Dear Reader,
Today I want to talk about Nvidia again.
On Monday, this company literally suffered the largest loss of stock market value in history.
Almost $600 billion!
It’s unbelievable.
Shares plummeted 17%.
To put that in perspective, the previous record was in September, which was a $279 billion market cap loss, also from Nvidia.
As a result, Nvidia, for those of you who care about this kind of thing, broke below its 200-day moving average – which is not a good technical sign.
We all know Nvidia is a proxy for the AI trade.
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We recommended Palantir in 2021, now we recommend this…
The AI trade may be done for now…
But President Trump’s pledge to defend America is stronger than ever.
That’s why the biggest AI trade for 2025 isn’t Google or Meta or Nvidia…
It’s a tiny, little-known defense contractor in the private market…
A pre-IPO opportunity available to regular investors, to get in for pennies on the dollar.
But its funding round closes TOMORROW. It may be their last before IPO.
Go here now for details on this “sweetheart deal.”
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I talked a little about Nvidia yesterday, but there are a few things I want to address today.
Because it really puts a whole operating thesis into question.
First, it speaks to a crazy high market…
To drop 17% in a day tells you how inflated the market is.
Investors sold first, asked questions later.
It reminds me of that scene in The Good, the Bad and the Ugly – one of my favorite westerns of all time…
When Tuco’s taking a bath and a guy comes in and says, for years I’ve looked for you… I’ve tracked you… you ruined my life… yada yada…
And Tuco just shoots him.
And then he stands up and says, if you’re gonna shoot, shoot. Don’t talk.
Well, yesterday, everybody shot.
Today, they’re asking questions.
The kinds of questions they’re asking really exposes, a) the overvaluation of the stock market, and b) the fundamental premises that Nvidia and the whole AI trade is based on.
Questions like…
Do we need the latest Nvidia chips?
Can we take older chips and rewire them?
Now, remember something – Nvidia stock has been going gangbusters because companies like Apple and Meta and Google are spending.
They’ve come out and said, we’re going to dedicate $60, $70, $80 billion this year to capital spending for AI.
Meaning, we are going to buy a gazillion Nvidia chips.
The best, newest chips.
So the first sign that we’re going to look at here is, when these companies report earnings, do they still believe they should do that?
My guess is they’re going to keep buying Nvidia chips right now, but by next quarter they’re going to sit down and try to figure this out – like, what’s really happening?
Because this is a lot to digest…
$2 billion… $5 billion worth of chips a quarter that Google or Meta are buying…
If you can go buy chips three generations old and get the same boom as people spending all this money on new Nvidia chips, this is a big thing.
It also opens the door to competition for Nvidia…
AMD, Broadcom, Qualcomm…
Maybe their chips are good enough.
Especially if you tweak them like the guy from China tweaked his chips for DeepSeek.
We’ve had our AI “Sputnik moment.”
It’s basically like, holy moly – the whole entire U.S. crowd of investors ran in this direction – “we need the best Nvidia chips; we need to spend this kind of money to train these models…”
Tens of billions of dollars, and then…
Bang! DeepSeek.
They used old Nvidia chips, rewired them, spent only $6 million to train a large language model the equivalent of Claude or ChatGPT.
It’s unbelievable.
So everyone who was running in this direction – buy Nvidia! Buy Meta! Buy this! Buy that!
They’re like, wait a minute – you did what with old Nvidia chips? China? DeepSeek? And it only cost $6 million?
So the big companies buying these chips are starting to ask questions. Do we need these chips? What other vendors can provide “good enough” chips?
And from a national security perspective, which I touched on yesterday, have our export controls been thorough enough?
There are so many questions and so few answers yet.
So I would be very, very cautious.
We’ve ridden the AI trade in Breakthrough Wealth like crazy.
We did very well as it relates to military.
That was kind of our thing.
But right now, I would be very, very cautious – wait and see, and let us see how this unfolds.
But, wow – the largest single-day market cap loss in the history of financial markets on Monday.
$100 billion dollars – what a day.
The AI trade has always been about perception. Everyone sees it one way, and then the perception changes, what does that do to the AI trade?
This could be the popping of the AI bubble.
When something like DeepSeek happens and changes the perception – when all the assumptions that market was built on start to collapse, we’ll see what happens.
We may very well be there right now.
The one serious opportunity I see in AI is in defense.
We’ve ridden the AI wave and cashed out on our AI defense plays in Palantir for gains as high as 408%… Rocket Lab gains as high as 502%… IonQ gains as high as 431%… and several other triple-digit winners.
The big opportunity I see now is actually a “secret supplier” to Nvidia, Intel, Amazon and the U.S. Dept. of Defense…
Solving a $1 Trillion problem for AI in defense.
Communication. Between satellites, weapons, commanders.
It’s a little-known, private company, set to IPO this year.
It’s backed by the early backers of PayPal and a bunch of really big IPOs – serious investors who’ve made as much as 7,666X on their private market investments.
This is a sweetheart deal but the funding round closes TOMORROW.
So please, take a look at this fully-vetted deal before it’s too late.
“The Buck Stops Here,”
P.S. I’ve never done this before, but I’ve been so confident in this deal I actually wrote a 10x minimum guarantee into our offer.
It’s crazy. And that offer comes offline tomorrow when this funding round officially closes. I don’t plan to ever offer it again.
This one is special. Go here now for all the details.