Transcription
All right, still on the road now in Los Angeles. Uh, lot going on again. Let's try to get through it. Uh, software collapse, weekly recap.
Um, silver and gold collapse on Friday. Uh, Fed holds, job picture, PMI set to rise. We'll go through the industrial metals, Brazil. Uh, this open a virus continues to spread and I think it remains a story uh for the rest of the year. Swarm risk from AI agents, the corny meta corning metadal and Bitcoin remains asleep. So I'm just going to keep running with the theme. Uh you want to be long scarcity, short abundance for the entire year. Get used to these parabolic moves higher and parabolic moves lower. Uh daily volatility and things that are scarce is going to remain on the high side. You've seen it with a lot of assets during the month and also on Friday.
Uh, in the case of software, Gavin Baker put out another thing and again I I posted too. The beatings continue. I use Claude in Excel. Blew me away. I'm going to show some of that later on in this, but um it's really hard to not get negative on the software side. And then Microsoft comes out and the chart looks horrible. Um, you know, at least you still have an upward sloping 200 day moving average at this point, but you've broken below, by the way, on the charts for the week. I'm doing this on Friday, uh, before the market is closed. Uh, so there's a couple things. The prices aren't exactly going to be in where they are, but give or take 15 minutes, unless something big happen uh, in that 15 minutes. Just know that these are not the actual closes for the month, but you can see the charts negative on Microsoft.
Um, Dan Ies who's been talking up Microsoft even kind of has his new price target a little bit lower but I think the story and this is really important um is really here they had massive RPOS so this is kind of like the story for Oracle but here's the thing that I said my issue for these companies the hyperscalers that are spending the money is that if they're depending on the cloud revenue they're depending on the data centers is being built and the bottleneck's not happening. We have massive bottlenecks that are going to continue and this story is going to make it difficult for them to be able to get the capacity at the same pace that they're spending the money. So that has implications for buybacks. It has implications for a lot of them and I just think at this point the uncertainty over when these companies will actually get the revenues just continues to grow. So you have to be wary about the spending. And here's the chart of Oracle, which is the orange line and led the way lower. But Microsoft is now following it. It may not be following it for the debt reasons, but it's definitely following it for the revenues down the line reasons. Uh this is SAP out of Germany. This problem in software is not just a US thing. This is a global thing. Software to me, as I'll keep saying, if you're spending your time trying to pick the bottom in these, you don't make money picking the bottom in these charts unless you have a long enough time to wait for this to bottom. Uh, and I'm not really sure that the multiple compression story is the only thing. As someone again who uses this seven days a week, all day long, there is not a single hour of the day where I'm not using AI unless I'm in a meeting or in some kind of exercise class. The ability of building things and competing hurts at least the growth rate. You can sit there and debate me on all the things that I've highlighted in the last few weeks, but the charts are speaking as SAP plunges on cloud backlog myths. Again, this whole backlog of cloud, I just think it's an issue.
Now, Palanteer has been brought into it. Palanteer definitely benefits from the data analytics, but when you have multiple compression happening across the software space, they're not immune to this. Even if the stock ends up going higher in in in the future, you could go back, you know, significantly and still be up a lot since uh uh since the beginning of 25. So, just be very wary in these names. And when you get this kind of story, the only reason I'm putting this up there is when there's good news, and these stocks fall a lot, not a little, they fall a lot in charts like that. Uh that's a problem. So, good news being bad reaction, not worth looking. I I think a lot of people this week uh tried to fade Chimath who's been continuing to pound the table on on the SAS side and again legacy SAS has a short window to convert RPO to revenue. Completely agree. I don't understand why this is such a complicated thing other than people's egos thinking that they can pick the bottom of something. There are better games to play here. But I think the issue is going to be can you be safely being long Western Digital at this point when it falls violently on on earnings? Can you be long silver? When it falls violently, unfortunately for these parabolic charts on the upside, they're just going to have extreme volatility. They're not going to be able to be a software name that you can sit in without having to worry about it.
