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Rich Habits Podcast
Special Guest: Caleb Silver, OpenAI's $1 Trillion IPO, & Meta's FAKE $16B Tax Bill
00:37:52
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- [00:00]
A
Public.com presents this episode of the Rich Habits Radar, a new 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. My name is Austin Hankwitz, and I'm joined by my co host Robert Kroke. The three things sitting at the top of our Rich Habits Radar this week include OpenAI's $1 trillion IPO rumor, Jerome Powell, and the Fed announcing rate cuts while while still holding firm that December's decision remains a toss up in Trump's trade agreement with China. Now be sure to stick around to learn more about Nvidia becoming the world's first $5 trillion company, something we'll dive into later. Robert let's dig into our first story.
- [00:41]
B
Definitely OpenAI's $1 trillion IPO OpenAI, the company behind ChatGPT and Sora, is reportedly preparing for what could be the largest IPO in tech history. According to Reuters, they're laying down the groundwork for a public offering that could value the company at up to $1 trillion.
- [01:02]
A
Now. Right now, OpenAI is rumored to be doing about 20 billion in annualized revenue, so that is up from just a few billion last year. But the rumored plan is to raise around 60 billion from investors, likely in 2026 or 2027. So don't be thinking about you can go to your public app and go invest in OpenAI right now. It's not an IPO anytime soon. We'll see it either next year or the year after. Now the capital would fund massive data center build outs, custom AI chips in further expansion of their enterprise platforms. Now Chat GPT Robert is a fun stat, has over 800 million weekly active users. Could you imagine reporting those weekly active user data on an earnings call? And Sam Altman just talking like just, that's just wild to me.
- [01:46]
B
It is just so crazy to think of a company that big is still private and we're deep in the AI boom. Nvidia is now a $5 trillion company. Microsoft owns roughly 27% of OpenAI, which means their stake will be worth nearly $300 billion if they IPO and the public markets are hungry for direct exposure to the rise of artificial intelligence. So what does this mean for you and your money?
- [02:12]
A
It means that a trillion dollar valuation equals OpenAI now being priced in the similar realm of Apple and Amazon. And despite being nowhere near their level of profitability, their compute costs remain massive. Competition for AI is everywhere and regulators are foaming at the mouth trying to figure out how do we make money off OpenAI and clamp them down from growing even more.
- [02:37]
B
So while this could be a once in a generation ipo, it's also a reminder that valuation doesn't equal value for investors. A smarter move right now might be looking at the picks and shovels instead of the chip makers, the data center, REITs and the cloud providers powering the AI productivity boom now that brings us.
- [02:55]
A
To our second headline news story here, which is the Fed cutting rates but still remaining undecided about further rate cuts. So Federal Reserve Chair Jerome Powell delivered a clear message for investors earlier this week who assumed that rate cuts would just be on cruise control toward a third cut now in December, he said not so fast. Instead of hiding behind his normal cryptic in vague language, Jerome Powell went out of his way on Wednesday to amplify that there is current division taking place in the Rate setting committee, alluding to the fact that another rate cut in six weeks might not happen. In his own words, they said they are far from it.
- [03:34]
B
What the Fed will do next depends on which of the two economic narratives prove to be more accurate. Number one, AI investment and productivity boom will continue to power business and consumer spending. Or number two, the effect of higher rates combined with changes in trade and immigration finally catch up to the labor market. Unemployment higher if the Fed stops cutting.
- [03:56]
A
So here's our take. Jerome Powell is out of a job starting in May of 2026. Him and President Trump never really liked each other too much. They always kind of butt heads. So we think that Trump will put in a yes man person, right, that's going to continue to cut interest rates dramatically as we head into the back half of 2026 as well as turn on that quantitative easing engine, money, printer, whatever you want to call it. So now the real question is Robert, what does this mean for you and your money?
- [04:24]
B
Yeah, definitely. Every single time the Fed cuts interest rates within 2% of all time highs and the US economy avoids a recession, the S&P 500 rallies by double digits throughout the subsequent 12 months, which we think this time is no different. Again, assuming we avoid an economic recession with AI productivity going through the roof, we've begun to see hundreds of thousands of middle management jobs get cut all across the board. And let's see how that shakes out over the coming quarters and years.
