As-salamu alaykum everyone. I hope you are doing well. Today is Tuesday, June, and I'm going to tell you a secret about me that I haven't really spoke about on this live, which is that I don't really get upset by many things. But one thing that does upset me is when a stock four X's and I'm not part of it. And that's exactly what core we've did since April at four X. It did its IPO at around forty. It's now one seventy two. And I was not a part of that. So I'm asking myself, what could be the next core reef? And. This is a stock that I've spoken about many times on this channel before. You'll probably be familiar with it if you're a PIF member, certainly, or if you just tune in to these lives. But the question I'd like to ask and a sentiment that seems to be very popular on x is that iris energy iron is the next core reef this is the next data center play that's going to do extremely well and I spent couple hours today looking into whether or not this is plausible so I'll tell you the results of my research and let you know my thoughts at the end of it all right so for those unfamiliar coreweave is a company that has grown its revenue in a rapid manner and is specialized in providing GPU compute for AI applications. It has a strong partnership with Nvidia. It has partnerships with Meta and with OpenAI. And it seems to be the best in terms of execution. They are not just a hardware play, mind you. They also have proprietary software that enables them to deliver this GPU compute very efficiently and tailored to the needs of their customers, which is why they have managed to gain a lion's share in the market, a market that, by the way, is only going to grow at a very rapid pace. And so you can see here, the quarterly revenue went from a hundred and eighty nine million just one year ago to a nine hundred and eighty two million four quarters later, four hundred and twenty percent year over year increase. And so that's why investors are really excited about this company. and not only has revenue grown just grown as I mentioned to the tune of four hundred twenty percent but also very importantly uh their operating margin has grown substantially so in q one of twenty twenty four their operating margin was closer to thirteen percent now it's at twenty five percent so nearly double which is what you want to see as an investor now That being said, this company is not without its ugly spots. And one of those ugly spots is its balance sheet. So it has eight point seven billion in debt and only one point two billion in cash and cash equivalents. Its net income is negative. It's paying out the wazoo in interest expense on that eight point seven billion in long term debt that it has. And it has a plan of capital expenditures to the tune of twenty billion plus. So that's going to come from knowing Corweave and its modus operandi, if you will. They're going to get a lot of debt to do that, but they may actually go to capital markets, especially considering they're especially considering their elevated valuation they may decide to go to the market and raise through equity which would dilute current current shareholders so that's got to be top of mind if you are an investor in core reef As I mentioned it more than four X since its IPO and now its valuation is extremely stretched. You're talking about, you know, thirty X book value. You're talking about a company that is not profitable yet trading at a market cap of eighty two billion, close to eighty three billion. And yes, it did have revenue growth. that got it to nearly a billion. which, you know, if you analyze that, that's, that's four billion. But obviously, there's a lot of growth that should happen in twenty twenty five. So revenue for twenty twenty five expected to be larger than four billion. But still, we're talking about eighty two billion on an unprofitable company that is going to have to take a lot of debt out. It's going to have to take it's going to have to do some dilution, I'm sure. So At this point, there's too far of a potential fall here for me to be interested. Now, could Iron mimic CoreWeave? Iron is a Bitcoin miner. I've spoken about it many times on this channel. We made, alhamdulillah, some good money in Iron as a Bitcoin miner, and it pivoted towards CoreWeave. AI and high performance computing, it's reached close to reaching in terms of hash rate for Bitcoin mining, making it one of the largest Bitcoin miners that are publicly traded, one of the largest Bitcoin miners on earth. But Bitcoin miners is a pretty lousy business. Bitcoin mining companies tend to do very well for a very short period of time that is really centered around Bitcoin's price going parabolic. That's when Bitcoin miners do extremely well. And then for the rest of the time, which is seventy five percent of the time, they're basically gasping for air because it's a very tough business to be in. You're constantly faced with an increased network hash rate. So there's increased