Elon Musk’s Rebellion; Circle IPO

Author

Ram Ahluwalia
June 08, 2025

Here’s a preview of what we’ll cover this week:

  • Macro: Trump/Musk feud, Trumponomics, Economic Outlook, Meme Stocks,  

  • Market: Lumina Calls, Foreign Demand, IPO Issues

  • AI: Mary Meeker on AI Trends, AI Milestone Timeline, Sundar on AGI, OpenAI’s compute ceiling

Lumida in the Spotlight

Non-Consensus Investing podcast

AI is flipping the script in venture capital. Sky-high valuations. 10x efficiency gains. Entire teams replaced by code.

Lumida CIO Ram Ahluwalia sits down with Sheel Mohnot to unpack how seed-stage investing is evolving — and what most VCs are missing.

Catch the full breakdown on our latest broadcast — listen here on Youtube. Or look up Lumida Non-Consensus Investing on Spotify or Apple.

Or check out the curated breakdown if you’re short on time.

Lumida on the Road

Our CIO Ram Ahluwalia will be attending the following events:

  • Coinbase – June 12 

  • Permissionless IV – June 24

  • Miami – Hosting a private dinner. Let us know if you'd like to join. 

Macro

Musk-Trump Feud: Parallels with Jack Ma

Elon Musk and Donald Trump are publicly feuding on X over Musk’s role at DOGE and Trump’s spending bill.

Steve Bannon has called for probes into Musk’s citizenship, drug use, and contracts, even suggesting deportation.

This echoes China’s 2020 crackdown on Jack Ma after he criticized regulators.

Ma faced probes, Ant Group’s IPO suspension, and public absence.

Musk’s clash stems from MAGA faction tensions, with Bannon labeling him a “techno-oligarch.”

Ma’s takedown was state-driven; Musk’s is a populist push within Trump’s camp.

Both faced threats to their business empires—Ma via regulation, Musk via potential contract losses.

Musk’s U.S. protections and platform give him more leverage than Ma had.

The bottom line is the Elon / Trump spat doesn't impact fundamentals (earnings or inflation). It's more of a scare for animal spirits.

But, it is a place to be cautious purely on technicals (not fundamentals)

Trumponomics Preview

This is not the first time Trump is citing metrics like the ADP survey. 

He has cited the often overlooked small business NFIB survey.

He is also focused on short term rates. 

Most political leaders stick to the Jobs report and the occasional inflation read. 

The obvious read through is that Trump is metric oriented and wants the economy to win. 

(That’s also true when a bad number comes out and it’s Biden’s economy in that nanosecond.)

We are not a fan of tariffs (outside of China). 

Nor a big fan of wartime deficit spending. 

The point is - Trump’s north star is around policies that will drive economic growth. 

If there is a negative shock from a policy due to a flawed model (such as Navarro poking around the Oval Office), Trump has shown he will respond to market feedback. 

The bottom line is you should have a bias towards assets that are growth oriented and benefit from a higher inflation trend and lower value of the dollar.

Economic Rollercoaster: Growth Now, Bargains Later

GDP growth is robust this quarter but we expect weaker GDP next quarter due to consumer response fluctuations.

Consumers are front-loading spending to preempt tariffs. We can see that in the auto industry. 

We expect we'll get a whiff of inflation over the summer. But a one-time shock and this could set up for better prices. 

Market weakness may follow. Presenting an opportunity to buy up the weakness.

Non-farm payrolls remain stable, signaling a strong economy while most are underestimating economic resilience.

Stablecoins

(1) advance US dollar hegemony

(2) enables the US Treasury to attract deposits on-chain

(3) enable the US to compete with China by paying talented entrepreneurs in USD (weaning them off the China system)

(4) Enable on-chain decentralized banking to compete with old school legacy bank

(5) Lowers the time and cost of remittances and 3% interchange charges that thinly capitalized merchants pay

Really hard to understate the transformative potential of stablecoins.

Market

Lumina Deals 

Last weekend, Lumida highlighted included Norwegian Cruise Line and HPP. Both rallied significantly this week.

Between the two, we prefer NCLH, the latter is a longer-term idea and more speculative (we have < 50 bps there whereas NCLH we have points of allocation).

We favor cruise lines for their insulation from inflation and tariffs, driven by baby boomer spending.

Google’s rating is climbing. TSMC now has a PE over 16x.

These names were undervalued weeks ago, and others remain attractively priced, making a bear market unlikely. 

High-beta, animal-spirit stocks face risks, with softness in bitcoin noted.

Put in a word, nature is healing.

Yes, markets are approaching all time highs - and we’ll get there.

But, it is accompoanied by earnings growth. Positioning matters here. Owning expensive and over-valued names like Costco is not a great idea, or Netflix.

We expect rotation into sectors like financials. There are pockets of over-valuation and excess in animal spirits, which should take a breather.

We bought Citizens Financial Group (CFG). Notice its 4% dividend yield. We won’t do a full write-up on CFG here — but we like its New York Metro expansion, quality of management and EPS growth. It has an 18% shareholder yield.

The fact is, it’s not too hard to find a dozen banks with similarly attractive metrics. This is why we like financials.

Healthcare is cheap, financials are enjoying deregulation, technology is growing EPS, consumer discretionary is coming out of a thaw, energy prices are coming back.

When you put all of that togther and consider their impact on the S&P market cap, you have a bull market.

Note: June 16th is when the buybacks largely stop due to earnings blackout period. These periods are often marked by lesser equity returns.

Note 2: The first week of the month you often see bullish activity due to inflows from pensions and other programmatic buyers.