- [04:54]
A
Now joining us to help make sense of all of it is Caleb Silver, the Editor in Chief at Investopedia. Caleb, welcome to our new Friday episode, the Rich Habits Radar. I'm so excited to have you here. We're Actually hanging out in Nashville, was it last week. We were, we were together. That was fun, dude. That was a lot of fun.
- [05:11]
C
That was fun. So good to see you in Nashville and hang out even just for a few minutes. But what a great city, What a great town. And I enjoyed our time together. But good to be with you guys as always. I enjoy your show so much.
- [05:21]
A
Thank you so much, man. Now, you sent us a ton of insider info from Investopedia on investor sentiment, AI bubbles the economy, highly searched for stocks, fun information like that. But before we dig into that behind the scenes data, we want to get your take on the Fed. Right. We just saw the rate cut, but Jerome Powell made it clear that they're not on a rate cutting frenzy right now and that despite seeing the unemployment rate tick a little bit higher, they're still weighing their options. So what's your take on what the Fed's doing at the moment?
- [05:51]
C
Yeah, I think a lot of us and a lot of consumers and investors were expecting the Fed to cut another time in December. But Fed Chair Powell basically saying that is not a foregone conclusion. Not at all. I think that's when a lot of us spit out our coffee during that press conference. We what does it mean that the, the means that the Fed is not sure what to do next because it has a lot of this uncertainty. It's being pushed and pulled in two different directions based on its mandate. First part of that mandate is price stability control inflation. Inflation's around 3%. The other part is make sure we're at full employment, which is around 4% unemployment. And we've been ticking higher. And even though we're not getting jobs reports because the government is still shut down at the time we're talking, the Fed knows that the job market's slowing. We're hearing it from big companies. We're like the Amazons of the world. We're also hearing it anecdotally from private payrolls. And we also know the replacement rate in the labor market isn't adding up. Right. More people are leaving the labor market than are joining it. So the labor market's in a soft spot right now, but inflation's in a decent spot. That's why the Fed doesn't want to commit to future moves. That's why we're going to be in this range for a little while. But next year I expect rates to go down and to the right.
- [06:55]
A
I like the sounds of that. Down into the right for interest rates. I'm here for it. Now, what I thought was Pretty interesting to kind of observe is like as we look around the world and look at all the different central banks from all these different countries, We've seen over 300 rate cuts over the last 24 months, which is the highest number of rate cuts on a rolling two year basis since the great financial crisis. And despite this, the United States is just kind of starting their rate cutting cycle. So I guess the main question I have for you when it comes to this is do you think that Jerome is behind the eight ball when it comes to cutting interest rates?
- [07:28]
C
Well, I know Jerome Powell gets all the attention because he's the one that's got to face the music, face the press conference, wear the purple tie and talk to the rest of us. There are 12 voting members of the FOMC that all weigh in on this and actually chair Powell saying yesterday in the press conference, they're split, and there's an even split within the Federal Reserve right now of people that governors who think that we should be cutting more aggressively to stave off even more weakness in the labor market and those that say no need to cut more. Inflation's kind of, we've just controlled it after a few years of inflation kind of running sky high on us. So I get that there's this dissension within the Fed and maybe they're a little bit late, but the economy's actually in decent shape. People don't feel that way at all, by the way, except for the very wealthy who feel like everything's fine and everything is fine if you're very wealthy. But most people, when you look at consumer confidence, when you look at consumer sentiment and people's outlook for the economy, don't feel like things are going that well. But if you look at the headline numbers, actually it is.
- [08:21]
A
You know, that reminds me of what downtown Josh Brown shared recently on his Instagram. I think it was a stat that 50% of consumer spending is coming from the top 10% earners. More, even more than that, that.
- [08:35]
C
No, he's right about that. It's the high, it's the, it's the most, it's the wealthiest consumers doing the spending, flying first class, going to Positano, you know, go and take it in the Broadway show, spending money on experiences. And the rest of the economy is just really getting by paycheck to paycheck. Even worse for those caught in the middle of the government shutdown.
