Can't Get Enough of Tech

According to the WSJ, the ChatGPT developer is gearing up for a $90bn valuation, triple its $29bn valuation set back in April. [The Daily Peel... ]() October 3, 2023 | Peel #555 In this issue of the Peel: - According to the WSJ, the ChatGPT developer is gearing up for a $90bn valuation, triple its $29bn valuation set back in April. - Sphere Entertainment and Technology stocks absolutely had a day for themselves, while NextEra Energy and VinFast closed red. - The prices of digital assets jumped inexplicably over the weekend, potentially due to the idea that "Uptober" is here to spread the good vibes again. Market Snapshot Happy Tuesday, apes. Phew, at least Monday’s over… and of course, it’s always a pleasure to see the Giants lose. But losing was only partially on the docket for markets yesterday. While most of the market was feeling the Monday blues, megacap tech came up big to carry the team with some help from Wall Street banks (more below). Only three sectors were up: tech, consumer discretionaries, and communications, but that was enough to give the Nasdaq a 0.67% ride. The S&P was basically flat, while the Russell 2k’s 1.51% dip shows that breadth was nonexistent in this rise. Yields surged for the day in the meantime. The 2-year went back above 5.10% as longer-dated yields moved even higher, with the 10-year flirting with 4.7%. The Dollar followed suit, rising through 107, leaving us all to wonder once again how Stan Druckenmiller is feeling about his USD short. Let’s get into it. The Ultimate Program for Aspiring Investment Bankers [image](=) Landing an investment banking offer is tough coming from any school – from non-target all the way to the Ivy League. But 6-figures right out of school isn’t supposed to be easy. 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Banana Bits - Speaker Kevin McCarthy’s job is [in the hot seat](=), and with that, so is funding for Ukraine. - Usually, it’s the government coming after Big Tech, but that hasn’t worked out too well, so Big Tech is now [coming after… Big Tech.](=) - The Arctic Sea Cold Wars, which seem cold in plenty more ways than one, are [getting started,]() and for those of us who plan to be around for the next 50 or so years, you’ll want to pay attention. Macro Monkey Say Valu-AI-tion It’s been an overall quiet year for venture capitalists, private markets, and their valuations. But not for OpenAI. OpenAI, the company behind the now ubiquitous large language model (LLM) ChatGPT, has frequently been credited with kickstarting the wave of optimism that flipped your portfolio from red to green this year. Now, they’re taking that optimism for themselves. Until version 1 of ChatGPT was released on November 30th, 2022, markets were down bad—arguably heartbroken—over JPow and his rate-hiking nuclear bomb. Since then, Nvidia and other semi/tech names have carried the team to a nearly 30% rise for the Nasdaq so far this year. And after all that work lifting public markets, it looks like OpenAI is finally going to be able to reap some reward for themselves. "... the ChatGPT developer is gearing up for a $90bn valuation ..." According to [the WSJ](, the ChatGPT developer is gearing up for a $90bn valuation, triple its $29bn valuation set back in April. Just so we’re clear, that’s a 200% return in less than six months, just about on par with Nvidia’s gain all year. The explosion of ChatGPT and the subsequent LLM wave it triggered from the likes of Google, Meta, and a whole cast of others has already been a game changer in many industries and to many people (and no, I promise that chatbot isn’t writing any Daily Peels… at least for now…). Anyway, there’s also a lot more going on under the hood. According to the rumor mill, OpenAI CEO Sam Altman has been regularly meeting with the Silicon Valley legend Johnny Ive, the key designer of the iPhone that wasn’t named Steve Jobs. Apparently, OpenAI is looking to launch an “AI-based smartphone” or other piece of hardware as its next world-changing/potentially-civilization-destroying move. "... AI is well on its way into and potentially taking over our daily lives." While that’s all pure speculation for now, one thing is clear: AI is well on its way into and potentially taking over our daily lives. And that’s because artificial intelligence allows humans (aka natural intelligence, or lack thereof, depending on who we’re talking about) to do their favorite thing: less work. Already, Google’s chatbot Bard can essentially plan an entire vacation for you and the fam while simultaneously explaining why Ross and Rachel were (in fact) on a break or why y = mx + b, for example. As they creep into our professional lives through internal LLMs or take jobs of lower-level employees, that impact will only grow. And, for some, the productivity wave might be the answer we need to solve some of our nation’s economic woes. For example, if AI allows companies and individuals to earn more, that leads to convex growth in our GDP and tax receipts, ultimately reducing the national deficit and debt-to-GDP ratio, in theory, at least. With $33tn owed to… ourselves?... that’s going to be a big bill for AI to pay for. But, if anything is gonna help us dig out of this hole, it would have to be some kind of game-changing technology. It's safe to say AI fits the bill, and, for one, we can’t wait to see where it goes. What's Ripe Sphere Entertainment (SPHR) ↑ 11.20% ↑ - Now, I’m not a big U2 fan, but I would’ve sold my kidney to be at that concert in the Sphere. In case you missed it, check [this out](=). - Dazzling nearly 18,000 people with a 250-foot wraparound LED display and 16,000 speakers, the $2.3bn megaproject that is the Sphere Las Vegas has objectively surpassed the hype it created. That concert looked sick. - And with U2 slated as residents of Las Vegas’s most expensive venue ever until December, there’s plenty more to come. And investors know it too, sending shares on a tear to kickstart the week. - Built and partially owned by MSG, the Sphere is also now the largest structure of that shape in the world. Clearly, investors hope it makes their portfolios the largest, too. Based on Monday’s move, maybe they're