This is Yahoo Finan's morning brief.

With me on the round table today, Jake

Connley and Pro Submani, both of them

inhouse dudes. And one of these in-house

dudes has had a very busy uh 12 hours,

24 hours year covering SpaceX. That is

of course um SpaceX coming out with its

first earnings report as a public

company. Revenue up by 92%.

It is spending more about 18.4 4 billion

in the second quarter, raised its

forecast for that spending for the full

year. The stock has been trading lower

this morning. It's been trending lower

since pretty much since the IPO after a

little pop after the IPO. It also

announced a big partnership with Nvidia.

Um, so give it like what stood out to

you now that you've had a little time to

sleep hopefully and like digest all of

all of the all of what you heard. I

mean, there was a I mean there's a lot

to cover here. Uh I guess first and

foremost I think we remember yesterday

the stock was up a decent amount before

the report.

>> Uh people can you know thinking about

maybe this is short covering ahead of

this and then have the earnings report

which was number Jake and I were talking

about this numbers coming out look very

positive like good beats here. Uh

businesses various businesses doing

well. Now you had that capex AI capex

number that was bigger than expected and

I think people are are a little bit uh

concerned about that but overall and in

the call too compared to a Tesla call it

was super professional. Everyone was so

well spent. Brett Johnson, Gwyn

Shotwell, uh Elon himself was a bit

measured. I thought the call was really

good in terms of just laying out the

vision and you can see today in the Wall

Street notes various notes all very

positive all reiterating outperforms

etc. But the stock is down 11% right

now. I mean, I've seen a couple of notes

that have said it has to do with the

pending unlock of the ability to sell

shares, which happens tomorrow. Right.

Exactly. So, that that that perhaps is

more of the pressure

>> on the shares still because, you know,

you have that lockup and then you have a

bunch of other ones um expiring before

the end of the year.

>> Yeah. And I think that makes sense. I I

just I just have to wonder. We knew this

is coming up. So you'd think that that

already be priced in in some sense

people would get ahead of it.

>> But there's going to be a huge

potentially a huge amount of shares

coming online tomorrow. Uh so that's

you're right that's that's a concern and

it's a question is how much of that how

many people actually sell.

>> That's right. It's not as though

everyone is going to unload their

shares.

>> Another thing I want to ask you about on

that report get your thoughts on

>> Elon Musk comes onto the call and

projects an ARR of a hundred billion

dollars by year end. He says, and I

quote here, "The $100 billion ARR in

December is not a question mark. That's

what we would achieve if we basically

did nothing." I think the Wall Street

understanding was that's a little bit

bullish to say the least.

>> There wasn't a ton of detail to where

that figure comes from. So, what are you

making of that?

>> So, at first blush, it seems it doesn't

seem that unreasonable if you have

something like two to four billion a

month coming in on their their uh AI

compute outsourcing deals, right? M

>> that's what $50 billion right there.

>> $60 billion right there based on how

much

>> there's potential that there's another

deal coming online that they haven't

announced yet. I think we've been

talking about that too. Maybe it's a

meta, maybe it's someone like that that

could add another few billion a month.

So getting to 100, you add that plus

Starlink plus rocket launch business.

100 ARR by December is not out of the

question. I think there what he did was

he moved up the one trillion revenue

production by 2030. Yeah. Yeah.

That one was a little Okay, that's a bit

of much.

>> Well, listen, we're we're sort of used

to Elon at this point, right? Like he

makes all of these big promises. He

meets 50% of them. You know, some of

them he never meets at all. Some of them

he meets but in a different way. Some of

them he meets but on a different

timeline. My two big remaining

questions, leaving aside the lockup

expiration, what's going to happen

there? My two big questions, um, one of

them was from before the call and it

still remains, and the other sort of was

raised by the call. One of them is, of

course, what is going to happen with the

rockets, right? Are they going to be

able to successfully launch and come

back and be caught by, as one of the

analysts called it yesterday, the

chopsticks that that catch them, the

sort of arms that catch them? Are they

going to be able to take the payloads

that they need to take in order to make

the whole thing work? That's number one.

Number two is they're making some new

promises about

>> one day providing uh connectivity for

everyone on the globe. And there's a lot

to go from here and from here to there.

You and I were I was asking you about

this this morning because I'm like, can

this phone work with Starlink, you know,

and how would that work and what would

it cost and how, you know, how do you

get everybody converted to that? And the

answer is a lot has to happen.

>> You got to build a lot of terrestrial

infrastructure here on Earth for that to

work.

>> And the answer is this phone right now

does not work. Like I can't connect

>> depending Yeah. Depending on the phone,

uh, how new your iPhone is, you can get

some connectivity. So, my iPhone, if I'm

in the subway, will do the it'll notice

I'm offline and say, "Can you connect to

a satellite? Can you get a shot of the

sky?" But my understanding from talking

with you pro is that's still going to a

tower on Earth before it goes up north.

>> You can't you can't get satellite

service in the subway, can you?

>> No, it it's I don't know why it

>> offers it ask it's it suggests thinking

that you're in a area where there's no

cell phone coverage.

>> Oh, like you're out the country. So, you

might as well try to get your satellite

coverage. I'll tell you my other

question with this company.

>> The numbers were good. When we were

watching the Bloomberg numbers come out,

revenue looked good. EPS looked better

than expected. EBIDA looked better than

expected. It was that AI capex number

which was about double what the street

was looking for that really sent that

stock falling. Sent some of those

worries.

>> Is it worth it when you're already a

rocketry company, when you're already a

satellite company, when you're already

doing all these other really expensive,

really hard businesses to try to also be

one of the world's leading hyperscalers

and to spend all of that money? What's

the capex figure for the full year that

they're looking for?

>> Um

>> because for the second quarter it was in

line or a little bit lower even than

than what was expected.

>> It's the capex number for the full year.

>> They didn't they didn't give a

projection but JP Morgan uh says that

2027 cap is going to be 200 billion

>> and in 2028.

>> Uh and that and that's of course not

just not just you know the space

business. It's it's it's like you

mentioned the AI business. mostly the AI

business

>> which is to go back to what they were

projecting what 95% of what Elon sees as

the TAM for the company

>> right um on on the the bulls will argue

that that this is all a big picture

thing right

>> uh the sovereign AI conversation right

they own everything not just the AI

actual software but the whole stack

right all the technology all the the

equipment the ability to broadcast it

anywhere right so yeah that's the big

the big sort of question is uh how does

it all work together? How does it all

end up being this this cohesive company?

And that's what I have some concerns

about but the bulls say no this is the

way it goes and and they talk about oh

by the way that big capex spend there

that's actually efficient they're

actually making a lot of money with

their outsourcing of their compute that

actually is a efficient use of that

saying that only 10% of their compute

capacity could be used for grock

training the rest they could rent out. I

mean that said, you know, the the Doug

Annemouth number that we were quoting

from JP Morgan, the $200 billion, he

says this further pressures free cash

flow in 2027. He said it's a trend we

see across the hyperscalers.

>> Here's the difference with SpaceX. Yes,

the hyperscalers are making money from

renting out compute also, but most of

them are also making lots of money from

other stuff.

>> That's right.

>> And yes, Starlink is making money,

although it lost money in the quarter.

So it in other words what I'm trying to

say it doesn't have that other huge

revenue engine that most of the other

hyperscalers have x renting compute out.

>> That's right. Which it's not doing yet.

>> Well the building but then it gets back

to the how do you how do you get money?

You got to raise a lot of debt

>> and as hybrid goes are doing that too.

