Nvidia’s Drama Could Be a Gift for These 4 Stocks — Transcript

Full transcript

1. 0:00Hey everyone and welcome back to another
2. 0:01video for today. It's almost weekend
3. 0:03guys and girls, 7.3% of you so we can
4. 0:07finally maybe rest a little bit.
5. 0:09Although I'm pretty sure that over the
6. 0:11next couple of days, yes, even during
7. 0:12the weekend we're going to hear a lot
8. 0:14more about the Nvidia Jensen situation
9. 0:17and then as you know on Tuesday we have
10. 0:19the Nvidia earnings report. So yeah,
11. 0:22chill out whenever you can. But but I do
12. 0:26also want to make my point that just
13. 0:28because all of the attention went to
14. 0:30Nvidia this week doesn't mean that the
15. 0:32other thousands of names out there,
16. 0:34thousands of stocks out there aren't
17. 0:36trading anymore. No, they are still out
18. 0:39there. There are still plenty of
19. 0:40undervalued, underappreciated names in
20. 0:43the market. And I do think that because
21. 0:45of this situation right now, it might be
22. 0:48a good opportunity to have a look at
23. 0:51those companies. We know most of these
24. 0:54companies, all of these companies
25. 0:55actually probably also own all of them.
26. 0:58But I do want to make my case yet again
27. 1:00as to why especially going to 2027,
28. 1:04these are names that are very much at
29. 1:06the top of the list. Now, before we
30. 1:08start, of course, we have to have a look
31. 1:10at the heat map. This is, by the way, a
32. 1:12new page here on fiscal.ai. The markets
33. 1:14tab where you see the top stories, the
34. 1:16top gainers, the top losers. We know
35. 1:19who's been a big loser this week.
36. 1:21insider trades, politician trades as
37. 1:23well. These guys do a lot more trading
38. 1:26than serving the people, it seems, but
39. 1:29okay. And then we have the heat map here
40. 1:31at the top. So, what's going on in
41. 1:34today's market at the moment? Well, we
42. 1:36do have we do have some decent amount of
43. 1:39green here. Google is up, Meta is up,
44. 1:41Amazon is up a little bit, Apple, Nvidia
45. 1:44is down 1.5%. Now, if we're going to
46. 1:46have a look at this segment right here,
47. 1:48what we've seen over the last couple of
48. 1:49days, right, Nvidia deep in the red, a
49. 1:52Broadcom was up, still up over the last
50. 1:55couple of days, and AMD is up quite a
51. 1:56lot over the last couple of days, right?
52. 1:58The the companies that were considered
53. 2:00or are still considered the anti- Nvidia
54. 2:04trade got a lot of attention over the
55. 2:07last couple of days. This stock, I think
56. 2:08AMD was in the low 400s and today were
57. 2:12$550.
58. 2:14So quite a lot of move on the upside
59. 2:17over the last couple of days purely
60. 2:19because the market right now the
61. 2:20perception is okay in a world where
62. 2:23Jensen is not leading Nvidia. This means
63. 2:26that Nvidia over the next couple of
64. 2:28years is going to be a much weaker
65. 2:30company which also means that the
66. 2:32companies like Broadcom and AMD which
67. 2:35are growing which are potentially taking
68. 2:37market share are going to have it easier
69. 2:403 5 years down the line and that's why
70. 2:43we should be rewarding them as of today.
71. 2:46Now maybe maybe that's the right way to
72. 2:50see this. I still believe that Nvidia is
73. 2:53run by not just one person although
74. 2:56Jensen is of course or was very
75. 2:58important to the company but I do think
76. 3:00that the people under him the teams
77. 3:02under him are very capable people the
78. 3:05road map for the next 3 years is already
79. 3:08set I don't think that's going to change
80. 3:09much but what about 5 10 years down the
81. 3:12line and I still think that the teams
82. 3:14inside of Nvidia are still very good
83. 3:18very capable to push this company
84. 3:20forward. Everyone's been talking about
85. 3:22well not everyone but I've seen one well
86. 3:25one comment about oh Nvidia is going to
87. 3:28be like Intel and then suddenly
88. 3:30everybody uses the same stupid example
89. 3:32because they can't thinking for
90. 3:33themselves. Nvidia is nothing like an
91. 3:36Intel of 10 years ago. Nvidia is still
92. 3:39innovating pushing the boundaries. Intel
93. 3:4210 years ago did absolutely nothing
94. 3:44other than paying its executives an
95. 3:46insane amount of money, buying back a
96. 3:49lot of super expensive, overvalued
97. 3:51shares and paying a dividend. That's it.
