattern around
[6:04] January 26th? very clearly highlights
[6:06] just how brutally fast competition moves
[6:08] into AI powered coding tools and how
[6:11] little mo rapper products have once the
[6:14] underlying models become commoditized
[6:16] and powerful enough again not all
[6:18] software is going to fit into the same
[6:20] component
[6:21] but at this point everyone who has
[6:23] software attached to them is going
[6:24] through a repricing and I think it is
[6:26] not only justified I'm going to keep
[6:28] saying this you want to be long scarcity
[6:30] you want to be short abundance anything
[6:32] built on code you have to prove that you
[6:34] can adapt your business. You have to
[6:36] prove that you're not going to get eaten
[6:37] by these little companies, not just in
[6:39] the US, globally. And I think that's
[6:41] going to happen. Um, another Claude bot
[6:44] was out. This got it. Um, feels like the
[6:46] chat GPT moment. I can't tell you how
[6:48] many Chat GPT moments there have been
[6:51] with Claude over the past three months.
[6:53] They just keep coming out time and time.
[6:55] And this is why you're seeing this.
[6:56] Anthropic was founded in 2021.
[6:59] Estimated revenues 1 billion, 10
[7:01] billion, 18 billion, 55 billion, 148.
[7:04] Now again they are dominating. This is
[7:07] absolutely competition for software
[7:09] companies. So if you don't believe it
[7:12] is, it is. This is all enterprise coding
[7:15] going on. They're seeing the revenue. So
[7:17] they're seeing companies use it. And
[7:19] maybe they're all startups. Maybe
[7:20] they're not all big enterprise. Maybe
[7:22] they're just getting on token usage. But
[7:25] I'm very wary. All right, we're
[7:26] finishing off uh the month. Everything's
[7:30] pretty much up across the board. So
[7:31] despite all the volatility that's been
[7:33] going on, um,
[7:37] still finishing up with the first five
[7:39] days of the year up and the month up. I
[7:40] think it's like 92% of the years when
[7:43] that happens, the market's up. Even
[7:44] though that's numerology, I'm just
[7:46] bringing it up because it went on for
[7:47] the week. S&P barely budged. So again,
[7:50] despite all of the news, we've had three
[7:52] weeks in a row of not moving. Barely
[7:54] down, barely down, barely up. Um, in
[7:57] terms of the S&P 1500 level two, GIX,
[8:02] best performing group year to date,
[8:04] energy. I'm going to keep pounding on
[8:06] energy. Number two, capital goods.
[8:08] Number three, materials. If this doesn't
[8:09] scream the physical upgrade that we've
[8:12] been talking about, nothing will. On the
[8:15] bottom, software, by far the worst
[8:18] performing sector, down 12% year to
[8:20] date. IWM down 2.3%. and it outperformed
[8:24] for the month but gave a little bit back
[8:26] in the last week. Q's barely bunched for
[8:28] the week. Mag 7 up slightly after
[8:31] earnings. Uh here's gold, here's silver.
[8:35] Look at these days. Nothing over the
[8:37] past five years that's even comparable.
[8:40] Multiple standard deviation fall
[8:42] collapsing in these. And then you look
[8:43] monthto date. Uh another great month for
[8:47] silver up here. and gold had its best
[8:50] month in the last 15 years, even with
[8:53] the collapses on Friday. Don't get
[8:55] caught into the narratives of all these
[8:57] things. Uh tenure rates again as people
[8:59] trying to chase all over the place and
[9:01] tenure rates. Again, it's going to be a
[9:02] frustrating trade. The dollar big week
[9:05] down, a little bit of a bounce when
[9:06] Kevin Worsh was announced as the Fed,
[9:08] but regardless, the dollar
[9:12] big move.
[9:16] Trump exacerbated the situation by
[9:18] saying he's not concerned with the
[9:20] decline of the dollar. Uh the Fed held
[9:23] rates.
[9:24] And again, as you go through this and
[9:26] you think about why, I just want to keep
[9:28] reinforcing if we don't get bad news
[9:30] news leading into a payroll number on
[9:33] the on the labor side, then they won't
[9:35] do anything.
[9:36] This is literally becoming ridiculous
[9:39] that we are talking about humanoids in
[9:42] the same week and autonomous vehicles
[9:44] and autonomous trucks and we're
[9:46] literally talking about whether the
[9:49] possible that the economy is strong
[9:52] while we're laying off people or at
[9:54] least not hiring people. But Amazon
[9:56] announces they're laying off 16,000
[9:57] people due to AI. UPS to cut up to
[10:00] 30,000 jobs and closed facilities.
[10:03] Oracle may lay off 20 to 30,000. And
[10:05] these were all this week.
[10:07] Home Depot, explain it to me like I'm a
[10:10] 5-year-old. What signs of stabilization
[10:11] do you see in the jobs market? She's a
[10:13] perma bear, so I'm not really caring
[10:14] about that. I'm just showing the fact
[10:15] that the labor market is not well. And
[10:18] here's the Atlanta Fed wage growth
[10:20] tracker. Big leap down that is overlaid
[10:23] with the ECI year-over-year.
[10:27] So again, wages are coming down,
[10:29] productivity is going higher, profit
[10:31] margins are moving higher, and the fact
[10:34] that we have this happening and the Fed
[10:36] is not sure what to do makes sense.
[10:38] Consumer confidence hit a 12-year low
[10:40] this week. Stocks hit an all-time high
[10:43] on the same day.
[10:46] All right, PMIs going higher. Andreas
[10:49] Stenol Lararsson with all the regional
[10:52] PMIs out, I'd highlight manufactures
[10:54] doing exactly what we expect. you're
[10:55] getting the bounce if this comes in
[10:57] where he has it. It would be the highest
[10:58] level since 22. We just had a big
[11:00] Chicago number today. I think it's
[11:02] happening. So again, abundance and
[11:04] scarcity. You want to focus this entire
[11:06] year in both in in investing in whatever
[11:08] is scarce. You can go look at the
[11:10] charts. You can go try to pick them, but
[11:12] if it's scarce, go software will remain
[11:14] the abundance. If you want to go try and
[11:16] pick the abundance side, have fun. Uh I
[11:19] go through in this piece why AI is
[11:22] running even into silver. So for
[11:24] everyone thinking silver is purely
[11:25] precious metals, the critical mineral
[11:27] side, the raw industrial uh metal side,
[11:30] I want to make sure that people realize
[11:32] that the amount of metals needed for AI
[11:34] is insane. In particular, in the silver
[11:37] side, it's in every single component.
[11:39] And I wanted to make sure that this was
[11:40] not a precious metal story. Again, I
[11:43] showed this chart last week. It doesn't
[11:45] include the close from today, but you've
[11:46] got the same parabolic nature in memory
[11:49] as you do silver. So when people want to
[11:51] say that this is trading like a
[11:52] commodity, this is trading like scarcity
[11:54] parabas. If you guys want to hear some
[11:57] podcasts to listen to over the weekend
[11:59] on critical minerals, macro voices with
[12:01] Craig Tinddale, good one. Um, Smarter
[12:05] Markets with Robert Freedelland and Jeff
[12:07] Curry. Great one. I'd go listen to that.
[12:10] Um, in terms of the critical minerals,
[12:12] again, Trump can't speak about them more
[12:14] enough. He's doing deals with them.
[12:16] Everything is focused on it. he had an
[12:19] announcement on this. I think this in
[12:22] particular in terms of backtracking on
[12:24] price floors is going to start to be
[12:26] more of a story around the globe. Now, I
[12:28] wanted to highlight
[12:30] this chart in terms of the raw
[12:33] industrial metals. So, the CRB ren the
[12:35] CRB raw industrials metals which has a
[12:38] high correlation to countries uh that
[12:41] are in the metals game and the minerals
[12:43] game over time. Uh, I created a copper
[12:46] and silver because they're one of or two
[12:48] of the components. This one ends up
[12:50] being threequarters copper and a quarter
[12:53] silver to normalize it to some degree
[12:55] with the volatility of silver. So, this
[12:57] is the chart over the course of the last
[12:59] 24 years into July. And I picked July
[13:02] because July is when I wrote the end of
[13:04] July is when I wrote the piece on PMIs
[13:07] going higher and believing that this
[13:09] would kick in in the coming uh in the
[13:11] coming months. And now that we're
[13:13] starting to see it as we get into the
[13:15] new year, uh you've had a huge move in
[13:18] DRAM prices and now you've taken this
[13:20] chart and this is the copper silver.
[13:22] You're going to have a pullback uh in
[13:24] this back towards 0.5. But the reality
[13:26] is for anyone looking unless you don't
[13:29] believe the copper silver story which is
[13:31] needed for electricity and the fact that
[13:33] we have supply shocks. Are we going to
[13:35] go straight up in a line? Absolutely
[13:36] not. We did as I showed before. We had a
[13:39] huge month in silver again for the fifth
[13:41] month in a row. But you got to pay
[13:43] attention to the story that the raw
[13:45] industrial metals, aluminum, all these,
[13:46] there's going to be switching that
[13:48] happens because when those metals go up
[13:50] up, the ones that can be switched are
[13:52] going to go to other places. This is the
[13:54] overlay of that chart with EWZ. Brazil.
[13:57] Brazil. Brazil. I can't emphasize it
[14:00] enough. I've talked about it. I think it
[14:02] fits in so many things for this year. So
[14:04] much so that this week for 22V I will
[14:07] have a paper come out on Brazil and the
[14:09] green computer arbitrage of the AI
[14:11] decade decade and it goes through a
[14:13] variety of different things. Brazil
[14:15] finishes up the month again this isn't
[14:17] completely updated. It was down about
[14:19] one a little over 1% but you're still
[14:21] talking about the biggest rise since
[14:22] 2020.
[14:25] Um silver with the price going higher.
[14:28] This is how it's going to trigger into
[14:29] the energy market. So silver is a major
[14:33] part of solar and just to give you an
[14:35] idea this chart here shows the black uh
[14:39] component here is silver's percent of
[14:42] solar panel cost. So it went from 3% in
[14:45] 2019. This was it into this year now
[14:49] with prices up and this was using a
[14:51] price of around 90 something dollars. So
[14:53] again you're talking about a rise in
[14:56] this where it's going to make it harder
[14:57] for solar to be a buildout. Silver
[14:59] squeeze leaves solar panel makers
[15:01] feeling the heat. Solar is for power. We
[15:03] need power. Go listen to this podcast.
