Rich Habits Podcast - Anthropic's $1T IPO, Inflation Updates & Billions in Bitcoin Losses

Starting point is 00:00:00 What's up, everyone, and welcome back to the rich habits radar, our Friday episode of the Rich Habits podcast where every Friday morning, we're coming at you with the biggest headlines impacting you and your money. This episode is brought to you by VCX, the public ticker for private tech. My name's Austin Hankwitz. I'm joined by my co-host Robert Croke, and the three things sitting at the top of our rich habits radar this week include job openings surging during the month of April, anthropic filing their S-1 confidentially so that they can go public later this year, and the Fed's updated view on inflation, and it's not good. Be sure to stick around to the end where we talk about pattern day trading

Starting point is 00:00:42 and the cool new rules around it. Well, is day trading cool? I don't know. We'll talk about it, Robert. I'm so excited about this episode, so let's get into it. Our first story today is job openings surge to 7.6 million jobs. On Tuesday, the Bureau of Labor Statistics released the Joltz report showing job openings surged to 7.6 million jobs in April up from 6.9 million in March. That's the biggest monthly jump in nearly two years and blew past the 6.9 million consensus expectation. It's also the highest reading since mid-2020, which looks good to me. So that was on Tuesday. Now, on Wednesday, ADP's National Employment Report showed private sector employment increased by 120,

Starting point is 00:01:29 thousand jobs in the month of May. So that was April that Robert talked about. Now we just heard about the month of May, which also beat those expectations. Annual pay was up 4.4% year over year. Small businesses led the hiring with 67,000 new positions, while large corporations only added 40,000, and mid-sized firms contributed about 17,000. Now, ADP's chief economist had said, and I quote, the labor market continues. to show sustained momentum going into the summer hiring season. Love to see it, Robert. And here's the context that makes this complicated. In April, the jobs report inflation outstripped wage growth for the first time in three years. So when your paycheck grows at 4.4%, but inflation

Starting point is 00:02:17 is running at 3.8%, your real purchasing power is barely positive. And for lower income workers whose basket of goods is more energy intensive, real wages are likely negative. Mark, Marketplace noted this week that the gap between wage growth and inflation is the tightest it's been since the Iran conflict began. Now, Friday morning's May non-farm payrolls report, we're filming this on Thursday, is expected to show about 95,000 jobs added, a deceleration from April's 115,000 jobs. Unemployment rate is expected to hang out around 4.3%. So definitely keep an eye on that as you watch this episode. Friday, June. 5th. If the number comes in significantly above those expectations, it strengthens the case for a potential rate hike at the June 1617 FOMC meeting. If it's weak, it gives Warsh a little bit more cover to keep rates steady for longer. Austin, this is a lot to digest. Share with our listeners.

Starting point is 00:03:20 What does this mean for you and your money? The labor market data is strong. Joltz are surging. ADP numbers came in higher than expected. Hiring is broadening not just corporations and mid, but now small business hiring. That's good to see. That's good for the economy. But it creates a massive problem for the Federal Reserve, which is a theme we've seen ongoing all of 2026 because strong employment numbers plus accelerating inflation equals no rate cuts. In a normal cycle, that's cool. We want to see that, right? Inflation can tick a little bit higher, but if, you know, hiring continues to outpace that and real wage growth trends up into the right, that's fine. But we're in a very weird and different environment.

