3 Incredible Stocks to Buy Right Now

Hey everyone, welcome back to the channel. Uh Neil and I are going to be talking about three incredible stocks to buy right now. These are three very different businesses with one common thread. This last quarter each of them beat Wall Street's numbers. Then they raised guidance for the quarter ahead. [music] One grew revenue 106%, another 48%. The smallest of these three still put up a 40% year-over-year uh growth rate. [music] Couple of these names get talked about constantly. one of them a bit less, but these are all compelling businesses that we think can be solid picks for growth investors [music] over the long run. >> Neil, why don't you kick us off today's first talk? >> Yes, of today's first talk, for those that know me, I I like fintech names and I like this name quite a lot, which is SoFi Technologies. Now I know I know looking at the stock itself year to date it's down 38%. So tremendous underperformance by the stock year to date when the market is up everything's up. You look at this one it's down 38%. You might think hm maybe a problem with the business. But that's the thing there is no problem with the business as of right now. The business is doing exactly what it should be doing despite some macro headwinds which is exactly why the stock is down so much. It's purely a macro story. It's a bad stock not a bad company as they say. So far came into this year expecting rate cuts. Rate cuts are not happening. Then guidance stayed the same, but their assumptions for the macro got worse, which in my eyes is quite good cuz if your assumptions for the year got worse, but your guidance still remains the same, to me that's a net positive. Then guidance for this year actually improved while the assumptions got even worse. So they're expecting now one to two rate cuts uh hikes, sorry, two rate hikes. We already got one. So their guidance got increased revenue growth. They're still expecting still expecting 30% revenue growth for this year, 52% growth in adjusted EBIDA, 72% in net income, and 54% in diluted earnings per share, which if you ask me, this is what a growth company looks like. And remember, they are facing macro headwinds. They said, look, if the rate environment improves, this accelerates our whole business. But if it doesn't, we can still grow. We can still grow quite rapidly across the board. No issues there. They also previously gave us some midterm guidance. They are also expected to grow 30% compounded until 2028 or so. Revenue growth. Adjusted EPS is expected to grow much faster than that over that same period in time. And again, if we do get eventual rate cuts, right now it seems like it might only happen mid 27 or late 27, but with energy prices, we don't know. It could stay higher for longer. If energy prices are coming down, that affects, of course, the inflation growth, and then that will affect the Fed's decision to cut or or not. But as of right now, this is a growth company across the board. Yes, they have a couple of business segments. Lending segment is doing very well. Financial services segment doing very well. The tech platform is the one where let's be honest most investors were quite and are still quite disappointed with that one. But even that segment has, as it seems right now, has bottomed last quarter and we should start to see that segment grow again. Not by much, but at least it's going to grow. And I'll say this and I've said this before, even in a high interest rate environment, a company like SoFi is still going to be making a lot of money, right? If if rates are high, company like SoFi, which has a banking license, yes, I know it's a bank, so maybe shouldn't be trading at a 20 times or 23 times forward earnings, but in a high interest rates environment, they can still be making a lot of money. And the let's say excuse of this is a bank so it shouldn't have a high multiple is in my opinion a bit of a weak excuse because you do get a high multiple because you are a growth company and like I said this is a growth company you're growing for the full year 30% this past quarter closer to 40%. EPS is also growing faster than that. So yes, you are getting a higher multiple because you are a growth company. That the whole, oh, you only should only get a high multiple because you're a tech company doesn't make any sense. There are various non- tech companies out there that are just growing maybe actually who one you might be talking about later. You get a high multiple because you are growing just faster uh than your peers and definitely faster than the market. And so I understand the frustration when you look at SoFi stock being down so much year to date. But if you dig a little bit deeper and you look at what the company has been able to do in an environment where usually actually over the last 5 years various times where so many headwinds if this was a company that was mismanaged it would probably not be at the stage that it is at right now. But execution has been quite excellent