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스페이스X와 테슬라 합병 가능성이 논의되나 머스크의 지배력과 이해충돌 문제가 큼. 스페이스X는 AI 인프라 확대(목표 20GW, 2027 ARR 5000억~1조달러 목표)를 추진하나 자금 조달 부담이 큼. 스타링크 가입자는 예상치 하회, 우크라이나 스타실드 제한 논란 존재. 앤트로픽 S1 기준 상반기 매출 63억달러, 컴퓨팅 계약 대규모 의무 지출이 리스크로 지적됨. 켄 그리핀은 AI가 거품이라고 언급. 기술 ETF 자금 유입 둔화, 방어주로 이동 관찰. 메타 실적 발표 앞두고 기대치 및 옵션 변동성 확대 언급.
다듬은 글
Welcome to 8:30 , guys. A busy, very busy day. We are really angry. I am angry. You don't sound... You don't sound angry at all , buddy. I'm trying...I'm angry. This is my angry voice. I heard you were angry. Yes, it's not angry. About Superman. And now I'm angry. That's it. Put it on a Formula 1 track.
Then he will get angry. Let's start with my mind. There is much to discuss. Shares of companies operating in the third quarter are rising rapidly. We see many, many things happening with the company, from artificial intelligence to Starling and rocket launches. But first, I want to talk about what CEO Elon Musk broke when he was asked about it during a conversation about a potential collaboration with Tesla.
I was surprised that he actually went into detail about it and brought up some new information. Let's listen. This is exactly the kind of question where I feel like I'm tap dancing in a minefield . So both SpaceX and Tesla have created special committees to discuss this idea, um, at the request of shareholders, and, uh, now these special committees, uh, are made up of independent, uh, independent directors, and because I have a conflict of interest, I can't really participate in the discussions of the special committees.
I think some people believe that a SpaceX and Tesla merger is inevitable, and I think that would be an exaggeration. Uh, you know, do I think that would be a good idea? Yes. Uh, he thinks it would be a good idea, but ultimately, he says, shareholders will have to decide if it's a good idea. Of course, he is the major shareholder, so he has the most votes, but if he merges the shares, he will need 50% approval from 50% of all Tesla shares.
This will be a pretty big bar because an investor in Tesla will be concerned that Elon Musk controls not the majority of Tesla, but 80% of SpaceX. If SpaceX bought Tesla, merging these companies , would Elon Musk have virtually sole control and voting power over the combined company, which is now worth trillions of dollars, controlling a huge industrial base?
And even if, um, it wasn't, it wouldn't be, um, horizontally integrated, if you will. In other words, they are in different industries. Yes. Of course, there would likely be some regulatory scrutiny over such a deal, partly due to the size of the two companies, as they are huge. This would be the largest corporate merger in history.
They are also found in different industries. But if you think about what Musk's goal is likely to be, one thing is to work on superintelligence, to work on artificial intelligence, if you want to use his term, superintelligence with the president, to work on the goal of the cosmic, um, cosmic ideas that he has.
And these companies already have such a common supply chain. You want to integrate therapub and colossal processes, um, through both companies. So from that perspective it makes sense, but it will get a lot of attention from both Washington and shareholders. Well, you know, in terms of mechanics, it's also interesting because he talked about how these committees are independent, and they're not disinterested.
They talk about these things. Does this mean he won't vote his shares when it comes down to it? He said he said he wouldn't , wouldn't, would n't vote. I mean, he said he can't, he can't participate in...Yeah, obviously he wants to vote with his shares because that would just kill off any opposition to it.
But he still needs the consent of Tesla shareholders, and not only does he have... Yes. And this is the highest bar - these are Tesla shareholders. Right. But to your point of view, it was a bit strange after all the speculation and, you know, waiting for some news on this , that he actually talked about it .
Yes. Right. Right. And then, and then, essentially, not just brushed it off and said now is not the right time or place for something like that, but we are looking into it, because that is exactly what he did last quarter. Right. I was asked the same question. And he said, “Listen, I can’t talk about this right now .
"From a legal perspective, I'm uncomfortable discussing this." But then he kept saying things like, “We work together and do cool things. " There is cooperation." I think it was on the All-In podcast, where they were talking about how good it would be, how it works, how to collaborate all the time, etc., a kind of prediction that got everyone excited, right?
So they were talking about wanting to finish 2027 with twice the capacity they had previously planned, saying they would use new form factors to get to 20 gigawatts , gigawatts, watt gigawatts , that's the next milestone, right? power. Okay, compared to the lower limit of 10 gawatts. So that's a lot of electricity generation.
Let's say, "First, we're going to create a power generation facility so that we can meet any computing power needs that we need." But I think they only had about 3 gavats potentially by the end of 2026. Are you telling me that you are going to increase them to 10, and maybe even 20? I mean, we're talking about, I think, $500 to, like, a few billion dollars per gigawatt-hour, right?
If not much more, right? It's probably much more. And they said they spend a lot. They spent about $19.6 billion last quarter . They said they would double this amount in the fourth quarter alone. So, it's definitely worth it for them to spend on creating these capacities. I think it's between $50 and $100 per watt of computer.
It's a few billion dollars, hundreds of billions of dollars, for the amount of money they want, or for the many things they want to put on the Internet. They don't have that kind of money yet. We're going to have to see a lot of debt raising, equity raising , what Musk, Gwen Shotwell and their team are going to be building on and using to support this is how much AIS revenue has grown.