[15:06] Rick Rule went through and he talked
[15:08] about the fact that oil it's time for
[15:10] oil and gas stocks um which we're
[15:13] seeing. But I think the rationale was
[15:15] we're in the parts of a boom now of
[15:19] of exactly what we said. So again just
[15:22] highlighting this is before the close on
[15:25] Friday. This is actually through
[15:26] Thursday. These numbers have come down.
[15:28] But the main point is again you are
[15:30] getting massive moves in materials and
[15:34] energy for investors for mutual funds
[15:36] for everyone who's looking at it. You
[15:38] have to be involved. Chevron verse
[15:41] salesforce.com I've highlighted this
[15:44] trade since in this area in here we've
[15:47] seen the breakout. This is not updated
[15:49] through uh all of Friday. I will give
[15:52] you the
[15:54] monthly performance. If you were smart
[15:57] enough to put this trade on and follow
[15:58] my lead, you're up 45% this month. Uh I
[16:02] did have some people that thanked me at
[16:04] the event in Miami who had put this on
[16:06] by buying calls on Chevron and puts on
[16:09] Salesforce.com. Again, I've shown XLE
[16:12] over IGV. It doesn't really matter to
[16:14] me. And this is the chart. We're at the
[16:16] very beginning stages of this, guys. Um
[16:18] this is going to continue to go higher
[16:20] in my opinion. Software is in the early
[16:22] stages of a rerating. Power is in an
[16:25] early stage and I do think you're going
[16:26] to see energy prices move higher at a
[16:28] time when everyone is bearish on them.
[16:31] SMH versus IGV. Again, this has been my
[16:33] favorite trade. Semis, I've now moved
[16:35] into energy as more as one that is less
[16:38] invested in. I'd rather be in the energy
[16:40] trade for this year uh than SMH.
[16:44] Although X XSD or any of the package
[16:47] things that I did which are more the
[16:49] analog names, I do think those names can
[16:51] double this year. But when you're
[16:53] dealing with Nvidia and Broadcom in
[16:55] particular, I think those have already
[16:56] had a good run as has Intel. I think
[16:58] you're still going to have rises in this
[16:59] because we don't have enough chips. Uh
[17:02] but again, I think you look to energy at
[17:04] this point. OpenAI on Friday, fourth
[17:08] quarter IPO plan to race to beat
[17:11] anthropic to the market. And I've said
[17:13] this before. I think Open AI is just a
[17:15] cancer right now for uh any of the
[17:18] hyperscalers.
[17:20] They are forcing so many other issues,
[17:23] doing deals. Everyone's trying to frontr
[17:25] run each other. They're doing deals with
[17:27] any place where scarcity is going to
[17:28] kick in and I think that ends up to a
[17:30] race to the bottom. I think it hurts in
[17:32] terms of the cloud ability because of
[17:34] the data center side. The models are
[17:36] moving extremely fast regardless because
[17:38] of the efficiency side. But I think open
[17:40] AAI, I think XAI, I think Enthropic, all
[17:43] of these fourth quarter or all of these
[17:44] IPOs that are coming to the market along
[17:46] with SpaceX, you're talking about
[17:48] trillions of dollars
[17:50] for growth companies out there or the
[17:52] growth bucket, you're going to be
[17:53] saturated with deals. And I think OpenAI
[17:55] is just going to continue to hurt
[17:57] things. And I want to remind people back
[17:59] in June of 2007, Blackstone, heavily
[18:02] into credit and heavily into the real
[18:03] estate market, basically came to the
[18:06] market just before the great financial
[18:07] crisis. This tends to happen over time
[18:09] in terms of IPOs or deals coming out
[18:11] around the time of peak. I don't think
[18:13] this is a peak in the market. But I do
[18:16] think for growth, I do think for
[18:19] anything related to AI and software and
[18:22] code, I'd be very very wary that OpenAI,
[18:25] that XAI, that anthropic that all of
[18:27] these deals coming out have an eerie
[18:30] similar feeling to what happened when
[18:31] Blackstone went in. especially when you
[18:34] combine it with the fact that they got
[18:35] the curse of being this at the end of
[18:39] last year on December 29th. So, I'm
[18:41] going to stick with my side that you
[18:43] want to be long commodities, you want to
[18:44] be long industrials, you want to be long
[18:47] this stuff. Um, I just want to highlight
[18:49] this came out this week. I saw this in
[18:52] um in X and I just wanted to take you
[18:56] through basically taking these dots and
[18:58] kind of bringing it together and getting
[19:01] ideas. Again, I'll be doing these demos
[19:04] for people. Uh, but when you take and
[19:06] you see something like that and you put
[19:07] it into chatbt or Gemini and you ask to
[19:10] explain it and what it means and you
[19:12] look for ideas and it shows you high
[19:14] bandwidth memory, Seridus, Pam, optical.
[19:19] You get these stories and you start
[19:21] realizing, okay, we've got memory
[19:23] pressure. How how how big is the
[19:25] scarcity issue? One major manufacturer
[19:27] saying all of its nan flash production
[19:29] for 2026 is already sold out. how the AI
[19:32] buildout is pushing up electronics
[19:33] prices. This will be a story as we go.
[19:35] Samsung raises NAM prices by 100%.
[19:39] Supply can't keep up with demand. And
[19:41] again, I remind you, nobody wanted to be
[19:44] long memory in the summer of last year.
[19:46] Now, Elon Musk is saying memory the
[19:49] memory needs on the earnings call. Frame
[19:51] memory as a long-term key bottleneck for
[19:53] Tesla's AI ambitions and said Tesla may
[19:56] need to build its own large
[19:57] semiconductor fab that includes advanced
[19:59] memory. If you're not going to trust me,
[20:01] at least trust Elon. Um, he said when he
[20:04] looks three to four years out, the main
[20:05] limiting factor in Tesla's growth is
[20:07] chip production. Do you really want to
[20:10] belong software when everyone is talking
[20:12] about the fact that we don't have enough
[20:14] chips? That AI demand is insatiable.
[20:18] Jensen Yu Wong is talking about $85
[20:20] trillion of a buildout. And to have that
[20:23] buildout work, it's all going to be in
[20:24] AI factories and on the edge, which
[20:26] means we need as much chips as we can.
[20:29] This story is not over yet. Memories had
[20:32] a big run. I'm sure best case scenario
[20:34] over the next year. Uh sorry, two years.
[20:37] Best case scenario, I can't imagine
[20:39] Micron more than doubling. I can imagine
[20:42] battery names more than doubling. I can
[20:44] imagine many of the smaller semi-names
[20:47] going up, but we've taken these things
[20:49] up to big levels. But until we start
[20:50] seeing something where we catch up on
[20:52] the earnings front, you're going to keep
[20:54] getting the movements that you got. So
[20:56] SKH Highix reported 66% year-over-year
[20:59] increase and 137% increase in operating
[21:03] profit. HBM revenue more than doubled
[21:06] year-on-year. Um we're still in the
[21:08] early stages, believe it or not, of
[21:10] memory in terms of the story. Um,
[21:12] SanDisk
[21:14] didn't close up as much as it was here
[21:16] pre-market on Friday, but I I think it's
[21:19] just more the earnings per share beat by
[21:22] almost 100%. Uh, on this the guidance 13
[21:27] verse 421. When in history have you seen
[21:30] those types of numbers? So, I took that
[21:32] chart, I said, I want to expand uh past
[21:35] that. What are the other verticals that
[21:37] will benefit from this chart? I put it
[21:39] into nano banana and this is what you
[21:41] get. Advanced compute, power
[21:43] infrastructure, metals and minerals to
[21:45] be able to build this which is what is
[21:47] happening. We actually need those
[21:50] things. You'll come back in three years
[21:52] and you'll be there. ASML, I've talked
[21:54] about this one. Uh again, it's been a
[21:56] good time to be long these names. Apple
[21:59] sellers surge on 16% on staggering
[22:02] iPhone demand. I mentioned how much
[22:04] better the iPhone is. I am grateful for
[22:06] having got this when I did because the
[22:09] cost of everything is about to go higher
[22:11] because of memory. Significant increase
[22:12] in memory prices make smartphones more
[22:14] expensive. If you haven't purchased your
[22:17] high-end computer, this Mac I bought in
[22:19] the last two months, the phone I bought
[22:21] in the last two months, go get them
[22:23] before the prices go up significantly
[22:25] because they're going to go up
[22:26] significantly. Get ready. Computers in
[22:28] 2027 will be triple the price they are
[22:30] now. As Clawbot gets more popular,
[22:33] tokens get more expensive, and open
[22:35] source models become more powerful,
[22:36] there will be an obscene consumer rush
[22:38] to buy high hardware. I won't read you
[22:41] all of it, but let's just say you want
[22:44] to be long the things associated with
[22:45] it. This week's video for the week
[22:49] is Deis Sabas and Dario Modi. This was
[22:51] actually last week, but I didn't see it
[22:53] till this week. I thought it was
[22:55] worthwhile to show this week because
[22:57] they got into a lot of different topics,
[22:58] but also these are the two nicest people
[23:01] in the AI world. These are the ones that
[23:02] I think are the most honest. They're the
[23:04] ones that will tell you the negatives
[23:07] along with the positives. Uh but this
[23:09] interview, they went back and they
[23:10] talked about a lot of different things
[23:12] that are important. Um Habas remains
[23:15] cautious on, let's say, the creativity
[23:17] for science side, uh which is his
[23:20] definition of AGI. Uh so he's still
[23:23] talking you know five years for true ASI
[23:27] or where you're going to actually have
[23:28] science breakthroughs meaning more than
[23:30] five years while Dario Modi is a little
[23:33] bit more. They both talked about jobs
[23:35] and they talked about the fact that
[23:37] there's going to be a medium-term
[23:40] issue. Um it just is. And I think their
[23:44] main point was governments are
[23:45] unprepared. You're going to start to see
[23:47] this. It's not just governments,
[23:48] organizations are unprepared. Uh I'll
[23:50] talk about that more as we kind of move
[23:52] forward. Demos on the AI shift 10 times
[23:55] bigger and faster than the industrial
[23:56] revolution. I mean he's talking about
[23:59] massive GDP expansion on this. Uh in a
[24:02] world where AI moves exponentially, what
[24:04] happens to the value of longduration
[24:06] assets? I wanted to bring this up
[24:09] because I I just can't get around the
[24:11] same way I talked about tenure rates and
[24:13] the Fed thinking about things like
[24:15] today. If you're involved in long
[24:18] duration assets, the amount of
[24:19] assumptions you're taking without the
[24:21] liquidity associated with it, I don't
[24:23] see how they have any value. Personally,
[24:26] you can't predict six months out. That's
[24:27] how fast things are moving. I think
[24:29] everyone in the market needs to adjust
[24:31] to time. We've seen things with memory.