- [08:54]
A
So let's jump into some of this data here. You've, You've asked over 800 readers of Investopedia's website a ton of cool questions. So let's kick off with this first one. The first question you asked them was how do you feel about the marketplace right now? Walk us through some of these responses.
- [09:10]
C
Yeah, that's the vibe check. And we've been surveying our newsletter readers. These are our newsletter readers who get our newsletters every single day. So they're engaged, they're in, they're invested. A lot of them investing on their own behalf. They tell us right now they're cautiously optimistic, but they feel like something's bubbling in there. And what's bubbling in there is a bubble in some of the assets that they own but also this uncertainty about the economy. But we've been living with that for the better part of a year. We've actually been living with that for the better part of several years. Yet they remain invested because all time highs will keep you going back into the market and they don't know what else to do but keep buying the same stocks they buy every couple of weeks through their 401ks Roth IRAs and defined contribution plans.
- [09:49]
A
So just kind of looking at this data here, right. 59% of your readers said that they are optimistic in general about the stock market. We've got 13% saying they're hesitant, 21% saying skeptical. I like the word skeptical a lot while only 1% are panicked. But 4% saying hey, I know when to walk away and now's that time. So it's really interesting to see the bifurcation there between like essentially 60% of people feeling good about it, the other 40% kind of being on their heels a little bit. I personally, after seeing the earnings of the Googles, the Metas, the Microsoft's of the world, seeing that all of that Capex spending, right, hundreds of billions of dollars, like I feel pretty good about how things are trending up until the right at the moment. But again a lot of it is more than just earnings. It also comes down to the economy, jobs and, and how everybody's spending money and it's, it's all very important to keep in mind.
- [10:40]
C
Yeah, and, and when you look at those responses it sounds like the American investor at different age groups feeling optimistic about the future, some people wanting to protect the gains that they've had over the last really 20 years. When you think about all these different bull markets we've been in but there is this skepticism, this, this growing fear that maybe things have gone a little too far too fast and if the economy is not as strong as a lot of them believe that it is. How can the stock market be doing this? Even though we know they're very different things, a lot of people equate them as one and the same.
- [11:08]
B
Yeah, that's where I was going to go with this, Caleb, is that so many people because we live in this world now where everything's in our face 247 between Instagram and X and and everywhere else that people just overreact to these headlines and you know these bulls are very loud and so are the bears. So we always have to like make sure people don't have these knee jerk reactions over every single headline that they see. And I mentioned this on our live last night in the Rich Habits Network that I was looking through X for a couple hours yesterday on my flight and I felt like about 60% of the information in there was either heightened or a blatant lie because there's so many initiatives and so much manipulation in the markets. So I really like your takeaway on this, Caleb.
- [11:50]
C
Yeah, and people are sensitive to that. But at the same time these are self directed individual investors who are educated. They know what's going on inside their portfolios. Yet they've also been kind of loading up on the same heaviest, biggest stocks in the stock market for years and years and they have really big positions in the Nvidias of the world and the Microsofts of the world. We like to ask them and I think we have it in the results there. What's their, what are the top 10 stocks in your portfolio? And guess what? It looks just like the top of the S&P 500 for the most part. Which shows you that we're all kind of concentrated in the places where we think that there's a bubble. We're afraid there might be a bubble, but we're not afraid to get, we're afraid to get out of it.
- [12:25]
B
Yeah, well they've just had such outsized returns for the past few years, it's hard to get out of it. But I think that's one of the cool things Austin does really well is he tells people, hey, when you're getting that large of a return in one sector, whether it's Nvidia and Micron and AMD and all them, you can always take some money away from that, put it in these basket of low cost ETFs that we talk about and give yourself a little more safety from greater volatility. So I think that's an important part for everyone to understand. And that leads me into the next question you guys also asked. Do you think Any of the following sectors of the stock market are currently overvalued and this blew my mind but 61% of respondents said AI related stocks are overvalued and that really does check out. So walk us through that. Were you surprised? Do you agree and what is your take?
