원문 보기
well holy smokes everyone this is a game Cher in terms of what we just saw on micron's artificial intelligence revenue and what it means for GDP as well as what we just heard from China but let's start right at the top also small note I'm at an event so I'm only going to be able to go live for the market open live stream for a few minutes today so we can hit the Q2 GDP data which is old news anyway the unemployment claims and some of the other stuff will cover that but right now I I want to talk to you these Micron earnings that are sending the market to new highs it's crazy they're actually pretty good I'm going to give them this this is pretty good there is a warning in them we're going to talk about that and then China let's hit it so first uh something to know about ight now is estimated to make up in 2024 somewhere around a $100 billion in United States GDP that's not going to be Global that's just US GDP throw that into about a $24 trillion economy and your contribution from artificial intelligence into GDP is about 4% which is actually pretty good because it could be the difference between being positive or negative of course right now the Atlanta fed thinks that our GDP is sitting at 2.9% which is actually also really good uh you know we've had a Jerome Powell who's told us oh you know we should be growing at a below Trend growth and quite frankly we're growing above Trend right now maybe maybe we're just above Trend by uh 04 because of artificial intelligence either way GDP looks good so far uh and artificial intelligence spending is definitely contributing now if we were to only hang our hat on GDP and or on artificial intelligence and everything else was flat well we would only have a GDP of about 4% again artificial intelligence only making up about 133% of our GDP most of our GDP is really made up by you the consumer so that's this is an important cont contributor nonetheless especially when micron pulls off what they just did now something to know about Micron that's really interesting before I tell you what they just pulled off which you maybe have already heard about a little bit but something to know is this is a cyclical company which means you go through really rapid boom and bus Cycles just to let you know how extreme those boom and bus Cycles can be this same quarter that we just reported last year Micron lost $1.4 billion because the memory Market went to trash there gross margin was - 10.8% which means they were selling their chips for less than they were worth mostly memory chips uh and now in part thanks to their artificial intelligence ships doing well for now of course until competition picks up which there's a warning coming up in just a moment and there's some this is from them not from me uh right now their margins are really excellent because quite frankly on their high bandwidth memory products for AI server and data centers it they they're sold out for 2024 and 2025 which when I first read that I'm like oh they're sold out for 2 years but then I'm like H this year is already almost over so they're sold out for about 15 months which is good they've already got that pricing set for that doesn't mean orders can't cancel but it's certainly a good sign uh and their gross margin this year is 35.3% on this quarter which is up from last quarter by like almost 9 percentage points really actually really good so this quarter is a smokey hot quarter uh really great quarter and so the question is will that last is this a good time to invest in Micron so one thing I looked at is uh I looked at uh their guidance for the next quarter they beat on EPS guidance by 14% they beat on Revenue guidance by 5% uh in this quarter they beat margin by 5% so they are beating expectations doing very very well here if I read out some sections of their earnings call they say from a demand perspective they expect that server demand will continue they expect AI servers to continue to be strong this year and next year and they don't see any change in that they think the AI momentum continues and they're hoping to get some modest growth in general purpose servers that's where you definitely have a lag PCS smartphones servers kind of the consumer side little on the soft side but those AI servers definitely cranking in terms of demand definitely strength and data center is driving upside to what we had communicated prior on our prior guidance we continue to see really strong demand from our data centers the data demand is coming from both cloud and Enterprise AI servers as well as well of course to some extent traditional server origin that's because that creates a certain base of their revenues the traditional servers but most of that extra demand that's making the difference here is they said it cloud and Enterprise so remember Google Microsoft Amazon meta these are the companies that are like we will buy AI sea chips and build out AI infrastructure at any cost because we will not be left behind even if we lose money for a while it's like what Mark Zuck said you know sucks like yeah yeah you know we're kind of known for doing unprofitable things for a while and eventually we're turn unprofitable Fair okay so what warning did they give well the first hint that they gave for a warning was uh actually in the face of of very good news which is we've seen very high demand for our product and we feel confident in our ability to ramp uh I mean all of that ramp we have for 2025 is really limited by Supply hm and then they start talking about competition so I always find this a very interesting one because when you start talking about oh we're Supply limited right now what you're really suggesting is hey we're in a place where we're uh able to pull these high margins because there is limited Supply which is fantastic don't get me wrong like milk the margins while you can it just does give a little bit of an awareness that where the company says look there's going to be a reason why we're not going to guide into 2026 here because you know prices could collapse as Supply ramps up and they are blowing money into capex in fact their free cash flow is only somewhere around $200 million uh I want to say that was for the year but let me double check that really quick because I have a cash flow statement right here sorry I'm at a I'm at a conference and uh that's why I'm not going to be able to be live at my normal time today and I snuck away into one of these little boardrooms over here just to make sure we can chat okay here we go expenditures for plant property and Equipment uh $8.3 billion blowing money into capex capital expenditure so they can continue to manufacture more uh and 8.5 in in in incoming cash flow uh so really very very little actual uh free cash flow which is not a surprise uh they they they are a manufacturer so this is uh they have their own Manu you know fabrication plants this is not like an Nvidia uh they actually uh conduct the R&D and they manufacture so this is not like a high margin Nvidia where you just send it all to tsmc and you take your 70% gross margins which is one of the reasons Nvidia is just such a sexy stock uh but uh that is for the year ended yeah so basically no free cash flow for the year ended now don't worry their balance sheet is acceptable they have enough uh cash and short terms to cover their short-term debt and then frankly they have enough receivables and inventories if they sell an inventory at full price to cover their long-term debt so their balance sheet is just fine obviously their margins are excellent this is a cyclical business and uh they think they are very well positioned from a competitive point of view however they do also make it clear they're asked hey so you feel pretty good for fiscal 2025 you just don't want to set the bar and be accountable to that bar but you feel pretty good is that a fair way of summarizing everything you've said asks an analyst the VP and CFO says we've given some positive indications for the year and we're Vigilant at all times about our cost structure about our cost performance and the discipline of our Capital spend and maintaining stable share and where we think we're doing a good job of executing well and managing the risks okay got it so what are those risks well overspending collapsing the prices uh in the chip market and then competition taking your margin away at the same time as you now have way too much excess Supply so it kind of makes sense why like let them bask in their Glory a little bit this is this is great news okay it's going to it's pumping the entire AI market and premarkets and and you would expect that dude it's like 4:00 a.m.
