SPEAKER_01 0:00

Justin, every week I keep thinking that uh we're not gonna have that much to talk about. And then like there's all kinds of news that comes out right before our podcast. And uh it's uh this week is super fun. It's gonna be holy cow, Tesla, uh Meta CyberCab. Yeah, Tesla CyberCab, MetaMuse, MetaMuse, uh MetaMuse. New iPhone, Apple's new iPhones. Um, so so much to talk about.

SPEAKER_00 0:26

What what else do we have? ChatGPT released Astra, which we talked about in the last episode, and I thought it was like still a ways out. And then I think like the next day, they were like, oh, we're gonna release that. Um, so I think our podcast added some pressure. At least that's what I like to think. Um and you know, both of our portfolios uh had some trades this week. So let's start with your portfolio as we like to do. What stock did you buy? I can I can remind you if you need me to.

SPEAKER_01 1:00

Sorry. So, like I um started getting um uh rebound sound because my uh the video was on the the YouTube video also on. So I got distracted for a second, but I probably got us extra views. Our our first chat is on Astra. Is that what you said? No. What did you say? I totally missed it. What is what did you buy this week? Oh, what did I buy this week? Okay, so uh yes, I did uh add to my meta position immediately after uh meta released Muse.ai. That was yesterday, and the stock hadn't moved, so I was like, this is pretty amazing. I'm I'm gonna like 615, right? Yeah. Uh and I added like three percent to my position, and then I was like, I'm gonna buy some more, but I figured, you know, the market is often stupid after these things, you know, it'll like sell the news or something. And then today, of course, Meta came out and said that their uh the adoption of Muse.ai is getting is exceeding their expectations, and all the reviews tend to be positive. So the stock was up five or six percent today when I added some more. So I in total, I think I added about 10 to my position, just just shy of 10. Um, something like uh 18, 19 of my portfolio now. So um, yeah.

SPEAKER_00 2:18

It feels like this is the first time the stock has moved based on AI news from Meta in a while.

SPEAKER_01 2:25

Yes, yeah. For the first time, it feels like um it's actually getting a little bit of respect. Um and you know, 5%, 6% move today is no trump change. So essentially, like uh it got a roughly $80, $90 billion market cap increase due to this product. So uh immediately this product just added $80 or $90 billion worth of uh market cap to Meta's uh market cap. And um, in my opinion, that's still very much undervalued because the whole company, uh the the rest of the business as uh, you know, their traditional businesses, if you will, the Instagram, Facebook, and um and WhatsApp is still worth more than its current valuation, in my in my view.

SPEAKER_00 3:14

So, what are your thoughts on Muse itself and Meta's position overall in this AI market?

SPEAKER_01 3:22

Yeah, so okay, let me sort of backtrack and talk about Meta's Muse in uh in the larger context of how markets work. And one of one of the things that um I often do in talks where I like talking in front of entrepreneurs or startups in Arizona or whatever, is I show them this sort of uh S curve of market growth, right? So if by the way, if you're listening to the podcast, this portion might be worth uh turning on the video. And it's the video is available on both Apple Podcasts and Spotify, because there's a couple of visuals that might allow you to sort of follow along a little bit better or easier with respect to the S curve of market growth. But basically every market, whether it's email or smartphones or EVs or AI adoption, grows in this same sort of S-curve fashion, right? Where uh initially there's zero users who are using that particular product or technology category. Uh, and eventually the market matures and it gets closer to 100% of everyone who could be using that product or category is using it. So you, you know, it might be helpful to sort of go through a couple of examples here. Um so if you think about email, today email would be on the right hand side where it's like very much mature, and there's everybody who could be using email is probably already using it. So that's a very mature market. Um you know, uh a um AI, for example, it's still in this ramp up curve of the uh of the S curve. Uh smartphones is more on the right-hand side where everybody who could be using a smartphone for the most part is already using one. Um and uh uh this S-curve helps sort of putting things into context. So there is a sort of good time and bad time to get into a particular market category. Uh, and you might think of this beginning slope where things are starting to grow exponentially as a great time to get into a particular market category or product category because all of the potential users or the vast majority of the potential users of that category are coming in the future. Meaning, not everybody uses AI or AI agents today. Uh, a lot of people are, but it's just the numbers are in the millions, whereas like billions could potentially use it. Um, so this makes it, you know, like uh a great time to get into the market. Uh whereas there's also times when it would be considered too late. So if you released a new email product today, uh it might be too late. If you released a um new uh smartphone, even if it's more capable than iPhone or uh Android, uh that in itself is not enough for you to do really well because you have to switch people from their existing phone in or into your new phone. So that switching cost is what prevents new entrance into the market to really succeed, is because you got to get people to switch and people don't switch. So keep this sort of uh in mind. And then there's sort of like a very early uh into the market uh where it's really, really hard because you're sort of building the knowledge about that this new technology is a thing and you should be excited about it, and you know, um so uh companies or examples of companies that have gotten into the market very, very early, and it's been really hard for them is like Tesla. Tesla essentially built the EV market, uh, OpenAI has built the AI market. Um, but a great time to get in would be like after the growth curve is happening. So Anthropic is an example of a company that got in early, but uh it's after the growth curve is already happening. So um Apple's iPhone got in early, but it's not it wasn't very early where they had to sort of build the uh case that smartphones are even a thing or that you should have a smartphone. They entered when BlackBerry was already uh a thing, and uh there was other smartphones as well. Um, so they entered at a great time because the bulk of the users that would eventually use uh smartphones hadn't come online yet. So this S-curve is important as sort of like context and backdrop on this uh this AI race, because what I would consider where I would consider we are on this S curve is in this great timeframe where whether it's Anthropic or uh SpaceX or um uh Google or OpenAI or uh Meta, uh they're all in this time frame where the bulk of the users haven't yet come online yet. So keep that in mind. And now we have Meta having released a new product in this time frame where the product is getting very good reviews and uh the um the product is uh they're able to market their product to 3.6 billion people because that's how many active daily active users they have. So when I look at Meta from this you know high-level view of the S curve of market growth, I am extremely excited about Meta and its positioning and its potential. Um you know, so that's the framing that I have on uh on why I'm excited about Meta.

