SPEAKER_01 0:00

Hey Dustin, what a week. Hello for mead. What a week. Yes. I mean, we're in the thick of earnings season. Um, a lot to keep track of. Uh yeah. How uh are any any companies you're particularly looking at right now?

SPEAKER_00 0:19

I'm I'm I'm very focused on my portfolio, obviously. Like uh Micron hitting all new highs has been uh fantastic to just watch. Um watch the thesis, thesis on that rollout, um, which has been phenomenal, but uh usually it doesn't work at this speed, right? Like usually you don't discover something and then the price doubles in the in the course of the next four months. Uh that's generally not how investment investments work. Um the these kind of results end up actually skewing people's expectations in terms of like what investments are and and how patient you need to be with investments in general. So um we can talk a little bit about that. But um I think you have a uh pretty solid agenda for us today, huh? You want to go over that real quick?

SPEAKER_01 1:08

Yeah, you you made some buys and sells this week. Uh my portfolio was a bit more quiet. Uh Bumble reported their earnings yesterday. So there's a lot for us to talk about there. Um we're gonna talk about more earnings as well from uh SMCI, AMD, Uber, Disney. We'll look at. And then Meta acquired a robotics company, and Amazon is starting a new business. So a lot of stuff for us to cover. Uh let's start with your portfolio. Um, so you continue to sell Rocket Lab and Robinhood. Any additional thoughts or is it just to you know continue to build cash?

SPEAKER_00 1:55

It's uh largely to continue to build the cash position. Um I have been, as I've mentioned before, I always like to be over 10%. I have been under 10% for quite some time since basically the micron um acquis or acquiring some micron shares that caused my cash position to go down to as low as like 2% at uh at one point after I paid my tax bill. Uh and uh and now I've sort of tried to build it back up to be uh above 10%, maybe even higher as the market sort of hits all-time, all-time highs. Um so you know, the way in which I'm deciding what to trim is largely based on valuation, right? And uh, despite the fact that I love Rocket Lab as much as I do, I think it's a fantastic company. I think it has a bright future. I think it's gonna continue to grow very, very rapidly over the coming years. Um, I do think that that one is the most overvalued of the companies that I currently hold uh in its current state of things, right? And that doesn't mean the stock is not gonna double from here or go up pretty significantly. In fact, it probably will because I'm trimming heavily. But um but that happens to be on uh on my trim list, right? So uh that's what I've been selling the most of. And then um second one on the on the block has been Robinhood, uh, largely because I um anticipated their quarter and their trajectory to be a little bit faster and better uh than the actual results. So I'm trimming a lot of the shares that I just most recently purchased, essentially. So uh those ones I'm actually ending up um trimming shares that are either at a loss or break even. So it hasn't been like taking all this sort of profits. Uh whereas when I'm when I sell shares of Rocket Lab, I have to take into consideration the tax consequences of it because there's so much gains there in the Robin Hood or in the Rocket Lab shares. So so yeah, I've been trimming um and uh uh building the cash position. And then today I make a buy as well.

SPEAKER_01 4:04

Yeah, well, we'll get to that in a minute. I will say I am concerned about you selling Robinhood because if there's a bottom signal, this is it. And obviously, I would love for Robinhood to skyrocket, but you know, I'd need to win that bet first. So this is the one thing going going against my thesis.

SPEAKER_00 4:25

Yeah, yeah. I figured that might uh that might be hurtful to your thesis there for the one one share bet that we have. But uh, but yeah, uh I'm I'm taking it uh taking a hit for all other Robin Hood shareholders and Rocket Lab shareholders.

SPEAKER_01 4:40

You're doing your part. Um let's talk about Micron. So I know it's slowly become the the largest position in your portfolio, and now let's see, it's over 27% of your portfolio. Rocket Lab being uh your second largest position is at 20%. Uh one thing that I've been thinking about, I should have brought this up sooner, is you know, months ago you you said you believe uh Micron is going to around $900 a share. And this was back when it was like $300 a share, as opposed to six, seven hundred dollars right now.

SPEAKER_00 5:21

Which puts it to the that was before the quarterly release as well, by the way. So yeah, we we did this sort of uh I I rarely do a sort of price estimation as to what I expect the stock price to be in a year because the market is so unpredictable. Um, but I was basically doing some math that would uh be you know based on evaluation, a typical price earnings ratio. This is the 972 numbers, how we got there. But anyway, continue with your question.

SPEAKER_01 5:49

Right. So if if the share if it's around $900, that would bring the market cap of the company to over $1 trillion, which is just another way to look at it. So from your assessment, is Micron a $1 trillion company? Should it be more? Should it be less? Um, or do you think that's right on the money?

