AI Infrastructure Whiplash: MSFT, META, IREN & SLNH!

We watch a historic one day reversal rip through AI infrastructure stocks and explain why the fundamentals still point to runaway compute demand and a power bottleneck. We also break down Microsoft and Meta earnings, connect the dots to Iron and other power-first operators, and share how we trade volatility with patience and math. 

• Bitcoin rally context and why regulatory clarity matters 
• Record green day across many AI infrastructure names while weekly and monthly heat maps stay red 
• Why leverage and margin can break accounts during fast market swings 
• Upcoming earnings and interview pipeline plus how to submit questions 
• NScale acquisition as a vertical integration signal for AI cloud platforms 
• BlackRock 13G filings and what institutional positioning implies 
• Microsoft earnings strength, cloud growth, faster GPU deployment, premium pricing signals 
• Data center depreciation moving from 15 to 25 years and why that impacts margins 
• Meta revenue growth alongside margin pressure from massive AI CapEx 
• “GPU demand stays tight” commentary and why reselling compute is a real option 
• IREN Childress buildout progress, mining capacity coming offline, and true cost per megawatt 
• Our dip buys, options trades, profit taking framework, and keeping cash for value 

Let us know in the comment section below if you took advantage of yesterday's dip and how you're feeling about the account today!

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Transcript

Welcome And Market Whiplash

SPEAKER_01 0:00

Hey guys, welcome or welcome back to the channel McNally Money, the official home of power analysis. Just like that, we went from a historic drawdown day to a historic increase. We're gonna be covering the crazy volatility we're seeing in the market, along with some of the top headlines really confirming the AI infrastructure thesis out from both Meta and Microsoft last night in earnings. We've got a lot to talk about, in addition to some comments out from the co-CEO of Iron himself, Daniel Roberts. Before we do, take a second, smash the like button, guys. Big help to myself and the channel. Anthony absolutely loves it. If you're not already subscribed, McNally Money, feel free to join. And let us know in the comment section below if you took advantage of yesterday's dip and how you're feeling about the account today. With that being said, let's get in to today's update. All right, guys, away we go. Thursday afternoon, and this is the day we've been waiting for a historic rally in the AI infrastructure sector following yesterday, really a historic pullback. So we're gonna be focused on that. Some of the reasons

Bitcoin Bounce And The Clarity Act

SPEAKER_01 1:10

why the catalysts we're seeing here and what that means for the companies we cover. Before we do, Anthony, a little bit of uh excitement on the Bitcoin side, actually, just below 65,000 and some positive developments again out from Brian Armstrong on Twitter.

SPEAKER_00 1:26

Absolutely. Some um some some really positive news uh with regards to the Clarity app. But Bitcoin, yes, a little bit of a slow rally today, getting back into that mid 65,000 range, and we'd like it to stay there. Remember, it dipped to 58. Um, that could be the low. So we'll just see how this plays out over the next month or so. But remember that low of 15,500 back in 2022, we may be hitting that low in 2026 now, and this this gradual climb like we saw in 2022, started at 15,500, ended the year at 42,000. Where do you think it'll end by the end of this year? Time will tell. Uh, great to see the uh updates on the Clarity Act. They've been working really hard. Senator Loom has come out with an interview today and effectively said they've been pushing this through over the last 11 months. The last six months, she indicated, I don't know how true this is, but she indicated that that a lot of people were spending six days, uh, six days working full days round the clock to get this to where it is today now, so that both sides um can can get some agreement and get this approved. And she believes that we could be uh even as close as a week away from the Clarity Act being signed. But there's a lot of people working behind the scenes, putting a lot of effort to get to where we are. Brian Armstrong is one of these that's been involved since the start. We've mentioned him a few times there. We know our good friend uh Dennis Porter has also been doing an admirable job uh with his team at Satoshi Action as well to get things moving in the space. And uh there's a lot of big thank yous to be had. Hopefully, we see the the end result we're looking for next week.

SPEAKER_01 3:04

And as Brian says, it's time to get clarity done. So we'll report back on that one.

Record Rally Across AI Infrastructure Stocks

SPEAKER_01 3:10

Moving into the main event, Anthony, we got to start with the daily screenshot here. This is my best performing day ever in the equities markets, both dollar value and percentage return. I think you're in a similar boat. Hopefully, many of the viewers are as well. We'll talk about a few of our actual trades a little bit later. But as you look down this list, Anthony, we've got 30%, we've got 20%, we've got tens. Pretty much every company we cover having a record day today.

