Summary of the Conference Call Industry Overview - The discussion primarily revolves around the **AI industry** and its implications for the **U.S. economy** and **technology sector**. The focus is on the investment landscape, particularly in relation to AI and its value chain. Key Points and Arguments U.S. Economy and Federal Reserve - The U.S. economy is described as **resilient**, supported by high-end consumer spending and strong nonresidential fixed investment [6][12][13] - There is a **bifurcation** in consumer-focused tech companies, with management teams reporting decent consumer health, while enterprise tech shows **tepid growth** in IT budgets due to rapid changes in technology [7][9] - The Federal Reserve is facing trade-offs regarding interest rate cuts amidst rising inflationary pressures and resilient growth [11][14] AI Investment Landscape - There is significant **enthusiasm** for AI-related investments, leading to a **dichotomy** between perceived AI winners and losers across sectors [17][21] - The **tech momentum factor** has reached levels not seen since 2002, indicating a potential risk in the market [18] - The **AI value chain** is broken down into four categories: application providers, AI models, data center operators, and semiconductor capital equipment suppliers [22][21] Data Center Infrastructure - The largest spenders in data centers are **hyperscale cloud service providers** (Amazon, Google, Microsoft), expected to spend around **$350 billion** in CapEx this year [39] - The **Neo Clouds** are emerging as a new category, reselling access to GPUs, but are heavily reliant on debt financing [40][44] - The **data center spending** is transitioning from cash flow funded to more debt-fueled investments, raising concerns about sustainability [41][42] AI Model Providers - The main players in AI model development include **OpenAI, Google, Meta, Anthropic**, and **XAI** [48] - These companies are projected to spend around **$150 billion** on training AI models next year, primarily funded through existing profitable businesses or ongoing debt issuance [50][51] Application Layer - The application layer is dominated by AI chatbots like **ChatGPT**, which has scaled to **800 million users** and a revenue run rate exceeding **$10 billion** [60][61] - Revenue generation is currently driven by paid subscriptions, with expectations for future monetization through advertising [61][62] - There is a significant mismatch between the scale of investment in infrastructure and the current revenue generated from AI applications, estimated at **$15-20 billion** [63][64] Investment Opportunities and Risks - The investment strategy focuses on **semiconductors** and **hyperscalers**, with caution advised regarding **Neo Cloud providers** due to high customer concentration and cash burn [46][47] - Concerns about overinvestment and potential market corrections are highlighted, with a warning that many companies may not achieve sustainable profits [71][72] - The discussion suggests that AI may be more of a **sustaining innovation** rather than a disruptive one, indicating potential opportunities in traditional sectors like **enterprise software** and **IT services** [69][70] Global Perspective - China's AI ecosystem is rapidly developing, with companies like **Tencent, Baidu, and Alibaba** benefiting from AI advancements, despite challenges in accessing cutting-edge technology [77][78] Other Important Insights - The call emphasizes the need for a cautious approach to investing in AI, recognizing the potential for both significant opportunities and risks in the current market environment [74][75]

We'll stick with the markets, bring in our next guest who's closely watching the risks around a potential AI bubble, bullish instead on opportunities across Europe and Japan. Joining us now is GMO co-head of asset allocation, Ben Inkler. You think there's a bubble happening in the US market, Ben.Uh, we're certainly seeing lots of evidence of bubble-like behavior in the AI space. We see the kind of circular uh revenue deals. we see a lot of very uh aggressive price behavior.So, I mean, is the whole thing a b ...

Welcome back. Shares of Oracle are lower today on a report that says the cloud provider is struggling to make money renting out Nvidia chips. That story from the information.Sema Modi has the details in today's tech check. Sema, what can you tell us about this report that is driving a lot of the downside today. Yeah, the stock is down right now after that big run up we saw last month.Dom, if you read the report, it basically alleges that while Oracle's cloud business is growing exponentially, it has quote r ...

Group 1: AI Market Developments - NVIDIA signed a deal with OpenAI to invest up to $100 billion, with an initial $10 billion investment valuing OpenAI at $500 billion [5][6] - The investment will be used to build OpenAI's AI infrastructure, with NVIDIA benefiting from chip sales as part of the agreement [6][7] - NVIDIA's cash on hand was reported at $57 billion, indicating strong financial positioning to pursue strategic investments [7] Group 2: Company Earnings and Market Reactions - Micron reported a 46% year-over-year revenue increase, with a 69% growth in its DRAM memory chip market, but the stock fell post-earnings [9][10] - Alibaba announced aggressive AI spending, resulting in an 8% stock increase, contrasting with Micron's stock performance [11][12] - The market is currently in a "promise versus execution" phase, where investor sentiment is cautious despite positive earnings reports [12] Group 3: Buy Now Pay Later Sector - Klarna and Affirm stocks have seen declines, with Klarna trading just above its IPO price of $40, indicating market volatility in the sector [17][18] - PayPal sold $7 billion in buy now, pay later receivables to Blue Owl Capital, suggesting a strategy to reduce exposure in a potentially risky market [19][22] - The buy now, pay later industry faces challenges as it has not yet been tested in a tough economic environment [20] Group 4: Retail Sector Insights - Starbucks is closing stores and laying off staff as part of a turnaround strategy, indicating a shift in its operational model [24][30] - The closures may reflect a response to underperforming locations or a rebranding effort to align with the company's coffee shop vibe [29][30] - The retail sector is experiencing a psychological impact from layoffs and store closures, which could influence investor sentiment [31] Group 5: Economic Indicators - Upcoming jobs data is anticipated to be a key focus, with recent PCE data showing elevated inflation levels [33][34] - There are signs of potential stabilization in the labor market, with positive revisions to GDP data and manageable jobless claims [35]

