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The Billion-Dollar AI Bottleneck — Why This Tech Giant Controls the Future of Nvidia · Earn Your Leisure

• 0:00
  Speaker 1: So about as Kate heynex I p O this Friday.
• 0:04
  Speaker 1: I believe big, big, big I PO something that's a
• 0:09
  Speaker 1: lot of people have different spending, A lot of people
• 0:11
  Speaker 1: have different theories on this. Some people think it's gonna
• 0:14
  Speaker 1: really hurt Micron. Some people think that it's the a
• 0:18
  Speaker 1: sign that this memory sector is coming to a halt,
• 0:23
  Speaker 1: because it's like when you start to see a lot
• 0:26
  Speaker 1: of I pos, it's like, let's get in while while
• 0:29
  Speaker 1: there's still room, like, let's get as much as we
• 0:31
  Speaker 1: possiblely gain before the before the gig is up. Some
• 0:34
  Speaker 1: people say that this is just the beginning of the
• 0:37
  Speaker 1: memory sector, and this is this is something that's you know, encouraging,
• 0:43
  Speaker 1: I don't know, Korean company. This is probably gonna be
• 0:48
  Speaker 1: another billion dollar I mean trillion dollars there. It's on
• 0:53
  Speaker 1: i PO like as soon like first day out. Like
• 0:58
  Speaker 1: so this is like a space AX situation all over again.
• 1:01
  Speaker 1: It's not it's not as popular as SpaceX, but this
• 1:05
  Speaker 1: is going to be like this like a new SpaceX situation.
• 1:08
  Speaker 2: I want to compare it to SpaceX in terms of well,
• 1:11
  Speaker 2: space X is a new company that's ipoing and it
• 1:14
  Speaker 2: had a one point dollars violation. This is already a
• 1:17
  Speaker 2: one point one dollar company that is ipoing to raise capital.
• 1:22
  Speaker 3: Obviously it's trading in South created.
• 1:24
  Speaker 2: Yeah, so the idea of raising capital, I get it
• 1:28
  Speaker 2: from that standpoint. Well why raise capital now? Well, they
• 1:32
  Speaker 2: understand and this is just my my, my bollcase on it.
• 1:35
  Speaker 2: They understand that the moment right like we saw that
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  Speaker 2: the demand for GPUs was a bottle neck, we've got
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  Speaker 2: that under control. Well, now that the bottle neck is memory.
• 1:46
  Speaker 2: And they lead the world. Like, I know, we want
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  Speaker 2: to talk about Micron, and we love Micron, but the
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  Speaker 2: world leader in high bandwidth memory is s k hix.
• 1:54
  Speaker 2: And so the US stock market is a place where
• 1:58
  Speaker 2: you can raise capital and give expose. Most people, if
• 2:01
  Speaker 2: you've been watching this show, if you're in eyl University,
• 2:04
  Speaker 2: or if you're in Red Panda, you've already had exposures
• 2:06
  Speaker 2: to eskhinix. Right, So if you bought DRAM the ETF
• 2:10
  Speaker 2: that has a twenty four percent allocation, so you've already
• 2:12
  Speaker 2: been there. The idea that now you can individually have
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  Speaker 2: access to it is a game changing. And so their
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  Speaker 2: goal and they expect to raise additional twenty nine billion, Well,
• 2:21
  Speaker 2: why would they want to raise twenty nine billion because
• 2:23
  Speaker 2: of the demand, right, they have to build new fabs,
• 2:26
  Speaker 2: they have to expand the high vandwidth. What's interesting is
• 2:29
  Speaker 2: that they're actually talking about advanced packaging. So that's something
• 2:33
  Speaker 2: that that's pretty interesting to me because when I think
• 2:35
  Speaker 2: advanced packaging, I think Taiwan Semiconductor, So that talks about
• 2:39
  Speaker 2: more demand in that space. But they're also directly going
• 2:42
  Speaker 2: to start buying machinery, the EUV machines from ASML, which
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  Speaker 2: is we talked about that. That's a four hundred million
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  Speaker 2: dollar expense for one machine. So think about that. How
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  Speaker 2: many companies are even in the realm of buying one.
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  Speaker 3: So they're going to have multiple machines. They're expanding.
