Allbirds to NewBird AI, Ozempic Partners w/ OpenAI, & Sydney Sweeney

0:00This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed Sponsored Jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate C. According to Indeed data, Sponsored Jobs have four times more applicants than non-sponsored jobs. So go build your dream team today with Indeed. Get a$75 sponsored job credit at Indeed.com slash podcast. Terms and conditions apply. We're the Hartford, with decades of experience insuring millions of unique small businesses. When it comes to your small business insurance, one size absolutely does not fit all.

0:39Get a quote or find an agent today at thehartford.com slash small business. Welcome back to the Rich Habits Radar, a Friday episode of the Rich Habits Podcast, where every Friday morning, we're coming at you with the biggest headlines impacting you and your money. This episode is brought to you by VCX, the public ticker for private tech. My name is Austin Hinquitz, and I'm joined by my co-host, Robert Croak. The three things sitting at the top of our rich habits radar this week include Allbirds' AI rebrand, Trump threatening to fire Jerome Powell, and Ozempic owner Novo Nordisk partnering with OpenAI for drug discovery.

1:17And be sure to stick around to the end where we're joined again by the legend himself, Ron Santella, the CEO and managing partner of Equable Shares, to get his veteran perspective on this recent 10-day market rally and see if it's legit or if it's just a bunch of pixie dust. All right, Robert, let's dig into our first story. Well, the first story should keep everyone's attention because we're going to talk about Allbirds. We all know them as the eco-friendly wool sneaker brand that once dressed almost all of Silicon Valley. And they announced on Wednesday that they're just changing its name to New Bird AI and pivoting its entire business to buying high-end servers equipped with AI chips and renting out access on those chips and servers.

2:03This is crazy. And the news sent shares up 582 % in a single day from Tuesday's close of$249 to$16.99. Austin, this is a crazy one. It's definitely crazy because this is the same company that went public in 2021 at a$4 billion valuation, became the unofficial shoe, to what Robert was alluding to, of the tech industry. And then they just lost it all. Their stock price, I think, was down like, I don't know, 95%, 98 % since all-time highs back when they first IPO'd. Their market cap heading into this week before this pivot was only$40 million. and the reason they now need a new name in the first place is because they had to sell their old one just to make some money.

2:53Yeah, they struck a deal last month and Allbirds sold all of its IP, including the brand name and the shoe designs, to brand licensor American Exchange Group for$39 million. So from billions and everyone rushing in to buy their stock all the way down to$39 million. And American Exchange Group's other brands include Ed Hardy, Aerosols, which tells you exactly which kind of bargain bin acquisition this really was. Yeah, so to fund this AI pivot, we've seen the stock go up like crazy. So what really happened here? The company went out and they raised$50 million in convertible debt from an institutional investor, which for context, like$50 million, that doesn't sound like a lot.

3:33It's not. $50 million in the AI infrastructure world is like peanuts. Corweave is spending$35 billion this year. Nebius is spending$20 billion this year. Allbirds is trying to show up to the arms race with a pocket knife. Analyst Dylan Cardin at William Blair put it perfectly in this note that he published to his clients. And I quote, a$50 million investment is a drop in the bucket. This is, by any measure, a Hail Mary by Allbirds. Yeah, it's crazy. You go from shoe company to AI company. I guess I might pivot from finance to becoming a piano consultant on piano lessons. I don't know, but it's just crazy.

4:15And this is the same playbook we saw during the crypto frenzy when an electric bike maker, a nail salon chain, a Japanese hotel operator, and even a Florida toy maker all raised tens of billions of dollars by rebranding as crypto treasury companies. most of which now have collapsed alongside with the obscure tokens that they bought during the hype and pivot that they did. Yeah, even after this massive pop that Allbirds experienced, the shares of stock are down 90 % from that 2021 IPO. Shareholders still have to approve the asset sale to American Exchange Group, the financing, the name change, all that stuff.

4:51The meeting's taking place on May 18th. That's the big day for Allbirds, Newbird, Whobird, What the Heck Bird, This is Crazy Bird. Get me a big bird, right? Get me out of here. Some Sesame Street type stuff. Robert, what does this mean for you and your money? It means I can't stop laughing because it's so true. I watched yesterday. Everybody pile into the stock. And there's going to be some winners that are like, all right, we're going to play this meme rally all of a sudden. But this really is the clearest bubble signal of the year so far. When struggling companies can 6X their stock in a single day just by slapping AI in front of their name and raising a rounding error's worth of capital relative to what actual players are spending, you are watching peak bubble froth in real time.