Core Insights - NVIDIA Corporation (NASDAQ:NVDA) has signed a letter of intent to potentially invest $500 million in Wayve, a UK-based autonomous driving technology company [1] - Wayve utilizes machine learning and camera sensors for autonomous driving, differing from traditional systems that rely on detailed maps and coding [1] - NVIDIA's chips power Wayve's platforms, supporting its AI-driven approach [1] Company Overview - Wayve was founded in 2017 and raised over $1 billion last year, with backing from SoftBank [2] - In addition to NVIDIA, Uber also invested in Wayve in 2024 [2] - Wayve is currently testing its technology in Britain and the US, with plans to expand into Germany and Japan [2] NVIDIA's Business Focus - NVIDIA develops advanced computing infrastructure focused on accelerated computing, providing AI solutions, data center platforms, and automotive technologies for autonomous vehicles [2]

Market Overview - The stock market continues to reach new highs, but is currently overbought, indicating susceptibility to a pullback [10] - Money flows in early trade show positive trends for Microsoft Corp (MSFT), neutral for Apple Inc (AAPL), Amazon.com, Inc. (AMZN), and Alphabet Inc Class C (GOOG), while negative for Meta Platforms Inc (META), Nvidia (NVDA), and Tesla Inc (TSLA) [7][8] Economic Indicators - Housing starts came in at 1.307 million, below the consensus of 1.375 million, while building permits were at 1.312 million versus a consensus of 1.370 million [10] - Consumer Price Index (CPI) showed a month-over-month increase of 0.1%, below the expected 0.2%, and a year-over-year increase of 2.0%, slightly below the 2.1% consensus [10] China-U.S. Relations - China is increasing pressure on the U.S. by using semiconductors as leverage, with a ban on Chinese companies purchasing NVIDIA chips [6][10] - The ban is perceived as a move to reduce reliance on U.S. technology, raising questions about investor sentiment regarding the narrative of it being a negotiating tactic [10] Federal Reserve Outlook - The Federal Open Market Committee (FOMC) rate decision is anticipated, with a consensus expectation of a 25 basis points cut, though a 50 basis points cut is also a possibility due to political pressure [10] - The market reaction to the Fed's decision could lead to either a 'melt up' or a 'sell the news' scenario, with differing narratives among investors [10] Commodity Market - API crude inventories reported a draw of 3.42 million barrels, exceeding the consensus draw of 1.6 million barrels [11]

Core Viewpoint - The discussion highlights the challenges and opportunities in the AI industry, particularly regarding capital raising for companies like OpenAI, and emphasizes the potential of Corning Incorporated due to its partnerships and innovations in technology [1][6][9]. Group 1: AI Industry and Capital Raising - OpenAI may face difficulties in raising capital for partnerships with major firms like Broadcom and Oracle, reflecting broader concerns in the AI sector about funding and investment [1]. - Jim Cramer expresses confidence that the current market situation is not akin to the dot-com bubble of 2000, suggesting that the AI industry's fundamentals are stronger [1]. Group 2: Corning Incorporated - Corning Incorporated is highlighted as a key player in the technology sector, particularly due to its innovative glass products and partnerships, including a significant collaboration with NVIDIA [6][8]. - The company has 70 hedge fund holders as of Q2 2025, indicating strong institutional interest [6]. - Cramer praises Corning's role in the data center market, suggesting that its products are crucial for modern technology infrastructure, and believes the stock has significant growth potential [8][10]. Group 3: Partnership with Apple Inc. - Corning's partnership with Apple Inc. is emphasized, with a notable $2.5 billion investment from Apple, which ensures that all iPhones will feature glass produced at Corning's Harrodsburg factory [9][10]. - Cramer discusses the importance of Corning's glass technology for the iPhone, linking it to broader themes of innovation and American manufacturing [9][10].