This is reportedly 7.6 billion , slightly less than 7.6 billion, an 830% increase over the same period last year. Yes. So, building a full-scale 1 gigawatt data center cost anywhere from $35 billion to $85 billion. So plus or minus 40-50 billion dollars per gigawatt. Right. But it also goes back to adding 10, that's $500 billion.
Add 10. And that goes back to some of SpaceX's revenue projections for the end of 2027, which I think many people are taking with a certain amount of skepticism. Musk comes out and says it's unrealistic. I think you'll find people who disagree, but it's unrealistic to expect SpaceX to emerge from 2027 with $ 500 billion to a trillion dollars in annual revenue.
Yes. Annual ARR. This is not $500 billion- trillion raised in 2027. This is what he says they will get out of the year with ARR. But it's still a huge leap compared to where they are now. This is 5 times more than they want to set a target for the end of 2026. When he said it during the conversation, he made this statement and said something like, " Guys, Gwyn, Brett," and they laughed nervously, and he kind of realized that he was kind of putting him on his spot.
It seemed like a very difficult goal. It was as if he almost knew we wouldn't make it, but we would try. Well, but to be fair, and this is what , um, analysts were saying this morning, the goals they've set for themselves so far, they've exceeded. This is true. This is true. And so I saw some analysts this morning saying, yeah, it's a crazy goal, but so far they're doing well.
I mean, Kadgun Marla from Evercore, who is in a bullish phase of the stock right now , he said that SpaceX still has a lot to prove. He talks , in particular, about the medium-term creation of computing systems, monetization and financing. Hmm, but that's partly because the stated goals just keep rising to ever more ambitious levels.
The other thing he points out, um, is that you know there are pricing concerns in the market right now , but he believes SpaceX has some pricing leverage to get to this point. Hmm, while everything was going well, one of the weak points that people seemed to be paying attention to was that the number of Starlink subscriptions was actually lower than expected, 13.6 million, compared to the 14.2 million that was expected.
That was the only thing I saw...I don't...I mean, I mean the numbers, I think it was 1.6 million ads... something like that. I do n't remember. I don't know what it was, but it was...I mean, I think it was...Yeah, it was... but people were like ...whatever it was ...That's right. That's right. Because the rest of the news was so good...
One thing, I admit, they talked a lot about selling the Starlink service directly. Right. They talked a lot about it. We are going to shut down the terrestrial network. We are going to do it. This will happen . Well, okay. And let's stop there for a second, because that's when they first started talking about the terrestrial network.
That was a question. How to do it? Right? If you're going to sell services, you need a way to deliver them to our phones. You can't stream all of this directly from satellite. So, like, are you buying this? Are you building this? What are you doing? And it seems like they're leaning towards construction, which is extremely expensive.
Like all these capital expenditures that they're talking about , in terms of plans that can't take that into account, right? Right. We just assume that this is all about artificial intelligence, and obviously rockets, right? And maybe some satellite launches, not necessarily buying a ground network, in addition to everything else you need.
They still need to buy a lot more bandwidth . They have certain, you know , ranges that they need to expand. So, yeah, there's a lot going on. They didn't talk about, I do n't remember, whether you would buy another operator, right? Um, so they're looking at how we're going to build it ourselves. That's what they said.
This somewhat overshadows perhaps the gaps in subscriber growth in Starlink, just a regular broadband service. Yes, these are interesting things. We'll see if that happens. Another thing I want to mention, regarding Starlink, is the news we got from the Wall Street Journal that Elon reported to The Journal, citing people in the White House, that it was Elon Musk who called Star Shield, the government Starlink service for the Ukrainian military.
Last week, reports emerged that the service had suddenly started to slow down for the Ukrainian front line. This is used for things like drones, where it seems like the service limits it so that if the drone exceeds a certain speed, it disconnects and loses access to Star Shield, which is problematic because these drones move slower .
They are easier targets for the Russian military. Communication for the front line is also being disconnected. Many of the truly problematic things that Ukrainian President Bodylinsky stated cost lives in this war. Right. This is not even reported. They say Ukraine claims that this actually happened, right?
Yes. No, it's... Well, the question is who made the decision. Right. And Reuters reports a slightly different story, saying that the idea originated in the White House and was sparked by a discussion in the White House. What seems to be a common thread in all the reports we've seen about what led to this decision is that there was a discussion between Elon Musk and people in the administration about the origin of the idea, which is a matter of dispute, but what they seem to agree on is that there was this dispute, but the magazine is very harshly critical of Musk on this , and also his concern about European business, you know, this is an act that is a business case if you do these things and upset other territories and regions, and they say, "We don't want to play the game with you." This is a real business issue.
This, this, this, this is a matter of income. If, if the EU tries to, you know, start creating a company or a conglomerate of companies that, as we've seen, they propose to displace this business, that's a big business opportunity for Musk. It's also worth noting that when the news about Ukraine first broke, Musk's public reaction was to say, " Look, Star Shield is not under our control.
It's a Department of Defense contract. If you want to ask questions about who's cutting off access, you go to the White House." But then he said that the "PNR" does not use our service for offensive purposes, right? He revealed himself a little to the White House or maybe even to himself. Well, then Secretary of State Marco Rubio said this morning that it's a private company, or not a private company, but a public company, but for the private sector.
SpaceX makes its own decisions. Any solution... Wow. It would come from SpaceX, not the White House. both Rubio and Hegst, the Secretary of Defense, both said we were not involved in this . And so you're stuck with this, he said, she said, um, this is a government contractor of extreme importance. You can't have an overriding importance that determines what kind of service it is.
