I Just Bought More of the Stock Everyone Slept On

Hey everyone and welcome back to another portfolio update for today. So over the past week the couch investing portfolio went up by 3% whereas the S&P was basically flat.1% year to date we're still up 39.38% whereas the S&P is up around 13% or so. And so in today's video we'll talk about the upcoming earnings week. We don't really have that much. There is a environment on Wednesday after the market closes and then Thursday that's probably the most interesting one. Oracle after the close and Adobe. We do have, of course, more news on Adobe's upcoming CEO. So, we'll touch on both of these companies in a bit. As always, we'll look at some technical analysis for the names that we've been covering for a while. I'll share my thoughts on the upcoming Fed meeting, rate hikes, no rate hikes, especially with some strong August numbers. What does that all mean for your portfolio? So, if we have a look at the upcoming earnings week, of course, like we said, Oracle and Adobe, the most interesting ones, although I don't know about you, but on Friday, there is this uh weird weird company name here, but okay, we'll focus on the two red ones. Oracle, of course, is still important for this whole AI story, data center buildout, even for the NeoClouds as well. We'll look at what the analysts are expecting. As for Adobe, it's more about, okay, what comes next for Adobe? We know the CEO is leaving. We know the CFO has left. We know they've chosen an internal hire to be the next CEO. We also know that David, the president, is also stepping down. So, a lot of a lot of moves inside the company. We'll look at what the market expects there as well. We'll start off with Oracle. Oracle year to date is down 18.8% over the past 12 months. Stock is down 33.4%. That was just after the huge huge spike last year when they suddenly gave us that huge backlog. It's a $457 billion company trailing PE 27.2 times forward one 19.7. Of course, the problem with an oracle is is the capex story. Capex is growing. Free cash flow is negative. But if we look at what the analysts are expecting this company to report this quarter, we're looking at revenue of around 19.1 billion, which represents 27% year-over-year growth. As for EPS, market is looking at $1.74. Here, that's 17.5% year-over-year growth. As for free cash flow, you will see that free cash flow for this quarter is at negative9.5 billion while capex capex for the quarter sits at $19.5 billion. So that's the that's the problem here, of course, we know this is a growth company, but can they grow fast enough in order to make sure that at one point free cash flow goes back into positive territory? Because if we go and have a look at free cash flow over the upcoming quarters, we can see that even a year from now, the market is still expecting Oracle to generate negative $7.7 billion free cash flow. And that's a problem right now for the market for the perception here because debt is quite high. Free cash flow is negative. Capex keeps going up. But hey, if Oracle can show the market that look, our RPO is of course very very big, RPO backlog is very big, we can now start to recognize more of it faster as well. I think that could send a very very positive message to the market. Right? If you look here at the remaining performance obligations, $638 billion. Look at that jump. So of course that's a great number but that is not 100% secured revenue. They still need to build everything. They still need to deliver and then they can start generating. But the faster they can start generating this the better it will be. Moving on to Adobe. Adobe is also down 20% year to date and over the past 12 months it's down 25.6%. It's a 105 billion close to $106 billion company. A trailing PE of 15 times a forward one of 10.3 with a PEG ratio of8 price of free cash flow close to 10 forward. Very very profitable company still a growing company despite the stock's performance. This is still a company that is experiencing growth. Right? If we look at this, it actually has seen some acceleration in growth as well. And if we look at what the market expect this company to do, as of right now, growth is expected to decelerate. But then again, the market was a bit wrong before. If we look at what Adobe delivered over the past couple of courses, you can see slight beats. So, it's definitely still growing, still very very profitable. But the problem, the problem in this case is not capex or free cash flow or things like that cuz free cash flow is still very good. The problem is just the questions around the company, the questions around the business model, the question around leadership more particularly right now because yes in this let's say day where Adobe's business some parts of its business might be under attack. It does not send a positive message to investors to the market when the CEO leaves without a successor. when the CFO left when you say you are going to look for a successor CEO internally externally then it happens to be an internal one which I believe is going to be a very good one but because of that decision the president David is expected to leave too many too many moves that are not going in Adobe's direction but you can understand why shareholders are not happy now I would say one thing if If you're selling purely because you wanted David to be CEO and now he's leaving and Anil is going to be CO. Anil is a very very good choice. Okay, it's a very good choice. But the thesis the thesis has never been, oh, one of these two is going to be CO. If not, then the thesis is