I wanted to bring this up because just remember this was February 2nd of last year. There's a new kind of coding I call vibe coding. Elon Musk giving his, you know, I think software is dead. Remember, he is really uh been vocal about this. So again, everyone wants to fade. Elon Musk as well. Here's the facts. Cursor, most people had not heard of it. February 7th of last year, just five days after Andre Carpathy put out the vibe coding thing. So five days, Curser went from one to 100 million ARR in 12 months. Fastest SAS to achieve this. This week, just canceled cursor. End of an error. Kind of crazy, but I would have paid like $2,000 a month for it only a year ago. That's what I showed you in terms of the time frame. So, I just asked Rock, "What does this mean? Does this highlight the speed of competition for things built on code where AI can replicate and prove the wave of cursor cancellations you're seeing, especially the pattern around January 26th? Very clearly highlights just how brutally fast competition moves into AI powered coding tools and how little mo rapper products have once the underlying models become commoditized and powerful enough again not all software is going to fit into the same component but at this point everyone who has software attached to them is going through a repricing and I think it is not only justified I'm going to keep saying this you want to be long scarcity you want to be short abundance anything built on code you have to prove that you can adapt your business. You have to prove that you're not going to get eaten by these little companies, not just in the US, globally. And I think that's going to happen.
Um, another Claude bot was out. This got it. Um, feels like the chat GPT moment. I can't tell you how many Chat GPT moments there have been with Claude over the past three months. They just keep coming out time and time. And this is why you're seeing this. Anthropic was founded in 2021. Estimated revenues 1 billion, 10 billion, 18 billion, 55 billion, 148. Now again they are dominating. This is absolutely competition for software companies. So if you don't believe it is, it is. This is all enterprise coding going on. They're seeing the revenue. So they're seeing companies use it. And maybe they're all startups. Maybe they're not all big enterprise. Maybe they're just getting on token usage. But I'm very wary.
All right, we're finishing off uh the month. Everything's pretty much up across the board. So despite all the volatility that's been going on, um, still finishing up with the first five days of the year up and the month up. I think it's like 92% of the years when that happens, the market's up. Even though that's numerology, I'm just bringing it up because it went on for the week. S&P barely budged. So again, despite all of the news, we've had three weeks in a row of not moving. Barely down, barely down, barely up. Um, in terms of the S&P 1500 level two, GIX, best performing group year to date, energy. I'm going to keep pounding on energy. Number two, capital goods. Number three, materials. If this doesn't scream the physical upgrade that we've been talking about, nothing will. On the bottom, software, by far the worst performing sector, down 12% year to date. IWM down 2.3%. and it outperformed for the month but gave a little bit back in the last week. Q's barely bunched for the week. Mag 7 up slightly after earnings.
Here's gold, here's silver. Look at these days. Nothing over the past five years that's even comparable. Multiple standard deviation fall collapsing in these. And then you look monthto date. Uh another great month for silver up here. and gold had its best month in the last 15 years, even with the collapses on Friday. Don't get caught into the narratives of all these things. Uh tenure rates again as people trying to chase all over the place and tenure rates. Again, it's going to be a frustrating trade. The dollar big week down, a little bit of a bounce when Kevin Worsh was announced as the Fed, but regardless, the dollar big move. Trump exacerbated the situation by saying he's not concerned with the decline of the dollar. Uh the Fed held rates. And again, as you go through this and you think about why, I just want to keep reinforcing if we don't get bad news news leading into a payroll number on the on the labor side, then they won't do anything. This is literally becoming ridiculous that we are talking about humanoids in the same week and autonomous vehicles and autonomous trucks and we're literally talking about whether the possible that the economy is strong while we're laying off people or at least not hiring people. But Amazon announces they're laying off 16,000 people due to AI. UPS to cut up to 30,000 jobs and closed facilities. Oracle may lay off 20 to 30,000. And these were all this week. Home Depot, explain it to me like I'm a 5-year-old. What signs of stabilization do you see in the jobs market? She's a perma bear, so I'm not really caring about that. I'm just showing the fact that the labor market is not well. And here's the Atlanta Fed wage growth tracker. Big leap down that is overlaid with the ECI year-over-year. So again, wages are coming down, productivity is going higher, profit margins are moving higher, and the fact that we have this happening and the Fed is not sure what to do makes sense. Consumer confidence hit a 12-year low this week. Stocks hit an all-time high on the same day.
