Micron Joins the $1T Club & The Knicks Send MSG Shares Soaring

0:28Consider this comparison. That's pwc.com slash us slash brewai. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, why Gen Z has gotten really into tanning beds. Then there's a new entrant to the trillion dollar market cap club, Micron. It's Wednesday, May 27th. Let's ride.

0:54The Oklahoma City Thunder are one win away from reaching the NBA finals, but they're not even the best sports franchise in the state. The UV Okies, a wee bowling team from a senior living center in Tulsa, went viral on Instagram this week after revealing they've gone undefeated for the last five seasons. And their 2026 campaign has gotten off to a hot start as well, recently beating up on Town Village to go two for two this year. So people are already asking where they can bet on this, and I'm going to guess it's at Bingo Night. Their Instagram page is hilarious because most posts, most content gets five likes, maybe 50 likes if it really pops off.

1:33This one wee bowling clip gets 44 ,332. Imagine being the social media manager and having to explain to your boss that, hey, we're going viral on Instagram. But unfortunately, it's because people really want to bet on Debra rolling a perfect game. I will be the one to say it, too. It's a little suspicious that the UV Okies added another undefeated season to their trophy cabinet right after the enhanced games started letting athletes perform on steroids and performance enhancing drugs. Someone's got to test the Okies because this level of dominance is not natural. I'm going to guess they're on a lot of medication.

2:08Not in that way. Just taking a step. All right. And now a word from our sponsor, LinkedIn Ads. Neil, how do you feel about spending? That it's something I don't deserve to do. Well, what about bowl spend? It's a term LinkedIn coin for when marketers optimize for numbers that look great, impressions, reads, and reactions, but they can't show revenue, which leads to a not-so-great conversation with the CFO. LinkedIn ads helps you invest in what looks good to your CFO. They generate the highest ROAS, 121 % of all major ad networks, reach the right buyers with LinkedIn ads you can target by company, industry, job title, and more.

2:45Spend$250 on your first campaign on LinkedIn ads and get a$250 credit for the next one. Just go to linkedin.com slash MBD. That's linkedin.com slash MBD. Terms and conditions apply. So it's Wednesday, but the market can't stop setting new all-time highs. So we're going to bring you an emergency stock of the midweek segment because there's two companies that deserve it. The first is Micron, which just entered the four comma club after a mega 18 % run up yesterday. The market cap of the memory chip maker briefly touched$1 trillion, thanks in large part to a single analyst forecast. UBS more than tripled its price target from$535 a share to$1 ,625 based on its assessment that memory demand is here to stay, powered by hungry AI companies.

3:33What's crazy is that 12 months ago, Micron was worth just$70 billion. But after A 75 % jump in May alone. It's more than 3x so far this year to add that extra comma to its valuation. Neil, the trillion-dollar market cap club used to be a very exclusive place, but now it's kind of like Soho House. They're letting anyone in. Micron is now the 10th American company to join and the 13th overall. And Andrew Lloyd Webber had it right. This is all about memory. The next stage of the AI race is agents, and agents require a lot more memory. Agents, remember, are those AI systems that will take over your computer and do everything for you.

4:11And they just do a lot of work and require a lot of CPU and memory. So a lot of these companies that produce memory chips like Micron are just going ballistic. I mean, just looking at a stock chart, it's a literal hockey stick. So if you invested in Micron a long time ago, you are sitting on absolute riches. Another big tailwind for the stock possibly is President Trump. Speaking of meme stocks and the president endorsing particular companies on Friday, he said Micron. He was at a rally in New York and he said, Micron, boy, Micron's great. They're investing hundreds of billions of dollars. And it's true.

4:46Micron is investing 100 billion dollars over 20 years. They're building the largest semiconductor factory in the U.S. up in upstate New York. So this company is just a rocket ship right now. Thanks to the memory crunch. Yeah. Memory chips as a business used to be a little bit of a boom and bust sort of cycle. But right now, what analysts are so excited about is it looks like the demand is here to stay. It looks like it's going to be persistent shortages that will be able to charge elevated prices for the chips that they do have. And companies, hyperscalers like Meta, Microsoft, Amazon, all these big tech companies are willing to pay a premium just to get their hands on memory because there is such a supply crunch right now.