SPEAKER_00 6:09

Well, let me ask you this do you know of any companies that generate $100 billion of profits, or even let's say $100 billion of revenue uh annually that are trading for less than a trillion dollars? Um, and especially in the tech sector. I don't know of one. Um so Yeah, not off the top of my head. You know, like uh the basically we're talking about um every company that is generating these kind of profit numbers is absolutely uh bonkers in terms of their valuation, right? And uh Micron is expected to have as much as $100 billion of profits over the course of the next 12 months. $100 billion of profits. That's more profits than Tesla has revenue. And Tesla is valued at like uh one and a half trillion dollars at times. So um it does that justify a micron having a $1 trillion valuation? Oh yeah, of course, you know, of course I think micron it justifies micron having a trillion dollar valuation. Um I think a multi-trillion dollar micron is a possibility as well, right? It it all depends on when the AI craze slows down and what that will mean for the capacity that memory makers have made and how much of that capacity will be utilized, right? So those things are sort of unknowns, but when the company itself is telling you they can only meet you know 40 or 50% of their customers' demands on memory chips, and that they're sold out for the next year, uh, and that they're starting to make five-year contracts, and that they're, you know, like they understand that the cyclical nature of the business has hurt them in the past. They all get this. You know, so this is something that uh these are all like very, very positive things for Micron. Um, and then when you look at their actual, you know, quarterly performances, it's just off the charts, right? It's uh uh they they just blew away their expectations last quarter and then raised their expectations for the current quarter that we're in by 50%, by $10 billion. They they were expected to have $22 billion of revenue in this quarter, they raised it to $32 billion, right? Um and and that and that that kind of raise just from quarter to quarter is just unprecedented type of numbers, and uh and it just blows me away. You know, this is funny because um after the quarter, after the last quarter, where they blew away all the expectations and they raised the next quarter's expectations, the market decided to tank the stock. As you know, it was like $440 a share before it reported its quarter. And after it had these spectacular results, it went all the way down to $330 a share. And I think you bought some at that price. Yeah, which is unbelievable. It's it's now doubled that price since the you know bottoming out at around $330. It has doubled in less than what, 40 days? In less than 40 days, it has doubled. So the question is where was the market wisdom when it took the price down from 440 to 330, right? People talk about like how the market kind of always knows it prices everything in, it's like very efficient. Where was the efficiency there? It what blows me away even more is the analyst. There was an analyst from Citigroup that downgraded the stock from a $510 price target, which he had prior to the quarterly report, right? Which blew away all expectations. He downgraded it from $510 to $425 per share. And my thinking is like, why did you have a $510 uh target price on it to begin with? And if you had that high of an expectation, what was the expectation you had for their quarter that they blew away that made you be like, hmm, they blew away all expectations and they raised the next quarter. I'm gonna lower my price target. Like, what was this reasoning behind that? Like it it makes zero sense to me. So I obviously I've said this so many times, I don't pay attention to analysts, but this is just sort of additional comedy that uh that adds to my conviction why I don't listen to analysts and I don't listen to the market itself. The market does what the market does, and I ride along with sort of like the pricing. Um, but just because something gets priced, the price goes up or the price goes down, people assume it's good if it's going up, bad if it's going down. And those things are not necessarily connected to the reality of how a company is doing. And eventually the reality will catch up, or the price, I should say, will catch up with reality, right? If the company is not doing well, the price will catch up to it. Uh, and if the company is doing well, the price will eventually catch up to it. Um, so in the short term, the price might go in opposite directions, but in the long term, it always catches up. So uh Micron is like a perfect, you know, you know, it's like almost like a case study of all of this stuff. But yeah, it's almost too perfect. It's too perfect, yeah.

SPEAKER_01 11:33

It's funny because I feel like the analyst was maybe more focused on the stock price, looking at the stock price than looking at the earnings.

SPEAKER_00 11:41

Um at least seems like it 100% seems that way. And unfortunately, that's how a lot of investors uh invest as well. You know, stock price goes up, they get interested in the stock. Stock price goes down, they're like, uh, it's it's bad. I should get out and and sell. And um and and what the I wish the mindset of investors was more about company building. And um, you know, it takes time to build a company, it takes time to execute on a product strategy, uh a roadmap, and um the profitability of the company and execution of it is sort of like what matters, especially in the long term. Um, one of the things that uh I love about Jeff Bezos is because he's got these amazing, great sound bites, a lot like uh Warren Buffett about like just the wisdom that he dishes out. But one of the things that he talked about is with Amazon, all of the results that you see Amazon producing today in their quarterly reports or whatever, is things that they made decisions on three, four years ago. And and uh it's you know, beating a quarter right now is just this decisions that they made three years ago or four years ago. But what we're doing now is going to affect our quarters three, four years down the line, and you won't even see it, right? And that that type of mentality is what investors need to have, right? And it's are is a company doing all the right things now for their future? And then if they are, that's you know what investors should be investing in, as opposed to did the stock price go up and did the stock price go down.

SPEAKER_01 13:20

Um okay, I think we have a couple of micron-related questions that uh Adrian's gonna bring up. Let's do it. Hey Adrian, pop in here.

SPEAKER_02 13:30

Um okay, we have one. Let me just pop it up here.

SPEAKER_00 13:34

Okay.

SPEAKER_02 13:41

Still bullish. When do you trim winners, even if your thesis hasn't changed?

SPEAKER_00 13:47

This is a great question, and I think it has to do um the answer to it is personal for every person, it might be different. Having 60% of your portfolio in um one sector, in this case, two two companies, but one sector, uh, is high risk, right? But are you comfortable with that risk? Do you is is uh is the um income, do you have separate income from your portfolio? You know, like all these things would should be taken into consideration. And then, you know, what might make a lot of sense, or for me, the way I often do it is um I take out uh sometimes my initial investment, and then with the rest of it, I am willing to play much more risky because or hold on to it longer, because uh uh it's sort of like I think of it as you know, not my money to have begun begin with, and it's uh it's the um rise in uh value of that investment. And as a result, I'm willing to risk it longer, right? And um yeah, but uh this question is sort of like more personal than something that I would be able to answer. For me, uh I generally trim, uh, but also if I still believe that the valuation is still underrated, I might not trim. So I I can't even tell you what I would do necessarily. Do we have something else regarding Micron right now that we can answer as well?

SPEAKER_02 15:14

We do. We do.

SPEAKER_00 15:16

Let's do it.

SPEAKER_02 15:16

Umid, what do you think Micron will do with their profits, buybacks, and dividends after the CHIP Act expiration or capital expenditures and holding cash?

SPEAKER_00 15:28

Yeah, so I think that um the uh CHIP act is what is preventing them from being able to do buybacks any sooner, but also they haven't had a lot of cash, they've had some debt, uh, which they just paid off something like five or six billion dollars of their debt. Their debt, I believe, was in the $10 to $12 billion range. By the way, the way in which I store information such as these numbers is like rough estimations because it makes me uh able to sort of remember more things approximately right, but almost never exactly right. Um so uh so they they've already cut their debt in half just in the past couple of months. Um and they're going to have so much cash that they're gonna be generating from this quarter forward that they have no choice but to do buybacks as soon as the uh Chip Act uh restriction from being able to do buybacks gets lifted. And that happens, I believe, in Q1 of 2027. So I fully expect Micron to do major share buybacks uh in 2027, um, possibly as much as $40, $50 billion or more. You know, it's uh it's quite possible in 2027, that is, in all of 2027, I could see them doing a $40 or $50 billion share buyback. And uh if the valuation of the company doesn't move significantly, that's like buying back 7% or 8% of the company based on current valuation. So um yeah, I I do expect that.