All right, PMIs going higher. Andreas Stenol Lararsson with all the regional PMIs out, I'd highlight manufactures doing exactly what we expect. you're getting the bounce if this comes in where he has it. It would be the highest level since 22. We just had a big Chicago number today. I think it's happening. So again, abundance and scarcity. You want to focus this entire year in both in in investing in whatever is scarce. You can go look at the charts. You can go try to pick them, but if it's scarce, go software will remain the abundance. If you want to go try and pick the abundance side, have fun.
Uh I go through in this piece why AI is running even into silver. So for everyone thinking silver is purely precious metals, the critical mineral side, the raw industrial uh metal side, I want to make sure that people realize that the amount of metals needed for AI is insane. In particular, in the silver side, it's in every single component. And I wanted to make sure that this was not a precious metal story. Again, I showed this chart last week. It doesn't include the close from today, but you've got the same parabolic nature in memory as you do silver. So when people want to say that this is trading like a commodity, this is trading like scarcity parabas. If you guys want to hear some podcasts to listen to over the weekend on critical minerals, macro voices with Craig Tinddale, good one. Um, Smarter Markets with Robert Freedelland and Jeff Curry. Great one. I'd go listen to that.
Um, in terms of the critical minerals, again, Trump can't speak about them more enough. He's doing deals with them. Everything is focused on it. he had an announcement on this. I think this in particular in terms of backtracking on price floors is going to start to be more of a story around the globe. Now, I wanted to highlight this chart in terms of the raw industrial metals. So, the CRB ren the CRB raw industrials metals which has a high correlation to countries uh that are in the metals game and the minerals game over time. Uh, I created a copper and silver because they're one of or two of the components. This one ends up being threequarters copper and a quarter silver to normalize it to some degree with the volatility of silver. So, this is the chart over the course of the last 24 years into July. And I picked July because July is when I wrote the end of July is when I wrote the piece on PMIs going higher and believing that this would kick in in the coming uh in the coming months. And now that we're starting to see it as we get into the new year, uh you've had a huge move in DRAM prices and now you've taken this chart and this is the copper silver. You're going to have a pullback uh in this back towards 0.5. But the reality is for anyone looking unless you don't believe the copper silver story which is needed for electricity and the fact that we have supply shocks. Are we going to go straight up in a line? Absolutely not. We did as I showed before. We had a huge month in silver again for the fifth month in a row. But you got to pay attention to the story that the raw industrial metals, aluminum, all these, there's going to be switching that happens because when those metals go up up, the ones that can be switched are going to go to other places.
This is the overlay of that chart with EWZ. Brazil. Brazil. Brazil. I can't emphasize it enough. I've talked about it. I think it fits in so many things for this year. So much so that this week for 22V I will have a paper come out on Brazil and the green computer arbitrage of the AI decade decade and it goes through a variety of different things. Brazil finishes up the month again this isn't completely updated. It was down about one a little over 1% but you're still talking about the biggest rise since 2020.
Um, silver with the price going higher. This is how it's going to trigger into the energy market. So silver is a major part of solar and just to give you an idea this chart here shows the black uh component here is silver's percent of solar panel cost. So it went from 3% in 2019. This was it into this year now with prices up and this was using a price of around 90 something dollars. So again you're talking about a rise in this where it's going to make it harder for solar to be a buildout. Silver squeeze leaves solar panel makers feeling the heat. Solar is for power. We need power. Go listen to this podcast. Rick Rule went through and he talked about the fact that oil it's time for oil and gas stocks um which we're seeing. But I think the rationale was we're in the parts of a boom now of of exactly what we said. So again just highlighting this is before the close on Friday. This is actually through Thursday. These numbers have come down. But the main point is again you are getting massive moves in materials and energy for investors for mutual funds for everyone who's looking at it. You have to be involved.
Chevron verse salesforce.com I've highlighted this trade since in this area in here we've seen the breakout. This is not updated through uh all of Friday. I will give you the monthly performance. If you were smart enough to put this trade on and follow my lead, you're up 45% this month. Uh I did have some people that thanked me at the event in Miami who had put this on by buying calls on Chevron and puts on Salesforce.com. Again, I've shown XLE over IGV. It doesn't really matter to me. And this is the chart. We're at the very beginning stages of this, guys. Um this is going to continue to go higher in my opinion. Software is in the early stages of a rerating. Power is in an early stage and I do think you're going to see energy prices move higher at a time when everyone is bearish on them.
