Transcription
First of all, um, thanks to everyone who came out to, uh, Robin Hood and, uh, and the Pomp event. It was great meeting all you guys and, uh, I'm glad you're doing so well trading, building a life for yourself, of enthusiasm. Uh, let's keep it going and try to give you some, uh, some views on the week, but also uh, a lot of stuff on Oracle.
Uh, I do think this was the week, the the end, the official end of the tariff fears. I think now that we've gotten through the inflation data, we've got Atlanta Fed GDP now up at 3%. I I think uh I think for the rest of the year, people are just going to have to focus on the fact that the Fed is cutting rates into a situation where manufacturing and the buildout for AI is going higher. And you can have all your views on what you think should happen. You can throw all these magical fake words out like stagflation and uh AI bubbles and whatever else you want to throw out there. You can just keep throwing it out. Uh the job is to make money. The job is not to be right on what you think should happen. Uh particularly when we've been at this now for the better part of six years of people fighting it. So a lot to go through. Let's just go through.
S&P up one and a half% for the week. Russell up for the sixth week in a row and again this is the 14th of the last 18th uh weeks that it's been higher. The major news of the week was Oracle uh up close to 40% in one day. Finished the week up 25 a.5% just below a trillion dollars. I'll go through a lot more details on Oracle as it was the most important story. uh tenure rates uh came down intraweek they they got below 4% for a little bit finished up uh around 406 uh this chart was floating around I mean people just don't stop uh but since it's out there you know the bond market is saying there's a recession apparently and the stock market's ignoring it uh if that were the case then VA wouldn't be going lower so Bonvall basically making close to three-year lows and credit spreads are at all-time tights. So, the bond market is just catching up to the reality of the equity market and the reality of the Fed cutting rates. But more importantly, for everyone who has tried to short bonds and think and and has thought that that has been the best trade, I think just this says it all right here. I mean, you can go back uh over a year. uh this uh it's what is it 17 months 18 months uh you've had four months where rates went higher for a month. So if you've been trying to play for the bond market to collapse and for rates to move higher since May of last year uh it's just a it's just not the trade. Uh bonds to me are uninvestable. Uh but I also think you don't want to sit there and try to play them as the big play when the administration wants rates lower. Uh we did get 30-year fixed rate mortgages got down to the lowest level uh since uh early 23 and they are now 150 basis points off of the peak in 23. And again, this is ahead of Besson and Trump saying they're going to declare a national emergency on housing. I will continue to say you want to be focused on the housing market uh from a long side because the administration has followed through on everything they've said this year. And that's why I'm going to use the old Rounders line. If you can't spot the sucker in the first hour, half hour, that means you're the sucker. And I think that's what has been the story since the tariffs were announced and how many people had talked about recession, stagflation, the deepseek moment, AI buildout's not going to happen. This has been a year of institutional um smart people uh thinking and looking at charts and believing that everything bad was going to happen when the reality is and I'll keep saying it over and over again. If you just spend your time on artificial intelligence and you go through the numbers and you realize how important this is, the impact that it will have on labor, the impact that it will have on profit margins, people have screwed up because profit margins have held up incredibly well despite the tariffs. At the same time that the labor market is weakening, part of that is related to AI. Uh, everyone's still focused on academic stuff that just doesn't matter. And this is one of them.
