Situational Awareness' Collapse, Big Tech Earnings & The Fed

Summary

Rich Habits Podcast — Episode Summary
Situational Awareness' Collapse, Big Tech Earnings & The Fed (July 31, 2026)

---

Episode Overview

In this episode of the Rich Habits Podcast, hosts Austin Hankwitz and Robert Croak dive into three top financial headlines: the Federal Reserve’s rate decision and the new chairman’s cryptic communication approach, the surprising details in the latest GDP and inflation data, and Wall Street’s growing skepticism of Big Tech’s unprecedented capital expenditures on AI infrastructure. The hosts dissect how these macro trends and corporate strategies impact regular investors, while also sharing several “radar points” on timely market developments and new tech.

---

Key Discussion Points & Insights

1. The Federal Reserve’s "Family Fight": Uncertainty Returns

   • [00:00–04:26]
   • The Fed, led by new chairman Kevin Warsh, holds interest rates steady at 3.5%–3.75%. Notably, three FOMC members voted to hike—first such dissent since 2016.
   • Inflation (headline PCE) is improving but still running at 3.7% YoY, nearly double the Fed’s 2% target.
   • Warsh avoids clear guidance, repeatedly referring to the FOMC as a “family fight”—creating market uncertainty.
     • “He used the phrase family fight 13 different times across now five public appearances. And when then asked about September, he said nothing.” —Austin [02:17]
   • Markets hate the lack of transparency:
     • Dow plunges 2.2% (worst day since April 2025), S&P down 1.5%, Nasdaq off 1.7%.
     • 30-year Treasury yield spikes to 5.2% (20-year high).
   • Advice to listeners: Focus on stocks with strong pricing power and stability (e.g., Coca Cola, Costco).
     • “Get comfortable with uncertainty because it's definitely our new normal. Now under Kevin Warsh.” —Austin [04:26]

2. GDP & Inflation Data: Sluggish Growth Meets Persistent Price Pressures

   • [04:26–09:12]
   • Q2 GDP “advance estimate” disappoints: just 1.5% growth vs. 2.1% Wall Street expectation.
   • Private sector demand is strong, but government spending drops and imports surge (especially AI-related hardware), dragging headline GDP down.
     • “Companies are importing the hardware they need to build out this AI infrastructure...Those imports are showing up as a GDP drag, even though it's actually an investment in future productivity.” —Austin [07:08]
   • Stagflation risk: GDP growth is weak, but GDP-deflator inflation is reported at 5.7%.
     • Focus for markets: Can corporate earnings offset weak growth? Will the latest energy shock (oil price spike on Middle East tensions) reignite inflation for good?
   • Big Tech’s investment (Nvidia, Amazon, Meta) in AI hardware is the root cause of these import-driven data quirks.

3. Wall Street Turns Cautious on Big Tech’s AI Spending

   • [09:12–16:22]
   • Wall Street is questioning if AI capital expenditures will really pay off across Big Tech.
   • Meta: Revenue up 28% to $60.8B, but EPS misses estimates by nearly 14% and free cash flow plunges 90%—huge CapEx ramp ($31B this quarter).
     • “Meta generated $61 billion of revenue and had less than 800 million in free cash flow to show for it.” —Austin [10:37]
     • “They are just spending money like they’re in Congress. And the stock dropped 10% on that statement.” —Austin [10:37]
   • Microsoft: Strong revenue and earnings; AI investment translating to real revenue now (Azure cloud).
   • Alphabet (Google): First-ever negative free cash flow quarter, CapEx at $45B for the quarter; planned $200B+ AI investments for 2026.
     • Tesla: Also negative free cash flow.
   • The market’s view: Companies like Microsoft, where revenue growth is outpacing spending, are favored; others are getting punished.
     • “Not all AI spending is created equal. The market is separating the winners from the spenders.” —Austin [14:15]
   • New investment vocabulary: “Worsification”—appearing diversified when actually concentrated in the same hot sector (e.g., AI).
     • “Wersification is when you think you’re diversified because you have a bunch of different names in your portfolio but all...still operate in the same sector.”—Austin [14:53]

4. Portfolio Rotation & Diversification: Don’t Panic

   • [16:22–18:30]
   • Diversification doesn’t simply mean owning many stocks—secular rotation into other industries (biotech, consumer staples, healthcare) is crucial to avoid sector bleed-through.
   • Take profits after big runs (e.g., semiconductors), consider equal-weight indexes like RSP for broader market exposure.

