The Compound and Friends - Time to Sell Nvidia? Plus A16Z on Stablecoins and a Netflix Earnings Preview

Episode Date: July 15, 2025

On this TCAF Tuesday, Josh and Michael are joined by Sam Broner of a16z crypto to break down the biggest developments in the world of stablecoins. From PayPal and Circle to the role of U.S. regulators, this conversation covers where the money’s moving and why it matters. Sam explains how stablecoins are quietly reshaping payments, banking, global finance and more. Then at 44:05 hear an all-new episode of What Are Your Thoughts with ⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠ and ⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠! This episode is sponsored by Public. Fund your account in five minutes or less by visiting: https://public.com/WAYT   Sign up for ⁠⁠⁠⁠The Compound Newsletter⁠⁠⁠⁠ and never miss out! Instagram: ⁠⁠⁠⁠https://instagram.com/thecompoundnews⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠https://twitter.com/thecompoundnews⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠https://www.linkedin.com/company/the-compound-media/⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠https://www.tiktok.com/@thecompoundnews⁠⁠⁠⁠ Public Disclosure: All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions, LLC (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative, involves a high degree of risk, and has the potential for loss of the entire amount of an investment. Cryptocurrency holdings are not protected by the FDIC or SIPC. Alpha is an experimental AI tool powered by GPT-4. Its output may be inaccurate and is not investment advice. Public makes no guarantees about its accuracy or reliability—verify independently before use. *Rate as of 6/24/25. APY is variable and subject to change. Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Ladies and gentlemen, welcome to The Compound and Friends. Tonight's show is sponsored by Public. That's public.com slash W-A-Y-T, as in what are your thoughts. Public.com is where you can trade stocks, options, crypto, bonds. You can do yield products with your cash. It's super easy to move money in and out. I use it all the time. Plus, for a limited time, you can earn a 1% match

on all IRA deposits, IRA transfers, and 401k rollovers. Go to public.com slash W-A-Y-T to learn more. Paid for by Public Investing. Full disclosures and podcast description. Okay. We talked to Sam Broner. Michael and I had Sam on live from the compound this week and talked about the explosion of popularity for stable coins and not just the coins themselves because of course those are just buying digital dollars but the crypto infrastructure plays like Circle which is I think the the IPO of the year or certainly in the conversation, why are people all of a sudden so excited about stable coins? Why are all the big banks and credit card companies racing to make stable coin announcements? What will this mean for your investing, your portfolio, your holdings?

We'll do it all. Sam is super smart. A16Z Crypto has spent tons of time and energy educating the public on this topic and we got to ask him a ton of questions. Immediately following that, it's an all new edition of What Are Your Thoughts? Michael and I answered the question, should I sell some Nvidia? You might be surprised at what I have to say. We also take a look at semiconductor stocks in general, what we've seen so far in earnings

season, how technology stocks were acting generally. We take a look at some aspects of the rally that may be surprising to people and some of the laggard sectors that maybe should be on your radar screen. So it's an action packed show. Super excited to have you here with us. I will send you into the show right now. Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates are solely their

own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Feel the energy. Feel the rhythm. Yes.

All right. Stable coins. What is it? It's crypto, isn't it? My name is Downtown Josh Brown. I'm here with my co-host, Michael Batnik. Welcome to an all new edition of Live from the Compound. You got that right.

We're going to talk about the Compound. There's crypto in it. My name is Downtown Josh Brown. I'm here with my cohost, Michael Batnik. Welcome to an all new edition of Live from the Compound. You got that right. We're going to talk about stable coins and we have one of the foremost authorities on the topic. Sam Broner is a partner on the investing team at A16Z Crypto. Prior to joining A16Z, Sam was a software engineer at Microsoft on the founding team

of the Fluid Framework and Microsoft Co-Pilot Pages. Sam also attended MIT Sloan School of Management where he worked on Project Hamilton, also starred in the school's play, Hamilton. And you were at the Federal Reserve Bank for a minute. You were consulting on some stuff for them, right? That is true. I worked at Project Hamilton. All right, very cool. Hey, we're thrilled to have you. Stablecoins historically had been a boring topic until Circle came public. And now I'm watching video of you all morning.

I see you making the rounds. Everybody wants to know why is Wall Street so excited about investing in companies that provide either stable coins themselves or the, I guess, the payments infrastructure that's going to be incorporating stable coins. Like what is this meteoric rise of the stable coin as a hot investment theme? Tell us what's happening. I think if you're on Wall Street, then you've done payment stuff before. You've sent money to someone to make an investment and you know, it kind of sucks. And so when someone says, Hey, look, I've got a substantially better product. I've got better money here.

People get excited. And that makes sense. Like we just, we've sort of unlocked that with stable coins. Um, but I've been doing stable coin stuff for 18 months, three years. Like it's been hot for a while. We're just getting regulatory clarity right now and the technology keeps improving and so Wall Street's waking up to it. I want to just start with a definition for people who watch the show and they invest

in stocks and bonds, traditional assets. Maybe they've traded Bitcoin. They might have some like awareness like, all right, I get it. It's a dollar. It's a crypto thing and it's a way to hold on to value without being currently exposed to risk. I think people understand that. Stablecoins as a segment of payments is now gigantic and there's a lot of money just parked in stablecoins or actively using stable coins, give people like an idea of when we say stable coins just generally, what like what is it about? What do they need to know? Yeah, stable coins is is money stored on the blockchain, but it's backed by things that we all understand. It's backed by the most liquid ass in the world. It's backed by a treasury, a 90 day or less treasury or other cash or cash equivalents. And so when I say I've got a treasury, what I'm saying is, um, I've got, uh, a thing it's worth a dollar.

It's sort of like the money that's in your Venmo account or in your deposit account or in a money market fund. Um, uh, but, but I can use it all these fun new ways. I can send it to you almost instantly and almost for free. I can set almost any denomination for, for less than a cent. That's unbelievable. And, um And and it's backed by treasuries backed by things that you know and trust that are easy to verify. And so we've got sort of the safest, best version of stable coins. Now it's these fiat reserve stable coins that are backed by treasuries. That's what's really popping off. That's what's 90% of the market. That's what Circle does. That's what you're hearing about in the news. That's USDC. That's USDC. USDT, Tether. These are Fiat reserves, stable coins, money, um, where you've got to claim, get a little bit wonkish here. Yeah.

And I'll do this throughout the day. If you, if you permit me, uh, you've got a claim on a dollar worth of treasuries or other cash equivalents. That's what a stable coin is. Tell people that are not in the crypto environment in any way. Why would somebody need this? Yeah, I mean, well, let me just give instead of why they'd need it. Let's talk about like what is how excited everyone is. Last this past spring, so last three months, Visa, MasterCard, Stripe,

MoneyGram, JP Morgan, and many other big names that all your listeners are going to know. They all announced that they're going to have stable coin initiatives. And that's because stable coins are an easier, better way to send money. I can send any amount. So from 10 cents to 10 million dollars over stablecoin rails nearly instantly and nearly for free. If you try to do that today, you might think, oh, that should be easy. You know, I do with my bank for a lot of people in a lot of circumstances. It's a very annoying, very, why aren't it? So why isn't a hundred percent of all the whole payment system already on board it? Like what's the negative or what's the potential negative or drawback that's stopping people? Was it just the regulatory clarity all along?

No, I think I think that would be like unfair. I could say that. But it's really like 18 months ago, we had a technology improvement that took stablecoin payments from being, you know, a dollar or two to send money and maybe 12 seconds. About 18 months ago, it became less than a penny in less than a second. And so it got a lot faster. 18 months ago, people started building some of the integrative technology to make it easier to use, bring it into FinTech applications and so forth. And then over the last six months, we've had this really exciting

regulatory improvements. So these three waves, it's the technology, then it's the integration, then it's the regs, and that's what makes it light up right now. Got it. Sam, I was reading some of your work and there was a crazy stat that you shared, like you'll tell me the number, some million, it's a 30 million people are exposed to currencies with a lot of inflation. What was the number? For currencies, a lot of inflation, it's way higher than that. It's like 300 million hundreds of millions. Yeah, whatever it is. Yeah. So so that part is lost on people in this country. Like I have Venmo. What's wrong with who cares? And the argument. So that resonates. Listen, if I'm in Argentina, I don't want that shit. I want the good shit. I want the USDC. I want the USD. Right now. It's hard to believe this week, the house announces it's crypto week and there's obviously a lot of talk, a lot of legislation. So if the biggest beneficiaries

of this stable coin are people that can't access our dollars, why is it so critically important that we lead the charge? Because that's what the crypto people say. We need to innovate in America. Why? Yeah, I mean, the we get stable coin adoption, that means way more dollar penetration. Dollar is already, by the way, the best form factor for money in the world. It's whatever it wants to hold. There's a reason why if you're in a high inflation country, you're, you're, you want dollars, there's this huge structural demand for dollars in Argentina and

Egypt and Turkey and so forth. I think the number was like 750 million people live in high inflation economies. They all want dollars and we want to be able to provide those and make them accessible. It's another way for it sucks up US short-dated debt. You know, one of the most liquid assets in the world. That's what's backing these things and it's sort of a way of projecting soft power. Who we pause? Yeah. Sucks up US debt. So if a trillion dollars comes into US denominated stable coin market, that's a trillion dollars potentially of buying power for T bills.