98. 3:54It cannot be compared to Nvidia. And
99. 3:56every time I will hear someone say, "Oh,
100. 3:59this is like Intel." I will disagree and
101. 4:03push back because it is just a BS
102. 4:05example. One more thing for those that
103. 4:08don't know me. I own a lot more of AMD
104. 4:11than I do Nvidia. I own now my position
105. 4:14in Broadcom is bigger than Nvidia. I own
106. 4:17way more Meta, way more Google than
107. 4:20Nvidia. And still, still I managed to
108. 4:24think for myself when talking about the
109. 4:26situation about Nvidia today. Still, I
110. 4:29can make some good cases as to why right
111. 4:32now over the last 48 hours, 72 hours,
112. 4:36people were freaking out as if their
113. 4:39lives were completely destroyed and oh,
114. 4:42it's the end of the world. Guys, calm
115. 4:44down. Okay, this is investing. You're
116. 4:48not married to any stock. And
117. 4:50apparently, even if you're married to
118. 4:52someone for 40 plus years, it's okay to
119. 4:55you know what. Back to the serious
120. 4:57stuff. We have not heard the last of
121. 5:00Jensen or this Nvidia story. I've made
122. 5:03my case over the last couple of days
123. 5:05that something here doesn't smell right.
124. 5:08The the the pressure, the speed of all
125. 5:12of this situation escalating makes
126. 5:15absolutely no sense to me. So yes, there
127. 5:18is an investigation, but I think there
128. 5:21should be an investigation on the
129. 5:23investigation as well. Another thing,
130. 5:27and that's the last thing we'll discuss
131. 5:29about Nvidia for now. This right here is
132. 5:32Nvidia's board of directors. Yes, I've
133. 5:34put myself on Jensen because everybody
134. 5:36knows who's Jensen. Look at how many
135. 5:39shares some of these people own. I know
136. 5:44personally people that own more shares
137. 5:47than this lady right here. 1,799
138. 5:51shares here. 2,00 let's call it almost
139. 5:54500 shares. Then yes, you have people
140. 5:56that own millions millions of shares.
141. 5:59This is the board of director of what
142. 6:01was the most valuable company on the
143. 6:04planet. Now, okay, you might say, "Yeah,
144. 6:07but the amount of shares doesn't really
145. 6:08matter that." Well, maybe it matters a
146. 6:11little bit, but what matters maybe a
147. 6:14little bit more is who these people are.
148. 6:18We have here former managing director of
149. 6:21Sutter Hill Ventures. No idea what that
150. 6:23is. Then a Centennial Professor of
151. 6:26aeronautics and Mechanical Engineering
152. 6:28at California Institute of Technology.
