Transcript was automatically generated.

0:00:02 – Announcer

Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on Main Street. 

0:00:16 – Frank Curzio

Let’s go down there to August 6th. I’m Frank Curzio. This is the Wall Street Unplugged podcast. We’re going to head to the headlines and Tell you what’s really moving these markets. Daniel Creech, what’s going on, man? How’s everything? 

0:00:31 – Daniel Creech

Hello Frank. Everything is wonderful, sir, Glad to be back with you. 

0:00:35 – Frank Curzio

You’re traveling, I know right, let’s not talk about my traveling. 

0:00:38 – Daniel Creech

Let’s talk about your traveling. 

0:00:39 – Frank Curzio

We missed each other last week, right. And I went upstate, my upstate house in Oneonta, New York. It was great. Near Oneonta it’s called Stanford, New York. What a great time. Just the air, the mountains, so different from Florida. It was actually the day before I got there it was 90 degrees and the next night it was 49 degrees. 

0:00:58 – Daniel Creech

You’re going way up north, right, you’re not going to the city. You’re like upstate, yeah, upstate, yeah, not going on. You’re in the beautiful area. 

0:01:04 – Frank Curzio

Really really nice up there. It was really cool. So we’re in the middle of the earnings season a lot going on. But first I want to start with Howard Stern’s show. It’s going to be canceled after 20 years. What do you think, man? 

0:01:16 – Daniel Creech

I love listening to that guy, holy cow. 

Well, I’m impressed with him from the standpoint that he’s had such a long career in just audio and broadcasting and such let’s see. For a long time I wasn’t allowed to listen to Howard Stern because of the craziness that he always had on there. And then I listened to him for a little bit. I’m not the biggest fan, but I respect the. Like I said, I’m a huge fan of broadcasting and audio. He’s no Rush Limbaugh to me, Frank, but I got to respect the guy and he was making a hundred million dollars a year. Yeah, oh, I was unaware of that. 

0:01:45 – Frank Curzio

I remember when they signed that deal and he was back and forth and everything and I forgot to create a CEO series because I covered series when I was with Kramer 20 years ago and I said the deal has to go through with Sirius and XM. I mean, it’s just that they said that Justice Department said it would not be fair and it’s a monopoly. I’m’m like there’s so many ways you can listen to music now. So just, uh, you know traditional radio, you know you can just listen to your favorite tunes on spotify and stuff and apple. But it was amazing to see, you know, how long that relationship lasted. I mean, he’s such a pioneer. It just, you know, disrupted when the best interviews of my generation if you have his interviews are fantastic. Uh, he never did what he’s told, right right, which made him disruptive. It was really cool. But I was just surprised in the past, like you know, five years or so, how easily influenced he was Because he went really left, you know. 

0:02:36 – Daniel Creech

And it’s okay how influential he was or wasn’t. Like he just he’s I would say he went way downhill. 

0:02:41 – Frank Curzio

No, he went way downhill to the point where, look, you could hate Trump, you could hate Biden, I get it. But when you say I hate everyone that voted for Trump, that’s a different story. I don’t hate everyone that voted for Biden. I don’t hate anyone that voted for Trump. 

0:02:53 – Daniel Creech

I mean, that’s what you believe. He actually said that. 

0:02:55 – Frank Curzio

He was comparing the Nazi, I mean, and he’s Jewish, I mean. Come on, you know the it definitely hurt his viewership, right. So it’s you know you got strong opinions about it. But when you’re calling everyone on that side like an idiot for voting, it’s kind of like you know it’s crazy. So, but 20 years. 

0:03:13 – Daniel Creech

Was he making money? Do you know, as a you know, like the Colbert show got canceled, they were losing estimates 40 million a year. Was his show making money? I believe his show was making money. I believe his show is making money. I believe his show is making money. 

0:03:24 – Frank Curzio

I’d be curious about that. Without him, sirius wouldn’t exist. That’s why they had to sign him to a monster contract and you know he put their feet to the fire and signed that contract. It was great for him. That’s what really got everything going. They started getting every single car is equipped now with Sirius for six months for free and stuff. I mean, they just did a great job building that brand, because so it was really on the verge of going under during the credit crisis especially. So it was because of him. That brand is where it is today and now it’s great. So I think he cut it down to like two days or something. 

I mean, I haven’t really been listening to him as much anymore. It’s hard to listen to someone who just tells you that says, hey, you’re an idiot for listening to me. Again, we go back and forth. We have our opinions on politics as well, but not to the point where, hey, we think anyone who did this is an absolute idiot. You’re going to vote for whatever. I mean kids are going to vote for things that favor them, that favor your family. Everyone’s different, you know. So you know some topics and you know are just much more important to some people than others and that’s what influences your vote, if it’s Democrat or Republican. But it was just yeah, it was pretty crazy, but yeah, 20 years, and I was just surprised to see that. 

0:04:30 – Daniel Creech

I was like, wow, so that’s it, he’s retiring. Is he retiring or are they canceling him for some other reason? I don’t know. I just it just came over the wire saying that they’re canceling him. So I don’t know you, because his interview with Biden at the end there, yeah, that was hilarious, yeah, that was kind of tough. 

0:04:50 – Frank Curzio

That just proves anybody can broadcast, which is he always asks the right questions and I hate it like the talk show hosts, where it’s all scripted. They’re asking them all Like he would ask some tough questions and go crazy. I really enjoyed that, but anyway, you know, 20 years and he did a lot longer than that that’s just 20 years of serious. So, yeah, it’s pretty cool, but anyway, I was just surprised to see it across the headlines and I want to start with all these earnings, Daniel. But I really want to start with some of the economic data we’ve seen. I mean, the market got crushed because of job numbers. We saw positive GDP data, but also, you know, just, it was several things right. It was also ISM. Manufacturing was really terrible. The jobs data was terrible and hurt the markets at first and the markets have come back a little bit and after that you see Trump firing the BLSU. 

What are your thoughts on the job numbers and what’s going on there? Because just the revisions and these constant revisions. I see it. I see what’s going on with the revisions. It’s pretty crazy. We covered that numerous times. It comes out with great numbers almost every single month. 

I mean, if you want the facts here, biden had 48 job reports. Forty-five of them were revised lower. I mean, the statistics don’t support that, unless you’re doing it on purpose. I’m being honest with you. I’m a statistics guy. You can’t be wrong 45 out of 48 times. Okay, you just can’t. 

There’s something wrong with the system. It’s broken. You got to do something different about it. You can’t be wrong 45, especially with a number that comes out that the markets trade over, people hire over, they look at it, they gauge sentiment over and then a month later they get, and not just a little bit. I mean June and May tolls were revised by a combined $250,000. Right, I mean the nonfarm payrolls came in $73,000 in July and expecting $100,000 is bad enough. But then, you know, june and May were revised much, much, much lower. Right, by a combined $258,000. There’s something broken there and I don’t know if that was the right idea to fire him. And I get people saying you know why are you firing the BLS chief and stuff. But what are your thoughts on it? Because I think something needed to change, right? I mean, it’s a report that’s pretty much, you could argue, the most important economic report that there is, and it’s wrong, every single freaking month. 

0:06:56 – Daniel Creech

Yes, it’s the 45 out of 48. I heard Gunlock say that I was searching. I would assume it’s about that for Trump. And the problem is and I agree with you something has to change and this is a macro level. And what I don’t like and this is a funny transition from politics, Frank is because I think there’s some changes that are needed. I’ll go over a few things, but it doesn’t matter, because if it happens under President Trump, then it’s bad by half the people and it’s so polarized. But that’s the world we live in. You just got to get around that To your point. 