Yeah. So this is right now stable coins are the 14th 18th biggest country by treasury purchasing that they hold that much in treasuries. And if we 10x stable coins, which I think is a real possibility that we'll see 10x the amount of stable coins out there, it's going to be a major player, especially in short dated treasury ownership. Based on your conversations, do you think Scott Besson understands that dynamic or thinks it's meaningful? We've got a whole policy team that's more in touch with him, but I think people do understand

that this does change a little bit how the treasury markets are going to work, like stable coin issuers are becoming major buyers there. This drives, but let's just say, these citizens that live in high inflation countries. These are behind economically, technologically, this idea that they're going to have access to some tech to get stable coins sounds great in theory, but why don't we just fix global hunger like there's plenty of resources to do that? Maybe it's a dumb analogy, but other countries are just going to let this happen. What happens if there's all this selling of their currencies, their treasuries, or their whatever federal instruments to back ours? Does the peso just go away? Like what happens to their currency in this environment? You guys are well read by the

way. Like I appreciate that we're getting ready to the meat of it. I love talking about this stuff. Like, you know, so I wrote this paper. Do you think we skipped over something important before we get to that or? Oh, well we've got time on this podcast. Well, do you think we skipped over something important before we get to that? Or? Oh, well, we've got time on this podcast. Okay, yeah. I mean, so I wrote this piece last month, how stable coins become money. And part of the question posed there is, you know, what happens to non US currencies? How are countries just gonna say, all right, fine, we're getting dollarized. I think that there's a lot of ways this could go. It's part of why I like investing in stable coin infrastructure and stable coin projects, because it's not obvious. It's not like I'm investing in SAS where we sort of

know what's going to hit and what isn't. There's a lot of directions that's this field going. Um, my guess is that we're going to see countries begin to build local currency, stable coins. They're going to see countries begin to build local currency stablecoins. They're going to continue to demand their tax payments are in their local currency. They don't want to give up control of the ability to change their own interest rate to respond to supply and demand shocks in their local economy. But they actually do want the efficiencies for their small and medium businesses that are doing import export, like let them denominate transactions and dollars and integrate with the

global economy more effectively and so if you're like a textile manufacturer in Nigeria Well, wouldn't it be great if you could just accept dollars natively instead of having to go through this kind of convoluted banking infrastructure That's slowing down your ability to focus on your core competencies. I think I saw this. I think that could work. Yeah, I think I saw this in your materials and maybe we have this chart, but the example that you use is a garment manufacturer where they're doing the final assembly of the garment in Mexico, but they are buying textiles from Vietnam. So this is a B2B payment, very typical in the modern economy. Walk us through how this works and why this needs to be replaced or should be replaced. Yeah, so right now this process is

a Mexican garment manufacturer wants to talk to a Vietnamese textile manufacturer. And they have an ongoing relationship, but it's mediated through the, a Mexican local bank, a larger Mexico based correspondent bank, maybe an HSBC or some other large bank, another correspondent bank, and then a local bank in Vietnam that can take three to seven days. And we talked to a lot of people who are running through this, like financial rail often, they have no idea where their money is. And they can't even get an estimate of how much it's going to cost in advance before they send a payment to their like collaborator. Now we talk to some,

the cost of moving the money or the cost of currency fluctuation. It's both, although FX is the one that's more frequently not estimated. Um, cause it's like a seven day window. Yeah. But also if you have an extra correspondent bank in the mix, they won't say what the fee is in advance. Imagine that I'm trying to send a thousand dollars. It's like, what's it going to cost? Oh, you just got to deal with it. You're beholden. And so we talked to some of these guys who are doing not exactly this business, but similar, and they can get on the phone with their, basically their friend, their business partner who lives in Vietnam and say, did you get the transaction? And it'll be over in one second. They get USDC one second later and it costs one cent.

So the person on the side can deal with, Oh, I actually want to store the money in dollars. I want to turn it into bot. I want to turn it to dong, whatever they're going to do. Um, and it's sort of, but the transaction happens instantly and it's way less confusing, way less bureaucratic. You never go full dong. Oh, but I want to give people, I want to give people the context of how big what we're talking about potentially could be because we're not talking about a thousand dollars, you know, that in 2023, the global payments industry

handled 3.4 trillion transactions. The global payments industry handled 3.4 trillion transactions, accounting for a mind-boggling $1.8 quadrillion in value, generating 2.4 trillion in revenue. Let's put this table up just to give people an idea of the transaction fees involved in the various ways that we move money today. The example Sam has is a credit card payment is two to 3% plus 30 cents. So that's like, that's like just like a standard fee that let's say Visa or MasterCard is imposing. Gosh, go to remittance. Look at that fee.

Yeah, remittance. It's crazy. Six point. And these are people getting remittances often. They need the money. Yeah, remittances, six point, and these are people getting remittances often are the people who can least afford to give up 6.65% to move $200 is out of control. That's Western Union effectively. Yeah, I'm a bit of a bleeding heart here.

This is offensive. I mean, this is someone who's like sending $200 home to mom and they're spending sometimes $13, $20 on that. Okay. That's a meaningful amount of money. It's crazy. All right. ACE ACH transfer could be from 20 cents to a dollar 50. It's a time. It's a time. It's the time. Um, let me do one more peer to peer payment app. So, uh, Venmo in somebody, the business or it's free. If you're peer to peer,

but businesses that accept Venmo are going to take 1% to 3%. Do I have that right? Yeah, you do. Okay. Or square or whatever. Okay. So it's a ton of money, a lot of transactions, a lot of delay, a lot of people in the intermediaries

sitting in the middle. So why is it this way to begin with? Because you need a trusted third party in the middle with the technology that we had. Because Visa has to say, yes, Michael is paying Sam Broner's bakery for a dozen donuts, and Michael is a credit that Sam doesn't have to be comfortable with. Visa will take that risk. Fraud, charge charge backs all that shit Okay, so now so now in this in this scenario

stable coins as a payment mechanism, there's no need for trust because it's a blockchain and Everyone sees the transaction and validates it and it's instant by the way So like when you go to a coffee shop and buy you got Obadiaga That's a New York City coffee shop in every corner, and you give them two bucks for a coffee, they take the money and give you the coffee. There's no like fraud risk there. You gave them the money, you got the coffee. With stablecoins, because you can actually do the transaction in less than a second, you can have that same feel where actually there's a lot of situations where you don't need the fraud risk prevention because the transaction

is a double's advocate. All right. So devil's advocate, the garment, the garment manufacturer in Mexico does a stable coin transaction with the company making the fabric in Vietnam. The fabric arrives damaged, the wrong color, lesser quality than what was expected. Well tough shit. It's on the f***ing blockchain. The transaction happened.

Live with it. Is that the answer from the crypto native people to that? Or is there some other mechanism? I want you to answer. I will. Yeah. Well, two things. One is in that transaction to describe the Mexican garment manufacturer, they don't have a credit card. They're not, that's not, it's not a credit situation where they're going to go to mom and say, uh, can you handle this fraudulent situation for me?

They've got to, you know, duke it out and maybe they have an insurance product, but let's talk about the credit card situation for a U S consumer where really the fraud prevention is a useful feature that we all we all like. First of all, I don't think that's the first place crypto gets adopted. Well, I don't know a card credit in credit cards to replace credit for us. Let me do you got you've been MX you've a chase Sapphire Reserve. Platinum. Yeah. Okay.

Platinum. Good fancy card. You get a basically a two and a half percent discount, everything you buy and that's a good deal for you. I'm not like a, that's not a deal that stable coins are going to, are going to beat tomorrow. Um, but for all the users that don't get the benefits of your, the credit card you're using this like very powerful credit card, cause everyone wants your business and they're willing to subsidize it. Um,

stable coins do offer better, a better product. The merchants prefer it cause they don't pay the fees. The users like it because there's better applications that support it. It's easier to program against stable coins. Um, and you can layer in fraud prevention, fraud, protection and insurance products that begin to, uh, imitate some of the features that you get from your Amex, but unbundled and more appropriate for every interaction. Sam, you mentioned it's good for the merchants.

Obviously it's great for the users. I don't know if the financial services industry extracts one to 2% of GDP a year, whatever it is, it's some ungodly number. On blue. But this is big business. It's big business for the banks. It's big business for Visa and MasterCard. And I understand that they are getting in the game, but the market caps of these companies are at all time highs. And Wall Street does not seem to be

worried that their margins are going to be under assault. Should they be? Okay. I think that stable coins induce competition and we all want take rates to go down on payments. Like we don't want a global tax on every transaction. We want to be able to do business together. We want to be able to make payments, buy stuff more cheaply. When fees go down, the total payment volume goes up. There's more things that you can buy that cost less. I think we're gonna see more transacting. And so the TAM is going to go up. Oh, it's like take rates go down. Free trade. Yeah. Free trading globalism. We see take rates go down, total volume go up. And I think ultimately the high tide raises all ships, even if on every transaction make a little less. Let's put this chart up.

Visa, MasterCard. These are not the charts of two stocks that anyone expects to be disrupted anytime soon. Visa is $700 billion in market cap. MasterCard, $500 billion. And what I want to ask you about here, they seem to want to put out a lot of press releases about what they're going to do with stable coins. So maybe they find a way to like add on value added stuff that like they say they say to

themselves, okay, we're hip to it, the new rails, blah, blah, blah. And we have an idea about how we stay relevant in a world that's moving towards stable coins. So I guess from an investing perspective, because we're like a Wall Street show, do you think the risks to them cannibalizing their own business just to be involved in stable coin is worth discussing? Or how do you think about that? They're savvy. They have people working on this.

This is the class. I'm an investor. I do mostly startup investing. Yeah. I think the startups are going to win. I mean, that's sort of who I root for by nature. I like seeing the little innovators. This is the innovators dilemma. Like this is the very slow. This is the S curve and this is, uh, you know, we'll see, um, what ends up happening, but they're going to have to work really hard to make sure they don't get beat by more crypto native stablecoin native early startups that are moving fast and trying to make better products.

So Sam, you mentioned you're an investor. We saw one stablecoin issue go public circle, the biggest legitimate one in the United States anyway. Is that and the stock is on fire? Is that a reflection of the future of stablecoins? Is that a reflection of the current a reflection of the future of stable coins? Is that a reflection of the current environment where there is just not enough supply of investable assets and investors want access to this? Are there more stable coin companies that are going to be publicly traded at some point in time? Well, I think that every fintech is going to become a stable coin company because it's an easier, better way to build fintech products. So this is PayPal Square? to build FinTech products. I, I'm like a PayPal square. Like you're like, if you're, I mean, look, those guys already made substantial investments in capital expenditure and making sure their product works today.

But if you're a new FinTech getting started on legacy banking rails, you got to go one by one to 190 countries to get your product out there. It's a convoluted regulatory and engineering process where you're working against software from the 1970s. It's nonsense. If you use a stable coin backend, if you use stable coins to build your Fintech app, you can be global on day one. You can have a product out in a week.

