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Chapter 1: What is the main topic discussed in this episode?
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What does it take to be prepared for disaster? You have to be confident. You have to be calm. Will you be perfect? No. But the idea is that you'll have your bearings and this won't be something new to you. This week on Explain It To Me, how to stay ready so you don't have to get ready. New episodes Sundays wherever you get your podcasts.
For years, if you ran a media company, you obsessed about Google because Google could send a fire hose of traffic your way. But now things are changing fast.
So last year, I told all of our teams, you need to plan your businesses around there being no search. And if you don't have a plan for that, you may not have a business. I think it was very effective.
That's Roger Lynch, the CEO of Condé Nast, the home of fabled magazines like The New Yorker and Vogue. And if you want to hear how Lynch is thinking about Google and AI companies and who's going to replace his most famous editors, good news. You can hear all of that on Channels with Peter Kafka. That's out now everywhere.
Welcome to Profiteer Markets.
I'm Ed Elson. It is May 21st. Let's check in on yesterday's market vitals. The major indices all climbed more than 1% after President Trump said talks with Tehran are in the final stages. Brent crude declined, even though Trump also said, quote, we're going to do some things that are a little bit nasty if a deal wasn't made. Treasury yields also stumbled. Tech rallied ahead of Nvidia's earnings.
More on that later. And finally, speculation swirled all day in anticipation of IPO filings from SpaceX and OpenAI, We will get into that right now. SpaceX has officially filed to go public. In a prospectus filed with the SEC yesterday, SpaceX said it will list on the NASDAQ under ticker SPCX. The company is looking to raise $80 billion or more, which would make it the largest IPO in history.
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Chapter 2: What does SpaceX's IPO filing reveal about its financials?
doesn't look like an amazing business at the moment. Like, it's a wonderful, it's a cool science experiment, but that doesn't mean that, you know, it's not obvious how you convert all of this stuff into dollars and cents.
You mentioned earlier the other company that is set to go public, which we actually just learned is going to go public. As of yesterday, that is OpenAI. There were questions over whether this was going to happen. Even the CFO was saying that we needed more time, that the company needed more time before it goes public. But apparently, now that the Elon trial is out of the way,
They are going to go public. Just before we let you go, I'd love to just get your top line thoughts on OpenAI as a business, your expectations for this IPO. And then hopefully we can have a longer conversation about it at some point too.
Yeah, I mean, you know, once again, all of this AI stuff, it's really early in this business and it's really hard to know who the winners and losers will be, you know? So the question with OpenAI, with Anthropic, with any of these is sort of, are they the sort of Google of,
search you know or are you investing in the yahoo or the aol or whatever you know because yeah being first doesn't necessarily make you the big winner um you know it's uh it's not something that i'm excited about just because it's kind of a roll of the dice and a hope and pray kind of thing um you know also it's not obvious even if ai is a huge productivity booster
It's reasonable to think it could boost the productivity of all the people using it, but that doesn't mean they get to charge that because there's sort of 10 models out there. They're all reasonably equivalent to each other. And so the question is, will AI be a winner-take-all model? Right.
like the way internet search was, or will we have kind of 10, you know, it's a bit like Uber, you know, where there's sort of, you know, in every part of the world, there's Uber, and then there's a few other ones. And the problem with, if there's always a few other ones, you never really get to crank up your prices.
And so people benefit from the affordable taxi rides, which is great, but the companies themselves never get that profitable. So with these huge valuations, The assumption is that one of these things is going to win the whole market and is going to be able to charge an awful lot of money for their services in the future.
Very exciting time in the IPO markets. I mean, it's just incredible what we're going to see this year.
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Chapter 3: How much revenue did SpaceX report in Q1 2026?
Each episode, I sit down with high-achieving women to discuss the pursuit of excellence without apology. This week, journalist Dina USC and now, along with her husband Bob Iger, owner of the Angel City FC women's soccer team. Willow Bay. I said, Bob, are you interested in doing this? And he said, absolutely. But I was definitely the driving force, I think, in the conviction about Angel City.
