Daniel Creech 00:00

Hey everybody, welcome to the Wall Street Unplugged podcast for Wednesday, October 28, 2026. I’m Daniel Creech, and I am solo today as the one and only Mr. Frank Curzio is catching some much-needed R&R. He decided to stay in Fort Lauderdale for an extra day, maybe two, who knows. Maybe he won’t come back at all—kidding, he’ll come back—after he absolutely knocked it out of the park for the second annual Curzio Research Wealth Forum. Big tip of the hat to Mr. Frank and his team. I’m not taking any credit there because I didn’t have a whole lot to do with the conference; I was there. It was absolutely amazing to see Frank interact with the CEOs and different sponsors, private placements, and all kinds of things. And of course, a big thank you to you guys—you listeners, you subscribers, attendees. It was absolutely incredible. The only thing that we are horrible at is forecasting the weather. Frank, I’m going to throw him under the bus since he’s not here to defend himself in good nature.

Daniel Creech 00:59

He always talks about beautiful South Florida in October, and that is true. Last year it was freezing cold; this year it was windy as could be. I had to move one of the dinners from outside to inside, but overall it was an absolutely huge success. Pier 66, beautiful hotel, check that one out. And again, thank you to you listeners, attendees. I know not all of you got to be able to make it. I appreciate your interaction. I missed you guys this week—or this past week—and look forward, and really enjoyed meeting new people. And I just can’t say enough about the network and the power of the network. And I’m not going to steal a lot of the thunder here; I want Frank to be able to give you his take. I just will say, for subscribers, One Members, it won’t be long, and you’ll see some videos and uploaded and all that kind of stuff. You’ll get to see a lot of great content from that conference, and you’ll hear more about that when Frank returns. But overall, just a round of applause to him and the team.

Daniel Creech 01:57

Golf clap with me and follow along there, everybody. I will say, without stealing the thunder there, I’m going to get into some of Musk’s comments while we were at the conference and what he said about data and cloud and stuff like that with AIA. And I will say that DigiPowerX and Blue Energy—so we got AI Bitcoin Miner to—or excuse me, Bitcoin Miner transitioning to AI Data Center and Power Provider—and then we have Deep Offshore Oil and Gas Drilling with Blue Energy. Listen, I thought everybody did a good job, don’t get me wrong, but those two stood out. So I will tease that just a little bit. Again, not stealing any thunder there, but those conversations with Frank and companies went excellent. And just, like I said, just had a great time. And again, thank you all for listening and attending. All right, let’s move into it. Today, later today, we have the Fed meeting where Mr. Fed Chair Warsh will take his Q&A and give a short speech. And I got to tip my hat to this guy. I love his shortened-down version of, “Hey, they put out a quick press release, they want to only include what they think is necessary,” and then he takes a few questions.

Daniel Creech 03:06

And last press conference was like rapid fire. He’s so serious about it. He had an assistant. The big difference between his previous press conferences was he had an assistant with him. And I remember it just caught my eye because I’m watching this as I’m listening to him, and he would—the assistant would announce who the next question is from, and he would give a pretty quick, simple answer, and then he would just turn and stare at the assistant. And that was like the cue. Remember Moneyball where he’s like, “When I point at you, you talk.” He’s kind of like, “Well, I’m looking over here,” and then the assistant was like, “Okay, and then next question is from XYZ.” Very, very kind of assembly—what am I trying to say—like down the assembly line form. Anyway, the odds. What is the market expecting today from Mr. Warsh? Well, not a whole lot. There’s about a 10—rounding—about a 10% chance of a Fed hike today.

Daniel Creech 04:07

So needless to say, that would be a massive surprise and give markets a little bit of a jolt. Don’t expect anything there. That’s not really earth-shattering or nothing. But I am curious, and I want to hear what he says about the task force. And the task force are important because they—we’re approaching the end of the year now—and they are all going to report. Remember, he has five: through communications, balance sheet, data, I think how they interpret and collect data, productivity and jobs, AI, and then inflation frameworks. That’s an odd one, but we’ll see. So these task force are starting to—or they’re already, you know, finding, they’re researching, they’re doing all this. Then they’re going to present, show Mr. Warsh at the end of this year, evidently is what he’s—the timeline he has provided. We will have—they will, you know, discuss their findings. And then Warsh, I’m hoping, the way he’s kind of hinted and signaled, he will then kind of express some of those findings to the public.

Daniel Creech 05:04

And that’s a big step. But I want to differentiate here. Warsh talking about what the task force has said or whatever they find and report back to him is not the same as what the Fed will do based on those findings, okay? And what I mean by that—and Warsh has been very clear with this—he says, “Listen, it takes a long time to implement change at the Fed.” So when these task force come back to him, I hope you guys don’t have a bingo card and drinking game with task force because you are hammered already, and we’re like six minutes into this thing. If they come back and say, “Hey, do XYZ, this would drop inflation by a percent and a half overnight,” just as an example, that does not mean the Fed is actually going to do that, do anything, implement that, or implement anything. That’s just the nature of that beast. However, I do think it’s important because, as we talk a lot about here, and Frank has hit the nail on the head with sentiment, investor sentiment. Right now, inflation is going to continue going higher.

