Chit Chat Stocks - SoFi Short Report Allegations; Micron's Insane Numbers; Nvidia's $1 Trillion Revenue Projection

Episode Date: March 20, 2026

The Investing Power Hour is live-streamed every Thursday on the Chit Chat Stocks Podcast YouTube channel at 5:00 PM EST. This week we discussed: (00:00) Introduction (02:19) Analyzing the SoFi Short Report (13:07) SoFi's Response and Shareholder Concerns (26:33) Uber's Autonomous Vehicle Partnerships (33:11) Trade Desk's Controversies and Market Position (38:18) Bumble's decline (41:45) Micron's Earnings Surprise (46:29) Nvidia's AI Revenue Projections (51:10) OpenAI's Strategic Shift ***************************************************** Subscribe to Emerging Moats Research: emergingmoats.com  ********************************************************************* Chit Chat Stocks is presented by Interactive Brokers. Get professional pricing, global access, and premier technology with the best brokerage for investors today:  https://www.interactivebrokers.com/  Interactive Brokers is a member of SIPC.  ********************************************************************* Fiscal.ai is building the future of financial data. With custom charts, AI-generated research reports, and endless analytical tools, you can get up to speed on any stock around the globe. All for a reasonable price.  Use our LINK and get 15% off any premium plan: ⁠https://fiscal.ai/chitchat  ********************************************************************* Disclosure: Chit Chat Stocks hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Learn more about your ad choices. Visit megaphone.fm/adchoices

This episode is presented by Interactive Brokers. Interactive Brokers is the best platform for global investors. From their one-of-a-kind market coverage to their best-in-class pricing, IBKR truly has it all. If you're serious about investing, head on over to IBKR.com. Stay tuned for more Interactive Brokers later in this episode. Welcome to the Chit Chat Stocks podcast, the podcast that helps you discover your next great investment.

I am one of your hosts, Ryan Henderson, and I am joined, as always, by the one and only Brett Schaefer, we got a lot on the docket this week. This is our weekly investing power hour episode where we talk all things financial markets. We do these live every Thursday at 5 p.m. Eastern time. So if you want to get any questions in, feel free to hit us up on YouTube, head on over at 5 p.m. Eastern time and ask away in the live chat. We've got a SoFi short report from Muddy Waters, controversial one, popular name there was a bit of selling in the stock we've got the trade desk not technically sued but uh protested by one of its largest customers we have absolutely insane revenue

numbers out of the largest memory chip maker i believe the largest micron who reported earnings this week and we've got plenty of other news as well open ai potentially giving up to google Google, some Uber partnerships, and plenty more. Brett, how are you today? Where do you want to start? Well, I want to start by saying if anyone cannot join the live stream, they can always join the Substack chat and ask away. I always do a pre-show.

I try to do at least 24 hours before, maybe on a Tuesday or a Wednesday morning as well. I usually toss out the same thing. Hey, what do we want to talk about this week? So if you can't make the live show and you have something you are dying for to retail investors to talk about ask away yeah usually i think we hit the big topics but sometimes we might miss a thing or two um and if you have any specific companies you want us to look at or anything like that the substack chat is the place to do that because it gives us a little bit of time to actually prep and add some notes instead of just doing a live take

do we want to talk so far short report let's do it i didn't have time to read it but it looks like you made quite quite a few notes here of course muddy waters pretty popular short seller well unpopular in certain circles but they've been around for a long time they're not afraid of any controversy what were they saying here ryan and can i assume that i think we talked about on the episode that came out this week where you know new lenders lending businesses it's all about trust and were we vindicated by our hot takes that some people give us pushback for yes well vindicated by this report uh and some of the allegations per se but obviously at the moment they remain allegations so i and i do want to maybe take a sec to there when we talk about

short reports they can be almost intimidating uh if you're a shareholder and i there are a lot of shareholders that just ignore them there's a lot of shareholders that try to dismiss whatever they can discredit the the short seller my general piece of advice because i don't know if you've ever had a company that you've owned where there's been a major short report that was released on it but my suggestion is to read it take some time don't make any decision the day of wait for a spots and give it some thought but wait wait to see what management says is usually my opinion it's it can be very frightening i think as a shareholder have you ever had this happen to one of your companies well we've had one that we both own ryan remittly global and i i actually

forget who did it was it spruce point is that it's very hard to remember all the investment fund names it was a complicated slide deck there were allegations of i i actually forget what the allegations exactly were the thing is they ended up being right uh even though the the what they said was going to happen with total deceleration of the business didn't happen but when you read one of those yes it does always sound scary and sometimes they're right sometimes they're wrong But I agree with you. Take a step back. You don't need to sell immediately. If you have a thesis on the company, well, just take it as another piece of information. And look, you try to digest it, figure out if they're right. And if you're worried that they're right, there's other fish in the sea. Yeah. I wouldn't be too quick to discard short reports either, especially ones that are alleging fraud potentially because some short reports are just based around, you know, we don't think the company is going to grow or whatever. uh they just are don't believe in the business but if it's alleging fraud or aggressive accounting

which in the case of sofi is what they are alleging here and i'll talk about that uh i do think it's important to actually look at some of these and and try to get a response or some uh clarity from management so let's talk about this here is the first paragraph muddy water says sofi is a financial engineering treadmill not a healthily growing origination business. SoFi shareholders are incessantly diluted so management can hit bonus targets through GE capital style loan marks and Enron-esque off balance sheet structures that disguise borrowings as revenue. Thoughts on the first sentence there? Well, whenever you talk to GE or Enron and yeah, I mean, I think that's just, we know why they're using that term. We'll

We'll see if there's any validity to what they're doing, but I could see SoFi having GE-style stuff. Enron, I have no idea what they're actually allegating here or alleging here. We'll see. What are the specifics here? Let's actually get to what they think SoFi is doing that makes it a short. So the focus really of the report was that they believe SoFi is engaging in fraudulent or at a minimum very aggressive accounting in order to hit bonus targets. So there were several different accusations in here that I think are worth talking about. I'll go maybe spend some time on the ones that I think really matter and then I'll hit on some of the smaller ones as well. So the first and probably the most pressing was an accusation that SoFi materially understates its net charge off rate on personal loans and personal loans are the largest percentage of their loan book. Now, it's been we talked about this, I think, two weeks ago or something like that.

