Ted Thatcher, he is the founder and president of Bright Lake Wealth Management for his take.
My man, nice to see you here as always.
Grateful for your time.
Are you surprised that this is the reaction we had after that Iran deal announced?
I thought for a long time this was already kind of priced in or assumed.
What happened today?
You know, I'm calling it the peace deal put at this point in the markets.
We've seen a whole bunch of green today and ultimately, you know, when you see, I think the consequence that we've gotten such a good day is because oil prices. down.
You're absolutely right.
We've actually thought we were going to get peace.
We didn't get it, and the market has barely moved.
But when we see the actual, I think, legitimization not just from the president and the administration, you know, being hopeful, but when we see that recognized on the Iranian side as well through their state media, it's, of course, a green day today.
There's going to be a lot of news out of Washington DC for investors here on Wall Street and around the world to digest.
It's not just news out of the White House.
How about Wednesday's Fed day?
We are expecting the decision.
From the FOMC to be a hold, but it's be all eyes on Kevin Warsh's first time there behind the podium.
What are you looking for for Wednesday?
Yeah, he's in the batter's box for the first time here.
I, you know, don't anticipate any rate changes, but what I'm really interested, JD, in is what he says specifically around AI.
You know, we've heard this narrative about AI being deflationary.
I don't necessarily think he should be jumping in with both feet in that narrative just yet, although I do think that this peace deal makes his Way a little bit easier this week.
Obviously consumers have been under pressure.
We see it in all the headline inflation numbers, but you know, now we have a little bit of a light at the end of the tunnel actually.
It's the first time you and I are talking since SpaceX's IPO on Friday.
We saw another pop in shares today.
Investors are getting ready for the anthropics, the open AIs.
We've got a big summer of these big blockbuster IPOs.
How are you thinking about the performance of that stock on Friday into this week and what this means for the road ahead?
You know, when we look at SpaceX, there's been so much talk from, you know, commentators about why this is overvalued, and obviously investors should be careful here, but I think that a lot of those folks have not actually, you know, given credit where credit is due.
Actually we've said, OK, we're paying 300 times EBITA for this company at a $2 trillion evaluation.
Should we do that?
I think that that actually misses the point though, that point being the denominator in.
That figure is changing just so rapidly.
Of course, SpaceX has an amazing launch business.
Let's set that aside.
Of course it's a huge moat.
Let's set aside the cursor business that they have and the upside there.
Let's look at the fundamentals here, of course, on their connectivity business.
Starlink, they have just less than 1% of the world's houses on Starlink.
And if we look at the way the big banks price this IPO, they did not price it for today's revenue.
They priced it based on the growth.
They're expecting $160 billion in revenue by 2028, actually expecting $110 of that to be EBITDA, even if they don't hit those benchmarks.
I think that there's still a case to be made that SpaceX, even at the high evaluations we're seeing, is fundamentally sound.
What are some of the biggest questions that your clients at Bright Lake are asking you about these highly anticipated IPOs?
They see the headlines.
Do you see a lot of interest that people want involved?
You know, retirees are asking that.
Question, is this a blue chip type company?
Is it safe?
Look, obviously this is a high growth type of company, but the sections of that company that I'm looking at in most again are the connectivity and then really the AI compute business.
If we just look at the last 30 days, JD, SpaceX has actually become the 4th in the 4th position of the hyper scales, knocking off Oracle.
We have Anthropic.
We have Google paying them $26 billion of revenue now, and really importantly, We look at Colossus 1, we look at Colossus 2.
They stood that up in 122 days and 92 days.
Speed is cost.
They're doing it at a much lower cost than their competitors.
The neo scalers are only getting 15 to 20 billion per gigawatt per year.
Those the anthropic.
Google deal are actually at a 50 to $70 billion per gigawatt per year rate.
So not only are they going faster, costs are lower, they're getting 4 to 5x the margin on those buildouts.
The man who coined the phrase the peace deal put, my man, come back on the show any time.
