AI Selloff Explained: Top IREN, HUT, WULF, DMGI, GLXY, CORZ, WYFI, HIVE & SLNH News!

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Hey guys, welcome or welcome back to the channel McNally Money, the official home of power analysis.
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An excellent episode in store for you this evening as we take a look at this sector-wide sell-off we've seen in the AI infrastructure space, really stemming from the tail end of June until current.
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We're gonna be breaking down exactly why this is happening, where we think the bottom is, and the outlook for the sector moving forward.
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Before we get into it, take a second, smash a like button, guys.
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Big help to myself and the channel.
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Anthony absolutely loves it.
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If you're not already subscribed, McNally Money, feel free to join.
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And let us know in the comment section below if you've been taking advantage of this recent pullback and your current top pick in the space.
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With that being said, let's get into today's video.
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All right, guys, away we go.
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Tuesday evening.
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This is gonna be one you want to watch.
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We're gonna be covering the recent sell-off slide, panic, whatever you want to call it in the AI infrastructure sector.
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We've got updated price targets, site expansion, and a number of top headlines.
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Anthony, kick us off with Bitcoin here.
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We've got the year-to-date view.
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Again, not seeing that 86, 87 we were used to a couple weeks ago.
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No, but we're in that sort of band between that 80,000-85,000 there.
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It's uh currently 83,500, a little bit higher than when we put together the slide for the for the podcast there.
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But um, if it stays in that range, I'm I'm more than happy.
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Slow and sure uh will get us there.
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We know that the long-term effect is um is is going to be higher.
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Um, you know, the shortage of Bitcoin, we're down to our last probably 900,000 Bitcoin unchange now.
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The vast majority over 95% has already been produced out there, so you have a supply and demand issue.
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Um, yes, we know there was a bit of a sell-off last year.
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Some of the old holders of Bitcoin sold when it was over$100,000, but uh, there's plenty of opportunity for people to get in, and um, people keep saying to me, What's a good time to buy?
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Today's a good time to buy.
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Um, you know, there's there's no real reason there.
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We we've been buying this year, and I put the year to date slime there specifically to highlight back in February, March, April, June, July, August, I was buying Bitcoin in that 60,000, 65,000 range there, reg with great regularity, small amounts, you don't have to buy a full Bitcoin.
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The great thing about Bitcoin, you can buy it in pieces of Bitcoin.
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Um, you know, I always say to people, just because of the costs, you know, try and save up and do it, probably like a minimum of about maybe$500, and it it spreads the cost out of buying it over that$500.
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If you if you only go and buy$50 worth, you the exchange might charge you$15 for the process, and therefore you're only getting$35 of physical Bitcoin.
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So save up a little bit of money.
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$500 is you know, for most people, it's a reasonable amount for to have some skin in the game and a long-term view on it.
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But uh, yeah, I'm happy where we are at the moment.
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Um, you know, we were, you know, let's say three months ago in the 60,000-65,000 range, so holding out at the moment, holding out.
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Yeah, dollar cost averaging into Bitcoin, the same thing we've been doing this week into the AI infrastructure plays.
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Now, in terms of format here, Anthony, we're gonna look at today's uh chart or numbers.
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We're gonna take it down memory lane back to June 22nd, and then most importantly, we're gonna talk about six reasons exactly why we think we've seen this sell-off.
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First and foremost, on that list, today's update again, market closed.
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ABTC once again leading the pack.
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This has been a number of good days consecutively for them.
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However, Anthony, the majority of the AI players again read.
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I think this is maybe 14, 15 sessions of this sell-off.
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Specifically, the 52-week range is catching our attention.
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Yeah, the 52-week range clearly shows performance over the last 12 months.
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And uh, even though ABTC's having having a couple of good days here, it's still got a long way to catch up to its 52-week high.
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Need a considerable amount of um increase from its current price of$8.66.
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Core Scientific having a good day as well today, which is a predominantly red day, and we'll come on to a bit more news about Core Scientific, a bit positivity today around them.
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Riot, um, still waiting to hear on that Corsicana site, the one client, the LOY for that site there, um, but they're in the green today, as is um host as well.
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Um, positive as well.
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The rest of the stocks there with Iron Flat are showing uh in the red with Saluna um bringing up the rear at down 7%.
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Um, having a few bad training days over the last few weeks there, and um, you know, it wasn't too long ago that share price was probably close to double where it is today.
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So, challenging times for number of these stocks, and and as you say, we'll come on to some of the reasons why they're in this position, that 52-week range there.
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Remember that slide.
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Um, that's uh what we're going to be discussing.
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Yeah, now we don't do a lot of technical analysis, but if you look at the RSI, the relative strength index, these stocks are significantly oversold.
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Proving that point, if we move into the heat map here, Anthony, a sea of red market caps are starting to slide.
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And again, if you look at those longer durations, we'll show you in a second here some triple-digit returns.
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We've seen those completely eroded.
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Yeah.
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Um, you know, you can see uh a few green sheets for ABC there, but look at the year-to-date and the one-year change, it's a different picture, really.
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You know, we're seeing a massive, a massive rent at the moment.
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Only the year-to-date change remains positive, and that's now down to four percent.
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I think it was six percent yesterday.
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So, are we getting closer to the to the to the lows?
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Um, I know that um I've certainly been buying stocks over the last few trading days, thinking that we're we're getting closer and closer because the fundamentals of these companies, they've signed contracts, they're gonna get this revenue start to coming through in the next few quarters.
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And one particular company we'll talk about is going to be getting extremely uh large amounts quarter by quarter now as it completes its first big, big deal out there and starts moving on to that second deal with AMD.
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But uh, yeah, uh still a sea of red there.
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It can turn around really quickly.
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The five-day change there, down 11%, a few days of trading, uh, you know, upside there.
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We can see companies move by that amount in a single day.
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But to get the you know, to get the one-year change now, which is it's down 27%, you'll need a few more days of of of green to sort of like accomplish that.
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But not too, not too far.
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We've seen these, we've seen these patterns before, and you know, you can it can turn around.
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It's all about your timing and not the market timing there.
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When you're buying these stocks, when you're selling these stocks.
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Um, I've said before, I don't look to try and wait for a 10x or anything like that.
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I was selling, you know, I think I've done 60 sell trades this year alone, all the way up to June the 22nd, which was my last sell trade, and that was keel at$7.
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And if you look on the heat maps today, there keel at$2.87.
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What that's enabled me to do is I've bought back into Keel all the way back down there in the$3 range there.
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Bought some on um on Friday at uh$3.05.
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So buying back in there, having sold at$7, I feel that you know turning them stocks around that way are shorter periods, uh, getting a bit of recovery helps me.
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And um, if you want to understand more about what we do with our uh personal training accounts, then you know you can uh log on to our Patrons or our members only uh video that we do regularly on YouTube.
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Yeah, it's good to get some confidence in these rough patches.
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And I liked your analogy there, Anthony.
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It's not trying to time the market, it's trying to time yourself in relation to the market.
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I almost think of it as surfing.
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Uh, you can't change the ocean, you can't change the tides, the waves, but you can ride them, get on and off as needed.
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Now, also worth noting market caps on this uh heat map today, you guys.
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Only two companies, iron and hot, with five digit billion market caps or over$10 billion market cap, I should say.
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Now, Anthony, you talk about June 22nd almost every episode taking us back down memory lane.
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What did these companies look like on June 22nd?
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Why do you keep bringing up this date?
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I bring up this date because going back to that period in time, we'd seen a nice run-up.
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And I was particularly selling, you know, maybe doing two or three sell trades a day there, uh taking off targets, short-term targets.
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And I mentioned about the likes of uh Keel.
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I also was selling Cypher and TerraWolf and and Core Scientific and Riot.
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All those share prices, um uh the the the last latter four were all hitting around the$30 mark and making great sales.
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And if you look at the the share prices today, it's a whole different picture.
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What we've done here is we've actually put in the 22nd of June uh share price position here, and it's um you'll notice straight away.
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My main focus went straight to the 52-week range.
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Now, on the previous 52-week range from today, only two stocks were getting probably close to their midway point.
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You look at this chart here, uh, eight, nine companies are very close to their highs on the 52-week range, including Kiel.
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Kiel's actual intraday reached$7.37 on this day.
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I think I sold out at$7.