It's been a very quick expanding portfolio of loans for them. And the crux of Muddy Waters' accusation here is that they claim SoFi understates the net charge-off rate in two ways. One, so they use the 120-day delinquency rate. And they say that SoFi disposes of loans close to the 100-day charge-off threshold in order to get them off their books. And then they, too, apparently park defaulted loans in unconsolidated VIEs. That's sort of the Enron accusation part. So the SoFi estimates that its net charge off rate or muddy waters estimates that the true net charge off rate for personal loans is closer to six point one percent, while SoFi states as of last quarter that their net charge off rate is two point eight percent. This is – the reason this is important is because that net charge-off rate is used as the – used as one of the big inputs for the fair value assumptions of these loans. So when they originate new loans and they book the earnings, it can be basically them potentially misleading or booking earnings that aren't going to materialize. Any thoughts there, Brett, real quick? Yeah, that's a pretty sharp allegation. What is it, to over-double the actual net charge-off rate or the stated net charge-off rate if they're doing this? I mean, it makes sense how they can do this. That feels pretty logical. It's before they hit the threshold. I'm not sure exactly if that's totally nefarious. But if they're putting defaulted loans off balance sheet and they're not actually stating that they're there, I mean, yeah, that's clearly misleading accounting because your loans are worse than you're reporting to investors.

That's pretty cut and dry if that's what's happening. Here's a quote from the Muddy Waters report. It says, in one such transaction, SoFi sold $62.5 million of defaulted but not necessarily charged off loans to an entity called Altura Ventures LLC for $5 million. That's $0.08 on the dollar that it was selling those loans for. Now – and the other accusation here is that they're selling to these entities who are just reselling them and that maybe there's some suspicious activities with these entities that they're selling to. The second big accusation here was that SoFi is using a manipulative financial modeling technique on their student loan portfolio. So on their $12.9 billion student loan portfolio, which generates approximately $450 per year in day one fair value gains, and some of this gets complex into the bank accounting. But basically, they're saying that they're recognizing these paper profits at origination before a single payment has been collected, which is apparently ultra-aggressive.

Yeah, and then I'll kind of rip through some of the other ones here, and then we can get some takes. Third big accusation, and I'm not totally sure how this works, because if you're reading this, my guess is that some of the SoFi shareholders were a little confused, honestly, and maybe didn't realize all the, I guess, secondary market activity that goes on with bank loans. So they are alleging that SoFi is seller financing sales of their whole loans to make it look like the fair value marks on their personal loans are valid. So basically, they are paying companies to buy from them. They apparently received a letter from the SEC about this, and then in the last few days

of a quarter shrunk the outstanding balance and in order to do that borrowed 312 million dollars they have not reported in their financials this is again what muddy waters is saying i'll fly through the rest of these here the other allegation says sofi's loan platform business is not a capital light toll booth generating fee income it appears to be a wet funded forward flow transaction a disguised form of borrowing whose loan proceeds sofi books as fee income they compared this to again the off balance sheet structure that enron used two more here brett i see you're about to chime in so well i was gonna say i'm confused on what this last part is the lpb thing the loan platform business so are they selling it to themselves is is that what they're

doing what what's the allegation believe so or selling it to entities where they have they've done seller financing or like suspicious entities i think is the assumption here um let's go through some of these other ones in 2025 so if i capitalized approximately 194 194 million dollars of marketing expenses instead of expensing it to hit adjusted ebita targets that's that's a red card right there that's that's tough yeah and then here's the last one i'll talk about and i actually this would be the most concerning for me if I was SoFi shareholder. It says, while SoFi's 8K filings state that Noto has not sold any SoFi stock, Noto and CFO LaPointe have extracted approximately $58.3 million through prepaid variable forward contracts, instruments that

are economically equivalent to stock sales. The seller receives guaranteed cash today. The share transfers at maturity. The shares transfer at maturity. In total, Muddy Waters estimates that SoFi's total adjusted EBITDA for 2025 was actually $103 million instead of the roughly $1.1 billion that management states, so a 90% reduction. And that's a compensation hurdle for them. So that's pretty rough. Yeah, that's pretty rough. This is bad. The stock should go down 80 so if i responded the next day they had a press release it was limited they issued a three-paragraph response the release did not specifically address any allegations i'm not necessarily saying that's a bad thing because i think sometimes timing can be important with this

especially when someone's alleging fraud you don't want it to just linger there for five days while you fix up responses but they did avoid commenting on anything specific from the allegations here is the first paragraph of their response the claims made in the muddy waters report demonstrate a fundamental lack of understanding of our financial statements and business we intend to explore potential legal action against muddy waters for the action for the factually inaccurate and misleading report that they shared about our business today let me i'm going to give my quick thoughts here and then we can get yours my first thought is i i would not really care too much about this honestly if i were a sofi shareholder if noto truly had never sold a share and because

