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Hello everyone, I'm Kevin. I'm speaking from Amsterdam Airport , you know what that means . The market may be in the red, but it is . That's why we've given away a coupon code called 'vacation red' on mekevin.com , which will expire soon. Anyway, let's focus on what's actually happening . Because I research this in depth , studying what other hedge funds, executives, or regular retail investors think about the market while on the go .
I think the explanation for what's happening in the market is much simpler than people are arguing . That's why, in this video, I want to discuss those things . Let's also discuss what JD Ones said on the Joe Rogan podcast , because it will give us some clarity on what's happening in Iran . This is useful for our analysis of oil and treasuries , as well as understanding the market and capex funding .
Because capex is funded through debt, as treasuries increase, the cost of debt increases, thus the cost of buying chips also increases, which puts everything in trouble , right? If we look at the IBM situation that we discussed earlier, we can see the importance of costs there . Yes, there was limited access to capital, or at least low- cost capital was difficult to obtain.
Raising money is getting expensive, and that's okay. That means Treasuries have increased, that's all. For example, when talking about 'house hack' , I always like to use ourselves as an example. This is not a campaign to sell something. We are not fundraising, nor is 'House Hack' trying to sell you anything right now .
I'm just saying this as an example , because we look at the market and think, "Wow, this is amazing ." Studying the market is one thing, what we do as a business is another. I remember last year, we stopped buying GPUs and focused on buying CPUs . We told our course members, "Hey, this is really good for AMD," and AMD jumped from the 170 range back then to the 500 range now .
Furthermore, we have noticed that the value of our GPUs has doubled in the last few weeks. They are just profits on paper , but whatever . Those were the times when we were buying a lot of GPUs early last year for our own designs. One thing we're seeing now is that when it comes time to raise funds, typically we buy real estate in the third quarter , believe me it's not just about a house hack.
We'll talk about the market and what's happening there soon , but I think it's related to this , so I do n't want to bore you. I am trying to give you this insight from our perspective . In the third and fourth quarters, we typically purchase real estate . We usually buy real estate. I'll clarify what I'm saying .
We've done that every year since we started the company, first saying "We'll buy real estate in Q3, Q4 of '23 ." We did it then , we did it in '24 , we did it in '25 , and we'll do it again this year . We think that's when we'll get the best deals. So, we're wondering if we should do fundraising in Q3, Q4, that is, in that later period when school starts again .
If we do, we will not only raise funds at a higher value than before , but also at a higher rate of return due to the increased cost of capital . Fortunately , we can afford it. We can pay it, right? We're making more money now than ever before , which is a great thing, and it's because of the AI products we sell.
But the thing is, companies are having to make some decisions . They think, "Okay, money is tight, the money we're raising is expensive, so let's make more strategic decisions," and I think IBM is an example of that . The IBM situation, or what I just described, should not be seen in isolation, but in conjunction with what Mark Zuckerberg said .
I think a lot of people are misunderstanding what Mark Zuckerberg said , because Mark Zuckerberg, in a private meeting, talked about the possibility of selling off the excess capex or excess computing capacity that we have . He later explained that the reason we wanted to sell that extra computing was not because we were building more than we needed .
In fact, this is happening because people are willing to spend any amount of money on our compute power to manage their proprietary AI models or the tasks they are doing. So Mark is trying to give a signal to the markets : Look, we're going to be a little more opportunistic when it comes to making money .
There are two ways to understand this . One way is, okay, Meta is an AI investment, it's an advertising investment, and it's a compute investment. Personally I'm interested in how AI can improve advertising , I think it's a big deal , I only see it from an advertising perspective, but whatever. Some people look at this and say, " Oh, this looks very promising ." This is a great opportunity to generate revenue with high values or high prices for compute .
Others look at this and say, " No, this is a sign that they are regretting their overbuilding ." However, a week later they say, "We're going to set up another facility in Canada ." So, you know, there are a lot of stories that are told from both sides . In my opinion, it seems like a combination of the two is happening there.
Mark Zuckerberg himself admitted that they were lagging behind in the LLM race . They admit it. In addition to falling behind in the LLM race, they realized that if they wanted to keep their stock from falling , they would have to be opportunistic when it came to making money . Because if the stock keeps falling and people are getting out of the stock, then you know what happens?