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I had a limit selling there, and when it clicked$7, um, it it it uh it sold it sold at the stock there.
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I was very pleased to take that, and obviously, in hindsight, extremely pleased to take it.
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But also uh looking at the heat map for this period as well, you can see straight away um that the last uh four 22nd was the starting period for the sell, so the day increase was it was was obviously a negative there, but the five, the one month, the year-to-date, and the one-year change clearly uh imposted territory.
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Look at the year-to-date change and the one-year change, significantly different from where we are now.
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Look at the market caps on that particular day on the 22nd of June.
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There, iron at 19 billion dollars, close to 20 billion dollars today, just over 13 billion dollars there.
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Um, Hutt's another one that's over the$10 billion range.
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Uh, there's they were$13 billion, Wolf were$13 billion, they're they're in a whole different position now.
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Riot$10 billion, Cypher$11 billion, Core Scientific close to$10 billion, so lots more value on that particular day there, a lot more green on the heat map.
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If you if you ignore the the actual day, uh for predominantly green, um, and so we've seen this massive uh pullback.
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And remember, Bitcoin price there$62,000, it's$83,500 today.
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So Bitcoin is up 33%, but the stocks are down massively uh from that position there.
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And um I checked um today on my portfolio from the 22nd of June, looking at what the value is today, and it's dropped by about 33%.
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And I've mentioned that many times on the podcast as it's been coming down and now I've been able to buy some of the stocks back cheaply, so I hold more of the stocks than I did on the 22nd of June at a sort of like lower average price.
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So that will help me if these stocks start to rally close to that June position, then my portfolio will be in a really stronger position than it was in June because I've bought stocks back at a significantly lower price than I had in the in the portfolio that day there.
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So you know it's something to bear in mind.
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But we do relate back to this day here.
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That's when we saw the last sort of spike in terms of um stocks reaching or many of the stocks reaching close to their one-year highs.
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So let's get into it here, Anthony.
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We keep saying the fundamentals are rock solid, these companies are reaching this inflection point, they're getting into the AI space, the revenues, the contracts, everything we're seeing forward looking is phenomenal, but the share price moving the complete opposite direction.
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So let's talk about exactly why that is.
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You and I have come up with six reasons we think this sector has been compressed over the period since June 22nd.
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Note none of these have anything to do with the fundamentals, but as we know, the market does not exist in a vacuum.
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These companies have macro headwinds that are pushing on them.
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So the first one here, treasury yield above 5%.
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We've been talking about this quite a bit over the last couple of weeks.
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Walk us through what's happening here.
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Why does this matter to our companies?
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Yeah, first things first, you know, treasury yields above 5% means an alternative now for investors to consider using a low uh risk return from the US government instead of putting their capital in volatile stocks.
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Uh, and we talk about the volatility of the Bitcoin mining and the AI sector, these stocks can move 15-20% up and down in one day.
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Second biggest point there really is is all about these stocks, it's about the higher borrowing costs.
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When you see the Treasury uh yields increase, there are higher borrowing costs.
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Companies will pay more to borrow, uh refinance there, or to fund capital-intensive projects like these big AI day centers, which will then impact on future earnings.
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Um, now high growth and tech stocks trade at very steep multiples.
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You know, we've we've covered the likes of um NVIDIA and Micron in recent earnings updates there, and some of their multiples could be you know in the 20 to 30 range there.
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You know, high yields mean future earnings are discounted more heavily, so investors pay less for the for the for the growth today.
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Um, so really you know, it's all about the borrowing side.
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This is where it's going to impact these companies.
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When you're building these data centers, they're going to be costing 12, 13, 14 million dollars a megawatt.
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So, you know, we talk about a small a small facility of 50 megawatts of compute power there.
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You're looking in the region of you know, maybe 600 to 700 million dollars to build that data center.
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And you know, we know a number of companies out there that are trying to deliver this, that could be more than their market capitalization.
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When they go to the markets and they try to borrow money, unless they've got some sort of a hyperscaler looking for that 50 megawatts, it might mean the level of borrowing for them is going to impact.
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And as these uh yield rates increase, that means the the you know higher potential charges down the line there.
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Yeah, it certainly does.
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Now, the second point linked very closely, rate increase fears.
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So we've got an image from Poly Market here essentially saying they're pricing in greater than 99% chance of a rate increase in 26.
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There's two potential rate decisions left on the calendar, Anthony.
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What can you tell us in terms of what to expect here?
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Yeah, well, these it this is uh again, it's all about high borrowing costs.
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These you know, smaller companies have fewer resources and therefore lean harder on you know getting external financing and high-yield debt markets than some of the larger caps do.
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We talked about the deal that uh TerraWolf have with uh Google supporting Fluid Stack, and we also talk about the Microsoft deal that Iron got there.
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They open doors in getting you know effectively cheaper rates there.
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If you haven't got those type of companies supporting you, then the doors will open, but they'll open at a higher rate there.
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And we've seen some interest rates uh where you have non-hyperscalers supporting it, probably as high as nine, maybe even higher than nine percent, whereas you know, as opposed to six percent, and you know, don't just think there's only a three percent difference there.
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When you're borrowing billions of dollars, uh three percent makes an extreme amount of difference, um, not only on the income statement, uh, but you know, in your to on your margins uh for profitability.
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Now, small caps also carry variable rate loans.
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So if you're already carrying loans and we have a rate hike, that means your loans going to increase.
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Many of us have got variable mortgage rates, and as soon as the rate hike occurs, we know our costs of borrowing for our houses or apartments are going to increase as well.
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This is exactly the same for these companies.
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They're borrowing money, maybe not on a fixed term, but on a variable term, smaller financing rates there, and these increases will impact them straight away there.
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And smaller and unprofitable businesses face valuational refinancing pressure.
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Remember, these companies are coming from Bitcoin mining to AI, and the Bitcoin mining model just didn't really work out as expected.
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I mean, lower Bitcoin prices are halving.
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The impact on difficulty has meant effectively another couple of halvings in the same cycle.
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Um, you know, it's really cut margins to a very, very fine team.
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And remember, you've got to buy these machines.
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So don't take it that you know the machines are free, they they're still a cost to the company.
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The company has to go out there and physically pay for them.
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Depreciation is the cost, and people say, well, it's non-cash cost, it's an absolute cost in the business there.
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You know, you can't run a business, Bitcoin management business, without buying the machines in the first place.
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The accounting uh will show depreciation, but there's physical cash being done to live at that.
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And if you sold shares to do to that physical cash, you diluted shareholders' value, so you are having an impact somewhere along the lines, and that business model didn't work out really well.
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Now you're going to the banks and saying, Well, we want to use another model now.
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And so the banks will start thinking, Well, you didn't make it the first time.
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What's the risk now of you achieving the second time?
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And although we see these wonderful slides showing these very, very high percentages, there are some risks against them achieving those percentages in terms of performance and delivering.
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We've covered that on many podcasts, and we might mention it briefly today as well as we go through the podcast.
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Yeah, we will in relation to white fiber.
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And I think important to note, a lot of these companies included now in the Russell 2000 index, and that traditionally gets hit very hard when interest rates go up.
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They know these smaller companies are more sensitive to borrowing pressure.
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Uh, speaking of the rate increase, I mentioned over 99% chance.
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It looks like we're okay for the October 28th meeting.
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Currently pricing 80 to 83% chance of a Fed rate hold.
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However, it's the December meeting, Anthony.
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We're concerned about 70 to 82% probability of a rate hike to close out 2026.
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So that's definitely putting pressure on this sector.
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The next two we wanted to talk about, we try and avoid on the channel, but it's pretty hard to completely turn a blind eye.
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Uh, next up, geopolitical tension, Anthony.
00:19:15.680 --> 00:19:19.039
A couple that definitely are impacting our stocks.
00:19:19.359 --> 00:19:21.599
Yeah, and and some a bit closer to home there.
00:19:21.680 --> 00:19:28.960
We have obviously the Russian and Ukraine tensions, um, and you know, NATO also remains at that cold war level intensity.
00:19:29.200 --> 00:19:39.599
What we've seen in recent periods is the drone and missile strikes from the Ukraine target Russian energy and refinery infrastructure while Russian bombardments pressure Ukraine's defence is there.
00:19:39.680 --> 00:19:43.680
Now, the second obviously uh biggest impact is the Middle East as well.