On the job revisions, I was using just Google, grok, chet, gpt. That’s hard to say for me, Frank. The revisions of over 200,000 for the past two months, looking back, was greater. No matter how you slice it, Frank, if you want to look back five years, 10 years, you can go back 25 years. Typically, you have plus or minus 10,000 job changes in the revised number. Let’s double that and say 20,000 plus or minus. You’re at 100 plus thousand for this Now, just in the last two months. The way they calculate this data and gather this data is going to make you laugh. And again, if Trump wasn’t president, I think this would be fine, but did you catch Jeffrey Gundlach’s, the Bond King’s, interview on CNBC yesterday? 

I didn’t see it. No, he said some amazing things. I’d encourage people to listen to it. He was on for about a half an hour. I believe it was yesterday or yesterday the day before the way they calculate the data and I’m not talking, and this is CPI data, so the Consumer Price Index, as well as the BLS Bureau, labor Statistics they send out these surveys to thousands or hundreds of thousands of different components and, Frank, I have to admit I didn’t realize this. If they don’t fill in the data and turn it back in like a homework assignment, do you know what happens to the data and how it’s filled in? No, the Florida guess about it, do they? They estimate it and they say Frank, you know what? Frank hired two people last month. He didn’t fill out the survey, but we’ll just say he hired two more people, like last month. Or if milk was this price last month. 

0:08:55 – Frank Curzio

What’s your response rate? Isn’t it like 60? 

0:09:00 – Daniel Creech

It had a great chart and the response rate is, uh, has been trending down. I mean, it’s the worst chart. It’s going from the upper left to the bottom right, not what you want to see when your money’s involved, but this one, the response rate, it’s hovering around the 60 and change I saw some different charts on that. The overall takeaway there is it’s going lower. Um, the bigger thing to me is you just kind of guess and here, here’s the here’s the lesson I think in this. It here’s the lesson I think in this. It’s not the problem that estimates or guessing for lack of a better word are part of the equation. If that’s part of it, that’s part of it. It’s the outliers and how wrong or how crazy it gets at times. And so when you look at the 258,000 jobs revised, like I said, that is two, three, four, five times the average norm going back, basically, anytime you want to look at it, what we talked about, Frank. And last thing, here and again, I’m not saying this is all a conspiracy, I’m simply saying this is politics and if you’re not paying attention or believing us yet, hopefully this kind of data proves it, because it does seem very coincidental at best. Now, the 818,000 jobs that were revised lower from March 2023 to 2024 is what got our attention. We talked about that during the Biden administration because it did look very political in our opinion. Now, how does that compare, Frank? 800,000 later got revised to about 600. So they revised it lower. Let’s use round numbers. Even the 600,000 mark was one of the highest since 1979 on a year-to-year basis. 

Wow, okay, so we’re talking, we’re not just saying now, trump’s messaging I would argue and even admit it brings a lot of criticism, and rightfully so. He uses words like rigged and corrupt and all that kind of stuff. But I think he should explain the process on how this is gathered and all this kind of thing. But I think he should explain the process on how this is gathered and all this kind of thing, because I think your average person like us and like our listeners would say, yeah, there’s got to be a better way with technology. You hear all this about blockchain and AI. Maybe we’ll get to that in a second, but the revisions are one thing, the gathering of data is another. And then, also on this Jeff Lee Gunlock interview yesterday Frank and I was using Google machines and AI supposedly, and he said years ago, mr Gunlock. He said about 8% of CPI was estimated or guessed. And again, that’s not bad by itself. That’s part of the process. I don’t know what years ago meant he said today it’s around 35%. That’s insane. Now let’s just recap. 

0:11:24 – Frank Curzio

That’s insane. 

0:11:24 – Daniel Creech

We are the superpower of the world and I’m having fun here. We are getting our data, which is extremely questionable by both sides, and it should be. I’m not arguing that you have Trump firing people. That’s been there for 20 years and this is the better thing I heard in one interview. Well, the top person doesn’t even have a thing to do with these numbers. Yeah he has nothing to do with it, then fire the whole Florida department. 

0:11:44 – Frank Curzio

Yeah, whoever’s not looking at that. You know, get rid of everything. That was a joke, that statement was a joke. Well, he’s not directly. Yes, you are. You are. It’s like the CEO saying, oh well, that division did bad, it’s not my fault. 

0:11:55 – Daniel Creech

Yeah, exactly. Yeah, who are thing here on data real quick is it should be an open conversation or a transparent conversation. In my opinion and we’ve talked a lot about the data and you have to question it under both regimes you can’t. You can’t question it. And then under Biden and not Trump, we’re not playing that game. Frank, I’ve talked about this true flation. I want your opinion or you can take it from here, but I want to leave everybody with this. 

The way we gather data and everything. Again, the process isn’t the problem, it’s the outliers in the situation. So you have to fix that. And with all the technology we’ve talked about Truflation, truflationcom you can look at it. I’m looking at it right now, Frank. It says inflation is running at 1.74%. The only reason I point that out is because you can read transparent or the transparency is great on this. 

You can look at how they gather their data in real time and all that. You don’t have to believe it. The point is it’s 1.74. You compare that to the recent 12-month CPI data that just came out recently. It’s at 2.7. That’s a 55% difference. That’s huge. I’m simply pointing out there’s a lot of gray area in where some real-time data and I’m not taking them as gospel. There’s one gospel you heathens and 55% difference, Frank. I just think there’s a lot of gray area in there. I think this is a great conversation for all investors and the markets, but I think, because of who the president right now is, it’s not going to happen in a nice way, and that kind of bums me out, to tell you the truth. 

0:13:18 – Frank Curzio

Yeah, I mean, if you look at the job numbers, you have a chart up, you could see how big those revisions were and it goes from 2022 the monthly job creation in the us from january 2022 to july 2025 and the revisions were significant I mean they’re the low two lowest numbers we have on this table in terms of months and since 2022. 

Uh, I don’t know if I agree with him firing him on the spot like that, but I I’m a her on the spot like that. I’m sorry. But the data you know how important it is to us. It’s everything right If that data is wrong, if you’re not getting the right information. That’s why we do very well on this podcast, because the information we get a lot of times is from our listeners who work at numerous companies around the world, have their own businesses and highlight a lot of stuff even data centers and AI and different trends like that, and cloud and just work across all types of fields right, so cloud and just work across all types of fields right, so we get in real-time information. That’s the biggest thing. You need the data to be right. 

The CPI has been horrible for such a long time. We’ve covered this. It’s been revised 30 times over the past whatever 27 years or something like that, to make sure to keep that number as low as possible. That’s why rentals are such a big part of the CPI. I mean, rental prices usually never went up, even during the credit crisis or pre-credit crisis, when housing prices were going up 20% annually For like a four year stretch. We didn’t really see that from the rental income. So they’re like let’s put more focus on rental income, because it keeps inflation lower. Every president wants that, no matter who’s in office, democrat or Republican. And then all of a sudden it came to bite us in the ass when rentals were going up 8% 10% a year recently, and that’s when we saw this massive increase in inflation, which caught a lot of economists off guard. 

So I agree with you, Daniel the data’s got to be better. There’s no excuses now with AI, but you can’t cover the fact that when you’re looking at the last 48 job reports, 4,500 are advised lower. That’s a broken system. You got to change it. I don’t care who it is, it’s a broken system. It’s pretty much the most important data point that people look at in terms of the economy, in terms of the world that the US is growing. It impacts so many other economies. Hopefully it changes, hopefully we get this right. But yeah, definitely want to lead off with that. 