SPEAKER_00 3:40

Yeah, this is a record day for me at the moment, still trading, obviously, and we could see a as quick a downturn as we saw this up cycle today. Um, but yesterday was probably my worst trading day in terms of um you know the amount that was that was removed from my pension fund and my and my portfolio, significant amount. And I couldn't really, you know, work out any strong reasons why, other than some like maybe the the big macro news or the the big world events like like obviously Russia, Ukraine, those big events that are continuously grow out there, affecting things like the oil price there and affecting markets. But um, you know, we've seen a turnaround saying we'll come on to talk more about why this turnaround. But you're quite right, Keel having a phenomenal day. Um, and I will say, you know, as much as we see these 34% up there, and you know, most of them in double digits, most of them above 20%. I looked at my portfolio from a from the last week, and I'm still down, you know, about double digits in terms of percentage. That's how much we've moved down, and it takes a lot more to get back to where you were. Remember, we said that you know, if you drop by 20%, you've got to grow by 25% to get to that same position. So we've seen a big drawdown as we showed you on the heat map yesterday. The last month was pretty dire. We'll come on to the heat map in a second, but it's great to see this rally, and this is how quick it can go. And we'll also talk about at the end of the podcast maybe a couple of the trades that we made during this last 24 hours as we saw these stocks really get into what I would say maybe value territory. Um, you know, keel's having a great day, 34% up today. Only five weeks ago, I sold Kiel for seven dollars, and it's up 35% today, and it's at $4.26. So that tells you how much it dropped to literally uh, you know, to literally more than 50% drop in five weeks, and now we're able to buy it a lot cheaper. And I have been buying keel uh this week to add to my portfolio as it as it as I believe, you know, Wednesday announced those deals, we'll start to see the market react as well. But a great day. The 52-week range, still not in a great position. We're starting to see a couple more get maybe towards halfway in that 52-week range. Um the day range looks phenomenal because every stock's up and it's every stock's up at its highest as we speak at the moment. But we've still got a couple of hours to go in terms of trading. Um, let's keep our fingers crossed that we maintain this level and we have another good day tomorrow going into the weekend. But uh very pleasing day today after a very challenging day yesterday.

SPEAKER_01 6:25

Yeah, and we know Amazon reports tonight. So if we see similar numbers, like we're gonna talk about from Meta and Microsoft last night, uh, hopefully that rally can continue. And interestingly enough, just a warning on leverage and margin, you guys. It sounds like our good friends over at Situational Awareness have had some issues according to CNBC as well. So keep that in mind. There's a lot of volatility, and leverage can really uh cause some problems

Heat Map Reality Check On Drawdowns

SPEAKER_01 6:51

here. Now, moving to the heat map, Anthony, you mentioned the monthly return here. You can see an average of about 15% to the downside. So with today's massive rally, we actually paired our losses or cut them down by about half for the entire month.

SPEAKER_00 7:06

Yeah, we have a natural, if you look at the five-day range, I was quoting the week's change, the five-day range, just the last five days, we're down an average of eight percent. And some of those big names up there, Wolf down 10, Cypher down 14, Keel down 13, that's not helping because those three stocks are in most people's portfolios. Um, there's a real push at the moment for those three stocks. Uh, you know, they're very, very popular stocks. You know, iron down 8%. Iron is still down, even with today's 28% increase. Iron's still down from a year-to-date change. Um, and there's not many stocks down from a year-to-date change, especially stocks that have got a contract already signed. Uh, you know, you look at HUT from a year-to-date change, 132%. And we said yesterday they were catching uh the market capitalization of iron. Um, iron's just had a better day today to sort of give it more of a lift off. And we'll come on some iron news towards the end of the podcast to highlight that as well. But it just goes to show even with these phenomenal rises today, even on the five-day change, we're still down eight percent, and like you say, one month change 15%, a little bit better on the year today than the one year. One year still 95% on average. That's helped by HUTTS 438% up, and Terra Wolf and and and Keel, both over 250% up uh for the year, and Cypher at 308% up. So, some really good moves from those stocks there, um, but still a couple of stocks in the red across all periods, um, from the five day to the one year, BitDear, um, bit digital, and um ABTC, a couple of those being more of the pure play and following the trend of of Bitcoin and Ethereum. But um, I'm pleased for today. Let's let's hope we we can get some of those five-day changes in the green very quickly.

SPEAKER_01 8:55

Yeah, and interesting. You'll see, despite today's rally, not a single company in green on the five-day or the one month. So interesting uh volatility. We'll talk about the reasons in a second.

Earnings Dates And Interview Lineup

SPEAKER_01 9:07

Before we do, housekeeping here. Saluna Q2 earnings. We've already reached out to the team. Thursday, August 13th. This one's gonna be post-market. Uh, we've got, I think, five interviews lined up over the next couple of weeks for you guys. So make sure you drop your questions in there. I know we've got Jason confirmed from uh Riot. We've got Patrick Fleury, CFO of TerraWolf, and we've got Asher Janute from HUD 8. So gonna be some great content coming your way. Another bit of housekeeping as it relates to Wi-Fi. You just mentioned Bit Digital. They've got a significant deal with NScale at their NC1 campus. I'll let you talk about the megawatts, the expansion potential in a second here, Anthony, but they've made a pretty healthy acquisition today, again, proving the point that you need the vertical integration and that global reach.