Daniel Creech 06:02

Everybody’s kind of grinding out and feeling this grinding out. Cost of living, that’s a very good—listen, kudos to both sides on politics. The Democrats more right now leading into the midterms because they’re talking about the cost of living and how it is surging and the affordability issue. And I think Trump has taken the bait. President Trump has taken the bait on that, saying, “Oh, that’s a hoax, that’s made up.” It’s not when you have gas prices rising and everything else. And yes, the big difference here, remember, with inflation and one thing that drives me bat-Florida crazy is they keep talking about how, “Well, inflation is coming down,” and it’s the rate of inflation is coming down. Yes, during the last administration, you saw inflation spike up to over 8, 9 percent, whatever the high was. Now we are in that sticky 3, 3.5 to 4 percent range. But the pain is still being felt because, as consumers, we’ve all experienced the rising prices, you know, well over 20 percent in most categories across the board over the last couple of years.

Daniel Creech 07:04

So the idea that politicians, any of them, can get on there with anywhere near a straight face and a spine and say that inflation is coming down, the rate of inflation is coming down, possibly. I mean, it’s been sticky now. It’s come down from its highs, yes. And I’m not giving or blaming anybody for that. I’m just simply telling you what’s happening. And so Warsh’s goal is to try to get inflation to go to 2 percent, meaning prices are only rising by 2 percent. That is still a horrible outcome for us as consumers because we are literally in this coliseum, this room, this gladiator battle that we don’t get to pick the rules or anything. We’re forced to play in this by these rules and the nature of this. And they want to get prices to rise. They want the rate getting back to the 2 percent. And that’s just, you know, I’m not going to rant more about that. So that drives me nuts, that rants over on how they kind of talk about that. And with the midterms coming up, the affordability issue is alive and well.

Daniel Creech 08:07

Gas prices, energy prices are high. And so it’ll be—I expect Warsh to really tightrope, tiptoe around that. I don’t think he’s going to overplay his hand or say anything. I think he’s, unfortunately, and I mean, I understand for the position he has, but he’s a good politician. I mean, the guy gets up there, he’s articulate, he can say, you know, he can talk around the answers and, you know, not really say a whole lot. It’s just the game. Now, so the task force is what I’m looking forward to. And if he signals anything else about a rate hike, and he has been, “Hey, we’re going to communicate less, we’re not giving this forward guidance,” kind of stuff like the last team did, and that will be key to me on how he says. You got to kind of read between the lines. I don’t want to get over into that. I’ll have more ideas and thoughts about this when I listen to him later this afternoon. But listen, it would be a huge surprise if he does anything. So you should expect nothing. And then the Q&A is really going to be what’s key there.

Daniel Creech 09:05

And now, if you look out, so there’s about a 10 percent odds, 10 percent odds of a rate hike this today. So nothing. They’re busy and they work so hard. They take November off, okay? So got to take November off, Thanksgiving, all that stuff. For the December meeting, the odds of a 25 basis point rate hike, quarter of a percent, are anywhere between 75 percent and 90. All right? So the market is anticipating, “Hey, we’re holding this meeting because typically, going back to the 90s, we haven’t had a hike right ahead of a midterm.” It’s kind of a fun fact. I don’t know if there’s any weight. I mean, it’s true according to UBS. I’m just simply saying, I’m not saying Warsh is putting in on that. But the market is simply saying, “Hey, nothing today, but basically a guarantee as of now.” We have a lot of data, more economic data tomorrow that’ll come out. But basically, they’re just saying the market’s like, “Hey, nothing today. November we’ll take off, eat some good food, and then we’ll get another rate hike on December, and then we’ll really start trying to guess and look into that forward 2027-ish.” But markets are going to react however they react.

Daniel Creech 10:16

We’ll be prepared. But the updates, anything on the task force and inflation is going to be key on that. All right, moving right along here. Typically, when Frank or I travel, markets get a little volatile. And Frank and I kind of joke about this like, “All right, if you go somewhere, you know, certain stocks are just going to tank or do something,” and it just seems to work out that way. Now, this time, we had some volatility, of course, especially at the end of last week. I’m not going to count that. But then earlier this week, Mr. Musk come out, and Elon Musk was talking, and he took to X, his platform that he owns, his own social media, and he said that he made a comment about the Neo Clouds and the AI Data Center kind of framework. And it caught great headlines because when he tweeted this out, he was talking about 200 plus Neo Cloud providers are going to go, are going to see Guppy-level death and consolidation.