if he had a huge chunk of insider ownership here and he hadn't sold a share then there'd be no incentive to deceive or manipulate the number right but the variable forward contracts show that he basically has booked share sales or at least whenever he says or the company says he's never sold a share you know it is at a minimum disingenuous which i would find frustrating the second thing here this is the difficulty of a lending operation i think this is why sofi shareholders were kind of stunned and most shareholders just basically said muddy waters was wrong about these companies in the past discredit them don't don't listen to this this is nonsense because the issue is we don't know minority shareholders here do not know what the true

default rate is in the loan book for personal loans it's a black box uh which is part of the issue with a fast-growing lending business and then the third thing and this is maybe the biggest this is the issue of having adjusted ebitda targets as executive compensation hurdles because there's no limit to how much can be adjusted or the things that they can do to make that number say what they want that's any thoughts from you yeah those are all fair i think with the loan book stuff being a black box i think maybe more so it's in a almost no one wants to put in 20 hours of work to analyze this and spend a you know you know what i'm saying where yeah like someone like buffett can go through during the financial crisis and look at

what were they lehman brothers uh goldman sachs guess they ended up investing in but he was given an offer like hey take a look at this business what do you think could you help us out here do you see any potential value if you could come in as a savior and he he analyzed it but there are very few people out there that have the skill to analyze a financial like this i don't think i really do and then do you want to put in the time no this is another example for me I if I'm going to invest in a financials company the one that we have a long history with is probably just Nelnet I don't think anyone else in our respective portfolios are true banking entities and that for me is just solely based on trust you have to be

just trusting in them as operators and when you're someone like SoFi that has new management new relatively of the last five years or so and getting into new lines of businesses that are growing quickly it's it's gonna add a layer of potential risk and even if none of these what they did here yeah you know that connection to actually selling stock when you stated you weren't uh you know synthetically and then having those adjusted EBIT to target yeah that's clear cut and dry unethical behavior by a management team but maybe some of the things that they did it wasn't necessarily like on purpose where you know maybe muddy waters is alleging this type of stuff but it's part of the business that makes it up and maybe it looks worse you know that they're

they're an upstart uh you know for lack of better not no pun intended their uh financials company and maybe they're just making a bunch of mistakes either way if they're actually could be like either if this stuff is true either way the the business is in much worse shape than people thought i do want to or i just want to say we probably have some sofi shareholders to listen to this podcast regularly again i would wait also it is worth noting anthony noto bought shares that day that this came out okay i don't know if that's optics or what that really means the But I've been, I mean, I think we did a deep dive on SoFi a year ago, or I did, and I was fairly optimistic about the business. On the deposit side, this is a really fast growing fintech, like it's a slick consumer app that's done a really good job growing customers and deposits. It's the lending side for me that has kept me away and has been the only hesitation for

me from being a shareholder is I just have no idea what the true net charge off rate is for personal loans without knowing the industry super well. 2.8% on personal loans seems low. If you're a regular listener to Chitchat Stocks, then you've probably heard us talk about interactive brokers. Here are three reasons why we think Interactive Brokers is better than any other brokerage platform. Number one, they've got it all. Stocks, bonds, ETFs, options, crypto, you name it.

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right for them specifically sofi it's just the fact that you have a unsecured personal lending business growing really quickly we don't know exactly how that's going to turn out it could easily turn it could easily just get super ugly within a year and maybe that's what's happened there's some comments here that says i will be honest i don't know a single person that uses sofi well yeah there there could potentially be allegations against how active one of their active users are um yeah i i don't know technically just members is the definition Yeah, you remember. Have you signed up for an account?

Yeah, I would look into the definition of that. Maybe it's looser than people think. That's something I would definitely look into if I was considering investing. We have a comment here from Tyler saying, banks can almost grow as fast as they want, but good bank operators are extremely disciplined and often limit growth to a slow pace. These SoFi accusations seem crazy.

Maybe there's some smoke, but what are regulators doing if SoFi can get away with all this? A fast-growing bank should be where regulators focus. Because I think that's true to a point, but regulators, what are you going to do? There's so many loans out there. I guess, I don't know. You can't expect them to inspect everything. It's more of an audit issue, correct, from the SEC?

Deloitte, I believe. Oh, yeah. And some of the stuff would be, apologies if you can hear the dog barking in the back, ground would be on the auditor's hand which i believe in this case was deloitte so but even they can be sort of why don't i keep i'll keep talking here if you want to get muted there the i know i grew i i agree with you there it's not regulars aren't going to pick up anything and if you look at the history complaining about the sec there's that i don't know if it's famous but it's always memorable

to me the scene in the comedy the other guys where they say what do you actually do with the sec there's all these frauds out there that you never catch and you only catch them in hindsight i think you should expect that to continue and that's why you have to stay vigilant respect the what do you call them the uh forensic accountants out there you have to respect the short report people such as muddy waters that i believe are doing it yeah they want to make money obviously but they're not doing it disingenuously you know there's some out there just like people in the long uh you know the people that just pump stocks all the time that's there's people like that on the short side but you have to read that listen to them think if you agree and a lot of the times when there's smoke

there can there can be fire um yeah i wouldn't touch this thing that's that's all i'm saying there's got to be better opportunities out there like yeah it's just tough for individual investors to buy these type of things. Because if these loans go sour, given how levered these businesses are, if you play around with accounting at all, you can get burned really, really quickly. Okay. You want to take some questions here from the chat before we move on? Sure. Let's see. We had someone say, how do you think the market would react to a massive acceleration in revenue growth at the hyperscalers, AWS above 25%, GCP, Google Cloud above 50%, azure above 40 i think it's almost priced in i want to be honest for 2026 they're they're

