The Two Best Stocks To Buy In 2026

Welcome back everyone. Today on the Joseph Carlson show, we're going to be discussing two stocks that are the best buys for 2026. These are the best buys. These are the best companies to own and I'm putting my money in them. I've put over $100,000 into each of these companies. They are significant holdings. The two companies are Meta and Amazon. First of all, with Amazon, we have Andy Jasse, the CEO, releasing a 2025 letter. And this is loaded with great stuff. He has some good stuff to share in this. He basically says the investors doubting Amazon and their capex spend are idiots. Now, he says it in a nice CEO like way, but that's the message. He's telling people, you're dumb if you think we don't know what we're doing. You're dumb if you don't think we're going to make an incredible return on this capex spend. We'll be going through the letter plus many other things he mentions. We also have Meta. Meta is on fire. Not only did Meta release their app Meta AI, it's like a chat GPT Gemini like assistant and already it's in the top 10 of the app store. It's been hopping around between 1 to 10. I've used the Meta AI app. I've tested it out. I'll be sharing some thoughts on it. We also have news that Meta is leaping ahead of Google in terms of total digital ad revenue. Google has held the crown of advertising revenue for years and now Meta is going to pass them up. So, I'll be looking at all of this news around these two companies, as well as my discounted cash flow assumptions. I'll show you what I think these stocks are going to do and why I believe they're such strong buys today. Now, of course, we have some other news to get to. For example, we have some interesting things going on in the land of Open AI. In an OpenAI memo that leaked, they're touting Amazon over Microsoft. We'll be looking at that. And we have the fail of the week, which in this case is Chat GPT's voice chat. This individual continues to embarrass Chat GPT's voice chat by asking it simple questions that it can't answer. We'll be looking at this as well in the fail of the week. So, this is going to be a jam-packed episode. We have a ton to get into. Let's go ahead and jump in. It's time to join the best stock investing community on the internet. You can join it with qualrim.com. Not only does it give you access to all the software, the tools, the graphs that let you visually illustrate the financials of a company, it's like having a highly visual personalized Bloomberg terminal. You also get access to an exclusive Discord community full of tens of thousands of investors with like-minded goals trying to invest in the best companies in the world. And then you also get access to exclusive content. Qualum originals, deep dives on companies, community AMAs, stock market updates, and portfolio transparency, all within the same membership for $10 per month. Try it out now risk-f free with a 7-day free trial at qualim.com. Now, to start things off, we can take a look at my own investments in my portfolio. If you're new to the channel, I share my portfolio transparently. It's something that I do. Not many people do this, but I like showing what I'm invested in, the outcome of these investments, talking about the wins and the losses. So far, we have the passive income portfolio, which is my primary one. It's the biggest one at $934,290,000 in gains. Throughout 2022 to 2025, this portfolio has outperformed the S&P 500. In 2026, it has underperformed the S&P 500. Currently, it's down around $90,000, otherwise 9% year-to date. So, we're down a little bit this year, but I don't think that all is lost for this portfolio. I think there's a chance that we can recoup those losses and even get to new all-time highs by the end of 2026. Now, I'm making lots of significant bets. For example, in the tech category, I have Meta as a massive new bet. This is the new thing that I'm investing in. I have ASML as a continued huge bet in the portfolio, now almost 130,000. We have Google across both portfolios. This one has done incredible. And we have Microsoft across both. Another stock that I've been investing in that I'm bullish about that's gone through a little bit of a downturn is Mastercard. I still feel very bullish about this one. I like its prospects going forward, but that one is getting caught up in the whole disruption concerns. We have S&P Global, Moody's, and into it that are also well into that disruption concern. Investors are scratching their heads wondering what's going to happen with these stocks, but I still feel confident with them so far. In the consumer category, Costco remains a massive winner. The majority of the holding now is just gains. So, this is one that it just continues to go up, paid huge dividends. Costco is such an incredible company. Now, that's not the only portfolio that I have. I have another one called the Story Fund that's very similar, but it's a little bit more aggressive. The Story Fund is $417,000 total, $145,000 in gains. This one has widely outperformed the S&P 500 and the QQQ since its inception, and it's done that primarily, well, a lot of it is attributed to Google and Netflix. Those two companies have simply just pushed up everything else. So, while these other holdings have done all right for the most part, Google and Netflix are really the big ones here. And these are all the holdings in this portfolio. Now, another thing is that even this year, if we go to year to date