SPEAKER_00 9:59

Yeah, they've acquired NScale and effectively enhanced their full stack AI cloud platform. Now, by acquiring this company, they've acquired the 200 employees. That's the entire team across the US, Europe, and India. And they all join NScale as part of the deal. It's a great vertical integration play. NScale adds NSscale software layer on top of its own power, data, and some compute, positioning itself as a full stack AI hyperscaler. And we've seen so many of the companies that we talk about regularly buying other companies to make sure that they've got the right strength to deliver uh these services, not now but in the future, as they start allocating that power towards their data centers and away from mining. But uh, yeah, a great uh acquisition from NScale today. Um, and you know, hopefully we'll we'll we'll hear more about this benefit once we see um you know that deal, which should have already been effectively started with Wi-Fi um at their site there, that 40 megawatt, there's a potential to increase that to 80 megawatts. Uh, we'll be keeping a close eye on Wi-Fi and NSscale as we move forward.

SPEAKER_01 11:12

Yeah, it's interesting. A lot of these private companies, you think NScale, OpenAI, Anthropic, uh, they're all growing, they're all rallying to go public, and any support or growth they have really bodes quite well for their partners or the companies that we cover.

BlackRock Stakes And Institutional Signals

SPEAKER_01 11:27

Uh, case in point, TerraWolf here, Anthony. We talked about some updates out from the banks in association with their earnings. Yesterday we cited a significant holding in keel, and you've dug up another pretty interesting one for us.

SPEAKER_00 11:42

Yes, there's another 13G been issued today to highlight that Blackwhat have got 22.3 million shares in TerraWolf, representing about 4.5% in terms of size of that uh particular share volume. There, we'll see BlackRock's 13Gs come out for a number of companies. Well, they've just released their earnings, and so these will start filtering out, and there's no doubt that they'll have many of the companies that we talk about uh regularly. So they had Keel's announcement yesterday, over 8%, Terra Wolf today. Um, you know, wait out to see the similar updates for the likes of Cypher and Iron and maybe Core Scientific as well. Some of the the big hitters in terms of those that have signed significant multiple contracts. Blackrock know what they're doing, they're the biggest investment uh company in the world. You know, BlackRock, you should really treat as like its own country in terms of the size of their balance sheet. Um, and you know, if they want something doing, it normally gets done.

SPEAKER_01 12:46

How do you think they're feeling about their portfolio today, Anthony, with Keel and uh Taro taking off there?

Microsoft And Meta Validate AI Spend

SPEAKER_01 12:53

Uh now this is where it gets interesting, you guys. We want to talk about AI. Earnings week or month is phenomenal for our own companies, but what we've been watching very closely is the hyperscalers, specifically the CapEx and how they're integrating AI into their businesses, what that means for revenue, so on and so forth. We've got the Meg 7 up here on the screen. You'll note two of the Meg 7 reported last night, Microsoft and Meta, and you can see pretty drastic differences in terms of the streets or the market's reaction.

SPEAKER_00 13:27

You can um, you know, phenomenal results uh from Microsoft. We'll cover them in a second there. Share price up 16% today, uh, all down to that sort of that cloud revenue coming through the glow through in cloud revenue and the margins of supporting that there. Um, but again, you you know, you look over longer periods, year to date, still down 7% there, so maybe some some value even that stock even after today's um price there. Um, on the other hand, we're going to cover Meta as well, and they brought out their earnings. And you know, when you look at a company that's investing so much money uh to grow their HPC, um, you know, we talk about investment, we talk about when the revenues will start coming through for the investment, and they don't come through until these sites have been completed and commissioned and energized and ready to sort of like you know to deliver that service, and that could be you know maybe once two years after the initial investment. So, you know, there is a time frame you know in between those there, and therefore, you know, when you're investing billions and billions and billions of dollars, you're gonna have to wait for those revenues to come through. But when they come through, then you'll see you know the real benefit of what your investments delivered. Um, it doesn't happen overnight. These these facilities are tier three and higher, and believe you me, do not try comparing them to what we've been discussing for the last five years in terms of Bitcoin mining. Many of the companies we talk about are effectively have containers or a step up from containers, these are totally different, these are expensive, these are a minimum of 10 to 15 times more expensive to build per megawatt than a Bitcoin mining facility. So bear that in mind when you look at the amount of investment required. But uh a tail of two two um two results today, I think.

SPEAKER_01 15:19

It is, yeah. And you bring up a really interesting point. I know we've talked a lot about cost of capital. Yesterday we covered the Fed's interest rate decision, but these companies, because they're so CapEx intensive and the projects take so long to come online, they're very sensitive to cost of capital and interest rates. Uh, so it's a good point to bring up there,

Microsoft Numbers Plus Data Center Lifespans

SPEAKER_01 15:39

Anthony. Now let's break into the earnings. We'll start with Microsoft. That was really the standout. You can walk through the numbers, and then we've got some specific points, more so related to the stocks we cover.