>> SpaceX has started issuing. Wouldn't you

be more comfortable, let's say, lending

that money to Alphabet knowing they have

this huge revenue generation generating

business where SpaceX, the launch

business still doesn't make money.

Starlink didn't make money last quarter

based on investments, right? So,

>> they're going to be able to borrow the

money. It's just a matter how much

they're how much they're going to have

to pay.

>> It's not that there aren't buyers for

that debt,

>> but the credit spread on like the, you

know, if you look at a 30-year bond

coming out of any of the hyperscalers,

Yeah.

>> that's a 50 pip credit spread now. It's

huge.

>> I mean, it's everyone is going on the

debt markets. What does that mean? What

does that how much capital is out there

is the question?

>> Yeah. Yeah. How much appetite too?

>> Yeah.

>> Yeah.

>> Um let's move to the other company that

came out after the bill that really got

overshadowed. I think we can safely say

by the

>> normally would have been a pretty big

deal. Yeah. Advanced micro devices where

we're talking about AMD revenue there

was up 50% to about $7.7 billion. Third

quarter revenue is going to be 13

billion plus or minus 300 million. And

it seems like that forecast was a little

bit short of estimates. So Lisa Sue, the

CEO, said that data center revenue is

going to more than double in 2027. So

she's sort of like going I wouldn't say

she's going Jensen, but she, you know,

she's making big predictions here. And

the market is not entirely sure how uh

the company gets there, it seems like.

So

>> and she got asked what goes into that

figure, how do you get there? And she

didn't really give any details, which

Wall Street then took as a sign of maybe

this isn't as sure as you're trying to

tell us it is,

>> right? Uh the other issue for AMD this

morning is the SpaceX announcement that

it's partnering with Nvidia um to design

uh what is it exactly? It's it's it's

something to do with the data center is

what they call the project

>> Star Mind. Okay. So that's how you it's

what they're taking into orbit. And so

that implies that they're not going to

be using AMD chips, right? And so that

also may be adding to the pressure on

AMD this year.

>> I mean, can that announcement came out

at 350 something like that

>> right before earnings.

>> SpaceX earnings right before AMD

earnings,

>> right? It seemed a little interesting, a

very interesting time. I know these

deals take time to put together and

maybe that's how it worked out, but it

just seemed odd that it came out right

before SpaceX earnings and right before

AMD earnings. Yeah,

>> like agree.

>> It's not not good for AMD. I I'll take

you my question about AMD coming off

this earnings report and they have one

problem is that they report pretty late

in the cycle. So Intel gets to set

expectations. All the other companies

get to set a high bar and then AMD runs

the risk of coming out after all that

and looking weak. But even setting that

aside, AMD plays a leading role in

making AI accelerator chips,

>> but they play second fiddle to Nvidia,

>> right?

>> They also are a leader in CPUs, but they

play second fiddle to Intel. And so is

it enough right now to say, "Hey, we do

all these things really well, but in

none of this are we number one, and can

we claim to be the leader?"

>> I mean, they've gotten a lot closer to

Intel on the on the on the

>> they're they're catching up certainly.

>> I would say their their CPUs are

actually really good uh compared to

Intel these days. I mean, Intel is still

just depends on what kind of technology

you want you want to have, but AMD like

for gamers, it's AMD CPU, Nvidia

graphics chip, you're good. Um, so

that's that's sort of and I not the PC

business here that is actually up uh and

it's almost it's basically more than

half the data center business.

>> Yeah.

>> Their PC personal computer business is

still chugging along. It's only it's

only $3.8 billion.

>> Yeah. Yeah. But it's like it's like what

we say about Nvidia. How did all these

companies start?

>> Graphics chips and other things for for

computer gaming computers.

>> Yeah. I mean and before you hate on on

AMD too much, the stock is up 142% this

year. So it's not like it's some like

also ran terms right in terms of the

stock it may be down this morning it's

still up 140% one by the way something

else I forgot to mention from SpaceX

that I think is important for the chips

is what Elon said about the memory chip

cycle I definitely noticed this and I um

uh this is from Doug Hartnett at

Bernstein he said a key part of revenue

upside is higher pricing assumption for

compute Elon speculated that compute

pricing could stay into $30 to $50 watt

range consistent with anthropic and

Google deals. He said our assumption had

been the pricing would go back down to

$10 a watt rate. Now that has to with

compute overall, but I think there are

implications down the chain for the

semiconductor makers. And by the way, we

get SanDisk numbers tonight and some of

the other hard disk drive memory and

storage makers. We're going to be

getting more numbers from them. So

there's also potentially, you know, what

does that mean about the the lasting

nature of the memory chip?

>> Right. Right. Right. So Musk said on the

call last night talking about how you

know supply of memory chip is supposed

to go 20%. He's like, "That sounds

great, right?" But guess what? We need

200% growth. And that means basically,

I'm paraphrasing here, but memory prices

are going up and that's it. Period.

>> Far out paces supply.

>> Yeah, it still does. It has not it's not

nowhere near meeting it. I guess I

mentioned we heard from the automakers

like GM and Ford talking about the same

concern, right? DRAM the same concern is

is that is those memory chips are are

everyone wants them, not just the hypers

skills, not just SpaceX.

>> Uh and it's not enough. We've seen so

many companies coming out and saying the

memory is just such a cost burden for

us. Um look at what we saw out of um

IBM, right? Talking about the memory

costs and how so much money was going

toward that segment.

>> I've seen a few Wall Street analysts

come out and say, "Look, now that the

prices are high, they can't come back

down and they never will. There are

always balancing factors, but for the

next few years, certainly it's looking

like again demand is just running so far

ahead of supply. And for a company that

needs a lot of this, that's going to be

a huge spend.

>> Yeah.

>> You'll be like, "Hey, hey, Claude, how

do we make ma maximize memory?" Some

thoughts make it cheaper.

>> Yeah. How do we make the chips

different? I mean, all I would imagine

>> or make existing memory more.

>> Yeah. I would imagine that's going to be

that AI is going to be leveraged to

figure all that out.

>> That's right.

>> Um, let's also talk about Disney

earnings. They were out this morning.

Profit was ahead of estimates. You know,

going from the digital world maybe to

the um in-person world. I noticed that

the experiences unit, which includes the

parks, um profit was up by 20%. And this

was kind of a surprise because Universal

has not been doing well in Florida, but

apparently Walt Disney World had what

they called a standout quarter and that

they said it they expected to continue

to be strong. their filmed stuff didn't

do um it profit was up by 64% but the

actual like in theater stuff um they

didn't have like that many great

releases but I guess they made up for it

with the streaming

>> revenue theme parks interesting I mean

based on the fact that yes international

travel was not great for theme parks but

domestic for some reason blew out blew

out

>> blew blew out of the water theme parks

up 10% to 10 billion dollars I mean I

was surprised by that given the

Universal news I went to Universal last

year by the way you did Universal

Studios

Oh,

>> pretty awesome.

>> Oh, I went a couple years ago to the

one. I have not been to one in a while.

And did you do the studio tour, too?

>> Oh, dude. Studio tour is amazing. Yeah.

It's like it's not something that's like

Oh, jeez. No, it's great. The three

amigo set still there. They have the

plane from that Tom Cruz movie, the

alien movie or whatever that was. Uh, it

was I'm like, this is incredible.

>> Yeah, it's it's a fun time.