Regarding Julie's point of view , what the magazine reports, what Reuters reports, seems to be that regardless of whose idea it was, who created it, who pushed the button, it was something in the dialogue. It's also worth noting that as we approach the midterm elections, Arizona Senator Ruben Jgo, let's say the 20th or 21st, came out last night and said, uh, on X to Elon Musk, you don't have to wait for a subpoena.
You can just come and talk to us, because if the Democrats take control of Congress, one or both houses, there will be a lot of investigative activity. And I would be almost shocked if I didn't see an investigation into this, into Musk and what happened, because the Democrats in both the Senate and the House are extremely behind Ukraine and some Republicans.
We've seen, uh, criticism from people like Tom Tillis, Mike Rogers, who's running for reelection in a very hot race. Uh, a few others. Yes. So it won't go away for Musk, right? I mean, I think if you put together all the headlines about Musk over the last week, it would paint a portrait of an extremely influential person.
Yes . It can be argued that this is the most influential person in history. Yes, you can say that. I think it's not difficult, especially if SpaceX and Tesla eventually merge. Especially if he continues with his plan to give a share of SpaceX to every child in America. I mean, and I think it's fair to ask the question.
Yes. And even Ian Fleming himself couldn't have come up with a guy like that. It's crazy, not insane, but it's just so powerful and connected to everything from politics to business to rockets to cars. I mean, it's just everywhere, right? That's right. This is AI. Yes. Good. Well , let's look at the other part of the AI story.
A little more information ahead of Anthropic's IPO. The Wall Street Journal, um, is getting a really big buzz. Uh, last night, uh, they say they saw a new version of the IPO prospects. Of course, we got the first round of this from Reuters a few weeks ago. Now the Journal says they've seen a new updated version.
I want to look at a few of these numbers, simply because, again, they continue to grow . In the first half of 2026, Anthropic's revenue reportedly amounted to $6.3 billion, compared to $1.1 billion in the first half of 2025. This is huge growth. Computing and infrastructure expenses totaled nearly $9 billion, up from $2.3 billion in the same period last year.
A net loss of $80.7 billion, although the bulk of it is related to some accounting for convertible shares and convertible bonds they issued. And then, perhaps the final figure from all of this, the company could be on track to spend $750 billion in the coming years to acquire the computing power they desperately need .
Yes. Can we break this down for a minute? Let's stop here for a minute. Good. So, the magazine went through this . 111 billion for Google. This is for a period of 7 to 10 years. $111 billion for Google. $110 billion for Amazon Web Services. $31 billion for Microsoft. Here is an asterisk with these three .
Regardless of actual use, these are non-cancellable contracts. They use these capacities. This is the story that stood out in this story. And that's not all. Oh, but wait, that's not all. $86 billion to lease Nvidia chips from NScale and Lambda . These contracts are valid until 2033 and 2034, respectively.
$160 billion for Google's chip lease in their deal with Broadcom. And then, you know, there are further negotiations for even greater cost increases. And that's how they get these 750 billion, 600 billion dollars that they are now actually obligated to allocate, and negotiations are underway for an additional 150 billion dollars.
Can you think of another company that has the kind of costs that I said are , maybe Open AI, maybe Open AI, right? We were talking about how I talked about how in the automotive world, building a plant costs $5 billion. This is a lot of money. This is the most terrible money in the world. Five billion is like...
five billion is like ... uh, is that our coffee bill? Our coffee, our trendy coffee beans, are worth five billion. That's good, right? You're no longer sniffing five billion. I need to calm down. This seems very angry. This is angry. Also on your thoughts on this $111 billion for Google, $110 for AWS, this S1 reportedly says that two customers, just two customers are about a fifth of half of the revenue.
Yes. If these customers, whoever they are, probably hyperscalers, two of the hyperscalers, stay strong, that's great. But if there is any fluctuation or reduction in capital expenditure, in computing expenditure on the part of any of the hyperscalers, you know what? You will suddenly have a huge loss of income, which will be a real problem.
And then, of course, there are all the risk factors that the magazine talks about. Again, this has been reported a lot, but they talk about, um, security issues. They're talking about, um, the data center opposition that we've seen. And by the way, on that front, um, the president made his own proposal this morning.
Yes. Or data center builders that they shouldn't just propose building schools or other neighborhoods. They should offer dividends. They should offer direct payments, which of course is Trump's own favorite, ahem, tactic of offering these kinds of payments. But they have this thing, you know, he well, this thing, you know, if the Republicans win the election, I'm going to give every American a $5,000 check, which will add something like $1.6 trillion to the budget.
Uh, just, you know, how much, how much, a few trillion, how much, you know, how much, a few trillion among friends, but it makes sense that he, you know, is proposing, who knows if anyone will take up his proposal, but you need to find ways to get support. Yes. That's right. So this speaks to the risk that this anthropologist is highlighting here in S1.
That's true. Also, some other interesting comments we got, I think it was yesterday, uh, speaking at the Bloomberg forum. Ken Griffin, who runs the hedge fund Citadel, one of the largest and most successful hedge funds in the world, has been, uh, probably most famously in the last few months, the man behind, or at least partly behind, the implosion of Situational Awareness, a hedge fund run by former open-source AI researcher Leopold Aschen Brenner.
Griffin stated that AI is almost certainly a bubble. This is a bubble. However, when you have this much technical progress, technological progress, excuse me, you get a bubble. And, as we keep saying on the show, there will be winners and there will be losers. But what usually comes out of these bubbles are transformative technologies that change the world.