and we look at it, it's down 0.5%. So, it's basically flat this year. So, I think it's first good to start by just congratulating investors by the successes last year. 2025 was a massive year. Google was a massive success. This company could not have gone better. Google has outperformed all the skeptics, all the Brad Gersonners, the Michael Burries, all the people that were going through saying how you should be fearful investing in stocks like this. When we look at it, Google went up, take a look at this. It went up in the past one year 95.9%. Not including dividends. This is just price action. So, it's up 100% if you include the dividends that it pays. Year-to date. It's flat, but Google has earned those gains and it's held itself in 2026. Congratulations to Google investors. Also, congrats to ASML investors. Shout out to you guys. This was another massive success. There are a ton of people in this channel buying ASML. Now, ASML is also a massive winner in 2026 so far. It's up 26%. At least the US listing is up 26%. We look back one year and it's up 117%. So, I'm up over a double on this company. I made a big holding. Talked about it a lot in 2025. Uh, it's still going. This is why I also refused to sell the stock at the beginning of the year. ASML got a bit more pricey. It is more expensive, but it's not crazy. It's not astronomically high at this point. And the moat, the relevancy, the need for their products is bigger than ever before. We also have to give a shout out to Netflix. This is one where there's a growing amount of investors I think in this stock, at least in my community. There's been more and more that have jumped in. The Warner Bros. discovery business was an opportunity to buy a great company on a dip. It went through a dip in early 2026. You can see it right here. It got down to $77. That was a pretty good time to jump in and you had a little bit of time. If you bought it anywhere throughout early 2026, you're in the green on those recent buys. Now, it's back to its old self. Investors are excited. Netflix, by the way, uh we're talking about this image of the top downloads. And the reason that I have this image is to highlight that Meta has a new app out, but I also just have to highlight that Netflix is number one. The Netflix game controller, showing that Netflix's push into games on the TV is working. Like, it's a number one app, and it's been that way for about a week on the the app store. So, people are downloading the Netflix game controller. They're playing the little fun party games with their family and friends on Netflix, which is really cool to see. That's one more thing that increases the value proposition for this company. Finally, a company that we don't talk about as much. I just have to mention this one, Costco. Costco's back up close to $1,000 per share. If we look back on Costco, it has its es and flows, but overall, this company seems to go up, then it will hold steady for a while. It never really dips all that much, maybe a 10 20% dip at most, and then it heads back up again. And we see that again with Costco. Year to date, the stock is up 16%. Business is as good as ever for Costco. So, that's a look at some of the biggest winners of 2025. the stocks that are just crushing it. And these continue to be big holdings in my portfolio. And overall, the goal of these portfolios is to have a combination of compounding machines, incredibly good companies in diverse sectors with diverse risk factors. That makes for a very good portfolio, especially when you can buy these companies on dips. When the multiples compress for one reason or another, whether that be tariffs or the Iran war, whether it be COVID, you name it. Buying these type of companies when those events happen is a very good strategy. Now, investing is not just about the past. We can look at the companies and celebrate the successes of 2025, but it's about the future. 2026 has been off to a rough start. It's been a little bit shaky. Investors are worried about inflation. They're worried about oil prices. They're worried about conflict with Iran and the potential of that spiraling out of control. They also have huge concerns today about claude and anthropic and what it's doing to software. What it means for white collar jobs, what does it mean for the future of the economy and many companies that are doing things that Claude could potentially replace. There's so many concerns circling through investors heads that in many cases good companies get sold off in the mix. When big institutions sell out of a fund, they're not picking specifically which company to sell. In many cases, they're just pulling their money out. and a lot of these companies become mispriced. The two companies that I believe are the best opportunities for 2026 today are Meta and Amazon. These two companies I think are incredibly good investments. Now, there is always risk and there's no way to really determine stock price movements in such a short period of time as one year. But I believe that as investors, we can look at the riskreward. We can look at the upside and downside of these companies. And I believe that each of these companies are lowpriced. They're priced with a lot of skepticism, a lot of concerns from all these things circling around and they have incredible levels of upside. I also believe that there's not as much risk in these stocks as people believe and the risk has been dramatically overpriced in them. The first one that