It will be more difficult to raise funds for programs that you think are profitable. I think the way Meta has set up their leases is pretty awesome . While it's a bit unclear that most of them are off-balance sheet , I think the cancellation provisions they have are great , which can be a burden on companies that lease compute services .
But if they can make money , that's good. Now you have to look at this uncertainty, combined with what's happening at Meta and the IBM news, which some see as " good for hardware ." But others say, " But look at Meta news ." Okay, look at these two together with ' sucking' . Remember , we've been talking about 'sucking' for the past four weeks .
We've been saying this since before the SpaceX IPO, it's going to be a meme , then it's going to fall apart. I predicted a 30% increase and then a decline . I want to be very clear on this matter . You know, first of all, someone did an AI analysis on my alpha reports and Kevin Claude said you were understating your win rate.
I said, "Oh, that's great." I don't like to claim that I am perfect . I make mistakes too, but someone made a comment the other day , "But Kevin, you said you should sell Micron shares when they were in the 600s ." I said, " Sell Micron when it's in the 600s while the Iran war is going on." After that, it fell to a low of 500.
In early April, when it was in the 500s , we said the hardware sector was going to rebound. What people are thinking is, "What's going on here?" That. Because hardware became cheaper and there were no capex issues back then. That is what we are going to discuss now . After that we saw a huge rally. Now we think it has increased again .
So things change, and you have to keep an eye on those changes . I know it's a little difficult in public videos. That's why I encourage everyone to join the Alpha Report . This is not intentional. There we write these things clearly , so there is no chance of missing anything while you are listening .
But I will try to be as transparent as possible in this matter . That's why I tell you what I think every day . I've been outspoken about SpaceX and how it's sucking up liquidity . The problem is that there is less money in cash, money markets and bank accounts. If you look at those two together, it's at a historic low.
If you just look at the money markets , they appear to be at their peak. But you have to look at cash and savings accounts together , because people are now shifting their savings to money markets . So, the claim that money markets are at an all-time high is somewhat misleading. There is an argument that there is a lot of cash available.
Actually, there is not that much cash available. There was a huge drain on cash . So we said there would be a 30 % increase and then a fall , and that's exactly what happened. Okay. So rather than looking to the past and telling people to go to meetkevin.com to join the Alpha Report, what does this mean for the future?
Since the SpaceX IPO , we've talked about how money is becoming harder to come by , especially in the face of those losses . People want to withdraw money from their lockups to invest in other opportunities . But now you have to take into account the IBM warning and the Meta capex warning as well , to see if this is opportunism or a capex warning.
It's like when the boom really starts, everyone says capex, capex, don't worry, it's going to continue. This will continue . When there is a turning point in a cycle , you can interpret things in two ways , but when an economic slowdown begins, you can only see things one way . All capex is turning negative.
We're at this potential turning point or break point where people are like, "Oh, is this the beginning of a turning point or is this just a break or are people misunderstanding the meta ?" They are thinking . So, what is the answer? This is the part that thinks about the future. This is what I tell those in the Alpha membership, and I'm sharing this to be completely transparent with you .
I'd rather be transparent with you and make a mistake than not be transparent. Then let's talk about what Joe Rogan and JD Vance said , because that's very interesting and it applies to what's happening in Iran. So what's next? The next thing is, we need to see what happens with mega cap earnings . This will be very interesting because between now and next week, we will be sitting idle waiting for the big companies.
Google on the 22nd, Microsoft on the 29th, maybe Meta on the 29th, Amazon on the 30th, Apple is coming after that, Nvidia is coming late, but we have seen TSMC achieve good results and raise guidance. They increased their capex by 6.4% . We expected their revenue growth to be more than 30% , but it ended up being more than 40% .
They are expanding their capex . That's all well and good , but what needs to happen for TSM to really respond positively to it ? Because people also make comments to me. They said, "But Kevin, memory is sold out until 2027. Maybe even 2030." I said, "That's great, because you know about it. Everyone knows about it." And that's already priced into the stock market .
That's why markets look for turning points, so that hedge funds can catch those turns early and react faster than retail investors. My goal and my Alpha Report is to give you what the hedge funds are thinking, combined with my opinion, before they reveal it. Yes? I'm trying to get ahead of them to ultimately give us an advantage .
