The Compound and Friends: Bubble bursts in 2027, Nvidia earnings preview, Materials sector set-up, AirBnB takes flight

Sourced by podcast-ingest on 2026-08-26. Auto-transcribed via AssemblyAI (universal-2, en). Speakers identified by AssemblyAI Speaker Identification using the per-podcast host/regulars hints; the resulting label→name mapping is in the frontmatter. Duration: 1h11m. Episode page: (not provided). Audio: https://pdst.fm/e/pscrb.fm/rss/p/traffic.megaphone.fm/TCP4041665727.mp3.

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Join ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for another episode of What Are Your Thoughts and see what they have to say about: whether we’re approaching peak AI spending, what Nvidia’s earnings could tell us about the next phase of the AI trade, and why the biggest opportunity may be companies using AI to surprise investors with better-than-expected growth.

Plus, Airbnb and Delta as emerging AI beneficiaries, a bullish setup in materials, ETF Issuer of the Year, LeBron James’ massive $300 million loan, Netflix vs. Spotify, and more.

This episode is sponsored by F/m Investments and SGVA, the F/m Accumulator Ultrashort Treasury ETF. To learn more about SGVA, visit ⁠Fminvest.com/SGVA⁠

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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.

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Transcript

Josh Brown: Yeah, we're back. It's gonna be a big show. Michael, what do you think?

Michael Batnick: You look loaded.

Josh Brown: You look at all the stuff that we're gonna do.

Michael Batnick: No, I haven't. I haven't looked at it.

Josh Brown: All right, so everyone's. Everyone's talking about Dolly Parton in the chat. You have thoughts? Iconic, right?

Michael Batnick: Yeah. Jolene.

Josh Brown: What a legend.

Michael Batnick: A little bit before my time, so I'm vaguely familiar with her music, but probably not as much as you are.

Josh Brown: We will never see and we will never see or hear anything like Dolly Parton ever again. I have to tell you.

Michael Batnick: Why.

Josh Brown: She's just like. She was just so. I, like. I keep saying iconic, but really and truly. And could do it all. Acting, singing. She started an amusement park in. Where she grew up in Pigeon Forge, Tennessee. She's like a hall of fame, like, every. Like, everything. You name it. Grammys, what's called the Country Music hall of Fame. Or, like, when I was in Nashville and I did all the tours, she's just everywhere. She's just. She's it. She's the thing. So you know what's cool? She did live long enough. Beyonce paid homage to her. Beyonce did a country record a couple of years ago and had Dolly on it, and she kind of got her flowers from, like, the younger, youngest generation. And that was kind of. That was kind of cool to say. Anyway, RIP Dolly. You know what else they're saying in the chat? They're saying, am I gonna address the Live Nation settlement? Yeah, all right, I'll address it. I'm a shareholder, so I am pro Live Nation settling its issue with the government. Seems to happen every three or four years. Somebody decides to sue them, and they always come out of it unscathed because in the end, they are the best operator of concert venues in the world. And people really like the combination of the ticketing being connected to the venue and.

Michael Batnick: Sure, I love it.

Josh Brown: Oh, what's. What's. What's the alternative?

Michael Batnick: We don't need to get into that right now.

Josh Brown: Okay. Anyway, that's my. And by the way, this was settled in March. It only came to light now, but it's not. It's. It's news, but it's not actually new. It's not. It's not a new thing that just happened. It happened six months ago. Get over it.

Michael Batnick: Anything else you would like to comment on or they would like you to comment on?

Josh Brown: I got one more. I got one more thing. I want to let people know that we are going to be throwing a major event later this year. I cannot get into the details. However, I strongly advise you to go to the compoundnews.com and subscribe and become a compound insider. Because the people who are compound insiders are going to get the heads up before everybody else.

Michael Batnick: Will there be. Will there be PFPs for the giveaway?

Josh Brown: What is PRP? We will have doctors on. We will have doctors on site performing the platelet rich plasma procedure.

Michael Batnick: You should do it on stage. That'd be great.

Josh Brown: Well, I don't need to anymore because look what I have going on. All right, so anyway, guys, super excited about this event later this year. I can't say more. I'm not at liberty. You cannot go to the compoundnews.com and subscribe. Become a compound insider. We regularly send you guys the heads up on stuff before everybody else knows about it. So this is your opportunity. We have a sponsor tonight, Mike.

Michael Batnick: We do.

Josh Brown: Tell us all about it.

Michael Batnick: We do. The sponsor is fminvest. And I just want to say a big, big congratulations to the entire FM Invest team, Alex Morrison squad. They just got bought by T. Rowe Price, a little asset management company. Maybe heard of them and it's been a pleasure working with them. Just a great people over there. All right, so this podcast, as I said, is sponsored by FM Investments and SGVA. The FM Accumulator Ultra Short Treasury ETF. Most Ultra Short Treasury ETFs Payout Monthly Cash distributions that investors don't need and don't want. Those distributions come as taxable income that must be reinvested after taxes. Well, here's an ETF built to solve that problem. It's the FM Accumulator Ultra Short Treasury ETF Ticker sgva. SGVA is structured to avoid unwanted taxable distributions and harness the power of compounding inside the etf. So instead of monthly distributions, you stay invested in ultra short treasuries and you choose when to redeem based on your personal cash needs. SGVA built to grow, not distribute. To learn more about SGVA, visit fminvest.com

Josh Brown: SGVA what a great story. We like this guy. Alex Morris. Big fan dude.

Michael Batnick: Good dude.

Josh Brown: And I like when good things happen to good people. So really happy to hear that and thank you guys for sponsoring the show. Of course. All right, I think. I think we're starting with peak AI spend. And the message that I wanted to get across here is one of the most important things to understand about stock markets are that they are anticipatory. Bonds are different. I mean, there is an anticipatory component to bonds and how they trade. But the investors in bonds are mostly there to get their money back plus interest. And they're not looking for surprises, upside surprises. They're not looking to substantially grow their investment. It's more about return of capital and equities are about return on capital. And so stocks behave based on the outlook more so than bonds. And the current conditions are not as important as we all think. So we're all looking at economic reports and we're all listening to earnings reports that are talking about 90 days ago. And we're all, you know, looking at what's going on right now and how do you play it, how do you invest based on it? But the reality is the preponderance of people in the market and the dollars at play are investing based on how things might be going six months from now, a year from now, depending on the stock. Do you think what I'm saying is accurate so far?

Michael Batnick: Facts only. Where are you going with this?