5:22And when you have that better visibility into demand, then you can start evaluating the company properly and saying like, hey, earnings are going to keep going up on a consistent trajectory. And now this company looks very undervalued, actually. And we were talking before the show. Micron, despite this crazy run up, is still trading at a pretty low forward price to earnings ratio. It's just about 8.4%. Right now, a lot of analysts think that it's actually going to get closer to 15x. and there's no reason that Micron should trade at a discount, quote unquote, to what NVIDIA trades at, which NVIDIA is the most valuable company in the world.

6:02So in a lot of ways, despite it reaching a trillion dollars, it still looks undervalued compared to some of its peers. Yeah, the S &P 500 trades at a price to earnings ratio of 21. So Micron is just at eight. And this memory chip shortage and memory chip surge among companies is not just an American story, even though 10 American companies are worth a trillion dollars. In South Korea, just this morning, SK Hynix, which is a huge memory chip maker, also reached a trillion dollar market cap in Samsung earlier this year. Another memory chip maker that also makes your phone also reached one trillion dollars.

6:36So it's boosting the South Korea stock market as well, because those two companies account for 40 percent of that entire market. That is insane. I do remember when a trillion dollars used to mean something in this business. It was a big deal when Apple crossed it, when Sadia Ramco crossed it. These were news stories that, I mean, I guess we're still covering it right now, but the fact that there's double digits trillion dollar companies just shows, I guess, the law of compounding returns right there because, again, it used to be like, wow, four commas is crazy. Now it's just another day of the week.

7:09Our second half of the Emergency Stock of the Week segment belongs to Madison Square Garden Sports Group, a.k.a. the owner of the New York Knicks. Turns out that investors like when Mikael Bridges can't miss and Jalen Brunson turns into the best point guard in the league. The stock jumped over 4 % yesterday following the Knicks booking their ticket to the finals and is now up 41 % so far this year. While the basketball narrative is fun to point to and does contribute to its bottom line, MSG is more than just a place for Carl Anthony Towns to show off his range as a passing big man. There's a plan that investors love to split up the Knicks and the NHL's Rangers into two separate publicly traded companies.

7:46Right now, owning stock in MSG means you own a piece of both franchises, but many analysts think that the market currently undervalues the franchises when bundled together. But also, the basketball does help. The cheapest seats to get into Game 3 of the finals at the World's Most Famous Arena are$3 ,700. Some courtside seats are pushing$150 ,000. I don't know if even Timothee Chalamet can afford it if the series goes to seven games. Might have to ask Kylie for a loan. Neil, the Knicks in the finals, a speculative stock market boom around a burgeoning technology. Is it 1999 again? Sure seems like it, except I'm a little older and wiser.

8:26This is James Dolan, the CEO of MSG, just going up to the plate like Babe Ruth, calling his shot and then hitting a home run. Back in January, he gave his first media appearance in two years and said, yeah, we want to get to the finals and we should win the finals. This is sports. This is business and anything can happen. But getting to the finals, we absolutely got to do. and the Knicks have done it and New York is in an absolute tizzy because of it. I think that the pent up demand for the finals is something people are sleeping on because not going to the finals in the world's biggest media market since 99 means not only is the casual fan raring to go and ready to go to these watch parties outside of MSG, but you have celebrities as well.

9:05You have all these wealthy corporate buyers that are willing to splash out hundreds of thousand dollars on seats because a lot of these people have gone their entire adult lives without seeing something like this. So even though it's been a well-written narrative that New York is raring for a championship, I still think people are underestimating demands. The other part of why Wall Street is pretty high on MSG right now is that obviously the playoff run boosts short-term ticket revenue, short-term sponsorships, merchandise, all the things that happen when a lot of people show up to a game. But I think a lot of analysts are saying that, hey, sports franchises are this very valuable commodity.

9:41Even in recent years, they've realized how big and how short the pool is to own a team like this. We've seen valuations just absolutely explode across Major League Baseball, across the NBA. So the fact that you could get the Knicks potentially and the Rangers in one company is something that a lot of people are kind of, their eyes are as big as saucers because those are two very scarce assets right there. And I'm circling the date of June 16th on the calendar. Now, if the Knicks and whoever wins the Western Conference finals play in a game six, it'll be in New York. At the same time, there's going to be a World Cup game over at MetLife Stadium in New Jersey between France and Senegal, which is one of the most hyped first round for group stage matchups of any.

