5 Stocks BlackRock is BUYING NOW on The Dip!

Hey, welcome back subscribers to my world of stocks. My name is Ali, of course. And hey, it is that time of the year again where we get another fresh wave of SEC filings pouring in from some of the biggest institutional investors in the world showing us exactly which stocks they've been buying most recently. Well, today's video will be a really interesting one because we're going to kick it all off with the absolute largest asset management company in the entire world, the notorious BlackRock, who holds literally trillions of dollars in the stock market, which by the way, is more than the average GDP of an entire country out there. And just last quarter quarter alone, they spent many billions of dollars, of which we're going to cover five of the largest purchases among them. And with these five stocks alone amounting to over 12 billion dollars in new purchases, again, just in that last quarter alone. Pretty crazy stuff. And as always, I'll be sharing my own opinion on each one of these purchases these stocks, and I'll even rank them from best to worst too based on that opinion. And these quarterly filings are always fun to dig into because they give us a direct look under the hood at where some of the largest amounts of money is really flowing directly into. So, hit that like button, smash the hype button too, and make sure you're subscribed cuz all of that helps keep my channel live, and it means a lot to me. So, thank you so much for that support, my friends. Well, with all that said, let's just go ahead and jump straight into this episode and into this list. Okay. So, first up on the list, well, we have one of my personal favorites, actually, in the tech giant Meta, ticker symbol META, which BlackRock added another more than two and a half billion dollars worth in the quarter alone, bringing their stake up now to pretty close to 100 billion in total. Pretty crazy. Now, I can understand why they're so bullish on Meta, though, as the parent company of Facebook, Instagram, and WhatsApp, it's basically acting now as almost like the digital town square for about half the entire planet. But recently the stock actually took a decent hit losing more than a quarter of its value from the very top. And the main reason for that drop came from Wall Street really freaking out about all their spending, especially on AI like so many others. Like I said, Meta is in a bit of a league of their own right now, admitting recently that their CapEx for the full year may even reach a whopping $145 billion. Dollars. Which would mostly be used to build out new data centers and various AI infrastructure. But here's why I think that this drop could actually be seen as a buying opportunity for the longer term. Now first of all, Meta's core advertising business is still incredibly strong. They brought in nearly $61 billion of revenue just last quarter alone. And representing a a 28% jump year-over-year. And the reason why they're making such incredibly large amounts of money in the in the first place really is actually a direct result of all of those AI investments, the big ones. As they're now heavily embedding AI into their own algorithms that continue getting smarter. And so by showing users more relevant content, they're increasing the amount of time that those, you know, 3.6 billion daily users spend on their apps. Which naturally allows Meta to sell more advertisements. And it's not just on the consumer side, but rather they're also giving businesses new creative tools too that are infused with AI to improve ad conversions, making their ads more effective and allowing them to charge higher prices for them. But that's not even the most exciting part about Meta's future. See, as the CEO recently laid out, Mark Zuckerberg, uh Meta's ultimate goal is to place themselves at the center of the AI world by providing their most powerful AI models for free as open-source software. Where they believe that by not locking their technology behind a paywall like, you know, Open AI or Anthropic, well, Meta will be able to attract a larger community of users and especially developers that will help improve the entire ecosystem over time. Now, I know short-term minded investors may hate the idea of, you know, giving something so powerful away for free, but if you really think about it, it's actually a great way of making yourself stand out in such a crowded market while still being able to make money in plenty of other ways, too. Like in not only running ads in various new ways, which again, they're absolute experts in, but also by renting out huge amounts of excess computing power to other companies, too, which Zuckerberg specifically mentioned recently that they're already getting offers to lease that excess computing power, AI power, at significant premiums. And despite all the heavy spending, Meta is still, you know, insanely large and profitable. Next year, for example, they're projected to break 300 billion in sales and over 100 billion in operating income. But because of the stock dip, well, their PEG ratio now sits over 40% lower than their own 5-year average and even 34% lower than the sector median, too. I think that's a steal of a valuation there for a company like this. So, I do agree with the purchase here from BlackRock and I'm going to rank it pretty high for now at number two until we see what else is on this list. All right. Now, moving on to purchase number two, though, we actually have really one of the most polarizing companies at the mo at the moment right now in the market and that is the EVs, robotics, energy, and just kind of AI in general giant, Tesla, ticker symbol TSLA, which BlackRock added about two and a half billion more dollars of in the quarter and that's bringing their stake up now to more than 