Good morning everybody. Welcome back to another episode of the market open. It is Thursday, November 6th and we are live. This week has actually been a very fast week in my opinion. Does anyone else feel like that? I felt like last week was like felt like a year going through a week. Maybe because we had so many things going on. I cannot believe it's Thursday. Tomorrow it's the end of the week and it's Friday and we're done.

But we had Palantir earnings on Monday. You have Hood yesterday which we'll talk about. I mean it's just been a wild week and it feels like it's gone by very quick. We got a bunch of different headlines to talk about. A lot of different macro stuff is happening. You have a variety of different things happening in the AI sector.

Jensen went to London yesterday and made some comments and he said some stuff that really got a lot of the analysts freaked out and then he had to clarify his stuff and so we'll talk about what Jensen said. OpenAI also was at some conference. They said some stuff that really freaked out the market. They had to clarify what they had to say. So we're going to discuss everything going on in the world of AI with Nvidia, Jensen, etc.

We had a lot of earnings yesterday. Some of them were good, some of them were bad. Robin Hood, it's up there as one of the best quarters I've seen in Q3. And likely over the past couple years, we'll talk about Robin Hood's quarter. We also had some quarters that weren't the best, like a Duolingo, which look, the quarter was decent, but there were some things that weren't that good. That stock's down 20%. Door Dash down 15%. ELF down almost 25%. I mean, you got a lot of these consumer names that really either put up the numbers or they didn't put up the numbers and they said something their guidance that wasn't really the best and the market is obviously not giving them the premium today.

So, we're going to talk about that. We got a bunch of different names that reported this morning. D-Wave, Oscar. So, we're going to get through all that and go through all those earnings, but we have a lot of earnings to cover. Today after the bell, we are going to be live and we also have a lot of earnings. We are gonna have Soundtown, Airbnb, Trade Desk, Iren. I know everyone cares about Iren. I'll be listening to the call for Iren, Archer, SMR, DraftKings, OpenDoor today. Oh my god. Okay, today's going to be wild. Affirm Square, MP Materials, Monster Energy Drink, Pelaton, AbCellera, and a lot of people like that one. Sweet Green, Wind Hotels, Dropbox, Texas Roadhouse, US AR, another rare earth company. We got a lot of stuff, a lot of stuff today.

On top of that, I recently invested in a startup. I was telling you guys about this crypto-based finance startup. I'm going to have the founders of that startup come on at around 11 a.m., so towards the end of the market open. They just announced their equity race today by one of the leading VC firms in Silicon Valley. So, very grateful to be part of that.

Again, the only reason I got to invest is because I debated one of the founders back in 2016. Have not talked to him in 10 years. But he hit me up on LinkedIn a couple weeks ago and pitched it to me and that's why I made the investment. So we'll introduce that startup to people and you know their growth is like 20x in the past three weeks. It's kind of crazy and so given we're all in the financial ecosystem I think it is important to kind of look at some of these up and-coming names and potentially they're going up against the big dogs like the Coinbases of the world when it comes to crypto.

All right, let's get started. Robin Hood, Robin Hood, Robin Hood, Robin Hood earnings. Let's do a couple minutes on Robin and then we'll get into all the different macro stuff we've got going on. What can I say about these earnings? These were some of the most phenomenal earnings I've seen.

Um, honestly, and obviously I'm biased here because these are two of my biggest holdings, but Robin Hood and Palantir put up, I think, two of the best quarters I've ever seen in stock market history. And I'm not trying to be hyperbolic here, like I'm really not. I think I tend to be pretty objective on these names. But if you look at these earnings, if you actually go under the hood and see what they've done, it is just incredible.

They're growing revenues at a 100% year-over-year, 1.27 billion. Net income is 271 million. There's a 50% net income margin, 50 cents on every dollar becomes profit. 61 cents of EPS up almost 300% year-over-year. Adjusted EBA is up 177%. Gold subscribers almost 4 million. And then platform assets 119%. The stock is flat.