00:19:43.839 --> 00:19:50.559
We've got ongoing flashpoints involving Iran and regional proxy groups such as the Houthis and Hezbollah.
00:19:50.640 --> 00:20:01.680
Uh, that means the shipping uh lane presses in the Straits of Hamoose and the Red Sea continue to threaten global oil and refined fuel routes feeding into energy markets, inflation expectations.
00:20:01.839 --> 00:20:09.039
This is a real issue for the companies we talk about because if all prices are high, everything is high.
00:20:09.279 --> 00:20:13.599
Oil impacts on every product that we purchase in some way or form.
00:20:13.759 --> 00:20:30.160
Because even if you're not if that product's not made of oil, it's certainly transported to those areas where we purchase it from, and therefore that the costs of carriage of those uh of those goods uh will increase, and that will be passed on to the to the to the buyer.
00:20:30.480 --> 00:20:51.440
And everything that we see that these companies will be buying in terms of the big capital items, um, you know, the fact that energy prices will increase as well for delivering uh this AI solution or this power solution if they're using a co-location deal, um, this is going to have a real um impact as well.
00:20:51.599 --> 00:20:56.880
Um, so you know, this is you know, these these are you know issues are you know, impacts now.
00:20:57.119 --> 00:21:00.880
They're going on the the Russian Ukraine thing's been going on for four or five years now.
00:21:00.960 --> 00:21:07.759
Uh that was expected to uh finish really quickly, but it's it doesn't even look like it's anywhere near uh closure.
00:21:07.920 --> 00:21:26.319
Uh there are some discussions at the moment with the president trying to look at some sort of um issue with regards to uh having a ceasefire on on fuel areas like that, but um it's it's you know we've heard these words before and and nothing's really occurred in any any length of purpose, really.
00:21:26.480 --> 00:21:32.559
But uh this is impacting on the cost to these companies and impacting on their share prices.
00:21:32.880 --> 00:21:39.119
Yeah, and the third one we've been talking about recently this China-US uh battle for AI supremacy.
00:21:39.279 --> 00:21:46.319
Obviously, the tariffs again impacting a number of the deliveries, the construction supply chain components.
00:21:46.559 --> 00:21:50.960
The next one we try and avoid the political side of things here, Anthony.
00:21:51.200 --> 00:21:55.599
Again, leading into midterms, these are expected November 3rd.
00:21:55.759 --> 00:21:59.279
Traditionally, markets pretty choppy going into this event.
00:22:00.079 --> 00:22:06.720
Yeah, we've got less than a month now until election day, and the race for the control of Congress is entirely competitive.
00:22:06.880 --> 00:22:16.799
Uh, president's approval, which according to silver bulletin data published you know literally yesterday, um, shows that the president's disapproval rating is nearing 60%.
00:22:17.440 --> 00:22:21.039
Now, in the recent polls, they indicate a surge for Democrats.
00:22:21.200 --> 00:22:30.960
Observers note that voters are expressing frustration over worsening affordability crisis, despite oil diesel costs and the ongoing war involving Iran.
00:22:31.279 --> 00:23:06.480
And we must make note that you know, not just that from the Democrat position, but also from a Republican side as well, that not everybody is happy with having data centres on their doorstep, even though we've highlighted many times on the podcast the sheer benefits of doing this and the fact that the revenues that come from these um uh industries in on the doorsteps of maybe locations where the previous industry hasn't been there for a number of years, and you know it's put back those communities in terms of being able to you know improve infrastructure within their area.
00:23:06.720 --> 00:23:15.279
This is something that we're seeing now, um, and we highlighted this with the likes of uh HUT 8 uh just yesterday's podcast as well.
00:23:15.440 --> 00:23:18.559
So um it's going to be it's going to be interesting.
00:23:18.640 --> 00:23:21.039
Uh come uh election day there.
00:23:21.119 --> 00:23:44.079
Uh there will be some sort of volatility before and after there, but hopefully once uh we've got that out of the way uh we can start um getting on with the the job of building these data centers and uh giving these communities these much needed revenues to grow um their infrastructure and and and effectively provide a better better quality of life for the residents.
00:23:44.400 --> 00:23:48.960
And luckily we do generally see a relief rally post-midterms.
00:23:49.039 --> 00:23:54.880
It seems the market, uh, regardless of who wins, just likes that certainty to be priced in.
00:23:55.039 --> 00:24:02.480
So these first four out of the six, we've got treasury yields, rate increase, geopolitical concerns, and the U.S.
00:24:02.640 --> 00:24:08.720
midterms, those are all more so industry, global, macro headwinds on the sector.
00:24:08.880 --> 00:24:13.359
The next two or final two are more company driven or specific.
00:24:13.599 --> 00:24:16.799
Number five on our list is deal delivery, Anthony.
00:24:16.880 --> 00:24:20.240
So we talked a lot throughout the last 18 months.
00:24:20.400 --> 00:24:25.920
It seemed every week there is a co-location deal, a CSP announcement, a site announcement.
00:24:26.079 --> 00:24:31.200
We've got a visual here showing the frequency and value of these deals.
00:24:31.440 --> 00:24:36.319
However, since then, we've got a number of companies that are locked up in LOIs.
00:24:36.480 --> 00:24:41.039
They've got JVs, they've got partnerships, deals that are still on the table.
00:24:41.200 --> 00:24:52.880
And we're really starting to see a bit of a slowing in terms of the cadence here, a lot of excitement in terms of what's to come, but we need those catalysts to move the share price.
00:24:53.200 --> 00:24:59.279
Yeah, in sort of like I'm gonna say the first 12 months of the previous 18 months, we saw a lot of deals coming through.
00:24:59.359 --> 00:25:02.000
They seem to have slowed down a little bit now, but you're right, right.
00:25:02.160 --> 00:25:15.440
The expectation there is for a number of uh these companies now to sort of like turn some of these LOIs which they've been announcing, and many have been going down the highlighting the LOI as opposed to highlighting a contract.
00:25:15.599 --> 00:25:29.039
Uh, and we know that you know the LOI gives that sort of like potential uh tenant there the opportunity to you know to sign and focus on you know commercial terms, you know, design and and and lease uh agreements, etc.
00:25:29.279 --> 00:25:29.519
etc.
00:25:29.759 --> 00:25:39.039
But in terms of the some of the companies that are still waiting to sign Saluna, uh their Project Cati 2 site there, 350 plus megawatts under development.
00:25:39.119 --> 00:25:42.160
We believe there's another wire in place for about 100 megawatts there.
00:25:42.400 --> 00:25:54.480
And so, you know, their hope is to you know to try and get that uh put into a contract uh for delivery in 2027 when the the power requirements are quite uh significant.
00:25:54.640 --> 00:26:07.759
Uh, you know, I think we've already gone past power requirements for 2026 now, so 2027, 2028 onwards, companies are now booking that uh that power in in time in their own calendars uh to meet uh that demand there.
00:26:07.839 --> 00:26:11.279
Now, long-lead items can take significant amounts of time.
00:26:11.359 --> 00:26:13.119
We covered that on a recent podcast there.
00:26:13.279 --> 00:26:19.119
Some of the long lead items, you know, in terms of uh gas turbines can take five, six years or more.
00:26:19.440 --> 00:26:38.960
Um, and we know that many of the companies that we speak about are ordering those you know, one or two years in advance there, so that by the time they get uh the buildings constructed, everything is uh going to be able to uh click together in terms of um energization and delivery, and then the revenues start coming through.
00:26:39.200 --> 00:26:50.720
Now, Project Cati 2, we talked about Saloon and that uh JV with Metro blocks there, the 100 megawatts of initial critical IT, part of a 350 megawatt uh build there.
00:26:50.960 --> 00:27:03.680
Power costs at 4.3 cents a kilowatt that's extremely low, but in terms of AI HPC, we don't sort of like pay as much attention to the power costs as we did with the Bitcoin mining.
00:27:03.759 --> 00:27:08.160
Any fraction of a change in Bitcoin mining was a big change in terms of margins.
00:27:08.319 --> 00:27:15.359
Um, I spoke to one large company earlier this year and said what would it take for someone to get really interested in the power costs?
00:27:15.440 --> 00:27:21.680
And he said that if they doubled, they might get a phone call from the from the client saying we've noticed the power costs have increased.
