Rich Habits Podcast - SpaceX's iPhone Competitor, June Jobs Report & High Gas Prices

Starting point is 00:00:00 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 and 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 meta turning into a neocloud company, the disappointing June job report, and SpaceX's new iPhone competitor. Yes, I just said those words. Very interesting. Be sure to stick around to the end where we talk about Amazon launching more satellites in space to also now compete with Starlink.

Starting point is 00:00:38 Robert, let's dig into our first story. Definitely. On Wednesday, Bloomberg reported that meta platforms is developing plans for a cloud infrastructure business that will sell access to both AI computing power and AI models to outside customers. The company is debating whether to offer hosted models or raw compute or both. So meta told their investors back in April that it plans to spend as much as a hundred-send. $145 billion in capital expenditures this year building out these AI data centers and purchasing GPUs. The most aggressive AI infrastructure buildout of any company on the planet. $145 billion. That's so much money.

Starting point is 00:01:15 And investors were pretty uneasy about all this spending. Meta stock was down in the month of June when reports started to surface that the company might need to raise tens of billions for more AI spending, if that was by diluting shareholders or increasing their debts. like investors weren't happy about this. Yeah, I feel like META was late to the party. I think we talked about this a few months back, but this announcement, this cloud business announcement, flips that narrative entirely.

Starting point is 00:01:40 Instead of a cost center, all that infrastructure becomes a potential revenue generator for META. And Mark Zuckerberg first signal this move during META's Q3 2025 earnings call and addressed it again at the company's annual shareholder meeting in May. It's definitely on the table, Zuckerberg told investors. If we get to a point where we have overbe,

Starting point is 00:01:59 built AI infrastructure, that is an option that we have. And they're exercising that option as we speak. Meta's been one of the biggest GPU buyers on the planet, specifically from Nvidia. I'm sure you guys remember when Mark Zuckerberg got on stage with Jensen Wang and like put on his jacket and like posted it online. It was a whole thing. So if meta starts selling that compute from those GPUs to the same startups and enterprises that CoreWeave and SpaceX's XAI are also trying to serve, remember XAI's Colossus is doing, what is it, Google Gemini, Anthropic, a couple others. They're making billions of dollars a month by selling compute. So now meta's like, yo, I want to sell some compute.

Starting point is 00:02:39 I want to make a couple, Billy. How do I get in the game? So once they jump in that, that competitive dynamic that's going on is just really going to ripple through this AI infrastructure market overnight. In Austin, meta entering this market means the hyperscalers are no longer just buying AI infrastructure. They're also selling it. So let's dig in. What does this mean for you and your money?

Starting point is 00:02:58 for the past two years, the investment thesis for the AI infrastructure trade has been very simple. Big Tech spends hundreds of billions of dollars on AI infrastructure. That is a expense item for them. But it's a revenue item for the picks and shovels companies that are selling that infrastructure. The neoclouds, the GPU suppliers, the data center real estate investment trusts, right? They all capture that as revenue. So Meta's saying, instead of spending a bunch of money, how about I take all of the capacity that I've built here with my infrastructure, my data AI center infrastructure, and then I turn it to a revenue generating

Starting point is 00:03:33 machine like what XAI is doing. So for your portfolio, this changes how you should think about the AI infrastructure stack. Invida does remain the safest play, in my opinion, because they sell to everybody. Meta's cloud business still needs those Nvidia GPUs. Robert, I'm about to pull up Nvidia on wallstreetfavits.com, which is the easiest way to see what Wall Street thinks about your portfolio, and of course other stocks in the S&P 500 and in the NASDAQ 100. And I'm seeing an average price target of $317 a share right now for Nvidia, 61% upside from current prices. So the stock is trading at a discount right now to where Wall Street thinks it should be.

