Hey everybody, welcome back to the channel. We are back on another episode of the daily recap. We have got a bunch to talk about today. Number one, Oracle after hours $38 billion debt offering in regards to building out, you guessed it, data centers. We're going to talk about it, the implications on what it means for those data center companies. Palier signed a pretty large partnership today. The estimate is potentially $200 million multi-year partnership with Lumen. We're going to talk about that partnership, what it means. earnings. We are officially in earnings season. Next week is really when we get a lot of the big tech earnings, but we did have Tesla yesterday. So, we're going to recap Tesla, talk about some of the earnings that have happened throughout uh the past 48 hours along with some macro stats. The basic argument here on earnings is that it's looking like Q3 is going to be a pretty strong quarter based on the earnings that we got today. Intel and Ford, not the worst earnings in the world. So, we got a lot to talk about. Let's get into it.

Okay, let's start off with this debt news around Oracle. So, there's a couple of implications to this that I think are really important. First of all, what is the headline? Oracle, and this came out really an hour ago after hours. Quite incredible to see this uh is completing a $38 billion debt offering uh likely through some version of corporate bonds. They did 13 billion a month ago, and they were giving out about 6.5% on those corporate bonds. We don't know the exact rate on these bonds, but it will be 23.5 billion towards a data center in Texas and 14.75 billion to a facility that is going to help a project in Wisconsin.

Now, Vantage Data Centers is the name of the company that's going to be developing both of the data centers, which are set to be used by Oracle to power OpenAI. We've been talking a lot about on on this channel about how vital Open AI is to this broader ecosystem and how much OpenAI ultimately needs to succeed. Here's a fun stat for everybody. AMD, Nvidia, Broadcom, and Oracle all had their market caps collectively go up by $630 billion in the following days after they announced their partnerships over the past two months with OpenAI. So, OpenAI obviously is integral to a lot of what's going on. And now it looks like $38 billion is going to be financed by JP Morgan, Wells Fargo, Goldman Sachs. You have some of the Saudis jumping into this, some of the Japanese, uh, some of the European banks as well in France. You have a ton of these different companies coming in to say, "Hey, we want to help you finance this overall data center buildout."

Now, two perspectives on this. Let's do bullish than bearish. Number one, bullish. I ran Cipher, Terwolf, Bit Farms, Nebius, Cororeweave, Galaxy. I'm probably leaving out some data center names, but whatever stock that you are in, obviously AMD, Nvidia, Broadcom, if you're in those data center plays, uh it seems like the demand for this product is the biggest product in the world and it might be the biggest product in the world forever. The demand for data centers is insatiable. The hyperscalers are financing it. The free cash flows from the hypersalers are continuing to subsidize it and as a result, your Nebius, your INE, your cipher, they might get a three, four, five, seven billion dollar contract. their market caps are only from 10 to 15 billion dollars, which one could argue is expensive, but if they get these deals, it becomes less expensive because they end up showing real growth.

So, I think if you're in any of those names, which have taken a beating over the past couple weeks, and I think it's kind of good, right? Everything in the stock market took a beating, whether it was high momentum or it was just a regular, you know, name like like a Google, like everything needed to take a little bit of a pullback so we can get that next leg to go higher. It's a little painful to deal with, but at the end of the day, it is healthy. And uh maybe this is a part of the story, a part of the news that can help make us get that next leg up for those data center plays. By the way, the S&P 500 closed at 671. I mean, it was a relatively good day across the board. Some of those momentum names, even in Oaklo that fell from 193 down to 118, ended the day at 125. So, of course, it's not back at 195, but it's also not down, you know, below 100. So, you are seeing a little bit of that momentum stabilization across the market.

Now, here's the bare case. This is debt. This is debt. And we got to be honest about it. This is something that I don't love to see. I'm sure a lot of you guys don't love to see and my only response to this, which has been my response over the past couple weeks as I've been trying to justify why the debt financing makes sense, is that if there is an ROI from AI, which if you're invested in the stock market at this point, you've got to believe got no matter what you're in, you've got to believe there's going to be some ROI on AI. As long as there is an ROI, you can justify it. If there is no ROI, if there is no, you know, return that Oracle thinks they're going to get, which is why they're happy to pay this 6 and a half% interest that they have to pay on this 40 billion bucks because they're going to make way more than six and a half%. Then this all falls apart.

