Data Really Is the New Oil

Alphabet is raising more money to meet AI demand... Debt, equity, and a big private deal... The AI boom looks more and more like a hot commodity cycle... South Korea's 'Melt Up'... What to make of mega-cap IPO season...

Here comes $50 billion more for AI – from just one company...

Yesterday, after markets closed, Alphabet (GOOGL) announced it's raising $80 billion through a new share offering to "expand AI infrastructure and compute."

About $30 billion of the capital raised will go toward a large bookkeeping expense: meeting tax obligations as the company changes how it vests employee shares. The remaining $50 billion will help meet "unprecedented customer demand" for AI, Alphabet said.

Berkshire Hathaway (BRK-B) has already committed $10 billion in a private placement.

Berkshire is buying $5 billion of Alphabet's Class A shares (GOOGL) and $5 billion of Alphabet's Class C shares (GOOG) – both at a 6% discount to yesterday's closing price.

Berkshire, which formally turned day-to-day control from legendary investor Warren Buffett to new CEO Greg Abel at the start of 2026, began building a position in Alphabet in the third quarter of 2025. The position has done well so far – up more than 50% from the end of that quarter.

With the additional $10 billion investment, Alphabet is now Berkshire's third-largest stock holding – trailing only Apple (AAPL) and American Express (AXP).

According to Stansberry's Investment Advisory lead editor Whitney Tilson, who has long been bullish on Alphabet, it's a good investment. "Alphabet continues to be one of my favorite stocks," Whitney wrote in an analysis of the deal in his free daily letter today.

Whitney only wishes Berkshire had done it earlier, since Alphabet has crushed the S&P 500 Index's return since the end of October 2019, when Whitney wrote this article urging Buffett to buy Alphabet instead of Apple.

The stock is up nearly 500% since then, compared with Apple's 393% gain and the U.S. benchmark's 150% gain.

While this new plan from Alphabet includes a lot of big numbers, folks don't have to worry about this offering seriously diluting existing shares. At a market cap of $4.41 trillion, $80 billion only represents about 2% of available shares.

The bigger story we want to highlight is why Alphabet is issuing new shares to fund its AI aspirations...

The cash for AI investment has to come from somewhere...

As we highlighted earlier this year, technology companies like Alphabet have lost their status as "capital efficient" giants because of their heavy investment in AI. Put simply, their spending pledges are eating up all their cash flows... and then some.

Alphabet generated $174 billion in operating cash flow in the 12 months ending March 31. But it has already forecast up to $190 billion in capital expenditures ("capex") for 2026. So it likely can't cover its spending plans with its operating cash flow.

That means Alphabet could be free-cash-flow negative (operating cash flow minus capex) for the first time since it went public in 2004.

From the February 9 Digest...

Only one of the four big companies – Microsoft – is expected to be able to cover its capex with the cash it generates from its operations this year. That means the rest are going to have to come up with the money another way – like with new debt or share offerings.

In the case of Alphabet, the company raised $25 billion through a bond sale last November. It raised more than $30 billion by selling a 100-year bond in February. This was the tech industry's first "century bond" issuance since 1997, during the dot-com boom. And now Alphabet's looking for another $80 billion.

Altogether, AI-related companies have raised more than $140 billion in investment-grade debt this year. That accounts for nearly half of all new investment-grade debt this year.

For non-investment-grade ("junk") debt, AI-related companies have raised $21 billion – 38% of new debt issuance.

This is a trend that will continue in the coming months...

Alphabet, Amazon (AMZN), Meta Platforms (META), and Microsoft (MSFT) alone have pledged more than $700 billion in capital spending this year.

Again, that money has to come from somewhere if they can't cover it with their cash flows. And as the companies take on debt, they have shorter leashes when it comes to showing investors the payoff from the heavy investments.

Right now, those four stocks don't have absurd valuations on a price-to-earnings (P/E) basis. Amazon is the most expensive at 30 times P/E, only slightly higher than the S&P 500's 28 times valuation.

But with lower cash flows from their businesses becoming more capital-intensive, investors may decide that the companies deserve lower multiples if their AI investments aren't generating any income. (Which, as we discussed last week, isn't happening yet.)

