Intel joins Elon Musk's Terafab AI chip project

Kind: captions Language: en So, while the markets have been watching the Middle East, there were some deals that were moving stocks. Let's go to Ross Gerber, president CEO of Gerber Kawasaki Wealth and Investment Management. Thanks for joining us today. >> My pleasure. >> So, Intel jumped today after saying it's going to join Elon Musk's Terraab AI project. Uh, what are they going to do and is this a catalyst for Intel? >> Well, it takes a long time to build a chip factory and we're just talking about it and they also have to raise the money for it. So, there's a lot of steps between Elon Musk saying something and it actually becoming a real thing. And, you know, like many of these projects, we're just not sure if they'll ever be completed because I've got about six other Elon Musk projects that aren't complete as we speak. So, so I think it's good news in general because we do need more chips and more fabrication and and it's certainly good news for Intel that somebody wants to partner with them. But, but I I just don't make anything of announcements. We need real chips and we need real results and and things that'll happen in the next year or two and that's not on the agenda with this. >> Okay, so let's get to the Broadcom deal. It's going to make AI chips for Google and Anthropic that sent the stock up. Uh do you see a lot more of this kind of circular deal making? >> Well, in essence, they all have a lot of incentive to work together because they all benefit from the success of AI. So, so yeah, I do think we'll see this continuous cycle of investment and reinvestment into new products and and technologies that are being developed through AI, you know, database systems that they're building. So, so this is just a continuation of the large investment Google's making into building out their AI infrastructure and making it, you know, obviously chips that are unique to Google's uses. So, so this is, you know, it's it's nothing but good news for these companies as they especially Anthropic which has made a wonderful product out of claude and the demand is off the charts. So, you know, they're going to be buying and building buying chips and building data centers for a long time to come. >> Okay, let's get to this uh interesting suggestion. Activist investor Persing Square's offer uh to buy Universal Music. So, tell me what you think about the offer and also the value uh that could be there. Well, you know, Aman, you know, actually, similar to myself, has a background in music and and he's, you know, I think I don't know if he still plays music, but I know he did in the past. So, he has a affinity towards music, but I've spent actually a lot of time actually in the music industry. And I can tell you that it is probably the hardest place to make money. And these publishing companies like Universal and Sony, they have these assets that generate, you know, a reoccurring revenue stream from the songs that are generated. But and there's a lot of value in, you know, classic songs and the revenue streams they generate, but it's very quantifiable. So paying a premium for a business like Universal, I just don't see where the upside is. So, I'm not necessarily saying it's a bad idea because there's only three players in this market, but music's changed a lot and the way young people interact with entertainment has changed a lot. And and where music will be in 5 years, I think, is going to be much more dominated by live experiences than by recorded music, which will still generate revenue streams, but but it's possible that they won't be as high as many people expect. >> Interesting. Okay. Uh what is your take on how the markets are reacting to the new threat to basically eliminate Iran from Donald Trump? >> Well, you know, the Persian Empire has been around, you know, for thousands of years and Donald Trump is not going to end that. Certainly, Alexander the Great tried and and did not. So, you know, Trump, the not so great, is certainly not going to def defeat the Persian Empire. So, I think all this hyperbole is Trump's attempt to force the Iranians to the table to make a deal because things aren't going in the timelines that he had hoped. But, you know, the truth of the matter is, you know, more violence and more uh attacks on Iran isn't going to change their, you know, insistence on on especially their pride and and what they believe is their right to control their own destiny. So, so, you know, they've never surrendered in 5,000 plus years. And, you know, I'm a Jewish guy, so we have a long history with the Persian Empire. And and I can say that this is probably going to go on for some time and and be a difficult thing to resolve. And and and markets, I think, are are I I wouldn't say wrongfully, but but probably a little bit overly optimistic that this is going to end quickly and in the in a manner that isn't economically damaging. So, so I'm not sure because, you know, I could tell you the worst case scenario and I can tell you the best case scenario. I'm not sure where we're going to fall on this, but I know that if I was president, I would certainly not be handling this conflict this way. So, I I really just can't tell you the outcome. >> Okay. So, let's talk a little bit about uh the broader idea of earnings and growth because, as you mentioned, we don't know what will happen that we can quantify, >> but we don't really know how long this conflict will actually go drag on for. So most have been still expecting earning season to be positive. Do you see perhaps revisions coming as we get closer to earnings coming earnings being released? >> You know, this is where it gets tricky because I don't think people cancelled, you know, their vacations or building their data centers or um shopping. You know, this it was spring break and you know, I'm in Southern California here and the weather's perfect and it's packed with tourists, packed. And most of them are not international. They're domestic tourists. But people are traveling and people who you would think would be struggling under the weight of higher gas prices are still spending money. So, we still just have not seen the effect of the war on on consumers. And many people don't even pay attention to it. So, there's a large part of America that probably doesn't even know that we're in a war. It's sad but but true. And so, you know, I I actually expect very good numbers for the quarter. I don't know what second quarter and third quarter looks like, but you know, the economy is very strong. So, so unless that this goes on for longer than another quarter, you know, I think that the damage is, you know, somewhat, you know, measurable and not too bad. But, you know, if this continues to go on, inflation continues to store, rates stay high, this could have an effect on the economy. And maybe it's not this year, maybe it's into next year, but it will have an effect on the economy. And it's an election year in the United States. So, there's a lot of factors coming into play here. And I think it's too hard to make a call like sell all your stocks or or go all in. So, I think the best thing is for what we're doing at our firm is is just taking a conservative approach to markets and making sure we're happy with our allocations. So if markets go down 10 or 15% more, you know, one should be ready to pounce and buy stocks. And if markets rally 10 or 15% more, you should be in a position to take advantage of that. And that you can do that by having a balanced portfolio. >> Okay. I do want to get to one of your stock picks because I thought it was interesting. It's called First Cash Holdings. Yeah. And it's essentially a pawn store chain. Are they doing well? What's going on here? >> They're they're like crushing it. it like, you know, I didn't know anything about the pond business. And it turns out one of my kids' friends dad runs a bunch of these pond stores here in Los Angeles. And I always thought it was about buying and selling junk and arbitrageing the difference. And he he laughed at me and said, "Let me take you to the store." And he and this guy taught me how pawn shops work, which are basically micro lending businesses that are based off the collateral that people, you know, bring in. And most of the collateral that they bring in is jewelry and much of it is gold. And so what happens is you have a double whammy with higher oil prices. More people need money and and it's and it's putting pressure on lower end consumers um lower income people. And so where they get money is not going to be the bank or getting a cash advance. So they have to go to these pawn shops and then they'll use collateral like their mom's necklace or something like that. And if they don't pay, the pawn shop keeps the collateral. But if they do pay, they're earning interest rates anywhere on the low side of 35% to as high as 100% or more on these loans. So, it's a wonderful business with this type of economy and having soaring gold prices. So, they they're just getting a quadruple whammy of positivity in this business and and we love the business. >> All right. I thought that was a really interesting pick there, Ross. Thanks for joining us. Appreciate your time. Hey, thank