0:15:21 – Daniel Creech

Not to beat a dead horse, but last, sorry, this will be an ongoing headwind. No matter what happens going forward, data is going to be questioned and investors need to understand that and take that into the bowl of ingredients and how they decipher things, because you’re going to have to just take everything with a pound of salt and then that’s why you know what you own and why, and all that kind of stuff. But I’m just saying this is not a one-off time, in my opinion. This will be questioned and again President Trump brought that on himself. I don’t agree with the way he fired it. I would have fired everybody on day one, like every other president. I don’t know why anybody is still sitting in an office and holding a job that isn’t appointed by you. That’s the way that Florida game works. But anyway, just be prepared for that going forward. Sorry. 

0:15:59 – Frank Curzio

And it’s good to know, because a lot of those numbers are going to be questioned all the time now. But guys, we’ve said this before If you want a good indication economy, open your freaking eyes. Okay, I travel all over the place. I see lots of things. I talk to lots of people. Talk to your cab drivers, talk to people, look at your neighbors, look what they’re buying. Look at the prices in your grocery store. Look at the price that you’re paying for every single off. Are you seeing stores as crowded as they used to be? I’m not seeing. This is why I said Chipotle’s going to fall off a cliff because the stores aren’t crowded. They’re not good. 

I actually went there the other day. They had no chicken. How do you have no chicken at Chipotle? They had no chicken. I was like are you kidding me? They had two people working there. I’m like no chicken being cooked. I’m like holy shit. You could see that people get. You buy everything. You shop your car, your house, everything around your prices. Pay close attention and talk to your friends and you really could get a good indication of what’s going on with the economy. Trust me, it’s helped me tremendously when it comes to recommending stocks, to getting out of stocks. But yeah, the data is going to be a question going forward. How important is that data? It’s very important. I mean, look at Palantir, palantir just reported great results. 

0:17:07 – Daniel Creech

Daniel, this is one we’ve been on. How long have we had that in the portfolio for you? Put me on the spot. Last we recommended it last. Give me one second May of last year, may 8th, we started it. 

0:17:18 – Frank Curzio

And what’s that? 

0:17:19 – Daniel Creech

around. Do you have the price there too? Well, we added to it one other time. So our combined price is $2,408, is our cost basis. Okay, where it’s $177. Today we did sell half at $125-ish a share, but yeah, the second half is still up about $640 right now. 

0:17:34 – Frank Curzio

Okay, so why is data important? Let’s continue on this theme, and we have a lot to talk about with Palantir. Okay, they blow out the estimates. It’s through the roof. 

And when you look at Palantir, everyone has been looking at this stock saying you know, you have to avoid it. You have to avoid it. It’s horrible. The P ratio is over 300. The price of sales was over like 70. And still, the P, the forward P, is over 250. Price of sales over 50. 

What we said is look, you know, being in this industry for a very long time, you can’t analyze this company and a lot of companies are just looking at a P-E ratio. You have to look at their growth and you have to look at their total addressable market. This is why most people miss Netflix. This is why most people miss Microsoft. This is why most people missed Amazon 20 years ago, because they were like, holy shit, all these traded 100 P-Es and now, look, they’ve filled into their growth because their total addressable market increased dramatically and they captured a portion of it, and these are trillion-dollar markets, some of these things that they’re in. 

When it comes to cloud and AI, when you look at a metric that I always use I really haven’t talked about. It’s called the rule of 40. The rule of 40, and you can find an article on CNBC. They did a great job with Palantir the revenue growth rate it’s the revenue growth rate plus EBITDA and if that equals 40%, pretty simple, or higher 40% is a benchmark. If it’s over 40%, that’s very, very good for software as a service companies. This formula was invented by Bradfield, who is a venture capitalist, and it’s meant for mature companies those generate at least $1 million in monthly recurring revenue, or even bigger than that. It’s not startups all over the place and you’re going to see huge growth. If you’re trading about that 40% threshold, you see these businesses do very, very good and the higher the number, the better the business in terms of growth, profitability. 

And these are the companies in this industry that deserve the highest premiums and, as we know, companies with high premiums. Usually they’re going higher because their stock price is going a lot higher, but they deserve it if they continue to grow. So everyone’s focusing on PE and everyone’s focusing on price to sales and saying this stock is crazy. We were buying the shit out of this company, which is great for our investors and having a portfolio, Daniel deserved a lot of credit. We had a back and forth on this. As he walked by, he goes hey, this one’s on me. I said, hey, buddy, my name’s on that newsletter. This is 100% Daniel, right? I mean we both like the stock, Daniel. No, we followed the stock for. 

0:19:45 – Daniel Creech

Sorry, but we followed the stock. If you pull up a long-term chart through COVID, it rallied and rallied, rallied and then it crashed to under 10. And we watched it from under 10 and talked about it a lot until 15. And then we started pulling the trigger in the 20s. But that’s kudos to him. 

0:19:58 – Frank Curzio

So, getting back to the valuation really quick, there’s a lot of of stocks in this camp. At the rule of 40, that’s over 40. It’s Microsoft, oracle, crowdstrike, salesforce, servicenow, zoom, twilio, datadog, shopify is up 22% today after earnings, but these firms broke 40 and some got to 50, which is an amazing number. Palantir’s when it comes to the rule of 40, so it’s a growth rate plus EBITDA, it’s 94%. It’s almost impossible to see a company and now I mean you may see it in a quarter, but in the past three years it’s been over 85%. I don’t think I’ve seen another company with those kind of metrics. It’s just showing how much this company is growing, how much money they’re generating. It’s a good indication of that cash flow of the business that’s coming in, of the growth and they’re in. They happen to be in one of the biggest growth markets that we’ve seen since the creation of the internet and we said they’re going to capture a large portion of this. 

Stop looking at these other metrics. And when it comes to data, you have to be able to not be fixed on a certain model because there’s not one model that works. I’ve been doing this for 30 years. If there’s one model that works, the whole entire world will use it, and that model was used during a credit crisis. Oh, housing is going to go higher. Everyone pour your money into housing. Everybody pour your money into housing. Then you get the greed factor coming in Holy shit. And then you realize what’s going on under the hood. With all the massive leverage that no one knows about crashes if everyone goes in on one side. That’s what happened. You always have to be able to adapt If you adapt. That’s how you learn. 

For me, I missed Netflix early on, scrooge Tron, I missed Microsoft, I missed Apple. I’m like what didn’t I see? Because I avoid them for the same reasons. People on CNBC talk about this shit all the time. They’re like well, it’s crazy PE, look at the price of sales. They even said it today. David Fabian said it today to Kramer. He’s like oh well, the P, the price-sales ratio. Stop looking at that metric. It hasn’t worked at 10, 20, 50, 80, 100, 120, 150, and now 180, and it’s going to go past 200. People are still citing the same stupid, effing metric. You’ve got to update if you want to make money. There’s no stubborn to this stuff. You’ve got to be able to understand what’s driving some of these stocks higher because I could tell you, when it comes to palantir, it’s great to to have that in the portfolio, it’s great to see people make a shitload of money on it. 

But that was made because of the mistakes that I’ve made in the past, that Daniel have made in the past, where we miss stocks like this. And for me, I want to know why do we miss it? And we didn’t miss this one. Okay, we didn’t miss core weave. We didn’t miss circle. You know, we didn’t miss CoreWeave. We didn’t miss Circle. We didn’t miss AVAV. 

