Welcome her warmly back to the broadcast.
The great Hartika Singh, economic strategist at Funstrates.
Great to see you here.
It's so nice to be here again.
Welcome back.
I want your take on Micron just delivered a huge quarter.
Do you still see this as being really one of the best AI plays right now?
It 100% is.
Semis have been on a roll.
This is a crazy hot streak, and I think this is just so impressive because they had huge feeds on sales, earnings.
Guidance was amazing.
They're saying that.
They signed 16 long term contracts.
That's so unusual because historically memory makers, they signed contracts for a year, right?
Like they're not long term contracts.
So this is amazing and we're also seeing them say that supply is supposed to be in shortage, uh, supply is supposed to be in demand till like the end of 2027, which is pushed out from our earlier estimates.
Everything just seems like to be really, really good, and I think the stocks jumped today.
It was highly just.
Are there other memory stocks, quantum stocks, things in that kind of broader AI adjacent trade that you're tracking and following closely these days?
I think it's all about memory right now.
And if you look at the Max 7, they are not getting the same level of enthusiasm as the semis have been.
Sandes, Western Digital, Seagate, they have been pushing up almost 7%, 6% every single day, except this week where we had a little bit of a stumble.
Earlier on, but yeah, I think other than semis, it's really hard to say because they're the ones making the money right now and so much of it.
They're making so much of it.
It's crazy.
I want your take on the MG 7, or as our mutual friend Jay Woods might call them, the LG 7.
Here to date we've only had 3 of them that are in.
It's so sad, says Hartia.
What's going on here with these tech leaders?
For the longest time they were the biggest winners, right, and now they're the losers, and it's so hard to understand, but I If you look at it since last year, their free cash flow has been really lower than their cap expend, right?
And I think that has hurt their stock.
How they've been really fueling their Capex is by debt and debt offerings, they've been doing great, but I think investors still like to have a little bit extra free cash flow to sort of see that, hey, if something goes wrong, you have the money to back it up.
But I think at the same time it is still a lot of free cash flow that they have.
I think by the end of 20.
28 they're supposed to have around uh 745 billion.
That's not, you know, that's not little numbers, that's big numbers, uh, and if you look at uh forward earnings bases, these stocks look really, really cheap right now.
I think the gap between MAX 7 and the S&P 500 is the narrowest it's been since 2023.
So I think to a point these stocks can only fall so much to where they become attractive again.
Uh, I want your take.
Obviously we had the SpaceX IPO not long ago, first time I've seen you since that.
We have OpenAI.
We have Anthropic preparing to go up, uh, go public soon.
Does that create another leg of demand for the chip makers, and how are you mentally thinking about these massive IPOs in the pipeline?
I, when SpaceX went public, I was glued to my screen watching how it would turn out, and it was a great public offering, right?
We saw it just go up to the moon, quite literally launch to the moon.
Right, but I think it's been kind of a flop since then, and this is when we haven't even seen the lockups expire.
So to me this initial weakness is concerning.
Granted, most of the IPOs, they don't really do all that well in the first year.
So I think a lot of retail investors sat this one out, at least my friends sat this one out, because to them they would just rather wait until it's down more.
Now with regards to AI demand, I think for me I.
I think if you think of SpaceX and XAI inside of it as an AI company, to me it doesn't really look all that attractive as an AI company.
I would rather buy OpenAI and Anthropic because they're pure play AI, right?
And XAI, it's just, it's just not doing all that well right now, you know, and I think that SpaceX satellite business, that's great, that's amazing, that's, you know, I just don't think these businesses mesh well together.
I got less than a minute.
Before I let you go, how are you thinking about rotation?
It's not just the XLKs and the tech giants leading the way right now.
You are seeing some industrials, materials, healthcare gets its day in the sun.
What does that tell you about the health and the breadth of the market?
It's been so good to see the market rally expand to include some of these laggards like financials, industrials.
They've been doing so well lately.
But again, for me, earlier this week, the stumble that we saw because of memory stocks was concerning, right?
More gainers than losers in the S&P 500 lately, yet the index has been lagging and finishing down on some days.
I think that's a concerning sign because I think, I think memory and the Max 7 really need to pull up and do what is expected of them.
Otherwise it's great to see industrials rally and financials rally, but it kind of doesn't hold much weight over the broader index.
They're so small, you know.
The great Hardika Sang, Welcome back to the show, my friend, to the moon.
Nice to see you.