SPEAKER_00 8:53

So I'll pause there and then like maybe we can so base the the the core argument, at least for the the specific argument, is like timing is really strong, at least that's your belief.

SPEAKER_01 9:06

Right.

SPEAKER_00 9:06

But then the question is why Meta over a anthropic or OpenAI or Google or SpaceX?

SPEAKER_01 9:14

Yeah, no, I mean I'm not saying that they have already won. Uh I'm just saying the timing. So so um a lot of people are like, well, meta is just releasing another product that's a Me Too product, who cares? And and the reality is that uh a Me Too product works just fine if you're on the early side of the uh adoption curve, right? A Me Too product doesn't work well if you're on the late side of the adoption curve. Meaning uh, you know, for example, search uh in the late 90s uh already had uh dozens of players. And there were sort of like dominant players like Yahoo and Alta Vista, who had like been the established leaders of search before Google even entered the market. But what was cool is that because the bulk of the users by like 1999, let's say, uh, who would eventually use the internet hadn't yet even used the internet yet, Google didn't need to switch a Yahoo user to Google. They just needed to convert a larger percentage of the new people that were coming online. And as those people chose Google, uh then Google became the standard of search because after a few years, there was way more of the new people than there were uh of the pre-existing people from 1999, right? When you know Google first came on the scene. So so you know, this is the reason, for example, that Anthropic could enter the uh race so late, late last year, or you know, last year basically, and in one year become the leader uh in the AI race from a revenue perspective, right? So Anthropic has already shown that it's not too late to get into the AI race. But when you get in, you have to have some advantages that would give you a shot as to um doing this well. You either have to have a way better product um or you have to have really good distribution and at least as good of a product, right? So the combination of those two things is that Meta has those things. It has as good of a product and way better distribution than everybody else. Oh, and it has a third thing, which is that it's been using its own money. It hasn't been using investor money. So it doesn't need more money in order to continue to sustain its uh its new product. It can use the cash flows from its existing businesses to sustain and grow this new business, essentially. So where that's not a luxury that OpenAI, Anthropic, SpaceX um have. Google has this luxury, by the way, but uh Meta doesn't. Or uh the others don't. Uh Meta is the only other one that has this luxury.

SPEAKER_00 11:51

So I do want to focus a little bit on what you're referencing, where they're not necessarily the first mover here. Specifically, this product is very similar to Grokbot. Um I posted earlier on Twitter being a little bit critical of Meta's positioning here. Nothing that can't be fixed, but right now Grokbot is very much focused on the professional user, and MetaMuse is focused on the personal use case of a user. And while there are definitely personal use cases, my issue is there are way more digital tasks that need to be done in a work setting than there needs to be in a personal setting. And that's one of the things where like you see all these AI companies show off, like, oh, this AI could plan a trip for you. It's like, well, how often are you planning a trip? Like, that's a terrible example. Like, who cares?

SPEAKER_04 12:51

Right.

SPEAKER_00 12:51

Um, whereas like uh uh in a professional setting, it's doing triage work, it's man, it's catching bugs, it's uh managing Slack. Like there's so much it could do. It's setting up iPhone screenshots, literally, for us today. Um so I I wish that they had a different launch strategy and they was more focused on the professional use case. Again, this is something that they could tweak over time, and I'm sure they'll end. And there's really nothing stopping anyone from using it in a professional setting. Um but I do think that was a mess.

SPEAKER_01 13:28

They need to have the integrations for the professional settings, right? Like and I think that it's um the the way because Meta is so strong in the consumer, it makes sense for them to start there and then introduce tools for the enterprise. Uh, and Mark has already talked about how they're going to have enterprise-based products uh in the AI category, where traditionally they've been a consumer-based uh focused company. And in the future, there's lots of opportunities for them in the enterprise, and they're going to go after those use cases as well. So, yes, you're right that they they are sort of starting with the consumer right now and basically providing a digital assistant for anybody that wants one. And by the way, they're doing it for free, pretty generous, sort of free version, which nobody else is doing. So that is going to allow them to capture even a larger segment of the user base. Um, but but then once they turn on the like enterprise use cases and uh provide enterprise billing and uh uh you know, basically bring this same type of technology to companies, they're probably going to do really well. And you know, they have roughly a you know uh seven, eight, ten time reach than X does for uh XAI products. So the fact that they might be able to get this into the hands of more people uh quicker might sort of like give them a significant advantage, even when they are ready to um introduce the enterprise features or work-related features, if you will.

SPEAKER_00 15:05

Yeah. And I I will say, like, there's really nothing stopping anyone from using it with enterprise integrations, because either there's an MCP with a lot of these products at this point where you can connect it that way, or similar to Grockbot, it has a virtual computer where you can go and log in to whatever account you need it to have access to, and you could do it that way too. So that there's minimal uh blockers uh at this point. One other thing I want to call out in terms of differences is it does have some uh additional features where it has uh like a goals and tasks section that you could like literally check off and see your progress towards a goal, which I think is interesting. Again, on a personal digital level, I'm not sure how much overlap there is there, but I do think it's an interesting UX. Um, and they have this like news feed section that's customizable to you, which at first I was like, I don't need another feed, but I did try it out, and the feed was very accurate. I gave it like a couple of things that I like to look at. Um, like tech news, I want um like high-level breaking news. I don't want like just you know garbage. And it was giving me some good stuff. Um I don't know if I would use it every day, but I think they were the the reason why they released that type of feature is there isn't that much of a pull to use this on a daily basis. Um, at least from what I can kind of think of right now. So it's kind of gets you into the app.

SPEAKER_01 16:42

Um but yeah, I guess the the pull would be similar to the to the casual ChatGPT user, right? Like uh the consumer chat GPT user might choose to use this over time as opposed to Chat GPT, especially if it could do more things for it. So uh you might uh ask ChatGPT, what do you recommend for uh a particular product category or whatever? And it and it goes and gets you know a handful of product categories that are or products that are well reviewed and tells you, here's what I recommend. Muse is going to say, Would you like me to purchase it for you? And it actually go through the steps of purchasing it and ship it to your house, right? So uh that extra bit of uh uh agency, if you will, is what might cause it to be the um the go-to tool, especially if it can do all of these things for free for some period of time, right?

