Transcription
Fang stocks are roaring back from the lows that they made just more recently. How much further do these stocks have to go? We'll look at that technically here in a moment. Tim Cook is being called out by Donald Trump for not making the iPhones here in America. How feasible is that, and what does it mean for Apple? Nvidia CEO Jensen Wong is making the tour of the Middle East along with the president and bringing big dollars back to the semiconductor industry. Is the AI trade back, and how much further does it have to go? Also, both of my sons made a purchase of one of these Fang stocks. I'll tell you which one it is. Could be signaling a top, at least in the shorter term.
What is going on, investors? Hopefully, guys are doing well out there. Let's kick things off like we always do with Meta Platforms. Start the week at $623, up 2.6%; finished the week closer to $640. Now, the company delayed their AI model. They're calling it internally, or maybe even externally, the "Behemoth." So, this is a large language model that was originally designed to be released in April. Then, it got delayed until maybe June, and now we're looking potentially into the fall. My research indicates that we are—do we are seeing—a little bit of a flattening in terms of AI capabilities until you get Blackwell and those systems up to speed. That is likely not going to happen until the fall and certainly into 2026. What this will likely do is extend out the capex spend that the company's going to have to spend into 2026 and beyond. We'll talk about that more when we get to the Nvidia segment with the semiconductors and certainly with the Middle East on board, probably bringing on a lot of capacity, at least in the short to kind of intermediate term. But for Meta, this means not a whole lot, as their core business still relies a lot on advertising, and these models largely get released into the open-source environment. So, still a question mark for Meta, how they're going to monetize this. But the fact that they're having trouble fine-tuning this model and probably releasing one out into the marketplace that gets attention and that actually does something that the models don't currently do themselves, probably something the company will have to continue to funnel money into compute power in order to do.
Now moving on to Apple. Start of the week at $207; got called out by name by the president in the Middle East, but shares resilient, up 2%; finished the week close to $211 per share. This is as earlier in the week. It's—it's so much stuff is happening in a week; you almost forget that it was actually at the beginning of the week. I believe over the weekend the United States and China agreed to some tariff reductions. Instead of those absolutely enormous 115%, 145% tariffs, they've been reduced to 30% in some cases, down to 10%. That's obviously still very much elevated over the tariffs that were previously in place, but moving backwards is certainly better than moving forward, and we'll see how Apple responds to this going forward in terms of pricing, certainly with the new iPhones coming out in several months. President Trump specifically called out Tim Cook by name, who was notably absent among many other executives that were by the side of the president during his Middle East tour. Tim Cook was not there, probably for one specific reason, but we don't need to get on it on today's show. But he says he has a little problem with Tim Cook and that he needs him to stop moving his iPhone manufacturing to India. A lot of people are chuckling at the fact that the president makes this statement. We can put that aside, with all due respect to the president. Apple has to plan for the upcoming iPhone release, and there's no way they're not going to do that anywhere but India and China. As you start to look into next year's—next year's iPhone release—another year and a half away, it's potentially possible they could assemble parts of it here in the United States. One aspect that Apple has already done is they're making the computer chips here in Arizona, here in the United States. So, the key component actually of those phones actually being made here in the United States. Now, down the road, could Apple bring manufacturing here? Absolutely. Probably not with human beings putting these together, but there's obviously ways they can do this from an automation standpoint with robotics. Apple would have to invest heavily, would have to get some partners with that. Maybe one of their partners from overseas could build facilities out here in the United States. It's certainly possible. Is it plausible? Is it something that is going to happen? Probably not. But in the meantime, Apple will keep investing inside of India, including Foxconn getting approval to build a fab for some of the semiconductor equipment that goes into the iPhones, as Apple likes to consolidate a lot of the components around a region and then obviously assemble those phones and then ship them here to the United States or around the world. It appears that the company is moving very quickly on this, and as a shareholder of Apple, you definitely want them to do that. Now, the company is still way behind as it relates to AI, but they are potentially going to use that in the upcoming model to improve the iPhone battery life. Obviously, improvements in chip technology will do that as well. There are rumors that the company might be releasing an iPhone 17 Air—put that in air quotes—a thinner version of the iPhone, probably slimmer down from a capability perspective as well, but potentially a lighter weight, thinner, maybe even a cheaper model with decent enough battery life is potentially possible to make its debut in September.