So, you know, my logic here is that the use cases of AI are just evolving. AMD this morning talked about helping to detect certain illnesses before they happen with a different company via AI. I know the you know elementary use cases of AI like taking a meeting summary which is still important and can make companies more productive is not as important as we're expecting FSD robotics personal assistance all of this stuff is coming in the future and as long as it manifests in what we think it can manifest into and we don't know we're going to have to see we're all living through this lifetime to see if that plays out this ROI is going to be there so I think for the people that are afraid that it's debt you should be afraid I think every investor should be like well it's a lot of debt but if the technology actually has value that can pay back the debt, then it likely makes sense.

Okay, next topic. Uh let's talk about earnings, folks. We have been getting some pretty damn good earnings results across the board, and it is quite incredible to see. So, I just want to give a couple stats today. Out of the 60 companies that have reported in the S&P 500 so far, 85% of them have beat earnings by an average of 8%. So, you are seeing that earnings growth across the board and beating some of the estimates. Some of the companies today that reported digital realy, they beat earnings by 510%. Next Tracker beat earnings by 18%. Ford, you know, legacy auto company beat earnings by 25%. By the way, revenue they beat by three billion. I mean, just just a quick note on Ford, you know, Ford sells cars to the consumer.

The consumer has to be able to buy those cars for Ford to make money. I'm not saying that there's not issues or cracks in the economy, but if people are willing to buy $3 billion worth of cars in Q3 ahead of expectations, that means the consumer might not be in the worst situation. They're not in the best situation, but they might not be in the worst situation. Pneumont beat earnings by 19%. Deckers, another consumer brand, selling shoes and clothes, beat earnings by 15%. And then you had the uh basically stock of the day, story of the day. Intel beating earnings by 2,200%. 23 cents versus 1 cent expected. Massive, massive beat for Intel. Donny T did have that $9 billion stake that they took a couple months ago. Should have followed Donn T.

Uh so look what does this mean about the earnings picture? I think the most important thing that it says about the earnings picture is that the at the end of the day a lot of these companies are beating on revenue or they're beating you know in or they're coming in line with revenue but they're really beating on EPS. Now why does that matter? EPS is a function of earnings per share. How do you determine earnings per share? Well you have to take the total shares outstanding in a company. You have to take the earnings, aka the net income, the gap net income, not the operating income, but the actual income after all of your expenses that a company is able to produce, and then you have to divide it by the number of shares, and then you get an EPS, an earnings per share. If the margins on a company are going higher, they have better earnings.

So, if you're making 30 cents on every dollar in profit, you have a 30% net income margin. If you're making 35 cents on every dollar, you have a 35% net income margin. at margin increase ahead of what the analysts are expecting. And what is Wall Street? Wall Street is a game of perception, not reality. Eventually, it becomes reality, but in the short term, it is perception. If the perception on Wall Street is that AMD is going to do a $150 a share, and AMD does $1.75 a share, that's 25 cents per share more than the street expected. And what I'm seeing in terms of all these earnings, and for those that follow the market, open, market, close every day, as we're looking at all these earnings, companies are beating pretty damn well.

So then it begs the question for the companies that are beating um wait a second are they beating because of AI? Are they beating because of earnings? Are they beating because their earnings are so good then their margin enhancement is so good and their productivity is so good that AI is allowing them to show up these good earnings? I think that is the existential question and I don't have a definitive response for this yet. after earning season is done, I kind of want to compile all the transcripts that we've heard from all these companies and you know kind of look for some themes in what these the these companies are saying. But if they all start mentioning margins are going up because workers are becoming more productive, employees ultimately have more decisions in the company as they have more autonomy to make new decisions, be more creative with the advance of AI. And as a result, we are actually seeing progress internally and externally with our products and services than internally with the companies uh that we're working with and the employees that we're working with to produce those products and services which is leading to better business results.