Josh Brown: Okay, where I'm going with this is this year is an absolutely incredible year for capex and technology and spending and investment. And it's like it's almost. I don't want to say it's never been better, but in our lifetimes it might not ever have been better than it is right now. But the stock market doesn't care about how good things are right now. They have already started to price in how good things would be today, in January, in February. So that what the stock market is principally concerned with at this stage in the game is the coming winter and the coming spring. That is the, that is what Pete. And that's why you have gigantic chip companies like Broadcom, for example, in deep drawdowns off of a tie, you have Marvellon and Drawdown. Both of those companies have just been reporting some of the greatest news and contracts and earnings and any of us will ever see. But that was already priced in six months prior. Now those stocks are looking to the future. And people that don't understand this, they would intuitively look at the share price and conclude either the stock market is wrong or, or I don't understand what's happening. And neither of those has to be true. Stock market is, could be right and you could perfectly understand what's happening. But it's the future that matters to the share price today, not today's current conditions. And I bring that up because there was a really shocking op ed at Bloomberg by Bill Dudley and Bill Dudley was the chairman of the New York Fed, I believe. Yeah. All right, so it's not often that you will get a former chairman of any of the Federal Reserve banks come out and literally call his shot, point to the, point to the bleachers like Babe Ruth and tell you, he tell you where the, where the ball's going. But he has an op ed last week, basically five reasons the bubble will burst by the end of 2027. So he's not just saying it's a bubble, he's saying it's going to burst. And he's not just saying it's going to burst. He's telling you the time horizon. I thought it was really interesting and the timing was interesting. So he is now a Bloomberg columnist in his private life, no longer at the Fed, but still was at the Fed recently. And this is a remarkable piece. So I wanted to go through it with you just to set the table, put up the first chart. So I'll quote, I'll just, I'll, I'll quote him. He's setting the table by telling you that stocks are expensive, which I think we all sort of understand. He's citing three things. The Shiller Cyclically Adjusted Price Earnings ratio or cape, which has not been helpful obviously for short term market timing. But a lot of the old heads really do care about this. It's 10 years. It's a multiple on 10 years worth of earnings, which is meant to smooth out the business cycle, which I don't think we have one of those anymore. But he's saying the long run average is 17 now it's 41 in December of 1999, very close to the peak for stocks. It was 44.

Michael Batnick: Dude, I'm sorry, what? Come on.

Josh Brown: He's not using this to time the burst of the bubble. He's just giving us the landscape. He's also citing the equity risk premium, which we'll get to in a second.

Michael Batnick: So hold on, number one, that's an erroneous landscape. What does, what I understand the concept of, of the CAPE ratio, you smooth out earnings to extend the business cycle to look over a longer period of time. You inflation adjusted and you compare it to history. I understand what it's doing, but. And I'm not saying that stocks are cheap, so that's not what I'm saying. But when you are looking at today's earnings and they're being bundled with earnings from 2017, it's a different world.

Josh Brown: Okay, agreed. And, but, but can we also say if there were to be some sort of a bubble in technology bursting, but it happened from a substantially lower valuation, probably the damage would Be less.

Michael Batnick: If there was lower valuations, we wouldn't even be using the B word. And I know you're going to get to in video, but that's trading at what, 20 something times forward earnings. Meta is trading at 15 times forward earnings. So I reject.

Josh Brown: Are the earnings, Are the, are the earnings definitely coming? So that's what he's asking. So he, he throws in the real equity risk premium, which is the expected pickup of return holding stocks versus inflation index, treasury bonds. We're gonna get to that one second. And he throws in the Buffett indicator, which is no longer really in use by anyone, probably not even by Buffett. But that's market cap. Come on, Bill Dudley ratio.

Michael Batnick: Bill Dudley. You gotta do better, sir.

Josh Brown: I would point out though, it's not a little bit high. It's 240% US market cap of all stocks versus GDP. The stock market is selling 240% of the GDP, the annual GDP of the country. So he's just setting the table that we're, we're in a position right now where stocks are historically at a high valuation. That's, I'm not saying, he's not saying sell because of that. He's just giving you the backdrop. Here's, here's the meat.

Michael Batnick: Okay, good.

Josh Brown: And he, and he, and he walks us through. Number one, the favorable impact of the AI investment boom on economic activity and earnings will likely diminish significantly in 2027. That's because what's relevant for growth is how much the investment is increasing, not its level. He is not saying the level of investment will fall apart. He's saying the increase in 26 over 25 is a much faster increase than what we're going to have next year. And I think that's, that gets back to what I was saying about the anticipatory nature of how we price stocks.

Michael Batnick: Hold on. Can I ask a question about this part of it? So I think everybody knows that the percentage growth rate that we're seeing across the board is not sustainable. Earnings are not going to grow 28% every single year. It's just not going to happen. So therefore, I think that that is not going to shock the market. I think that is very well baked into the pie at this point.

Josh Brown: Okay.

Michael Batnick: What do you think?

Josh Brown: Not everybody has to agree with that.

Michael Batnick: It's. No, I'm asking, missing your opinion. What do you think?

Josh Brown: I think that people get disappointed when growth rates slow down. Even if they see it coming while it's actually happening, they don't enjoy it. That's my personal opinion to the group. As the growth of investment spending slows, the growth in earnings of the hyperscaler suppliers will falter, profit expectations will diminish, and as a result, PE ratios will shrink. See, this is the problem. The growth rate slows, the earnings growth slows, and then simultaneously the multiple compresses. So you get hit twice. And that's without the bubble bursting. That's not, that's not earnings falling. That's just like earnings aren't as good. And also because people are less enthusiastic. I just for those earnings not to

Michael Batnick: nitpick every point that he's making, everything that you've said so far, I think is very much consensus and which is why we've repeatedly spoken about the forward PE coming way in, even as earnings surge. Everybody is expecting this to happen.

Josh Brown: So what happens next?

Michael Batnick: I don't know. I can't wait to find out.

Josh Brown: So his opinion is it's not good what happens next. So this is number three. As the investment cycle matures, the focus shifts, and now it becomes about the returns that the hyperscalers are expected to earn on their massive investments. Everybody's getting the benefit of the doubt and not almost everybody's getting the benefit of doubt right now, with a few notable exceptions. Meta Oracle. Okay, he says, quote, I suspect it will be difficult for the hyperscalers to generate sufficient revenue, which he defines as $2 trillion or more per year, to generate the returns needed to justify an AI capital base that is likely to reach 5 trillion. Reasonable, not reasonable.

Michael Batnick: I agree with everything you're saying.

Josh Brown: Will 2 trillion be good enough on

Michael Batnick: 5 trillion, Josh, the max 7 are up 2% this year.