5:36So be very careful with small cap AI names right now. The Russell 2000 has a lot of companies that are one press release away from pulling an Allbirds type situation. Bubbles don't end because of one hype story pops. they end when the flood of hype stories stop working. An eco-friendly brand is still 6X-ing on a name change. It just doesn't make sense. When these pivots stop rallying, that's the signal the rotation out of speculative AI names is starting. And most importantly, stick with the picks and shovels trade. NVIDIA, the hyperscalers, utilities powering the data centers, power generation companies, the actual infrastructure layer.

6:16These are the companies that benefit regardless of which headline-chasing zombie retailer pivots next. Yeah, Robert, I think we were talking about some of those in the Rich Habits Network, and I even think we mentioned them on our recent podcast episode. But anyway, if you're confused, DTCR is the GlobalX Data Center Digital Infrastructure ETF. That's up 25 % year to date. POW is the, let's see here, this is the VistaShares Electrification Supercycle ETF, ETF 33.6 % year to date. That's the picks and shovels that we're talking about. I'm putting money in these ETFs every day of the week instead of a new bird, AI, whatever, right?

6:58So when a wool sneaker company can add half a billion dollars in market cap by changing the name, market's telling you something. You should listen. Next story is Trump doubling down on the DOJ probe of Jerome Powell saying, and I quote, I'll have to fire him. In a Fox Business interview that aired on Wednesday morning, President Trump confirmed that he's not dropping the Justice Department's criminal investigation of Fed Chair Jerome Powell. And instead, he threatened to fire Powell if he doesn't resign when his term as chair ends next month. His exact words were, well, then I'll have to fire him, OK?

7:31But here's the problem with that, Austin. Fed officials are protected by a federal law that narrowly limits the reasons a president can remove them. And the Supreme Court is literally weighing the bounds of that law right now in a separate case involving Trump's attempt to fire a different Fed official. And while Powell's term as chair ends in May, he has the option to stay on as a voting board member until 2028, which is exactly what he has already signaled he's going to do. Powell said last month that he has, in a quote, no intention of leaving the Fed until the investigation is well and truly over with transparency and finality.

8:10The DOJ probe itself is examining whether Powell lied to Congress about a Fed building renovation. Prosecutors visited the construction site on Tuesday. So this thing is active and happening right now. Powell has called it a pretext, part of Trump's long-running campaign to influence how the Fed sets interest rates. Now here, Robert, is the political twist that matters most for the markets. Republican Senator Tham Tillis has said he won't support Kevin Warsh, Trump's pick to replace Powell, until the Powell probe is resolved. And so Trump's response to that in the interview was, he might not, but that's why Tillis is no longer a senator.

8:48Tillis is retiring but is still sitting in his seat. Senate Banking Chair Tim Scott went on Fox Business on Tuesday and predicted the probe would wrap up within weeks. But when pressed on what he was basing that on, he admitted that he had nothing. I mean, we have probe this, war that, tariff this, and we wonder why the markets are all over the place. So, Austin, tell our listeners, what does this mean for you and your money? Yeah, so there's, I guess, you know, two scenarios. Scenario one is Trump actually tries to fire Jerome Powell. This triggers a Supreme Court fight, crisis of the thought of Fed independence, potentially a rapid spike in the long end yields as foreign buyers begin to reconsider what risk-free rate actually means.

9:33Maybe gold rips, the dollar weakens, equities get completely repriced lower. That is scenario one. Scenario two is Jerome Powell stays like he's signaling he wants to. Warsh doesn't get confirmed, and we end up with a lame duck Fed chair inside a deeply divided FOMC going into the back half of the year. This policy paralysis right when tariffs and war-driven inflation pass-through is hitting the hardest. It's a really weird thing, really hard pill to swallow right now. And I looked on Polymarket, 41 % chance, zero rate cuts in 2026, which is the exact opposite of what we were pricing in in December of last year.

10:14It was like a 3 % chance, right? We had like two or three rate cuts that were being priced in, which makes me think that's so weird. The stock market's back to all-time highs. So like what's going on? So I don't know. This is very interesting to me as an outsider looking in, just trying to decipher and demystify what's really going on behind the scenes. Like I think, I don't think the markets yet are really pricing in the turbulence and the uncertainty of what could happen here with Jerome Powell and Kevin Warsh. Yeah, I think it's part of why the Rich Habits podcast and the Rich Habits Network are so important.

