oh sh*t... this is really really bad

complete gamecher happening in

artificial intelligence and it's bad for

Nvidia stock. Now, that's going to make

me sound like an Nvidia bear. I've been

very bullish on Nvidia. Uh I own Nvidia

shares. I'm not sure like I just want to

be transparent about this. Uh this is

got me a little nervous. Uh but there's

a specific date you want to write down.

Uh it's in November. We'll go through

the exact date and why that date

matters, but it could be a game-changing

catalyst for what's going on in the chip

industry. And it's really weird because

it's totally the opposite of what we're

hearing right now from institutions.

Like for example, Oracle is blowing

money, taking on debt to blow money and

issuing stock to buy as many Nvidia

chips as they can. Remember just last

week they announced that they're buying

$40 billion of Nvidia chips. Mind you,

they're planning on spending 50 or sorry

$70 billion in capex uh you know over

the next basically 24 months including

the last about 6 months. So sort of the

past year and the next year plus or

minus $70 billion of capex spend. This

is insane that Nvidia basically makes up

nearly 60% of that and then everything

else, the racks, the buildings, the

infrastructure, the CPUs, that's the

other 41%.

So Nvidia is a huge beneficiary of this

insanity for this AI boom in capex and

it's really driving GDP. I actually

think it's probably the biggest

contributor to GDP right now. Uh, and

Goldman Sachs based on their AI

conference says the same thing. And all

this is bullish, right? So, what's

bearish? Trust me, I'm about to say

what's really bearish and it's scary. It

like it's making me nervous and and I'm

more nervous that nobody's really

talking about this. That's probably what

I'm most nervous about. But anyway,

Goldman Sachs, they're like companies

deploying capital behind AI buildout or

build out of AI remain capacity

constrained. So, in other words, we

still don't have enough chips to keep

building out all these these products.

But the problem is this is potentially a

debtfueled capex expansion right now

because companies like Oracle are like,

"Oh, wow. Our investors love it when we

borrow money or issue stock to buy more

Nvidia chips." Then Nvidia goes up. Uh

then private valuations of OpenAI go up,

the valuation of Oracle goes up,

everybody gets rich. And this makes

sense. And so a lot of people are like,

"Oh, you know, why be bearish on this?

You know, this this is this all sounds

good, right? That's what I thought as

well. And then I saw this, which I

misread when I first read it this

morning. I saw this headline. Coreweave

says Nvidia cloud contract valued at 6.3

billion. All right. Initially, it's

really easy to brush this off. It's

like, oh, cool. Okay. Core is going to

buy more chips from Nvidia because we

see these headlines all the time. At

this point, they're just dime a dozen.

But what they actually say is Coree said

its shareholder Nvidia will buy cloud

services with an initial value at $6.3

billion. In a deal announced in April of

2023 that runs through 2032, Nvidia is

required to buy any excess capacity not

used by its customers, Cororo said in a

regulatory filing on Monday. Okay,

that's a lot. So, let's digest this for

a moment. Okay, I really hate this. Let

me explain this and digest this. This

latest deal requires that Nvidia start

buying unused data center capacity.

Well, wait a minute. In order for Nvidia

to start buying unused data center

capacity, it means there's unused data

center capacity. But wait a minute. If

there's unused data center capacity,

why is Oracle, Coreweave, NBIS, Iran,

why are all of these companies, these

data centers throwing more money at

building out more capacity? If all of a

sudden we're getting our first canary in

the coal mine that we actually have too

much capacity, right? I mean, think

think about it this way. Let's come up

with an analogy. Let's say you have an

ice cream stand and you're selling ice

cream and you're on the phone going,

"Guys, guys, more more ice cream, more

ice cream. Keep ordering more ice cream.

We we need more shipments. Back up the

trucks. We need more trucks. More

trucks, more trucks, and you're standing

at the the ice cream stand and your

employee who's actually selling it to

customers is looking at the ice cream

bin and you're like, "Bro, we have so

much ice cream. some of this down here

at the bottom. It's starting to go

stale. Like, it's getting all frost

burned because the ice cream's going

stale. And I'm trying to sell the frost

burned ice cream, but I can't sell it.

And then I like the guy at the front

desk is like, "Hey, Nvidia, I need you

to buy some of this frost burned ice

cream cuz like we have too much of it.

Get rid of the old crap at the bottom."

All right, I guess fill it back up

again. We we really don't need to fill

it up again. Meanwhile, you got the guy

in the back. This is good for the stock

price of the ice cream stand. Keep the

trucks coming. Keep them coming. Hey

bankers, more loans. More loans. More

debt. Hey attorneys, another filing.