>> Yeah. So, I think theme parks I mean

>> I mean they're all a fun time. They're

all fun. They're all fun. Universal I

thought was really interesting. I know

the one in Florida they have like their

own like nighttime like a nightclub

area. that's always crazy. Um,

>> Disney does too. They both

>> a bit more adults Universal. And I think

maybe that's why Disney is always going

to have that stronger kids connection,

>> right? Because parents are going to

spend. Something else notable in those

parks numbers, customers spending at

parks

>> up 3% year-over-year. What do you always

What's the critique of the Disney parks?

The cost is just so outrunning that it's

so expensive to take your family there.

The hotels are so expensive. The food is

so expensive. We keep talking about the

K-shaped economy every day. People are

still spending at those parks. People

are still going. Those numbers are

coming back. They're expecting another

quarter of guest growth in this current

quarter. And people are spending more

money when the narrative has been, "Oh,

I can't take my kids to Disney. It's too

expensive. We've got to go somewhere

else." The people who are going are

spending.

>> People are going. You got to have You

got to have the Dole Whip.

>> You've got to have the Dole Whip. The

turkey leg. Uh Magic Kingdom. Come on.

>> Yes. I I'm I I always have time.

>> Do it at these things are just so

horrible, right? Like like like

ballparks now have like new like nicer

venues.

>> I will say well that's not entirely

true. The the Disney does have higherend

restaurants now that are good. Like you

can but again you're spending up a

little bit. It's more of a sit down

experience. So I think the food has

gotten better.

>> I guess I'm almost universal universal

student.

>> It wasn't great.

>> You're not like a Harry Potter like

chicken fingers. They the butter I I

tried it was okay. It was okay. It's

very sweet.

>> But everything else we went to Mo's

Tavern. It was pretty cool. They have

Simpsons Land.

>> Yeah. Fun.

>> Yes. We went to um Crusty Burger.

>> Yeah. Yeah.

>> We went to the one in Florida. All of

this said the stock is down 14% this

year. So it I mean Josh Dearo who's been

this is now his second quarter as CEO

from Bob Wager. um you know it seems

like it's whatever he's doing is working

but the street is not quite entirely on

board for it yet. So

>> one more thing from Disney interesting

to me

>> where we saw weakness was in the ESPN

segment of the business. Jimmy Petero

over there has been under pressure for

the last few years.

>> It looked like a lot of that weakness

was from the timing of sports deals and

the payouts they had to give to the

leagues and for streaming rights for all

of that. But it's another open question

of how do you keep that business growing

while the theme parks and the

entertainment side and the streaming

service are doing really well.

>> Especially because they've said they've

indicated they're going to now hang on

to it.

>> That's right. They they do Jimmy Petero

does not want to sell that out.

>> They got they got a nice boost from the

NBA finals.

>> Yeah.

>> The Knicks. I mean that was a big deal.

>> Oh, come on. Huge.

>> Yeah. All right. Let's talk about

markets overall for a minute because the

S&P 500 closed yesterday at a record. It

was up for the fourth session in a row.

During that run, by the way, it's up by

nearly 6%. And I was looking at that

run, that 4-day run to see what was

driving it. Tech is back, baby. It's up

by like 11% in that period of time. Um,

consumer discretionary, which includes

Amazon, is up 10%. Communication

services, which includes um, Alphabet

and Meta, is up about 7%. So, you know,

it's that's what's back. You and I have

been talking about, you know,

situational awareness selling its

portfolio to Citadel and then Citadel

sitting back and counting its money as

the

>> So, let's point out Citadel's flagship

fund for July right after that buy is up

6%. Which sounds like not a lot, but for

a big hedge fund, that's a really nice

uh return. Their stock focused fund is

up 14% on July. And a big part of that

is getting these assets when they were

cheap and then letting the last four

days run. To your point, over the last

four days, we've added three and a half

trillion dollars to the market cap of

the NASDAQ 100. Tech is back.

>> Yeah.

>> And Kenny G was in line to benefit.

>> It worked out well for him.

>> I mean, I we we were talking about

situational awareness just real quick. I

was surprised that all these big

heavyweight, you know, they call them

individual investors. big professional

investors buy their own family offices,

their own money, putting all this money

into Ashen Burner's uh fund and then

>> worried about the leverage,

>> right? Right.

>> You probably should have thought.

>> What do you mean you're 4x levered? What

do you mean?

>> Yeah. I mean, and the Colton brothers, I

mean, Jesus, they one of the first

investors there. I mean, it's right.

>> Yeah. I I talked to Greg Zuckermanman a

little bit about this yesterday from the

Wall Street Journal who broke this the

story initially that Citadel bought

this. And I think part of it is that it

he's one of them. Yeah. Do

>> you know what I mean? He's not he's not

Ken Griffin. He's not somebody who has

this Wall Street background. He's

somebody who they see as getting what

they're doing. And so it it feels like

that's part of

>> So his only real media he's done was a

4-hour podcast maybe a year ago with

Dorces. They work out of the same

office. To your point, the circle is

small. Everybody who was anybody in AI

was at this guy's wedding right after

this whole thing went down last weekend

in Carmel. It's a very small world. He

was seen as kind of the brilliant wonder

kid. Let's put the money there. He had

done really really well and then got

caught on the wrong side of the

>> but it also was risky. Some a lot of

risks.

>> When do you take profit instead of just

adding and adding adding and leveraging

and leveraging and leveraging,

>> right? The risk isn't the problem. The

problem is not unwinding the risk

>> right or the right moment

>> or hedging any of it which is

everything.

>> It's right there in the name.

>> Where's your situational awareness?

>> Yeah. Or hedge hedge fund. Like what's

the other thing?

>> This is the I used to cover hedge funds.

I reached out to a few friends in the

industry to ask them for their opinion

about this and what I heard across the

board was look he's probably brilliant

on AI but there's a difference between

being brilliant in AI and understanding

risk limit. and understand how to

properly balance the risk you're taking

and when you got you've got to cut that

down when you've got to pull back when

you've got to cut a book and cut your

losers instead of sticking with them.

>> Yeah.

>> Another Wall Street friend of mine said

this guy should never be running

people's money ever again.

>> Like that's he will be.

>> I know he will be but that that's how

offended he was by by this behavior.

>> His fund is still up very highly on

that. I forget the exact percentage.

It's still very up on the year and he

will be fine. the thing he will be

>> I mean that's something else

Zuckermanman said is that you know for

some of these guys like losing a lot is

a bad almost a badge of honor going

forward that you that you put it all in

the line you lost it

>> the best thing you can do as a hedge fun

>> ask the Collison brothers how they feel

about that how they feel about

>> but it's true the best thing you can do

as a PM is blow up

>> because everybody looks at you and says

well you're not going to make the same

mistake twice back in April uh

liberation day last year when so many

PMs lost a billion dollars in a day they

all got fired from firms and within 3

days they were making double the money

at another firm because the new firm

says, "Well, you can't do it again."

>> Yeah. Well, we'll see. Whatever the case

is, it looked like more broadly for the

market, it was something of a clearing

event or a signal when Kevin Griffin is

coming in and buying. Now, will that

last? Will this, you know, 11% gain in

the S&P tech index last beyond these few

days? Who knows? But, you know, who

knows if they're, you know, if this is

if this is it for this current bout of

volatility.

>> We also still have Nvidia earnings

coming in week and a half, which is

going to be another huge bell weather

for the longer than that. Maybe two

weeks, maybe two and a half, the end of

August.