Starting point is 00:04:07 In the current environment, with the PCE, the personal consumption expenditures index, that inflation gauge that the Fed really likes to keep an eye on hanging out at 3.8%. The beige book, something we'll talk a little bit more about as the episode goes on, showing inflation is spreading outside of energy into other places, right? That's not a recipe for success. That's a recipe for higher interest rates than the consumer wants. Yeah, Austin, in a strong labor market means the recession everyone's been predicting keeps getting pushed further out. And for everyone to remember, consumer spending, which is about 70% of GDP, has a floor as long as people are employed. That's why these job numbers are so important. The risk isn't a job's collapse. It's a

Starting point is 00:04:53 slow erosion of real purchasing power that gradually weighs on consumer confidence and that discretionary spending. So, Robert, we're definitely going to be encouraging our friends listening here to tune in every single week because we're going to keep you abreast on what the labor market's doing, the unemployment rate, the openings, like, you all have to know this stuff. And here on the show, we'll absolutely continue to talk about it. Now, let's jump into our second story, which is Anthropic Filing to Go Public. A little IPO action. So on Monday, Anthropic, which we all know is the AI company behind Claude and all the fun stuff Claude has turned into with Claude Code and the design and all the cool

Starting point is 00:05:32 things they've built, they submitted their draft for the S-1 to the SEC to eventually go public with an IPO. The announcement came from a blog post that the company had shared and it immediately set the tech world buzzing because Anthropic is valued at about $1 trillion right now in the private markets. But then if you go to Polymarket, one of these, you know, online prediction market websites we like to look to not to make our own bets, but to understand what other people think. Right now on Polymarket, it shows that by the end of 2007, the market is expecting Anthropic to be worth over $1.8 trillion. So you really can now put in perspective when Anthropic puts in their S1 filing here to go public, just how big of a deal, just how big of a company that's

Starting point is 00:06:20 going to become. And it's top of mind for me right now, Robert. Yeah, it's crazy thinking as long as I've been doing this, that we're actually talking in T's and trillions now for these IPOs because, you know, back in the day, even with Nvidia and Palantir and meta, thinking of the difference now of these IPOs is just crazy for me to fathom these numbers. And so Anthropic filed just weeks after SpaceX filed it's S1 and both are racing OpenAI, which has also been preparing for their public offering as well. And the Guardian noted that the financial stakes of the AI race rise as Elon Musk's SpaceX. Open AI and Anthropic are all slated to go public this year with SpaceX's tended to go public next week, I believe June 12th or 14th. These are three of the most valuable private

Starting point is 00:07:09 companies in the world all hitting the public markets in the same six month window. So it's crazy. There's going to be a lot of movement, a lot of liquidity and a lot of people just resetting their portfolios. Yeah, let's talk about SpaceX for a second. I think it's really important because they just firmed up more of their terms earlier this week. They're targeting a fixed IPO price of 135 per share with a $1.77 trillion valuation. So $135 per share, $1.77 trillion valuation. New York Times reported Wednesday that a revised prospectus now shows Elon Musk is exceptionally confident about demand for their offering, which is expected to debut, to Roberts Point, June 12th, under the ticker SPCX on the NASDAQ. Roadshow starts on June 8.

Starting point is 00:07:59 The combined capital raise from SpaceX, that's $75 billion, plus whatever anthropic targets, plus the OpenAI offering, we're looking at potentially $100 to $150 billion in new IPO supply hitting the market in Q3 and Q4. So to think about that, that's an enormous amount of capital that needs to flow from somewhere. at Alphabet's 80 billion stock sale, and you're approaching $250 billion in new equity supply this year alone just in the second half of the year. I think it's so important for us to really walk through this slowly for our audience because that $250 billion has to come from somewhere. Obviously, the Google, we'll talk about that. That's already been sort of figured out where some of that's going to come from.

Starting point is 00:08:43 But, you know, SpaceX, Anthropic, OpenAI, that's 100, 150, maybe even closer to two. depending on how big Anthropic and Open AIs, you know, offerings are going to be. So, Robert, walk us all through what this means for you and your money, portfolio, all of that. Yeah, this IPO wave is both an opportunity and a risk. The opportunity is obvious. You get a chance to own Anthropics, SpaceX, and potentially Open A.I. As public companies for the first time. These are genuinely transformative businesses, so everyone is super excited.