SPEAKER_00 15:51

Yeah, and these are quarterly numbers. So don't sort of like think I'm talking over a year. These are quarterly numbers and not the sort of normal numbers that we cover for the likes of the of the companies that we talk about daily. Um, in terms of revenue, just for the quarter, $90 billion. That's an increase of 18%, um, driven by their cloud growth of 27%. Now, cost of revenues also uh grew. Um, that grew by 23%, and that was at uh 29.5, the margin uh 60. The margin 60.5 billion dollars. That's a gross margin percentage of 67%. They've then got their operating expenses, um, so you've then got your total operating income, and you know, with a few more uh costs in terms of uh you know interest bearing costs or non non-income related uh costs and income, you have a net income of 35.8 billion. Um, you know, it's it's it's it's fairly rare that we talk about netting positive net income with some of the mining companies because of the fact that related to Bitcoin, Bitcoin price hasn't performed in the last sort of um eight to nine months, and therefore it's a very challenging environment. Companies like the the the you know, the Mag 7, they're operating in areas where they are delivering, it's just a case of how big the profits are, you know, and in this case, um significant. Uh, you know, that's 35.8 billion there. That represents just under $5 per share for every share that's easy on $4.81 in total. That's an increase of 32% and 31% in net income increase there. Uh, phenomenal. Now, if you look at the Microsoft Cloud Elements itself, the revenue of $59.3 billion, as I said earlier, that's an increase of 27%, reflecting that strong demand across Asia and first-party AI applications and services. And there's a little table there to show you the growth from literally Q4 2025, that's a year ago, to where we are today. And you can see that Microsoft cloud revenues grow from 46.7 billion all the way up to nearly 60 billion dollars. That's 33% just in a year, and the gross margins associated, they were 68% on the 46.7 billion last year in that quarter, and the same quarter this year, it's down to 65%. But them but the growth in revenue to nearly 60 billion just highlights um where this is. And if you think about where this is now, just think about when the continued investment that Microsoft are piling in, and you know, we'll talk about Meta's investment, but Microsoft investment is again extremely significant, and they're growing quicker than you know most of these hyperscalers at the moment, Bryce.

SPEAKER_01 18:54

It's really significant, and this is important because we've seen so many companies investing tens and hundreds of billions of dollars of CapEx, but at some point they need to see that return. And we'll talk about how this compares to Meta in a second. A couple speaking points here as well. They note 88 data centers globally, adding 31 new facilities, so that's a macro strong demand signal. Uh, they're saying they're able to actually deploy the GPUs faster or bring the compute online about 50% quicker. And the very interesting comment we picked up, Anthony, extending the useful life or the depreciation amortization of these data centers from 15 to 25 years. So I wanted to get your thoughts on that. Also citing margin improvement, which you mentioned, and premium pricing. So we'll see from both of these CEOs saying we're actually getting inbound requests to buy our compute for way more than we paid for it just a few quarters ago. But I wanted to get your thoughts on that data center lifespan because that's significant to our companies.

SPEAKER_00 20:02

Yeah, it is. And and you know, we talked about iron and the fact that they were building a facility that was going to last 20 years, so they probably had a depreciation of 20 years in you know, ready for the for when their day centers is complete and they'll start depreciating that over. Uh even though their CSP contracts, the one with Microsoft is a five-year contract with extensions uh in place for that contract. Um, you can see that uh having a 25-year will you know will effectively reduce the depreciation year on year, so effectively um increase the potential for better margins because depreciation is a is a direct cost to the income statement, and so it's you know it's reducing your profitability if you have a small depreciation because you'll expand extending that depreciation across 25 years, then that that will obviously um give you a better linear um cost over a longer period than a lower cost over a longer period. The other thing that I quickly mentioned, the premium price, we've highlighted this on two or three podcasts in the last few months there. We're seeing the rates grow, and we're also seeing the rates hold firm for some of the old machines. I'm talking the A100s, the H100s. These machines are now getting closer to that five-year age, and just like we're seeing the uh useful life of facilities increasing 15-25 years, it might be that in a couple of years' time we see the life cycle of a GPU extend beyond five years. At the moment, I think most companies in five years, but remember what Dan Roberts said if we can get six, seven, or even eight years out of a GPU, then that's real proper additional profits at the end of the cycle there. Um, I mean, they're probably basing their, you know, if they do uh reciprocal contracts going forward, that five year baseline. To extend the GPU life, that's going to give you a lot more profits with very little cost against them. It's going to be really strong profits for that period. And we're already seeing you know GPUs now extend beyond five years. So it's going to be an interesting opportunity. Somebody asked me a question today about, yeah, but we're changing the technology machines as we go. Well, yes, we are changing. I mean, the A100s, H100s, we've probably had six or seven iterations of machines since then, but we're still using the A100 and H100s because there's still a uh great return on investment for those level machines. And companies like Iron and companies like Hive, especially Hive, because they had A100s that they were using to mine Ethereum. And the great thing that they did was when they bought those GPUs, they bought them to ensure they were multi-purpose machines that could be used for other things apart from Ethereum mining. Remember, ASICs can only be used for Bitcoin mining. So Hive had the sense of strategy to make sure they had a future life post-the Ethereum fork back in 2022, and it's working out quite nicely for them now as they grow their HPC strategy in Sweden, where they've just purchased the leasehold of the sites they're occupying there and want to really grow that business model in Sweden alongside their Canadian HPC business model as well.