Daniel Creech 11:18

Some will make it through, but not many. And he talked about that after he announced that SpaceX had closed $40 billion of debt for GPUs, but they’re investment-grade. They have an investment-grade balance sheet because of Starlink and all their launch revenue. And essentially, he was saying that the over the past couple of weeks, and I’m just paraphrasing his quote here on X, debt markets have almost been completely shut off, and access to money is gone to the companies that don’t have substantial revenue outside or independent of AI data centers. Now, what does all that mean? As he was hinting with his own company, SpaceX, well, they’re generating a great amount of revenue from their GPUs and AI. However, like he said, they also have Starlink. They have the launches and stuff. And so if you’re just a CoreWeave, let’s say, or you’re just another Neo Cloud, or you’re just a provider to where you’re trying to say, “Hey, our entire business model relies on OpenAI or Anthropic or Nvidia,” and that one customer risk and that one focus and sector on AI or GPUs or the data center, that’s all we have.

Daniel Creech 12:30

And Mr. Musk is explaining, “Listen, that’s not going to fly for much longer because the credit markets are closing for companies like that. They’re just going to say, ‘Hey, if you don’t have something else to kind of help offset that risk, we don’t really want to loan you money for all this kind of thing.'” And so you saw a lot of volatility. And I’m going to use FinViz here because I absolutely love this feature that they have. They do not sponsor us yet. I don’t get paid for this. They should. Hopefully, we’ll do it at some point. But here, I just type in CoreWeave. So we have CoreWeave here. And as you can see, this is a yearly chart. The stock has gotten hurt hard. We’ve talked about this in the past. But take this with a grain of salt. But I do like this feature. So if you look at CoreWeave, and if you’re following along here, when it breaks down the information and data under the chart, you see this Piers tab, and it highlights a lot of different ones. If you click Piers, it puts them all together, and then you can rank them by market cap or anything you want to.

Daniel Creech 13:27

I’m going to put them in largest to smallest market cap and then hit the charts feature, and you can pull these up. Now, the reason I say you take this with some salt is because it lumps some of these companies in that aren’t specifically cloud providers and/or just renting or buying GPUs. So first of all, you have Nvidia, okay? Nvidia is the king of AI. They make the best GPUs, but they’re not. They are in the business with the circular financing and things through CoreWeave and everything. But my point is, when you’re talking about the clouds like Nebula or CoreWeave or Iron or Hut or White Fiber, some of these, these are more of your plays. WYFI gotten absolutely smashed, as you can see from this chart. But this is just a great feature to kind of bundle up and look at different Piers or a sector in general. Now, if you’re a trader, okay, so now you have Musk out there, and SpaceX is stealing a lot of thunder. They are coming out of the gates, just absolutely pedal to the metal, doing great.

Daniel Creech 14:29

Frank had talked about their quarterly report that they just reported. Just fantastic. Blew everybody away. Rocket and rolling. Now, the stocks that sold off here, if you’re a trader, I would really look at the White Fiber, WYFI. I would look at CoreWeave because I believe that they’re kind of not in a league of their own per se, but I do think that there is so much fear right now in the space, and the next quarterly earnings for CoreWeave is going to be key. And the one thing I want to pay attention to is you want to focus on, and as Frank says, quickly on the trading thing. You know, the real volatile ones, sometimes the worst companies go up the most during the volatile times when you get some momentum or whatever. I’m not bashing any of these companies, but I am saying this is crazy volatile. So this is not just a buy and hold unless you really have some conviction on who you’re buying and holding.

Daniel Creech 15:30

You have to have conviction on the name, their partners, their debts, their balance sheets, access to capital, and then you have to have a specific timeframe, okay? If you’re saying, “Well, I’m going to buy White Fiber and give it a month,” I don’t think you’re putting the risk-reward in your corner there. That’s what I mean by that. Now, on CoreWeave, the thing when they report their earnings next that I’m going to be really looking into is not only how they—I think the CEO has done a pretty good job of saying he could do better. I’m not trying to bash him, but I think he’s done a pretty good job on trying to talk to the market about how they get a return on capital and say, “Listen, we’re not investing blindly. We are waiting until we have firm contracts signed. We’re getting some money upfront. We are understanding the economics and trying to match that with the debt.” Okay, but when rates are rising, when bonds are selling off, CoreWeave’s bonds, when all that’s going on, investors are not going to keep their wits about them, all right?