>> It's towards the end of the month, so we

still have a little time between now and

then. But, you know, um it does feel

like that and and and one of my favorite

things um I think it was Doug Bonapart

who um who who tweeted this. He said,

"Congratulations to all the people who

did nothing."

>> That's right. You leave your money in

the market. You just wait it out.

>> We're at record highs.

>> What's the Buffett quote? Uh, time in

the market beats timing the market.

>> Yes. Or you can quote Sam row. Stocks go

up.

>> Stocks go up.

>> Over time. Yeah. But in Ferris, overtime

stocks go up. We didn't talk about our

our friend Bur. Maybe next time.

>> Maybe next time. Michael Bur making some

tweaks to his portfolio. That's right.

>> Okay. Well, we got to leave it there for

now. Thanks, guys. Appreciate it. And

that does it for Morning Brief. Opening

bid is next with Brian Saus.

Heat.

Heat.

Heat. Heat.

Hey, hey, hey.

Heat. Heat.

Heat. Heat.

Downow

down.

Down.

Down.

Ah.

SpaceX shares are losing more altitude

after last night's earnings as investors

were rattled by its planned capex

spending. The harsh reaction is not

unlike the one afforded other tech names

such as Alphabet this earnings season

that have promised big-time money will

be spent on advancing all things AI.

Here are the two call outs from Elon

Musk and CFO Brett Johnson I found most

interesting on last night's earnings

call. Our

>> internal projections for reaching a

trillion uh dollars in revenue, not AR

but revenue, um have moved up from 2031

to 2030. There's a non-zero chance of

that being in 2029.

>> If you look at the rest of this year, uh

to answer specifically on capex, I think

you should probably think that the the

next two quarters are very similar to

the current quarter from a capex level

perspective.

All that said, I come to you with my

Yahoo finds Alpha Space stat of the

morning. It reflects a rough estimate on

how much in capex SpaceX said it would

spend in 2026. Total capex for SpaceX in

the second quarter was $18.4 billion,

much higher than analyst estimates

around 6 billion. I even saw some around

6.5 billion. Commentary by Johnson on

the earnings call indicated that third

and fourth quarter capex could each

remain at similar levels as of that of

the second quarter, implying fullear

capex of about $65 billion, give or

take. Wall Street was modeling for $50

billion in capex for SpaceX this year.

Let's get into these SpaceX numbers and

also ones from AMD which I think are

being viewed very wrongly by the market.

That was a darn good quarter by AMD. Art

Hogan is B. Riley Wealth's chief market

strategist. Y'all find senior reporters

Brooke Depal and Nez Fere uh are here as

well. Brooke, I know you've been

covering SpaceX all morning. What do you

got for me?

I think what we're seeing here is the

expectations were so high for both AMD

and SpaceX. But when you take a look

exactly what you just had said, it seems

like that is what investors are focusing

on. This big ramp up of what exactly uh

capex spending could look like in 2026

now implicating that this could mean

upwards of 65 uh billion dollars within

capex spending on top of what analysts

had expected or far higher than what

analysts expected of roughly 50 billion.

And also I was reading this note from

Deutschbank out this morning which did

cut their price target to $235

to $255 for shares of SpaceX. And they

noted that because of these major

implications, what exactly does this

mean when it comes to the ramp up into

2027 and just how much money will they

spend? So even though we saw a beat on

revenue, I think that the jitters are

back a bit there and there's fear of

just how much they're spending on all

this buildout right now. Brian

>> Andz, another key concern here, at least

from what I was able to uh gather from

reading around talking to people this

morning, no near-term financial

guidance.

>> No, no near-term financial guidance. And

as you were mentioning the capbacks

being a a concern here, how much

spending, but this is a company that is

scaling and is spending heavily. You

also of course have the lockup period

that is coming up now tomorrow. So th

this is also weighing on this stock as

well. And I thought it was interesting

that they very heavily leaned into

Starlink and to enterprise and to

government contracts and how much

Starlink will be needed in the future

with Elon Musk talking about robotics

and self-driving and that you will need

more uh connectivity because of that. So

that was what they really leaned into

which is their money maker of course. or

at the Morgan Stanley note on SpaceX. Uh

SpaceX got me giggled for a little bit

because they were one of the first ones

that I've seen at least today that is

saying uh we welcome more shares coming

to market because this is a generational

opportunity. Uh they are but I'm not

saying they're encouraging but they're

saying more shares come to market. The

average investor go out there and buy a

generational company uh much cheaper

than the IPO. Would you agree with that?

Is that the right action to take right

now?

>> Yeah. And I think it's uh pretty

difficult to call something a

generational uh opportunity that's

trading at 77 times sales right now.

They reported what they could about

progress. So the Starship had 12 or 13

test flights and that seems to be moving

a pace, but it's a money burner.

Starlink obviously had better sub growth

than had been anticipated, but not

enough to move the needle. And their

only real revenue source right now is

actually leasing out excess uh compute.

So this may well be a a generational

opportunity, but it might be the next

generation before it actually comes to

fruition.

>> All right, let me just stay with you

here on that one. uh the market

essentially ignoring Elon Musk calling

out $1 trillion uh in revenue potential

by 2030. At the time of the IPO in June,

that prediction was for 2031. At what

point does the market say, you know

what, maybe Elon is on to something.

This company could go to a trillion

dollars in sales for about $50 billion

this year.

>> Yeah, I think that's uh that's

aspirational, I think, is the right way

to express that. And it's not different

from what Elon Musk has talked about

with Tesla for the, you know, 15 years

that it's been public. So, I think it's,

you know, that investors know that. They

know there's aspirations here and

there's, you know, great things to be

had, but, you know, the pointing to

something that's going to happen in 29

or 30, uh, certainly in the here and now

makes things look very expensive and and

you're pulling forward a lot of that

positive potential.

>> And as my fellow resident Lisa Sue fan

here, uh, I like these numbers out of

AMD. Uh, the way I saw it, there was a

lot of sequential acceleration in really

all key parts of the business,

especially that lucrative data center

business. Yeah, people are concerned a

little bit about that third quarter

guidance, but who the hell cares? I this

company's growing so strongly and this

is one of the best in breed names in the

space.

>> Yeah, these were strong results across

the board and as you mentioned the data

center business that is so lucrative for

them and is growing. Um, I would say

that what Wall Street was expecting or

what some analysts are talking about is

that they wanted a blowout quarter and

it maybe it wasn't a blowout quarter the

way they wanted it, but it was a strong

results with the revenue guidance. You

saw that yes, it beat the consensus, but

perhaps the whisper numbers were higher

and so it didn't beat that. I mean, this

was a a stock that was really priced

beyond perfection. And as one analyst

said, this was not exceptional results.

They were great results, strong but it

was expected even the data center

segment that was expected. So uh one

other note also this stock one analyst

had pointed out this stock over the last

12 quarters this company guides very

well to the almost to the penny but o

for six of the last 12 times the stock

has sold off uh after strong results. So

this may be just a pattern that we see

with AMD. Yeah, these analysis so

silliness. Uh I was one and I can call

myself silly because I had a lot of bad

calls too, but not many. You know, just

not many. You don't get to this position

making bad calls. All right, I want to

get back to you real quick because uh

Elon said came out put out an X. They

are all in on Nvidia chips. Uh is that

bad news for AMD?

>> It's not. I think that you know it's an

apples and origins comparison. And uh

AMD's cutting edge GPU chip um is still

behind Nvidia's leading edge and and

that's where uh uh Elon Musk is is

putting all his chips if you will. And I

certainly think that uh with the amount

of capex they're going to have to spend

to get to their eventual dreams. Nvidia

may well be a source of that uh capital

as Nvidia has been sprinkling some

capital around all of the artificial

intelligence space. So I think he wants

to uh put all his eggs in one basket

right now. I don't think that's a bad

thing for AMD.