SPEAKER_01 23:27

And I was gonna say for a lot of our long-term viewers, they're used to the ASIC upgrade cycle, but keep in mind with Bitcoin mining, you've got the having. So you have to keep up with that efficiency with GPUs, a lot more similar to other technology like the iPhone. Say there's obviously new models, but people still use the old ones and they still have uh versatility as well.

SPEAKER_00 23:48

And one other point, Bryce, you're quite right to mention that, is the sensitivity of electricity pricing. Remember that you know, if you're looking at a revenue cost for uh GPUs of say three dollars per hour, the electricity cost per hour can be very, very small percentages. Whereas with regards to Bitcoin mining, your electricity cost could represent 50, 60, in some cases 70% of your revenue. So the sensitivity is not as bad for GPUs. That's why you know you'll see uh companies not totally looking to go into the very cheapest places for power, they're looking for power, and if it costs five cents or six cents a kilowatt hour, that's well within their remit. They're not as focused. And I said yesterday on the podcast, one big company I spoke to in May suggested that if the price went from five to ten, they don't even think they'd get a call from the client to say what's happening with the electricity price. It's not as big a deal. I think when we saw um Iron's updates, monthly updates, when they brought them out, remember they were bringing out the monthly revenue and they were bringing out the electricity costs, and the electricity costs represented less than 2% of the costs. So not as sensitive, and therefore, you know, um it it's it's it's it's it's it's it's helped when you've got uncertainty with regards to market price.

SPEAKER_01 25:11

Yeah, good point there. And we're gonna come on to iron. It's a good example as we move into meta here about a company that's investing significantly into AI, similar to all the companies we cover, but maybe not yet seeing the same level of results as, say, a

Meta CapEx Surge And Pricing Power

SPEAKER_01 25:26

Microsoft. So I'll let you go through some of the numbers here for Meta. Uh, we just saw obviously a big pullback in share price today, and then we'll talk about some of the comments again at a macro level, very bullish for our stocks.

SPEAKER_00 25:39

Yeah, and when you look at the I mean, you look at the revenues there, they're not as big as um Microsoft there, Microsoft 90 billion dollars, Mesa's at 60, but I want to draw your attention to quarter two 24, which is two years ago. You look at the total revenue then that was just less than 40 billion dollars, and that's grown in two years by 50 percent. So I don't want to put all doom on the on the earnings there, very, very strong revenues there. Um, however, when you look at the operating margins, we've seen that uh reduced from a high of about 48% back in Q424. Now it's at 31%. There are some sort of you know reasons for that there. You can see the investment that they're making in terms of raising capital for uh growth in in AI there. And we we've got a chart to show you the net um income uh in terms of uh millions there, and you can see the reduction um in Q226 from where we were in Q1. There are $10 billion uh less in a quarter there. But remember, the capital expenditure these companies are investing is off the charts. Um, in 2026 alone, for the first two quarters, Meta are already at $51 billion. Remember, they Mark Zuckerberg sat in front of the president along with five or six of his peer CEOs. And when the president asked how much you're going to be investing per year over the next five or six years to give an indication what was going to go back into the US, the majority of those COs very, very quickly said $100 billion per year. And you can see in 2026 they're making good on that. Now remember, you're investing this money now, you're building data centers, so therefore you're not expected to get the revenues now. These will be future revenues. So I suggest, like we talk about with the companies we talk about daily basis, the irons, the ciphers, the terror wolves, the core scientifics. You know, Core Scientific announced their deals starting two years ago in Denton, and this quarter we just started to see some nice growth in HPC revenue. We'll see even bigger growth in the next quarter, and that will continue to rise until we've handed over the 590 megawatts, and then we'll see you know really proper growth based on the fact that that's a full 590 megawatt compute. This is the same for meta, they're investing this money now, they're having these data centers built, and the revenues will start following that. So I'm not too um distracted from the results now because I can see what they're doing with the money. They have got growth there, it is affecting you know uh cash flow. And if you look at the free flow cash flow reconciliation there, that has dropped as well in terms of the um of the fact that they are spending cash flow on purchasing property and equipment. These are the requirements for delivering their HPC uh and cloud strategies going forward. So I'd look at these these companies like Metro in a couple of years' time, like we're going to see with the companies we talk about regularly, and we'll see a move into some real free cash flow uh amounts that will be significantly higher than what we're seeing today. They'll get back to where they were. They're just investing a lot of money at the moment, and that's costing money to do that, and those costs are passing through the income statement before the revenues have been achieved.