10:44We talk about it all the time as preparing people and trying to read through all the tea leaves and help people understand what's really going on. So for your portfolio, I feel like there's two moves here. First, own some gold. Because if Fed independence gets questioned by the bond market even just once, gold gets repriced higher very quickly. Second, quality duration. If this whole thing sparks yield volatility, high quality bonds and dividend aristocrat equities are going to outperform speculative growth names that are priced for perfection because of speculated rate cuts. Bottom line, the markets have been trained to ignore the Trump-Paul drama, and this week should end all of that.

11:25Austin, before we jump into our third story, support from the show comes from VCX, the public ticker for private tech. For generations, American companies have moved the world forward through their ingenuity and determination. And for generations, everyday Americans could be part of that journey through perhaps the greatest innovation of all, the U.S. stock market. It did not matter whether you were a factory worker in Detroit or a farmer in Omaha, anyone can own a piece of the great American companies. But now that's changed. Today, our most innovative companies are staying private rather than going public on the stock markets.

12:00The result is that everyday Americans are excluded from investing and getting left further behind, while a select few venture capitalists reap all the benefits. Until now. That's why we've been excited to introduce VCX, the public ticker for private tech. VCX by Fundrise gives everyone the opportunity to invest in the next generation of innovation, including the companies leading the AI revolution, space exploration, defense tech, and so much more. So visit GetVCX.com for more information. That is GetVCX.com and carefully consider the investment materials before investing, including objectives, risks, charges, and expenses.

12:40this another information can be found in the fund's prospectus at getvcx.com this is a paid sponsorship robert we talked about vcx in the most recent live stream we hosted inside the rich habits network and the interesting part about it is you think about the market net asset value that vcx listed on the new york stock exchange at about 18 19 20 or so at the time but the interesting part about that and we all know anthropic makes up about 21 percent of vcx market net asset value. And when it listed at$18,$19,$20 a share, it was assuming that Anthropic was a$300-ish billion company. As you guys might have seen just this week in the headlines, Anthropic shareholders and Anthropic, like the company, they are turning down money at an$800-plus billion valuation, which means that I, and I'm not going to really get into the details here, but I highly encourage all of you, now that VCX is around$80 a share, hopefully none of you guys chased it up to$500 something with these day traders that were trading it and bidding it up.

13:44But now that it's come back down to reality, or starting to rather, here at$80 a share,$79 a share, I would really encourage you to think about what is the updated MNAV of VCX, knowing that Anthropic is well on their way to become a trillion dollar company. OpenAI is well on its way to be a trillion dollar company. Databricks, all of these names inside of VCX has been dramatically repriced in the secondary markets just over the last two or three months since VCX got on the scene and listed with the NYSE. So do your own research, use Claude, ChatGPT, Gemini, whatever you want to do, ask it questions about repricing of the MNAV with VCX with these secondaries and you might be surprised.

14:23So our third story here is Nova Nordisk partnering with OpenAI to accelerate their drug discovery. Novo Nordis, which you guys know as the Danish pharma giant behind Ozempic and Wegovi, announced earlier this week that they're partnering with OpenAI to integrate ChatGPT's models across their entire operation. The goal of the partnership is to use artificial intelligence to analyze massive data sets, speed up drug discovery, and cut the time between research and delivering treatments to the patients. And the key here is this isn't a pilot in one department. It's a full company integration. Pilot programs are launching an R &D manufacturing and commercial operations right now with full AI integration across the business by the end of this year.

15:12The company's CEO framed it like this, and I quote, integrating AI in our everyday work gives us the ability to analyze data sets at a scale that was previously impossible, identifying patterns we could not see and test hypotheses faster than ever. And Moderna is using ChatGPT Enterprise across its business and advancing its MRNA work with OpenAI as well. Sanify and Formation Bio are also partnered with OpenAI to accelerate drug development. Novo also teamed up with NVIDIA last year on an AI-powered drug discovery, and the pattern is clear. Big Pharma is racing to bolt AI into every single stage of the drug pipeline.