increasing their capex at such a high rate and they're stating that there's a huge amount of demand that's not catching up with supply yet so there's going to be this huge boom and i honestly think it's priced in yeah it certainly feels expected given the capex guide and that they are saying that they're for as fast as they're growing capex they're booking as well so it i think it's pretty likely uh we'll see on how would they react my concern is that like if cloud accelerates again we're just going to see more commentary about capex growth from the management teams and it's like push and pull because analysts seem to not like the capex guides which don't blame them and obviously you like the cloud acceleration okay we have someone asking here

about grocery outlet recent 10k said that they do a 50 50 gross revenue share with store operators thoughts on how this compares good or bad to others they probably i remember we covered them a while back i haven't kept up with them but feels like good incentive alignment i wouldn't read into it as necessarily good or bad whereas are the hurdles good does it lead to good performance all around me you can have a 50 50 revenue share line but you have to think well does it actually incentivize everyone to do well and is it going to leave a little bit for shareholders at the end of the day yeah we've had two people now comment uh any updated thoughts on kelly partners group uh we actually talked about them last week on the power hour so if you want to check that out

we we touched on some of the ai risk maybe um and then the opportunity and the revised valuation as well by the way if you're heading to berkshire this year uh or omaha for the annual hiatus they have their own event apparently kelly partners group is doing their own event at Berkshire, you might be able to get more context there. All right, yeah, so I'm sure the CEO will be there. That's one that I follow somewhat closely, but I can't say I'm an expert on it at all yet. We have another, and this is a tease from someone

that is going to be on next week. Have you guys heard of this G.mergerR, but G-D-O-T? Seems mispriced to me. Total book value around 0.5 times. Ryan, have you heard of this? I'm assuming no, but maybe it's a small thing we can look into. I appreciate the idea generation. There's always something to do, even if things look crazy out there and oil is going to $150 a barrel.

I will say I've gotten away from the Merger Arb game a bit. I can't remember the last time I – Activision Blizzard. We did all right. That did not – well, whatever. It worked, I guess. What was the other one that ended up working out? It was like the semiconductor company, I think.

IDN, I think. They're a memory player. No, no, no, no. IDN was that small cap IntelliCheck. I can't remember. It was like a Korean company or something, but it was like the merger spread was massive. It was NAND memory chips.

I'm sure their stock is soaring at the moment. Yeah, I can't remember. I can't remember if it even worked or not. I think it actually didn't go through, but they maybe have been better for it. Okay, what are we going to talk about now? NVIDIA, a lot of announcements, a lot of press releases, a trillion dollars in revenue, allegedly.

High-tide earnings, Uber and AV partnerships. It's kind of the same old stuff every week at this point. It's just so many press releases I can't get over. Let's go maybe some of these Uber partnerships. I want to switch to a high note here and some positive developments. Do you think this is positive? For Uber? Maybe.

We can debate that. That's, I guess, my question at the end of the day. I'm not sure what I think. So they're announcing a lot of partnerships within the autonomous vehicle and self-driving taxi space. They just announced, I think a couple of days ago, or maybe even yesterday, $1.25 billion investment into Rivian to accelerate their AV goals, not EV, not electric vehicles, autonomous vehicle goals. So both companies are going to work to get Rivian, I guess, robo-taxis onto Uber sometime by 2028. I'm sure Uber got pretty good terms on this deal because Rivian is struggling quite mightily as a company. They need funding.

They need cash injections. Volkswagen has been doing that for them as well. And they're hopefully getting that DOE loan. But, you know, besides that, they have an expanded partnership with NVIDIA. nvidia apparently is going to have robo taxis on the market by 2028 2027 uh but at least uber is going to be powering something with nvidia's software for autonomous vehicles i don't know exactly what that is but we'll see follow that one yeah they i guess have software i've never understood that part of the business but there's a company called wave and they are

partnering with nissan and having nissan leaves who you know autonomously driven on the uber platform in japan zoox is joining uber the amazon startup uh within i think san francisco and las vegas and uber itself launched uber autonomous solutions which allows autonomous vehicles and autonomous vehicle companies to easily on board to ride sharing so getting onto the uber platform it's a lot of announcements clearly it's hard to keep up with the company is pretty press release heavy what do you think is this coming from a position of strength or a position of weakness for uber because you have all these small players they're partnering with but then you have the teslas and way most out there that many many people are scared of i'm more scared of waymo

but there's there's those big two players that are trying to compete without uber at least most of the time i'd argue that it's it's a positive development but it does feel like they know what the narrative is around their stock and that the big risk being waymo so they're trying to diversify their partnerships as much as they can even if it's maybe more noise the news at the moment like it might just be press releases for the time being but i mean in theory the more autonomous vehicles or autonomous vehicle companies that are on their platform the better i think that's like that makes them the the platform the powerful platform as opposed to being beholden to waymo but it does kind of seem like maybe they're doing all this to for optics so that

it doesn't feel like they are beholden to waymo i think it's coming from a position of weakness i'm gonna be honest they know they just know they see waymo's growth rate i i'm still on this i i don't buy it i don't buy it but why do they need to invest a billion in rivian then why it's going like rivian stock is probably going to zero like have you seen their business No, I haven't kept up with Rivian. But if we're going around again on this Waymo versus Uber debate, I think I stand in Uber's corner here. It feels like Waymo needs Uber more than Uber needs Waymo at the moment. okay when i sell my business i want the best tax and investment advice i want to help my kids and i want to give back to the community oh then it's the vacation of a lifetime i wonder if my out of office has a forever setting an ig private wealth advisor creates the clarity you need with plans

that harmonize your business your family and your dreams get financial advice that puts you at the center find your advisor at igprivatewealth.com new from nespresso blend wellness into your coffee routine with the coffee plus range infused with functional benefits choose the coffee you love with added b vitamins like coffee plus b12 to help support immune function and coffee plus b6 to keep your day moving or go with the flow and choose ginseng delight our new double espresso with ginseng extract whatever lies ahead don't change your morning let your morning change you discover coffee plus on espresso.com nah well i just disagree we don't have to talk we have other things to talk about we've talked about this many times but when for example apple premiere is the