10:30So Madison Square Garden sits right on top of Penn Station. And that's where you need to go to if you want to get to the France-Senegal match. So there's going to be 80 ,000 people going to that match as well as 20 ,000 people, a lot commuting into Penn Station to go to the Knicks game. So that's going to be the cluster of all clusters at Penn Station that day on June 16th. So whatever happens, I don't know if I care who wins the NBA finals, but I just want there to be a game six to see what happens at Penn Station that day. Neil's in it for the logistics. All right, moving on. One of the central promises of the AI revolution is that it's going to make businesses and employees more productive and efficient.

11:05Single workers can take on 10x the tasks with AI by their side. But that premise is running into cold, hard economic reality headlined by what's going on at Uber. Uber's operations chief, Andrew McDonald, admitted over the weekend that the company can't clearly prove that AI spending is actually leading to a better product. It's been an expensive realization to come to. Uber engineers are chewing through so many AI tokens that the company has burned through its entire 2026 Claude Code budget already in May. But this is what lies on the other side of the token maxing philosophy many companies adopted where higher AI uses was treated as inherently good.

11:46Most companies spent the last few years acting like AI was basically free because venture capital subsidized everything. But now the bill is arriving and it turns out running AI at the enterprise level is expensive as heck. Like when the check finally shows up after a night out, this earnings season saw Meta, Pinterest, Shopify, Spotify, and others admit that, yeah, this whole AI thing is dragging on margins rather than enhancing them. Neil, to recap, costs are hitting margins, prices are going up, and ROI is difficult to prove. Not great, Bob. It sure is expensive. 45 % of companies surveyed by the cloud cost firm CloudZero said they spent more than$100 ,000 a month on AI in 2025, which was up from 20 % the year before.

12:30And as McDonald, the Uber executive, said AI can seem free if you're, quote, just a user sitting there coming up with interesting use cases. So if you're just a regular Uber software developer, you're a software engineer at any company, you're just using AI and you're saying, okay, this is what my company provides for me. But then when you're the CFO or CTO of a company, you're looking at the bill and what you're paying for in terms of enterprise software. And you're seeing, oh, my God, I'm paying for Claude Code for my employees. And actually, we just used up our license by May. And then the CEO comes to you and says, so, sir, what do we have to show for all of this token maxing?

13:07And they're like, actually, I don't know if we made the Uber app even better. Then that's a huge quandary. And the quandary for the AI companies themselves, like OpenAI and Anthropic, is that cheaper models are arriving and all of a sudden maybe this product that we're building is a commodity. It's not actually something that has a defensible moat because a lot of Chinese AI companies are coming to companies and saying, hey, we can do 90 % of what Claude Co. does, but at literally 9x cheaper the cost. And that really undermines the whole AI revolution, essentially. If someone can come in and say, yeah, maybe we can't do the upper, upper levels of what advanced reasoning models can do.

13:47But if we can do the bulk of 90 % of what you need, then at a much cheaper cost, then that is a very scary thing for a lot of companies. And we've seen even Google Sundar Pichai saying that, hey, we understand you're blowing through your token budgets way too quickly. they've been highlighting their Gemini flash model rather than their, you know, top of the line Gemini model saying that this is the lower cost alternative. So maybe we're reaching a phase where lower cost is the value prop rather than more powerful. The question is, how much does this ripple across corporate America? Uber CTO, this is kind of big news because he was the first executive to come out and say, hey, we're not seeing much ROI on AI, but we'll see how other companies respond.

14:33And usually there is a herd mentality. CEOs are a little bit of sheeple and they'll say, if somebody goes first, then they give me license to say it. But we're already seeing some rumblings. Duolingo is walking back its decision to use tokens and AI usage as a metric on employee review. The CEO said it felt like rather than being held accountable for the actual outcome, We were trying to just push something that in some cases did not fit. We have Microsoft reportedly canceling some of its cloud code licenses and going to the cheaper alternative GitHub Copilot CLI. And NVIDIA executive just said, for my team, the cost of Compute is far beyond the cost of the employees.

15:13So here we have Mark Zuckerberg and other executives saying, yeah, we need to cut. We need to cut 10 % of our workforce because we have to pay for all this AI stuff. And then we have an NVIDIA guy coming and saying, look, this is way more expensive than our human employees. So it kind of undermines that case as well. But this is really crucial for OpenAI and Anthropic, whose$800 billion valuations are underpinned by them selling enterprise AI to these companies. So we'll see what other companies have to say about their AI usage and whether they can see any return on this investment. I think it's a delicious irony, too, that Uber is the company saying that, hey, AI used to be cheap.