---

Notable Quotes & Memorable Moments

• “The era of the Federal Reserve holding your hand through every single rate cycle is probably over.” —Austin [04:26]
• “Energy is the wild card here that keeps reigniting the inflation fire every time it starts to cool.” —Robert [01:50]
• “Is AI spending a wealth-creating investment cycle or a capital-destroying arms race? Right now the answer depends entirely on which company you’re looking at.” —Robert [13:33]
• “Wall Street’s tolerance for the trust us revenue is going to come...is running thin.” —Austin [14:15]
• “By having rotation in their portfolio and diversification their portfolio does not mean you’re selling out a big tech because it’s in a downward spiral...It means that we’re rotating out some of those profits into some of those Coca Colas and Costcos and other things that are non related...” —Robert [16:22]

---

Important Segment Timestamps

• 00:00–04:26: Fed holds rates steady; market react; Kevin Warsh’s “family fight” approach.
• 04:26–09:12: GDP report, stagflation math, impact of AI infrastructure imports; consumer spending trends.
• 09:12–16:22: Big Tech earnings breakdown—Meta, Microsoft, Alphabet, Tesla; Wall Street’s changing attitude to AI investment.
• 16:22–18:30: Advice on portfolio rotation, the dangers of “worsification,” rebalancing.
• 20:03–28:04: Radar Points—Project Panama (Anthropic’s secret book scanning for AI training), Amazon Zoox robo-taxi approval, Mets/Novig prediction market partnership; Blossom Social investing app.
• 28:11–34:12: Additional Radar Points—Situational Awareness hedge fund collapse, Apple-Klarna partnership for device leasing, Joby Aviation’s impact report and progress.
• 34:12–35:32: Closing messages: importance of long-termism, avoiding leverage, and using tools like Wall Street Favorites.

---

Radar Points Highlights

1. Project Panama — Anthropic secretly scans millions of used books for AI training, drawing sharp ethical criticism. (“Project Panama is our effort to destructively scan all of the books in the world...we don’t want it to be known...” —Robert [20:03])
2. Amazon Zoox — First purpose-built robo-taxi gets regulatory approval; high-margin business potential for Amazon’s future.
3. Mets & Novig/Prediction Markets — Mets partner with Novig to launch a sports prediction market in Citi Field, marking a disruptive step for sports gambling and fintech.
4. Situational Awareness Fund Collapse — High-profile AI hedge fund crashes from leverage; lesson in overconfidence and margin risk.
5. Apple-Klarna Partnership — Apple launches leasing on all devices with Klarna, lowering monthly costs and expanding upgrade options.
6. Joby Aviation Progress — 850+ flights, massive emission reduction, and international expansion signal air taxi tech is moving toward reality.

---

Key Takeaways for Listeners

• The Fed’s lack of direction means more market swings—focus on defensive quality and pricing power.
• Understand GDP data nuances; AI investments now look like GDP “drags” due to import accounting, though are seeds for future growth.
• Don’t get lulled by sector concentration—diversify thoughtfully, take profits on meteoric runs, and avoid margin-related disasters.
• Not all Big Tech is created equal: Scrutinize whether AI spending is generating real revenue, not just headlines.
• Technological leaps (autonomous vehicles, air taxis, prediction markets, AI research practices) are reshaping business models—follow these radical shifts, but invest carefully.

---

For more information and transparency on the hosts’ portfolios or to join the growing Rich Habits Network, visit the episode show notes or search for the Rich Habits Network online.

Transcript

[A]

Welcome back to the Rich Habits Radar, our Friday episode of the Rich Habits podcast, where every Friday morning we're coming at you with the biggest headlines impacting you and your money. This episode is brought to you by vcx, the public ticker for private tech. My name is Austin Hankwitz. I'm joined by my co host Robert Croak. And the three things sitting at the top of our Rich Habits Radar this week include the Fed's meeting yesterday holding rates steady. We'll definitely talk about that. We got some GDP forecasts and we are seeing big tech get scrutinized by Wall street on their data center spending. Can't wait to dig in. Be sure to stick around to the end where we talk about Apple's new partnership with the buy now, pay later giant Klarna to offer product leasing. Yeah, imagine that. Okay, Robert, let's dig into our first story.

[B]

That's right, the first story today is at the top of everyone's mind, and that's Kevin Warsh held rates steady. The Federal Reserve voted 9 to 3 on Wednesday to hold its benchmark interest rate steady at 3.5% to 3.75%. And three regional Fed presidents dissented and voted to hike rates by a quarter point. And that's the first time since September 2016 that three FOMC members dissented in the same direction at a single meeting. Which is crazy to me.

[A]

Yeah, headline PCE inflation, which is the Fed's preferred inflation gauge, came in Thursday morning at 3.7% year over year for the month of June, which is down from 4.1% in the month of May. That's good. Like to see that. Core pce, which now strips out the volatility that comes with food and energy, rose at 3.3% annualized for the month, down from 3.4% last month. But that super core measure that the Federal Reserve officials obsess over is starting to cool down as well. So on paper, inflation is improving.

