Special Guest: Caleb Silver, OpenAI's $1 Trillion IPO, & Meta's FAKE $16B Tax Bill

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1:27firm that December's decision remains a toss-up in Trump's trade agreement with China. Now, be sure to stick around to learn more about NVIDIA becoming the world's first$5 trillion company, something we'll dive into later. Robert, let's dig into our first story. Definitely. OpenAI's$1 trillion IPO. OpenAI, the company behind ChatGPT and Sora, is reportedly preparing for what could be the largest IPO in tech history. According to Reuters, They're laying down the groundwork for a public offering that could value the company at up to$1 trillion. Now, right now, OpenAI is rumored to be doing about$20 billion in annualized revenue.

2:07So that is up from just a few billion last year. But the rumored plan is to raise around$60 billion from investors, likely in 2026 or 2027. So don't be thinking about you can go to your public app and go invest in OpenAI right now. It's not an IPO anytime soon. We'll see it either next year or the year after. Now, the capital would fund massive data center buildouts, custom AI chips, and further expansion of their enterprise platforms. Now, ChatGPT, Robert, here's a fun stat, has over 800 million weekly active users. Could you imagine reporting those weekly active user data on an earnings call and Sam Altman just talking?

2:44That's just wild to me. It is just so crazy to think of a company that big is still private. And we're deep in the AI boom. NVIDIA is now a$5 trillion company. Microsoft owns roughly 27 % of OpenAI, which means their stake will be worth nearly$300 billion if they IPO and the public markets are hungry for direct exposure to the rise of artificial intelligence. So what does this mean for you and your money? It means that a trillion dollar valuation equals OpenAI now being priced in the similar realm of Apple and Amazon, despite being nowhere near their level of profitability. Their compute costs remain massive.

3:27Competition for AI is everywhere. And regulators are foaming at the mouth trying to figure out how do we make money off OpenAI and clamp them down from growing even more. So while this could be a once-in-a-generation IPO, it's also a reminder that valuation doesn't equal value. For investors, the smarter move right now might be looking at the picks and shovels instead. The chip makers, the data center REITs, and the cloud providers powering the AI productivity boom. Now that brings us to our second headline news story here, which is the Fed cutting rates but still remaining undecided about further rate cuts.

4:02So Federal Reserve Chair Jerome Powell delivered a clear message for investors earlier this week, who assumed that rate cuts would just be on cruise control toward a third cut now in December. He said, not so fast. Instead of hiding behind his normal cryptic and vague language, Jerome Powell went out of his way on Wednesday to amplify that there is current division taking place in the rate setting committee, alluding to the fact that another rate cut in six weeks might not happen. In his own words, they said they are far from it. What the Fed will do next depends on which of the two economic narratives prove to be more accurate.

4:39Number one, AI investment and productivity boom will continue to power business and consumer spending. Or number two, the effect of higher rates combined with changes in trade and immigration finally catch up to the labor market. Unemployment higher if the Fed stops cutting. So here's our take. Jerome Powell is out of a job starting in May of 2026. Him and President Trump never really liked each other too much. They always kind of butt heads. So we think that Trump will put in a yes man person, right? That's going to continue to cut interest rates dramatically as we head into the back half of 2026, as well as turn on that quantitative easing engine, money printer, whatever you want to call it.

5:20So now the real question is, Robert, what does this mean for you and your money? Yeah, definitely. Every single time the Fed cuts interest rates within 2 % of all-time highs and the U.S. economy avoids a recession, the S &P 500 rallies by double digits throughout the subsequent 12 months. We think this time is no different again, assuming we avoid an economic recession. With AI productivity going through the roof, we've begun to see hundreds of thousands of middle management jobs get cut all across the board. And let's see how that shakes out over the coming quarters and years. Now joining us to help make sense of all of it is Caleb Silver, the editor-in-chief at Investopedia.