You can do stuff that you can really hardly imagine using traditional, um, banking rails because it's just too complicated and not worth it. And so I mean, the question is like, what, what is there invested in the public markets? But the answer is that like, I think a lot of the FinTech opportunities are going to be stable. So let's take, let's take like an example. Let's say, and I'm sure this has been pitched to you 5,000 times already. Somebody comes along and says, I'm willing to bet that there are enough people comfortable moving money in crypto that I can build the Venmo for crypto that goes mainstream and we could get a few million people with a dedicated app. And all we do is enable people to send whatever it is.

If it's Bitcoin, if it's ETH, but send value peer to peer and not try to build Coinbase, but just like try to build this like very specific. How many times have you heard that pitch and like how far away do you think we are from something like that crossing over and becoming a thing that regular people use? Well, we see it. I've seen it a ton of times. I mean, maybe the answer, the realtor might be like 40. Uh, but that's because it's a great idea.

It is the place we see it work the most is in a pretty narrow remittance scenario. So someone will say, I've got a great edge going to market in Columbia. I'm going to own the U S to Columbia corridor. And I think I might've met with 20 companies that were growing, uh, 10 to 30% a month doing this kind of remittance app. And that's, that's crazy for me to see 2030. I mean, just a lot of companies growing at 10% a month. Unbelievable. This never happens. And, um, but, but there is this question about the Venmo product. The Venmo in country has actually been solved.

How much better are you going to get than free instant payments? But the international scenario, I have no problem with it. Unless a lot of my money is sitting in is sitting in staple coin already. And I just want to not change it to dollars. I just wanted to do that. But you're saying that's not that big of a problem. Well, look, I think the pure payments thing is basically solved in country, but out of country for minutes, it hasn't been solved.

But then when you want to do, um, like a super app finance, super app, I would prefer to be able to get a yield on my money. I'd prefer to be able to invest it, send it, save it, do a bunch of other verbs besides just send, and crypto stable coins in particular make that a lot easier as well. So suddenly it's not just a payments app. It's an app where I'm tracking more of my financial life. I'm sorry.

I just let's follow up on that before we move on. So at the current moment, my understanding of the Genius Act is that they wanted to separate stable coin activity from banking in such a way that stable coins cannot in and of themselves have a yield attached the way that a checking account or a savings account or a CD can. Do you see that evolving then? And we get into a situation where people hold stable coins, earn a yield while they're waiting to transfer value. Yeah. This is one of my hot takes.

And so if we ever go out for a beer, I'll give you my full list of hot takes. But the I actually don't think earning a yield with stable coins is such a huge deal, the way it's typically described. And that's because most consumers have, they're doing two different things. You spend or send money and then you save money separately. And so it's actually totally okay. If I don't earn a yield on my payment stable coins, and then once I'm done doing payments, I can either stake that money to earn a yield using DeFi, or I can turn it into a different asset that does actually earn a yield. But you want to be able to do that really quickly. Today, I store my money in some deposit account at a mainstream bank,

Bank of America, Wells Fargo or something I'm earning like half a percent I mean, it's crazy given what treasurer rates are and it's kind of annoying to sweep that money into a money market fund where I could be earning four and a half five percent But stable coins are gonna increase the amount of competition in fintech apps So that and they're gonna get much easier to build interesting products And so I can be spending money and not earning interest. But then 10 seconds later, I'm staking I'm earning interest.

I played you might have I tell like a brief story about this. Yeah, cool. So I was playing basketball today. I rent this gym in Chelsea. And at the end of the game, people send me 20 bucks because I paid for the gym. And this guy had heard that I like stable coins, he sends me $20 in in USDC. I get it, it cost a fraction of a cent, I immediately stake it on this service called Aave. And by the Saturday game, by Tuesday, I'd made back in interest the money that had been spent to send the money in the first place.

And now I'm earning interest on this. You can't really do that action in traditional financial apps where I'm sent money and immediately earning yield on it. That's because the composability of stablecoins makes it much easier to do. So now we've got, all right, we have the political wherewithal to allow this to happen. You have better technology and you have lower take rates. It seems like a very ripe potion. What sort of timeframe we were looking at realistically

before this is a thing and are we even gonna know it's a thing or is it gonna be sort of part of JP Morgan's offering and Visa's offering and it's not gonna be like this whole new stable coin world? Yeah, I think of the, in different countries it'll happen differently. And we're going to see this adoption developed depending on the application and the use case. So in countries with high inflation, they're holding stable coins directly and they're, they know that they're doing this. They want that dollar product, um, for international money, sending, uh,

remittances, B2B so forth. They know stable coins are sort of involved, but they're using a new application that gives them a better price and a faster, better experience. And so it's kind of on their mind in the U S I think it's going to be more silent where we all have the, right. It doesn't matter. It's a stable coin. It just matters that they're moving the money.

And the next great fintech you hear about is going to be powered by stable coins and it's going to allow them to offer you a really great product that just like wasn't possible. And you didn't know why it wasn't possible, but now you've got a fintech app that's, it's three times better at sending money internationally. It's two times better in terms of the UI. It's a little bit better at giving you a better interest rate. Um, and the, you know, and so forth. So you'll just use a fintech app and you're like, this is this thing rocks.

Uh, I wonder how you have a sense of how many people are sending international remittances either from the United States or just globally, like, like what's the, the tam of something like a really cheap stable coin remittance? The, well, as I mentioned, we met with a bunch of companies this winter and spring and all of them are growing 10% a month. So whatever the number I'm going to give you, I think it's going to be 10 to 20% higher next month, just based on the early stage startups that we're talking about. next month just based on the early stage startups that we're talking about. So it's like an Uber driver in Miami whose family is in Venezuela and every week whatever he takes home from Uber he wants to move a portion of that from like however they pay him he wants a way to send that value back to his family in Venezuela and not get raked over the coals for 7% by a traditional remittance.

That savings, that's 7% of I don't know how much he's sending home. $1,500, $2,000. That's a big deal. Often it's $100 or $200. Wow. And the less money you send, the worse rate you get. But actually with stablecoins, it's often a flat fee, and it's a very low flat fee. And so that also makes a big difference, because now you can do more smaller transactions, rather than trying to scrape together to 300 to save five bucks, which actually matters to your mom in Venezuela. Like people are distorting the market right now because of the expense of these remittances. Like people are distorting the market right now because of the expense of these remittances. So earlier we showed charts of Visa and MasterCard

and said, do these look like companies that are worried about being disrupted by stablecoins? What we should have shown was Western Union, the stock is down 50% in the last three years and it's at a 52 week low. And this is certainly evidence of, yeah, there's something there. They might have no business.

Well look, Visa and MasterCard, Visa and MasterCard actually do have something really impressive, which is their merchant network. They work with millions of businesses all over the world. They help build that terminal, you know, that you everyone knows you swipe tap, whatever scan to pay. And they've helped bootstrap this trust network where you can go, I was just in Italy over the last two weeks and I tapped to pay. Not to brag, same. Oh, where were you?

I was in Positano on the Malfon Creek. I did that two years ago, I loved it. It was amazing. Awesome. Well, they accept my credit card there and that's because Visa helped bootstrap this trust network. Did you stay at El. San Pietro?

No, I did not, but I saw it. It looks like you have a drink there. That's pretty impressive. Okay. Go on. Well, anyway, I mean, look, I could spend my money there partially because of Visa's work. And but that same trust network could probably be re-leveraged to actually support stable coins. So actually, this is actually no Amex in Europe. They, you can use it, but you shouldn't because they're charging you an international fee. I've never used my Visa so much. I only use Amex here and I only use Visa when I'm overseas. Now, if there's this third thing,

I could tap my phone and it's connected to an app that allows me to pay a stable coin to, but like MasterCard and Visa, I guess, have to agree that they want to introduce that into the merchant network that you're talking about. Yeah, well that part is really interesting. And again, I am an engineer, so I kind of geek out on that stuff.

You could repurpose that payment terminal to just accept stable coins natively, uh, and there's some fraud steps that go away with a stable coin transaction because the money is sent instantly, there's no way to undo it. So if I'm buying a drink and I see the bartenders making it, I'm happy to send them a dollar and the bartender is happy to accept the dollar and we don't actually need to have quite the same trust network that we have with, um, these in mastercard, which are operating on credit and therefore need to have the guarantees they can actually trust me.

Um, and that'll be good for my money. Are you surprised at the valuation that wall street has given circle? I think it effectively 10 X from its IPO price, not the opening price, but like the price was offered at Mike. Did it, did it do it? Did it do a 10, a full 10 X from its IPO price, not the opening price, but like the price was offered at Mike. Did it, did it do it? Did it do a 10, a full 10 X? I mean, I don't know if it 10 X, but let's say, it certainly went, uh, went bonkers. That's the technical term. So it came out like, I think they pr they price it at 40 came out at 70. Is that something about, I thought it was 31 for some reason. I have my rant. It ran to 300. You might be right. Are you surprised, Sam? What do you think?

I buy, sell or hold. These guys know I'm an RIA, so I'm like, there's not so much I can say on the matter. All right, fine. But let's put it this way. The underwriters, had they had any idea about the true demand for this stock would not have priced it where they priced it because by accident, I assume they left a ton of money on the table. So Wall Street was definitely surprised by the fervor to get in on a crypto infrastructure play. It's effectively what it is.

They're not bullish on stablecoins. They're bullish on the usage of stablecoins, I guess, would be the way to phrase it. So like, what do you say from Silicon Valley? Like, what were you like, holy shit, they really want this circle stock. What's going on? Well, for me, it's obvious. I spent all day talking to early stage companies and they're all saying- So you're not surprised? Well, what I'm not surprised about is that, uh,

wall street's a little bit late to pick up on a new, better way to move money and that people who are really using the stuff, get it and know that this is the future and they, they want to access, you know, a way to invest in that. But the key thing is that people just have recognized that stable coins are likely going to be a big part of how payments work going forward. And circles one of the things you can see, of course, you guys know more about it than

we do. You can see you guys are funding it. The best analogy that I give people for Silicon Valley, and I know you're in New York versus Wall Street, like you guys are the elves were the orcs. But the orcs really wanted in on this particular stock. And now this morning I saw Grayscale just filed for just filed for a confidential IPO, a confidential filing for an IPO. And it looks like we're going to get a whole host of crypto infrastructure plays to come to the New York Stock Exchange and the NASDAQ. So like this is a really hot theme now, even for the non crypto native.

