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SMALL CAP INVESTING
Recorded: July 7, 2025 Duration: 1:20:45Space Recording
Short Summary
In a recent discussion, crypto enthusiasts explored the current market trends, emphasizing the euphoric sentiment surrounding all-time highs, the transformative impact of AI, and the importance of strategic investment decisions. Key insights included the need for caution amidst rising speculation and the potential for growth in companies leveraging AI technology.
Full Transcription
Thank you. Good afternoon, everyone. Welcome in to the Small Cap Investing Show right here on Wolf Financial.
I'm excited for this one. I didn't get to do much, but listen in a little bit the last week.
So I'm excited to hear what's going on from all of these great panelists that we have on each and
every Monday. A reminder, make sure you go in and follow these guys. A lot of really smart,
great thoughts given on this space every week. Go in and check them out. Check out everything they're doing. Quick little market
update. We did have a couple letters sent from the president to Japan and Korea just a little
bit earlier that you saw some of that volatility drop the market a little bit here intraday.
Been just kind of a choppy downtrend day other than that across the broader markets.
There's some things that are green, though, and some things I'm sure that are doing great,
some things that are setting up maybe for a little swing action there. So we'll see what's
on everyone's mind here. I'm going to go ahead and kick it off. We'll jump straight into it today,
and I'm going to throw it over to my co-host, Ben, over at Story Trading to start us off with some market sentiment type of thoughts.
Yeah, perfect. Let's start with that sentiment.
And man, I don't know. I nailed it again in terms of the direction of the market.
This morning on our morning notes in the nest, I switched to yellow alert for the first time since June 22nd.
So since June 22nd, I've been green alert,
carpe diem every day, push hard, push harder.
And then last night I put the morning note out
the night before on Mondays.
I went to yellow alert expecting
or raising the prospects of a correction,
seldom used on the tax bill passage.
So you can see that morning note up in the nest.
And if you swipe right up in the nest, you'll see what I think of the big picture. So that's just
like the short term sentiment is that, you know, I think everything's still great, to be honest
with you. I know we got like jobs data that was good on Friday and the market was up, you know, even though that meant maybe, you know, what's going to happen with the rates.
But the up market on Thursday is also something I predicted because you get that a lot on those holiday weekends
and those half days that you get short squeezes usually in, you know, retail type names and highly short names.
So that was kind of predictable.
So now, you know, we're getting this pullback. And if you, again, go to the nest, I have a chart
there. You swipe right. This chart looks exactly like what happened in the COVID crash in the
subsequent recovery, like identical. Maybe like the rate of the V-shape was a little bit faster this time.
But I think, you know, I think if you look at the fundamentals, it can support the same type of price action here, you know, where we recovered V-shape recovery, went to all-time new highs.
And then there was like a two-week period of consolidation and a pullback.
And I have the arrow pointing right to that area where it says we are here.
All right.
I put that out, actually.
When did I put that out?
I don't know.
What's the date on that?
June 29th.
All right.
So we are here.
So I think it's going to repeat, man.
I think you can get this consolidation pullback.
Let me see what the world moving averages are in QQQ SPY
for a second. Let me see.
QQQ SPY.
I don't know about the 20, but maybe
QQQ to 5.
Maybe. Maybe it goes to the 20 DMA.
Maybe. Right on 540.
Maybe you can get that. Maybe it won't be like a crash,
but like a sideways
consolidation pullback.
Same thing with SPY.
IWM, I'm actually still bullish on this for a move towards $2.29,
but it's probably going to move with the markets during this consolidation and pullback.
And I think you're off to the races again.
So like the intermediate to long term, I'm very bullish.
I kind of expected this coming into today on a macro level. So not a surprise to me. And it doesn't change my process at all. I did like slim some things down.
in the nest in that morning, though, you know, even though it was once the yellow alert on the
macro, I'm still like balls to the wall on individual stock picks with the right. And
there's the last line here is that for this reason, we're downgrading our short term macro
signal yellow alert, but still extremely bullish on individual stocks with the right setup. So
and that's what I do for the most part. Anyway, I'm not like an indice trader. And I'm not like
a money flow trader. I'm like, yeah, let me just ride the big cap mega caps because the market's hot now. I don't do that
anyway. I give the commentary on the macro. And all it might do is if I get into a more cautious
area, I might have higher cash level positions overnight or just be less into the more speculative
name, something like that.
But other than that, my process remains the same and I'm really pumped and I got
at least one very good idea for you, a small cap. Can't wait to talk about it.
Appreciate you kicking us off there with those thoughts, Ben. Yeah, it does seem like,
I know a lot of people are looking at this as all-time highs, breakout high. What do I do? What can I do?
And sometimes you got to let it cool off a little bit and find those high probability
setups. So it'll be interesting to see. Money Mark, what are your thoughts around the market
right now? Don't let the money burn a hole in your pocket.
We've been making so much money this year, so many great picks. And as you take profits
on those picks, there's going to be a propensity to want to put that money back to work. But if
you're taking profits on a name that just ripped and putting that money back into another name that
just ripped, you're going from the devil that you know to the devil that you don't. So be careful
about that. I think Wolf just made a great point there. know to the devil that you don't. So be careful about that.
I think Wolf just made a great point there.
Wait for the opportunities to come to you.
There's nothing wrong with having cash.
In fact, sometimes cash is the most important thing to have.
Now, as far as the market goes, the fear greed index just went to extreme greed for the first time in a while. So we've got that to
contend with. It does tend to be a pretty good indicator. I like using the CNN. It's been pretty
good for me. That hasn't hit 75, which is extreme greed, since October of last year. So we're in pretty high territory as far as that goes. Now,
here's the thing. Can the market still rise in an extreme fear environment? Yes. And what could
drive that? To me, it's AI. Harkening back to 1999, I've been saying for two years straight,
this is not a bubble. AI is for real, and it is for real.
The thing is, I'm starting to see some unreal things taking place. You see some of the valuations
on some IPOs. You're seeing more IPOs. You see a lot more speculation, more stories,
more BS stories. I get a lot of people asking me about this stock and that stock, and it's all
AI. These guys are an AI. These guys, listen, bro, everybody is an AI now. The question is,
are they really? Do they have a real story? I'll give you an example. A lot of people like Duot,
D-U-O-T. I am not fully acting on this yet because I'm doing the rest of
my research, but their story is they have this generator business that is a service business
that's going to help drive the capital needs for them putting together edge data centers.
putting together edge data centers. And it never rang true to me because the guy that went to Duos
to do this, well, Duos never did any of this stuff before. So if he's going there to help a company
with no capital, no good stock price, to do something completely different, why would you do
that instead of starting your own company and have it be venture funded? So right off the bat, I'm like, this is sketchy. It's going to the bottom
of my pile of interest. But fast forward, everybody's interested in the stock. A few
months later, it's done pretty well, which is what a speculative stock will do in a speculative
situation. But I get an anonymous tip from one of my contacts. I've got thousands of them.