Daniel Creech 16:27

This is not something where they’re just calm and steady. They’re going to go floor to this, and they’re going to start selling everything, and you see some really tough charts here. With CoreWeave, the key thing here is going to be when they sign these shorter-term contracts to rent out and have others use their GPUs, their Nvidia chips and such. The pricing on the shorter term compared to year over year, that direction and momentum is going to be key. And the reason that’s key is because, as we’ve talked about the Shelley Lee from Sprout interview that she’s been on CNBC a couple of times very recently, she was talking about how these chips, specifically some Nvidia chips, are holding their value much longer than originally thought. And there’s this big bear thesis out there saying, “Listen, these guys that provide the Neo Clouds and these not software as a service, excuse me, but the Neo Clouds, the big bear case is this is going to be so capital-intensive, they’re not going to be making any money because these GPUs, you plug them in, you run them two, three years, they’re worthless.

Daniel Creech 17:36

And then you got to spend all this money and get the newest, latest, greatest chip that are going to come out like the more frequent than the iPhones.” That is proving to be incorrect according to Shelley Lee through Sprout and talking about how you have some of these chips that are three or four years old holding 70 percent of their value and still being able to be rented out at very economic, solid prices for the providers and to service the debts and all that kind of stuff. And we know the price of tokens is going down. That’s a good thing for consumers, but the demand for compute continues to go off the charts. Everybody in the AI business still has one thing in common, and they’re saying, “Listen, demand is still outpacing supply, and it’s going to be that way for a couple of years.” Okay? We have to wait a couple of years and see how that river flows. But that’s what everybody is saying right now. And there’s a lot of fear saying, “Well, that’s not going to, you know, it’s not going to work out that way.” But CoreWeave is going to report earnings, and when we see the pricing, and we can look at other of these as the other companies report as well, and I’ll report back to you.

Daniel Creech 18:39

But the exciting thing here is those rental contracts, the value that those GPUs still hold, and what CoreWeave and others are able to charge, especially for shorter-term contracts, is going higher and higher. And if that continues to be the case, that is going to really lower the stress on the debt-level side, and we should see some reaction in the bonds. Now, of course, the CEO will be able to comment more on that, and I just think that that’s a very good—there’s a very good risk-reward there for the ones—and Musk didn’t say they’re all going out of business. And he’s also talking out some of his book, okay? “Hey, we just signed this great big deal. We want to crush the competition. This is where we’re playing.” You know, he’s doing a massive conglomerate of everything. He’s going after so much, and it is impressive. But yes, a lot of them are going to struggle. A lot of them probably will fail. And I’m not trying to be rude or matter-of-fact here, but that’s nothing new. That is markets.

Daniel Creech 19:36

That is bulls and bears and all that kind of stuff. So take that with a little bit of grain of salt. Mixing a little bit of apples and oranges here because when I read this tweet and I saw some of the market and the stock reaction, it made me think about not only your GPUs and your Neo Clouds. And remember, they’re not all related the same. So you want to look at—and again, Frank has talked about this—and you have some companies that are building the power shell, okay? They have the power, they have the infrastructure, and then they go and they rent that out almost like an apartment building, think. And the tenant, the hyperscaler, whoever, comes in and puts all the money and infrastructure within the shell of the building that has the power, okay? So they’re buying the GPUs. And so that’s what you want to pay attention to as well. There’s a big difference between companies that own the power and rent out the space versus owning the power and also investing into the GPUs and the infrastructure that goes within the power walls, okay?

Daniel Creech 20:43

Two totally different business models. We have exposure to here and there, both. And again, I’m not taking away from Frank’s thunder because there were some excellent interviews that he’ll touch on from the Curzio conference. When you look at—so this is the apples and oranges part. I’m mixing this a little bit. Gartner, the firm that provides a lot of great analysis and research, they estimate—this is from just about 10 days ago, and I saw this on BlockSpace—and there’s a line in here that Gartner estimated AI data center owners would need $8.5 trillion, all right? Everybody that’s a fan of Austin Powers, Pinky, up $8 trillion, T, $8.5 trillion of cumulative revenue through 2030. That gets them a 12 percent return on invested capital, all right? So their target is to earn 12 percent on all this CapEx.

Daniel Creech 21:44

They need $8.5 trillion in cumulative return through 2030. That is against—no number by itself is very valuable. You want to compare it to something or give context to it. $8.5 trillion is against or versus a forecast of no more than 3.6 trillion revenue in AI over the same period, okay? Now, you could do some math and say, “Well, if they don’t get $8.5 and $8.5 equates to 12 percent, they only get 3.6 percent. They’re nowhere near a 12 percent return. How’s this going to work? How’s the market going to react?” We will see, again, that’s why pricing and demand continue to be so important, and we have to figure out, and we have to kind of keep our ear to the ground there and listening to that through these different conference calls. But I wanted to share that because—and I know, like I said, I’m getting a little out of the—this is not just the Neo Clouds here. I’m skipping over from that and Musk. But I wanted to give you guys that because I love the macro big picture. And as the market digests this 8.5 to 12 percent, if that’s accurate, and Gartner does a lot of great research, I’m not knocking them.