Even for the non crypto native. But again, I'll just go back to the fintechs. I think a lot of regular fintechs and regular payment companies, they're going to be using stable coin rails and stable coins as the basis for their new products because it just is a better way to build what they're already building, what they want to build, what consumers want. And so I don't want to spend too much time building a delineation between a stable coin company and not a stable coin company when I think a lot of the financial companies out there are going to be using better infrastructure, not because of any speculative. I don't care about that.

What I want to see is better products that make payments cheaper and faster. And that's happening. Star Wars guy? Oh yeah, a little bit. Okay. So it occurred to me, this sounds like it could turn

into a galactic credit standard. So whenever there's an exchange of value in the Star Wars universe, they talk about credits and they don't talk about what country the currency is from. They're not talking specifically about any one planet's monetary system. These are just the galactic credits and how many credits will you pay me to take the Millennium Falcon on your suicide mission? Like that's...

If we do increase the penetration of the dollar by means of getting everybody comfortable with stable coins, we could end up in a one, two or three currency... Not one. A three or four currency world versus a 10 currency world. I don't think we're going to end up in a three currency world. Um, I do think as a consumer, we don't always realize just how much of the world is already priced in dollars. I mean, when that's what, uh, B2B payments are priced in, it's the,

it's the global unit of account to some extent. And maybe that'll grow. Um, I think that dollar penetration will grow. And I think there's this huge structural demand for dollars consumers everywhere, especially in high inflation countries want to be saving in dollars. Businesses want to hold money in dollars because they're buying good in dollars, because that's the unit of account. Um, it'll get it. Dollar penetration will will continue to grow. But I don't think we'll have a hegemonic currency, just because the value of controlling your own currency is pretty high. Like if let's say there's a some sort of supply shock in a local industry, maybe you're export a lot of wood and there's a big forest fire, well, you might need to induce more credit to help businesses bridge that production gap. And if you're all on the dollar, you can be it can be harder for countries to be responsive to their own local needs. And so there's a lot of reasons to have a local currency. But also there's a lot of reasons to have people have access to the dollars, they can participate on the global stage more readily as well. Does the stablecoin ecosystem rely on people's enthusiasm for Bitcoin continuing? I know these are not speculative per se, but the continued use of this

does rely on people remaining interested in the whole crypto ecosystem. Or is that not anything worth worrying about at this point? Speculation has, has of course been a big part of crypto's history. Uh, that's not why I'm and it's actually not why a 16 Z is excited about crypto. We think it's a better way for No, that's why Michael's excited about crypto. Yeah, that's why Michael and Michael's nodding over here. No, it's the reason why we like it is because, uh, crypto offers a better

way for people to trustlessly collaborate and it's a better technology stack for building financial products. And so that reason is why we see all these fintechs getting into stable coins. And so I think the two issues are fairly unrelated. Michael, do you have anything else? I have one more for Sam finished with this guy. So for the crypto skeptics who watch our show, and you have anything else? I have one more for Sam. I'm finished with this guy. No, I'm good. So for the crypto skeptics who watch our show and we have, you know, we have both. But for the people that are just uneasy about, you know, spinning up an entire new financial

architecture for the world with up until three weeks ago, no regulations. What do you think is the biggest risk? Systemic risk, not risk to any one player or coin, but what is the biggest systemic risk that could arise from the mass adoption of stable coins as kind of like a foundational financial services system? What do you worry about? Or what do people worry about? them? What, like, what do you, what, what do you worry about? Or what do people worry about? What, what I want to see is I want to see tight integration with, um,

existing financial institutions, because there's a lot of implicit knowledge. There's a lot of knowledge that's been built up over years of how to manage risk, how to do like distribution, how to educate customers, how to get, um, merchants and suppliers to coordinate effectively. And I'd like to see stable coins have access to the people who know those systems really well, so that stable coins aren't just sort of a new rail. There are rail that can really move forward the existing important industries that are out there.

And so a risk would be that traditional payments companies don't adopt stable coins fast enough. And we end up with, um, people reinventing the wheel in a way that's slow and just doesn't benefit the consumer as much as I think stable coins should and will. So you don't think there's a risk to the banking system, let's say, or, or to the banking system, let's say, or to a risk to the credit card system that could potentially be introduced if something goes awry. You think the bigger risk is just that we move too slowly?

I think there's going to be a lot of competition. I think if I was a incumbent in payments or in banking, I'd be certainly then I'd be worried I'm not moving fast enough and I might get my lunch eaten by a savvier startup. But no, I'm not very worried about, I think the existential risk that you're getting at. I'm worried that stable coins and traditional finance aren't going to collaborate enough to get best of both worlds. Sam Broner, this has been super helpful for Michael and I and I know for the audience as well. I want to thank you so much for joining us. Let's tell people where they could learn more about the A16Z house view on stable coins and other crypto topics. Where would they go? You can follow me on Twitter at Sam Broner or and more importantly, go to

A16Zcrypto.com or follow us on Twitter. You're the man. We'll come back. We'll come back to you someday in the future. Let's let's let's let's let's revisit. I'd love to. Thank you guys. Really missed me both. All right. Awesome. Hey guys, thanks so much for watching.

Thanks for listening. Smash that like button, subscribe, tell your friends, et cetera. And we'll talk to you soon. Oh my, George Takei voice. Oh my. It's, hey guys. Oh my, George Takei voice. Oh my. It's, hey guys, what are your thoughts? It's Tuesday night, 5 p.m. We are back with an all new edition of What Are Your Thoughts?

My name is Downtown Josh Brown. My co-host Michael Batnik is with me as always. Michael, please say hello. Hello, hello. All right, we have a action packed show. We are just getting into the heart of earnings season. We're about one weekend. Today we had all the banks report and you know, tech is on the way and we're

going to get into a whole lot of stuff related to earnings and so many other topics. We're super excited to have you guys here. And thanks to everyone who is joining on the live stream. We appreciate that so much. Tonight's show is brought to you by Public. Public is the investing platform for those who take it seriously. You can build multi-asset portfolio of stocks, bonds, options, crypto, and more on public.com.

So you know, Ben and I, you mentioned for those who take it seriously, that's not just our tagline, that's like real shit. Ben and I had life on the other day on the podcast to talk about what differentiates them from their competitors. And it's not like this swipey app. It is really the modern 21st century, maybe even 22nd century, dare I say, custodian. Yeah, I use public every day. So on, I think it's on the front page of my phone

and it's a really easy way to transact. And I also do some DCA stuff there. And we're gonna talk about that later on in the show. Find out more public.com slash W-A-Y-T paid for by Public Investing. Full disclosures in podcast description. All right, here's where I wanna start. The number one, so I'm walking on a halyard

with sprinkles the other night. And this happens, so she pointed this out to me and I didn't even realize it. She's like, Josh, every other person that comes up to you asks you the same exact question lately. Have you noticed? And I said, you know what? I think you're right. What do you think the number one question people ask me is?

Besides what's Michael Batnick like in real life? What else do you think I get asked? Is it too late to buy NVIDIA or should I sell NVIDIA? Should I sell NVIDIA? Everyone owns it already. Maybe like three years ago it was, Hey, would you still buy Nvidia here? The number one question that I get asked over the last couple of years, and really increasingly in the last couple of months, Hey, love you on the show. Love you on CBC.

Listen to your podcast, whatever, like whatever it is. Hey, what do I do with this Nvidia? Should I sell it? It's unbelievable. She picked up on it because I'm oblivious. I'm in my own world. People are asking me this shit in the airport, on the street, we're in stores. What do I do with Nvidia?

Should I sell some? I want to start. We have a one-year price. Let's put a price chart. I mean, look, obviously the stock pulled back during the tariff tantrum from March and April, had a pretty good pullback, got down just below $100 a share. Here we are two months later, it's $170. Just when you thought everyone that wants to buy NVIDIA already bought it, it's just not how markets work.

Apparently, there were plenty of people that still didn't own enough of it that wanted to own it because when you're talking about a $3 trillion stock going to a $4 trillion market cap in two months, that's an insane amount of buying power on the sidelines. I assume you agree with that so far. Nothing that you said is controversial. I am very excited to offer an alternative view, but you're cooking, so keep going. All right.

Well, I want to get into the news today. One of the biggest overhangs on Nvidia, not that it really hurt the stock, but it's definitely the thing that one of the most bearish things about Nvidia was the problems they were having with selling their chips in China. It's not that there wasn't demand. It's that the United States imposed rules that kept them from selling their highest

end chips, then they were having problems selling all chips, then there was concern that Chinese competitors would come along and fill that vacuum. We'd be in this bipolar world of two different versions of the GPU and Nvidia would lose dominance, blah, blah, blah, blah, blah. There's a whole line of thinking where China was going to be this massive headache for Nvidia. The news today is that the Trump administration said, do what you need to do. Howard Lotnick was on CNBC with us a little while ago talking about the need to get the Chinese addicted to building their tech stack on American AI chips and that that supersedes

any of the issues around trade or tariffs. Strategically, we want Nvidia to be dominant around the world, and we want every technology company to be building around American AI. That obviously sent the stock significantly higher. This is Tay Kim at Barron's. Nvidia is back in China in a stunning turn of events. The chipmaker says it expects to soon be able to sell its H20 AI chip in the country, sending shares sharply higher. It's up like 4% today, as we're talking. That is a big about phase from the administration.

That removes this bearish overhang about whether or not Nvidia is going to be able to operate as successfully in Asia as people had hoped they'd be able to. It's a big development. Just to give you an idea of the scale of what we're talking about, Bank of America says that Chinese AI sector spending in this year, 2025, will be $98 billion, which is a 48% increase over what they spent on AI last year. You could just mentally extrapolate that number in your mind and picture how much of that is going to NVIDIA and get an idea of why this is so important.