[B]

The annual headline rate is still nearly double the Fed's 2% target, and it's been above target for more than five years straight. Oil just spiked back towards $90 a barrel after Iran launched ballistic missiles at US forces Jordan on Tuesday evening, all intercepted, but the escalation still sent crude up as much as 8% in a single day. Energy is the wild card here that keeps reigniting the inflation fire every time it starts to cool.

[A]

And then you've got the new chairman, Kevin Warsh. Kevin Warsh held his second post meeting press conference and essentially refused to tell the stock market what the Fed plans to do next. He wouldn't call the hold a pause. He described the meeting as a rigorous review of the economic situation in a good old family fight, I kid you not. He used the phrase family fight 13 different times across now five public appearances. And when then asked about September, he said nothing.

[B]

The market's reaction told us everything we needed to know. The Dow plunged 2.2%, its worst day since April of 2025. The S&P fell 1.5%. The Nasdaq dropped 1.7% and the 30 year treasury yield surged to 5.2%, its highest level in nearly two decades. The 10 year also hit 4.7%. But the two year yield, which near term rate expectations actually dipped four basis points. So the translation here is the bond market thinks the Fed might hike, but it's more worried about long term inflation spiraling out of control.

[A]

The June dot plot from the FOMC is expecting to now have one rate hike between now and the end of the year. The market's giving that a 40% chance of actually happening. So Robert, what does this mean for our listeners and their money?

[B]

This is the most important fed story of 2026 so far. Not because of what they did, but because of what didn't say. Under Jerome Powell, you always had forward guidance. You knew roughly where policy was heading. Under Warsh, you get a blank slate and a phrase about family fights. That uncertainty is definitely what moves markets. When investors don't know what the Fed is going to do, they demand a higher premium to hold long term bonds. And that's exactly what we're seeing in the 30 year yield right now. So for your portfolio, the playbook hasn't changed. Quality and pricing power are your best friends. In an environment where inflation is sticky and rates could still go higher. We seen names like Coca Cola and Costco perform really well year to date. That's right. Because of this uncertainty. I'm on Wall Street Favorites.com right now and I'm seeing Coca Cola with a $95 price target with some really strong technical signals as well.

[A]

So the bigger takeaway is this. The era of the Federal Reserve holding your hand through every single rate cycle is probably over. Kevin Moore is running a different playbook than Jerome Powell, which means a lot less transparency, maybe more flexibility on timing and willingness to let the data dictate committing to some sort of strategy and doing that in a public fashion. Get comfortable with uncertainty because it's definitely our new normal. Now under Kevin Warsh, Thursday of this Week, the Bureau of Economic Analysis released the advance estimate for second quarter GDP and it came in at just 1.5% annualized growth. Wall street was expecting 2.1%. The Atlanta Fed GDP now tracker has it at 1.54%. This is a meaningful deceleration from Q1's revised 2.1% growth, well below that post 2000 average of 2.3%.

[B]

Consumer spending, which drives more than two thirds of the entire economy, actually accelerated. Real final sales to private domestic purchasers grew 3.9% in Q2, up from just 1.7% in Q1. That's strong. And people are still spending within goods. Prescription drugs, new trucks and furniture led the way. And services like restaurant spending and financial services drove growth as well. The American consumer is in debt. They're just getting squeezed like they have been for the last few years.

[A]

So if that's the case, then why did headline GDP miss expectations? Two answers for you. The first one is government spending has actually declined, primarily federal non defense spending getting cut dramatically. Second, imports surged, specifically capital goods like semiconductors, telecom equipment and industrial machinery. Imports subtract from GDP by accounting convention, even though they signal, you know, strong business investment. So companies are importing the hardware they need to build out this AI infrastructure in the factories and all that stuff. So you think like that's a good thing because like business investing, they, you know, more profits in the future, stuff like that. So I think this GDP print might be a little front loaded from what we might be able to expect from the economy in a couple of years from now when this build out is done and the hyperscalers are actually making a lot of money. So Those are the two main things at play. Bringing down headline GDP, offsetting that stronger than expected consumer spending.

[B]

So GDP at 1.5%, headline inflation embedded in the GDP report at 5.7%. That gap, low growth plus high inflation is the stagflation math we talked about a few months ago and it just got wider. So Austin, lot going on here. Break it down for everyone. What does it mean for you and your money?

[A]

Growth is slowing. GDP miss was real, but private demand is accelerating, so consumers and businesses are now spending more than they were before. The drag again is coming from government cuts and a surge in imports that are sor of like a, you know, artifact of this AI infrastructure build out that we're seeing. You go look at Microsoft and Meta and Amazon. They're importing hundreds of billions of dollars of semiconductor equipment and telecom equipment and things of that nature. And those Imports are showing up as a GDP drag, even though it's actually an investment in future productivity. So the market is going to trade on two things from here. The first one is can corporate earnings keep growing fast enough to offset a slowing gdp? And then can the energy shock from what's going on in the Middle east fade enough before it perman re anchors inflation expectations? Right now, the earnings are definitely doing some heavy lifting. We'll talk about that here in a bit. But Microsoft just posted $90 billion in quarterly revenue. Their cloud business just hit 100 billion in annualized revenue. Right. So earnings are very strong. But it's important to ensure that those earnings remain strong enough to bolster GDP while they're also investing hundreds of billions of dollars in imports that are pulling GDP down.

