As-salamu alaykum, everyone. I hope you are doing well. Today is Wednesday, June fourth. And I'd like to talk to you today about a stock that has been on my radar and I'm just seeing it go up and up and up. And I just wanted to give you my thoughts on it. And the company's name is Coreweave. This is a company that's in the business of providing compute, GPUs primarily and CPUs. Now that are used for AI and. It has a partnership with Nvidia that gives it access to the highly sought after Nvidia chips that really don't have a replacement. And since its IPO a few months ago, it's gone from high thirties to one hundred and sixty three dollars per share. So I'd like to take a deeper look at this company and see, is it overvalued or not? So without further ado, let's get started. So this is the graph for the stock price. And it, as you can see, since April, so two months ago, it is up three hundred sixty percent. It ended up bottoming. mid-April after the tariff scare that we got. And since then, as I mentioned, up three hundred sixty percent. So what's going on here? So if you look at the most recent quarter that they reported, nine hundred and eighty two million in revenue. Revenue growth was four hundred and twenty percent. By the way, interestingly, their interest expense growth was over five hundred percent, but that's not on the slide for obvious reasons. Revenue backlog in terms of things that were ordered for them that they plan on delivering in the future, that was close to twenty six billion. The operating income margin, seventeen percent. The net income loss is negative fifteen percent. And they're shelling out cash like there's no tomorrow in order to invest in more and more data centers and in the last quarter that was around two billion and by the way this is a company with a market cap now after its most recent share price market cap of close to eighty billion dollars So just to put these numbers in context, quarterly revenue of close to a billion dollars, market cap, eighty billion dollars. Net income margin is negative. Now, their revenue backlog has grown. So if you compare their revenue backlog in Q-one twenty four versus Q-one twenty five, it went from fifteen to twenty five. So let's assume a similar growth rate that puts us at between thirty five and forty, basically. next year so assuming the same growth rate next year uh we get to uh something between and and and again this is that's for revenue that's not for income that's not for cash flows that's for revenue top line is what we're talking about and it's trading at eighty billion dollars And fundamentally, what we're talking about in terms of compute, yes, the chips that are actually producing the compute are quite proprietary and demand for them far exceeds supply. This is actually very true. So in that sense, what they're delivering is not a commodity, but compute itself is a commodity in that you either have it or you don't. the there are you know chips that are more efficient than others more powerful than others yes but compute itself which is what this product is what their main product is that is a commodity and if you want to see their growth in terms of quarterly revenue that's at around Four hundred and twenty percent year over year. So nothing to scoff at. Obviously, they were at one eighty nine last year. They're at close to a billion, as I mentioned this year for this quarter. And something that they have, I think, that reflects positively on them is that the percentage of individual insiders who own the company is quite healthy. So close to thirty percent. That is always a good sign. I like to see insider ownership being very high because that means that insiders actually believe in the company. It means that there's an alignment of interest between the people who are making company decisions and the public equity holders. Now, if you look at the estimates for free cash flow, and I always say, when you own a public equity, you should think of your ownership decision as the same as if you own the entire business. So if I were to offer you a business, your top of mind for you that is I wanted to sell you a business top of mind for you would be you know how much cash is this business going to give me over the foreseeable future and in terms of free cash flow this company is not expected to produce any of that In the next three years, it's just going to be needing more and more cash in order to fund its expansion. So if you look all the way out to December of twenty twenty seven, their free cash flow is estimated to be negative two point three billion. In twenty twenty six, it's estimated to be close to negative twenty billion. So I have an asset that I want to sell to you for eighty billion dollars. And I tell you, this asset is not going to produce any cash over the next three years. In fact, it's going to require cash to the tune of close to, you know, twenty five billion dollars that you'll need to feed this asset over the next three years. Are you a buyer? Are you interested in buying this asset from me? It costs eighty billion. It's going to need another twenty five billion over the next three years. It's not going to generate any cash for you during this period of time. Are you interested? I suppose you could ask, well, what is it going to generate in year four and five? Sure. But In this day and age, are you really that comfortable making predictions about years four and five? Do you really know what the world's going to look like four years from now, five years from now? Can you really make a high enough conviction prediction of what the cash flows are going to be four to five years from now? Do you know the competitive landscape that well? Are you that sure? that no one is going to eat into their business, that the demand landscape is not going to change from what it is right now? Are you that sure that no one's going to execute as good as this particular company is going to? And therefore, are you willing to put this type of valuation on this asset, eighty billion dollars? And that's really how you should think about it as an investor. At least that's how I think about it. And the answer to me is plainly no. I wouldn't buy something for eighty billion dollars if it's not going to give me any cash over the next three years. It's going to require from me between twenty and thirty billion dollars in additional investment. And who knows what happens in year four and five. Why? I mean, there's, I think, much more clear opportunities out there in the market. I mean, the best case scenario seems to be that I didn't overpay. That's the best case scenario. Not that I underpaid. That doesn't even seem like a possibility at this valuation. So I actually ran the numbers here and I tried to figure out like what type of assumptions do I have to make in order to justify its current valuation. So if we go with the free cash flows being zero, years one, two, and three, I'm looking into the future here. And then let's assume year four, all of a sudden they're at two billion dollars in free cash flow. And then after that, it grows, thirty percent every year until we reach year ten in the future. Thirty percent, that's very aggressive. And then let's assume that the company grows in perpetuity forever for two and a half at two and a half percent. I'm using the weighted average cost of capital that the company currently has. And by the way, that's very liable to increase. Let's use the weighted