The inflation data came out this week. Uh, CPI came out at point4 382. You can see all the component pieces in here. Uh, you can also see, you know, we've had weaker than expected ones. The reason the market responded is because that's all you got. We waited for all this on the tariffs and all we got this year is something you can't even tell what's gone on. So, this is uh year-over-year core inflation. That's the red line now at 3.1%. Still, and then the white line here is the uh fivemonth moving average of the threemonth core sticky Atlanta Fed inflation. I've had this chart and used it for a long time. So, yeah, I guess you could say, look, we're we're trending higher, but the reality is whether we're at four or two is completely irrelevant for what stocks are doing because companies are making money. I listened to a bunch of podcasts again this week. Uh, and it's funny, everyone who says stagflation says the bulls, the bulls. Why don't people just accept the fact they're talking about garbage? Stagflation is garbage in an AI world. It's garbage. I'll say it over and over again. If you're sitting there worried about stagflation, you're just going to lose money uh chasing things that don't exist. Uh 10ear rates are still way above headline inflation. So again, you go back over time and you see how far above we are here. You see that we just don't have many times in history except for severe drops in inflation where you've had rates this far above. So, I can make the argument still that we shouldn't be any higher than 4%. At a minimum, it has to be something where inflation expectations are moving higher. We had the job revisions. This was obviously known. So, this got the stagflation fears going. Uh, and of course every single newscast and all the media stagflation, stagflation again, completely madeup word doesn't mean anything when you're talking about it from the difference between the 1970s because basically people there's unemployment rate is sitting at incredibly low levels and corporate profit margins are at all-time highs. So, if you're going to pick a word and just pick out two pieces, this is the BS that goes with people who are just sitting there talking about stuff with absolutely no data to support it.
Here's what inflation did this week in terms of the swaps market. All of them came down. You got the 2-year, you got the 5year, you got the 10-year. So whatever people were hoping would show up in the data, this was definitely a period in terms of the swaps market from the market that they said, you know what, I guess the tariffs are not going to be as big of inflation deal as we thought. Here is what is happening if the small business inflation as the single most important problem continues to decline. So again, if you're going against stuff where the trend is getting better, uh it's not the story you should go on. And again, what happens to profit margins during stagflation? During stagflation, profit margins usually compress. Profit margins are rising. There's nothing going. We just had unbelievable um corporate earnings. And as I said, the forecast going forward is arguably the strongest in terms of the change in estimates for Q3 relative to the last I think I went through it last week, 5 years, 10 years, 20 years in terms of taking it higher at the end of Q2. Here's the profit margin chart on the red side. Again, if tariffs were having an impact, you should see this come down. You've seen profit margins come down as we go into recessions since there are no more recessions, what you're left with is a situation where people are just going to have to get used to this disconnect between the labor markets, which is a new thing. Um, here's one way to look at. So, I've shown this chart many times before. This is the conf conference market conference board employment trends work worsening, but employment is not. And again, you're in a different world. So no matter how you go through it, there is a job situation where people are clearly worried about what's going to happen with uh AI in their jobs. There's anxiety over jobs. Corporates are are big companies are not making it easy on people. Businesses are going through bankruptcies. These are all real. They're all things that happen. But that's not the economy. This is the problem of having a K-shaped economy. But if you're only going to focus on the bottom side of the K-shape, then you're fighting against what Donald Trump and the administration is trying to do. Whether or not successful, you got to at least wait for the data to go. But the problem is the bearish sentiment still remains. So when you have a stock market sitting near all-time highs, you have credit spreads at all-time tights, you have the unemployment rate not budging higher, you have inflation in a normal range, and yet you still have sentiment in terms of investors. I mean, look at this. It's come all the way back down to almost where it was when we came out of Liberation Day. And this is not just one sentiment gauge. I want to highlight this. So Helen Mistler puts out this sentiment poll each week. I don't really care about the fact that two weeks in a row it was negative. What I care about is we have this rapid rise in a bull market. Look how many weeks are negative versus how many are positive. I already showed you how many weeks have been positive on the Russell and yet it's the complete opposite for sentiment during bull markets. This is normal. This is normal. So you end up as you're going higher every week as they expect it to go higher. The sentiment is horrific for institutions right now. There is absolutely no doubt that sentiment is much much worse than where it should be given everything that's happening. Uh I've highlighted the fact that this Goldman Sachs one has been my favorite. Now look where we were coming into the year. This is when the market went down. We are still sitting here. We've been here for almost the entire year. So, anyone who wants to argue about sentiment, just think about it. Stocks alltime high, home prices alltime high, blah blah blah blah blah, and the Fed's cutting rates, and yet somehow magically we have sentiment sitting at lows. If that's not academic BS, I don't know what it is. People sitting there believing this can't be real.
