Meredith Whitney, Founder and CEO, Meredith Whitney Advisors

CoreWeave

Across the shows: 86 speakers in other episodes, 25 bullish and 94 bearish calls, past 30 days

• Meredith Whitney · Meredith Whitney Advisory GroupBearish

  CoreWeave's leverage was hidden in plain sight for a year; she expects trouble among neoclouds.

  She is starting a rabbit hole on CoreWeave's leverage, which she says was hidden in plain sight for about a year. She also says she expects something to happen with neoclouds, the category of AI cloud providers. She offers no numbers, so this is a preliminary, lightly supported view that leverage in the buildout is a risk.

  “this is inspiring me to actually do a little rabbit holing on the leverage of [CoreWeave] was hiding in plain sight for a year.”at 29:51

Chevron

Across the shows: 5 speakers in other episodes, 5 bullish and 1 bearish calls, past 30 days

• Meredith Whitney · Meredith Whitney Advisory GroupBullish

  Oil stocks like Chevron should work more, since oil shouldn't fall; she owns Chevron.

  Meredith owns a large position in Chevron and calls it a no-brainer. She thinks oil names have worked but not to the degree they should, because the forward curve assumes oil falls next year, which she considers wrong. Peace-deal hopes around the Strait of Hormuz keep disappointing, and inventories and reserves are at lows that must be rebuilt, so oil prices should stay elevated. She notes Chevron reports earnings in the coming week or two.

  “These names have worked, but I don't think they've worked to the extent that they should work. I think Chevron reports this week or next week. I own a bunch of it. That's been a no brainer for me.”at 31:43

Block

Across the shows: 1 speaker in other episodes, past 30 days

• Meredith Whitney · Meredith Whitney Advisory GroupBullish

  Block's daily wage access is its fastest-growing loan; she expects its stock to keep doing well.

  Block, through Square, offers daily wage access, which Meredith says is the fastest-growing loan product in its business even though it is smaller than other offerings. Margins on these products are very high and rising as a share of revenue. She reads the growth as a sign of household strain, and she expects the stock to keep benefiting, though with the caveat that it is a sad outcome for consumers.

  “And so the names that we discussed, the Chime, the Dave, the Block, the Pont, all of that, sadly, those continue to do well.”at 32:11

Dave

• Meredith Whitney · Meredith Whitney Advisory GroupBullish

  Dave's daily wage access is growing fast, and its stock should keep doing well.

  Dave is one of the providers of earned-wage access products, which Meredith describes as among the fastest-growing loan products in the sector, with very high margins and rising dependence among customers. She treats this as evidence of household strain. Her stance is that the stock, like Chime, has been performing and will continue to do well, though she frames that as a sad outcome.

  “And so the names that we discussed, the Chime, the Dave, the Block, the Pont, all of that, sadly, those continue to do well.”at 32:11

Chime Financial

• Meredith Whitney · Meredith Whitney Advisory GroupBullish

  Chime's daily wage access is growing fast, and its stock should keep doing well.

  Chime offers daily wage access, a fee to get paid two days early, which is its fastest-growing loan product with very high margins. The fee is like an ATM charge, and at an APR of close to 200% if treated like a credit card. Customers become dependent on it, and the product is a reflection of how strained many households are. Meredith calls the stock's continued strength sad but expects it to keep performing, since these names have already rallied and her view is that the growth in the product continues.

  “And so the names that we discussed, the Chime, the Dave, the Block, the Pont, all of that, sadly, those continue to do well.”at 32:11

US consumer

• Meredith Whitney · Meredith Whitney Advisory Group

  About half of households now borrow outside banks as lenders withdraw from non-prime borrowers.

  Banks have retreated to prime and super-prime borrowers. Home equity lines fell from roughly $700B before the crisis to about $290B today, and banks rarely offer credit cards, home equity loans or other lending to anyone below prime, though they still take deposits and issue debit cards. Subprime auto lending persists. Meredith estimates about half of households have had to use other sources, including earned-wage access apps and pawn lenders. Stimulus checks lifted after-tax income during COVID, but it then dropped sharply. Pawn borrowers are not repaying loans even with large tax refunds and are losing their collateral. Home equity extraction is the fastest-growing bank lending product, and daily wage access is growing as a share of revenue at the companies offering it.

  “I would say 50% of households... have had to go to other means to get loans. Now I'm not saying they're not banked.”at 20:22

• Meredith Whitney · Meredith Whitney Advisory Group

  Households are cutting groceries to afford gas, and the squeeze is moving up the income ladder.

  Grocery spending has been flat to negative this year, which Meredith reads as households choosing gasoline to get to work over food. The Iran War Cost tracker estimates households have paid roughly $1,100 more since late February on gas, diesel, food and energy, while the average household has only about $400 for an emergency. Credit card balances, which mostly reflect balances at a point in the month for prime borrowers, tracked gasoline prices almost one-for-one through the May peak in gas prices. That relationship has recently broken down. She reads the divergence as lower-income households making spending choices rather than absorbing higher costs. She says the pressure is now moving up the income chain.