153. 6:31Okay. Then we have a former chief
154. 6:34marketing officer of the NFL and a
155. 6:36former CEO of Pepsi Coca-Cola North
156. 6:39America. Why? Why are these people on
157. 6:42the boards of directors of Nvidia? I
158. 6:45don't know. former president of Taco
159. 6:48Bell International. That's the woman
160. 6:51with barely any shares. Like if you look
161. 6:54at the people on the board here, it it
162. 6:58makes no sense. It's a failure on on
163. 7:00Jensen's part and and maybe on some
164. 7:02other people's part as well that this is
165. 7:04this is the board. Why isn't the board
166. 7:07filled with people
167. 7:09from I mean ex people of course
168. 7:11semiconductor industry tech AI robotics
169. 7:16you name it you know people that also
170. 7:20want to push the boundaries of
171. 7:22innovation of technology why is the
172. 7:25board here filled with people that in my
173. 7:27opinion shouldn't be here I don't know I
174. 7:30cannot answer this question right now
175. 7:32because it is a huge blunder anyways
176. 7:36Moving on here and I highly suggest you
177. 7:39to go and have a look at who sits on the
178. 7:41board of well Meta is a bit different
179. 7:44cuz Mark basically controls everything
180. 7:46that happens right there but look at
181. 7:48who's on the board there. Go and check
182. 7:50who's on the board of a Microsoft of a
183. 7:53Alphabet of an Amazon and then compare
184. 7:57that to whoever was on the board of
185. 7:59Nvidia. Anyways, moving on here quick
186. 8:02summary what's happening here. Neocloud
187. 8:04space Nebuse down another 13% today. I
188. 8:07ran down 9.5 applied digital 9.5 corre
189. 8:1011%. So Nebus this week is basically
190. 8:14down 13.5% followed by 16% the week
191. 8:18before we're basically here at the 100
192. 8:21uh moving average on a weekly that is
193. 8:24which yes was previously close to the
194. 8:26top and let's say if it can stay right
195. 8:29here form a base going into Nvidia's
196. 8:32earnings report might be might be a good
197. 8:35thing me personally I own a position I
198. 8:37said it before I'm waiting to make my
199. 8:39moves post Nvidia's earnings report and
200. 8:42yes if the stock does go up that's also
201. 8:45fine by me. Now why are we seeing
202. 8:48weakness here in the Neocloud space?
203. 8:51Well, first of all, also seeing weakness
204. 8:52in the semiconductor space, but in the
205. 8:54Neocloud space specifically. That's
206. 8:56because of an article that came out and
207. 8:58talked about well the fact that Colette,
208. 9:00the CFO that's now interim CEO, was not
209. 9:03the biggest fan of all of the
210. 9:06investments that Jensen wanted to make,
211. 9:09whether it's in OpenAI or in the
212. 9:11NeoCloud space. Now, I can take one side
213. 9:15of the story, I can take the other side
214. 9:16of the story. Of course, I am biased
215. 9:18because I own shares of Nebus. I have a
216. 9:21small position in Cororeef also own
217. 9:23Nvidia but okay now CFOs CFO's jobs is
218. 9:28to make sure that the company is
219. 9:30financially responsible and that the
220. 9:33investments that they're making makes
221. 9:34sense right so I'm not shocked that she
222. 9:38was opposed to huge investments and
223. 9:40backstopping what was it $200 billion or
224. 9:43something like that for an open AI I'm
225. 9:46not shocked by it we've heard Zuck and
226. 9:48Alexander Wang talk about the same thing
227. 9:51how Susan came to them and said, you
228. 9:53know, we're spending quite a lot of
229. 9:54money on this project and on the the
230. 9:56GPU, so you better make sure it works
231. 9:59out otherwise the company is in a deep
232. 10:03trouble. This is the job of the CFO.
233. 10:06Now, if Jensen and the CFO were clashing
234. 10:10quite a lot on these types of things,
235. 10:11then okay, that's definitely not the
236. 10:14greatest thing, especially right now for
237. 10:16the market sentiment wise. I get it.
238. 10:20But we just heard about Nebus. We just
239. 10:22heard about CO. There are a lot of
240. 10:24prepayments happening right now. A lot
241. 10:26of these prepayments cover almost all of
242. 10:30the costs. And both of these companies
243. 10:32have told us that they're not looking to
244. 10:34raise an insane amount of money anyways
245. 10:36going into 2027.
246. 10:39So everything that has happened already,
247. 10:42I don't think that's going to change.
248. 10:43Yes, moving forward, if you're now
249. 10:46deciding to become a Neocloud, you're
250. 10:49going to have a very very difficult
251. 10:50time, you're not going to have the
252. 10:53backing of the Nvidas or the banks or
253. 10:55whatever. And if you're looking for
254. 10:57money, you're probably going to pay
255. 10:58quite a fee for it. That's true. But for
256. 11:03the companies right now, a Nebus, a core
257. 11:06reef, even an iron, I wouldn't say those
258. 11:08are established names. But I do think
259. 11:11that they have put themsel in a much
260. 11:14better position and whatever they told
261. 11:16us during their own earnings call. I
262. 11:19don't think that's going to change
263. 11:20anytime soon. Just wanted to put it out
264. 11:22there because I do know that we have a
265. 11:24lot of NeoCloud investors out there and
266. 11:26a lot of people are just freaking out
267. 11:28and say, "Oh, look at this headline.