Starting point is 00:04:15 I agree with you totally. We've talked about this for quite some time now about Amazon and Nvidia. But the companies most at risk are the pure play neoclouds. Corweave derives a massive chunk of their revenue. from concentrated hyperscaler contracts. And if meta, SpaceX, and eventually others all start selling excess compute, the pricing power of the neoclouds erodes quickly. Robert, let's now jump to our second story, which is the June jobs report.

Starting point is 00:04:40 We heard from the Bureau of Labor Statistics on Tuesday that non-farm payrolls increased by just 57,000 in the month of June. Less than half of the 115,000 economists were expecting. and a dramatic slowdown from May's already revised downward lower now to 129,000 jobs. What is going on, Robert? I just feel this is the big gut punch of the week and why the markets are all over the place. And speaking of revisions, May was originally reported at 172,000 and got cut by 43,000 jobs. April was also revised down by 31,248,000 jobs.

Starting point is 00:05:21 So the labor market has definitely seen significant. significantly weaker than we thought for the last three months. The unemployment rate did drop from 4.3 to 4.2, which is like, okay, that's great. But not really because labor force participation also dropped half a percentage point to 61.5%, which is the lowest it's been since March of 2021. Think about that. All the people out there that could be working, they're saying, I don't want to work. I can't find a job.

Starting point is 00:05:50 I can't do this anymore. I can't keep a plan. Don't even. I'm out. doing this, right? So that now means 507,000 fewer people are reported being at work in the household survey. People aren't

Starting point is 00:06:02 finding jobs, so they're leaving, that's half a million people that just left the workforce entirely over the last four or five years. Yeah, it's crazy to me because you think of Taylor, my chef partner from the sushi place. He just moved to St. Petersburg last week, and in three days he has

Starting point is 00:06:17 four job offers, four good job offers. And I feel like it's just crazy, especially when you think about leisure and hospitality shed 61,000 jobs. The BLS said this reflected slower than usual seasonal hiring, which is remarkable considering the FIFA World Cup, was expected to boost hospitality employment. So I don't know.

Starting point is 00:06:37 It's confusing to me. It feels like everyone's hiring. We're hiring. Restaurants are hiring. Everyone's hiring. Yet there's so much job loss. It's definitely confusing for me. Yeah.

Starting point is 00:06:46 And the experts are, you know, you go look at like a Goldman Sachs, for example, who estimated that the World Cup would add about 40,000 jobs. but instead the sector went deeply negative that you were talking about, right? 61,000 jobs lost. Professional and business services, though, added 36,000 jobs. Healthcare added 22,000 jobs, lower than its usual pace, but definitely in the positive.

Starting point is 00:07:06 Government added about 8,000 jobs. Like, we're seeing some positive momentum in specific little sectors here, but certainly not as fast as we saw in 2025, 2025, 24. And again, that labor participation rate has just fallen off a cliff. Yes, an average hourly earnings rose point. for the month and 3.5% year over year, both in line with expectations. So wage growth is holding, but with core PCE inflation running at 3.4% as of the May reading, real wage gains are razor thin. Thomas Simons, who's the senior economist at Jeffries said, and I quote, for the Fed, this number's

Starting point is 00:07:42 fine. The pace of job growth is plenty strong enough to maintain a steady unemployment rate in average hourly earnings are solid, but they're not accelerating. There's no imperative on their part to do anything with rates immediately. And the solid, softening in the pace of job growth suggests that rate hikes are very unlikely to be necessary this year, which is music to my ears. I don't know if you remember this. Robert, we talked about like two weeks ago Bank of America was saying three rate hikes in 2006, which like, dude, get out of here. No way. But Robert, what does this mean for you and your money? Oh, on one hand, this is bullish for markets in the short term because it kills the rate hike narrative. Fed Chairman Kevin Warsh spent this week at the ECB forum in Cintra saying inflation is too high.

Starting point is 00:08:23 and vowing to get it back to 2%. And markets were nervous he was laying the groundwork for a hike. A 57,000 print makes that nearly impossible to justify in July or September. So we'll wait and see. But on the other hand, this is the kind of data if it continues shifts the conversation from higher for longer to are we heading into a recession and we're already seeing those headlines. Labor force participation is at a four-year low, so that's important to understand as well. and a half a million fewer people reporting work in a household survey. Three consecutive months of downward revisions is definitely not good.