Josh Brown: Okay, he's, he's talking about the suppliers more so than, than just the hyperscalers. But your point is well taken. Fourth, the supply of US equities will increase due to the sharp rise in IPOs and the sale of equities by corporate insiders as lockup periods end. This should weigh on valuations. Okay, you could say it's consensus, but also it's true. Fifth, last point. The macroeconomic environment is likely to become more challenging. Yeah, this is a former Fed chair, so we'll just, we'll, we'll take his word that he's saying this, that he's saying this honestly in his opinion, but he can't know this for sure. But this is his point. Real and nominal long term rates have increased significantly this year. Yields on 30 year treasury bonds are at the highest level since 07. The rise in yields puts increased strain on equity market valuations, the risks are tilted toward a further rise in yields given the lack of political will and progress to address the debt trajectory. Here's a chart is the too much risk point. He's showing you the earnings yield in stocks, basically the earnings of the stocks but like in the form of a yield relative to price, like you would look at a dividend that's in black. And he's showing you the TIPS yield almost on its way toward meeting or possibly eclipsing that, that level. Last, last thing on this and then, and then I'll, I'll take your, I'll take your full comment. We'll give Bill Dudley last word. In its early stages of bubbles, growth is self reinforcing. The demand from the boom supports rapid profit growth, wider margins and higher valuations. But on the downside, the feedback loop runs powerfully in reverse. Collapse in demand leads to a drop in cash flow and a reevaluation of the risks of lending to support the bubble's further expansion. I expect I will follow the broad trajectory of the other great technology booms and busts like the railroad and the Internet. I will have a significant impact on productivity and growth. There will also be an inevitable glut of overcapacity that will weigh on profits and stocks. And this is the final chart. What are you showing here? What he's showing here is interesting. This is the, the Wilshire 5000 Index market cap. So let's just say this is the complete stock market. Every category unmoored from reality versus gross domestic product. It's not that. It's not that. I guess the point here is we have never seen these two things this divorced from each other. It is a tremendous distance between the growth in the market cap in dollar terms which you see approaching 80 trillion versus GDP, the overall economy closer to 30 trillion and all right, who cares, Blah, blah, blah. It'll all work out in the end. Maybe. I just thought it was remarkable to hear this from a former Fed chair. What are your thoughts?

Michael Batnick: Since when do you take stock market advice from an economist? Are you kidding? What happened to Josh Brown? Where'd he go?

Josh Brown: I'm not taking his advice on it.

Michael Batnick: It's not that interesting. Dude. All due respect to Bill Dudley, this is very, very consensus. I don't take, I don't think the

Josh Brown: senses is that the bubble will burst by the end of 2027.

Michael Batnick: This is, this is the consensus bear case. And it's very basic. I saw. Let me return to this in a second. The macro environment will get Harder. This has been an easy macro year. Really? The war, inflation, interest rates going up, the straight being closed forever. This has not been an easy macro year.

Josh Brown: It's been inside it. He didn't cite any of those things.

Michael Batnick: Macro conditions.

Josh Brown: He's talking about the bond yield.

Michael Batnick: He said macro conditions will get harder.

Josh Brown: Okay, right, but, so here's my point, here's my point.

Michael Batnick: If you're going, if you're going to shoot your shot and listen, maybe he's right. I don't know what 20, 27 is going to hold. Would I be surprised if 27 is a tough year for the stock market? No. Who the hell would? But this is my point. If you're going to call your shot, tell me something I don't know. Respectfully, there's nothing in there that's.

Josh Brown: So he can't do that because he's, he's look to your point. He's looking at economic data. He doesn't have any insights into whether or not next year will be a continued year of AI related spending and, and the associated earnings growth that comes from that. He cannot, he obviously cannot do that, nor can anyone else. Even the people that are expected to do the spending, they don't know for sure what they'll be doing because market conditions might change their minds. They may decide, you know what? These CapEx plans we laid out, we exceeded them in 25, we exceeded them in 26. Maybe 27 is the year where we don't exceed them because we're looking at a share price that's 40% from a tie and we're taking a market signal.

Michael Batnick: I love, I love a good bear case. I really do. I like that.

Josh Brown: You don't think that's a good bear case?

Michael Batnick: No, it's not. Interesting. I like reading something I haven't thought about. And I say, oh, shit, that's. That's pretty compelling.

Josh Brown: Okay, I can move on by saying, screw you, Bill Dudley.

Michael Batnick: No, no, no. I'm just. Come on. I'm not. Screw Bill Dudley.

Josh Brown: Do you think it's, do you think it's remarkable though, who it's coming from?

Michael Batnick: No.

Josh Brown: You don't.

Michael Batnick: No.

Josh Brown: Do we normally. Do we normally see recently retired former Fed officials actively predicting a bubble bursting within a year?

Michael Batnick: Everybody, everybody's a sub, a podcaster, blogger. Now this is.

Josh Brown: So he's doing, he's like, he's like the Kate. He's like the Prince and Princess from England that they're doing content now.

Michael Batnick: Yeah, sure. I mean,

Josh Brown: wait, is it William? Who's the one Harry Harry and Meghan Markle.

Michael Batnick: Dude, I'm just saying, you shared. You should. He. He gave us a CAPE ratio, the earnings yield and the TIPS yield and the Buffett indicator. All right. I mean old.

Josh Brown: Okay.

Michael Batnick: All right, let's talk. Oh, you want to do some Nvidia stuff? Why. Why does Nvidia report so late? It's so anticlimactic.

Josh Brown: Well, we have this OpenAI stuff. Let's hit that first.

Michael Batnick: All right, so OpenAI reported that its revenue grew to 6.7 billion. I don't think reported anything, but this came out. Its revenue grew to 6.7 billion in the three months ended in June, up from 5.7 billion in the first quarter. That's not awesome. Meanwhile, its operating margin sank further into the red anthropic. Meanwhile, more than doubled its revenue to 11.6 billion the same period.

Josh Brown: The anthropic guy said they could do 30 trillion in revenue someday. Is that all the years added up combined or did he. In one shot, did he give.

Michael Batnick: Did he, did he give a time frame on that? Thank God now, because by 2020, by 2126, it's. Anything is possible. Inflation keeps going up 3% a year.

Josh Brown: I think he was. I guess he was making the point like the same way that SpaceX talks about. It's Tam. And I don't know if that's a revenue projection or like, how big could this company get kind of thing. I didn't, I didn't actually hear. I just, I just saw the headlines. I do think it's a lot of money either way.

Michael Batnick: I do think that to not overthink a bear case, it's just our ability to be less surprised at good news. Just look at Nvidia as a classic example of this. Yeah, the stock has traded nowhere for months and months and months. The earning, the earnings numbers are astounding, but the market's over it. Like, show me something else. What else you got?

Josh Brown: All right. Get earnings tomorrow after the close. The valuation's been compressing all year for multiple years, actually, and we have great chart of that. So if there is a bubble, it's not an Nvidia. Now, people have said, okay, there's no bubble in the valuation, but the actual bubble is in the earnings. And I understand that argument and I don't, I don't laugh at it because I don't want this to age badly. They're going to report a quarter tomorrow night where the street is expecting them to report 98% earnings growth. So, and, and that's not like they had 5% earnings growth last quarter and they all of a sudden released a new product. They've been putting up quarters like this for years already. So if it is an earnings bubble, it's sure taking a long time.

Michael Batnick: Do you think it's an earnings bubble?

Josh Brown: Something to come undone?

Michael Batnick: Do you think it's an earnings bubble?

Josh Brown: I think there's a higher likelihood that it's a pull forward earnings bubble than it's. Everybody was stupid for buying all this stuff and it's just going to evaporate. So a pull forward earnings bubble to me is like everyone's worried about compute. Everyone. Everyone's worried about are they going to get their slice of compute, are they going to be able to deliver the services that they're contracting with their customers? And so they're stockpiling as as many chips as they can. They are building data centers. You can't build a data center with no chips in it. So you have to order as much as you can to make sure that you'll have access to the supply. And that's more pull forwardy to me that than it is like this massive error of like buying things that no one's going to need.