[24:33] We've seen things with silver. We've
[24:35] seen things with gold. I think
[24:37] longduration assets, I really don't know
[24:40] how you can think more than three years
[24:42] out on anything. So, I think these
[24:43] things are going to remain an issue. Uh,
[24:45] I think the money is going to look for
[24:47] liquid things. I think the volumes on
[24:48] the liquidity side are going to be there
[24:50] because I think people still have to
[24:51] manage money. I only bring that up
[24:53] because I see higher volatility uh, in
[24:56] terms of the markets and you're going to
[24:57] have to get comfortable because the
[24:58] things to invest in now are about
[25:00] scarcity. They can run up dramatically.
[25:02] They can fall back 50% in a short amount
[25:04] of time as we saw with silver and gold.
[25:06] You're going to see this over and over
[25:08] again. You're not going to be able to be
[25:09] involved in these on any kind of a basis
[25:11] and I don't think you're going to have
[25:12] time to get in. You're going to have to
[25:13] be buying on days if you're not in when
[25:16] things are crazy. You're going to have
[25:17] to be getting out during the par
[25:18] parabolic side, but you run the risk of
[25:20] these things never coming back to you. I
[25:22] know multiple people in Micron Sandisk
[25:24] that now are on board, but they can't
[25:27] buy them up here. Um, the arrival of
[25:29] AGI, just to show how close it is,
[25:31] Google DeepMind announced
[25:34] that Shane Le is the chief AGI
[25:38] scientist, the co-founder of DeepMine.
[25:41] Humanity
[25:44] needs to wake up. Dario Modi put out a
[25:46] new
[25:48] warning in an AI constitution.
[25:52] Uh it's worth going through and it's
[25:54] just highlighting the risks that are
[25:56] coming. And this gets back to Demisab
[25:58] said the same thing. Sam Alman also said
[26:00] the same thing which I'll read in a
[26:01] second. Governments are not prepared.
[26:04] But this goes further because I have to
[26:06] answer constantly quantum risk for
[26:08] Bitcoin. And I sit there and say, "Are
[26:10] you kidding me? With everything going
[26:11] on, you're worried about quantum risk?"
[26:14] And yet still, intelligent people keep
[26:16] coming my way. Hey people, I want you to
[26:18] read this and just realize we are at the
[26:20] level now where AI agent swarms are
[26:23] going to be a story.
[26:25] Bitcoin is far far far more prepared for
[26:29] agent AI agent swarms than JP Morgan and
[26:32] Goldman Sachs and any of the banks you
[26:34] want. We saw a run on a bank recently
[26:36] with SF SVB. what would happen if this
[26:39] happened with multiple agent swarms or
[26:41] the money was taken out and I'm sure it
[26:43] would end up in Bitcoin um at some point
[26:46] over the course of the next year. The
[26:47] more I listen to this, the more that
[26:49] they are screaming, we've already seen
[26:51] the danger that's happening. When these
[26:53] guys say we are going to reach the cyber
[26:55] security high level on our preparedness
[26:56] framework soon for for open AI,
[27:00] we're getting there. It is very
[27:01] important the world adopts these tools
[27:03] quickly to make software more secure.
[27:04] There will be many very capable models
[27:07] in the world soon. This is starting to
[27:09] get out of control. These guys have to
[27:10] release this. They're spending the
[27:12] money. They're going to release things
[27:13] before the security under the other side
[27:16] is ready. So, the system is going to be
[27:17] ahead of it. I would just be very wary
[27:21] and thinking about the fact that this
[27:23] quantum risk for Bitcoin, which is
[27:26] multiple years down the line. In fact,
[27:30] timelines also remain highly contested
[27:32] with projections ranging from a few
[27:34] years to several decades.
[27:37] They're going to have preparedness
[27:38] because they're going to watch what
[27:40] happens with agent swarms on these old
[27:42] archaic fiat systems. Mark my words,
[27:45] there will be an event with agent swarms
[27:46] that will happen in the banks. That will
[27:49] be something that goes on whether it's
[27:51] the stock exchange, all of these things.
[27:53] We are getting to the point where
[27:55] billions of AI agents will be able to
[27:57] target things and the defense is just
[28:00] not there. AI token consumption
[28:02] increased exponentially last year due to
[28:04] reasoning models. Now it's going to
[28:06] increase exponentially again with
[28:08] agentic workloads.
[28:10] The agentic world is about to explode
[28:14] guys.
[28:15] Here's more of the agentic world. The
[28:17] future of personal AI assistance. So
[28:20] this is all Claude Claudebot which has
[28:22] gained most of the stories. That was an
[28:24] Apple Mac story place. Uh the most
[28:27] important video you'll watch. Claudebot
[28:28] has taken X by storm and for good
[28:30] reason. It's the greatest application of
[28:31] AI ever. Every week there's a new thing
[28:33] by Claude guys. Every single week Gavin
[28:35] Baker put this out just to show that the
[28:37] productivity boom is here already and
[28:39] it's going to explode as AI agents come
[28:41] in. Revenue per employee up 75% for the
[28:44] top decile of AI software companies in
[28:46] 2025. Remember this is with software
[28:49] going down
[28:51] probably doesn't slow down in 2026 given
[28:53] the December revolution in AI coding
[28:55] agents.
[28:59] Prism accelerating science writing and
[29:01] collaboration with AI. This is just
[29:03] speeding up the process of the medical
[29:05] side allowing scientists to go on just
[29:08] continues to make it easier and easier
[29:10] for everyone to make breakthroughs. And
[29:13] here's one of them again David Sinclair.
[29:16] Uh I follow him there as part of my HRV
[29:20] substack. Uh I do a lot of things from
[29:23] his book FDA greenlights life biosens
[29:26] human clinical trial on a near total
[29:28] reset. A near total reset in longevity.
[29:34] First of its kind freightonly driverless
[29:36] truck network hits commercial scale.
[29:39] This was on Wednesday. Get ready to see
[29:41] trucks driving down the road with no
[29:43] people in them at some point. Next six
[29:46] months are going to be really weird.
[29:49] I follow AI adoption pretty closely and
[29:51] I've never seen such a yawning inside
[29:53] outside gap. People in San Francisco are
[29:55] putting multi- aent claude swarms in
[29:58] charge of their lives consulting chat
[30:00] bots before every decision wireheading.
[30:02] If you read through the rest of it,
[30:05] this is all and this is Kevin Ruse who I
[30:07] believe is a New York Times technology
[30:09] writer. He's saying at the same time
[30:12] you're finding people that don't use it.
[30:15] I completely agree as I do this for a
[30:17] living and I talk to people about it.
[30:19] Bill Gurley, the number one way to
[30:21] protect your career from AI is to be the
[30:22] most aggressive user of AI in your
[30:24] field. I'll say it again and again on
[30:26] here. Uh mainly because it's resonating.
[30:29] Uh I will be my I did my first video for
[30:32] the webinar series. Um we will have the
[30:34] payw wall going up in the next two
[30:36] weeks. They're just going through all
[30:37] the bugs at this point. I know that I
[30:38] say that every week. It is coming, guys.
[30:40] I know you're waiting. I know you've
[30:41] been patient. Your kids have to be ready
[30:44] for this. They have to be ready. They're
[30:46] the ones that have to be AI native. They
[30:48] have no choice. They're not being taught
[30:49] it in the school before they get there.
[30:51] They have to be using it all week long.
[30:53] And I'm going to show you. I thought the
[30:55] first video went well. Uh this is kind
[30:58] of a summary on what it is.
[31:02] Repetition builds comfort. Comfort
[31:04] builds fluency. Fluency turns AI from a
[31:07] tool into a partner. AI is not an
[31:09] answerbot. Its real value comes from
[31:11] exploration. If you guys have gotten to
[31:14] like the way that I think about markets,
[31:16] the way that I think about going from an
[31:17] idea to something, that all has been
[31:20] exacerbated by AI. I always had that.
[31:22] I've been a curious person. I collect
[31:24] dots, as I call them, as I go along. For
[31:27] those of you who listen to my podcast,
[31:28] Green Marbles, I collect them all the
[31:30] time. I had one uh moment of integration
[31:33] that happened where all of a sudden the
[31:36] systems thinking side of my brain popped
[31:37] out and answered a question for me. I'll
[31:40] get to that at the end. Human creativity
[31:42] versus AI optimization. The only edge we
[31:44] have as people is right now on the
[31:46] context side and finding the ideas and
[31:48] being able to filter. Our creativity is
[31:51] what allows us with the ability of
[31:54] having a polymath with us find things.
[31:58] That is the game plan for everyone. And
[32:00] here's an example of it. There was a
[32:02] deal this week. Meta and Corning. I've
[32:06] recommended Corning before.
[32:09] a $6 billion multi-year deal between
[32:11] Meta and Corning. Optical fiber is the
[32:14] emerging physical bottleneck. So
[32:16] remember, memory is a bottleneck. I've
[32:19] talked about Corning. I've talked about
[32:20] it and referenced it. So it's up a good
[32:23] amount since then. We're not even in the
[32:25] big phase of Corning. This is before the
[32:27] glass buildout. This is for the need
[32:29] before the needs of the autos, the needs
[32:31] of the phones, the needs of the
[32:32] computers, which is coming. They're
[32:34] talking about a shortage in optical
[32:35] fiber. Why the scaling east west traffic
[32:37] that goes back to the thing I showed you
[32:39] earlier with the Steve Jobs side in it.