>> All right. Big thanks to Art Brook and

Nez for being on my round table quick

morning, but we have a lot to get to uh

on that topic. In October 2025, Base

Power closed a massive $1 billion series

C funding round that valued the energy

startup at $3 billion post money.

Building on that momentum, the company

secured another billion dollar series D

round this week, more than tripling its

valuation to 13 billion. co-led by

investors including uh Rivet Capital,

Addition, and Valor Equity Partners.

This latest capital raise brings base

power's total funding to over $2.5

billion dollars to support the

nationwide rollout of its new US built

very important there, Base Core home

battery system. I want to welcome back

uh on the show Base Power co-founder and

CEO Zack Dell. Zack, good to see you, my

man. Uh congrats on this raise. I know

it's a big moment for you all compared

to when I last talked to you nine months

ago. Where is the base power business

today?

>> Well, first of all, thanks for having me

back on the show, Brian. It's good to be

with you. Uh we've we've made a lot of

progress in the last year. We're we're

we've ramped installations massively.

We're now installing around 100 systems

a day. Uh we've entered into a new

state. We're now offering our services

in in Illinois. And we've actually

transitioned from third party hardware

to first party hardware. So we launched

uh base core, which is our

customdesigned battery. Really optimized

to be a grid asset and completely

designed for the use case. uh in my

opinion the best home battery on the

market by far but I'm pretty biased uh

but very exciting designed and

manufactured by our team here in Austin

so really made the jump uh to almost

entirely you know vertically integrated

so very very exciting stuff for us

>> how is the battery itself different Zach

compared to last time we spoke

>> it's really purpose-built for the use

case to be a grid asset so it's larger

easier to install more efficient

switches over uh in the event of an

outage much faster um and it's just a

way more effective grid asset to support

the grid in times of need and to back up

homeowners uh when there are outages.

>> Why Illinois?

>> It's a great state for battery storage.

Uh and the value of capacity in the PJM

market is extremely high. And when we

can realize a lot of value with our

distributed batteries, we can share that

value with our homeowners, our members,

uh in the form of lower prices. So the

value proposition for our customers in

the state is extremely strong. How

important is it to your story that and

you know when you're out there pitching

investors, you're raising this money

that your your products, your batteries

are made right in the United States?

It's important and I I think for a ton

of reasons and and we can talk about all

of them, but in our opinion the the main

one is just the control over supply and

when you're scaling rapidly, you know,

we went from one install a day two

summers ago to 100 installs a day today

and we plan to continue scaling very

rapidly to meet all the demand we have

from consumers. You need to be able to

control the supply chain because if

there are issues with your suppliers and

the people who are making the things

that you're selling, you're not going to

be able to scale. And so controlling

that supply chain and manufacturing the

batteries ourselves in Austin with a

product that we design, it means we can

iterate quickly. It means we can scale

rapidly. And when problems do arise, we

can solve them with our team versus

working with a bunch of different

companies that maybe don't have their

incentives as aligned as as we do. Texas

is really uh of course I have to tell

you this but I'll mention anyway has

morphed into like the central place for

AI data data centers like it is it is

ground zero. This is where a lot of

these things are being built. How

stressed is that grid in Texas? Well,

Brian, I I think the reason Texas has

become kind of the home of AI in in

America is because it is the the energy

capital of America and AI infrastructure

buildout has converged to energy and the

entire uh growth of the compute industry

has basically come down to how fast can

you get power and and where can you get

it and how can you scale it and Texas is

the best place to develop energy in the

country and we c we plan to help

continue to to grow that advantage and

scale our energy resources in the state,

but also to help the rest of the country

catch up because we need all we can get

if we're going to build the AI

infrastructure that's going to be

required to continue to scale all the

great progress that's happening in that

space.

>> Zach, I want to get your your thoughts

on this comment we got from uh NVIDIA

CEO Jensen Wong. who was speaking at

Stanford University to a computing class

I believe it was late May said the

amount of energy that we need for AI

computing is likely to probably uh we're

going to need a thousand more power

thousand times much more power than we

have today as someone in the energy

space what would that what would that

even look like?

>> Well, we're going to need a lot more

power, but we're also just going to need

to use our system more efficiently. And

that's where where we think battery

storage is is really effective.

Batteries are able to increase the

utilization of the system. The grid as

most people know is built for times of

peak demand and batteries are able to

time shift that demand. So you charge

the batteries when demand is low, you

discharge the batteries when demand is

high and you make the whole system

system way more efficient. So yes, we

need to scale the the size of the system

and the capacity of the system, but we

also need to make it way more efficient.

And so we need generation, we need

battery storage. Um and I think we will

be able to develop those things and

scale our capacity to consume

electricity. It's going to take a lot of

capital, uh, a lot of hard work, a lot

of, you know, people solving really hard

problems. Um, and it's going to be a

challenge, but I think we're up for it.

>> This is a very large increase in

valuation compared to your last round.

Now, company's now valued at $13

billion. Where where do you see this

business in 5 years?

>> Well, we think the opportunity is

absolutely massive. Um, and you know,

energy technology is a massive category.

The energy industry is obviously one of

the largest in the world. and you know

we see an opportunity to scale the

business across the US and eventually

internationally. So uh we we have a

massive road ahead of us and you know I

think for a lot of people outside in it

looks like the company's really far

along and you know we've got this big

valuation but the truth is it's just so

incredibly early for us and if you're in

our office with our team I think

everyone here knows that and appreciates

that and sees the scope of the

opportunity and the scope of our

ambition uh and and the truth is you

know we're really just getting started.

Why do you think base power succeeds

where where Tesla stumbles?

>> I don't think it's about us succeeding

and Tesla stumbling. In fact, I think we

have very complimentary missions. We

just have a totally different business

strategy. Tesla, at least on the energy

side, is primarily an OEM and a hardware

company that they sell these products at

a gross margin. We're more of an

infrastructure company. So, we own and

install these assets and bid them into

the wholesale markets as a resource uh

that sits on our balance sheet. And so

it's just a fundamentally kind of

counterposition strategy entirely.

>> Zach, I still have to take you up on

that offer to come out there and visit

you at HQ. I I think this is very

interesting technology. Congrats on this

race. Hope to see you soon.

>> Thanks, Brian. We'd love to have you in

Austin.

>> I appreciate it. All right, let's get it

moving here. A mixed quarter out from

Circle CEO Jeremy Aair is just wrapping

up his earnings call and will join me

next. I'll be right back.

Heat.

Heat. N.

Hey.

Heat. Heat.

found.

So let's just say circle posted a mixed

quarter today. revenue fell a little

short estimates, but adjusted operating

profits came in a little above

estimates. Circle co-founder and CEO

Jeremy Lair just wrapped up his earnings

call and is here with me now. Jeremy,

always good to see you, especially on a

busy earnings day. Thank you for doing

this. Um, I was watching this earnest

call and I'm like, Jeremy's going to

talk about earnings. He's go through the

quarter, but you started off the top

addressing some new competitive

concerns. I I think maybe you were

lightly alluding to Open USD. I How much

of a threat is that?