Daniel Creech 22:49

I’m simply saying, you know, there’s a lot of gray area here. And it’ll be interesting to see how this plays out from now until 2030 and as we’re in the heart of earnings season, and we’ll get some more forward guidance and such. Now, all right, moving on here a little bit. I’m going to stick with AI because that is what’s propping up and holding up markets right now. I know that we’ve talked about a lot of individual stocks getting hurt as indices remain near all-time highs. And let’s do a little quick check on markets here. We’ll go over to FinViz and see what’s happening. So S&P, Nasdaq, and Dow. Nasdaq’s down a little bit, well, basically flat now, but markets are holding in there. Nvidia’s down about a half a percent. Micron’s up just under 5 percent, but Nvidia is really the driver right now. Palantir’s down, but overall, the market continues to be in this kind of odd forest-from-the-trees type. Again, markets are near all-time highs. Yet a lot of individual stocks have gotten hurt.

Daniel Creech 23:51

Now, the AI trend, trade, and momentum has definitely been hit. However, it is not dead. And as I mentioned in the past, Ken Griffin of Citadel Capital had talked about how we are in a bubble. We are in an AI bubble, and that’s a great headline grabber. However, just because you’re in a bubble and, you know, are we in a bubble? Sure, I’ll agree with you on that because there are bubble-like tendencies. However, that just doesn’t mean that it’s going to crash right away. The timing is always very difficult. Frank likes to talk about the Nasdaq and the dot-com bubble and how, you know, markets were very overvalued, doubled in a year, and then crashed, okay? I’m not saying we’re going to get the timing exactly right at all. I’m simply saying when, as Frank has talked about, and I want to keep pounding the table, and I apologize if this gets on your nerves or kind of feels redundant, but when you have supply being outpaced so much by demand, it’s very hard to just have a crash.

Daniel Creech 24:58

There’s other things. Anything could happen, but I think it’s okay. I think we’re in an environment right now with the midterms, with earnings, and with interest rates in general in this competition for capital. As Frank has said, “Hey, you can have some more money on the sidelines than whatever you normally would right now because of the uncertainty and volatility.” Now, the AI trade did get a big boost from Vertiv, VRT, and I’ll pull up that symbol here. Again, we’ll go back to our trusty FinViz guys. That stock’s up about 14 percent. As you can see, though, this is a daily chart, and Vertiv peaked in May at about 300. We’ll round up. We’ll give them 380 and then sold off down to under $200 briefly, as you can see here on the far right of your chart. Towards the, you know, just a few days ago, it was under $200, got a little bit of a bounce, and then it had these positive earnings. Now, what is so good about these earnings?

Daniel Creech 26:00

Well, what really stood out to me here was margins because from the last quarter to this quarter, margins really took off, and they increased from, let’s see here, adjusted operating profit was up 83 percent year over year. And remember, yes, the stock’s gotten hit hard recently, but the stock overall has had a tremendous run over the last couple of years. And we’ve done very well on Vertiv. We actually were positive and had a great trade on this in the Dollar Stock Club, and then we were also popular and had this in CRA. Now, 83 percent operating profit jumped year over year to $1.09 billion. Operating margin expanded from Q2 2020, okay, Q2, it was 22.6 percent. Margins went from 22.6 to 25.2. That’s a big deal because last quarter, the stock got hit hard, as you can see from that chart we were just looking at, and continued lower because Vertiv is growing so much.

Daniel Creech 27:08

And while that’s great for your backlog, and it’s great for investors, and it’s great for Wall Street, that strong demand then raises the question of whether you can deliver, whether you can execute. And the reason you saw operating margins contract or go lower during last quarter, during Q2, was because they had some supply chain issues. And Vertiv is also—I don’t want to get too far ahead of myself. They’re not—I wouldn’t call them a roll-up just yet, but they are doing a lot of acquisitions. And you have to execute and manage that. Think of just having a couple of spinning plates, one of your favorite service acts, you know, you got these balancing things. All right, so you got some tough situations there. The idea coming into this quarter, everybody was more nervous about that. And again, it’s fine to be critical, ask questions and all that, but listen and see about the execution and/or results and answers to those questions. It’s great to see margins improve from 22.6 up to 25.2 percent.

Daniel Creech 28:10

What’s even better is that looking forward, they had overall 2026 margins to be over 22 percent, actually creeping up between around the 25-ish percent. And the street is obviously pretty happy with that. Organic revenue growth. So this is just looking at the core business, and we’re not adding on to anything that we have acquired. And they recently just closed another acquisition. Organic revenue accelerated 55 percent year over year and 18 percent from Q2, all right? Now, we always hear and focus on the Americas, or typically. I mean, I know we’ve talked about some companies that have projects overseas and investing overseas and such. But really, when us Americans and investors in the US think of AI, we think of the data centers here. Vertiv had some really great numbers because they’re in—so the Americas led with 60 percent growth, okay?

