저자: AmitKukreja · 외국인
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미중 관세 전쟁과 연준 압박으로 시장 급락, 금리 상승이 주식 하락을 키움. 엔비디아는 중국 매출 상실과 화웨이 910C 추격으로 하락, AWS 데이터센터 임대 중단 루머 존재. 테슬라는 실적·가이던스 부진을 예상하며 Model 2 지연 가능성 언급. 미중 무역 협상 진전 없음, 베트남 등 경유 우려. XAI 1500억 달러 밸류 펀딩 추진 소식.
다듬은 글
Monday. We are starting off the week and uh well, we lost about $800 billion in market cap today in the stock market. So, it's a fun way to start off the week. S&P was down 2%, NASDAQ down 2 and a half%, Tesla down 6%, Nvidia down 5%. You know what we're going to talk about? Trump tariffs, China. We do have some very specific updates in the context of Nvidia, Amazon.
We also have Tesla earnings tomorrow. We'll talk about that. Lot to get into, lots of money to keep losing. Let's get into it. All right, let's get started with the first story of the day. Trump and Jerome Pal. Now, what happened last week? Well, a Wall Street Journal article came out that said that Trump was trying to get rid of JPA.
And the reason Trump was trying to get rid of JPAL is because he's not lowering rates. Again, why does Trump want uh rates lowered? A because it's better for Americans. If rates are lowered, mortgage rates, auto rates go down. B, it's better to refinance the debt. And C, rates go down, you have more business capital spending activity.
Why is JPAL not wanting to cut rates even though CPI and PPI are at multi-year lows? because the fear of tariff inflation which Austin Goulby another Fed president came on CNBC this morning and he basically reiterated the fact that look he thinks that the volatility that's going to come from the inflation that is caused from tariffs even if it might decrease growth which would create a slowdown which would create a deflationary effect which would mean you should cut the inflation from that given how unprecedented 10% universal tariffs and 145% tariffs against China are uh warrants the fact that we shouldn't be cutting rates you can agree with that you can disagree with that is the stance of the Federal Reserve.
Trump obviously disagrees with that. Trump is not a fan of the fact that the that the Fed is not seeing things in his way. So, what does Trump do today? And as soon as he tweets what he what I'm about to read to you, uh that's when the market really tanks. So, if you're wondering when the market really started to not cooperate today, it was when essentially Trump tweeted what he tweeted right here because the market looked at it and they were like, "Hey, this is starting to get really scary." And we'll talk about why in a second.
So Trump says preemptive cuts in interest rates are being called for by many. With energy costs way down, food prices, including Biden's egg disaster, substantially lower and most other things trending down, there is virtually no inflation. However, with these costs trending so nicely downward, just what I predicted they would do, there can be almost no inflation.
But there can be a slowing of the economy unless Mr. Too Late, a major loser, his new name for JPL is Mr. Too Late, lowers interest rates. Now Europe has already lowered seven times. Powell has always been too late except when it came to the election period when he lowered in order to help sleepy Joe Biden later get elected.
How did that work out? Essentially, Trump's making the argument that hey, wait a second. JPAL was political for Biden, but he's not returning the political favor for me and uh he's getting very upset about rate cuts. Now, you can get into the politics of it and if if he cut in September for Biden or not, like you can have your own opinion on that.
I frank I quite frankly don't care. I am curious about why is he not cutting right now and if Trump can get him to cut with all this public pressure. And the answer that I've included to both of those questions is I think a he's not cutting for a legitimate reason. B um public pressure is not going to make him cut.
So first let's talk about the legitimate reason. Again the tariff volatility and the inflation from those tariffs is unprecedented. Do I think they should be cutting right now? Yes. Do I think they're too restrictive? Yes. That is my official stance. However, I cannot blame the Federal Reserve for saying, "Wait a second.
We don't know what the impacts of tariffs are going to be. Let's give it some time to play out. Let's get a little bit more data and then we'll end up making the decision." I think they're going to cut in June anyway. There's a 7% chance they're going to cut in May, which means there's virtually a 0% chance they're going to cut in May.