- [13:17]
C
Those stocks, AI stocks in particular and big tech stocks, mega cap tech, are overvalued. When you look at the standard valuation metrics that we grew up using to valuate to evaluate stocks, price to earnings, price to sales, price to future sales, all the grade metrics and, and the terms that are on Investopedia, these are the classics. And yes, these are above levels that we saw in the 1999 Internet bubble and maybe even bigger than what we saw in the telecom bubble and in the railroad bubble. But this is a very different type of industrial and technological revolution where the gains long term are so vast and the amount of spending that's going on tens of billions of dollars a quarter by some of the biggest companies in the world. A lot of them getting punished for overspending right now. But they are, for them it's an, it's a zero sum game. So they're going to keep spending until they can control the AI ecosystem and all the data and information on us to sell us more things. And so this looks like this is the beginning of something very big versus the Internet bubble where we were unsure. We knew the technology was important, we knew that medium was very important. But there was a lot of things that came and went very quickly like Pets.com and other stocks like that that fooled us. There's going to be some in this wave and in this mania as well. That's what happens when you have a big industrial or technological revolution. There will be little bubbles that pop and maybe not a big giant above the ground swimming pool that somebody takes a, a samurai to, so to speak.
- [14:40]
A
Yeah, we completely agree with that sentiment. Right. We think that there absolutely are these, you know like the no revenue nuclear energy companies out there that are 18, 19, $20 billion in market cap. Not going to name any names, but there are some names I'm looking around like you guys aren't making money but you're a multi billion dollar company that seems a little bubble ish. Right. So that there's definitely that happening. Absolutely. But to your point as well, I don't think this is a, you know Google and, and you know Nvidia and Microsoft and, and meta these names that make up the top 5, 7, 10 companies in the S P and the Nasdaq they're actually delivering earnings. We just also heard from Jerome Po. No, this is very different than the dot com. Right. These companies are actually generating revenue and profits. Now I've got the chart shared on the screen right now in the podcast for people that are watching. But for those of you who are just listening to the show, I'm going to walk you through. Right. The results as to. Again, that question is, do you think any of the following sectors of the stock market are currently overvalued? 61% said AI related stocks, 55% said mega cap tech. But this one surprised me. 49% said cryptocurrency right now is overvalued. I just, you think about it looking around like if it's Bitcoin or Ethereum or these other altcoins, we haven't seen that blow off top. We haven't seen that crazy, you know, 20, 22 NFT or 20, you know, 17, whatever, kind of just parabolic growth in the sector. I wonder why. Essentially half of the respondents over here were just saying no. I think crypto's overvalued. That's interesting to me.
- [16:14]
C
Yeah, just even the word overvaluation when you're talking about crypto almost doesn't make sense because what are you valuing it against? Right there is. It's hard to do that when there's no underlying asset like, like the dollar or gold, except for the stable coins. But I just feel like they think, especially those that don't own it and have been skeptical about it, feel like the numbers are crazy still and they've gone, gotten bigger and bigger every single year. I mean, bitcoin has returned some 5 million percent, you know, over the last 14 years or so since it came on the scene, we've never seen an asset like it. So I think a lot of people say, well, that I don't understand why it's worth anything or why any of these cryptocurrencies are worth anything. So by, by that standard, they're always going to be overvalued. But relative to other asset classes, especially in the last couple of years, that has been a little bit of a tighter correlation. Except for the parabolic rise that's happened over the last 10 to 15 years, that's very different. Now we know it's a mature asset, especially Bitcoin, and it's becoming a bigger part of institutional investing. It's become a bigger part and it's going to be opened up to our 401ks. Really, the door is wide open for the Big cryptocurrencies out there. So they think they're bubbly now. Just wait a couple of years.
- [17:18]
B
Yeah, it's crazy to me because if you do any searches, because I still think we're pretty early to crypto. Not saying we're going to have this huge blow off top, but I think we're pretty early. But if you read up, it clearly says that only 14% of US adults even own bitcoin. So when you think of it from that perspective, I feel like we still have a long way to go. And how I've kind of looked at the market is you see so many retail investors I feel like are stuck over here putting all their money into AI instead of crypto because now they have a different option that's fun and sexy. But meanwhile all of the big banks and hedge funds and everybody are all in on cryptocurrency and putting in hundreds and hundreds of millions of dollars. So it's kind of a slippery slope on where is the crypto market going and when.