Now, Fortnite, the video game that essentially set off the battle with the App Store that Apple appears to be losing, has been blocked by all iOS devices. I don't know why Apple decided to take such a combative stance against Epic Games and this video game. They could have carved out a deal with this company four or five years ago, and they could have been done in the back room on the side, and nobody would have known about it; or they could have cut similar deals with other video game makers out there as well, the large ones. Instead, they decided to go toe-to-toe. Epic Games, by all accounts, appears to be winning, at least in the court of law, but Apple still has some jurisdiction over its own app store, and they continue to fight it out.
Moving on to Amazon; start the week at $206. This one didn't really rally back, but roughly flat; finished the week at $205. This is obviously as Amazon has a lot of goods that are coming in and being imported from the great country of China, and reduced tariffs in that region and certainly further reductions here will help out Amazon. There's still that diminutive tariff—say that a few times fast on a Friday—but you got a 120% tariff with a minimum flat fee of $100. This is on any goods coming into the United States under $800. Previously, the tariff was zero, and then it went to 120. Now it's back down to, we'll say, 54%. So, still a lot of negotiation here to go. I think this is leading to some of the upside in the market that these tariffs are still in place. The market knows this; I don't know if it's fully being digested into the stock, but what the belief is on Wall Street is there's even further progress to go here, and both countries have it in their best interest to make that progress. And at least over the last week, we haven't actually seen any form of either country wanting to take a step back or ratchet things up. As long as that continues, we'll talk about this. Technically, there's more upside left for a lot of these stocks. Now, FedEx is getting in on Amazon again, as there's some delivery gaps left by Amazon's own fulfillment centers, but also UPS and FedEx coming in there fulfilling that—probably good for Amazon that they need more capacity there. Now, AWS signed a deal; they—they didn't skip out like Tim Cook. They said, "We don't care; we're going to the Middle East, and we are signing a $5 billion deal." There were multiple deals signed by a number of different companies, not just the Fang stocks, but a lot of them going over to the Middle East, where there's obviously a lot of wealth, a lot of money, a lot of centralized wealth inside of governments and princes and those types of things, and they're looking like they're willing to spend it. Now, the company is cutting some jobs though in the devices and services segment, including the self-driving cars and other high-growth areas, including the Alexa voice assistant. But this seems to be a small number of jobs, not a sign of the business unit struggling.
Moving on to Netflix; start of the week at $1,114. We're near a 52-week high. You will see this one. Technically, it's in an area where I would take profits. It's probably in an area where I certainly wouldn't buy Netflix, but my two boys, when I asked them yesterday, I said, "Hey, you got a couple hundred dollars in your—is there a stock that you want to buy?" And for the very first time, they both said Netflix—that they would like to buy Netflix stock. So, my son's buying Netflix at a 52-week high, at the top of a technical range. But considering their hold horizon is probably 20 years, they'll probably end up doing well. Netflix finished the week at $1,200. Its monthly active users for its ad-supported business, my son said, topped 94 million. That was up 135% year-over-year. He's saying, "Hey, Dad, it only costs $7.99, and they're feeding you ads. It's a double dip, as you like to say." And I tell you what, a lot of people want to sit through ads. I don't know how you do it. Props if you do it here on the channel. Equity Empire subscribers, you get the videos commercial-free.
