*Holy Smokes! Complete Stock Market BLOWOUT - PREPARE [MOON]!*

well holy smokes everyone this is a game

Cher in terms of what we just saw on

micron's artificial intelligence revenue

and what it means for GDP as well as

what we just heard from China but let's

start right at the top also small note

I'm at an event so I'm only going to be

able to go live for the market open live

stream for a few minutes today so we can

hit the Q2 GDP data which is old news

anyway the unemployment claims and some

of the other stuff will cover that but

right now I I want to talk to you

these Micron earnings that are sending

the market to new highs it's crazy

they're actually pretty good I'm going

to give them this this is pretty good

there is a warning in them we're going

to talk about that and then China let's

hit it so first uh something to know

about artificial intelligence artificial

intelligence right now is estimated to

make up in 2024 somewhere around a $100

billion in United States GDP that's not

going to be Global that's just US GDP

throw that into about a $24 trillion

economy and your contribution from

artificial intelligence into GDP is

about 4% which is actually pretty good

because it could be the difference

between being positive or negative of

course right now the Atlanta fed thinks

that our GDP is sitting at 2.9% which is

actually also really good uh you know

we've had a Jerome Powell who's told us

oh you know we should be growing at a

below Trend growth and quite frankly

we're growing above Trend right now

maybe maybe we're just above Trend by uh

04 because of artificial intelligence

either way GDP looks good so far uh and

artificial intelligence spending is

definitely contributing now if we were

to only hang our hat on GDP and or on

artificial intelligence and everything

else was flat well we would only have a

GDP of about 4% again artificial

intelligence only making up about 133%

of our GDP most of our GDP is really

made up by you the

consumer so that's this is an important

cont contributor nonetheless especially

when micron pulls off what they just did

now something to know about Micron

that's really interesting before I tell

you what they just pulled off which you

maybe have already heard about a little

bit but something to know is this is a

cyclical company which means you go

through really rapid boom and bus Cycles

just to let you know how extreme those

boom and bus Cycles can be this same

quarter that we just reported last year

Micron lost $1.4 billion because the

memory Market went to trash there gross

margin was - 10.8% which means they were

selling their chips for less than they

were worth mostly memory chips uh and

now in part thanks to their artificial

intelligence ships doing well for now of

course until competition picks up which

there's a warning coming up in just a

moment and there's some this is from

them not from me uh right now their

margins are really excellent because

quite frankly on their high bandwidth

memory products for AI server and data

centers it they they're sold out for

2024 and 2025 which when I first read

that I'm like oh they're sold out for 2

years but then I'm like H this year is

already almost over so they're sold out

for about 15 months which is good

they've already got that pricing set for

that doesn't mean orders can't cancel

but it's certainly a good sign uh and

their gross margin this year is

35.3% on this quarter which is up from

last quarter by like almost 9 percentage

points really actually really good so

this quarter is a smokey hot quarter uh

really great quarter and so the question

is will that last is this a good time to

invest in Micron so one thing I looked

at is uh I looked at uh their guidance

for the next quarter they beat on EPS

guidance by 14% they beat on Revenue

guidance by 5% uh in this quarter they

beat margin by 5% so they are beating

expectations doing very very well here

if I read out some sections of their

earnings call they say from a demand

perspective they expect that server

demand will continue they expect AI

servers to continue to be strong this

year and next year and they don't see

any change in that they think the AI

momentum continues and they're hoping to

get some modest growth in general

purpose servers that's where you

definitely have a lag PCS smartphones

servers kind of the consumer side little

on the soft side but those AI servers

definitely cranking

in terms of demand definitely strength

and data center is driving upside to

what we had communicated prior on our

prior guidance we continue to see really

strong demand from our data centers the

data demand is coming from both cloud

and Enterprise AI servers as well as

well of course to some extent

traditional server origin that's because

that creates a certain base of their

revenues the traditional servers but

most of that extra demand that's making

the difference here is they said it

cloud and Enterprise so remember Google

Microsoft Amazon meta these are the

companies that are like we will buy AI

sea chips and build out AI

infrastructure at any cost because we

will not be left behind even if we lose

money for a while it's like what Mark

Zuck said you know sucks like yeah yeah

you know we're kind of known for doing

unprofitable things for a while and

eventually we're turn unprofitable Fair

okay so what warning did they give well

the first hint that they gave for a

warning was uh actually in the face of

of very good news which is we've seen

very high demand for our product and we

feel confident in our ability to ramp uh

I mean all of that ramp we have for 2025

is really limited by Supply hm and then

they start talking about competition so

I always find this a very interesting

one because when you start talking about

oh we're Supply limited right now what

you're really suggesting is hey we're in

a place where we're uh able to pull

these high margins because

there is limited Supply which is

fantastic don't get me wrong like milk

the margins while you can it just does

give a little bit of an awareness that

where the company says look there's

going to be a reason why we're not going

to guide into 2026 here because you know

prices could collapse as Supply ramps up

and they are blowing money into capex in

fact their free cash flow is only

somewhere around $200 million uh I want

to say that was for the year but let me

double check that really quick because I

have a cash flow statement right here

sorry I'm at a I'm at a conference and

uh that's why I'm not going to be able

to be live at my normal time today and I

snuck away into one of these little