These are great companies that people did amazing on Even Bitcoin, ethereum, ethereum. I think we recommended 150. It’s like 3,600 to 24X on Ethereum. That’s what makes or breaks, not just your portfolio, everything you could have. How many losers with a winner like that? 

But you’re looking at these winners. They always come from buying some of the most expensive stocks. I mean you could buy something that sells off and stays cheap, but it’s a lot of these like the Microsoft Look at the Mag7. Always been trading at a premium, most of them. Google’s a little bit, not so much, and you know, I think that’s a great buy as well as Amazon. But most these stocks are trading expensive valuations because they’re growing super fast, because that rule of 40 is over 40% or 50%, because they’re capitalizing, they’re growing and they’re increasing their market share in one of the biggest total addressable markets. Try to focus on that. It’s where a lot of our winners came from. Again, that’s about learning the data, just like we said with the jobs market. But I just thought that was a good segue into Palantir, which is rocking and rolling again. 

0:23:26 – Daniel Creech

Yeah, All you Kid Rock fans out there. Kid Rock has a song about being cocky. It’s not cocky, mother, if you back it up. 

0:23:34 – Frank Curzio

And. 

0:23:35 – Daniel Creech

Palantir. And granted, like I said, I’m not I love Frank’s fired up and passionate about that and I’m with him because we do take a lot of heat for this. But again, it’s like you know, at 50, at 75, at 100, I’m not saying we’re not saying it’s valued correctly, we’re not saying it’s not a high valuation, we’re simply saying when are you going to stop letting that get in front of something that’s clearly going down a different path? And to your point, Frank, a couple of highlights. These are year over year Revenue US revenue growth 68% higher, 17% quarter to quarter sequentially. 

Us commercial revenue growth remember this story was at the beginning. It was just a AI killing machine, government only working about that, and there was a lot of truth to that. That was their big component. Us commercial revenue grew 93% year over year 20%, quarter to quarter. Government revenue grew 53% year over year 14%, quarter to quarter. And one of the big deals is commercial versus government. The percentage of revenue coming from the commercial is up to like 30 some percent now. So that is massive growth. 

And why do you want to know that? It’s because Frank’s talked about this. It’s because not only can they help our allies in our country, which CEO, alex Karp. I just finished his recent book. His mindset is America first, america’s the best and we’re going to give them a 10-lap lead in an 11-lap race. And this guy is all in on that and I respect that. 

I know some people don’t. I know a lot of people that didn’t buy the stock because of his beliefs and that’s fine. The point here is these guys are making money hand over fist and really what is not impressive? But Frank, they just they have such a retail component and you know market shift and, as Frank was saying this, you got to be able to adapt. I would argue, Frank, tesla was big leader in this Elon Musk and had this cult like following, and I mean that out of respect. I’m not that’s a compliment, not a dig. 

Alex Carr literally talks to the retail investors on the conference call. That’s a compliment, not a dig. Alex Karp literally talks to the retail investors on the conference call, Franks, I mean he talks directly to them and it’s us versus them and them as Wall Street and the haters and the short people and all that kind of stuff. So these kind of numbers are absolutely growing. And one thing that caught my mind or my attention is Karp talked about growing 10x from here with less employees than they have today, highlighting the benefits of AI and their models and all that kind of stuff. It’s just, man, I mean it’d be hard to buy here if you haven’t bought any of it, but, man, this is an absolute buy on any pullback. 

0:26:00 – Frank Curzio

Yeah, and I will tell you that was one thing that he said about the employees and growing 10x with few employees, which you’re going to see out of every of the Mac 7 companies. You’re seeing that now, where Microsoft’s just laid off employees, you’re going to see a lot of these guys lay off employees. They’re capturing the benefits of AI, which is incredible. They can’t be too public with that because it means that employees are getting fired and it just doesn’t look good in the headlines. But I will tell you one of the other things that came across which I love Karp’s comments when he said college degrees, even from top universities, do not matter. Once someone joins a company, their past educational background is not important. We make a new credential, independent of class and background. At Palantir he’s actually said that you know, focus on a specific world view within universities, which he describes as a new religion rejecting the West, and can hinder genuine learning and problem solving. I have two daughters that are one’s about to look at colleges now. She’s a senior, the other one’s just going into high school and I really believe the whole entire college system is so freaking broken. It’s completely broken. I mean, how much do you really take from college and that’s okay if you’re going to pay $20,000. It’s costing $50, 60 grand to go to college now. I mean, it’s freaking insane, right. And you’re looking at these kids and how much debt they’re going to be in and, yes, I’m a good dad, I’m going to be paying for that for her, because I work hard and I could do that for them, right, and I’m in that position, which I’ll never apologize for, because I worked my ass off to do that, to give them a better life. That’s what we all want to do as parents. And I got to tell you just a college system of what they’re going to learn and what they’re forced to learn, what they have to take. I mean, how about learning about entrepreneurship? How about learning about open up a brokerage account, bank account? You know just classes that they’re going to use, where maybe you don’t just want them to be a typical worker, because we know, like you know, you want them for a shot to own their own business or be really high up the chain, and, yes, you could go to the Ivy League schools and achieve some of that. But I can’t tell you how broken that system is. Where you know what are you really paying? You know, $250,000, for what are you getting? I mean so many people. How many people use our college degrees? And yeah, if you’re a lawyer, you’re a doctor, you’re going to use it, that’s fine. But how many people really use what they learned in college and can apply it to what they’re doing right now in life? And a lot of people will be like, no, not really Right. So you know, it’s just crazy when you see this. 

I said this to him. You know, I can’t train anyone to work hard. I can’t. I can’t train people to work hard. You know that’s. But I could teach you a lot. I could teach you what I know, but all I need from you is that commitment. I need you to be able to bust your ass. I need you to be able to, you know, work your ass off. And that doesn’t matter about education, that comes from inside. So if you have the ability to learn to put your ego aside and work your ass off, I could teach anyone. That’s what CEOs want. They want people who are going to bust their ass be proud of the company they work for. 

It’s not so much of that degree, because I don’t know how much of that degree you’re actually going to use and you could email me Frankkirzerresearchcom. Of course there are. There are lawyers, doctors, you’re using your degree, maybe you went to Ivy League and you’re in big investment firms or whatever, and I get it. But for the most part, when you’re looking at 80%, 85% of these people that are paying this amount of money to go to college, what are their benefits? What are they getting? For him to come out and say this, I was really happy he said it. I think this is a big deal. Inflation has gone up I think it’s 8x. When you’re looking at the rate of tuition has gone up 8x over inflation. Just, the whole entire system is broken. How it’s paid for, how you’re forcing these kids into debt. The whole entire system is absolutely broken and it needs a reset. It really does. 

And having kids go to college I’m telling you I’m going to be proud they’re going to go to college, I’m going to pay for it and stuff like that. I’d rather just teach them every single AI system, learn AI system, learn everything about all the AI systems which is going to teach you how to become a better writer. They’re showing how the tutors, through AI, are much, much better than traditional tutors, how they’re better traditional teachers, just everything’s good at anything, whether it’s math. It’s going to have everything right at your fingertips to learn to be more productive, and having that is so much more valuable than actually spending money. Learning all of that in terms of AI and what it could do in terms of your writing, your skill set, anything Every single industry is going to be disrupted. If you want to get into Pixar studios, movies, whatever, making games and stuff, I mean everything’s being disrupted by this. 

