the market is cooked [what I'm buying anyway]

This could be the worst earning season that we've seen in a very long time and honestly pretty surprising to me some of these companies. We will go through each and every single one of them and I will grade the earnings for you and tell you which ones I think are worth adding to, which ones are holds, and which ones have to be reconsidered. Also, as I said in my last video, we've never had three minus 10% corrections in the NASDAQ in the same year without being in a bare market. And I said that based on where the stocks in the NASDAQ were. We looked through the top holdings of the NASDAQ that there was a little bit more to go in terms of a draw down or potential draw down that could take us to that minus 10%. And before I grade the earnings for you, you definitely want to stick around for that. I just want to highlight two things that I said on X. I said that it's extremely weird that ahead of the FOMC, which we just had on Wednesday, as of the time of this recording, we've never left two FOMC lows, which is the low of the day during the FOMC meeting. We've never left two of them in a row untouched. And when I looked at at QQQ, you could see here from uh this one is from September and this one is from July, neither of them were touched. And so I thought that my thesis was that at least one of them would get taken out before we have any chance of a rally further. And that is why before FOMC, the first swing trade that I've had in a few weeks, I bought puts on QQQ and SPY. And so far those puts are up massively after hours. But let's not get ahead of ourselves. Let's get into the earnings gradings. I want to go through each of these for you quickly so that you can get a sense for how well, you know, whether the earnings were an overreaction or whether there is something of concern here. Just really quick, how we're grading the earnings. Forward guidance, headline beats, margins, cash flow, and sector KPIs. Each of these will be weighted differently as you see here. This is a proprietary earning scorecard that I put together. Now, let's talk about Google because to me, this was the one that well, first of all, it's the one that uh hurt the most because my portfolio, as you can see here, is 12% Google even though my cost basis is really is really nice. Uh did lose a bit of the return there. Still up 182% on Google. However, it is a big position in in my portfolio and because of the multiaceted business, it is one that I think that I had considered extremely cheap and now it's even cheaper. But with YouTube, with Google Cloud, with subscription services, there there's so much around Google, there's so many ways that they make money. However, the thing that really shocked me isn't that they missed an earnings. Sure, a lot of the earnings miss can be attri attributed to SpaceX, a paper loss on SpaceX, but it's because they actually missed revenue on every single one of their services except for one. So, not only did they miss earnings and revenue as a whole, but they missed on search revenue, which is huge because that is their primary business. Even though search supposedly searches were up 12%, but search revenue is down. YouTube ads is down, subscription uh revenue is down, platforms and devices revenue is down. Network revenue and Google cloud were the only two sectors that they beat on. Now Google cloud being in my opinion the most important even more important than search going forward. The most important sector that they have. This is the one that is related to AI. But if we take a look at Google on Alphascope here, if we take a look at Alphabet, you could see that the one thing that the market did not like is their negative free cash flows came in at double the amount of negative free cash flows that they had last quarter. So they went from -5 billion to9 billion, almost double. And last quarter was the first quarter that Google ever reported negative free cash flows. And then also they do not guide. So there is no formal guidance and they raised capex. They said that they are going to keep raising it significantly through 2027 which obviously is going to scare the market on that free cash flow number. Now as we've been saying all along the the the companies that are generating an insane amount of cash once they stop spending everyone knows that their free cash flows are going to go up but in the interim the market is not going to reward them. So if you look at the Mac 7 stocks that are up this year year to date, they are the ones that have positive free cash flows. Microsoft, Nvidia, and Apple. And if you look at the Mac 7 stocks that are down year-to- date, they are the ones that have negative free cash flows. Google, Meta, and now Amazon. So I rate Google's earnings a C plus. And for me right now, it is just a hold. Even though their cloud uh their cloud revenue was impressive and their cloud