Dan Ives on AI, Tesla, SpaceX, Coreweave, and more – Transcript

00:00Take a trip to Korea, Taiwan, see what the demand looks like. And see if you come back here and you're still as bearish. I I think that's the that's the one day I think a lot of times when I talk to some of the very, very bearish investors, I'll be like, "Have you ever been to Taiwan or Korea before?" They're like, "No, but."

00:23So, I think that's the one day I would say is that What's going on, guys? Today, we have an excellent conversation with Dan Ives, the goat. He is here to tell us all about the AI trade. He's a partner at Yorkville Ives, and he just went to Korea, and he was on the ground. This is a report from the front lines of what he saw, where the demand is coming from, and why all the AI bears, they are wrong. On top of that, we talk about SpaceX and Tesla. Is the merger going to happen? What are the ramifications? How should investors think about actually playing this? Then, we get into what's going on with

00:51CoreWeave, and what maybe Dan actually agrees with the bears on. Why he thinks that it's not as big of a deal as the bears believe. And then, he takes a step back, and he looks at midterms, interest rates, and many of the other themes that are going to influence the stock market into the end of the year. I think you're going to enjoy this conversation. Here it is with Dan Ives.

01:08All right, Dan, you recently went to Korea. Let's get a report from the front lines. Korea seems to be one of the most important countries when it comes to the AI trade and a lot of the kind of momentum that's going on in the stock market. What did you find when you went there? I mean, memory, if I look at demand, it's probably up about 30% in the last 4 to 6 weeks. So, so to me, you know, when you think about the nervousness, the jitters, seeing CoreWeave AI trade, it all comes down to like what demand looks like from a chip

01:35perspective. And I think memory, that's front and center. The there's you can name a lot of memory players on one hand. And obviously, Korea front and center there. And look, I just think what's happening here is investors are skittish on the trade, but the fundamentals are telling a much different story. And that's why I just came away from there even incrementally more bullish relative to demand. And I think what we'll see this tech earning season, we've already started to see it,

02:02it further validates, I think, the AI story. >> So, Korea's interesting because it does have a number of companies that are very important, but it also has the retail traders, and they seem to be very enthusiastic. You're like a legend over there with the retail traders. Is that like a chicken or egg? Like you had to have the companies and then you get the retail traders? Or like is it just no, Korea generally is very kind of retail driven and they just happen to have these memory plays?

02:25>> Oh, I mean, it's I think it kind of goes hand in hand because the industry there, especially built around Samsung, SK, call it, you know, Hyundai, women amount of companies, but they basically own the memory market. And the as more and more, maybe if you go back years ago, you'd have to look up KOSPI on Google to understand what it is. Now today, like New York City cab drivers like is the KOSPI up or down?

02:50But [snorts] that fed into the retail environment in terms of the trading. There's so many finfluencers, so cuz there, I mean, when we think about Korea, it's like K-pop and stocks are almost the equivalent of like the Yankees, right? You know, there's like that's their passion. And I think it feeds a market where the volatility, it maybe overstretches on both sides. Right now, I just think it is like way

03:16detached from fundamentals. It's the sell-off in Korea is eye-popping, and I I continue to believe like the KOSPI will make new all-time highs when we go into next year. >> Now, uh K-pop and stocks, pretty good uh tagline for them. Uh sounds fun. Um is the sell-off driven by leverage? Is it driven by just the skittishness in retail investors? Like what what is the driving uh force?

03:40>> for and you saw it that E-slides, which is a small Neo Cloud, when that IPO came in, you know, it was down 30%, and that kind of feeds into the whole narrative with Korea even just Neo Cloud. Look, I think part of it is definitely leverage in the system. I think the other thing is is that you saw is just so many retail investors that have sort of piled in.

04:03And Korea for many years, like that market really did nothing. So, part of it is just almost being discovered. That market's being discovered globally. And that's the difference, too, is that KOSPI now has really become I think a big conversation among global investors.

04:21But I think maybe it it got overstretched on the upside. It got way oversold now on the downside. And it's just they're sort of navigating a new environment because the reality is like, "Look, Micron's trading at what? Five times earnings?" You look where SK is now listing also dual on the on the US.

04:39I think that's actually the start of Korea today's memory. But I think it's going to expand over time to much more from Neo Clouds to software to whatever years, like the broader ecosystem. >> So, if we take the lessons from Korea, we bring it to the United States. We saw the sell-off and people were freaking out. They were predicting Black Monday.