Moving on to Nvidia. Start the week at $121; we are up 11% on Nvidia to finish the week at $135. If you bought the dip in Nvidia, my god, you're feeling good, because year to date, you are now flat, and you're moving into earnings—just about a week and a half away from earnings on Nvidia. I wonder how those will go. My guess is it's going to be all about talking up the back half of the year, as I've looked at a lot of semiconductor companies. The Q3 and the Q4 look absolutely glorious. That is because data coming out of Taiwan is showing that they have put the pedal to the metal, and they are finally ramping up production here—cell phones, other things taking a back seat in Taiwan, and they are in on HPC, which is high-performance computing, and that is showing significant improvements. This is also what I'm seeing is that you will have a Q3 and a Q4. It's not going to be unlimited, but it's going to be at a high—high volume, and those revenues are going to likely surprise Wall Street to the upside. But in a lot of ways, that is what's being priced into Nvidia stock at the moment, because if you do 30 minutes of internet research, you probably find out the same stuff I do. Jensen Wong went to the Middle East, and he was cutting deals like the president. He signed an AI deal with Humane, which is an AI firm out of Saudi Arabia. He also went to the United Arab Emirates—great country there—and they're going to buy over a million—a million chips. So, we are talking about multi—multibillion dollar deals. The thing about the Middle East is they're great at building stuff, and they also have—I don't want to say unlimited power, but you know, they have access to power and less bureaucracy in terms of building power plants and those types of things than we do here in the United States. And so you're going to get a massive ramp-up here. A lot of United States companies will have access to this, or this will be an extension of some of the data centers that you actually have here in America. And so this is exciting from a software perspective, because this capacity was going to come online either way, whether it's here in America or Europe or wherever it happened to be. This likely accelerates it actually, and because of the Middle East's ability to scale things up very quickly. I mean, one trip around Dubai, and you could see how quickly they can—you know—turn a desert into—you know—a beautiful place. So, they're going to be able to scale up these data centers. They're going to have American partners, American chips, American companies in there, and I think it's going to be a great partnership. Here's a sign that—you know—you—you're going to watch the news, and you're going to be like, "Huh, you know, the—I—I was watching something on CNBC, and it was like three commentators just laughing about the president saying, 'Hey, Apple's going to build phones here in America,' or that—that's what the president was trying to insinuate." And certainly this year, next year, likely not going to happen. But what was proven under the Biden administration—because I remember the same criticisms happened under President Biden's chip acts. He was saying, "Hey, we're going to build chips here in America." And there was a lot of skepticism around there. They're like, "No, nobody's going to build chips here in America." Well, look at Taiwan Semi. They've scaled up manufacturing here in the United States. In fact, I believe within a year or two, all of the high-performance chips that America needs will be made here in America, which is about 30% of the volume. And so, it is something that scales up. Go back to the pandemic as well. There were people saying we need years and years and years to develop a vaccine. Now, I understand it's a controversial topic. Some people think it's a vaccine; some people think it's not. But the bottom line is multiple companies came to market with something relatively quickly. If these companies put their minds to something, if Apple wants to make phones here in the United States and still sell them for $1,000, I promise you they can do that. If Nvidia wants to make chips here in the United States, I promise you they can do it. It's not decades away; it's not 5 years away. In fact, US plans for servers will be ready by 2026. That is less than 12 months away.
Moving on to Google; started the week at $157, blasted higher, up nearly 5.5%, finished the week at $166. The CEO of YouTube is saying they've got rising viewership and monetization on those short-form videos. They also bagged the rights to stream an NFL game on Friday. Believe this was during week one of the NFL. So, the NFL continues to like expand to different days, streaming platforms. It's frustrating for fans that don't have YouTube or don't have Netflix or Prime Video or whatever. It's great if you're like me and probably like a lot of you out there; you've got access to all these services, and now you get to watch these games how you want them, where you used to have to sit on your couch. Now, Nitsa is flagging some Waymo software glitches that were linked to some minor collisions. This is going to happen in the scale-up of robo taxis or cyber cabs or autonomous vehicles, whatever you want to call them. Waymo, Tesla, whoever gets into this market will have some growing pains here. But in general—in general—you are going to have some software glitches; you're going to have some accidents; there's going to be some silly stuff that happens. Unfortunately, there'll probably be some tragic stuff that happens, but in terms of humans, it's probably a heck of a lot better.
Moving on to Microsoft; start of the week at $442. My graph just froze. And we finished the week up, I guess, about 2.6% on Microsoft; finished the week at, we'll call it, $454 on this one. Now, Microsoft and OpenAI are potentially revising the terms of their partnership, which sees Microsoft having exclusive access or first right of refusal to a lot of OpenAI's large language models. There's also a revenue-share agreement where I believe Microsoft pulls in about 30% of Microsoft's—or excuse me, OpenAI's—revenue. OpenAI wants to reduce that to, I believe, around 10%. Still give Microsoft full access to its models. But it appears that both of these companies are trying to separate just a little bit. I think it is mutual. I think both companies realize that separately they can maybe thrive even better than they do as a combined entity to a certain degree. Now, the company is planning to reduce its workforce by 3%. Amy Hood, the CFO at Microsoft, is relentless at cost-cutting. She's one of the best CFOs, but my research is also pointing to her being very conservatively outlaying capital for this company. And so, some people believe that that potentially will put Microsoft where it used to be, in a pole position in terms of investment. It could put them in second or third place, as Google and Amazon don't have as aggressive CFOs cutting back on spending or making sure the projects are just perfect. She's more meticulous on those types of things, and these other companies that are more aggressive and don't necessarily need profits to show up in the shorter term could capture some of the business that Microsoft could have captured if they were a little bit more aggressive.