00:27:21.839 --> 00:27:27.839
But that was a sort of how much the correlation was between um HPC and Bitcoin mining.
00:27:27.920 --> 00:27:30.960
If it went up a fraction of a of a percentage in mining, it was a problem.
00:27:31.039 --> 00:27:36.079
But uh yeah, Project Caty on on on board to to to to to hopefully get that sign.
00:27:36.400 --> 00:27:49.839
DMG's another one there, they've got a uh a 50 megawatt LOI in place there at uh their Christina Lake site there, and you know that the the expectation they want to sort of like obviously do that in phases.
00:27:49.920 --> 00:27:56.640
I mean, we've just highlighted what it would cost to deliver 50 megawatts anywhere between 600 and 700 million dollars.
00:27:56.799 --> 00:28:03.200
Um BMG's market capitalization would suggest that they would have to be able to go out there and borrow proportion of that.
00:28:03.279 --> 00:28:07.680
So they'll do that in phases, it may be 10-15 megawatt phases there.
00:28:07.839 --> 00:28:15.039
But as you get to the third phase, you then start the money from the first phase, and the second phase start helping you pay for future phases.
00:28:15.200 --> 00:28:19.279
So hopefully we can get something that's seen by those there.
00:28:19.359 --> 00:28:33.440
And uh, you know, they've they're a you know, they're a leader in high performance computing, they've been building data centres now for 10 years, they've got the 75 megawatts of contracted power, although most of that is non-firm and they are looking to transition that non-firm into firm power.
00:28:33.680 --> 00:29:18.880
They have 33 acres of owned HPC campus and 27,000 uh feet uh facility at their Christina Lake, which is currently being used by Bitcoin mining but will be repurposed for HPC, and some of that infrastructure will be able to utilize in the same way that we've seen White Fibre, Hive Digital, and a few of the other uh peers uh utilize uh brownfield sites in terms of you know uh uh getting these builds in place there without having to start from scratch using existing facilities and then building the tier three days within those facilities there, saving potentially uh a little bit of the money, but overall, still an extremely expensive cost for every company to face.
00:29:19.279 --> 00:29:20.240
Yeah, it really is.
00:29:20.400 --> 00:29:24.160
So we've got a couple of LOIs on the table in terms of deal flow.
00:29:24.319 --> 00:29:26.240
We've also got some big partnerships.
00:29:26.400 --> 00:29:43.039
The Mara Long Ridge Energy expected to close in the fourth quarter of this year, and who can forget Keel Infrastructure, Ben Ganyon coming on the program, giving some big promises and talking about the catalysts that can move that company forward.
00:29:43.200 --> 00:29:46.640
We'll play you that clip quickly, then we'll move into the sixth point.
00:29:47.119 --> 00:29:51.759
A lot of other players in the industry who haven't yet signed leases or or show me stories.
00:29:51.920 --> 00:30:22.319
But I think what that means for investors is look, a lot of companies have show me in their real view, which is great if they use you know re ratings and they're places, you know, you know, so one of these opportunities in front of us, we have three.
00:30:22.559 --> 00:30:27.200
It's not that we have one that's near-term high probability, it's that we have three.
00:30:27.440 --> 00:30:32.079
And so there's so many different opportunities coming forward for us.
00:30:32.400 --> 00:30:38.720
So, as you can see there, obviously a lot of that excitement built into those share prices we saw back in June.
00:30:38.799 --> 00:30:42.240
That started to taper off towards the end of the year here.
00:30:42.400 --> 00:30:44.799
Hopefully, we see these deals convert.
00:30:45.039 --> 00:30:48.799
The final one we wanted to bring up, Anthony, short interest here.
00:30:49.039 --> 00:30:50.400
This is pretty significant.
00:30:50.559 --> 00:30:53.440
We don't talk about it a lot on the channel.
00:30:53.599 --> 00:31:00.480
Just for reference here, you guys, if you've got under 5% of your float traded short, that's considered low, normal.
00:31:00.640 --> 00:31:04.960
Anything 10 to 19 is considered high or elevated.
00:31:05.039 --> 00:31:08.319
Uh, possible notable pessimism from traders.
00:31:08.559 --> 00:31:12.960
And the 20 to 29% range, that's what we want to focus on here.
00:31:13.119 --> 00:31:20.000
Considered very high, severe bearish conviction, which I would say the market has right now.
00:31:20.240 --> 00:31:22.079
We put together a visual here.
00:31:22.240 --> 00:31:31.440
You can see color-coded for those companies with over 20% short interest, but this is why this sector is so volatile, Anthony.
00:31:31.599 --> 00:31:35.599
There's a lot of people betting on both sides of the equation here.
00:31:36.000 --> 00:31:36.880
Yeah, there is.
00:31:37.039 --> 00:31:39.839
Um, and and that's the same way with with Bitcoin itself.
00:31:39.920 --> 00:31:44.400
We've seen that uh through the last three or four years as we've been covering it on the channel.
00:31:44.559 --> 00:31:50.400
Um, yeah, these uh these numbers don't seem to be uh reducing anything significantly over time as well.
00:31:50.640 --> 00:31:57.039
So, as I say, half the stock shown there in that severe range of between 20 and 29 percent.
00:31:57.359 --> 00:32:03.440
Yeah, unfortunately they are, but the nice news there potential short squeeze opportunity.
00:32:03.519 --> 00:32:10.000
This is as of September 30th, so they released the short books on the 15th and 30th of each month.
00:32:10.160 --> 00:32:15.039
We'll continue to include this in the episodes if you guys have interest.
00:32:15.279 --> 00:32:18.079
Now, we've talked a lot about our portfolios.
00:32:18.160 --> 00:32:22.079
I think you mentioned down 30% since June 22nd.
00:32:22.240 --> 00:32:24.079
I'm in a very similar range.
00:32:24.240 --> 00:32:33.359
Luckily for us, we've been able to accumulate some shares at these lower prices, but it does appear nobody's been immune to this pullback.
00:32:33.680 --> 00:32:43.359
No, and we've um we've got the filing here from Alpine Fox, which is Mike Alfred's um uh company, uh a registered investment advisory firm.
00:32:43.519 --> 00:32:58.400
Um, and they vibe they filed their 13f back at the end of Q2 2026, which included$211 million in managed 13F securities and a top 10 holdings concentration of 98%.
00:32:59.440 --> 00:33:16.559
Now, two of his biggest convictions in that um in that holding there are Cypher Digital and Iron, and um, you know, they make up effectively over 60% of the whole whole portfolio, as they did at the end of 2020.
00:33:16.640 --> 00:33:21.920
Uh as it as they did at the end of the quarter, um uh which he last filed.
00:33:22.000 --> 00:33:26.960
Now we've already past the third quarter and we're already sort of halfway through into the month of October.
00:33:27.200 --> 00:33:48.000
We wanted to show you um the impact of what share prices have had on this portfolio, as we've already highlighted uh through the heat map and the and the share prices from that 22nd of June, which we felt was the sort of the high point of the quarter and of the of the of the 52-week period for most of the stocks, and some of those stocks are in this portfolio here.
00:33:48.079 --> 00:33:50.880
So we've highlighted the top seven or eight stocks here.
00:33:51.039 --> 00:33:57.359
Uh the IBIT calls uh can't be uh revalued um because they are calls there.
00:33:57.519 --> 00:34:14.960
But if you look at the uh the impact now of some of these stocks from where they were valued at the 30th of June to where they are valued today, and we've already also included what that delta means, uh you can see that a number of them have sort of like uh uh uh uh pulled back significantly.
00:34:15.119 --> 00:34:17.199
Cypher being one of those stocks there.
00:34:17.360 --> 00:34:23.920
Cipher's in my portfolio, I know it's in your portfolio there,$82.6 million as at the end of June.
00:34:24.000 --> 00:34:33.599
And if you look at today's valuation for the same number of shares, 37.5, that's a pullback of 45 million or 55 percent in terms of percentage.
00:34:33.760 --> 00:34:37.039
Iron's not had any uh not a good period of two there.
00:34:37.119 --> 00:34:40.320
Uh that's down 26% over the same period.
00:34:40.639 --> 00:34:48.719
Open door, which um Mike had a a significant amount of conviction with, and many retail shareholders went into that stock there.