04:58I mean, just crazy, crazy stuff, right? And uh what I maybe saw as the turning point was uh I think one or two Fridays ago, the S&P put buying was second highest in history. Nasdaq third highest in history. The second everyone kind of goes all in on the consensus put buying, you're like, "What if the stock market goes up?" And everyone's got to rush to cover. Basically what happened, right?

05:20Now, that doesn't alleviate the concerns around some of these CDSs blowing out or the Coreweaves of the world or or whatever. So, like there's price and then there's the fundamental, you know, worries. What do the bears have right? Or like, are there anything that they're saying that you're like, "Hey, you know what?

05:36Actually, we do need to watch that that there is some risk there." >> Yeah, I think look, with yields going up, there's no denying that that puts more pressure cuz go back 20% of the build out is going to either have to be debt funded or some sort of, you know, equity convert rate. So, there's no doubt like does that raise the cost capital? Of course.

05:59>> Mhm. >> So, they're right, I think, directionally in terms of that being an issue and you saw that with Coreweave. I think where they're wrong is even when you look at Coreweave, the debt that they're taking on relative to their backlog is minuscule. And that's how Gento always says, like they're almost healthier today than they were 6 months ago or a year ago.

06:22I think it reminds me a lot of times like very similar like SaaS apocalypse earlier this year. It's almost like a SaaS apocalypse moment narrative for infrastructure. >> Mhm. >> Now, I I always think it comes down to like the bears or all the naysayers the last quote and a lot of them have been consistent the last 3-4 years.

06:41You could be negative when you're on Metro North in the 20th floor in New York City office building. But when you see it like I do globally in Taiwan, in Korea, with the hyperscalers, the CapEx dollars, they're happening.

06:59So, when there was like for every dollar spent on CapEx, 5-6 dollar multiplier across the rest of tech. It goes back to my view like street is underestimating earnings 15, 20, 25% next 12 to 18 months. But as that plays out, I think that's what sends the bears back in the hibernation.

07:18It's the fundamental stories and we saw with SpaceX, we've seen with Meta, we see we'll see with the hyperscalers. That continues to be my view. >> What's interesting is, um, the stocks are getting cheaper. Yet people are getting more bearish.

07:32Like that blows my mind that that's happening. >> Because I think there's just the narrative like the standard dinner pole lounge of four char, like, you know, like 20 minutes in after the how's everything? It's like, "Oh, could this be a 99 bubble moment?" It feels like it. It's got But then my whole view is like let's just go back. Like tech companies are trading at 30 times revenues, now 21 times earnings, and

07:58getting cheaper. And the use cases are further getting built out. It's getting more validated. And even when you're talking about on the consumer side, that's why Apple Rock of Gibraltar way out stock trading because market's telling you they will now start to monetize the consumer piece. Look at Meta as another example. Like the reason that that is because of music, because me and you have talked about like

08:23narrowing the gap versus an Anthropic Open AI. And the view where Anthropic I went from two trillion to a trillion and a half. Look, the reality is is that it just goes back to SpaceX and the narrative that SpaceX was going to suck up all the liquidity in the market and that was going to be a sort of, you know, this this black swan event. But it wasn't. And I just think we're going to have to continue to like fight narratives in this market. But it

08:50goes back to like this market would be like flying from New York California. And you had a crazy thunderstorm over the Midwest. Someone next to you think they're going to crash and they're texting their relatives, you know, where their stuff is and they're, you know, in their drawers.

09:08The other person's watching Netflix drinking Cabernet. The point is like this market you're going to go through these moments, but you cannot have the panic and the narratives, just like SAS apocalypse, surrogate financing I think dictate your investments.

09:25>> Mhm. What are the things that when you're talking to your friends at those dinners and they're worried? What are the like two or three anecdotal conversations that you've had where you're like, "Well, so-and-so told me X and so that doesn't you know, I'm not worried.

09:40>> Yeah. To me, the thing that I that validates for me is like, A, it's seen where the demand is in Asia. Because that is the telltale sign. Like that's no different than like getting a grade on a test. That That's You could have worked hard That's the grade.

09:58That shows where the demand is in terms of the supply chain. And two, when it comes down to like when I talk to CIOs, I talk to so many enterprise IT and and you're seeing it.

10:14The AI use cases, they're multiplying by the day. And you see that more with like a Palantir specifically, you see with Snowflake specifically terms on the software side. That now speaks to like the next phase of this AI demonetization, the use cases is now starting to play out. But it But it takes time for it to happen. It doesn't happen overnight. So when you go