For ordinary people; Maybe some officials are watching too , but if you are, it's okay, we are all human after all. Okay. So, what happens between now and then ? Personally, I think there will be a lot of uncertainty and negative momentum, especially amid this Iran chaos, especially since the Iran war is likely to escalate.
This means that until there is clear guidance from Meta, Google, and Microsoft that they will continue to spend , not just the capex guide they write on paper , but also what they say on their earnings call , the market will be volatile until then because SpaceX has kind of cheated them . And you know, I do n't want to repeat myself, I invested in SpaceX in my venture capital fund and I do n't want it to fall.
I said before its IPO , I do n't want it to fall at all, because we've been in it since it was worth almost $300 billion . And I remember, it's now up to $2.2 trillion . This is a great thing, but it wo n't last long. When can I come out? You know, it's like I'm predicting before the sale . But that's okay.
So now we have this catalyst calendar , which is primarily a sum of mega cap earnings. For this rally to continue and for hardware to thrive, we need Zuck, Satya Nadella, and Google to be willing to spend more . But it's not just the higher cost compared to last year . We are already expecting a cost of around 450 billion to 725 billion .
And maybe next year it will cross the trillion mark . That is already calculated in the price . We need to exceed those expectations, and only then will the semi- rally continue. Unfortunately , until then, you can't rely on cybersecurity alone to sustain the market. You can't rely on software alone to sustain the market.
We need hardware to stabilize and another sector to rally . And for the past 4 weeks, that hasn't happened to us . For the past 4 weeks, we have not had consistent support from hardware or another sector. And that's why, we're facing losses in the Nasdaq 100 . Now, where are we likely to go ? But unfortunately , if this Iran conflict continues like this, I think we could drop to 675 .
I also set a time limit for it . I'm not saying it will happen right now, that is, today. Who knows? We might even end up in profit today, right? The argument is that between now and those earnings, the concern for cash or the desire to receive profits could be so intense that we could hit the 675 level .
We already talked about that time limit in the Alpha Report . And you'll always know about it here first . Don't forget to join me.com. So, what did JD Vance and Joe Rogan say? This is also interesting . This is concerning for Iran, as the US has been attacking coastal bases, trying to deter Iranian militants who are disrupting the Strait of Hormuz by launching drones .
The good thing about this is that we can hopefully reduce their capacity to some extent . But JD Vance revealed a big thing . Speaking on the Joe Rogan podcast, he said that there are two types of people in Iran. There are madmen and practical thinkers . Those lunatics don't need to send more money to lunatics with drones to disrupt the Strait of Hormuz.
Because honestly , it's enough if a ship catches fire and is attacked . Hundreds of other ships are stranded, throwing up their hands and saying, "Our insurance doesn't cover this ." We don't do that. We will not go that route. "And that's where we get the disruptions . Unfortunately , this is not from the podcast, but we know this.
Donald Trump has laid out his strategy. He won't do that. Yeah. Look, now look at the headline. Iran warns America about Hormuz . The red line is warning that there will be a reaction to Trump's attacks , right? Because they want control of the Strait of Hormuz. They know America's weakness. J.D. Vance also mentioned this .
The Strait of Hormuz is the key issue in their view. But let's be clear about what the real key issue is . The real key issue is the S&P 500, which is down only 19 points today . As we're recording this , the Nasdaq is down about 65 points. The Dow Jones is slightly positive, but the real issue is the economy , and now the price of oil Brent crude has gone from $75 to $85 .
WTI fell below $ 70 for a moment , when we thought the market was opening up again . Donald The only thing that will cover up the extreme experiments that Trump is going to do in office is the economy. I’m not here to debate whether you like tariffs or not . As many of you already know, I’m against tariffs.
I believe in free markets, I’m an economic libertarian , and I tend to lean towards libertarianism in all things . When it comes to left or right , I’d say I’m about halfway. But the point is, it does n’t matter what you think about tariffs. Tariffs are an economic shock. So far, only about 50% have made it into the economy .
The rest is still flowing through the economy . It’s going to take time for them to be reflected in our CPI, PPI, and PCE reports . Unfortunately , the only thing that’s holding them or the economy together is the stock market. If oil prices skyrocket and the stock market crashes, and people fear a new never-ending war because of attacks in Iran, Trump’s ability to cover up his experiments will fail.