268. 11:30That means uh Nvidia is going to now
269. 11:32make sure that these companies are going
270. 11:34to go down." No, why would they? Nebus
271. 11:37is a customer of Nvidia. Cor is a
272. 11:40customer of Nvidia. It's in their
273. 11:43interest that both of these companies
274. 11:44become way bigger because then they'll
275. 11:47buy even more chips from Nvidia in the
276. 11:50future. Of course, this is becomes even
277. 11:52better if these companies become
278. 11:55profitable, can sustain themselves to
279. 11:57not need to have a backstock. Think
280. 12:00about it. Moving on and actually maybe
281. 12:03moving back to the main topic of this
282. 12:06video and that's well the companies that
283. 12:08are still trading at a very very
284. 12:10attractive valuation. I'll start off of
285. 12:13course with company numero uno and
286. 12:16that's alphabet now alphabet as of right
287. 12:20now yes trailing p very low one time
288. 12:22things but forward one 21.1 times we
289. 12:26know that alphabet is gaining a lot of
290. 12:28traction with regards to GCP and also
291. 12:31their TPU business now alphabet yes is
292. 12:34going to benefit if if Nvidia does not
293. 12:37execute anymore we know that the TPU
294. 12:39business is going to become way bigger
295. 12:42in 27. We've heard that also from Amazon
296. 12:44for their own tranium chips. We more
297. 12:47recently had actually an announcement of
298. 12:48TPUs including AMD chips as well. And so
299. 12:52yes, I do think that the TPU business is
300. 12:54going to become much much bigger. Google
301. 12:57Cloud is going to continue to grow and
302. 13:00become more profitable in the future.
303. 13:02While this company is yes, very cheap
304. 13:05because yes, it is still spending a lot
305. 13:08of money. It is spending a lot of money
306. 13:10because it is still growing. It is still
307. 13:13growing the biggest well what might be
308. 13:16maybe their biggest business a year or
309. 13:18so from today. Google Cloud, right?
310. 13:21Google Cloud continues to grow and
311. 13:23accelerate. And so why shouldn't they
312. 13:25invest? They they said it other
313. 13:27companies have said it as well. As long
314. 13:29as the return on invested capital is
315. 13:31higher than the cost of capital, why
316. 13:33wouldn't they do this? It's just so
317. 13:36simple. And yet Google back under or
318. 13:40close to $300 per share, right? Year to
319. 13:42date, it's down 7.5%. Over the past
320. 13:45three months is down 15.2%. In my
321. 13:48opinion, this company again gets
322. 13:50overlooked. And what happens a year from
323. 13:52now when suddenly they are getting quite
324. 13:55close to generating free cash flow.
325. 13:58Maybe it happens sooner. Who knows? But
326. 14:00what we do know is that the capex growth
327. 14:03cycle is slowing down. Right? The rate
328. 14:06of growth that we've seen for capex each
329. 14:09and every year is definitely slowing
330. 14:10down. Doesn't mean that the number
331. 14:12doesn't get bigger, but that's slowing
332. 14:14down. Then what happens? Well, the
333. 14:16business, the actual core business,
334. 14:18which is still very profitable, that
335. 14:21continues to grow and grow and grow and
336. 14:23then suddenly you're going to have that
337. 14:24inflection point where they can invest a
338. 14:26lot and they're generating a lot of free
339. 14:29cash flow and then Yeah. And then maybe
340. 14:31it might be too late. The same can be
341. 14:33said of course with a meta. Meta had
342. 14:36probably a better earnings report than a
343. 14:40lot of the companies that we've covered,
344. 14:42right? The advertising business
345. 14:43definitely had a better quarter than the
346. 14:45other advertisers out there. It doesn't
347. 14:49have a Google Cloud business and AWS or
348. 14:52an Azure, but the core business of Meta
349. 14:55is still very very profitable, is still
350. 14:58growing quite quickly. But this is also
351. 15:00a company that yes is investing quite a
352. 15:02lot. It's not generating free cash flow
353. 15:04anymore.