this is ridiculous I'm East Coast so but you know I came here from G uh but I'm just looking at my clock like oh my gosh I'm already in a suit oh no uh but anyway it's really good at the same time now you've got China they held a meeting with their pollet bu Bureau and they're talking about trying to fall stop the fall of home prices they're going to stop the over supply of new construction that's something you should really tell Austin and Texas as well like maybe if yall stopped building as much you wouldn't have as many issues but anyway uh and and they are potentially planning some uh local Municipal spending as well as consumer additional fiscal spending to to help the consumer of about $284 billion so it seems like on a daily basis here they kind of see the market pop up a little bit on these stimulus ideas and then they're like all right all right got it yeah the market wants stimulus let's give them more so it's good uh I mean it's it's a wonderful thing for for markets on this you've actually got oil I mean I don't think oil is moving on on China here it's probably more of a Saudi Arabia issue gold though going over 2700 bonds relatively stable and pre-market nasdaq's up 1 a 12% uh Dow in S&P also pretty positive I think the only thing that could really screw this up is in a couple hours we'll be getting unemployment claims data I that is such a lagging indicator I can't imagine that's bad we get Q2 GDP who gives a flying F about Q2 GDP third revision price index GDP whatever uh you will get durable good manufacturing uh reports and some other data I'll cover that when the time comes but in the direction of artificial intelligence if micron's any guide there there's no slowdown here uh maybe there's some cheap opportunities for you to take advantage of uh and keep in mind that this is uh AI can boom and you can still have a recession uh but it definitely helps like not having AI you'd still be a 2% GDP still be over 2% GDP so you haven't actually seen that translation to substantial weakness just yet of course you know as I've maintained for a while many of the leading indicators suggest we might be you know one large shock away from substantial layoffs and then your consumer gets crushed in the near recession but then again you know that could be true at any given point in time of course I I do think we're in a particular position now where some of the indicators of recession are more numerous than I have ever seen in my career uh which makes me a little bit more dare I say nervous and watchful but consider it you know it's not just the S rule it's not just the 10 to inversion which usually when we get to 50 to 90 basis points that's when the recession starts okay we're at like 20 basis points inverted right now but it's also uh the peaking of of government payrolls uh uh following the peaking in privates the delinquencies in Consumer loans credit card loans the decline uh uh in the personal savings rate it's not good now under 3% which is terrible at the same time as incomes are only Rising somewhere around 1% not good architectural buildings down Isa manufactur ing down ISM Services above 50 but very very low relative to normal boom times construction spending month over month down pricing power at companies outside of AI substantially down uh you look at um uh I went away construction job openings rapidly falling temp hiring longest stretch of negative readings Drome Powell's warning we seek no further cooling yet they still only went down 50 basis points I think they got a like surprise cut down 200 to honestly that would make me very very bullish because then they might actually avoid a recession beige book 9 out of 12 districts uh flatter declining the Challenger report showing the slowest hiring since August of 2009 the number of unemployed for 27 and uh weeks or more never increasing consistently absent a recession it is the restaurant performance index sitting under 98 which only occurs in a recession so I mean I hate to say it but when you put that list together it just doesn't sound that sexy anymore but hey in the short term the Euphoria can march on which is fantastic I mean good go make money uh you know take profits as you feel comfortable or don't and uh I love you all thank you so much if you want personalized Financial advice uh something catered to you for how to build wealth in real estate stocks or otherwise make sure to sign up at stock hack.com we're booking up our calendly you're welcome to join in there you can get a free intro call uh and then of course uh if you're interested you could also directly sign up and get yourself on the calendar so we can start are working for you check it out at stock.com we'll see you in the next one folks thank you so much goodbye and good luck
댓글 0