over the past couple of years. I expect that to continue. I think this is an undervalued name, but one that is being put under pressure because of the high interest rate environment. And once that's gone, I do think that you're going to see a rerating that will happen quite quickly. >> Yeah. What I what I find interesting is is kind of the disconnect that we see between how the business is performing and how the stock is traded. And I think, you know, there's been a few reasons for this. I there's been sort of this debate about valuing SoFi as a high growth tech company versus a traditional bank. I think we still see that in its valuation. There's been a lot of weaknesses in the technology platform segment with their you know Galileo and and and Technicus offerings. They've seen some shrinking of revenue and margins there and that has sort of I I think in some ways compelled the market to view SoFi a little bit more like a consumer lender. And so that's something that I think has dragged the multiple down. Obviously, there was the earlier in the year there was the the short seller report which I think SoFi dealt with promptly, but there's been a lot of sentiment affecting the stock and then you look at the business and how it's actually performing and it's really a very different story. So, you know, to me, if I'm an investor looking at this business right now, I think, you know, really pay attention to the kind of cross buy engine. I mean, the user monetization in the second quarter, 51% of all new product openings came from existing members. And that is a very lucrative piece of the puzzle. You know, they're this means that they're dramatically lowering their customer acquisition costs. I think it proves as well the platform's stickiness, but also, you know, paying attention to that lending versus non-lending revenue split. You know, management is really aggressively pushing fee based revenue, blockchain, international money transfers, their financial tools like their I think their AI powered SoFi coach uh is another piece uh to pay attention to. So there's a lot of really good things happening with this business that I don't think are reflected in the share price. So uh these are I think some of the key metrics and developments as well to pay attention to that I'm watching um as an investor right now. >> I do want to correct myself a bit. I said I just said net revenue guidance for this year 30%. That was the guidance. It the updated one is actually between 32 to 35%. And I will also add that the reason why they've increased revenue guidance but didn't touch EPS as of right now is one because of the environment that we're in. But two, the fiscal year 26 guidance does assume a fullear tax rate of 22% compared to an assumed mid team's target tax rate when the 2026 EPS guidance of 60 cents was originally provided. They did tell us I think in an in a post on X that without it it would have been higher. EPS would have been higher than the 60%. And look revenue is growing faster than expected despite macro assumptions being worse. EPS still the same. If they can surprise us in the upcoming quarter despite us already seeing one rate hike, I do I do think that the stock pops. But if guidance stays the same, assumption stays the same, we might stay under $20 until we get maybe a bit more easing in the interest rates environment. >> Yeah, makes sense. Well, with that, I'm going to switch to a completely different industry. Uh, healthcare. I'm going to talk about Eli Liy. Again, this is not a name that probably many investors were following unless you followed the healthcare and pharmaceutical space until the last couple years uh with the GLP1 boom. Bearing in mind Eli Liy is one of the oldest continuously operating pharmaceutical companies around. They were founded in 1876. This has been uh you know so for 150 years one of the world's largest pharmaceutical companies historically known for insulin. It was actually the first company to commercially produce insulin back in the 1920s. Uh but of course the growth story for Eli Liy especially over the last couple years has been its success with its GLP-1 drugs. Monjaro for type two diabetes and Zepbound for obesity. But I want to underscore the fact that this is a company that has been diversified across the health care space. Oncology drugs, immunology drugs, drugs that target various neurological conditions for many many years. It's been a leader within these respective industries. And so that's also a part of the growth story even though I think the market and investors are really watching the GLP-1 angle. So tursupetide which is the key ingredient in munjaro and zapbound that has emerged as the bestin-class option in the category up against noonorisks ompic and wiggoi I mean Eli Liy has been able to claw market share it is now you know the the leading company in this space ahead of the competition in April of this year Eli Liy garnered approval for a drug called foundio this is the oral pill version of its