- [18:06]
C
Yeah, well, also this administration is very favorable towards crypto and being close to power. Proximity to power has been the best recipe for return across the capital markets period in 2025. And I expect that to be the case for the next several years. Companies are on the wrong side of this administration. They're not doing well. If industries are on the wrong side of this administration's agenda, they're not going to do very well. But you see this administration getting very involved with the private sector with cryptocurrency, with a decentralized finance, and those sectors have been booming really for the past seven or eight months.
- [18:36]
A
Now, this next question was actually my favorite one that you asked your readers. It's if you had to buy one stock today and hold it for the next 10 years, which stock would you choose? And the number one response was Nvidia, which makes a ton of sense to me because I truly believe that we are just rebuilding this earth with AI in mind and Nvidia is going to continue to benefit from that. But do any of these names surprise you? I'm looking at it right now. I've got it on screen for our people who are watching. We've got Nvidia, Microsoft, Google, Walmart, Amazon, Apple, a little bit of Berkshire Hathaway, Tesla and Palantir. But we also see some names like intel, IBM, JP Morgan, Oracle, Meta was actually a very small one here, but Boeing. Right. Do any of these names surprise you, Caleb?
- [19:20]
C
I think it really represents, you know, the, the age of the readers at Investopedia 18 to 80, you can see the older investors there have been holding on to a lot of these dividend paying stocks. And God bless them, dividend paying stocks are great for years and years and they're not willing to let go of them. They've also, you also see some people there that are probably owned Berkshire Hathaway for a long time and are definitely not willing to let go of it and want to hold it forever because it's been the source of great wealth creation probably for them and their families for the past several decades. So that really represents to me the age of readers. But what it also represents to me when you look at the stocks that they own today and the stocks they say they would own 10 years from now, buy and hold for 10 years, they are very similar. There's a lot of overlap there which just tells me even more that we just keep piling in to the same stocks, the same indexes year after year, week after week. Every time we get paid through our 401ks or through our IRAs or Roth IRAs, we buy the same things, we buy the same ETFs, we buy the same index funds and we buy the same stock. So yeah, you got a lot of concentration. You get overweight in a lot of these sectors, but they become almost like dividend plays in and of themselves or value stocks in and of themselves because they have delivered the returns. And when you look at the play the stocks and the sectors that are delivered the best returns over a 10 year treasury or over your money in the bank, it's been those names, but it doesn't necessarily mean it'll be those names ten years from now. But we stay loyal to the same stocks. And just this year alone we've missed out on some of the best performing stocks in the market. They are not on that list except for a couple of them.
- [20:48]
B
So Caleb, the final question you all asked that I wanted to highlight was if you have an extra 10k right now, where would you most likely put it in? And they could choose from options like cash savings, pay down debt, cryptocurrency, things like that. And a whopping 19% of respondents said individual stocks, which tells me the retail investors risk appetite is definitely growing. And interestingly enough, since we just covered cryptocurrency, only 3% of respondents said cryptocurrency. Maybe we won't get that year end blow off top like we were expecting as it seems as if retail has moved into these individual stocks like AI that we discuss. But what is your take on these results. And most importantly, were you shocked about the 3% for cryptocurrency?
- [21:31]
C
Now that sounds like the retail investor in America today. We have, we are less exposed than other countries to cryptocurrency. So, you know, they're the people that have early adopters and the people that have gotten to it over the past couple of years. Still a relatively small percentage of the overall investment pool out there. But it doesn't surprise me because we like to ride with the same horses that got us here and the same horses that got us here. A lot of us, a lot of individual investors over the past five years, 10 years, 20, 25, 30 years have been big individual stocks. You have done very well by buying the indexes and you've done very well by buying the biggest ETFs in the market. But you've done even better if you said max 7 big, you know, fabulous 10, fantastic 10, and picked the 1012 biggest stocks in the market that have been growing their profits the most and that have the highest revenue per employee. And that's, I think, one of the most important metrics right now in the market. Right now we're looking for efficiency and profitability. If you've owned those stocks, you have generated a lot of wealth and you're unwilling to let go of it. So this question about what you would do with an extra $10,000, the ultimate discretionary investment question, and the fact that most people say they would still buy individual stocks doesn't surprise me at all. We're willing to take a flyer on some of the biggest stocks that have delivered some of the best returns and stick with them. That doesn't surprise me one bit. Sounds very much like the American investor in 2025.