This week, one of the names we bought was Abercrombie & Fitch; its stock has improved, and we believe the worst is over. The stock has a low PE ratio and double digit EPS growth driven by the Hollister brand.

Lululemon’s 18% drop this week on lower guidance doesn’t interest us - the stock is still too expensive relative to an asset like ANF and facing competition from cheaper brands like Athleta or TikTok D2C.

On housing — the 10-year yield is stabilizing, giving mortgage rate a chance to stabilizing. We think mortgage rates have topped.

That means housing-related names may be bottoming.

We’re monitoring but hold no positions here. All to say, you have a recipe for mean reversion, catch-up trades, and categories like small cap value to perform.

By the way, we heard Nasa Director is looking at alternatives to SpaceX? Isn’t RocketLab (RKLB) a natural beneficiary? This is a highly volatile idea so position size accordingly, and if it breaks its MAs consider exiting.

There are many names out there that are mispriced. We’ll share more in the coming weeks.

Housing

Homeowners are moving less, but renovating their homes more.

My wife has made peace with the fact that I have no desire to move after locking in a 30-year fixed 2.5% mortgage.

I am on this graph somewhere.

Meme Stocks

The term ‘meme stock’ used to be pejorative (unprofitable, high momentum, prone to failure). 

Now ‘meme stock’ means you have a 10x on your hands and a community that buys all dips. 

Meme stock is now the highest honor.

The best is finding stocks that have a ‘kernel of truth’ (eg, a disruptive story, a mispricing, etc) and have the potential to go meme. 

Our latest meme stock is CoreWeave - we bought this pre-ipo.

Past: DAVE ASPI APP CLS HROW ETHE (all of these initiated near the lows in the last year)

We may have found a new potential meme stock.

We are accumulating it now and probably will share more details in the coming weeks.

Good to balance momentum with high Buybacks + FCF, ROE, Quality at a reasonable price. 

When to sell high momentum?

Parabolic extension or break below key MAs (like the 20 day).

Foreign Buyer Fade

There has been a drop in foreign demand for US equities.

Was this a tactical one-off or a preview of a larger shift in appetite?

We are of the view that it is a one-off shock but can't say that with high confidence.

Europeans are upset with Munich and Trade War 2.0. 

But, what investment alternatives do they have to American earnings growth and the American consumer?

Really, the only alternative for a European isn't their home market (except for spots like European banks). 

The opportunity is emerging markets (international value).

Emerging markets also benefit from a weaker dollar from excess U.S. fiscal spending, and stronger commodity prices.

Is the IPO Market Rigged?

The IPO process is a rigged game favoring Wall Street clients that are most active with investment banks sales & trading desks.

Wall Street allocates IPO deals to its preferred customers - that usually means players that are very active in prime brokerage.

The bookrunners also have a lot to do with the cutting back of allocation to customers and favoring of TradFi firms.

At Lumida Wealth we are able to secure access to Brad Jacobs QXO - a building supply materials roll-up.

We got in at the same price as Sequoia Heritage, Duke University, Walton family at $9.14 (first outside money in). 

Quite the cap table! 

(We were able to secure a slot through anticipation and hustle.)

But, our original allocation was cut back 90% due to the investment banks favoring their preferred (active) clients.

We managed to secure our fill on the secondary market. But, the upside was not nearly as good as the original $9.14 price.

All of this stems from the fact that Wall Street will favor Millennium, Point72, Citadel, etc.

When the banker tells the CFO 'we are placing this in long-term hands' that's BS.

Incidentally, QXO is now at $19 .

Sequoia, Walton's, Heritage, etc are up 100% in less than one year.

AI

Every year, Mary Meeker has a slide deck that is an epic. Hundreds of slides.

I went through those to identify choice takeaways.

The main headline is the AI transition is here and not stopping anytime soon.

Some highlights:

The pace and scale of change in AI is unprecedented—technologically, economically, and geopolitically.

Usage, user growth, and revenue are all trending sharply up. So is creator and enterprise spending.

Capex is leading the charge—NVIDIA projects an overall $1T in spending, up from $300B. Nation-states like Saudi Arabia, China, and France are entering the buildout.

ChatGPT has grown 8x since October 2023. What matters next is active usage—idle subscriptions signal churn as users test alternatives.

This wave isn’t just hype—these are paying users. Unlike the dotcom era, platforms like Meta and Google are showing real ROI on infrastructure.

NVIDIA’s compute capacity has grown 100x over six years. The curve is steep—how long it can hold is an open question.

Inference costs have dropped 99.7% in two years. That’s great news for scale, but a challenge for AMD compared to NVIDIA’s dominance.

Token generation is now 105,000x more energy-efficient than a decade ago. Costs are falling fast—accessibility is rising. That’s a win for productivity and economic growth.

Model performance is converging fast, leading to commoditization at the LLM layer. Differentiation will come from the app and distribution layers—Meta and Google stand out.

Creative destruction is here—job roles and skill demands are shifting quickly.

The range of use cases continues to widen. Startups can launch faster, with fewer constraints—OpenAI shipped what Google couldn’t.

Despite the momentum, 52% of U.S. adults say they’re more concerned than excited. Four out of five haven’t used AI at work.

Capital is not the constraint anymore—$212B in Capex from the Big 6 in 2024, up 62% YoY.

AI Milestone Timeline

Sundar on Limits

OpenAI hits compute Ceiling 

Lumida Hiring: Join Our Team

We’re seeking talent to fuel our mission. 

Lumida is growing quickly and we’re excited about our vision to transform wealth management with AI.

All roles are in-office in Wayne, NJ.

Open roles: 

Apply at lumidacareers.com. Be part of the future of wealth creation.

Meme of the week

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