Sell some more stock. Okay. Stock

markets at all-time highs. Take

advantage of it. Sell some more stock.

Buy more chips. More debt. Let's go.

Back up the truck. You're selling,

right? Yeah. Yeah. Yeah. Yeah. Yeah.

We're selling the ice cream. Frost

burned ice cream. Going to Nvidia.

This is not good. This is like an early

canary in the coal mine. And trust me, I

do not want to be bearish here. I I want

my Nvidia shares to go to the moon

because there are these leftover shares

that I actually have a lot of, thousands

of, many thousands of, and I'm like,

"Oh, this is great." uh and uh like so

so I want to be bullish here but part of

me now is like oh shya right like this

sucks so the biggest concern is you

can't sell these data center products

because how the cycle plays out right

this is the cycle always plays out this

way the cycle is really easy you end up

with excess supply then you get lower

utilization then prices go down then

there's a lower return on your

investment for data centers. Then capex

goes down. Then you have lower sales at

Nvidia and Super Microcomput and TSM.

Then stock prices go down. Then people

lose their jobs. And all of that falls

onto an already weak economy. That's not

good. It all starts with the frostburned

ice cream, the excess supply. It's

always the cycle is always excess

supply. Have you ever seen Kevin? Meet

Kevin's real estate chart. Meet Kevin

real estate cycle. Let me see if I could

just Google it really quick because

there's an old Ah, yeah, there it is.

Look at this. Uh, so this is an old old

thingy here that I made this back in

like 2010. Okay, so I I drew this cycle

back in 2010. Let me put it to the

desktop here. I I wish I had a higher

resolution of it honestly, but it's it's

such an old chart from uh you know when

when I was like getting into telling

people to go buy real estate. Yeah, it's

super blurry. Uh I was telling people

that we're probably here in 2010 and you

should go buy real estate. But it always

starts I mean look at this cycle. You

could really call it the AI cycle

instead of the real estate cycle. Look

at this

uh absorption of excess supply. Oh my

gosh. the GPT moment. We're out of

chips. Oh, we don't have enough chips.

Prices skyrocket. Margins skyrocket at

Nvidia. Then it says accelerated new

construction. Build, build, build, back

up the truck. Then you get an overupp of

those data centers. That leads to low

utilization. In real estate, we call

that high vacancies. Then prices go

down. The real estate cycle could may as

well just be the business cycle or the

AI cycle. So now we're like, we're here.

We're at this accelerated new

construction phase. Literally, the real

estate cycle that I talk about in my

courses

probably applies to the AI cycle. Now,

like if you're not already part of the

Meet Kevin membership, you really should

be. Some quick calls that I want to

point out just from literally the last

few days.

One of them, well, first of all, look at

this. Okay, figure is up like to $40 and

it's skyrocketing right now. It's up

like 19% or something like that. And I

wrote last week, this is a $45 to $55

stock. Uh, Coreweave, we talked about if

we don't confirm$1249,

don't touch it. And what happens? We

don't confirm 1249. We reject, we

literally reject off of 1249. Don't

trade that up. Then in the me Kevin

membership we talk about the most

bullish thing for Tesla is popping onto

the 414 line which we bounce on twice

which is bullish and I said as long as

the Q's or as long as Tesla doesn't dump

it open the trading strategy for today

is the Q's slowly continue to slog

higher the next target is 590 on the

Q's. Now why do I mention that from the

Meet Kevin membership? Well, because I

think there's first of all obviously a

lot of value in the M Kevin membership.

But if you look at the Q's, what did the

Q's do today? The Q's literally went

straight up to 590. Well, what happened

with Tesla stock today? Well, we know

what happened with Tesla stock. It

literally went down to 414 twice. It

didn't dump open beyond our line.

Therefore, the cues were able to go to

590. and we had a double bounce at 414

which we also called that it would

likely go towards. These are the things

that you get if you're a member in the

course member liveream. So join us at

the meet Kevin um the meet Kevin

membership over at meetcaven.com. But

let's keep going with this chip analysis

because this chip analysis is a problem.

When we actually understand that this is

a cycle that ends at some point, we

start getting a little nervous because

this partnership with Coreweave is a big

red flag in my opinion. Look at this.

Nvidia was willing to enter what are

called MSAs in 2023

and they probably entered these MSAs

with other companies to get as many

sales as possible. uh MSAs

are basically these contracts, material

service agreements that guarantee that

or or I'm sorry, they call them master

service agreements that guarantee that

Nvidia will buy excess data center

capacity. Well, why would Nvidia need to

buy excess data center capacity unless

there were excess data center capacity,

right? So Nvidia now buying

uh data center capacity means Coreweave

can't sell all the data capacity.