Starting point is 00:09:16 But the risk is those supply dynamics. $250 billion a new equity supply means existing stocks face competition for capital. Think invidia, micron, Intel, all of these, because when Space X starts trading on June 12th, some investors will sell other holdings to buy in. That's that divergence of moving capital from one winner to hopefully another. So when Anthropic eventually prices, even more capital will need to rotate. I think that's so important for people. to understand, you know, this money doesn't just come out of thin air. People have to say,

Starting point is 00:09:54 oh, I need to sell my micron that's up 250 percent, which, by the way, I hope you've been buying micron because we've been talking about it for three years now. Shout out Robert. But it's like, you know, I've got this name that's up 200 percent in my portfolio. Yeah, maybe I sell it, take some profits and rotate that capital into an anthropic or an open AI IPO. And that's going to cause some turbulence. That's going to cause a little bit of volatility, I would imagine. And for individual investors, right? Be patient. Be patient here. IPO euphoria almost always fades within the first few weeks. Robert, I had shared inside the Rich Habits Network. Let me see if I can find it here live as we record this episode. Yep, here it is here. So inside the Rich Habits Network,

Starting point is 00:10:36 and if you're watching this on YouTube or maybe on Spotify, whatever, just look at your screen for a second. This illustrates the hottest IPOs throughout the last, I don't know, call it 10, 15 years what their volatility was on a one week, one month, three month, six month, and 12 month basis, like what that return was. But, and you go like, okay, well, 12 month return, the average return is 14%. That sounds pretty good to me. True. But the average max drawdown to get to that 14% is a 55% max drawdown. Median is 54%. Right. So like IPO day, cut it in half because that's the the max drawdown to experience and what to expect when it comes to some of these hot IPOs. We saw the same thing with Facebook. I remember their max drawdown here was 54%. Massive, cool, fun, sexy name. Everyone wanted

Starting point is 00:11:28 it. And I think it had traded up in the first call it a couple weeks. But then by the time, month three and month four had rolled around, stock was down 30, 40, 50 percent. Everyone thought it was a bust. What's going on? It took 14 months for Facebook to come back around rock and roll. Ron Santella talked about that on the show. I think it was last. week or the week before. Shout out to the HEDGETF. And Equable shares, you know, Ron's a great guy to have on the show and help us, you know, familiarize ourselves so we can look at the data. We can see this type of stuff and make our own decisions. Now, SpaceX at 135 a share, that $1.77 trillion. I would argue that's probably not a bargain, right? It's, it's probably

Starting point is 00:12:11 a justified premium valuation that prices in, you know, how big can Starlink get? How big can their launch business get Amazon. I mean, obviously Blue Origin, they just had a very bad rocket explosion the other week. Amazon's not going to be able to use Blue Origin. Amazon's launching a lot of these low Earth orbit, you know, satellites. They're going to have to pay more to SpaceX. They've got defense contracts. They've got the XAI stuff going on and those subscribers. So like you got to kind of underwrite this like a venture capital investment to be quite honest with you. It's going to be very interesting to see how SpaceX trades in going into the first couple earnings calls. If you are an eager investor, the biggest advice we can give you here is take a deep

Starting point is 00:12:55 breath, give it some time, add it to the watch list, keep an eye on it. And as the stock settles, gets more predictable, then feel free to dollar cost average, assuming you have a deep conviction in the business. I love this take. And I appreciate everything you just said, because I think it's probably the most important part about this podcast episode. And I talked about this the other day, one of Benjamin Graham's famous quotes is for IPOs is the intelligent investors should conclude that IPO does not only stand for initial public offering, but it also stands for its probably overpriced IPO. And I think that's very true here because I don't see a lot of value. I've been doing this for 35 years. And back in the day when I could get in on a meta IPO, when it was Facebook or some