And they're like, hey, listen, I know somebody who works at a company that's doing business with
XAI. And they told us that the press release that Duos put out about having a major hyperscaler as a customer a few months ago
was a shock to them because that hyperscaler is their customer and Duos is just a subcontractor
on that deal. Not only that, but they're only a subcontractor because the company that actually has the XAI account, the deal is so big that they can't
fulfill the whole demand for like another 12 months. So they're just using Duos for backfill
for the next 12 months, starting February, by the way. So it's only like another six months
and then they're going to drop them. So that's a problem. And then the problem gets deeper because
there is a fleet of generators that they are managing. And this company that's doing business
with XAI looked at those generators, obviously, because power is in demand. And they said,
we can't use these generators. They're in a state of disrepair and they don't meet EPA standards.
use these generators. They're in a state of disrepair and they don't meet EPA standards.
So on one hand, they've got generators that are reasonable to work and are only going to be used
for the next 12 months because more reliable, better power is going to be put in place. And
on the other hand, they've got generators that nobody wants to use.
Be careful, people. Okay. I didn't save this for the stock part of the show because this is macro
that's going on right now. There's a lot of BS stories going around and don't fall for them,
especially at this point in the market where we have this extreme greed going on. That's what
happens when extreme greed.
Every story sounds great, but you hear what Ben said, and I agree with it.
This is a nice place for a yellow alert, nice place to pick your spots,
nice place to pay attention to people who actually know what they're doing,
and we'll be back later with some picks to help you out with that.
Well said, Money Mark, and great delivery as well. I just think
a lot of people, the euphoria kind of starts to set in a little bit. And that's where people
really get a little overextended. They get a little too excited. Just like you said,
if you're trimming out some good names, some good profit, don't let that cash burn a hole
in your pocket. I like the
cautious approach here, especially extreme greed on the fear and greed index, some overextensions
too. You just look at a daily chart, look at some of the moving averages, simple moving averages,
or if you prefer EMAs and just look how extended we are from some of those kind of floated higher
on low volume last week or so. So makes sense i hear you guys and honestly sometimes i
need that a little bit that hey just be patient dummy you know i heard you slapping something
over there i felt like you're like hitting me in the head today which i kind of need you know
to roll that newspaper microphone yeah there you go just just tap me on the head a few times with
that and you know knock some sense into me anytime I'm looking at some of this stuff today and going, I just want to buy everything for some reason.
But patience.
There's enough great stuff out there at great prices.
I mean, there are some significant things happening in AI right now.
The Blackwell transition is opening up opportunities for all new companies.
But you have to really understand the technology to be able to make those picks. And that's not me, by the way. I'm using my contacts in the field who are experts
in technology to figure out what's real and what's fake. If you don't have that, then you have to
either lean on somebody who does or just take your chances. And that's gambling. You don't want to
gamble with your money. You're way too smart. You're way too good for that you work too hard for that money 100 can't argue with that at all dougie fresh let's go over to you next and get some of your
market thoughts and then we'll go to the godfather well i've been saying on my show i've been cautious
last time it got up like this guys i played it a little too aggressive i was saying it on my show
and it caught me and i uh ended up not catching them
as well as i wanted to and now i said for the last two weeks i've been playing some but
i've been a little bit cautious as it's been hitting this top and you can see it getting
topped out they've been running up for a long time the spy went into the top today or uh thursday
and then bounced down today it's down like 482. It was down a couple, like five something before.
And yeah, I think that we are going to see a little bit of a pullback.
How much?
I think I might have to agree with Ben.
These things could, like the SPY could come back down to that 610.
It's at 620 right now.
Could even come back down to the 20 in between at that 606 area.
So you could see some pullback here.
And honestly, it needs to.
They've been run up for so long.
And they have to pull back, as I make the example of the bow and arrow.
You know, the arrow shoots way up there.
And then you've got to go retrieve your arrow and pull your bow back.
And that's what you're seeing so that that arrow can get shot up even higher.
And I do think the second half of this year is going to be wild
i just think we have to see this pullback and it was it was all over the charts you could obviously
see it coming last week i remember the iwm was setting up beautifully i remember talking about
it in the very next day last tuesday it was way up and then thursday it jumped up and today it's
down about 296 right now and another one got into that top area.
Could it be some healthy pullback today and they bounce back up tomorrow with some kind of news?
Absolutely.
But be cautious because I do see some pullback happening here, and I've been trying to be cautious.
I haven't traded anything today.
Coming in off a three-day weekend holiday, it's just one of them days where you want to know
exactly which way the market's going and i like to keep my money in my pocket and not gamble like
money mark was saying so with the charts looking the way they are i didn't want to be forcing any
trades and maybe something will get set up as the day progresses but again today just wasn't anything
jumping out at me and it's just uh one of them
days where you're trying to tell if it really wants to pull back or is it really healthy pull
back today and it wants to bounce up so that's what the market looks like but definitely be
cautious because that pullback is going to happen when you've had all these guys run way up into the
tops all the mag seven everybody's been way up there and running
like animals and they've been some big big paydays so anytime you see that happen and expect that
pullback it's just a matter of how much it wants to come down and we'll obviously be pointing it
out on this show as we usually do but yeah that's what you're looking at right now on the market
and a bow and arrow you're shooting over there that's all i really want to know because it looks looking at right now on the market.
And a bow and arrow you're shooting over there.
That's all I really want to know.
Cause it looks like the last,
it's like you've got a crossbow the way that this thing shot up.
But I love that little bit of a reference there,
a little comparison.
I love real world example. You shoot the arrow, the arrow goes a long ways.
You go retrieve the arrow and there's a time in between that.
I think it's important.
I love the message that the panel is sending here to our audience today with the patience
aspect and theme that we're talking about here.
Godfather, what are your thoughts around the market?
Yeah, look, I'm hearing from everybody exactly what we've been hearing all the way through this piece,
which is that we hate this rally, but still we're going to play it.
And that's basically what's been happening here, right?
This 50-day rally we saw since April 8th is the fastest ever price recovery from 15% drop, right?
And it's in the top 10
in terms of, you know, 50-day rallies ever. And, you know, if you look at those,
you know, everybody goes, okay, we need a correction from here and all the rest of it. Sure.
Digestion, correction, whatever you call it, it can happen. And it's going to happen by,
whatever you call it, it can happen.
And it's going to happen by, you know, some catalysts that none of us know about today
and can't see.
But I think you need to zoom out from that and, you know, kind of look at where does
the market typically go three, six, 12 months from this kind of a place.
And, you know, the stats going back to the beginning of time for each of these indices, you know,
the Dow, the S&P and the Q's on averages, that you get a further, you know, six plus percent
return in the first three months after this kind of a move. You get another 10 percent in the next
six months. And 12 months later, you're up over 15, 16 percent. So, you know, I see a recipe here
for continued melt up. Sure. And you've heard me
say it, you know, the summer swoons happen, you know, typically every year, there's this three,
four week period where you can get as much as a double digit drawdown. But look, you know,
the second half of this year, you still, again, we've got this institutional
placement in the market that are positioning in the market that's still offside.
Yes, you know, retail that's been driving this is, you know, continues to add to their margin debt.
But, you know, like I think that it's time to start believing that the consumer is going to be more than just fine in the second half of this year.
Because and, you know, we're starting to see some of this broadening out, right?
Like, look at the Russell 2000.
We're up 3.5% so far in the month of July.
That's, you know, better than most mid-caps, better than most of the other indices.