This is a podcast, the only real podcast I'm going to recommend you listen to this week. I heard plenty more where the stagflation stuff was brought up and where they called out everyone like me who is mocking stagflation, but it has nothing to do with making money. If you listen to this podcast, I I don't know this person, Aan Menon. I've heard him now twice. It is, no offense to him. He's kind of boring, but the reason it's good is because boring is just factual. He does everything in data. He's very, very articulate about the things going on in the economy. I would go listen to it. Here are the highlights. US economy is in a business cycle expansion. Consumer spending is resilient. Business investment is modestly rising. And financial conditions aren't restrictive enough to derail growth. That's just logic. That's just the facts of what is happening. You can say stagflation. This doesn't mention stagflation. The center of this cycle is tech IP. So AI yes on AI capex. Go through it. 90% of personal consumption expenditures categories expanding. That is inconsistent with a consumer-led slowdown. These are the diffusion things that you have to pay attention to. The labor market looks weak for atypical reasons. Again, he's acknowledging all of the things that people are saying. Manufacturing is showing green shoots after a multi-year profit squeeze. I'll get more into this. This is something I've talked about. PMIs are going higher. I believe they're going to get close to 60 next year. And people are going to have to adjust all based on AI. Bonds are unattractive. See, he's bearish bonds. He believes labor is weak. Commodities turning constructive on industrial metals. Liquidity backdrop is benign. Bank reserves flat. So all the people that follow this liquidity stuff, I get asked about it all the time. Some guy Michael How telling you everything is going to be horrible. Blah blah blah. This just continues. Guys, focus on artificial intelligence. Another thing he posted an X go sign up for it. Orders are also rising strongly while inventory is generally low. Between the nominal sales orders, very early PMI indications, profit estimates and pro, it looks like very early manufacturing recovery. Again, he deals in factual stuff. Here are the datas that are supporting what he just talked about. And again, I want you to look at all of these things that are trending higher in terms of the manufacturing side. I've shown charts like this in terms of the capital goods orders, the IP diffusion side, the percentage of uh of companies that are now turning positive in terms of this from negative. We've been in a long-term bare market in IP and PMIs. That's the main story. We're coming out of something that's been going on. And acknowledging again the AI impact on employment. This is the information technology output for GDP and yet no labor increase. Again the tech side anything related to AI AI agents are coming the infrastructure side the inference side it all means that this is going to have pressure continuously on labor. There is no back test on this. There was no AI impact on labor 20 years ago. This is a completely new thing. So, it's garbage in, garbage out for all these data points and all these recession signals and all of these things that have gone on in the past. They don't matter. That's the reason why we've been able to have PMIs at such a low level. All during chat GPT, all of the PMIs below 50 occurred during Chat GPT. Profits went higher and now we're starting to see the buildout.