GLP1s and this is really important. Injectable drugs have a real adoption ceiling. Um, some people won't start or stick with a self-administered shot no matter how effective it is. And so, a pill removes that barrier entirely. Fondo, even though it's only been launching over these last several months, is already uh accounting for something like 30% of all new patients that are uh taking a GLP-1 drug in the US. So they are rapidly gaining uh market share as well with these new launches. A key development to watch with Eli Liy is what comes next because of course within this space you launch a new and successful drug but the market's watching what happens after. What is your next generation product? Well for Eli Liy that is a drug called uh retatride. Essentially, it activates three different metabolic hormone receptors at once instead of the two that its flagship drugs, Majaro and Zepbound, use across five separate late stage trials. So far, Reddit True Tide has posted the strongest efficacy data reported to date in this entire drug class. Uh, one trial showed a placebo adjusted weight loss of around 27%. that's well ahead of what its current GLP1s deliver, but also real improvements in blood sugar control, cardiovascular risk, and even joint pain in patients with um you know, other related conditions. So, Eli Liy is going to be filing for approval for Redat True Tide in the first quarter of 2027. Um I've seen Wall Street estimates that peg what Reddit tide sales at nearly $4 billion annually by 2030. That's probably a conservative uh estimate. But on top of that, Eli Lilly is expanding its GLP1 franchise at a rapid pace. Munjara was actually added to China's national reimbursement list recently. And Mujara revenue outside of the US is now growing faster than US revenue. Even though Eli Liy is accounting for the lion's share of all GLP1 prescriptions uh and medications taken by patients, this is a business that brought in 23 billion in revenue in the recent quarter alone. that was up about 50% year-over-year. About half of that revenue was from its GLP-1 franchise. Fondio, that GLP1 that was just approved this spring in its first quarter in the market generated about hund00 million in revenue and it's still very early days there. So, a uh, you know, profoundly successful GLP1 franchise, very promising next generation candidates. This is a stock that's been pretty highly valued compared to most healthcare businesses. um PE multiples well above what you tend to see with the competition, but that's really because of what we've seen in terms of how that growth story for the business has shifted. And I want to again say this is one of the most veteran pharmaceutical companies in the space. They have a very compelling profitable portfolio outside of GLP1s. The GLP1 business has definitely rerated the business and the stock. I think it's still a really fantastic business to buy and hold for the long run and they have been paying a dividend in some form for uh over a century at this point. So Eli Lilly is definitely a compelling stock to buy and hold in my book. I mean when you look at it you would think that they are selling GPUs with the amount of growth in the business and and the stock but yeah this is this is again one of those names outside of the AI story that has been doing quite well. Of course, it definitely helps when one of your main competitors out there, which is Nova, Nordisk, uh, doesn't do well, right? In in such a growth environment, main competitor was previously the leader, didn't really perform well. It helps Eli Liy, they continue to perform and grow rapidly. And as I said with SoFi, they get a multiple that's higher than the rest because they're best-in-class because they continue to grow. Free cash was actually expected to grow faster than revenue growth. So they're becoming more and more profitable and with that extra cash they either invest in their next product or they just reward investors with buybacks or uh dividends. So a tremendously well-run company that yes has been riding that that tailwind to perfection actually. >> Yeah. And it's interesting because, you know, for a long time, Eli Liy and Nova Nordisk, which recently rebranded to Novo, they traded, you know, from a share price perspective somewhat in lock step. And then, of course, they both kind of were, you know, neck andneck within the the GLP1 race. Their drugs, their GLP-1 drugs interact with the body differently. But we have just seen steadily quarter after quarter Eli Liy's financial performance has just broadly outpaced Novos. Um their execution strategies have been very different. You know Eli Liy built out you know billions building out its own domestic manufacturing infrastructure. They've really worked to insulate their supply chain from thirdparty vendor errors. You know, Novo kind of famously also spent billions, but they bought uh a few manufacturing sites, but they've had a lot of issues with integration. That's been a a problem for them. And then Eli Liy