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Main topic of today with tech stocks crashed, specifically chip stocks, Nvidia down fifteen, SMH down tremendous amount ASML down, TSM down tremendous amount, so in a in a very short period of time, and there's been a lot of people that have said that AI bubble wouldin at some point, Mike Novegrats being one of them, saying that not artificial intelligence wasn't real, but it was overpriced, overhyped, and it was going to be a catalyst at some point in
time to kind of bring things back to the level of reality.
So this deep.
Seak thing comes out and shoots to the app top of the app store overnight, pretty much a Chinese app company that, yeah, they said, achieved workable function at a very high level, something say, even better than open Ai for six million dollars, a fraction of the cost of the billions of dollars that has been poured into all of these companies, including open Ai, and it shakes the whole industry and thinks makes people think that yeah, maybe
not that Nvidia is not valuable company, but maybe their products are over hyped and overvalued as far as how much money is being poured into the space. And then for other companies that have not even done anything yet but still have been able to raise a bunch of money from venture capital. So all of these chip stocks are down drastically. So, like I said, even if they're forging the numbers a little bit or it's not, it
definitely speaks to some level of pestimism. That people have been talking about talking about this for a while, as far as the Ai bubble, for at least eighteen months. So I don't think that these companies just disappear overnight. But the question that everybody has is okay? Is this a sign of what's to come? Is this now? This is a reset and it's going to be just a lot slower growth for these companies. Is it a good time to buy the companies? That's the next question as well.
Yes, shameless plug, go toeininvest dot com. If you want to know where to get into the market, where to get out. I put this price in it, I think two weeks ago for in video. As far as it being a reset, the top two or three players in the space will remain that they will be dominant.
But I think and I don't want.
To be flippant about the deep seek allegation, but I want to be clear, it's almost okay if you run it through their model. Can't wait for the mass of mind, because I'm gonna show you some of the prompts that I use for investing. The mathematical probability of being able to get this compute out of six million dollars is zero point zero zero zero zero one percent probability.
So not me.
That's their own tech. When I ran my model based on capex of other companies, Now is their AI bubble? I think there's a lot of companies that don't have any real AI yet have acted like they do and they're gonna fall apart.
So yes, but will in video be fine?
Yes?
Meta be fine, yes, Will Oracle be fine? Yes? Will AMD be fine? Yes?
And a lot of people who kept calling for this AI bubble are people who missed out on buying in video the same dirty Mac and Elon did over that Stargate project we got stolen from Microsoft, and he's mad because he didn't get part of that spend. So in order for Deep Seek to be great, let's just go through some of them and say that they are better.
They got to be open AIH one oh one Mini, Gemini, Gemini one point five, Claude, Novapro, Lama three and three point three, GPT four point zero, gp T four oh Mini. It's a lot of competition. So is the AI bubble over hyped? I think there are too many companies who attest themselves to be AI facing and they weren't in And also too, it's a conversation about interest rates that people are afraid of, and I think this just took
the leadership cycle. And for everyone who said you found the next quant company, why are you afraid of deep seeks quantum is superior. If you found the quant company that are going to rule the next twenty years, why are you asking me if you should sell off your quant position because of deep seek?
It makes no sense.
I think the on this, Yeah, I think the question that they can you create innovation without advanced hardware?
That's that's the question, right, Like is it? Is it possible?
And so when we're talking about advanced hardware, you're talking about the nvidios, you're talking about the broad coms, you're talking about the AMDs, you're talking about the micro Like that's advanced hardware now? Is in video over hyped? I can't use the word overhype because they're still going to be necessary. Even for deep Seat. If you look at how it's built, it still needs the GPUs. Does it need many GPUs is the real question. But you're still
gonna need them. And so that that's the first thing, And then it's is this a war to who's first?
Right?
Absolutely?
So, like if China is saying like, hey, we have this company and we can do it for this efficiency, then when you try to use it today, why can't we use it?
If it's a global thing?
Right?
So, like that.
There's that part of it, and then it talks about efficiency from our standpoint, like I said, think about the amount of money that has been allocated. Last week we talked about five hundred billion that was for AI expansion, data centers and everything adjacent to it.
Energy.
We saw a VISTA go down today, We saw a vr T move down today, we saw GeV move down today. All these are energy components, broadcom connectivity average, all these things pulled down because of.
This quote unquote efficiency. The other thing is this man people want new buying points.
All right, like the market has to falsil people can buy in absolutely. If deep Seat was created in December of twenty twenty three, if it was disufficient, Is it coincidental that it is? This announcement is happening after all those everybody's said that they're going to have their cap backs, and it's the same week of these max seven earnings.
Metas reporting this week, Apple's reporting this week, Microsoft reporting this week, and two weeks in video B reporting, big companies reporting with their numbers and what they've been spending.
Coincidental? I don't know so.
And the real conversation is were they able to get some of those GPS in China that they were not supposed to get in for their infrastructure.
Now that's the conversation that needs to be had.
Oh during the.
Band, Well, the thing about it is that you never buy stocks at all time highs facts, so that stocks always pulled back for one reason or another. Yeah, but there's a difference between a pullback and a reset because a reset you can actually just reset the whole landscape and it can change potentially forever, as opposed to a pull back, which would just pull back for the second then just go back to things as normal. So we'll think the question is will things be as normal or
will it be a reset in the space. Like I said, I don't think anybody isn't thinking video is not going to be here anymore? But will it be a reset in the space where chip stocks will not be leading like they were.
And in the cycle of America?
What could replace it? That's a great question. But what will replace it? I think in videos here to stay MD, I think it's going to have a monastery or but what when people talk sector rotation and some people were bank is doing better, I'm like, you're not going to go by bank of a I mean, shot to Brian one hand, an amazing person. You're buy a Bank of America over AMD. Like AMD is neck and neck with Apple in terms of returns over the last five years.