premiere smartphone uh platform you could call it right pretty much for all of existence and up till today, almost every company has to go to Apple, kiss the ring, they'll do what they do. Apple doesn't need to beg companies to come to them because they have all the power. Now, that's flipped a little bit in recent years because of this AI stuff where now they're paying Gemini slash Alphabet, where before Apple was receiving a huge amount of money from Google Search. But usually Apple just goes, no, sorry, we're not going to approve your app. Sorry, it took us a month to approve it or sorry you're going to pay 30 uber has to go out and try to go to all these companies i don't think they're coming from a position of strength where they

don't hold all the power in the industry i mean you don't think these avs are these av companies are wanting to partner with uber oh i think they do but i i think these av companies are i mean it's like it's like duck duck go versus google it's nothing like these companies have nothing on the road there there isn't anything cruise has nothing zoox has barely anything waymo dominates but are they worse but is uber worse off for having these deals in place in the event that these vehicles or these companies do start to have vehicles on the road like it feels like they've got no choice but to partner with these companies yeah but if uber had all the power the companies would just come to them

they wouldn't need to pay a billion dollars to have them join that's what I'm saying Apple doesn't pay Spotify hey you gotta use the Apple platform no but I don't know I still think there's the supply issue

with Waymo that we talked about with the oscillating demand but and Uber solves that but let's shift gears we have had that conversation before And I should say we did a full Uber deep dive with Aria a while back that I would – I think most of that conversation was about the Uber versus Waymo debate. Yes, more detailed discussion there.

What about this Trade Desk allegations? This was pretty surprising. The Trade Desk. The Trade Desk, just like the Ohio State University. It is still one of the most frustrating names in public markets for me actually. I own one of these, the real brokerage. we're going to the the real brokerage yeah yeah it's infuriating anyway so publicist group which is one of the largest advertising companies in the world commissioned a private audit of the

trade desk and allegedly found multiple violations of their service agreement the publicist group accounts for more than 10 percent of the trade desk's gross billings allegations include that the trade desk applied its demand side platform fees to additional charges not permitted by the contract the clients were automatically opted into tools and billed for them without consent and publicist says that the trade desk failed to provide data needed to verify that media costs were invoiced without hidden markups the big issue here aside from the complaints uh is that publicist delisted the trade desk and advised its global clients to stop using the platform that is way more harmful than just a pure lawsuit and this to me is way worse than any short report

or anything like that you've now just a lost potentially 10 of your revenue but also lost credibility across the board and probably across the industry the trade desk is now down 83 from all-time highs is there any world in which you end up no buying this nope nope i'm gonna answer before you finish the question trade desk is this a tough market all the last five six years we've been pitched many many times on this show by outside guests reading reports we've talked about on power hours or maybe deep dives you have what the trade desk uh pubmatic wasn't there magnite uh all these other players i mean amazon's in the game now but they have it more of as a holistic solution for prime video and amazon sponsor listings it kind of makes sense

hey no no this is a tough field and look at their p i've written a bunch of motley fool articles on them i'm sure if we look at fiscal ai right now the trade desk is trading at a p.e of all right load for me 26 this isn't right like it's not a it's not a pe of 10 yeah are they i mean under earning or is that like what you think steady state gross profit is four and a half so to be fair maybe they're under earning but they're in a very competitive spot i mean i think what the the ai overview that fiscal i has makes sense it says there's a structural uh disadvantage well it says that they're competing against google meta and amazon i wouldn't want to compete against google and meta in advertisements we've said this many times

and amazon is obviously a big player as well there's also a lawsuit against them this week that they drastically overstated what their new kokai platform kokai is the name of it uh was capable of and i guess under delivered for partners anyways yeah tough week for some growth stocks man i'm glad i'm not in any of these things i've had october november december was tough for my portfolio i think you as well we have some overlap but man yeah i feel bad for anyone that holds holds these trade desks and so far you know what we haven't talked about on this show yet is the decline of bumble i know and the stock they had a somewhat i don't know the stock went up 50 percent on uh i don't know it's like a cigar but it's trading like a cigar but and it

might deserve to uh users have just like i think they dropped 20 percent or something like that year over year it's maybe pull it i'll pull it up on fiscal this is our our weekly plug for fiscal ai yeah okay i'll uh i'll give the ad while you pull up the numbers here fiscal ai uh is fiscal dot ai is the best i'd say terminal that you can use within your browser for all sorts of financial tools and they put out stuff all the time ryan is you know helping helping marketing and getting the word out but one that one product feature that i've been requesting for the last i'd say two years has finally made it through and it's annotating conference calls and maybe other stuff uh maybe not just transfers but at least transcripts where you can highlight or you

can tag something and you can have your own notes being taken within the app or the web browser so it's just fantastic where okay instead of having my own google doc or written notes on a yellow notepad. I can actually put it within that specific point and I can come back to it for that company. It just provides a ton of value. You can use our link, fiscal.ai slash chitchat, get 15% off any paid plan. You've heard us talk about that plenty. All right, Ryan, that's a long enough ad. What's Bumble looking like here? Here's your Bumble app paying users year over year change. They were growing 35% three years ago today they are declining 22 here's the actual uh specific app numbers

they were officially for the first time ever eclipsed by hinge in total revenue wow that is interesting would you ever get back into the dating apps not not as a user as an investor as an investor probably not probably not it feels like there's momentum against all of these businesses and you look at something like hinge that is growing within within match group doing fairly well financially it's growing i mean it's not growing explosively on a revenue basis but it seems to me that maybe this is just reading stuff on twitter and being 29 years old but it seems like everyone just uses that app and eventually it's they're not like tinder and bumble are pretty much dying i that that's purely anecdotal um so yeah i i don't want to lose any

