Here's Your Fortune: Rich vs Fake Rich, Nvidia’s Plunge, AI Spending & Confetti Cash

Tomorrow’s Fortune

Welcome to the action-packed newsletter designed to help you navigate the world of business, investing, and technology. You owe it to yourself to stay informed! If you missed last week’s post, check it out here. 😎 

Today’s post is 2,618 words (~4 minutes). Don’t be lazy… let’s get rich!

Cool Fact: Crypto’s Million-Dollar Typo: In 2017, a cryptocurrency startup named Parity accidentally deleted its own $280 million worth of Ethereum due to a coding mistake. A developer inadvertently triggered a bug that rendered the funds completely inaccessible. It’s safe to say the coding team learned the hard way that a single typo can cost millions.

Today’s Digest: 

1. NEW VIDEO 👉🏼 Look Rich or Be Rich? Here's What Real Millionaires Do 🤑

2. The Stock That Fell 10% Over a Rumor: What Really Happened to Nvidia. Learn how a single rumor wiped out billions—and what’s next for Nvidia.

3. Breaking the Rules: How AI is Driving Record Spending Despite High Rates. See why Big Tech’s AI spending spree shows no signs of slowing—learn more here.

4. Party Planner Profits: Make Money from Events. Explore event planning as your side hustle.

KENNY FINANCE ON YOUTUBE!

Back again with a Friday special on YouTube! As I said before, my goal is to touch a million lives through financial wellness and provide the framework, insights, and playbook to be SMART with your money.

Few things:

1. Check out tonight’s video on Look Rich or Be Rich? Here's What Real Millionaires Do 🤑

2. Make sure you Subscribe and hit those bell notifications so you never miss a beat 📲

3. WATCH THE ENTIRE VIDEO! Pls and thank you… it helps the YT algorithm spread to others who could use the advice

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5. I’ll be uploading fire content every Friday until you’re rich

6. Check out KENNY FINANCE for other videos

TOP STORY

Nvidia: The Stock Market’s Favorite Piñata? Or Just a False Alarm?

Nvidia, once riding high on AI-fueled optimism and dizzying valuations, took a massive blow recently when its stock tumbled by a whopping 10%. The news wasn’t just about numbers though—it had the extra spice of a potential antitrust subpoena. But guess what? Nvidia says there’s no subpoena. So, what’s really going on here?

The Subpoena That Wasn’t

On Tuesday, Bloomberg reported that Nvidia had been hit with a subpoena by the Department of Justice (DOJ) as part of an antitrust investigation. Investors panicked. Headlines screamed. Nvidia stock tanked, wiping out an eye-watering $279 billion in market value—the largest single-day loss in stock market history. It’s hard to fathom losing that much in a day. To put it in perspective, the value Nvidia shed in one day is more than the entire market cap of companies like McDonald’s or Pepsi!

However, by Wednesday, Nvidia came forward and said, “Hey, wait a minute. We’re not subpoenaed.” Sure, the DOJ is asking questions about their business and acquisition of RunAI, but the whole "subpoena" story? Not exactly true. Nvidia clarified that they’ve been in contact with the DOJ and are cooperating, but no subpoena has been issued.

The market had already taken the hit by then, though. Stocks slid another 1.7% after Tuesday’s carnage. It’s a textbook case of how rumors, even if just a little exaggerated, can spark chaos in financial markets.

Earnings Were Solid, So What Happened?

What’s fascinating here is that Nvidia is no slouch when it comes to earnings. They’ve been posting impressive numbers. So, why the sudden panic? Well, despite blockbuster earnings last week, Nvidia’s future outlook didn’t quite light the market on fire. The company is still riding high on the AI wave, but investors seem jittery about the broader economy, wondering if the demand for AI tech will really hold up in a potential downturn.

Nvidia’s stock has been on a steady decline since its peak in mid-June, dropping more than 20%. This is part of a larger trend among tech companies that have thrown their weight behind AI. Microsoft is down 12%, Taiwan Semiconductor Manufacturing Co. (TSMC) has slipped 18%, and Intel is struggling with a staggering 59% drop this year. All of them are betting big on AI—but the market is starting to ask some tough questions.

So, Should You Be Worried About Nvidia?

Despite all the chaos, many market bulls are still holding firm. Nvidia remains up an astonishing 118% this year. Investors like Wedbush’s Dan Ives think the stock’s recent dip is more of a buying opportunity than a reason to panic. Nvidia’s AI chips are in high demand, and their GPUs are becoming essential tools in the tech world, much like oil was during the Industrial Revolution. CEO Jensen Huang has been emphasizing that the return on investment for clients using Nvidia’s new chips is substantial and almost immediate.