And, you know, you got oil prices that continue to, you know, be weak here.
We saw a material increase from OPEC over the long weekend in terms of, you know, be weak here. We saw a material increase from OPEC over the long weekend in terms of,
you know, further increases in production, like a 33% number on quotas. And I realize the real
number is somewhat off of that. But nonetheless, you know, oil prices are low, gas prices were some
of the lowest for this long weekend we've seen in a long time. You're clearly getting a stock market wealth effect here. Inflation seems relatively
benign despite the tariffs. So yeah, you got Dr. Copper just ticking below all-time highs. I think
economically speaking, extension of the tax cuts, possible Fed interest rate cuts, calmer geopolitical
environment, you know, all this kind of stuff sets up for, you know, second half of the year
that that looks good. And yeah, like I too saw this fear greed index ticked into extreme greed.
And I'm also, you know, watching like everybody else, you know, when when bad news is good news
and good news is good news, you know, you got wondering, is the market just a little bit ahead of itself?
And you look at what's happening in the other markets.
It's not just the equity market, right?
There are big, big markets that are bigger than the equity markets like currencies and bonds.
And currencies, look at the U.S. dollar.
It's been extremely weak through all of this.
So it's had a lot more to say about the tariffs than the equity markets, at least in terms of nervousness. You know, what are bonds saying? Well, relatively stable.
So they're certainly not showing as much enthusiasm. And this week, a lot of people
are away. There's no earnings until the start of Q3 earnings season, which doesn't come till
sort of mid-July. We're kind of in this lull. There's not a lot on the economic calendar
slate. There's a couple of auctions this week, but look, it's all going to be about tariffs.
We saw a couple of headlines start to shake the market a little bit in here. And without a lot of
volume, expect some choppiness through this. But in general, with this move, the market has kind of said, you know, this was the end of the day, I still think this is a backdrop
of a market that allows us to focus on the key themes in the market and to pick these quality
small cap names. And I actually think we're going into the next sort of three, six, 12-month period
that should see a fair amount of tailwinds for small cap names. The biggest theme in the
market, of course, is still AI. If you're not owning an AI company or something directly related
to AI, you've got to ask yourself, when you're looking at new names, does this company benefit
from AI efficiencies? And a lot of this sort of double digit earnings revisions that we're expecting through the Q2 is going to be a bit of a lull here.
But from Q3 onwards, it starts to pick up to like double digits into 2026.
And a lot of that is being driven from AI efficiencies. So if you're not involved in the AI trade through a first derivative or second
derivative play, then you got to ask yourself, you know, does my company that, you know, I own
that makes consumer products or whatever it happens to be, you know, are they benefiting
from AI? Are they using or utilizing all the tools necessary? Because if they're not, they're going
to get punished by the market. And, you. And competitively speaking, they're also not going to be able to keep up.
So, yeah, I really think that there's, you know, there's second and third waves to this theme that are going to come.
But this even the first wave that we're in now, this AI infrastructure thing, you know, 600 billion was spent last year on AI. They're going to spend substantially more this
year. Jensen, of course, is talking his book, but Jensen Wong from NVIDIA was out there saying,
we're going to look back and we're going to be able to total numbers that are crazy pants.
Hundreds of trillions of dollars will be spent over time on AI infrastructure. So I think we're still relatively early in that. And, you know, I've
been focused a lot and our Discord has been focused a lot, you know, on that, specifically
the power theme and, you know, the Bitcoin miners that are transferring capacity to HBC.
And of course, that's very topical again today with us finally getting this
CoreWeave cores deal. So I'd like to come back and talk a little bit about what the read-throughs
are for that, for the names, some of these other smaller cap names, the names like Cipher and BTBT.
And everyone wants to know what does this mean for IRN and so on. So I'll dispense with some
new ideas, which I'm working on, So I'll dispense with some new ideas,
which I'm working on that I want to get through to our Discord folks first. There's a lot of those
that are close to the top of my pile, but you've got to pay attention to what the market forces
you to pay attention to. And today, I think we all need to pay a little bit of attention to
what this deal means for these names. Is it the end of this anticipation run or is it really just the beginning?
So I'll come back to some of that.
Appreciate that rundown, Godfather.
And yeah, what a great set of thoughts from all the great traders and mines investors up here on the panel today.
Just seems like, hey, let's make some smart decisions, right?
Maybe not risk off yet, but maybe, hey, let's wait a little bit.
It seems to be the general consensus here.
What I am interested in knowing is as you guys are going through this,
it seems like you guys always find some opportunities in some pocket of this market.
And as we always do
in the back end of this show, I guess, second half of the show, we always start off with those
market sentiment thoughts, just kind of set the tone. And then we come in with a little bit more
granular approach. What is on the radar? What thematics are we watching? What names are we
watching? What's going on that maybe some of us have missed. So excited to jump into the second part here.
And Ben, we'll let you kick it off for us today.
Okay, great. I got an exciting micro cap pick for you. You know, the one thing that I,
not the one thing, but like the best thing I look for that gets me really pumped are what I call an inflection point
catalyst. So an inflection point catalyst is a catalyst which turns the bear thesis on his head,
which takes the company that was, for example, you know, maybe their product was not accepted
in the marketplace. All of a sudden now you have evidence that it's going to be broadly accepted,
or you have a catalyst that's going to launch the company from losing money for years to making money for the first time.
That's my favorite type of catalyst, especially in microcaps.
And when I find one, I get extremely, extremely convicted and I go in large size.
So we have one.
Ticker symbol is I-I-N-N.
Inspira Technologies.
Now this one, I want to give credit to Rick Bentonville in our Discord community for putting this company on our radar maybe a couple quarters ago.
And it seemed very promising.
So it was on my watch list. And we went, you know,
heavy into this starting July 2nd. So what was that? July 2nd was, was that Wednesday?
It was Wednesday morning of last week. So I piled into this at 95 cents. And as he said,
we find that alpha in every market. It's three open green candles in a row from 95 cents to $1.35.
I've been increasing my position every day.
I added more today, even right here at $1.35.
I've been adding more to both my short-term and long-term account.
So let's dig into why this is an inflection point catalyst.
Catalyst is a medical device company with a $35 million market cap.
This is a medical device company with a $35 million market cap.
And if we go to our news feed here, you'll see that on Wednesday, July 2nd, that morning
that I picked this up, they secured their first revenue contract, basically, to get
their device.
And I'll tell you what the device says in a second.
But they got their first contract, a $22.5 million purchase order.
Okay, $22.5 million purchase order to be fulfilled within the second half of the year.
And I think they're binding, it says too.
Binding purchase order and the full payment of $22.5 million will be made during 2025.
And this is with a market cap of 35 million now i've seen things like this before
where you know the stock on that first day of announcing this you know compare 22.5 million
revenue to uh 36 million actually on that day it was like a 20 million market cap so you're getting
the entire revenue worth in market cap you know sometimes those kind of stocks will move like
60 to 80 percent in a day.
Now, there are some capital structure issues and some overhang and some warrants and ATMs and stuff like that.
So there's some volume to go through, and that's why it didn't suddenly jump 60 to 80 percent. But it's been going up, as you can see, pretty heavily each and every single day here.
So I had a short-term target here of $1.30 to $1.50.