I mean that is the promise of AI at least to an extent in the stock market and also what that matters for the S&P 500 which is trading at 26 times earnings uh you know historically should be trading at 18 times is that we are validated to an extent to have the S&P trade at these levels. The only way you get a market to trade at higher than historical levels if is if something actually matters to that market to be able to give you a reason for why investors should pay a multiple. Lots of times investors pay a higher multiple based on pure hype. If the earnings growth is there and again not every company's going to put that up for but for the companies that matter if they can put that up then that earnings multiple will continue to expand because where else are you going to put your money right like yes you have gold you have crypto but at the end of the day if you want your money to compound inside of an asset that produces free cash flow and net income you need to put it into something that can actually grow and if it's showing the growth you're willing to pay a bit more of a premium especially if there is meaningful growth that is a trajectory of longevity and that's what justifies the market being where it is today.

So, it is quite incredible to see the earnings that we've seen so far and I'm just hoping that in Q3 that can continue when we get the most important companies in the world that are starting next week.

Okay, Tesla. Let's talk about Tessy. So, look, Tesla had one of those quarters, we talked about it over the past couple days that was a good quarter, not a great quarter. Um, and you know, it was just one of those quarters where the street was like, "All right, cool." You know, we're just going to see if the progress can continue the way that everyone thinks it eventually will continue. Tesla actually ended green on the day as the entire market came up uh 448.98 a little bit red after hours. It did fall all the way to 418. So if you did buy that 418 dip uh you got it here now round about at 450. Uh they missed on EPS 55 cents versus 50 expected. Uh so or 50 cents versus 55 cents expected. So they missed on EPS. They beat on revenue. The biggest thing about this Tesla earnings is that when you listen to Elon on the call, I mean it was typical Elon, right?

He you know he had some energy. He was talking about different things around the business, FSD, autonomy, robots. I mean, ended up saying that he's going to build a robot army and he doesn't want to lose controlling power of that robot army, so everyone needs to vote for his compensation package. So, I mean, you had the typical Elon thing there. The one thing that pissed off a lot of people was that they didn't talk about future products and I understand why they can't do it, but like they kind of didn't really answer the questions that most shareholders cared about. So, that was one thing that uh was not the best for some of the Tesla faithful that were just annoyed they didn't get those answers.

I think the biggest thing is as follows. Based on what Elon said on this call and the last call, it doesn't look like there's massive earnings growth potential going into 2026 at the current state of the business. And the reason for that is because energy, even if they double it next year, is not going to make a meaningful difference in terms of the actual net income or earnings growth that the company can put up. Vehicle deliveries, this is the wild card. I mean, look, the EV subsidy is going away. So, the question becomes, without the EV subsidy, are they going to be able to sell as many vehicles as they did even this year? Now you do have rates coming down which should hopefully be helpful. But nonetheless, if people aren't buying that many Teslas, they're just not going to have that much, you know, raw revenue coming through the door. So that's another problem that's potentially not going to help them next year.

Optimus, Elon said production for Optimus is going to start next year. So that's great, but that doesn't mean they're necessarily getting orders yet for Optimus. Now, that could change if they report that like Walmart's buying two million robots and they already put in a purchase order for them. That's a whole different question. that could completely rebate the stock overnight, but uh that so far has not really, you know, put in into the the the ether. So then the question just becomes FSD. And FSD, you know, I updated recently. I'm not on 14 yet. I was at 13.2. And I said that the nagging that FSD does in terms of forcing you to like constantly look in the road, not even check your phone if you get a message for like 4 seconds. Um that was really annoying. And Elon said specifically if we can get to the point where people in the car can text and drive aka they can, you know, text being a metaphor, do whatever they want in the car without having to worry about getting bombarded with messages of like paying attention, that's when they win.

And I agree if that if if Tesla can actually get unsupervised FSD because I use it every day and I love it. If if you could get someone to do whatever they want in the car without having to worry about the implications of like driving, that would be a game changer. Unfortunately, Tesla's not there yet, but Elon knows that they're getting closer. And if they do end up achieving that goal, they're going to win regardless of how much uh, you know, vehicles they sell because no other company has so far been able to do that. Now, there's a lot of companies that are competing with your Whimos and all these other AV startups. But that's one of the main things Tesla cares about.