[32:41] So let's go back to my how do you take
[32:45] something like that that happens and
[32:46] immediately go hey there's a news
[32:48] article give me and I run my skill on
[32:51] this and then I go in and do my deep
[32:54] research. So I did that. I ran this
[32:57] while I was on a plane flying from Miami
[32:59] to LA. It runs this whole thing. It ends
[33:01] up giving me a fivepage thing. Viser
[33:04] labs the fiber ingredient it goes
[33:07] through everything in there creates all
[33:09] the details it gives me a fivepage thing
[33:13] with a bottom line this this deal is
[33:15] less about Corning specific revenue
[33:16] uplift and more about institutional
[33:18] validation the optical bottleneck thesis
[33:20] the constraint migration from GPU power
[33:22] optical is now being priced into
[33:23] hyperscaler procurement behavior this
[33:26] all gets into data movement data traffic
[33:28] optical is a better way to go through it
[33:30] so I take all of that stuff it goes
[33:32] through my investment process and what
[33:33] do come out with
[33:36] a list of about 15 to 20 names in this
[33:39] framework that I've shown over and over
[33:40] again. So for any of you who want it,
[33:42] the optical fiber bottleneck, there's a
[33:44] bunch of names in here that will benefit
[33:47] all with the same thing. They've got a
[33:48] technical score from Johnny Ro. They've
[33:50] got a commentary score in terms of are
[33:52] they already seeing the optical fiber
[33:55] side? Is it already showing up and are
[33:57] is it already progressing over the last
[33:58] three earnings reports? And again, are
[34:00] revisions heading higher in a strong
[34:03] way? Are they going? All of that's going
[34:05] here is
[34:07] clawed. So, I basically took I don't
[34:11] know two minutes. I put the ad in. I
[34:13] launched it and then I went in here and
[34:16] I asked it to do something on Microsoft
[34:19] for me. So, can you go through the
[34:21] recent Microsoft earnings report and put
[34:22] together a model on how their financial
[34:24] model has changed due to rising RPOS? If
[34:26] data centers are bottlenecked and they
[34:28] keep spending at current rate, when will
[34:30] this become an issue? So, it goes
[34:32] through, finds all the estimates, puts
[34:34] this in based on everything it gets from
[34:36] both the earnings commentary,
[34:38] and then it comes through and it says
[34:40] this. Now, only thing I did was this.
[34:42] That's all I did. I hit it. It spent
[34:44] about 3 to five minutes going through.
[34:47] It gave me a Excel file with all of this
[34:50] stuff in it with numbers that I can go
[34:52] check with the street. I can do whatever
[34:53] I want. But if you wanted to ask a
[34:55] question, have it modeled out, and then
[34:57] go bring it back and look at your own
[34:59] analysts and have them go through it.
[35:01] It's saying if things don't change and
[35:03] we go at this run rate of RPOS and this
[35:06] capex, and that's the thing I want. How
[35:09] do you get this number to go faster if
[35:11] the RPOS are going and the reality is
[35:14] you want to see what's going to happen?
[35:16] So, I did that. You can do it on your
[35:18] own. HRV, thanks to everyone who's been
[35:21] going through it. I made the best new
[35:24] Substack list number five uh on the HRV
[35:27] thing. Uh I I've really enjoyed talking
[35:30] back and forth with people who have got
[35:32] it. All right, Bitcoin still asleep.
[35:36] Doesn't want to move given what went on
[35:38] this week. It was actually a pretty
[35:39] quiet week. Um given how much silver and
[35:41] gold were down, didn't follow silver and
[35:43] gold on the way up. Kind of kind of went
[35:45] through its little girrations. The chart
[35:47] is still horrible. uh until we get a
[35:49] change in it, it is in the list of hey,
[35:52] we need this thing to go for the short
[35:54] term. So, from a trading perspective,
[35:56] it's very hard to buy something like
[35:57] this other than stick your toes in and
[35:59] not and stop yourself out. It has not
[36:02] acted well at all. I wrote this paper,
[36:05] the Substack,
[36:07] uh I highly recommend everyone read it.
[36:10] Um it goes for the silver side, it goes
[36:13] for the micron side, it goes for
[36:14] everything.
[36:16] It was clear that there was parabolic
[36:18] envy. This is all at the event I was at.
[36:20] I just want to remind people silver
[36:22] didn't move for 14 years and then when
[36:25] it finally did, it went parabolic.
[36:27] Micron didn't move for a long time. It
[36:29] went parabolic. Corning didn't move for
[36:31] a long time, 15 years, and then it went
[36:33] parabolic. I'm just telling you these,
[36:35] this is the world we're in. When things
[36:38] turn, they're going to go quickly. The
[36:41] sausage squeeze of how many names on the
[36:43] software side are not going to
[36:45] participate. I do not believe that the
[36:46] Mag Seven can get you the alpha that is
[36:49] necessary. I think there's a lot of
[36:51] headwinds for them. Part of them is the
[36:52] RPO, part of them is the IPO that are
[36:54] coming. Part of them is just the amount
[36:56] of debt these guys are are now taking. I
[36:58] want to be long energy. I want to be
[37:00] long materials. But when you go through
[37:01] things, I still believe Bitcoin will be
[37:05] part of this equation once we get
[37:07] through it. One more thing uh to finish
[37:10] up. Uh I have never mentioned NFTTS. I
[37:13] have never brought it in. So when I
[37:15] mentioned a moment of integration, I do
[37:17] want to highlight that between
[37:19] conversations I've had with very
[37:20] respected people in the NFT side, but
[37:22] also something Demis has said last week
[37:27] on AI purpose. I finally have a place to
[37:30] where I understand where NFTs will be an
[37:32] important thing. This is not a digital
[37:34] art thing. This is not a people thing.
[37:35] This is not a cyberpunk thing. This is
[37:37] not Pudgy Penguins. none of the things
[37:40] that you guys probably remember from
[37:42] 2122.
[37:44] But I will say as part of the utility
[37:46] function for what is happening in
[37:47] crypto, stable coins, realworld asset
[37:50] tokenization along with NFTTS is a big
[37:53] deal. I think you should read this
[37:55] report. I had a fun time writing it. I
[37:57] had a fun time coordinating with some
[37:58] very very smart people in the space. But
[38:01] a lot of these issues have come up and I
[38:03] look forward to spending more time
[38:04] talking about in the future. That's it
[38:06] for this week. I look forward to being
[38:08] back and doing it from Brooklyn next
[38:10] week. Thanks, guys.
[0:03] Angeles.
[0:04] Uh, lot going on again. Let's try to get
[0:07] through it. Uh, software collapse,
[0:11] weekly recap. Um, silver and gold
[0:14] collapse on Friday. Uh, Fed holds, job
[0:17] picture, PMI set to rise.
[0:21] We'll go through the industrial metals,
[0:23] Brazil. uh this open a virus continues
[0:27] to spread and I think it remains a story
[0:30] uh for the rest of the year. Swarm risk
[0:33] from AI agents, the corny meta corning
[0:35] metadal and Bitcoin remains asleep. So
[0:39] I'm just going to keep running with the
[0:40] theme. Uh you want to be long scarcity,
[0:42] short abundance for the entire year. Get
[0:44] used to these parabolic moves higher and
[0:47] parabolic moves lower. Uh daily
[0:50] volatility and things that are scarce is
[0:52] going to remain on the high side. You've
[0:53] seen it with a lot of assets during the
[0:55] month and also on Friday. Uh in the case
[0:59] of software, Gavin Baker put out another
[1:02] thing and again I I posted too. The
[1:05] beatings continue. I use Claude in
[1:08] Excel. Blew me away. I'm going to show
[1:11] some of that later on in this, but um
[1:13] it's really hard to not get negative on
[1:16] the software side. And then Microsoft
[1:18] comes out and the chart looks horrible.
[1:21] Um, you know, at least you still have an
[1:23] upward sloping 200 day moving average at
[1:25] this point, but you've broken below, by
[1:28] the way, on the charts for the week. I'm
[1:29] doing this on Friday,
[1:32] uh, before the market is closed. Uh, so
[1:35] there's a couple things. The prices
[1:36] aren't exactly going to be in where they
[1:38] are, but give or take 15 minutes, unless
[1:40] something big happen uh, in that 15
[1:43] minutes. Just know that these are not
[1:44] the actual closes for the month, but you
[1:47] can see the charts negative on
[1:48] Microsoft. Um Dan Ies who's been talking
[1:52] up Microsoft even kind of has his new
[1:54] price target a little bit lower but I
[1:56] think the story and this is really
[1:57] important um is really here they had
[2:01] massive RPOS
[2:03] so this is kind of like the story for
[2:06] Oracle but here's the thing that I said
[2:08] my issue for these companies the
[2:11] hyperscalers that are spending the money
[2:14] is that if they're depending on the
[2:16] cloud revenue they're depending on the
[2:18] data centers is being built and the
[2:20] bottleneck's not happening. We have
[2:22] massive bottlenecks that are going to
[2:24] continue and this story is going to make
[2:26] it difficult for them to be able to get
[2:27] the capacity at the same pace that
[2:29] they're spending the money. So that has
[2:32] implications for buybacks. It has
[2:33] implications for a lot of them and I
[2:35] just think at this point the uncertainty
[2:37] over when these companies will actually
[2:39] get the revenues just continues to grow.
[2:40] So you have to be wary about the
[2:42] spending. And here's the chart of
[2:44] Oracle, which is the orange line and led
[2:46] the way lower. But Microsoft is now
[2:48] following it. It may not be following it
[2:50] for the debt reasons, but it's
[2:51] definitely following it for the revenues
[2:53] down the line reasons. Uh this is SAP
[2:56] out of Germany. This problem in software
[2:58] is not just a US thing. This is a global
[3:01] thing. software to me, as I'll keep
[3:03] saying, if you're spending your time
[3:05] trying to pick the bottom in these, you
[3:07] don't make money picking the bottom in
[3:09] these charts unless you have a long
[3:11] enough time to wait for this to bottom.