And this is something that I said yesterday that the stock would probably be flat because a lot is baked into it. It's up 240% year to date. Could I imagine it pops today when the market opens and we get a ton of volume? Yes, because that quarter was just really good. But even if it doesn't, again, it's understandable. And the stock actually dumped it. We got to like 137 as soon as the earnings came out because, you know, the algos kind of take control when these earnings come through. But if you really look at the earnings, my goodness, this was just an unfathomably good quarter.

And the reason why the quarter was so good is because the operating leverage that Robin Hood is creating is something that I don't think we've ever seen before. Honestly, the only two companies that are doing it like this are Hood and Palantir. They are able to grow the top line at an unbelievably accelerated rate while also managing the bottom line to become more efficient.

And that's the holy grail of any investment is like can you grow the top line and the bottom line in the same way while being able to make sure that the operating leverage of the business overall has a trajectory for growth. At the same time they bought back a million shares. They increased adjusted IBIDA. They kept OPEX relatively flat. Net income is up.

And the biggest stat that I think some people are overlooking and my biggest concern actually for Robin Hood going into the end of the year was that they've had easy comps for a long time. aka they had to beat 637 million from Q3, which is relatively easy to do. They did 1.27 billion, so they beat by over 100%.

Next quarter for Q4, they've got to beat a billion dollars of revenue. It's really hard to grow a 100% because then they would have to put up like $2 billion of revenue, which might not be the easiest thing to do in Q4. They disclosed that their October numbers on equities, options, prediction markets, crypto, etc. was better than the entirety of Q3.

I'll say that again. their October numbers were better than the entirety of Q3, which means even if November and December are a dud, which they're not going to be given we're seeing momentum in these two months, we are likely going to see a massive beat going into Q4 or even if it's not a massive beat, it's definitely going to beat a billion dollars. They're not going to have any problem being able to show growth, which I was actually concerned about is like could they actually show the growth?

But they've accelerated the business in such a way that they brought in so many new accounts, so many new subscribers, so many new higher level accounts, and you can tell their net deposits. Take a look at that. $20 billion in three months came to the platform. I mean, you look at a lot of the other fintexs of the world, they're not bringing in 20 billion. They're barely bringing in $3 billion because it's really hard to bring over money from JP Morgan and Bank of America into a small niche company like a Robin Hood. But they've figured it out.

And that 20 billion includes a lot of large accounts. Their margin interest, aka the amount of people that are paying interest to borrow money from Robin Hood, went to $153 million, up from 114, 16 billion on their margin book now, which is an all-time high. And the reason that's also really important, number one, it shows that there's a risk on appetite in the market because people are willing to borrow money and pay interest on it. But number two, a lot of wealthier, high net worth individuals utilize margin. And as a result, if you're bringing those accounts onto your platform and they're borrowing millions and millions of dollars and they're paying interest on that, you know, for Robin Hood, that's a very, very good deal. And as rates come down, that likely is only going to accelerate because the cost of capital will continue to get cheaper.

So, I mean, there's a variety of different things to look at in this earnings call. I'll probably do a separate video on it to go deeper on it, but from margin interest to prediction markets to the October guidance signaling that it's better than the entirety of Q3 to record transaction volumes, record net interest revenues at 456 million. And then this slide right here that I thought was really important. They are taking market share at scale.

If you take a look at this right here, they now have 1% of the equity markets, 7.4% of options, 1% of crypto, and 1% of margin that it's barely penetrated. I mean, over the next 10 years, this is going to get well above 10% in my opinion when we're talking about a global market share of all these different products.

And in my opinion, and I tweeted this last night, I think they're setting up the foundation for a trillion dollar market cap. I really do. And I say that not with a lot of hesitancy. And I know people are like, "Wait a second, JP Morgan's only at $800 billion. How are you saying, Robin, it's gonna be a trillion dollar business?" That's a fair point. I'm not saying it's happening overnight. I'm not even saying it's going to happen over the next 10 years.