more money oh and these investments i'll make my money somewhere else yeah i think i'm with you it can't get cheap enough for me to be get interested yeah maybe i would match his buyback maybe there's a price like it's significantly lower than here but here's hinge versus bumble um pretty chart wow but but here's the issue is i used to love these businesses because i thought there was a wonderful network effect like right like the more users you have on there the more people want to be on there because there's more potential dates that's fair no i mean that is a that is a benefit to scale there is a benefit to scale but we've now seen two apps in a row deteriorate in their network effect and get

replaced by a new app again so tinder bumble are both seeding users to hinge is this going to happen to hinge again like i just i don't know it the staying power i've been underwhelmed by the power of dating apps well i guess yeah the point is uh if you have like there is value obviously and if uh someone said here that the podcast stopped recording sound oh that's not good you can hear me right ryan video still works yes i can i can hear you all right this might make for Maybe the live isn't working. If not, unfortunately, it'll work on the recording. But I don't know exactly how to change that because Ryan and I's looks totally normal.

For anyone, okay, it's back. Bugs by Riverside. We pay them their annual fee, and it seems they come up with a new bug for their software every month. All right, let's get back to what we were actually talking about with the dating apps because we have a lot of topics at hand today. I think the last thing I'll say is you can build a network effect within a dating app, within, let's say, a good one, a good city, New York City. That's kind of a premier one, large city, wealthier people, a lot of people willing to spend. You can build a network effect there by getting a lot of people to join your app. But I think it's easy to – if you have one, it doesn't mean you can't start five others and get people to start joining those.

So that's what makes it hyper-competitive. You don't have a network effect that really builds a sustainable moat. So it kind of – it's just a little bit flimsy, and we learned that the hard way by losing a little bit of money in that. Okay. I want to briefly touch on Micron's earnings because this was – It's a chart. Yeah. That's a chart right here.

This was outrageous. Maybe you can share this chart. Pull it up. Fiscal AI, again, shout out. And this was, so Micron reported earnings yesterday as of this recording, two days after this will be released on the podcast players. And I thought this was a mistake when I first pulled it up. And by the way, shout out to Fiscal.ai, the data's up in usually within minutes of an earnings report. The – they reported – so they have gone through I guess maybe 10 years of cycles where it was at the max $9 million or $9 billion in revenue per quarter and then last – two quarters ago they printed $11 billion in revenue and then $14 billion and then out of nowhere $24 billion in revenue last quarter. their revenue growth accelerated so revenue growth last quarter was 57 this quarter revenue grew by 196 now i'm not very i'm pretty sure micron's like an eight bagger over the last like three

years or something astounding the i'm not really interested in micron as an investor just because it's not really my expertise and and it seems to be a cyclical industry historically actually one of the most cyclical industries and we talked about that on the recent capital cycles episode where memory chips have historically been one of the most cyclical industries and you get huge investments from the big producers when things are going well because they invest into the success and it makes sense here's a quote from the press release brett get ready for this in the ai era Memory has become a strategic asset for our customers, and we are investing in our global manufacturing footprint to support their growing demand. Reflecting confidence in the sustained strength of our business, our board has approved a 30% increase in our quarterly dividend. this is the this is the catch right it's like and here's the thing micron reported 196 percent

revenue growth the stock dropped four percent today this and i think people knew people knew sure yeah i was kind of baked in but when you see 196 percent revenue growth an outrageous demand for your chips what are you going to not invest in expanding your footprint like how do you you have to samsung just announced i believe i read this in the wall street journal this morning uh 70 billion dollars in capital investment commitments so that's another competitor yeah it's just an industry where if all you have is scale and there's multiple competitors there's going to be someone that's going to want to invest get more supply online take advantage of the high prices and then the high prices eventually solves itself because supply matches

demand it's how it always goes and unless there's someone like tsmc with processing advantage meaning that no one's able to compete with them on advanced chips yeah you're in a riskier position and yeah i wouldn't i wouldn't be interested in micron but i am interested and glad that they're investing in more supply because it really hurts uh nintendo It all comes back to Nintendo for me. Okay, when I sell my business, I want the best tax and investment advice. I want to help my kids, and I want to give back to the community. Ooh, then it's the vacation of a lifetime.

I wonder if my head of office has a forever setting. An IG Private Wealth Advisor creates the clarity you need with plans that harmonize your business, your family, and your dreams. Get financial advice that puts you at the center. Find your advisor at IGPrivateWealth.com. you discover coffee plus on nespresso.com yeah the one caveat here i'll say is they are investing heavily to increase the manufacturing footprint but they also approved a 30 increase in their dividend so it's not like they're reinvesting all their money back into expanding capacity but

yeah it does feel like classic capital cycle at play here do we want to talk nvidia's uh maybe nvidia and coupon real quick sure yeah and our portfolios are getting in on the yeah hype train ryan let's let's see what you think about this quote from this press release coupon a u.s based technology leader they always love to say that announced at the nvidia ai conference and expo today that its collaboration with nvidia has helped coupon create a quote ai factory which is accelerating new innovations across the company's e-commerce logistics and delivery services and you know just trying to just pump the stock that's it like who cares show me show me i already show me your own cloud like i don't know i already assumed that they were

having very technologically advanced factories whether you call it an ai factory or not my assumption here was that they have uh great fulfillment capabilities so this means pretty much nothing to me it did surprise me that uh apparently they have a fulfillment center in california i saw you yeah i saw that i think it's for getting and they bragged about this because they're trying to just really push the idea that they're a united states business it's for getting product from the US to Korea and I guess Taiwan so you have brands they try to go for the mid-sized brands