Unfortunately , if his experiments fail and the economy goes into recession, Donald Trump will be a failed leader because of the stock market crash . And sure, people will look for reasons why the stock market went down. But the thing is, Donald Trump is so sensitive about the stock market performance that if we go into recession, the stock market indices are going to go down 30% and the stock market is going to go down 90%; a lot of people are going to lose their jobs, and everyone is going to blame Donald Trump for that.
That's why he's so sensitive about the economy , and Iran knows that. They know there's a loophole, and Johns fully admitted that on the Joe Rogan podcast. Now he's even saying to send in the military . He says we've destroyed their nuclear program, but destroying their nuclear program and not sending in the military is the exact opposite of what Trump said, "Yeah, we might have to attack Pyramid Mountain soon, and that's not possible from the air." Okay.
So, you need an army on the ground. And you're telling me that the nuclear program isn't over yet. That is, the left hand doesn't know what the right hand is doing, or the right hand is n't working properly, whatever it is. Jedi Ones is talking about something and saying that if these endless wars continue, there is a possibility of failed states like Libya or Syria forming, which will lead to a migration crisis in Europe.
I completely agree with that . Also, I think Jedi Ones is very rational in the way he presents himself . He tries to speak very sensibly . True, we can analyze some of the things he says . For example, I'm not going to go into this in depth, but when it comes to the Epstein files, he dodges it and says, "We should have communicated better, but it's not our fault." That's entirely related to the Epstein investigation in 2006 and 2007, which they failed to do and didn't give us the information we needed to expose how vile the man really was.
It was interesting to note that JD Ones mentioned an article in Time magazine in which Time magazine accused Trump’s former campaign manager of running a campaign for Israel . This guy, Brad Parkle, runs a company called Clock Tower X, which is reportedly targeting Gen Z on social media and even using artificial intelligence chatbots to influence them with pro-Israel propaganda or misinformation .
Israel is reportedly paying Clock Tower X $ 1.5 million per month for this work , and paying influencers $4,250 per post on X, to try to sway Americans to favor Israel . He believes that Israel is somewhat behind in the communications war, and that every country does the same . He dismisses this lightly, saying that everyone is trying to influence public discourse , which is probably true.
That is, Iran is also trying to make them believe that they are the victims. Lego AI uses it, right? So, it's an interesting interview. There are some interesting points in it, but it doesn't surprise me that Israel is spending money for its own benefit, I think that someone would do something like this.
They're a country of 9 million people , they're trying their best to raise funds for their Iron Dome or to protect whatever other priorities they have . That, and I really believe , this is my opinion, you know, nobody sponsored me . The only sponsor I have is House Hack . You know, we don't even take sponsors on our channel.
Joe Rogan takes sponsors on his channel . We're not taking sponsors on our channel . That, but the thing is, yeah, 9.38 million. But the thing is, you know, Israel may have some legitimate reason because I personally think that Iran is trying to make a bomb at Pickaxe Mountain very quickly . Donald Trump knows about this.
They're not telling us the truth about what's going on there. This is my own Analysis. This is not what someone is telling me. And you know, if I were Israel , I would be scared too , because I think the day will come when Iran will grab the bomb and say, " We got it." It's all ours, guys. What can you do about it?
That's all I'm saying . That, and I don't think they're going to put the same safeguards on a bomb like our nuclear bombs, for example, if you drop a nuclear bomb now, it won't go off. But that's because they have special fail-safes that prevent them from going off in unexpected places . I don't think Iran has any fail- safes , because I agree with what JD Ones said , there are hardliners out there who will continue this endless war .
And I'm coming back here to say that this is bearish. I've lowered my level on the bull-bear scale because of the Pickaxe Mountain comments , because I'm going to be talking about Pickaxe Mountain for the next two or three I've been worried about this for years . Donald Trump's mention of it has made me even more worried .
In the long term , I'm still buying stocks. You can see what we're buying at mekevin.com. Honestly , I expect to buy stocks between now and next week's earnings reports and buy when prices drop . But we're going to be watching everything that's being said on these earnings calls very carefully because that's what's key. I agree that when we see capex coming down, it's game over .
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