A Bullish Sign for the AI Trend
The Weekend Edition is pulled from the daily Stansberry Digest.
Trump Accounts have reached a new milestone...
Last year, President Donald Trump signed a bill establishing Trump Accounts – investment accounts for American children born between January 1, 2025, and December 31, 2028. As part of the bill, the government deposits $1,000 into each account upon activation, and parents can contribute up to $5,000 per year.
The accounts have been expanded to cover all children under 18, but those born between the dates above are the only ones eligible for government deposits.
So far, folks are piling in...
According to the White House, there are around 70 million Trump Accounts. And in a post on X, Treasury Secretary Scott Bessent said that those accounts have now passed $8 billion in contributions.
Soon, these accounts could be expanded to cover anyone under 40, according to a report from Business Insider. That would open the door to another 100 million potential Trump Accounts.
That's a lot of money set to flow into the stock market...
Back in a February Digest essay, we wrote about the "relentless bid" from passive investing and 401(k) accounts.
Put simply, folks are blindly putting money into the market every two weeks. As Extreme Value editor Dan Ferris explained in a June 2025 Digest...
This is also referred to as passive investing, where investors don't actively research the stocks they buy. Instead, they passively own index funds, without regard for their attractiveness based on fundamentals like valuation or quality. Investors simply buy the same stocks every paycheck without any research whatsoever.
In his February State of the Union address, Trump said that the government may look into matching 401(k) contributions up to $1,000 annually for workers whose employers don't contribute.
Trump Accounts are just another example of the relentless bid. They represent even more money flowing into passive indexes and the market.
This isn't to say that we won't see pullbacks, corrections, and bear markets. But the rise in passive investing – boosted by these partially government-funded accounts – ensures that the stock market will always have a bid.
Switching gears, SpaceX's earnings gave worried AI investors a jolt of excitement...
After the market close on Tuesday, we got the second earnings report from mega-cap tech giant SpaceX (SPCX). Revenue surged 161% to $14.6 billion – coming in well ahead of Wall Street estimates. And SpaceX reported profits for both net income and operating income for the first time as a public company.
The major U.S. indexes jumped the day after the report. But, as with all companies tied to AI, SpaceX is also spending like crazy...
SpaceX's capital expenditures ("capex") more than tripled year over year to more than $19 billion. So far in 2026, SpaceX has spent $48 billion on capex – up from $14 billion in the first nine months of 2025.
With an operating cash flow of $13 billion in the first nine months of 2026, SpaceX has a free-cash-flow deficit of $35 billion.
SpaceX burned through $25 billion in the first six months of this year, meaning it had a free-cash-flow deficit of about $10 billion in the third quarter. (SpaceX doesn't break out its cash-flow statement into quarters, but we can estimate the number using its first-six-month cash-flow deficit.)
At the end of the third quarter, SpaceX had about $53 billion in cash on its balance sheet. If the company maintains this year's average quarterly burn rate of $12 billion, it would run out of cash in the fourth quarter of next year... and then need to raise capital again.
And then there was the earnings call...
CEO Elon Musk said that he believes there's "a lot of merit" to merging SpaceX with another one of his companies – Tesla (TSLA).
Shareholders of both companies would have to approve, but that may not be a problem... Musk controls 85% of SpaceX's voting shares and about 20% of Tesla's.
It wouldn't be the first time Musk combined two of his companies. As Rob Spivey from our corporate affiliate Altimetry wrote in the Digest in June...
He has used his massive voting power to his advantage in the past. For example, he caught the ire of Tesla shareholders after he "bailed out" another one of his companies, SolarCity, by acquiring it into Tesla for $2.6 billion.
He just pulled a similar maneuver by selling xAI into SpaceX at a $250 billion valuation... and selling social media network X (formerly Twitter) to xAI before that.
Musk was asked about the proposed merger after Tesla reported its own earnings on Wednesday. He declined to go into detail, saying that he felt like he was "tap-dancing through a minefield."
Musk recently said that SpaceX could have an annual revenue run rate of between $500 billion and $1 trillion by the end of next year. The company would have to rapidly accelerate its growth rate to reach those figures.
In a post on X, Substack contributor P Equity Research estimated that SpaceX would need to have at least one quarter with $125 billion in revenue next year to hit just the low end of Musk's goal. That would be nearly 9 times the record revenue the company just reported.
Only time will tell if SpaceX can meet Musk's projections or if this is just another way for him to drum up excitement for his companies.
Tesla is in Whitney's "Stinky Seven"...
In his free daily e-letter on Monday, Stansberry's Investment Advisory editor Whitney Tilson updated readers on the Magnificent Seven.
While he is bullish on Alphabet (GOOGL), Amazon (AMZN), and Meta Platforms (META), he remains bearish on Tesla. As he wrote last October...
With its tax-credit expiration in the U.S. and competition from Chinese manufacturers, I expect Tesla's vehicle sales to collapse.
That's why Whitney added Tesla to his "Stinky Six" list of stocks to avoid (which he has since expanded to seven). And his view hasn't changed, as he wrote on Monday...
With the stock down to around $365, it's trading at 210 times this year's estimates and 168 times next year's (which I don't believe).
These are absurd multiples for a company whose top line has stalled out and profits have tumbled by 70% in the past five years.
In short, Whitney's view "remains the same as it has been – stay away from the stock."
While Whitney has expressed caution over AI becoming a "bubble" – mainly because of circular financing and the absurd valuations of startups like OpenAI – that doesn't mean there isn't money to be made.
And the recent sell-off in AI-related stocks has given investors the perfect opportunity to buy in.
That's why Whitney is sitting down with legendary tech analyst Jeff Brown from our corporate affiliate Brownstone Research to talk about what could be the biggest investment opportunity of 2027.
It involves a new AI superchip that could change daily life as we know it. Jeff and Whitney say the firm behind it could generate 1,000% gains... And they're sharing all the details in a free online presentation on October 28. Sign up to reserve your free spot right here.
All the best,
Nick Koziol
Editor's note: Jeff has served as an executive at multiple tech firms that are now powering the AI build-out. He says the goal for every chip is to make it powerful enough to replicate the human brain. On October 28 at 10 a.m. Eastern time, Jeff and Whitney are doing a deep dive into a new AI superchip that is blowing away the competition... and opening up a major opportunity for investors.