I think what did I see it's like not mom and pop but maybe a small to mid-sized business within consumer packaged goods or something like those pomegranate seeds and pomegranate juice and then there was like some beauty and

I believe some one of the Kardashians I don't know they did a press release on that about bringing their products over there that makes a lot of sense to me you sell into coupons fulfillment center you don't worry about anything they put it on the coupon platform they get it over to korea they sell it to people they give that brand their cut that feels like a good business to me you don't have to get it over to korea like you know it makes sense yeah they're not competing with amazon anytime soon no thanks uh okay well speaking of do you see amazon launched one hour shipping

in some major u.s cities i did and what surprised me and i think is something that shows that bezos is not there anymore running the show um and i did hear more about this blue origin amazon thing apparently it's a it's bad blue origin stealing a lot of talent which is strange i don't i don't understand this bezos it's your own you're both it's both your companies uh he still owns a lot of stock i know i know but maybe he just doesn't care the uh what i saw here is that there's an extra fee to get one hour delivery on certain items and i think bezos would have said screw it it's going under the prime bundle what do you think yeah i agree any i think you yeah absolutely if you can get one hour shipping in the included in prime that does a huge upsell

that's that's pricing power yeah just don't make everything uh one hour yeah well here's here's the difficulty brett how are you going to you can't have any more loss leaders if you're spending 200 billion dollars on ai data centers no more there's no more room for lost leaders that everything has to be profitable now other than data centers ads will make up for it yeah Yeah, it's interesting that they're getting closer to the rapid deliveries of Uber Eats, DoorDash, Instacarts. You can get a grocery delivery pretty quickly now with – I don't think any – you have to have it do a large enough order, but I don't think it comes with an extra fee in major cities in the United States. You could probably try it. On Amazon?

Yeah, Amazon. It's called Amazon Grocery. I actually tried it once to just test it out investor style, and it was quick and pretty cheap. It wasn't even – it was significantly cheaper. It wasn't marked up? Not too much marked up, no. Okay, I do want to talk about this. OpenAI this week – here's a quote.

Chat GPT maker OpenAI's top executives are finalizing plans for a major strategy shift to refocus the company around coding and business users. looks like they're trying to go after claude's market does this does it feel like they're giving up to google in any way or they're just trying to chase claude that's a trillion dollar question i think for one the anthropic guy dario don't know how to say his last name is just popping up in the cigar and saying you know i beat you altman he was he worked for altman back in the day so it is a pretty big rivalry they wouldn't even hold hands at some india ai summit where everyone stands really strongly together and says we're partnering for ai and then they they wouldn't hold hands they're supposed to hold hands you know in a

group photo they wouldn't do it um so they do they do not like each other and i think open ai is realizing that anthropic was smart to go after enterprise it's much more lucrative and there's not going to be that much monetization we've brung up the stats on this show before of what the amount of people that spend on uh chatbot subscriptions is quite low even though i i pay for gemini pro i'm pretty much i'd say a skeptic on this investment narrative like not very many people are going to be using it at all the fact that there's a billion people using open ai and most of them aren't paying anything i think is an extremely flawed business model given your compute costs so they need to find a way to get profitable this is maybe a way

to do that it seems like they were able to pretty much catch up pretty quick with anthropic and they they seem to be doing okay within the whatever it is the enterprise agent market but i i i get that's a good point i'm not maybe giving up to google is a little strong but it shows that i I think Alphabet, for better or worse, can be a bit more comfortable with using Gemini as a loss leader, where OpenAI, they got to get profitable quick, given how bad their income statement is. What do you think about this? OpenAI equals Yahoo. Maybe.

I think OpenAI equals, I don't even, P.T. Barnum times 1,000. like this guy is just he's something it so here's okay it feels like open ai chat gpt generally has kind of lost its i don't know aura i hate that word but aura i guess in markets like feels like it kind of has it doesn't have the same like thrill to it like when people talk about claude when people talk about anthropic when they talk about gemini or anything google's doing with ai there seems to be a ton of excitement and maybe i'm underestimating how much how many people use or how many businesses use open ai under the hood like as an engine for any llm stuff they're doing but it's majority claude has majority market share now i would be

i'd be concerned that the consumers are more flexible than people think and even if they use chat gpt all the time i don't think it's that hard for them to switch to gemini and google still owns the most valuable real estate on the internet which is their own search bar on google chrome just tab enter you're on gemini like i think it's really hard to compete with that they still have the largest market share credit to them but it feels like i don't know i kind of like the potential yahoo analogy of 25 years ago yeah i think i think it definitely work the i'm just what i'm very curious about is whether the ipos go out for both anthropic and open ai later this year i hope they do it yeah well i want to see those s1s the