So, I think it doesn't make sense for them to not cut in May if they're going to cut in June. And I don't know if one month makes the difference, but nonetheless, if they're afraid of the tariff inflation that we'll get and maybe another month of data gives them the conviction that they need to cut or not to cut, then that's what the Fed is going to do.
Trump doesn't have that much time. Trump has an economy where the stock market selling off. The bond market today, the 10ear and 30 year were up almost 1% both. That's not good. We talked extensively on the show last week about why the bond market selling off and yields going higher is bad. Bonds control the cost of capital in the entire economy, the 10-year, 30-year.
You cannot have those go higher when stocks go down because they should be a flight to safety when stocks go down. People should be selling stocks. Risky Nvidia, risky Robin Hood, risky Palunteer, risky Tesla. Safe 10year, safe 30-year. I'm going to buy US debt. If that's not safe, and bonds aren't safe, or and stocks aren't safe, bonds aren't safe, and the US dollar is not safe.
The dollar got to a three-year low today at $98.15. What's safe? Well, the asset that is outperforming everything this year, uh, gold is up now 35% year to date. So, right now, we're seeing a flight to safety that is nothing to do with the United States equity markets, bond market, or currency markets.
It's gold. That is happening because the bond market is afraid that tariff inflation is going to erode the value of of their four and a half% return that they would get on a 10-year. Uh that is also happening because they're afraid of the instability that is being caused by the volatility of the up and down negotiations with tariffs.
We still don't have any deal. The Mexico president today said, "Hey, no deal. We don't have any deal yet." The Japanese prime minister came out and said, "Hey, we love the United States, but like we can't concede to all the things they're conceding about, so we also don't have a deal." And then you've got Trump threatening to fire the head of the Fed, which again, you just can't do that.
We're not North Korea. You can't just get rid of someone that you don't like, no matter how much you don't like them. And so from that perspective, I think there is a legitimate reason for why the Fed is not cutting even if I disagree with them. And then number two, I don't think Trump's going to be able to pressure Pal because I think Pal has fundamentally concluded this is your recession.
This is your fault. I didn't do anything to get here. In fact, I think Pal would be cutting right now given where CPI and PPI are at if they weren't afraid of the potential inflation from tariffs. But they're afraid of it and there's nothing you and I can do about it. It is up to the Fed ultimately on whether they want to uh disagree with the potential inflation, the transitory inflation that JPEL last week said it's not going to be that that bad transitory anymore.
That's why the S&P fell 3% on Wednesday. Last week fell about 2.5% today. The market and the Fed still have come to the conclusion that rate cuts are not happening anytime soon. If Trump, this is my opinion, gets rid of JPAL, stock market goes down 5% in a day, no one will be able to trust the dollar.
No one will be able to trust a bond market. The bond market is built on a trust that the US won't default on our debt. If we start doing dictator type where we just get rid of someone if we don't like them and then the new guy that we put in immediately does what the president wants them to do. Yeah, you're going to have people saying, "Hey, we got to find some other places to go outside of the United States." And obviously the stock market's not going to like if that happens because they want the Fed to be apolitical.
And although the Fed acts sometimes in political ways, the official stance should be apolitical. Trump removing the head of the Fed, which by the way is probably going to get challenged in the Supreme Court. I don't even think there's a way he can do it. It's just the level of instability he's putting against the market by constantly saying he's going to do it, creates more pain.
And if he actually tries to do it, I think we're going to have a lot more pain. So, from that perspective, it sucks. It was the number one reason the market fell today. We got some Nvidia headlines. We'll talk about it in a bit. That also probably contri contributed a little bit to the decline. But the reason we saw the NASDAQ down, Tesla down, Nvidia down, Alphabet, Meta, etc., All of it, in my opinion, really stems from the idea that the market is not happy with JPAL potentially being fired and the bond market right now is king and they're telling Trump how unhappy they are by going higher.
If yields continue to get to levels that are unsustainable, we're probably going to have someone step in and do something about this. Maybe bescent like they did last time with the 90-day pause. But as of now, um this is turning into a movie and um we are all seeing this movie unveil itself in real time.
