Here's What I'm Buying If the Market Drops Again

Hey everyone and welcome back to another video for today. Earning season is fast approaching. Markets are still shaky. Some of the days are good or the past couple of days maybe a bit less good. But all in all, all in all, I think we're still in a very, very good place right now. Of course, as you know, going to the earning season, I do like to increase the cash position in case the market does overreact, right? in case we do have a good earnings report, good comments, but maybe maybe too much was priced in and then we do see a pullback in some of these names. We'll do a completely different earnings preparation video as always on another day. But today I'll talk about what happens if we do have a broader pullback because if we look at the market year to date for example, well year to date we're still doing quite well. Of course Microsoft is still down 19.2% doesn't make any sense. Meta is basically flat right now. Also to me extremely undervalued. Oracle down 33, Palanteer 28, Netflix down 21, AppLov is down 35. Same with Salesforce. And then of course you have all of these names here at the bottom left. The Intel, the Cisco, the Clack, Dell, Texas Instruments, Micron, AMD, they've all been crushing it year to date. Now, over the past month or so, of course, some of these names here at the bottom left have come down a bit, which again, yeah, okay, Sand is down 11%, Intel down 12, Marvel down 19. It's fine. They're down over the past month, these numbers, but as we've just seen year to date, they have been crushing it. So, a little pullback makes sense. you do not unless you are trading and you don't really care about owning these companies for the long run then yeah having these types of pullbacks is definitely healthy over the past week we did see the pullback happened right over the past week alone Intel is down 15% is 8.4 micron 7 Marll 14.6 six. So it makes sense. Sometimes it's headline driven, some other times it might be a report, maybe semi analysis comes out with something, maybe another company comes out with something else and it does impact these types of companies. But all in all, do I want to buy the small dip here in these types of companies? At the moment, I would say probably not. I would like to see maybe a broader pullback in order for me to start adding more to these types of names. Although although I would maybe put an AMD on there under 500 bucks, maybe closer to 480 or so could start to look a bit more interesting. But I'll start off with to me the most obvious name where I'd say, you know what, if we do have a broader pullback, I'd want to own more of that name, even though I already own quite a lot of it. And that's of course Google Alphabet. Now, Google Alphabet, I couldn't say quite about this company a year ago, rightfully so, was extremely undervalued, underappreciated, was left for debt for some reason or another. We knew the reasons. I think it was a bit ridiculous. Right now, this is Yes, this is a $4.2 trillion company, but still trading P 26.6 times, forward P 27.6 times. Of course, the price to free cash flow here, as we know, is quite high compared to what we're used to. But if you do say to yourself, you know what, I believe in this whole AI transformation and all, but I I don't know who's going to be the winner, right? I don't know. I can't pick the winners, etc., etc. And I'd say Google. Google is definitely going to be one of the biggest winner out there. Not just because, well, it's extremely profitable today. Revenue is still expected to grow quite nicely over the next couple of years, right? You can see revenue growth for this fiscal year 21.2% then 19.4 and then 17.4. Right? This is already a company that's generating close to half a trillion dollars in revenue and they're still expected to grow this quickly. But when we go and dig a little bit deeper, of course, we have to look at the Google Cloud revenue. And the Google Cloud revenue, if you look at the growth rates there, of course, excellent. Uh I wouldn't even be surprised if we see this acceleration continue, right? 66.4 billion. That's over the past 12 months. If we look at the quarterly numbers, it's also extremely extremely impressive. And this is basically them showing, you know what, AI race this LLM models that look this is a business that is benefiting from everything that's happening right now. Not only that, of course, they're buying an insane amount of Nvidia GPUs as well, but they have their own TPUs. They are vertically integrated. They own the stack. They own the distribution, right? They have YouTube. They have Google search, which again, people thought, "Oh, Google search. Who's going to use it?" Well, still billions of people use it each and every day. They own it all. They are to me one of the clearest winners in this AI race. I I'll go even further and to say that if let's say if there is a huge crash in this whole AI narrative right oh overbuilding this and a company like Google is going to survive right a company like Google is going to come out of that crash as a stronger company because guess what all of these so-called competitors that are maybe growing very very quickly but are still burning money every single day well when there is a crash they'll have a very very difficult time to survive. And that's when companies like a Google Alphabet come in and say, "You know what? We actually like what you're doing. We'll pick you up for 50% of your value because, well, you have nothing to say. We have the cash. You have nothing." So, either you go bankrupt or we buy you out. Of course, Google is not the only one that can do this, but it's one of the most powerful ones out there. Now, Google at the moment is only experiencing a draw down of around 12.6%. As we've seen here, the metrics, the valuation metrics here are not that bad. Although, yes, I would like to see it go lower in order for me to buy more. Right? If we can go back under $300, I mean, that would be a huge gift. I don't know if that's going to happen, but that's the point of this video. If you want I've seen many question, oh, when should I add more of AMD? When should I add more of Google? When should I add? Well, this is the way I'm thinking. I already own quite a lot of it. I don't mind the price of it right now to hold it, but for me to start buying more since this is already a big position for me. I would like to see it drop closer to 300, ideally under 300 might never happen and that's completely fine. Now before continuing of course as you know if you want to look at all of this data right here the charting the screeners the queries