[3:13] Uh, and I'm not really sure that the
[3:14] multiple compression story is the only
[3:16] thing. As someone again who uses this
[3:18] seven days a week, all day long, there
[3:21] is not a single hour of the day where
[3:22] I'm not using AI unless I'm in a meeting
[3:24] or in some kind of exercise class.
[3:28] The ability of building things and
[3:30] competing hurts at least the growth
[3:31] rate. You can sit there and debate me on
[3:33] all the things that I've highlighted in
[3:35] the last few weeks, but the charts are
[3:37] speaking as SAP plunges on cloud backlog
[3:40] myths. Again, this whole backlog of
[3:43] cloud, I just think it's an issue. Now,
[3:45] Palanteer has been brought into it.
[3:46] Palanteer definitely benefits from the
[3:48] data analytics, but when you have
[3:50] multiple compression happening across
[3:51] the software space,
[3:53] they're not immune to this. even if the
[3:55] stock ends up going higher in in in the
[3:57] future, you could go back, you know,
[4:00] significantly and still be up a lot
[4:02] since uh uh since the beginning of 25.
[4:05] So, just be very wary in these names.
[4:07] And when you get this kind of story, the
[4:09] only reason I'm putting this up there is
[4:12] when there's good news, and these stocks
[4:15] fall a lot, not a little, they fall a
[4:17] lot in charts like that. Uh that's a
[4:20] problem. So, good news being bad
[4:22] reaction, not worth looking. I I think a
[4:24] lot of people this week uh tried to fade
[4:26] Chimath who's been continuing to pound
[4:28] the table on on the SAS side and again
[4:31] legacy SAS has a short window to convert
[4:34] RPO to revenue. Completely agree. I
[4:36] don't understand why this is such a
[4:38] complicated thing other than people's
[4:40] egos thinking that they can pick the
[4:42] bottom of something. There are better
[4:44] games to play here. But I think the
[4:45] issue is going to be can you be safely
[4:48] being long Western Digital at this point
[4:49] when it falls violently on on earnings?
[4:52] Can you be long silver? When it falls
[4:54] violently, unfortunately for these
[4:56] parabolic charts on the upside,
[4:59] they're just going to have extreme
[5:00] volatility. They're not going to be able
[5:01] to be a software name that you can sit
[5:03] in without having to worry about it. I
[5:05] wanted to bring this up because just
[5:06] remember this was February 2nd of last
[5:09] year. There's a new kind of coding I
[5:11] call vibe coding. Elon Musk giving his,
[5:14] you know, I think software is dead.
[5:16] Remember, he is really uh been vocal
[5:19] about this. So again, everyone wants to
[5:20] fade. Elon Musk as well. Here's the
[5:23] facts. Cursor, most people had not heard
[5:27] of it. February 7th of last year, just
[5:29] five days after
[5:32] Andre Carpathy put out the vibe coding
[5:34] thing. So five days, Curser went from
[5:36] one to 100 million ARR in 12 months.
[5:39] Fastest SAS to achieve this. This week,
[5:42] just canceled cursor. End of an error.
[5:45] kind of crazy, but I would have paid
[5:46] like $2,000 a month for it only a year
[5:48] ago.
[5:50] That's what I showed you in terms of the
[5:53] time frame. So, I just asked Rock, "What
[5:56] does this mean? Does this highlight the
[5:57] speed of competition for things built on
[5:59] code where AI can replicate and prove
[6:01] the wave of cursor cancellations you're
[6:03] seeing, especially the pattern around
[6:04] January 26th? very clearly highlights
[6:06] just how brutally fast competition moves
[6:08] into AI powered coding tools and how
[6:11] little mo rapper products have once the
[6:14] underlying models become commoditized
[6:16] and powerful enough again not all
[6:18] software is going to fit into the same
[6:20] component
[6:21] but at this point everyone who has
[6:23] software attached to them is going
[6:24] through a repricing and I think it is
[6:26] not only justified I'm going to keep
[6:28] saying this you want to be long scarcity
[6:30] you want to be short abundance anything
[6:32] built on code you have to prove that you
[6:34] can adapt your business. You have to
[6:36] prove that you're not going to get eaten
[6:37] by these little companies, not just in
[6:39] the US, globally. And I think that's
[6:41] going to happen. Um, another Claude bot
[6:44] was out. This got it. Um, feels like the
[6:46] chat GPT moment. I can't tell you how
[6:48] many Chat GPT moments there have been
[6:51] with Claude over the past three months.
[6:53] They just keep coming out time and time.
[6:55] And this is why you're seeing this.
[6:56] Anthropic was founded in 2021.
[6:59] Estimated revenues 1 billion, 10
[7:01] billion, 18 billion, 55 billion, 148.
[7:04] Now again they are dominating. This is
[7:07] absolutely competition for software
[7:09] companies. So if you don't believe it
[7:12] is, it is. This is all enterprise coding
[7:15] going on. They're seeing the revenue. So
[7:17] they're seeing companies use it. And
[7:19] maybe they're all startups. Maybe
[7:20] they're not all big enterprise. Maybe
[7:22] they're just getting on token usage. But
[7:25] I'm very wary. All right, we're
[7:26] finishing off uh the month. Everything's
[7:30] pretty much up across the board. So
[7:31] despite all the volatility that's been
[7:33] going on, um,
[7:37] still finishing up with the first five
[7:39] days of the year up and the month up. I
[7:40] think it's like 92% of the years when
[7:43] that happens, the market's up. Even
[7:44] though that's numerology, I'm just
[7:46] bringing it up because it went on for
[7:47] the week. S&P barely budged. So again,
[7:50] despite all of the news, we've had three
[7:52] weeks in a row of not moving. Barely
[7:54] down, barely down, barely up. Um, in
[7:57] terms of the S&P 1500 level two, GIX,
[8:02] best performing group year to date,
[8:04] energy. I'm going to keep pounding on
[8:06] energy. Number two, capital goods.
[8:08] Number three, materials. If this doesn't
[8:09] scream the physical upgrade that we've
[8:12] been talking about, nothing will. On the
[8:15] bottom, software, by far the worst
[8:18] performing sector, down 12% year to
[8:20] date. IWM down 2.3%. and it outperformed
[8:24] for the month but gave a little bit back
[8:26] in the last week. Q's barely bunched for
[8:28] the week. Mag 7 up slightly after
[8:31] earnings. Uh here's gold, here's silver.
[8:35] Look at these days. Nothing over the
[8:37] past five years that's even comparable.
[8:40] Multiple standard deviation fall
[8:42] collapsing in these. And then you look
[8:43] monthto date. Uh another great month for
[8:47] silver up here. and gold had its best
[8:50] month in the last 15 years, even with
[8:53] the collapses on Friday. Don't get
[8:55] caught into the narratives of all these
[8:57] things. Uh tenure rates again as people
[8:59] trying to chase all over the place and
[9:01] tenure rates. Again, it's going to be a
[9:02] frustrating trade. The dollar big week
[9:05] down, a little bit of a bounce when
[9:06] Kevin Worsh was announced as the Fed,
[9:08] but regardless, the dollar
[9:12] big move.
[9:16] Trump exacerbated the situation by
[9:18] saying he's not concerned with the
[9:20] decline of the dollar. Uh the Fed held
[9:23] rates.
[9:24] And again, as you go through this and
[9:26] you think about why, I just want to keep
[9:28] reinforcing if we don't get bad news
[9:30] news leading into a payroll number on
[9:33] the on the labor side, then they won't
[9:35] do anything.
[9:36] This is literally becoming ridiculous
[9:39] that we are talking about humanoids in
[9:42] the same week and autonomous vehicles
[9:44] and autonomous trucks and we're
[9:46] literally talking about whether the
[9:49] possible that the economy is strong
[9:52] while we're laying off people or at
[9:54] least not hiring people. But Amazon
[9:56] announces they're laying off 16,000
[9:57] people due to AI. UPS to cut up to
[10:00] 30,000 jobs and closed facilities.
[10:03] Oracle may lay off 20 to 30,000. And
[10:05] these were all this week.
[10:07] Home Depot, explain it to me like I'm a
[10:10] 5-year-old. What signs of stabilization
[10:11] do you see in the jobs market? She's a
[10:13] perma bear, so I'm not really caring
[10:14] about that. I'm just showing the fact
[10:15] that the labor market is not well. And
[10:18] here's the Atlanta Fed wage growth
[10:20] tracker. Big leap down that is overlaid
[10:23] with the ECI year-over-year.
[10:27] So again, wages are coming down,
[10:29] productivity is going higher, profit
[10:31] margins are moving higher, and the fact
[10:34] that we have this happening and the Fed
[10:36] is not sure what to do makes sense.
[10:38] Consumer confidence hit a 12-year low
[10:40] this week. Stocks hit an all-time high
[10:43] on the same day.
[10:46] All right, PMIs going higher. Andreas
[10:49] Stenol Lararsson with all the regional
[10:52] PMIs out, I'd highlight manufactures
[10:54] doing exactly what we expect. you're
[10:55] getting the bounce if this comes in
[10:57] where he has it. It would be the highest
[10:58] level since 22. We just had a big
[11:00] Chicago number today. I think it's
[11:02] happening. So again, abundance and
[11:04] scarcity. You want to focus this entire
[11:06] year in both in in investing in whatever
[11:08] is scarce. You can go look at the
[11:10] charts. You can go try to pick them, but
[11:12] if it's scarce, go software will remain
[11:14] the abundance. If you want to go try and
[11:16] pick the abundance side, have fun. Uh I
[11:19] go through in this piece why AI is
[11:22] running even into silver. So for
[11:24] everyone thinking silver is purely
[11:25] precious metals, the critical mineral
[11:27] side, the raw industrial uh metal side,
[11:30] I want to make sure that people realize
[11:32] that the amount of metals needed for AI
[11:34] is insane. In particular, in the silver
[11:37] side, it's in every single component.