[B]

Every single one of those important numbers in the GDP report, semiconductors, telecom equipment, industrial machinery, traces back to the AI bu out that Nvidia is the backbone of the demand is real. The revenue is real. But the macroeconomic environment around it is getting more fragile. If you look at Nvidia on Wall Street Favorites.com right now, you'll see that despite the recent price action and volatility with GDP, the price target is still at $318, representing over a 60% upside. From here. We've been talking about it. We both think that Nvidia is cheap, Amazon is cheap. Some of these other stocks are really beaten down and a really good value. But the bigger takeaway here is that we're in a 2 SPE. The AI powered private sector is booming. The government is cutting, energy is the wild card, and the consumer is kind of caught in the middle here. They're still spending, but watching their purchasing power road with every trip to the gas station and the grocery store.

[A]

Well, we talked about here big tax. So let's double click on it with our third and final story with our headlines, which is Wall street is now starting to ask those harder questions about this big tech spending. This was a big week. Big tech reported earnings. And then also we're filming this on Thursday so we get to hear from Amazon later. They've not yet reported a time filming this, but the numbers that have been revealed are becoming impossible to ignore specifically from Wall Street. So the gap between that AI revenue growth and the money spent, that capital expenditure on AI, Right, that's widening at a crazy pace.

[B]

Yeah, Austin, I think we should start with Meta here. Because revenue surged 28% year over year to $60.8 billion. Advertising revenue climbed 27% to 59.4 billion ad impressions grew 14% and average price per ad jump by every top line metric. The business is firing in all cylinders. But earnings per share came in at $6.18, missing analysts expectations of $7.17 by nearly 14%. Net income fell over 14% year over year to 15.85 billion. The reason? Costs rose 55%, which is crazy. Capital spending at 31 billion in a single quarter up 83% from just a year ago. And free cash flow collapsed 90 to just $784 million.

[A]

I'm gonna, I'm need y' all to lock in for a second and hear what we're saying. Meta generated $61 billion of revenue and had less than 800 million in free cash flow to show for it. Right? So think about that. 61 billion but only 800 million in free cash flow. Zuckerberg said there's nowhere near enough compute for all the demand they're seeing and that it would be be foolish to sell capacity for short term profit. Meta raised their full year capital expenditure guidance to now be between 130 billion and 145 billion. So they are just spending money like they're in Congress. And the stock dropped 10% on that statement.

[B]

Now Microsoft told a more reassuring story. Revenue at 90 billion, up 18% in beating estimates by nearly 5%. Earnings came in at $4.81 per share, crushing the $4.24 consens. The Intelligent Cloud segment grew 31.6%. Azure is accelerating, not decelerating. And Microsoft cloud revenue crossed 54.5 billion in a single quarter. This is one hyperscaler where AI spending is clearly translating into AI revenue right now, unlike so many others.

[A]

But the pattern that should concern you is that last week Alphabet, Google, right, reported their first ever negative free cash flow quarter as a company. Negative $5.8 billion after their expenditures doubled year over year to $45 billion spent in a single quarter company, they raised their 2026 capex guidance to between 195 and $205 billion. Right? They are telling investors we're going to go spend $200 billion in cash and reinvest it into our business to go build these data centers and $200 billion. It's just unbelievable. Tesla, they also reported negative free cash flow. So between Alphabet and Tesla, hundreds of billions of market value gone after they report because investors are thinking, wait a second, you guys are spending a lot more cash than we originally expected you to. We're not too comfortable with this anymore.

[B]

Yeah, I feel like this is the era of the AI race and the trust me bro situation of trying to figure out, hey, we're going to spend way more money in this capex spending over the next three more years and we're going to figure out how to get it back later on. So if you think about it, between Meta Alpha Beta, Microsoft and Amazon, we're looking at combined AI related capital expenditures approaching $500 billion in 2026 alone. Meta at 130 to 145 billion. Alphabet at 195 to 205 billion. And Microsoft and Amazon have not yet updated their guidance this week. Those numbers come out in the next 24 hours after we film this episode. But pre existing estimates put them well north of $100 billion combined.

[A]

So Robert, walk everyone through what this means for them and their performance. Money.