SPEAKER_01 17:02

Okay, let's move on to Bumble. They reported their earnings yesterday. You also bought more bumble, which was surprising to me just because I know you've been trying to maintain a larger cash position. Uh, they were down roughly 20% today after earnings. It was kind of interesting. I don't know if you clocked this, but like pre-market, they were only down like 3%. And then once the market opened, that's when they had the big drop, uh, where they were like down pretty quickly 14%, 17%, and then 20%. Yeah. Um, so what were your thoughts on the earnings? What were your thoughts uh buying more bumble?

SPEAKER_00 17:42

Okay, let me ask you, just sort of like at a high level, what was different this quarter than last quarter about Bumble? Bumble's earnings. Well, to me, nothing.

SPEAKER_01 17:53

And I would say that but I would say that was the problem.

SPEAKER_00 17:57

Okay, okay, but I I I grant you that. But last quarter was the results were also just equally as bad if you if you look at it from a bad angle, or equally as good if you look at it from the good angle. Um, yet the market's reaction after last quarter was that they were up 30% the next day. They were up 50%, more than 50% since the last quarter's earnings. Yet the earnings report was not great. I mean, their revenue was down 15%, you know, they're they were profitable except for the one-time expense for the quarter, the uh write down of the goodwill. And then this quarter, they literally executed exactly as expected. They set the expectation of as far as what the revenue would be. They came in right in the middle of that. Um, they were profitable, they generated 34 cents of EPS, which if you sort of extrapolate, that's over a dollar, $1.20 of uh earnings per share on an annual basis. And the stock is now down 20%. It's trading at $3 and what, 50 cents, something like that. Um, it makes zero sense for either direction. Like last quarter, it shouldn't have gone up. This quarter it shouldn't have gone down. You know, you know, if you sort of look at it with an unbiased viewpoint, there was nothing great about last quarter that should have, you know, caused it to go up 50%. There was nothing extraneously bad this quarter that should that should have made it go down 20%. So that's my perspective on it. Um, but um aside from the financial results, there is things that I'm excited about that we can talk about. So you know, let me pause there and let me let get your comments in on what I'm saying.

SPEAKER_01 19:38

Okay. So I agree they shouldn't have had the pop that they did last quarter. Uh it was a nice surprise, but yeah, it's not.

SPEAKER_00 19:49

The market does what the market does.

SPEAKER_01 19:51

Yeah. But I do think the price going back to roughly where it was before that pop does make sense, even though it's the same results, because I'm not looking at the results piece, I'm looking at the transparency of like where they're going with their new product. So, and I I did a whole post about this on X and in my community, uh Savvy Trader community. Where there's this element of I trust their leadership, I trust the company to execute, but as an investor, I want to have the ability to verify that I'm aligned with where they're going, what they're doing. And I don't have enough details to do that. So I'm following a little blind, or what to me feels like a little blind.

SPEAKER_00 20:38

So there's two I actually yeah, yeah. Well, go ahead because I I was gonna say I read your what you wrote and I want you to actually spell it out because I I agree with almost everything you said.

SPEAKER_01 20:48

So yes, I'm I'm I'm spelling it out. So it I I think about it in two pieces in regards to the product. The first is they they're constantly referencing how they are overhauling the actual underlying technology that there's currently a bunch of tech debt that they need to move away from. And it makes sense for any large technology company or any small technology company for there to be tech debt over time. What I would like to know as an investor is well, what are what framework or uh uh or language are they moving from and moving to? Uh why is the current code base apparently such a mess that they they've claimed it takes months for them to release a feature that would take them basically no time at all with this new version? Like that type of stuff doesn't necessarily add up to me. And I would and I want to just be able to judge for myself. And I understand that's maybe getting too into the weeds for a typical investor, but because I have the background to understand it, I would like to know. Know. And that I've been on the other side of it where like I've worked at companies in the past where we've done major migration overhauls. Um, so like I get it, but I I want to know more details.

SPEAKER_00 22:11

But as a software, software guy, you also know that major uh overhauls take longer than expected as well. Um so there's like concern about that too, right?

SPEAKER_01 22:22

Like Yes, I have I have I'm I will give them a lot of grace for missing deadlines because I I think they need to be realistic about the deadlines. And I know from a leadership perspective, that's typically hard because they're not in the weeds dealing with all of it or dealing with the actual migration. But like I'm expecting this to not necessarily be released this year, and it might be like I know they're saying they're gonna roll it out and test markets uh later this year. I would not be surprised if that goes into uh early 2027. But I do, but I need to I would like to know what they're doing under the hood as opposed to them just saying it's gonna be better. Right, right.

SPEAKER_00 23:06

Yeah, I I totally get that. And and you know, what would prevent it from happening again?

SPEAKER_01 23:12

Like uh the legacy belt. Exactly. And like what what have they learned? How are the yeah, exactly, how are they gonna prevent this? The other piece is the actual features of this new product they've been very like coy with. So, like in this previous earnings or in this current earnings call, they referenced uh a new interaction model. And I'm assuming they're referring to uh they're gonna move away from the swiping mechanism and it there's gonna be something else. What is that something else? It would be great to know. And they're they definitely made the choice to not share that information. And I don't know if it's because that they're trying to remain in stealth to not uh provide any hints to competitors. And if that's the case, they should be more clear and say that as opposed to just like beating around the bush. Um, I don't know if it's because they don't know what they're exactly building, and it's one of those, like, you know, you're building the plane as you're flying it type of thing, which isn't necessarily a bad thing, but is definitely more concerning as an investor. Not saying that's what they're doing, and I don't think that's what they're doing.

SPEAKER_00 24:22

But based on the interviews of um Whitney in with and and just her earnings calls, it does seem like the implied messaging of what she's been saying is that they they are solving this problem in a way that is unique and more AI-based. That um I would I would be shocked if they don't know what they're doing yet. Right. So that interface should be relatively known. But but you're right in that they might not be wanting to share because they don't want copies of it, but they should be able to say that, right? Like we we'd love to share more, but we don't want to we don't want to put it out there um because we know our competitors would be copying us. Now keep in mind, Whitney is responsible for two of the three major dating apps in in the world, right? The top two of the three, uh uh Tinder and Bumble, uh Hinge being the other one making the third. Um so for her and her team to be able to come up with a new interface uh or new way of interacting with a dating app that is unique and uh might be very well embraced is not an implausible type of idea. But that is also what gets me excited. Uh so I'm sort of betting on the other side of this that like they probably are onto something, we just don't won't know it, and it might take us longer to get there than than we would like. But this is sort of directionally, this is kind of like what I was talking about earlier. Directionally, it's in the right direction of company building and product building, and um it's gonna take time for all of this stuff to come to fruition. Um I think we know whether or not it's successful for a while. Right.