we'll be looking at is Amazon. Now, again, with Amazon, I have this as a a fairly large holding. It's a $150,000 holding. Amazon itself has increased by $51,000 with the returns here of 120%. That's because I bought Amazon. The stock over doubled in price and then I bought more and more and more. So, the total value has increased, but the gains on what I've bought so far have been very attractive on this company. Even though I've had great returns on Amazon so far, buying the stock when it was selling off dramatically, I don't believe that it's nearly finished. I think that Amazon's going a lot higher. I'll first turn your attention to the letter that the CEO wrote about the company and what's going on with it currently. This was published just a couple days ago. He says, "We have never seen a technology adopted more quickly than AI. When ChatBT launched in November 2022, it reached 100 million users in 2 months, four times faster than Tik Tok, 15 times faster than Instagram. Chatbt already has over 900 million weekly active users. Both OpenAI and Anthropic have revenue run rates reportedly approaching 30 billion. So the people saying, "Ah, well, they they have a lot of users, but how are they going to make revenue?" Well, with 900 million users, you can make a lot of revenue. They're making $30 billion already. These companies are like brand new. They've been around for a couple years. These are breathtaking numbers for companies this soon after their commercial launches. When Edison opened his first commercial power station in 1882, most people understood it as a better way to light a room. What they couldn't see was that electricity would eventually reorganize every factory, home, and industry on Earth. AI may have a comparable impact. The difference is that electricity took 40 years to get where it is going. AI happens to be moving 10 times faster. So, Jasse sets the scale. He says that this is the fastest moving, biggest thing that's happened since basically electricity. We've heard that before, but how is that relevant to Amazon? Well, Amazon happens to have a strategic advantage here, one that's very difficult for other companies to compare to, and that is that they have the largest cloud hosting business in the world. They already have invested, luckily, hundreds of billions of dollars into infrastructure. Jasse says that Amazon is smack in the middle of this land rush, and companies are choosing AWS for AI. Three years after AWS launched commercially, it had 58 million revenue run rate. Three years into this AI wave, AWS's AI revenue run rate is at 15 billion in Q1. Nearly 260 times larger than AWS AWS at the same point. Customers are choosing AWS for AI for a few reasons. First we have broader capabilities than others with compelling offerings and model building Sage Maker high performance inference with leading selection of frontier models which is bedrock lowerc cost inference on our custom silicon tranium those are their own chips that they're making that compete with basically Nvidia agent building strands scalable and secure agent environments agent core and turnkey agents for coding software migrations and most tasks knowledge workers use in their daily routines transform forms and quick. So, they basically just have products for everything. Like Amazon has the biggest product suite. In fact, one of the cool things is when you work with AWS and you open up their products, you just see that they they really do have something for everything. There's like a hundred different things to select from. Everything imaginable that your business could need, Amazon has built in the tooling for it. They're just so far ahead of other companies and how technologically advanced AWS is. There's some other cloud hosters that specialize in some things. Like Oracle is good at some things. Microsoft is good at some things. Amazon's AWS is good at everything. It's just the all-encompassing cloud and that's how they have such a huge broad diverse base of customers. He says third, as customers expand their AI usage, they consume a lot of additional nonAI services where AWS also has the broadest and most capable offerings. So Amazon is good at doing cross-selling. when you start using their AWS services, you start using everything else they have to offer. And he says, "And fourth, AWS has the strongest security and operational performance of any AI infrastructure provider. We spend a lot of time listening to customers and they continue to remark about AWS's advantaged performance as increasingly move their AI to AWS." So, Amazon has the broadest, most diversified portfolio of tools to be able to use AI. If a company wants to have an all-in-one solution, if they want to build their business on the thing that has the most support, the most tools, the broadest reach, the biggest infrastructure, they're going to use Amazon. And that's why the most companies use Amazon more than Google Cloud, more than Microsoft. Those ones, they're doing great. Google's doing great. Microsoft's doing great. Amazon is by far the biggest. They're almost as big as the second and third combined. That's how big AWS is. And there's a reason to believe it could become even bigger. Amazon could maintain their market share. They are growing incredibly fast. There's also some news that just proves what they're saying here. Of course, this is coming from Amazon, but we also have news that OpenAI is basically saying the same thing. Open