And the companies that survive and come out on top end up achieving extraordinary success . Well, and he, as he says, wishes he had left his Amazon shares in that place at that moment. However, there are hundreds of companies that have either gone bankrupt or whose stocks still haven't recovered, you know, decades after the dot com crash.
So, no one is saying they are anthropic. Just remember the ones that succeeded, right? Hmm, one quick explanation he mentioned, he said he described the AI sell-off as investors doing their homework, right? Good. We heard that too. And he said that hedge fund deleveraging would be the 10th explanation he turned to for these bubble talks.
It's like: yes, you were pretty closely involved in this deleveraging with one of our dear friends, as you mentioned, but this is one of those Leopold nerds. Yes. This is one of the narratives we heard. It's not necessarily that there's going to be some kind of market crash, but there's almost certainly going to be a downgrade at some point, once things cool down and we get over this IPO hype and investors start saying, "Okay, how much are these companies really worth when we see the real numbers?" If you listen to the godfather of artificial intelligence, the demand is such that it doesn't mean everything will be fine.
I'm talking, of course, about Jensen Wong from Nvidia. Drabosa just spoke to him after his keynote at GTC in Berlin. By the way, do you know the name of the place where he performed? I like it. It was called "Temple Drom." " Temple Drom". I do n't know if I'm saying this correctly. In Berlin. Anyway, let's listen to what he said on demand.
The demand is simply incredible. Coreweave is about the same. Uh, NBS is the same, and the scale is the same. I think the challenge, of course, is that, um, this is what you're trying to achieve from the time the computers ship to the time they start to make money, um , it can take many months. And the amount of free funds, since we are talking about fair, quite significant, um, investments, the amount of free funds is quite large.
And so, uh, we need to help, we need to help these companies, uh, reduce that. And I think that this, the former shortening of the supply chain, which will make it easier for them to withstand these, computational, will be of great importance. And this is somewhat consistent with what we talked about yesterday with the Business Insider report on Amazon, that there's a certain disparity between when they get the chips and when they can deploy them in the data center and recognize that revenue.
But I think what he's really not paying attention to is the further issues that Gartner, um, I think Bain, others have pointed out. There is more than just a gap and inequality in the supply chain. There is also, even though you see that what you're saying is a big demand, there's a gap between the cost of all this and getting the revenue and end- market recognition, right?
And that speaks to some extent to part of it, but not to the other part. Is n't that right? Because you have to assume that if you're going to spend all that money, and let's say you're a person who buys $10 million worth of Nvidia chips, but it takes you six months to get them connected, you're assuming that in those six months, when that money is sitting on your balance sheet, you're going to recoup it in the future, that the revenues are going to come in.
And it goes back to the fact that it's not necessarily not going to happen, because it's entirely possible, but will it happen quickly enough? Will you get a return quickly? Well, and some of these reports say that the scale will never be that way, or it will never be that way, that something has to happen technologically, innovatively, to get there.
And then very quickly Nvidia talks about the company's IPO, right? How, supposedly, they are going to back them with a lot of money to get this IPO off the ground. Again, there is a discussion about circular finance, again , what chips the firm uses, for example, Nvidia chips, etc. And then I just saw, uh, an Australian data center management company called NextDC, uh, they're having trouble building in a community there because they just don't want it, and they're maybe considering filing a force majeure notice.
Oh, one more. Another one again in Australia, as Fermus is an Australian firm. One of the things that, uh, Nvidia announced today at this GTC is something called the DSX pod. Uh, it's basically a mini data center. So the purpose of this is to try to compress the setup time that Jensen was talking about, which is causing this unevenness.
This will likely be for smaller players, but it will allow for faster setup and deployment so there is n't such a gap between the chips being delivered and them being deployed in the data center. Uh, and this problem makes sense. Yes, that makes sense. And he told Dirry that the problem is that this gap has been going on for months now.
So, if you can cut it down to weeks or even a month, that would really move things forward. Larry Frink, the chairman of BlackRock, also spoke this morning or last night, I think, at the same Bloomberg event where we heard Griffin speak. And Finn makes this argument where he says if we can, if we can, if we can speed it up, if we can get rid of some of these delays that keep capacity constrained, then prices will come down.
We just need to unlock the ability to bring more computing resources to the market, and then we can see prices balance out and come down because there will be more supply. So his argument is: anyone who tries to delay this, anyone who tries to delay this, anyone who tries to challenge this in court, anyone who tries to, you know, for example, oppose data centers, any of that, to legislate this, you are the ones who are supporting high prices.
It is also raising a $30 billion data center fund. But yes, he does. But what is $30 billion a month? Nobody ever says. Nobody ever speaks their mind. Nobody speaks their mind. A quick note on the driving force we are seeing related to GTC. It's a company called Amcore Technology that works with Nvidia.
They will help reduce the amount of chip packaging. Um, and this, I think, will again help with the speed issue. So, Amcore Tech shares are up this morning. Yes, they are thanks to this partnership. Okay, let's take a break. Next, we'll talk more about other earnings, supermicros, prior data, Netflix, AT&T.
We'll be back soon. Heat. Heat. N. Heat. Heat. Heat. Heat. Down. Gay. Gay. Down. Down. Look. Heat. Heat. Welcome back by 8:30. Uh , let's get down to AI. This morning, the AI market got a little boost thanks to some really good preliminary numbers from Super Micro : their sales, gross margin, well above expectations, uh, and above the previous forecast.