Last week Nvidia got or or exited uh the

data center industry. What does that

mean? That means Nvidia no longer wants

to build out data centers to license the

actual data centers to you because

they're already having to buy the excess

capacity from Coree because it can't be

sold. Now, the problem is the next

earnings report is when we'll actually

get a copy of the material services or

the master services agreement. We won't

get that until November 14th. We

literally have to wait two damn months

to get this MSA.

This MSA is going to show that Nvidia

has to buy these damn chips or or the

the output from these chips through

April 13th, 2032. This is so smart by

Coreweave that they did this. And if

Cororeweave pulled it off, because I

don't necessarily think they're

particularly brilliant, but if they're

able to pull it off, then other

companies probably pulled this off as

well. It basically means that Nvidia

went out there whoring themselves out

going, "Buy our chips, take on debt, and

dilute your stocks. Buy our chips. We'll

guarantee they make money for you."

Well, that's like the perfect way to set

up a bubble. I mean, look at this. This

is Core Weef. When they IPOed, they

raised 1.4 billion by IPOing, by issuing

shares, and then they took on another $3

billion in debt, all to go buy more

Nvidia stocks. So, of course, Nvidia

wants desperately

their companies to go uh buy more Nvidia

stocks. So, whatever they can do to prop

up and enable these companies to go,

great. So, if they can dance around

like, you know, the naked heavenly

maiden and and they can go, "Hey, you

know, let's go buy more of our chips,

we'll guarantee that they're

functional." Great. But what is Jensen

Hong? There's a lot of people like, "Oh,

Kevin Jensen Wong's really smart, you

know, trust what he's doing." Yeah, I

will trust what he's doing. Jensen Huang

sells $13 million worth of shares. July

19th, Jensen sells 35 million, sorry, 37

million shares. A week earlier, Jensen

is able and has filed to sell as many as

6 million shares, which is worth a

billion dollar.

That's a lot. That's a lot of selling.

It's the opposite of what Elon Musk is

doing who just bought a billion dollars

of Tesla shares that he made that back

like instantly by pumping the stock. So,

you know, does he really m Does it

really matter? No. Uh but, you know,

it's interesting. It's it's the opposite

that's going on. So now when we look at

this material services agreement that

comes out November 14th, what we're

going to want to look at is the the big

questions now are what price is uh is

Nvidia buying uh data center capacity

for? Are they are they paying uh 2023

prices? Because prices are going to

fall. So, if they're stuck paying 2023

prices, they're going to pay over market

value. Or are they going to pay a market

value? We don't know. We don't know the

details. How much spare data center

capacity is there? Are we talking about,

you know, a day worth of extra capacity

that Cororee is making Nvidia buy? I

don't know. But this really changes the

argument because I've always said that

in the short term, Cororeweave, Nbby, I

ran, Oracle, great short-term place, but

they're long-term bag holders.

Basically, inside the bag are Nvidia

chips. The bag itself are like the

server racks like Super Micro Computer.

Super Micro is able to sell the chips.

TSM is able to sell the chips. Nvidia is

able to sell the chips. They all wash

their hands of the chips and somebody

else hold the bag holds the bag. holds

the bag are the data center plays.

Coreweave, Oracle, NBIS, INEN. So,

short-term good for them, longerterm bad

for them. But this literally flips all

of that on its head. It literally lets

Core Weave take the bag and dump it back

onto Nvidia. It's almost like a

repurchase agreement.

So, I hate this for Nvidia. Nvidia it it

now sharing in this data center capacity

marks an inflection point in artificial

intelligence. It's a red flag now. So

far nobody's really talking about this.

I saw a Doomberg reaction that said,

"Oh, this is good. It could concern e it

could ease concerns about coreweave's

overbuilding because there's a long-term

risk of overdeveloping AI

infrastructure." Yeah. No. Duh. Like of

course there's a long-term risk of

overdeveloping AI infrastructure. That's

the problem. But the fact that even the

suits aren't realizing that this is bad

for Nvidia, right? Because if there's

over capacity, if Coree is like, man,

we've got over capacity. Hey, Nvidia,

start buying back. At some point, Nvidia

is going to go, "Hey, ma'am, we'll sell

you chips, but we're not going to keep

guaranteeing we're going to buy back all

your capacity." Because if they're

buying back over capacity and they're

getting ripped off, Nvidia is going to

stop doing it. that tanks Nvidia chip

sales. Now, again, maybe this is just a

really, really early canary in the coal

mine. But I thought this person, Tony,

this Tony guy's comment was right on. Is

it just me or is all of this Nvidia

coreweave, OpenAI, etc. stuff just a

circle jerk of companies buying from

each other at inflated prices to push up

each other's valuations and then rinse

and repeat? I'm not the smartest guy

around, but this all seems very

predictable and tiresome.