Michael Batnick: Question. I have a question.

Josh Brown: That's where the, if there's, if there's an earnings bubble, it's, it's the most innocent type of earnings bubble because the demand really is there.

Michael Batnick: Okay, so you, you know a lot more about this stuff than I do. If. Let's just say that there's a demand pull forward. Isn't the Cuda operating system a major part of the story that even if the demand for the chips fall, there's still demand to operate these things on their platform? Maybe. Is it sort of similar to CrowdStrike or am I making a really stupid comparison?

Josh Brown: It's not a stupid comparison. It's just, it's, it's. That's like orthogonal to the main point. The main point is if you build a steel mill, which is the way people think about like in heavy industry, if you build a steel mill, it's very likely you'll still be using a lot of the same equipment 20 years later. If you build an oil refinery, which we haven't done since the 1970s, it's very likely that most of what you've built is still in operation and you're making repairs and substituting parts here and there. And that's just like the regular maintenance cost of running a heavy industrial site. Data centers are different. Do you know it's an, it's estimated 50% of the cost of a data center is the chips. Do you know that? You know, astounding that is. And the thing is, these chips may have a useful life of five years, but it's unlikely. These chips may still be in use in 10 years. But given the speed of the advance of what this technology can do, it's highly unlikely. So in videos portion of this data center center spend is such that even if there's a slowdown in new data centers being built, the amount of maintenance and replacement of the GPUs that are being installed today is so astounding that I think in video is probably in the safest position of all of these data supplier stocks. You, you, you are not likely to see a situation where they're using 2024 and 2025 era GPUs in 2029. You're very unlikely. So even if the data center construction is cut in half because people get spooked, you're still going to need chips to supply what you've already built. What are you going to do? Not buy the replacements? And all this inferencing burns out the chips not as fast as training, but pretty fast. And they're talking about this explosion in inference because of all the new things we're doing with AI. You're going to have to replace GPUs. And Nvidia will be supplying these data centers for as far as the eye could see. Not for years, for decades. For decades.

Michael Batnick: So why do you think, why do you think it's trading at 16 times forward earnings? Is it the most obvious long hiding in plain sight?

Josh Brown: Marvell is coming on very strong. Broadcom is coming on very strong. These comp. Let's take Marvell. Marvell is building custom Asics for customer. Amazon's their biggest customer. So Amazon's building Trainium chips which are application specific integrated circuits. They do not have as broad of a use as a gpu. They're not as powerful, they're not clustered the same way. You know, you take a, take a, take a cluster of 10,000 chips and put them in a physical. It's not the way that's being done. But Amazon, its training line of chips. Alphabet's making chips. Microsoft is making chips. Meta Apple is making its own chips. They're, they're utilizing application specific integrated circuits. And that custom chip making for the hyperscalers is coming out of Marvell. This doesn't mean Amazon's not buying GPUs. Doesn't mean Gemini is running without GPUs. But it is new competition for the build out of compute. Why would they want to use asics? Well, if they build them themselves, they can customize them for exactly the uses within their data centers that they see as being important. Okay, so that's what Marvell is doing. Broadcom is, is in there as well. Obviously AMD is always nipping at somebody's heels. It's, it's not going to be an 86% market share story for Nvidia forever. And so I think competition from 3,000 different players, including their own customers, is part of why we're seeing that multiple shrink. I also think there's fatigue, there's boredom. This is already 7% of the S and P. How much more can investors buy? Like, like if you're not an index, how do you want to be 9% Nvidia, you want to be 10. So there's some element of that. It's a $5 trillion company. We've never seen a company get to 5 trillion. We don't. One day we'll have 50 companies at 5 trillion and somebody will look back and do a study and they'll say this is the threshold beyond which stocks can no longer trade at 20 times earnings.

Michael Batnick: So that's my answer. Charkin and I made a chart earlier in the year, showed the reason why Nvidia is trading at below market multiple. It has a size problem. If it were trading at 18 times forward 20 or 25, what, 30, whatever it was, whatever the best growth stocks in the market have historically traded at, it would just be too big and the market can't digest a stock that for that size.

Josh Brown: Last thing, I don't give a shit what anyone thinks. These stocks are going to be cyclical in the end. And this derating of the multiple of the last three years I believe is an acknowledgment on the part of the investing public that 99% earnings growth, quarters are awesome, their products are awesome, their competitive position is awesome, etc. Etc. Etc. But these are cyclical companies. They are selling a semiconductors are cyclical out. Maybe I'll end up wrong. Maybe this will go on for 20 years uninterrupted. But the history, if you read chip war, chip wars or if you have been on Wall street for 20, 30 years, you know that what goes up must come down in this space. Funny, funnily enough, funnelly. And is it funnily either way? Laughably enough, ironically enough, one of the reasons software stocks have historically had such a higher multiple than semiconductors, up until two years ago when the semis just went wild is that investors know that software is less cyclical than hardware. And investors know that historically software can outgrow a cycle in a way that semiconductors never have. That may prove to be not true this time, but historically software company growth software companies have gotten higher multiples than growth semiconductor companies for precisely that reason. And a lot of people either aren't doing this long enough to have learned that or forgot about it. But I do think there's a gravity that is pushing down on the multiples of Marvell of in video of Broadcom. They understand that these companies are going to go into a phase where they rip each other's throats out for the next upgrade cycle. And not everybody can win. And that is why they're not selling at 30 or 40 times earnings the way that they were three years ago.

Michael Batnick: Anything to say about Nvidia? Tomorrow?

Josh Brown: I'll give you the storylines. These are the things that the people that care about the stock and care about the AI trade are watching the most closely. Let's start by saying the Wall street consensus price target for Nvidia is now 305.

Michael Batnick: Where is it right now?

Josh Brown: 212. That is almost 50% higher than where the stock is. So you're not going to get bailed out by. By upgrade price target lifts. You could get a lot of reiterations if Jensen kicks ass on the conference call, but like what are they going to do? Take the target to 320? 330. So that's number one. The here. That's its own story. Here are the seven storylines. Number one, the revenue bar is staggering. Consensus is $95 billion in quarterly revenue. Data center is going to be 85 to 87 billion or almost all of that for context. Nvidia did 26 billion for this quarter a year ago. Wow. I want you to think about that.

Michael Batnick: Your point? That's. That's in, that's over. Like investors are no longer warning that we know.

Josh Brown: Right. Just so Jensen's guidance is 91. So the 93 to 95 is the street storyline to the Blackwell ramp and chip yields. The Blackwell is the new central product. If you call up in video, I want the newest hottest shit. That's what it is. Investors want to hear about production scaling. That's obviously Taiwan semi is is who's making these things on the 3 nanometer chips. They want to hear about supply constraints. They want to yield is like how many chips go bad in the manufacturing process? Like how many do we get out of each turn. So they're listening very granularly for any sign of a slip up in execution.

