Dear Reader,
Today I want to talk about Nvidia, and what it means for us.
Jensen Huang is out at Nvidia.
He’s the founder and the CEO, and he’s been a driving force behind AI.
But it’s important to remember he is not God.
A lot of you have asked for my take.
I’m going to take the weekend to process it before I give you the full version.
But four things come to mind, and they're what I've been telling all the friends who've been texting me.
Four Things I’m Telling My Friends
First, the stock is cheap, period.
Second, the product line is good for two years.
There’s no doubt about that, because they’ve mapped it out.
Third, the interim CEO, Colette Kress, is a serious operator.
She’s been there since 2013 as chief financial officer, the woman behind the throne.
She’s responsible for a lot of the deals they’ve done.
She has serious experience from Microsoft and Cisco.
She’s a billionaire in her own right.
She’s a very shrewd operator.
She’s very well respected in Silicon Valley and beyond, so don’t sleep on her.
Fourth, they report earnings next week.
If I owned Nvidia today, I wouldn’t be selling it.
I’d be looking at it, and I’d be considering buying more, because everybody is in a panic.
Oh my God, the world is coming to an end.
What Bothers Me Most
I think what happened to Jensen is bad.
He’s too valuable a piece.
What really bothers me is how shocked people are that China could have targeted him.
According to the reports, the allegations involve a woman U.S. intelligence officials believe was a Chinese spy.
Nvidia hasn’t addressed that.
But if the reports are accurate, that’s a honey trap, and he fell for it.
He’s a flawed man, fine.
But the fact that China is doing this shows you we are in a cold war.
People who don’t watch this channel seem surprised that China is trying to knock us out of the AI race.
China is trying to win it.
It’s not a hot war, but this is what a cold war looks like.
You take your adversary’s chess pieces off the table.
If the reports are right, that’s exactly what just happened.
Of course, Jensen may decide to go work for Elon Musk or Palmer Luckey or somebody like that.
It’s a different kind of culture there.
They’re really focused on brains over everything.
So it’s very important to keep that in mind.
This is a competition with the highest stakes in the world.
Everybody needs to wake up and realize it.
How We Beat China
Besides winning in AI, I think it comes down to three things.
The first is technological supremacy.
We have to win in AI.
The second is capital markets.
We need to keep our capital free, so our money can chase opportunities.
China is state-directed, which is why it’s always following and copying us.
The third is rebuilding our military.
I mean really rebuilding it, not just saying we’re rebuilding it for political reasons.
What the Winners Have in Common
Think about the great companies built in the last 10, 15, or 20 years that have changed our military.
Palantir. Anduril. SpaceX.
All three have been big winners and important additions to our military.
And they had three things in common.
They made early investors rich, really rich.
They were all built up and nurtured by the U.S. government.
And they were all funded by the CIA, NASA, and the Pentagon.
The Next One
That’s why I keep my eye on the small private companies being built up the same way.
There’s one I’m watching right now.
It’s a tiny private space company — a fraction the size of SpaceX.
NASA has been funding it since 2021.
And it’s building the replacement for the International Space Station.
NASA is paying SpaceX up to $843 million just to bring the old station down.
Once it’s gone, this little company could collect up to $1 billion a year in “rent” from NASA.
That’s the same kind of government-nurtured story that made early investors in Palantir, Anduril, and SpaceX rich.
Get the full story on this NASA-backed company here>>>
It’s become even more important given what happened this week.
It really brings home what’s at stake in this competition with China.
Remember the three ways we beat China.
Technological supremacy.
Capital markets that are deeper, better, and freer than everybody else’s.
And a strong military.
See how to get in early here>>>
Have a great weekend.
God bless you.
God bless America.
I’ll see you Monday.
“The Buck Stops Here,”
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Written by Dylan Jovine