354. 15:05But this is a very profitable company to
355. 15:07its core. Muses momentum is still
356. 15:10continuing and I do think that it's
357. 15:13going to become bigger and bigger.
358. 15:14Right? Look at this. This is a company
359. 15:16at this size that is still expected to
360. 15:19grow one close to 28% this fiscal year,
361. 15:22then 21.7% next fiscal year, then
362. 15:24another 19.2%
363. 15:26in fiscal 28. By then, of course, they
364. 15:28will be generating free cash flow again.
365. 15:30And I do think that we could see growth
366. 15:32be a bit higher than this. And yet the
367. 15:36stock right now is trading at well 21.5
368. 15:39times trading earnings, 19.1 times
369. 15:41forward earnings. This name does not get
370. 15:43the respect it deserves. Before moving
371. 15:46on to the next one, I know controversial
372. 15:48to put Nvidia back here in the video,
373. 15:51but Nvidia is trading at 13.2 times
374. 15:53forward earnings, 14.6 times forward
375. 15:57price to free cash flow. This is a
376. 16:00company that by the way as of right now
377. 16:02I don't think much has changed but as of
378. 16:04right now is expected to grow revenue
379. 16:06for fiscal 27 by 90.8% then 68% the
380. 16:10fiscal year after that. It's probably
381. 16:12going to be much higher than this and
382. 16:13then another 30.8%
383. 16:16in fiscal 29 to generate just over 900
384. 16:18billion in revenue. Uh by then they are
385. 16:21expected to generate close to half a
386. 16:23trillion dollars in free cash flow. So
387. 16:26just wanted to put this out there. Of
388. 16:28course, all of this and much more is
389. 16:30available on fiscal.ai. There's a link
390. 16:33down in the description and in the pin
391. 16:34comment. If you want to use it, you'll
392. 16:36get 15% off and new users will get
393. 16:38Fiscal Pro for free for the first two
394. 16:41weeks. Then I need to talk about a
395. 16:43company that I've owned for a while.
396. 16:46I've been a net seller this year of
397. 16:49Micron up until last week when the stock
398. 16:52was a little bit lower than where we're
399. 16:54at right now. And that's of course
400. 16:56Micron. Now with Micron, I've said it
401. 16:59before and I'll say it again. I don't
402. 17:01think Micron for me right now is going
403. 17:02to be a company where you know what,
404. 17:04I'll own it for 5 10 years. No, me
405. 17:07personally with my average, which is way
406. 17:09lower than where we're at right now. I
407. 17:12didn't mind adding in the low 700s. Why?
408. 17:15Because the margin of safety here is
409. 17:19quite good. The riskreward is quite
410. 17:21good, right? A forward P of 4.3 times.
411. 17:23Now I know cycles schmeichels let's go
412. 17:26with this argument that yes there might
413. 17:28be a top on the cycle happening let's
414. 17:31say in the next two years okay but in
415. 17:34the next two years in the next two years
416. 17:37do we think that micron is not going to
417. 17:39become extremely profitable and grow
418. 17:41revenues like never before I mean look
419. 17:44at the comparisons right if you want to
420. 17:46compare it to what has happened before
421. 17:48you can't even notice that before there
422. 17:50was a cycle that's how much revenue the
423. 17:52company's generating ing today already.
424. 17:55And if we expand that and we look fiscal
425. 17:5727, 28, 29, look at how much revenue
426. 18:00this company is expected to generate.
427. 18:02Now yes, look 28,29, not much growth at
428. 18:06all, right? Okay, fair enough.
429. 18:10But these are still years that dwarf
430. 18:14anything that this company has done
431. 18:16combined over the last 10 years. If I'm
432. 18:19looking at free cash flow, same story,
433. 18:21right? If I pull it back all the way
434. 18:23here to 2012, I mean even right now we
435. 18:26are already generating more free cash
436. 18:28flow than ever before combined. So
437. 18:30what's the point to even compare, right?