SPEAKER_01 26:07

I think we both believe the destination is going to be positive. It's that that during this transitionary period, because I believe they're handling it poorly by not providing enough transparency, the market is punishing them for the lack of transparency because it's hard to underwrite, you know, just trusting leadership without seeing any specific details of the plan, like even providing mock-ups in the slide deck or uh user flows or anything like that, which I know gets in a bit in the weeds, but I think that would be helpful.

SPEAKER_00 26:42

But but just even talking about it in in a little bit more depth uh would be would be fantastic. On on the call, one of the things that Whitney said is that I've been doing this. Trust me, I've been doing this since I was 22. I'm like 36 now or whatever. So there's like this sort of implication that I know what I'm doing, but but that's a lot to ask for uh of investors. She should come on our show and talk about it. It's an open invitation, Whitney. So not that not that she's watching this. Well, I'll send her the clip, maybe. Okay. But anyway, um, I did buy Bumble. So the things that I'm excited about, just just so that uh we're we're uh we finish out this sort of bumble discussion, is that um I I am excited for uh uh what uh the the new product, both on the back end of fixing the sort of uh overhauling the under underlying uh infrastructure of the product, but also the user interface. I'm excited for that, what that will do. She teased on the call another product that is um platonic based. It's not sort of relation, it's not uh uh romantic relationship based uh product that uh kind of implied uh that that is a new product that they're also working on. That might be kind of interesting. So there's like upside there. Uh and then there's this sort of like raw financials of this company, which are fantastic, right? They generated another $50 million of profits, 34 cents a share. Cash flow-wise, they generated over 70 million of cash flow uh in the quarter, uh, adding to their massive cash pile. Uh, and then they used some of that cash in April post-quarter, um, meaning uh they announced it, uh, but it happened in the current quarter that we're and not the last quarter. Uh, but they used it, used it, used their cash pile to pay down some of their debt. So their debt is coming down rapidly as well. It used to be over $600 million. Now uh it's in the mid $400 million, if I'm not mistaken. So uh their debt is coming down, their cash continues to be strong. Uh, they continue to be generating a ton of cash every quarter, and it's projected that they'll generate more cash in the current quarter and the remainder of the year. So this is a company that is not in any kind of danger of shutting down or closing down or going out of business. Um, it's a cash generating machine. And at over a dollar a share, so if it's generating, you know, at least a dollar a share of profits in a given year, when it's trading at $3.50, that means it has a price earnings ratio of like three and a half, roughly speaking. Um so that is an extremely attractive price point for all the potential upside that if their products actually land and it starts to expand their revenue, uh, that upside potential could be enormous. Um, so that's what I like about uh Bumble. I added a little bit to it. Uh I think it was like a little less than 5%, but I might add even more if the price keeps going down.

SPEAKER_01 29:53

Because um you increased your position by 4.2%. And 4.2%. Bumble makes up about 4.5% of your portfolio.

SPEAKER_00 30:02

Yeah, that sounds about right. And it, you know, it's uh it's making up a smaller percentage of my portfolio over time because the price per share has gone down from my average buy-in and my portfolio's value has gone up. So the combination of those things, those two things has caused the percentage to be uh relatively low. So uh I like Bumble Bumble here.

SPEAKER_01 30:24

Yeah. And to be clear, I'm also bullish on Bumble. I'm just frustrated as an investor and as a product person. I would love to get more details about what they're doing.

SPEAKER_00 30:35

I do agree on that frustration. And that even like little misses from like on the financial slides, for example, last quarter, they didn't make it clear that most of the reason that they had, you know, and there they had a one-time expense that was over $600 million of write down or something for uh goodwill. Uh and uh that was not made clear on the main slide and what the financials would have been on a per share basis, that they were profitable, for example, that the cash flow was positive, that uh the per share earnings would have been positive. None of that was spelled out on the first slide deck of their slides. And and I think those things are very important. But despite that, the stock price went up after last quarter and went down this quarter when they didn't have that one time. So again, the the the market is always making me super fascinated by its reactions to everything. Uh it's it's a fascinating place. But you know, I I kind of I kind of like think of it as like riding this wild horse that uh I have no control over, but directionally I feel like it's going in the right direction.

SPEAKER_01 31:41

That's funny that you think of it as a horse because I think of it either as like a roller coaster or a wave. Yeah.

SPEAKER_00 31:48

Maybe I should be thinking of it as a as a uh raging bull because Right. You know, it's war on brand. Yeah. Yeah.

SPEAKER_01 31:56

Um let's talk more about earnings that occurred this week. So let me just share my screen. Um I'm just gonna click around. Let me know if you want me to talk about anything specifically. Uh but SMCI uh reported yesterday. Revenue was a 17% miss. Uh they were expecting 12 or analysts were expecting 12.5 uh billion dollar revenue. They ended up reporting uh 10.25 billion dollar revenue. EPS was a 37% beat. Um, expected EPS was 61 cents and reported was 84 cents. And then let's just go to do the move.

SPEAKER_00 32:54

Um yeah, major uh increase in price up 32% in the past week, but you can see that vertical line right there. Yeah, and for the day, 20 24 day. Yeah, so um yeah, as you know, SMCI is uh is a company I uh used to own. I think I sold it. I bought it around 40s and I sold it in the 40s after I lost confidence in the CEO. Um, and uh, you know, it's still below 40, despite the fact that it's up 25% today. I I don't regret exiting this position. Um it they're all over the map in terms of uh estimations and actual results. And this quarter is no different. Their estimate was 20, 12.5 billion almost, and they came in at uh you know, with a 17% miss on that $12 billion of revenue, and they came in at $10 billion of revenue. And you know, I didn't listen to their call because I'm kind of like done with this company, but I suspect there wasn't a great explanation there. Um, and uh the CEO is very difficult to understand. I uh, you know, I I lost hope in that that company is going to be able to do great things. Uh the other thing that I didn't like about what SMCI, uh SMCI's revenue growth was uh where it was coming from, is that it was coming largely from Asian, the Asian market, where a lot of the data center spend is actually in the US. So I was surprised their US revenues weren't growing significantly and it was just mostly Asian. So and then the low margins, of course, didn't help either. It's like a company that has roughly 10% margins. Um, all of this information is back when I owned it, which was roughly six months ago or more. Um, so I haven't looked into that more recently. But um what else?

