Transcription
Folks, you better get ready. In today's video, we're going to break down the latest on the market and plays. And then we're going to get into one specific stock that is incredibly cheap and screaming buy that I believe could change early buyers' lives.
As always, we're going to present the evidence, the data, the facts, and we're going to present some strategies and risks to consider and let you be the judge. On top of that, of course, as always, make sure that you're doing your own due diligence on all ideas presented. If you're the one taking the ultimate risk, you got to be the one doing the ultimate frisk. And we're going to get right into it with the timestamps down below, but the only thing I ask in return for all the work that goes into making a video like this is that you hit that like button and also don't forget to subscribe. Okay, let's get to work.
We need to start with the market context. So, listen carefully to these headlines from the AI space. Nvidia plans to invest up to $100 billion in OpenAI as part of data center buildout. OpenAI and Nvidia announced strategic partnership to deploy 10 gigawatts of Nvidia systems. OpenAI, Oracle, SoftBank planned five new AI centers for $500 billion Stargate project. Oracle to spend $40 billion on Nvidia GPUs for OpenAI Texas data center. OpenAI and Oracle's $300 billion Stargate deal building AI's national scale infrastructure.
Now, what does this sound like to you? Sounds exactly like this meme that's circulating everywhere. OpenAI sends a hundred billion to Oracle, and Oracle sends a hundred billion to Nvidia, and then Nvidia sends a hundred billion to OpenAI. A circular cycle. Meanwhile, at each leg of the cycle, the companies get a massive boost in valuation as investors get super duper excited about this news.
Now, I don't know about you, but when I was a kid, I used to love to go ahead and plug power strips into themselves or extension cords into themselves. And I used to think to myself, "Hm, I'm about to beat the system." But of course, you never really beat the system, just like the power strip plugged into itself here. Well, many fear that this boom cycle for AI might not generate much real output compared to the cash burned. And they're starting to worry that, "Hey, maybe this AI ecosystem and all these investments are actually just fueling themselves and fueling the upside and kind of causing an upward melt-up that might not be sustainable." Well, certainly the circular level of financing, once it unravels, is going to cause a bigger downside pull simply because a lot of the money is coming from within the ecosystem. So, if any one player decides to pull back on the ecosystem, well, you're going to see a bigger collapse in valuation.
But long-term, this AI spending is set to pay off in a big, big way. When you're asking whether this AI spending is all just well, think about what it's buying. The assets that it's buying are real. Data centers, GPUs, software, IP, recurring contracts. The demand is sticky. Enterprises are locking in not just a few month contracts, but multi-year AI adoption contracts. And companies are building out mega, mega pieces of real estate with major, major data centers. So again, this spending is on real things, real assets. The demand is ongoing. The productivity payoff is also very, very visible for companies. They can see productivity today, and they're going to see a lot more productivity down the road. So for folks who are looking at this and they're saying, "Through this looks awfully bubbly." Sure, things can have a correction. No doubt. Who knows when that's going to be, but overall, bigger picture, the way that I see this is that these companies have a symbiotic relationship with each other, and working together allows them to accelerate their timelines. And if anything, when you can see these types of investments, well, if Nvidia is going and investing a hundred billion dollars in OpenAI, well, that means that, "Hey, down the road, a lot of that money is going to flow right back to Nvidia as OpenAI needs to buy a lot of NVIDIA GPUs." Or or OpenAI might work more with Oracle, who also has data centers, and they'll need to buy more Nvidia GPUs. And the circle continues on and on. And there's also a lot of other smaller data center plays that take a lot of the overflow of demand. And those are going to see bigger and bigger contracts. And they're also going to need more Nvidia GPUs, and the competitor GPUs, and so on and so forth.
Okay, next, we got to talk valuations. So, I've been vocal and will continue to be vocal about the fact that since the stock market is denominated in US dollars, well, a lot of the stock market's performance is kind of a mirage. I don't know why this isn't talked about more, but it's very, very important. For example, the S&P 500 is up just 13% year-to-date, which is very, very solid, but the value of the US dollar compared to, say, the euro, is down about 12.8% in that same time span. The US dollar index overall is down a little less than 10%. So again, your dollar's lost somewhere around 10%, and the market is up 13% USD-wise. Are those fantastic returns? I don't think so. Especially considering that when you sell, you got to pay capital gains taxes, which probably net you in the red.
Now, keep in mind, when you're looking at these comparisons, you're literally just comparing the dollar to other currencies that are also getting devalued massively, just less so than ours. What if you compare the dollar to something that's like real money that holds wealth and has held wealth for thousands of years, like, for example, gold? Well, if you pull up the chart for gold, look at this. It's up 41% year-to-date. And I know there's a lot of folks that watch these videos and they don't actually buy stocks and they're kind of scared to because they think, "Oh, what if I buy a stock and it dips?" Well, why is it okay to hold currency that's dropping massively year after year after year and has been doing so for a hundred years? But buying a productive asset like a stock that might have a down quarter or two is such a disaster.
