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So you can see it, tweet me Jim Cramer. There's nothing easier than being pessimistic right now. We're almost enjoying it, aren't we? There are so many reasons to be unhappy about the economy, the frenetic nature of the tech sector, oil, the president's actions on the war, inflation , housing affordability, and the bond market, whether it's two-year, ten-year, or the infamous thirty-year .
So it's easy to see why the market is selling off today: the Dow is down 116 points, the S&P is down 0.69%, the Nasdaq is down 1.33%—a real blow to all those great data center equipment stocks that were so popular. But for a moment, let me offer you an alternate reality. No, I'm not going to say that despite our massive debt, so large that the interest on the deficit alone is now a trillion dollars, we can handle it.
That would put me at the top of the stupidity rankings. I don't know how this will be resolved here or in other countries with such stakes. But let's agree for a moment that the bank is not going bankrupt anytime soon, and move on. No excuses for the president either. As this war goes on, it's becoming a rare issue that now unites left and right in disgust .
That's not even controversial, right? Almost no one likes this, and not just because it raises the price of petroleum fuel, especially diesel. Each of us has our own reference point. I like the late General George Marshall, the highest- ranking officer in the Army during World War II. He would n't talk about defeat.
Like Harry Truman. President Trump often talks about this loser and that loser, and how presidents have lost war after war. If he wants to see who didn't lose the war, maybe he should take a closer look at those two. Hey, or how about appealing to Lincoln's experience? Wars can be won even by those who say they are not prepared to lose.
But I want to take a moment to present a counterargument that is more compelling than that. We all know that as long as the president and the Iranians can't agree on anything and the memorandum of understanding is over, we can't expect anything good. With that said, we also know that these oil rallies may be excessive.
We know that this trade is one of the ways oil is transported at this time. I mean, the Houthis in Yemen are also trying to block the Red Sea. We know that the Iranians receive all kinds of weapons from Russia . It's hard to believe that Russians have anything extra, but apparently they do. But the Houthis' days may be numbered, given that they are surrounded by enemies.
So I will consider the Red Sea a closed issue. At the same time, we're going to be producing a lot more oil here in America soon, because there are a lot of pipelines that will now take the natural gas that's burned when oil companies drill. Burning gas is prohibited in this country. There's going to be a huge amount of drilling going on in New Mexico that you have n't even heard of.
This is not taken into account. And it would be worth it. I am confident that this will be our biggest growth area over the next 5 years. The Bakken is growing again. Venezuela is producing even more as its refining capacity is destroyed. The Chinese also seem to have vast, boundless oil reserves. I just don't see oil soaring much above $100 a barrel.
It is now $91. It's not positive, but it's not the end of the world. Even though this pushes the price of diesel well above $5 per gallon. I'm just saying that oil will reach a price that won't drag bonds down every day. And then it will take oil off the agenda, which is a huge plus. What about those pesky bonds?
All we keep hearing is about the global bond crisis. This is not good news. But then again , can we mention PIGS? This is when Portugal, Ireland, Italy, Greece and Spain almost went bankrupt about 15 years ago. I mean, my God . This was likely to provoke another global financial crisis. It's much worse than it is now.
This did not happen. These countries literally couldn't pay their bills. We did n't even come close to that . More importantly , while rates are rising due to both oil and Treasury bond issuance, we often forget that there are many people who were actually looking forward to higher yields before investing their money in bonds.
They can buy 30- year bonds right now at 5.28%. Then they can buy a little more at 5.5%. Take this as a promotion. Okay, they lower the average price, they make a good profit. Stay focused. I do n't like it when bond yields rise. This often signals that the Fed is going to tighten policy, right? This is very bad for stocks.
This does not mean that bonds are in crisis. Again, it's not great, but not enough to take us off the path you're hearing from me about. What about Nasdaq? This may be inflated by data center expansion, but don't tell that to shareholders of Meta, Google, Apple, Tesla, or Microsoft. There's no joy in this, Bill.
These stocks showed almost nothing. Semiconductors took off. Today they returned to earth during a real crash. Everyone is afraid of them during a sale like this. Well, no one wants to touch them now, right? Oh, they're no good. And thanks to Ryan Detrick, who I follow at X, I was amazed to see that we have the highest number of short positions in Nasdaq of all time.
Can such a large number of people really be right? When a deal becomes so popular, is n't it usually a mistake? For Investing Club, we are actually looking for an opportunity to buy some beaten-up data center stocks. We...we won today. You can pyramid buy them during the drop. Pay special attention to Micron , MU, which we recently bought for Travel Trust.
Why? Okay, on Thursday we're going to Sanjay Mehrotra, the CEO of Micron, at his facility in Boise, Idaho. This will be a special trip, right into the heart of the most important piece of equipment in the data center. Because there is a huge shortage of such memory chips, and this person is trying to solve it.
We need to find out what's going on. The media doesn't tell you enough. That will change this week. Finally, on my list of things that aren't so terrible, the consumer is number one. Last time I talked about how well things were going at Airbnb. They are on the rise. People travel non- stop. They use artificial intelligence to write programs and answer calls, saving huge amounts of money.
Today is a magical Home Depot, which had its best quarter in 5 years. Strong performance in 13-16 product categories. Really good numbers for a professional business that is built on stability, and the company has spent a fortune buying firms like SRS Distribution, which serves roofing professionals, and GMS, a former plastering business that helps contractors with walls and ceilings.
The rhythm of how each month consistently showed remarkable dynamics. They...they've had just great sales from those using their... natural language. If you look at Nvidia today and compare it to some of the biggest names in tech, the valuation argument becomes very interesting. Imagine Nvidia trading at 14-15 annualized earnings, while Apple is closer to 35 earnings.
Now add the difference in height. , with management forecasting approximately 17% annual growth. And the problem is not a lack of demand, but . This created a very unusual situation. The company is growing at a tremendous pace, deeply rooted in the AI ecosystem, increasingly involved in open source models, and still trading at a val modest compared to other mega-tech companies.
And that's why some analysts see a much clearer opportunity in Nvidia than i doesn't get enough attention. How long does its AI infrastructure actually remain useful ? For some time, investors were worried that Nvidia's GPUs would become obsolete very quickly. And the argument was simple. A new architecture appears, companies buy it, and the previous generation is displaced, depreciated, and within a few years the old equipment becomes economically worthless .
But this assumption may be too simplistic. One cloud infrastructure operator recently provided an important example with Nvidia A100 GPUs. And these GPUs were introduced around 2020. Instead of becoming useless in a few years, part of this data infrastructure has been that not every AI workload requires the latest GPU available.
The latest hardware may be ideal for training the most advanced basic models, but older accelerators can still be extremely valuable for other tasks. Physical AI - batch computing, enterprise applications , inferential research, and other accelerated workloads that previously lacked sufficient access to computing power.
So, when new generations appear, old equipment doesn't necessarily disappear. It can simply move down the workload hierarchy . And this creates something very important for infrastructure investors. Longer useful life . If a GPU purchased years ago can continue to generate revenue for a few additional .
And that's why NVIDIA's latest infrastructure updates are so important. The first NVIDIA systems have already started to arrive at customers. Some of the earliest deployments involved the NVL72 configuration, showing how quickly the industry is moving from announcement to real infrastructure. But getting a new GPU isn't enough.
A functioning AI cluster requires an entire ecosystem. And you need NVIDIA accelerators, you need a rack, and you need a network. Now we need data center capacity. You need power, you need software cables to configure and operate the system . And all these parts have to work together. And think of it like building an airplane.
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