- [22:50]
A
Well, here's a shameless plug. If you are someone who wants to build an assets class ETF of your own index around efficiency, right. Revenue per employee at one of these companies, Generated Assets.com, which is owned by Public.com allows you to sort of just build your own. This little chat GPT action. You say, hey, go find 20 companies that have the highest revenue per employee and let me invest into it. And you can go do that on generatedassets.com so it's really interesting, Caleb, that you had mentioned that like specific characteristic of what you think are to be some of the most successful companies. And I agree. Right. We're looking over here and we're seeing hundreds of thousands of jobs being either one not hired for because of AI in the middle, sort of middle management roles. Or just getting laid off right now in the month of October that we're here inside of at the moment. And it's all about efficiency right now. And you're seeing the stock prices go higher because less employees means higher margins on the bottom line. And it's just, it's a really interesting kind of dichotomy we're in where we're seeing stock prices go higher despite the underlying economy continue to trickle lower with the unemployment rate rising and things like that. So revenue per employee, I really like that call out.
- [23:59]
C
Yeah. The stock market and the economy pulling in different directions and I think that's just going to be amplified over the years to come as investors are going to demand to see results. Profit margin expansion from the use of AI given all the money that these companies have been spending on it.
- [24:14]
A
So if you guys are obsessed with Caleb Silver's take all the time as it relates to the markets, the stocks, the anything and anything we're talking about here, Caleb, tell the people where they can find you, where they can listen, where they can subscribe, where they can just take in all things Caleb Silver and Investopedia.
- [24:31]
C
Well, thanks and don't take in too much Caleb Silver, but if you must, at Caleb Silver across all socials at investopedia, of course, investopedia.com we've been here for 26 years providing free financial education to everyone and anyone and anyone is welcome on in. We got over 40,000 articles on the site and a huge dictionary, of course. And then if you want to hear more of me babbling on the Investopedia Express, there's the merch right behind me there. The skateboard, the hoodie, the Investopedia Express podcast live every Monday on all socials and then on demand on every podcast platform. So come one, come all and thank you so much for having me. I appreciate you.
- [25:06]
A
Thanks for joining us, Caleb. Robert, I love conversing with Caleb. I feel like he is such a smart person and he deserves that editor in chief spot at Investopedia.
- [25:14]
B
Definitely. He always crushes it for us and just really love having him on the show and it's so cool to get another really deep dive insight into everything that's going in. We always talk about reading the tea leaves in the markets and he's really good at understanding all of that information and sharing it with our followers.
- [25:33]
A
Now let's round off this episode with our third headline, which was Trump meeting with Chinese leader Xi Jinping and declaring immediate cuts to tariffs. So Trump and Xi met face to face for the first time in six years. Earlier this week, they left the meeting with a temporary truce in the trade war after agreeing to a 10% reduction in U.S. tariffs on Chinese goods in exchange for a pledge by China to crack down on the trade in the chemicals used to produce fentanyl. After this reduction, US tariffs on Chinese imports are at 47%.
- [26:10]
B
China also promised to ease the exports of rare earth metal materials that Western manufacturers rely on heavily to make things like EV motors, smartphones, laptops, as well as wind turbines. China also promised to buy tremendous amounts of American soybeans, which is all good news.
- [26:28]
A
Chinese leader Xi said to Trump during the meeting, and I quote, I always believe that China's development goes hand in hand with your vision to make America great again. Our two countries are fully able to help each other succeed and prosper together. Trump said he thinks the US And China will be able to sign a trade deal pretty soon and that there aren't many blockers left to stumble over in getting a deal done. As a reminder, this podcast is not anything politically motivated. We are quoting things we are not trying to say Trump is making America great or not great. This is just a quote so no one go freak out in the comments like y' all normally do. So Robert, what does this mean for you and your money?