That's just China. Wow. Right. Here's the bottom line. And then I want to get your take on this. This is the number one question I get. And I understand why everyone has made so much money in the stock. It's $4 trillion.

I've become very much associated with Nvidia in the minds of people who watch CNBC. Could be worse. Could be worse. Could be worse. And I want to tell you, I've spent the last 10 years saying no, is my answer to that question, or not yet, or I don't know. A lot of times I just say I don't know, which is the truth. Or I'll say to people, it depends on your time horizon,

or it depends on your risk tolerance, whatever the f***k that means. And now you're saying short it. My new answer is yeah, sell some. And I still think that I'm not selling, let me preface this by saying, I think the stock gets into the 200s. It could take five years, it could happen three weeks from now. I have no way of knowing, obviously.

When you look at the new spate of analyst price targets and you think about some of the news flow, Metta, talking about building Titan clusters, and you think about last earnings quarter how powerful all of the AI spending reaffirmations were coming from Alphabet, Meta, Amazon, Microsoft. I don't think any of those companies are about to get on a conference call in the next three weeks and say, we were just kidding. One of the things about AI spending is it doesn't work the way people think it should. It's not like you could spend like a trillion dollars amongst 20 companies and be like, all right, we're all set.

The spending is required now to maintain the spending that you had already done. So, I think when you get that wave of announcements on the earnings calls of the hyperscalers, it's probably very supportive of Nvidia's recent rally, at least maintaining these levels. So I'm not saying, yes, you should sell it because I think it's going to be a bad quarter or I know something that anyone else knows. I'm just saying, if you're in the stock for a really long time, it's likely it has far outgrown most or all of your other investments. Even if you also own like a 401k with a balanced portfolio, you have a ton of Nvidia there

too. And so if you're coming up to me, a stranger on the street, and asking if you should sell it, then the answer is probably yes because you probably own enough of it that you're nervous. It's probably become a huge part of your portfolio. And yeah, what's the, because what is this business, Michael, the business of owning stocks? It's about regret minimization.

I knew you were gonna say that. But because, so what will piss you off more? You sell none and the stock has a 30% drawdown or you sell 20% and the stock doubles. Yeah, it's obviously A, it's not even close. Obviously A. We, like, we, this is like, this is Daniel Kahneman stuff. We know.

It's basic. It's basic stuff. We know that the anger over not having sold is going to be way worse for most people than the, oh man, I shouldn't have sold any. It's no questions. I'm such an idiot. I was a greedy pig.

Yeah. So, so my new answer, when, when people walk up to me on the street, it's like, dude, if you're asking me, then yeah, you probably should sell some. Yeah. And that's, that's, that's where I'm at with this thing at this point. All right. SoIA is large. Chart on, please, John. We made this chart last week, but the story remains.

It's bigger than the entire staple sector. Those are not small companies, OK? It's bigger than the entire energy sector and utilities and REITs and materials. Not all of them combined, but each of them individually. This is crazy. Can we pause on this? Please pause. Not only is it bigger than all of them combined, but each of them individually. This is crazy. Pause on this. Please pause.

Not only is it bigger than all of these sectors, if you add up all the utilities, all the REITs, and all the materials companies, they're at 75% of the market cap of Nvidia. It's completely insane. And I'm not saying it's not justified by the profits at Nvidia and the expectations of profit. I'm just saying any good thing you could possibly say about how great this company is. We know.

We know. Look, everyone, everybody knows. So is there, is there like another level to unlock? What if they discover AI? Dude, if, if, if people start curing various cancers because of AI being inserted into into the clinical trial process and being able to speed up the time to market for a promising drug by 50% or so. These are all within the realm of possibility. If Nvidia is the indispensable company sitting at the center of that, yeah, I could see the stock tripling.

Yeah. But what is the stock tripling. But what is the likelihood that $4 trillion goes to $12? Okay. So you know what is not only in the realm of possibility, but in the realm of guaranteeability is that there will be a large to quite large drawdown at some point in the near future because that's what always happens with Nvidia. And there's no reason to think at $4 trillion at this time is different. So turn on please, Sean.

Josh, what are we looking at here? This is so important. Great. Great. Great to you. So I asked Sean to, all right, so I buy the stock in the summer of 2015. I go on CNBC. Netflix is struggling at that time.

And I make the argument that the N in Fang, before we were saying Mag-7, we were saying Fang, the N in Fang should maybe be Nvidia. And I'm talking about, at that time, machine learning, AI, things that existed but they weren't a stock market story. They were more a computer science story. And look, I'm not somebody that was predicting what's going to happen or someone's going to launch ChatGPT. I have no idea.

But one thing that I know about NVIDIA is that all the people in Silicon Valley on the tech podcast that I listen to are talking about it Wall Street has video game analysts covering the stock Wall Street has no Wall Street is not even thinking about parallel processing as a means toward Augmented reality virtual reality AI machine learning because there's no earnings coming from that yet It's it's not commercialized yet. Wall Street's looking at this company, the same people who are covering Take Two Interactive and EA and Activision are the people commenting on Nvidia. Then I'm listening to guys like Andreessen

saying, we can't get our hands on enough of these GPUs because we have to fight with Xbox to get them, but this is the way that we're gonna do. So that's the only insight I'm armed with. I don't know anything else. I'm long the stock, but the more I'm reading the news, because you're an investor, so you keep, you say, oh, people are starting to wake up.

And then there was this whole crypto debacle. And so put that drawdown chart back up. That's 22. Can you fathom, look at this 2017. So in 2017 is I think the first crypto crash. So that's the year where Thanksgiving dinner, everyone's talking about Bitcoin, like the nephew is telling the uncle about Bitcoin. A week later, it makes an all-time high, and then it completely crashes.

They sold off Nvidia because Nvidia is the main chip being used in mining operations for Bitcoin. Some of these drawdowns were based on absolute nonsense, but I guess at that time it was meaningful. The mining companies were heavy buyers of GPUs at a time before chat GPT. So being a shareholder all this time in Nvidia, even though it's up 10,000% plus, there have been some massive L's along the way. If I were to have this chart handy when somebody says, should I sell some Nvidia? I feel like it would be very illustrative. Like, how many people could reasonably, if they have a ton of money on the line, live

through drawdowns like these, even given all those gains, it gets harder and harder as the dollar amounts go up. That's a great point, but it's worse because they don't have the conviction that you do. You can't export your conviction because they don't know the name as well as you do, so they know that the price goes up. And they're much more likely to get scared because they don't know that 25% isn't going to go down to 40%. And they don't know how they're going to behave when it goes down, if and when it goes down

to 40%. So I love this for you. I love that you are giving people who have been with you for a long time and all credit to you for riding this buck and bronco because Lord knows I couldn't have done it. So I love that you are giving people the permission to sell because your answer has been not yet. I want to talk about some alternative views, not disputing nothing that you so eloquently said, but this is just some more information that I think is important. So Mark Zuckerberg today said, we are also going to invest hundreds of billions of dollars

in the transcript into compute to build super intelligence. We have the capital from our business to do this. Beth Kindig this morning said, via the Daily Chartbook, Goldman Sachs sees hyperscaler capex increasing sharply through 2027. Capex is projected to be 1.15 trillion from 05 through 27, more than double, more than double the 477 billion spent from 22 to 24. So chart off please for a second. These numbers are so insane. The market is not dumb.

It's the opposite. It's very smart. Let's just not say that it's all known, but it's close. It's pretty damn good. The returns that we've seen in Nvidia are justified and then some who knows where it's going to go from here. But also if you zoom out and you take out the last 30 days or last 60 days off the bottom, whatever it was, do you know that from July of 2024 through, let's say, I pulled

this up, through mid-May of 2025, the stock was up 4% in video. So it went a whole year with doing nothing but getting sideways chop, you could say consolidating gains, but it went a whole year with doing nothing but getting sideways chop. You could say consolidating gains, but it went a whole year. So all of these questions that you're getting are A, from people around this neighborhood that follow you. And B, it's happening because the move off the laws are astounding. But prior to that, it had done a whole lot of nothing. So let me give you some less anecdotes from our hometown, from people that follow you, and some more data that shocked me and also supports this rally.

This is from Schwab, the largest or second largest pool of investor data in the entire planet. They said that NVIDIA, this is from their S-Tax report, NVIDIA set new highs in June, but Schwab clients net sold shares of the AI giant by a large margin for the second month in a row. Nvidia, which enjoyed net buying from clients in late May leading it to its earnings report, was the biggest net sold stock every week of June. Oh my God.

That's why I'm getting all these questions. Every week of June. This is what people are doing. Every week of June. Oh my God. That's why I'm getting all these questions. Every week of June. This is what people are doing. So dude, think about the rally from June to today. Every single week of June, it was the largest net sold stock. And so the market, the Nvidia is climbing a wall of worry. It is proving that-

Who's buying it? It's got to be an institution. I don't know. Because Schwab is everyone. I mean, it's the biggest pool of investors in the world. And so I have no idea whether or not this quarter is going to disappoint these lofty expectations in the short term. I also don't know if it's outrun the potentials on the fundamentals in the long term, but everything that it's done to date

is justified and then some. But nevertheless, you're not going to feel like an idiot taking profits of four trillion Even if it goes to five or six the whole thing to me here is just to remind people Even if you're right on the fundamentals You still don't know how the markets going to react. So Look the earnings estimates continue to go higher for this name. And then they keep coming out and destroying those numbers. What happens if the analysts finally catch up and they put out a lofty estimate and Nvidia comes out and does the estimate?

Yeah. And then people are like, wait, wait, wait, wait, wait. This company used to beat their expectations by 80% and now they just did a penny better. So you could nail the fundamentals, but the sentiment, you could lose 20% after an earnings report. Easy, it takes nothing. And so people need to be reminded,

that's, this is the difference between investing in individual stocks versus the market. You're not gonna lose 20% in a market-wide portfolio overnight. It lose 20% in a market wide portfolio overnight. It's the difference between investing in bonds versus stocks. The individual volatility of one name, you could have the fundamentals perfectly nailed and still experience a bigger drawdown in a single stock than in almost any other investing endeavor maybe outside of crypto.