What I am saying is the level of innovation that we are seeing from this company, the level of trust I have in management to just ship more and more products, expand into new verticals. Case in point, prediction markets did 2.3 billion contracts in all of Q3. In October, it did 2.5 billion contracts, 25 million, boom, right to the bottom line in one month. Robin had entered this market less than a year ago. And they weren't even the first entrant. Poly market and Kalshi already had the lead.

So it's like I just and banking's coming next year. You got all these AI services coming next. I think there's so many verticals that they are going to expand into that I think over the lifetime of covering this company, they will be over a trillion dollars. they will be the beneficiaries of the largest wealth transfer we've seen from boomers to millennials. And I think the macro tailwinds along with the company specific execution is kind of making this blatantly obvious that it's going to get to a trillion.

Now, that doesn't mean buying it at $143 is going to be good in the short term because Trump could tweet something and then 2026 could be a bare market and then hood falls 50%. like anything could happen. But the point is if you really do have a long-term trajectory on this, I think it's a quality generational company that is going to a trillion dollars one day and very very excited based on the earnings that they put up.

So that's what we got on Robin Hood. Uh we'll talk more about it throughout the entire show, but uh if you're a shareholder, I think you got to be happy with this. Again, same thing like AMD, they had a phenomenal earnings. Stock was relatively flat. A lot is baked into a lot of these equity prices as we're getting into Q3 earnings. you're just not going to see a ton of momentum because the street has to really ask themselves, can they give more of a premium to something that has a premium, but if the growth goes up and the stock stays flat or the stock comes down, the multiple goes down, which is also really good long term for the stock to consolidate into the quality of the multiple that it has right now.

I essentially asked him about tokenization. That's the other thing I didn't talk about too much. I think this tokenization thing we all are really not understanding and in fact the startup that I invested in when we're going to interview the founders in a couple hours. They are also in this tokenization world and like basically I asked Vlad to say hey can you speak on how big the opportunity is and for all my open door bulls he mentioned real estate. He mentioned private credit he mentioned a variety of different assets outside of just equities that can scale on the blockchain.

And when you think of assets coming on chain, that's why I'm super bullish Ethereum, but I'm also super bullish on the company that can become the toll booth to collect all the trading volumes on those assets. And when we think about trading volumes in the traditional financial market, it's as Larry Fink said, almost $4.5 trillion dollars that coming on chain and increasing more liquidity to everyone because you don't need to have a bank account to now trade these assets or be registered with some broker. You can just have a wallet address to be able to trade them up and down. That's a really big market. like we're talking about many many tens of trillions of dollars that market is. Robin Hood is not going to get the entire market, but if they even get four to 5% of it, that's going to be a massive business for them.

All right, so that's what we got on Robin Hood and that's what we had yesterday. Let's get into some of the other headlines. So, a couple of different things that we got going on. First of all, OpenAI, actually, let's do earnings. Let's do earnings real quick. Let's just look at some earnings results and then we'll get into some of the headlines around AI.

So, we have a bunch of earnings this morning. I'm not going to go super deep into them. I'm just going to give you guys their topline results and we'll see how their stocks are doing and then we'll keep going from there. First of all, let's get into D-Wave Quantum stock that had earnings today. I believe they beat on the top and the bottom. Let me pull this up. D-Wave, yes, they beat by 29% on revenues. or sorry, EPS beat by 23% in revenue, 3.73 million versus 3.03 million expected. They lost 5 cents versus 7 cents. Revenue is up about 100% year-over-year and EPS is up 58% year-over-year. That's what you have on D-Wave, ticker symbol QBTS, that stock is flat.