SMH versus IGV. Again, this has been my favorite trade. Semis, I've now moved into energy as more as one that is less invested in. I'd rather be in the energy trade for this year uh than SMH. Although X XSD or any of the package things that I did which are more the analog names, I do think those names can double this year. But when you're dealing with Nvidia and Broadcom in particular, I think those have already had a good run as has Intel. I think you're still going to have rises in this because we don't have enough chips. Uh but again, I think you look to energy at this point.
OpenAI on Friday, fourth quarter IPO plan to race to beat anthropic to the market. And I've said this before. I think Open AI is just a cancer right now for uh any of the hyperscalers. They are forcing so many other issues, doing deals. Everyone's trying to front run each other. They're doing deals with any place where scarcity is going to kick in and I think that ends up to a race to the bottom. I think it hurts in terms of the cloud ability because of the data center side. The models are moving extremely fast regardless because of the efficiency side. But I think open AAI, I think XAI, I think Enthropic, all of these fourth quarter or all of these IPOs that are coming to the market along with SpaceX, you're talking about trillions of dollars for growth companies out there or the growth bucket, you're going to be saturated with deals. And I think OpenAI is just going to continue to hurt things. And I want to remind people back in June of 2007, Blackstone, heavily into credit and heavily into the real estate market, basically came to the market just before the great financial crisis. This tends to happen over time in terms of IPOs or deals coming out around the time of peak. I don't think this is a peak in the market. But I do think for growth, I do think for anything related to AI and software and code, I'd be very very wary that OpenAI, that XAI, that anthropic that all of these deals coming out have an eerie similar feeling to what happened when Blackstone went in. Especially when you combine it with the fact that they got the curse of being this at the end of last year on December 29th. So, I'm going to stick with my side that you want to be long commodities, you want to be long industrials, you want to be long this stuff.
Um, I just want to highlight this came out this week. I saw this in um in X and I just wanted to take you through basically taking these dots and kind of bringing it together and getting ideas. Again, I'll be doing these demos for people. Uh, but when you take and you see something like that and you put it into chatbt or Gemini and you ask to explain it and what it means and you look for ideas and it shows you high bandwidth memory, Seridus, Pam, optical. You get these stories and you start realizing, okay, we've got memory pressure. How how how big is the scarcity issue? One major manufacturer saying all of its nan flash production for 2026 is already sold out. How the AI buildout is pushing up electronics prices. This will be a story as we go. Samsung raises NAM prices by 100%. Supply can't keep up with demand. And again, I remind you, nobody wanted to be long memory in the summer of last year. Now, Elon Musk is saying memory the memory needs on the earnings call. Frame memory as a long-term key bottleneck for Tesla's AI ambitions and said Tesla may need to build its own large semiconductor fab that includes advanced memory. If you're not going to trust me, at least trust Elon. Um, he said when he looks three to four years out, the main limiting factor in Tesla's growth is chip production. Do you really want to belong software when everyone is talking about the fact that we don't have enough chips? That AI demand is insatiable. Jensen Yu Wong is talking about $85 trillion of a buildout. And to have that buildout work, it's all going to be in AI factories and on the edge, which means we need as much chips as we can. This story is not over yet. Memories had a big run. I'm sure best case scenario over the next year. Uh sorry, two years. Best case scenario, I can't imagine Micron more than doubling. I can imagine battery names more than doubling. I can imagine many of the smaller semi-names going up, but we've taken these things up to big levels. But until we start seeing something where we catch up on the earnings front, you're going to keep getting the movements that you got. So SKH Highix reported 66% year-over-year increase and 137% increase in operating profit. HBM revenue more than doubled year-on-year. Um, we're still in the early stages, believe it or not, of memory in terms of the story. Um, SanDisk didn't close up as much as it was here pre-market on Friday, but I I think it's just more the earnings per share beat by almost 100%. Uh, on this the guidance 13 verse 421. When in history have you seen those types of numbers?
So, I took that chart, I said, I want to expand uh past that. What are the other verticals that will benefit from this chart? I put it into nano banana and this is what you get. Advanced compute, power infrastructure, metals and minerals to be able to build this which is what is happening. We actually need those things. You'll come back in three years and you'll be there. ASML, I've talked about this one. Uh again, it's been a good time to be long these names.