Let 's take a brief look at some of these metrics for the first fiscal quarter of 2027. This is the quarter that ended on September 30th for them. They now expect preliminary revenue of $18.5-19.5 billion. This is against their previous forecast of $14.5-15 billion. Bloomberg, uh, consensus analysts estimated it at $15 billion.
This is a great overachiever for them. The forecasted gross margin is also now forecast at 12-12.5% versus the previous forecast of 10.4-10.8%. All of this is a really strong signal. They're talking about demand, as we heard Jensen Wong talking to Dirrah about demand, about the really good business they have in server supply, and that's enough to lift the whole AI infrastructure complex this morning.
Yes. And I was looking at the analysts' comments . Bloomberg Intelligence said the high demand for AI servers is not necessarily surprising, as there are record sales. This is true. But it could mean their total sales could exceed their target of 72 billion. Right. You know, my favorite part of this company is the name " Supermicro." So old school, isn't it ?
It's like the old days of technology. You're not some weirdo like a thermos and the next DC. Yes. Supermicro from micromachines for micromachines. Microsoft, micromachines. Oh, micromicromachines. Oh no, dude. I loved micromachines. They were amazing. Was that before my time? If he hadn't died, they could have hired him as a spokesperson in advertising.
The "10 Second" micromachines were small, ahem, tiny machines . They looked like Matchbox cars, but small. Were they even smaller? And the man who was their presenter was a fast speaker and he shot very fast commercials and he was the guy who shot commercials for him . The guy who shot the commercial was the owner of the company.
No. Oh, right? Oh, I thought... No, no. Pitchman. He was their pitcher. Pitchman was the owner. No, the guy from the ad was the guy we remember. This is the one you look back on. I don't know. I don't know who the owner was. Um, back to Superhero. Back to that, maybe they could make a version of it with artificial intelligence to do that.
That's it. Full results will be released on November 3. And I know there were some questions about why they made this preliminary announcement in the first place? I noticed that the stock has fallen 28% since October 7th. So, now they've grown up, that's why they came out. I mean, look, they're up 17% this morning.
And then you look at the sector, Cor and Nebius are up more than 4% and 0.5%. Dell and HPE rose by more than 5%. Nice climb. I would say it's the SpaceX supermicro effect. That's fair. That's fair. Supermicro. I mean, even today it has increased. Yes. It increased by four and a half 5%. Yes, that's right.
The trade in artificial intelligence is growing. Why did you increase your numbers so much? Maybe because your stocks need a little boost. Perhaps. So, well, we know that the AI trade has been suffering lately. This is true. I meant they forgot that they had a China problem where their co-founder could potentially have quietly implemented these...
right, the survey... well, there was an independent investment that found that management didn't necessarily know what was going on, they just happened to be there... yeah, I mean, you could still argue that it's a little bit of overstock , but, um, yeah , it also speaks to a bigger problem in the chip and server market: how much of it is being diverted through black market sales or large market sales to China, that's something that Jensen Wong had to address in Washington in other ways.
And that's where you get some of the power of Chinese labs really trying to catch up with American labs. If they can't get the chips they need , yes, they will find a way. Um, and I know we were going to talk about Neoclouds earlier and show their stock, guys. I don't know if we can mention them here.
We forgot to mention them, or at least I forgot to mention them before. We forgot to mention, but Iron is rising this morning. Intel is growing. Coreweave is growing. Oracle is growing. Just looking at some names. Nebas, uh, is also trading higher. So , Micron is growing. Here we are. So we are definitely seeing a recovery in Neoclouds and in AI-related commerce in general .
Um, and so , you know, those two names definitely help the cause. How many days has it been since we saw anything green in the, uh, Neocloud space? Yes, it's been a while. Um, on the other hand, though, not everything is green this morning. Not everything is green. Definitely not. Um, I'm talking about Netflix.
The company found, as we said, expectations were pretty low, but they still lived up to expectations. They had their slowest sales growth since the fourth quarter of 2023. Sales increased by 12% to just under $13 billion . Earnings per share beat expectations, but the company's outlook for the current quarter means this will be the fourth consecutive quarter of slowing growth.
Yes, that's true. They also said their operating profitability could be affected by job cuts and costs associated with about a thousand jobs, 6% of their staff. Total revenue for this year will be about 51.1 billion, up 13%. So, you know, the crux of the problem seems to come back to the fact that they need to create content that people want to watch on a very regular basis, and it just doesn't...they have n't had a definite hit.
No, there was no increase in the number of subscribers in the near future. Maybe they'll try to solve this with some personnel changes, right? Um, the head of the content office, although, the main one there, excuse me , Bella Bahariya is leaving, she is being replaced by Peter Rice from Fox, and Disney's head of film Dan Lynn is also leaving the company.
So you might see some cleanup, because Bella had a string of good hits for a while. She was more or less up to date. Now to your thoughts: It's been a few years since anything happened, so what's the next big show? " East of Eden," dude . You need to get there to get there. I forgot we were in this "East and Eden" nonsense.
But it all comes back to whether any of these streamers have a show that you're like, "I have to sign up now. I have to do this now." I mean, we've all already registered, and that's also a problem, there's a problem of overcrowding, right? So I wonder, even if they released something new... that is, their churn is still low.
Their churn is still only 2%. So the question is , even if they released some amazing new content, in the US of course, would it really change the world that much? Has everyone who is going to subscribe to Netflix actually subscribed to Netflix? Maybe that's the market you can get here, so they're focusing on international expansion, translating the show into Spanish and other things.