Yeah. Like this ain't going to happen to a house that you own. Guess what? At some point, Bitcoin will, I'm sorry, Nvidia will report record quarter, meaning the best individual quarter that has ever been reported in the history of Wall Street and it could fall 15%. Yeah, and it won't be enough. Yeah. It won't be enough.

It won't be enough. Last thing on this, I was talking to, I was talking to ChatGPT this morning, just trying to share my feelings. And I have a partial list, but worth running through, of all the competition. Even if you think Nvidia will maintain 85% of the market for graphics chips, even if you understand how much more advanced Blackwell is than everything else on the market, and even if you believe that they will remain at the forefront of innovation and that the massive investments that everyone has already made in Nvidia will keep them in their market position, there is a world in which people find that cheaper chips can be used to supplement their Nvidia spend and help them with efficiency.

I don't mean efficiency like a better chip. I mean like a dollar spend efficiency. And that's no matter how great Jensen Wang is or Nvidia, I almost feel like that's inevitable. So here are a couple of companies that are working on their own chips or already have their own chips out there in the market and understand that they're not slowing down the pace of their innovation. Obviously AMD, the Mi 355X launched this month. It's said to rival Nvidia's Blackwell. I doubt that it's the first choice of a lot of buyers, but again, it's a competing chip

and it exists and it will ultimately build its own ecosystem. Intel has the Gaudi 3. They've positioned this as an AI training chip or application-specific integrated circuit slash GPU-like chip, so it's got a lot of niche uses. They claim that this thing is competitive with the H100 in terms of performance and power. Then you've got Broadcom. They launched something in July this month called the Tomahawk Ultra.

Then you've got Trinium 2 chips coming from Amazon. Google's TPU architecture, and these are all Nvidia customers, mostly Nvidia customers, by the way, when we talk about the Amazons, the Googles. They're coming up with some of their own in-house chips. Grok has the LPU, or Language Processing Unit. There's a company called Cerebris. They've got a wafer scale engine. Huawei is out there in China.

Meta is building chips. The MXC is their training chip. The MXN and the MXG, those are their inference chips. These are all GPUs. It's not Blackwell, but again, at the edges of the architecture, there's a place for this stuff. Then, of course, Marvell, which is the application-specific integrated circuit, Champ, they're out there building stuff for data centers.

That's just a sampling. I think there's a world in which NVID Nvidia remains every bit as dominant as it is, but Wall Street starts to ask more questions about the infringement of other competitors. And what does that do to the multiple? You could still have a company reporting record earnings, but the street starts to value it less. It gets derated by some degree. So these are the risks if you're going to stay long.

I've chosen to stay long. I've already sold a bunch along the way. My average cost, it doesn't matter what I do at this point. But I'm telling people, if you're concerned, you should be concerned. You've made a ton of money and it ain't always going to be as easy as it's been. And maybe you should take some off. That's my new stock answer for, and don't walk up to me on the street and ask me because I don't want to do this on the street and ask me because

I don't want to do this 10 times a day. I love it. Okay. All right. Let's talk about the bull market. I love this chart. I love Grant Hawkridge's work. Throw this on, please.

So he has a risk on, risk off ratio. So it's one divided by the other. And in the numerator, the risk on we're looking at copper, high yield bonds, the Aussie dollar, semiconductors, and high beta stocks. These are all things that go up when risk is on and down when risk is off. Okay. The risk off bucket, we have gold, US treasury bonds, the Japanese yen, utilities, and staples. And this looks about as clean as you would want this to look in a bull market. It is at the highest level that it's been since early 2024. One of the arrows, Michael, what are the red arrows? They're tops.

So, it's just market tops. Yeah. All right. So, this is not an index of stocks. This is a ratio of risk on versus risk off. That's right. And it looks like it looks like it wants to break out above the congestion dating back to what is that early 20 mid 24? Yep.

Okay. Well, it certainly feels like it already has. It's doing it. So I would agree. That's pretty clean. This is a great chart certainly feels like it already has. It's doing it. So I would agree. That's pretty clean. This is a great chart. I like it.

Love it. You take issue with any of the things that are in that basket? No, no. The Aussie dollar, I would like to explain to me. That's interesting. Yeah, that's probably the one that stuck out. But yeah. Probably something to do with mining.

Yeah. Maybe. All right. Todd Sohn keeps a chart of levered long ETFs versus inverse. And we're looking at the AUM and then he's got a ratio. And we're not quite at all time highs, but we're getting there. $128 billion in levered long ETFs. Just wow. How fast could, I mean, this could unwind really

fast because the people that are in this, this is not set it in for that. It's fast money. It's really fast money. I wonder if it's grown big enough where it will start to enact itself on the actual market. Or maybe it's already on the way out. It's got to be. This is like beyond my pay grade. I'm not a market structure expert, but how could it not be? So do you think at an individual stock level, there's like a large portion of the recent gain in stocks like Palantir that's coming directly as a result of all the buying coming from the leveraged ETF? I wouldn't be surprised. I'm looking at NVDL right now. Oh, interesting. This is

not even close. Not even close to reclaimed. NVDL is the 2X Nvidia? Yeah. So this peaked in November 2024 at $6.4 billion in assets. Not even close. It's 4.1. How does it get its leveraged exposure through options? I don't know if it's options or swaps. Or margin? I don't know, honestly. But it's not even close. It's not even close. So again, people are not forgetting the market cap, the price.

The sentiment, at least from my perch, is not nearly as bullish in Nvidia as it was in the run up in 2024 when there was watch parties. But the price action is telling you somebody's buying. Well, the price action, obviously. Well, yeah. But also, it was the largest net sold stock every week in June at Schwab. So maybe these are people that sold and are like, oh, should I? Take me back. Take me back. All right. This surprised the Dickens out of me. This is from Sean made this chart for us.

He looked at the rolling 64 day semi-conduct performance. Why that? Because that's when it bottomed in liberation day. And the thing that surprised me is that the rally off the lows, off the liberation day lows was more powerful than the rally from the COVID bottom. How about that? Holy shit. I mean, this is pure, this is pure broad common video.

I don't know. Like I know there's other important chip names, but like what's driving this bus? It's GPUs. Yeah. Obviously it's nothing to do with cell phones. Like there was a time where the semiconductor index was dominated by what was going on with PC shipments, PC sales.

And they used to report that number on CNBC on a monthly basis as breathlessly as anything that they report ever. That was such a hugely important number for the whole tech sector and especially for the chip stocks. And if you looked at the composition of the SMH at that time, it was a lot of CPU and DRAM companies. Quite Intel.

Well, of course, Intel was the biggest. Intel, AMD was still knocking around, but then you had companies like SanDisk, which was memory. around, but then you had companies like Sandisk, which was memory. Oh, that's right. And you had, so there were NAND Flash companies. Remember Serious Logic? Yeah, of course.

I remember all of it. I'll never forget. LSI Logic was big. So that PC shipment number drove the semi-index for the first third of my career. And then, like obviously they stopped reporting it because it stopped having an impact on the market. It became less important. And what took its place was cell phones.

And then it was Qualcomm. Became the dominant, Qualcomm alongside Intel. And it was about handset shipments. And these are the early, this is Blackberry, early days iPhone. This was really, really important to the semiconductor sector because it would, the shipment numbers would be why you would get bullish or bearish on the cap equipment names in the space, the KLA 10 cores, the applied materials.

So you had this whole cascading effect where the handset shipment numbers from AT&T would come out and you would see these chip stocks rise and fall on something like it sounds ridiculous to us now. Wait, people used to care about how many phones AT&T sold in a month? Yeah, so really back then, in my day, it wasn't AT&T. It was singular. People don't even understand how long I'm doing this was Bell Atlantic.

It was Bell Atlantic, pre-Verizon, and it was singular wireless. Um, but like now, so you look at this, the biggest, what is this? The biggest 64 day rolling semiconductor performance. Put that back up. The biggest 64 day rolling semiconductor performance, put that back up. Nothing in here has anything to do with Intel or Qualcomm or PC shipments or handset sales. None of it. iPhones. None of that's in here. What's driving the bus here very clearly is GPUs and the CPUs that are related to the cloud build out. That'll go on for a while and someday it'll be some other category that drives the performance

of semiconductors. But man, this is a really remarkable time to be in the game. No doubt. All right. On the flip side of the coin, things that nobody wants, again, bull market behavior. Throw this chart up from Todd, healthcare. Holy mackerel. This is wild. So healthcare had a 15.9% weight in the S&P 500 in 2022, towards the tail end of 2022. So it's called beginning of 2023. And it's now down to 9.3%. I mean, for quite a lot, Nvidia is 8% of the market. Nvidia is going to pass healthcare. If I'm a value investor, you're looking at your chops, right? This is the only sector on my screen. If I'm a value investor, I'm combing through the rubble. You're combing the desert. You're looking at the worst performing large caps in the whole market.

Low valuations, justifiably low. There's very little in the way of organic earnings growth. The only companies that have any kind of growth are the ones selling weight loss shit. That's become increasingly crowded. Outside of that, you got basically old line farmers that have to acquire very expensive biotech assets just to rebuild their pipelines. You've got regulatory issues with conspiracy theorists running the Health and Human Services Department. You've got like God knows what's going on at the FDA these days. I think it's Dr. Oz. I mean, literally, like, you could not get worse sentiment. And if you're a value

investor, the bet that you have to make, I alluded to this earlier, something with AI is going to transform the economics of this industry and make these companies significantly more profitable. They spend tons of money on marketing, but the real spend is in drug development, drug discovery, clinical trials. And so if you believe in the AI theme, you have to believe these companies are going to spend tens of billions of dollars in order to become more profitable faster on new drugs and that that's going to ultimately benefit the share prices. You're not interested in anything, are you?

No, I don't do this stuff. I want the best stocks in the market and I'm happy to be late. All right, let's talk about your old ass. Had my dalliance with Pfizer, complete waste of time, misallocated capital. When this sector wakes up, I'll pay attention. All right. Gen X. Michael, do you know the years during which Gen X was born?

I'm going to say it ended with my sister. She's 1979, and it started, I don't know, 1971, 1972. Okay, close. The official is the Boomers go until 1964. No. So yes, the Boomers are 45 to 64. And I don't know why, but this is the official, I think it may be the Beatles came to America.