whatever you want everything is available for you on fiscal.ai there's a link down in the description and in the pinned comment new users will get of course sometimes for free on fiscal pro and if you use the link you'll get 15% off. I know a lot of you do like it and especially going into this earning season I do think it's extremely valuable because well transcript are going to be uploaded very very quickly on the platform as you can see here you have everything you need proxy filing investor presentations Q1 report everything's on the platform if you want to try it out there's a link down below the next one is a position that I opened more recently and as you can see the stock more recently has started to go back up which is great because my initial position is already very much green, but not that great because I wanted to build that position up and buy more shares. And that of course here is Reddit trading at around $200 per share, $38.5 billion in market cap. A trading P of 57.1 times forward 37.8. But this here of course is a company that is growing very very quickly top and bottom lines margin-wise looking extremely extremely good. Even at $200, I wouldn't call this an expensive name. Although you will say, "Oh, but the forward P is higher than that of Google." Correct. But this one is also growing quicker. And if you look at price to free cash flow, it's of course way better than a Google today. But of course, Google, it's because of the huge capex increase. Now, a Reddit, as you can see, is still down 17.3% year to date and experiencing still a draw down of around 22.8%. But over the past 12 months, it is up 36.6%. The thing here with Reddit is that you can see that over the past month or so, it has gone up quite quickly. Even over the past 3 months, it's up close to 30%. Now, this one, if we do have a broader market draw down, I wouldn't be surprised to see it back around 160 170 or so. You might say, who cares? And you know what? If we do not get back at these prices, yes, I wouldn't mind buying at 200. That's the thing. I wouldn't mind because my average would be lower than this. But if we do have a broader pullback, this is a name that I'd probably pick up more shares. Why? Simply, this is a company where I think the market misunderstands it. You might not like the platform. That's completely fine. And I'm also not the biggest fan of some of the forums on there, but this is a company that's still expected to grow quite rapidly. And in my opinion, these projections right here are quite conservative. I think the licensing deals with all of these big AI companies are misunderstood, are not well calculated, and I do think we're going to see surprises on the upside. Of course, the majority of their revenue is generated through advertising revenue, but here as well, I think that Reddit average revenue per user compared to a meta, for example, still very early days. And so, purely on optimizing that, purely on optimizing the return on ad spend for advertisers, purely on optimizing for them average revenue per user, increasing that, making sure that the platform is better, provides better results, better answers, better performance. you're going to see that number continue to increase a lot over the next couple of quarters. It's not the endgame or anywhere near the endgame for Reddit. I would also think that AI is a huge tailwind for that platform. Now, you might say, okay, there are two different types of users. The user that goes to Chad GPT, to clot, to Gemini to ask, oh, should I buy this product? Should I buy that product? Or is this a good movie? Is this a bad movie? they'll go to those types of services which okay is fine is is what we've seen before people just go either maybe on YouTube or on Google and find their answers but I do still think that there are a very very big group of people that will continue to go to these types of platforms like a Reddit to hear what other people have to say to discuss with other people to maybe have uh well heated conversations with other people whether it's about TV shows movies sports politics products services, you name it. I do still think that there is a large enough group of people that would still like to have conversations with others on the internet, which is yes, a bit strange to say because maybe go out and have conversations with real humans that are not behind the screen. But okay, that's maybe a conversation for another day because you are listening to me now through the screen. But yeah, for that argument, I still believe that even previously you had these two types of groups. going forward you will still have the same two types of groups. So for me Reddit makes sense small position as of right now already in the green. If we do have a broader pullback would love to add even more. Switching to the next one here and this is an expensive name. This is one that I also recently bought more at around $400 per share. Then as you can see it went all the way to $640 which is up 50 something% in record time. And now we're experiencing a a small pullback of around 11 12% or so. And that's Axon. Now Axon over the past 12 months is still down 27.4%. Year to date it's now close to being flat. It's down 3.3%. This is a $44 billion company. Trading PE, this is going to be probably one of the most expensive ones. Although yeah, maybe trading P 219 times forward 65.5 times. Margin wise looks fine. But we've discussed this before. you are going to see margin improve going forward. I talked about Axon when I bought it in more detail. Now, Axon, of course, since this is a new company for me in the portfolio, I would have loved it if I had more time to buy it at around $400 per share or even close to it. But the market then suddenly realized that, oh, Axon is also in the drone play. Then we had the recycled Trump investment in Axon or something like that. So stock went even higher. That didn't make much sense. But to me, Axon, yes, I would love it back under $500, even closer to $400. That would be ideal right now. Even in in the DCF, even in the bull case, I do think we are quite expensive. Well, valuation wise, you might say, pricing wise, oh, it's definitely super expensive. Yes, but in the DCF which is available to all of you of course for free you will see that the bull case this could still make a little bit of sense but I'd like some margin of safety and so closer to $400 per share here for Axon I would love it even more because again this is a company that yes you are going to pay a premium for this because this is a company that is still expected to grow close to 30% for the next couple of years. This is a