However, sentiment around AI and related stocks continues to be red-hot... Today, the broad semiconductor ecosystem was higher again, with the iShares Semiconductor Fund (SOXX) up around 5%. That makes for a 90%-plus gain since the end of March alone.

Another AI story is playing out across the Pacific...

We've written previously about how Taiwan is an important piece of the global semiconductor and AI supply chain. It's the primary source of these products.

But another East Asian country is also critical to the tech boom. And if you think things are buzzy in the U.S., this country's stock market shows that things can always get wilder...

We're talking about South Korea. South Korea's KOSPI Index – which tracks the largest companies on the country's exchange – has already more than doubled so far in 2026. Over the past 12 months, the index has more than tripled.

It's all thanks to AI – specifically, memory chips.

South Korea accounts for more than 60% of the global memory-chip manufacturing market. And two of the largest memory-chip makers – Samsung and SK Hynix – represent more than 50% of the KOSPI's weighting.

Those two stocks alone have been on a tear... SK Hynix is up about 250% this year, while Samsung is up 180%.

As our colleague Sean Michael Cummings wrote in the December 1 edition of the free DailyWealth e-letter, memory chips were in an "overlooked shortage." That has sent prices soaring, and Big Tech companies are turning to SK Hynix and Samsung (among others) to lock up long-term supply.

This looks like the top of a cycle...

These stocks have shot higher in the short term without the promise of sustained long-term growth...

Sean went on to explain that memory prices are cyclical. And even after demand peaks, the chipmakers will continue pumping chips out, leading to a surplus and crashing prices. It's similar to the dynamic in the oil industry, which we discussed yesterday.

People have been saying "data is the new oil" for about 15 or 20 years now, meaning a commodity that will be valued like oil, gas, or any other. Today, we're seeing it. In the AI boom, data is a hot commodity, and the associated stocks are flying higher.

In DailyWealth this morning, True Wealth editor Brett Eversole explained that rallies like the one in South Korean stocks today have historically come near market tops. As Brett wrote...

Only in 1999 did we see an extreme setup similar to today's... with this market more than tripling within a year.

Back then, South Korean stocks still rallied another 10% before finally peaking.

Brett isn't calling for a top in South Korean stocks just yet. He even went as far as to say that the "Melt Up" isn't a sell signal for folks who do have exposure to South Korean stocks.

But the limited historical upside from here, coupled with the risk from buying near a market top, is a good reason to stay on the sidelines if you haven't bought already.

One thing is certain... The blow-off top in South Korean stocks is just another example of the "froth" in today's market when it comes to AI. And at some point, that frenzied sentiment is going to reverse – and send South Korean stocks crashing lower.

Meanwhile, back here in the U.S., another big IPO is getting closer...

Yesterday, AI leader Anthropic said it has filed a confidential initial public offering ("IPO") prospectus with the U.S. Securities and Exchange Commission ("SEC"). That sets the stage for the company behind Claude to go public this summer. Notably, Anthropic wants to beat rival OpenAI to the IPO market.

Anthropic will likely command around a $1 trillion valuation. Last week, it closed a private funding round at a $965 billion valuation.

Anthropic could be public in a matter of weeks. Filing rules say a company seeking an IPO must file a prospectus at least 15 days before beginning a "roadshow" for investors.

SpaceX submitted a similar prospectus with the SEC on April 1 and disclosed it to the public on May 20. Now, Elon Musk's rocket/Internet/AI company is set to go public on June 12 as it seeks to raise $75 billion at a nearly $2 trillion valuation.

This run of impending mega-cap IPOs is, frankly, what we expect to see near the top of the AI boom.

Cashing out...

As we wrote last week, SpaceX, which has lost $37 billion since it was founded almost 25 years ago, will see billions of dollars in investments through passive index funds. The indexes have bent rules to allow mega-cap IPOs to be included sooner than ever.

Anthropic, which is projecting its first-ever operating profit in the second quarter of 2026 on a 130% surge in revenue, has better fundamentals than SpaceX and OpenAI based on what we can cull from the private companies.

But it's not a coincidence that all three are seeking to go public in essentially the same season, as AI sentiment and promise remain grand – for now...

After four-plus years of a full-fledged bull run, you have to ask yourself: Do you want to be the one providing capital to these companies as they go public? Speculate in an IPO trade at your own risk, but as long-term investors, we know our answer.

