Do NOT Panic Sell Your AI Stocks Until You Watch This

**Rashad Bilal** (0:00)
But let's break down this AI chip outlook situation for all the micron and send this holders out there.

**Troy Millings** (0:06)
Yeah, I think it's very important to look at the market in its totality, right? If you look at it from the beginning of this year to now, the story is very clear, like the demand hasn't changed. And how do we know? Well, we started the month when we looked at TSM and their reporting, and we said that that was going to be important, right? We need to see if from the manufacturing packaging side, has this story slowed down, has momentum slowed down, and unequivocally, it was no. It hasn't slowed down from the manufacturing packaging side. ASMR will be in that category. I know they reported back to back. All right, well, we passed the first hurdle. Now, did the market respond in the manner that we thought? No, but that's okay. We're not thinking from a short-term perspective. Then the hyperscalers came into focus the last couple of weeks. And that was an important moment, right? We needed to see if the hyperscalers were going to tell us a different story. Were they painting a new scenario? And we saw Metta, and we saw Microsoft, and there was two different tales of what happened last Tuesday.
But one thing remained the same, and that CapEx was still at the forefront.
And it hadn't slowed down, right? Like Metta decided that they were going to spend more.
Microsoft said they were going to spend more, but they leaned more toward the lower end of their expectation. And something very key happened. The first time all year, Microsoft decided, hey, not only are we spending more, but we're actually starting to see revenue come back from this CapEx spend, which is very important. So when you look at the Azure growth, and that was the key number I was looking at. Have they grown in cloud? And once I saw that the cloud number grew, I knew that this was going to be a story. We've been talking about it since we were in DC in February about where Microsoft was going to be headed. That was positive.
Meta did something very different.
They talked about how it's still going to take some time, and it's still going to need a little bit more proving to do. And then we saw Apple and we saw Amazon report, and I'm like, okay, perfect. Demand is still there. CapEx is actually going up. Amazon is the number one spender. Why is a CapEx been important? Because it tells me money is still out there, they're still spending it, and now it becomes where. So now the infrastructure piece comes back into play. So if they're spending it, they're saying, look, we have revenue, we're getting it from our cloud service. That tells me that the infrastructure story is still very much in play, and that speaks directly into the AI chip space. And so if we're talking about compute, they were gonna need GPUs, we're gonna need CPUs, we're gonna need memory. All of the companies we've been talking about all year, there was now a validation. Okay, CapEx is still intact, memory is still gonna be a part of this fold.
Semis is still gonna be part of the fold. Infrastructure is gonna be part of the fold. I know we saw Arm report and they had some really good earnings. The story still remains. Now, did the market respond in a positive way in July? No, it didn't. That's part of the next story, right? And that kind of paints another picture for us in terms of being a very intelligent person versus being a very intelligent investor. So the AI story is here. I know we got AMD reporting tomorrow. We'll talk about that. I'm super excited. I'll be telling you the exact things we need to be looking for. If we're going to be investing in that, NVIDIA will be reporting at the end of the month. So we got some time into that. And then obviously we just saw my micron report at the end of June. So everything is right in the realm of what we thought it would be. Sandisk is going to be reporting Wednesday, which is going to be a big number, my estimation, as well as Western Digital. So you got the semiconductors reporting. You had the capex spend from the hyperscalers reporting. All signs point to yes, this story is going to continue and definitely to the end of this year. And we're talking about maybe sold out into 2027 when we're talking about the memory space. So I'm still bullish and that shouldn't surprise anybody, but based on what we saw from the earnings thus far, all positive on my side.