00:34:48.800 --> 00:34:52.719
That stock's down 55% over the same period there.
00:34:53.199 --> 00:34:59.679
Um, he's also a director of BKKT, and that stock's down 15% there.
00:34:59.760 --> 00:35:02.639
There are a couple of uh highlights on there.
00:35:02.800 --> 00:35:07.920
Uh we've we've covered um uh strive in terms of ASST there.
00:35:08.239 --> 00:35:11.679
Their stock prices up 154% over the same period.
00:35:11.760 --> 00:35:28.159
They've sort of rallied as the Bitcoin prices rallied, and they've got that strategy in place for buying Bitcoin using the preferred uh five or six positions there, clearly showing the sentiment the markets have had, not just in my portfolio and your portfolio, but also in Mike's portfolio.
00:35:28.320 --> 00:35:42.400
And uh you know, he has similar convictions, and I know I know now that many retail investors out there will have similar stocks in those top five, and also I think quite a few people will have the ASST stock as well.
00:35:42.559 --> 00:35:48.320
Um, that one was also uh being chased by the retailers, but that one's obviously proved to be okay.
00:35:48.400 --> 00:36:03.039
But um, yeah, it's it's if you look at the total position now, all seven combined, you can see that the the valuation has dropped uh 55.5 million, which is 33 percent.
00:36:03.119 --> 00:36:09.519
And and hey, Presto Borice, that's pretty much where my portfolio drops, and probably where your portfolio drops.
00:36:09.599 --> 00:36:19.119
So having similar types of stocks in your portfolio in this particular period of time, and I've said this on the three or four podcasts before we've included this today.
00:36:19.199 --> 00:36:26.960
There, most people will be down, you know, between 30 and 40 percent as an average if they've got similar types of stocks over that period there.
00:36:27.039 --> 00:36:31.679
I mean Cypher's down 55%, but there are some stocks that have been less impacted.
00:36:31.760 --> 00:36:37.840
Um, iron being one of them, only down 26% over a you know, three and a half month period.
00:36:38.000 --> 00:36:40.000
Um, it's a volatile sector.
00:36:40.239 --> 00:36:44.559
Make sure you do your due diligence when you enter this, uh into these uh stocks.
00:36:44.880 --> 00:36:45.840
Yeah, it really is.
00:36:46.000 --> 00:36:49.519
But I hope this segment, you guys, has helped ease your fears.
00:36:49.679 --> 00:36:51.360
None of this is fundamental.
00:36:51.599 --> 00:36:52.719
The deals will come.
00:36:52.800 --> 00:36:55.119
We've heard that from multiple CEOs.
00:36:55.280 --> 00:36:57.039
There's not enough megawatts.
00:36:57.280 --> 00:37:01.039
This is just market fluctuation, volatility at its finest.
00:37:01.119 --> 00:37:05.599
Now keep in mind this assumes Mike Alfred made no trades on these positions.
00:37:05.760 --> 00:37:13.039
But the point is, you guys, real wealth is made from high conviction plays where you put a lot of money on the table.
00:37:13.280 --> 00:37:15.039
That's exactly what Mike does.
00:37:15.280 --> 00:37:17.920
That's exactly what we're doing in our portfolios.
00:37:18.079 --> 00:37:20.960
So that rounds out the introductory section.
00:37:21.119 --> 00:37:22.800
Why is the market selling off?
00:37:22.960 --> 00:37:27.440
Let us know your thoughts on our six uh feelings or thoughts here.
00:37:27.519 --> 00:37:30.320
And if you agree, disagree, or if we missed any.
00:37:30.480 --> 00:37:39.119
Now, moving into the AI specific news, again, on a fundamental standpoint, we continue to get positive feedback here.
00:37:39.360 --> 00:37:41.760
A big one to kick us off, Anthony, tonight.
00:37:42.000 --> 00:37:50.320
HUD 8 again at their West Feliciana Riverbend campus talking about some significant expansion.
00:37:50.800 --> 00:38:02.079
They are, and remember, they've got the first uh deal uh signed there for the 245 uh megawatts there at the Riverbend campus in Louisiana.
00:38:02.239 --> 00:38:12.079
Now we're talking about a tranche 2 potential there, a additional 1,000 megawatts of IT capacity on top of the 245.
00:38:12.159 --> 00:38:15.039
That takes a total to 1,245.
00:38:16.239 --> 00:38:29.440
And Hote has grant the tenants and writer first um offer for up to that 1,000 of additional IT capacity at the River Bend, subject to the expansion of power at the site itself.
00:38:29.920 --> 00:38:45.039
Uh, you can see from the graphics there uh the potential of these additional uh buildings going in place there, and uh this just shows you uh Hutt 8's uh move uh through this strategy uh in an impressive manner.
00:38:45.199 --> 00:38:57.119
Um, you know, they've not long uh been that merger of two companies, just over three uh three years, and already um showing you what they can do in the AI space.
00:38:57.280 --> 00:39:12.000
Remember their sister company ABTC is delivering all the Bitcoin now from um their Vega site, and now that Hut 8 gives all that time and effort to focus on generating AI capacity and infrastructure.
00:39:12.159 --> 00:39:37.360
Um, they've got some of the largest power contracts out there, only Core Scientific from the companies that we talk about on a regular basis has more power contracted than Hut 8, but then Hut 8 uh are holding that second spot to themselves, and if they are to sort of um take advantage of some of these increases, uh that's going to obviously massively increase their contracted power as they move forward.
00:39:37.440 --> 00:39:40.239
They've got one of the largest pipelines of power of any of the miners there.
00:39:40.320 --> 00:39:46.239
Last time I looked, it was circa eight gigawatts of power in the pipeline, so plenty of potential over the next few years.
00:39:46.320 --> 00:40:02.239
Asher and the team doing an exceptionally good job there, and hopefully we'll get Asher on the channel as earnings are about to come out uh in the not too distant future, and he can give us more colour to this type of expansion opportunity at the Riverbend campus.
00:40:02.719 --> 00:40:13.760
Can't wait for earnings season, always a fun one around power analysis, and you can see based on the slide we've got here, delivering as planned on Tranch 2, or at least making headway.
00:40:13.920 --> 00:40:19.760
Uh, one thing I've got to say about HUD 8, they've been very transparent and strong with their financing.
00:40:19.920 --> 00:40:25.119
We've talked a lot about some of the deals they've used or levers they've used.
00:40:25.360 --> 00:40:33.840
A nice tweet out from the CEO of TerrorWolf today, also calming market jitters here, basically saying we've got all the money we need.
00:40:33.920 --> 00:40:35.599
We don't need to dilute you guys.
00:40:35.679 --> 00:40:37.840
So I'll let you walk through the tweet here, Anthony.
00:40:37.920 --> 00:40:43.519
But this is nice, uh, even if we already know it, just to hear from the CEO again.
00:40:44.159 --> 00:40:47.840
Yeah, and just re-emphasizing what we've said on the channel many times.
00:40:47.920 --> 00:40:58.000
Uh, the great thing about having the team uh with Paul and the rest of the senior management team there, they've been together for 20 years.
00:40:58.159 --> 00:41:10.079
Uh they've created this company, they were a power company initially, they've used that power to deliver Bitcoin mining successfully, and now they're using that power to deliver HPC AI successfully as well.
00:41:10.239 --> 00:41:27.440
And the great thing that they put together is they do things in a sequence, they get these contracts, and then the next piece of work is for Patrick Fleur to make sure that all the funding is in place, and within sort of three to four weeks of every contract announcement, there's been an announcement on how they're going to deliver it financially.
00:41:27.760 --> 00:41:39.039
And so, as Paul quite rightly says here, you know, we've got the cash, we're not going to uh, you know, to constantly dilute uh shareholders, and they've been very clear on that since the start.
00:41:39.280 --> 00:42:02.960
Um, you know, we we we had Paul on the channel many times uh when we created um uh power analysis or power mining analysis in the older days there, and uh he talked about dilution, um, he talked about the way they would move forward, and ever since um, you know, those early conversations, you can see the progress and how things have actually come to fruition for the company.
00:42:03.119 --> 00:42:10.719
He dictated what that roadmap was going to be like, and they've met every target and even exceeded some of those targets.
00:42:10.800 --> 00:42:23.280
I think they must be scratching their heads sometimes at how how well they've achieved things in a very, very short space of time and become one of the biggest players in the market of the companies that we talk about regularly.