SPEAKER_01 29:12

Yeah, and we're gonna come on to iron in a second, talk about some of those capex costs. Before we do, though, to your point, they've narrowed their capex range at Meta on the upward end of the band there to 130 to 145 billion, so even higher than we initially heard uh disclosed to the president. The other thing I wanted to just touch on here, Anthony, some of the commentary on the earnings call. We had uh Zuckerberg himself talking about the margin improvement opportunity. The CFO went on to talk about that premium pricing. And in both cases, specifically with Meta, we've heard the opportunity to resell some of their compute. Uh, they're essentially saying that that is an opportunity, it's too big to ignore. But based on what they're seeing, the demand for compute is only going up. So it would be foolish to sell it all at this time. And to quote, uh, they expect it to be tight in terms of GPU demand for the foreseeable future. So, as that relates to our companies, you think about the irons, the Nebbius, the Bit Deers, Hives, uh, pretty substantial commentary from some of the biggest companies in the world.

SPEAKER_00 30:23

Absolutely, and it will benefit uh the companies that we talk about daily because those are the companies that have got the power. Meta and Microsoft and many of the other hyperscalers and neo clouds will be looking for that power and will have to align with these companies. There's even talk about some of these hyperscalers buying out these companies and taking on that power and moving forward there. Interesting, you mentioned there about the about the fact that they're they're not looking to sell their compute power now, as they mentioned. Remember when they came out with that comment there, it really shook the market, and we had a free fall that particular day, only to be sort of like told that you know, maybe a little bit hasty. And now they're saying, you know, although it's it's they can see it there, it's it's not going to be favourable to sell that compute. They think the demand is too good in terms of the fact that revenues are very good, they're at a premium, and it will help them going forward. So I think um, you know, as I say, results might not be great to say the share price is lower today because of results. And we've even got um a little share price chart here to show you where it's gone. I mean, 16th of July, there it was at $682. Today um it's hovering around the $530 mark, so that's a $150 drop effectively in the last two weeks, Bryce.

SPEAKER_01 31:45

It is, yeah, and it really shows you again the difference of companies that are converting AI deployment into revenue versus maybe those that aren't yet.

Iron Childress Buildout And True CapEx Math

SPEAKER_01 31:54

Now, an interesting tweet out from Dan Roberts last night. We talked about iron. We've got some updates on the childress build out and their capex spend. But for those following closely, iron actually dipped back into the 20s yesterday, I think 28 or 29 dollars at their low. You can see Dan Roberts specifically calling that out. Some weeks the market agrees with us more than others. But going on to say, Anthony, from a fundamental perspective, which is what we look at, demand for capacity is exceeding everything we can build. Exactly what we just heard from Meta and Microsoft. 85% of their $4 billion ARR target is already signed or locked up. And there's literally thousands of people on these sites racking GPUs every day, which we can attest to. Now, we went down to Childress back in November. We've got an updated image here, uh, aerial satellite image. And I wanted you to tell people essentially what's happened since our visit there just seven, eight months ago.

SPEAKER_00 32:55

Yeah, I mean, effectively, you can see the 27 buildings in a row there. That's the Bitcoin mining buildings there. Now it looks like the first three of those have been ripped down, and they're going to be building you know more um facilities for GPUs. In terms of Horizon 1 and 2, you can see clearly from the diagram on the left-hand side there that that's pretty much completed there. There's probably a little bit of work on Horizon 2. Horizon 1 is imminently ready to hand over. It's going through probably commissioning, final testing, and then handing over formally to Microsoft. And you can already see the works for Horizons 3 and 4 taking place in tandem as well. So, the one thing about Iron is they really have a workforce that can deliver and keep things moving. We got there, I think it was over a thousand um employees on that site, and from that photograph, it's like a mini town. If you look at the amount of car parking at the bottom of the photograph, there, I mean, that's got to be a few hundreds, maybe 500 cars in there. And believe you me, there are vehicles going around that site all day long. In the morning, you've got a queue of vehicles trying to get in delivering stores and equipment, and then you've got a constant inflow-outflow of visit vehicles all day long. I think there's a 10 mile an hour speed limit around that site. I wouldn't want to walk around it all day long. That building in the centre, the white, the white roof building, is where we met the team uh from um from Iran, and we we had the presentation there, this health and safe presentation. Got to meet some of the senior management, um, had some introductions there, and and and then we set off on our on our tour from that building there across literally diagonally to where Horizon 1 and 2 is. Those two buildings were literally shells, it was just like steel infrastructure, no concrete at that point in time. But look at it now. We were there in November. Look how fast they developed that. There, they're going to be on target for Horizon 1 to 4, and you can already see they're not they're not reliant on those four buildings, they're already taking down the Bitcoin mining um buildings there, and they'll start refurbing those. Interestingly enough, um, financial Ernie, who does a daily update on on um on production. I think the last one I looked at maybe yesterday or the day before, he had iron down as only mining four bitcoin um a day. If you multiply that by 30, that gets you to about 120 bitcoin. Remember, BitDeer are mining over 900 Bitcoin. That gives you an indication that BitDeer have uh potentially eight or nine times hash rate. And if you look at the hash rate to deliver four, you're probably looking at somewhere in the region of 10xh. So that 50 exahash that took those two years to get to when they were pushing from 10 all the way to 50, um, as as as quick as it's got to 50 has effectively come offline, making way for the new strategy, which we all appreciate, has a significant current rate of return far superior to that of Bitcoin mining.