It's in that target right now. That's short-term target here of $1.30 to $1.50. It's in that target right now.
That's short-term, though.
You know, I think this possibly can become a billion-dollar market cap one day.
Now, let's talk about what this is real quick.
This is a medical device that's set to replace, and maybe not fully replace, but replace, what do you call it, mechanical ventilation
in ICU. So people can't breathe, right? They put you in an induced coma and put the ventilator,
the tube down your throat. So that would be a, you know, induced coma mechanical ventilation.
And that's very expensive.
It's dangerous.
The outcomes aren't necessarily great when you go in a coma and get intubated.
This device allows people to be treated out of the ICU, and they can stay conscious.
It basically does like what a dialysis machine does.
Dialysis machine takes your blood out and cleans the blood.
This takes your blood out, oxygenates that that blood and puts it back in right um so this is groundbreaking technology that can save the medical system billions upon billions and billions of dollars
now i haven't done my whole research in terms of competition you know do they have a path to being
this might can this be standard equipment in every hospital around the world?
Maybe. All right. That's potentially on the table here to do more research on the competition.
But in any case, they it's not just this twenty two point five million order.
Now, leading up to this twenty two point five million order, they've been talking about that.
They've been they're having negotiations with huge potential customers, so it didn't come out of the blue,
right? They've been consistently talking about this, and once they got that FDA approval,
now those orders are coming in and getting binding and getting secured. And then this morning,
they come out with a press release saying they're in high-level government talks to advance national integration of their device and to establish a global distribution framework.
So this is big.
Excuse me.
I was about to curse.
This is big stuff for a little $35 million company.
Now, I'd love to get Godfather's comments a little bit later when I'm done here on the capital structure and the
dilution that may be happening that they have to work through with warrants and a little bit of an
ATM. But even with that, like we're talking about, again, this device could conceivably be
something that can one day be standard equipment across, you know, massive health networks across
the world. So the $35 million, even if there is dilution, even if you say, okay, fully diluted, it's what, $50 million now?
Great.
So that's still trading at one times their second half revenue of the year.
So I think this is a major inflection point catalyst.
It's a type of stock I like to go in with size.
Right now in my trading account, I'm at an 18% position. I've been adding it to my
long-term account as well. And honestly, I wish I went like 20%, 25% because these numbers are
just massive. And all the indications that the company is giving is that there's going to be
additional massive contracts coming. So I'll pause there. And Emp, if you want to chime in,
you can. But after that, I do want to hear from Godfather regarding the cap structure on this company.
We can go straight over to Godfather.
One quick piece.
The EU just announced that they will not be receiving a tariff letter.
So you saw a little bit of a pop across the markets getting faded immediately.
But that is the headline.
If anybody was paying attention, I always like to keep people up to date.
And with that, Godfather, if you want to go ahead and chime in on Ben's topic here.
Yeah, sure.
I'll provide a few thoughts on this.
So, yeah, interesting company.
A couple of notes of caution here.
Number one, it's an Israeli company.
Nothing against Israeli companies, but they're a foreign reporter.
So you only get disclosure on financials from them once every six months.
So it isn't the sort of disclosure that we typically see with
U.S. or domestic reporters. That's caution number one. Caution number two, yes, in the cap structure,
there are 7.382 million warrants at an average exercise price of $1.22. So those are now in the
money. That's about 30% dilution. That's the downside. The plus side is the company would take
in about $9 million in cash on exercise of those. And typically what you would see if it flips that,
that price level of $122 million would then become support. So there's potential for that.
Watching the volumes nicely, $1.7 million already today is pretty impressive.
So the more volume there is, the greater the chance that you'll see exercise of those and
they get absorbed in the market. It should be known that the company also has an ATM that
they're active on. They upsized it just days ago from 1.9 million to 7.1 million. So they can be in the market up to, I think it's
around 25% of the volume active on that ATM. I got to imagine they are because they're burning
about 4.5 million a quarter or sorry, every six months. I wish I had the quarterly numbers for
them, but every six months. So by my estimate,
they're basically sitting around a million and a half in cash right now, net cash. So yes,
the market cap and the adjusted market cap or the enterprise value are pretty much the same here,
around $34, $35 million. This initial order that they got for $22.5 million, this purchase order,
if you assume that they have no other revenue whatsoever,
you know, in the next 12 months,
the stock is trading in an EV to sales of one and a half times.
I don't yet have the details.
This is, again, another one of those names that I mentioned on top of my list
that's been sort of waylaid in terms of deeper dive
with all the stuff going on with data center.
But it looks very interesting to me.
This is
a cardiac bypass machine, you know, life support system, if you will, that, you know, both serves
in that function as well as, so it's been approved and was approved by the FDA in May of 2024.
It's been in test with multiple U.S. hospitals. It should be noted that this PO that they announced on the 2nd of
July is not for a U.S. hospital. It's for a non-U.S. entity. We don't know exactly.
And, you know, we don't know either what the details are of this European government agency,
which, you know, this isn't the first time they've teased it. So clearly they're trying
to get their stock price up here, but clearly something is potentially also imminent.
This device is also approved in the EU for blood oxygenation, as Ben alluded to.
That could come as well in the US, which obviously expands the market. And on top of all of that, they've got a blood monitoring sensor that they're submitting for approval in the second half of 2025.
So, you know, just to put a bow on all of this, it's a relatively clean capital structure.
If we can flip through on those warrants, there's not a lot of other options or RSUs or other dilutes there.
And as long as they don't, you know, crush the stock, which I don't think they'll do with this ATM.
And at the end of the day, it's really not that big.
It looks fairly clean.
These purchase orders look like they're just starting.
So and who knows what this, you know, actual government arrangement is going to look like. If it's
strategic and you get nationwide rollouts and all the rest of it, it could be substantial.
The company has been ramping their capex for manufacturing of these machines. So, you know,
typically you don't do that unless you have good certainty on future purchase orders. So yes,
I think from a catalyst standpoint,
looks fairly rich over the next few periods. And it looks like it's just getting started.
And I don't think the market has really discovered this name either. So I like Adam Mussellong.
Love it. Beautiful. All right. Great. If anyone else on the panel has any thoughts on that, you 2nd saw that on the discord that was beautiful ben
and uh yeah i think you do have some more room to run up here and we'll keep an eye on it just
to watch for that little bit of pullback but this thing does look like it wants to run up some more
so that's what i see on it and just wanted to tell you what the chart looked like it's it's one other
thing that that should be noticed that you know the the timing of the POs, I guess that's a function of when the POs actually come in.
But, you know, this increased level of chatter from management on all these things that are in their pipeline kind of coincided with the fact that they had really until September 8th to get over that dollar minimum bid for NASDAQ.
I mean, they would probably have just gone through the shareholder approval route of,
you know, doing a reverse split like everybody else to attain that.
But, you know, if you look at the chart, you'll see that since the beginning of June,
they've bounced hard off of that 50 cent level when they started really talking about this pipeline.
So, you know, convenience, you know, skepticism aside,
you know, we'll want to see the actual numbers come in when they report.
And unfortunately, you know, we're not going to get that until early new year when they start reporting the end of year numbers. So or actually, no, that's not true.
They should report the half year numbers for the period ending June 30th.