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  Speaker 2: They already talked about what they do in the South
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  Speaker 2: Korea July tenth, they're supposed to IPO here. How will
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  Speaker 2: it affect the memory sector. I think it's a clear
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  Speaker 2: indication that demand is still here. The memory sector is
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  Speaker 2: still going to be an issue or definitely a high
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  Speaker 2: concern over the next two to three years from what
• 3:15
  Speaker 2: we saw for Mike Cron's report. I see Samsung just reported.
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  Speaker 2: I'll be interested to see how they did today. Obviously
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  Speaker 2: they've done on a COSP index, so they're in South Korea.
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  Speaker 2: And then this IPO Friday, it'll be a clear indication
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  Speaker 2: of hey, either we're resetting the levels because the evaluations
• 3:32
  Speaker 2: are too high, or we're going to match these levels
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  Speaker 2: and say here we go on another run.
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  Speaker 3: So the idea of Samsung today.
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  Speaker 2: Or tonight or tomorrow this morning if you're watching and
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  Speaker 2: July tenth, which is Fridays, Kahnix IPOs ASML will be
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  Speaker 2: reporting on Tuesday TSM on Wednesday. The demand story will
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  Speaker 2: come to the forefront in the next five to seven days,
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  Speaker 2: and so that's what we should be watching for.
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  Speaker 4: And yeah, for the Yeah, the people put in chat.
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  Speaker 4: It actually is not IPOs a a d R.
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  Speaker 1: So yeah, it's already a public paid company, but it's
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  Speaker 1: it's getting debuty to it to the American market on
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  Speaker 1: the IPA here on Americans change, So it's not an
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  Speaker 1: initial it's not an initial public offering, but similar as
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  Speaker 1: far as people in America now have access to invest
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  Speaker 1: in it. But Ian, what's your thoughts on on this
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  Speaker 1: and what's your thoughts on the memory sect? Like how
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  Speaker 1: does this impact the memory sector?
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  Speaker 5: I think there's a lot of and I went into
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  Speaker 5: this with a video try. I'm sure you're going to agree.
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  Speaker 5: A lot of people who missed out on the memory
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  Speaker 5: run up are doing the Michael Burry and they're requesting
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  Speaker 5: a crash. So because you missed out, you want these
• 4:44
  Speaker 5: companies to fail. And we're talking about Earth. Let's say
• 4:47
  Speaker 5: Micron falls fifty what you want, most people aren't going
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  Speaker 5: to buy it a fifty percent dip. I think will
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  Speaker 5: Micron lose some share? I think of adjust It'll be
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  Speaker 5: like in Video and AMD. I think both are InCred valuable.
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  Speaker 5: The other argument is there's so much interest in this one.
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  Speaker 5: I wonder what are the tech software companies doing to
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  Speaker 5: rebalance to make their stock attractive again, because now I'm
• 5:18
  Speaker 5: seeing more of an American desire to invest internationally with
• 5:22
  Speaker 5: more patriotism going to non American companies. Even when I
• 5:27
  Speaker 5: was at the World Cup, was in them high sense
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  Speaker 5: like we need to have if we picked China's big
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  Speaker 5: three tech products versus are big three.
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  Speaker 3: I'm sorry.
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  Speaker 5: We was talking about this in Atlanta, like if they
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  Speaker 5: sold those by D cars here, it would be over
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  Speaker 5: with for four Yes, So do I think that there'll
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  Speaker 5: be a correction of some sort or an adjustment, yes,
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  Speaker 5: but do I think this company is incredibly valuable without
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  Speaker 5: a shadow of a doubt it is. And the efficiency part,
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  Speaker 5: like we can talk about bottlenecks, but out of the
• 6:03
  Speaker 5: AI boom, the companies who really benefited were the ones
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  Speaker 5: who adjusted the business, who really delivered a return on
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  Speaker 5: value for the enterprise customers, and they did it great.
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  Speaker 5: So Drama is going to benefit dramatically from it. M
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  Speaker 5: My rule of thumb is the same, wait six months.
• 6:21
  Speaker 5: There are no exceptions to that rule, but I will
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  Speaker 5: definitely be looking for a price point to get into
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  Speaker 5: it after six or seven months.
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  Speaker 3: For sure.
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  Speaker 5: I like a long term but two things can be
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  Speaker 5: true ra shot, like there can be an adjustment in
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  Speaker 5: sector overall, but these two will be the superstars in.