To me, it gives you an avenue to go so many different routes compared to going to college and you take a major and you decide to switch and next thing, you know, know, you’re at 240 grand or your dad’s out 240 grand. Like I’m gonna be with both of them, but seriously, I really like that. He said that. I’m a believer in that. It might be different from people out there. 

I like to hear your stories too, what you think because there’s a lot of you that your kids are going to college and then they finish college and like, well, what am I gonna do? And it’s totally different from what they learned in freaking college, which they paid a fortune for. So I don’t know. I just I’m glad he said that Somebody had to say it and you know I think Jamie Dimon has said something like that in the past. But you know it’s getting more and more true where you don’t have to go to the biggest colleges and the most expensive colleges to get really, really good jobs, and I think that’s going to be a big factor of people learning and being better at their jobs and stuff like that and being more productive. We’ll see how that trend works out. I just wish that trend would happen before I’m paying for my first tourist college, which is going to be very, very expensive. 

0:31:15 – Daniel Creech

Try community college. First Get all the electives out of the way somewhere easy. 

0:31:18 – Frank Curzio

Yeah, I know, I know it’s just all this craziness, but okay, let’s move on. Palantir good numbers, let’s go to Disney. 

0:31:24 – Daniel Creech

Oh boy the mouse house. 

0:31:26 – Frank Curzio

Disney’s down today after reporting earnings. People might be like why is Disney down? Their earnings are pretty good. They were okay, they were good, they beat Revenue came in a little bit light. It’s down 3%. It’s at 115 still. The high was 124, low was 80. I’m looking at it right now just to see this year, performance Year to date. It started at 110. It’s 115. So it’s underperforming, probably a little bit underperforming the Dow year to date. Don’t even look at the five-year, you’ll kill yourself. It was 135 years ago. It’s 115 now. So when I look at these numbers and I look at Disney, I do like a few things that they’re doing. 

They did a great deal signing the NFL Red Zone channel, which some guy, Daniel on CNBC, was on yesterday and talked about this and said they’re going to announce it for the quarter. They announced it last night before they reported. I don’t know why you announced that the night before. That’s something good to throw into the quarter, but they announced that they signed a deal with the NFL NFL’s receiving 10% equity stake in ESPN. They needed to sign something like that. Also, they signed a deal with WWE because no one’s going to buy ESPN streaming for $30 a month. It’s a shitty brand. You don’t have all the sports. The Red Zone channel is going to help. 

I’ve always said that, even when it came to DirecTV, that it is such an important property having the NFL rights where you can watch every single game. That’s why I subscribe to YouTube TV. It took the air out of Hulu, I think, which is why Hulu has been in business the longest streaming service and still has not really made a lot of money, but maybe a few people will purchase it now, so it’s a big deal. It gave away a lot. The new subscriber ads was expected, since they have massive promos out right now signing up $4.99 a month for three months for the Disney bundle. So disappointed that Disney did not put out its average revenue per user for streaming, because it’s going to be a lot lower because of this promotion. At least I didn’t see that. 

But looking at the quarter and I always break this down for Disney most of the gains you’re seeing are not going to be gains you’re going to see over the next 12 months, because most of those gains are due to cost cutting. They’re due to price hikes firing people. Look at ESPN how many people did they let go? It’s not new business coming in. So they’re cutting content, which is great. It’s going to increase earnings. However, there’s a reason why it’s the only streaming platform where advertising revenue is going down Crazy, right. So you know why is that? Well, if you don’t have really great content, people are not staying on your site. As long as they are where it comes to, you know, a Netflix, a Paramount, which has great series right now, and HBO Max and stuff like that. 

I do like the the park in the Middle East. That’s great, but a lot of this is listen, we’re increasing prices. We’re lowering our costs. What’s the growth model? Is the growth model ESPN? Because I don’t see it. You tried ESPN bet. That was a nightmare. Where’s the growth coming from? Is it going to come from streaming? I don’t know. 

If you’re growing so much in streaming, why are you offering this discount across the board to everyone? For you know, $3.99, $4.99 a month for three months for the Disney bundle. You don’t see that Netflix is not offering discounts for that. They’re raising prices, right, and I know why Disney’s raising prices because it’s easier to break into Fort Knox than it is to get out of a Disney Plus service. Let me know if you find out. I try all the time. It’s hard to cancel your Disney account. It really is, and they make it hard. Most companies make it hard. To be fair, they don’t want you to cancel and you just give up. You’re like to hell with it. Next thing you know you’re paying for a few months. But I don’t like the stock here. I think it’s fully valued. I don’t know what the catalyst to buy the stock is. What are you going to raise prices for? I don’t see that. But Disney’s putting a lot of money into streaming and they’re competing against the biggest companies in the world with the biggest balance sheets, deepest pockets, and those guys this is like their third or fourth division. They really don’t even care about it. 

Did you see F1, the movie with Brad Pitt? I didn’t see it yet either, but I think it generated $300 million or something in the movies and I was so surprised to see this. Don’t quote me on this, but after the first weekend or something like that, I mean they marketed the hell out of this. It was everywhere, all over every freaking social media site, and you know what Apple said. They said well, almost that break even If you’re generating $300 million in revenue. 

So think about the marketing power that Netflix has, that Apple has, that Prime has, which is Amazon, with the amount of money they have in terms of their marketing, compared to Disney. And Disney okay, fine, you’re getting their best content goes out in the movies first, but when it comes to their streaming platform, you’re looking at companies that could spend so much more on content to make their services so much better, and you’re looking at companies that could spend so much more on content to make their services so much better, and they’re not even reliable on this with. This is Disney’s growth model. That’s what scares the hell out of me that your growth model is competing against the biggest companies in the world and you’re lowering your content spend, and you could see it on that site. You don’t have great new content like you’re having with Netflix, that you see new content all the time on Netflix, on HBO Max, on Prime, on Apple TV. 

So I don’t know where the growth is going to come from and I don’t know how much. You could only cut costs to a certain extent. You could only raise prices to a certain extent. I think Disney is at those levels. Where is the growth going to come from? Until I see that? That’s when I’ll tell you to buy the stock, I wouldn’t tell you short here. I just really don’t like it here and that’s probably why you’re seeing it down, even though those numbers look to be better than they really were. But I’m not really so surprised that it’s down a little bit here. 

0:36:59 – Daniel Creech

The only thing I know about the red zone was that’s a cool channel number one Number two, if I’m not mistaken, Frank. It has zero commercials on it. That, I bet, is going to change Last time I watched it. I’m watching a while that had a few commercial breaks in the middle, like Verizon was sponsoring it or something like that. I don’t remember hard commercial breaks. I always remember just having highlights. 

0:37:27 – Frank Curzio

And the guy who did it. I think he’s still doing. It was awesome. He’s been doing it the whole time. Pretty sure, hopefully. 

0:37:32 – Daniel Creech

But my point is do you think it’ll have hard commercials? I think that’ll change. When I heard this thing, I thought oh man, red Zone’s just going to have commercials like your average sitcom. 

0:37:41 – Frank Curzio

Yeah, you’re going to have to put commercials on it for ESPN because it’s losing, it’s bleeding. They’re losing so many subscribers right now. I think their subscribers are down Don’t quote me on this 50%. I mean I think they had like whatever 100 million. Maybe now it’s 50 million, don’t quote me on that but it’s constantly going lower because a lot has to do with the politics that they talk about, which people watch sports and they don’t want to hear anything about politics. That’s why they go to forget about everything. That’s why they watch sports. That’s why they play sports. 