I think the big thing going into 2026 is that this stock trades at a very aggressive valuation. Now, Tesla's always traded at a very aggressive valuation. So, you know, one of the reasons I like Tesla is because you're able to build a narrative and a story long term and kind of pull forward the growth and then watch that growth grow into an S-curve. The problem is the stock's not $200 anymore. The stock's at $450. So, if you're expecting upside in 2026, the question is where is the earnings growth coming from or do they even need earnings growth? Now, you could say they don't need earnings growth because the potential of their earnings is so strong that it doesn't really matter that they don't have the earnings growth right now. It's going to happen in the future. That's fair. And that might very well take the stock higher as rates come down, etc. people might just want to park their money in Tesla. Um, but if we have another year of negative 30% earnings growth, again, Tesla is not growing. It's negative 30% growth, even though the valuation is assuming that they're growing, then the question just becomes what's the upside going into next year.

And I do think there is upside. I just think it's towards the latter half of the year when you start to get more progress around FSD and optimist and you start to see that really materialize. Until then, I think it's business as usual. I mean, it was not a bad quarter. It was not a good quarter in or not a phenomenal quarter. It was a decent quarter and the stock is relatively flat based on the quarter. I mean, it was at 440 yesterday. It's at 448 today. So, you didn't have this explosive upside, but you also didn't have explosive downside. And I think that's how it should be. Like, you shouldn't have massive downside for Tesla when everyone knows the story. FSD Robotics. It's just that story is not materializing in earnings today. The question for 2026 is how much investors are willing to pay in terms of a premium for that story to materialize eventually. And I would love to know in the chat, I mean like are you willing to subsidize at these prices Tesla uh over like an Nvidia, Amazon, Google, Meta, all these other companies that are showing the earnings growth because you believe the expon exponential nature of their S-curves are so strong that it doesn't matter what the multiple is today. It matters can Tesla actually grow into that multiple. And if that's the case, then ultimately we're going to see how the story plays out with Tesla. But not a bad quarter, not a phenomenal quarter, just a regular quarter. And if Tesla keeps executing, hopefully that quarter turns into positive growth going into 26.

All right, last thing for today is Palanteer and Alex Karp. Now, I'm going to attach a small compilation video at the end of this video that has a couple clips of the best moments of Palanteer's uh CEO Alex Karp's new interview. Uh this was on Fox Business. I thought it was a great interview. So, a couple clips that I will be posting at the end for you guys to get some of the juicy highlights. Main thing, Pounder, and Lumen, big partnership, multi-year partnership, $200 million. essentially pounder and lumen are going to be working in a collaborative effort to be able to deliver value to all the clients that they both share, especially in the government and commercial space.

Um, pretty cool stuff. They both the CEOs came on Fox Business and it's very similar to a lot of other CEOs and how they talk about Palunteer. Palanteer's value is downstream from value creation. If they're able to create value, they're able to get paid. And you know, the CEO of this interview basically said, "Carp came into the room, showed us the value, and then we decided to sign a big contract because at the end of the day, a palenteer is able to do what they can do in a very very sophisticated way that a lot of other data service providers just aren't able to do. So overall, look, I I I've said this over the past couple days. I think Paler has a shot at 200 after um after their earnings. I did buy a little bit at 17238. I know I'm buying a company that is trading at a very expensive multiple. I just think logically if they show 50 to 55% earnings growth I think the stock probably goes higher. I could be wrong and maybe the street's expecting that number and pounder comes in a little bit less and then it goes down 10% that can happen. I'm willing to deal with it.

Uh I I I am willing to DCA into the companies that I really do believe in even if I'm buying them at a higher multiple but I think it could be a really good quarter and if it is a really good quarter then I think that could be really good for Pounder and their trajectory. Two quick things I just want to say on the macro before we play these pounder clips. Number one, uh Trump confirmed he will be meeting with X on October 30th. very important for easing China relations and potentially getting a negotiated deal. Uh so that's going to be important. That's going to happen Octo October 30th. Jameson Greer and Bent are going to be speaking to the China vice premier which is China's trade representative. So it's good to have more conversation between Bent Jameson Greer who is the trade representative for the United States and China.

Uh and then final thing I want to say right here on macro. Uh buybacks are starting folks. Buybacks are starting. We've been in a blackout period for buybacks over the past basically month. As we get into earnings, companies can't really buy back their stock. That period is coming to an end. And so the stat right here also Trump pardoned CZ, which is like this massive figure in the crypto space. So that was another thing that happened today and basically said he was being personally prosecuted by the Biden administration's war on crypto and uh that's why he got a pardon. Uh buybacks have rose 16% year-over-year, reaching a record 1.15 trillion, second consecutive yearly increase. Uh buybacks by the four largest US banks jumped 9.6 billion year-over-year. Uh 21 billion is in Q3 2025 and since the 2020 low share repurchase authorizations have more than tripled. We're getting into a November where more companies are going to buy back their stock.