[B]

This is the single most important investment question of 2026. Is AI spending a wealth creating investment cycle or a capital destroying arms race? Right now the answer depends entirely on which companies you're looking at. Microsoft is proving the thesis. Revenue is growing faster than costs and AI is clearly pulling customers onto Azure. Meta is vesting for a future that hasn't arrived yet. And revenue is strong. But profits are getting crushed by a capex spending machine running at full speed. Alphabet is somewhere in between. The search business prints money, but the company just went cash flow negative for the first time in 22 years. A lot going on here and a lot to unpack, but we'll keep an eye on it over time.

[A]

So for your portfolio it means this. Not all AI spending is created equal. The market is separating the winners from the spenders. Microsoft 420, $430 a share. Right now, Wall Street Favorites has a price target of $522, right? So Wall street likes Microsoft, but then you go look at some of these other spenders and they're like yeah, we don't like that stock go down 10%. So you gotta there Wall Street's tolerance for the trust US revenue is going to come, right? That tolerance, it's, it's running thin. It's running out. They're starting to say no, no, no, no, we want to see the money, we want to see the earnings. Alphabet, Tesla, they got punished this week. Meta got punished. The market's telling big tech, show us the margins or you're just going to get slapped in the face. Want to give a shout out to Mary Esposito? Money with Mary. She went on the Investopedia podcast with Caleb Silver who's also been on this show Shout out Caleb Silver. And she was talking about being the difference between diversification and wor. And it's interesting, I had never heard this term. Wersification is when you think you're diversified because you have a bunch of different names in your portfolio but all of those same names still operate in the same sector of tech or AI. And so when the sector gets hit your portfolio you think, oh, I'm diversified, I've got a bunch of different stuff. No, you're all in the same and they all come down together. So make sure that your portfolio is diversified and not wors ified with versification or whatever you want to use there for the phrase. I like that a lot. But I think it's kind of important here as we talk about big tech, you know, kind of taking this, this beating at moment because of this capital expenditure stuff. Now let me get this straight, make sure everyone's on the same page. I've got a ton of Apple, I got a ton of Microsoft, I'm going to, got a, you know, Amazon, Tesla, Alphabet, I think it's all great. I'm not selling any of this stuff, I'm buying more. But it's very important to understand why the markets are treating these names differently now. Like that's, that's the whole point of the show here is like you don't have to take action or do things differently, but you do need to know on a daily, weekly, monthly basis why the market is doing the things it's doing. What the Fed's up to, to how this is impacting, you know, big tech, what Wall street thinks about big tech. So you're not surprised by your portfolio one day and you think oh my gosh, oh my stocks are down 2, 3% this day. I gotta run for the hills, I gotta sell everything. Right? No knee jerk reactions. Have full information.

[B]

Yeah, I think that's one of the biggest hills you live on inside of the rich habits network. That I really enjoy is getting people to understand that by having rotation in their portfolio and diversification their portfolio does not mean you're selling out a big tech because it's in a downward spiral. Right. Matter if it's down 10, 20, 30%. Because long term, if you really like these companies and you believe in all of these big tech giants, long term it's okay to rotate some of those profits out because none of these stocks can just go up and to the right forever. They're going to take breathers, they're going to come down, they're going to come back down to earth like Micron has recently and Nvidia and all these stocks, it doesn't mean we're getting rid of them. It means that we're, you know, rotating out some of our profits into some of those Coca Colas and Costco's and other things that are non related and maybe biotech or healthcare or whatever. So just keep that in mind because I think that's a really important understanding of how to have secular rotation of your capital within your portfolio without running for the hills and having those knee jerk reactions.

[A]

And recently Robert, I know we were talking about this inside the Rich Habits network when SMH and SOXX went on these 50, 80, 100% runs in a two month period of time. And I told everyone on our live streams, hey guys, don't chase this stuff, this isn't sustainable. Be careful. These names going up 100, 200% side of these, you know, the semiconductor stocks going crazy. This isn't going to stick around. I'm going to take some profits. And I did, I, you know, took like $20,000 of profits and I moved it into RSP, which is the S P 500 Equal Weight ETF, which is essentially saying I'm going to own the same S P500 index that we all know and love, but it's equally weighted. It's not overweight tech, it's not overweight energy or anything like that. Every single name has a has a weighting in it that's exactly the same. If you go look at RSP's performance year to date versus the S& P, especially during this volatility that we've had in the last month or so. Feel like I made a good choice on that one. So Robert, before we jump to our radar points, I know you've got a couple you want to talk about. I'm excited to learn more about Project Panama, but got to give a shout out to this episode's sponsor, vcx.

[B]

Definitely support for the show comes from vcx, the public ticker for private tech. For generations, American companies have moved the world forward through their ingenuity and determination. And for generations, everyday Americans could be a part of that journey to perhaps the greatest innovation of all, the US Stock market.

[A]

It didn't matter whether you are a factory worker in Detroit or a farmer in Omaha, anyone can own a piece of the great American companies. But now that's changed. Today our most innovative companies are staying private rather than going public. And the result is that these everyday Americans are excluded from investing and they're getting left further and further behind, while a very select few of them reap all of the benefits. Until now.