Now, OpenAI is launching a preview of a software engineering AI agent. I would assume most of you watching are not software engineers; you're not coders. But what you have to understand is this is the first problem a lot of these AI applications are going to solve. I understand that AI applications—there are flaws, and they've certainly gotten good at a lot of things, and they've gotten a lot better at things over the past two years. This will probably be the first thing that it solves 100%, to where you almost eliminate the need for humans, and then once it does that, code is going to be written and revised and constantly approved—approved—on time and time again. So, what that is going to do is actually accelerate the need for more AI compute, because you're going to have more computer code written, and that computer code is going to get better and better, and there's going to be better and better software applications that will be written, and they'll be written faster. And so, this will be a self-fulfilling prophecy of AI, and it's something that a lot of people that don't study computer science or have never coded don't really appreciate, but that is what's coming very, very quickly.
Moving on to Tesla. Speaking of quickly—not the cars themselves moving fast—shares of Tesla also moving fast. Start of the week at $315 and blasted up 11% to $350. Just a couple of weeks ago, I posted a very bullish earnings video about Tesla here where they had terrible quarterly earnings, but I said this stock is going to rally to new highs very, very soon. And boy, 90% of the comments were negative. And I'm sitting over here sitting on some cash while the rest of you are sitting on some ass. Tesla joining the trillion-dollar club. This is as the company is wildly overvalued, and their cars continue to see demand issues. But again, you've got to be able to analyze these stocks more than one way. If you're one-dimensional in the way you analyze stocks, you're not going to be a great investor; in fact, you will be replaced by AI. I can have an AI tell me that, compared to every car company out there, Tesla is overvalued, but it doesn't mean that the shares are going to go down. Robo-taxi plans under scrutiny. This dates back to a 2024 incident among full self-driving Tesla; will have a lot of starts and stops as it relates to this. We'll see if they'll be able to power through this as they resume Chinese parts coming to the United States as the pause of those tariffs. You also have the humanoid robot war starting to tick up. You'll probably have an event with Tesla later this year that'll really kick this off from an investment standpoint. There are a lot of quote "rivals," but there's nobody actually dominating this. Tesla showed off a video earlier this week where you had incredible movement shown by the Optimus. Now, this is obviously—you know—a computer program, series of dance moves, but if you compare the movement—and this is not CGI; this is an actual robot doing this—if you compare the movements of this robot compared to what it was doing prior just a year ago or even six to eight months ago, this is a massive improvement. And now they need to combine the movements with the computer vision with the AI. And again, if you do 30 minutes of research, an hour of research, that is what's coming, and it's coming very, very, very quickly. Now, doesn't mean that humanoid robots are going to be a big product for this company, but investors that can connect the dots and see a little further than just where their toes point can show you that this is a—you know—this is a trillion-dollar product if the company can pull it off. Now, obviously, that's a big if, but if Tesla pulls this off, this on its own supports a trillion-dollar valuation. I know there's a fair amount of you watching this that don't understand this or don't see this, but if you did an IQ test, my guess is it wouldn't come out very great for you. Now, a well-known Chipotle and McDonald's veteran joins the board of Tesla. What I thought was interesting about this is he actually has a son-in-law that works for Tesla and is a salaried employee making $124,000. So, he has some inside information as it relates to that.
Moving over to the technical segment of the show, we'll kick it off with the S&P 500, making a beautiful series of higher highs, higher lows. Came down here and retested the bottom of the channel, and we bounced up here, and we are making our way back through the middle of the channel, likely retesting all-time highs on the S&P 500. I think it begs the question, how much higher do you have to go? Not a lot; you've only got four or five percent more higher to go on the—That was not even proper grammar—but we've got more higher prices coming for the S&P 500—potentially another four or five percent. If you want to lighten up, if you want to sell, if this worried you or think we're going to retest the lows here in the markets, which is potentially possible, it would just be a resumption of the trend, honestly, if we do that. These are the areas where, if you want to, you can certainly take profits.