SPEAKER_01 34:47

Who else reported? Another company that reported yesterday, AMD, uh be it on revenue and EPS, beat revenue by 3.5%, EPS by almost 10%, um, and positive guidance. Uh the expectation for next quarter was uh 10.5 billion revenue. Uh they guided for uh 11 to 11.5 billion dollars in revenue. Uh pretty soon. Yes. Uh AMD is up 18% uh today.

SPEAKER_00 35:24

Oh wow. There you go. 18% today, uh 25% for the week. Um yeah, AMD continues to be a good company, and uh it's pretty exciting. Go to the top. Let's look at the uh uh earnings earnings hub score. So it's trading at a PE ratio of 92, a forward PE of 62. I mean, I love this company, 37 billion of revenue growing at 35%, $687 billion valuation. Um, pretty awesome. But in comparison to Micron, my favorite current company, uh, valuation-wise, market cap-wise, they're about the same. They're both in the, you know, roughly $700 billion plus or minus, let's say $50 billion range. Um, yet one of them has revenues of $37 billion. The other one is expected to have profits that are more than double that, maybe triple that if they're lucky in the next 12 months. So meaning Micron is expected to have more than double the profits of AMD's revenue, just to be clear, just to put things in perspective. And they're both trading at the same valuation. So you, you know, when you look at it from the perspective of would I want to own this company, which company would I want to own? The company that has roughly, you know, $40 billion of revenue or the company that is going to have $80 billion worth of profits. Right. That just seems like a no-brainer when when at the same price, right? Like we're not saying like one is way cheaper than the other. At the same price, for the same dollar amount, would I want to own a company that has $40 billion of revenue or $80 billion of profits? And to me, the answer to that is a no-brainer. Like I love that AMD is executing well and it's doing fantastic. More power to them, but I know which one I want to own between AMD and Micron. And uh to me, that's it, that's a no-brainer.

SPEAKER_01 37:25

Okay, let's go to some earnings that happened this morning. Uber, uh, another company that you used to own, yes, uh, had a small miss for revenue, about half a percent, and EPS beat uh by almost three percent. Guidance for next quarter was neutral. Um, and I believe the stock is up roughly eight percent today.

SPEAKER_00 37:52

Yeah, eight and a half percent today. Yeah. Um and yeah, this is so Uber basically has has been struggling. I think the last price at which I sold it was in the low 90s. Um, and it continued to do well, in fact, after I sold it, uh, probably thanks to the fact that I sold it. It went all the way into the uh 110, 105, 110 price point before it started to come back down. And the reason it's been coming down is uh, oh, did it not go to 110? It's almost at 100. Uh is we don't think it ever crossed 100. Oh, I could have sworn it did, but um, but anyway, it didn't close, it went there intraday. Yeah, you might be right. Um, but the reason it's been coming down and uh struggling as a company that is generating huge amounts of profits, too. By the way, this is a this is another great example of a company that is executing fantastically. But uh the investor sentiment on this company turned when Robotaxis and Waymo's started to make progress. And it just looks like their answer to that problem is not a good one, uh, in that their plan is to just partner with everyone. And uh the partnership strategy uh doesn't make a lot of sense from the standpoint of why would these partners in the long term want to want to share a portion of their revenue with you, Uber? What do you bring to the table? And their answer is, well, we bring all the customers to the table. But it's not difficult, in my opinion, to get the customers. And I think in the investment community's uh opinion, it's not difficult to bring the customers to the table if you have a great safe uh solution that is price competitive, right? And I think Waymo is already showing that with their own app. Um and I think they're gonna continue to struggle. I think that partnership strategy is not the greatest strategy. So that's that's my perspective on Uber.

SPEAKER_01 40:05

Last one I wanted to call out was Disney. I believe this is the first quarter that they're reporting with their new CEO, um, because Bob Iker has stepped down. Uh revenue beat by 1%, EPS beat by roughly five and a half percent. The price move. I think it was minimal. Oh no, it was seven and a half percent too.

SPEAKER_00 40:29

Yeah, that's pretty good.

SPEAKER_01 40:31

Yeah.

SPEAKER_00 40:31

Pretty good uh day of earnings for uh uh for those who reported today, huh?

SPEAKER_01 40:36

Yeah. Um, you know, it's too early to tell uh with any like new CEO they're not gonna have too much of an effect, you know, immediately. But right um there's definitely big shoes to fill. I was a big fan of Bob Iker's. Um I think he did a lot of smart moves uh for Disney.

SPEAKER_00 40:55

Yeah, it's uh it'll be interesting to see how they change up their sort of like streaming services. And um they are they part owners of Hulu as well?

SPEAKER_01 41:08

Or they're not part owners, they are the owners. Oh okay, they are the same. So the way Hulu started was like all the the major networks owned, like I don't know, P each owned 20% or whatever it was. Okay, and slowly Disney's just been acquiring the other uh like players' shares, and now they fully own Hulu.

SPEAKER_00 41:32

Okay, that makes sense. Yeah. So so they have a couple of great properties in terms of uh streaming services as well.

SPEAKER_01 41:39

Um integrating uh Hulu into Disney Plus directly, like merging the two. Oh, nice. That's awesome. Yeah. All right, what else do we have? Okay, let's get into some news and then we'll get to listener questions. So uh Meta acquired a robotics startup company. Uh they're called Assured Robot Intelligence, otherwise known as ARI. Um, now the thing to note is Meta was already internally working on uh humanoid robotics, and obviously they're working on AI to power the the robots as well. Um I think the main reason for this move was for additional expertise in the space. In our last year, the CTO or meta CTO claims that what they're looking to do is not only build humanoid robots, but to also be um this uh like open, I don't know if open source is the right word, but licensed software layer for the robotic space in general. So kind of similar to how Android works, where you could be any phone manufacturer and you use Android uh for your for your OS. And they kind of want to do that for robots. I think they wanted to do that also for VR with Meta OS, if I remember correctly. Um I don't think that panned out too well, at least yet. Yeah. Um but uh yeah, so uh we haven't really talked too much about robotics on this channel, uh, especially in regards to meta. So I thought it was a good article to bring up and to get your thoughts on you know the that as part of the industry.