Starting point is 00:08:58 So if you're an investor, the question you need to be asking isn't just, will the Fed hike? It's what's happening to earnings if the consumer starts pulling back? I think that's the key narrative here. And again, the companies that do well in a softening labor market are the ones with recurring revenue, pricing power, and low sensitivity to discretionary spending. As we head over to wall streetfavorits.com, you can go pull up Costco and see that of the 36 analysts that are covering Costco stock,

Starting point is 00:09:25 they are implying an upside of over 21% with their price targets. So in a world where consumers are trading down and consolidating purchases, companies like Costco's membership and their pricing power make that company a fortress. So maybe Costco continues to do well as consumer spending reels back. The bigger takeaway is the labor market isn't exactly falling apart, but it's definitely cooling and the direction matters more than the last. level itself. So Robert, round us off with our third story here about SpaceX secretly building an iPhone competitor. Yeah, this is crazy. We watched that interview and I was like, this makes

Starting point is 00:10:01 sense for Starlink. And according to the Wall Street Journal, SpaceX recently showed select investors and stakeholders a prototype for a handset-like device designed to reshape how people interact with artificial intelligence. This device is slimmer than an iPhone, runs on a proprietary operating system integrates XAI's technology directly and is built on Qualcomm's Snapdragon chipset. So wow, what an update. SpaceX told their investors the project is still early stage and the design could change, but the fact that a physical prototype exists and is being shown during the company's IPO window tells you that this is more than just a brainstorm. This is where the company could be headed. As recently as February, though, must

Starting point is 00:10:42 denied SpaceX was developing a phone, pushing back on a Reuters report about a Starlink connected device. Last October, he said, and I quote, the idea of making a phone makes me want to die. But if we had to make a phone, we will. And that framing of if we have to, we will, certainly seems like they are trying to. I mean, in the interview, he alluded to the fact that he believes within two years this could all be at scale and happening. And he talked about how there would be no need for AT&T and Verizon and all this, which is crazy. But if you think about it, for people that travel a lot, especially international travel, if you had one phone, one service with no dropage, that would be game-changing for millions and millions of people, so we'll see. But Musk isn't just building a phone. He wants to compete with Apple and hardware as well. He's building a platform because he doesn't want to depend on Apple and Google to distribute the XAI, X and Starlink, and whatever else comes next. And a lot of this is drawing from Elon's Everything App Vision, a super app concept that he championed back when he acquired Twitter, you know, changed it to X, X, X the Everything app. In Asia, this model already dominates China's WiiChat and AliPay, owned by Tencent in the Int Group,

Starting point is 00:11:52 function as this all-in-one platform where you can transfer money, you could order food, you could book travel, you can play games, all without ever leaving the app. So Chinese companies are now layering AI agents on top of these super apps, and maybe that's what Elon wants to build. Yeah, and ByteDance already released a smartphone powered by its DeBao AI model designed to help users shop and book across platforms, though competitors have restricted its access to their services. The U.S. has never truly had a super app, and Musk may be betting that that is the way to build one isn't through software alone.

Starting point is 00:12:24 It's by controlling the hardware, the OS, the AI layer, and the connectivity, which he'll get through Starlink. Yeah, they've already sell those Starlink dishes. They already offer direct-to-sell service through T-Mobile. X-A-I has GROC. X already has payment infrastructure and development. They're offering 6% APY right now. Like, proprietary device can really tie all this together into a single ecosystem that doesn't have to depend on an Apple or at Google, so we'll see what happens.

Starting point is 00:12:48 Yeah, and Open AI is also developing a family of AI-first devices. The race to define what the post-smartphone AI interface looks like is accelerating, and the companies building it aren't the traditional hardware players. They're the AI companies that want to own the relationship with the user from end to end. This is an exciting one, Austin. I think it's huge, huge news for SpaceX and Starlink and everything that's happening. So break it down. What does this mean for you and your money?