Apple sellers surge on 16% on staggering iPhone demand. I mentioned how much better the iPhone is. I am grateful for having got this when I did because the cost of everything is about to go higher because of memory. Significant increase in memory prices make smartphones more expensive. If you haven't purchased your high-end computer, this Mac I bought in the last two months, the phone I bought in the last two months, go get them before the prices go up significantly because they're going to go up significantly. Get ready. Computers in 2027 will be triple the price they are now. As Clawbot gets more popular, tokens get more expensive, and open source models become more powerful, there will be an obscene consumer rush to buy high hardware. I won't read you all of it, but let's just say you want to be long the things associated with it.
This week's video for the week is Deis Sabas and Dario Modi. This was actually last week, but I didn't see it till this week. I thought it was worthwhile to show this week because they got into a lot of different topics, but also these are the two nicest people in the AI world. These are the ones that I think are the most honest. They're the ones that will tell you the negatives along with the positives. Uh, but this interview, they went back and they talked about a lot of different things that are important. Um, Habas remains cautious on, let's say, the creativity for science side, uh, which is his definition of AGI. Uh, so he's still talking you know five years for true ASI or where you're going to actually have science breakthroughs meaning more than five years while Dario Modi is a little bit more. They both talked about jobs and they talked about the fact that there's going to be a medium-term issue. Uh, it just is. And I think their main point was governments are unprepared. You're going to start to see this. It's not just governments, organizations are unprepared. Uh, I'll talk about that more as we kind of move forward. Demos on the AI shift 10 times bigger and faster than the industrial revolution. I mean he's talking about massive GDP expansion on this.
Uh, in a world where AI moves exponentially, what happens to the value of long-duration assets? I wanted to bring this up because I I just can't get around the same way I talked about tenure rates and the Fed thinking about things like today. If you're involved in long duration assets, the amount of assumptions you're taking without the liquidity associated with it, I don't see how they have any value. Personally, you can't predict six months out. That's how fast things are moving. I think everyone in the market needs to adjust to time. We've seen things with memory. We've seen things with silver. We've seen things with gold. I think long-duration assets, I really don't know how you can think more than three years out on anything. So, I think these things are going to remain an issue. Uh, I think the money is going to look for liquid things. I think the volumes on the liquidity side are going to be there because I think people still have to manage money. I only bring that up because I see higher volatility uh, in terms of the markets and you're going to have to get comfortable because the things to invest in now are about scarcity. They can run up dramatically. They can fall back 50% in a short amount of time as we saw with silver and gold. You're going to see this over and over again. You're not going to be able to be involved in these on any kind of a basis and I don't think you're going to have time to get in. You're going to have to be buying on days if you're not in when things are crazy. You're going to have to be getting out during the par parabolic side, but you run the risk of these things never coming back to you. I know multiple people in Micron Sandisk that now are on board, but they can't buy them up here.
The arrival of AGI, just to show how close it is, Google DeepMind announced that Shane Le is the chief AGI scientist, the co-founder of DeepMine. Humanity needs to wake up. Dario Modi put out a new warning in an AI constitution. Uh, it's worth going through and it's just highlighting the risks that are coming. And this gets back to Demisab said the same thing. Sam Alman also said the same thing which I'll read in a second. Governments are not prepared. But this goes further because I have to answer constantly quantum risk for Bitcoin. And I sit there and say, "Are you kidding me? With everything going on, you're worried about quantum risk?" And yet still, intelligent people keep coming my way. Hey people, I want you to read this and just realize we are at the level now where AI agent swarms are going to be a story. Bitcoin is far far far more prepared for agent AI agent swarms than JP Morgan and Goldman Sachs and any of the banks you want. We saw a run on a bank recently with SF SVB. What would happen if this happened with multiple agent swarms or the money was taken out and I'm sure it would end up in Bitcoin um at some point over the course of the next year. The more I listen to this, the more that they are screaming, we've already seen the danger that's happening. When these guys say we are going to reach the cyber security high level on our preparedness framework soon for for open AI, we're getting there. It is very important the world adopts these tools quickly to make software more secure. There will be many very capable models in the world soon. This is starting to get out of control. These guys have to release this. They're spending the money. They're going to release things before the security under the other side is ready. So, the system is going to be ahead of it. I would just be very wary and thinking about the fact that this quantum risk for Bitcoin, which is multiple years down the line. In fact, timelines also remain highly contested with projections ranging from a few years to several decades. They're going to have preparedness because they're going to watch what happens with agent swarms on these old archaic fiat systems. Mark my words, there will be an event with agent swarms that will happen in the banks. That will be something that goes on whether it's the stock exchange, all of these things. We are getting to the point where billions of AI agents will be able to target things and the defense is just not there. AI token consumption increased exponentially last year due to reasoning models. Now it's going to increase exponentially again with agentic workloads. The agentic world is about to explode guys.