90 billion in total. It's a giant position. Now, similar to Meta, Tesla also had a large spike before dipping hard more recently, falling by about 30% from the top. And the main reason for that dip, in my opinion, has a lot to do with their valuation. That's number one. As well as ongoing headwinds in their core automotive business, and I will say that's number two. But starting first with the latter, actually, total vehicle deliveries, for example, have essentially stalled out since 2023. With part of the problem being, I feel at least, was an aging product lineup as their mass market Model 3 and Model Y vehicles haven't seen a complete redesign in years. And because of sky-high inflation, high interest rates, and even rising competition globally, really, um Tesla has had to implement several price cuts just to keep consumers buying, who, many of which are now, of course, drowning in just more expensive debt. Well, uh because of it, their profitability has also been getting squeezed as their operating margin over the past 12 months dropped from historical peaks of over 15% down to just less than 5% today, 4.6% to be exact. So, why then is BlackRock still buying the stock? Well, it really all comes down to their future potential. And Morgan Stanley, for example, estimates that only about a third of Tesla's valuation is driven by their core automotive and energy businesses, while the rest of it is really being propped up by all the hype surrounding their self-driving software, the upcoming robo-taxi network, and the Optimus robots. Which, to be fair, it's also the main reason why I still hold on to my Tesla shares, you know, myself, too. Um but I'm not delusional into ignoring some of the issues, namely, the giant valuation that they currently hold. One that is still sitting hundreds of percent higher than the sector on even the most forgiving, most forward-looking PEG metric. Again, I recognize the future potential, and I even notice the possible synergies that can come later on down the road from Elon's other companies, especially if there's even a merger at some point, too, which is something that is, you know, gets pretty heavily speculated on. But, at present time, there's no way that I could rank Tesla above Meta, who's gigantically more profitable and stable of a business. So, Tesla's going in third place for now on this list. All right, guys, coming up next, though, uh we still have yet another tech stock to run through. Except, this one is much more of a semiconductor play that looks to quietly power much of the AI revolution a little bit behind the scenes. You'll see what I mean here, but that stock is Marvell Technology, ticker symbol MRVL, which BlackRock actually went pretty crazy on last quarter, increasing their stake by a giant 35%, adding more than uh $5 to their position. So, why so much buying here from the world's largest uh asset manager? Well, it really comes down to the huge opportunity that I think these giant institutional investors are seeing right now with AI data centers. And that's that there's actually a ton of tech behind the scenes that is quietly rising in in terms of importance. See, Marvell is really the market leader in optical digital signal processors. I know that's a mouthful, but um what these basically are is um chips that can convert data into light signals in order to transport all of that information between AI servers at incredibly high speeds through fiber optic cables, instead of the older um legacy copper wires that the industry used to use. And because these AI models are getting, you know, so much stronger and more advanced, well, the need to transfer all of that data at huge speeds without any lag is arguably becoming, you know, the biggest bottleneck out there, or for sure one of the biggest um to the entire system. In fact, even Nvidia thinks that Marvell's technology has become so crucial to preventing these bottlenecks that they actually invested around $2 themselves directly into the company, too. And which are helping to integrate all of this optical networking into their own hardware ecosystem, as well. Now, on top of that, though, Marvell also designs custom AI chips for a huge cloud computing providers like Amazon and Microsoft. And so, this dual-threat kind of business model here is starting to produce some incredible numbers. Our last quarter, for example, they posted 28% revenue growth, with management even saying that they expect that growth to accelerate even faster in the future, projecting their data center revenue alone to climb by 50% next fiscal year, and another 55% the year after that. And the demand for their optical products has been so high, too, that management even doubled their revenue forecast recently for those specific components. And yet, despite all of this optimism, the stock has actually taken a pretty big hit recently, dropping around 35% from the very top. Now, much of that was really driven by broader market fears, I'd say, among all the, you know, giant AI spending on on infrastructure. And, you know, to be fair to them, even after this 35% haircut, the stock is still trading at a premium, with even their best, you know, forward-looking PEG metric, most forgiving one, um still sits higher than the sector by double digits. But, I just think that anyone who can afford to hold this one long-term, which BlackRock obviously can, uh this dip will probably end up looking like a solid buy opportunity years years from now. Um and because I really like this company's positioning in the market, I'm even going to rank them higher than Tesla on our list, cuz I think it's um probably a little bit of a safer play at the moment. I will bump Meta up, though, to number one, since um that still looks like the best kind of overall value that we've seen so far on this