AAI says, "Our Microsoft partnership has been foundational to our success, but it's also limited our ability to meet enterprises where they are." And for many, that's Bedrock. Bedrock is an Amazon tool. Dresser wrote in the memo, which was viewed by CNBC, quote, "Since we announced the partnership at the end of February, inbound demand from our customers for this offering has been frankly staggering." So, we already have a lot of evidence that Amazon's products are really good. Big companies like OpenAI are saying that the growth that they're getting from them is staggering. But we also have Andy Jasse highlighting that what he sees in the business today is a huge opportunity that investors aren't seeing. This is the difference between management's perspective and investors perspective. Andy Jasse has a clear sight into the demand for the products they offer. AWS could be growing even faster. AWS added 3.9 gawatt of new power capacity in 2025. It expects to double total power capacity by the end of 2027 and is monetizing that capacity as fast as it's installed. That's one thing that I want to highlight. So, this isn't a situation where they're opening up new restaurants and hoping customers come. No, this is like AWS opening up new restaurants and they're booked out weeks in advance, months in advance. Uh the patrons are already there. The customers have already signed legal agreements saying they are legally required to have this much spend, this much revenue go to these products. They're monetizing full capacity as fast as they're installed. In Q4 of 2025, AWS reported 24% year-over-year growth with a 142 billion revenue run rate. That's a lot of absolute growth. And yet, we still have capacity constraints that yield unserved demand. As an aside, two large AWS customers have already asked if they could buy all of our Graviton instance capacity in 2026. So, they have they have two customers, not one, but two, saying, "Hey, can we buy all of that product? like a 100% of whatever you're making from it. That's a problem. You don't have enough product when two customers are want wanting to buy all of your product. So, this is again what Andy Jasse is seeing. He's seeing customers lining up at the block, big customers. Graviton is our widely adopted custom CPU chip. We can't agree to these requests given our customers needs, but it gives us an idea of the demand. Our chip business is on fire, changes the economics of AWS, and will be much larger than most think. He's saying here that you're just wrong. Saying it's going to be much larger than people think is saying investors out there out there have not priced this in. Virtually all AI thus far has been done on Nvidia chips. But a new shift has started. We have strong partnerships with Nvidia. We'll always have customers who choose to run NVIDIA. They say and we will continue to make AWS the best place to run NVIDIA. So they're giving credit to Nvidia. But here comes the butt. However, customers want better price performance. We've seen this movie before. In the CPU space, virtually all of the workloads ran on Intel chips until we invented Graviton in 2018. Graviton, which has up to 40% better price performance than other x86 processors, is now used expansively by 98% of the top 10 EC2 customers. The same story arc is unfolding in AI. Our second version of our custom AI silicon trannium 2 has about 30% better price performance than comparable GPUs. Comparable GPUs is Nvidia. So they're saying they already have better price performance and it's largely sold out. Tranium 3, which just started shipping at the start of 2026 and is 30 to 40% more price performance uh performant than Trannium 2 is nearly fully subscribed. So even the ones like you know just starting to ship, they're sold out. People want these. Nvidia has net profit margins around 65%. They sell their chips at a massive markup and Amazon knows that. Amazon already looks at industries across the board that have huge profit margins and they say, "Hey, can we make this a better value for consumers? Can we go after that company's margins?" This is exactly what they're doing with their custom chips. They're saying that we want to take these profit margins of of Nvidia that we're paying for them down by 80%. We only want to have 20 30% profit margins on these chips. We'll sell them to our customers and give them a better value so that they'll come to us. We'll get more compute. We'll get more business. And this is happening and it's happened before. He's already said that we've seen this movie before. The same thing with Intel. This is the problem with being the supplier of the chips is that your customers can essentially develop the same thing. He continues on. A significant chunk of tranium 4, which is still about 18 months from broad availability, has already been reserved. So, we're looking out, you know, 18 months in the future and they already have this stuff booked. It's sold before it's even close to getting to the market. Now, not only will the use of tranium chips, their own in-house chip development save customers a ton of money, it's going to save Amazon a ton of money. Again, when you don't have to go out and license other chips and have them develop it and pay for their huge markups, when you vertically integrate your business, it saves money for both the customers and you as a business. They say having our hotly demanded AI chips opens up many possibilities, but perhaps none larger