Starting point is 00:13:43 of these others, Nvidia, stuff like that, they were priced accordingly. But we have so much hype in the markets right now. A lot of times people rush out of really good positions to get into these euphoric IPOs only to find out that their money is either going down, down, down for the first year, 18 months, or they bought at the top and may never recover. So just be careful out there. I love your on this, Austin, and really appreciate that breakdown. Yeah, no, totally. And I love doing these sort of breakdowns and it's really important. And it actually kind of tees us up for the sponsor

Starting point is 00:14:16 of today's episode, Robert. Support from the show comes from VCX, the public ticker for private tech. For generations, American companies have moved the world forward through their ingenuity and determination. And for generations, everyday Americans could be a part of that journey through perhaps the greatest innovation of all,

Starting point is 00:14:33 the US stock market. Robert, it did not matter whether you were a factory worker in Detroit or a farmer in Omaha, anyone could own a piece of the great American companies. But that's now changed. Today, our most innovative companies, like the ones we just talked about, are staying private rather than going public. The result is that everyday Americans are excluded from investing and getting left further and further behind while a select few reap all of the benefits until now. Introducing VCX, the public ticker for private tech. VcX by Fundrise gives everyone the opportunity to invest in the next.

Starting point is 00:15:07 next generation of innovation, including the companies leading the AI revolution, space exploration, defense tech, and more. So visit getvcx.com for more information. That is getvcx.com. Carefully consider the investment material before investing, including objectives, risk, charges, and expenses. This and other information can be found in the fund's prospectus at getvcx.com. This is a paid sponsorship. I hope you guys are really paying attention to this stuff because Anthropics not going away. They're going to be a one, two, three, four, five trillion dollar company growing at this pace. SpaceX obviously coming in at two trillion. Open AI is going to come in at one trillion, I'm sure. It's just it's unbelievable. And VCX is a really cool way, in my humble opinion, at the right price to get exposure to some of these names in your own portfolio.

Starting point is 00:15:57 So with that said, let's now jump to our final story, our final headline story here, Robert, which we alluded to before, the Fed's beige book showing inflation. has begun to spread into about absolutely everything. Now, the Federal Reserve's beige book, which is this qualitative roundup of like economic conditions from all 12 regional Fed banks, showed that most U.S. regions experienced higher inflation from late April to late May with energy-related costs, creating spillovers into shipping, packaging, groceries, and fertilizer.

Starting point is 00:16:33 Yeah, and it's not just gasoline anymore. the inflation is everywhere. When energy costs hit fertilizer, that feed goes up in prices. When they hit shipping and packaging, that feeds into everything consumers buy. And the Bage Book noted that businesses are responding with more frequent wage adjustments and cost of living increases to manage increasing fuel and other household cost pressures, which is exactly the kind of wage price spiral the Fed has been trying to avoid for months now. Now, at the same time, the economic activity picture was actually encouraging.

Starting point is 00:17:09 So the beige book described growth as modest overall, with employment as steady, and the AI investment boom providing a genuine tailwind to several districts. Manufacturing hit its highest level in four years. The ISM manufacturing PMI came in at 54 for the month of May, highest since May of 2022, up from 52 in the month of April. That's five consecutive months of expansion. Services, they also came in beating expectations of services. PMI had its 23rd consecutive month in expansion territory. So the economy is moving up into the right. But unfortunately, as the beige book is telling us, so is inflation.

Starting point is 00:17:45 So you have an economy that's growing, but the inflation problem is getting worse, not better. PCE is at 3.8%. CPI is at 3.8%. And both are running nearly double the Fed's 2% target. And now the beige book is telling you the pass-through effects are broadening throughout the economy. This sets up Kevin Warsh's first FOMC meeting on June 16th and 17th as potentially the most consequential Fed decision since the rate height cycle began. The Fed funds rate has been at 3.5% to 3.75% for three consecutive meetings. The April vote was 8 to 4 the first time since October 1992 that four officials dissented.