[B]

Introducing vcx, the public ticker for private tech. VCX by fundrise gives everyone the opportunity to invest in the next generation of innovation, including the company leading the AI revolution, space exploration, defense tech, and so much more.

[A]

So visit getvcx.com for more information. That is get VCX.com and carefully consider the investment materials before investing, including investing objectives, risk, charges and expenses. This and other information can be found in the funds [e-mail] this is a paid sponsorship. VCX right now is trading around 35 $40. Super interesting to us at this price. We talked about it inside the Rich Habits Network last week when it came down from that craziness that people, these traders bid it up to like 2 or 300 bucks a share. We're like, wait, no, no, no, no. That's crazy, right? The nav is closer to like, you know, 30, 40, 50, $60, not 300. And now that we've seen it come back down to like fair market value. Dude, I'm pumped. I. I'm excited. I'm very excited.

[B]

Yeah, I'm definitely loving it at this price. And if you're like us and you believe Anthropic is going to have a massive outcome, then definitely something to keep an eye on. So, Austin, I'm going to jump into my radar points and I'm going to start with Project Panama. Anthropic, the company behind Claude, got caught running a secret intern Panama where they spent tens of millions of dollars buying used books from libraries, secondhand stores and places like the Strand. And here's the kicker. They then sliced them apart with a hydraulic cutting machine. So imagine they cut the binders off, scanned all the pages, millions and millions of pages, and then pulped what was left. So all these cool books over the last whatever, decades of time, they bought, shredded apart so they could teach their programs using the content and got rid of the books. Internal documents showed they converted somewhere between 500,000 2 million books over a six month period to feed their AI training data. The kicker is their own internal planning. Doc literally said, project Panama is our effort to destructively scan all of the books in the world. Followed by a sentence where it says, we don't want it to be known that we are working on this. So some employees flagged it internally because they knew it was basically bringing every criticism of AI companies to life. So what a crazy story. I've been following it for a while now. It's really hitting the headlines. And so maybe there's a world out there, you start holding on to those books. If you have a bunch like I do, some of the older things that are really cool out there, hold on to them because I assume the value is going to go skyrocketing over the next few years as more and more of these older short run books, the more rare books get shredded by these companies. My second story today is Amazon Zoox is finally approved for paid rides. You heard it. Amazon just got approval to start charging for robo taxi rides, making it the first purpose built autonomous vehicle without a steering wheel or pedals. To get that clearance, they've been given free rides in Vegas and San Francisco, racking up over a half million passengers, and will start charging in Las Vegas next month. The NHTSA is capping them, however, at 2,500 vehicles per year for the first two years while they build out the proper oversight and framework and simultaneously announce plans to create the first national AV safety standards, replacing the current patchwork of state and local rules. Worth noting in the competitive landscape. Waymo retrofits Jaguars and Hyundais. Tesla uses the Model Y for Robo Taxi and is testing the Cyber Cab, but Zoox is the first to go fully purpose built. It basically looks like a toaster on wheels with sliding doors and two rows of seats and there's nothing else you have to do but get in and let it work its magic. So pretty crazy story, but I wanted to definitely cover that because Amazon's got a large moat and they are ahead of the game in this rope robo taxi category. And the last radar point for me today is the New York Mets become the first Major League Baseball team to officially partner with a prediction market. What does this mean? Let's learn together. The New York Mets just became the first Major League Baseball team to individually partner with a prediction market, and it's a startup called Novig that's entering a multi year deal to get its branding across Citi Field broadcast and digital activation. Novig has positioned itself as a sportsbook killer, offering market driven odds instead of house driven nods, with their CEO flat out saying sports books are obsolete. So not sure about that. We'll see what happens there. The company just got CFTC approval last month to operate nationwide, is doing a full scale launch in August coming off of a $500 million valuation from a Series B funding round led by Pantera Capital. So those are my radar points all over the board. Some pretty interesting stuff happening and we're always looking for those picks and Shovels plays. And that's why I love our radar points, because Austin picks his three, I pick my three, and we have some fun with it.