list at our current prices. Okay, that's going to bring us now, though, to the final two purchases here of the list. And coming in at number four, we actually have a major player in the energy space with GE Vernova, ticker symbol GEV, which BlackRock added another billion dollars worth of the stock, bringing their total stake up now to more than 25 billion. Now, if GEV sounds a little strange to you, it's probably because they were actually spun out from the larger GE General Electric parent company into this now separate entity that houses their entire energy division. And since their since their market debut, uh the stock has been on an absolute tear, uh climbing over 660% all time. So, why is BlackRock pouring even more money into the stock this year? Well, it really has much to do with the AI data center boom. See, Elon Musk, for example, recently pointed out that the biggest bottleneck for building out AI infrastructure isn't actually getting enough chips, but rather it's getting enough electricity to power them. Well, GEV is a giant play on this because they build the gas turbines, steam turbines, wind turbines, and all the general um kind of like electric grid electrical grid infrastructure that is, you know, so desperately needed right now to to increase supply. In fact, demand has been so high recently uh that utility and and data center companies are even prepaying with cash up front through what they call slot reservation agreements just to guarantee that they can get their hands on enough of Vernova's equipment in the future. Um because of it though, their backlog of orders just swelled to over 176 billion dollars. And when you look at analyst forecasts, well, both their revenue and operating income are expected to climb much higher in the years to come. However, I just personally feel that much of this is already priced into the stock as it currently trades hundreds of percent higher than than the sector on a forward P basis and still about 30% higher, too, even on the most, you know, more forgiving on PEG metric. Now, don't get me wrong, I am still mostly bullish on GEV long-term. But, at the current moment, um there's just other stocks that I see greater value in right now that also excite me a bit more, too, about their future. So, um this one will unfortunately take the last place ranking for now on our list. All right, finally though, at purchase number five, we have an absolute behemoth in the um healthcare industry, actually. And that's going to be with United Health, ticker symbol UNH, which BlackRock added over a billion more dollars worth last quarter. That's bringing their stake up now in the um health insurance giant to nearly 32 billion in total. Now, when I say this company is big, I really mean that they're ginormous. Like, in total sales, for example, this is a company that is now generating around half a trillion dollars per year. That's insane size. And although the margins are pretty small in comparison because of the the high costs of a medical care and prescription drugs, it does still translate to many billions in profit due to just really the sheer size and volume of what they're able to collect like on the top line. But, um despite that incredible size, uh the stock actually took a a pretty big dive recently, dropping around 40% from the top, which is partly due to investor panic over rising medical costs that uh really ate into their profits. Although, they are expected to recover in future years. Still, while I really have no doubt that a healthcare-related giant like this should perform pretty well long-term as demand will likely continue to rise and always really be there, especially with aging populations, but my biggest issue has always been though that um really that uh that there is a a kind of looming threat out there with the whole kind of Medicare-for-All trend that we've been seeing. And um if I was an investor in a company like United Health, um I just wouldn't really know how they will ultimately be affected by any changes in government policy like that, or how to price in that risk into the stock's current valuation today. Which, I'll grant you, it is at least lower than the sector right now on a P/E ratio basis, with still a pretty good dividend to go along with it, too. Uh but the business overall is, I would say, also a little too boring for my taste. And those other mass uh macro risks out there are just a little too difficult for me to gauge, too. So, um overall, I would just sleep better at night owning something else instead, even though I do understand why other investors may be buying the dip here on UNH. But um yeah, again, for me personally, this one would just go in last place, at least compared to the others that we've seen on this list. Uh but hey, there you have it, guys. Overall, it's not a bad group of stocks, I would say, by any means. Um but I I do just think that the two clear standouts would be Meta and Marvell as probably my favorites among them at the top of at the top there of our rankings. Um the other three, though, I probably wouldn't be buying at this time myself. Uh but hey, what do you guys think? I would love to hear your perspective on all of this. Do you own any of these stocks? Are you thinking about buying any of them? I'd love to hear um why or why not. And also, let me know if you agree or disagree with my rankings. I'm always curious curious to um get your perspective on that, too. See if you would make any changes to the rankings. But uh hey, either way, I just hope that you enjoyed the video. I hope that you're all doing well. I've got more videos coming for you soon. So, um hang in there. Stay tuned. But uh yeah, thanks again for stopping by, my friends. I hope you're all doing well. Take care. I'll see you in the next one. Bye-bye. >> [music]