Just one last point about this. In 1971, as you likely know, the US was taken off the gold standard. And at that point, you had a massive break between growth in US productivity and compensation of the average worker. This is when the everyday average American worker got totally screwed. Why did this happen? Well, because President Tricky Dick Nixon decided that the US government and the Federal Reserve, the beautiful central bank, needed to be able to control its currency, print endless amounts of it, and be able to finagle it all around the world. And so, what did they do? They decided, "Okay, we're going to make it a fugazi currency. It's going to be a beautiful fugazi." And the result of this is giving capital, capital holders, a massive, massive unfair advantage over the worker. Before Tricky Dick removed us from the gold standard, well, productivity and wages rightly tracked very, very closely with the economic growth of the country, which means workers benefited proportionately. The rich were getting rich, the poor were getting rich. If you were working, you had a job, you're getting lots of money. Well, after the Tricky Dick, well, after that, government and central bank policies allowed for extreme, extreme levels of dollar erosion. High inflation eroded wage gains while financial assets, stocks, real estate, so on and so forth, persevered and multiplied wealth for asset owners. Also, this fugazi money also made it way easier and capital way freer to go and move all around the world and allowed US companies, actually incentivized them to move abroad, which also gutted the average worker. But this is a story for another time.
The bigger picture here is if you understand this trend, you understand that this is only going to get substantially worse with the creation of AI, the continued devaluation of our currency, and the continued massive debt issue that we have in the United States. The people that benefit from this fugazi currency and fugazi system that we have are the people that own actual assets. The people that get hurt are the people that are going to lose their jobs because of AI. The people that wages aren't going to keep up with the inflation, and so on and so forth. So, if you want to protect yourself, if you want to make sure that you're coming out not just the same as you are today, but way better, you need to be investing in the right stocks, and that's what we're fired up to do. And I'm going to do my best to make sure to bring that to you.
Okay, let's go on to ideas. So, we got to start with RGTI. So, there's an arms race out there to develop quantum, and RGTI has been one of the main quantum plays we've been highlighting basically all year. I tried really, really hard to get this idea in front of you and present you as much evidence as possible because there was a lot suggesting that it could be a big winner. Just for example, back in April, we screamed buy the dip because we believed this would bounce back aggressively. It was at about $8.57 at the time. On June 1st, it was trading around $13. We made the same arguments again, and we screamed it was a buy. And then just a bit over a week ago, we made another video outlining the overall trend line it was following quite beautifully and explained how this stock was looking set to change lives. And as of today, this is what that same chart looks like. And it almost hit $35 at highs today.
Now, if you followed the media's opinion on the stock since all the way back when we talked about it at $8 plus, well, what did they say? They said, "Sell, sell, sell. Quantum is unfounded hype." As if every new technology that people are developing isn't unfounded hype when they start. So, folks, I just got to tell you, look, this is yet another of many, many examples of why it's so important that you're not just a media headline jockey and you're actually doing the work yourself and you're looking into the numbers yourself. So, shout out to folks who played this successfully. And I want you to give yourself a big pat on the back. This was yet another one of our evidence-backed plays. We have we've had five very clear arguments ranging from market tailwinds to technology leadership to their manufacturing moat, their customers and partners, as well as their financial backing. This was not a pick at random type of stock. This was a stock that was backed by a lot of evidence. Nothing's ever guaranteed, but this had a lot going for it.
Next, we got to talk about LAC. Now, if you're in the Discord, we talked about this one in the pre-market briefing this morning, and the reason is because the Trump administration just proposed a stake in them. Quote, "The White House proposed an equity stake as Lithium America's renegotiates the terms of a $2.2 billion loan from the Department of Energy for its Thacker Pass in Nevada." A Trump administration official told CNBC. Reuters first reported the equity stake proposal, blah, blah, blah. Now, what is LAC, Charlie? Well, this company, Lithium America's Corp, focuses on the developing, the building, and operating of lithium deposits and chemical processing facilities in the US and Canada.
Now, as you know, we've been working really, really hard to give you government-backed companies and companies that the government is trying to take a stake in or considering taking a stake in. And that's how we called out INTC and MP and a few others before they had massive runs or largely before they had massive runs. And this was another one that we called out. We were a little bit late on this one. I think it was like halfway in the pre-market. But, so what do you need to know about LAC? Well, for starters, this is a play in strategic mineral security. Lithium is classified as a critical mineral. Control over LAC's Thacker Pass deposit helps the US secure domestic supply and reduce dependence on China. There's also the energy and AI infrastructure angle. Of course, AI data centers are energy hogs. Lithium batteries stabilize grids by storing renewable power. Government see LAC's lithium as essential to scaling AI-ready infrastructure that's actually reliable 24/7. And then you have national competitiveness. Just as the US is protecting AI chips, Nvidia, and so on and so forth, it wants to secure lithium to avoid foreign choke points in the AI energy supply chain. This is all about controlling for choke points. If China has all the lithium, well, guess what? They can just choke us off, and we have a big, big issue. A lot of people say, "Oh, you know, the government shouldn't be getting involved in this." That's fine, but you need to give up your power to China because these companies aren't going to do this on their own. And if they're backed by Uncle Sam, they've got a rocket up their rear. It also has a world-class asset. Thacker Pass is one of the largest lithium reserves in North America, giving LAC decades of production runway. And then there's alignment with big players. Government support, GM's prior investment, and likely offtake deals reduce risk and validate demand, especially as automakers and AI firms push for energy storage.