Yes, they also make original films in other languages. Here are some things, you know...they want to talk about increasing engagement, and they want to get some big movies, but the problem is you have to make a commitment. So, the new Greta Gerwig film: Narnia, they have to commit to showing in theaters for 45 days.
Will it save your involvement if you only watch it on Netflix? You can only watch it on Netflix. You can't . Won't that help you? Yes. But they have to make a commitment to cinemas if they want to get big stars. Secondly, no mention of games. This was already being violated. Someone raised this issue.
They've been promoting this for some time as a way to get people involved in online broadcasts. Oh, a free game on your mobile phone or part of your subscription. Oh, I like that. What happened to this? They just stopped talking about it. I think people are not that active in this . Well, that was only for mobile devices.
You couldn't do that on TV. So, uh , that's one potential miss, but you know, maybe new content, people come in, and they also promote live sports, boxing matches, um, you know, Formula 1 football, getting some of these sports rights for me, like something on air, you know, like you can't go back to watch, right?
And they also don't get enough of a list of those sports to think, okay, I don't need to subscribe to Fox, or YouTube TV, or YouTube , which usually has pretty much everything. I'd be interested, and it wouldn't make any difference financially because you don't get more subscribers, but I wonder if some of their shows would have better viewership if they didn't take action on accounts that are spreading information like, "Hey, Mom and Dad have an account.
I'm going to college and I'm going to use a different IP address six states away, but, you know, it's my parents' Netflix account." Now that it's over, I wonder how many people have decided to just disconnect from Netflix completely and not pay for it. They had a lot of estimates on the numbers when they did it.
Yes. And I don't remember where they came from, but I would also be interested to know how that affects the number of views on their shows, because part of getting a hot show is getting views. Yes. But what does it ultimately do for them, except that this is my opinion of the charm that doesn't translate into money, right?
Unless they are funded by advertising. Unless they are funded by advertising. Yes. Have you guys seen "The Four Seasons "? You know that. Oh yes. Yes. Yes. Great series. I just watched what I think is the third episode of the second season. I have n't laughed so hard at a TV series in a long time. I mean, even the last third season is really good too.
Yes. Is this the third one? Maybe I'm on the third. Whatever the current season is. Good. So, season two, episode three. They are on the Jersey Shore . That's good. That's good. Very. What is What is It's been too long since I read in the series? This is a remake of the series from the city. He's not for this guy.
It's about...It's about middle- aged friends who vacation together. This could be for me. Pros. Tina Fey. This is a great cast. I can imagine him and his girlfriend watching and thinking, " This is what's happening. This is... Wait, what?" This is Tina Fey. Coleman Domingo, Will Forte. Oh , that's a good cast.
Coleman Domingo is fantastic. This is a great cast. Yes, that's right. Steeply. And Coleman's husband or partner on the show. It's fun too. Yes. Yes. This is very good. OK. Anyway, maybe you can watch it on the plane. Oh, there it is. Transition. This is a great show. Yes, they talk about United, they talk about planes, they talk about all sorts of things, but United doesn't look that hot right now.
They will cut their forecast as fuel costs continue to have a big impact on their business, right? So, you know, they lowered their forecast. Therefore, adjusted earnings for 2026 will be no more than $722 per share. This is from 9 to 11 that they saw before. Fuel costs were up 62% in the quarter year-over-year to $4.8484 billion, which is a little more than Delta reported in the second quarter, but again, they said that consumer spending revenue was up $17.4 billion to $17, sorry, revenue was up 17.44% to $17.887.9 billion, again, premium was up, even basic economy was up, loyalty revenue was up , all of that for $10 to $15, right?
So you see that consumers, at least for United, are still resilient, but United is getting a little bit of a bite here because the cost of fuel is out of control now , the stock is up a little bit. I'm surprised, oh, they used to fall, yeah, yeah, but it's the balance sheet of the airlines, yeah, you see that consumer spending, yeah, you're selling your premium seats, but you're also getting more than just a net benefit from it because you have to spend a lot more on fuel.
So you're in this quandary: do we need to raise prices, do we sell seats, or do we stop selling seats? We are raising prices too much, but we have to balance fuel the hard way. They definitely reduced capacity. Delta did it. They all do it. But the issue is that when you fly international flights, if you fly, say, to Europe, you have to refuel there.
The cost of fuel there is actually higher than here. And if you get bitten twice there, uh, because of that kind of influence...Um , do you have anything? Yes. Good. I'll add one more quick thing. Oh, uh, Scott Kirby is talking about the Starlink effect. I want to read this quote here. Right. Quote: "We're winning new long-term United customers who are loyal to the brand because they're trying us Starling for the first time and they're staying with us because our leading app, whatever great source it is , is Starling." So they're talking about taking people from other places who are loyal to other places, intending to use Starling .
So, Bastion has an intention. They didn't give any numbers, but they say we see it, right? Interesting. I mean, I already fly United frequently, it's my home airport, so I take advantage of Starlink, which is what it is . This is great. I'm not saying that's the only reason I want to fly. I mean, people like to relax and not be a part of it, to be online, but if you're working, if you're doing something productive, you really need help.
Yes. Because even with the Wi-Fi services offered on other planes, it's just night and day. Yes, that's right. Yes. Okay . Speaking of Starlink, uh , speaking of Starlink, let's talk about a company that's maybe a little bit critical of Starlink, uh, in the broader SpaceX business. This is AT&T. The earnings report was released, actually beating revenue and profit forecasts, raising its full-year profit forecast.