[A]

Dude, I'll tell you what, that Amazon one I'm so excited for because Amazon is this business that does 4, 5, 6, $700 billion a year of revenue. I don't even know the number. Hundreds of billions of dollars a year in revenue. But their actual like operating margins are so thin because, you know, they don't have a high margin business per se. Their, their marketplace isn't high margin. Their highest margin business is Amazon Web Services, the aws. And that really drives all of their earnings. But as their advertising business starts to, you know, inch drives margin expansion, as their international marketplace business, you know, has, has wider margins, that that's going to help as well. But now we've got autonomous vehicles, which I don't know how high those margins are, but they got to be 30, 40, 50, 60%. Right. Because there's no driver to be paid. So now you've got these autonomous vehicles. That is a high margin recurring business that. Who doesn't want to go sit in a rolling toaster, Right? Because the, it's going to be a cheaper ride than perhaps a cab or even an Uber. You don't have to talk to someone, someone's stinky, like you're just hanging out little toaster on wheels. Like that to me is interesting. I know they're only at 2500 vehicles right now per year for the next two years. But fast forward 10 years because I'm a shareholder for 10, 20, 30 years. You now have an Amazon that maybe they're doing billions if not tens of billions of dollars of operating margin more because of their autonomous vehicle rollout. With Zoox, I, I think autonomous vehicles are the future. I really, really do. And I'm glad to see there's now like these regulatory frameworks from the NHTSA that you were alluding to. I agree, it's a pat. State and local rules and it's just we need, we need something federal here. But once we get that ruled out, I'm telling you, Waymo, Zoox Cyber Cab, like, like that's going to be the future and these companies are going to print money for their shareholders.

[B]

Yeah, I love it because I think about when you and I go to New York, we do it all the time for events and things we're doing. And my last trip was terrible. So I look at the future of you and I get off a plane, we jump in a Zoox or A cyber cab. We take it to a short little trip over to a joby station, we get on an evtol, we fly over, we've got a Zoox or a cab waiting for us and we go right to our destination. We don't have all of these sticky friction points or like you said, a stinky driver, a bad driver, you know, because the last time we went to New York, I got in a cab and I was running late. I got in an Uber, he was texting and talking on the phone. I said, you can't do that. Pay attention to the road. The guy pulled over when I was already late and I'm like, you can't do that either. And I'm like, what are you doing? All of that goes away and the affordability ability comes way down to make it more convenient for everyday people and travelers.

[A]

Couldn't agree more, man. Now, before we jump to my radar points, you guys know we've been talking about the best tools to take your investing to the next level for a while. Which means if you're not yet using Blossom, you need to be. Blossom Social is genuinely different. At its core, it's this beautiful portfolio tracker. You just link your brokerage, everything sends up automatically. You get the clean visuals, performance, dividends, all that stuff. And it is such an incredible platform to take your investing tracking to the next level.

[B]

Yeah, the UI alone is definitely worth it. It's one of the few investing apps that actually makes you want to check your portfolio and not in a stressful way, but in a wow, really clean way. And here's the part that really sold Austin and I. It's not just our portfolios. You can follow other investors and see their real verified holdings.

[A]

Right? These are verified holdings and not just the trust me bro portfolios. They're broker linked and verified. You can literally see when someone adds a position, trims their position, holds their position, including myself, Robert, you go look at Robert and I's Portfol on Blossom right now. Best part is it's a community of long term investors, not these day traders. Right? We're all about dollar cost averaging into big awesome companies that we believe in for a long period of time. So you're not going to find get rich quick traders and portfolios on that platform. You start to understand how long term investors actually behave, what they buy, what they ignore. The transparency is something you're just not going to get somewhere else. Definitely go check out Blossom Social on the app store and on desktop.

[B]

We're both on there. Our portfolios are on there and people can follow in real time and see the transparency done, right?

[A]