00:42:23.599 --> 00:42:30.639
And keep in mind, including unvested shares, Paul Prager himself has over 50 million shares of TerraWolf.
00:42:30.800 --> 00:42:35.360
So he's sensitive to dilution just as much as any other shareholder.
00:42:35.519 --> 00:42:53.679
Now, a couple of quick housekeeping items, uh, interesting data points here out from Saluna and Hive Anthony, talking about the wasted uh renewable capacity, and then again the value of this AI revolution we're going through, both of which extremely bullish.
00:42:54.000 --> 00:43:11.039
Yeah, and Saluna have highlighted that um during 2024 the um ERCOT experienced a total curtailment of 5.3 uh terawatts of renewable energy, and that's energy effective that's been generated and then thrown away because the grid couldn't move it.
00:43:11.199 --> 00:43:25.679
Um, you know, we saw first sights of that uh last year on our trip to Texas and spent 1,500 miles over five days going around some of the biggest sites there and covering five of the companies that we talk about regularly.
00:43:25.840 --> 00:43:31.440
And the one thing that struck out to me, Bryce, was the number of uh wind farms that weren't even operating.
00:43:31.599 --> 00:43:37.840
Um, because we found out from some of the power companies, we managed to speak to two of the power companies that operated these wind farms.
00:43:38.239 --> 00:43:42.079
If you can't use the power, then you don't turn the wind farms on.
00:43:42.159 --> 00:43:50.880
So it's all about you know the ability to um actually uh you know make use of that power once it's been created, and so that's that's the challenge.
00:43:50.960 --> 00:43:52.480
And I think Saluna here highlights.
00:43:52.719 --> 00:43:59.760
Remember, they've got their own 150 megawatt wind farm in West Texas, and that is close to where Project Dorothy.
00:44:00.320 --> 00:44:05.760
Which is going to be one of their flagship uh data center sites, Project Dorothy 3.
00:44:05.840 --> 00:44:10.239
That's going to be a 300 megawatt potential uh site there for them.
00:44:10.400 --> 00:44:24.079
Um and having that wind farm uh behind uh the the the meter uh power supply there uh will will uh you know continue to give um additional um optionality for Soluna.
00:44:24.239 --> 00:44:27.360
Yes, they're also connected to the grid so they can use grid power.
00:44:27.519 --> 00:44:43.039
Um but when we were at the site itself uh for the for for seeing the operations there for Dorothy One and Dorothy II, uh we were told that on good months you could have up to 80% of wind power uh supporting those data centers.
00:44:43.119 --> 00:44:45.599
Um and on a bad month, 50%.
00:44:46.400 --> 00:44:50.159
So plenty of uh potential potential with that 150 megawatts.
00:44:50.239 --> 00:44:52.639
And at the time there, they were leasing power from the wind farm.
00:44:52.800 --> 00:44:54.480
Now they own the wind farm.
00:44:54.719 --> 00:44:56.000
Yeah, pretty comical.
00:44:56.239 --> 00:44:59.199
Anthony and I rental vehicle 1500 miles.
00:44:59.280 --> 00:45:01.519
I think we saw 100 plus wind farms.
00:45:01.599 --> 00:45:03.440
We knew Dorothy was near one.
00:45:03.599 --> 00:45:06.639
I kept saying, Anthony, there's a wind farm, no, not it.
00:45:06.719 --> 00:45:10.880
There's a wind farm, no, not it for about 99 times till we got there.
00:45:11.039 --> 00:45:12.880
Hey, the Hive one, pretty cool too.
00:45:13.039 --> 00:45:20.000
We've talked a lot about this super cycle, comparing it to the railroad industry to the electrical revolution.
00:45:20.159 --> 00:45:29.440
Uh, this one from Hive compares it to recent or previous compute cycle upgrades, and again, absolutely massive numbers.
00:45:29.760 --> 00:45:34.880
Yeah, this goes over the last sort of 60, 70 years there, maybe to when I was a boy.
00:45:34.960 --> 00:45:52.000
The mainframe computer, but a bit of uh fun fact for you one of the largest mainframes in the world um was actually based um in Winchester, UK back in the in the 1960s there, and that covered um uh the the the the mainframe for the military.
00:45:52.079 --> 00:45:55.760
Uh the military used to there all the records were kept on that mainframe there.
00:45:55.840 --> 00:45:57.920
Uh so that goes back to the 1960s.
00:45:58.000 --> 00:46:08.639
Then we had mini computers and PCs, we had the desk desktop internets, and then cloud and mobile came out in the in 2010, and there was 10 billion units now.
00:46:08.880 --> 00:46:23.360
Now we've got the AI era, and there are tens of billions of units, and the amount of capex now being spent is somewhere in the region of$10 trillion, which is 10 times the capex that cloud and mobile brought.
00:46:23.519 --> 00:46:40.480
So this is significantly the biggest um era, and it's just hard to envisage where do we go from here because um you know they've AI's been around now for a couple of years, and I know we've said the analogy before, it took Facebook, you know, 10 years to get to 100 million users.
00:46:40.559 --> 00:46:51.840
It showed it took Chat GPT, which has probably got the most users of all the AI um packages, it took them two months to get 100 million users.
00:46:52.000 --> 00:46:56.239
So, this is the extent of AI, and the people are seeing a real benefit from it.
00:46:56.320 --> 00:47:32.639
And actually, if you have a mobile phone nowadays, you're pretty much using AI every time you access the mobile phone, you no longer need to sort of like search for websites, you're searching for the answer, and pretty much instantaneously the answer will appear on your phone as you ask the question, and um, so you know, people can see the benefit of there, and more and more people are starting to think how AI can support what they do on a day-to-day basis, but the sheer size of this era now is ten times bigger than the previous cycle where you know mobile phones and and cloud, uh etc.
00:47:32.880 --> 00:47:35.679
uh were in their sort of like uh in their highest.
00:47:36.079 --> 00:47:38.320
Yeah, and really it's very basic.
00:47:38.480 --> 00:47:41.440
My thesis here AI makes your life easier.
00:47:41.679 --> 00:47:43.440
People like having an easy life.
00:47:43.599 --> 00:47:53.039
If you think about Uber, you think about delivery services, Netflix, many of the biggest company stories have delivered on making people's life easier.
00:47:53.280 --> 00:47:55.519
I think that's exactly what AI does.
00:47:55.679 --> 00:47:58.800
Now, this was an interesting article in terms of timing.
00:47:58.880 --> 00:48:03.920
We talked yesterday about SLAs, service level agreements, payment mechanisms.
00:48:04.159 --> 00:48:06.480
What's great about all these companies, Anthony?
00:48:06.559 --> 00:48:08.639
They've put out awesome slide decks.
00:48:08.719 --> 00:48:11.119
It highlights the top line revenue.
00:48:11.280 --> 00:48:23.119
However, that assumes things go perfectly, and we haven't really seen enough data or track record yet to know what level of performance or SLA targets these companies are gonna hit.
00:48:23.280 --> 00:48:30.639
Lo and behold, White Fiber put out a great piece or article walking through exactly uh this topic.
00:48:31.039 --> 00:48:39.039
Yeah, and this this article that they've produced explains why AI reliability uh in co-location deals is not the same as uptime.
00:48:39.280 --> 00:48:53.519
And the point they're trying to make here is as a facility can meet its uptime guarantee, whilst an AI training job quietly fails, then Wi-Fi say the reliability should be measured at the workload level and not the building level.
00:48:53.920 --> 00:49:04.719
Standard Enterprise Rack for those technical people out there draws about 5 to 10 kilowatts, but a modern graphics processing unit rack may need 30 to 150 kilowatts of power.
00:49:04.880 --> 00:49:10.639
Most of the older co-location sites were actually built for that, so there's a density gap there.
00:49:10.800 --> 00:49:12.800
Now, redundancy tier isn't enough.
00:49:12.880 --> 00:49:18.559
The key question is what happens to chip clock speeds during single cooling fault at full load?
00:49:18.880 --> 00:49:21.920
Because the throttling hits utilization right away.
00:49:22.079 --> 00:49:26.639
So that cooling headroom needs to be uh needs to be thought about as well.