onto something. Big Tech (NVDA, AAPL, AMZN, META) ↑ 2.95% ↑ - After carrying the multi-year rally stocks have seen in the recent past (2022 excluded), Big Tech names from Nvidia to Meta did… exactly the same thing on Monday. - Wall Street banks were tossing out upgrades to these stocks like Oprah gives away cars—everyone gets one. Goldman hyped up Nvidia by adding the stock to their “conviction buy” list, but it was far from over. - Truist reiterated a Buy on Meta, Amazon got dapped up by UBS, and saving the two biggest for last, JPMorgan sees a lot of promise left in Apple, reiterating their Overweight rating. In short, it was a good day to be big. What's Rotten NextEra Energy (NEE) ↓ 5.37% ↓ - On the other hand, some stocks got the exact opposite treatment from Wall Street banks yesterday. Victim numero uno was once again NextEra Energy. - Giving the opposite treatment they gave to Nvidia above, Goldman Sachs slammed their price target on shares from $83.00 to $72.00. But, being the sweet lovely people they are, they did nicely keep the stock’s “Buy” rating alive. - The alleged problem stems from a recent pullback in the market’s view on the growth of the renewable energy sector. At a $105bn valuation and a 13x P/E, the stock still trades at a premium compared to old-school energy giants trading at a multiple of 8-10x. - Analysts at GS could see that going away, or they’re just going pro-fossil fuels to heat the world up a little as New York heads for a cold winter. Next time, maybe just grab a jacket? VinFast (VFS) ↓ 21.60% ↓ - Vietnam is known for a lot of things, like beautiful scenery, beating the U.S. in a war, and delicious food like pho. One thing they are not known for, however, is being an auto manufacturing powerhouse. - Don’t get me wrong—the country manufactures a lot; it’s just that manufacturing cars is a whole different animal. Basically, Japan, Germany, China, and the U.S. are some of the only ones who got really f*cking good at it. - So, when Vietnamese EV maker VinFast went public at $10/sh and then skyrocketed to $80—where it was the 3rd most valuable car company in the world for a minute (only behind Tesla and Toyota)—something seemed fishy. - And it probably was. For starters, 99% of the ownership here is still held privately, mostly by founder Pham Nhat Vuong. Only 16mn shares are outstanding, and with an average trading volume of ~7mn, it’s no wonder this thing has had a volatile ride… and even less of a wonder why the hype wore off. Thought Banana Digital ASSets Despite the fact that the NFT is worth a combined ~$0.00 and that no one on Earth has Googled “price of Solana” in almost 2-years, digital assets are still… well, they’re still there. We wanted to say they’re still alive and kicking, but we wouldn’t want to lie to you apes. As discussed above and all too often, markets have been rough since the start of 2022, which, believe it or not, is already almost two years ago. Of course, digital asset prices are some of the highest beta trades out there. "... digital asset prices are some of the highest beta trades out there." Essentially, whatever markets and overall levels of liquidity are doing, just slap a 2x (or 100x) on that, and you can get a fairly accurate assessment of the digital asset space. Still, with that said, prices popped off yesterday and this weekend. October—or, as it’s known natively in the space, “Uptober” —is typically a great month for BTC, ETH, and other crypto prices. Aside from the fact that the original BTC whitepaper, as dropped by Satoshi him/her/themself back on Halloween 2008, was released this month, there’s really no further explanation for the coincident rally. Prices jumped inexplicably over the weekend, potentially grateful to the above idea that Uptober is here to spread the good vibes again. Or maybe it’s just some random bullsh*t. After all, it is crypto. However, once again, the resilience of the asset class is on full display. Rates, yields, and anxiety levels are at the highest they’ve ever been since the first BTC was mined. That means financial conditions are at their least conducive to this asset class, powered purely by speculation, that we've ever seen. "... financial conditions are at their least conducive to this asset class ..." To many (like the haters and losers out there), this is a looming nail to be hammered into BTC’s coffin. But to others, it’s another feather in their cap. The longer digital assets exist without dying (aka, stopping to exist), the longer we can expect the asset class to exist… and that’s on [Lindy](. As a result, the price of linked equities like Coinbase, Riot, Marathon, Microstrategy, and all the others rose in tandem. Next on deck in terms of expected catalysts would/could be the SEC getting off their ass—if and when they choose to—to allow big bois like Fidelity, BlackRock, Grayscale (way smaller), and others to get in on the fun. We’ll see what happens. The big question: How will digital assets perform in a world of “higher for longer” rates? Is this the death knell of the restriction needed to weed out the wheat from the chaff? Banana Brain Teaser Yesterday — There are two pixies, an old one and a young one. The old one is 120 years old, and the young one is 32 years old. How old will the old pixie be when he is exactly twice as old as the young one? Answer The old pixie is 88 years older than the young pixie. This means that the old pixie would be 176 years old when the young pixie would be 88 years old. Today — You can have me but cannot hold me; Gain me slowly and quickly lose me. If treated with care, I can be great, And if betrayed, I will break. What am I? Shoot us your guesses at vyomesh@wallstreetoasis.com Wise Investor Says “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong” — George Soros How would you rate today’s Peel? [All the bananas]( [Decent](=) [Rotten AF](=) Happy Investing, Patrick & The Daily Peel Team Was this email forwarded to you? [Be smart like your friend](=). [ADVERTISE](=) // [WSO ALPHA]() // [COURSES]() // [LEGAL]( Don't want The Daily Peel? [Unsubscribe here](. Click to [Unsubscribe]( from ALL WSO content IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States