broken. No, if you sold because of this announcement, you probably looked for a reason to sell and to jump ship. And you know what? Okay, we're not going to blame you, right? Like I said, too many question marks. still a good business, still very profitable, but too many question marks. No problem. But to say that, oh, it's because David is not the CEO, that's just a load of BS in my opinion. Moving on to the stocks that we've been covering, and then I'll tie it with the portfolio moves and the Fed's upcoming decisions. So, up first, we have here Google Alphabet. Google Alphabet sits again in a area where it is consolidating. It's an area where yes, if you would like to add more or maybe start a position if you want. I do think these types of areas right now 330 340 is quite attractive. If it goes to 300 in my eyes, even better. You can actually look to sell some puts at $300. I think for December this year, the premiums are very, very attractive. But if you're looking for a rebound, I would say around 350. If we can get to there, then we might get some momentum. A stock that definitely does not have upwards momentum. That's usually a name that does go up a lot with Rockets. And that's Rocket Lab. Now, Rocket Lab I did add last week. I explained why. Even though it's expensive, wanted to add more. I did sell at higher prices. So, I'm just getting back more shares with the same amount of shares at a lower price. And guess what? It's still around the same area. It's an area between 64 58 57 or so. That's an area where you could be looking to add to me. You know what? As I've said before, if it does form a sort of floor at around these areas for the next couple of weeks, I don't even mind it sitting around $60 or so for the next couple of months or even until we get some more concrete news with regards to Neutron or some other big contract. That's completely fine because yes, the business needs to catch up to the valuation. That's the reality of it. If somebody tells you otherwise, it's probably lying or selling you some BS courses because yes, it is not a cheap name. This thing cannot continue to go up and up and up and up and up without the business showing accelerated results. Moving on to a name where the business is definitely showing a lot of results. stock not so much although we are starting to see more closes at $18 over $18 creating a nice little support area and that's a sofi I like to see this we can close around $18 couple of more times that would be great and then of course we can finally go back above $20 per share but with SoFi it's more of a macro story right now than a business one moving on to Amazon Amazon sits again quite close to that support area. $258 was the close on Friday. So, you want to build a bigger position in Amazon or you want to open one, it's definitely a good area to do so and then look for under it $250, $240 if you want to accumulate more and more. Finally, Meta started to move back up back above $600. We actually have a close here at $616. also did reclaim a crucial crucial point here. Of course, we know why. We've been talking about Meta a bit bit too much lately, although I'll I'll talk about Meta in a bit a bit more. That's their new model. New model comes out or part of a new model comes out. Good performance, very very wellreceived. I'll talk about that in a bit. But finally, Meta is moving a little bit. Is this the last time we could have bought Meta under 600? I don't know because we've seen this story play out before, right? Good news. Meta goes up then goes back down. But the business itself is a very good business, very profitable business and in my opinion remains extremely undervalued. Moving on to new holdings is also a name I've added more last week. Closed out again above $15 here. That was important. Try to stay above $15 and then maybe we can go tackle the above areas. $16.5 $17 in the long run. New is a very very good business. Yes, when we talk about new, when we talk about SoFi, now we're going to talk about Revolute. Revolute of course is getting bigger around the world, but especially it's entering the United States. Now, is this a problem for new, for SoFi, for all the rest? No, I don't think so. I don't think Revolute will be able to offer what SoFi offers as of today. Is it a problem for the other banks, the other financial institutions that could not offer great services to their customers? Yes, I use Revolute. I've been using Revolute since 2019. Okay, I'm in Europe, so it's a bit different. Our rates are also a bit different than in the United States, but if you haven't tried it out, maybe give it a go. It's a very wellbuilt app. Is it going to be bearish for SoFi? No. Moving on to Netflix. still around the same price. So, here again, trying to build that floor and then maybe we could have consistent closes above $80, but as of right now, it still sits right under it. And then we have Nebus. Nebus actually over the past couple of days did go under $200 slightly, but managed to close out the week at $226. So, back above a crucial point here as well. I've had many people ask, "Oh, when should we add more to Nebuse? If I don't have a position, when should I buy?" Around 200, under 200 is an okay area to buy if you really want to own it for the long run. If you buy it at 200 just because you think it's going to 300 next week or 400 by the end of the year, sorry to say, but it might never happen and then you'll be stuck and you'll be disappointed. I've seen some people talk about, oh, people are disappointed by the stock reaction of Nebus. Who's