Yes, the company’s stock took a hit, but the long-term fundamentals remain strong. Nvidia’s tech is at the center of the AI boom, and even with competition heating up, the demand for its products is still skyrocketing.

The Takeaway

Markets may have momentarily picked on Nvidia, but this wasn’t a death blow. It’s a classic case of overreaction—a single report sparked a panic, but the underlying strength of Nvidia’s business remains intact. Yes, they’ve got the DOJ breathing down their necks with questions, but there’s no subpoena, no antitrust hammer waiting to drop. The company is still thriving, and its chips are more in demand than ever.

So while Nvidia took a brutal punch this week, it’s far from down and out. If anything, the tech giant is gearing up for its next round.

BITS OF GOLD

• More EV charging stations are here! Just... not enough for you to actually find one

• The US is trying to catch up on building EV charging stations, but it's like trying to fill a bathtub with a teaspoon. While progress has been made, the number of chargers still falls short of meeting the growing demand for electric vehicles. This is causing range anxiety for many potential EV buyers, who are hesitant to make the switch without a reliable charging network.

• A bargain that's no longer a deal

• Dollar Tree's stock took a nosedive after a disappointing earnings report. The discount retailer is struggling to navigate a challenging economic environment, and investors are losing faith. It's like trying to find a bargain at Dollar Tree, but the only thing going down is the stock price.

• The billionaires club shrinks as Jensen Huang loses his spot

• Jensen Huang, the CEO of Nvidia, just got knocked out of the $100 billion club. His net worth took a massive hit thanks to a plunging stock price. It's like he was in a boxing match with the market and got knocked out cold.

🏠💸TASTE OF THE FUTURE WITH AI

AI Boom Defies Economic Logic: Why Big Tech Won't Stop Spending

In the world of economics, one rule has stood tall for decades: when interest rates go up, capital expenditure (capex) goes down. But in today’s AI-crazed tech environment, that rule seems more like a suggestion than a hard law. Despite sky-high interest rates, the mega-cap tech giants aren’t just spending on AI—they’re spending more than ever. It’s a financial paradox, and it’s turning traditional economic models upside down.

Why Higher Interest Rates Should Stop the Spending

Typically, when the Federal Reserve cranks up interest rates, businesses tighten their belts. After all, borrowing becomes expensive, and spending on big projects doesn’t look as attractive when capital is pricier. This is precisely why rate hikes are used to cool down overheated economies. But it seems like no one told Big Tech about this rule.

According to Apollo’s chief economist, Torsten Sløk, the usual relationship between rising interest rates and lower business investments has been disrupted. “Despite the Fed funds rate being at the highest level in decades, capex spending by the Magnificent Seven is at record-high levels,” he said. That “Magnificent Seven” refers to the tech titans: Amazon, Alphabet, Meta, Microsoft, Nvidia, Apple, and Tesla.

So, what’s going on here? One word: AI.

AI is Too Tempting to Resist

These tech giants are throwing their cash into AI faster than you can say "neural network." The opportunity to lead the AI revolution is too good to pass up, even if borrowing costs more and the economy is facing some turbulence. The reasoning is simple: if they don’t invest now, someone else will. As a result, AI-focused capital expenditure has surged, defying the traditional economic logic that higher rates would slow things down.

"This is another reason why the monetary policy transmission mechanism is much weaker than usual,” Sløk explained. In plain English: the Fed’s interest rate hikes aren’t scaring these companies off from spending. The AI gold rush is in full swing, and nothing, not even high rates, seems to be slowing it down.

Cash Piles, Bigger Bets

Morgan Stanley’s director of research, Katy Huberty, points out that these companies have plenty of cash to fuel this spending spree. By 2025, tech giants like Amazon, Alphabet, Meta, and Microsoft are expected to generate a jaw-dropping $176 billion in operating cash flow. And guess what they’re doing with all that money? Buying more AI-enabled chips and boosting their investment in AI infrastructure.

Huberty added that the AI capex boom shows no signs of slowing. "Hyperscalers' pockets are still deep enough for further spending," she said, referencing the companies building massive AI-driven data centers. Even with rising interest rates, the return on AI investments is just too good for these companies to sit on the sidelines.

In fact, the average AI capex to EBITDA (earnings before interest, taxes, depreciation, and amortization) ratio sits at around 40%. Translation? The profits these companies are making on AI investments are substantial, and that’s driving even more spending in the sector.

What Happens Next?

Here’s the kicker: the Federal Reserve could soon cut rates. If that happens, it could pour even more gasoline on this already roaring AI fire. Rate cuts would make borrowing cheaper, meaning tech companies could ramp up their AI investments even further. The AI revolution could accelerate at breakneck speed, leaving traditional economics in the dust.