backlog is impressive at 561 billion, they did miss on overall revenue. And for me right now, Google's just a hold. I'm not looking to add to Google here. In my opinion, I can wait for the broader market to stop correcting before adding to my position, especially because I have a lowc cost basis as well. But right now currently trading at 278 and it looks like it might even take out that low from March at 270. Now if you didn't have a position in Google, it's trading at a 14p. This is the cheapest that it's ever been. So I don't begrudge anyone for adding Google here if they really wanted to. But just know that momentum is not on its side until at least uh another print. All right, let's keep on moving here. Meta to me again a C++ forward guidance uh came above street but so did their forwardyear expense guide. So cost grew 68% and free cash flow once again if we take a look on Alphascope here at Meta you could see that free cash flows dipped to the negative for the first time ever or the first time since 2012 since it was a young company. Now, I think that because of the legal charge, the 9.9 billion legal charge, uh the earnings per share was actually a bit diluted and was a lot better than than what was reported. So, even though they technically missed on EPS, without that legal charge, they would have beat on both EPS and on revenue. But their operating margins came in at 35% minus the charge versus 40%. And as we said, their cost grew to 68% versus revenue growing at 26% and then they dipped into negative free cash flows. Now, Meta for me is I I would not mind adding to it here. It's not a huge position for me actually. It's 3% of my portfolio. I don't have a great cost basis as I do on Nvidia, Google, ASML, etc. So, I don't mind adding to it here. But once again, I am personally going to wait until the Q's subside here and we take out that September 16th FOMC low at least. Microsoft, this was an absolute monster. A minus here forward guidance. Q2 revenue and Azure guided above the street even though capex did come in above expectations as well. But the market is going to reward companies that actually that that actually still are even if they spend they are still able to deliver positive free cash flows. Look at Microsoft's free cash flows. It looks like it's unaffected even though their capex look at their capex is just growing quarter over quarter but they're able to generate positive free cash flows. Just an absolute monster of a company here. Clean double beat. Net income and earnings per share both at plus 18%. No legal charge, no paper loss, no nothing. Operating margins 50% up year-over-year. Operating cash and free cash flows healthy. Not crazy, but healthy. And what we want to see is their commercial RPO, their performance obligations coming in at plus 73% year-over-year at 677 billion with Azure growing 48%. Now, this is only about 6% of the portfolio. Wish I had more, but it is what it is. I'm not going to be adding to it here. I would add to it on dips, especially when you look at their PE is still a 27 PE which is fairly cheap from Microsoft historically. Now VRT is one that I talked to you guys about Vertive. This is an AI power play, but we added Vertive back on October 20th when it dipped to 200 and below. You can screenshot this here if you want and read it if you want to see how detailed the analysis goes for stocks that we add. But to me, this was the best earnings so far in the market out of all of the tech or AI related companies. Forward-year sales raised to 14.45 billion to 14.85 billion. Q4 guided above the street. They they even had light capex, so not a ton of capex. Headline beats both sales and EPS beat pretty easily. Operating margin up 290 basis points. organic orders more than doubled year-over-year. And you can see here it's forward PE is 26 with a PEG of 0.441. The lower the better in terms of PEG. So this one I wish I did add to my main portfolio. I did add it to the AI portfolio, but I wish I added it to the main portfolio. I would continue to if you look at at VRT's chart to me this is one that hasn't even yet broken out and it's still down 35% from highs but just an absolute great performance for a growing company that is one of the most important in terms of power as it relates to AI. So I would add to this now I would add to it on dips and I certainly would add to it if it broke out service. Now, this one hurt a bit as well because I do hold service now in my portfolio. Uh, service now accounted for 1.9% but my cost basis was 96 and this was trading if we look at service now was trading at 160 and now it's all the way down to 108 after hours. So, not a great look uh for those who who held Service Now and enjoyed this rally for it to drop this much. Now, I do think Service Now is a bit of an overreaction drop. Although, I still grade its earnings a C. So, the reason that I think it's it's a it's a little