Musk's next unthinkable!

 If you don't know yet, Musk's xAI is acquiring his another famous company, X (formerly Twitter). For those who don't understand the meaning of this deal, here is what the tech guru can tell you about its great importance for Musk's next unthinkable endeavor: to develop an artificial general intelligence (AGI) probably within one year, the ultimate goal of the AI revolution!

I cannot be more excited about this development as I'm a happy early investor for both xAI and X. It is certainly one of my highest interests to wish Musk's success in this endeavor!

 

 The Everything App

by Jeff Brown

(Excerpt)   So, Musk bought it anyway. And in less than six months, he removed 80% of Twitter’s workforce and improved the performance of Twitter. Within one year (i.e., by October 2023), Twitter, now X, was free cash flow positive less the cost of servicing the debt payments. And last year, X generated $1.2 billion in adjusted EBITDA.

But even more impressive has been the growth of monthly active users (MAU) from 229 million before the acquisition to more than 600 million today – a feat Twitter only dreamed of.

Musk and his team overcame all of the fake spam and bot accounts, restructured the entire business, rearchitected the platform, more than doubled the monthly active users, and made X the single best place for news on the planet.

X is the number one news application in 140 countries around the world.

No news media platform on the planet has anywhere near the reach of X.

And this is why it makes so much sense to combine the two entities – X and xAI

X has now become one of the most valuable sources of training data for an AI model.

And most users of Grok 3 are actually using it through the X software app.

And this is just the beginning…

Most have forgotten that Musk always intended X to be the “everything app.” AI is an accelerant to radically increase the utility of the application. It will enable seamless transactions – many of which will be enabled by agentic AI – that will simplify and benefit our lives.

And when I refer to transactions, I mean it in the broadest sense. X will eventually be able to schedule appointments and reservations. It will be able to purchase whatever we need. In time, it will have a memory of our conversations and also understand our individual preferences and lifestyles. Some of us will think of it as a powerful assistant, and others will think of their Grok as a friend.

Either way, we won’t want to live without it. Google serves no purpose now. Grok is already so much more.

Despite all the fear, uncertainty, and doubt, Musk made all of his investors – and those who loaned X money – whole. All seven banks that loaned Musk $13 billion for the original transaction sold their debt off and were paid a pretty penny in interest payments over the two-plus years that Musk was turning around X.

And those that bought that debt are looking even better. X is worth a whole lot more now, given the firepower that xAI has – both in terms of capital, as well as the success of Grok 3.

xAI’s acquisition of X is an all-stock transaction, which means that equity holders of X will now receive equity in xAI. Incredible. They have gone from holding equity in an amazing turnaround story, which would have generated great returns in a couple of years, to holding equity in the company that will be the first to develop artificial general intelligence.

You heard that right. I’m throwing down the gauntlet.

xAI will become the first company in the world to develop an artificial general intelligence (AGI), and it will happen within 12 months.

Bulls are gathering energy for next week!

 

Market Trading Update (by L Roberts)

In yesterday’s note, we discussed the dollar’s impact on international and emerging market investments and why investors should consider taking some profits. Today, the next opportunity may be a rotation back into U.S. stocks, particularly following the Federal Reserve’s more “dovish” stance. The reduction in Quantitative Tightening and additional rate cuts is a reversal toward monetary accommodation. That reversal, while minor, was a tailwind for stocks on Wednesday and Thursday, but even more notable was the rally in the bond market as the Fed returned to being a potential buyer. That support gave buyers a reason to return to the market.

As noted previously, the market has been on a vital momentum “sell signal” since late February. Since then, the decline has worked off the previous overbought conditions, and now we are closing in on a reversal of that “risk off” period. As shown, the market’s momentum is improving and close to triggering a “buy signal,” with relative strength improving as well. Furthermore, the market completed a very normal 23.6% retracements of the rally from last year’s lows. The market needs to conquer resistance at the 200-DMA, but with recent improvement, a break above that resistance should trigger a round of “short-covering,” pushing asset prices higher. If that occurs, retail and professional investors will likely start chasing the rally, providing further support for the rally back to the 50-DMA.

Here is my pre-market note today. Although SPX is far from challenging the 5700 level today, considering it was under drastic selling pressure most of the day (about -60+ points at its worst down to test 5600), the last minute buying to push it up above the water at closing is a reflection of the strength of the bulls. I think chance is high to see 5700 being taken and surpassed early next week!

By the way, TSLA has a great week, especially today when the overall market was not doing that great.  Near term, I think it is heading to $300, probably within the next 2-3 weeks. If you haven't seen yet, here is why:

• Tesla: On the way to $1000 

• Here is my short-term trade with TSLA by selling puts:
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