has just rapidly gained market share in a way that Novo has found very difficult to catch up with. And then just from an efficacy perspective, their results have broadly been better. So definitely a growth story for both companies, but I think if you're looking at this space, Elle Lillly is the clear contender to be a much more compelling growth story over the long run. And bottom line as well, their portfolio is much better diversified with a wide range of other growth oriented products outside of GLP1s. >> Yeah. And with that, I will uh maybe talk about a not so well-known company out there, a a company that's that's worth around $5.4 trillion. It's uh it's of course Nvidia now. >> What could it be? [laughter] >> Yeah, what could it be? It's it is the biggest winner in this in this AI super cycle. As we've said in in a previous video, the AI capex super cycle is expected to reach over a trillion dollars in 26, 1.4 trillion in 27, maybe a bit higher, and then 1.6 trillion in 2028. And of course, Nvidia is is a huge winner in that buildout. Now what's interesting with Nvidia is that right now it's still expected to grow over 90% revenue and then for next year they told us actually Jensen for the first time in I think a while he gave us some forward forward looking guidance for for the next year and they said they're expecting around 70% revenue growth and that is described by management as a supply constraint outlook which means which means If they get more supply, we might be seeing Nvidia grow over 70% in 2028. That's fiscal 28. They're already in fiscal 27 right now. And the numbers for this fiscal year is currently at $411 billion in revenue growing 90%. Right now, despite Jensen's comments, analysts only project only 65% growth in fiscal 28 to reach $682 billion. then another 30% in fiscal 29 to reach $883 billion. I know the numbers here are quite crazy but imagine if imagine if they can grow at again 70 75 maybe 80% in fiscal 28 how big those numbers are going to look like and all of this happen is happening while yes some of their biggest customers are also making their own custom chips they're most of them are working with Broadcom to come out with their own custom chips but Nvidia is still experiencing ing a tremendous amount of growth. Their forward PE you would think would be in the mid20s, but no, it's at 18 19 times right now. Forward PE price to free cash flow 2021 times forward multiple. And to quote Jensen, he said, I expect Nvidia to sell twice as many ships this next year as we do this year. And the reason for that is because AI has had so much contribution to the benefits of different industries, different economies, and you could see that almost every single country that we're in, people want to invest in AI. Now, of course, this is maybe what he has to say, but the numbers do back it up. Now, to to nitpick here, when he says to sell twice as many chips this next year as they do this year, this is probably because they will start shipping GPUs, CPUs, and LPUs as well, which is something that they didn't do previously. So, naturally, they are supposed to ship way more than than what they did in the past. But this is a company where yes, the size of it I guess does matter because to double a $5 trillion company, well, you need to add another $5 trillion. So I guess to move to move an Nvidia, you you would need quite a lot of momentum. But if not, well, if not, this company is expected to generate well over $420 billion in free cash flow in fiscal 2028. So if the market does not want to reward it, I guess they can reward shareholders by increasing their dividend which is something that they did think two quarters or something like that. Buy back more shares. They have invested in various companies. They've invested in Marll in Intel in so neoclouds like core reef like Nebuse some other company I think Nokia as well. So they're making sure that yes we are generating an insane amount of cash. We are investing in our own business which by the way capex as a percent of revenue for them is just between two to 3% or so which is in a very very very good spot to to be in. Return on invested capital is above 100% trending towards 200% which is way above the cost of capital for them. They are in a tremendously good spot despite the fears of increasing competition. It seems like Nvidia is in a spot right now where I I don't see them lose anytime soon or ever because they have reached a stage where you know what if we see a lot of competition well we might just invest in one of those right as we've seen with with a Marll though Marll is not a competitor one to one but they've invested $2 billion in Marvel they've partnered up with Marll as well so if some of their biggest customers yes want to create their own custom chips and things like that which should benefit Marll. Nvidia wins. Uh that that's the beauty of generating so much cash. You just don't know what to do with it. And so you start diversifying a little bit and and that's that's going