AI Stocks Are Coming Back — I’d Watch These 3 Before New Highs

Stocks can give you everything you actually ask for when they report. Earnings, good revenue, stronger guidance, growing demand, and still a stock can lose 20% of its value. That sounds irrational, but if Wall Street wants a stock to fall, well, it happens all the times. And sometimes that temporary disconnect between the business and the stock price creates amazing opportunities. Now, a few weeks ago, we saw this happen time and time again with AI infrastructure and memory. Not because artificial intelligence suddenly stopped needing memory or storage or faster networking. And in several cases, the exact opposite was happening underneath the hood. Business were getting stronger. And now we saw prices falling hard. But over the last two weeks, stocks have been catching up. So today, I want to show you some stocks I'm looking at. I want to show you three stocks that the fundamental story hasn't changed, but they have been improving on Wall Street after the meltdown. And then if you don't like any one of those, I want to go through a ETF that packages them all together. Before we get on to that, man, I want you to like, I want you to subscribe, and I want you to share this video out if you could, man, help us get to 2,000 likes because that'll help us get good in the algorithm. And I'm buying these stocks right now. Let's go. First, let's start here. Why do stocks actually go on sale after having great revenue, after having great profits, after having strong guidance? Well, one of the reasons why they go on sale is because well, stocks can be super extended and Wall Street just has a sell-off. So, let's start with a company by the name of MU. I want to start there. Now, in Nvidia, if Nvidia is the brain for powering AI artificial intelligent, then Micron helps the brain have memory. Now, Micron makes semiconductor memory. Now, I want to answer some investors so you can really understand how this go because we make stock trading content and we make stock market advice content and I need us to just understand how this game goes, right? And so, we saw Mic Grime have a record quarter and the stock fell really, really hard. So, think about it like this. You have a filing cabinet behind you and the papers are spread across the desk in front of you. Then a filing cabinet is where the information is stored for the long term. And then the desk is where you keep the information you need right now. That's essentially the difference between storage and working memory. AI systems need enormous amounts of fast memory because GPUs are constantly moving gigantic data around and you cannot buy the world's most powerful GPU and then starve it of information. And that's where stuff like drum and HRB and HBM basically come in. So it's high bandwidth memory for the technical name. And that is a widening highway between memory and processing. And I don't want to sound too technical, right? Just giving you an idea what that is. Now more AI models means more interface. It means larger clusters of AI and more GPUs. An increase in the importance of memory. And Mike Grime's numbers are beginning to show exactly how powerful that demand has come. Think about this. In the third quarter, he had 41.6 billion in revenue and $18 billion in free cash flow. And management said it's only going to go up. Now, let's stop right there for a second because I want you to understand what free cash flow tells us. Revenue tells us how much money came into the company. Accounting profits tell us how much is remaining after expenses. Free cash flow asks a more practical question. After running a company, after investing on everything the business needs, how much cash did we produce? And Micron produced billions. Now, that is a company that was on sale for us. Now, when I say on sale, that stock truly went from $1,200 all the way down to $737. Now, just wait for a second cuz I want to show you how that look on the chart. Alltime high on Micron was about here we go $1,25616. It came down as low as $737. Now I want you to look at something right here. I'm going to use my measuring tool. That stock came down 41% from its high. That my friends is an amazing discount. And some people keep saying I wanted to go lower. I wanted to go lower. Now, true enough, you not none of us can really catch it at the bottom because we don't know where the bottom is. So, this becomes a great time to average down. I mean, if you bought high, you keep average down, you bring your cost basis down. Now, look over the last week and a half, two weeks, high has done like rolled up. So, it went from um 737 to now it's now trading right above its 20 and 50day moving average. And right now, as of the close of Friday, it's trading at 976. So, we take that number 976, 10, 11, 12. It's about $300 from its all-time high. I personally think that that would be a great opportunity to still buy this stock because like we said, Mike Ron told us what their demand for memory is only getting larger. So, this becomes a great time to buy. And I know what you're saying, Trap. Like, that's hot. But just wait a minute. Just hang in here with me cuz I got a few options that I think we can all look at when they get toward the end. The next company I want to look at is Seagate, ticker symbol STX. And I want you to stop and think about Seagate as don't look at it as some old computer storage company. Look at it as it has changed cuz every AI model creates data. Every customer creates data. Every training runs creates data. And every checkpoint creates needs data. And every video generated by AI creates data. And every image and every medical record, every financial document, every security camera, every enterprise data, enterprise-based software needs data and it needs somewhere to live. And here's where people confuse memory and storage. Micron helps us provide the desk. Seagate helps us provide the warehouse. That's right. You don't need every piece of information sitting on the desk. I mean, it's the world's most expensive piece of information. So huge present uh percentages of that data gets stored at scale in a high capacity drive and that's what Seagate does. It's pushing what's called HMR and as technology increases and as it gets insanely like immense it becomes a capacity issue. Imagine you're operating a hypers scale data system. How much data storage do you need? a lot to store that building and how much electricity will it consume? How many racks will it need? How much cooling will it need? How much maintenance will it need? Well, if Seagate can put significantly more data into each drive than the customer may be able to store more information without, you know, proportionally messing up the physical footprint. And financially, Cate has been executing at a high level. We talking about 3.1 billion in revenue, up from 2.6 billion early in the year. The gross margins was at 4.6% 46.5% I mean and about 953 million in free cash flow in Q1 and Segate used part of that money. Just hear me when I say this. This is going to be interesting. Seate used part of that cash to retire early. 