And that was like the, that was like the, the end of the baby boom and the start of something new. I don't really. So when's X what's the, what's the generation years starts in 65 ends at 80. So I'm born in 77. I'm pure, I'm among, I'm among the last of the, but I actually have always thought of myself as an Xennial because I have a lot more in common with the millennials in many ways. Yeah. Like the early Xers were born in the mid sixties. That's like Barry's generation. They're really into Caddyshack.

Steely Dan. Yeah. They think like Stridyshack. Steely Dan. Yeah, they think like Stripes is the height of comedy. Terrible. There's not one laugh out loud in that movie. So that's not, I don't associate myself with that generation that kind of grew up watching like Good Times and Sanford and so on. Even their shows are alien to me. So I see myself as more of an ex-annual.

Be that as it may, and who cares? Saruli put out a huge report this week that everyone's writing articles about. And I thought we would just take a look at it because it's about the forgotten generation who are now my age age between the ages of 45 and 60. Saruli says they stand to receive $1.4 trillion annually over the next decade as their Boomer parents get older and pass away. Millennials are still going to inherit way more over the next 25 years, but Gen X members

will receive more money than any other generation in the near term. So obviously, this is just like chronology. The number that I thought was interesting is $39 trillion for Gen X, and they pegged the millennial inheritance at $45.6 trillion. Do you believe any of these numbers or not really? What do they know? I mean 39, 30, 26, who cares? It's a lot of money. It's a ton of money.

Gen X made a, did you know this? As of the end of 2023, Suruli says, Gen X made up a quarter of US advisors clients up from 20% in 2021. In comparison, only 9% of advisors clients in 2023 were millennials or Gen Z. Don't you feel like you and I and everyone in the wealth management industry is constantly hearing about preparing for millennial clients and nobody's talking about preparing for Gen X clients. Gen X clients are only 25%. For me, that's the fat pitch that's right in front of us. I think that we are swimming every day in Xers.

No, but there's no media. I understand. There are no articles. It's always about how to cater to millennials, which is so weird because you still have 75% to go of Gen Xers that haven't yet hired a financial advisor. And they're in their peak earning years right now. And this is it. Yeah.

So like they're in their peak years, career years from many perspectives. Like, why isn't anyone talking about serving GenX clients? I found that interesting. I want to share a couple of other stats with you. The percentage of people who are viewed as advisor reliant goes up substantially as GenX has moved from their 40s to 50s. Like this is the key thing that I'm talking about So really completed a survey last year that said a third of people in their 40s are

advisor reliant So two-thirds of people in their 40s don't have a financial advisor one-third does by the time people reach their 50s That one-third goes to one half That's like tens of millions of households. The last thing I wanted to share, GenX is a battered generation to some extent. We all are. Stop being a baby. Between 07 and 2010, it's estimated that GenX lost 38% of their collective, of their median net worth,

or $24,000 per person, more than any other age cohort. How old were you in 07? You were fine. I was 20. Again, I'm a young Xer, but I could have been 30 and still been an Xer. And those are the people. Anyway, interesting that not a lot of content is being made deliberately geared specifically toward like Gen X.

Meanwhile, that's the fat pitch over the next five to 10 years. I don't know why people are skipping ahead and talking about how do I serve Gen Z. You don't even know how to serve me. Let's talk about a Gen Xer that I know you closely identify with. I'm talking about Elon Musk. So he had a very busy week. This was maybe a lull.

Our boy Dan Ives tweeted, Tesla board of directions, take the following three steps in our view. Number one, new pay package getting Musk to 25% vote and control clears a path for the XAI merger. Number two, guardrails established for an amount of time Musk spends at Tesla as part of pay package. And number three, oversight on political endeavors. And Elon replied, shut up, Dan.

All right, so knowing Dan the way that you and I do, I know that was his favorite tweet he's ever seen. He's probably framed that. It's amazing. Like what up, Dan? That's even better than Elon Musk, like quote, tweeting it and putting a check mark or something. It's good. Like shut up, Dan. It's not even like Daniel wrong. It's just like, shut up, stop talking about my shit. You know, Dan, I know, I, I mean, I haven't spoken to him, but I know deep down, Dan loved it. So it's influence.

Yeah, it's great. Dan's an influential guy. I think we're seeing Dan next week. We'll ask him. All right, SpaceX, $400 billion. This was an insider round. This would mark the largest ever valuation for a privately held company company passing only their last round

400 bill that ain't nothing if If you're an Elon hater The way that you're referring to what's going on is three card Monte The cups are being moved around. You don't know which cup the ball is under but basically He saved wait itself and the invest. Wait, hold on. This is not even, we haven't even gotten to the Monte.

Put a pin, I will unpin it in one second. So here's the Monte. The Monte, because everything that we just read is kosher, right? That's above board. The Monte is this. There was chatter earlier in the week, speculation that Tesla is going to invest $2 billion into XAI. Now, I kind of forgot about this. First of all, $2 billion into XAI. Now, I kind of

forgot about this. First of all, $2 billion investment into these hyperscalers is nothing. You might as well piss into the ocean. But I forgot, dude, you probably did it, that XAI and Twitter and X merged. I mean- It just happened. Okay. I forgot about that. So here's the part that's like, wait, what? So in March, Musk merged XAI and X together in a deal that valued the artificial intelligence company at $80 billion and the social media company at $33 billion. The tech billionaire also said this from CNBC. He also said last week that Tesla vehicles will host XIA's chatbot Grox, which has gone

amazingly well. All right, back to you with the three-car Monty. What the f*** is going on? Okay. I predicted this and everyone said, no, that's not, I told you Tesla would bail out Twitter. I didn't know that SpaceX would be part of it and I didn't know that the AI business was going to be part of the rescue.

But like people that were like, oh, Twitter is really going to sink him. Nope. Cause we already saw him do this with solar city. What happens is- Which was way more egregious by the way. Yeah. Um, right. Well, it was a public company and X isn't so X has like private shareholders, but mostly

private creditors, right? And they're all the big investment banks that were happy to, they would have taken 100 cents on the dollar loss if they had to, because what they're really at the table for is underwriting fees related to Starlink and then SpaceX. Okay, so that, nobody cares if Morgan Stanley loses money on their Twitter bonds, doesn't matter. Which they didn't.

But what the genius of Musk, and if you're short one of his endeavors, you would say the larceny, but I'll just say the genius of Musk is at any given time, some of his businesses are doing really well and some of them aren't, and he's able to fix or mask or address problems in one business utilizing the strength of another and That's clearly like the case with X itself a lot of the data that the AI thing was utilizing was coming from the Twitter platform anyway, and Again, it's not even a public company. It's not like there's any conflicts of interest. He's the shareholder

He owns it. So he decided this is what's best for both, smash them together. And I think like that's a win. If you're part of the AI part, you're like, hey, great. We now have the former Twitter platform, now X. That's now part of this thing that I invested in. They love it.

So this is why I think Elon's shareholders love him is because he comes up with really creative solutions and the cult-like following that he has in the markets enables him to do this. And his ability to outrun FTC concerns, regulators, he basically could just do whatever he wants at this point. As long as Trump doesn't step in and intervene, he could do whatever he wants. That's that. I don't want to do the anti-Semitism, Grock stuff, because I think it's not really part

of what we do here on the show. We don't like to do political stuff. People that think that that's somehow going to negatively impact the valuation of XAI are smoking crack. Everyone already understands that the AI, the Grok, and the Grok product is going to be a little bit more unhinged than whatever Gemini does. Everyone gets this. If that's too shocking for you and you can't handle it, I don't know what to tell you. XAI will be absolutely fine. So it's not three-card Monty in the sense that somebody on the street is being scammed.

I'm just saying the ball is under one of the cups. You keep moving around the cups. Ultimately, you get to the point where SpaceX bails out this one and this company gets a contract with another related company and he controls both companies and it's just like this spinning plate routine and so far most people are benefiting from it. So I don't really know how else to describe it but that's how I see it. You described it well, real quick let's talk about cash finally.

Oh, should I? I forgot to put this in the dock. Oh well. Cash is finally coming off the sidelines. So the thing that I forgot to put in here is we have $7 trillion in money market funds. Money never came out, kept going in, not just the reinvesting of it and then the compounding,

but actual flows into it. Just why not? It's free, it's good money. So, all right, Kevin Gordon tweeted the AAII cash allocations fell by three percentage points in June. That was the largest decline since December 2020. So let's assume that it's probably going into stocks and not long dated bonds, although I guess who knows. But it's moving. Interesting. But this isn't what you're showing me here with the bars is not cumulative. This is just each each month. It's monthly change. It's monthly change. But this isn't what you're showing me here with the bars is not cumulative. This is just each reporting period.

It's monthly change. It's monthly change. It's monthly change. But it's the biggest cash decline since December 2020. It's interesting. I suppose it's interesting. I suppose it's notable just given how long it's been, how many months it's been since the last time we saw one, and how big the drawdown is.

Yeah. Drawdown is the wrong word. The withdrawal. How bigdown is. Drawdown is the wrong word. The withdrawal, how big it is. But when I stare at this chart, it looks like whatever happened last month bears absolutely no relation to what might happen next month. So you could just have people pulling money out of money markets because they're chasing tech stocks. And then next month, they decide not to do that. And we'll find out, would be the way I would phrase it. What jumps out to you in this chart other than the big red withdrawal last month? I'm not going to over index on one thing. This is a very specific set of investors.

I don't know where the money is going, but it's interesting. As much as I describe this rally as a nervous rally, because there's still a lot of people that are doubting it. And there's obviously euphoria in a lot of different places. I thought it was just, just a notable, that's all interesting. I've noticed that the rally has gotten narrower other than tech stocks and companies that are in tech and industrials and maybe a subset of the consumer discretionary names that we actually

consider to be tech, like Amazon, there are less stocks going up right now. If I had to poke one hole in the rally, it would be that even though the SPY or the cap weighted index made a new all-time high, the equal weight is rolling mildly. I don't want to be dramatic, but the equal weight did not take out its previous highs. And so if that is a lower high, and again, it is very early, but you're right. You're right to point out that the RSP SPY has made a new cycle low, but that's been happening this entire time. Well, the problem is there's only one investing theme right now and it's AI. So, like you, I looked at the results from JP Morgan and Citi and Wells Fargo and like they're good, they're great. Like these companies, like by and large had a lot of good things to say.

