nick retweeted
Booming economy! The hottest economy we’ve ever had! The likes no one’s ever seen before! Thank you for your attention to this matter. Where’s the 18 trillion promised by the middle east for data centers 😂all a big hoax. @edzitron @DowdEdward fraud corrupt, USA
nick retweeted
The Bank for International Settlements has something to say about this arrangement:
They call it endogenous demand.
“When a chip maker or cloud provider finances a model developer or data-center operator that then buys its products, the supplier’s revenue growth reflects its own capital deployment as much as (or more than) independent customer demand. This obscures how much of the “boom” is organic versus self-reinforcing.” - My paraphrasing part of their recent bulletin on circular AI financing
nick retweeted
The "unlimited AI demand" story just hit a wall.
Corporate token spending growth collapsed from 42% in July to 0.2% in September, per Ramp data. Meanwhile, return on invested capital at the five biggest hyperscalers fell from 38% to 20% as capex outruns earnings. The infinite-demand thesis needs infinite returns. The returns are going the other way.
nick retweeted
Everyone should see this. Everything trump does in his administration is beginning to make a lot more sense...
nick retweeted
Not the kind of headline in the WSJ that AI datacenter builders want to see when they're spending trillions of dollars: "AI’s Transformational Value Remains Elusive for Most Companies"
Just "Thirteen percent of CIOs report that their organizations realized significant or transformational value from AI, according to a Gartner survey of 2,002 CIOs and technology executives released this week at Gartner IT Symposium"
And CIOs (Chief Information Officers) are the ones most likely to claim they're seeing the benefits. CFO opinions would likely be even lower.
wsj.com/cio-journal/ais-tran…
nick retweeted
Shhhh @Ross__Hendricks , you might upset the bulls!
You want to know why $NVDA trades at a decade-low forward PE multiple?
Well consider the scene: one of your largest customers is taking delivery of $3B of your product every month and can't even plug it in. As a result, it went from one of the world's largest cash cows to cash flow negative
Now play that same scene out across all of your major customers
With that in mind, can you possibly envision a scenario where $NVDA's future order book baked into sell side financial models might need to get adjusted downward?
Maybe the stock ain't as cheap as it looks at the "forward PE" charts, and maybe that's the message the market is trying to convey. Just maybe.
nick retweeted
An inconvenient truth.
The "unlimited AI demand" story just hit a wall.
Corporate token spending growth collapsed from 42% in July to 0.2% in September, per Ramp data. Meanwhile, return on invested capital at the five biggest hyperscalers fell from 38% to 20% as capex outruns earnings. The infinite-demand thesis needs infinite returns. The returns are going the other way.
nick retweeted
Energy makes up 3.5% of the S&P 500, yet it's about to pay out 20% of all the cash the index returns to shareholders. And the crowd still won't touch it.
My friend Robert Mullin of Marathon Resource Advisors has been all over this for years, and he walked me through where he's finding the best opportunities right now:
- Why the back end of the oil curve just started moving, and what it says about inventories heading into peak demand season
- The oil service giant hiding a real AI business that could be worth more than the whole company
- Why the AI capex boom looks like a dead ringer for the shale boom
- The Persian Gulf shortage that could hit the food chain within 3 to 6 months
- Where he's buying producers at 2 times cash flow with 10% dividends
I'm long Robert Mullin and short Scam Altman.
Very timely, watch it here:
youtu.be/rgKtKXpCnzI
nick retweeted
The era of easy money is over, and the market made that very clear today.
Our long/short spread widened to 67.4% today, with our longs up 25.9% on average and our shorts down 41.6%.
We made money on both sides of the book, which is exactly what a hedge fund is supposed to do.
But the people chasing momentum and narratives are having a very different day.
When the tide of easy liquidity goes out, the momentum and narrative bros find out what they really own, and anyone who's been doing the work on valuation and fundamentals finds this market pretty easy to read.
We doubled down on a lot of our shorts last week, and CoreWeave alone is down almost 25% since we added to it on October 8.
If you only started investing after the financial crisis, all you've ever known is more liquidity, and that game is OVER. I'm not calling a crash, because we're long and short, but the downside from here looks much bigger than the upside, and I have far more conviction in my shorts than my longs.
If you want 60 more ideas for what comes next, our technicians conference runs October 27 and 28, with 20 of the best chartists on the street bringing 3 ideas each. Tickets are $99 until midnight tonight, and then the price goes to $199:
noble-capevents.com
BRACE FOR IMPACT
nick retweeted
ROSS NAILS IT AGAIN.
He is a voice of sanity in a sea
of narrative chasing financial illiteracy.
The AI trade is FINITO.
GAME OVER.
AI is the biggest misallocation of capital in history.
The coming bust will be epic.
@Ross__Hendricks is a must follow if you care about fundamentals and your capital.
nick retweeted
HSBC looking for CoreWeave to be crushed.
2028-2030 EPS estimates "50%-70%" below consensus:
nick retweeted
The most corrupt president in U.S. history is pretending to root out fraud. Every day he Jedi Mind Fucks his MAGA base.
BREAKING: Trump has revealed his new anti-fraud program set up to reward people who expose fraud with a 1% commission on the money uncovered. "If you turn somebody in and you, let's say report and you find $1 billion, we are giving a commission to that person of 1%."
nick retweeted
🚨HOLY. Business Insider obtained internal Amazon emails projecting $5 BILLION in Nvidia GB300 racks deliveries in August, then roughly $3 BILLION EVERY MONTH.
Some AWS data centers have room for the racks but NOT enough power to turn them on. Equipment is being staged in warehouses, while Amazon takes ownership earlier, tying up cash before deployment.
At an internal September staff meeting, AWS CFO John Felton joked to infrastructure chief Prasad Kalyanaraman: "You've taken us free cash flow negative as a company, so congratulations."
AWS's infrastructure chief expects Amazon's free cash flow to remain negative for 'the next couple of years or so.'
nick retweeted
US to begin the largest wage and asset seizure in history after the midterm elections; seizures will target 10 million students in student loan default. $COF $BAC $WFC $JPM
The banking and housing system are about to implode.
forbes.com/sites/adamminsky/…