[11:39] And I wanted to make sure that this was
[11:40] not a precious metal story. Again, I
[11:43] showed this chart last week. It doesn't
[11:45] include the close from today, but you've
[11:46] got the same parabolic nature in memory
[11:49] as you do silver. So when people want to
[11:51] say that this is trading like a
[11:52] commodity, this is trading like scarcity
[11:54] parabas. If you guys want to hear some
[11:57] podcasts to listen to over the weekend
[11:59] on critical minerals, macro voices with
[12:01] Craig Tinddale, good one. Um, Smarter
[12:05] Markets with Robert Freedelland and Jeff
[12:07] Curry. Great one. I'd go listen to that.
[12:10] Um, in terms of the critical minerals,
[12:12] again, Trump can't speak about them more
[12:14] enough. He's doing deals with them.
[12:16] Everything is focused on it. he had an
[12:19] announcement on this. I think this in
[12:22] particular in terms of backtracking on
[12:24] price floors is going to start to be
[12:26] more of a story around the globe. Now, I
[12:28] wanted to highlight
[12:30] this chart in terms of the raw
[12:33] industrial metals. So, the CRB ren the
[12:35] CRB raw industrials metals which has a
[12:38] high correlation to countries uh that
[12:41] are in the metals game and the minerals
[12:43] game over time. Uh, I created a copper
[12:46] and silver because they're one of or two
[12:48] of the components. This one ends up
[12:50] being threequarters copper and a quarter
[12:53] silver to normalize it to some degree
[12:55] with the volatility of silver. So, this
[12:57] is the chart over the course of the last
[12:59] 24 years into July. And I picked July
[13:02] because July is when I wrote the end of
[13:04] July is when I wrote the piece on PMIs
[13:07] going higher and believing that this
[13:09] would kick in in the coming uh in the
[13:11] coming months. And now that we're
[13:13] starting to see it as we get into the
[13:15] new year, uh you've had a huge move in
[13:18] DRAM prices and now you've taken this
[13:20] chart and this is the copper silver.
[13:22] You're going to have a pullback uh in
[13:24] this back towards 0.5. But the reality
[13:26] is for anyone looking unless you don't
[13:29] believe the copper silver story which is
[13:31] needed for electricity and the fact that
[13:33] we have supply shocks. Are we going to
[13:35] go straight up in a line? Absolutely
[13:36] not. We did as I showed before. We had a
[13:39] huge month in silver again for the fifth
[13:41] month in a row. But you got to pay
[13:43] attention to the story that the raw
[13:45] industrial metals, aluminum, all these,
[13:46] there's going to be switching that
[13:48] happens because when those metals go up
[13:50] up, the ones that can be switched are
[13:52] going to go to other places. This is the
[13:54] overlay of that chart with EWZ. Brazil.
[13:57] Brazil. Brazil. I can't emphasize it
[14:00] enough. I've talked about it. I think it
[14:02] fits in so many things for this year. So
[14:04] much so that this week for 22V I will
[14:07] have a paper come out on Brazil and the
[14:09] green computer arbitrage of the AI
[14:11] decade decade and it goes through a
[14:13] variety of different things. Brazil
[14:15] finishes up the month again this isn't
[14:17] completely updated. It was down about
[14:19] one a little over 1% but you're still
[14:21] talking about the biggest rise since
[14:22] 2020.
[14:25] Um silver with the price going higher.
[14:28] This is how it's going to trigger into
[14:29] the energy market. So silver is a major
[14:33] part of solar and just to give you an
[14:35] idea this chart here shows the black uh
[14:39] component here is silver's percent of
[14:42] solar panel cost. So it went from 3% in
[14:45] 2019. This was it into this year now
[14:49] with prices up and this was using a
[14:51] price of around 90 something dollars. So
[14:53] again you're talking about a rise in
[14:56] this where it's going to make it harder
[14:57] for solar to be a buildout. Silver
[14:59] squeeze leaves solar panel makers
[15:01] feeling the heat. Solar is for power. We
[15:03] need power. Go listen to this podcast.
[15:06] Rick Rule went through and he talked
[15:08] about the fact that oil it's time for
[15:10] oil and gas stocks um which we're
[15:13] seeing. But I think the rationale was
[15:15] we're in the parts of a boom now of
[15:19] of exactly what we said. So again just
[15:22] highlighting this is before the close on
[15:25] Friday. This is actually through
[15:26] Thursday. These numbers have come down.
[15:28] But the main point is again you are
[15:30] getting massive moves in materials and
[15:34] energy for investors for mutual funds
[15:36] for everyone who's looking at it. You
[15:38] have to be involved. Chevron verse
[15:41] salesforce.com I've highlighted this
[15:44] trade since in this area in here we've
[15:47] seen the breakout. This is not updated
[15:49] through uh all of Friday. I will give
[15:52] you the
[15:54] monthly performance. If you were smart
[15:57] enough to put this trade on and follow
[15:58] my lead, you're up 45% this month. Uh I
[16:02] did have some people that thanked me at
[16:04] the event in Miami who had put this on
[16:06] by buying calls on Chevron and puts on
[16:09] Salesforce.com. Again, I've shown XLE
[16:12] over IGV. It doesn't really matter to
[16:14] me. And this is the chart. We're at the
[16:16] very beginning stages of this, guys. Um
[16:18] this is going to continue to go higher
[16:20] in my opinion. Software is in the early
[16:22] stages of a rerating. Power is in an
[16:25] early stage and I do think you're going
[16:26] to see energy prices move higher at a
[16:28] time when everyone is bearish on them.
[16:31] SMH versus IGV. Again, this has been my
[16:33] favorite trade. Semis, I've now moved
[16:35] into energy as more as one that is less
[16:38] invested in. I'd rather be in the energy
[16:40] trade for this year uh than SMH.
[16:44] Although X XSD or any of the package
[16:47] things that I did which are more the
[16:49] analog names, I do think those names can
[16:51] double this year. But when you're
[16:53] dealing with Nvidia and Broadcom in
[16:55] particular, I think those have already
[16:56] had a good run as has Intel. I think
[16:58] you're still going to have rises in this
[16:59] because we don't have enough chips. Uh
[17:02] but again, I think you look to energy at
[17:04] this point. OpenAI on Friday, fourth
[17:08] quarter IPO plan to race to beat
[17:11] anthropic to the market. And I've said
[17:13] this before. I think Open AI is just a
[17:15] cancer right now for uh any of the
[17:18] hyperscalers.
[17:20] They are forcing so many other issues,
[17:23] doing deals. Everyone's trying to frontr
[17:25] run each other. They're doing deals with
[17:27] any place where scarcity is going to
[17:28] kick in and I think that ends up to a
[17:30] race to the bottom. I think it hurts in
[17:32] terms of the cloud ability because of
[17:34] the data center side. The models are
[17:36] moving extremely fast regardless because
[17:38] of the efficiency side. But I think open
[17:40] AAI, I think XAI, I think Enthropic, all
[17:43] of these fourth quarter or all of these
[17:44] IPOs that are coming to the market along
[17:46] with SpaceX, you're talking about
[17:48] trillions of dollars
[17:50] for growth companies out there or the
[17:52] growth bucket, you're going to be
[17:53] saturated with deals. And I think OpenAI
[17:55] is just going to continue to hurt
[17:57] things. And I want to remind people back
[17:59] in June of 2007, Blackstone, heavily
[18:02] into credit and heavily into the real
[18:03] estate market, basically came to the
[18:06] market just before the great financial
[18:07] crisis. This tends to happen over time
[18:09] in terms of IPOs or deals coming out
[18:11] around the time of peak. I don't think
[18:13] this is a peak in the market. But I do
[18:16] think for growth, I do think for
[18:19] anything related to AI and software and
[18:22] code, I'd be very very wary that OpenAI,
[18:25] that XAI, that anthropic that all of
[18:27] these deals coming out have an eerie
[18:30] similar feeling to what happened when
[18:31] Blackstone went in. especially when you
[18:34] combine it with the fact that they got
[18:35] the curse of being this at the end of
[18:39] last year on December 29th. So, I'm
[18:41] going to stick with my side that you
[18:43] want to be long commodities, you want to
[18:44] be long industrials, you want to be long
[18:47] this stuff. Um, I just want to highlight
[18:49] this came out this week. I saw this in
[18:52] um in X and I just wanted to take you
[18:56] through basically taking these dots and
[18:58] kind of bringing it together and getting
[19:01] ideas. Again, I'll be doing these demos
[19:04] for people. Uh, but when you take and
[19:06] you see something like that and you put
[19:07] it into chatbt or Gemini and you ask to
[19:10] explain it and what it means and you
[19:12] look for ideas and it shows you high
[19:14] bandwidth memory, Seridus, Pam, optical.
[19:19] You get these stories and you start
[19:21] realizing, okay, we've got memory
[19:23] pressure. How how how big is the
[19:25] scarcity issue? One major manufacturer
[19:27] saying all of its nan flash production
[19:29] for 2026 is already sold out. how the AI
[19:32] buildout is pushing up electronics
[19:33] prices. This will be a story as we go.
[19:35] Samsung raises NAM prices by 100%.
[19:39] Supply can't keep up with demand. And
[19:41] again, I remind you, nobody wanted to be
[19:44] long memory in the summer of last year.
[19:46] Now, Elon Musk is saying memory the
[19:49] memory needs on the earnings call. Frame
[19:51] memory as a long-term key bottleneck for
[19:53] Tesla's AI ambitions and said Tesla may
[19:56] need to build its own large
[19:57] semiconductor fab that includes advanced
[19:59] memory. If you're not going to trust me,
[20:01] at least trust Elon. Um, he said when he
[20:04] looks three to four years out, the main
[20:05] limiting factor in Tesla's growth is
[20:07] chip production. Do you really want to
[20:10] belong software when everyone is talking
[20:12] about the fact that we don't have enough
[20:14] chips? That AI demand is insatiable.
[20:18] Jensen Yu Wong is talking about $85
[20:20] trillion of a buildout. And to have that
[20:23] buildout work, it's all going to be in
[20:24] AI factories and on the edge, which
[20:26] means we need as much chips as we can.
[20:29] This story is not over yet. Memories had
[20:32] a big run. I'm sure best case scenario
[20:34] over the next year. Uh sorry, two years.