Moving on to Meta, doing the exact same thing as the S&P 500. Meta's got another about 17% to go to make a new high—probably going to shrink that down to about 15%. So, you could go another 15% up to the 760s for Meta. Again, if these trends stay intact, and they've been intact for multiple years, there's no reason to believe that they won't stay intact until the bend at the end, and we're not seeing that at the current time. Apple's got a long way to go; got another 25% to go till it gets to the top. Obviously, they're playing with a little bit more baggage than some of these companies, with its app store under pressure; also, the Google trial essentially relating to that as it relates to the default search engines on Safari. You've got domestic phone providers in China catching up from just a sales perspective, and then obviously the president moving manufacturing out of China, the tariffs, all that type of stuff, still weighing on Apple shares, but if some of that gets cleared up, you've got another 25% upside to go on that one. Amazon's in a slightly different area, just technically. There's a clear area of support here at 191. The all-time highs are back up here at about 240, 250. You've got another 17% to go with Amazon. Netflix is sitting up at the top of the range, and my boys were like, "I don't care; I'm gonna buy this one at the top of the range." What you're looking for with Netflix is a pullback—pullback south of 1,100, certainly back into the thousand range, should certainly be bought with Netflix. Nvidia—been saying for a couple of weeks now—think this is going to retest up here heading into earnings. We were just 12 days away from earnings. This one's got another 12 to 13% to go as it gets to earnings. Nvidia gets rejected here; absolutely should be bought. A break above the all-time highs could blast you into the 160s, 170s, 180s, and then a back test back to the 150s should absolutely get bought. Google is also having baggage over its stock very similar to Apple, although they don't battle with the tariffs as much. You've got another 20, 25% upside on this one until you confirm the next higher high. Talked about it for a few weeks now with Microsoft after reporting earnings, retesting these highs up here in the 460s. So, what you're looking for in this scenario with Microsoft is a break above the...
Highs. There's some momentum traders that play this breakout that you play the breakout. That's a trade perspective. If you want to go long Microsoft, you're waiting for the breakout and then the back test of the highs. You buy the back test.
The other buying opportunity is that you get rejected here. This is the most likely scenario. You get rejected at the 460 areas and then you come back down here to the 390 areas. Those areas should be bought.
Now Tesla's in a beautiful uptrend as well. This is kind of in the shorter term as shares have been trending higher really since 2324. We've bounced off these lows here at 20 or 222. That was a series of higher lows being confirmed. Tesla's got higher highs back up here in the $55 range. Believe it or not, that is another 40% 40% upside with Tesla. It sounds crazy. It sounds crazy, but just again understand that the beta or the move in the divergence of the move here with Tesla is wider than the rest of these stocks.
This is why some of you can't actually invest in Tesla. You can't invest, and I mean this with all due respect, this is a lot of you. You can't buy a stock at 350, a year later have it be at 108, and then a year and a half later it's back at 480. You can't stomach that. You buy it here and then you sell it down here. In fact, that's the majority of investors. They buy it when it's at the top and then when it tanks it, that's when they sell. A lot of people did this in April. They bought a lot of stocks at the highs and then it tanked in April and they sold. They panic sold. You got to train yourself to do the opposite.
And with Tesla, the opposite is a wide wide spread. Like I said, just to resume this trend. And even if this trend crapped out at a slightly lower high, that's still 30% upside on this one, this trend line's probably not drawn in super accurately. Yeah, I think you've got 43, literally 43% upside in Tesla before you might have a pullback in this one. Again, that's just based on technicals. You guys reminding me about fundamentals. Just understand there's a fundamental aspect to the show, there's a technical aspect, and we just covered it.
Folks, that was the Fang Sack Recap Show for Friday, May 16th. Hopefully guys have a great day, great weekend. Be safe out there. Thank you everybody that has signed up over at Equity Empire. I don't even need to promote it on these videos. There's so many of you. We actually might need to slow down the number of subscribers as we're trying to provide as much value for everybody that has got in. And we really, really appreciate it. We'll see you guys again. Certainly on that side over on the weekend, I've got so much content that I've got to put over there. Lacking on the free content side, but that's the way it is going forward. Thanks for tuning in. Good luck with your investments.