00:00 Speaker A
let’s go to the Wi-Fi interactive. We’ll just point out today’s price action. So I wanted to draw attention to Apple in particular, which is down today, but it recently hit a record high, actually this morning it did. Uh, it has since sunk into the red, but this is its first since about November of last year. So it has just peeking above that range right there.
00:23 Speaker A
And you can see there’s it’s just been treading water. Now it finally was able to launch off of the lows in March. Uh, but it’s kind of not been really that additive to the entire stock market.
00:36 Speaker A
And if I show you the performance of all of the mega caps here, and it’s not just a Mag 7. We got a few others uh thrown in like uh Berkshire Hathaway, which happens to be negative here. You can really see uh the out performance of some versus others. Alphabet is up the most from those March 30 lows.
00:51 Speaker A
This is a one-year chart. It is just rocketted past its old highs very quickly. Uh Nvidia is another one. It’s kind of been flirting with record highs or posting some uh recently but hasn’t really truly broken out yet.
01:03 Speaker A
Uh you take a look at Broadcom. That is another strong chip stock. It’s trying to use its breakout level as a base here. So there’s a lot going on and what I would say is the Mag 7 were kind of dormant in the in the last quarter of last year, in the first few months of this year, in terms of contributing to the stock market.
01:20 Speaker A
And now they’re kind of back. So I want to show you what’s uh happening with MAGs. This is a round tail MAG 7 ETF and this is a one-year chart as well. So this peaked and it’s this peaked uh last October. It is finally punching through above that high only today and so this is going to be a big test. if it can hold this breakout level. So around 68 70, you’re going to want to see that happen to uh be support going forward.
01:50 Speaker A
Now, separately, I’ve also been tracking on a fundamental basis, some of the spending out there, the hyperscalers that includes Alphabet, meta, Microsoft, Amazon. They have been spending a lot of their free cash flow in plowing it back into the AI infrastructure trade.
02:05 Speaker A
So what you’re seeing here on your screen is Alphabet’s AI rally. This is their price to forward free cash flow multiple. It is up over 200 now. For a multiple to be over 200, that is just out of sight. Now, that is because their share price has been going up as their costs and they’ve been eating into their free cash flow. So that’s been going down. So that’s why the number is going up right there.
02:26 Speaker A
Um, I also have this on another basis for all four of these hyperscalers. This goes all the way back a decade, 2016. All you need to pay attention here is the trend. All of these are racing towards 100%. What they’re spending is being eaten up by their operations. And so when that gets to 100%, well, they got to pull some other levers there.
02:44 Speaker A
They’re not my canaries. I’m looking at smaller companies like Oracle and such for, you know, kind of those canary in the coal mines to see if they fall first. But these big guys, they’re getting close to their uh real, the real test here.