Michael Batnick: What about customers broadening out last last quarter they broke out the number the hyperscaler revenue right in May for the

Josh Brown: first time they categorized what they sell to the hyperscalers versus everybody else. And obviously the hyperscalers is most of the business. So yes it would be nice if there were demand coming from somewhere other than Amazon and Alphabet. So stay tuned for that. The Vera Rubin architecture, that's that's what's coming. That's going to be the next next thing. Jensen has already said he has $1 trillion in revenue visibility through calendar 2027 for the Vera Rubin upgrade. So let's take him at his word.

Michael Batnick: It's not that it's going up, not an earnings bubble.

Josh Brown: Well it seems like he thinks he's got that in the bag. Three is the launch timeline for Via Rubin Vera Rubin. So a delay would be very problematic for the stock because a delay would force people to change their near term quarter outlooks. So we want to hear that that's on schedule for China export restrictions. So during the course of this quarter they did get approval and allegedly started selling in China. It's I don't think that's in the numbers but again it's a storyline that people are listening to the commentary on.5 is the hyperscaler custom silicon threat which you and I just spent 10 minutes on. I won't go terribly further. Google's TPU's Amazon's Trainium which again that's Marvell. Microsoft and Meta are building custom accelerators or XPUs. People are going to want to hear Jensen answer the question about that competition. It'll be asked of course 6 is gross margin trajectory. They margins. This pressure would be the wrong way to say it but margins had come in a bit as they were developing new products. They want to see 75% plus again. And so when we talk about yields, yields will be a part of that number. Seven, I don't know if this comes up on the call or if analysts are too or too prissy to ask. 28 insider cells in the lead up to earnings. This could be part of why the stock is down 12 straight days. I don't know but I think the insider selling has to stop at a certain threshold before we get to the earnings. So maybe not. It's not a huge dollar amount relative to the market cap but it's also not like the greatest vote of confidence out of at the levels that that those insider sales. I made this point with Sean today on tv. So those are the storylines. Do you have any, any thoughts on those or am I, are we missing anything?

Michael Batnick: No, no. You first of all, credit to you. You did a fantastic job laying out the story. So that was very well done. The stock has not been been treated well after earnings recently. Well, this chart.

Josh Brown: So that's, yeah, that's, that's really, I think that's a really key point. Tell people what they're looking at here.

Michael Batnick: So the last four times it reported and the fiscal year is a little bit weird. That's why you see 27 in here. The market has not liked it. Josh, you and I were on. What are your thoughts? I believe during one of these or I can't remember what show it was, but stock got smoked.

Josh Brown: Yes, this is a terrible post earnings reaction. Stock that could change and it hasn't always been that way, as you can see on this chart. But it really, you have to go back a while to find a quarter that people were super enthusiastic about. The next day. All you're looking at is next day returns on this chart, the market.

Michael Batnick: So I don't know what he could say for the stock to go up 8%. What hasn't he already said? But sometimes investors just change their minds. Okay, well, SpaceX. SpaceX did say that they're all in on Nvidia.

Josh Brown: If I were in the investor relations suite, Nvidia, I would, what I would be telling them is, listen, if you don't care about the stock price reaction, no problem.

Michael Batnick: Of course they do.

Josh Brown: Okay, but let's assume you're wearing a fucking leather jacket. You do care what people think. Okay, all right. Talk about space. You don't have to be specific. Talk about robots. Because if there's a new leg to the Nvidia story, not that it needs one with 99% earnings growth, but if there's going to be an expansion of the TAM or a change the subject from ASIC competition, it's going to be automation and self driving cars and rockets and data centers in orbit and robots. Let's talk about robots because that could be a whole new TAM that's not in the stock or not meaningfully in the multiple. I don't know if they'll do that. So I would just tell people who are in the name going into this quarter, of course anything can happen. And Michael and I don't know, but over the last 26 quarters they've reported. So that's back to Q1, 2020. So half of those quarters in the air. 12 times the stock has moved up or down by 5%. That's remarkable. Which means it almost never does a thing. If you look at the average next day return, it's plus 2% after an earnings call over the last six years. But there were two massive reactions skewing that. In May of 2023, the stock exploded 24%.

Michael Batnick: Yeah.

Josh Brown: And then in February of 24 plus 16, if you pull those out, the stock is typically flat on average the next day. So here's the tape. Let me set the table for you. 92 billion in revenue is the midpoint of that guidance. That's 97% year over year growth, earnings $2.09. That would be 99% growth. EBIT 61 billion. That would be 102% year over year. And the final point to make here, and I think this is applicable for everybody listening and watching for as long as they live. Just because you identify the stock with the most insane growth rate, that does not guarantee you a reaction in the stock to earnings or other news that's going to make you money. If it were that simple, we would just automatically buy Nvidia, let them report 102% growth in EBIT and sail off into the sunset with unlimited wealth. That is not how things have gone for shareholders in this stock for a very long time. So knowing the numbers, fetishizing the growth rates, these are interesting things. They do not guarantee you upside in the share price because the market is smart. It is way ahead of this. Back to the Dudley conversation. When we talk about anticipatory. Nobody gives a shit that in video grew earnings by 99% over the last 90 days. They're worried about 27 and 28. That's what the stock is trading on.

Michael Batnick: Amen, sister. All right, we just did 40 minutes. 42 minutes on topic one. So we're gonna have to move. We'd have to move the rest of the show along.

Josh Brown: This is the most important thing though. This is what's going on. Yay.

Michael Batnick: It's important support.

Josh Brown: Okay, okay, what do you got?

Michael Batnick: All right, let's talk. There was a milestone reached. Shout to Invesco. The equal weight RSP ETF crossed $100 billion in assets. And just a couple of years ago in 2020, granted after the fall, even pre fall, it was like 15 billion. It was 20. It was 10 billion in 2020. This thing is 10x off the lows. It's a lot of money.

Josh Brown: Who is the all this new money in this is this Institutions. Retail doesn't buy equal weight. S and P is this people that want to be allocated to the stock market but don't want to face the full brunt.

Michael Batnick: Sure.

Josh Brown: Of an AI issue. That's what I think it is.

Michael Batnick: Sure. So it got me thinking about the different type of instruments that we have available to us. And you juxtapose that against something that I saw in my Robinhood app. And I'm a big fan of Robinhood. Use it every day. But I saw this and I just shook my head, Josh. That's what I did. We've got no 15 minute markets. You are able to gamble on what the price of various cryptocurrencies will do over the next 15 minutes. Because this is America, damn it. And so then also later in the day or a week, I saw Jeffrey Patak tweet that Defiance has registered 16 single stock ETFs that will reset their leverage on an hourly basis. Because who the hell could trade daily leverage stocks? That is so boring.

Josh Brown: Stop. What is this single stock etf? What is it? Resetting.

Michael Batnick: So chart off for a second.

Josh Brown: I don't understand what it's. What is it resetting?

Michael Batnick: All right, so the reason why you are able to see a stock go up 50% over a year and the double X ver, the two times levered version of that stock go up 55% is because it does not guarantee you two X the outcome over an extended period of time.

Josh Brown: Yeah, I understand that.