Daniel Creech 29:12

But the Asia-Pacific had growth of 48 percent, and then the Middle East had growth of 19 percent. So the exciting thing is, yes, they are rocking and rolling here in the US, and we have strong growth. But then when you expand and you go globally, they’re seeing growth across the board and basically every sector and every area that they operate in. So that’s absolutely incredible. Their earnings, they had a great beat. They beat earnings by 39 cents. The street was expecting $1.82. They came in at $221. Revenue expectations were $3.75 billion. They came in at $4.31 billion. And again, revenue growth year over year was about 61 percent. It was a little lower than that if you back out some of the acquisitions. But again, I don’t want to, you know, I’ve liked this stock for a long time. We’ve talked about it as it’s come down. Again, we did trade this successfully in the past. But if you still believe and want exposure to kind of a picks and shovels AI play, this is an absolutely no-brainer, low-hanging fruit idea.

Daniel Creech 30:19

And yes, the stock, you know, I know it’s hard to buy a stock when it’s up 14 percent or whatever. However, again, just like I was talking about with the Neo Clouds, if you want to weight into anything like White Fiber or whatever, have your ideas here with your just manage your position sizes around volatility and also have your timeline. If you want exposure to a picks and shovels tool on everything from cooling to power management and within the data center play, Vertiv is a very good, positive stock to look at. And last thing here, this is always important because you want to see management execute and also provide solid cash flow numbers because cash flow, free cash flow, is going to be able to kind of keep the wolf away from the door or the boogeyman. A lot of people have concerns about credit, about interest rates, and all that kind of stuff. For the full year in 2026, Vertiv guides for adjusted free cash flow of over $2.5 billion, all right?

Daniel Creech 31:20

That has been increasing like crazy. For a full year, sorry, I said they were around 25 percent. The margins are between 23.5 and 24.5. In fourth quarter, we’ll actually be a little bit higher than that, between 25 and 26.3 percent on margins. But the big key here is they really reverse some of the worries. They fixed some of the issues they had with the supply chains, excuse me, and Vertiv is getting a good boost from that. Still a lot of ways to run. Stock trades at basically a 25 forward PE if you look at it that way versus the market, 21, 22-ish. But these guys are growing revenue at 50, 60, or excuse me, earnings at 50, 60 percent year over year, revenue the same. I think it deserves a higher multiple, personally. I think it would be a buy if you—I think that’s on the buy side of the T chart when you look at it that way. But obviously, momentum and sentiment is going to trump those two figures. But you have an excellent, well-run company, cash flow machine, and you also have—they’re in the heart of the greatest growth sector right now.

Daniel Creech 32:27

So it’s going to be volatile, but if you want a low-hanging fruit for picks and shovels, look no further than VRT. All right, last thing here. I want to talk a little bit about Bitcoin because I continue to be extremely impressed with Bitcoin holding—watch it be tanking right now. I continue to be impressed with Bitcoin and how it’s holding up around this 80,000. So if we check in back to FinViz, here’s Bitcoin, and it’s 80,356 as of right now. But what I want to talk to you about is I want to think out loud here on as we go through this competition for capital. So AI is taking all of this capital. Hyperscalers, debt market are going to debt markets. You’re having an influx of equity raises from hyperscalers. You’re having debt raises from hyperscalers and everybody else. And that’s putting major pressure on interest rates, okay?

Daniel Creech 33:28

Not to mention, you have the Fed raising interest rates. So that’s going to raise—rising tide lifts all boats. You have everything from, you know, you always have high credit card debt and stuff, but your floating debt on anybody’s borrowed money is going higher, okay? Your mortgage rates and things are going higher. I know mortgage rates can fluctuate. I saw a headline that said, “Oh, mortgage rates dropped.” I think for the second week or maybe in a row or two weeks out of so many, they’re still very elevated, okay? Put that in context. And I say all that because on the private sector, we have higher interest rates, higher cost of everything, capital, which means capital is going to be more thoughtful before it’s deployed and where it goes. And that was also behind Musk’s tweet about a lot of companies being in trouble because the capital markets are essentially shutting down to those only focused and highly levered companies in that area. On the private side, we have all that.

Daniel Creech 34:31

Then on the public side, or on the Fed side, the government side, we’ve talked a lot about how debts, deficits, and things are out of control. And the reason it matters now more than ever is because of everything else that’s going on, okay? So we’ve talked about how we just had a 6 percent deficit to GDP. Treasury Secretary Bessent is on record saying, “Hey, this will be peak deficit.” So looking ahead and the end of the year for our government is October. So they go October to October, meaning 2027, the deficit to GDP had better floor to be under 6 percent. That’s what he is saying. We’ll see how that all plays out. Higher interest rates are causing a lot of the expenditures on the government side to go up automatically. Of course, the one that jumps out to everybody is your interest expense that’s going over a trillion dollars per year because we have over $40 trillion in debt. And the public and private markets are competing because you have all this capital going to where it needs to be treated best and look after itself, okay?