disappointed? Literally, who's disappointed? Maybe those that bought at 280 because someone told them that it's going to 350 the next day. Okay, tough luck. But if you're buying this company because you believe this company is going to be worth more than hundred billion in the future, then why why should you be disappointed? This name literally gives you every week an opportunity to add more if you want it because the volatility here is insane. If you're selling covered calls, if you're selling puts around this name or even an oracle, but I do think that the premium for Nebus is much higher, you've been making quite quite a lot of money over the past couple of weeks and maybe even months. Turning to Reddit, Reddit closed out the week at around the same price as the last time we've covered it, which again is not the greatest because we would like to see it back above $160, $165 to really try to get back on track. It completely lost all of the gains from when it got into the S&P, which is quite interesting. But as I've explained time and time again with Reddit, it's more about the perception around the name. the market is looking for that catalyst, right? A new deal that could be announced or could not. It really depends on their negotiation skills. So, we'll see. But as of right now, all the data does suggest that Reddit will report another very good quarter. Moving on to Axon. That's a name I've actually added this week. Funny enough, last week we said maybe it might never go back to 500 or under it. Guess what happened couple of days later? It went to close to 500. closed at $515. So, I did add I think at around $520. I'll show you in a bit. Yes, it's expensive, but as I said, I wanted to add more at lower prices. Got the opportunity if we do go even lower, I'll add a bit more. Marcado Libé, sneaky, sneaky little one. Went back above $2,000 per share actually on one day, I think Wednesday or so. Closed out the week quite close to it here as well. We still have quite a lot of momentum for the stock and definitely also for the business. So nothing more to add there. As for Uber, it's not really moving much. It's same story as with Netflix. We would like this name to go back above $80 per share. Now Tesla robo taxi event to me was a bit of a lot of hype. Very good rides, good-looking cars, although we knew what the cars would look like. But here as well, it's going to be a slow roll out. Yes, the app is probably going to be the number one app in the free app store or whatever. Makes sense. Everybody wants to try it out, right? But does this hurt Uber's business? No, not at all. Uber is a worldwide business. Uber does billions of rides every year. This is not going to change the thesis as of right now. Plus Uber is also launching with various partners around the world. So nothing really changes here other than again the perception around the name. And yes, the perception does hurt the stock's performance but not the business one. Moving on to the upcoming FOMC meeting which will happen in around 10 days or so. If you see the probabilities, you know that a rate hike is expected. Okay, it's not really going to surprise anyone if it happens, but it is definitely going to surprise everyone if it doesn't happen. Although it does tell us here 40.6% probability that we get no rate hike as of right now after the strong August numbers, it does seem like the Fed is going to increase rates. Though some people say because of the midterms, because of President Trump, because of this and that, they might just do nothing. Now if we go and have a look at what's expected in January which means after 2026 still around the same probabilities one to two rate cuts for 2026. Now I think we all agree that right now yes unemployment is quite low. Inflation is still there. Stock market still doing well. Gas prices are still high. And so to cut rates right now would be a bit strange. to increase rates could make sense. You could make the argument that increasing rates right now is just going to hurt the economic momentum and everything. Okay, fine. But one way or the other, you will have to tackle the inflation problem. And as we said last week, the inflation problem is not just a US one. You're starting to see inflation creep up in various European countries as well. We've also talked about the Venezuela deal and how that impact is going to take a lot of time, right? The headline was there, but the actual impact on oil prices will take time. The Iran issue is still a big issue for the oil prices. The Russia Ukraine war still an issue as well. lots of issues could be resolved, could have a positive impact on of course gas prices, oil prices, then gas prices and then inflation does come back down and then you don't need to increase rates. But we do not control any of this which is why we rather focus on the companies that we own in our portfolio. And so if we have a look at the portfolio, nothing much has changed. Nebu still the number one SoFi AMD Google Meta is the number five. Rocket Lab 6. Oscar Health. Robin Hood has been having quite a lot of momentum. That's because of the Robin Hood chain that also gathers a lot of momentum. We're now at $122. Micron back above $8,000 per share, which we actually said is going to happen sooner rather than later, trying to get back to all-time highs. might happen closer to when they report their quarterly figures in a couple of weeks or so. New Palanteer, Uber, Rubric, Reddit, Axon, Netflix cash position, a couple shares of Nvidia. Now, like I said, I did increase my Axon position by 16%, added four extra shares