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  Speaker 4: That space for sure, these two what MICRONSK Honey, Yeah.
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  Speaker 2: I'll just add at this because this is important too, right,
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  Speaker 2: So like, yes, you'll have it if you're ready, and
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  Speaker 2: Drama you have exposure to it. The idea that this
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  Speaker 2: is a South Korean company, I'm glad you brought that up.
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  Speaker 2: And we know this administration is about making American company
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  Speaker 2: American companies the forefront of innovation I'll say.
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  Speaker 3: This, right, you look at every hyperscaler pick one.
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  Speaker 2: If high bandwidth memory doesn't perform or can't execute at
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  Speaker 2: its function, these hyperscalers businesses will drastically suffer and video
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  Speaker 2: won't be able to sell. Compute, Meta, Microsoft, Google all
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  Speaker 2: have the same issue that is needed, and that's the memory.
• 7:24
  Speaker 2: He texted me this is over the week, and I
• 7:26
  Speaker 2: said optimistically obviously, but I'll be interested to see how
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  Speaker 2: fast because I've already seen ETFs being built for esk heex.
• 7:33
  Speaker 3: Already, yevery CTFs are being built.
• 7:36
  Speaker 2: I'll be interested to see how fast Vanek puts escha
• 7:41
  Speaker 2: Heix into SMH and what allocation. Yet, those are the
• 7:45
  Speaker 2: type of things you should watch, right well, SOXX have
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  Speaker 2: exposure to esk Heinex and what allocates me, that'll tell
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  Speaker 2: you the importance and the money. And so when you
• 7:53
  Speaker 2: see this, I po, yes, retail investors have access, but
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  Speaker 2: the most important piece is that institutional the firm now
• 8:01
  Speaker 2: have access and can integrate them into their funds.
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  Speaker 5: And so that's what I'll be watching for as well.
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  Speaker 5: And above eight percent is like a key, like if
• 8:08
  Speaker 5: it's eight to ten percent. Oh, I love that, boy, boy,
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  Speaker 5: it's a home run.
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  Speaker 3: Home run.
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  Speaker 4: So for the leader in the space, which is Micron.
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  Speaker 2: They're not the leader in the space. So Eske Hicks
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  Speaker 2: is the leader. They're the number one happened high bandwidth
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  Speaker 2: memory company in the world. Samsung is number two, Micron
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  Speaker 2: is number three, Micron is the American leader.
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  Speaker 3: Yeah, this is like if one be performed in the finals.
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  Speaker 4: Well, okay, how you define Samsung? What Samsung's market cap?
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  Speaker 3: It's like one point they're all in the one point three.
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  Speaker 4: They're all.
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  Speaker 2: That's crazy, Like they're all at number twelve, thirteen, and
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  Speaker 2: fourteen on.
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  Speaker 3: The on the market capit list.
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  Speaker 5: Samsung market cap Yeah one point.
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  Speaker 3: Nine, yeah trillion, right, yep, yep, yep yep.
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  Speaker 1: So Micron, who just had a blowout earnings historic actually,
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  Speaker 1: and it's actually at a lower point now than it
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  Speaker 1: was when it reported the earnings. And it's something that
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  Speaker 1: Blat was talking about last week when he said, like
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  Speaker 1: that's kind of a sign that that's not a good
• 9:14
  Speaker 1: sign when it's like expectations have already been baked in,
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  Speaker 1: when nothing that you can do can actually move the needle.
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  Speaker 1: And they moved the needle the first day. But it's
• 9:23
  Speaker 1: been sliding back since So okay, if historic earnings have
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  Speaker 1: not increased the stock price, is that a sign of
• 9:36
  Speaker 1: the times of what has been happening with stocks going
• 9:40
  Speaker 1: lower after earnings and then they've gone up over the
• 9:42
  Speaker 1: course of time, or is at the beginning stages to
• 9:46
  Speaker 1: say that the companies are good, they're solid and not
• 9:48
  Speaker 1: like they have flu companies. But it's run up so
• 9:51
  Speaker 1: much that the price increase has already been built in
• 9:54
  Speaker 1: kind of like in video, you could say, you can
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  Speaker 1: make argument that's why in video has it moved because
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  Speaker 1: the price increase has already.