  “Grocery spending has been flat to negative. And what that tells you is that people are choosing to put gas in their tank to get to work versus spending on groceries.”at 23:02

US elections & politics

• Meredith Whitney · Meredith Whitney Advisory Group

  Republicans will be destroyed in the midterms because consumers are not better off than two years ago.

  She judges the midterms from the consumer rather than from polls or prediction markets, which she says got Brazil badly wrong. Asked whether people are better off than two years ago, she says the answer is absolutely not. Only the high end that owns stocks is better off, and many Americans are drawing down retirement accounts and paying fees and taxes just to access cash. She concludes that the fundamentals point to a bloodbath for the party in power.

  “I would tell you from my perspective of the consumer that Republicans are going [to] be destroyed in the midterms because what's the old question? Are you better off today than you were two years ago? And the answer is absolutely not.”at 23:29

US rates & the Fed

• Meredith Whitney · Meredith Whitney Advisory Group

  Fed rate moves barely reach low-end borrowers, whose funding costs are already exorbitant.

  Low-end borrowers such as those using fintech and daily wage access are already paying very high effective prices for liquidity. Those lenders fund themselves largely through banks, and credit spreads remain very tight, so a small rise in bank funding costs would not move the needle much. What drives household stress is gas and grocery prices rather than the short rate. She says it is extremely expensive to be poor, with pricing that is obscene for the people borrowing at the bottom of the income distribution.

  “I don't know that it does necessarily because I think that how capital is being priced at the low end is already so exorbitant.”at 24:51

Banks

• Meredith Whitney · Meredith Whitney Advisory Group

  Bank credit metrics look healthy only because they cover prime borrowers, masking household strain.

  Banks now lend mainly to prime and super-prime borrowers, so their loss rates and consumer credit metrics reflect a group that is not affected by rising costs. Losses across the board are currently very low, and that is why the 'resilient consumer' narrative persists. The households under strain have been pushed to non-bank channels such as earned-wage access and pawn lending, which bank data does not capture. Meredith therefore considers bank earnings an unreliable gauge of how the broader economy is doing.

  “If anyone's looking to banks to tell you how the economy is, this is something that sort of sticks in my craw when everyone says, the consumer's resilient. Well, their consumer's resilient because their consumer's prime and super prime.”at 25:51

AI infrastructure & data centers

• Meredith Whitney · Meredith Whitney Advisory Group

  AI-era leaders that grew on buybacks will now issue equity, reversing what drove the Magnificent Seven.

  Within the discussion of the AI buildout's capital needs, she argues that stocks which grew on buybacks lack the excess cash flow to keep repurchasing shares. Without that cash, these companies are issuing more and more equity instead. She calls this a reversal of what propelled the Magnificent Seven three years ago, which means the equity financing of the buildout is changing how those stocks behave.

  “When they don't buy any stock back, they don't have excess cash flow. What happens to those names? And they're just issuing more and more equity. It's a reversal of what propelled the Mag-seven three years ago.”at 30:14

Oil & fuels

• Meredith Whitney · Meredith Whitney Advisory Group

  The oil forward curve's decline next year is unjustified; Hormuz reopening keeps being over-promised.

  She flags that this is outside her core expertise. The forward curve has oil lower next year than this year, which she says assumes the Strait of Hormuz reopens and everything returns to normal. Peace-deal expectations have been over-promised repeatedly and have disappointed every time. Inventories and reserves are at persistently low levels that have to be rebuilt, which implies hoarding and upward pressure on prices. For her, a falling curve makes no sense.

  “This isn't my area of expertise, but these are just like the basics, which is I don't understand why the forward curve on oil assumes the oil will be lower next year than this year.”at 31:09

US inflation

• Meredith Whitney · Meredith Whitney Advisory Group

  Inflation will be hard to tame because the Fed cannot control oil or diesel prices.

  She sees inflation as very difficult to tamp down because its main driver is energy costs, specifically oil and diesel, which the Fed has no control over. Rate policy therefore cannot address the source of the price pressure. The impact runs through household budgets: households are absorbing roughly $1,100 each in extra gas, diesel, food and energy costs and trading off groceries to afford gasoline. She describes this as the biggest puzzle in the outlook.

  “I see inflation being a very tough thing to tamp down. And this is nothing that the Fed can control. They can't control the cost of oil or diesel.”at 32:22

Enterprise AI adoption & AI software

• Meredith Whitney · Meredith Whitney Advisory Group

  AI research tools are wrong most of the time, so analysts must verify every output.

  In her own research workflow, AI gets a lot of things wrong, and the validation of its answers is poor, which leads to arguments with the tool. She estimates it is inaccurate at least 75% of the time. She warns that younger analysts risk assuming AI output is accurate, so every output must be checked. While the data sources have broadened, that makes verification more important.

  “AI gets a lot of things wrong and you're arguing with it because the validation is so poor... I would say at least 75% of the time it's not.”at 33:27