I mean, look, I I think just going back

to what I uh what I talked about in our

earnings call, which is we definitively

operate the largest regulated stable

coin network in the world, and we've

built extraordinary modes in liquidity,

in our global footprint, in the

technical infrastructure, and then

critically in the partnerships. I think

one of the things that we talked about

is uh you know we have several thousand

companies that are already operating and

building on the network over 150

companies that we have distribution

relationships with that are economic in

nature where they're incentivized to

build and grow and I I also would say uh

you know many of the firms who are you

know involved or thinking about

supporting other stable coins are

already 70% are already actively you

know building with circle so I think we

feel very good and in fact um our most

important partners are doubling down and

are investing more and really stating

quite publicly that their goal is for

USDC to be the number one stable coin in

the world. So I think we feel very good

about uh about that position and I I

kind of laid out the strength of the

position that we're in today. And I

think the the bigger point here though

is that um you know we've been building

towards this moment for about 10 years

which is federally regulated digital

dollars that are part of the financial

system where major firms, financial

institutions, uh corporations and others

are going to build on this and we are

the best position company in the world

for that moment. Do you see that what

that other consortium is is building is

that more of a I guess a separate

separate payment rail and not maybe a

really a competitive threat to what you

do?

You know, I think actually there's some

data that actually came out yesterday

that looks at sort of the adoption of of

different stable coins and how they're

used in actual payments. There's the

Visa data where you know at the end of

June uh USDC was 70% of stable coin

transaction volume. the rest was

basically USDT and everything else just

falls off a cliff. But there was other

data that came out. Uh there's been a

huge number of consortium coins and

other coins and other things that have

launched over the past couple of years.

And while they might have a billion or

two or three uh in circulation, they're

not actually used. They're not they're

not transferred much. They're not used

much. And so what we've just

historically seen is that for for for

the network utility and payment utility

and as a as a form of capital in

markets, USDC stands above the rest uh

by far. And so it remains to be seen

what any new uh any new stable coin is

going to be able to accomplish. Um we

welcome the competition. We think having

clear regulations around the world

invites competition. But we also feel

that uh with that regulation comes a

significant expansion of the market

where this this will grow from where it

is today several hundred billion of

stable coin in circulation to trillions

in the coming years. Uh and so we're

obviously trying to position ourselves

to maintain and grow our share of the

market uh as that market continues to

expand. You talked a little more Jeremy

on the call about uh this national uh

trust bank calling it uh I believe you

called it foundational. What does this

exactly unlock for circle?

Well, I mean, if if you think about

this, um, you know, we with USDC, we

want to make sure that the

infrastructure of USDC is held to the

highest standards of trust and to the

highest regulatory standards. And the

combination of the genius act which

establishes these federal standards and

of circle operating circle national

trust gives us essentially an

infrastructure bank for this internet

financial system to uh be part of the

way USDC itself is reserved and

operated. But more importantly, it also

creates a broader surface for Circle to

provide technology to other financial

institutions and major corporations that

want to build on top of onchain

infrastructure who want to build digital

asset services themselves. Being able to

provide capabilities through that trust

bank is going to expand what we can do

not just for regular companies but for

major financial firms as well. And so it

is, you know, it is an infrastructure

bank uh and it and it is something that

we're going to be, you know, providing

more products and capabilities through

uh as it goes operational in the very

near future.

>> When it goes operational, what do you

see yourself at Circle offering that you

that you don't offer today? I mean what

we've talked about at a high level is

that aspects of the USDC reserve uh

would in time be part of the the trust

bank but it also gives us the ability to

provide custody services uh and digital

asset custody services um and you know

from our perspective there's an

opportunity not just for the custodying

of uh stable coins uh but also other

tokenized assets tokenized real world

assets uh and and you know I think uh

the the kind of mega trend that we're

seeing right now and in fact I talked

about this on the earnings call is in

these onchain financial markets as

recently as last week nearly 75% of the

traded volume on on a venue like

Hyperlid was actually tokenized real

world assets. So the proliferation of

tokenized real world assets needs

safety, security and infrastructure to

hold those and custody of those on

behalf of uh you know firms and markets

and exchanges and others. And so I think

there's a a great role for Circle to

play in supporting that broader

tokenization uh you know undertaking.

>> You and I in the past year have talked a

good bit about uh AI agents, how they're

going to impact the economy, the labor

force, and you piqu my interest. You

have a white paper, I think you said,

coming out soon. I'm a big white paper

fan, but you mentioned AI agents. You

think they will earn and monetize and

that the labor market uh will a labor

market will emerge for agents. H how do

you see this all shaking out? like what

is the ultimate economic impact of

having more AI agents inside of

companies?

>> I mean I I think we're seeing this

happen uh and and you're seeing this

happen. I think a lot of tech forward

companies are already leaning into this.

I talked about the the actual work that

Circle itself internally is doing here.

But I think the big picture is this AI

agents are cognitive perform cognitive

labor and uh and they do it incredibly

well. And that cognitive labor is uh is

going across every discipline, every

domain. And agent builders are basically

taking that cognitive labor, they're

enriching it with their own data and

their own knowhow and they're and

they're manifesting that through these

AI agents that are essentially acting as

service providers. And so that is the

labor market emerging. And so agent

creators need an infrastructure. They

need marketplaces where their agents can

be discovered. They need the mechanisms

for the agents to be able to express

their capabilities, for people to

discover those capabilities, for

reputation to be established, and for

identity both of the agents consuming

and the agents selling to be known.

Those are all things that we're working

on at Circle and uh you know, we we will

be providing a lot more detail. A bunch

of that we already have shipped with

Circle agent Stack. Other things that we

will be shipping over the remainder of

this year, but we think this is a a

fundamental shift. We think that there

will eventually be billions of agents

providing work and labor and they'll be

able to be orchestrated and integrated

within a firm and across firm

boundaries. And this is an incredible

time for entrepreneurs, for startups,

for builders who are going to be able to

tap into these agent labor markets uh to

get things done uh and accelerate their

own uh development and growth.

>> And Jeremy, lastly, it's important to

know you are living in this agent world.

I you talked about how you now have a or

moving towards a hybrid type of

workforce. I mean, where agents and

humans are working together. If I were

to go work at Circle today, I how does

my job look?

Well, I mean, look, I I think um

increasingly what we're trying to do is

whatever function it is, if it's a

marketing function, a creative function,

a software engineering function, a

product management function, a finance

function, whatever the function is, uh

we're working with the team to basically

capture the skills that are necessary uh

to uh build AI agents that can execute

those skills and then build pipelines of

work that can orchestrate between humans

and AI agents. And the AI and humans can

interact directly through messaging

environments like Slack uh but also can

interact between each other uh and and

communicate between each other uh

directly. And so the the thing that

we're doing at Ciro is we're asking all

of our employees to be part of crafting

this and building this. And this is I I

think incredibly exciting because we

want our employees to have the

superpowers of fleets of agents that

they can use themselves to amplify their

own capabilities. So this is a this is

an opportunity to multiply the

capabilities of a firm and of of humans

themselves and that's what we're working

on day in and day out at Circle.

>> All right, good stuff uh indeed, Jeremy.

Always good to see you. Thanks for

making time.

>> Thanks, Brian.

>> Appreciate it. All right, we'll keep the

SpaceX uh SpaceX analysis coming right

along. Julie Hyman has you next. I'm

Mark Katos.

Heat.

Hey, Heat.

Heat.

Heat.