Warner Brothers, these guys are potentially going to be bought out. Missed by 50% on EPS, missed by 1% on revenue. Obviously, not in the best operating shape as a business. There are very large rumors that Netflix or Comcast is going to buy them out. These guys are also flat and you know, they're not really putting up earnings that you would think that a public company that is going to survive long term is putting up.

Moderna pharmaceutical, they beat by 76% on EPS, beat by 17% on revenue. MRNA, that stock is up 7%. By the way, at 11:00 a.m., Trump is going to be making an announcement. That announcement has to do with drugs. We're not going to be watching it because it's not about the economy or anything like that. It's about Trump RX and Ozempic and stuff like that. So, I really don't think it's going to be that interesting to watch.

Data Dog, they crushed it. They beat by 20% on EPS. 55 cents versus 46 cents expected. 885 versus 852. Again, more software companies continuing to put up revenue, which is really good because you want to see that AI is a tailwind for a lot of these businesses. EPS up 20% year-over-year. revenue is up 28% year-over-year. They're actually having the best performance in the pre-markets. Look at that. Up 19% right here, which is not too bad for Data Dog as that one goes green.

Now, Celsius, I was confused. Their stocks down, but they beat by 50% on EPS. 42 cents versus 28 cents expected. 725 versus 715. That stock down 15%. I don't know why it's down 15%. It's kind of confusing. I mean, when you beat EPS by 50%, there's got to be something management is guiding for saying that's really troubling people.

Oscar beat by 9% on EPS. Lost 53 cents a share versus 58 cents, 2.98 billion versus 3.08. They missed revenues by a little bit. Oscar was up and then it came down. Now it's back up 10% on the day. It did get to like 19.50, I think, then it fell to 17. Now it's back at 18.79. Again, I don't know all the nuances of Oscar's business. I know that they're in the healthcare space and those ACA subsidies are going to be very important for them long term.

Yesterday we had a lot of different earnings. Um, as you can see on the left hand side right here, Duolingo, my goodness, 189. I just want to give a big thank you, a very big thank you to the Green Owl. And my thank you is not on behalf of myself. It's on behalf of Matt Money because in my stock draft, you know, I just want to let the Green Owl know that Matt Money is very grateful for the fact that I am never going to recover and even have a chance even after having Pounder Hood, Tesla, AMD, and Nebus to be able to win this damn draft.

I don't know what's going on with this stock and I don't personally own it. When I did the deep dive on it, for those that actually read towards the end of the deep dive, the conclusion was I can't buy the stock. And the reason is I can't buy the stock is because of the narrative of the AI overhang.

I spent a lot of time in that deep dive towards the end of it actually explaining, look, I think there's a moat in regards to the metrics. And look, it's hard to say there's not a moat when you look at these metrics. DAU's all-time highs, MAU's all-time high, subrevenue all-time high, paid subscribers all-time high. But there is a narrative and that narrative actually infiltrated itself in terms of some of the numbers on Dualingo yesterday when they didn't give I believe bookings a guide for Q4 and their percentage of paid subscribers as a percentage of overall revenue went down for like the fifth quarter in a row.

That to me is a narrative issue more than anything. I don't know if that's a fundamental issue because you know when you beat the estimates and you you're consistently profitable you are putting up good earnings. It's either the multiple is way too high and the street can't stomach it or the narrative is so bad and we saw this with Google for a long time until Google was able to change the narrative with the DOJ.

What about buying Duolingo right now? Well, so now it's below the 200 day moving average. Now you know the multiple has compressed dramatically. Now it looks a lot more attractive. The problem is now you're bottom fishing. And if you're bottom fishing, you have to understand that you're bottom fishing with the intention of buying a very high quality business based on the numbers that we've seen at a multiple that is compressed because the street doesn't understand it.