SPEAKER_00 43:28

Yeah. Um I I guess I I haven't really been paying attention to um what Meta's robotics ambitions are, and Mark has never really touched on any of that in in his discussions or earnings calls or um or anything. So I wonder if they're sort of like dabbling in it in the same way that, for example, Google was dabbling in it when they acquired uh Boston Dynamics and then ended up even selling Boston Dynamics despite the fact that they were doing like leading edge work. So um So I I am not like very optimistic for Meta being a great robotics company in the way I would be if uh if I was a Tesla shareholder, for example, for uh Tesla to be a uh pretty uh premier robotics company, humanoid robotics company in the future. Um in both of those cases, I'm not sure humanoid robotics have a place yet at scale, at least in the next you know, three years, so maybe longer. So I'm I'm I guess I'm not super optimistic about the whole robotics space, humanoid robotics space, uh just yet. But you you know, this uh just just also to contradict myself a little bit, it um I suspect that the robotics space will have its chat GPT moment where no one expects the AI to, you know, no before Chat GPT, no one expected AI to be as smart as like all of a sudden ChatGPT was, because everyone's experience with AI was just that like, okay, AI is really, really dumb. And then all of a sudden, you know, ChatGPT understood the details of what you were saying and could regurgitate it and could summarize things and was like better at humans, at you know, like the logic and understanding of large passages. And uh that was just so unexpected. And I and I suspect at some point in the next, you know, probably five to ten years, we're going to have that moment for uh for humanoid robotics, but uh but in the short term, I'm kind of like more pessimistic that that's gonna happen in the next year or two years. Right.

SPEAKER_01 45:46

Yeah, I am very excited about the space at a personal level. Like I would love to have a robot that can basically manage all the little tasks around my house, assuming that it could be at a reasonable price. And by reasonable price, I mean, you know, around the price of maybe a cheap car where you're you're you're paying it off on some sort of payment plan. Um which like we hire uh a cleaning lady to come twice a month. The amount that I would pay her is basically the same amount I pay for for a car payment monthly. Right. So it's very reasonable for for those funds to be switched over to a robot that could be cleaning my house every day, as opposed to twice a week.

SPEAKER_00 46:37

But this is what this is where I'm very skeptical. I just do not see a robot being able to do the things that a potential housekeeper like uh can do, um, or just a human can do in uh in and around the house because their dexterity is just not even remotely close. Um and I think this is where it sort of like Tesla directionally is focused on the right area, uh, meaning like the the hands, uh, hand dexterity being a major focus point, but um but there's just so much there in order to make progress on that I like I just don't see it happening in in the short term. So that that would be my skepticism.

SPEAKER_01 47:22

Yeah, I don't think it's happening in the short term, but I do think there's going to be significant progress in the next decade. Um yes, yeah, I agree. Yeah, it's not it's not happening tomorrow. And by the way, in regards to like, is Meta the right company to be doing this? Yes, I agree with you that Tesla is a much better position than Meta. Yeah, but out of the other mag 7 companies, I think Meta could execute better than Google, Microsoft, just based on their their nimbleness. Um agreed.

SPEAKER_00 48:00

The only other one of the mag 7 that yeah, agreed. Sorry. Uh the only only other of the mag 7 that might be able to execute better is NVIDIA. So I would put it at Tesla at the top for humanoid robots, then NVIDIA, then maybe meta of the mag 7. Yeah, I agree with that. And then of course there's like the non-Mag 7. Who who's working on that um uh that other robot that's um figure? Uh is it? Figure figure's one of them, yeah. Yeah, like Figure's got a very, very impressive robot that is really cool. And of course, Boston Dynamics' Atlas is absolutely amazing. It's constantly getting better at gymnastics. If I ever need a gymnast in my house, Boston Dynamics is the way to go. I knew that joke was coming.

SPEAKER_01 48:53

Um okay, well one other uh news piece to get to it, and then we'll do listener questions. So Amazon is opening up their logistics networks for any company to use. So before you would have to sell your product on Amazon to take advantage of their larger logistics uh and supply chain network. Uh, now you could just sign up for it and use it instead of like the Postal Service or DHL, et cetera. Um basically this is similar to how AWS got started, where they they built AWS for in-house for their own problems, and then they they started selling that as another business. And the idea is same, is is the same here, where now they have this Amazon supply chain services ASCS that they're selling to other parties. So this could potentially be a huge uh revenue generator for them. On top of that, talking about our own portfolios, and I know I own Amazon, you don't, but Rivian, in theory, should see some upside from this if they're able to drive significant business and they're going to need more trucks on the road. Where do they buy their trucks from? Rivian.

unknown 50:12

Yeah.

SPEAKER_00 50:13

So what I don't know if you have any thoughts on this um or how this could affect Rivian, but um, well, it's so just uh staying focused on Amazon itself, I think this is just very much up uh in line with what Amazon does great and uh you know extends the services that they have to others to utilize. So I think it's very much in line with their business, and I and I love that. I think Amazon is a fantastic company uh from that standpoint. Um, as to what this means for Rivian, I think is like relatively immaterial because I think just uh Amazon could use probably a lot more Rivian trucks anyway, uh, if they just prioritize that. Uh and I think it is becoming a bigger priority for them just because last quarter's Rivian numbers, apparently, uh as much as half of the deliveries, Rivian deliveries happen to be delivery bands to Amazon. So half of Rivian's revenue may have come from or uh vehicle revenue, automotive revenue may have come from uh Amazon because uh they've ramped up the delivery uh bands. Now, going forward, I think the R2 uh means a lot more for Rivian than the delivery bands do. But um, so as exciting as that might be, I don't think it's going to make a material difference, even if they increase that number uh substantially. So I I wouldn't put any uh weight into it.