SPEAKER_00 17:33

Yeah, what is interesting, and then we'll move on from this. What is interesting is that they just and I don't think I've seen this in a in an AI product before. The UX is you have one core chat with your agent or bot. And then like you can have um, I forgot what they call them, like side chats. Yeah, um, but it is a little, I don't know if it's a good thing or a bad thing because having individual chats helps me as a user find previous conversations and like there's more focused context around what we're talking about, and it's hard to know now, but like over time, if I'm just talking to the same one bot and there's a really long conversation, uh, is that how's this system?

SPEAKER_01 18:18

How's it gonna handle context? How's how are you gonna be able to search for past conversations, continue a thread?

SPEAKER_00 18:24

Yeah, like in a perfect world, that is the correct use case or the uh user experience.

SPEAKER_01 18:30

Yeah, I haven't used it enough to know how it's gonna handle those things, but yeah, you're you're right. Like um some sometimes the side panel is is so convoluted and so busy that you kind of want to like avoid going there. Or this notion of like create a bot. Like I started using GrockBot, and you have to create bots for various different things that you want to do. Um, and the a particular bot it becomes an expert in that thing, supposedly. Yet you could probably ask this same bot all kinds of different questions, right? But it gets you into this mindset of creating different bots for different things. And in a way, that's an additional hurdle that you have to jump through in order to create a bot, right? Like where this thing is just like start a conversation. What do you want to call me? Go ahead. Right. What can I do for you now? So uh I think they are probably in the right direction on the user experience. Uh it'll be interesting to see what we think a month from now, you know, for sure.

SPEAKER_00 19:32

Um, okay, let's pivot to my portfolio. That I made a uh transaction. This was the first transaction I made in like two months, um, which is a decent amount of time for me. So I sold uh a little bit of Robin Hood, specifically around 17% uh when it was at $123. Um and if we look at the Robin Hood chart, you could see I've just kind of been selling throughout the year. Um and majority of this is just reducing my crypto exposure. Um my most recent sell was due to Robinhood had like a 15% jump in like one day, which just felt like much or a decent amount. And I don't think there's really any big news outside of maybe like an analyst uh increasing their rating. So I just felt like it was another good time to take uh some profit. With that said, I wouldn't be surprised if I start accumulating uh Robinhood at some point. Um yeah, but well, we'll I have to see how it plays out. But I think later in the year, I I I just expect there to be a lot of turbulence. Um, this is a election year. So um depending on what the stock does, if if it if it drops from here, there's a there's a chance I start to accumulate it again. But I'm also not, I don't, I don't feel like I need to accumulate it either. Um, you know, I'm I'm happy where I am.

SPEAKER_01 21:12

I ended up uh as you know already, but like I ended up reducing my Robin Hood pretty significantly um over the past few weeks, and I ended up selling right before this major run-up. It had already run up some, but I think uh my last sales were in the uh low 100s as opposed to 120. I still am holding on to some some Robin Hood, so we'll see. I probably won't have much sales uh at this point going forward. I'm gonna wait for new information. So that would be earnings reports to see what happens. Yeah.

SPEAKER_00 21:46

Um, okay. Tesla CyberCab had their I don't even know what to call it, a release, a rollout. They're they're official another announcement is it. I guess people could people could hail them if you're in the right place at the right time.

SPEAKER_01 22:05

I think they rolled them out in Austin. I don't know if there's any other city that they rolled them out in. And uh they appear to be doing well. So um the the event itself was kind of weird and unimpressive and uh was not uh live like live casted, and they kind of put people under embargoes, but there was like literally nothing revealed in in the event. Um one thing that is kind of interesting that might be worth uh uh talking about, which is that Tesla has been talking about uh selling either cyber cabs or allowing your existing to individuals or allowing your existing uh Tesla vehicle to become part of the Tesla network, where you could sort of like enter the network and exit the network at will and then make money using your car. Or if you buy a cyber cab or a handful of cyber cabs, potentially sort of like operate a fleet of these robotaxis. Um and and my bet on this is that 10 years from now, Tesla will have no third parties doing this. Um, but what what are your thoughts on uh on you know like what what Tesla has been uh promising essentially users that they will be able to enter and exit their their vehicles into the network?

SPEAKER_00 23:25

Yeah. So I think it's going uh look, obviously I don't know, but I think it's going to be very different depending on where you live. So like if you're in a popular city, I find it hard to believe that Tesla, that there's going to be space for individuals to offer their own cyber cabs, uh, where Tesla will just have their own operating. Um, because it's probably going to be a lucrative business, right? Like there's not much upkeep. Right. But they do need to they do need space to charge the the cars, clean the cars. Um and I do think during peak times, like maybe during uh holidays or even like it could just be like when it's raining, there might be more usage needed, and then you could kind of rent out your own cyber cab. Um, so it might be dynamic from that standpoint, but most of the time, I think Tesla's gonna have it covered. With that said, if you live in a more remote area where maybe Tesla's not going to have a charging slash cleaning facility, then there's probably going to be a lot of, or not a lot, but like a handful of people that have their own fleet in you know the middle of nowhere, uh, and they could kind of run it. Um so I do think it's going to be a hybrid system, but Tesla is going to run more of it than what most people realize right now. That's my over my overview.