SPEAKER_01 36:09

Now we talked a lot about CapEx investment from the hyperscalers. I wanted to bring up the original slide from the Microsoft presentation here. You talked about the speed of delivery, how much has happened at this site since we were there. And actually, that's because they paid a $2 million accelerator bonus. So we've talked a lot about that range: $9, 10, $12 million, $14 million in the case of Iron. And with that accelerator, actually $16 million per megawatt just for the buildings, Anthony. So this gives you a frame of reference exactly why this stuff is so expensive and why it can eat into free cash flow, for example, uh, as you're getting up and running.

SPEAKER_00 36:50

Absolutely. $16 million for the build, $29 million for the GPUs. That's a total of $45 million per megawatt. They're going to hand over 200 megawatts in terms of those four buildings to Microsoft. That's a $9 billion investment in the buildings before they've got any return in terms of revenues. And so, as we saw with the Meta, they're investing $130, $130 to $145 billion this year. And because you know that the investments and the raising of capital for that investment, that's provided a lower cash flow for them in a couple of years' time, just like Iron will, when they get the full amount from Microsoft day after day for delivering that contract, that's when we'll see that money coming back in there, recycling back in there, and the accounts start looking a little bit rosier. And by that time, hopefully, iron are on to their next project, which which will undoubtedly look into further enhance childress and at the same time further enhance sweetwater.

SPEAKER_01 38:00

Yeah, you're right

Trades, Options, And Using Volatility

SPEAKER_01 38:01

about that. Now, we wanted to share a couple of our actual trades. We've been doing this quite some time, Anthony. We've been through a few of these cycles. We've talked about our Patreon and our members only uh channels here, where we highlight our trades in real time, but we get a lot of comments in the comment section saying, hey, you guys are pumping these stocks, they pull back the volatility, this and that. We wanted to highlight exactly why we like the volatility. So you went out yesterday, took advantage of that major drawdown. Again, everything we're seeing, everything we're hearing, our site tours, macro news, everything is telling us AI demand is growing exponentially, but the price didn't. So we took advantage of that yesterday. Anthony, you deployed looks like over $50,000. I made some trades as well. I'll let you walk through a couple of your trades here. And keep in mind, you guys, if you want more information like this, feel free to sign up. Uh great opportunity to maybe take advantage of these swings rather than just looking at your account and wishing you had sold or took some profit.