Uh you've already had a draw down in the market to an extent in a lot of different individual stocks. So, they're setting up for a good earnings rally if those companies can execute and you kind of have that Q4 momentum, which is that Santa Claus rally that a lot of people talk about. You kind of need a little bit of pain before you get those gains. I mean, we could potentially have a really good Q4 going into the end of the year as these buybacks commence. So, that's what we got in the stock market. Thank everybody for listening and watching. Deeply appreciate everyone. This is going to be the last daily recap for the week. It is already Thursday. Been a quick week. I will be back on uh Sunday for the future. So, tomorrow for the Monday or for for Friday's market open, market close, and then yeah, I'm turning 28 on Monday. So, uh on the market close, I said today uh we're going to go through a bunch of my pictures, like pictures from my past that a lot of you guys haven't seen. It'll be like a fun thing we can do on my birthday uh for that market close on October 27th. So, deeply appreciate everybody. Here are some clips of pounders Alex Karp in the latest interview that he did today.

that there's basically the way they look at it and the way I look at it, which is my view, than not uh not not anyone else's, which is we're in a we're in a we're in an arms race here. This is that's all academic, super academic. It's like we're going to either have AI and and determining the rules or our adversaries will have it and they'll determine the rules. And it and so this is why these infrastructure things are crazy important because in order to make it work, what do you need? You need infrastructure that can actually run the models, get the data there in a secure and cheap enough way. You need to make the models actually useful. You need ontology to do that. Meaning, you have to deploy them where they're useful and where they're not and and orchestrate them. And if you start putting impediments on this de facto, what's going to happen is our adversaries will build it and we will be buying everything from them including our ideas of how to run our country. And so like my personal version, Palanteer, what we represent at Palanteer, what we do not impose on anyone else is we're running. We're running like hell and we're going to support anybody, especially people on the front line who can like galvanize this infrastructure and then our clients in the DoD especially, and help make the American war fighter the most lethal in the world.

>> Jen, >> I mean, look, we're doing very well. I mean, you know, and if if we're doing things that are not valuable, then I want to hear about that, too. So, I was I was very supportive of those efforts.

>> Did you Did they tell you there was something? Yeah. You know, we could trim some of the pallet stuff that we have.

>> I I we have so many contracts. We're doing very well. You know, we we are fully aligned with the US government. And if there were, you know, I I don't actually No, I don't think so. But the truth is um you know look our we have we're doing we've become a very large business actually surprisingly to most people outside the US government and in US industry which is where we're just you know crushing it but also in the US government and we're very aligned with our this is one of the secrets of Palunteer because we started in the US government with full alignment when when I show up I'm like I'm not saying pay me and I'll do nothing. I'm like hey we'll show you results and then pay us. We are downstream from value creation. And if downstream from value creation means we're doing something that's not valuable like then I want to know because it's not valuable for you and tomorrow it's not going to be valuable.

>> That's how we started. Alex came into my office first. You were the first US CEO to go to Ukraine after the war began.

>> Uh yes, that's true. And again, it's so funny. I get yelled at in some places because of Israel. I get yelled at in some places Ukraine. And

>> we're not yelling at No, I know you're not. But it's fine. It's like to have someone who welcomes. This is a rare um yeah, you know, I I mean, by the way, just to say the obvious, the Ukrainians are tough and proud people and that's the primary reason they're still fighting. And um yeah, it's very hard to know will happen. I I'm happy, you know, as we've seen the president's fully engaged and I think, you know, at some point we might actually get a piece. I'm really hopeful. It's the worst going on cost a lot a lot of lives, but the truth is I don't know and I'm but I am proud that we're able to support them and they're I they're very very tough people. I think they will, you know, continue fighting until they can until they can reach something that they feel is they can accept.

>> President Trump has said that uh he's not going to meet with Putin right now. He really wants the war to stop, the blood shed to stop and he's

>> you know what it No, I I really respect that about the president that he's actually a peace president and I you know it's far less important but you know we're not a palenteer. The I the idea and just what I very much support is you know you you want to be so strong that there are no wars. worse. Really? Really are bad