SPEAKER_01 24:57

That's interesting. So so I my my view is that uh there's a lot of complexities that Tesla is not going to want to deal with with um with dealing with individuals, meaning like um having people that have one vehicle that they enter and exit the um uh the network is probably not going to happen. So the next stage would be okay, let's have partners in different areas, sort of like the Amazon delivery uh network, where they uh partner with a third party who takes on the burden of the risk, by the way, for delivering the packages for Amazon. Uh, and if they get into an accident, that's their own liability or whatever. Um, so the Amazon delivery network is with a handful of partners. Uh it's basically individual uh companies that get a you know pretty decent uh region that's uh that's um that's dedicated for them. Uh and uh and that partner sort of like takes on that responsibility. Now, uh if Tesla did something like that, that could potentially work. But I mean, at least it's simpler than you know dealing with millions of potential individual owners or hundreds of thousands of individual owners, but then the complexity becomes these guys have no pricing control, they have they have no uh ability to uh say, okay, like um uh that's that's you know like uh give us exclusivity, or like if they do give them exclusivity, then they might have a little bit of control. So in a world, in a perfect world where they have exclusivity uh and they have a fleet of vehicles that sort of like one partner manages, um then what does Tesla get for that? It still has to take on the responsibility of liability, because you, you know, obviously the partner is not there. So the only thing that they get is upfront capital, which Tesla doesn't need. It could go raise the money by selling stock or whatever, or even through loans. Um, and they get the um uh the maintenance of the vehicles, which is like the cleaning uh ability. So again, I don't think that's a complex problem for Tesla to solve on its own. And eventually I suspect they're gonna land on this model where they're gonna just do everything themselves because it's gonna be too difficult for an Elon-based company to deal with hundreds or potentially thousands of partners across the country. So that would be my guess. If we were to fast forward 10 years from now, at least in the US, they're probably not going to have partners, but we'll see.

SPEAKER_00 27:28

How close, how close are we for them to actually sell a cyber cab? Like no steering wheel, no pedals, um, can drive anywhere, anywhere in I guess the nation.

SPEAKER_01 27:39

But that's the other thing, is you sort of need licenses on a per cyber cab basis, right? Like every city that is allowing these things to um to operate in their city is issuing licenses for each individual Waymo. And then like uh Google can't just uh or Waymo can't just deploy unlimited number of Waymo's, they have to go get a license for each one. So uh the average Joe can't just like go buy a cyber cab and deploy it as part of Tesla's network without additional uh, you know, either Tesla or the individual doing this additional work of getting the uh regulatory approval for that vehicle. And then there's the sort of like risk for the people who might be putting up the money. You know, I certainly wouldn't want to put up the my money for taking on this risk that they might issue licenses and then later retract them, right? Like what happens in that scenario? Does Tesla buy back the vehicles? You know, so if Tesla has to take on the risk, then there's no point in having partners. If the partner has to take on the risk, well, that's a lot of risk for them to take on. And the expectation would be way too high for the partners to be taking these risk risks on, especially if it's individuals that you know, like are doing onesie twosie Tesla vehicles. So uh it just doesn't make sense. The Airbnb model here does not work because Airbnb is it, it would it the Airbnb comparison doesn't work because if in order for it to work, it's like Airbnb is only renting out hotel rooms and they sell the hotel rooms for other people to buy to then go rent to other people and the hotel rooms on their own have no value. If that's what Airbnb was doing, that would be a good comparison. But that's not what Airbnb does. The houses that that individuals who enter the Airbnb network uh uh enter it with have intrinsic value. The person can just live in it if uh if they don't Airbnb it, they can rent it out to someone else, uh, they can sell it. So none of those things would be possible for these cyber cab vehicles if the only thing you can do with it is to enter and exit the Tesla network. So the the model comparisons don't work there.

SPEAKER_00 29:54

Uh you could also compare it to the Uber model, right? Where Airbnb, that's an appreciating asset. But with Uber, it's a depreciating asset. It's a car, which is obviously the same thing as CyberCab. Um, but the difference is with Uber, it's you own the car that you are using for Uber, where with the CyberCab, maybe you it's a your car that is doing transit during off times. But I think most of these uh uh fleet owners are going to be spending extra capital to buy additional cars that are not their own, um which is a very different uh perspective and use case. Um, because right now it's it's Uber's a means uh for someone to get by, right? To make a living, where this is like someone trying to start a business, um, and we don't even know what the ROI is on running a cyber cab fleet or how how long it'll take to make your money back.

SPEAKER_01 30:59

Yeah, no, that's exactly right. Like there's so many unknowns that I don't see the sort of uh large investors lining up to be buying a bunch of cyber cabs and trying to deploy them, not knowing the regulatory approval requirements, what happens to these cyber cabs if they don't allow if cities sort of like reject them or don't allow them. So there's there's a lot of complexity to solve. And interestingly, Tesla has to solve all that complexity on its own anyway, right? Right. So at the end of the day, what are they saving? If they're saving it, you know, the the cost of the vehicle, which for them is going to be in the $20,000 to $25,000 range. Um, and uh they don't they have access to enormous amounts of capital. This is not just some regular old company that's trying to do this. This is Tesla, uh, who that has a $1.5 trillion valuation, right? It could it could easily raise $10 billion by just selling 1% or $15 billion by just selling 1% of its uh uh equity, and all of a sudden it has enough money to sort of pay for a half a million cyber caps. So it doesn't save anything for them in order to sort of bring on partners.

SPEAKER_00 32:11

Let's go to Apple. They had a big announcement today, uh, or several big announcements. They announced new iPhone 18 Pro and Pro Max, they announced new uh AirPods 5, they announced new Apple Watch and Apple Watch Ultra. But the big announcement is they announced the iPhone Duo, which is their foldable iPhone. This was heavily rumored. You know what I didn't like? Um, in the keynote, they did the oh, we have one more thing, and it was the iPhone, yeah, it was the iPhone duo, and it was definitely um the the new CEO wanted to say the line, but like you have to say it when you no one's expecting it. Like we literally knew what the name of the product was this morning uh before the announcement.

SPEAKER_01 32:56

Um that's funny. So it's the worst kept secret unlike jobs secrets, but to be fair, jobs was running a much smaller company, so keeping secrets was easier back then, and the world was just very different back then, you know, not everything had a camera on it.

SPEAKER_00 33:13

Um so what are your thoughts on the iPhone duo specifically?