Michael Batnick: So I know you understand I'm talking to the audience. So on a day by day basis, you will get two times the exposure. But volatility is a tax on returns. So if you're up 1% down 1% up 1% down percent, you're not flat. Eventually, the volatility, and if you dial it up to two plus three, like it just. It eats into the returns. All right, so if you are now doing that. Not on a daily basis. You look. Is that your blue Steel face? You look like Zoolander with that hair. I love it. What?

Josh Brown: What did I do?

Michael Batnick: Yeah, it's blue steel.

Josh Brown: Wait, I'm. But I'm trying to understand. So this is for a day trader that wants to be F once. Is it 5X? It's now.

Michael Batnick: I don't know how much leverage. I don't how much leverage there is, but I'm just telling you it's intraday shit on steroids. It resets hourly. So I don't know the mechanics exactly how it works. But the broader point is. What? Go ahead. Who is it for traders.

Josh Brown: What trader is doing this?

Michael Batnick: We will find out. We will find out. Listen, we were talking to Todd, so. And this is the spaghetti cannon. If it doesn't work, shut it down. Who cares? Doesn't. Doesn't cost much. Shut it down. So anyway, I had Claude put together a capital cooker. In your words, I can't wait to do this. A capital cooker in order of the most basic boring investment to intraday and everything in between. So here we go. This is our capital cooker.

Josh Brown: This is so good.

Michael Batnick: Number one, just cash T bills, money market. Very, very boring. Then you've got the Ben Carlson's. Number two, the set it and forget it targeted funds. Then a little bit further out on the risk spectrum, you've got beta, just plain market beta. Whether it's the S and P or the total bond, whatever it is, you just, you get market exposure. Then you go a little bit further. You want to get a little bit cute. We've got some factors and some sectors. Whether it's the equal weight that we just mentioned, sprinkle some smart beta in there. You want some sector exposure, okay, everything's fine. And then you've got. Recently coming to market, very, very, very popular are the engineered outcomes. Talking about the buffer ETFs, some of the option overlays, shout to Jeppy, and a lot of the structured products. And then we start to spice it up a little bit. We've got crypto and we've got crypto treasuries, and then we've got the yield max. The yield max. I don't know what.

Josh Brown: No, it's like call set, call selling option income.

Michael Batnick: Basically. Basically 140% distributions. Yeah, okay, sure. You've got the levered ETFs, whether it's, you know, individual stocks or, or on indexes. And now we get to the fun stuff. We've got gambling ETFs coming out. We spoke with Todd Sohn about event contract funds, and a couple of companies just filed for NHL team features. I have no idea why. I have no idea why the NHL. NHL was first. Maybe there's a league reason. I have no freaking idea. And then finally, and don't think this is the end, Josh. This is. We have not reached the final, boss. We've got intraday. I mean, zero day to expiration. Boring intraday, intraday, levered ETFs. I love it.

Josh Brown: First, first of all, bravo. I love that thing. Let's, let's do more with that two points. Do you remember National Lampoon's Vegas Vacation.

Michael Batnick: I didn't see it.

Josh Brown: Okay? It's a absolute classic. But it's a bad movie. But such a great bad movie. It's right up your alley. It's the Last Griswolds with. With Chevy Chase. Takes the family to Vegas. He's with his idiot cousin Eddie, you know, the. The white trailer trash guy? Okay? So he, like, has to make a lot of money really quick. And like, the regular casino, like, he, like, he can't do it.

Michael Batnick: Is that Randy Quaid or somebody else? I know he was in the.

Josh Brown: Randy Quaid who's amazing in the movie, as usual. So they go to Vegas downtown and they go into, like, the seediest casino in Vegas. And it's like, there's no blackjack, there's no roulette, there's no. There's no baccarat. They're playing flip a coin, pick a number from 1 to 10. I forget some of the other games that they're playing.

Michael Batnick: We are.

Josh Brown: We are at the Vegas vacation phase of the. Of the current market environment. And I agree with you, we're not at the end.

Michael Batnick: But.

Josh Brown: My God. My God. And we talked about this last week. These are lawless times. You can fucking launch anything. And the message to the people watching and listening to us, I'm. I'm not gonna. I'm not gonna, like, trash people. Entrepreneurs who are putting these things out into the universe and seeing if there's a market for it. But I will say to the listeners, to the viewers, to our fans, listen to me. These people are not sitting in think tanks asking themselves, will this help investors? That's not the question. They're not in white lab coats, okay? What they're actually asking is in their board meetings, will people buy this shit? That's the only thing that matters not, is this good for people? Will most people use it profitably? Will it help someone retire? Will it help someone? Some people are thinking that way. The buffer ETFs are probably a great example of that. Most people. The only question is, will these animals buy this thing? Will they? That's the question. And if the answer is no, they don't bother. If the answer is we're not sure these days. Cheap enough to give it a shot. Let's see. And if the answer is yes, they're gonna launch it with the. And the only thing stopping that are regulators. And the regulatory pendulum swings back and forth. They get too strict, then they get too loose, and then lots of people lose money. And it swings all the way back. It never stops. In the middle. So the backlash to whatever the fuck is going on right now, it's gonna go all the way back the other way, where it's the no Fun League and nobody can launch anything. And I don't know when that happens, but right now, we know what's going on. And if you know how to fill out the paperwork, you could probably get something launched. Like, we're gonna give you intraday leverage and reset every two hours, every 15 minute, whatever it is.

Michael Batnick: Sure.

Josh Brown: Let's see. Let's out. Let's. Let's experiment. It's a free market. It's. It's capitalism. Let's see how people use it. So I'm not against it. It's fine by me. I just want the people to hear me say, these are not. This is. These things are not going through an FDA Phase 3 trial before they get into your hands.

Michael Batnick: All right, so we know. I think in 2018.

Josh Brown: I don't know that. Everybody knows.

Michael Batnick: Yes, we do. Yes, we do. Our list, you and me. No, no, no. Our listeners are very smart. The average investor today knows a lot more than they did, a lot more than they used to in 2018. In those days, we were. We were screaming about these things and saying, people. People don't understand what they're doing. They think it's 1 for 1 2x over a year. They don't understand it's 2026. People understand. Investors are very smart. They know. All right, you want to do this?

Josh Brown: Yeah, let's do some stocks. Okay. I thought. This is interesting. The travel trade has been on fire this year, and we have talked a lot about Hilton, and we've talked about Marriott and Expedia and booking.com, the airlines. There's just been money made, and this is not one year. This is going on multiple years. One of the big laggards all this time finally caught a bid, and it is Airbnb. And this is a company whose product I will never use. I will not stay in someone's home. I don't judge anyone for wanting to do that. I will never let somebody in my home.

Michael Batnick: Yes, you do, you coward. You just.

Josh Brown: No, I don't know. I don't. I get it. I totally get it. There are people. Listen. People. People like, oh, so you'd rather go to a hotel where 9 million people slept in the bed, then stay in a house where maybe 20 people a year. They have a point. They have a point. I don't care. I don't do this. And no one is ever living in my House. I will starve and die. I will starve and die before that. Anyway, Airbnb is kind of killing it right now, so let's put this chart up. Huge upgrade from Bernstein after their latest earnings report, which was earlier in August.