So, we get this deal early in the week. Microsoft signed 17.4 billion AI deal with Nebus to grow its AI cloud business more aggressively. So that started the week and then we got this. Everyone who's a macro person who has not gone through the numbers on Oracle, I'm going to put them into context. The orders that they received are up 359% from last year, but from the prior quarter, $317 billion. We've signed significant cloud contracts with a who's who of AI, including OpenAI, XAI, Meta, Nvidia, AMD, and many others. RPO RPO, so orders will likely grow to exceed half a trillion dollars. They're already 400 something, so it's not that big of a deal. Much of the revenue is already booked in our 455 billion RPO number, and we're off to a fantastic start this year. Again, these numbers are insane. You've got Larry Ellison's quotes here. Some of these I went through but the most important thing for moot a lot of people are looking for inferencing capacity. So again inferencing thinking AI agents the whole next stage what I've written about time and time again I wrote the inference moment back in uh April after we got all the earnings reports where everyone basically was saying we're now running out of inference capacity. So this is not a new story. This is something that you could have been invested in. You could have been involved in because this story has been growing. But because every time there's a little story about AI's not being adopted or some BS about there's nothing going on, people keep missing these just like the administration has been signaling what they're going to do. These comments are there. We're running out of inferencing capacity. I talked about VO3. I talked about all of these models. I talked about what it means for Tesla in terms of you turning video into decisionmaking. This is a neverending situation of inference that will continue to grow at a rapid pace. Listen to moonshots and you'll get the story. Training AI models is a gigantic multi- billion dollar market. That's what the first phase of GPT was. So this is the first phase, the training models. It's hard to conceive of a technology market as large as that one, but if you look close, you can find one that's even larger. It's the market for inferencing. We need the power for this. This is what I'm going to continue to emphasize. He he mentions that he's now dealing not with the the CTOs or some person in the back office putting in an order. He's dealing with the CEOs, the heads of government, the heads of state. Everyone wants it. I think demand is going to be insatiable. It's the speed of acceptance. Everything is moving rapidly here. So, as an example of, you know, something I I wrote about for 22V, but also it was my stock pick for the year purely based on inference. Again, what does this mean for Micron Technology? High band high bandwidth uh demand. Here's what the stock did. So, it's up close to 100% this year now after this week. This is a big company. These are the types of things that are happening in the alpha being created. If you're focusing on 10ear rates going up to 4 and a.5 instead of 425, it's a waste of time. If you're not allowed to trade equities, then go spend time now on the power trade because that's the next phase of this. Or go spend time on countries that are going to supply the commodities that are necessary for the build out of this. The next time someone fades AI strength, just send them this. Oracle's 317 billion order increase from Q4 to Q1 represents approximately 81% of the entire US economy's quarterly nominal GDP. Like I just don't know what to say if you're sitting there fading the size of AI and that this is a bubble. These are orders. He said the revenue has been booked. Uh, someone posted a post on this and basically said, "Unpack why Jord's AI aided assessment lends credibility to his work verse random opinions on X. He grounds claims in verifiable data." Thank you. Not me, not vibes. Unlike random takes that lack sources or calculations, think stagflation. These are facts. This is a number. This is what they reported in order. If all they talk about, which is what I heard on podcast, was CPI coming in at 0.02 higher than what was expected, but PCE, it's just blah blah blah. There's nothing valuable in that. Nothing. Zero. The Fed is letting inflation run at a higher rate. We have an administration that's going to replace the Fed chair with someone who wants to run it hot. Make money. Don't care about this stuff, but find the trades that are there. Eventually the charts will favor rates going higher maybe, but that is not the case. You've been stuck in a range for this entire time. So maybe if the PMIs do go to 60, maybe if oil goes up to 85, at that point we'll get CPI above four instead of 2.9% and at that point maybe it'll be a trade.