Uh, and disney’s gonna have to monetize that some way. I just I would never pay 30 for it and you got to get the people off youtube because the red to red, the red zone channel is really awesome. I mean it just so. It’s basically, if you’re not a football fan, it’s just any time a team’s in a 20 yard line, it automatically goes right to that feed and that’s what they cover so constantly. You know when all the games going off at once and one o’clock and 4 o’clock spots. You see there’s so much activity there, but the red zone ends at the end of the day and you have. You know they don’t have Thursday night football. They don’t have, you know, the Sunday night football. They don’t have Monday night football, which you know. 

Disney, I think, is going to try to capture a little bit of that market. They can. I don’t know what the deal is for Monday nights, but Thursday nights, I think, is Amazon now with Prime and they’re doing great with that. Sign up so many people for Prime for that, because you get it for free when you sign up for Prime. But yeah, I don’t know, like ESPN and how they’re going to sign. Not only that, their gambling site was a total disaster as well. Espn bet has been a total disaster. 

But I wouldn’t be buying the stock here. I don’t think it’s a buy here. I think it’s a little expensive. I don’t think you’re going to make a lot. I still think Netflix is a much better play, which has pulled back a little bit, but it’s done extremely well over the past three, four years, which I told you to buy instead of Disney. I just don’t think this Corey changes my mind of what the growth is and that’s what companies trade on on growth. I don’t know what their growth model is unless you’re giving your service away for $4.99, which is the reason why your stock crashed because you did that last time and I highlighted that, yeah, you’re adding tons of 120, 150 million subscribers. The average revenue per user was literally 80% lower than Netflix and the major streaming companies and eventually, that’s why JPEG got fired, because people started realizing well, your numbers are freaking really terrible. That’s why your stock is crashing and it is interesting, but yeah, I wouldn’t be buying it here. 

Mouse House remains in the penalty box it does. Let’s go to Apple really quick. I mean we saw after our last podcast a lot of the Mac 7 companies reported, but I want to talk about Apple because I just thought Apple was a disaster Not so much the quarter but what they were saying around the quarter where now they’re going to try to do AI by itself and they’re going to be looking for acquisitions which what are you going to acquire right now? I don’t know if you’re familiar with this guys. I don’t know if you’ve seen the amount of AI companies, the private AI companies, that got acquired by hyperscalers over the past two to three years. I mean there’s probably 100 of them. I mean they were picking these guys off like crazy. I mean there’s nothing out there that you’re going to be like, wow, this makes a lot of sense for me that you’re not going to pay up like 40 times Salesforce. So now, two years, three, the head start. These guys probably spent the hyperscalers outside of Apple. You know those guys. Probably they’re up to, I think, almost $100 billion each, the top four that they’re spending on CapEx. But times that by, you know let’s see four, five, six, seven, eight, I would say close to a trillion dollars in CapEx has been spent before Apple made this decision to go and take. We’re talking about the biggest company on the planet, the biggest company in the world Now Microsoft is, and I think NVIDIA is there. But how do you get this so wrong to the point where your new phone that came out was supposed to have Apple intelligence and you’re still selling that and you have nothing. Ai available, nothing through Siri, nothing. So the best private company that’s been taken, just horrible execution. It’s a good thing that they generate $100 billion, 100 billion. Daniel. 

Apple generates a hundred, I gotta say 100 billion dollars in free cash flow every year. 100 billion in free cash flow, holy shit. That’s probably higher than the market caps of, I would say, 60 of the companies in the sp500. That’s the free cash flow they generate. Right, so they have money to spend, uh, but you know they’re not used to spending a lot of money, especially on acquisitions. Their largest acquisition was tim cook. When tim cook era was uh beats for three billion. That was it. Three billion for a three trillion dollar company. So you know they don’t have. They don’t have the team in place to buy companies in m&a and integrate them. That is an art. Oracle has done an unbelievable job with it, and so have a lot of the other hyperscalers have done an unbelievable job. It’s hard, even IBM with Red Hat look what happened when that finally integrated and IBM look where it is. So it’s not easy when you’re not used to growing through an M&A strategy, and that’s not Apple. 

Now they’re going to be fine because you know, app Store sales surged 13%. Services grew 13%. Iphone sales surged they’re up 13%. I know it’s because they lied about Apple intelligence, but still, hopefully that’s coming. I don’t know if it’s coming in the next few months. In September the new phone’s going to come out in September. 

But you know Apple’s making up the difference because they have incredible pricing power, because no one could go anyplace else. You’re not going to take everything off your cloud and go to a Samsung phone if you’re an Apple user. So they have incredible pricing power which is working right now. But the whole AI thing I mean being this late is I mean you want to talk about dropping the ball. This is like an Intel decision here. This is like something that Intel did over the past 20 years. Like this is. 

This is impressive for this company, because man to see the biggest company in the world, and I know they’re not so innovative. They usually take concepts and then put them on steroids and make them better than the original people that started them. But they are so freaking behind this trend I have no idea what they’re going to do. If they’re going to do this in-house, they could, they have the money, but you’re going to compete against Zuck, against Elon Musk, buying that talent, open AI, sam Altman. I mean, these guys are paying a fortune for talent. You have the money, but you’re going to have to double those salaries. 

If you’re an AI right now and you’re really good at your job, apple is going to be paying you millions of dollars a year to work for them right now. That is great. If you’re in this field, it’s the field I want to get my daughters into and that’s not going to change anytime soon because when you get the biggest company $3 trillion market cap that’s behind this trend they’re going to have to spend a lot of that $100 billion of free cash flow every year on new talent, on M&A. Let’s see how they do. I don’t know. They haven’t done it yet. It’s hard to predict. It’s hard to say they’re good at it? 

0:44:02 – Daniel Creech

I don’t know, but they’ve got to do something because they’re way behind in AI, and that will be millions a year less than Zuck’s paying you Exactly. Frank, let me ask you is Tim Cook on the hot seat? No way, no. 

0:44:16 – Frank Curzio

Never, never, tim Cook. Never. Say never, Frank. I could say that I truly believe that and this is no disrespect to Apple founder this is going to be good. Here we go, people. No disrespect, Frank at Curzio Research. Seriously, if he was still, if he didn’t pass, rest in peace, if he was still a CEO of this company, I think that this market cap would be at least 50% lower than what it is right now. There wasn’t a lot of integration, there wasn’t a lot of partnerships, there wasn’t a lot of like they didn’t believe in sharing technology, there wasn’t a lot of partnerships, there wasn’t a lot of like, they didn’t believe in sharing technology. And you know, with Tim Cook coming into that company, what he did is absolutely incredible of where he brought Apple. I mean, it’s incredible of what he’s done. 

0:45:00 – Daniel Creech

Well done Tim. 

0:45:01 – Frank Curzio

He’s not in the hot seat. He may be retiring pretty soon, so who knows? Well, same thing yeah. 

0:45:07 – Daniel Creech

But well, hot seat is being fired. Well, that’s true. I meant he’ll come up with an excuse to retire. Yeah, I meant, if it’s like an abrupt same thing, it’s not a firing, it’s a. Hey. I’m choosing to leave right now, Frank yeah. 