Michael Batnick: And.

Josh Brown: And I want to show people the technical. The technicals here first. This is what we call a runaway gap. Runaway gap. Not a breakaway gap. A runaway gap happens in the middle of a move. And this is like Edwards and McGee stuff, but basically you would take the amount of the move that preceded it and then on the other side, that's how far you should expect this to be able to keep running before it runs out of steam. So these are very bullish. This thing gapped up and never even looked back at that gap level. Michael, would you agree that's a pretty bullish formation in a chart?

Michael Batnick: Insanely.

Josh Brown: Okay. Management is now guiding to a fifth consecutive quarter of 10% or higher growth in usage. So Bernstein came out and put a $217 target on the stock. They're looking at double digit revenue growth, margin expansion, ongoing buybacks, and they think they're going to get 20% annual earnings per share growth going forward. They're also talking that this is an AI stock, which I thought was interesting. So this is so, you know, my antennas are up because I love this idea of the S&P493 being the next leg of the bull market because they're the users of AI. Airbnb is using a ton of AI. They have an awesome CEO, Brian Chesky. He knows what he's doing. And here are some of the ways that they're using AI to grow earnings. Rebuilding its search and discovery layer to better match guests to listings they're likely to book rather than just returning results based on proximity, which is how this thing used to work. Surfacing the right home for the right traveler at the right time. Increasing conversion rates. Dynamic pricing tools. Are they charging the right amount? Probably not. Nobody is. AI helps you get to the highest price somebody will pay without abandoning their shopping cart. We've seen them do this in the concert business. We've seen the airlines do this. Okay. Sponsored listings and emerging advertising products where product where hosts can pay to appear in search results. High margin revenue stream that sits on top of the core take rate. AI is central to to making the auction and placement logic work. And last, the loyalty program. Expanding AI personalization to make more loyalty offers and rewards and target them better. This is what Meta does. They're the best in the world at it. But seeing Airbnb utilizing AI to start putting up 20% growth. This, these are the types of stocks that I personally am most interested in seeing. Is a pretty boring business. It's lodging. But supercharging. The existing business with AI, I think, is how the S and P could have multiple bull market years ahead of it. We'll do one more. Here's.

Michael Batnick: Wait, wait. I have something to say about Airbnb. The biggest problem for Airbnb, the biggest problem was when it came public. Airbnb came public in December 2020. It was unprofitable right at the top. It was trading at 40 times sales. And that is it. It took six years to grow its way out of that hole. John, throw this. Throw this tweet up. So this tweet comes from. I want to give attribution. This tweet comes from Ben Schmark at the benchmark. Oh, that's clever. That's clever. What we're looking at is this. He says it's hard to overcome a high starting multiple even when future growth is robust. So here's what we're looking at.

Josh Brown: SpaceX stands. Pay attention.

Michael Batnick: Right. So when you're trading above 50 times. And what is this? Earnings. Okay. When you're trading above 50 times, look at the five year CAGR. Even when you're growing between 15 to 20%, the average is negative 2%. And this is very tricky. This is very, very tricky. And it goes to the point that Josh was making earlier. Chart off, please. The reason why those companies get rewarded with such a high multiple is precisely because the earnings growth is so explosive.

Josh Brown: Yeah.

Michael Batnick: And so expectations get ahead of itself. And it takes Airbnb six freaking years to burn that excess off.

Josh Brown: Yeah. And we've told stories like this before. We talked about Microsoft growing earnings, double digits in the 2000s decade, and the stock price being flat because it was. Because it went into that period at like 70 times earnings.

Michael Batnick: Cisco really did grow 20% a year.

Josh Brown: Right.

Michael Batnick: It really did.

Josh Brown: Right the. You were right on the fundamentals, but you paid too much. And this is very apropos of the current moment. Let's look at Delta. Let's look at Delta. I see a double bottom at 80. I bought some more today. I do have a stop in. I think this is the best airline in the world. Not just the experience as a user, but the way the company is run at Bastian is phenomenal. He said so. This is the same theme. He said this week AI could lift Delta's profitability by as much as 50%. He frames that moving the margins from roughly 10% to 15%. But that's worth billions on a revenue base. Billions. Okay. Delta is working with Fetcher on AI. Fair setting. As of July 2025, I was only influencing 3% of fares. The stated goal is for 20% of all Delta flights to have this AI lens on the pricing. It's going to work. So long as the economy holds up, it's going to work. Delta also implemented AI driven baggage technology during the July 2026 quarter. And I don't know what that means, but I like. I don't know. I don't know. Maybe they put a data center in the baggage claim.

Michael Batnick: Yeah,

Josh Brown: listen to me. But I want people to understand the takeaway. This is the way the bull market, which is already into its fourth year, this is the way the bull market can make it through 2027. If the S&P493 continue to use AI to surprise investors with better than expected earnings outlooks. That's how it works.

Michael Batnick: Can I take that a step farther? I think it's the only way 2027 continues the bull market. If the 493. If we don't see margin expansion, 2027 is going to be tough.

Josh Brown: Now what's remarkable about what you just said is that I said it and you said it a year ago. We were so early. We were so early to this concept where the only way these hyperscaler investments make sense is if you see small and mid cap companies beating earnings. Therefore the market has to broaden or it has to crash. There was no way these hyperscaler investments could continue on without seeing the rest of the stock market react positively to their AI investments.

Michael Batnick: Because.

Josh Brown: Because who's the customer At a certain point you're building compute for people that aren't making money using it AI bag. We could have said this a year and a half ago. I don't remember. But we were so early.

Michael Batnick: Okay, what do you say the rest of the topics? We could say for another day. Is there anything on fire that you want to discuss?

Josh Brown: No. Let's kick. Let's do round tail to close out because I like those guys.

Michael Batnick: All right, so this is my topic. I gave Round Hill the ETF Issuer of the Year award. That is the. What are your thoughts? It's. It's official. It's the one of your thoughts. ETF of the ETF Issue of the Year award. And yes, Josh has a business relationship with them, but here's what they did. Full disclosure, all fully disclosed.

Josh Brown: The most disclosed extremely I'm.

Michael Batnick: If you're.

Josh Brown: If you're listening and not watching, I have removed my clothing.

Michael Batnick: Extreme. So here's what these guys did. Shout to Will and the team. They launched DRAM in April and got to $10 billion. Outside of Bitcoin, it's nuts. It's the fastest ETF to get. I think it did it. Did it do it in 10 days? I mean, I don't know what the, what the details are, but off the charts. And then, and then if that wasn't enough, they did Halo. They capitalized on Josh Brown's genius. Way to describe the market.

Josh Brown: It is 52 million in assets, Michael.

Michael Batnick: Did you know that, dude?

Josh Brown: I mean, $52 million, no problem with no promotion.

Michael Batnick: $52 million. But here's the other one. Photonics. John, chart on or tweet on or whatever on something on photonics. Look at this. Okay. Light L Y T e has crossed $300 million in AUM in only nine days of trading. I know that might be lost in some people how insane that is. Yeah, it used to take like an indie issuer years for the entire firm to cross $300 million. And they're just out here just slinging it. So.