Daniel Creech 35:38

That’s the soapbox for that. If you have a higher interest rate environment and interest rates are going higher according to sentiment and momentum, market odds, however you want to play that, then why in the flying Florida is Bitcoin and gold holding up as well as they can? And you can say, “Well, Mr. Kreach, gold is not holding up that well. Gold is trading down to, what is gold, 4,000-ish an ounce, and it’s down significantly from 5,200. So gold is about 4,052 an ounce. It’s high. Let’s see, last yearly chart, it was over 53. Let’s just say 53 to 4,000 since early 2026. Now, I understand that that is very painful if you bought at the top. Bitcoin and gold do not pay you anything to hold it. That’s one of the negatives to it. Everybody likes to point that as a negative. So my question is, if Bitcoin, as interest rates have moved higher, you know, Bitcoin is at the earlier this year, Bitcoin went from, let’s call it 65,000 in February to 82,000 in May, fell back to 60,000 a couple of different times in June and July, and then has bounced from 80 to 75 to over 85 and back to 80.

Daniel Creech 37:00

Gold has not done that well in the recent as Bitcoin has. Now, gold and Bitcoin, Bitcoin specifically, I’ll focus more on that. I’m sorry to be confusing. Bitcoin’s not paying you anything to hold it. Interest rates are going higher. Sentiment is it will continue to go higher. Forecasts are for at least another rate hike this year and maybe one, two, or three next year in 2027. Why would Bitcoin continue to see inflows or money? And what I want to talk about here, and we’re going to go to sosovalue.com. We’ve shared this before, and this just easily shows the inflows and outflows to Bitcoin. And so when we look at this, I’m just looking, so here’s the 27th. This is yesterday. So 176 million in inflows. And this just breaks it down by day. Now, if you look at the weekly chart, you can clearly see, and I’m taking a small snapshot.

Daniel Creech 38:04

This goes down here to August 7th and up to the 27th, which is not over yet. So the 286 will change. But you can clearly see, okay, we got some more green than red, and the numbers go from 79.5 billion in total net assets back in the week of August 7th to about 104 today, okay? So we’ve seen massive inflows of the Bitcoin ETFs. And these are all of them. These aren’t just BlackRock or whoever. These are the Bitcoin ETFs. And I say all that because I’ve talked about this in the past, and with Bitcoin, I think it’s a portion of money is going to be treated where it goes, money is going to flow where it’s treated best. And what I want to focus on with Bitcoin is, in the past, I talked about its 200-week moving average. That is a massive, it’s a very long-term view. But when you look at that, that is about 66,800 if you look at that today.

Daniel Creech 39:07

And there’s a fun, you can go to bitbo.io, and they have some cool features there. When I’m looking at this, and a few months ago, and it did end up holding, and I’m not taking credit for that, I was just explaining that when Bitcoin trades near its 200-week moving average, historically, it’s been a good buying opportunity. It’s been acting as a very good area of support, and it looks like it, now, it did bounce off of that recently. We’ll see if it holds. I’m still not out of the weeds that Bitcoin cannot violently drop to around 70 or 75, but I keep inching that higher and higher as the performance and as it continues. You know, you don’t just want to be stuck and say, “Oh, well, here’s my thesis, and I’m just never changing it.” You know, you don’t want to be flip-flopping every single day. You know, you want to try to have a plan in place. I’m simply saying, a few months ago, I was talking about an accumulation mindset for Bitcoin and cryptos, and that has proved to be pretty good over the last couple of months.

Daniel Creech 40:05

So right now, Bitcoin 200-week moving average is around 66,800 versus the spot price of about 80,000. And we’ve seen these inflows continue to be pretty strong overall. Now, I’m going to give you my two cents and my thesis here on this. And what I think is going on a little bit is the world is realizing, listen, we know we have debts, deficits, spending out of control, okay? It’s not an income problem. And since there’s nowhere else to go in the currency world, meaning, okay, US dollar, reserve currency. Yes, it can, more than one thing can be true. You can have foreign governments hold less of our debt. You can have the US dollar play a smaller role in global transactions. You can have the US dollar play a smaller role in global reserves, however you want to measure that. That does not mean you are losing the reserve currency status anytime soon.