But when you look at the business unit performance, all of this is about booming markets. It's not about housing. It's not about, it's not like above trend growth for business lending. Like none of that. This is all about booming asset values and those booming asset values are booming as a consequence of the AI build out. And it's not just tech stocks. Industrials are playing a really big role in this build out. Whatever we have 11,000 data centers, and we need 30,000 in the next five years, whatever the numbers, that's a lot of earth moving. That's a lot of metal and material usage. It's a lot of transportation. Then you've got the tailwind of defense, and that's also an industrial subsector. But by and large, everything that's going on that's good right now in the economy is either

directly or indirectly benefiting from the AI boom. And there is no other story. There's no second story right now. And we should admit that to ourselves. Not to belabor the point, but all of the earnings, all the expected earnings growth for S&P, it's coming from AI. So, it better. Yeah, no shit. All right. It better.

And it better. All right. Real quick, Netflix is reporting earnings on Thursday after the bell. And we talk about the stock a lot on the show, so I just wanted to do a little bit of a preview. Let's throw that chart up while I'm talking. Netflix is in like the 7% or 8% drawdown right now. Yeah, I wouldn't phrase it like that. Well, from the record high that it set in June. I'm not saying like it's a cat. I'm long the stock. I'm bullish. The expectation

is a 15.7% year over year jump in revenue, $11.1 billion for the quarter, earnings per share of $7.09, which would be a 45.3% jump versus the same quarter last year. Obviously, let's just do the stock price reactions. Put this table up. So I asked Sean to put together what's happened over the last four quarters and what was the stock price reaction more importantly. And as you can see, they beat all four of the last four quarters. Revenue growth has been high to low teens percentage, but nonetheless, still growing, even at its increased size. And the two-day stock price reaction last four quarters, last quarter plus 6.9%, quarter

before that plus 13.2%, quarter before that 12.3%, I remember that well, that was last October. And then this quarter last year, which they reported on July 18th, plus 0.7%. Shareholders have been rewarded over the last four quarters, staying long into the print. I can't promise that that'll be the same outcome, obviously, this time. I think the thing to say is they have utilized those twin tailwinds of the password sharing, turning that into revenue. They've done a really good job with that.

The advertising support tier, those aren't new stories. Now the story has to be becoming more profitable. If you're going to continue to get 40-something percent earnings growth, there's not a new gimmick coming along. You just have to show that you're increasing profitability as revenue grows. And Netflix is up 620% over the last three years. It's up 94% over the last 12 months. I don't own the stock.

I wish I did. I sold it too early. It's had an incredible run and I think you're 100% right. I would not at all be surprised to see this go back to a thousand bucks on no news. This has been on our best stocks in the market list for a while. And what I said today, it's thoughts about it on TV is just like, if you don't own it, I would not buy it ahead of the print. Be willing to miss out on a 5% jump. If it gets annihilated, I'm going to get back in.

That's my point. I like this as a better react to the print than anticipate the print. Totally agree. Just given like the way it's been acting over the last two weeks and the fact that the stock is up 40% year to date. Like I would let the print happen and then decide what you want to do. So if you're not in the name. Amen, sister. All right. I'm going to make the case for CMA, a stock that we had spoken about a lot over the last

couple of years and it just never gave you a chance to buy it. I did buy it. Before we get to CMA actually, let's just talk about Robinhood real quick. So Robinhood is obviously on an epic, epic run. Try it on please, John. The price is $101 a share. It is a $90 billion market cap. Holy shit. They are executing. They deserve it. Let's compare that to CME Group please. CME has a $98 billion market cap, which is wild when you consider that it is an incumbent, a storied franchise, and it is about a bad week from being passed by Robinhood. Now I did some fundamentals.

Let's show the next chart, please. We are looking at the revenue of the two companies. Did you make some fundamentals? Yes, I did. I made the fundamentals. Robinhood has $3.26 billion worth of revenue, about half of the CME group. And if you look at free cash flow, it is about one third of the free cash flow. And I'm not saying that the market is wrong or dumb. This is what happens. Robin is obviously growing at a much more rapid clip than CME is. However, if you want exposure, chart off, please. If you want exposure to the degen economy, the gamification of the stock market, but you missed Robin and I would not recommend buying Robin here. I think you get it through CME Group. It pulled back and it's given you an opportunity to get along the degenification of this economy.

Okay. I like it. I don't love it. And I'll tell you why. The reason why Robinhood has, I think, earned this premium to its own fundamentals versus CME, CME is already as dominant as it gets. Robinhood is still a minnow relative to its competitors, which are Fidelity, Merrill Lynch, Bank of America, Merrill Lynch, JP Morgan, Schwab, Vanguard.

Like Robinhood is tiny, and that's what the market is giving them credit for, the opportunity to grow into that TAM that CME doesn't have. So here's, hold on, but here's something maybe I failed to mention. You're right, you're totally right. These are apples and oranges. My point is that CME benefits from futures and options and trading and they are a big

beneficiary of what Robinhood is doing. So I'm not comparing the two in that sense. I'm just saying if you want to get exposure to the Robinhood stock and you feel like you missed it, you could do it more sustainably, less risk in a name like CMA. Yeah, I agree with that. And CMA is obviously more facing commercial hedgers and facing institutional investors and Robinhood is pure, pretty pure retail. It's two sides of the same coin. The name I actually like better than both right now

is IBKR. Pull up this chart, I know we don't have it for the show. Interactive Brokers is on the best stocks in the market list, this is going. So today it broke out, but it had this resistance level at 59. It's been consolidating beneath for a long time. Today it went, they report this week, if you look at the account growth that they put up,

their last two earnings reports, they're growing their account base at a 30% clip each quarter. They have- What type of investors are they getting? Like professional, quasi professionals? Glad you asked. 55% of their commissions come from retail, 45% come from institutional.

So they have a lot of RIAs on their platform. They have a lot of hedge funds, not the biggest ones, but where the growth is, they are catering to a very high growth segment of the investing public and they're kicking ass. They added 750,000 accounts last year and it looks like this year they're on pace to add even more. The better the markets act, the more pro-cyclical this IBKR story is and this is a breakout in progress.

This is on my best stocks in the market list. Robinhood is too. It's just that Robinhood just doubled. And this thing is breaking out for the first time today. But I think you're fishing in the right pond. Okay. Thank you. I'll take it. All right. We got a mystery chart? Yeah. You are going to get this one because I'm forced to give you a clue that it makes it too easy,

but I don't know how else to clue you. Okay. Hold on. Hold on. Oh, I know what this is. Wait, is this Ethereum? No. Okay. Go ahead. Well, I'm going to tell you it's crypto, so you're probably going to get it. It's Solana. Look at you. Smartest guy I know. I do look at charts, many charts, all that. I might be losing my mind.

The more information I consume about Solana and the more I think about the tokenization of traditional finance, the more bullish I get. This is basically the layer one, the base layer that was built for the tokenization economy. It has the highest potential throughput. I think it could accommodate 600,000 transactions a second or something like that. It's far and away the best version of what you'd want in a layer one. Obviously, there's a lot of layer twos out there that enable tokenization,

but like as a pure play on tokenization, we already saw the efficiency of Solana in the NFT mania, and those are obviously nonsensical assets, but imagine real assets and Solana as the blockchain that is most effective at having there be a huge marketplace of these assets changing hands. Put up my chart, guys. I'm going to school you a little bit on my flavor of technical analysis. I see three things going on here that are bullish.

First things first, pay attention to the yellow lines. This is a clear trend breakout. We're leaving the prior short-term downtrend channel and breaking away into something new. Pay attention now to the stars. This is an inverse head and shoulders setting up. You see the left star is the left shoulder, the lower star is the head. We're

in the process of forming this right shoulder now. And I don't have to tell you what happens next. And then just if you were to pull back a little bit with your eyes and just look at the entirety of the chart, it's cup and handle forming. It's not quite there. 180 would be my trigger. I think 180, 185, a convincing breakthrough there. That is the completion of the cup and handle formation. Technically, I'm showing you technicals because there are no fundamentals. I could tell you that that as use continues of Solana and grows, obviously there is more there's more fees and more burning, but you know that.

What this is really bad for me is just supply-demand. I could envision a scenario where this thing breaks $185,000 and you see a lot of investment accumulation. The last thing I want to tell you is, of the big three, this is the only one without an ETF. There are several ETF filings. Everybody wants to do this. Obviously, it makes sense for this to be the next one to happen.

It was a good catalyst for Ethereum. It was an amazing catalyst for Bitcoin. If we get approval from the SEC for ETFs surrounding Solana, you're going to see investors come in from traditional finance finance just as we've seen in the past. So that's my catalyst. I don't know when it happens, but I'm accumulating Solana on public. Hi.

I bought more Solana last week. I DCA. I have no opinion. Yeah, I'm not really trading it based on technicals. I'm DCAing, but getting more and more interested in seeing if we really are going to start tokenizing traditional assets, which is something that I believe in. So we'll see what happens. How was the show for you? Good? I thought it was a great show. I love that you're giving people permission to part with some of

their Nvidia. All credit to you. One of the greatest investments of all time. So you nailed it. Good stuff. All right, guys. We that's why you say that's why you say thank you. Thank you, buddy. Guys, we thank you so much for joining us on the live. Thank you, everyone in YouTube land. If you're listening on a podcast, please make sure you use that podcast app to give us a like and God forbid, leave a review. Tell other people how you feel about, what are your thoughts on the compound and friends? Tomorrow's Animal Spirits, all new edition with Michael and Ben,

we'll have an Ask the Compound, so if you wanna submit questions, you can, and Ben and Duncan will tackle those on Thursday, Wednesday, Thursday? Wednesday. And then at the end of the week, it's an all new Compound of Friends and it's a very, very special edition and we can't wait for you to join us there. So thank you guys. Have a great night. Thanks for watching!