15:54And I think it is great, great news for the future of healthcare, but also for these companies that we're watching. Well, Robert, why don't you break down for everyone, what does this mean for the future of healthcare? Yeah, for me, it's two takeaways. First, this is bullish for big pharma broadly, not just Novo. If drug discovery timelines compress the companies with the biggest R &D budgets benefit most because they get more shots on goal. Eli Lilly, Novo Nordisk, Pfizer, Merck, the ones spending 10 billion plus per year on R &D are going to be the winners. Second, keep watching the picks and shovels.

16:30Austin and I talk about picks and shovels all the time. Every one of these partnerships, Novo with OpenAI, Moderna with OpenAI, Novo with NVIDIA runs on GPUs. So drug discovery workloads are enormous. NVIDIA's healthcare AI business is quietly one of their fastest growing verticals and no one is talking about it. So if you own NVIDIA for AI, you're indirectly owning the pharma AI thesis as well. Yeah, Robert, as I think about it, Nova Nordisk, they make the world's most valuable drugs for obesity and diabetes. So when a company that's already winning decides to put AI at the center of their operation, I think that's a signal about where the entire industry now is headed and the compounding benefits are going to finally start.

17:12I love this. I'm so excited. Maybe if I'm lucky, I'll get to live to 100. Who knows? Me too. Man, I'm excited as well because with AI, all of this technology, there are a lot of claims out there in the medical field and in the pharma field that if we stay healthy for another five to 10 years, AI is going to help solve all of the problems that cause aging and heart disease and all these things. So I'm excited as the elder statesman in the Rich Habits podcast that I could also live 30, 40 more healthy years, which is just incredible. Now, Robert, as I alluded to at the beginning of this episode, we are joined by Ron Santella, CEO and managing partner of Equible Shares.

17:51He is a Wall Street veteran, going to give us his perspective on the market rally. But before we jump to that, let's go to ETF Central for a second. ETF Central, great website, great platform to learn all things ETFs, fund flows, expense ratios, total performance, because we'd like to give you guys a little bit of a highlight as to what are the best performing ETF themes and segments and the worst performing every week. So let's jump to this one real quick. So I'm looking at their homepage right now under the segment section, movers and shakers, best performing this week, top three, fintech up 11%, AI and big data up 11.5%, and blockchain up 14.5 % this week.

18:29And the worst performing ETF sectors of the week include volatility down 6.8%, U.S. energy down 7%, and energy as a whole down 10%. But the interesting part, Robert, is the energy segment as a whole is up 65 % year to date, despite that 10 % pullback. Now that we've heard from ETF Central, let's jump to our interview with Ron Santella. And joining us today to share their perspective about all things going on in the stock market. Welcome back to the podcast, Ron Santella, CEO and Portfolio Manager of Equible Shares. Happy to be here, guys. It's been about two weeks, and I appreciate coming back today.

19:08We are thrilled. It's been a crazy two weeks, right? The markets have experienced a record 10-day bounce back, with the S &P now closing over 7 ,000 for the first time in history just earlier this week, a very different environment from when you were on the show just a couple weeks ago. So you're in these meetings every single day with the biggest investors on Wall Street and around the world, frankly. What's everyone thinking about this V-shaped recovery, bounce back rally? And in your opinion, is this a durable, something to get excited about for 2026? Or maybe we have some cautiously optimistic?

19:43Sure. So I talk to 20 or 30 people a week, and I think the consensus is we've seen this movie before. If you just circle back to 2025 and we had that precipitous drop in the stock market, D-shaped recovery, obviously a different set of circumstances this year, but over a 21-day period, we saw about a 10 % drop in the market. It took 15 days to make it back. So I think people are kind of getting used to it, Austin, is the answer to the question. But I think what underlies it is that for the veteran Wall Street investors, they know ultimately the market is about fundamentals. and they say the market is already looking beyond the war.

20:24They're looking at the earnings, looking at the economy. And I think that's the bet that they're making. I agree. Actually, to that point, Ron, I saw a chart that was shared on X. And essentially, as we think about earnings seasons that happen throughout every three months here, when all these publicly traded companies report their profits and their earnings to their investors, we see earnings revisions, expectation revisions, which is Wall Street analysts saying, we're seeing the writing on the wall. We think profits are going to be higher or we think profits are going to be lower. And I saw this chart on X.