But here is the weak point. Mobile subscribers do not meet estimates . Just looking at some of these numbers. Adjusted earnings per share were at 65 cents per share, compared to expectations of 60 cents. This is 20.4% more than last year. Revenue was 32.3 billion for the quarter, compared to the expected 31.7 billion.
This is 5% more than last year. But here's the mistake. Postpaid postpaid, sorry, advertising on the phone network was 379,000, compared to the expected 387,410. So it's not a huge miss, but it's a slight slowdown. And analysts say part of that could be because people are looking at Starlink and looking for what they could otherwise get on a cheaper plan or with better coverage.
Well, and analysts also say that it's not necessarily consumers who are already doing this. That's exactly right. It's a market, and it's also, I don't know how many people are actually comparing right now , you know, en masse, but the market is certainly considering that possibility, especially when SpaceX executives were talking about all this, right?
And they talked about expanding their mobile network. You're seeing some discussions now among the big mobile operators about how we deal with this, because we know this is going to be a huge, huge headwind for us. I mean, yes. Right. But it also needs to be said that they wanted to have direct sales in every market where Starlink operates.
This doesn't just apply to AT&T . You have to buy others, if you want to buy, you have to buy other networks in other countries. These are 174 countries where Starlink is active. I mean, even though it's not an immediate threat, I think that's the point. I think so too. You know, meanwhile AT&T and its compatriots are spending more on incentives, right?
AT&T raised its plan prices this year, but it also offered incentives. This is true. Um, so they, you know, are being pressured even by potential Starlink competitors. But this link I want to quote from Bloomberg Intelligence is John Butler. You know, he's saying here that the uncertainty with Starlink is already or could already start to put pressure on profits, as AT&T and companies like that are now feeling the pressure, saying we need to spend.
We have to find ways to retain the customer. What can we offer them so that they don't switch in six months, a year ? I mean, how sticky are these customers ? They are wrong. People change carriers, especially now that phones can be easily ported, right? You don't need to buy a new SIM card or anything like that.
I think it's still difficult to port your phone number , right? Isn't that too complicated? I don't know. I...I...I...I've been holding on to my 917 my whole life, and I never ...I know you'll never give up on this. I want the city code to talk about maintenance. It's not 212, but I'll take it. Let's talk about maintenance.
You know, you have a new update cycle. Maybe there is an incentive. Again, you might pay more to keep them, but if you offer a duo with good trade-in value, maybe that will help, you know? Perhaps. Yes, absolutely. Hint, hint. AT&T as your customer. Hint, hint. If you listen to AT&T's offerings. I have a 16 Pro Max.
It's a bit outdated now. Well, I mean, the question is , if Starlink eventually reaches more markets, what can they do? Yes. Once it appears, do you know if it will be related to coverage? Will it be related to cost? Will it be, I mean, obviously it will be all of that, but how will they compete ? Interestingly, some analysts are saying that one of these carriers will just blink and say, “You know what?
We cannot defeat them. Let's just cooperate with them. Let's work with them." And such people, they offer them a deal, and that's how they will convince us. They don't need to buy us. Just give us a chance to keep us busy. Right. And this can be a long-term strategy. I also wonder if the quality of the internet is just part of the competition.
For example, if you've ever used Starlink internet, it's incredibly good, is n't it? So I've used it in remote areas, which again, is more of a limited business case, but it's phenomenally good . So if you can get that kind of coverage across the market, then maybe that's your competitive edge. Also, yes, I just want to quickly point out that SpaceX says Starlink operates in 174 countries.
I think, by my last count, there are 179. So...There are only five countries in the world that Starlink hasn't penetrated. India is one of them. OK. Having a service and having customers are, of course, two different things. But even accessibility, because it needs to be regulated. Right. Right. I can already see Jake with a nice, Starlink-like, little antenna attached to him.
I'll put it in my backpack. I'll put this little backpack somewhere in the field. 100%, well, you know, wildlife. Remember the days of satons, when in remote areas you had to have satons like big, big ones, which is funny because we really feel nostalgic between microphones and satellites. But it's funny, because when I go out long distances, I usually travel with a Garmin tracker that runs on the Aridium network, which Rocket Labs is currently working on acquiring.
So I think they've already done that, yes, they've closed that acquisition. So how does SpaceX begin to compete with the Aridium market? After all, Aridium's claim is that their satellites work anywhere, even if the signal is weak. world. Right. Right. Well, I think we should buy a record player right here.
It fits perfectly into our analog micro-style record player recording. Well, we already have a typewriter in the back. You know, it's... That's how it is. So, I think that... Oh, we have one. We have a ticker, an old ticker. We have...We have all kinds of old stuff in this area. Here he is. Right there.
Yes. Right next door... We have...We have a few...That's it. That's it. Um...Okay, let's switch gears because it's time for this week's CTF report, sponsored by Kimco. Um, I'm reaching out again to our good friend Todd Zone at Beard Strategus, who has a lot of good ETF charts every week. The one that caught my eye this week is what's happening with tech ETF flows after the sell-off we saw last week.
And he says the demand for technology is finally decreasing. It has a flow chart. Now, the tech ETF flows...are still higher than everything else, but they have stabilized somewhat this year, or I should say, the last couple of months, and have started to dip a little below the trend line. Will this continue?