SPEAKER_01 33:20

So um the dual screen or foldable phones have been out on the Android side for for quite some time, and I don't see a lot of them. Um, so you know, like I haven't had a desire to have a foldable phone. Um, I'm not sure what the attraction there is. And I understand the starting price here is like $2,000. So it just seems like that's a lot to pay for a phone where um, you know, a larger screen would be nice, for example, for watching movies or something, but then the width of that screen is still the same width as like a you know seven-inch iPhone Pro Max or something like that. So your movies are still not going to be any any wider, right? Because the height is not going to fill up the screen, right? Otherwise, you're sort of like missing the the sides. So I don't know, like it's not ideal for video. It's what's it ideal for? Uh the per the perception that you're able to do more and see more. The perception, yeah. And for $2,000, I'd rather have uh an iPhone, yeah. Well, one an iPhone and uh um i Mac Air, right? Or not i Mac, uh Mac MacBook Air, right? Uh MacBook Neo. Or MacBook Neo, yeah. I mean, that's even less than 2,000 in total. So I'm not sure where like who who's the sort of like target audience for this thing.

SPEAKER_00 34:47

Yeah, for on the Android side, I've definitely seen people use the Android foldables. It's not many, and it's typically Android enthusiasts. And they're expensive on the Android side too. So there's two types of foldables for Android. There's like the flip phone, where it's like really small, and then it kind of unfolds to just be a normal-sized phone. And then there's the it's a normal-sized phone when it's not expanded, and then when you expand it, it's more of like a tablet, which is what Apple did. Um, and the the flip phone version typically runs around like $1,200, and the tablet version runs around uh like $1,800. So it's definitely a premium price tag being $2,000. But Apple could have easily asked for more. Like I wouldn't have been surprised. Uh so I don't I don't know how successful it will be, but I will say just because something isn't a success on Android doesn't mean it won't be a success for Apple. Because typically, whenever Apple does it, people just kind of come. Like, for example, and then not that this was a success or not a success, but like when Apple released the iPhone X or the iPhone 10, um, that was their first $1,000 phone, which was crazy at the time.

unknown 36:02

Right.

SPEAKER_00 36:03

And I'm pretty sure it sold pr it sold well. Um, because it was Apple.

SPEAKER_01 36:07

And it became sort of like the standard eventually. Um so uh so there was like a lot of reasons to love the iPhone 10, except for its price. I'm not sure what the reason to love this phone is, right? Right, like the bigger screen, but then once you get a certain size screen, it makes sense to have an iPad or some other device that's sort of like better dedicated for the for the uh screen size and significantly better price. So I don't know, like I I'm not extremely excited. If I if I had to guess like five years from now, is this uh product going to be is going to have like any significant amount of revenue for Apple, I would say like the chances of that are very, very low. Um and but in fact the chances of them canceling this product five years from now is probably higher.

SPEAKER_00 37:00

I don't know if they'll cancel it. I I think it's going to, I don't know how well it's going to do, but I think it's going to do decently for them. That's my that's my guess. I think people are just gonna be impressed by the new shiny objects. Like, you know, you are able to have it half-bold and use the keyboard on the bottom, kind of like a small computer. Like, I don't know. There's gimmicks, right? And people will fall for the gimmicks.

SPEAKER_01 37:27

Um, there's also the status symbol element of it where like you have to have the nicest uh the status symbol, by the way, is uh is why they change the color on every uh every new release. Is that like otherwise you wouldn't have you had you have the orange one? Oh, you have 17. You have the uh what's the new uh unique color, the burgundy one? Yeah, it's like burgundy. You have 18. So I don't I don't I like the orange better personally. For sure. I'm sure there's people who are like, where's the orange? Right, like yeah, they're like, we can't sell the orange because people wouldn't know you have the 18.

SPEAKER_00 38:00

So last year. Um and some other call outs that are less known about the event, they did increase the price of the older iPhone models, of the iPhone 16 and 17 models. They increased all the prices by $100. So if you recall, a couple weeks ago, Apple increased the prices of like majority of their products due to the memory shortage, but they didn't touch the iPhone prices. This is them now touching the iPhone prices. So everything was was increased. Uh the other call out is they did not announce a new iPhone 18. So, like the base model, they only announced new pro versions. This was also heavily rumored, again, because of the memory shortage, kind of slowing down the release schedule, um, which I believe will have lasting effect. So they're going to do a pro event, which is now the September event, and then probably six months from now, do a normal normal iPhone event. Gotcha. So that's a big change for them. Uh okay, one last topic, and then we'll get to listener questions. Um, so open AI released Chat GPT Astra last week. At least it was an early release. Um, and it's it's very impressive. So I want to just pull up some charts here to compare it to other models. Um, so I'm gonna focus on the two things I care about, which is the intelligence and the cost. So, right now, for me, the the like top model I like to use is Opus. So let's just compare it to Opus. So the intelligence score, this is on artificial analysis uh dotai. They do a great breakdown of all the models. Um, the intelligence score for Astra is 53 versus Opus 51. And compared to Muse is already number four on that. We're gonna get to Muse. Don't worry about it. I'm sorry, don't worry about Muse yet. We're focusing on Astra and Opus and Fable too. Well, we could talk about Fable. Anthropic and ChatGPT. And yeah, chat GPT. Uh so and it matches the 53 of Fable 5.1. Now, if you go to cost, you could see Opus is uh five dollars and eighty-six cents per intelligent index task, whatever that means. But you know, it's all standardized, so it's fine. Uh Claude Fable 5.1 is $7.63.63, and Astra is $3.26. So significantly cheaper with basically the same intelligence. So as a the top model that like I would want to use daily, I should probably be switching to Astra. I haven't played with it yet. Um but now I want to focus on what do I use for the lower end model, which right now has been grok 4.6, which currently has a 44 uh in terms of intelligence score. But I think I maybe need a switch to Muse uh Spark 1.3, which is a 48 in again, intelligence score. Because if you go over to cost, grok is uh one dollar eighty-six cents. Again, let's compare that to Astra, which is three dollars twenty-six cents. So it's really I if I want something cheaper, grok is still the way to go. Right. But muse is cheaper than grok and smarter at $1.60 versus $1.86. So I think I need to switch both of my two models where I need to go from Grok to Muse and I need to go from Opus to Astra.