All right, next up is Nvidia. What the heck is going on with Nvidia today? So, Nvidia fell 5% not just because of Trump and JPAL drama, but also well, there's a legitimate headline right here. So, remember when Nvidia got banned from China like last week and Nvidia fell 10%. Apparently, Huawei, which is not the Nvidia of China, but essentially is the Nvidia of China.
I mean, it's like one of the biggest tech companies in the world uniquely for China. They make phones, chips, laptops, all that stuff. They are beginning mass shipments of its new 910 C AI chip to Chinese customers as early as May, which is next month. According to Reuters, the launch comes shortly after the US imposed stricter export controls on Nvidia's H20 chip, prompting Chinese AI firms to seek domestic alternatives, aka all that demand that Nvidia, an American company, was getting, it's going to a Chinese company.
And what's the most interesting about this piece of news right here is that the 910C, which is the Huawei chip, combines two 910B processors in a single package, delivering performance allegedly on par with the Nvidia H100. That's not good. That's not good. Why is that not good? Well, all that demand, all that revenue that Nvidia was getting is now going to Huawei.
And it was either going to be an American company or a Chinese company. Based on the export control, based on Nvidia being used as a pawn in the trade war, it is now going to a Chinese company. What's more troubling about this is that it's giving another Chinese company the potential to innovate. So think about this here.
Forget the money that the billions of dollars that Nvidia is going to lose on this. By the way, as an Nvidia shareholder, I did not buy the dip today. Um I didn't I didn't buy anything today. I am coming to the conclusion that we lost China revenue for the year. I think anyone who's in Nvidia kind of has to come to the conclusion that we're losing China revenue for the year.
It is what it is. We have to move on, price it in. But I think we're losing China revenue for the year. If it comes back, great. But I think we're losing it. So, so, so, so what's the issue here? It's not about Huawei getting billions of dollars from like Bite Dance that's buying their chips. It's about Huawei having all this demand.
So, now they have the money from a Bite Dance, from a Tencent, from Alibaba, etc. to then do the R&D to be able to catch up to Nvidia when it comes to chips. So, either we could have supplied them crappier versions of the H100, which were the H20, which Nvidia had plenty of demand to be able to sell, or we're letting Chinese alternatives now have the R&D and the subsidization of the um capital it takes to be able to develop what would be an H100, which again is a two generation old uh chip, but it's still a phenomenal chip, right?
And a lot of companies are still using that chip before Blackwell. If Huawei can develop their own version of it, it's not good for Nvidia. But forget Nvidia. It's not good for the overall AI tech scene because now China is becoming more advanced and developed because they have their own company internally inside of the country that's able to build these types of chips.
So that's why Nvidia was down 5%. Does Nvidia actually deserve to go 5% down on that news? I don't think so. I think Nvidia is down 5% more more so because the market's realizing that they're losing the China revenue, not because a competitor is catching up to them. But it's not good that a competitor is catching up to them.
I am highly skeptical that Huawei is going to be able to come up with anything as meaningful as a Black Wool or Reuben or whatever may be in the context of what Nvidia is doing, but it's not good news and it's one of those things if you're an Nvidia shareholder, I think the overarching thesis around Nvidia is not going anywhere.
But this is one of those things that definitely sucks. Now, one other headline that we got today that was not the best thing in the context of Nvidia was Amazon. So apparently Wells Fargo came out with a note this morning and Wells Fargo said, "Hey, uh, we think AWS is not going to be licensing the amount that we thought they were going to be licensing when it comes to data center spend." So specifically, they said AWS has hit a pause on some leasing deals, mainly international for data centers.
Wells Fargo heard from multiple sources that AWS is stepping back from ongoing leasing talks, mirroring what's been seen from Microsoft. We do have confirmation that Microsoft did cancel a couple leasing deals. I think two weeks ago that headline came out and the market I think kind of ignored it. It was like, "All right, whatever.
Microsoft's, you know, pulling back a little bit." Now AWS, these are not confirmed. These are rumors from Wells Fargo based on people that they talked to potentially is lowering back capex spend. Google's on Thursday with earnings. If Google comes out and says, "Hey, yeah, we got to lower back capex spend." Not because we don't believe in AI, because we don't believe there's a revolution, but two things.