15:50It used to be subsidized by venture capitalists. Now we've got to turn on the monetization channels. That's literally what Uber did throughout the entire 2010s. There was the golden era where you could get a$4 Uber ride, and everyone's like, this is awesome. Then they layer on the cost. A similar thing is happening in AI right now. All right, we're going to take a quick break and come back with a story about tanning right after this. Toby, what if I told you you had to pay me$1 ,000 right now? I'd be in deep trouble. Well, you would be in the same boat as a lot of employees in the U.S., and that can lead to decreased productivity and distractions.

16:24Thankfully, Aflac can help. Aflac pays claims fast, accurately, and fairly at no direct cost to businesses. Plus, Aflac plans can save businesses and employees tax dollars when payroll deductions are withheld pre-tax. To learn more, just head to aflac.com slash morningbrewdaily. That's A-F-L-A-C dot com slash morningbrewdaily. Toby, how are your investments looking these days? Great, because all my investments are of the emotional variety. Well, for those of you who are actually serious about investing, there's Public.com. With Public, you can build a multi-asset portfolio of stocks, bonds, options, crypto, and more.

17:01You can now also create AI agents that can monitor the market, manage your cash, and execute your trades. Just enter a prompt, approve the workflow, and put your agent to work. Head to Public.com slash Morning Brew and earn an uncapped 1 % match when you transfer your portfolio. That's public.com slash morning brew. Paid for by public investing. Full disclosure in podcast description. Did you happen to catch what Emily told us to absolutely not do on next week's episode? No, I missed that. I usually meditate during our team meetings. That's where Plod NoPro could come in handy. It's an AI-powered note-taking device that magnetically attaches to your phone and helps capture and organize real-world conversations from meetings to deep work.

17:42Instead of scrambling to take notes or relying on memory, Plod automatically transcribes and summarizes the discussions, turning long conversations into clear, structured notes and actionable takeaways. It meets enterprise grade standards, including SOC to HIPAA in GDPR compliance. Start at plod.ai slash brew. Use code brew for 10 % off. Anyone else notice the use are looking extra bronze these days? It's a real trend. According to The New York Times, Gen Z has gone very into tanning, both from the sun and tanning beds. and it's worrying dermatologists who've drawn a direct link from UV exposure to skin cancer.

18:18But younger adults seem to be shrugging it off. In a new survey on sun habits from the American Academy of Dermatology, 25 % of Gen Z respondents said they were concerned about developing skin cancer in their lifetime, much lower than 39 % of the general population. 20 % said getting a tan is more important than avoiding skin cancer compared to 14 % of the general group. And in a 2024 survey, one quarter of Gen Z said looking good now was worth it, even if your looks deteriorated later on in life. Surging interest in getting your tan on is driven from the top of American society down and bottom up.

18:52At the top, Health and Human Services Secretary and Snake Wrangler, RFK Jr., frequents tanning beds and recently pulled an FDA rule that would ban minors from using them, citing bodily autonomy. And from the bottom up, a growing number of social media influencers promoting tan maxing and decrying sunscreen have made being dangerously tan cool to their peers. Toby, as the Times points out, This is very curious. For a generation that cares deeply about sleep, doesn't drink or smoke, wants to eat clean, they're adopting what experts consider a very dangerous passion for being barraged by UV light.

19:23I had no idea how powerful tanning beds were. I mean, I knew as a concept, like, how they worked, but UVB exposure is roughly equivalent to equatorial noon sunlight. So that is going to the most sun-exposed place on Earth and sitting there. UVA exposure is roughly 15 times stronger than anything naturally found on earth. And that's what you're getting hit with when you're laying in a tanning bed. The World Health Organization classifies tanning beds as a group one carcinogen. That is in the same category as tobacco, asbestos, and plutonium. That's a tanning bed that the youths are going to. But psychologically, one explanation for this is sort of what you were describing there, that a lot of people are willing to have good looks now and sacrifice down the line.

20:09One therapist described Gen Z as a generation as having a reduced sense of agency over the future. They feel like, you know, climate change is spiraling out of control. Why should we care about anything 20, 30, 40 years down the line when it's all about the here and now? It's kind of like a YOLO mentality. So fascinating the psychological component, but also fascinating at just how dangerous of a pastime this actually is. Moving on, as beef prices skyrocket, some of Texas's most storied barbecue joints are getting smoked. According to The Washington Post, the effect of higher meat costs has been, quote, close to cataclysmal for the more than 3 ,000 barbecue restaurants across the state.