6:00Caleb, welcome to our new Friday episode, The Rich Habits Radar. I'm so excited to have you here. We're actually hanging out in Nashville. Was it last week we were together? That was fun, dude. That was fun. That was fun. So good to see you in Nashville and hang out even just for a few minutes. But what a great city. What a great town. And I enjoyed our time together. But good to be with you guys as always. I enjoy your show so much. Thank you so much, man. Now, you sent us a ton of insider info from Investopedia on investor sentiment, AI bubbles, the economy, highly searched for stocks, fun information like that.

6:32But before we dig into that behind the scenes data, we want to get your take on the Fed, right? We just saw the rate cut, but Jerome Powell made it clear that they're not on a rate cutting frenzy right now. And that despite seeing the unemployment rate tick a little bit higher, they're still weighing their options. So what's your take on what the Fed's doing at the moment? Yeah, I think a lot of us and a lot of consumers and investors were expecting the Fed to cut another time in December. But Fed Chair Powell basically saying that is not a foregone conclusion, not at all. I think that's when a lot of us spit out our coffee during that press conference.

7:05What does it mean? It means that the Fed is not sure what to do next because it has a lot of this uncertainty. It's being pushed and pulled in two different directions based on its mandate. First part of that mandate is price stability, control inflation. Inflation is around 3%. The other part is make sure we're at full employment, which is around 4 % unemployment. And we've been ticking higher. And even though we're not getting jobs reports because the government is still shut down at the time we're talking, the Fed knows that the job market's slowing. We're hearing it from big companies like the Amazons of the world.

7:35We're also hearing it anecdotally from private payrolls. And we also know the replacement rate in the labor market isn't adding up right. More people are leaving the labor market than are joining it. So the labor market's in a soft spot right now, but inflation's in a decent spot. That's why the Fed doesn't want to commit to future moves. That's why we're going to be in this range for a little while. But next year, I expect rates to go down and to the right. I like the sounds of that. Down and to the right for interest rates. I'm here for it. Now, what I thought was pretty interesting to kind of observe is like as we look around the world and look at all the different central banks from all these different countries, we've seen over 300 rate cuts over the last 24 months, which is the highest number of rate cuts on a rolling two-year basis since the great financial crisis.

8:15And despite this, the United States is just kind of starting their rate cutting cycle. So I guess the main question I have for you when it comes to this is, do you think that Jerome is behind the eight ball when it comes to cutting interest rates? Well, I know Jerome Powell gets all the attention because he's the one that's got to face the music, face the press conference, wear the purple tie and talk to the rest of us. There are 12 voting members of the FOMC that all weigh in on this. And actually, Chair Powell saying yesterday in the press conference, they're split. And there's an even split within the Federal Reserve right now of people, governors who think that we should be cutting more aggressively to stave off even more weakness in the labor market.

8:51And those that say, no need to cut more. Inflation's kind of, we've just controlled it after a few years of inflation kind of running sky high on us. So I get that there's this dissension within the Fed and maybe they're a little bit late, but the economy's actually in decent shape. People don't feel that way at all, by the way, except for the very wealthy who feel like everything's fine and everything is fine if you're very wealthy. But most people, when you look at consumer confidence, when you look at consumer sentiment and people's outlook for the economy, don't feel like things are going that well.

9:18But if you look at the headline numbers, actually, it is. You know, that reminds me of what downtown Josh Brown shared recently on his Instagram. I think it was a stat that 50 percent of consumer spending is coming from the top 10 percent earners. More, even more than that? No, he's right about that. It's the wealthiest consumers doing the spending, flying first class, going to Positano, going taking in the Broadway show, spending money on experiences. And the rest of the economy is just really getting by paycheck to paycheck, even worse for those caught in the middle of the government shutdown.

9:54So let's jump into some of this data here. You've asked over 800 readers of Investopedia's website a ton of cool questions. So let's kick off with this first one. The first question you asked them was, how do you feel about the market right now? Walk us through some of these responses. Yeah, that's the vibe check. And we've been surveying our newsletter readers. These are our newsletter readers who get our newsletters every single day. So they're engaged. They're invested. A lot of them are investing on their own behalf. They tell us right now they're cautiously optimistic, but they feel like something's bubbling in there.