Starting point is 00:13:14 I think this is less about whether Space, X can go sell 200 million, a billion of these like handset devices. I think it's more about what this signals for the competitive landscape of the AI ecosystem right now. Right now every AI company, if it's XAI, if it's OpenAI, if it's Anthropic, if it's Google, they deliver their products through Apple or Android. And that could be a choke point depending on your perspective. Apple takes 30% of in-app revenue controls what apps can and can't do. so if Elon is building a device that can bypass that entirely, it could change the economics of AI distribution for everybody. And also important, Qualcomm, since the ones are powering this device,

Starting point is 00:13:53 that could just be pure upside in the stock. Another major customer for the Snapchat and chips. New device category, sign me up. For Apple, it could be a long-tail threat. Not because SpaceX is going to outsell the iPhone, but because of, you know, AI-first devices is kind of like a category in all of its own. And if this category takes off, it validates a future where the iPhone isn't the default platform for AI interactions. Again, SpaceX's AI device, open AIs, AI hardware device. Like if more and

Starting point is 00:14:21 these are there, people are going to say, wait a second, why is an Apple having an AI device shouldn't make a switch? Like, what's going on there? Yeah, as we discuss this, I'm actually shocked to think of how long this bottleneck has occurred with Apple and them taking 30% of the revenue from everybody. It's just crazy to think. In the most important tech battle of the next five years, isn't who builds the best AI model. It's who controls the device. It's who controls the device. the distribution and the platform that the AI lives on. And Musk is trying to own all three. And this prototype is the first physical evidence

Starting point is 00:14:51 that he's serious about it and we'll see how he pulls it off. Those are our top three stories. Now, Robert, it's time to jump to our radar points, which are kind of like a little show and tell action. I've got three headlines. You've got three headlines. And they caught our attention this week and we got a show with the audience.

Starting point is 00:15:05 But before we do that, let's take a moment to hear from this episode sponsor. That's right. Support for this show comes from VCX, the public ticker for private tech. For generations, Americans have moved the world forward through their ingenuity and determination. And for generations, everyday Americans

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Starting point is 00:15:53 including the companies leading the AI revolution, space exploration, defense tech, and so much 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, be found in the fund's prospectus at getvcx.com. This is a paid sponsorship. Robert, why don't you kick us off with your radar points and then we'll get into mine. Yeah, I'm excited. We have some really good radar points. And my first one today is the Trump administration lifted its export ban on

Starting point is 00:16:27 Othropics Fable Model. The episode created a de facto government approval for frontier AI models that has the entire industry on edge. Open AI also restricted access to its newest GPT 5.6 models over similar cybersecurity concerns, and Anthropic is now working with Amazon, Microsoft, and Google to build a shared framework for evaluating AI safety risks, while critics warn the U.S. is handing China an advantage by throttling its own labs. I don't know if I agree with that. I think we need to be winning this battle and keep winning. So letting them be able to do some self-monitoring and putting it with some the largest hands in the business companies in the business, I think is a great step forward. Number two, Tesla delivered $480,000.

Starting point is 00:17:12 126 vehicles globally in Q2 and listen up up 24.9% year over year. So they really broke through. The company discontinued its 100K Model S and Model X in May and is now down to just three vehicles. The Model 3, the Model Y, and the cyber truck. Tesla's Robotaxy service is still limited to just dozens of cars in Texas and Musk admitted the autonomous software still gets stuck in literal infinite loops around construction zones. A full earnings drop July 22nd, so we'll keep an eye on that. And my last one leading into the 4th of July weekend is gas prices are at their highest in the last four years at $3.84 a gallon.