SPEAKER_00 39:05

Yeah, and in all honesty, um, you know, I had a cash position back on the 22nd of June. I'd made some strategic sales there. I've already mentioned that I sold some of my keel at $7. You know, you're in there in significant um improvement in the price you paid, and you've got a good return. Didn't have to sell all the holding there, sold a percentage of it, you know, but took the benefit of that seven seven dollars there. I've this is three trades that I've done last in the last 24 hours, but I've also I've made a total of eight trades this week. Those of you know want to know more about that can find that by by connecting via my Patreon. I always let every member know by by um by text when I'm doing my trades, and so it gives you the opportunity to see what I am doing. Do your due diligence, and you think it's something of value for yourself, um, that's something you can look at too there. But um, I've watched this, like you just explained there. This this pullback from June um has been um excessive, and you know, we're talking about companies here that have the keys to the kingdom. Power is the sh is the sort of like the limiting factor in terms of the US um HPC growth, and the mining companies have it in in significant amounts, and everybody's realizing that now. So, you know, it didn't wholly come as a shot today. This the size of the rebound say was a shot, but actually, I was anticipating we couldn't go much further low because the value is in these companies. Some of these companies were starting to be valued basically just on their Bitcoin mining and um not necessarily in all the contracts. TerraWolf have got over 900 megawatts of compute power, Cypher have got close to you know 500 megawatts. Iron have got the contract with Microsoft, but they've got six gigawatts of power. So I made these uh trades um you know in the last 24 hours there. I think I made some good choices there. The iron one looks to be pretty good at the moment, $30.15. I think it's hovering about $7 more than that, or over $7 more, and Wolf and Cypher also having 20% plus gains today. That's popped those into some sort of like you know nice profit, but it helps to bring down my average of the um of the of the shares that I had in my portfolio. Um, and as I say, when I see some you know real uh rises, we notice that Cypher and TerraWolf and Core Scientific and Riot seem to be in this sort of twenty to thirty dollar range, and I've been using that as a sort of a guide there. You know, if I'm if below twenty dollars we've been buying the stocks and getting close to thirty dollars, I sold some core scientific again on the 22nd of June, $30.40 there, and I'm able to buy these stocks back less than $20 a few weeks later. So, you know, it doesn't hurt to take a profit. I'm not looking to get 10x. I know these people out there they want to hold forever and ever. But my strategy is to take some profits more regularly, and then when there's value, um, have enough cash on the sidelines. Now on the 22nd of June, I had 50% cash in my portfolio. You can see now that it's only 20%. So I've made quite a few purchases as these stocks have been coming down, as they start rising again. I'll be focusing on you know, time frame then to maybe take a bit of profit as they continue to rise. But that's my three for today, Bryce.

SPEAKER_01 42:24

Very nice. Yeah, well timed and really following our golden rules here, you guys, being patient, taking profits when you can or when the opportunity presents. Uh, I did a similar thing, Anthony. I was out there yesterday. Here's a few of my trades buying some HUT, buying some iron. I took the opportunity yesterday to purchase some call option contracts on Keel and Cypher. And you can see in the case of Cypher, up 73% in 24 hours. So this is the power of volatility. If you're sitting there on your hands, you're frustrated about the pullbacks or drawdowns, you may be missing some opportunity here, you guys. So make sure you give us a follow.

Audio Podcast Plug And Closing Questions

SPEAKER_01 43:04

Uh, the final thing I wanted to mention, the audio podcast, Anthony. We started this just kind of on a whim. We figured, hey, if we're already doing the work, we might as well throw it on Apple, Spotify, whatever, see if people listen. Turns out 118,000 people have listened to these episodes. Uh, so we wanted to remind you guys if you're commuting, if you're at the gym, whatever, you want to listen to the show. We're on all of the major players. It's a great opportunity to do so. Updated every single day in real time. So, with that being said, let us know in the comment section below did you buy the dip yesterday or not? Anthony, I'll give you a final word.

SPEAKER_00 43:41

Yeah, and I'm just looking back now, I think there's been one interview that I've missed in the last three years, and that was I had a pre-arranged uh concert to take my wife to. And I think you interviewed Jason, um, Jason Les from Riot Platforms. It was a great podcast. Now, the benefit for me is when the concert finished and it was about an hour's drive home, I was able to log on to Spotify through the car, through the Apple app, and and and able to listen to that podcast for the rest of the journey home there. And to be honest with you, it was really clear. Yeah, you don't get to see all the um all the sort of the charts and the tables that we put in there, but sometimes it's just it's just as easy to listen to. And I know I get a lot of comments, and when I see a lot of uh subscribers at various conferences, and I ask them, you know, where do you listen to the podcast? A lot of them say going to and from work, it's a great way of using that time up there. You can just put your headphones on, uh listen to it, or listen to it through the car. Um so we've seen these steadily rise here. We've also seen the YouTube videos rise as well. So it's great to see you know both formats rising quite well. Um, and we hope that you know you're enjoying the level of content that we're putting out there. Put in the comments anything else that you'd like to see or things that you think we're missing out on here, uh, and we'll try and accommodate where we are possible. We've started to include a lot more of the neo clouds, the hyperscalers. We are moving that sort of Bitcoin mining into the HPC. That's why we're called Power Analysis now. And so, you know, we want to make sure we're reaching a broader, a broader market out there, and and you guys can help us um get to where we need to be by letting us know. So put in the comments if you listen to the downloads and the car going to and from work, or you prefer the YouTube, uh, where I get lots of photographs sent to me of families sat in front of the TV on an evening watching the podcast as it goes out there. Uh really gives me a sense of pride that people have are taking the time to listen to this. But um let's get your thoughts. Put your thoughts in the comments where you think we're what we're doing and how we can how we can make things better, and we'll certainly bear those in mind going forward.

SPEAKER_01 45:53

That's right. I think you're at the Katy Perry concert that night, Anthony. So good to make uh use of the time and also throw in, you guys, all the valuation analysis work that Anthony's done available on the website, either on the individual company page or under the HPC deals analysis. That's getting a lot of traffic right now, too. Thanks so much. See you back here tomorrow.