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We're back with Profiteer Markets. Nvidia posted earnings last night, and the entire economy was watching. The chip company had beaten earnings expectations for 18 of the previous 20 quarters, and this time was no different. Total revenues came in at over $81 billion, up 85% from the same period last year, and beating analyst expectations.
NVIDIA also authorized an $80 billion stock buyback and a massive dividend hike, signaling a confident outlook for quarters ahead. Still, investors weren't entirely impressed. The stock whipsawed after hours. So here to give us a breakdown on NVIDIA's earnings, we are speaking with Zed Francis, CIO and co-founder at Convexitas. Zed, thanks so much for joining us.
Just some of the numbers here, $81 billion in revenue, up 85% year over year. The data center revenues up 92% year over year. These numbers are just astounding. Give us your initial read on these NVIDIA earnings.
Yeah, I mean, ultimately, NVIDIA has turned into an established veteran company in comparison to what it was a handful of years ago. So as you alluded to, the beat and raise is basically what's baked in the cake. That's what everybody's expecting at this point, because that's what they've been doing in the past. And we see this stock moving, but kind of benign, ultimately.
I'm a volatility guy at the end of the day, and the options market was pricing in a 5.5% move in NVIDIA on these earnings. And the entire range of after hours were obviously well inside of that. So I think we're kind of at the point where NVIDIA is the new Apple. It's just a boring event, even though it used to be the main show for the last handful of years. Right.
Yeah, in that sense, I mean, the fact that they are authorizing $80 billion in new buybacks, they're raising the dividend from $0.01 to $0.25 per share. I kind of see that, and I love that. It's like they're owning the fact that they are an established, profitable company. And it does seem quite Apple-like in that regard.
Did that stand out to you, the fact that they are returning that money to the shareholders?
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Chapter 4: What are the implications of SpaceX's net losses?
And the concern there is, you know, there's a gold rush for data centers right now. Everyone's trying to build a data center. Once they're built, though, maybe that's it. At which point, What is NVIDIA going to sell? Is that a concern for the company? Is that something that they are addressing and talking about?
Yeah, so you bring up a perfect point. It's very much a barbell industry within the same exact sector. So you have NVIDIA trying to become less cyclical. They're definitely the least cyclical of the group. And the memory guys on the other side are the most cyclical. So what does that mean in terms of valuation and how you think about the business? Well, NVIDIA has more...
forecastable revenues in the out years, beyond, you know, years one, two, three. And so because of that, years ago, they were the first mover in terms of valuation because people gained confidence in the, you know, out years, you know, the years three plus and their ability to produce those revenues And thus, you get a higher valuation.
If folks believe that a decent amount of your ability to produce those earnings is actually reoccurring, then you're naturally going to get a higher valuation, which is exactly what happened with Apple, again, from kind of 2013 through live.
It went from a teens PE stock to a mid-20s plus simply because the confidence of those reoccurring revenues were grown, and NVIDIA is trying to follow that path. opposite side, those memory folks, they have a cliff, right? It is a purely commoditized business where right now they're on the right side of the supply-demand dynamic where they're raising prices dramatically, expanding those margins.
But the market's belief is there is a hard cliff where eventually they will go back to where they were before. And that's why when you look at a You know, a micron, their forward P is like a 12-ish. But ultimately, that's because, well, we have confidence in the next 18, maybe 24 months of earnings. But after that, very, very little confidence.
So it's all about discounting what we know right in front of us versus that longer-term kind of DCF valuation of something with reoccurring revenues.
What do you make of the NVIDIA valuation at this point? I don't have the multiples in front of me, but the stock's trading at around $220 a share. It's up 18% year to date. It's up 66% in the past year. How are you feeling about the valuation at this point?
Yeah, I mean, Ford valuation in mid-20s is about in line with the S&P, technically a little lighter than the market as a whole, so it still has a little bit of that cyclicality priced into it. But I would say it's in the reasonable realm. It's the largest company in the world.
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