All right. So then I go through and say give me uh the power needs for these numbers. So this order I asked ChachiPT to do this. 273 billion of power. Oracle's future energy needs equal 90% of Japan's total consumption. 155% of Germany's electrol electric uh electricity system. 21% of total US electricity. Okay. I don't trust anything I get from AI because they have hallucinations. They do faulty stuff. So then I go into Gemini and check the work. Can you please do the same analysis of that order? Blah blah blah. It goes through. It comes up with an answer. And the only thing I care about is it is important to note that the result of this analysis is highly sensitive to the initial assumptions. A slightly higher electricity price or lower percentage of revenue would drastically change final number. However, even with the conservative assumptions, the scale of power needed for this level of AI infrastructure is staggering. That's the only thing you need to do. You invest in staggering. I want to be long staggering. I don't want to be long stuff that sits in a range for three years trying to play when it's going to break out. I wrote this paper on hybrid solutions. So here's my analysis that I did spending a lot of time from a top- down systems uh thinking perspective to go backwards and basically say how is this going to be dealt with since we don't have enough power. Nuclear can't solve it. Fusion can't solve it. Fision can't solve it. So how are we going to solve it? Everything comes up as hybrid solutions. Now, why AI is the new electricity across silos. The problem with this is to solve the power problem. This is not just go out and buy oil. This is not just go out and buy natural gas. For everyone who's sitting there saying, "Well, there obviously isn't any more power needs because oil is not going higher and natural gas is going higher." We don't even have the plants built yet. So, you don't need the commodities. If you're building a restaurant, you don't buy the food before the people come in into the restaurant. So this should be pretty much second nature to people on the way this works. The company should be seeing the orders come in and you should be able to make money on the core on on the companies. So I ran a report created on the AI data center investment thesis navigating the supply chain demand supply mismatch. So I did a 40page paper to go through all of the places of where we're going to need to do the hybrid solutions meaning everything that goes on. This includes the cloud infrastructure, the energy and grid infrastructure. And within these components are tons of stuff, transformers, switch gear, power distribution, everything that will be necessary that you should be seeing the demand show up for companies. Then I included the compute needs because that was just the power. So what's going to be needed on the compute? There's micron, not surprisingly. But as you go through this, you get all of these name, a bunch of these names. These are not all the names obviously but the reason this is important and for you guys to understand to map out the power and compute names into the level three gigs we're talking about a lot of industries we're talking about a lot of electrical component this involves caterpillar this involves um Cummings this invol in involves eventually packar this involves every single commodity company as you go through them eventually we're at the very early stages of this so these are all of the the places that show up in here it's not just like it is for a boom in oil where okay kerosene u uh diesel gasoline that's not the story here this is a much bigger thing in terms of all of the components so it spans these sectors these are all the sectors that are impacted so the problem is if you go to a technology person and say what are the power needs they got to go to the utility person or the energy person the reason I'm doing this is because this is a macro macro theme. AI is not a technology theme. It is a macro theme. The power needs are associated. You will make lots of money on these. But then this also as you go through it, there's commodities that are involved that are necessary for the buildout. Once it gets going, so it's massive. Copper is the new oil for the grid buildout. Everyone's heard this. There is no way to get enough electricity. So what I did again through 22V, I said, "All right, I know everyone's going to ask and look for companies. So give me a 100 public companies that are likely to benefit from this between 2025 and 2030 again while we're not going to have the nuclear buildup. So show me everything in the supply chain. I organized it where the bottlenecks and dollars are most likely to flow. And I want to make sure that the companies that you're showing me have already in their commentary showed me recent earnings and IR evidence that demand is already showing up. So I connect to earnings commentary through an API. I run all this. I create basically a program for it. I run it and it breaks it down and goes through all of these different components. Lists me the hundred names and then I give those to John Ro and John Ro goes through and attaches a scoring system next to all of them. So if you guys want to talk about this, call 22V. We can go through it. I highlighted one company here, Mastic. Okay? It's an engineering and construction company. Just as like a general sense as to what is there. I know we didn't use the word data center but the reality is the data center is driving so many pieces of our business right now. Expect data center driven to be a couple hundred million dollars. This was back in 24 alone. We've now accelerated. They just spoke at uh the Morgan Stanley conference. Data center build.AI. It