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  Speaker 5: Been don't think if I can take this real quick,
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  Speaker 5: everyone go and chat GPT your clock and asks what
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  Speaker 5: is the expected higher end return for every tech company
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  Speaker 5: on Earth? Micron is gonna be within a standard of
• 10:18
  Speaker 5: two deviation and Vidio is doing the.
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  Speaker 3: Same thing like the days of.
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  Speaker 5: Like they're not going to have a four year run
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  Speaker 5: where they get two thousand percent return. I think that's
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  Speaker 5: unfair to ask for. I think it will come to
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  Speaker 5: an attractive price point. But once again, when did forty
• 10:36
  Speaker 5: and fifty percent returns in the year become failure? Like
• 10:41
  Speaker 5: I don't like, I don't understand the equivalent of like
• 10:45
  Speaker 5: if a player scores ninety points in the game legit
• 10:48
  Speaker 5: shot the band, but like legitimate ninety and then he
• 10:51
  Speaker 5: goes back to score in thirty seven. It's like, no,
• 10:53
  Speaker 5: he's not failing, he's just calibrating to whateverever his average is.
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  Speaker 5: So I think in a world where they have blockbuster
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  Speaker 5: returns and this is a part of the rotation, they're
• 11:05
  Speaker 5: gonna hunt for the next thousand percent return company. There
• 11:09
  Speaker 5: are not many to pick from, so buy it at
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  Speaker 5: an attractive price. I do think expectations need to be modified.
• 11:17
  Speaker 5: But if anyone think the Micron is going to fall
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  Speaker 5: apart overnight and that their story is over with you
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  Speaker 5: sadly mistaken, You're definitely are mistaken.
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  Speaker 3: I'll add this to it.
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  Speaker 2: And that's why I think the historical data is important.
• 11:31
  Speaker 2: And so we if we watch what happened last quarter,
• 11:34
  Speaker 2: it did the exact same thing I think you touched
• 11:37
  Speaker 2: on a little bit earlier in when people miss a run,
• 11:41
  Speaker 2: they're going to allow it to pull back to a
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  Speaker 2: point where it becomes even more attractive.
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  Speaker 3: So they should now buy into that.
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  Speaker 2: And so, yeah, it did blow its earnings, but it
• 11:51
  Speaker 2: did that in Q one and we watched it get
• 11:53
  Speaker 2: down to three hundred. In fact, there were posts that
• 11:56
  Speaker 2: were made about this. Maybe you guys remember about the
• 12:00
  Speaker 2: fall of it and here we are at, you know,
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  Speaker 2: over nine hundreds in it.
• 12:06
  Speaker 3: Yeah, I mean that's right. So mh yeah, we can't
• 12:11
  Speaker 3: have the short term vision.
• 12:13
  Speaker 2: I know. I feel like, oh my gosh, like gods,
• 12:16
  Speaker 2: you're up six hundred percent, you're up four hundred percent,
• 12:19
  Speaker 2: Like these type of numbers are not even like realistic
• 12:22
  Speaker 2: for anyone.
• 12:23
  Speaker 5: We're talking about the stock now, the stock, Yeah, it's like,
• 12:27
  Speaker 5: what are we talking about this?
• 12:30
  Speaker 2: This this company is not going anywhere in fact that
• 12:34
  Speaker 2: I have a new price target for it molding anywhere
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  Speaker 2: under a thousand. So we just got to be mindful
• 12:41
  Speaker 2: and be patient with it. Right, We've already laid out
• 12:44
  Speaker 2: the case for it. We understand that high bandwidth memory
• 12:48
  Speaker 2: is going to be and continue to be in demand.
• 12:50
  Speaker 2: We understand that it's sold out for this year and
• 12:52
  Speaker 2: sold out for next year. The strategic partnerships, it's all
• 12:55
  Speaker 2: laid out for you. The idea is will you invest
• 12:58
  Speaker 2: and will you hold it and be disciplined about holding
• 13:03
  Speaker 2: the position? Is your price point sixteen hundred, it's right
• 13:08
  Speaker 2: in that ballpark. Fifth, it's in that ballpark. Yeah, not
• 13:11
  Speaker 2: far seventy Yeah, it's in it. It's in that ballpark
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  Speaker 2: hole
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  Speaker 3: For the long term.