If you asked me two years ago in regards to AI, I would have said that Alphabet was very undervalued. We talk about that all the time. And they've shown their ability to regain market share. We'll see if they can push back. I think they're like 20% maybe on consumer now. We'll see if they can get even more. But I think it's extremely just uncertain what's going to happen

because I think OpenAI still has a lot of use among consumers. Cloud is growing extremely quickly, but who knows what the potential growth is within enterprise. like it's growing extremely rapidly now but whatever the roi is we'll see and i still think well maybe i've uh changed my mind a little bit on i think gemini i i just it doesn't work as well as it should like i give it a google map i give it a google maps this is the same company i give it a google maps link i say tell me what this place sells or something you know can i buy x thing here and it goes oh this is x and x store in a city thousand miles away i got no look at

the link i sent you i like yelled at it once again no that's wrong like look at the link how how is gemini not fully connected with google maps is what i'm saying yeah i don't know um i think if they didn't have the balance sheet if they didn't have the balance sheet they would have that connection now they can just act a little more lazily and not get everything pitch perfect okay uh do we want to talk about your bubble watch here we are we got five minutes left here the boldest take yeah did you see this did you see this uh i just thought in your notes yeah well this is barons and i found this on i'm actually on blue sky now yeah it's it's it's boring over there but twitter is i don't know twitter's getting worse so yeah it's back

and back i like substack more but substack chat substack chat's better i know try to spend more time there but here's what baron says moody's warrants a recession risk if oil prices stay elevated first i mean just fantastic analysis that's what you pay them for here's what they said they put the probability of a u.s recession at 49 percent even before disconcerting events in the middle east i mean bravo what a bull tech 49 i'm on a 50 i'm coin flip only what a um what that's like that is a they just said basically nothing with all those words they said nothing it's like there's always a 49 chance of a recession i don't know it just makes my head hurt and then every one of the

replies just puts it into some like political thing like well i blame this person on it's like yeah no politicians don't have the uh much of an impact yeah social media is it's well i'm only on really x or twitter and it's just it's a terrible experience like what happened to fin twit i just need that back now it's going to send you promiscuous photos that just no i don't want to see this i want to see investing stuff you know how about this okay yeah thanks thanks ai or thanks uh the algorithm but why don't we talk about nvidia's projections huh nvidia yeah at a conference this week their conference

what is it GT something GTC it's like their product annual product conference yeah actually a couple friends of the show were there asked questions Jose Naharro you remember Jose Naharro I think he's been on one time before

yeah yeah with contractors for the Molly Fool as well yeah he he asked Jensen Huang a question but anyway um they are projecting that the company's ai chip revenue could reach one trillion dollars by the end of 2027 here's here's my take that's not that crazy with all the capex estimates i that kind of makes sense if the cap x estimates are real why would that why would that not happen

that's fair yeah that's that's that's fair um yeah that's crazy it's crazy i think it's crazy i think is it i feel like we've almost just become desensitized to putting to putting numbers out there a trillion dollars in revenue is it's a lot that is crazy that is more revenue than any company in the world at this moment i think the highest is currently amazon in the 700 billion walmart yeah they're both like 700 and they're selling toilet paper not high productive semiconductors yeah the yeah i i don't know um yes who knows who knows what it's gonna be but what i thought was interesting is what the dario the founder of anthropic said on the uh gosh gosh what's his name dwarkash podcast that all the tech people go on he said look we're

projecting at our current rate our revenue is going from a billion last year 10 billion this year to 100 billion dollars at the end of 2026 and if we're off a little bit versus what we have to spend to come in the fact that we're growing so quickly could put us 200 billion dollars in the whole if we're just off on what we're projecting so that's why he's like we gotta act a little more cautiously in our spend where open ai is saying well let's just commit a trillion dollars and see what happens and it just puts all those businesses i i think i actually have a hot thing i don't think the cloud is that good of a business when's the cash flows showing up like it's actually i don't know if this is that good i don't know if if amazon decided

let's not build a new data center okay then you lose you lose you fall behind april in three years but not on certain workloads right like it depends on what you're like serving right like storage like aws storage they're sure i'm sure they're profitable there you know yeah but yeah i mean it is fair like is it just a spending treadmill well there there's just an idea and kind of it's almost like a meme that cloud's one of the best businesses ever and i i was a before maybe looking at these businesses more closely like four or five years ago would say yeah you're probably right aws wow what a monster but you kind of look under the and you go, ah, he got so much upfront capital spending.

I think there's better businesses out there. Like the stock exchanges. Last one, what about this? Thoughts on SpaceX forcing the NASDAQ and S&P to include them in the indices before the normal time frame and profit before the IPO. So at the IPO, you need to be included. And this is actually, I know we're going long,

but on Blue Sky, the one person on there that I appreciate, so far is kabuki who people have on our fit twitter guys who what is this guy talking about basically one of the funniest people ex-investment banker he's on there doing his old thing i missed him it's been like two years and he's up to his old nonsense but he wrote about this on his sub stack which is completely free so essentially uh the basically the ipo when spacex goes public they're forcing the nasdaq to put them in the NASDAQ 100 before the actual time commitments of something like, oh, you got to be out for a year or what have you,

or you have to be profitable. Isn't that just harassment? Am I wrong? Like he's shaking, Musk is shaking down the exchanges or the indices. Yeah. I don't know. The indices, look at the latest companies they included. The Trade Desk, I think it's down 70% since they included it.

um carvana carvana who are the other ones there's some other like just the timing is always the worst yeah oh peloton um yeah there's plenty of examples i think that's gonna do it thank you uh everyone in the chat uh i see some questions around the sub stack the chat is totally free uh there's actually yep yep some great conversations going on there yeah then i have the premium research side of things emerging modes and it's slightly confusing under the same banner, but that is paid. But anyone can join the Substack chat. We talk all about the podcast in there. All right. Ryan, you're going to hit the disclosure or me? Sure thing. Thank you, everyone, for tuning in. I want to remind listeners that Brett and I are

not financial advisors. Anything we say or discuss here on Chit Chat Stocks is not formal advice or recommendation. We may buy, sell, or hold any of the securities discussed in this podcast. Thank you again for listening, and we'll see you all next time. the royal canadian legion is celebrating its 100th anniversary and now our change has a two dollar coin to mark this milestone honor the legion's mission to carry forward stories of service and sacrifice to new generations and their dedication to supporting veterans and their families from coast to coast to coast celebrate this enduring legacy find the 100th anniversary of the royal canadian legion two dollar coin today