As our Director of Research Matt Weinschenk recently wrote, if Musk can't "make unprecedented technical and financial progress to justify" SpaceX's valuation, let alone see shares rise from there, the IPO will be "nothing but a cash-out for early investors... at the expense of everyone who buys next month." Matt continued...

As an investment – something you hold for years and compound wealth on – the picture is grim. The company has $30 billion in debt already, and the $75 billion won't last long before the company ends up diluting shareholders.

Rather than follow the crowd, we suggest doing your own thing...

In the "space race" – which is at the heart of Musk's ambitions for SpaceX – there are companies much better positioned to deliver long-term returns for shareholders.

That's according to Stansberry Venture Technology editor Dave Lashmet, who has spent years looking for these opportunities...

You might know Dave as the analyst with three 1,000% winners in the Stansberry Research Hall of Fame at the bottom of our daily emails.

Dave was one of the first people we know of to recommend buying Nvidia (NVDA) shares back in May 2016, when Nvidia was known more for video-game chips than AI, and shares were trading at a split-adjusted $11 per share.

Dave also identified the companies behind the world-changing weight-loss drugs on the market today years before most caught on.

I (Corey McLaughlin) will never forget his March 2020 presentation to a massive ballroom in Florida during one of our editor conferences. He detailed the "obesity epidemic" – and the investing opportunity in the solutions – shortly before the world became caught up in a pandemic.

Dave has given his subscribers nearly 50 different chances to double, triple, or 10X their money over the years.

And now, he's getting set to reveal – in a final public appearance – a "make or break" twist to the SpaceX IPO.

In a new, free presentation set to debut on Thursday, Dave will unveil a company with technology 10 times better than SpaceX's... It's a business linked to a Pentagon project that could deliver massive profits, whether Musk's plans for SpaceX work out or not.

This event is 100% free. We just ask that you sign up in advance here, and we suggest you do so now. This will be your chance to get the full story, and it could change how you invest your money as mega-cap IPO season plays out this summer.

New 52-week highs (as of 6/1/26): Altius Minerals (ALS.TO), Applied Materials (AMAT), Arm Holdings (ARM), Broadcom (AVGO), BHP (BHP), Alpha Architect 1-3 Month Box Fund (BOXX), Canadian National Railway (CNI), Pacer U.S. Cash Cows 100 Fund (COWZ), Cisco Systems (CSCO), Datadog (DDOG), DigitalOcean (DOCN), iShares MSCI Emerging Markets ex China Fund (EMXC), iShares MSCI South Korea Fund (EWY), Cambria Emerging Shareholder Yield Fund (EYLD), Hewlett Packard Enterprise (HPE), iShares Convertible Bond Fund (ICVT), Illumina (ILMN), Cloudflare (NET), Nucor (NUE), Palo Alto Networks (PANW), Invesco High Yield Equity Dividend Achievers Fund (PEY), Ryder System (R), ProShares Ultra Technology (ROM), ProShares Ultra S&P 500 (SSO), and Taiwan Semiconductor Manufacturing (TSM).

In today's mailbag, feedback on the divergences in the market that we've been writing about, and what it might mean for new Federal Reserve Chair Kevin Warsh and central bank policy... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"The divergence within the stock market and the bond market both seem to be pointing toward a likely correction in the near term. If yields on the long end of the bond market continue to rise simultaneously with said correction, will [new Fed chair Kevin] Warsh have to courage to avoid market intervention? I personally doubt it. [Alan] Greenspan was opposed to market intervention and a self-defined gold bug prior to his appointment, and we all know how his tenure went. My expectation is that at some point in the very near future the Warsh Fed will begin Yield Curve Control in lieu of or even in conjunction with an adjustment to the overnight rate propelling the next leg in the Commodities 'Supercycle!'" – Stansberry Alliance member Bryan B.

Corey McLaughlin comment: Thanks for the note, Bryan. The scenario you lay out is one worth thinking about. Though we can't predict for sure what will happen, Warsh is starting his tenure leading the Fed by facing an environment not historically ideal for low rates (or inflation).

All the best,

Corey McLaughlin and Nick Koziol
Baltimore, Maryland
June 2, 2026