So if you want that clean portfolio tracker, genuinely great user experience and a way to learn from real investors with real money. Go check out Blossom. All of you all need to be on Blossom. Seriously, just go download the Blossom app, go follow Robert, follow me, whatever you want to do here. Link your broker, link your public, your, your Robinhood, your Schwab, your fidelity, I don't care. Link it all together so you see your stuff, right? If you're not tracking your investments on a quarterly or biannual basis, like you are not doing rich habits, right? You want to know your net worth on a quarterly biannual basis. Are you doing better, worse than the S and P? How are you benchmark, right? Are you doing like what's going on? You need to know that information. So Blossom, super, super simple way to do that. Could not recommend the application enough. Link in the show notes below for that or visit blossomsocial.com on your computer. Go to the App Store Blossom. All the good stuff. All right, Robert, so let's talk about my radar points. My first one is situational awareness. You've probably heard of it online. It's a very popular fund, kind of like the Cathie Wood of our AI time right now because Kathy was cool like five years ago anyway, the one that built entirety around the AI infrastructure thesis, right? The all of the holdings were around this AI infrastructure. The fund just blew up and they had to sell its entire public stock portfolio to Ken Griffin's Citadel. The fund peaked at a $45 billion valuation essentially in early July, but got crushed on both sides recently. The long positions in these AI infrastructure plays like SK Hynix, Nebia, Sandisk, Micron Core. We've all down 30, 40, 50% from recent all time highs though we record this here on Thursday. Nebius is up 26%, Bloom Energy up another 24%. So a little bit of a rebound today, which just tells me my boy Leopold sold the bottom. Unfortunately, short bets against software companies like Adobe moved against him as well. The big brokers that were helping him move this money were scrambling to meet margin calls and marketing these positions for sale before the market opened on Thursday. Ashton Brenner is the 25 year old former OpenAI researcher who graduated from Columbia as valedictorian at 1980 years old. He built this hedge fund around this widely read 2024 essay arguing that AI is going to require a massive build out of chips and memory and power infrastructure, which is all true. Like all of it worked. He just wasn't a good hedge fund manager per se because he took on 4x margin and like all this stuff that didn't work out. So sorry to see it man. Hope you come back soon. But like I think we can all learn from this of like hey, let's maybe not use margin when it comes to something as volatile as AI stocks. My next radar point is Apple partnering with Klarna to offer leasing products. So Apple just launched a full device leasing program through Klarna called Apple Upgrade, replacing the old iPhone only upgrade program and expanding it now to the watch, the Mac and the iPad. The pricing is notably cheaper, right? An iPhone 17 Pro drops from 57amonth to 32amonth on a two year lease. And at the end you can return it, you can upgrade it, you can buy it outright for a one time fee. But the timing here is strategic. Apple raised prices on their Macs and iPads by $2 dollars last month because of surging AI demand for memory and storage. We talked about this on the show. So it's a smart move now ahead of the CEO transition because some of these consumers are looking at these higher prices like I can't afford this. Well maybe you can't afford to buy it outright. So let's figure out a different way to finance this and let's do this leasing program with Klarna. So Klarna massive distribution win for them. They're getting embedded now into Apple's ecosystem. Maybe worth looking at the stock. In my opinion though, you shouldn't be leasing your iPhone. That's kind of silly. Go buy it. Last thing I want call out Here is Joby's 2025 impact report came out this week. Joby dropped that report and the numbers tell a story of a company that's actually getting close to launch. And they completed over 850 flights across five aircrafts last year. Two and a half percent increase. And became the first electric air taxi company to fly that routine pilot inhabited transition flight through the full envelope from vertical takeoff to cruise down to landing. They're expanding aggressively across these markets. Flying 41 demos at the World Expo in Osaka, starting test flights in Dubai, partnering with Virgin Elastic for UK Services and acquiring Blade's air mobility passenger business to build out those commercial operations. We had Blade CEO over here on the show recently knocked it out of the park. I see Joby stuff, I talk about it, I learned about it. I think Joby's such a cool company and I can't wait to have someone from their team back here on the show. Environmental angle is actually really compelling if you ask me. Their aircraft generated 47% fewer emissions per passenger mile than a gas car and 94% fewer than a helicopter on a 41 mile LA commute. With 97% of their facility electricity coming from renewable energy. That's great. Count me in for that. I like that, Robert.

[B]

Yeah, I agree. My biggest takeaway from your radar points, they were great today, but my biggest takeaway is with situational awareness because Leopold was the darling of the AI race and the irony here is so thick. This is the guy who wrote the intellectual playbook for the entire AI infrastructure, trade, and now he just became the biggest casualty of the business. So like you said, hope he comes back from this really smart guy. And it's just, you know, it just really leads people to understand why the Rich Habits Network and the Rich Habits podcast is so important. Getting people to understand, diversify, think in long term, not in months. And please don't operate under leverage like he did with this fund because when the banks start calling on you, you have nowhere to run, especially when you have 2, 3, 4x leverage on your account. So I hate to see it happen, but I love to be able to use it as an educational tool to get people. It's okay to do it by the books and not get greedy and think long term and have diversification.

[A]

Yeah, it's not just okay, it's encouraged. Right. You should just be investing. Robert says it all the time. It's like watching paint dry with ice cream at the end. I mean, you just. It's boring, it's simple. But if you do it right, you're going to compound in the right direction and it's. It's all good. Everybody. If you enjoyed this episode of the Rich Habits Radar, please consider joining us inside the Rich Habits Network. We're still running a seven day free trial. We had 118 people as of today's filming sign up for the Rich Habits Network. In the month of July, 118 people joined us.

[B]

Crazy.

[A]

Why aren't you the 119th person? Right. There's obviously over a hundred people in July that have really enjoyed it. Our retention's 98%. People stick around. They love it. We have nearly a thousand people now inside the Rich Habits Network. What are you waiting on? So many people love it. You could be the next and we'd love to have you. So be sure to join us over there. Just Google Rich Habits Network or click the link in the show notes below. You'll find it on the Internet. It's very easy to find, and we're grateful. And we can't wait to see you over there.

[B]

And don't Forget Wall Street Favorites.com. we're very proud of it. I think it's the best tool on the Internet to help investors of ilks be able to figure out are they on the right track with their current portfolio, how to research other stocks that maybe they don't own so they know what Wall street thinks about every stock. It is an incredible, incredible tool. So make sure you check that out as well.

[A]

Thanks, everyone, and we'll see you on Monday. Sam.