here at around $522. of course would have loved to get it below 500 again, but as of right now it's still good enough because my average is lower. My average sits at around $413. So that's fine. Now let's talk a bit about what could go wrong here. Of course, what could go wrong is the so-called AI bubble popping. Although I am not a believer in the AI bubble, especially not after the consistent revenue beats, EPS beats across the board. Yes, there are always companies that are overvalued and will have a correction. I have one in my portfolio, maybe a couple, but definitely Rocket Lab. Rocket Lab was just overvalued, expensive at $150. All the hype around SpaceX drove all the space stocks up. This one is now down over 50%. Can happen, but it can happen in a vacuum. Certain sectors, certain names will have corrections. That doesn't mean that the whole market is going to break or pop. No, because there are a lot of companies here. Most of them actually reported excellent quarters top and bottom lines. Some of them even raised guidance as well. So what can go wrong for me is just macro related macro related bad policy changes could of course affect the momentum that we're seeing for various companies here various companies in your portfolio as well because purely business-wise I think we own quite a lot of good companies if not all of them are good companies I'm biased because I own them but to truly stop the momentum that we have right now it's going to be macro related less company specific issues unless of course there is such a huge slowdown in AI adoption across the board over the next couple of quarters and then all of these companies are losing momentum business-wise could happen. We of course have an upcoming entropic IPO, OpenAI IPO, although with Entropic it's still going to happen maybe October, November or so of this year which I would love. I I wouldn't buy it, but I would love to look inside that company and see what is happening because finally we would have one of the biggest players in this whole AI story open up its books. They could tell us how much money this model might be making, how much money that model might be making, how many subscribers they have, how much money they're making per GPU clusters. I don't know. The more information the better. Maybe I just made up some information. and maybe they will never share these types of metrics, but it's a company that goes public. Whenever that happens, a lot more scrutiny. Could this be a local top for a lot of the AI names? Definitely. We've seen that with SpaceX. I just gave you that example. Could happen. Yeah. So, don't be surprised when it does. Now, non-bubble territory is of course meta. And like I said, meta, there was a specific reason why the stock went up finally. I'll share this post by mostly borrowed ideas on X and I believe he has a Substack newsletter as well. Following Muse Spark 1.3 release, Meta's token share on Open Code went from 25% to 40% and is approaching half of all tokens on Open Code today. Of course, it's I think free or close to free. So, yes, it's going to grow rapidly. But what's impressive is this. He says 5 trillion tokens today means this. Back in June 2026, when Google was proposing an $80 billion equity race, Sundar Pichai mentioned the following thing. The anti-gravity coding harness has accelerated how we build internally. Every few weeks, we're doubling the number of tokens we're processing across our developer tooling. Recently, we reach more than three trillion tokens a day. This scale creates a powerful feedback loop to improve our current and future models. Remember that last sentence. So only on open code, Meta is essentially processing almost twice that of Google was processing for their cording harness a couple of months ago. Of course, Google Anti-gravity is processing more tokens today. But he basically gives us this example to show us how big this Meta lounge has been. He continues by saying Meta also has a strong incentive to ensure their model is on par with Frontier models at coding. Recent media reports suggest that Meta is expected to spend $10 billion on entropic models and we can assume they're spending tens of billions of dollars maybe on other models as well. And so Meta by releasing their own frontier model does not only help them be at the top of the charts, attract new customers, developer ecosystem, etc., etc. But if it is so good, this means that they don't have to spend tens of billions of dollars on Entropic, on OpenAI, maybe on Gemini or whatever, right? You bring all the cost inhouse. You're saving tens of billions of dollars. What else is great here? The last sentence that I said, the scales creates a powerful feedback loop to improve the current and future models. That's why the pricing has been so aggressive for Meta. And I'm sure that when they'll announce their watermelon model, when they will go to the next upcoming earnings report and call, they will talk more about it. They will say, "Look, we're now cutting costs because our model is so good. Internally, we are starting to use our own models more and more, relying less and less on external ones." And that's suddenly when I do believe the perception here is going to flip. And so that's about it for me in today's video, ladies and gentlemen. I do believe that on Monday, because it's a Labor weekend in the United States, the market might be closed. Correct me if I'm wrong, but if it is, hey, an extra day of doing absolutely nothing. That's great for everyone. Have a great rest of your Sunday. See you all in the next one. Bye-bye.