I guess you could just look on Edgar and see when they reported that last year.
So anyway, consider that another catalyst,
at least for the second half of the year.
Awesome. Thank you for the additional context.
That was great.
Father Hemph, I'll turn back to you for now.
Yeah, we'll keep going around here, Ben.
And of course, if we have time, we always come back and get some more of your thoughts.
Money Mark, let's go over and see what's on your radar.
Yeah, just some updates on the AI market.
On the monitoring side, on the heels of last week's show where I introduced Gatekeeper, GKPRF.
It's GSI on the Vancouver for you Canadians.
Looking at the work that the Godfather had done,
surprised me.
I didn't realize he was looking at it.
So that was great work.
I went back and re-listened to this space,
something that I do encourage everybody to do
to catch everything.
And went back into the field,
checking my contacts,
also doing some AI searches for all the different deals that are going on out there because of
the mandates that are going down in the US and Canada that are going to require transit to have
monitoring systems on them over the next couple of years, which is going to pull forward a
lot of demand for the types of systems that Gatekeeper has been selling. Now, that would be
good enough as it is. The thing is that when I looked at the last few months of wins and who's
been winning, Gatekeeper is winning upwards of 50% of these deals. 40 to 50% is the number that I came up with.
And that is a stark contrast to the 16% win rate that they were coming up with a couple of years
ago. And the reason for that is because the investments that they made, if you look at the
chart, you'll see that the stock didn't do so
well in 2024. They were putting investments in place to make sure that they were well-positioned
for this boom in AI-driven monitoring, which again, mandated. This is going to be hundreds
of millions of dollars spent over the next two years. And these guys are winning state after
state, region after region, province after province in the U.S. and Canada with a presence
in both countries, which puts them into a position that they don't have to worry about
the tariff situation between U.S. and Canada. In fact, they're in very good position to win
heavily in Canada because they have almost no competition there.
And of course, with Canada having that anti-America stance that puts Gatekeeper in an even better position there.
But then here in the U.S., they have a great presence in the U.S. as well, a native presence that has been allowing them to win state after state after state.
So that win rate is something that you really want to pay attention to. And then the other thing that you want to pay attention to is
as these deals go down, not only are they going to be selling the equipment that goes onto the
buses and trains around the country and North America at large, but those installations are going to lead to monitoring contracts.
And those are both recurring, which is not something they had in the past, and high margin, which is not something they had in the past.
Right now, it doesn't look like it.
If you look at their AI monitoring business, relatively small, but growing rapidly.
It's up 10x year over year.
The gross margins on that are only just over 50% now. The reason for that, the big investment, the upfront investment in setting up that
infrastructure to do that level of AI monitoring. But now each additional deal they win, most of it
drops right to the bottom line such that over the next
couple of years, you're going to see those gross margins go from 50% to something closer to 90%.
So you've got multiple catalysts here, one being on the top line with those mandates,
as well as their win rate going up, and then also on the bottom line with their margins expanding as the monitoring increases. So that's Gatekeeper, GKPRF. And then a couple of quick tidbits,
AEHR, air test systems, the market, I've been doing some extra research on what's going on here,
and the stock's been acting well. My sense is that the stock's acting well mainly because of retail investors. The institutional coverage on AEHR is, in my estimation,
weak. And I used to be a Wall Street consultant. These guys don't really know what's going on.
They don't believe what's going on. One of the two main analysts is an energy power analyst that has nothing to do with semi-capital equipment.
And that has enabled people to be able to sneak in here and buy up this company in an environment where they had no 10% customers in AI last year.
year, and now they have three. That means over 30% of their revenue is now coming from AI at a
And now they have three.
point at which the EV side of their business seems to have bottomed out with a majority of that
revenue coming from the consumable side of the business as opposed to new infrastructure
deployments at a time where on Semi, their main customer on the EV side is saying that they're expecting a good back half of the year.
They report earnings tomorrow.
And the most important thing to pay attention to there, I don't have any insight into what the numbers are going to be.
I don't care because I can all but guarantee you that on the call, Gain Erickson is going to give a bullish commentary on what's going on
I've spoken to him recently and it was clear to me that he was expressing some
not quite frustration but pretty close to it relative to the disbelief that is
being cast on his company in the marketplace despite what's going on.
I mean, it's very clear.
You go from 0%, 10% customers in AI to three of them.
You've got major AI customers.
Go look at their investor presentation and their investor deck.
Compared to what it looked like last year, you didn't see NVIDIA.
You didn't see Broadcom.
You didn't see TSMC.
They're all there now.
But most people haven't paid attention. So stay tuned for that tomorrow. That's going to be a great earnings call, I think. deep fakes are getting so good that they are now beating fraud detectors. This is really bad news
for companies that need to obviously detect fraud. You don't want your identity stolen.
You don't want money being taken from your accounts or money spent on your accounts.
And neither do these companies because in many cases they're going to be found responsible.
And neither do these companies because in many cases, they're going to be found responsible.
You're going to go through a headache, right?
Eventually get your balances restored and all that stuff.
But at whose expense?
A bank somewhere.
And these banks, losing tens of millions of dollars a year to a greater and greater threat of fraud, are willing to spend single-dig digit millions to save tens of millions. And that's where
IDN is coming in. And it's getting better for them because they have a bulletproof piece of
the equation, which by the way, should be acquired, right? This is not a full scale solution,
but it's a bulletproof piece of a solution that would give a larger player a checkbox that nobody else can offer.
And I've been asked about competition there. There are a couple other companies that seem
to offer similar services. Yes, seem to offer similar services, but nobody has the bulletproof
solution that IDN has due to the relationships that they have with AMVA and the DMV that gives
them exclusive access to all the security features in driver's licenses.
So that's the update for this week.
If there are any questions on that, let me know.
Otherwise, let's check you next week.
Ben?
Yeah, actually, let me also chime in on AIR a little bit.
AIR was a wonderful short-term trade for us from about $12.50.
It hit our $15 target.
So I own some of my long-term account that I'm holding through the earnings report,
but I had this basically earnings anticipation run play short term, which worked
out, hit the target at 15.
So I did sell most of those short term shares.
I'm not sure yet how I'm going to play into the earnings report in my short term account.
I might pick up some common shares into the report, but I think in this case, what I like
to do is react rather than predict.
I do expect incredibly good guidance, but I think there's a chance we're going to sell
off initially on the headline.
So I'm kind of positioning like that.
I'm not fully committing to holding the earnings report.
I'll probably have a position in by kind of hoping
maybe for a bad headline that they'll get us like an entry in after hours and then, you know,
fully expecting thereafter really good guidance. Gunn-Haller, go ahead.
Yeah, look, the last time they spoke publicly was that broker presentation. I can't remember
I can't remember if it was Jeffries or who it was, but.
if it was Jeffries or who it was, but... I think it was William Blair.
I think it was William Blair.
Okay.
So yeah, both the CEO as well as the CFO were there.
And they were asked specifically about guidance for this quarter because they pulled their guidance, remember?
And that was, you know, two weeks ago, I think, that presentation.
And at that point, they hadn't yet made the decision whether they were going to give guidance again at this quarter.
So I agree with Moneymark that we're going to hear commentary out of management about
the market sizes for a burn and test in AI devices and memory that dwarfs what we saw in SIC.