10:25And what's bubbling in there is a bubble in some of the assets that they own, but also this uncertainty about the economy. But we've been living with that for the better part of a year. We've actually been living with that for the better part of several years. Yet they remain invested because all-time highs will keep you going back into the market. And they don't know what else to do but keep buying the same stocks they buy every couple of weeks through their 401ks, Roth IRAs, and defined contribution plans. So just kind of looking at this data here, right? 59 % of your readers said that they are optimistic in general about the stock market.

10:56We've got 13 % saying they're hesitant. 21 % saying skeptical. I like the word skeptical a lot, while only 1 % are panicked, but 4 % saying, hey, I know when to walk away and now's that time. So it's really interesting to see the bifurcation there between like essentially 60 % of people feeling good about it, the other 40 % kind of being on their heels a little bit. I personally, after seeing the earnings of the Googles, the Metas, the Microsofts of the world, seeing that all of that CapEx spending, right, hundreds of billions of dollars, like I feel pretty good about how things are trending up until the right at the moment.

11:31But again, a lot of it is more than just earnings. It also comes down to the economy, the jobs and how everybody's spending money. And it's all very important to keep in mind. Yeah. And when you look at those responses, it sounds like the American investor at different age groups feeling optimistic about the future. Some people wanting to protect the gains that they've had over the last really 20 years when you think about all these different bull markets we've been in. But there is this skepticism, this growing fear that maybe things have gone a little too far too fast. And if the economy is not as strong as a lot of them believe that it is, how can the stock market be doing this?

12:04Even though we know they're very different things, a lot of people equate them as one and the same. Yeah, that's where I was going to go with this, Caleb, is that so many people, because we live in this world now where everything's in our face 24-7 between Instagram and X and everywhere else, that people just overreact to these headlines. And, you know, these bulls are very loud and so are the bears. So we always have to, like, make sure people don't have these knee-jerk reactions over every single headline that they see. And I mentioned this on our live last night in the Rich Habits Network that I was looking through X for a couple hours yesterday on my flight.

12:38And I felt like about 60 percent of the information in there was either heightened or a blatant lie because there's so many initiatives and so much manipulation in the markets. So I really like your takeaway on this, Caleb. Yeah. And people are sensitive to that. But at the same time, these are self-directed individual investors who are educated. They know what's going on inside their portfolios, yet they've also been kind of loading up on the same heaviest, biggest stocks in the stock market for years and years. And they have really big positions in the Nvidia's of the world and the Microsoft's of the world.

13:08We like to ask them, and I think we have it in the results there, what are the top 10 stocks in your portfolio? And guess what? It looks just like the top of the S &P 500 for the most part, which shows you that we're all kind of concentrated in the places where we think that there's a bubble. We're afraid there might be a bubble, but we're not afraid to get, we're afraid to get out of it. Yeah. Well, they've just had such outsized returns for the past few years. It's hard to get out of it. But I think that's one of the cool things Austin does really well is he tells people, hey, when you're getting that large of a return in one sector, whether it's NVIDIA and Micron and AMD and all them, you can always take some money away from that, put it in these basket of low cost ETFs that we talk about and give yourself a little more safety from greater volatility.

13:52So I think that's an important part for everyone to understand. And that leads me into the next question. You guys also asked, do you think any of the following sectors of the stock market are currently overvalued? And this blew my mind, but 61 % of respondents said AI-related stocks are overvalued. And that really does check out. So walk us through that. Were you surprised? Do you agree? And what is your take? Those stocks, AI stocks in particular, and big tech stocks, mega cap tech, are overvalued when you look at the standard valuation metrics that we grew up using to evaluate stocks. Price to earnings, price to sales, price to future sales, all the great metrics and the terms that are on Investopedia.

14:35These are the classics. And yes, these are above levels that we saw in the 1999 internet bubble and maybe even bigger than what we saw in the telecom bubble and in the railroad bubble. But this is a very different type of industrial and technological revolution where the gains long term are so vast. And the amount of spending that's going on, tens of billions of dollars a quarter by some of the biggest companies in the world, a lot of them getting punished for overspending right now. But they are, for them, it's a zero sum game. So they're going to keep spending until they can control the AI ecosystem and all the data and information on us to sell us more things.