I think he's got a really good point,

and this MSA is really scary. Now, we'll

see what price Nvidia has to pay

November 15th. It's scary to me that we

have to wait that damn long to get it.

You know, somebody else in the chat

commented this. A shout out to Brandon

in the chat. Let's go, Brandon. Uh he's

never heard that one before. Uh Brandon

in the chat said at his company, the

first thing they strike from their

contracts or buyback agreements or

arrangements. This is basically, you

know, what this is is you're buying back

the output of these chips.

Uh so now to be clear, Nvidia is not

buying back the chips, they're buying

back the extra compute. This comes just

as last week Nvidia left the data center

business, right? So it's all sort of

aligning like if the data center

business was so profitable, why would

you leave it Nvidia? You know, it's it's

a start of a cycle. It's the start of

the canary in the coal mine. This is

what the cycle looks like. Again, just

like the real estate cycle. Excess

supply, lower utilization, lower prices,

lower ROI on data centers, lower capex,

lower sales at NVIDIA, SMCI, TSM, lower

stock prices, job loss, all fall onto an

already weak economy. This is such a

huge inflection point and nobody's

talking about it. So, either I'm wrong

or I'm just really early. And my wife

already tells me I'm really good at

being early. So, I'm probably correct.

Just again, very early. Time for

drilling stops. I'll tell you when I

dump my How about this? I'll make you a

deal. When I dump my Nvidia shares,

you'll be the first to know in the Me

Kevin membership.

Uh and and let's just put it this way.

I've got over 10,000 of them. So, uh I

will tell you when I dump them, you'll

be the first to know in the Me Kevin

membership. So, uh to me, you know, then

somebody I saw in the comments said, uh

you know, oh, this is good for Nvidia.

They can control the data centers but

not own it. And then I responded and

said, "No, that's totally wrong. They

don't control the data centers and

they're they don't get the upside other

than, you know, more chip buying, but

they are responsible for the downside."

So, it's literally not control it, don't

own it. It's don't control it and be

responsible for the downside to squeeze

out money in chips today. You're

basically saying, "Hey, we could get

three years of selling you chips and if

hits the fan in the future, no

problem. I already made my money.

That's scary. You know, this is this is

the this is the like this is the part

where people wonder like, okay, when

does it turn? I mean, I don't think

anybody's going to really pay attention

to uh the Empire Manufacturing report

from this morning. I don't think

anybody's going to give a flying hoodie

duty about this. You know, Empire

Manufacturing first negative read since

June. Really, we're in a place where you

you have to look at I mean, here's just

the bottom line of it, okay? uh in like

so inventories get used up. They wrote

inventories edge lowers while the same

kind of companies were buying less

orders and shipments fell sharply. Okay,

that is literally written right here.

Inventories edged lower and new orders

and shipments fell sharply. What does

that mean for the market? Well, it's

bullish in the short term. A because

nobody's going to care about this

report. It's bearish for the long term

because it's a bad report. And then for

employment, they say that employment

came in at zero, but productivity went

down. The average work week went down

5.1 hours. That is bullish short-term

jobs report, bearish long-term.

So, uh, yeah, I don't know, man. All

this makes me nervous. So, you know, if

you want to play the short term, you

need to keep you need to do the

following on core. Okay. So, some some

technicals. You can't play the core

upside until you break out of 125.

That's my opinion.

Tesla needs to hold 414. Elon's pump

probably won't be enough to hold it up

alone. Okay, very important. Pay

attention to that. In addition,

uh watch what's happening with Nvidia,

especially that MSA. Okay, that's a

really, really, really big deal. So,

watch that. Uh and then uh uh yeah, as

far as my top 10 stocks to buy. Keep in

mind I also have a top 10 stocks list

not to buy list that we started. We

started that I think Thursday or Friday.

So we're developing that all. We we

include it now daily at the bottom of

each alpha report starting with this

morning's alpha report which did really

well. Make sure you're part of it in the

meet Kevin membership. All right. So

there you have what's going on in the

chip sector. Good lord.

>> Why not advertise these things that you

told us here? I feel like nobody else

knows about this.

>> We'll we'll try a little advertising and

see how it goes. Congratulations, man.

You have done so much. People love you.

People look up to you.

>> Kevin Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.