20:45And not even the most beloved spots can survive the bloodbath. Bretts to the west of Houston, Kirby's, Saabar in Fort Worth, and right on Taco and Barbecue in East Texas have all shut their doors recently because the economics just doesn't add up, the Post reported. The only thing that saved Brotherton's Barbecue near Austin was when the owner begged fans on Facebook to lend a hand. They wrote, we were hoping it wouldn't come to this, but we desperately need your help. The hard truth is that we are on the brink of having to close our doors for good. And fans showed up in force. In the past year, brisket prices have shot up 28 % to over$5.50 a pound, forcing pitmasters to make the painful decision to raise prices for customers or close entirely.

21:26And while brisket is the most important cut in Texas barbecue, every part of the cow is getting pricier. Steak prices were up 17 % in the past year, and ground beef is up 19 % to reach a new record of$6.90 per pound, frustrating meat eaters not just in Texas, but across the country. Toby, it's survival mode out there in the barbecue world. I mean, I'm looking at the chart of the price per pound for a pound of beef, and it looks like micron at this point. It really just has accelerated as that cattle herd has shrunk to a 75-year low in the U.S. And it's really bad for Texas, as you were describing, because Texas brisket is, you know, the name of the game down there.

22:04That is what people go to. It's the centerpiece of most menus. And a lot of restaurateurs are saying now they cringe when someone orders brisket because they know that the margins on that are so razor thin for them. So it is fascinating that you don't want people to order what the main event is on your menus. That makes it really hard to run a profitable business. Yeah, they're getting creative. I mean, first of all, here's what you can do. You can raise prices. So it's not crazy to see brisket now at a Texas barbecue joint for$40 a pound. I mean, some are going to$38, but we're starting to see that$40 barrier being breached.

22:40Another thing you can do is just limit brisket to one day a week, which is what some places are doing. as well. And then others is, yeah, you just can't use brisket. They're moving to other cuts of the animal, like beef cheek, which is traditionally used for barbacoa. It mimics the fatty texture of a brisket. So restaurants are just having to get creative because they just can't afford to put brisket on the menu at prices that people can afford. And the issue too is this is political because you want cheaper beef, but you don't necessarily want to import. Trump has been trying to lower beef prices, but a lot of cattle states are saying like, hey, we do not want to allow low tariff beef imports.

23:19We do not want to, you know, undermine our livelihood just to push down beef prices. So it's a little bit of a catch 22 where everyone doesn't, no one wants$40 brisket, but also you don't want foreign cattle coming in as well. So that's part of the issue. My final say on this is I don't like brisket that much. Well, have you had it in Texas? I guess not. I have, I've been to, what is it? Terry Black's in Austin, but I don't even think I order brisket because I love pulled pork. So maybe I'm actually the ideal customer for them because I don't go in, uh, going for the expensive brisket. I really just want a great pulled pork sandwich.

23:56I am saying this. So someone puts out a place and says, you need to go here. I'll tell you right now. Lockhart, Lockhart, South of Austin, uh, on the way to San Antonio kind of, and it just has the best brisket in the world. So that's where you need to go. Lockhart, Texas. There's a bunch of places there and go get yourself some brisket. and I think you will be converted. Look at that. I achieved my goal right here with my own co-host. Let's sprint to the finish with some final headlines. Heart disease, you've been put on notice. A new experimental gene editing treatment from Eli Lilly lowered cholesterol levels dramatically in a new study, raising hopes that a one-and-done treatment could help prevent the leading cause of death in the United States.

24:32It was a small phase one trial, but it turned heads. In 35 patients with genetically high levels of LDL cholesterol, the bad kind, those who got the highest dose saw their LDL levels plunge by up to 62%. While there are plenty of medicines out there for high cholesterol, the main problem is that patients don't stay on them because at least for statins, you need to take them every single day. Sec Theracin, the former CEO of VIRB, which is the company Lilly scooped up for this particular treatment, estimates that just one half stay on their meds for less than a year. That's why some cardiologists are calling this one-shot wonder a game changer while cautioning lots more data is needed before declaring victory.

25:12So the way this works is you get an infusion where a gene editing machine, as they call it, wrapped in fatty particles, delivers into your bloodstream via the liver, and it changes one DNA letter that just totally disables this problematic gene that comes into play when you have these elevated LDL cholesterol levels. The difference between how that works versus what the other medicines on the market currently do is that a lot of these statins just repeatedly block that gene over and over again. This one just turns it off altogether, which is why the one and done approach has a lot of people, their ears perking up.