We'll have to continue to monitor his schedules. Um, and is this a leading indicator or a lagging indicator, based on what happened last week? I guess we'll find out. But it's interesting. No, and it is , and it's what you saw across the market as technology got a little bit overheated, got a little bit overheated, started to feel a little bit overheated.
Uh, whether it's, you know, uh, hedge fund client flow or equities, uh, sell-side trading or, uh, where family offices invest their money, mutual funds, index funds , we've seen a return to some of these defensive sectors, whether it's energy, whether it's healthcare, whether it's, uh , industrials, they've all seen a little bit of a boost over the last few weeks as concerns have arisen about technology, artificial intelligence and whether there's going to be a repricing at some point .
So it makes sense that in the traditional, more, uh, traditionally safer investment market , the ETF F market, uh, if you don't take into account some of the 3x leveraged ETFs and all that, you would see a similar shift. Yes. We also talk about , uh, money coming in, money going out of the financial and industrial sectors.
Uh, that's interesting, and you mentioned bond ETFs that are growing a bit. We talked about this a few weeks ago when it would be a good idea to trade, due to the sharp increase in yields . When is a good time to invest? Yes. Yes. Well, we've already seen money coming in there, and, uh, I think you also mentioned healthcare, and Todd mentioned that ETF flows into healthcare have definitely increased .
So, I think some money is considered a defensive sector there. Well, we will continue to monitor these flows. Uh, but in the meantime, we're also setting ourselves up as if our brains aren't filled with numbers enough. Oh, we'll have more big numbers today. Can I continue? You can continue. Good. We are watching Meta and Tesla.
never ends after closing. I'll quickly start with Tesla. Of course, the main news will be about the merger. It may or may not appear again. We'll see. I'm sure they'll ask about it . This will be the second take, right ? But the real numbers are here, aren't they? We're certainly watching the delivery forecasts in the real auto business, cash flow, meat and potatoes, revenue of 28.13 billion, EPS of 44 cents, whatever.
But again, merging is fine. What about Optimus? Where is Optus? We have to see this new robot. We haven't seen this new robot. What's next? Plans to expand the robo-taxis network. What's happening outside of Austin and San Francisco? Will we see Nevada go online, etc.? Will the capital expenditure announcement exceed 25 billion as they announced last quarter?
They constantly increased this amount. Again, 25 billion sounds strange. It's like... a little house somewhere, right? Not 400 billion or whatever we see, right? Interestingly, Tesla is only up about 1.7% this morning. Yes. Of course. This is super interesting. She didn't get a huge boost, did she ?
And you know, maybe it's just because it's gradual, right? It's just another small step towards... But you're right, Julie. I mean, if you see these... what's... special... for Musk... has a good idea, you could probably... push it... Why wouldn't the stock trade much higher, right? And either it's factored into the price, or they don't believe in it.
I do n't know. I thought we would see more movement. Yes, that may be priced in, but the stock is still down year-to-date. They have risen significantly from the lows, but are still down 17% year-to-date. Yes. Or skepticism... it won't happen in the next six months. You know, I'm not sure, right? This is possible...
The deal will happen, but it will take a year or two. I also want to touch on Tesla for a second regarding your point about Optimus, which I think is really good because we've seen a narrative shift at Tesla. Obviously, we had the Roadster at that debut, and that would be a huge accomplishment. Hmm, but Musk talked about focusing on robotics at Tesla.
So not only where will the new robot be, but how will that affect the goals they've set for supply, and how many of these robots are they going to produce ? How quickly can they actually deploy them? Because this should be a huge revenue generator for this company. I mean, that's what volume production looks like, right?
I think they were talking about maybe 25,000 - that's the first goal, you know? Hmm, how many do we have now? So hopefully we'll hear some answers to that question. I also want to quickly raise a topic. We obviously have a goal, let's do it tonight . You know there's a goal and your own capital expenditures to look at.
This year, 117% to 41 billion. This is just for this year. What about next year? How are things going at Muse? Sorry, that's it for this quarter. Sorry, it's a quarter of a billion. How is Muse doing this year? How are things going at Muse? Right. How are the downloads going? How are things going with their implementation?
Is customer retention normal? Among many other things. Yes. I think capital expenditure and Muse, I think, will be the two main things that analysts will focus on. It seems that the shares there also did not rise very much , for example, after Muse, and then seemed to fall along with the rest of the artificial intelligence trade.
So maybe expectations are maybe setting up nicely for the start of the report, as we talked about earlier this week, the goal, let me double check that. We talked about the fact that the options did not foresee such a big movement. They have actually grown. It almost doubled. So now the expected one-day movement is about 6.6%.
Previously it was only about 3.2%. So now the expectation is that maybe we can get more movement based on earnings. We'll see. Just to, you know, read out the numbers we're expecting tonight . Uh, the analyst consensus would be: uh, we expect earnings per share of $3.56, revenue of $ 63.3 billion. These are numbers that Meta will try to beat tonight to get a nice little jump.
These are big numbers. These are very large numbers, considering that a year ago these figures were $105 per share in earnings and $51.2 billion in revenue. So, especially the profit, is that it's for two jumps of $2.50. This is a big leap. OK. This is an obstacle for Mark Zuckerberg tonight . Good.
Hopefully we can get some sleep and have the energy to talk about all this tomorrow. That's it for 8:30 . Kenny, and once again for Brian Sage. Further. Warm up here. Heat. Hey, heat it up. Heat. Heat. Down. Down. Dive deep . Hey, hey, hey.
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