Hello there.

Happy Friday! AI bears woke up and started shorting things, and Nvidia responded with receipts for $68 billion in revenue. Then NVDA still went down 5%. Classic week, honestly.

In this issue:

When your quarterly revenue is bigger than most countries' GDP, you kinda get to mic drop. Jensen knows this. Let's break it all down.

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AI bears are officially crawling out of hibernation.

After a three-year rally that made early investors look like geniuses, the skeptics are now hunting for ways to bet against the AI hype. Some think Nvidia's chip sales are about to slow down. Others are betting against Oracle because of its ties to OpenAI. And a few are even targeting Big Tech's debt, figuring that's safer than going head-to-head with stocks that keep defying gravity.

The bear case is pretty simple: Big Tech is spending money like there's no tomorrow. Amazon, Google, Meta, Microsoft... they're all pouring hundreds of billions into AI. If all that spending doesn't actually make them more money? Their profits take a hit, their stock prices drop, and suddenly everyone's talking about the dot-com bubble again.

Then Nvidia dropped its earnings report this Wednesday.

Revenue jumped 73% compared to last year. Data center sales (that's where most of their AI chips go) hit $62.3 billion. And here's the kicker: they said next quarter should bring in around $78 billion, way more than Wall Street expected. Profits have nearly doubled, and the big cloud companies are still buying chips like crazy. In other words, the spending spree hasn't slowed down. Somehow, it's still speeding up. So in summary, CEO Jensen Huang isn’t buying all that bubble talk.

And yet... NVDA dropped 5%. Why?!

The stellar earnings report wasn’t enough for Wall Street. They’re more concerned about the long-term sustainability of AI capital expenditure (spending on data centers & chips) and how AI threatens the software industry than they are about immediate financial results.

But Jensen Huang has a different take. He said the market “got it wrong” about AI hurting software companies. His take is that instead of replacing software, AI just makes it better. And Nvidia's the one selling the tools to make it happen.

Where does that leave us?

On the one hand, bears say these companies are burning through cash to buy a ticket to nowhere. On the other hand, you've got Nvidia making tens of billions every quarter with orders that look very, very real.

But the little guy can’t afford to get caught up in some philosophy debate. We’re watching two things: are the big tech companies still spending on AI infrastructure, and is Nvidia's business still growing? If either one cracks, the bears get their moment. If not, betting against Jensen might be a losing game.

Remember when Facebook tried to launch its own digital currency and basically everyone said no? Well, Zuck is back for another shot.

Meta is planning to bring stablecoin payments to Facebook, WhatsApp, and Instagram later this year. That's over 3 billion users who could soon be sending money to each other using crypto without even realizing it's crypto.

Quick explainer: stablecoins are digital currencies that are pegged to the dollar. So 1 stablecoin = 1 dollar. They move fast, they're cheap to send, and they don't have the wild price swings that make Bitcoin a rollercoaster. Think of them as digital cash that lives on the internet.

Back in 2019, Meta announced Libra (later renamed Diem), a plan to create their own global digital currency. Regulators freaked out, and lawmakers instantly jumped down their throats. Even Trump (usually Team Zuck) tweeted that he wasn't a fan. The whole thing got killed in 2022 before it ever really launched.

Note: the views in the tweet below belong to the user who posted them, and the fact that we’re including them here doesn’t mean we agree or are confirming those opinions.

So what's different now? A few things.

First, the rules have changed. Trump signed the GENIUS Act last year, which created the first real legal framework for stablecoins in the US. That gives companies like Meta a clearer path forward.

Second, Meta learned its lesson. This time, they're not trying to build the whole thing themselves. They're working with a third-party partner (probably Stripe, whose CEO just joined Meta's board) to handle the actual money stuff. Early reports say they want to do this at arm's length.

Third, stablecoins are already taking off. Payment volume doubled last year to about $400 billion. They’re moving from experimental tech to genuine payment option at this point. In fact, stablecoins are a solid crypto business model right now, which are hard to find in the crypto industry these days 😅

The big use case here for a Meta stablecoin is WhatsApp. Hundreds of millions of people in places like India, Brazil, and Southeast Asia already use WhatsApp for everything. But sending money across borders still costs a ton in fees. Stablecoins could make those transfers almost free.

Meta's also competing with Elon Musk's X and Telegram, which both want to become "super apps" (like China’s WeChat and AliPay) with built-in payments. Whoever cracks this first gets a massive head start on the future of social commerce.

If you’re tied up in Meta or the stablecoin space at all, this is worth watching. If Meta pulls this off, it could be one of the biggest mainstream crypto adoption moments ever. And if it flops again... well, at least we'll have the memes.

In this live episode, the TBOY hosts break down the robotaxi wars and why Uber’s $100 million “Swiss Army knife” pivot could let it win no matter who dominates self-driving—also, somehow, Levi's is involved.

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That’s all for today. Write us and let us know your thoughts on the market, the newsletter, or the weather—we’d just love to hear from you.

Till next time,
— Brandon and Blake