A, we might not be seeing the ROI immediately, which at the end of the day, Google has shareholders and they could use a lot of that money to buy back some of their stock that's cheap. And if they're not seeing that ROI, they have to justify to investors where they allocate capital, it might be going into shares versus chips.
And then B, uh, if the tariff volatility is hurting their margins, if companies are pulling back their advertising budgets and Google says, "Hey, we're just not going to do this much money that we thought in revenue, which means our budget cannot be allocated as heavily towards capex if we're not bringing in that much revenue." Because that's the way business works.
If you don't make enough money, you can't afford to hire all the people you have or take all the risks that you're taking, then that is a direct impact because of the tariffs. I'm going to be very curious, even more curious than Tesla earnings is what Google says about capex. I am hoping as an Nvidia shareholder they say, "Hey, capex is something we are not touching.
That is something we have to have on the table. Like we need our capex to be strong." But if they say, "No, we got to pull back on some capex." And then if Meta reiterates that, it's obviously not going to be the best for Nvidia. I don't think that ruins the Nvidia thesis, but that does mean that capex will go down a bit.
So, everyone has to adjust their multiples on Nvidia. If you thought they were going to do 450 of EPS, you put a 40 multiple on that, you get to $180 of price. Yeah, maybe they're doing $3 of EPS, you put a 40 multiple on that or a 35 multiple on that, you get to 115120. I mean, everyone just has to adjust their expectation based on what we get from big tech earnings.
But this will be the first week, at least in the context of Google, that we'll start to hear from what big tech has to say around capex. All right, next topic we have is Tesla. Tesla reports Q1 2025 earnings tomorrow. Street wants 46 cents a share, 22.46 billion in revenue. Look, my my thoughts on this are pretty simple.
I I I want to buy more Tesla stock. I do think Tesla is expensive right now given the lack of growth. I think Tesla is cheap if you believe in the robotics and FSD story. Do I believe in those two stories? Yes. However, I also know that you don't just buy a stock because you believe in the story and it's whatever.
You try to get a good entry point and everyone's saying it's going below 200. Let leave a comment in the chat if you think it's going below 200. I kind of don't think that's the case anymore because quite frankly, everyone's saying it's going to go below 200, but would I be shocked if it goes below 200?
No. I think psychologically it would be a big deal for Tesla investors. I don't think it would be the best thing in the world to see that. Would I be able to scoop up some more shares? Yeah. And I would probably take advantage of that. But um I think earnings are going to be bad. I think guidance is going to suck.
There was a report out over the weekend by Reuters saying that the Model 2, which is the $30,000 affordable car, is going to be delayed. Elon hasn't denied it. Last time this year, Reuters came out with a report saying pretty much the same thing. Elon denied it immediately. I think the reason Elon's not denying it is because the supply chains, the tariffs, all that stuff.
It's going to be really hard to launch an affordable car this year. Like, I wouldn't blame Tesla. If they delayed it, it would suck. But I also wouldn't blame them because of all the tariff volatility. So, if that happens, that could be a headwind. And then I think Elon's going to try to paint a really good story about FSD and Optimus and what it's going to do for the future and yada yada yada yada.
And he's going to get people excited, but if the numbers aren't there at some point, you know, it's hard to get really excited. Tesla's the only Mac 7 stock that's not growing anymore. I mean, Apple's kind of growing their EPS even if they're not growing their topline revenue. But every other Mac 7 is growing on the top and bottom line.
Even if it's like one or two% a year, most of them are in like 10 to 15%. Tesla's negative and it trades at the most expensive multiple. trades at 100 times compared to all the other stocks trading at around I think at the most is like 35 times. So, I don't know. Let me know in the comments what you think is gonna happen.
I think it could go up if Elon announces anything like a letter of intent for Walmart to buy more Optimus robots or FSD launching immediately uh before the robo taxi coming in June like FSD launches in like May or something. They're doing a surprise event in June or that they're launching in California in July or something.