It's not talked about because of what sector they are, So would that be a reset I've been really big on I don't think the energy companies are going to do what they did last year. So in video will do well, MDA do well, Metal will do as a result, Tesla will do well. They have a lot of compute over there as well. But everyone just slapping AI on their stock to make the value go up.
Yet it's over with.
I'm on the record saying I believe energy will do well.
Will it have fifty sixty games?
We know I can call that.
Will it do well? Yeah?
From the standpoint of what we're talking about efficiency, how do we make energy more efficient if we know that it's going to cost us this amount to have this type of compute, and not just in the GPU space, but if you're even talking about in the crypto space as well, Like that's still requires energy to run at
its highest and most efficient capacity. So like, even like I said, like when I talked about this data center, revolution like they originally with house too and they were mining bitcoin right when you saw how much energy it took. We have to create more efficient ways to have connectivity, uh, to have coolant, all that is inside of it now obviously with AI being at the forefront. Yeah, it's a dual purpose in a sense where like, hey, we need
it for this too. So I still think energy is going to be a story this year.
So okay, so let's let's speak even a little bit clearer for the people. What stocks do you think would be a.
Good boss and video meta?
All right, listen, lest let's listen, right, let's go a little deep.
Amd.
I'm you know, I'm I'm an advocate for the for the for the people, and I know I know what the people will say. So what's the stocks that are not in the mag seven? Look, Troy, because you've championed a lot of these other the companies. So these companies that are not in the mag seven are you? Are you still confident about these companies? Are you starting to feel a little bit nervous?
No, I'm still confident.
All right, Which which of these companies would you be enthusiastic about now? Tomorrow morning? Bying because all of them are down like we.
Got I'm still in TSM. That's not a max.
I'm talking about the VSTs.
What you said, max seven?
Okay, the lower the lower ran.
The v yeah, I actually you Yeah.
So I went shopping even a right like so when and again it's one of these mindset things, right we see a pull back like that. I woke up, I saw Nastak was down in angel punts. I'm like, all right, we already have some some money in reserves. Now let's see if we can get some of these price points that we were saying prior to. And so when I saw VST get down to a number, I was like, oh, it had ran up to one ninety nine last week.
I'm like, damn, it might have outran me. I saw go back down to one. I'm like, all right, well, it's back in the range where I wanted to get it at. So I went shopping.
I did grab some VSD because again, I still think energy is going to be a story. We spoke about this on the Thursday call about a company that I mean we if we if we look at his chart over the past six months, uh, and we look about the story in AI.
It pulled back to a pointment.
I'm like, all right, down at one ten, let me let me go grab some let me go grab some some contracts down there. And that is a h Aresta networks an e t uh. And so I think the story stays the same for at least twenty twenty five for sure. But again when we when we do these contracts, I'm going you know, out a lot further with maximum potential growth, right, and so.
So you're still confident on your companies.
I'm still in all I actually went shopping today. I'm be honest with you. I went shopping, and what'd you buy? I'll show you you want to see it. So I bought, I bought more. I bought VST because it got to a point. I bought VRT right again energy as well, and talking about cooling for the data centers. So I'm still in the data center revolution. I got more contracts on TSM because that's pulled back. I already had the one oh five that I exercised, and I talked about that on the.
Class I had a one eighty.
We went down and got some more down at the one ninety five range, and I got one more.
I don't even know if it got filled, I'll chat, I'll feel you in.
And when I opened up my brokers, but I definitely got those three for sure, and then I had one that was just pending.
And now I'll play Devil's advocate to my own position.
The threat the Deep Seak does pose is open source. But what happens when Trump knocks on somebody's door, maybe Elon's, and say, hey, make grock Ai open source so we don't have to deal with this threat in China than what Deep seek.
You're screwed. I'll wait to the second hour.
Thank you to the families in their parents to watch the kids, love you you.
My fourth one was Palo Alto. I bought more.
But they do have an advantage of education.
They have smart people a thousand percent, and they have.
A unified government. They have they have a lot of it. So you can't just count You're right, can't count them out.
No, I'm not counting it out because it's either a couple of things are gonna happen, right, Like either American company is gonna say, hey, they're onto something and we've got this wrong and they have to cut back spending, right, But then that spending is going where Right, These are the cappex numbers already for twenty twenty five, So this money is already been allocated out right by the time
we see it, It's already been spent, right. So like when in video reports, my meta has already spent the money with them, right, Like Microsoft has already spent the money with them by the time we see the report. So what does that look like for twenty twenty six? We gotta we gotta really mind to this.
We'll see and you know who didn't have all these capex in Ai Manzana. My favorite investment move is when people get to picture me things that I'll need. Let me wait three months to six months to see if I still want it. Apple is on fire today as a result, and the thing is too, And I keep strussing this. It's not the sexy media answer. A lot of you needs to stop chasing the next new thing week to week. I just thought, y'all loved Quantum and that bullshit collection of stocks.
Storry to the.
Parent, Sorry to the parent, like yo, what do we like?
Yeah?
But even Apple pulled back right, like this is what I'm saying, Like we saw Apple run up to two fifty three. We spoke about it, like what's the innovation? It pulls back down to two twenty five, and people are like, well, I don't know. Yeah, I don't know, but I mean it's a big week for Apple the long term. Yeah, obviously long term vision. You're looking at this as a great opportunity for a bypoint, but this is a big week for Apple. We'll see what happens.
I agree with your point.
The only thing in the SWAT analysis that we have to remember is that their own leadership are keeping They have some amazing companies that are publicly traded, and they've kept them quiet the last three years.
I don't think they're gonna let this from flourish.
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