Starting point is 00:18:29 Bank of America has pushed its first rate cut forecast to July of 2027. and the bond market is pricing essentially zero cuts through years end. So, Austin, this seems really scary to me. What does this mean for you and your money? The beige book confirms what the data has been telling us for months now, which is the Federal Reserve is stuck. Growth is fine, right? ISM manufacturing is at this four-year high.

Starting point is 00:18:54 Services are expanding. Jolt's job openings surging to $7.6 million in April. We just talked about that. But inflation is also accelerating. It's not decelerating. Warsh inherited the worst possible setup. So here's the thing to watch. It's what Robert and I are going to watch on June 16 and June 17.

Starting point is 00:19:14 Does Warsh signal any willingness to hike rates or does he take a wait and see approach? His reform-oriented Federal Reserve language from the swearing-in ceremony suggests he wants to break from Powell's framework, but nobody knows in which direction. And depending on what that May Jobs report comes in at, the pressure for a hike could intensify. If it's weak, the case for staying put gets stronger, but either way, that three and a half to three point seven five interest rate isn't going anywhere for a while. So make sure you own those quality names with real earnings. Now, here's the fun part, Robert, despite all of this, the Russell 2000 is still up 17% year-to-date. Isn't that interesting?

Starting point is 00:20:01 Yeah, Austin. Markets are all over the place. We've seen a lot of all-time highs happening, but we've also seen a lot of negativity. And we just have to really keep an eye on all of these reports because they're so important with the Fed of what's going to happen next. What's going to happen in Q3 and Q4 in these markets? So we will definitely keep an eye on this for everyone that follows along on the podcast. Yeah, follow along in the podcast.

Starting point is 00:20:25 Share the podcast with your friends that care about the Federal Reserve and inflation and the jobs data and earnings and S-1s and IPOs. Like that's what these Friday episodes are all about. They're all about the biggest headlines impacting you and your money and making sure that you understand what's going on and maybe what we're doing with our money to see how we're going to navigate some of these headlines. So Robert, every episode, we have our radar points, which are essentially an opportunity for you to go get three of your favorite headlines that you think are really meaningful

Starting point is 00:20:54 and fun. I get three of mine and we come and we talk about it, show and tell style. So I'll let you start, start us off here with your three radar points. Well, yeah, we talked about this on the Rich Habits Network inside the live last week, where I was talking about how people really need to pay attention to these headlines, not just to have knee-jerk reactions, but also to understand where the market sentiment is and where things are going. And we saw just the other day that Marvell surged 22.5% to a record high

Starting point is 00:21:25 after NVIDIA CEO Jensen Wong said the company is on past, to $1 trillion, a bold call for a chipmaker currently valued at only $234 billion. Invidia put $2 billion into Marvell earlier this year to tighten the integration between Marvell's custom chips and Nvidia's networking gear. Marvell's forecasting, its custom chip business alone will top $10 billion in revenue by fiscal $2029 as hyperscalers keep building out AI data centers. The stock added over $45 billion in market cap. in a single session, and that is a sign that the AI infrastructure trade is spreading well beyond

Starting point is 00:22:05 NVIDIA into the Picks and Shovel's names, designing the interconnect technologies that link thousands of processors together. So keep an eye on it. You see Trump calling out stocks. You see Invidia, you know, Jensen Wong calling out things, and you just see all of this movement. So I think these trades are alive and well, but just keep an eye on them. My second call out, and I feel we were so right on this one, Austin, and you really, really nailed it earlier this year months and months ago, and that is Micro Strategies $11 billion in losses on their Bitcoin. Strategy, formerly Micro Strategy, is sitting on nearly $10.8 billion in unrealized losses on its Bitcoin Treasury with a position down 25% year-to-date after Bitcoin slid recently to around $62,600. The firm has $63.9 billion