Here is the CEO of Duolingo real quick just talking about some of these bare market or bearish concerns about Duolingo and then we'll keep going from there

>> of the competitive land landscape. Uh you know I think people you know people say things like uh the two things that people say about the competitive landscape with AI are number one why would anybody want to learn a language with Duolingo when you can just learn it with ChachiPT. Um okay uh I you know we're not particularly worried about that. The main thing that we do really well is keep people engaged. And in order to learn a language, you need to be engaged for years. And then the other thing that people have said that they're worried about is oh well nobody's going to want to learn a language because we're going to have simultaneous language translation and okay also not worried about that. For the last 10 years we have not seen the desire to learn a language go down at all.

Let's talk about the other reason why we might be having a little bit of a red market, and that has to do with what happened with Nvidia and OpenAI yesterday. Jensen at a conference in London basically said China's going to win the AI race. That that's in a nutshell that's what he said. And the streets started freaking out and they started selling off the stock and then Jensen four hours later had to comment and say, "As I have long said, China is nanoseconds behind America in AI. It's vital that America wins by racing ahead and winning developers worldwide." Aka, Jensen double down on the thesis that wait a second, I'm not going to take back what I said just because my stock is down five bucks and it just lost 120 billion in market cap. I'm gonna double down and say, "Guys, no." Like, China is very close to America when it comes to AI capabilities.

Now, why is Jensen saying that? I think we all, you know, can read between the lines, he wants to be able to sell into China. And right now, he doesn't have the ability to sell into China. In fact, he has a great relationship with Trump, but Trump is like on the side of his advisers like Marco Rubio that are saying we shouldn't be allowing Nvidia to sell these high quality chips into China. So, Jensen right here is obviously trying to save the company a little bit and say it's not fair for us to not be able to sell into China and if we don't then China's eventually going to beat us.

And then OpenAI came out at some conference and they basically said, "We are seeking government backing to boost AI investments." The quote was from the CFO. This is where we're looking for an ecosystem of banks, private equity, and maybe even governmental. federal loans guarantees would really drop the cost of the financing. Obviously, this got a lot of people worried because everyone...the question continues to remain, is this unsustainable to say they're going to spend 1.4 trillion dollars, have all these spending commitments, and not really have the cash flows to be able to put up for it. It already is screaming. It's very bubblish. And now you're saying you want the government to be involved in backstopping these loans.

The CFO clarified on LinkedIn, I want to clarify my comments earlier today. Opening eye is not seeking a government backstop for our infrastructure commitments. I used the word backstop and it muddied the point as the full clip of my answer shows. I think that's a little, you know, PR to try to cover up the quote.

The Supreme Court started hearing comments of tariffs yesterday. Here is what Trump had to say on Fox around what's going on with the Supreme Court and these tariffs. Trump has said this decision is going to be life or death for the United States. Now, my understanding of the decision is that it's not coming out till January. There are mixed reports. Some reports are saying that the Supreme Court justices are more on the side that it's unconstitutional. Other are saying that they're on his side. But from my understanding, we're not going to get a decision until January. If it ends up happening before January, then that is very important. I'm going to try to get some clarity on when exactly the Supreme Court will make their ruling. But if it's before the end of the year, that's a big deal because that could affect markets dramatically if somehow the ruling ends up going against Trump.

Jobs data, we got some third party jobs reporting this morning. The exact quote right here from Challenger is that US employers announced 153,000 job cuts in October, 175% year-over-year, the highest since October 2003. Employers are setting cost cutting and AI as the primary drivers of these cuts.

JP Morgan this morning said that the market is rocked by headlines that layoffs are spiking due to AI. The market is weighing a weaker labor market and potential spending versus evidence on the efficacy and ROI of AI plus productivity gains. And so when you look at what Chipotle said, when you look at what Door Dash said, when you look at what a bunch of these other consumer brands are talking about ELF in regards to having some issues with the consumer, they're not explicitly saying the consumer is in a horrible situation and you guys need to prepare for the worst, but they are saying we are seeing signs of weakness.