Welcome to Market Catalyst. I'm Julie

Hyman. 30 minutes into the US trading

day. Let's take a look at the major

averages because we have been on a

record run and the record run continues

right now. Uh let's actually go over to

the Dow. The Dow's up 1.1% here about

615 points or so. The S&P 500 rising for

a fifth straight session and once again

at a record. And it has really been the

comeback of large cap tech that has

powered it higher over that 5day span

after we got the unwind of the situ

situational awareness hedge fund Leo

Ashen Brener's hedge fund last week with

Citadel buying the public portfolio. uh

the market may be seeing that as

something of a signal and it also moving

the market and since then we have been

gaining particularly in that tech

complex and uh today not quite as much

if you look at the S&P versus the

NASDAQ. The S&P is gaining more. The S&P

equal weight index is only up about a

third of 1%. So let's look under the

hood here and see exactly what's

happening within large cap tech. A

little bit of a mixed picture here.

Amazon's been on a run today. It's a

little bit lower. Nvidia getting a boost

after SpaceX said it's going to be

partnering with Nvidia on its chips for

its space data centers and will be

partnering with it exclusively. So that

is pushing those Nvidia shares higher.

SpaceX shares themselves, and we're

going to get more on this in a moment,

are slumping some 10% here, um, as we

get the company's earnings and as we

await the lockup expiration that will

allow, uh, some of its shareholders to

sell shares, some of its shareholders

that had the shares in the private

market. You can see here the decline

that we have had, of course, since that

company's IPO. And then just wanted to

broaden it out and look at some other

semiconductors here. Uh, because we did

get those numbers from AMD. I'm going to

equal weight it here to make sure that

we can see AMD. There it is. It is

there's the year-to- date chart. Today

it is down by 6% after its numbers and

its forecast for the current quarter was

short of what some analysts had been

anticipating. But as you can see year to

date, it has had quite a comeback here

before uh this pullback that it had in

response to the earnings. Chips broadly

are sort of more mixed as you can see in

today's session and we're continuing to

watch a lot of the earnings movers as

well. Looking at the sectors in the S&P

500 today, materials and healthcare are

the two best performing groups. Energy

is now falling. We continue to watch the

developments that are going on in Iran

in the street of Hermuz. We're going to

be talking about that later in the show

as well. But let's get back to SpaceX.

Big story of the day here. It's racing

205 billion dollars in market value this

morning as shares plunge on those

spending plans. Or maybe something else.

Let's talk about it. Joining us for

more, Ron Epstein, Bank of America

security senior aerospace and defense

analyst. Ron's got a buy rating on the

stock, $235 price target. Ron, um, what

is going on today, do you think? Because

you and most of the other analysts notes

I've read this morning have been pretty

positive on the numbers.

>> Yeah, it was a it was a good first

quarter, right? You think there was a

lot of anticipation, you know, for their

their first quarter release. Um yeah,

topline beat uh profitability across all

the segments was better than I think

what people are looking for. Um they did

quite well in their AI segment. Uh

selling compute that's that's panned out

much better than uh at least early on

than than people thought. I think what's

weighing on the shares today are are two

things. You mentioned one of them, the

lockup uh and that that people have been

anticipating and you know this the spend

on AI. That being said, I I think some

very important things did come out on

the conference call with the management

team. Uh but I think probably the single

most important thing is the success

they're having with Starship. So, you

know, the Starship uh launch 13 happened

about 2 weeks ago. Uh and they mentioned

on the call that launch 14 is going to

happen uh uh probably by the end of this

month, maybe early next month. And I

think this is some important milestones

that are going to come through on that.

Uh they said that um you know it's going

to go into orbit. They're going to

reenter it. But more importantly,

they're going to most likely try to

catch the second stage and the first

stage. So this potentially could be the

first time where you see um SpaceX

uh catch both the first and second

stage. And that that's a big step

towards reusability. Also on the call,

management discussed the uh the heat

shield system on it that the heat

shields are important for reusability.

Uh and you know the the real I I I think

when people tend to just focus on the AI

piece or the communication piece, they

really sort of missed the forests for

the trees on this name because their

their superpower if you will is their

ability to put mass into orbit. And uh

in their press release they were you

know I I think gave really good

disclosure on what they're putting in

orbit for customers, what they're

putting in orbit for themselves and and

the progress that they're making. So you

know on the weakness here I mean I I I

would be a buyer. I mean for sure. I

mean we have a buy rating. Uh but I

think it's more driven by technicals

than fundamentals right now.

>> Um I I want to get into that in a little

bit but I I want to dig into what you're

saying a little bit more about this

being the differentiator for them. I I

had one guest on the show the other day,

I think, refer to SpaceX as a bit of a

Frankenstein's monster, right? Because

you do have all of these seemingly

disperate parts glued together. And I

know the hope is that it will be a fly

well flywheel and it will all work

together. Do all of those pieces have to

work? And what's you know, this has been

the question for me for SpaceX from the

beginning is like what's the what's the

margin of error here? because like a lot

has to go right for that vision to be

realized.

>> Yeah. I think you're calling it like a

Frankenstein's whatever uh isn't isn't

isn't quite fair. Uh and you know let's

go through why you know what is their

you know their their huge barrier to to

entry. What what do they have that

nobody else can do? Uh they're very very

good at launch. Uh they have the most

successful launch business in the

history of the world. uh they blow away

everybody in the launch market uh by you

know however you want to measure it

numbers of launch launches kilograms in

orbit just pick your pick your uh your

thing and you know what we've seen with

space companies including SpaceX but

others too that you know the ability to

put um mass in orbit opens opportunities

to do other things. One of the

opportunities that's open for them

that's been early on very successful is

Starlink and space-based communications.

Another opportunity has been the

security work that they do for the US

government in terms of Earth observation

uh and and and other things. Um you know

they they're very reticent to talk about

a lot of work. It's classified. Uh and

and then the another opportunity it's

opening for them is orbital compute and

an application of orbital compute is is

AI. Um, nobody else has the capability

to put the amount of mass in orbit that

they do reusability re reusably. And you

know, let's let's put numbers around it.

If you look at, you know, kind of

traditional uh kilogram into orbit,

you're talking somewhere, I don't know,

call it $15,000 a kilogram. And then

Falcon 9 lowered that to about 2,000.

Falcon Heavy lowered it to about maybe

a,000 or,200. Then Starship promises to

lower that to maybe $100 a kilogram,

maybe less. And that gives you the

ability to do all kinds of

infrastructure in space. And one of the

infrastructure plays in space is is AI.

So when you think about though, like

this is just one like that's that

business in and of itself is seems like

a great business.

>> Why do they need a terrestrial compute

business?

>> Why do they need a why do they need a

social media platform? Yeah, it's it you

know it's it's it's a great question. Um

the terrestrial compute is a bridge to

um orbital compute today. Uh and if if

you have orbital compute

or even terrestrial compute having an

application is a way to monetize that

right now do they do they have to have

an application layer? No, they don't.

they could be very successful uh selling

uh you know space-based infrastructure,

space-based compute, but if you have

that, why not try to deploy it with an

application layer? And and that's what

they're trying to do. I've said this

many times and I and and I mean it most

sincerely. 10 years from now, if you

look back on where SpaceX ends up, it'll

probably look up look a little bit

different than where we think today and

probably more successful because what

tends to happen when you when you have

this ability to do space-based

infrastructure, it opens more

opportunities. You know, the biggest

opportunity on the horizon today is

space-based compute, but there'll be

other opportunities, too. So, and and I

I hear your point where you have these

businesses that are seemingly not not

connected. the connection between all of

it is the ability to do space-based

infrastructure because it benefits all

of them.