Here's more of the agentic world. The future of personal AI assistance. So this is all Claude Claudebot which has gained most of the stories. That was an Apple Mac story place. Uh the most important video you'll watch. Claudebot has taken X by storm and for good reason. It's the greatest application of AI ever. Every week there's a new thing by Claude guys. Every single week Gavin Baker put this out just to show that the productivity boom is here already and it's going to explode as AI agents come in. Revenue per employee up 75% for the top decile of AI software companies in 2025. Remember this is with software going down probably doesn't slow down in 2026 given the December revolution in AI coding agents. Prism accelerating science writing and collaboration with AI. This is just speeding up the process of the medical side allowing scientists to go on just continues to make it easier and easier for everyone to make breakthroughs. And here's one of them again David Sinclair. Uh I follow him there as part of my HRV substack. Uh I do a lot of things from his book FDA greenlights life biosens human clinical trial on a near total reset. A near total reset in longevity. First of its kind freightonly driverless truck network hits commercial scale. This was on Wednesday. Get ready to see trucks driving down the road with no people in them at some point. Next six months are going to be really weird. I follow AI adoption pretty closely and I've never seen such a yawning inside outside gap. People in San Francisco are putting multi- aent claude swarms in charge of their lives consulting chat bots before every decision wireheading. If you read through the rest of it, this is all and this is Kevin Ruse who I believe is a New York Times technology writer. He's saying at the same time you're finding people that don't use it. I completely agree as I do this for a living and I talk to people about it. Bill Gurley, the number one way to protect your career from AI is to be the most aggressive user of AI in your field. I'll say it again and again on here. Uh mainly because it's resonating. Uh I will be my I did my first video for the webinar series. Um we will have the paywall going up in the next two weeks. They're just going through all the bugs at this point. I know that I say that every week. It is coming, guys. I know you're waiting. I know you've been patient. Your kids have to be ready for this. They have to be ready. They're the ones that have to be AI native. They have no choice. They're not being taught it in the school before they get there. They have to be using it all week long. And I'm going to show you. I thought the first video went well. Uh this is kind of a summary on what it is. Repetition builds comfort. Comfort builds fluency. Fluency turns AI from a tool into a partner. AI is not an answerbot. Its real value comes from exploration. If you guys have gotten to like the way that I think about markets, the way that I think about going from an idea to something, that all has been exacerbated by AI. I always had that. I've been a curious person. I collect dots, as I call them, as I go along. For those of you who listen to my podcast, Green Marbles, I collect them all the time. I had one uh moment of integration that happened where all of a sudden the systems thinking side of my brain popped out and answered a question for me. I'll get to that at the end. Human creativity versus AI optimization. The only edge we have as people is right now on the context side and finding the ideas and being able to filter. Our creativity is what allows us with the ability of having a polymath with us find things. That is the game plan for everyone.