I think a lot of those if if if statements are just dreams and fantasies at this point and it's hard to build an investment thesis off that that could help pump the stock. But the tariffs are bad. The earnings are not going to be good. Guidance is not going to be strong and unless there is some unique story in this macro that can keep Tesla alive.
I do think it's going to be a tough earnings, but we'll see how it plays up. I'll be live. I'll be covering it and I hope for the best. But if it goes down, it goes down. It is what it is. This is a bad macro. A lot of stocks are down. It could rebound though if it gets that much momentum to the downside and I think it's just going to be a question of either it's going to be the deliveries event where they only deliver 336,000 cars versus 370 expected and they fell only 5% not a big deal or it's one of those things where the numbers are so atrocious and the story just really isn't there but the street says you know what we're taking it down and if that's the case I think there will be buyers ready to buy some more Tesla stock.
Okay, next update is on China. Now what was really interesting from China today uh is that they essentially put out a warning. So what was their warning? China has warned that any country siding with the US in its trade offensive will face reciprocal countermeasures signaling a firm stance amid escalating tensions.
The warning follows US efforts to pressure allies into reducing their economic ties with Beijing through tariff negotiations. We saw the Wall Street Journal article last Wednesday where basically they reported the US is potentially pursuing a strategy that isolates China from all the partners that they're uh negotiating with, South Korea, Japan, um Vietnam, etc.
And it's like, okay, that's one route you can try to get Vietnam, Thailand, South Korea to to just just hate China, but that means they're going to be picking you over China. And if that's the case, I don't think China's going to be that happy about that. So what did China say? He said today, "China firmly opposes any party reaching a deal at the expense of China's interest," said the Ministry of Commerce.
"With US tariffs on Chinese goods now reaching 145%, obviously we are starting to see the uh trade war intensify." I think what's really interesting about this is that China has the cost of labor. US has the propensity to consume. US has the best to consumer. China has the best cost of labor. So the question becomes what do companies choose or what do countries choose?
Most likely than not, countries can't choose either or. They have to choose both. There's no way they can just pick the consumer or the cost of labor because you need both sides to make a market. So the takeaway from me on this question is I don't think the same takeaway I had last Thursday. I don't think the United States has even started negotiations with China.
No matter how much Trump says that we're having good talks with China, they've been calling us. I think it's all BS. I think he's saying it just to say it. Maybe they've reached out like maybe China's like called them a couple times. But if there's not any serious level of negotiations, which is why we still have 145% freaking tariffs against them, they have 125% against us.
Then that's an issue. Why is that an issue? Because that means we're nowhere near a trade deal with China. And the fact that China is saying, "Hey, Vietnam, before you think of just getting into a deal, you know, it's like that scene in Breaking Bad with Walter White, by the way, greatest show of all time.
Dawson's Creek is number two, but Breaking Bad number one." Um, and I mean that Dawson's Creek is number two. Don't let anyone fill you with propaganda and say it's like Game of Thrones nonsense. Game of Thrones medieval crap. Um, I just pissed off a lot of people, but that's okay. Uh, the the remember when Walter says, "Tread lightly." I don't want to ruin the show for people that haven't, but there's a scene where he looks at Hank and he's like, "Tread lightly." It's an epic scene, right?
And I think China is basically looking at Vietnam, Cambodia, Thailand. Tread lightly, you know? Tread like you want to work with the US, cool. But tread lightly because when you need us, we're not going to be there. And if you screw us right now, you will pay for it. The only way this works is if the United States gets all these countries to unilaterally go against China.
That's not going to happen. That's just not going to happen. So, uh, we don't have any trade deals. We're not really close to any trade deals. None of them were announced today. And it looks like China, we continue to isolate. Now, one quick piece of news as well. Uh, Nike and Levis's, Levis's jeans and Nike shoes were one of the two of the only stocks that were green today.
And we had a pretty red market. Why? People are speculating that those companies get a lot of their products, shoes, and jeans from Vietnam. Maybe they're green because people know that a Vietnam deal is going to be announced soon. I don't know if that's true. I mean, the theory kind of makes sense that those are the only stocks that go green.