>> Um what about the the talk that you know

they could be providing connectivity to

the world or to more people certainly

than they are now which seems like it

would require and as you point out in

your note a much bigger investment

because you can't currently go from sat

from Starlink satellites to most phones

as they as they're currently configured.

like you just it doesn't you know

they're they're not made that way. Um so

what would need to happen connect the

dots for me in order for them to really

realize that business and do you think

that that's a good way for them to go?

>> Yeah. So I mean as a as a maybe a litmus

test as you know Starlink has been very

successful selling broadband um and you

know one vector they're going is the

ability to sell broadband globally. And

then the next question is all right yeah

next year they're going to put

satellites that can do mobile uh and you

know then then the next question becomes

well how do you deploy the mobile

particularly in urban environments will

they have to partner with an M or can

they deploy it themselves they seem to

suggest yesterday on the on the call

with management that they'd be able to

deploy it themselves if they needed to

in some clever ways uh and and you kind

of think about you know I was just sort

of trying to think about it uh if you

have a um you know SpaceX antenna

collecting a signal But that also may be

able to be a mini tower. So they may be

able to really do to do to do mini

towers because they have ground stations

already. Um that would potentially take

some investment. But what's fascinating

about what they're doing that's

different than most other providers

today when you think about space-based

communications both mobile or broadband

when they put another satellite in

orbit. in addition to a global network

where if you're putting fiber in New

Jersey, it benefits everybody in New

Jersey but or in the local area of New

Jersey where the fiber is, you add an

extra thousand satellites that benefits

your global network. So um you know on

one hand they they will have to do some

investment to do the mobile piece on

some form or another either through you

know M&A or just direct investment in

some sort of infrastructure. Um, but on

the other hand, they are building out a

capability in terms of space-based

communications that at a level that

nobody else has. Um, so on that front, I

mean, I hate to frame it this way, but

it almost seems like a no-brainer for

them to continue down this path because,

you know, they they already have a a

think about it, a optical

internet surrounding the world with

1,200 with yeah, with excuse me, 10,000

satellites today. Um Ron, finally I

wanted to circle back to the lockup

expiration, right? Because that has been

an overhang on the stock to your point.

We know it's happening. We we know the

schedule.

>> Um and so why do you think that is still

such a weight on the stock and do you

think that we won't see meaningful

upside in the shares until after

December when this is all done?

I mean I mean it's it's you know it's

hard to say specifically but I would

imagine as we start working through the

lockup it'll take off some sort of

technical pressure from the stock. Now

there's other fundamentals that could

drive the stock um you know independent

from from the lockup but you know the

lockup is a technical factor that will

probably weigh on the shares I would

imagine.

>> Yeah Ron, good to see you. Thank you

very much. Really appreciate it.

>> Yeah my pleasure. Thank you for having

me. Coming up, we're looking at the

sustainability of tech ETF inflows.

You're watching Market Catalyst. We'll

be right back.

Heat. Hey, Heat.

Heat up

here.

down.

Big tech earnings are testing the

sustainability of tech ETF inflows as

Wall Street assesses whether surging

capex plans make for worthwhile

investments. So, let's talk about the

state of the ETF market. Joining me is

Julie Gunce for this week's ETF report

brought to you by PIMCO. She is with

Alliance Bernstein, of course, global

head of ETF strategy and partnerships.

Good to see you. Good to see you as

well. So, it's been interesting because

even when we were seeing ETF or tech

prices pull back, it feel it felt like

tech inflows were still happening.

>> Yes. Yes.

>> So, what's that's it's you know, it

seems sort of counterintuitive

sometimes.

>> It is. It it's interesting if you look

at ETF flows in July which was a pretty

volatile market for for tech stocks and

and tech overall as a sector there were

still net inflows and I think it shows

two things you know investors are using

the ETF vehicle as a way to reposition

their portfolios um during market

volatility or different headlines and

then you know there could be a buying

the dip as well. Tech has had an

astounding run year to date and so there

may have been some money on the

sidelines waiting for this dip to enter

the market. Were there particular areas

where you saw strength? Was there

anything that surprised you as we were

seeing that sort of jockeying around? I

mean, it's really interesting. I think

uh ETFs that have a bit broader exposure

to tech saw inflows. And so, for

example, we have an active thematic ETF,

you know, we continue to see inflows

into that versus, you know, the levered

ETFs have made a lot of headlines. Um,

you know, that was an area that had a

lot of trading and and extra volatility

given kind of the nature of that segment

of the market. And there's been some

criticism of that sector of the market,

right? There's been some calls don't,

you know, we saw in South Korea actually

them the the regulators saying you can't

issue any more of these. Do you expect

any sort of move like that here in the

United States?

>> I mean, I think it's interesting if you

look at the US and you take a step back,

you know, we're a 16 trillion ETF market

now and that number keeps going up every

single month. Of that levered ETFs are

only 1% of the market. Um, and so if you

look at the money going into ETFs and

continuing flowing into ETFs, levered

ETFs are a really small part of the

market. Um, and I think, you know,

aren't adding systemic risk to date.

Gotcha. But they're certainly adding

individual risk, you know, and

institutional risk depending or who

depending on who's taking on. We saw, of

course, the blow up of the situational

awareness hedge fund. Not an ETF

situation, it doesn't seem, but a

leverage um situation. And so what do

you you know I imagine you're getting

questions from clients about how they

should be deploying leverage, right?

What what do you tell them? I I think

they're a tool for a very specific type

of buyer or trader. And so when we talk

to our clients, we talk about long-term

investing and long-term portfolio

construction. And so at AB, we are an

active management shop. We have active

ETFs. And so a lot of our conversations

are really about how do we take passive

beta building blocks in ETFs, combine

them with active ETFs to get to the

long-term goals of our clients, whether

that's increasing income, um, downside

protection, you know, risk management,

and how do you put all the pieces

together so you don't have, you know, a

risky bet or something that surprises

you and impacts your financial outcomes,

>> you know, as you say this, I'm kind of

curious, um, away from markets question,

more just ETF plumbing question,

>> like it is so crowded right now. There

are so many ETFs. So, as an issuer, how

do you cut through that and sort of um

differentiate yourself in this market?

Or is there really just so much demand

that it is less important to do that? I

I think it's twofold. I think the ETFs

are becoming the preferred delivery

mechanism for investments, but at the

end of the day, they are the

infrastructure, the way to access

investments. And so you need to have a

unique investment strategy, something

that delivers performance. You know,

performance is table stakes at at this

point. And then, you know, how do you

help your clients meet their investing

goals and and their financial future?

And so at AB, we think about what's our

research driven process and what are

those long-term outcomes that our

differentiated client base is looking

for and how can we take our investment

teams, you know, our global PMs and

construct an ETF that meets those needs

of our clients.

>> Gotcha. Um, lastly, I want to talk about

space a little bit because we've been

talking about SpaceX so much, and as we

know, there are some single stock SpaceX

ETFs, leveraged included. Um, but

there's also some space sector ETFs. So,

what kind of stands out to you in terms

of the the action that you're seeing in

that space?

>> Yeah, I mean, I think it's interesting.

I think taking a diversified view on any

of these thematic um relevant thematic

ETFs are important because you you pick

a single stock and you know can go one

way or the other and and I would

probably leave that up to the

professionals um and so as you look at

the space ETFs or the broader thematic

ETF universe you know understand what's

in it what's how does the index

constructed or how is the active PM you

know constructing the portfolio to make

sure you have that diversification um

because we will see volatility Whether

it's, you know, AI, space, or the next