Core Insights - NVIDIA Corporation (NVDA) is expected to report strong second-quarter fiscal 2026 earnings on August 27, driven by high demand for AI infrastructure and generative AI tools [1][9] - The global generative AI market is projected to grow significantly, reaching $967.65 billion by 2032, with a CAGR of 39.6%, contributing to NVIDIA's robust performance [4] AI Demand and Market Growth - Generative AI is transforming business operations, leading to increased demand for computing power, with NVIDIA's hardware being central to many AI applications [3][5] - NVIDIA's chips are utilized across various sectors, including healthcare, automotive, and cybersecurity, enhancing the importance of its products as more businesses adopt AI tools [5] Datacenter Business Performance - The datacenter segment has been a key growth driver for NVIDIA, with a 73% year-over-year increase in Q1 fiscal 2025, reaching $39.1 billion [6] - Projections for Q2 indicate datacenter revenues could reach $40.19 billion, reflecting a 53% year-over-year increase and a 3% sequential rise, fueled by heavy investments in AI [7][12] Financial Expectations for Q2 - NVIDIA anticipates Q2 fiscal 2026 revenues of $45 billion (+/-2%), a significant increase from previous years, with the Zacks Consensus Estimate at $46.14 billion, indicating a 53.6% year-over-year growth [9][12] - The consensus estimate for Q2 EPS is $1.00, suggesting a 47% year-over-year surge, with a history of surpassing earnings estimates [10]

Core Viewpoint - An artificial intelligence (AI) revolution is underway, with CoreWeave, Inc. (CRWV) and SoundHound AI, Inc. (SOUN) positioned to capitalize on this trend, as evidenced by their significant stock price increases of over 220% and 110% respectively this year [1] CoreWeave Analysis - CoreWeave has outperformed major tech stocks due to its strong relationship with NVIDIA Corporation (NVDA), providing access to NVIDIA chips across more than 30 data centers [2] - The demand for NVIDIA's Blackwell chips has exceeded expectations, bolstering investor confidence in CoreWeave's future [2] - NVIDIA's 7% stake in CoreWeave indicates its potential as a key player in AI development, despite competition from Microsoft and Amazon [3] - CoreWeave was the first to offer NVIDIA's Blackwell Ultra chip for commercial use, enhancing its market position [3] - Revenues grew over 400% in Q1, with annual revenues projected to rise from $16 million in 2022 to $1.9 billion in 2024, and a CAGR of 105% expected to reach $16.6 billion by 2027 [4] - The company has relied on significant debt offerings, totaling $8.7 billion as of March 31, with interest payments consuming 27% of Q1 revenues [9][10] - Insiders have shown confidence in the company by purchasing more shares than they sold over the past year [5] SoundHound AI Analysis - SoundHound AI benefits from rising demand for voice automation in restaurants, gaining clients like Casey's General Stores and Chipotle [6] - The effectiveness of SoundHound AI's voice solutions is driving popularity, with the conversational AI market expected to grow from $17.05 billion in 2025 to $49.80 billion by 2031 [7] - A $1.2 billion booking backlog for 2024 indicates strong long-term revenue growth potential, with a total addressable market (TAM) of $140 billion [8] - SoundHound AI expects revenues to range from $157 million to $177 million this year, significantly higher than 2024's projected revenues of $84.7 million [8] - Despite strong revenue potential, SoundHound AI reported a loss of $188 million last year, prompting caution for new investors until profitability is achieved [12] Comparative Analysis - CoreWeave is favored in AI infrastructure and has strong backing from NVIDIA, but its significant debt and reliance on Microsoft as a main customer pose risks [9][11] - SoundHound AI's stock value has increased due to the acceptance of its voice AI solutions, but it also faces challenges with past losses [12] - Current Zacks Rank indicates SoundHound AI at 3 (Hold) and CoreWeave at 4 (Sell) [13]

Core Insights - NVIDIA has achieved a market capitalization of $4 trillion, becoming the first publicly traded company to reach this milestone, outperforming major competitors like Microsoft and Apple [1] - The company is significantly benefiting from the growth of generative AI, with its specialized GPUs and CUDA software platform giving it a competitive advantage [2] - Major tech firms are heavily investing in NVIDIA's products to build AI data centers, driving demand for its chips [3] Financial Performance - NVIDIA's stock has increased by 17.8% year-to-date and 20% over the past year [1] - Despite a $4.5 billion loss in the last quarter due to U.S. government restrictions on chip sales to China, investor confidence remains high [7] - The forward P/E ratio of NVIDIA's stock is 38.4X, which is lower than the industry average of 40.0X, indicating it is not overvalued [9][10] Market Dynamics - NVIDIA's chips are still considered top-tier for both training and inference phases of AI development, despite early-year volatility and concerns about obsolescence [4][5] - The rise of sovereign AI initiatives globally is expected to boost demand for NVIDIA's chips, with countries like Saudi Arabia planning significant purchases [6] - The company is set to launch its next-generation Blackwell Ultra chips, which will further solidify its market position [8] Investment Opportunities - Investors interested in NVIDIA's growth can consider ETFs with significant allocations to the company, such as Strive U.S. Semiconductor ETF and VanEck Vectors Semiconductor ETF [11]