SpaceX CFO Just Dropped A Bombshell - The Market Is DEAD Wrong! Here's How I'm Playing This Dip

While everyone wants you to focus on how 1 billion additional SpaceX shares are about to be unlocked and how this could crush the stock price, [music] I believe almost nobody is listening to what the CFO said during the latest earnings call. SpaceX CFO just dropped a massive bombshell. The company's investment in AI computing infrastructure can [music] achieve a payback period of less than one year. Yes, you heard it right. AI comput spending can achieve payback period of less than one year. An important announcement before we continue further. After listening to the complete SpaceX earnings score, I first shared SpaceX buy the deep opportunity alert with members of our Discord community. If you want early access to my detailed research on a regular basis, consider joining on Discord through [music] Patreon. The link is given in the description down below. Now, let's get to the main point. [music] In this video, I will share two high conviction stocks that I believe are massively undervalued. if you can hold them for long term. Number two stock will surprise you the most. This is not a clickbait line to trick you into watching for longer. Honestly speaking, please watch completely to understand my complete investment rationale and also consider liking the video if you find any value out of it. Number one on the list is SpaceX. [music] SpaceX latest earning call delivered several powerful bullish signals. Revenue increased 92% year-over-year. A revenue grew 247%. Starlink subscribers doubled to approximately 12 million. The company signed 6.7 billion in additional cloud contracts after the quarter ended. The new AI compute investments are reportedly achieving a payback period of less than one year. Management expects SpaceX to reach a 100 billion annualized revenue run rate by December, while Elon Musk moved the company's 1 trillion revenue target forward from 2031 to 2030. These are not the numbers of a business facing weakening demand. [music] Quarterly revenue reached approximately 7.8 billion, comfortably exceeding expectations of around 6.9 billion. SpaceX reported a net loss of 541 million or 9 cents per share, [music] less than half the loss analysts expected. The biggest concern is capital spending. [music] SpaceX invested approximately 18.3 billion during the quarter, including around 15.8 billion in AI infrastructure. That number looks frightening until we examine what the CFO said. Brett Johnson explained that recently deployed AI compute capital is producing a payback period of less than one [music] year. This statement refers specifically to AI infrastructure supported by customer agreements, not every rocket, satellite or launch facility. If this performance continues, SpaceX [music] is not simply burning cash. It is purchasing revenue generating equipment that may recover its cost quickly and continue producing income afterward. mentioned 100 billion annualized revenue target is equally important. [music] To reach that level, monthly revenue would need to approach 8.3 billion by December. The CFO said all three major business segments are contributing with cloud services expected to be the largest driver. Musk also described an extraordinary imbalance between demand and supply. He said demand for AI computing is increasing by approximately 200% annually [music] while memory production is expanding by only around 20%. Basic economics suggests that when demand grows far faster than supply, pricing power remains strong. This sports SpaceX [music] AI compute business while also benefiting suppliers such as Nvidia and major memory producers. SpaceX installed computing capacity has already [music] expanded from roughly 400 megawatt one year ago to approximately 1.4 GW. Management expects it to exceed 2 GW by year end and potentially reach 10 GW by the end of 2027. The company also plans to build its AI infrastructure exclusively around Nvidia's architecture with Musk describing VA rubing as the best available AI computing platform. Meanwhile, Starling continued scaling rapidly. Connectivity revenue increased 66% as subscribers doubled. Musk believes Starling could eventually provide a significant share of global internet connectivity in countries where [music] it receives approval. SpaceX also holds approximately 100 billion in cash and marketable securities [music] and has a reported backlog of around 47.5 billion. The risks [music] remain substantial. Kepler spending is enormous. A demand could slow and management's targets are extremely ambitious. But the earnings call revealed accelerating revenue, growing contacts, expanding capacity [music] and potentially exceptional returns on new computing assets. The market sees excessive spending. I see a company building three major growth engines, launch, global connectivity and AI infrastructure at the same time. Number two stock on the list is Reddit. Reddit stock suffered its worst post earning decline [music] since going public. Even though revenue grew by more than 60% for the eighth consecutive quarter. Net income more than doubled and free cash flow increased 135% to 261 million. Meanwhile, gross margins remained above 90%. [music] So, did investors discover a serious weakness in the business or has the market created an attractive buying opportunity? Second quarter revenue reached 805 million, increasing 61% year-over-year and beating Wall Street expectations by approximately 74 million. Advertising revenue rose 64% to 762 million, while other revenue, which includes AI data licensing, increased 24% to 43 million. Profitability was equally impressive. Net income more than doubled to 253 million representing a margin of approximately 31%. Adjusted EPR reached 343 million while gross margins remain exceptional at 91.3%. The platform's audience also continues expanding. Daily active users increased 18% to 130.3 million while weekly active users grew 24% to a record 514.6 million. According to Samrush, Reddit was the third most visited website in the United States and the sixth most visited website worldwide in June, generating approximately 5.08 billion visits. Reddit is commonly described as a social media company, but that description ignores its most valuable asset. The platform owns one of the internet's largest collections of real human conversations. When people search for honest advice about buying a camera, [music] preparing a computer, or choosing a holiday destination, they frequently add the word Reddit to their Google search. This information is also extremely valuable for artificial intelligence companies. AI models need authentic human conversations to improve their training, reasoning, and answers. Reddit [music] has already signed licensing agreements with Google and OpenAI. So why did the stock collapse? The main concern is that Google's a generated answers could replace the number of people clicking through to Reddit. Management acknowledged that search referrals were uneven during the quarter. Investors are also uncertain about Reddit's upcoming AI licensing renewals. However, I believe Reddit enters those negotiations from a position of strength. Google, OpenAI, Anthropic, and other AI companies need highquality human generated information. Reddit controls a unique collection of conversations that cannot be reproduced easily. Management's guidance also remains strong. Reddit expects third quarter revenue between 860 million and 870 million representing growth of approximately 47 to 49%. That outlook was comfortably above previous Wall Street expectations. Following the selloff, Reddit's valuation has become significantly more attractive. Based on the forward estimates used in my research, the stock trades near 20 times projected earnings. That looks compelling for a company growing revenue close to 50%, producing substantial cash and expanding its global audience. Here is my final verdict. The market is viewing artificial intelligence only as a threat to Reddit's search traffic. It may be overlooking Reddit's position as one of the most valuable sources of human knowledge required by AI itself. The stock will remain volatile. So I would not purchase my entire position at once. I view the declines as an opportunity to begin with a small position and gradually accumulate more shares while monitoring search traffic, user growth, and licensing renewals. and