impacts a lot of different things that we do. Not just from the pure construction of those facilities, but for the needs of power and interconductivity of communications that these facilities are going to require. It is a big driver across our end markets. You have to realize that this is a much bigger story than just hey Google blah blah blah. We're past that point. Those guys are spending the money. So here's a lower ranked one. I gave you a one that was a number four for John. Here's a number two. Antio Resources. Let's go look at theirs. Okay, natural gas demand. They're focusing on that. We're also going to have exposure to local demand from data center growth. This position for data center natural gas demand surge. So again, they're talking about what's going to happen in their power plants. The reason I wanted to bring these guys up, here's their chart, their stock chart. The white line here, this is them overlaid. The green one here is Chevron, which has been acting better. I've written about this. They have to benefit from this. and the XLE which is unchanged. You'll notice this time period here early 22. I wonder what that chart looks like that you guys will remember at some point during this thing. All the energy stocks are sitting there. Beautiful basing formation. Eventually those are going to get fours on John score if the power needs are what I think they're going to be and eventually we'll have energy join in. So what I want you to realize is these charts were very similar. So this is BW and BE Bloom Energy and Babcock and Willox. These charts were left for dead in in terms of uh I mean these stocks are were were left for dead. They've been declining all the way into the end of last year when they finally do get a bid. Here's Bloom Energy. I must have talked about this name with a bunch of people because it kept showing on my list of companies that were already having conversations and then all of a sudden a deal happens with guess who? Oracle. And the stock goes up to where it is now almost 70. When I was having these conversations, it was around 30. I think the initial ones were in the 20s. And again, this was just showing up on screens that I was doing similar to that. Now, Babcock and Willox actually came from one of you guys who just said, "Hey, I your story is resonating. I'm finding companies like this more and more. Here's a company that was trading at 50 cents back in in at the lows of Liberation Day. It is now up to $2.78. They primarily make boilers. Uh, so in Bloom Energy's case again the story Oracle Oracle is Bloom Energy's first direct hyperscaler client. They are looking at every energy company looking for solutions. Babcock and Wilcox surge in AI demand from power centers. This is where you need to look for things. This is where you need to go find things. Um Chris Wright spoke on the All-In podcast. You should listen to it. Um, I think there's even like an a good discussion in there as to why people should continue to focus on solar. That's my own thing. It's been thrown out. Um, batteries and solar and all the green stuff, the renewables because of the one big beautiful bill. People said, "Okay, I can't be involved in there." That's not the case. We need all power. And Chris Wright talks about the fact we need all power, but we need to focus on the proper allocation of resources to make sure that we're getting the power there. and there's no subsidies involved. So, it's just worth listening to to go through the thing and actually hear what's happening.
Now, I want to go back to what I said, which is remember the chart. So, this is a chart of the PMI, which is the the pinkish line here. Uh uh yeah, and then you've got the IP here. So, IP year-over-year is the white line, which is already up at the highest level since basically around here. The green line here is the six-month diffusion. So this is similar to what I showed from the Prometheus Ahan uh menon. You've already got this stuff going higher. This line here is really critical because this is basically when chat GPD started and when the PMIs went back under there. Oh, it's the exact same thing as when the energy stuff started to consolidate. So if PMIs go higher, I showed last week, every time PMIs have gone up to 60, at some point during that movement, you get oil prices that are up year-over-year 60%. I don't think oil prices are going to go up that high, but I do think there is a floor on oil as PMIs go higher and that eventually we will get the surprise of all energy prices including natural gas going higher next year as this build out and as the PMIs get rolling especially if housing's a part of it and everything is you will get a transition. it will be negative for the mag the mag 7 in terms of what I believe will be happening which is running it hot getting inflation higher eventually moving rates somewhat higher not as high and collapsing as people want but I do think the pressure is going to be there and I think the spending companies are going to have an issue now we are doing all of this with the PMIs about to move higher we are got three rate cuts in now for the next three months uh into the market so that's just a fact. That's what's going to go on. This is not a fact. This is just BS. How bad. This is an article meant to get you people to send it to me. This is an article meant to get people to click on it. This is an article meant to get people to click on it. How long are you going to fall for this crap? Um, I go back to this thing. Verifiable data unlike random takes that lack sources or calculations. That's what those are. Uh this is the reason why the uh cover on YouTube for my video is the tariff fears finally end. People throw in the white towel.