[20:37] Best case scenario, I can't imagine
[20:39] Micron more than doubling. I can imagine
[20:42] battery names more than doubling. I can
[20:44] imagine many of the smaller semi-names
[20:47] going up, but we've taken these things
[20:49] up to big levels. But until we start
[20:50] seeing something where we catch up on
[20:52] the earnings front, you're going to keep
[20:54] getting the movements that you got. So
[20:56] SKH Highix reported 66% year-over-year
[20:59] increase and 137% increase in operating
[21:03] profit. HBM revenue more than doubled
[21:06] year-on-year. Um we're still in the
[21:08] early stages, believe it or not, of
[21:10] memory in terms of the story. Um,
[21:12] SanDisk
[21:14] didn't close up as much as it was here
[21:16] pre-market on Friday, but I I think it's
[21:19] just more the earnings per share beat by
[21:22] almost 100%. Uh, on this the guidance 13
[21:27] verse 421. When in history have you seen
[21:30] those types of numbers? So, I took that
[21:32] chart, I said, I want to expand uh past
[21:35] that. What are the other verticals that
[21:37] will benefit from this chart? I put it
[21:39] into nano banana and this is what you
[21:41] get. Advanced compute, power
[21:43] infrastructure, metals and minerals to
[21:45] be able to build this which is what is
[21:47] happening. We actually need those
[21:50] things. You'll come back in three years
[21:52] and you'll be there. ASML, I've talked
[21:54] about this one. Uh again, it's been a
[21:56] good time to be long these names. Apple
[21:59] sellers surge on 16% on staggering
[22:02] iPhone demand. I mentioned how much
[22:04] better the iPhone is. I am grateful for
[22:06] having got this when I did because the
[22:09] cost of everything is about to go higher
[22:11] because of memory. Significant increase
[22:12] in memory prices make smartphones more
[22:14] expensive. If you haven't purchased your
[22:17] high-end computer, this Mac I bought in
[22:19] the last two months, the phone I bought
[22:21] in the last two months, go get them
[22:23] before the prices go up significantly
[22:25] because they're going to go up
[22:26] significantly. Get ready. Computers in
[22:28] 2027 will be triple the price they are
[22:30] now. As Clawbot gets more popular,
[22:33] tokens get more expensive, and open
[22:35] source models become more powerful,
[22:36] there will be an obscene consumer rush
[22:38] to buy high hardware. I won't read you
[22:41] all of it, but let's just say you want
[22:44] to be long the things associated with
[22:45] it. This week's video for the week
[22:49] is Deis Sabas and Dario Modi. This was
[22:51] actually last week, but I didn't see it
[22:53] till this week. I thought it was
[22:55] worthwhile to show this week because
[22:57] they got into a lot of different topics,
[22:58] but also these are the two nicest people
[23:01] in the AI world. These are the ones that
[23:02] I think are the most honest. They're the
[23:04] ones that will tell you the negatives
[23:07] along with the positives. Uh but this
[23:09] interview, they went back and they
[23:10] talked about a lot of different things
[23:12] that are important. Um Habas remains
[23:15] cautious on, let's say, the creativity
[23:17] for science side, uh which is his
[23:20] definition of AGI. Uh so he's still
[23:23] talking you know five years for true ASI
[23:27] or where you're going to actually have
[23:28] science breakthroughs meaning more than
[23:30] five years while Dario Modi is a little
[23:33] bit more. They both talked about jobs
[23:35] and they talked about the fact that
[23:37] there's going to be a medium-term
[23:40] issue. Um it just is. And I think their
[23:44] main point was governments are
[23:45] unprepared. You're going to start to see
[23:47] this. It's not just governments,
[23:48] organizations are unprepared. Uh I'll
[23:50] talk about that more as we kind of move
[23:52] forward. Demos on the AI shift 10 times
[23:55] bigger and faster than the industrial
[23:56] revolution. I mean he's talking about
[23:59] massive GDP expansion on this. Uh in a
[24:02] world where AI moves exponentially, what
[24:04] happens to the value of longduration
[24:06] assets? I wanted to bring this up
[24:09] because I I just can't get around the
[24:11] same way I talked about tenure rates and
[24:13] the Fed thinking about things like
[24:15] today. If you're involved in long
[24:18] duration assets, the amount of
[24:19] assumptions you're taking without the
[24:21] liquidity associated with it, I don't
[24:23] see how they have any value. Personally,
[24:26] you can't predict six months out. That's
[24:27] how fast things are moving. I think
[24:29] everyone in the market needs to adjust
[24:31] to time. We've seen things with memory.
[24:33] We've seen things with silver. We've
[24:35] seen things with gold. I think
[24:37] longduration assets, I really don't know
[24:40] how you can think more than three years
[24:42] out on anything. So, I think these
[24:43] things are going to remain an issue. Uh,
[24:45] I think the money is going to look for
[24:47] liquid things. I think the volumes on
[24:48] the liquidity side are going to be there
[24:50] because I think people still have to
[24:51] manage money. I only bring that up
[24:53] because I see higher volatility uh, in
[24:56] terms of the markets and you're going to
[24:57] have to get comfortable because the
[24:58] things to invest in now are about
[25:00] scarcity. They can run up dramatically.
[25:02] They can fall back 50% in a short amount
[25:04] of time as we saw with silver and gold.
[25:06] You're going to see this over and over
[25:08] again. You're not going to be able to be
[25:09] involved in these on any kind of a basis
[25:11] and I don't think you're going to have
[25:12] time to get in. You're going to have to
[25:13] be buying on days if you're not in when
[25:16] things are crazy. You're going to have
[25:17] to be getting out during the par
[25:18] parabolic side, but you run the risk of
[25:20] these things never coming back to you. I
[25:22] know multiple people in Micron Sandisk
[25:24] that now are on board, but they can't
[25:27] buy them up here. Um, the arrival of
[25:29] AGI, just to show how close it is,
[25:31] Google DeepMind announced
[25:34] that Shane Le is the chief AGI
[25:38] scientist, the co-founder of DeepMine.
[25:41] Humanity
[25:44] needs to wake up. Dario Modi put out a
[25:46] new
[25:48] warning in an AI constitution.
[25:52] Uh it's worth going through and it's
[25:54] just highlighting the risks that are
[25:56] coming. And this gets back to Demisab
[25:58] said the same thing. Sam Alman also said
[26:00] the same thing which I'll read in a
[26:01] second. Governments are not prepared.
[26:04] But this goes further because I have to
[26:06] answer constantly quantum risk for
[26:08] Bitcoin. And I sit there and say, "Are
[26:10] you kidding me? With everything going
[26:11] on, you're worried about quantum risk?"
[26:14] And yet still, intelligent people keep
[26:16] coming my way. Hey people, I want you to
[26:18] read this and just realize we are at the
[26:20] level now where AI agent swarms are
[26:23] going to be a story.
[26:25] Bitcoin is far far far more prepared for
[26:29] agent AI agent swarms than JP Morgan and
[26:32] Goldman Sachs and any of the banks you
[26:34] want. We saw a run on a bank recently
[26:36] with SF SVB. what would happen if this
[26:39] happened with multiple agent swarms or
[26:41] the money was taken out and I'm sure it
[26:43] would end up in Bitcoin um at some point
[26:46] over the course of the next year. The
[26:47] more I listen to this, the more that
[26:49] they are screaming, we've already seen
[26:51] the danger that's happening. When these
[26:53] guys say we are going to reach the cyber
[26:55] security high level on our preparedness
[26:56] framework soon for for open AI,
[27:00] we're getting there. It is very
[27:01] important the world adopts these tools
[27:03] quickly to make software more secure.
[27:04] There will be many very capable models
[27:07] in the world soon. This is starting to
[27:09] get out of control. These guys have to
[27:10] release this. They're spending the
[27:12] money. They're going to release things
[27:13] before the security under the other side
[27:16] is ready. So, the system is going to be
[27:17] ahead of it. I would just be very wary
[27:21] and thinking about the fact that this
[27:23] quantum risk for Bitcoin, which is
[27:26] multiple years down the line. In fact,
[27:30] timelines also remain highly contested
[27:32] with projections ranging from a few
[27:34] years to several decades.
[27:37] They're going to have preparedness
[27:38] because they're going to watch what
[27:40] happens with agent swarms on these old
[27:42] archaic fiat systems. Mark my words,
[27:45] there will be an event with agent swarms
[27:46] that will happen in the banks. That will
[27:49] be something that goes on whether it's
[27:51] the stock exchange, all of these things.
[27:53] We are getting to the point where
[27:55] billions of AI agents will be able to
[27:57] target things and the defense is just
[28:00] not there. AI token consumption
[28:02] increased exponentially last year due to
[28:04] reasoning models. Now it's going to
[28:06] increase exponentially again with
[28:08] agentic workloads.
[28:10] The agentic world is about to explode
[28:14] guys.
[28:15] Here's more of the agentic world. The
[28:17] future of personal AI assistance. So
[28:20] this is all Claude Claudebot which has
[28:22] gained most of the stories. That was an
[28:24] Apple Mac story place. Uh the most
[28:27] important video you'll watch. Claudebot
[28:28] has taken X by storm and for good
[28:30] reason. It's the greatest application of
[28:31] AI ever. Every week there's a new thing
[28:33] by Claude guys. Every single week Gavin
[28:35] Baker put this out just to show that the
[28:37] productivity boom is here already and
[28:39] it's going to explode as AI agents come
[28:41] in. Revenue per employee up 75% for the
[28:44] top decile of AI software companies in
[28:46] 2025. Remember this is with software
[28:49] going down
[28:51] probably doesn't slow down in 2026 given
[28:53] the December revolution in AI coding
[28:55] agents.
[28:59] Prism accelerating science writing and
[29:01] collaboration with AI. This is just
[29:03] speeding up the process of the medical
[29:05] side allowing scientists to go on just
[29:08] continues to make it easier and easier
[29:10] for everyone to make breakthroughs. And
[29:13] here's one of them again David Sinclair.
[29:16] Uh I follow him there as part of my HRV
[29:20] substack. Uh I do a lot of things from
[29:23] his book FDA greenlights life biosens
[29:26] human clinical trial on a near total
[29:28] reset. A near total reset in longevity.