SPEAKER_01 42:00

Yeah, that that's pretty impressive. What about the speed? Like uh we were gonna talk about speed.

SPEAKER_00 42:06

So it's funny. So speed is like their third big big metric, which is important, but to me, this is all so much faster than doing it by hand that like you know, I'm not too bothered. The speed is the third, yeah. Yeah, so this is where Muse um kind of lags, or sorry, no, mu the higher is better. I'm getting confused here. Um so Muse kills it here, but this is where um Astra lags, at least compared to Fable. So the speed score of Muse is 226. This is tokens per second, output tokens per second. Um uh Fable 5.1 is a 67, Grok 4.6 is 53, and Astra is 52, and then Opus is 51. So basically, Grok, Astra, and Claude are all kind of neck and neck in terms of like being on the slower end. Um and Muse is by far a lot faster. The fastest model on this uh chart, if you're not watching, is Gemini, um, which I can attest is very fast.

SPEAKER_01 43:16

Um but but it doesn't have as good of an intelligence as Muse. So like it it almost looks like Muse might be the best cost uh speed intelligence combo.

SPEAKER_00 43:29

Yeah. Like if you want an all-around, yeah, and they have like some other charts. Let me find it. Yeah, so like this kind of is a good um intelligence versus cost breakdown, and you kind of want to be in this uh top left quadrant here. Um they put Muse right on the border with yeah, with Astro. Yeah, so the one thing that was missing from those other charts is that was. Like all the high level of the models where, like, if you do astra low, astra medium, you kind of get more into that green box. Gotcha. Gotcha. Yeah, it's kind of hard to compare all the variations of the models because there's like three to four to five variations of each one. Right. But Muse overall is very, very strong. That's impressive, considering they basically had nothing a month ago. Right. And and similar with Grok. Like Grok has definitely been around longer than uh Muse, but all of a sudden they they came out with I think it was 4.5, was their like really noticeably different uh strong model. So uh like you were saying with the S curve at the top of the show, like it's very early innings here, um, and it's anyone's game. Very cool. Good stuff. With that, we go to listener questions.

SPEAKER_03 45:02

Hey guys.

SPEAKER_00 45:03

Hi, Adrian. Hey Adrian.

SPEAKER_03 45:05

Um, okay, let's just dive in. Um, this person is wanting Dustin. Can you go more in-depth on Iron? This was a big week in the power plays and curious to see his thoughts.

SPEAKER_00 45:19

Yeah, so uh with Iron, I mean, not much has really changed with my opinion since last week. And I did a big breakdown last week, uh, if you haven't seen it, uh, about their earnings. But I'm very excited about where Iron is right now. They're in the really at the beginning of transitioning from uh their Bitcoin mining uh work to becoming a true AI uh neo cloud. Um right now their their target annual run rate by the end of this year is $4 billion. Um their last year of revenue is $707 million. So if they can execute, it's going to be incredible growth. And then my own estimates, which take with a grain of salt, but based on their numbers of how much they're they're signing uh future contracts per megawatt. Uh, so my own math is next year, end of year, uh, we could be seeing an annual run rate of 15 billion to 19 billion dollars. Again, take that with a grain of salt. Um so I think there's a lot of growth for this company, assuming the AI build out continues, which is my base case. That could obviously obviously change at any point. Um but yeah, again, if you missed the conversation last week, you should definitely uh check it out because I definitely lay out all my thoughts there uh in a more organized fashion.

SPEAKER_03 47:00

You done? Should we move on?

SPEAKER_00 47:02

Yeah, let's do it.

SPEAKER_03 47:03

Okay, this one's for Hamid. Hi, Hamid. Thanks for identifying Meta and guiding us through the ups and downs. What's your experience with options trading? Is it something you've ever done or still do often?

SPEAKER_01 47:16

I have, and I still do buy uh options. Um there was a time when I thought that I could time the markets well, and uh options uh slapped me around enough to realize that I can't time the markets well. So the only way in which I do options now is uh if I want to buy more of something and I'm not ready to sort of pull the trigger on it, I'll buy an option to give myself a little bit of time uh to decide whether or not I want to buy more of uh of those shares. So that's the way in which I use options now. It's usually buying calls, uh, usually on stocks that I already own. And um uh I am not selling options, I'm not uh uh writing covered calls or selling covered calls uh as a way to sort of make money on the side. I've also gotten burned that way. Um but uh but yeah, uh and and there's nothing worse than getting burned by um being forced to sell a stock you were already excited about because the stock price ran up more than what your covered calls um uh trigger point is, and uh and you were forced to sell it uh at a price you might have changed your mind about by the time it reached that price. So it's easy to say beforehand, well, if the price was X dollars, I would want to sell some, and therefore writing covered calls has no downside, is is sort of like one way of thinking about it. But uh sometimes the company will announce something, like you know, let's say Meta announced Muse, and then you're like even more excited, and then next day the stock goes up six percent and it might hit your covered call trigger point, and then you're like, wait a second, I wouldn't have sold those shares. Um so I generally stay out of uh options from a speculation standpoint, but rather as a way to buy something that I might want to have more of, but I'm not ready to commit the entire capital for.

SPEAKER_00 49:16

For me, I sometimes stay away. Sorry, Adrian, I sometimes uh stay away from options just because they add more complexity. And like I just need to make less decisions uh when it comes to my portfolio and keep my eye on the ball. And I find that sometimes the options could just be a little too distracting, even if it's the optimal way to manage my portfolio.

SPEAKER_03 49:43

Okay. This one, shout out to me. So thank you so much. Um, question for Hamid: what's your view on STRL? It looks like that's sterling infrastructure. The growth is obvious, but it's essentially a leveraged bet on data center CapEx. Are you interested in it?