- [27:03]
B
I love that takeaway because people get so mad when all we're trying to do is educate how they can make more money and how they can function in uncertain times. So what does it mean for your money? It means that the markets can finally settle down and the headlines should begin to ease up, allowing for investors to finally take a breath. This offers stability rather than a back and forth trade tariff war and hopefully a resurgence of our agriculture and semiconductor trading channels. We're optimistic this is the fuel to a continued stock market rally.
- [27:37]
A
And remember, rallies come with speed bumps. This was very much a speed bump, as is the government shutdown. Right now the Fed kind of saying, well maybe we don't cut rates. December, right? That's a speed bump. Market rallies come with speed bumps all the time. What's important to remember is that being a net buyer of assets, right? US equities, real estate, cryptocurrency, precious metals, alternative assets. Being a net buyer of assets is how you build wealth over a long period of time. It has nothing to do with the day to day, week to week, month to month headlines that are dominating your social media feeds right now. What matters is the habits that you implement on a daily, weekly, monthly basis that allow you to consistently invest because if you are consistently and intentionally investing into the S&P 500, the NASDAQ 100 and just assets in general, building wealth becomes inevitable.
- [28:28]
B
I think that's a mic drop moment and everyone just needs to lay off the headlines, keep the knee jerk reactions in check and do what that man just said and everything will be just fine. So let's now jump into our rapid Fire section of the episode.
- [28:42]
A
All right, Robert, I'll kick us off here. So my first rapid fire is Google's record 102 billion doll in quarterly revenue. As a reminder, these rapid fire sections are just Robert and I taking some things that caught our eye and making sure that you all are aware of them. Now, Google reported a 16% surge in quarterly revenue with growth in their digital advertising and cloud computing leading the charge. Their cloud computing unit, which has grown as a result of the race to deploy AI globally grew revenue by 34% during the third quarter. The company also said that their ChatGPT competitor Gemini now has 650 million monthly active users as query have tripled over the last three months alone. Despite this, their search business delivered $57 billion of revenue. The thing that everyone was scared that Chat GPT was going to replace up 15% year over year. And the best part is the company announced $92 billion in capital expenditures for 2026. Now jumping to my second piece. Microsoft's aim to double their data center footprint. Microsoft CEO said during their earnings call this week that demand for their cloud services are so great that Micro being forced to boost their AI capacity by more than 80% this year and then double their total data center footprint over the next two years. Microsoft now expects to spend much more than they had previously guided toward and despite this, they will still not be able to meet demand. Their cloud computing Azure business unit grew by 40% during the quarter. Which just goes to show that yeah, they're going to need this new capacity. Now remember, the money that Microsoft is spending on their data centers is revenue for other companies that are helping them build those data centers. Think Arista Networks, Eaton Trane and Applied Optoelectronics. Now Robert, my final rapid fire piece here. Gotta talk about Nvidia becoming the world's first $5 trillion company. Shares of the stock were boosted by everyone's excitement around AI's potential, but more recently a flurry of deals and partnerships with some of the biggest companies in AI and corporate America. Talking about OpenAI, Oracle and Nokia, and then also Eli Lilly as of late. Nvidia is now larger than here we go amd, ARM holdings, asml, Broadcom, Intel, LAM Research, Micron Technologies, Qualcomm and Taiwan Semiconductors combined. Right, all those companies combined. Nvidia is larger than all of them by market cap. Now here's where we need to pay attention, Robert, because in September, Nvidia agreed to invest up to $100 billion into OpenAI, which would allow the startup to build and deploy at least 10 gigawatts of their systems for their data centers. Now, Nvidia and I just saw this today, they just invested another billion or something into a company called Poolside. But Nvidia has backed a ton of AI startups. So if heavy spending in this sort of AI race begins to cool down a little bit, specifically as it relates to startups and you know, if they're not getting the revenue that they expected, not only Nvidia lose out on revenue in the future, but also their equity investments will go down in value dramatically. So we'll see what happens with that. I'm more on the bullish side of the equation, but you got to give both sides of the story.