Starting point is 00:22:58 of invested capital against the current balance worth just $53 billion. And the stock is down 66% over the past year as volatility hammers the entire crypto ecosystem. And my third point today is Nvidia goes in on the AI enabled PC market. This one really shocked me. I didn't see it come in. I didn't see any warnings. And Nvidia just declared war on Intel, AMD, Qualcomm, and Apple in the PC. market at Computex on Monday, Jensen Wong unveiled RTX Spark, a super chip that pairs with a 20-core

Starting point is 00:23:36 ARM CPU custom built with Media Tech on TSMC's 3-nometer process with a 6,144 core Blackwell GPU and 128 gigabytes of unified memory delivering desktop RTFX, 5070-level graphics performance at a laptop. That was really hard for me to read, but what it means is this is a much faster chip, and Wong called it the single most important tool of humanity, and here's the thing to watch out for. Microsoft is co-developing it to turn Windows into what they're calling, an agentic AI OS, where AI agents run locally on your machine and not in a cloud. So this is huge news because Nvidia's not just resting on their laurels to take over data. centers, but they want to own the entire compute stack from cloud to your laptop and everything

Starting point is 00:24:32 in between. And this really reshapes the $250 billion PC market the same way they've reshape the AI infrastructure market. That's really interesting. As someone who has OpenClaw and went out and got a, what is it, like a $600, you know, Mac Mini to host my OpenClaw. I'm not running a local model on it because I just don't think it's strong enough. I mean, this is way stronger than what I've got here for $600. So it's really interesting to think that you could run a model locally on your laptop. And I think that's where a lot of this is going because I think it's more and more of these corporations are, especially Windows, right? But more and more of these corporations are starting to go and look and say, hey, wait a second,

Starting point is 00:25:15 we want to use these AI agents for our own, you know, productivity and our processes and projects and things like that. But if I'm using an AI agent and I'm doing Anthropic, or if I'm using OpenAI's chat GPT, they can read and see every single thing that my company and my business is doing. I don't know if I want that. Compared to one of these local models, you know, you can go download some of these local models

Starting point is 00:25:40 or, you know, I've never done it, so I don't know the technical term here. But I've heard you can literally just take a Kimmy K or whatever it is or one of these, you know, local models and get it on your phone or your laptop or your computer, whatever's going on. And it's like having the whole large language model just right there on your machine itself,

Starting point is 00:25:59 not doing this communication with Anthropic and subscribing to their $20 or whatever it might be or $200. So it's really interesting that Nvidia is enabling and creating these types of machines, these computers that hopefully will have their own models running on them, maybe even just straight out of the box. I love it because I think about guys like me and you,

Starting point is 00:26:21 and anyone else that owns companies and all of that, the efficiencies that it creates. And we hear a lot of people talking about the age of abundance as we move forward further into AI and agentic models and all of this robotics. So I think it's important for us to just stay on top of it because I know that my companies are already infinitely more efficient. You've built some really cool things within your stuff through clot and all that.

Starting point is 00:26:46 So I'm really excited about it. I was just shocked because I didn't even know this was a move for Nvidia. So I probably shouldn't have been surprised, but I'm excited to see what comes out of this. Yeah, and I'm still telling you, my dark horse for AI is Apple. I still think they're going to do or have or say something that just makes it all really fun and exciting. Now, Robert, before we jump to my radar points, which I'll be talking about the pattern day trading rule updates that we alluded to earlier, I'll be talking about Google's $80 billion equity offering and now the recently announced New York Stock Exchange partnership with Anthropic for that

Starting point is 00:27:23 glass-wing cybersecurity side of the equation. We got to hear from this episode's sponsor, ORA-E-T-F, and the U.S. Defense ETF, trading under the ticker, D-U-T-Y. As geopolitical tensions rise and governments all around the world continue increasing their defense spending, many investors are looking for ways to gain portfolio exposure to one of the fastest-growing sectors in the global economy, which is military defense, aerospace, and cyber security. Yes, Austin, DUTY is designed to provide targeted exposure to companies supporting America's national defense infrastructure, including advanced military technologies, defense manufacturing, cybersecurity, and space-related defense innovation, a lot of the sectors we've been watching.