company in my opinion this here could easily easily be achieved especially if you're bullish drones if you're bullish well defense and things like that Axon at $44 billion or so in market cap could this be a hundred billion company in the future I think it could I think you're going to see across the board them being more and more vertically integrated you're going to see margins start to recover and that of course would make the whole oh it's actually cheaper than it looks case much clearer. Moving on to the next one, and that's of course AMD. Now AMD, as you can see, is the one that's up the most. It's 144% up the year to date. Over the past 12 months, it's up 273%, which might explain why it's on the list. Now, this is already a company that's worth $890 billion, a trading PE of 177 times, forward PE 62.2 times. So, even the forward PE is quite expensive, right? It's quite elevated, especially if you compare it to an Nvidia, for example. But this is why again it's on the list. We have margins that are improving with a company that's still expected to grow quite rapidly over the next couple of years. And remember what I said time and time again, what we're getting right now from AMD is not even the ultimate AMD. Right? AMD, as you can see, this year is expected to accelerate. 43% year-over-year growth in revenue, then 55.6% 6% in fiscal 27. Why is that? Well, the MI400 series is coming out of course pretty soon. This is why we're paying we're paying for what's coming up, right? The huge increase this year is of course, yes, servers, CPU, right? CPU is getting a lot of traction, but the data center part of all of it is the big story. And this is what we're getting. This acceleration for next year is why this is worth close to $900 billion. Then the market sees it grow only 36% in fiscal 28. Nobody knows what's going to happen there. Let's be honest. And so right now for me with AMD, yes, the price today is quite expensive. They might surprise the next earnings report, right? CPUs might become even bigger for them and that's why you're paying right now the premium, but for me to start adding more to an AMD right now, I would love love to see a nice pullback. Now, how big of a pullback could we go back to the $450s that we've been not that long ago? Over a month ago, we're at $450. I think it could it could happen. Let's say the market is not happy with what gets mentioned during the earnings call. Maybe it's not good enough. Maybe there are some delays or maybe some headlines, right? Headline driven market. It could push it back down. But if not, then to me that's fine as well. If not, then I don't mind not buying more AMD cuz I already own enough. But if I were to buy more, it would probably be under 500 bucks. Last but not least, and that's of course the newest position. Well, newest again, and that's Palanteer. Palanteer, I've bought it again at $107 per share. And of course, lo and behold, what has happened since? Well, the stock is up 20%. Now, Palanteer, everybody knows it. you when you look at the pricing metrics here, right? It's a $37 billion company trading PE 144 times forward 80 times. But this shouldn't scare you when again the DCF is available to all of you when you look at what you're actually getting when you look at or listen to the comments from management. And you might say, "Oh, I don't trust management." Well, okay, fine. But then if you go back and look at the last couple of years, what has management said and what has actually happened? Well, they've met their goals and then some. And so, if you were to believe what they're telling us with regards to free cash flow over the next two years or so, then yeah, it's not that expensive the price that you're paying at right now. It is, of course, or it was less expensive than before. It's not cheap. It's not super expensive, just less expensive right now. But here as well, I would love it. I would love to see it again closer to $100 per share. And the reason why, of course, the reason we explained in another video, but if you look at the expected growth rates for this company going forward, this is a company that's expected to grow 72% this fiscal year, then another 45% next fiscal year, then another 42 43% in fiscal 2028. Now, if you listen to what management has told us, fiscal 27 can also be a year where they're growing closer to 70%. And so the forward multiples are of course based on analyst projections. And what we've seen is that analysts were completely wrong when it came to projecting palenteers growth. And that's why when you look at certain companies, I'm not just talking here about a palunteer and you look at the forward multiples. Remember the forward multiples are only based on what the analyst project. And we know that analyst projections move quite a lot. So some names might look super expensive, but then after an earnings report, suddenly we have revisions on the upside and it looks way less expensive. That's why looking at forward multiples, yes, can sometimes make you feel a little bit better about what you're buying or maybe what you're selling, but it definitely doesn't tell you the real story about the company. Now remember, this video is basically me thinking out loud and saying, "Oh, you know what? If we had a broader pullback, these are the names and these are the prices that I would like to buy more shares of these companies. It might never happen. And that's also fine, right? If these companies continue to perform, maybe I wouldn't mind paying an extra 20, 30, 50 bucks or so per share to buy more of these companies. Might have done that before. I'll probably do that more in the future as well. I don't mind averaging up if the reason is a good one. And luckily for us, we are going to have an earning season where I do think we're going to get quite a lot of information and you're going to see yet again a big difference between the very very good companies, the good companies and the less good companies. That's why maybe raising cash right now could be a very good idea. So you are a bit more relaxed going into this earning season. Now you're going to tell me, "Oh, what about SoFi? What about Nebus?" Yes, but these names are trading at good prices already uh today. So wouldn't mind that. Same with Rocket Lab. Although with Rocket Lab can go even closer to 70 bucks. I wouldn't mind that either. But yes, $75 $76. I I I don't think I could go wrong, especially not for a long-term investor. So all in all, that's about it for me in today's video. Let me know what you will be buying if we do have a broader pullback down in the comment section below. See you all in the next one. Bye-bye.