bit of a an overreaction because performance obligation guide came in at 18.5% and the street wanted to see 19.8%. and revenue came in line. EPS missed by only 2 cents. Not a huge deal, but their gross margins came in at 80% versus 83%. So, not as great of of a margin as as the street was expecting, but I think for 2 cents earnings per share miss, it's still a profitable company. And for an 18.5% performance obligation growth versus 19.8% 8% for the stock to drop like this. It dropped 27% in one day. You know, it was priced for perfection. Again, if we take a look at uh at Service Now on Alphascope, it was priced for perfection. when you're priced at you, it was above this, but when you're priced at 78 trailing PE, the the the street is not really going to forgive you for missing on guidance and missing on earnings per share. But I still think 27% was just wild. And I do not mind buying service now, but would I would I make it a large position in my portfolio? I personally wouldn't. This is not the the type of I I don't really like the beta of my portfolio is 1.1 which follows the market very closely. I don't really like to weight high beta stocks heavily in my portfolio. Now, if I have a separate portfolio that I'm more aggressive in, if I'm doing an an AI portfolio, sure. But in my main portfolio, even though I think this is an overreaction and I think Service Now is a great company that is benefiting from AI, uh this isn't one that I would rate heavily. But in the past, it has had major drops after earnings. It is just a high beta company at this point. So I do think it's a C. They scored a C. I may even, you know, score it as a B minus in terms of their earnings, but at, you know, 80 PE, it is priced for perfection and the street is is going to punish it. Sometimes it's going to punish stocks like this that that are valued really highly. So, for me, I'm just going to hold on to my position. I'm not going to increase it beyond that. Now, Fordinet, this is one that I thought was an actual massive overreaction because their print was solid. Their 40-year revenue, billings, and earnings per share raised. Their service revenue guide was cut slightly, but they beat on revenue, beat on earnings per share, and their operating margin is up 130 basis points. Free cash flows are up 52%. And if you look historically at their PE, even before COVID, you know, they routinely trade in the 40s, 50s, 60s, and sometimes even in the 70s PE. So for it to have a forward PE of 36, a trailing PE of or 36, a trailing PE of 44 is really not that bad. Return on invested capital 31% 10-year revenue kager 21%. You look at its revenue, you look at its EBA gross profit, net income. This company is an absolute monster. And I think that if you are looking to buy cyber security and you could see you could see that it it recovered. How much was this intraday? It recovered almost 8% intraday. To me, this is a just a laughable discount based on the earnings sprint and we know that cyber security stocks whether it's Palo Alto Networks, Fordinet, Crowdstrike, these stocks have been absolutely booming and they are going to be AI beneficiaries. I think this is a discount and I would add this to the portfolio in a heartbeat if I'm looking for cyber security exposure. All right, next on the list is CRM. Again, this is a solid beat and it was rewarded with a 23% upside the next day, but solid print B. I would rate it a B. Forward guidance raised headline beats even though the EPS was inflated by an investment gain and buybacks. Operating margin right around what the street expected. Free cash flow up 81% in a seasonally line seasonally light quarter and RPO performance obligations up 14% and just gaining. So you could see that their current RPO which is kind of you could think of it like backlog for SAS stocks 33.5 billion. And you can see here that it lost uh some of the gains that that it made after hours and actually ended up on a negative on the day. But this to me is just a great company, great quarter. If you need SAS exposure in your portfolio, I would consider this. I might even rotate out of service now into CRM. All right, we have Amazon, Intel, and SanDisk. So Amazon, Intel, and Sandesk reported tonight as at the time of this recording. Amazon C. This again was a big surprise to me that Amazon and Google just came in on they they just missed earnings, missed revenue. Not honestly not not great for those two companies. Not great looks. Uh Q4 revenue and operating income guided below the street as well. Operating margins did well. Once again, negative free cash flow, but Amazon is a little bit of a different business because it does have a large retail wing. However, AWS revenue, just like Google Cloud, up 46 billion, 39% yearover-year. So, Amazon trading at these lows from June and July here at around 226 after hours. To me, this is a decent area for a buy on Amazon for the