S&P 500 opens up red on the day. Again, we had a lot of earnings yesterday. So, we're going to see how some of these stock prices react as we get into it. As you can see right there, the S&P 500 is indeed red. Robin Hood goes red 2.39% down about 3%. Palantir right there, that also goes red. We're seeing red across the entire board.

Dualingo 27% down on the day. Door Dash 13%. Tesla goes down. The shareholder meeting is going to be happening today. So that's going to be very important as well to see what happens with Elon getting this compensation package. I think it'll pass overwhelmingly.

Celsius down 20%. I don't get it. If anyone's a Celsius bull, let me know if you know why this thing is getting hit by 21%. They beat EPS by 50%. I'm really not sure why.

So, I had a conversation last night with a really good friend and I want to give you guys some takeaways from the conversation. The basic thesis on grab right here that I wanted to ask him for is look the stock is flat although the earnings trajectory is good. We concluded the answer is no. And again, we spent a lot of time going through this. We really looked at the thesis and we said the only part we might be being a little bit aggressive on is giving it a higher uh EV to Ebida multiple.

There was a darkpool order yesterday for 43 million shares. What is a darkpool order? A darkpool order usually is conducted by institutions to not be seen by the market makers or by you know the general public when they are executing a trade. We don't know if it's a buy or if it's a sell. Based on the option flow that I've been looking at over the past couple days, I'm leaning towards a buy because the put call ratio is getting stupid.

Now, Sebastian also has Meta as his largest position. I said, "Dude, do I buy the dip?" His answer unequivocally was no. Do not buy the dip on Meta. He said the street is completely justified in taking this stock down because Meta has not shown that they can do anything in their business to generate an ROI outside of advertising. And his argument is that they did 72 billion of capex this year. Reality Labs is losing money. The glasses are a dud. Zuck already showed people in 2022 that he's willing to spend money and the only reason he pivoted was because the stock fell to $88.

And Sebastian's argument is Google and Microsoft and Meta that are spending almost the same amount a little bit more than Meta but almost the same amount that Meta is spending. They have something called a cloud and that cloud is generating a lot of freaking revenue. Meta does not have a cloud. Meta has advertising. And the biggest thing that pissed him off on the call is that Zuck kind of like said on the call to a response to a question about Capex that oh if we have leftover GPUs we'll come up with our own NeoCloud data center. And he was just like this guy has no plan. This guy has absolutely no plan. He doesn't know what he's doing with AI.

Eli Lily and Novo Nordisk are committing to offer Zepbound and Wiggoi at most favored nations rates for American patients. This will slash the cost of Wiggoi from $1,350 a month to ultimately $250 a month. In addition, they're both committing that future GOP1 weight loss drugs taken orally, which are currently under development, will be sold at no more than $149 per month. Just as significantly, Medicare and Medicaid will finally cover the costs of these weight loss drugs for millions of patients suffering from obesity. Co-pays for Medicare patients will be as low as $50.

Ugly, ugly stuff today. And again, I still don't think anyone has a full reason. I know we've pontificated about a variety of reasons, but there's not that core headline that everyone can point to. Tesla vote is at the market close, so we'll cover that when we're back on the close. The banks are somewhat green. Everything high momentum is getting wrecked today.

The only thing I can kind of piece together is shutdown fear is intensifying the labor market data we got from the challenger third party study showing the most layoffs in October since 2003. That could be a headline that's pissing off the markets. And then the last thing could quite literally just be the consolidation of October gains.

Fear and greed. Are we at extreme fear yet? We are at extreme fear officially. We were there a couple days ago and now we are back.

Equinimity. Mental calmness, calmness, composure, evenness of temper. Uh especially under stress or pressure. That's actually a really good one for today. Got to keep the mental composure straight on a day like this. If you're not leveraged, if you're not on margin, if you don't have to worry about getting in and out of a position because it could wreck the account. Um, you kind of just don't look at it and wait for more data is what I would say.