15:10And so this looks like this is the beginning of something very big versus the Internet bubble where we were unsure. We knew the technology was important. We knew that medium was very important. But there was a lot of things that came and went very quickly, like Pets.com and other stocks like that that fooled us. There's going to be some in this wave and in this mania as well. That's what happens when you have a big industrial or technological revolution. There will be little bubbles that pop, but maybe not a big, giant, above-the-ground swimming pool that somebody takes a samurai to, so to speak.

15:40Yeah, we completely agree with that sentiment, right? We think that there absolutely are these, you know, like the no revenue nuclear energy companies out there that are 18, 19,$20 billion in market cap, not going to name any names, but there are some names I'm looking around like you guys aren't making money, but you're a multi-billion dollar company. That seems a little bubblish, right? So there's definitely that happening, absolutely. But to your point as well, I don't think this is a Google and NVIDIA and Microsoft and Meta, these names that make up the top 5, 7, 10 companies in the S &P and the NASDAQ, they're actually delivering earnings.

16:17We just also heard from Jerome Powell, right? They said, no, this is very different than the dot-com, right? These companies are actually generating revenue and profits. Now, I've got the chart shared on the screen right now in the podcast for people that are watching. But for those of you who are just listening to the show, I'm going to walk you through the results as to, again, that question is, do you think any of the following sectors of the stock market are currently overvalued? 61 % said AI-related stocks. 55 % said mega cap tech. But this one surprised me. 49 % said cryptocurrency right now is overvalued.

16:51You think about it looking around, like if it's Bitcoin or Ethereum or these other altcoins, we haven't seen that blow off top. We haven't seen that crazy, you know, 2022 NFT or 2017, whatever, kind of just parabolic growth in the sector. I wonder why essentially half of the respondents over here were just saying, no, I think crypto is overvalued. That's interesting to me. Yeah, just even the word overvaluation when you're talking about crypto almost doesn't make sense because what are you valuing it against, right? Right. There is it's hard to do that when there's no underlying asset like like the dollar or gold, except for the stable coins.

17:26But I just feel like they think, especially those that don't own it and have been skeptical about it, feel like the numbers are crazy still. And they've gone gotten bigger and bigger every single year. I mean, Bitcoin has returned some five million percent, you know, over the last 14 years or so since it came on the scene. We've never seen an asset like it. So I think a lot of people say, well, that I don't understand why it's worth anything or why any of these cryptocurrencies are worth anything. I think so. By that standard, they're always going to be overvalued. The relative to other asset classes, especially in the last couple of years, that has been a little bit of a tighter correlation, except for the parabolic rise that's happened over the last 10 to 15 years.

18:02That's very different. Now we know it's a mature asset, especially Bitcoin, and it's becoming a bigger part of institutional investing. It's becoming a bigger part, and it's going to be opened up to our 401ks. Really, the door is wide open for the big cryptocurrencies out there. So if they think they're bubbly now, just wait a couple of years. Yeah, it's crazy to me because if you do any searches, because I still think we're pretty early to crypto, not saying we're going to have this huge blow off top, but I think we're pretty early. But if you read up, it clearly says that only 14 % of U.S. adults even own Bitcoin.

18:33So when you think of it from that perspective, I feel like we still have a long way to go. And how I've kind of looked at the market recently is you see so many retail investors, I feel like, are stuck over here putting all their money into AI instead of crypto because now they have a different option that's fun and sexy. But meanwhile, all of the big banks and hedge funds and everybody are all in on cryptocurrency and putting in hundreds and hundreds of millions of dollars. So it's kind of a slippery slope on where is the crypto market going and when. Yeah, well, also this administration is very favorable towards crypto and being close to power.