SPEAKER_01 50:03

I haven't uh looked at it before. So let me let me take a look and see if uh there's anything I can tell you in real time. Um, so uh I start with the earnings hub score. It has a current PE of uh 31, a forward PE of 23, which means it's uh growing pretty rapidly. 61% on top line revenue, and 100% on EPS is its growth rates for trailing 12 months. That's pretty awesome. Um, I don't know anything about this company or what they do, by the way. So just uh like I'm evaluating it as uh as we're speaking. It does look like the next couple of quarters is expected to have declining revenue, so I'm not sure why that is. Um uh construction company focused heavily on civil infrastructure construction and infrastructure rehab. I mean, this is not uh my wheelhouse, and also like it's sort of fundamentals don't um don't particularly interest me when there's companies like Micron that um uh are so much better on their final fundamentals, as well as Meta, for for example. Now, Meta is not necessarily growing at 61%, but um uh but I feel like it has a more consistent and uh um more solid revenue potential. So especially because of this projections of uh sterling.

SPEAKER_03 51:32

Okay. Let's talk about this. We were talking about Apple earlier. This person says, I think Apple will soon crash. People have no idea yet, but Apple intelligence is not working in Europe as they showed. They so uh so be careful with stocks on Apple now. What are your thoughts?

SPEAKER_01 51:51

Uh Dustin, you want to go first?

SPEAKER_00 51:53

And Apple intelligence is working anywhere right now, not just yeah. That's that was the first thing I was gonna say is that there is no um yeah, no, uh I think this is going to be a bigger problem than just for Apple, because Europe has different rules around how data can be used. Um, so either I think AI is, and look, I'm I don't live in Europe, so please correct me if I'm wrong, but either AI is just not going to be able to do everything it could do in America versus in Europe, um, or Europe is going to have to change their rules to be more realistic around what I think consumers want. Um so I am not too concerned about Apple intelligence in Europe, personally.

SPEAKER_01 52:46

One other comment I'll I'll make is on the first uh part of that uh question, which is I think Apple will soon crash. I think it's very difficult to determine when a company, company's stock price will crash, even if it struggles in the marketplace for finding its footing on new products or revenue growth. Um, Apple hasn't been growing that fast for the past several years. I mean, it's uh its growth rate is like in the six uh sub-10%. It's one of the slow and growing, slowest growing Mag 7 companies, yet its stock price has done really well. And uh I learned this lesson where the market can sort of um continue to reward a company for years before it sort of like changes its mind um to recognize the reality of the situation. I learned this in late 1990s when AOL was considered the king of everything. Like AOL at one point had a higher market cap than Microsoft. And I was like, how is this possible? And and uh by the way, that was one of the times that I uh dabbled in um in buying uh put options, like betting against the company um, that its stock price was probably way overvalued. And uh for the next two, three years, I lost many thousands of dollars on on buying uh puts on AOL, which expired worthless every time as AOL just reached new highs, and it's just unbelievable. Uh, but then it it eventually I was correct and it crashed, but it took the market years before it sort of like recognized that reality for AOL. Um, but anyway, so sometimes uh timing these things is very, very difficult, even if Apple was going to be struggling, which it's not, by the way. Like Apple has still got like one of the best brands out there.

SPEAKER_03 54:37

So okay, let's move forward. Um if Rivian comes up with any bot like Tesla, that would help. What do you think? We love to talk about Rivian.

SPEAKER_01 54:51

So uh if the bot that you're referring to is uh the um Optimus uh humanoid robot by Tesla, um I disagree. I don't think um Rubian as a company that is not yet profitable should be focused on a humanoid bot that might be years before it it uh makes any progress in. Uh it should stay focused on making its vehicles and building a profitable business and uh full self-driving because uh autonomy, basically, which um which it's which is exactly what it's doing. If you're talking about manufacturing uh robotics, um Rivian has spun out a company called Mind Robotics that actually it uh owns, I think roughly half of. Um, and um Mind Robotics is going to be focused on manufacturing robotics. And I think that was a good decision to sort of spin it off into its own company so that it's not a distraction for Rivian, but they still own a piece of it where uh if there is significant upside from that company, they'll still benefit from it.

SPEAKER_00 55:57

I believe RJ is also the CEO of Mind Robotics, so it might be a little bit of a distraction for him, but not necessarily at the company level. Is he? That's that's interesting. So in terms of them building an Optimus, I overall agree with Hamid. They're very they're in a very different position than where Tesla is right now. But also at the same time, and we've talked about this on the podcast, like I don't know if it makes sense for Tesla to build an Optimus as opposed to that being an additional company. Um, or uh maybe that being under uh SpaceX just because they have the AI piece. Um, because you could tell Tesla's eye has been taken off the ball where they haven't been releasing as many updates with um their cars. And like, for example, they they didn't add grok to their cars until Rivian announced that they're doing their own AI, which is like a no-brainer uh update for them to do. So um yeah, I don't I don't think it's make or break. Yeah.

SPEAKER_03 57:03

I'm wondering this listener was also talking about um if Rivian should come up with like a cyber cab equivalent.

SPEAKER_01 57:11

Oh, well, they they are working on autonomy and they've partnered with um Uber as potentially one of the first customers for their autonomous vehicles. Uh, and they haven't ruled out doing their own robo taxis, but they're still ways away from even having full self-driving capabilities uh in their vehicles. So um it it's it would be very premature because they don't have the technology just yet.

SPEAKER_02 57:38

Okay. Speaking of Uber, is Uber over or buy Uber and Tesla?

SPEAKER_01 57:46

So I used to own Uber. I thought it was very much undervalued uh years ago. And um uh I exited my last position of Uber a little over a year ago, and largely because of the oncoming Robo Taxi. And here's the way in which I view it. Um, I view uh Uber uh very similar to how I viewed Blackberry in 2000, let's say seven, 2008 timeframe when the iPhone was first released. So um essentially the equivalent of iPhone in the form of Waymo's and Robotaxis from Tesla have been released. Uh, and Uber still might do well over the coming few years, uh, just as Blackberry had its record revenues in 2008, 2009, 2010, 2010 is when it finally uh had its last record revenue, and then starting 2011, it uh it started to decline. Uh so it took uh three years for like the best smartphone on the planet to start to make an impact on um on BlackBerry's numbers. So I I suspect it'll be years before uh, you know, like Uber will continue to have record revenues and profits uh, you know, this year, next year, possibly even in 2028. But I don't know for how much longer it's it's even um going to survive, right? So as a long-term investor, uh I think about I think about that. It's like when am I gonna sell Uber if I own it right now? And that's the reason I decided to sell it a year ago. My last sales were in the uh low 90s, if I'm not mistaken. And the stock price is lower now because a lot of people are also thinking that uh the company might be over. So the stock price might actually reflect it being over sooner than the financials do, meaning the financials they might still have record profits and revenue growth um this year and next year. So I can't tell you what the stock price is going to do, though.