But we may not actually get it in terms of formal numbers.
And I think if we don't get that,
the market will be disappointed
and there's potential for a sell-the-news event on that,
despite positive commentary out of management.
So I have taken the same stance as Ben here,
made some gains on the anticipation run.
And I think this is an incredible opportunity
to own a little bit going in as a free call. Not a free call, but if you've made some money,
for me, it's effectively a free call at this point, the few shares that I've left,
in case we do get a pop. And again, this is a heavily shorted stock. So even just a little bit
of good news can send this higher. And it has a history of doing that well it has the history
of doing both but the other thing is um it's it's uh it's going to give you the opportunity to react
right if you do get an aggressive sell-off it's probably going to be a great buying opportunity
because eventually they will come out and start to put some formal numbers around
the excitement that they do have and I think legitimately so for their machines in these
new markets. Yeah you know it's really interesting so you know if you look at the balls on the
options one way you can play this is to sell puts against this thing now Now, if it does pull back, it automatically gets you in. But if
it doesn't pull back, those options will collapse the day after tomorrow as far as that goes.
One other thing to look at is last quarter, the February quarter was their best quarter since November of 2023. They put up $18 million in that quarter. That's $72 million annualized.
Gain has said that all of their categories on the AI side are going to grow next year
from where they are right now. The street's only at 74 million. I think they're easily going to do over
100 million. And given some hints that we've been getting in speaking to GAIN and other contacts in
the industry, there are folks asking them if they can produce 10 plus units per month for those customers.
Now, just to put it in perspective, each unit, including the consumables and all that, it all kind of $60 million, $50 million per month, $600 million per year.
And this happens in semi-cap equipment land.
You see these things kind of happen where things blow up. Not saying they're going to go there, but if they're getting inquiries along those lines,
then that shows you the kind of potential that we're dealing with.
And if they put up numbers like that, then you're talking about EPS in excess of $7 per share. Okay. So
that's what we're dealing with. And of course, that's to put the long-term in perspective with
the short-term, because I agree 100% with what the Godfather and Ben said about how to deal with
tomorrow. And one way of dealing that, like I said,
I haven't backed up the truck yet because I wanted to leave a little dry powder in case
the print tomorrow isn't great or if the street doesn't like it. But I don't know. I think these
shorts are going to end up squeezed at some point. And I don't know if it's tomorrow,
but I have to have a position there and then be set up for a bigger position and selling those puts can be a good way of doing that. Yeah, look, I think you want to have some
of this in your long-term account. So even if it does sell off on the quarter, use that as an
opportunity because over time, if this business can scale in the way that MoneyMark just mentioned,
scale in the way that MoneyMark just mentioned, you know, 50% of the CapEx comes back to them
in terms of recurring revenue over time. So at maturity, it's around 50%. It starts to grow from
30 onwards. So they just have to keep buying, you know, new wafer packs. Again, it's the consumable
element of this. So I don't think anyone can dispute the need for high power and elevated temperature
and voltage burn in for these complex layered now chips, chipsets that need to be tested.
You know, there's just, they're too expensive and there's just no margin of error for failure. And these guys
are leading edge, both in terms of IP and in terms of sales history. And we're talking about
a small company here against what could be an absolutely massive market. I mean, right now,
the run rate for this company in terms of revenues is like 15 million a quarter.
So yeah, it's, I guess it was 18 last quarter, but you get the idea. It's small in the grand
scheme of things. So I do think you want to zoom out to the extent that this thing sells off because
over time, I think there's a lot of traction to this solution.
Yeah. You know, what's interesting there is what you just described in terms of the stacking that you're seeing with the HBMs, the integration of the chipsets into a full system.
These AI data centers are really, they're basically running like one component.
You know, you've got these NVIDIA chips being connected 72 deep acting as a neural network, so to speak.
And if any component of that entire infrastructure from the storage to the transport to the processing power goes down, the whole thing is down.
And that is a tremendous amount of money. Now, when you think about, you know, AIR doing 60 million last year to potentially going to 600 million, that sounds outlandish until you think about that 600 billion number that the godfather put out there for AI infrastructure.
$1,000,000 is one-tenth of 1% of the infrastructure spending to make sure that the components going into your AI data center are not going to stop working for you.
And that's really what it comes down to.
It just comes down to electronic physics and the risk-reward of having subpar components versus taking the time to test them.
having subpar components versus taking the time to test them and from there
it's just a matter of adding up all the components that gets sold each year and
how long it takes to test them and how many testers you need for that to work
I had a company back in the day into vac IVAC and when the hard drive makers
moved from one technology to the other incidentally a stacking type of technology perpendicular
on this company went from 7 to 37 in a few short months because they had the
product that was enabling that technology to really do all that it could
and that's what you're seeing here perfect example of the black wealth
infrastructure enabling new companies to start generating revenue.
There are a few companies I've already been in and out of.
You had Navitas, a perfect example, NVTS.
And they are a new winner in the AI infrastructure landscape because of the Blackwell architecture and what that means for what components are going to go into the data
centers. So great, great points by the godfather there. I'll cede the floor. I'll just make one
last one and then move on. You know, this is like Mind, you know, one of these companies where you've
got world-class technology in a small cap company against an absolutely massive TAM. And as Money
Mark mentioned, you know, there's the
trends in the industry are to larger die sizes that makes each wafer, you know, more expensive.
You've got compound, it's all compound, you know, semiconductors now, you know, this,
these things are being operated in clusters. It's all about increasing the power density
and, you know, squishing these things together. But the physics and the point I think
that Money Mark was trying to make is that irrespective of all this, you still can have
a single point of failure. And that's where their technology comes in. And they are showing
themselves to be leading edge, not only in terms of dye size increase, but working with SIC and now gallium nitrate and, you know, what they're doing in flash memory, they're clearly leading edge.
So, you know, run rate times, doing nine wafers at a time, 3,500 watts each, you know, all this stuff is leading edge technology.
So, yeah, there's not that many companies where you can point to and say,
these guys are actually the leader in their vertical, but yet they still have an adjusted
market cap that's less than 500 million. Yeah. And the reason for that is that there wasn't
really so much of a need for testing compound semiconductors until silicon carbide chips came
out for the EVs. And now you're seeing gallium arsenide and all that.
And it's really that high power component that you brought up that is bringing compound
semiconductors. For those who don't know, semiconductors used to be silicon. You know
the term silicon, but now it's not silicon anymore. Silicon carbide, gallium nitride,
blah, blah, blah, blah, blah. It's compounds, multiple elements within these semiconductors,
and the amount of power that goes through them is much higher.
So it changes that dynamic of how they need to get tested,
how reliable they need to be,
and therefore who the winners are going to be in terms of what it takes to
produce, test, and deploy those into the field.
test and deploy those into the field.
All right. Love it. That was awesome stuff. I love air.
Special place in my heart. Got a nice position in my long-term account.
All right. We'll see.
Dougie, fresh picks.