Josh Brown: And they had to, like, they had to like, go hat in hand to Merrill Lynch, Morgan Stanley, like, begging to get on the platform. Then they get on the platform, they have to beg to get into the asset allocation. Like, put us in one of your model portfolios. These guys, they just. And by the way, the degree of difficulty in that DRAM ETF should not be understood, should not be understated. You file and the etf, the. If it doesn't get blocked or delayed, the effective date is like 75 days later, which means you can't just identify a trend and launch an ETF that day. You have to. You have to be two and a half months ahead of the curve to see, like, what people might be into to get a product launched with as perfect timing as that DRAM etf. And it's set. And Will Hershey is fine. He's. He's, he's just, he's just a regular guy. Dave Maza is the. Is the real. I'm just teasing. I. I like both those guys. Congratulations.

Michael Batnick: Before we get to make the case, I just, Just real quick, John, throw up the. Plenty of stocks working. I just want to put this on people's radar. Josh, do you know how on fire materials are?

Josh Brown: Not until you put this on my radar.

Michael Batnick: So the. I don't follow any of these names The XLB etf. And maybe we'll do more in this next week. Looks incredible. And these are just some names that we selected. There's so many things in here working that are completely off anybody's radar. Something copper is not in xlb, by the way. But it's. There's so many things working. Chart off.

Josh Brown: It's Freeport. I follow Freeport and I follow Newmont.

Michael Batnick: Josh. It's the type of market where you feel like you want a short cash, meaning you want to go on margin because there's so many stocks you want to buy and you just can't buy everything. And if that puts your antennas up, good. Right. If you're like, holy shit, Michael wants to buy every stock. That makes me nervous. Good. It's that type of market. It's not good. I saw.

Josh Brown: I saw the crazy. So first of all, the best stocks in the market list. The quantity of names on our list is exploded.

Michael Batnick: It's got to be at a multi, multi month high.

Josh Brown: That's one, two. I saw Atlassian hit the list this week. Team.

Michael Batnick: I think it doubled off the lows.

Josh Brown: This was the epicenter.

Michael Batnick: Correct.

Josh Brown: Of the SaaS apocalypse.

Michael Batnick: Correct.

Josh Brown: It's at a 52 week high and it's on the best stocks in the market list.

Michael Batnick: How.

Josh Brown: Holy cow. Is this market hot?

Michael Batnick: I love this game.

Josh Brown: Holy cow. Holy cow. All right, we're going to make the case. We'll do this quickly because. Because Netflix and Spotify put up Netflix credit to me and I think you, you still in this.

Michael Batnick: I bought it the day after earnings at 67. I'm not only down 9%.

Josh Brown: Great print. I am now above water with all my average downs. I stuck it out. I am not. I am not walking away. I think that this is the most misunderstood stock in its sector.

Michael Batnick: Preach. Tell me more.

Josh Brown: They just don't understand. They don't understand. They don't understand, but they will. They will catch me. Catch, catch me in triple digits and I'll explain it. Spotify trades very similarly to Netflix. You and I both bullish on this name.

Michael Batnick: I bought. I bought an added. I bought an added. But more or less. We can add it yesterday.

Josh Brown: So I bought it last week. I think I nailed the timing beautifully. I do have a stop in on Spotify. Not Netflix, but Spotify. I don't want to marry this thing, but I have to tell you, I think it's one of the best businesses in media. I know we did this whole conversation last week, so I won't repeat it, but just a shout out because these stocks are grinding back. They're not ripping. They're not on the best stocks in the market list. Nobody's talking about them, but they are literally grinding off those lows. And I like to see it.

Michael Batnick: Spotify will enter the best smart stocks in the market list. All right, I've got a, I've got a mystery chart. I just made a comment. I love this game. It's just the best. The way, the way that stories change so fast and make us all look like complete schmucks. We all of the time. If you're not entertained. I mean, I don't, I don't know, I don't have to tell you. So, mystery chart. John, please. This, these are two stocks. Obvious. Well, not obviously. These are two stocks, okay? And these are very much considered head to head competitors. Now, there are differences in their business models. They, they don't do exactly the same things, but whatever. Any casual shopper, oops, I just gave it away. Any casual shopper would say that I go to this place, go to that place. This is from April 2024 to November 2025. One stock was up 78%. One stock was down 53%. And then since that time. John, please. The stock that was getting killed has now doubled and the stock that was killed, killing it has flatlined. And as we said earlier about Airbnb and, and really throughout the entirety of the show, expectations are everything. John, last chart. The top one is the forward PE for the stock that's, that's outperformed.

Josh Brown: Oh, I got it.

Michael Batnick: And everybody loved one and everybody hated the other. All right, please. I'm sure you do have it.

Josh Brown: I'd like to solve the puzzle.

Michael Batnick: Go ahead.

Josh Brown: Walmart and Target nailed it. Yeah, I mean, you gave me a lot of hints along the way, but isn't that amazing? So, you know, this is the, this is the thing with, this is the thing with technicals and charts. I have a bias about every company I hear about, especially if it's a consumer facing company. Like, in other words, I have no, I have no bias about, let's say we're talking about Micron and Western Digital because I don't interact with their products. So those are easy. For me, it's charts only, right. I look at the earnings growth, I read the analyst comments, and then I look at the price. Those are easy to not have a bias. Walmart and target, I mean, McDonald's, Coca Cola, Anheuser Busch, Disney, Netflix, Spotify. Impossible not to have a bias, right? You have, you have got to use charts and technicals to tell you when your stupid bias is being laughed at by the people who are actually putting their own money on the line with trades. And so this is why I've, my almost my entire career, I have just been like a chart and fundamentals person, not one or the other. Because what you saw in that target chart when it started to outperform Walmart, you might have looked, you might have looked at the stock price and said, target, what a piece of shit. Because that's how we all, we're all predisposed to make snap judgments. Do you know why that's what that's the case? Not to belabor this, because it's survival. You see a group of people that look dangerous, you turn around and walk the other way. And you live on to pass your genes to the next generation. So these snap judgments that we make in one second where we decide, this looks like it's safe to eat, this looks like it might kill me, that's necessary for human life. It works against you in investing. Humanity did not develop its survival instincts alongside financial markets. We have a hundred thousand years of human evolution. We have 400 years of stocks back to Amsterdam, right? So we don't, we don't have these built in mechanisms for no reason. It keeps us alive, right? But it doesn't help when we're thinking about stocks. Oh, I love this company. I hate this product. I like that CEO. What are you, an idiot? How could that possibly work? So that's why we use technicals. And with that we will sign off. Guys, once again, thank you so much for coming to the Live. Sorry we ran long. We had a lot that we wanted to do and we really appreciate everybody sticking with us. Please go ahead and smash that like button on your way out the door if you haven't done that yet. Super helpful for us. Once again, make sure to go to the compound news.com Become a compound insider and subscribe new animal spirits tomorrow. Have a great night.