Starting point is 00:17:53 And I know that stinks for everybody, but that's where we're at. Prices have dropped 2 cents per day over the past several weeks after Brent Crude fell below $72 a barrel following the U.S. Iran agreement to suspend the Middle East conflict and reopen the Strait of Hamuz. Gas buddies Patrick DeHan says we could see low to mid $3 gas by Labor Day, which Bank of America notes would be a meaningful tailwind for lower income consumers, half of whom currently describe their finances as poor or terrible. That's the case-shaped economy right before our eyes, where gas is affecting people that much. I think my favorite calling on this is the Anthropic Fable model.

Starting point is 00:18:31 If you have not yet played around with Fable, Fable 5, all that fun stuff going on, go check out Fable. I don't know if you have to have a pro subscription. or max subscription or whatever's going on. But definitely go play around with it. Check it out. It is the most capable model yet. I think they even nerfed it from before,

Starting point is 00:18:46 which I saw some hosts online about, which would be interesting to dig into or not. But it's still very capable, much more capable than Opus 4.6, 4.8, 4.8, 4. whatever. This is Fable 5. So go check it out for sure. But it's interesting to see how the government is now sort of looking at this of, hey, this is too capable.

Starting point is 00:19:03 You need to go through an approval process before that goes into the hands of the public. Yeah, I agree. and that is a great call out. I just want everyone listening and watching. Play around with these models. Get the free trials. Learn and see what works for you because it is important, but the key here that what you just mentioned for me is,

Starting point is 00:19:20 if we throttle it too much by the government, will fall behind China and will lag in the development of all of these models. And so having some sort of way to move it forward quickly while still keeping control of it, I think, is super important. Completely agree. Now, before we jump to my radar points, got to give a shout out to ORA ETAF. and the U.S. Defense ETF trading under the ticker symbol DUTY, duty, which I think is just perfect for the 4th of July.

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Starting point is 00:20:21 to charitable organizations supporting American veterans, aligning investor capital with support for those who have served with a minimum commitment of $150,000 during the fund's first year of operations. Which I just think is incredible. Now, for investors seeking exposure, to the long-term growth of America's defense and national security ecosystem, D-U-T-Y, offers a different approach to defense investing. To learn more about the U.S. Defense ETF, visit U.S.DefenseEF.com. Investors should carefully consider the investment objectives, risks, charges, and expenses before

Starting point is 00:20:53 investing. For a prospectus or summary prospectus containing this and other information about the fund, please call 8888-824-4-6467 or visit www.w.w.w.w.U.S.D.D.F.com. Please read the prospectus or summary prospectus carefully before investing. Investing involves risk and possible loss of principle. And this ETF is distributed by Foreside Fund Services LLC. All right, Robert, my first radar point is Ford recalling over 740,000 of their vehicles. If you're driving an expedition, a navigator, a Ford Explorer, a Ford Aviator, which thing is Lincoln, right, or any of these F-150s from 2018 to 2021, be careful because your transmission might be messed up. They got a transmission defect that can engage the park function while the car is still moving,

Starting point is 00:21:39 which could cause your car to roll away. This comes after Ford recalled 1.4 million F-150s back in April for unexpected downshifting. In 2025, Ford issued more recalls than any other automaker, affecting nearly 13 million vehicles, not a great look for a company, already navigating some export, import, import, tariff uncertainty, and a crazy price to earnings ratio of 30 times. So if you drive a Ford, be careful. You might have got a recall here.

Starting point is 00:22:08 Now, here's my next story, Robert. Apple's ramping up their foldable iPhone ambitions, asking their suppliers to prepare for 10 million foldable units this year in 2006 up from their earlier forecast of 7 to 8 million. So we all know that Apple comes out with these new iPhones every year, every two years, every three years, whatever. And they're now making this foldable. iPhone, which I don't think is new news. I think people have known that for a while, but Apple's saying,