Here we go. Ready? I'll cover air real quick since we're talking about aehr and uh, yeah
Beautiful run-up earnings tomorrow like you guys are saying and it's in a very interesting spot
It looks like it wants to kind of stay up at that top and have a bounce
It looks like it's almost some healthy pullback today
Um kind of like a coin flip i'm not gonna lie at the moment going into the earnings tomorrow
i'm not the biggest on earnings but that's what it looks like and i'll tell you what idn
money mark is looking really good to start curling back up off that 20 there 552 that
one's looking sweet i'm going to keep an eye on that one and then a couple that i had mentioned
before open door technologies is open and that-e-n and that one's moving
up looking good it's in that channel between the 20 and 50 and has been running up slowly but moving
up here like about two and a half percent today so not bad and dnn is denson mines i'm that uranium
company and that look at that setup guys that thing looks like it's ready to roll i've been
saying that for like the last two weeks it's been setting up and that one looks really good right there.
And another one that I was just looking at that a guy, Michael Anthony mentions on my show, he's he's an interesting guy.
But anyway, Clover Health Investments, this thing's getting ready.
things getting ready it's running up there today over 10 over 12 clov and that is getting set up
It's running up there today over 10 percent, over 12 percent.
has some resistance right there around three dollars it's at 288 but it will get set up and
blast off relatively soon so i'll be keeping an eye on clover health right there clov and that's
what i have for you guys does uh adhr have earnings am i remembering that correctly tomorrow tomorrow
tomorrow yeah tomorrow okay okay i was i was following along most pieces but like i would
you know my adhd kicked in and i was like went down another path real fast came back i was like
i think that was an earnings list that i had written down great all right well we uh we've
had a great hour so, we've had a great
hour so far. We've got a few moments left. We can close up CHOP at any point here. But Ben,
wanted to give you a chance if you had any commentary, Godfather, Money Mark, any last
things, last thoughts maybe we didn't get to. We can go another 10 minutes or so if we need to.
Yeah. Well, AAHR was one of the other stuff I wanted to talk about. We covered that pretty well, so that's good.
I just did a little further research on IINN, Inspire Technologies, trying to figure out
can this grow into that $1 billion market cap?
Can this device be standard equipment across all hospitals?
So still doing some initial research, I want to share some of the conclusions I came up with here with AI.
It looks like it's really a matter of execution at this point because they do have the advantage, it looks like, compared to competitors.
There are a bunch of other devices out there, but they don't allow you to be treated in a non-ICU setting, completely conscious, breathing on your own, right?
So this is the least invasive solution that's out there.
And as far as my AI assistant is concerned, it's a matter of kind of racing between execution
over the next two to three years versus maybe entrenched players trying to quickly catch
up with this device and offer something that's similar.
So that's really a question, right? Can they scale? Can they execute to get this everywhere?
They do seem to have the advantage over pretty much every other device out on the market.
So that's the update on INN, and I'll keep researching that.
It does warrant pretty significant research in my opinion.
I think this could be a potential 10 bagger over here.
So we've got to research it more.
IINN.
All right.
That's all I got.
I'm looking forward to burn our earnings BYRN as well.
Wednesday morning, I got a position.
Oh, I actually even got some trading shares for an event anticipation run into the report.
And I have a feeling it's
going to do well after the report as well. But yeah, that's all I got on my plate.
I haven't had a chance to go through names. Can I run down a few?
Yeah, absolutely.
So look, I wanted to talk about this Coors deal and what it means, because I think there's probably
a lot of folks online that are looking at these Bitcoin miners that are talking about converting some of these megawatts
that are currently dedicated to Bitcoin mining to HBC. We all know it's a better business model,
less capital intense, high margin recurring revenues if you can sign deals for this capacity.
recurring revenues if you can sign deals for this capacity.
So if you look at the course transaction, the CoreWeave course transaction,
and you sort of take out the 590 megawatts that's already under lease agreement with CoreWeave.
And by the way, the stock is down today because people anticipate that CoreWeave post the lockup IPO lockup on September 24th is going to be a lot lower than it is today.
So, you know, right now you're implying with the price on cores, you're implying that, you know, CoreWeave is going to be 120 bucks in Q4 when this deal closes. If you don't think that that's reasonable, then this 24% discount
that you can buy CoreWeave at through Coors is an opportunity for you. But let's just talk about
what this means if you dissect and take those pieces out for the rest of the landscape.
Historically, Bitcoin miners were trading around $ and a half million in terms of enterprise value for operating megawatt.
But that business is getting more and more difficult and the margins are getting skinnier on mining Bitcoin.
So the focus of the market has turned to what sort of enterprise value is implied on the planned megawatts.
And this is why you're hearing all these companies like IRAN and like Cypher, like
Wolf, like BTBT, you know, you name it, talking about their pipelines, you know, what they
have in terms of approved power capacity, where they're at in terms of building out
that infrastructure, where they're at in terms of negotiating deals for,BC leases and all the rest of it. And so what does this mean?
I'll get right to the juice of it. If you look at the implied values for planned capacity,
and again, bear with me here because not all sites are created equal.
Where you're located, what your power contract looks like, you know, are you close to fiber,
are you close to major metropolitan areas? As we all know that the latency, especially for
inference is a really key element. But if you look at the landscape, you know, again, the cores deal is up at 6.2 million
in enterprise value per total plan capacity. But again, you've got, you know, that, that contract
that already exists, the best contract that will ever be negotiated in this space, you know, where
Corweave was paying all the capex up front, you know, plus they were paying 10 billion over 12
years in terms of lease revenue. So they're at 6.2. The IRONs and the
riots of the world are around 1.4 million enterprise value per planned megawatt. And then
you go down and you see Cypher at 900K. I think that the two best names continue to be IRON and Cipher, with the best one being Cipher, not just because of the valuation on a per megawatt planned capacity, but when you actually go in and look at the sites.
I'm very bullish on the Sweetwater site that IRON has and them as operators, and this is really what it comes down to.
You have to have guys that have the talent to build these data centers.
It takes a certain kind of expertise.
So you need to have, A, the uniquely placed sites, and they have it.
Cypher has it with Barber Lake.
They have it with Black Pearl.
And they probably have it with their Stingray site as well.
Most of these are located in West Texas for strategic reasons that I won't get into exactly,
except that there's a reason that Stargate and all these other data centers are being built in Texas.
So the power contracts are some of the most favorable in North America there.
So the upside is still there for the names like Cypher and like Iron,
despite what we're seeing in terms of the price action, of course,
post this transaction, this all share deal with Corweave. So I think that's going to continue to
be a strong theme in the market after today's, what I would call a digestion day. And two other
names that I mentioned before in
essence of time I'll just throw the tickers out again and these are you know what I would consider
both great trading opportunities given where the stocks are trading today as well as good
long-term buys one is this United Natural Foods Inc UN. And this is a boring food distribution company.
But they've been doing a fabulous job in terms of squeezing efficiencies out of their business.
It's a $30 billion run rate revenue company that spits out, you know, 600 to 700 million in EBITDA.
That spits out, you know, 600 to 700 million in EBITDA.
And if you look at their most recent quarters, you know, that EBITDA number was up some 20% year over year.
Free cash flow was up 150%. Adjusted earnings were up some 300%.
Then they had a cyber incident, which is basically going to take out their fourth quarter.
going to take out their fourth quarter. But this month, and stock dropped from $31.50 down to
low single-digit 20s. They're through that. There's going to be some spoilage in inventory
that they had, all the rest of it. But from here on, it's all positive catalysts. There's a claim
and settlement process when it comes to the cybersecurity insurance.