19:10Proximity to power has been the best recipe for returns across the capital markets, period, in 2025. And I expect that to be the case for the next several years. If companies are on the wrong side of this administration, they're not doing well. If industries are on the wrong side of this administration's agenda, they're not going to do very well. But you see this administration getting very involved with the private sector, with cryptocurrency, with a decentralized finance. And those sectors have been booming really for the past seven or eight months. Now, this next question is actually my favorite one that you asked your readers.

19:39It's if you had to buy one stock today and hold it for the next 10 years, which stock would you choose? And the number one response was NVIDIA, which makes a ton of sense to me because I truly believe that we are just rebuilding this earth with AI in mind. And NVIDIA is going to continue to benefit from that. But do any of these names surprise you? I'm looking at it right now. I've got it on screen for our people who are watching. We've got NVIDIA, Microsoft, Google, Walmart, Amazon, Apple, a little bit of Berkshire Hathaway, Tesla, and Palantir. But we also see some names like Intel, IBM, JP Morgan, Oracle.

20:16Meta was actually a very small one here. But Boeing, right? Do any of these names surprise you, Caleb? I think it really represents, you know, the age of the readers at Investopedia, 18 to 80. You can see the older investors there have been holding on to a lot of these dividend-paying stocks. And God bless them, dividend-paying stocks are great for years and years, and they're not willing to let go of them. You also see some people there that have probably owned Berkshire Hathaway for a long time and are definitely not willing to let go of it and want to hold it forever because it's been the source of great wealth creation probably for them and their families for the past several decades.

20:46So that really represents, to me, the age of readers. But what it also represents to me, when you look at the stocks that they own today and the stocks they say they would own 10 years from now, buy and hold for 10 years, they are very similar. There's a lot of overlap there, which just tells me even more that we just keep piling in to the same stocks, the same indexes year after year, week after week. Every time we get paid through our 401ks or through our IRAs or Roth IRAs, we buy the same things. We buy the same ETFs. We buy the same index funds and we buy the same stock. So, yeah, you got a lot of concentration.

21:17You get overweight in a lot of these sectors, but they become almost like dividend plays in and of themselves or value stocks in and of themselves because they have delivered the returns. And when you look at the stocks and the sectors that are delivered the best returns over a 10-year treasury or over your money in the bank, it's been those names, but it doesn't necessarily mean it'll be those names 10 years from now. But we stay loyal to the same stocks. And just this year alone, we've missed out on some of the best performing stocks in the market. They are not on that list except for a couple of them.

21:47So, Caleb, the final question you all asked that I wanted to highlight was, if you have an extra 10K right now, where would you most likely put it in? And they could choose from options like cash savings, pay down debt, cryptocurrency, things like that. And a whopping 19 % of respondents said individual stocks, which tells me the retail investors' risk appetite is definitely growing. And interestingly enough, since we just covered cryptocurrency, only 3 % of respondents said cryptocurrency. Maybe we won't get that year-end blow off top like we were expecting, as it seems as if retail has moved into these individual stocks like AI that we discussed.

22:24But what is your take on these results? And most importantly, were you shocked about the 3 % for cryptocurrency? Now, that sounds like the retail investor in America today. We are less exposed than other countries to cryptocurrency. So, you know, the people that are early adopters and the people that have gone to over the past couple of years, still a relatively small percentage of the overall investment pool out there. But it doesn't surprise me because we like to ride with the same horses that got us here. And the same horses that got us here, a lot of us, a lot of individual investors over the past five years, 10 years, 20, 25, 30 years have been big individual stocks.

22:59You have done very well by buying the indexes and you've done very well by buying the biggest ETFs in the market. But you've done even better if you said MAG7, big, you know, fabulous 10, fantastic 10, and pick the 10, 12 biggest stocks in the market that have been growing their profits the most and that have the highest revenue per employee. And that's, I think, one of the most important metrics right now in the market right now. We're looking for efficiency and profitability. If you've owned those stocks, you have generated a lot of wealth and you're unwilling to let go of it. So this question about what you would do with an extra$10 ,000, the ultimate discretionary investment question, and the fact that most people say they would still buy individual stocks doesn't surprise me at all.