SPEAKER_01 51:46

Okay, so the package is not delivered, got it. Uh terrible pun. Okay, let's go to listener questions and keep in mind, Hamid, we're we're running a little long, so don't be too verbose because we have a lot of questions. You ask it a lot though.

SPEAKER_02 52:03

But Hamid, keep it short. Um, okay, here's the first one. I'm wondering how do you find the stocks that you invest in? Do you look for specific industry find based on social media, et cetera?

SPEAKER_00 52:20

Yeah. Uh so my my focus is on tech, uh, just because my my whole background uh is is tech and software. I went to school for computer science, so um built a couple of software companies, uh actually, maybe more than just a couple, uh software products that I've been involved with. So I feel like that that is my sector, that that is an area that I know well. Uh, and being in that sector, um, I've paid attention to a lot of like what happens in tech. But in terms of like how I discover various different things that come on my radar that I feel like is a great company that is undervalued, that has happened in a variety of different ways. Um so you know, it's uh sometimes mentions of them on social media like X, on X Spaces, it's happened on CNBC, it's you know, it's happened in a variety of different places. Uh and then when, you know, obviously in all of these places they talk about all kinds of stuff, but when they talk about something that uh I'm interested in or is in my space and sector, then I pay extra attention uh and uh and dive into it. So um, and then my criteria for what companies I end up investing in has to do with I think the company is great, and I think the valuation or price of the company is good or great, right? Uh, but it has to be at least good for me to invest in it. Uh and the combination of these things is is what matters. Um, so that's why, for example, I think a company like Tesla or AMD or Amazon or whatever is great, but I don't necessarily think the valuations are great, and that's why I'm not invested in them. Hopefully that that helps. Yeah.

SPEAKER_01 54:02

What the so I am very busy working actively on Savvy Trader and Earnings. So I don't spend too much time looking for new investments. Um, but I'm talking to you obviously every week. So a lot of the investments I learn about are from you, which is why our portfolios are very similar. Um they're converging. Yeah, they're converted, they're slowly converging. Uh we just need you to buy a bit more Bitcoin. Um but then I also have been actively trying to use the products I build, Savvy Trader and Earnings Hub, to find opportunities. So um, like Iron and EOS, um, I discovered by by using those my own products. Um so those those are right now the the two main ways I'm finding stocks. I love it.

SPEAKER_02 54:52

You ready to move on?

SPEAKER_00 54:53

Let's do it. Yep.

SPEAKER_02 54:55

Um this is going back to Micron. Why are you conservatively predicting market cap of only one trillion, one trillion for this year, but it can be easily two to three trillion, perhaps more in 2027. They are sold out till 2027 and have contracts in place for five years. I know we talked about this a little bit, but I just wanted to make sure we said everything we want to say.

SPEAKER_00 55:17

Yeah, I mean, I wouldn't say that uh it's uh its market cap is only a trillion dollar potential. I think uh in fact, when we were talking about it earlier, I did say it could be a multi-trillion dollar company because it it is uh exactly what this person says. It has a tremendous amount of um opportunity, and it seems like uh they're sold out for at least 2026. That's the the time frame that they the management of Micron has said. And they've talked about how they're starting to build five-year contracts with some of their customers. So um the picture for this company and the news for this company might just get better and better over the coming quarters as they execute, just as it did for NVIDIA, for example, between 2022 and uh uh maybe 2023 and 2022, uh and then currently. Basically, just NVIDIA just keeps getting better in terms of its execution and uh profitability and revenue growth and so on. So um, yeah, it absolutely might be a multi-trillion dollar company. Um, we won't know, of course, until until we wait and see.

SPEAKER_02 56:25

Ready for the next one?

SPEAKER_00 56:27

Let's do it.

SPEAKER_02 56:29

Um ASMC in the context of AI slash grid related infrastructure demand.

SPEAKER_00 56:40

Um Dustin, do you want to comment on this one before I do? I don't have any perspective.

SPEAKER_01 56:48

I don't think they're an American company. Or they're they're maybe OTC.

SPEAKER_00 56:53

Uh ASMC. Oh, I was I was mistaken it with ASML, actually. Uh ASML asking for ASML. Yeah, I I don't see ASMC. Um, I was thinking ASML, just in case they were asking for ASML, I'll I'll briefly talk about it. But ASML makes a key component for the uh chipmakers. They make uh they're the only company in the world that makes uh these machines that are like $400 million machines that make the chips for NVIDIA and um uh I think even like uh Google's uh chips are made on ASML machines. And basically all the sort of like modern chips are made on ASML machines because they invented the uh technology behind how these chips are made, which is an absolutely fascinating uh technology. There's actually a video, like a 30-minute video, talking about the details of how they built uh some of these machines and the technology that goes into them. It's it's absolutely mind-blowing. And I think ASML is a phenomenal company. It's one of those, again, on the list of great companies. It's not US-based, but it is traded on the US markets. Um and uh valuation-wise, though, I just you know think it's fairly valued. It's not like extremely inexpensive. So uh again, I have chosen to buy other things like Micron instead of ASML or Meta instead of ASML. So those are my two sort of focuses on AI.

SPEAKER_02 58:27

Dustin, did you have anything you wanted to say?

SPEAKER_00 58:30

Oh, let's just keep going.

SPEAKER_02 58:32

Okay. Okay, this one's a great question. How is your savvy trader business going? I love the product, really best portfolio tracking app. Seems a lot of fun building it.

SPEAKER_00 58:43

Yeah, so uh you you know, I think uh thank thanks for the opportunity to talk about Savvy Trader, but but Savvy Trader is uh is a product that uh surprisingly, shockingly, both Dustin and I had independent of one another and a mutual friend, despite the fact that we're thousands of miles apart, a mutual friend who knows both of us, who we had both talked to about our product idea, um introduced us and said, you guys should talk to one another. So uh it turned out that both uh Dustin and I had a similar idea for portfolio sharing so that you could share your portfolio with the world. Um, and you know, when I when I talked to Dustin, he's like, yeah, this is this is what I want to do. I'm like, all right, let's do it together then. And and we've been working together on it for the past four years. It's been super fun building it. And then as a result of Savvy Trader, uh we had a spin-off product called Earnings Hub, uh, which has been uh received extremely well uh in use by hundreds of thousands of people every quarter uh around earnings and like now just even getting stock quotes is more fun on Earnings Hub than uh than uh uh the typical financial website. Uh and both products are doing fantastic. I mean, neither neither product is profitable just yet, just to be clear. Like I'm I'm I've been investing in the in the company to keep it going. And um, but I'm having a great time building it. I think Dustin is probably having a good time. Absolutely. Uh and uh if he if he's not, he wouldn't tell me. But but we have a team of people who are who are very passionate about it and uh uh we love building it. Thanks for asking them. Yeah, from from like team dynamics. Go for it.