long term. Again, the market is going to have a hard is going to have a hard time rewarding these companies that are delivering negative free cash flows, but these are stocks that are going to be amazing buys for 5 10 years to come. So, you know, I don't mind adding Amazon here if I didn't have it. Intel. This one came it did it actually did beat earnings and beat revenue, but it guided light because it said that it's PC sector is still slowing down. However, the draw with Intel is not the PC sector, it's the foundry. Remember, Intel wants to be the TSMC of the West. It wants it wants to have that level of dominance. It wants to build chips for other companies, taking their design, but manufacturing their chips in the same way that TSMC does for Nvidia, for AMD, for Samsung, etc. So, Intel wants to be that. It will take years for that to happen. But the good news is that their foundry business is growing. Gross margins are up. Adjusted free cash flows 1.64 billion versus 0.9. So, operating cash doubled. data center uh revenue up 78% currently coming in at 7.32 billion so definitely seeing gains from AI and if we take a look on Alphascope at Intel it is generating positive free cash flows after a big big slump here in the last few years trying to build out its foundry it's still able to ek out positive free cash flows however Intel is still pretty expensive trading at 41 forward PE. If you look after hours, Intel is down to $71, filling this gap here. Now, Intel is also owned by a lot of bigwigs, not only the US government. Trump has it in his portfolio, and I'm pretty sure Nancy Pelosi still has it in her portfolio as well. But we did fill this gap, and this gap was the earnings gap from April. So, if you believe in the foundry business, this stock is now down 50% from highs. And these equal highs here, this double top from 2020 is at around 69 where the price is currently trading after hours. I don't mind adding Intel here if you believe in the foundry business, but the PC business, as they said, is going to continue to slow. We rate this earnings a C though because of the forward guidance. And last on the list is SanDisk. Nothing really to say about this. absolute A+. Q2 revenue came in 12.2 billion to 12.6 billion guidance and EPS came in at 55 to 57 earnings per share guidance which is insane. Headline beat on revenue and on EPS they did a $5 billion buyback gross margins at 85.1% last year it was at 29.9% free cash flow 6.3 billion versus 0.4 4 billion data center revenues coming in at 61% quarteron quarter. So beat on earnings, beat on revenue, forward guidance elevated, data center revenue coming in 61% quarteron quarter, 85% gross margin. The story is kind of priced in, but I think if we do get a major dip on SanDisk, right now it's very flat after hours. If we do end up taking out that low in July, I would definitely add this to the portfolio. But just know that it is a high beta stock. So it would go into a high beta portfolio for me or if I did put it in the main portfolio would be a small amount. Anyway, the next video that we do on Sunday, I will break down how it is to construct a portfolio based on your risk tolerance, your age, your investing goals, etc. So, you will definitely want to stick around for that video. We'll talk about stocks uh to buy outside of these stocks here, but I did not want to leave you guys without a video based on all of the earnings that we've had so far this week and all of the earning surprises with some of those companies that really just it blew me away that Google and Amazon both missed earnings and missed revenue. The worst earning season for the mega cap tech stocks in a very long time. But also know that that means that we are also getting discounts. So let me know in the comments section below which one of these are you buying heavily. I want to know which ones are you bullish on. Are you did you abandon some of these stocks and say you know what I don't believe in this company anymore based on what they reported. Let me know in the comment section. I read each and every one and I want to hear from you guys. If you want all of the buys, the thesis that we do on each stock, we do stock writeups, very detailed on every single stock that we're adding to port to the portfolio and every stock that has reported earnings as well. I think these puts are going to open up very green tomorrow and you get access to the swings, too. Make sure that you sign up. Link is in the description below. Make sure that you get yourself an Alphascope account. There is a 7-day free trial. No credit card required. if you don't already have an account, but you you get access to the quickest and most concise fundamentals all on one page just by putting in a ticker symbol. It will help you make investing decisions really that much easier. Subscribe to the channel, hit that notification bell, stay safe out there, traders. Please.