They have the majority of their manufacturing in Vietnam potentially because someone always knows. I do believe in that theory that someone always knows. And if someone always knows, maybe they're buying them before the deal gets announced. Uh it might be a sell the news. It might be a big deal. It might be a small deal.
I don't know, but take that with a grain of salt. It doesn't seem like we're any closer to a China deal. It seems like we continue to isolate ourselves from a China deal, and maybe a Vietnam deal is on the way. All right, final topic for the day. We got a quick couple headlines I want to get to everybody.
Number one, XAI looks to be raising at a $150 billion valuation. It's not happening yet, but sources tell CNBC that XAI, which is currently worth about 115 billion, is looking to raise $20 billion at a valuation of 150 billion. And the reason for that is because they want to build out their next generation Colossal Colossus 2, which is an AI supercomputer cluster.
Right now, what's powering Gro 3, 200,000 Nvidia GPUs in a super cluster, I believe in Tennessee. Um, Elon has publicly stated that he wants XAI's upcoming training cluster, which would be the one they build out after they do this massive fundraising round, to be worth 25 to 30 billion and have a million GPUs, which means they've got to raise a ton of money to be able to pay for those GPUs.
That's bullish Nvidia, like super bullish Nvidia, but also I mean at the end of the day, right, like Nvidia needs that money to make up for the lost China revenue. So I think that's an important headline and hopefully that's going to be good for Xi. The rumors are that XAI is doing about a billion dollars in revenue.
We don't know if that's necessarily true, but if that's the case, it's trading at 150 times, which actually makes Chad GBT look cheap because Chad is doing like five billion in revenue or I think it was they're projected to do 12.9 billion uh by the end of next year, something like that. And they're growing like 300% year-over-year.
I'm sure Xi is growing a lot, but uh valuation wise, they're going to need a lot of money obviously to keep investing when it comes to GPUs, which is why I believe this AI revolution is not going anywhere. It's just the China part of it might not be uh coming back to Nvidia. Two um upgrades or downgrades in the context of stock.
So, Amazon uh got a downgrade from strong buy to outperform lower the price target from 275 to 195 from Raymond James. Basically, they said, "Hey, tariffs are a big risk. We believe in Amazon. We believe in AWS but we think the supply chain logistics and all their other initiatives are going to be affected by tariffs.
Now maybe if tariffs go away this price goes back up but Amazon was below uh 168 today. I think it got to like 165 167 and the reason for that was because the tariff volatility is starting to catch up to a company like Amazon which theoretically looks incredibly undervalued in my opinion. It's just tariffs are obviously a big issue.
Then we got Netflix. We talked about Netflix earnings on Thursday. Incredible earnings did very well. Canacor Genuity raised their price target from 1150 to,200 with a buy rating following a strong Q1 report. Again, the big thing from Netflix is that operating margins uh revenue and EPS. Not only they beat it in Q1, but they raised guidance in Q2.
Netflix is now being pitched to the street. It was up 2% on the day as a recession defensive stock. I don't know if I fully believe in that thesis, but it is starting to be framed as the stock that's not going to decline in a recession because the numbers and subscribers are going to hold up. are not going to unsubscribe if there is a recession because it's cheap entertainment.
And if that's the case, who knows? Maybe Netflix is a recession defensive name. But if it is, then obviously that would not be the worst thing for Netflix. Still trading at about a 50 times earnings, but the streets continuing to give it the multiple. Finally, last headline. Air India is exploring the option of acquiring Boeing 737 Maxjets that were initially built for Chinese airlines, but left undelivered due to US China trade tensions.
So Air India is coming up and saying, "Hey, we'll take some of those Boeing airplanes." But the fact that China still, it's been two weeks and they still are like, "Hey, no, we are not buying Boeing jets." The trade war continues to intensify between the United States and China. Tesla earnings. I'll be live tomorrow starting at 3:30 p.m.
Eastern. It's going to be a big day. We'll see how this all plays out and uh it'll be the beginning of Mac 7 earnings. We had Netflix, which started off big tech, but now Mac 7 starts off tomorrow with Tesla and then Google on Thursday. Thank everybody for listening and watching. I'll see you on the next one.
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