But here’s the real takeaway: this isn’t just about AI or tech stocks; it’s a signal that the rules of the game are changing. High interest rates used to be the big stop sign for business spending, but now, the potential rewards of AI are too large to ignore.

The Bottom Line

The AI boom is rewriting the economics playbook, with tech giants spending big despite the high cost of capital. The opportunities in AI have proven too lucrative, and companies like Amazon, Alphabet, and Microsoft are digging deep into their cash reserves to fuel this capex frenzy. As interest rates hold steady—and maybe even drop—the AI race is only going to get hotter. Traditional economics may have to play catch-up with the relentless pace of technological advancement. In this AI-driven world, the old rules don’t seem to apply anymore.

Other Cool AI News!

• AI stocks skyrocketed, but now Wall Street’s asking: real deal or hot air?

• AI stocks have been skyrocketing like someone forgot to carry the decimal, but now the shorts are circling. With companies like Super Micro and Lumen ballooning 250%, some investors are raising eyebrows—and bets—on which of these AI high-flyers will fizzle out. It's a classic Wall Street showdown: the real players are about to get separated from the AI pretenders.

• AI isn’t causing job cuts yet, but it’s definitely not hiring a robot army either

• Good news, humans—AI hasn’t turned your job into a robot’s plaything just yet! A recent survey from the New York Fed reveals that firms using AI aren’t exactly on a hiring spree, but they’re not slashing jobs either. In fact, only about 5% of service firms in the Big Apple have trimmed their workforce due to AI. So, while you might still have to endure the robot vacuum cleaner at the office, your job isn’t going anywhere for now!

• Creativity still rules in the AI age, report shows

• If you’re worried that AI will make human creativity obsolete, fear not—according to Canva’s latest report, your artistic flair is still in demand. The study emphasizes that while AI can handle repetitive tasks, it can’t replace the unique spark of human imagination. Creativity remains a hot ticket in the job market, making it the best way to ensure your resume stands out amid the rise of our robotic colleagues. So, keep those paintbrushes and problem-solving skills handy; they’re still worth their weight in gold!

WHAT ABOUT TODAY’S FORTUNE? SIDE HUSTLE OF THE WEEK 💸

Throwing Parties for Profit: The Ultimate Side Hustle

Event planning might just be your ticket to fame (or at least a well-earned paycheck)! Imagine getting paid to make someone’s special day unforgettable, from epic weddings to dazzling corporate events. Ready to trade your 9-to-5 for a side gig where fun is part of the job description? Let’s dive into how you can start cashing in on your party-planning prowess!

Overview of this Side Hustle: Ever dreamt of making money while hosting glamorous events? Welcome to the world of side hustling in the events industry! Whether it’s coordinating weddings, throwing epic corporate bashes, or managing festival fun, this side gig is all about turning party chaos into a well-orchestrated symphony. Just be prepared for a whirlwind of confetti, cake disasters, and over-caffeinated vendors.

Startup Cost: So, how much will it cost to dive headfirst into the event planning hustle? Buckle up: you’re looking at about $500 to $2,000 to get started. This includes everything from snazzy business cards to a decent laptop for all those spreadsheets and floral arrangement Pinterest boards. Just remember, it's an investment in your future as the unofficial “coolest person in the office”!

Capital Intensity: This gig is like a cash buffet, but with some conditions. Initial capital intensity runs around 30% of your total costs—mostly for marketing and software to keep your chaos in check. But once you’ve got your footing, you’ll be mingling with the big wigs without breaking the bank.

Interesting Growth Opportunities: The event planning industry is full of potential. Think about branching out into niche markets like eco-friendly events or virtual events, which are all the rage these days. You could also team up with local vendors for exclusive deals or offer specialized services like themed parties, making every event a unique experience. The sky’s the limit, and the best part? You get to wear the “creative genius” hat.

Earning Potential: If you’re ready to hustle, the earning potential is nothing short of spectacular. On average, event planners can make between $30,000 to $60,000 a year on the side, with the top-tier gigs bringing in $100,000 or more. The best part? You’ll get to count every dollar with a smile, knowing you turned someone's wildest party dreams into reality.

So there you have it—your gateway to the glamorous world of event planning! Whether you’re envisioning swanky soirées or cozy gatherings, this side hustle promises excitement, creativity, and the potential for some serious cash. Don’t just sit back and wait for the next big event to land on your lap—take the leap, start planning, and watch as your side hustle turns into your new favorite job. Ready to make every event unforgettable? Dive in and start your journey today!

This newsletter is for informational purposes only and does not constitute investment advice. The content is based on publicly available information, and the author makes no representations about its accuracy or completeness. Readers should conduct their own research before making any investment decisions.