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Starting point is 00:29:10 U.S. defense ETF.com. Please read the prospectus or summary prospectus carefully before investing. Investing involves risk, principal loss is possible, and it's distributed by Foreside Fund Services LLC. All right, Robert, let's now jump to my three radar points. We'll never forget opening up my first brokerage account and buying AMD stock at $18 to share with it when I was in college, and that was on Robin Hood. I didn't have that much money, and I was trying to figure it out, right? And so I put this money on Robin Hood. It was like 2016, 2017. It was a long time ago. And I got 100 bucks in here and buying a couple shares at AMD and I start buying and selling. I start buying and selling a little bit. And then I get this thing that flashes on my screen robber. It says, hey, no more buying and

Starting point is 00:29:54 selling until you have $25,000 in your account because you're going to be flagged as a pattern day trader. Well, my first radar point to call out here is after 25 years, the pattern day trading rule is officially dead. Starting today, you no longer need $25,000 in your account to make more than three day trades in a week. Finra is completely scrapping the threshold entirely and replacing it with a real-time risk monitoring system by brokers instead of these arbitrary trade counts. Robin Hood and Weble are live immediately. Schwab is going to switch on June 8. Interactive brokers and e-trade are coming soon. It's a massive unlock for retail investors, especially those that are, you know, let's say for example, oh, I'm really excited. I'm going to buy this. Wait a second. Maybe I don't

Starting point is 00:30:42 want to buy this. Let me just sell this real quick. Or they sell. Like, you know, everyone mistakenly or like just, it's so annoying because like sometimes like, wait, I want to buy this real quick. And oh, shoot, maybe I don't want to get that. I made the wrong decision. Or like, oh, I want to sell this and oh, maybe I should buy it back. This doesn't make sense. Like, we're emotional creatures, especially when you're first getting started. And it's so cool to see that now this like restriction is gone. Because I vividly remember getting so frustrated about trying to like buy and sell or do something in the same day and Robin had been like, nope, can't do that because laws. And I'm like, dude, come on. Now, margin rules, they still apply. You need $2,000 minimum and a 25% maintenance

Starting point is 00:31:24 so the guardrails aren't gone there. Just a little bit smarter for you. Let's now jump to my second story, Google's $80 billion equity offering. Robert, this one is nuts. Alphabet just raised $80 billion in the largest equity offering in tech history. Warren Buffett's Berkshire Hathaway, anchored it with a $10 billion private placement, which is remarkable, considering that Buffett avoids tech historically. But anyway, no longer running the company, so I guess it makes sense now. The deal included a $30 billion underwritten public offering that was oversubscribed and ultimately priced at $35 billion, bringing the total haul to that $80 to $85 billion range. The money is going straight into AI infrastructure. Alphabet expects $180,000.

Starting point is 00:32:12 to $190 billion of capital expenditures this year, six times what they spent in 2022, and two times doubled the size of what they spent last year. And the, I quote, overwhelming majority of that is going to technical infrastructure to meet their CEO and what they have called the AI demand being meaningfully exceeding available supply. So that's what's so interesting, Robert. We have a company like Alphabet generating $400 billion a year in annual revenue and they still have to go and raise $80 billion just so they can meet the demand because

Starting point is 00:32:47 they can't supply everything that they need. I mean, you've seen the backlogs of Google Cloud. It's unbelievable. So Google is definitely treating this like a winner take-all moment. I think it's really interesting. I've seen some rumors online about people saying, well, Google coming in for an $80 billion offering is going to take some equity away from SpaceX, some equity away from Anthropic and Open AI and kind of being a little bit competitive around that. So I think that's an interesting call out. And my last radar point, but certainly not least, the New York Stock Exchange partners with Anthropic-defined cybersecurity vulnerabilities