And here's an example of it. There was a deal this week. Meta and Corning. I've recommended Corning before. a $6 billion multi-year deal between Meta and Corning. Optical fiber is the emerging physical bottleneck. So remember, memory is a bottleneck. I've talked about Corning. I've talked about it and referenced it. So it's up a good amount since then. We're not even in the big phase of Corning. This is before the glass buildout. This is for the need before the needs of the autos, the needs of the phones, the needs of the computers, which is coming. They're talking about a shortage in optical fiber. Why the scaling east west traffic that goes back to the thing I showed you earlier with the Steve Jobs side in it. So let's go back to my how do you take something like that that happens and immediately go hey there's a news article give me and I run my skill on this and then I go in and do my deep research. So I did that. I ran this while I was on a plane flying from Miami to LA. It runs this whole thing. It ends up giving me a fivepage thing. Viser labs the fiber ingredient it goes through everything in there creates all the details it gives me a fivepage thing with a bottom line this this deal is less about Corning specific revenue uplift and more about institutional validation the optical bottleneck thesis the constraint migration from GPU power optical is now being priced into hyperscaler procurement behavior this all gets into data movement data traffic optical is a better way to go through it so I take all of that stuff it goes through my investment process and what do come out with a list of about 15 to 20 names in this framework that I've shown over and over again. So for any of you who want it, the optical fiber bottleneck, there's a bunch of names in here that will benefit all with the same thing. They've got a technical score from Johnny Ro. They've got a commentary score in terms of are they already seeing the optical fiber side? Is it already showing up and are is it already progressing over the last three earnings reports? And again, are revisions heading higher in a strong way? Are they going? All of that's going here is clawed.
So, I basically took I don't know two minutes. I put the ad in. I launched it and then I went in here and I asked it to do something on Microsoft for me. So, can you go through the recent Microsoft earnings report and put together a model on how their financial model has changed due to rising RPOS? If data centers are bottlenecked and they keep spending at current rate, when will this become an issue? So, it goes through, finds all the estimates, puts this in based on everything it gets from both the earnings commentary, and then it comes through and it says this. Now, only thing I did was this. That's all I did. I hit it. It spent about 3 to five minutes going through. It gave me a Excel file with all of this stuff in it with numbers that I can go check with the street. I can do whatever I want. But if you wanted to ask a question, have it modeled out, and then go bring it back and look at your own analysts and have them go through it. It's saying if things don't change and we go at this run rate of RPOS and this capex, and that's the thing I want. How do you get this number to go faster if the RPOS are going and the reality is you want to see what's going to happen? So, I did that. You can do it on your own. HRV, thanks to everyone who's been going through it. I made the best new Substack list number five uh on the HRV thing. Uh I I've really enjoyed talking back and forth with people who have got it.
All right, Bitcoin still asleep. Doesn't want to move given what went on this week. It was actually a pretty quiet week. Um given how much silver and gold were down, didn't follow silver and gold on the way up. Kind of kind of went through its little gyrations. The chart is still horrible. Uh until we get a change in it, it is in the list of hey, we need this thing to go for the short term. So, from a trading perspective, it's very hard to buy something like this other than stick your toes in and not and stop yourself out. It has not acted well at all. I wrote this paper, the Substack, uh I highly recommend everyone read it. Um it goes for the silver side, it goes for the micron side, it goes for everything. It was clear that there was parabolic envy. This is all at the event I was at. I just want to remind people silver didn't move for 14 years and then when it finally did, it went parabolic. Micron didn't move for a long time. It went parabolic. Corning didn't move for a long time, 15 years, and then it went parabolic. I'm just telling you these, this is the world we're in. When things turn, they're going to go quickly. The sausage squeeze of how many names on the software side are not going to participate. I do not believe that the Mag Seven can get you the alpha that is necessary. I think there's a lot of headwinds for them. Part of them is the RPO, part of them is the IPO that are coming. Part of them is just the amount of debt these guys are are now taking. I want to be long energy. I want to be long materials. But when you go through things, I still believe Bitcoin will be part of this equation once we get through it.
One more thing uh to finish up. Uh I have never mentioned NFTs. I have never brought it in. So when I mentioned a moment of integration, I do want to highlight that between conversations I've had with very respected people in the NFT side, but also something Demis has said last week on AI purpose. I finally have a place to where I understand where NFTs will be an important thing. This is not a digital art thing. This is not a people thing. This is not a cyberpunk thing. This is not Pudgy Penguins. None of the things that you guys probably remember from 2122. But I will say as part of the utility function for what is happening in crypto, stable coins, real world asset tokenization along with NFTs is a big deal. I think you should read this report. I had a fun time writing it. I had a fun time coordinating with some very very smart people in the space. But a lot of these issues have come up and I look forward to spending more time talking about in the future. That's it for this week. I look forward to being back and doing it from Brooklyn next week. Thanks, guys.