competition from other miners that are becoming more efficient all the time. You have to deal with electricity prices. You have to deal with upgrading your Bitcoin mining rigs all the time to make sure that you have the most efficient rigs out there so that competitors aren't taking away from your share in the network. It's a cutthroat business, and Iron has decided it wants to pivot from the Bitcoin mining business to AI high-performance computing. Now, the biggest asset that Iris Energy has is in this regard is that it has two point six gigawatts of secured power and it owns the infrastructure it owns the land and it owns a lot of the shells that can be used for data centers although retrofitting these locations and making them suitable for ai and high performance computing is going to take billions in additional investment but the two point six gigawatt of secure power that's nothing to scoff at this is more secured power than even core reef have core reef has and and keep in mind we're talking about iris energy with a market cap of two point four five nine billion so in terms of just secured power iris energy has more than the near to CORE Reef. So that's something that I think a lot of investors are saying, hey, this is a missed opportunity. This is a company, it's pivoting towards AI and high performance computing. It's being valued as a Bitcoin miner, it should be valued the same way CORE Reef is being valued. Now, my thoughts on this are as follows. So CoreWeave is not just a hardware company. It's not just, okay, land and access to power and buildings. That's not what CoreWeave is. It is a software and a hardware company. It does have proprietary software that enables it to deliver very efficient AI compute. And that is something that... And this software layer, I think, is what is behind its improving margins. This is where the margins are. Hardware typically has really crummy margins. And Iron is... is at this point just hardware, just land and buildings and access to power. That's what Iron brings to the table. And that means tougher margins and a tougher sell for hyperscalers. Obviously, if you're a hyperscaler, you're gonna wanna go with something like CoreReeve, which has the software that you need in order to deliver the GPU compute. which iron doesn't, even though it does have the infrastructure for it. And as I mentioned, retrofitting iron's infrastructure for AI may cost billions. So I do expect debt and dilution to be ahead for iOS energy. Now, what seems to me to be the best, most logical play here is for someone who's already good at software to come in and just buy out Iron's assets and repurpose them for AI HPC. Because Iron doesn't really have any noteworthy experience with AI and high-performance computing. That's not its wheelhouse as of yet. That being said, I have to say that Iron's management, to their credit, were extremely good at executing when it came to Bitcoin mining. recognized the bitcoin opportunity when it happened when it was starting and they and they were extremely good at execution and they got to a fifty x a hash uh making it one of the biggest public uh bitcoin mining companies on earth and there's something to be said about that I always say the most important capital in any company is the human capital that it has and the human capital at iron seems to be very good at execution Now, I can't say for sure how much this transfers over to AI and high-performance computing. But if we were to invest in iron, it would be because, okay, we have confidence that management is going to figure it out. Otherwise, just based on what they have right now, I think the best course of action is something like an acquisition. The bulk case for investors is something like an acquisition where there's a twenty five to fifty percent premium that's paid to the book value of the company. And there's some appreciation in the stock based on that, although If you take out the hardware related to Bitcoin mining from the book value of the company, let's say that's around fifty percent, it's hard to judge. But if it's around fifty percent, then the actual book value of the company is around a billion dollars. you know, a fifty percent premium would put you at one point five billion, which is still less than the current market cap of the company. So with all that being said, there's a lot of hype around iron on X and Perhaps some of that is justified, perhaps it isn't, but this is just the results of my take on it. If someone is going to invest in this company, it's probably because they either know something that's not public or they're just saying to themselves, you know what, management has proven to be competent in the past and I think they'll continue to deliver moving forward in this pivot to high performance computing and AI, obviously this is an industry that's growing at a very rapid pace and I want to be in it. And if this starts to be valued like a Cori, for example, then it