Now, one of the things you got to keep in mind is that a lot of these government-backed plays, right after they get government backing, they tend to see partnerships from private companies. That's what we saw with MP Materials and Apple. And I think you're going to see another thing like this here, which is going to provide another potential catalyst if that materializes.
Okay, let's talk HOOD. So, as you know, we were one of the first, if not the first, people on YouTube to come out hard for HOOD at just around $18 a share early last year. And as of this morning, it hit $130 at highs. So, a big warm shout out to folks who played this correctly and did well. But again, I want to highlight the fact that this was not a shot in the dark. It was an evidence-backed play. So, anyways, the evidence here, look, we've been talking about for a while. This is a company with visionary leadership, willing to remake and lead industry and has been doing that for years. It's exponentially expanding its user base and engagement. It's got a beautiful diversification of revenue streams. It's got a rock-solid balance sheet and financials. And that's truly what sets you up for this win. Not gambling, nothing like that. Simply looking at evidence.
Okay. Next, we got to talk about Alibaba. BABA. So, BABA was up some 8% today, and it's continuing to fill in the recovery gap that we've projected, but I believe there's a lot more to go. We've been right on this stock since really March of 2024. It was slower than I wanted it to be in terms of recovery, but look, it's been pretty consistent, and there's a lot of upside to get back to a fair valuation. And with and with Jack Ma back at the helm, I think it's going to be a very, very hard one to ignore. We put out a price target forecast for BABA this morning in the Discord, and I'll leak it for you here without the price targets themselves, just because I want you to see the bigger picture here on growth and the different segments they have. There's quite exponential growth to be had when you consider the resurgence in their core commerce brands, which are all around the Asian markets, their cloud computing segment, their digital media and entertainment segment, and some of their other miscellaneous segments like logistics, fintech, and so on and so forth. This is a company that's trading at foreign multiples that just don't make sense. And I'd argue there's a lot of upside to be realized here if you're patient.
Now, I'm not a big believer in having huge, huge exposure to China or any kind of foreign markets, but I do like having a little bit, and this is one of the ones that I would say is probably one of the more obvious killer deals in that market. And look, it's already nearly 3x from the 2024 prices when people said it would never come back. Look, it's come back. If you look at the history, Alibaba does tend to have pretty big dysphoric cycles, and then they recover and they get back to a longer-term trend line. I think that's going to happen here. I think you've got a lot more valuation to fill in.
Next, we got to talk about HD. So, in the last video, we spoke about how HAND is in the process and preparing to take Terrestrial Energy Inc. public and broke down how this nuclear play was on a short list of stocks that the Department of Energy, the DOE, has selected for a key pilot program. We talked about how this was actually one of only two publicly tradable options here on this list. Meaning if investors wanted to benefit from the DOE order, the Uncle Sam backing, they only have two options. They could buy OLL or they could buy HD. But OLL, very, very pricey because it's already run so much. But a lot of people are scared of HD because HD is a SPAC, and SPACs are kind of like pre-going public entities. You buy HAN today, it ends up buying Terrestrial Energy, and you own shares in Terrestrial Energy. But anyways, when we posted that video, HD was at about $13.95, and this morning it hit over $18 at highs.
Now, just so everybody stays grounded here, here is the upside picture we see for HAN. We're looking at the potential anticipatory run into the combination with Terrestrial Energy Inc., which looks like it's going to happen in Q4 at some point. We also see the long-term upside as Terrestrial Energy expands with government and regulatory tailwinds. And we also think it happens to be likely underpriced as many, many people don't like to buy SPACs pre-merger because they're scared and they're worried about the combination and regulatory hurdles and so on and so forth.
Now, how much farther can this climb? How should we look at the recent rally? Well, this is what I sent out to Discord members shortly before market closed today. Quote, "HAN has seen quite a nice couple of days. It is reasonable to expect a breather at some point and impossible to say to what extent or when, but we believe the play for this stock is the anticipatory run into merger sometime in Q4 and then the longer-term value creation post-merger. In case A, we see the momentum continue with light breathing. In case B, we see the momentum see a more immediate and aggressive breathing that gets bought up in periods afterwards. In both situations, we see a journey to a new all-time high." So bigger picture, look, we're expecting various levels of shaking out, beautiful breathing, but given that it's one of only two plays in the DOE list and probably the only viable one that isn't extremely overvalued, well, I would expect more upside. Net, I would expect this overall trend to get to a much higher all-time high. And I think that long-term, though, is the bigger picture with the stock. I think once they combine, well, some of the biggest value creation runway is post-merger. So again, you have that anticipatory situation and then you have the long-term value creation.
Anyways, folks, that caps off today's video. Have a great rest of your day. We'll see you next time. If you'd like to get the full Zip Trader experience, make sure to join us in the Discord with that first link down below. We'll see you in there. Have a good one, folks.