0:45:17 – Frank Curzio

If they get a new CEO, that stock falls 10% immediately. If I own Apple and they got rid of Tim Cook, I would sell it because that guy is that good and what he’s created want to go into is. Let’s talk about Apollo really quick. I don’t know if you saw that they came out with really good results. It was interesting. I wanted to cover this because there’s new laws now with the new administration that are going to allow individuals into private markets. Dan, you love that decision, right? 

0:45:44 – Daniel Creech

I do you think it’s a great idea. In general, I do think it’s a great idea, I think, and a burning upside down, fiery car crash, Frank. But overall, from a macro level, I like it. 

0:45:52 – Frank Curzio

Everybody wants access. The whole world wants access. It’s the one thing that you’ll find. Every billionaire, rich person. They all want more access. Right, and if you can give them access through information, through, you know, do, stock picks and stuff like that, it’s funny because that’s the one thing that everybody wants. And even if you’re not a big shot, you want access to these private deals. 

Unfortunately, the private deals that are great are always going to have access to the biggest capital in the world that you’ll never get into, and the ones that aren’t that good are the shitty deals. And when you look under the hood at some of these shitty deals, I think this is dangerous for just individuals not having to be accredited investors and get to the private markets. Now, why is this a big deal? Whether you like that or not, that’s my opinion, because I structure some of these deals myself, including the last one that my Curzio One investors just got into, where they’re getting free VIP tickets. They’re getting 10% of gambling rights for this entertainment property that just signed with Resorts World. You know I structured that deal where, if this thing works, holy shit, I mean, we’re gonna be getting paid 10% of the gambling rights forever, which is awesome. Hoping it really works out. I really do for all of us. 

But when I look into some of these deals and the warrant structures and what’s going on and how they all want liquidity. That’s the goal here is to get liquidity. And you get liquidity by selling something to the retail markets. This way, wall Street and institutions could sell it to you at a much higher price. So they love this euphoria around SPACs, they love it around space and stuff like that and they sell this great story. And you’ve got all these individual investors getting in, getting in, getting in and they’re getting in, usually at the top of the institutions. They need that liquidity to get the hell out of their positions that they bought 80% lower than you. It’s very hard to see this stuff. I’m still learning structures from two brilliant guys that are the best in the business that construct pipes that I asked them a millions questions still to this day. 

Like holy shit. I mean I just saw a deal that went off with cashless warrants, meaning that you don’t have to pay the cash to buy whatever. If the stock is five and you’re getting warrants at seven, the stock goes to 10. Usually you have to put the money up at seven, which could be a lot of money, depending on options or warrants that you have. Now it’s cashless, you don’t have to put the money up. I’m like what? So I mean you want to talk about favorable structures. I mean that keeps you even more liquid, which is crazy. 

So you know just a lot of things going to private. I don’t know if it’s good, but I do know it’s great for Apollo. Why? Because it’s going to be the first private markets. There’s $100 billion in managed money institutions across the United States that’s from BlackRock’s figures and now a percentage of that is going to go to Apollo, who has a lot of private deals, and they call it public-private convergence that’s what they name it. The CEO said they’re looking forward to it. It’s great. 

But if you look at fee-related earnings hit a record $627 million for the quarter, up 22%. They have $840 billion in assets in their management Insane, and this massive growth opportunity ahead. So, regardless of what Daniel thinks or I think about individuals and retail investors getting into private markets, you’re going to see this massive inflow of cash going into that, into Apollo’s and some other firms. But it’s something that you should pay close attention to because you’re opening up a multi-trillion dollar market to firms for the first time, and when you do that that’s what happened to Palantir you see these stocks go absolutely through the roof because you’re increasing your total addressable market by that much. 

I mean they don’t even have a trillion in assets. They’re going to have access to $100 trillion. Not $100 trillion is coming in, maybe 1% of that comes in, but still, if 1% comes in and they account for that, I mean they have $840 billion assets under management. They could easily increase that by 10%, 20%, as more people invest in the private market. That’s a massive move for a company like this and if you continue that growth going forward like you’re seeing alternative assets and money going into crypto. Now these are the markets. This is things that drive stocks increasing that total address on the market. I think it was definitely worth talking about it and Powell’s going to be one of the winners there and CEO let everyone know it yesterday on CNBC, which is a very interesting interview. 

0:49:45 – Daniel Creech

Yeah, very interesting interview. Yeah, I thought it was good. I like it and kind of a keep with a macro theme here. One reason I like this and we’ve talked about this and why it’s happening, and when I say why why it’s happening the private public partnerships is because Larry Fink of BlackRock, that biggest asset manager in the US, has talked about this a lot. Number one you need this public private partnership because the public markets ie the government, private partnership, because the public markets, ie the government, and when they refer to them are Florida broke, so you need that. Jp Morgan CEO, jamie Dimon my favorite bankster I think I speak for Frank when we say that as well also talks about how the amount of public companies over the years have shrunk. 

So we have about half as many publicly traded companies on stocks that we can pick and choose from. Again, you need access to that capital. But the reason that you have to have this private public partnership is because of the degrading or the fallout in the public ie government side, in my opinion. I think that’s something to really pay attention to. But as far as this, listen, do your homework. You’ll find it no better, more honest than right here, that nobody looks after your money better than you, including us. That’s the way it is, that’s the way it should be and you can do that. Look into the details. I know you just like to buy blindly at times. I’ve been guilty of that. But this is great, in my opinion, for access and for individuals to have the same opportunity or, quote unquote same level playing field to an extent. But a lot of people are going to be bag holders, but that’s no different than SPACs and Frank’s favorite SPAC play and going to space, so favorite SPAC play and going to space. 

0:51:05 – Frank Curzio

So I like that. Yes, I want to cover two more names. We have a lot more names to cover which we’re going to cover tomorrow as well. On our premium Wall Street Unplugged premium If you want to subscribe to that $10 a month and we give you a stock pick that we buy into our portfolio, which is really cool and our portfolio is is really doing well and kicking ass. So if you want to subscribe to that, you can go to CurzioResearchcom, but we’ll talk about more stock picks there. 

Like AMD, supermicro did not report good news. We have that in one of our portfolios. We’re still up on it. We recommended it a while ago in my AI portfolio but it did pull back. I wasn’t crazy about that news. 

But the two names I want to talk about now is Gartner, symbols IT, and Gartner does amazing research, technology research. It does quadrants and stuff like that. It’s very expensive research and they got annihilated yesterday. They got annihilated when expectations were really crappy, which tells you things are not good for that business. If you want to look at what AI is going to impact, it’s every industry across the board. This industry in particular, look out. I mean, this industry is all about APIs. It’s all about pulling information from other sources and then putting it in one software service that they charge, and Gartner charged a fortune. 85% of their revenue comes from that research division. 

If you’re looking at Bloomberg, if you’re looking at S&P Global, which is Capital IQ, which we pay for, the days of paying $30,000 annually to access these research platforms are over. They’re done. I mean so much done. Where CapIQ, I was paying $28,000, and I told them. I said I can’t do it anymore. I said I’m going to go to FactSet and FactSet was charging $18,000. They lowered it by like $10,000 for me and now we’re going to come up on a renewal and I’m going to tell them to lower these memberships. Come down tremendously. 

Gartner is now down 50% for the year. I think it’s 55% for the year. I mean that stock has gotten absolutely hammered. I think Bloomberg and S&P Global same thing. Bloomberg again has their. It’s not just their research engine they make money off of, but also their whole media division and advertising and stuff like that. I’m talking about who pays for Bloomberg and who pays for this. 

