Prof G Markets
00:46:03 · Josh Brown
[00:46:03] S4: Well, no. Opportunistically, he's saying, let Dario write the s one that talks about the extinction of humanity, and then come public and say, I've solved safety. That might've been a tactical error. So I think this company is coming public just as the excitement around it is peaking, and that's a good thing, that bodes well for the first few days of trading. I also think we now have some prototypes in the market for staggered liquidation periods for shareholders like Cerebras didn't go as well as it could have, and then SpaceX came along afterwards and sort of did it better. And then, you know, whatever they've learned from that, they'll apply now to the Anthropic IPO. Like, we we are learning to do 100,000,000,000 to $1,000,000,000,000 IPOs in real time. The bankers have this instant feedback loop that they're benefiting from and it's just a different day and age. So do I think they could raise a $100,000,000,000? Yeah. Like with their eyes closed, they could do it in the private market right now if they wanted to. What they actually, what they need to do is say, we're the safe one. We're publicly traded. We're conforming to SEC. We're answerable to like all of the regulators around the markets, debt and equity. Like we're the consumer friendly, safe. We're the ones that wring our hands in public about all the risks to humanity. Like we're the good guys. That's what they're doing here with the IPO. They don't have to go public right now. I know people said they better go public right now or they're screwed. I don't think that's true. I think they could do a series G and easily raise a 100,000,000,000. I think this is the smart move to the ducks are quacking on Wall Street. If you if you never learn anything from me other than this, it's good enough. What... When the ducks are quacking, you feed the ducks. That's what they're doing.
00:48:08 · Scott Galloway, Josh Brown, Ed Elson
[00:48:08] S0: Alright. So, Josh, we're increasingly hearing, open quote, bubble claims. Ken Griffin and Ray Dalio both suggested last week they rent a bubble. What's your response to the bubble question today? [00:48:19] S4: If it is a bubble, it is the most pathetic bubble I have ever seen in my life. We are discounting. We are [00:48:30] S3: I agree.
00:48:30 · Josh Brown
[00:48:30] S4: Factoring in growth skepticism every single day the market is opened. It is an anti bubble. The only thing that you can credibly say is that it's an earnings bubble and that the profitability our tech giants are enjoying today is not sustainable. You could say that. You cannot say it's a valuation bubble. The semiconductor industry is the largest contributor to tech earnings growth. And there's a lot of tech earnings growth and the semis are by far the biggest contributors. The year over year estimate for tech earnings growth is 65.6% for the quarter that we're in now. Just think about that number for a second, okay? Sector wide, it's not one company. 65% for the tech sector, if you exclude semis and semi equipment, it falls to only 24.9%. So the entire tech sector is growing 25%. And within that, the semis are almost triple that. We're getting tech reports now that are continuing to crush. We had Western Digital print $4.64 in earnings versus $4.11 expected. Oracle, dollars 1.92 versus $1.74 big earnings per share surprises. And yet we are seeing a contraction in the number of fifty two week highs within the SMH, the semiconductor ETF. There has not been an above average reading, which I would say is like 70% or higher names making new highs. Since July, there are zero percent fifty two week highs for the semis. Explain to me how that's a... Why is it a bubble? How is it a bubble? Here are the three cheapest stocks in the market right now. SanDisk has a price to earnings growth or peg ratio of 0.08. 0.08. In a bubble, it's like five. Micron, point one o. Western Digital, point one three. Micron is selling at five times earnings. So if this is a bubble, it is the worst bubble ever. I want my money back.
00:50:42 · Scott Galloway, Josh Brown, Ed Elson
[00:50:42] S0: I pity the fool that thinks this is a bubble. Another rocky quote. [00:50:46] S4: NVIDIA's forward PE is 15 times earnings. This is the lowest valuation, I think, in history on a forward earnings basis, you have ever had the opportunity to buy Nvidia. Now, I'm not saying it should be 30 times, should it be 15? And if it is 15, the only bubble must be therefore in this year's earnings. It's not in the valuation. [00:51:14] S3: Scott, I agree with Josh and keep talking about it. Do you have any follow ups? [00:51:19] S0: I'm looking up Rocky quotes right now. So [00:51:24] S4: my wings outside is the great... This is the greatest Rocky quote quote. They say, he's he's he's on the street or he's he's inside. The guy wants to fight. He says, my ring's outside. I didn't hear no bell is another good one. Get up, you son of a bitch. [00:51:42] S0: Because nobody owes nobody nothing. You owe yourselves.
00:51:42 · Scott Galloway, Ed Elson
[00:51:42] S0: Because nobody owes nobody nothing. You owe yourselves. [00:51:46] S3: Yeah. Yeah. Yeah. Josh, I'll I'll I'll put forward a thesis. So I I agree with you. Like, when we look at the multiples on, like, the the the hardest AI names, they have come down. NVIDIA's multiple has fallen almost 50% since last year. Micron's has fallen, but it's gotten cut in half. Broadcoms, SKRN. You know? So I'm totally with you, which is like, if this is a bubble... And I think you could make a claim that it is, as you say, like, there's... You know? I guess it depends on your definition of bubble. It's it's a very, very small one where it seems as though all of the risks of things going wrong are being priced in. And to me, I'm kind of like, oh, that's that's good. It's almost like we've seen the big short so many times. All of the stories are so resonant and so real in our minds that Wall Street is go... Going, yeah. We're not gonna make that mistake again. We're gonna predict, and we're gonna front run the possibility that there are boom and bust cycles. We've gone through the boom, and now the bust is probably going to happen, which I honestly think that they're right about. And so my expectation is that we're gonna see some sort of correction. We're gonna see some sort of drawback. There'll be some problem. We're beginning to see it with the neo clouds, which everyone was very excited about last year. And now people are pointing out that they have some precarious debt obligations, and will the money run out? And I think for a lot of them, will.
00:51:46 · Ed Elson, Josh Brown
[00:51:46] S3: Yeah. Yeah. Yeah. Josh, I'll I'll I'll put forward a thesis. So I I agree with you. Like, when we look at the multiples on, like, the the the hardest AI names, they have come down. NVIDIA's multiple has fallen almost 50% since last year. Micron's has fallen, but it's gotten cut in half. Broadcoms, SKRN. You know? So I'm totally with you, which is like, if this is a bubble... And I think you could make a claim that it is, as you say, like, there's... You know? I guess it depends on your definition of bubble. It's it's a very, very small one where it seems as though all of the risks of things going wrong are being priced in. And to me, I'm kind of like, oh, that's that's good. It's almost like we've seen the big short so many times. All of the stories are so resonant and so real in our minds that Wall Street is go... Going, yeah. We're not gonna make that mistake again. We're gonna predict, and we're gonna front run the possibility that there are boom and bust cycles. We've gone through the boom, and now the bust is probably going to happen, which I honestly think that they're right about. And so my expectation is that we're gonna see some sort of correction. We're gonna see some sort of drawback. There'll be some problem. We're beginning to see it with the neo clouds, which everyone was very excited about last year. And now people are pointing out that they have some precarious debt obligations, and will the money run out? And I think for a lot of them, will. [00:53:13] S4: I think that's bullish.