00:49:26.800 --> 00:49:32.079
And the congested networks and the slow storage leave GPUs idle, which acts like downtime.
00:49:32.320 --> 00:49:38.480
Uh, the the article says the storage must be tested in degraded states, not just at peak throughout.
00:49:38.559 --> 00:49:40.960
So don't starve the chips.
00:49:41.119 --> 00:49:52.719
And production ready means fault injection tests, i.e., cooling, network, and storage failures, which pass fail rules in workload terms, such as no job aborts and check ports finishing on schedule.
00:49:52.800 --> 00:49:56.400
You know, more acceptance testing in this particular environment.
00:49:56.559 --> 00:50:06.880
And as AI co-location gets denser, the winners will be providers that can show test results and failure run books, not just megawatts.
00:50:07.440 --> 00:50:08.639
And I think that's important.
00:50:08.800 --> 00:50:11.840
We talked about the semi-analysis cluster max rating.
00:50:12.000 --> 00:50:24.079
Obviously, the performance of these data centers is critically important, and we talk a lot about the PUE, the amount of money and megawatts these companies are allocating just to cooling.
00:50:24.159 --> 00:50:34.639
But as Wi-Fi points out, even if a single GPU starts to overheat, that can have significant downstream impact and ultimately impact the revenue.
00:50:34.800 --> 00:50:45.840
Now, in terms of companies that are delivering on a big scale and hitting that inflection point, this is really the quarter we're going to start to see some significant AI revenue.
00:50:46.159 --> 00:50:49.039
Core Scientific well out in front.
00:50:49.360 --> 00:50:56.320
Yeah, they've just released a tweet to say they're now billing for 485 megawatts across their portfolio.
00:50:56.880 --> 00:51:04.159
That includes an incremental 48 megawatts at their Dalton Georgia campus, uh, and that's since the last update.
00:51:04.239 --> 00:51:23.039
Now, remember this deal with Core uh Weave is for 590 megawatts, you know, 80% or more than 80% of that journey already completed, and the final uh 105 megawatts will probably uh be completed by the end of the year very, very early into 2027.
00:51:23.360 --> 00:51:40.159
But the interesting now is as their earnings come out now, they're going to be effectively showing significant uh revenues for their co-location uh uh power deals with uh Corwee rather than what we've seen in the past, their Bitcoin mining.
00:51:40.239 --> 00:51:58.800
The Bitcoin mining now must be really dropping off to literally uh zero because they'll be operating and building out that then final sites to deliver that 590 megawatts, and as soon as you know that's happening there, you've also got the the the sort of 530 megawatt deal with AMD.
00:51:59.280 --> 00:52:18.639
Now they recently had an investor day um at the Denton facility, which is uh where we were fortunate to go to a couple of years ago, Bryce, and they highlighted that initial 200 megawatts of uh power of the first part of that contract, the first part of that 590 megawatt contract.
00:52:18.719 --> 00:52:32.800
Now they've had another investor day now the call scientific announced it expects to deliver its remaining capacity ahead of schedule, um, having just energized that 48 megawatts and advancing its AMD parchment at the same time.
00:52:33.039 --> 00:52:44.159
Now, AMD's initial 530 megawatts agreement includes potentially 1.9 gigawatts of reservation rights, creating significant expansion potential.
00:52:44.400 --> 00:52:58.000
And with approved and execution, disciplined financing and reusable infrastructure, uh, this will provide competitive advantages with project cost estimated at between 11 and 12 million a megawatt frame D.
00:52:58.159 --> 00:53:05.920
Remember, go back a couple of years ago, um, Core Scientific was citing about$8 million a megawatt at core weave there.
00:53:06.000 --> 00:53:14.320
These prices have increased, and this is what we talked about before as one of those issues for uh why some of these stocks are dropping there.
00:53:14.400 --> 00:53:19.280
The costs are just increasing, the margins are being eroded a little bit there.
00:53:19.440 --> 00:53:28.800
And Core Scientific, one of the first companies to come out and let everybody know that they were now paying closer to$12 million a megawatt in terms of their costs.
00:53:28.960 --> 00:53:45.599
Now, despite regulatory challenges in Texas, the company believes its sites remain well positioned and trading at an estimated 9.6% cat rate on year one net operating, and core scientific appears undervalued relative to contracted cash flows and future growth.
00:53:45.679 --> 00:53:56.800
Now, Cantor have attended that uh invest today at Core Scientific, and they've come away with an overweight rating and a price target of$39.
00:53:57.199 --> 00:53:59.599
I think that's one of the highest we've seen for Core Scientific.
00:53:59.679 --> 00:54:05.440
Now you compare that to the current price, which is circa the$15.50.
00:54:05.840 --> 00:54:14.079
Um, that's a significant upside there, way over uh 100% there, uh maybe 160% in terms of the upside there.
00:54:14.320 --> 00:54:19.840
So uh one of my uh favourite buys over the past few years has been Core Scientific.
00:54:20.000 --> 00:54:32.000
Ever since they came out of chapter 11, they seem to have put things uh right, and um certainly the biggest contracts of the companies we talk about on a daily basis are with Core Scientific.
00:54:32.159 --> 00:54:37.119
In terms of their Bitcoin mining prior to chapter 11, they were the biggest producer of Bitcoin.
00:54:37.280 --> 00:54:42.639
You know, whether they still are now in terms of total Bitcoin since mine, they'll certainly be in the top three.
00:54:42.800 --> 00:54:51.440
Maybe Mara uh will be close, and potentially BitDeer sort of like seems to be advancing extremely quickly with what they're producing on a daily basis.
00:54:51.519 --> 00:55:03.039
But you know, uh I can cite now that uh Core Scientific had produced uh something like 30 odd thousand Bitcoin um you know a few years ago, um and they were significantly ahead of the rest of the pack there.
00:55:03.119 --> 00:55:23.519
They were a behemoth in terms of a mining company, and then just really sort of cost got out of control a little bit, went into chapter 11, paid the punishment, but they came out a stronger company with a stronger management team, and ever since that date, there it's been delivery, execution, delivery, execution.
00:55:23.840 --> 00:55:26.719
Yeah, and ahead of schedule, which is phenomenal.
00:55:26.800 --> 00:55:37.360
And what's so exciting about the core scientifics, about the white fibers, the irons, we're gonna start to see that AI revenue start to hit that inflection point.
00:55:37.440 --> 00:55:39.199
That's what analysts want to see.
00:55:39.440 --> 00:55:44.000
Another company uh that's going through that inflection right now, Galaxy.
00:55:44.159 --> 00:55:46.079
We've also got a price target for.
00:55:46.400 --> 00:56:00.000
Yeah, and City uh have upgraded their um their rating from neutral to buy and have um increased their target from$26 to$28.
00:56:00.480 --> 00:56:05.039
Now, based on the current price there, there's potential upside of nearly 41%.
00:56:05.440 --> 00:56:07.679
Now we did have one out yesterday, I think, for$43.
00:56:08.000 --> 00:56:14.559
So this is at the this target's at the lower end of the of the scale, but um, you know, we're very impressed with Galaxy.
00:56:14.639 --> 00:56:18.880
We're impressed with what the opportunities hold for them at the Helios site there.
00:56:19.119 --> 00:56:24.719
Already um uh 133 megawatts of computers been handed over to Coreweave as well.
00:56:24.800 --> 00:56:35.440
They've got a a big contract with Corweave at their site there, and the and that's going to grow to about 533 megawatts of computer power for that first phase of 800 megawatts.
00:56:35.679 --> 00:56:49.519
Then they have a further 800, I think 830 megawatts of available power with the potential to get approval in the next batch through ERCOT for another uh two gigawatts of power.
00:56:49.599 --> 00:56:56.000
That site can be 3.6 uh three gigawatts of power when it's fully um operational.
00:56:56.159 --> 00:57:01.119
Um, a behemoth of a site, potentially one of the biggest sites in North America.
00:57:01.199 --> 00:57:16.480
I mean, we we talk about Corsi Carnegie, we talk about Sweetwater 1 and 2, uh, they'd be struggling to be anywhere near the size of this one here, and all on one site, um, certainly an opportunity, and it's not sort of like too close to residential areas as well.
00:57:16.639 --> 00:57:33.360
So you have the uh the Dickens County uh close by, but um, this is a a perfect opportunity, and one that Mike Novogratz, the CEO of Galaxy, said it's the best investment he's ever made, and they run their own crypto exchange, which is extremely profitable.