should go to the moon and beyond perhaps. And with all the sort of chatter about it online, even if the fundamentals don't actually justify it, there could be a pretty big, upward trend here. It's kind of one of those things where I have to remind myself, if it's not a hell yes, then it's a no. And I'm not at the hell yes phase yet. So those are my thoughts for what they are worth. Obviously, if you'd like to follow my portfolio and invest in the things that I'm investing in, then join PIF, link to join PIF is in the description of this video. Salamato Chad, nice of you to join us. Thank you for moderating as always. Bruce Wayne sold all my Tesla and PIF growth made two X return to buy a car. is it too late to go back to buy Tesla in the PIF portfolio or should I follow the weekly investing email? Well, Bruce Wayne, congrats on the Batmobile. I don't think that I don't think if you have a long enough time horizon that it's too late to get into Tesla. In fact, I believe that we're in the beginning of a pretty sustained run in that stock. So no, I think if you have the patience, then it's still a good stock to own. Mariam says, what are your thoughts on Bitdeer price falling after announcing three hundred million convertible notes? Yeah, recently A PIF member shared an interview with the CTO of Bitdeer on our Discord, and I had a listen to that. And I think it's pretty promising what they're working on, especially as it relates to the vertical integration that they have, which no other Bitcoin miner has. As I mentioned, Bitcoin mining is a very tough business to be in. And vertical integration gives Bitdeer that edge that I think other Bitcoin miners can really only dream of and really is going to help improve their margins with Bitcoin mining. And then not only that, when you think about the predictions for the price of Bitcoin and where it's going and, you sailor thinks it could be north of, you know, twenty million in the next twenty, thirty years. So, the people selling the picks and shovels, the Bitcoin miners, should do well. And it does seem like Bitdeer is positioning itself to be either the number one or number two picks and shovels seller in this race for Bitcoin. And so, I think that commands a valuation that's probably multiple times where we are right now, which is just that two billion. Again, it's selling maybe the number one or two picks and shovels seller for an asset that is climbing the ranks of the most valuable assets in the world. and could compete with gold perhaps in the future in terms of being multiple tens of trillions of dollars in value. So a two billion dollar valuation for the number one and number two picks and shovels seller, you can see how there's upside potential there. Now, what I would what I always caution against is being too focused on the near term last month two three six and you know trying to zoom out and I think that's appropriate when you're talking about bit here at this particular time there are obviously risks here with regards to that play but I think that the potential upside is compelling Would there be any catalyst for Iron Bittier other than BTC skyrocketing? Well, yeah, for Iron, obviously, if it gets an agreement with a hyperscaler, I think that's what everyone is waiting for. And I think it's sort of a binary outcome for Iron. You know, either it gets the hyperscaler deal or it doesn't as it relates to its AI HPC business, but... it's still in a position to benefit immensely from a bitcoin skyrocketing because as I mentioned fifty x a hash of mining power is nothing to scoff at um a bit there I think I think once the their seal miner three, their third generation basically starts, first they're going to fill their own shelves with it and then they're going to start selling. And I think when those sales happen and the margin profile for the company starts to change, I think that you're going to see a jump in valuation there as well. Also for Bitdeer, Bitcoin rising is going to be catalytic for it, for sure. Salamat, Dr. Khaled. Nice to see you. Salam, Malik. Nice to see you. Did I buy a Tesla? Well, not recently, but I do own a Tesla. Are you still bullish on PLL? I think the valuation here is quite compelling, Malik. Salam, if I have ADK to invest in Tesla, should I lump some or DCA in? I have a long-term investment horizon around five years. So I can't really give personalized financial advice. I'll tell you generally what my answer is. Generally, my answer is yes, DCA, but don't DCA over a very long period of time. I'm talking weeks, not months. But again, not financial advice. I'm just telling you how I would do it. And with that being said, if you enjoyed this live, definitely leave a like. I would really appreciate that. And become a PIF member. Join our community of Halal Conscious Investors. Link to do so is in the description of this video. And until next time, make sure to take care of yourself. Assalamualaikum and peace be upon you all.