Starting point is 00:22:35 hey, we think more people are going to want this foldable iPhone than we were previously expecting. The company is planning to release at least five new iPhone models across the back half of 2006 in the first half of 2007 as they push into the high growth foldable segment that's currently dominated by Samsung and Huawei. So definitely check out that story alongside whatever the heck SpaceX is doing. I think both of those are pretty important right now, especially for Qualcomm. And finally, my last radar point is Amazon launching 29 more Project Leo satellites, bringing their total of satellites in low Earth orbit here of 396, enough to begin initial broadband services later this year. Starlink competitor coming at you. Now, they could

Starting point is 00:23:17 compete with Starlink, but Starlink does have 10,000 satellites in low Earth orbit, serving 160 countries. So 396, 10,000 there's a little bit of a lead, right? Amazon plans to scale, though, 3,200 more satellites and then hundreds of flight-ready units standing by at the Cape of the dedicated integration facility doing more of these launches. So we'll see if they get thousands more satellites up into low Earth orbit. But it's pretty obvious that Starlink has that entire, entire business on lock. My favorite part of your callouts today. And for everyone listening, we don't see each other's callouts, our radar points before we film. My favorite one is that you've covered forward because if you remember in the Rich Habits Network this past Tuesday,

Starting point is 00:23:59 I covered the fact that Ford announced that they had gone too far with AI and robotics and that they were bringing back, I think it was 550 seasoned engineers because of all the problems affecting so many vehicles. Then I see this headline, 13 million vehicles have had problems just in the last two years, which is crazy. So we're getting to see some cracks in the surface of AI and humanoid robotics and robotics in general because you still need those people in there at this point. And I think that speaks volumes to the fact that having full integration of AI and humanoid robotics and robotics of general is still a ways off to be able to maintain the quality and the pricing that works.

Starting point is 00:24:40 And for it as a prime example of what's wrong with it still to this date. I completely agree, Robert. And I think, you know, you mentioned humanoid robots and robotics. Like that is so important. Like this, like the decade, the next 10 years will be defined by humanoid robots and robotic companies, in my opinion. We saw agility robotics talked about that last week. Last Radars episode. We've talked about the B-O-T-E-F, the H-U-M-N-E-F, the K-O-I-D-E-F.

Starting point is 00:25:06 We think humanoid robots are here to stay. So if you want to invest alongside Robert and myself into humanoid robotic companies and a bunch of other really cool startups, join the Rich Habits Network. We're always investing into incredible things. If you're subscribed to the Rich Habits newsletter, you've probably read. We've got two deals going on right now inside the Rich Habits Network. One of them is for a open-source frontier AI model. in a company building that, which is really exciting.

Starting point is 00:25:30 And the other one is for unmanned AI-enabled military vehicles, including drones and vessels and all the other different things that the military need to best keep human beings out of harm's way. So both of those deals are live right now inside the Rich Habits Network. We've also invested into Apptronic, which is a humanoid robotics company, like three or four different times. We did figure AI a couple times. We've done these humanoids a ton, and we're super, super bullish on them.

Starting point is 00:25:55 So cheers to everyone inside the Rich Habits Network that's invested. alongside of us into humanoids. It's been something we've been passionate about for a couple years now. And last but certainly not least, before we go, make sure you check out the Wall Street Favorites, wallstreetfavits.com. It is, in my opinion, the coolest best aggregator stock analysis tool on the internet today. So make sure you go to Wall Streetfavits.com and check it out. Yeah, it's pretty cool. I think we just crossed 3,000 people that have registered and created an account on Wall Street Favorites. So check out Wall Street Favorites.com. It's an awesome. awesome website to see what Wall Street thinks about your own portfolio. Everybody, thanks so much

Starting point is 00:26:32 for tuning into this episode of The Rich Habits Radar. And if you enjoyed this episode, please consider leaving us a five-star review on Spotify, Apple, subscribing to YouTube, giving us a thumbs up, just showing us some love. It goes a lot further than you might think. Thanks, everyone. And we'll see you on Monday.

Rich Habits Podcast - SpaceX's iPhone Competitor, June Jobs Report & High Gas Prices

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