boardrooms over here just to make sure

we can chat okay here we go expenditures

for plant property and Equipment uh $8.3

billion blowing money into capex capital

expenditure so they can continue to

manufacture more uh and 8.5 in in in

incoming cash flow uh so really very

very little actual uh free cash flow

which is not a surprise uh they they

they are a manufacturer so this is uh

they have their own Manu you know

fabrication plants this is not like an

Nvidia uh they actually uh conduct the

R&D and they manufacture so this is not

like a high margin Nvidia where you just

send it all to tsmc and you take your

70% gross margins which is one of the

reasons Nvidia is just such a sexy stock

uh but uh that is for the year ended

yeah so basically no free cash flow for

the year ended now don't worry their

balance sheet is acceptable they have

enough uh cash and short terms to cover

their short-term debt and then frankly

they have enough receivables and

inventories if they sell an inventory at

full price to cover their long-term debt

so their balance sheet is just fine

obviously their margins are excellent

this is a cyclical business and uh they

think they are very well positioned from

a competitive point of view however they

do also make it clear they're asked hey

so you feel pretty good for fiscal 2025

you just don't want to set the bar and

be accountable to that bar but you feel

pretty good is that a fair way of

summarizing everything you've said asks

an analyst the VP and CFO says we've

given some positive indications for the

year and we're Vigilant at all times

about our cost structure about our cost

performance and the discipline of our

Capital spend and maintaining stable

share and where we think we're doing a

good job of executing well and managing

the risks okay got it so what are those

risks well

overspending collapsing the prices uh in

the chip market and then competition

taking your margin away at the same time

as you now have way too much excess

Supply so it kind of makes sense why

like let them bask in their Glory a

little bit this is this is great news

okay it's going to it's pumping the

entire AI market and premarkets and and

you would expect that dude it's like

4:00 a.m. this is ridiculous I'm East

Coast so but you know I came here from G

uh but I'm just looking at my clock like

oh my gosh I'm already in a suit oh

no uh but anyway it's really good at the

same time now you've got China they held

a meeting with their pollet bu Bureau

and they're talking about trying to fall

stop the fall of home prices they're

going to stop the over supply of new

construction that's something you should

really tell Austin and Texas as well

like maybe if yall stopped building as

much you wouldn't have as many issues

but anyway uh and and they are

potentially planning some uh local

Municipal spending as well as consumer

additional fiscal spending to to help

the consumer of about $284 billion so it

seems like on a daily basis here they

kind of see the market pop up a little

bit on these stimulus ideas and then

they're like all right all right got it

yeah the market wants stimulus let's

give them

more so it's good uh I mean it's it's a

wonderful thing for for markets on this

you've actually got oil I mean I don't

think oil is moving on on China here

it's probably more of a Saudi Arabia

issue gold though going over 2700 bonds

relatively stable and pre-market

nasdaq's up 1 a 12% uh Dow in S&P also

pretty positive I think the only thing

that could really screw this up is in a

couple hours we'll be getting

unemployment claims data I that is such

a lagging indicator I can't imagine

that's bad we get Q2 GDP who gives a

flying F about Q2 GDP third revision

price index GDP whatever uh you will get

durable good manufacturing uh reports

and some other data I'll cover that when

the time comes but in the direction of

artificial intelligence if micron's any

guide there there's no slowdown here uh

maybe there's some cheap opportunities

for you to take advantage of uh and keep

in mind that this is uh AI can boom and

you can still have a recession uh but it

definitely helps like not having AI

you'd still be a 2% GDP still be over 2%

GDP so you haven't actually seen that

translation to substantial weakness just

yet of course you know as I've

maintained for a while many of the

leading indicators suggest we might be

you know one large shock away from

substantial layoffs and then your

consumer gets crushed in the near

recession but then again you know that

could be true at any given point in time

of course I I do think we're in a

particular position now where some of

the indicators of recession are more

numerous than I have ever seen in my

career uh which makes me a little bit

more dare I say nervous and watchful but

consider it you know it's not just the S

rule it's not just the 10 to inversion

which usually when we get to 50 to 90

basis points that's when the recession

starts okay we're at like 20 basis

points inverted right now but it's also

uh the peaking of of government payrolls

uh uh following the peaking in privates

the delinquencies in Consumer loans

credit card loans the decline uh uh in

the personal savings rate it's not good

now under 3% which is terrible at the

same time as incomes are only Rising

somewhere around 1% not good

architectural buildings down Isa

manufactur ing down ISM Services above

50 but very very low relative to normal

boom times construction spending month

over month down pricing power at

companies outside of AI substantially

down uh you look at um uh I went away

construction job openings rapidly

falling temp hiring longest stretch of

negative readings Drome Powell's warning

we seek no further cooling yet they

still only went down 50 basis points I

think they got a like surprise cut down

200 to honestly that would make me very

very bullish

because then they might actually avoid a

recession beige book 9 out of 12

districts uh flatter declining the

Challenger report showing the slowest

hiring since August of 2009 the number

of unemployed for 27 and uh weeks or

more never increasing consistently

absent a recession it is the restaurant

performance index sitting under 98 which

only occurs in a recession so I mean I

hate to say it

but when you put that list together it

just doesn't sound that sexy anymore but

hey in the short term the Euphoria can

march on which is fantastic I mean good

go make money uh you know take profits

as you feel comfortable or don't and uh

I love you all thank you so much if you

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folks thank you so much goodbye and good

luck