All right, so let's finish this up. Tesla again, not surprisingly, uh kind of fits the PMI model starting to go higher. Tesla had a huge week. Uh there was really no reason for it. I hear speculation that people think the vehicle sales are going to surprise on the upside. This is not a car company, guys. I don't give a whether they have uh car price or car sales going on or not. This is about robo taxis and energy. End of story. Mega Vegas was there. So, when I was in Vegas for Robin Hood at the same time, Tesla was having a mega Vegas to show their new Mega Bloks systems that can power 400,000 homes in under a month. This is a major major major part of Tesla's long-term plan is the battery storage. Tesla Mega Block is a gamecher. The stock is rising. Again, I spend time on this. There are no battery companies big enough to deal with the needs that we have for both the data centers, but also the roll out of the robo robo taxis and humanoids. We don't have enough batteries. So, over the next 5 years, do your work on what's necessary. Um, Tesla's Mega Block, the perfect solution for Oracle's 455 billion AI infrastructure boom, represents a 19.2 billion revenue opportunity from Oracle alone. And basically all I'm doing is going through what is necessary in terms of having batteries for these data centers and what Tesla can do because they can supply them. The two biggest battery places in the world are Chinese. Those are not going to be the ones doing our data center. So Tesla I believe is the largest in terms of making this these kind of blocks and the only provider with proven AI data center deployment. He used this in his Colossus. Everyone's going to go to Alon Musk to ask how to do it. And he's now got something to sell to them. So Alon Mus has already validated the Tesla approach at their Colossus Super Center in Memphis. I'm telling you, I am shocked at how many people just sit here and fade Tesla and really hate it. I cannot believe how many smart people do this on Wall Street. I had to do a minor debate with someone who I understand why he doesn't like it purely from a valuation basis which I get because it is like Bitcoin. It's all on the future. But the future is he paid 17 billion to buy Echoar. If you want to go hear Alon Mus speak, he spoke this week again on the All-In podcast. Go listen to it. See if you're biased. Check it at the door and just realize what he is building. The Echoar thing for Starlink is going to be competition for phones. Go listen to the satellite thing. Go think about what's happening on the battery side. Go through the robo taxi. All of those are accelerating. And I will say this to everyone who wants to listen on all forms. If you are underweight Tesla as a benchmark for next year that to me will be the biggest contributor to global returns from an alpha basis next year. That's what I believe is going to happen because I do believe the robo taxi stuff has made a level based on everything that is public knowledge that at some point next year people will start going through the numbers on optimists in the future and realizing what I said over the last three weeks. The vision bet that he has make if it pays off it will get people to focus more and more on the humanoid side now because of how big the opportunity is. So go watch that video I said from Adam Jonas and at least know the numbers. If you are benchmarked to something that has Tesla, which is everything, and if you're underweighted, which I'm sure no one was really underweight, the Mag 7 in general, that would be the one they'd be underweight. I'd be very, very wary. I think there's an opportunity for it to double or triple next year on the frontloading of the humanoids if he gets this right. If he doesn't get it right, I still think it's going to be the best performing NAG7 stock purely on the energy side and some of the expectations on the robo taxi side.
Google Cloud forecast 58 billion revenue boost by 2027. Again, 58 billion. That number only looks small now because of the $455 billion number I showed you from Oracle. These are massive numbers. Um, you can go uh to this site and go read the backlog and stuff and everything in there. Open eye says spending to rise to 115 billion through 20 may rise to 150 million about 80 billion more than previously expected. Again, I'm going to say this over and over. I do not believe these companies are going to spend money good. Meaning, I'm not sure that where the revenues are going to come in to completely justify the valuations of the companies. I just don't see it from my own work in it. I just don't know how they're going to translate this into big dollars. I do believe there's going to be a misallocation of resources. I do believe the spending will lead to stuff that three years from now, four years from now will be stuff that isn't used. There'll be new technologies. We won't need the buildouts of all of these energy plants because we'll make advancements. AI will deal with this, but not now. So, these companies, I do think their free cash flow yields are going to be an issue. But the one thing you can't say, capex, boom, bust, the spending is going to keep happening. Oracle just showed you that there's a back order. Gas turbines back order. Focus on the things where supply and demand are in a mismatch. The e the EIA increased uh electricity consumption this week.