SPEAKER_01 1:00:27

Well, I sorry, sorry, sorry, sorry to run through there, Justin. No, from team dynamics, it's great because like we just have such a capable team uh where we kind of like build anything we uh imagine. And we do have some pretty incredible features coming down the pipeline, um, both for Earnings Hub and for Savvy Trader, but some killer stuff coming uh that you'll you'll get to see very, very soon. So yeah, I love it. Good stuff. It's exciting.

SPEAKER_02 1:00:55

Okay, guys. Could Uber buy a car company?

SPEAKER_00 1:01:00

Oh boy, you don't know existed.

SPEAKER_01 1:01:03

Oh, here we go. Okay, this is gonna be another hour. Did I ask this question?

SPEAKER_00 1:01:08

Oh no. Who is this person? Um, yes, I mean, could they buy a car company? Yes, they should be buying a car company. They should be buying one that is an electric car company that ideally has a lot of technology similar to Tesla in um in self-driving uh capabilities in their cars, uh, who has cars, vehicles that people love. I mean, ideally they would be buying a company like Ribian, but instead they have this sort of partner strategy where they're partnering with everyone and their mother, and uh they're investing in companies like uh Ribian, and they've they they just committed to a $1.3 billion investment, if I remember correctly. And then um they also invested in Lucid, uh uh a few hundred million dollars as well. So um they they have chosen not to buy a car company, uh, and they have chosen not to build their own AI and uh autonomous driving technology. It baffles my mind as to why. I wrote an open letter to Dara, uh, I think more than a year ago, uh, encouraging him to do that, to focus on building their own autonomy uh tech and to also own the full stack and also buy a car company such as Rivian. Um and and uh that uh open letter actually went super viral. So I'm pretty sure he saw it, uh, but has chosen against it. So or maybe he did try to acquire Rivian and it just didn't work out. Yeah, maybe he did, but yeah. But even if you couldn't buy a car company, I think you should still own the A V stack in the same way that Waymo does, for example. And I and I think this is the part where Travis, the founder of Uber, got right. He was just doing it too too early. Uh, and when uh Dara came on board uh as the CEO of Uber, he shut down the division that was building on the autonomy uh technology. And I think that was a good call for the time, but he should have restarted that division uh sometime in the past two or three years since ChatGPT, this sort of like reset of the uh autonomous vehicle technology, if you will. And he never did. And and I think that was a missed opportunity. So um, all right. Should we end there? Or do we have more?

SPEAKER_02 1:03:31

Uh there's there's a couple more. What do you think?

SPEAKER_00 1:03:35

All right, let's let's let's go quick. Okay. That's what I've been saying. Sorry.

SPEAKER_02 1:03:42

Okay, what's the thing that keeps you so excited about Rocket Lab that makes you keep the position at 70x valuation?

SPEAKER_00 1:03:50

So so first of all, keep in mind I have now uh extracted more than four, maybe five times as much as I've put into Rocket Lab. So, like the way I view it is that um it has already paid me back far more than I could have imagined uh and deserve in in like literally less than three years. So um everything that I have in it is uh you could think of it as like additional gravy. Um, despite the fact that it's like still 20% of my portfolio, it's just unbelievable how much Rocket Lab has has gone up. Um so there's a sense of loyalty that I have to it. But then uh but then what makes me excited about Rocket Lab's future, again, this you got to go out multiple years in order to be able to justify 70 time valuation. Uh, and that's part of the reason why I'm trimming Rocket Lab more than any other stock right now. Um but the space industry, I do believe, will become a multi-trillion dollar industry over the coming decade. Uh, and then Rocket Lab has the second best and is well positioned as it's the second best company positioned to take advantage of that growth. I think SpaceX is first and then Rocket Lab is second. Blue Origin is uh a close third. They might be a second if they can get their new Glenn sort of reusable and reliable, but they're not there yet. Uh in the meantime, I think Rocket Lab is is uh very well positioned in that regard. So that's what is kept me excited about them.

SPEAKER_02 1:05:24

Okay, let's do one more.

SPEAKER_00 1:05:26

Okay, last one.

SPEAKER_02 1:05:28

Hi, did they talk about RJ's $4 million bonus? Kind of shocked when I read the headline.

SPEAKER_00 1:05:34

$400 million bonus. I I suspect I didn't uh look into the details of that uh bonus, but um I suspect it's uh stock grants or stock options uh in general that are tied to performance base. This is for last year, and I think the performance of the stock late last year was pretty solid, meaning like uh those same shares might not be worth nearly as much or even might be zero. Already, uh depending on the stock price. But the way to think about uh stock compensation for CEOs, especially founder CEOs now, versus pre-Elon, um, is that Elon's $58 billion pay package in 2018 and then $1 trillion pay package in uh in 2025 has set a new precedent that is now everything is going to be compared to that. And everything seems minuscule and small relative to Elon's pay package. So you should, as investors, start expecting massive pay packages, including for founders who traditionally got zero or you know, negligible pay packages because they had a huge chunk of the company. Uh, you can start to expect massive pay packages coming down the road because that's the precedent that Elon has set and shareholders approve. So thank you, Elon, for that. Um but yeah, RJ's pay package is nothing relative to Elon, even in terms of percentage of the company that he gets. Uh, and he owns a much, much tinier percentage of Rivian than Elon does. So, all things considered, it's it's all relative and it's very small, relatively speaking, despite the fact that it's extremely large. But this will become the norm.

SPEAKER_01 1:07:28

That is it for episode 38. Extremely long episode, but a good one. A lot of good conversation. Um, thank you all for listening, and we will rant with you next week. Awesome. Thanks, everyone. Bye. Bye.