SPEAKER_00 59:51

Focusing on the second half of the question of buying Uber and Tesla, my qu my question to you is like, are you not you, Hamid, you the the listener, um is are you that bullish on ride sharing? Like again, going back to the S-curve chart that Hamid shared, like, where do you think we are in the ride sharing story? Where do you think that growth is going to come from? Now, there's an argument to be made of if ride sharing is cheap enough and accessible enough, maybe you have people stop buying cars and they're just ride sharing as their primary mode of transportation. And that could, you know, increase revenues there. But is that a bet you want to make on across two companies? Probably not. Not investment advice.

SPEAKER_01 1:00:44

Also, you know, people might be overestimating the amount of revenues that uh cyber cab or robotaxis in general are going to generate for Tesla in the coming uh years, right? Like it takes a lot, a lot of time to ramp these things up. And I and I did some basic math on sort of like what if Tesla was able to release a thousand cyber cabs every single week into new markets and uh and deploy them and get regulatory approval. That that would be an incredible number, right? So over the course of the next um next uh year and a few months, uh if it was able to reach 60,000 cybercabs by the end of 2027, uh, that would be phenomenal. That would be, by the way, 20 times more than Waymo already has, right? So to scale something 20 times larger than Waymo in a year and a half uh would be unbelievable progress. So let's just assume that it was able to do that. What does that mean in terms of revenue? Well, uh the uh if the average number of vehicles on the road is like roughly 30,000, if they uh drive about 100 miles per day, that's you know, 30,000 times 100 miles if they're charging roughly a dollar per mile. Uh it turns out you do the math and it's about $1 billion worth of revenue to Tesla's revenue uh in 2027. That's roughly what you could expect if it does incredibly well and it gets through all of the regulatory hurdles to deploy 60,000 vehicles by the end of next year. Um, that's a big if. And if it if it's successful, it might have $1 billion in revenue. That's not a lot of revenue for a company that already has $100 billion of revenue. That's a 1% increase in revenue. So uh I think there's a lot of uh lot of enthusiasm for Tesla that is unwarranted. And by the way, uh Uber will continue. That's why Uber will probably continue to have a great year next year, right? Because it will also only at most take away $1 billion of revenue on Uber, who's already growing and will not even notice a billion dollar missing, right? So um the accumulation of these numbers don't really happen in a significant way until probably well beyond 2028, 2029.

SPEAKER_03 1:03:06

Okay, let's do one more question. We get a lot of questions about Broadcom. So let's go ahead and um it says, thank you for this weekly podcast to meet and destined. What do you both think of opening a position in Broad Broadcom after Hock Tan mentioned that they'll do 115 billion and 230 billion on AI revenue in 27, 28 years? In the 27, 28 years.

SPEAKER_01 1:03:33

Um 2027, 2020. I haven't been following Broadcom very closely. Um, so uh and I don't know who who Hawk 10 is. Do you do you know that person? Oh, I wasn't going to admit that. The company's CEO. Oh, oh, okay. So that that's bad. I should probably know who uh Avgo's CEO is. Um, but but uh like uh I I keep looking at Broadcom and sort of dismissing it and largely because uh, and here if you want to switch to my screen, I'll sort of like show you why the initial numbers, and again, like I very heavily rely on the earnings hub score, um, which is basically like taking into consideration um the market cap of the company, the revenue of the company, the growth rate of that revenue, historically at least, uh the profitability, the growth rate of the profits, uh, and then what that means for the uh price-earnings ratio, both current and forward. Um, so a forward PE of 22 is actually pretty solid. It's it's fantastic. Um, the only issue is if we were to sort of like look at Nvidia, the forward PE of NVIDIA is 18 and it's growing faster, and it's the number one uh company in this space uh of AI. So would I want to own Broadcom uh over the number one company that's growing faster, has a lower forward PE? The answer is no, I wouldn't, right? I would I would prefer to own Nvidia. And then if I compare NVIDIA to Micron, who also benefits from the AI growth, and my view is that AI is going to continue to grow and we're gonna continue to be bottlenecked by all of these things, whether it's GPUs or memory, um, well, who's going to have the better potential return? Well, in Micron's case, it has a forward PE of seven. So that means for every dollar that I'm investing into Micron, it's going to make that amount of money in seven years. And it could pay back that in the form of dividends or stock buybacks. And therefore, I think it has a much higher potential increase from this stock price at $1,000 a share versus NVIDIA versus Broadcom. So that's why my bet is on Micron. It's not because, you know, like of historical uh, you know, charts of Micron or technical analysis of Micron or because of the W pattern or head and shoulder pattern. None of those things matter to me. What matters to me is how much revenue are they making, how much profits are they making, and what are they projected to make. And do I think that do I agree with those projections that uh they're gonna make those kind of revenues? That's what sort of drives me to own Micron over um Broadcom or NVIDIA.

SPEAKER_00 1:06:20

With that, we will wrap episode 56 in the books. I feel like I always say that, in the books. I don't know what book we're in, but we're in the books. Uh thank you for listening. Book of life. Book of life, that's right. Uh thank you for listening and spending uh an hour with us. You are uh too generous.

SPEAKER_04 1:06:42

Yeah.

SPEAKER_00 1:06:43

Here are our eyes, our whole rant. I ranted a little too. Um, we will see you next Wednesday. Sounds good. Bye, everyone. Thank you.