You know, the material impact in Q4, it's essentially behind them.
They're now, you know, shipping product again.
The impairment that's implied by the market, even at the current price, which is clawed back a little bit here at 23, is like a half a billion dollars.
I estimate that that number is somewhere closer to 170. And after the insurance, you know, it could be less than 50.
But, you know, for conservative reasons, I think it's probably worst case scenario around 100 million.
So the catalyst that's imminent here is that they guided to the market, they would update their financial outlook in July. I don't know exactly when that's coming, but the focus
is going to be on the fact that, you know, irrespective of this cyber event, they held
their guidance for 2026. And market being a forward-looking mechanism, we'll start to more
focus on that than something that's transpired already in the past. So from a risk reward basis,
I think that that's one of the most interesting things
on the market.
I see very, very little downside risk.
I think the stock should be trading 27, $28
just based on the fundamentals.
And by the way, one of their key competitors
just got taken over.
And if you use that takeover multiple of seven times EBITDA,
it gets you a number closer to 45 or 50 bucks a share.
So there's your sort of pie in the sky upside for this thing.
But just on operating results, no strategic transaction, should be $27, $28.
And I see very, very little downside in the name.
The other name is, and again, I'll just talk about the ticker and won't go through the whole dynamics because you can replay these small cap spaces where I've talked about it before.
But it's OUST, Oyster Inc.
And they make LiDAR.
There are a lot of guys out there that make LiDAR.
But these guys are particularly focused in the verticals that are
outside of autonomous driving. They are also in autonomous driving. They are in mechanical
mining equipment with some of the biggest, you know, makers of those yellow metal machines.
But they are the very first blue UAS certified 3D LiIDAR for DoD applications.
And this comes into play when the DoD, you know,
orders drones from Anduril or KTOS or what have you.
So the thing that's important to understand here is that this is the best pure play, in my opinion,
on this bridge between, you know, physical AI, you're bringing AI into the physical world, if you will.
So again, $30 million run rate currently, similar to AIR.
TAM is potentially absolutely massive here.
One government contract, and this thing could
quadruple overnight. So tremendous balance sheet, clean capital structure. I love what management's
been doing, both in terms of execution, tying the software and hardware solution together.
It's clearly leading edge. You can see it from the adoption. You can see it from the approvals that they've gotten from the DOD, NDAA, et cetera. So this should be in everybody's
long-term account, in my opinion. The applications are everywhere from robotics to
industrial automation to smart infrastructure, you name it. These are the eyes that are on robots.
I'll leave it there.
Great rundown there, Godfather.
Grab a gap, those thoughts from you.
And if you're in the audience,
make sure you are following all these great speakers up there.
Go in and check them out, of course.
Kind of a good spot for some wrap-ups.
If anybody has some final thoughts, I don't know, Money Mark,
anything that you want to leave with the crowd today?
I know you let us off with some strong thoughts there.
Appreciate that.
Appreciate you joining.
But if you've got anything or anyone else up here, now's the time.
No, we're good. I mean, you know, you saw in the picks that we gave, the specific stocks that we're bringing up, how they are benefiting now from what's happening now versus the skepticism
some analysts out there, even on the professional side have, oh, well, if you guys didn't benefit
from the AI boom two years ago, why are you going to
benefit from it now? Shut up. You have no idea what you're talking about. The infrastructure
world and AI is changing. And therefore, the environment for AI is changing. And now you're
seeing these new names that are taking advantage of all the new things that are happening. That's
going to continue to happen. It's going to continue to happen for the next few months,
the next few years, and the next few months, the next few years,
and the next few decades as things continue to change, change, change in the AI landscape.
Just go to YouTube and search for VO3 videos, and you'll see just a slew of the amazing AI-generated videos that are being made now. I even saw a trailer for a show.
They want to do a whole season of this show. This is somebody that's had a dream for a long time to
make this show but couldn't find anybody to produce it, and he's producing it using AI,
maybe with VO3. It's just going to open up a whole world of opportunities. It's
going to make it a lot cheaper for companies like Disney to produce movies. It's going to make it a
whole lot cheaper for people with great ideas to come out with content. Obviously, getting that
content in the hands of people and then rising above the din of just a slew of amazing things
out there is a whole other problem.
But it's going to benefit the big guys for sure.
Just keep your eyes open because this is just the beginning.
Just like back in the late 90s when the internet was just getting started,
it was just the beginning.
And so stay tuned to what we're bringing up for you guys.
And we'll continue to keep trying to bring you the newest picks
that are benefiting from the trends.
Well said there.
We just got Malaysia, South Africa, Kazakhstan, Laos
all being released on True Social right now as we speak for some tariff activity.
We're back to tariff talk, of course, again here.
Godfather Ben, any last words from you before we shut her down here today?
No, what a great show.
I love this spot.
And we got our 5 p.m. soft picking show with you.
I guess, are we going to do the second half of your picks today?
That's the plan. I've been bumping the chat over and over.
So today we'll do our normal two stocks for the week pick.
And then we're going to do the back half picks today.
So anybody that is on that show, I've asked them to send them in or bring them with them.
We'll do that on the back half of the show.
We don't have anything after the show today.
So we'll make sure and get all those in.
And we'll see.
Oh, by the way, look at that.
I-I-N-N just broke 150.
Wow.
That happened all during this show.
I was talking about it.
Gave the idea here at 135
with a 150 New York term target. And I just broke 150. I haven't sold any yet, by the idea here at 135 with a 150 near-term target.
I just broke 150.
I haven't sold any yet, by the way.
After that research I did live during the show with you guys,
I'm kind of leaning towards holding my position for bigger gains.
But, wow, look at that.
Yeah, absolutely.
Big shout-out to Dougie Fresh, Godfather Moneymark.
And, of course, thanks for co-hosting,ie Fresh, Godfather Moneymark. And of course,
thanks for co-hosting as always, Ben from Story Trading. We will be on Stocks on Spaces here in a little bit. And then of course, tonight, 5 p.m. Eastern, we'll do our stock picks for the week
show. I really haven't even taken a peek to see what's going on with that yet. But either way,
we'll do our picks for the week.'ll see uh how it's going who's winning
uh what's going on there and then beyond that we will also do a second half pick so our year long
picks uh our friend ben up here is just absolutely crushing everyone right now and uh if you want to
find out if he's going to go with the same two picks so maybe that he already picked or if he's
got a couple other in the holster that he's going to bring out for us, definitely tune in. 5 p.m. tonight right here on Wolf Financial.
Big shout out to the Small Cap crew.
A big shout out to the audience hanging out with us today,
going through all these Small Cap on a fairly slow Monday,
a little pullback Monday here.
Just made some new lows on the market here.
And with that, I'm going to sign off.
This will become a recording.
As Money Mark said earlier, you can go back and listen to this at any point.
And look, even our panelists are going back to listen and say,
did I miss a comment here or there? Was there a good idea presented? Definitely check that out.
As soon as I close this out, it will become a recording right here on the Wolf Financial Timeline. And with that, I'm out. We'll see you guys on the next show. Thank you.