20:58I'll pull it here and put it on screen right now so everyone can see here in post-production what I'm looking at. But essentially what the chart shows is on a 10-year average, the earning revisions we've seen so far year to date are way higher than normal. And so if you were asking me, why was this only a 10 % pullback versus perhaps, you know, we think back to the Trump tariff tantrum, April of 2025, which was 18%, 20%, 22 % pullback. I think it's because of what you were just talking about, the fundamentals kind of holding the bottom there and saying, okay, sure, we can overreact, but let's look at these profits.

21:32Let's look at these earnings per share revisions and get excited about that. Yeah, I agree with that. I think, as we discussed on the last show, this will be six consecutive quarters of double-digit S &P earnings growth. That's a strong market. If I look back to last year, Austin, I feel like there was maybe a bit more uncertainty because it was really just day to day coming up with numbers, whether it was 30, 40, 50, 100 percent tariffs, possibly. By the specter of war is not desirable. I do feel like early on investors did know that there would be an end to the war, to the conflict, and we would probably come out a winner in one way or another.

22:08But, yeah, I agree with your statement for sure. We were just talking about how Trump is threatening to fire Jerome Powell if he doesn't step aside in May. So what do you think investors should be thinking about right now as it relates to Fed cutting, Fed maintaining, or God forbid, an interest rate hike in 2026? And also, second part of the question, what do you think about Kevin Warsh? So I'll start with your second question, Robert. A, he has experience. As you know, he's a governor. He certainly has the pedigree. If you just look at his education, Stanford, Harvard, he's a smart guy and he's done some real things.

22:44He also has Wall Street's ear. He's worked with some of the biggest investors on Wall Street. I think the question about Kevin Worsh is going to be, will this be the hawk that we had in 08, or are you going to see a dove? And so he's going to have a line to walk when he is confirmed, and he will get confirmed. In terms of expectations for the Fed, Kevin Worsh will most likely follow what the Fed dot plot was at the end of 25. The Fed was looking at two, possibly three rate cuts. So I don't see anything right now that would derail that. I think the open question with Kevin Warsh is going to be really two things.

23:18First one's going to be his view of shrinking the balance sheet, because as you know, I'm sure many of our listeners know, he's been on record many times not favoring a large balance sheet at the Fed. But he's also aware of what happened in 2019 when the Fed didn't just let positions roll off, they actually sold positions. And it really reminded us that there's two sides to the Fed's balance sheet. There's the asset side, which we talk about, but there's also the liability side, which are bank reserves primarily, right? And so I think he's aware of what happened at that time in the repo market.

23:52But for me, the larger open question about the new Fed chair, as he's getting confirmed, is will the Fed maintain that level of independence that gives the market confidence? Because it's obviously been well communicated that this administration was very involved in picking this chair. They made their feelings well known about the path of interest rates. And so I think people will be viewing him and saying, is he going to be his own man when he runs the Fed? And I think that's really important. I completely agree. You know, when we were talking about this story, Robert and I sort of laid out two scenarios.

24:24Scenario one is Trump actually tries to fire Jerome Powell, triggers a Supreme Court fight, crisis of the Fed independence of what you're just talking about, potentially a rapid spike in long end yields. Foreign buyers begin to reconsider what is risk-free. What does that actually mean in this environment? Gold probably rips, right? Things like that. Or scenario two, which is Jerome Powell stays, Warsh doesn't get confirmed, and we end up with this lame duck-fed chair inside a deeply divided FOMC going into the back half of the year. Speaking of the back half of the year, I'm up on Polymarket right now, and I'm looking at the odds of how many rate cuts could come in 2026.

25:06And the number one highest odd outcome is zero at a 41 % chance right now being priced in to buy the bettors on Polymarket. Does that surprise you? It actually doesn't surprise me when you look at the labor markets are still fairly strong. I know when I was here two weeks ago, we looked at February number. That wasn't great. The March number came in, as you know, very strong. So the two months combination was fine. Economic growth is still running at over 2 % on a real rate. I would have a hard time making a case for a rate cut myself at this point. I think a lot of people look at the economy.

25:41And so it doesn't surprise me you're seeing about 40 % of people say no rate cuts this year. So now let's kind of keep going on this conversation. How do you think investors should be evolving from the traditional 60-40 portfolio strategy as its effectiveness, as we sort of saw here with the volatility we just experienced in the stock market, the bond market, things like that. As that 60-40 portfolio strategy effectiveness continues to erode given the instability of the bond market. Sure. I think one of the biggest differences, Austin, from 15, 20, 25 years ago is investors now have many more choices of how to direct their capital.