641 billion in debt. That's really good. That's what you want to see from a customer. Now let's talk about price when we talk about Seagate. So now let's look at STX right here. It had uh what's called a demand shelf. Uh you could look at it as support triple equal lows right there. So it came down from all-time high which was here. Alltime high was here at $1,143.68. It came down as far as $697. Think about that. Now let's put that on our measuring tool. Our measuring tool shows us how much that came down. that came down right at about 38%. That is a sweet, sweet, sweet discount. Now, let's think about something for a second. It's trading now at $973. So, it still has 10, 1100, about $200 and something before it reach all-time high. I still think this stock is 100% cheap because nobody knows where the bottom is. It came above it 20 and it 50-day moving average. So, that becomes really good. It didn't get as far as the 200 day, but it did fall to the 50 and the 20 and it recovered those. That's a good sign of a stock. And the next stock typical is a a listen what I'm about to say here. A AOI. Now, this one is one I want people to understand carefully because the opportunity is exciting, but the risk profile on this is completely different from Micron and Seagate. AOI makes optical networking products. And the easiest way for me to help you understand this is a data center can have thousands of powerful servers. But those servers are useful if they cannot communicate fast enough. They're no good. Imagine building a city full of skyscrapers and connecting all of them with one land road. You have the biggest buildings in the world. Traffic destroys everything. And AI data centers have similar problems because GPUs need to exchange enormous amounts of information really, really fast. And servers need to communicate. clusters need to act like one giant computer and that requires extremely fast networking and increasingly that information is going up and it travels through fiber and AOI builds optical transceivers that get those products and make the connection possible. The AI market is now moving from technologies of 400D to 800G and eventually 1.6 terabyte. Now those number basically represent the lanes on a highway. The faster the AI clusters, the more important those highways become. And AOI is in the middle of an enormous manufacturing expansion. The company has told us [sighs] that they have capacity for 200 units and they can reach around 650,000 per month. That's really huge, y'all. Why would management build such capacity? Well, because they believe consumer demand is coming and revenue is already beginning to increase and show that. Think about this. In Q2 they had 191 million in revenue compared to 103. That's roughly a 86% increase. And in Q3 management is saying we can get about 255 million to 290 million. So this stock is truly it's one of them ones man. And it's important for us to see that because AOI is not Micron. It's not Seagate. This is a smaller company scaling aggressively and that means potentially greater growth but also greater execution risk. They have to build to capacity and they have to convert that capacity into shipments and they have to maintain margins and they have to keep customers buying in order and they not and they can't afford to spend billions of dollars if it's not going to turn into cash. So this is 100% a higher risk company. Now I want to show it to you on the chart. So think about it. Alltime high was here at 233. The low kicked in here about $76. Enough to scare everybody away, which is an amazing deal. And then we come down to it. What do we see? That was in total a 67% 67% discount. And it's now trading at 35% discount. It's over the 50 and the 20. And we see our 20 curving up. and it's at 150. It has to get to 232 to get back to all-time high. Now, if you can't afford any of these stocks, a great look would be Dr. Dam. Now, this has all the memory inside of it. So, you get the Seagate, you get the Micron, you get the WDC's, you get the SKH Highix, you get all of those things in. Let's talk about drum for a second because when we first mentioned drum on the channel, it was $37, right? $37. Now, what I want to do is show it to you all on the chart. All right. So, when we first mentioned drum, it was about $37. It's about here. That's when we first talked about it. Now, the stock got up all the way to 70 something dollars and it bottomed out here a little bit past that low. So, it came to $44. It's currently trading at $57. But let's see on our chart how far that came down from here. to here. It dropped 44%. Now, it's still under the 50, but it did reclaim the 20s trading at 47. It's still 28% from its all-time high. I think this can be a great buy if anybody hasn't got in yet. Again, you have all of the big name memory stocks inside of this one. I think it's a great time for us to look back into memory. For those who think they missed it, you didn't. You can get Rhyme Rime at $57, but you can get AOI at $150 and if you can't afford STX, WDC, SNDK or MU drum will be the better position for you. And that's all I want you to understand. Like why everyone is scared, you have to see, you have to see the opportunity. And I know it can be so fearful and the market is just red and it's just bleeding and everybody screaming for help. But that is truly the best time to buy because we heard Warren Buffett say, "Be fearful when everybody's greedy and be fear greedy when everybody is fearful over the last couple months. Everybody was being fearful." That was a great time for us to be greedy. And we talked about it a lot in my Patreon. If you're interested in getting in my Patreon, the link is in the bio in the description. Check it out cuz we go through two lottery picks a week and that's when I give you two stocks and I break them all the way down for you. And if you're in a trading level, then we take the trades and I show you all of my trades and you can be a part of the trades if you want to. Um, we do have a great win percentage. We win and loss and I'll be showing more of that on the page. U make sure you like and subscribe and share us with somebody, man. We're going to be putting more on YouTube. We did a live YouTube yesterday. Go check that out. We went through about six or seven charts. We're going to be putting more information on the channel from reading charts to breaking down companies to looking at dividend stocks, looking at ETFs. My goal is to help us all around the board, even going through wealth management, how to produce wealth, how to create wealth. It's your boy, the Wall Street Trap. Make you send this out to somebody who's interested in learning how to make money in the stock market. Salute.