A lot of that stuff is going to be available to different AI systems and a lot, lot cheaper. I’m seeing on my end. I don’t like the new global, the S&P, the Capital IQ platform. They revised it. Now they’re including AI in it. Gartner said in their call we’re going to integrate AI into it. It’s too late, it’s so. I know Salesforce has been doing this and look at the stock at Salesforce too. 

I mean, when AI is basically taking over your industry, yes, you want to be part of it, but it is going to hurt sales and you’re going to lose pricing power because AI is becoming more and more like a commodity and as it becomes a commodity now you cannot charge higher prices for something, a service, that’s a commodity. It’s going to be a lot cheaper that you could use and you could get similar results. And you’re seeing that in search. You’re seeing that when you search something on Google, it has AI features. You’re seeing it on Copilot now AI features come right up. They do automatic downloads illegally Microsoft on your computers now, and now it includes their AI Copilot, which they did for my system as well. 

I have everything shut off. They broke through somehow and did an automatic update to include Copilot illegally. Again, they do that illegally, 100% when everything’s shut off. But look, it’s the day and age of AI, so you be careful. And Gartner is really taking on the chin. I don’t see that changing anytime soon. I don’t know how they’re going to have a system that’s going to be better than AI and they charge a fortune for it, just like Capital IQ, just like Bloomberg. So I thought that was interesting. I don’t know if you have any comments on that, Daniel. 

0:54:24 – Daniel Creech

On the east of the quarter. I’m impressed. It looks like S&P Global. I don’t know when they report earnings, but their stock’s still trading near 52-week high. That’ll be interesting to watch. Yeah, and just the things from AI. I mean getting data from Grok or ChatGPT. I’m very impressed, I still. But yeah, I’d look out for those companies Good point. 

0:54:42 – Frank Curzio

Yeah, and S&P has a lot of different divisions and asset management and stuff like that. So we’ll see. I just know Gartner 85% comes from that. You can see that’s why they’re getting annihilated. And I want to talk about Snap really quick. 

Snap reported just another terrible quarter. This is a company that needs a new management team. I mean, when I look at the growth here and this is a company we recommended it and it fell right. We lost money on it, but we got out and it’s lower than what we got out, which is great, but I was looking at these numbers the last time too the growth of this company is enormous. 

My daughters are both on this platform. Every freaking kid I know is on Snap, snapchat doing you know, snap streaks and all this stuff. So to make sure they’re constantly on this platform. And if you look at the growth, they reached 932 million global monthly active users in Q2. So an increase of 64 million 7% year over year. Daily active users 469 million and just for the quarter, that’s an increase of 37 million 9% year over year. 

Again, every kid I know is on this platform. They use it all the time, yet they can’t monetize it. They’re having trouble monetizing. They’re having trouble incorporating AI into their ads, which Google’s doing a great job. Meta’s doing a partner with one of these guys. I mean that’s their Reddit core. They partner with Google and I mean, look at Reddit stock. As soon as they partner with Google, it’s through the roof. They’re getting massive. When you look for anything, search for anything on Google, one of the first things that comes up is Reddit, and I’ve even looked through Reddit. I’m going to take my daughter to one of the biggest roller coaster parks in Cedar Point in Ohio and just using Google and then going on Reddit and looking at the parks and how many roller coasters and I usually don’t do that but that’s right in front of Reddit that provided me the best results. 

Do something, sign with someone, get a different management team. This is a company that’s growing like a weed and yet its stock is absolutely crashing. I don’t get it. That’s bad management. I mean, the goal is to get as many users as possible and find a way to monetize it. You’re still gaining so many subscribers. 

These kids are loyal to this platform. They’re going on this more than they go on Instagram. This is the kids’ platform. You got to find a way to sell it because these kids, what people will pay and parents will pay to make their kids happy, is freaking insane in this world. It’s insane in this world. It’s over the top they’re doing, you know, driving to different sports leagues in different states when these kids are, you know, not even top tier, not even top tier. I mean it’s crazy how much parents spend their kids these days and years of experience. There’s got to be a way to capitalize on this platform. 

I was just surprised. I saw those growth metrics and yet you’re looking at revenues not meeting up. They’re having problems with the ad platform. There’s other companies that are not having any problems at all with the ad platform, integrating AI. Start talking to these companies and sign it. I really do think Snap is actually a buy at these levels because there’s so much negativity. You have a platform that’s growing. Eventually. You’re going to figure out it’s hard to get the users. That’s the hardest part. They got the users. Now they got to get someone that knows how to monetize it. Once they do that, this thing is a double or a triple from here. 

0:57:38 – Daniel Creech

I like that. I’m biased because because, like I said, we bought this, we lost. So I need to mature and, you know, have to revisit, but that’s the human nature in me, but I do like it. Listen, the overall lesson here is you want to buy stuff like this or that. You’ve been burned on when things are falling apart and it looks horrible. So I like your point there. The takeaway for me is you’re right, the user growth was impressive, so they have the people there, and there’s a big difference between not having people and needing to monetize it and having the platform and monetizing. I remember when Facebook crashed as its IPO and Frank was talking about that way back when and afterwards, but he said listen, they have a billion people I don’t know, it’s like 5 billion people or something now, but they’re like, they have a ton of people Like give them the benefit of the doubt, and I know we’re talking about it over time. 

But this is a shorter-term thing, but I think it’s the same concept. If you have user growth, you can point to which they did and you have a product that people like. Then you just got to tap through that. I don’t know how to do that. I don’t have kids, but I like that. 

0:58:45 – Frank Curzio

You buy when shit’s bad. Yeah, I mean, look, Reddit did not make a profit for the first 20 years. Even when IPO they didn’t make a profit. Now they’re generating money hand over fist because they partner with someone that understands how to monetize that massive amount of traffic. That’s what you have to do. How do you monetize that massive amount of traffic? 

0:58:54 – Daniel Creech

It’s your point. 

0:58:55 – Frank Curzio

They got the people there. That’s impressive. 

0:58:56 – Daniel Creech

They have the people there, but you’ve got to partner with someone. 

0:58:58 – Frank Curzio

I mean now you could partner with Amazon. Amazon partnered with Google. I think part of that deal Reddit could use Google’s cloud for free or whatever. And now Google is. Basically they gave them the keys of the kingdom Reddit Like here’s our APIs. So basically they have all these names. They drove through the AI system with Gemini, with Google, and now they can predict everything right that these people are going to do, especially since they’re on the Reddit site so often and they’re talking and they’re engaging. They’re not just buying something and they’re disappearing, they’re actually engaging and talking and having conversations and all that filters into AI of the predictability of what they’re going to do. And that’s the goldmine, that’s the holy grail when you sell it to advertisers. So it is interesting. 

But listen, Mcdonald’s reported, caterpillar reported I want to get to that tomorrow. Galaxy Digital, upstart. Another two names AMD I thought was very good, stocks down. I think it’s an incredible buying opportunity because those China sales are going to come online. I’ll break this down tomorrow. We’ll have a nice pick for you tomorrow with Daniel and I in a premium segment. We won’t show you on Plug Premium, but that’s some of the names that we’ll go over tomorrow. We just want to cover some of the big ones that reported today and again. Questions, comments. We’re here at Frank@curzioresearch.com, Daniel. 

Daniel@curzioresearch.com All right, guys, we’ll see you on the other side. Actually, we’ll see you tomorrow, tomorrow. We’ll see you on the other side when we’re doing Wall Street Unplugged Premium in the weekend. But yeah, we’ll see you tomorrow. Really good stuff and we’re going to have a really good pick for you guys tomorrow. 

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