- [32:02]
B
Yeah, I think Nvidia has the war chest of all war chests, so I'm not too concerned with it. And I think all of these investments in these startups and all these other major, major companies is a huge win for them because, you know, high tides rise all ships. So I'm going to get into my rapid fire today, Starting with number one, Meta's $16 billion accounting wizardry. We did a deep dive into this and everyone saw the headlines saying that Meta had a $16 billion tax bill. Here's the real story. They didn't actually pay $16 billion. What happened is because of the new one big beautiful bill, Meta had taken an accounting hit, hit a non cash tax charge, basically saying our future tax breaks aren't worth as much anymore. It's like marking down the value of a coupon that you can't fully use later. So their profits for the quarter dropped on paper, but no cash actually left the company. That's the important thing here. And it's a reminder that corporate accounting, what looks like a massive tax bill, can sometimes be just a balance sheet adjustment. So don't lose faith in Meta. I still believe they have a large upside through AI integration in their advertising base plus their growing user base, which is still a thing. So keep that in mind. Number two for me, important because I live in Florida, is that they're proposing Florida property taxes to be eradicated by 2027. If approved, this will end property taxes on all primary homes only. So it's really cool because DeSantis is on board with this and they are backing a constitutional amendment that would eliminate all property taxes on primary residences throughout Florida, which I think is huge news for the Florida market. So if you're considering getting down here, I would really, really up that and start moving faster on this because no property taxes is going to mean a housing boom here. Now, however, here's the caveat. It only applies to primary homes. It won't apply to second homes, rentals or commercial property. So you'll no longer have property taxes on your primary home, but you would on any investment properties that you may have down here. And my last point today is JP Morgan Tokenizes Private Equity Fund on its Own Blockchain the banking giant said Thursday that it tokenized the private equity fund on its blockchain platform and is offering that as availability to the wealthy clients served by its private bank. This move comes ahead of JP Morgan's broader rollout next year of its fund tokenization platform, and I believe it's called connexus Fund Flow. So that's a tricky word. So basically what it means is tokenization lets the bank offer clients a digital representation of the ownership of an asset that lives on the blockchain ledger. And despite past wariness of crypto, banks have long espoused the potential of the blockchain technology that underpins digital currencies to streamline their businesses. Those are my three hot takes for this week on the radar. And I'm so excited about all these because I think it's just further great news of where the economy's heading, where crypto's heading, and just so many opportunities for all of us to build greater wealth.
- [35:14]
A
I think the big call out for me is to make sure people that do live in Florida that are like, whoa, I don't have any property taxes, now I'm going to start saving 5, 8, $10,000 a year. No, it's just you won't have any property taxes on the county level. So about a third of your property taxes get PA to school, right? School related property taxes. That'll still come. So you're still paying about a third of your property taxes, whatever you're paying annually, but the other 2/3 could potentially go away, which is still very exciting.
- [35:42]
B
Yeah, great call out because you will still have a portion of taxes, but.
- [35:46]
C
You won't get away with it all.
- [35:47]
B
But I love it because, hey, I'm down here in Florida and I think it's going to be a great opportunity for people because I've always felt, Austin, that it's not right that someone can pay off their home, live in it for 30 years, but not truly still own it because they have to pay the property taxes forever. So this changes things and we'll see how it works out.
- [36:07]
A
So here's the deal. We are going to skip this week's Q and A section of the episode because we had Caleb on and we don't want to have this become an hour and a half long episode. I know that you guys like how short and sweet these Friday episodes have become, so come back next week and we absolutely will answer more questions from side hustlers, entrepreneurs, business owners, or anyone else trying to get their income up. As a reminder, please check out the Rich Habits Network. There's going to be a link to it in the show notes below. Subscribe to the Rich Habits newsletter and be sure to also learn more about our Multi Asset SPV where any accredited investor listening right now can invest alongside Robert and myself into SpaceX, Perplexity, Xai, Mr. Beast's Beast Industries, Katy Perry's Desoi Graza, the olive oil company Acorns, and a ton of other awesome privately held companies.
- [36:59]
B
Yeah, I think this multi asset portfolio is definitely the coolest thing we've ever put together and you guys put in a ton of work and I'm so proud of it and so excited for all of the people that follow along on the podcast that are part of the community because it's just some of the greatest companies out there that are privately held still and this is a tremendous opportunity for people people to get involved pre ipo.
- [37:21]
A
Thanks everyone for tuning into this week's episode of the Rich Habits Radar and we will see you on Monday. Sam.