[29:34] First of its kind freightonly driverless
[29:36] truck network hits commercial scale.
[29:39] This was on Wednesday. Get ready to see
[29:41] trucks driving down the road with no
[29:43] people in them at some point. Next six
[29:46] months are going to be really weird.
[29:49] I follow AI adoption pretty closely and
[29:51] I've never seen such a yawning inside
[29:53] outside gap. People in San Francisco are
[29:55] putting multi- aent claude swarms in
[29:58] charge of their lives consulting chat
[30:00] bots before every decision wireheading.
[30:02] If you read through the rest of it,
[30:05] this is all and this is Kevin Ruse who I
[30:07] believe is a New York Times technology
[30:09] writer. He's saying at the same time
[30:12] you're finding people that don't use it.
[30:15] I completely agree as I do this for a
[30:17] living and I talk to people about it.
[30:19] Bill Gurley, the number one way to
[30:21] protect your career from AI is to be the
[30:22] most aggressive user of AI in your
[30:24] field. I'll say it again and again on
[30:26] here. Uh mainly because it's resonating.
[30:29] Uh I will be my I did my first video for
[30:32] the webinar series. Um we will have the
[30:34] payw wall going up in the next two
[30:36] weeks. They're just going through all
[30:37] the bugs at this point. I know that I
[30:38] say that every week. It is coming, guys.
[30:40] I know you're waiting. I know you've
[30:41] been patient. Your kids have to be ready
[30:44] for this. They have to be ready. They're
[30:46] the ones that have to be AI native. They
[30:48] have no choice. They're not being taught
[30:49] it in the school before they get there.
[30:51] They have to be using it all week long.
[30:53] And I'm going to show you. I thought the
[30:55] first video went well. Uh this is kind
[30:58] of a summary on what it is.
[31:02] Repetition builds comfort. Comfort
[31:04] builds fluency. Fluency turns AI from a
[31:07] tool into a partner. AI is not an
[31:09] answerbot. Its real value comes from
[31:11] exploration. If you guys have gotten to
[31:14] like the way that I think about markets,
[31:16] the way that I think about going from an
[31:17] idea to something, that all has been
[31:20] exacerbated by AI. I always had that.
[31:22] I've been a curious person. I collect
[31:24] dots, as I call them, as I go along. For
[31:27] those of you who listen to my podcast,
[31:28] Green Marbles, I collect them all the
[31:30] time. I had one uh moment of integration
[31:33] that happened where all of a sudden the
[31:36] systems thinking side of my brain popped
[31:37] out and answered a question for me. I'll
[31:40] get to that at the end. Human creativity
[31:42] versus AI optimization. The only edge we
[31:44] have as people is right now on the
[31:46] context side and finding the ideas and
[31:48] being able to filter. Our creativity is
[31:51] what allows us with the ability of
[31:54] having a polymath with us find things.
[31:58] That is the game plan for everyone. And
[32:00] here's an example of it. There was a
[32:02] deal this week. Meta and Corning. I've
[32:06] recommended Corning before.
[32:09] a $6 billion multi-year deal between
[32:11] Meta and Corning. Optical fiber is the
[32:14] emerging physical bottleneck. So
[32:16] remember, memory is a bottleneck. I've
[32:19] talked about Corning. I've talked about
[32:20] it and referenced it. So it's up a good
[32:23] amount since then. We're not even in the
[32:25] big phase of Corning. This is before the
[32:27] glass buildout. This is for the need
[32:29] before the needs of the autos, the needs
[32:31] of the phones, the needs of the
[32:32] computers, which is coming. They're
[32:34] talking about a shortage in optical
[32:35] fiber. Why the scaling east west traffic
[32:37] that goes back to the thing I showed you
[32:39] earlier with the Steve Jobs side in it.
[32:41] So let's go back to my how do you take
[32:45] something like that that happens and
[32:46] immediately go hey there's a news
[32:48] article give me and I run my skill on
[32:51] this and then I go in and do my deep
[32:54] research. So I did that. I ran this
[32:57] while I was on a plane flying from Miami
[32:59] to LA. It runs this whole thing. It ends
[33:01] up giving me a fivepage thing. Viser
[33:04] labs the fiber ingredient it goes
[33:07] through everything in there creates all
[33:09] the details it gives me a fivepage thing
[33:13] with a bottom line this this deal is
[33:15] less about Corning specific revenue
[33:16] uplift and more about institutional
[33:18] validation the optical bottleneck thesis
[33:20] the constraint migration from GPU power
[33:22] optical is now being priced into
[33:23] hyperscaler procurement behavior this
[33:26] all gets into data movement data traffic
[33:28] optical is a better way to go through it
[33:30] so I take all of that stuff it goes
[33:32] through my investment process and what
[33:33] do come out with
[33:36] a list of about 15 to 20 names in this
[33:39] framework that I've shown over and over
[33:40] again. So for any of you who want it,
[33:42] the optical fiber bottleneck, there's a
[33:44] bunch of names in here that will benefit
[33:47] all with the same thing. They've got a
[33:48] technical score from Johnny Ro. They've
[33:50] got a commentary score in terms of are
[33:52] they already seeing the optical fiber
[33:55] side? Is it already showing up and are
[33:57] is it already progressing over the last
[33:58] three earnings reports? And again, are
[34:00] revisions heading higher in a strong
[34:03] way? Are they going? All of that's going
[34:05] here is
[34:07] clawed. So, I basically took I don't
[34:11] know two minutes. I put the ad in. I
[34:13] launched it and then I went in here and
[34:16] I asked it to do something on Microsoft
[34:19] for me. So, can you go through the
[34:21] recent Microsoft earnings report and put
[34:22] together a model on how their financial
[34:24] model has changed due to rising RPOS? If
[34:26] data centers are bottlenecked and they
[34:28] keep spending at current rate, when will
[34:30] this become an issue? So, it goes
[34:32] through, finds all the estimates, puts
[34:34] this in based on everything it gets from
[34:36] both the earnings commentary,
[34:38] and then it comes through and it says
[34:40] this. Now, only thing I did was this.
[34:42] That's all I did. I hit it. It spent
[34:44] about 3 to five minutes going through.
[34:47] It gave me a Excel file with all of this
[34:50] stuff in it with numbers that I can go
[34:52] check with the street. I can do whatever
[34:53] I want. But if you wanted to ask a
[34:55] question, have it modeled out, and then
[34:57] go bring it back and look at your own
[34:59] analysts and have them go through it.
[35:01] It's saying if things don't change and
[35:03] we go at this run rate of RPOS and this
[35:06] capex, and that's the thing I want. How
[35:09] do you get this number to go faster if
[35:11] the RPOS are going and the reality is
[35:14] you want to see what's going to happen?
[35:16] So, I did that. You can do it on your
[35:18] own. HRV, thanks to everyone who's been
[35:21] going through it. I made the best new
[35:24] Substack list number five uh on the HRV
[35:27] thing. Uh I I've really enjoyed talking
[35:30] back and forth with people who have got
[35:32] it. All right, Bitcoin still asleep.
[35:36] Doesn't want to move given what went on
[35:38] this week. It was actually a pretty
[35:39] quiet week. Um given how much silver and
[35:41] gold were down, didn't follow silver and
[35:43] gold on the way up. Kind of kind of went
[35:45] through its little girrations. The chart
[35:47] is still horrible. uh until we get a
[35:49] change in it, it is in the list of hey,
[35:52] we need this thing to go for the short
[35:54] term. So, from a trading perspective,
[35:56] it's very hard to buy something like
[35:57] this other than stick your toes in and
[35:59] not and stop yourself out. It has not
[36:02] acted well at all. I wrote this paper,
[36:05] the Substack,
[36:07] uh I highly recommend everyone read it.
[36:10] Um it goes for the silver side, it goes
[36:13] for the micron side, it goes for
[36:14] everything.
[36:16] It was clear that there was parabolic
[36:18] envy. This is all at the event I was at.
[36:20] I just want to remind people silver
[36:22] didn't move for 14 years and then when
[36:25] it finally did, it went parabolic.
[36:27] Micron didn't move for a long time. It
[36:29] went parabolic. Corning didn't move for
[36:31] a long time, 15 years, and then it went
[36:33] parabolic. I'm just telling you these,
[36:35] this is the world we're in. When things
[36:38] turn, they're going to go quickly. The
[36:41] sausage squeeze of how many names on the
[36:43] software side are not going to
[36:45] participate. I do not believe that the
[36:46] Mag Seven can get you the alpha that is
[36:49] necessary. I think there's a lot of
[36:51] headwinds for them. Part of them is the
[36:52] RPO, part of them is the IPO that are
[36:54] coming. Part of them is just the amount
[36:56] of debt these guys are are now taking. I
[36:58] want to be long energy. I want to be
[37:00] long materials. But when you go through
[37:01] things, I still believe Bitcoin will be
[37:05] part of this equation once we get
[37:07] through it. One more thing uh to finish
[37:10] up. Uh I have never mentioned NFTTS. I
[37:13] have never brought it in. So when I
[37:15] mentioned a moment of integration, I do
[37:17] want to highlight that between
[37:19] conversations I've had with very
[37:20] respected people in the NFT side, but
[37:22] also something Demis has said last week
[37:27] on AI purpose. I finally have a place to
[37:30] where I understand where NFTs will be an
[37:32] important thing. This is not a digital
[37:34] art thing. This is not a people thing.
[37:35] This is not a cyberpunk thing. This is
[37:37] not Pudgy Penguins. none of the things
[37:40] that you guys probably remember from
[37:42] 2122.
[37:44] But I will say as part of the utility
[37:46] function for what is happening in
[37:47] crypto, stable coins, realworld asset
[37:50] tokenization along with NFTTS is a big
[37:53] deal. I think you should read this
[37:55] report. I had a fun time writing it. I
[37:57] had a fun time coordinating with some
[37:58] very very smart people in the space. But
[38:01] a lot of these issues have come up and I
[38:03] look forward to spending more time
[38:04] talking about in the future. That's it
[38:06] for this week. I look forward to being
[38:08] back and doing it from Brooklyn next
[38:10] week. Thanks, guys.