00:57:33.519 --> 00:57:38.079
So he can see the writing on the wall in terms of AI, and so so can we.
00:57:38.400 --> 00:57:39.760
Yeah, we certainly can.
00:57:39.840 --> 00:57:44.320
Now, ending off in strong fashion here, Iron, a multi-part update.
00:57:44.400 --> 00:57:58.320
Again, one of the companies hitting the inflection point, excited for earnings, a big announcement post-market tonight, talking about their Wagga Wagga expansion plans in southern Australia.
00:57:58.480 --> 00:58:04.159
This is another catalyst, another site, and another massive opportunity for Iron.
00:58:04.800 --> 00:58:14.079
Yeah, fun fact as well, Bryce, when I was 21 years old, I I was fortunate to be given a um a flight ticket to go and see relatives um in Sydney.
00:58:14.159 --> 00:58:25.119
And I also had relatives on my mother's side of the family um uh close to Wagga Wagga, so I've I've been very close to this region, uh albeit it was nearly 40 years ago.
00:58:25.360 --> 00:58:39.519
Yeah, now this red bank is is actually in the in the early assessment phase, and we've talked about iron uh working towards can the connection here um as part of that you know that five gigawatt secured portfolio of power.
00:58:39.760 --> 00:58:54.159
Um they'll go through the normal processes uh what they've been following in the US as well, getting that local community to approve as the first step before they start lodging for uh scoping reports and permitting and planning approvals like that.
00:58:54.320 --> 00:59:01.199
But you can see that everything now is is is going, you know, is planning from a from a calendar perspective there.
00:59:01.599 --> 00:59:04.719
They know they've got the opportunities now at uh Sweetwater 1.
00:59:04.880 --> 00:59:11.119
Sweetwater 2 has power approval as well, it's just a case of that's two gigawatts, that's a significant amount.
00:59:11.280 --> 00:59:21.679
They've also got the facilities in Spain as well, which is 300 megawatts there, and then on top of that, in their homeland, uh bringing AI back to Australia.
00:59:21.760 --> 00:59:40.719
Uh, this is probably something that's high on their uh bucket list uh for the company there to show um that they were the you know a company that you know should have been taken more notice of uh many years ago when they when they came up with the idea of utilizing power for um data centers and high performance computing.
00:59:41.039 --> 00:59:43.760
Yeah, maybe a little slight at the ASX.
00:59:43.840 --> 00:59:46.960
I know they tried to list on the Australian Exchange.
00:59:47.039 --> 00:59:52.239
Now they're a massive company and a massive site, as you can see in that visual there.
00:59:52.400 --> 00:59:57.199
Uh now a couple other updates with Iron, the AGM, mark your calendar, guys.
00:59:57.360 --> 01:00:00.960
November 24th, the annual general meeting.
01:00:01.039 --> 01:00:03.519
This is where they vote on a number of topics.
01:00:03.760 --> 01:00:10.719
A couple of them, oh Anthony, caught our attention in relation to the cap call and executive compensation.
01:00:10.880 --> 01:00:15.440
If you can walk us through what that means uh in more regular terms.
01:00:16.079 --> 01:00:18.159
Yeah, proposal three on the cap call there.
01:00:18.239 --> 01:00:26.000
It lets iron buy back its own shares through the cap call contracts it bought from banks to offset dilution from its convertible notes.
01:00:26.159 --> 01:00:31.119
Now, Australian law itself requires shareholders' approval for this kind of buyback.
01:00:31.519 --> 01:00:43.519
And in terms of compensation, proposal for a non-binding vote on executive pay, the board doesn't have to change anything if it fails, but a low approval is effectively a public warning sign.
01:00:43.760 --> 01:01:04.000
Now, remember, in terms of uh compensation and RSUs, uh both co-COs, co-founders received uh a large allocation in 2026, and at the same time, the expectations they won't receive any further RSUs until the earliest of 2031.
01:01:04.559 --> 01:01:12.559
So uh the largest part of some of these compensation packages and receiving RSUs for performance and tenure.
01:01:12.639 --> 01:01:16.079
So, what is time-based, what is actual, how the company performs.
01:01:16.239 --> 01:01:18.880
Uh, not like it's receiving any further RSUs.
01:01:18.960 --> 01:01:23.920
Uh, we've been told by the company, and they've announced that uh until the earliest 2031.
01:01:24.000 --> 01:01:26.320
So Shell has be quite pleased about that.
01:01:26.639 --> 01:01:27.840
Yeah, they certainly will.
01:01:27.920 --> 01:01:30.559
We'll report on that after the 24th.
01:01:30.639 --> 01:01:34.079
Now we gotta give it credit to the iron retail community here.
01:01:34.239 --> 01:01:39.119
We've highlighted a lot of these site picks: aerials, satellite, drone.
01:01:39.440 --> 01:01:42.800
I've never seen a thermal drone image, Anthony.
01:01:42.880 --> 01:01:44.000
This is pretty incredible.
01:01:44.159 --> 01:01:48.639
The Prince George site up in BC, we know they've been retrofitting here.
01:01:48.800 --> 01:02:00.800
We know this has been a focal point of the semi-analysis hit piece, and we've actually got Ace Kicker uh up there on location with a drone looking at thermal images of the site.
01:02:00.880 --> 01:02:08.320
And as you can see, all data halls up and running, generating heat, taking advantage of that upgraded cooling system.
01:02:08.480 --> 01:02:25.599
So hats off uh to Ace Kicker and Morantis putting out an interesting article today as well, talking about uh integrating open source NVIDIA software with their Cordon AI for full stack NVIDIA DSX AI factory operations.
01:02:26.079 --> 01:02:36.960
Now, what that essentially means, we had Kent on the day following semi-analysis, he said, look, we're not currently operating any Slurm or Kubernetes clusters.
01:02:37.199 --> 01:02:41.519
They now have Murantis that adds a software layer to this story.
01:02:41.679 --> 01:02:46.400
Now they can operate these clusters, and that's exactly what they're looking to do here.
01:02:46.639 --> 01:02:47.679
Yeah, you're quite right.
01:02:47.760 --> 01:02:59.119
It provides the AI workload and graphics processing unit inside the NVIDIA DSX, um, the Open Modular Software Portfolio of the NVIDIA DSX AI factory platform.
01:02:59.199 --> 01:03:10.000
Now the operators get one operational model from infrastructure provisioning and lifecycling uh management across clusters to workload and GPU orchestration within them.
01:03:10.239 --> 01:03:11.440
That's the full stack.
01:03:11.519 --> 01:03:12.400
And who's it for?
01:03:12.559 --> 01:03:24.159
Well, it's for AI Cloud Partners, NVIDIA cloud partners, cloud service providers and enterprises looking to maximize GPU utilization and workload throughout.
01:03:24.320 --> 01:03:26.320
And why does open source matter?
01:03:26.480 --> 01:03:38.639
Uh well, with Run AI now open source, Maranti says it can integrate it more directly into Cordon AI, giving operators more visibility and flexibility from bare metal up.
01:03:39.199 --> 01:03:40.159
And that's important.
01:03:40.320 --> 01:03:42.800
We've talked about the iron bare metal offering.
01:03:42.880 --> 01:03:46.079
That's what they took uh up with Microsoft.
01:03:46.320 --> 01:03:54.320
Important to get that full stack software integration, and that's really what they're focused on now, obviously expanding their client base as well.
01:03:54.480 --> 01:03:57.679
Uh, we've followed that story really since day one, Anthony.
01:03:57.760 --> 01:04:00.639
You mentioned Iron came to you with half an exahash.
01:04:00.800 --> 01:04:05.119
Just wanted to highlight that history on the website, poweranalysis.io.
01:04:05.679 --> 01:04:10.639
You can go in, look back through all of our meetings with all of these companies.
01:04:10.880 --> 01:04:15.199
Pretty interesting to see how far they've come over the past five years.
01:04:15.360 --> 01:04:16.880
So we'll end it there, you guys.
01:04:17.039 --> 01:04:24.719
Some big headlines, some big price targets, and six reasons why we think the AI sector has sold off.
01:04:24.880 --> 01:04:28.480
We'd love to hear your thoughts, and we'll see you back here tomorrow.