China the best performing market. So I've highlighted China a bunch of times. I it's still amazing how many people fade this as well. And I understand it. People don't own Tesla. They don't own China. Some people own China that are trading the thing. But from an investor standpoint, people don't want to be long these things. China's the best performing market. This is the CQQ up 38% year-to date. Then you've got the MSCI China. We hear everyone talk all year long about Europe. I just want to highlight to all of those people about the American exceptionalism, all this blah blah blah. I see this stuff out there every day. Europe is unchanged since February 14th. Unchanged. The Euro stocks. So, for everyone who's been sitting there, I it's unchanged. You've got all these markets breaking out at this point. Uh, you've got new highs coming on everything and people are still focused on on places that just don't matter. Here's the chart on CQQ when we were on the Robin Hood event. John Ro was on stage with me as well as um Vinnie Daniels and uh we all agreed on this from three different perspectives. So I like it from the AI perspective in terms of competition and from what they're doing uh on terms of the hardware side. So everything being related to technology. John likes the chart because of his famous bases and it breaking out. And Vinnie liked it because of the valuation. So from a China perspective, it's still hated. You got a lot of positives going on. I think the Chinese market will continue to be a dominant force as we break out here.
Open AAI GPT5 Pro. I just want to emphasize this. I said this last week. This was put out um by Andre Carpathy. It's just it is an unbelievable thing to use this model. What you can do with it, what it does after 15, 20 minutes and comes back with software, whatever you want. It is an amazing thing. So for people that are fading GPT5 and I highlighted that the peak in a lot of these AI trades was on August 7, August 8th, which was a day after GPT5 when it got all panned by this. People are missing the boat on how much the advancements are. And I just thought this was good. I ran a case by GPT5 Pro is a doctor from our 89,000 strong physician Facebook group yesterday. You have to read the stories and just realize what's happening. It's solving problems and this is what's going you have 150 IQ friend now that you can have a conversation with whether you're a doctor or you're a hedge fund person or anyone in the markets and you can do work. That's what I used to do all of the reports that I did on this uh and as a systems thinking approach which I like to do which is start from a top down macro basis and then break it into each of the verticals. It is phenomenal at that. Uh just highlighting again they don't believe that the money supply matters. It's just like the pope not believing in Jesus. Um Trump is not going to stop with the PAL thing. Wants 50. Uh Besson brought this back to inequality. Again this is important. I think this fits in with the manufacturing side, with the housing side. They are focused on the rebalancing. It has not ended.
Finally, Bitcoin, we've been consolidating up here. Here's the monthly charts. I highlighted that we were down for a month. Uh, normally the next month is up. You're starting to get the signs. All of these charts are breaking out. Now, I'm not going to go through all of these. These are all a bunch of the ecosystem that says to me that we're starting to get the community in there ahead of the rate cuts. I would watch how these things trade in the weeks after the rate cuts. This stuff could get explosive. And here is the consolidation. Caleb put this out this week. I think looking at the total crypto market cap is important. We are still near the levels we were there. We've been consolidating in my opinion during tons of good news. We are unchanged. We are about to go lunar. So for everyone on the crypto side, this has been a long year of kind of consolidating. This is a bullish formation. Once we get above the tailwinds of all of the stable coin, the genius act, the network effects that are happening, circle IPO, getting everyone invested in it, but also for next year, if I am right about PMIs going higher, if I'm right about energy prices going higher, if I'm right about inflation staying in a sticky perspective, but also inching higher, possibly taking rates higher at the same time that the people that are spending the money are the MAG Seven, which are a massive part of global things, you need to find an innovation place that is moving higher. And I think the innovation place that is moving higher on the technology side which will become more and more inevitable people is crypto. So next year is the big year. The third wave uh of an Elliot wave move in my opinion. Uh it's going to be explosive. This was basically one wave up. I think we're now about to do the third wave up on this and this is after a long consolidation.
That's it for me this week guys. Uh again, thanks to everyone who watches. Hit subscribe. Uh it was great seeing all you guys at the events. Uh, and I look forward to seeing you guys more and