to reward shareholders for the long run. My main issue here is still the size of this company. But then again, whenever Apple reached a trillion dollars in market cap for the first time, people also said, "Oh, a trillion. How much higher can this go?" Well, it went to two, then it went to three. And I guess it went to $4 trillion as well. So I guess higher can go higher, especially if it's backed up by great business performance. And with Nvidia, it's been nothing but a great business performance that will continue for for the foreseeable future despite increasing competition from AMD uh from Broadcom's customers, which are all of the the hyperscalers out there, which by the way AMD is now worth a trillion dollars. And AMD is trading at I think close to 50 times forward earnings expected to grow slower than Nvidia. That's also quite quite an interesting move by by the market rewarding one company maybe because it is much smaller and not really rewarding the other because maybe it is too big. It's just my my opinion on the matter and I do own AMD so I'm quite happy with the with the premium that I'm getting here. But yeah, Nvidia is despite its size, I I still think it can go much much higher. >> Yeah, it's interesting. I mean, the market isn't always rational, right? And I think you you see that here. I mean, despite its multi-t trillion market cap, Nvidia's forward PE is not only low relative to its peers, but it's low relative to its historical averages, which tended to be in the, you know, the 50s or or more. So, you're also seeing a growth story that's it's backed by real profits and real projected forward growth that is backed by, you know, long-term order books. I mean, the the 70% revenue growth projected for fiscal year 2028, aiming for about 700 billion in total annual revenue. Uh Jensen Huang has said that they could sell twice as many chips next year compared to this year. They control up to 85% of the data center AI accelerator market. So, you know, Nvidia's mode, it's not just hardware, it's also their their CUDA software ecosystem. You know, millions of developers are locked into that framework. It's very costly and disruptive for hyperscalers to switch uh to arrival. And we're still in the early stages of a global computing overhaul, right? There's projections that indicate that global capex on AI data center infrastructure could be anywhere between three and four trillion dollars by the year 2030. Even if there is a slowdown at some point, you're still looking at tremendous growth runway there as these tech monopolies, the Microsofts, Metas, Alphabets, and Amazons are competing in what is truly an AI arms race. And Nvidia is still one of the key beneficiaries of that entire infrastructure spend. So, I think that if you're an investor looking at the runup curious why is this still a buy, I think those are some points to think on. The biggest concern I have that I'm watching is, you know, the the ways in which this is a company that has also acted as a financing arm for its own customers, right? You're not just selling into demand, but you're actively underwriting the build out of that demand. It's a bit of a different risk profile than we've seen with Nvidia before. And so, I think that that then begs the question of whether these are companies that the companies that Nvidia is financing, can they succeed? It's a different risk profile. I think it's something that investors and the market is sitting with right now. I do think management is very deliberately guiding around a lot of these risks. I think we're seeing still a lot of, you know, actual uh, you know, agreements and orders that are underpinning its growth, but that circular funding is probably one of the biggest risks that I'm watching right now. I don't think it undermines the growth story, but I think it's something to watch for sure. >> I agree. I think it's like you said something to watch out for, but I also think that Nvidia is smart enough not to give away money to companies that they don't think would be a success in the future or that won't contribute to the ecosystem because yes, I I would be way more hesitant in investing in in the space if they were just giving away money to XYZ company that that might have a great presentation, but the business model just doesn't make much sense because then Yes, eventually it will all blow up in in their faces. >> Yeah, absolutely. Well, I think that's all the time we have uh for this video. We talked about an AI infrastructure giant, a drug maker that's still in the early stages of its biggest product launches and a fintech whose stock hasn't caught up to its own numbers. Of course, that's Nvidia, Eli Liy, and SoFi Technologies. Three very different stocks to be paying attention to right now. Maybe putting a slice of those companies in your portfolio. Let us know your thoughts in the comments below. Like and subscribe. Let us [music] know what stocks you'd like us to talk about in future videos. And we will see you in the next one.