Daniel Creech 41:10

It could be a very slow death. It could be a violent quick death, depending on events and things that unfold. I just find it very hard to believe that there’s essentially no other currency you can diversify into, at least not in my opinion, not anywhere now and not anywhere in the near future. And I don’t mean this in a negative, condescending tone. I mean this in a common sense tone of simply saying, you’re not going to choose to hold China’s currency or Europe’s or anybody else’s versus the US dollar. We are trying to screw that up as a country because we keep tinkering with the system, being a bully in some sense, kicking people off Russia, freezing assets, confiscating assets, and all that kind of thing. But when you look at money trying to diversify, if you’re not going to go to another currency, and it could be a basket of currencies, and we’ve talked about the BRICS and how the BRICS would like to, and there’s been a lot of stories about they’re going to build their own currency and back it by gold or oil or other commodities.

Daniel Creech 42:16

I don’t think that’s a crazy idea. In fact, I think it’s a pretty good idea. Having your money tied to a sound commodity like the gold standard, I don’t think is a bad idea. I don’t think it’s going to happen anytime soon. I think it’ll be forced when it does. You know, it’s kind of like people in power voting themselves out of power. You know how often that happens? It doesn’t. That’s the point. They’re forced to. They don’t willingly do stuff like that. If we’re in a situation where you don’t have another currency to jump through to diversify, and you don’t have anybody with one that’s backed by commodities and things that you trust, because trust is very key here, then Bitcoin and gold do play a significant role in this, in my opinion. Bitcoin is no doubt the king of crypto. It’s in a league by itself. It’s the majority of the market cap.

Daniel Creech 43:05

Gold has always been a league in itself. Central banks have been buying gold. I think more institutions will buy gold. I think you should own exposure to gold. And I think Bitcoin is going to play a bigger role in this accumulation phase or as money looks to flow somewhere, I think Bitcoin is going to be one of those avenues and destinations. And so again, I would really keep, if you’re a shorter-term either trader or you’re thinking about adding exposure or looking, if you don’t have any and you want some, I would go ahead and buy some now with the plan. And I’ve said this for as long as I can remember, and I do it as well with different stocks and exposure to cryptos. I would buy some now if you don’t have any exposure and you want some with the only under the impression and act that I would buy more, either higher or lower. Pretty easy to look at the chart right now and think, “Hey, this 75-ish area needs to hold, in my opinion.” But I don’t, I wouldn’t be surprised if it’s just going to bounce around between 80 and 85.

Daniel Creech 44:11

But what’s holding it up is obviously you have real inflows into the ETFs. And the longer that Bitcoin stays around and doesn’t get hacked, and it just keeps kind of doing its own thing, which it’s going to be volatile, but it’s still fixed. The same Bitcoin story that the bulls have been saying forever has not changed. And I think that there are great things there. Just like gold. The story on gold has not changed in Florida forever. And I, you know, as kind of an older soul, I like that. You don’t have to, you know, you’re not changing your thesis there. It just, it is what it is. I look for Bitcoin to, if Bitcoin can stay above 75,000, in my opinion, this is a little guesstimate here. If Bitcoin stays above 75,000 through the end of the year and until we hear from the task force, I keep bringing that up because I think that’s key. I think the task force are going to be extremely dovish, more easy money. I think they are going to allow and give Warsh an opportunity to explain to the people that, “Hey, we’re going to make some changes here at the Fed, but they’re for good reason, and here’s why.” And quickly, those answers are essentially going to get back to an easy environment, lower interest rates, and that is going to absolutely skyrocket assets, stocks, commodities.

Daniel Creech 45:33

I think housing is going to go up. Yes, we are taking it on the chin right now in a lot of these as interest rates. The rise in interest rates is stalling out a lot of things. But overall, the inflows continue into Bitcoin. I think that you need to pay attention to that, have some exposure to that. And also, if it can hold around these levels and gain kind of this coiled spring, I think the task forces are going to be very dovish, and then we’ll be back to this more risk-on atmosphere. As Frank has hit and called well this time, this is not a risk-on atmosphere per se. It’s okay to have some more on the sidelines, clip the coupons, earn a competitive interest rate that you didn’t have the option to several years ago, and now you can. But I just wanted to point this out. I think it’s absolutely incredible that Bitcoin has rallied over the summer lows to where it’s at now, given the higher interest rates and the intent or the expectation of even higher interest rates in the short term. We’ll see.

Daniel Creech 46:33

If Bitcoin tanks, I’m wrong. I’ll come here. I’ll admit that. Email me. Love me, hate me, daniel@curzioresearch.com. Daniel@curzioresearch.com. Don’t ignore me. Love me, hate me. Don’t ignore me. I messed that up. Anyway, thank you all for tuning in. I will see you tomorrow. I’ll recap Fed Chair Warsh’s press conference. We’ll take a few questions. Send those to askcurzio.com. That’s askcurzio.com. And I will see you mañana. Cheers. 

Announcer 47:02

Wall Street Unplugged is produced by Curzio Research, one of the most respected financial media companies in the industry. The information presented on Wall Street Unplugged is the opinion of its host and guests. You should not base your investment decisions solely on this broadcast. Remember, it’s your money, and your responsibility.