Starting point is 00:33:19 with that project Glass Wing. So Anthropic, the company behind Claude, just landed one of its biggest enterprise developments yet, the New York Stock Exchange. ICE, which operates the New York Stock Exchange, plus clearing houses, data services, and mortgage technology, announced that they're deploying Anthropics Claude Mythos preview across their entire cybersecurity infrastructure as part of Project Glasswing, a recent

Starting point is 00:33:48 initiative to use AI to find and fix the cybersecurity vulnerabilities before they get exploited. This is massive news because ICE runs the most critical financial infrastructure on the planet. And choosing to go with Anthropic over Google or Microsoft or Open AI for that job is a major credibility signal for clod in these regulated industries. Also highlights that a new AI monetization lane that doesn't maybe get enough attention. Not talking about chatbots or content generation or open claw and the APIs, whatever, but autonomous cybersecurity for mission critical systems where a single breach could disrupt global markets.

Starting point is 00:34:31 Think about how much JP Morgan and Morgan Stanley and these other big financial institutions are going to say, Anthropic, let me give you a little bit of money. I want access to some of that cyber security stuff you got going on over there. So again, really, really, really cool headline. Yeah, I think my biggest takeaway from your radar points today is the pattern day trading rule going away. I always thought it was just inefficient and wrong that they're going to tell someone that may want to trade or swing trade stocks or whatever that they can't day trade unless they have $25,000. And that really is kind of a sign of the times by this going by the wayside. because there's so many retail investors.

Starting point is 00:35:10 We talked about this in the Rich Habits Network the other night. I looked up a stat and it said since COVID, there had been 30 plus million new accounts opened up by retail investors in the last four or five years. And I think that's an important part of this of why this had to happen. Because there's a lot of people out there that want to get in the investing game but don't have $25,000. So I like that they've lowered the threshold.

Starting point is 00:35:34 There's still going to be guardrails, but more and more people can get out. there and learn and do trading if they want to without having to have the $25,000. That's my favorite takeaway from your radar points today. I am a big believer in, yes, people should be investors and not day traders because day traders tend to lose money over a long period of time. We all get that. I'm just a big believer in let someone do whatever the heck they want to do, right?

Starting point is 00:36:01 Do you want a day trade? I'm not going to stop you. And I don't think it's cool that the regulators want to stop you either. So if you want to do your day trading, more power to you, I hope you learn to make a ton of money. But yes, I vividly remember Robert, like being in college and be like, oh yeah, I'm going to like buy this stock here, then I'm a sell a little bit high. Oh, it's green today. I made $7. That's my lunch today.

Starting point is 00:36:21 I'm just going to boo-boo bop. No more boo-bo bopping. I couldn't do it. Wouldn't let me. But now everyone can boo-boo bop down the street and go make their lunch money. I love it. Everyone, thanks so much for joining us on this week's episode of the Rich Habit to Radar. If you learn something, please consider sharing this with a friend.

Starting point is 00:36:36 we have these Friday episodes trying to do our best to get the biggest headlines, the most impactful news events and sharing them with you every single Friday morning. So if your portfolio's up, down, left, right, and in circles, you know why and what's driving the markets on a weekly basis. And for all of you that are out there building that stock portfolio and want to learn more, make sure you check out wallstreetfavorites.com. It is incredible. We've added more tools. It is, in my opinion, and I'm a little biased, but we did build. this. I think it's the best tool out there to help people figure out how their portfolio is going to perform, what stock should be in their portfolio, and how to react to the markets as they stay

Starting point is 00:37:16 right now. So make sure you check out wallstreetfavits.com. That's right. Wallstreetfavits.com to see what Wall Street thinks about your portfolio, price targets, buys, sells, hedge fund trading. All of that is on Wall Streetfabritz.com. Go type in your portfolio to see what Wall Street thinks about it. and we'll see you on Monday.

Rich Habits Podcast - Anthropic's $1T IPO, Inflation Updates & Billions in Bitcoin Losses

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