438. 18:33Okay, even if this is a cycle, do you
439. 18:36know what this company can do with this
440. 18:38amount of free cash flow? Even in a down
441. 18:40cycle, they can still return an insane
442. 18:42amount of value to shareholders. And so
443. 18:45yes, to me, in the short run, in the
444. 18:47short run, this could go back to $1,000
445. 18:50per share. Who knows? Maybe go even back
446. 18:53to all-time highs. It's definitely a
447. 18:55possibility. I don't need this to go to
448. 18:583,000 to $5,000 per share. May probably
449. 19:02by then they'll do a a stock split. But
450. 19:04a micron at these prices, these growth
451. 19:07rates, all of the comments that we're
452. 19:09hearing about HBM and the partnerships
453. 19:12and the long-term agreements that
454. 19:14they're signing, well, it doesn't seem
455. 19:18like this is a cycle that will peak
456. 19:20anytime soon. It also seems like the
457. 19:24down cycle is going to be way less
458. 19:26extreme than previously because of HBM
459. 19:30and because of the one-year cadence of
460. 19:33new GPUs coming out. Last but not least,
461. 19:38this is cash from operating activities.
462. 19:40I've also added here Broadcom because I
463. 19:42also think that Broadcom is still fairly
464. 19:44cheap and the growth rates are very
465. 19:47incredible right now and they could also
466. 19:49potentially benefit from Nvidia's
467. 19:52downfall further down the line if if
468. 19:55that were to happen. But let's look at
469. 19:572026
470. 19:59cash from operating activities for all
471. 20:01of these companies. The number is still
472. 20:03of course very much positive. We go from
473. 20:06$558
474. 20:08billion to then $916.4
475. 20:11billion in fiscal 27 to $1.27
476. 20:15trillion in cash from operating
477. 20:17activities in fiscal 28. That's $350.6
478. 20:22billion from Google, $216.4
479. 20:25billion from Meta, $335.5
480. 20:28billion from Nvidia, $137.6
481. 20:31billion from Broadcom, and $232.4 $4
482. 20:35billion from Micron. Yes, Nvidia is
483. 20:38getting all of the attention right now.
484. 20:40Yes, all of the headlines are there to
485. 20:42create a lot of panic, a lot of chaos,
486. 20:44but it's in times like this that
487. 20:47long-term investors have to look at what
488. 20:49hasn't changed. What hasn't changed is
489. 20:51these good companies are still good
490. 20:53companies. What hasn't changed is that
491. 20:56whatever they told us in the earnings
492. 20:57call and report a couple of days, maybe
493. 20:59a couple of weeks ago hasn't really
494. 21:01changed either or or at all. These are
495. 21:05companies that are very well-run,
496. 21:07extremely profitable and still growing
497. 21:10and will be growing for the foreseeable
498. 21:12future. There are opportunities in this
499. 21:15market. Of course, that doesn't mean
500. 21:16that oh, we have to buy every single
501. 21:18dip. Oh, myself included, I don't mind
502. 21:21waiting post Nvidia's earnings report in
503. 21:24order to see what I will be doing,
504. 21:27right? They're probably going to share
505. 21:28some interesting uh notes and
506. 21:31information out there. If they suddenly
507. 21:33come out with now at least 80% revenue
508. 21:36growth for their guidance for next year.
509. 21:38Previously, that was at least 70%. I
510. 21:41think that could bring a lot of
511. 21:43confidence back into the name, into the
512. 21:46market. Maybe they'll talk about their
513. 21:48investments right in Neocloud, in AI
514. 21:50labs as well. I don't mind waiting to
515. 21:54see what happens with the market. The
516. 21:56market definitely needs to chill out a
517. 21:59little bit, right? This volatility, I
518. 22:01know, is maybe not that great,
519. 22:03especially not when you go down, but we
520. 22:06need the market to chill out a bit. We
521. 22:08need the VIX to come back down and then
522. 22:10you make well educated decisions. That's
523. 22:14it. great companies. Don't have to go
524. 22:16look at some little names here and
525. 22:18there. Although I could have definitely
526. 22:20put in a SoFi, a new holdings or things
527. 22:23like that in this video, but but maybe
528. 22:25that's going to be for another episode.
529. 22:29That's all I've got for you in today's
530. 22:30video. I hope you all have a wonderful,
531. 22:32relaxed weekend ahead. See you all in
532. 22:34the next one. Bye-bye.
533. 22:37[music]
534. 22:40Hey,
535. 22:43[music]
536. 22:52[music]