average cost of capital of ten percent and discount all those cash flows to today. We come out with an enterprise value of sixty seven And then since we have net debt here of negative ten billion, we have an equity value of seventy seven billion. So the intrinsic value per share here is one hundred and sixty one dollars. The current price is one hundred and sixty three dollars. So you really have to assume something. you'd really have to assume the best case scenario to come out with today's valuation. And that leaves no meat on the bone. That leaves nothing left for stockholders. And so I just thank God that shorting is not halal because I would have shorted this stock a while ago, but... the markets can remain irrational longer than you can remain solvent, as the saying goes. And so this seems to me like an asset that's overvalued. At least it seems to me like something that I definitely wouldn't touch. I can say that much. I mean, maybe something astonishing happens in its outlook and all of a sudden, the valuation that it's sporting today is justified. But as far as I can tell, with its current valuation, I wouldn't touch this thing. And I always like to say this, when you're investing, ideally, you don't even have to do a discounted cash flow. The opportunity is so obvious. You don't really have to do something cute like this. discounted cash flow analysis and you know plug-in numbers ideally it's something like oh well here's a company that makes two million two million dollars in income it has two million in cash uh on its uh book it has two million in assets are you gonna will you buy it for six million And sometimes you come across opportunities like that, in which case, you back up the truck. That's really the ideal opportunity. But something like this, it's not something that I would be interested in. So CoreWeave can continue running up, but I'm not gonna be touching it unless something in this analysis changes. All right, so before I wrap up and go to questions, a friend that I trust actually shared this with me. He knows the person in question. This friend of mine is a doctor at a Veterans Affairs hospital. And one of his patients actually did Shahada and then later was diagnosed with cancer. And because of some red tape, his his cancer is not going to be covered don't ask me uh healthcare system in the united states is crazy so uh what I'm asking I asked from the community in discord and I'll ask you here is to I mean uh the goal is twenty thousand we're already close to twelve thousand so I'm hoping the generosity of this community can get this person to twelve thousand take care of these bills for him and inshallah he can focus on getting better so the link to the campaign is in the description of this video and I think given the times that we're in you know coming up on Eid al-Adha this is a perfect time to do something like this so check it out if you're interested and with that I'll go to questions can you suggest any good index fund yeah become a member of PIF and follow our investments Hamid Amir says, Salam, brother. Do you think Tesla will start moving after RoboTaxi event? I think the negative sentiment is an opportunity regarding Tesla, and we keep being given more and more opportunities. And I think the inevitable will happen with Tesla, which is that it's going to have its chat, GBT moments, similar to Nvidia, and it's going to go on a pretty strong run in the years to come. Insha'Allah. Salamat Ahsan, nice to see you. Uh, yeah, sorry. I wasn't able to go live yesterday. I'm a bit worried about Elon and Trump. yeah to be honest I mean you can think of what uh what you want about elon and you know the actions that he's taken uh fact of the matter is I think the guy is genuine I think he speaks his mind in most cases um And so he's genuinely concerned, I think, about the spending bill, as it should be in the United States. And we can't really afford it. And so he's speaking up about it, even though he has nothing to gain from it. People are going to say, oh, well, this is because they took away the EV subsidies or something like that. And these people don't know what they're talking about. EV subsidies being taken away actually benefits Tesla because Tesla is the only EV company that can make it without them. So it will likely... concentrate the market even further in the hands of Tesla. So their market share should actually increase in the United States because of this move, all else being equal, that is. So I don't know what's going to happen between Elon and Trump. Obviously, I think that this has impacted the share price, but has it impacted the business? Has it impacted the number of People that are going to ride in robotaxis in the future, has it impacted the number of cars they're going to sell, the number of battery packs they're going to sell? Has it impacted the number of humanoid robots they're going to sell in the future? I think the answer is no. I believe CoreWeave is currently not Sharia compliant. Yeah, it's not Sharia compliant. That's why I didn't really do a deep dive into that company when it went public. Actually, their interest expense in the next quarter is forecasted to be between two fifty and three hundred million dollars. Their interest expense, keep in mind, this is a company that generated a million billion in revenue. So their interest expenses is out of control and that's because they need a lot of financing and they're going to need a lot more. And that's going to come through a debt and dilution. Assalamu alaikum. Comparing Corweave and Nebius group, would you suggest adding Nebius to our portfolio? Problem with Nebius is that I think they have like really strong ties with Israel. At least that's what I saw last time I took a look at them. Hamid says, Salam Akan, any comment on Uranium Energy Corp? Seems like things are moving towards nuclear. So, Hamid, actually things are moving towards solar. solar will be by far the most common energy generation source of the future. Nuclear is going to play a It's going to play an important role in some aspects, but generally speaking, if you told me the energy source of the future, I think it will be solar. There are some opportunities, I think, in nuclear, but the further away you go from... Now, it depends on the situation. So, you know, if you have a low-cost mine... that can you know produce the thing at a lower cost than competition then you basically have a license to print money but and if the valuation is correct then makes sense to make a move there but generally speaking the further you move away from the mine and so downstream into you know closer and closer towards actually value delivery the fatter the margins become typically mining is a really like bad business to be that close to and so generally speaking regardless of the commodity that stay away from mining and look more into Things that are not commodities that are closer to, you know, value production. Yeah, please don't forget to like. Thanks, Ahsan. Appreciate it. Thanks, Mohamed. I appreciate it. And yeah, make sure to get this campaign to twenty thousand. Inshallah, now is the time to do it. These are great. days that have a lot of barakah in them. May Allah Subh'anaHu Wa Ta-A'la add barakah and preserve the barakah in all of your lives. Thank you for being part of our community. Really appreciate it. Until next time, make sure to take care of yourself. As-salamu alaykum and peace be upon you all.