than the ability to lower costs for consumers and secure better economics for AWS. At scale, tranium will save us tens of billions of capex dollars per year and provide several hundred basis points of operating margin advantage versus relying on other chips for inference. So, they're diversifying away from Nvidia being the all powerful constraint and bottleneck to computing. Nvidia had a good run. They were the first ones to really have the chips in place. Everybody went to them, which has boosted Nvidia's earnings like crazy. But now that companies like Amazon, Google, and Microsoft can develop their own chips, they're not going to be quite as reliant. And this is part of the reason why I believe that companies like Amazon, Google, and Microsoft have much more resilient and reliable and durable business models than Nvidia. Nvidia is an input cost to their customers which are actively working on ways to try to mitigate that cost. One of the most incredible stats here that he shares is just how big their chips business actually is. And as as a standalone business, it's massive. Our annual revenue run rate for our chips business inclusive of Graviton, Tranium, and Nitro, our EC2 NIC, is now over 20 billion. Uh to put that in context, let's just like compare it against this stock. Let's bring up one here. We'll go to Qualrim and we'll plug in uh AMD. Let's take a look at AMD. We bring that up. What is AMD at with their their business? They're at $34 billion. So, Amazon is where AMD was in 2023 with just their chip business. Just one like business of Amazon that really nobody's pricing into the stock today. And fun fact, it's also growing tripledigit percentages year-over-year. tripledigit percentages. To dimensionalize this versus other chip companies, that run rate is somewhat understated by our currently only monetizing our chips through EC2. If our chip business was a standalone business and sold chips produced this year to AWS and other parties, as other leading chip companies do, our annual run rate would be 50 billion. So, Amazon has a chip business that's about 50% bigger than AMD if it was a standalone business. And by the way, AMD has a $400 billion market cap. So just Amazon's chip business would be worth what $500, $600 billion if you give it a relative valuation multiple to AMD. Jasse notes that there's literally so much demand for their chips that they are quite possibly interested in selling entire racks of them to third parties in the future. So they might become a vendor. They might just sell their chips to other companies as well. Now, he doesn't say that they're for sure doing that, but that's like that that's where this is headed. So, Amazon is the largest cloud with the most capabilities. Andy Jasse sees clear signal from enormous amounts of data that the demand for AI is only accelerating and it's already grown substantially. AWS cloud has continued to grow at a massive rate. Even as big as the numbers already are, they're continuing to add more compute and their capacity constraint. On top of that, Amazon is vertically integrating. They're reducing the reliance and the need for Nvidia and paying them those juicy margins. Instead, they're stealing that margin for them and their customers that at scale will save them tens of billions of dollars per year. Now, one part of this thesis for Amazon that's been routinely challenged by Michael Bur, by many of the skeptics, many of the people saying that these companies have manipulative accounting tactics and they're depreciating their assets for too long and uh where are they going to get the ROI on all this capex spin? All those people with those concerns, I believe, are entirely misguided. I believe that they'll be proven wrong. And I believe that Amazon will have incredibly attractive returns with their capex pen. And I base that off of the data. The data and what the leadership of the company is stating with empirical data to back it up, I believe proves this point. For example, on point number five, Andy Jasse says, "The way AWS's cash cycle works is that the faster AWS grows, the more short short-term capex will spend. AWS has to lay out cash for land power buildings chips servers and networking gear in advance of when they can monetize it. Typically 6 to 24 months before we start building uh billing customers depending on the components. So literally they're paying for stuff today for things that are going to happen 2 years from now. That's the cash cycle. However, these capex investments fund assets with many years of useful lives. 30 plus years for data centers, five to six years for chips, servers and networking gear. The free cash flow and ROIC for these investments are accumulatively quite attractive a couple years after being in service. However, in times of very high growth like now where the capex growth meaningfully outpaces the revenue growth, the early years of free cash flow is challenged until these initial tranches of capacity are being monetized and revenue growth outpaces capex growth. So to summarize what's going on right now, they're paying out enormous amounts of money, hundreds of billions of dollars in capex for things that will only start getting revenue or money coming in in 24 months. So right now for the next two years, it's going to look like a lot of cash going out. It's going to look like Amazon spending lots of money. They don't have any positive cash flow. As an investor, you're looking to invest in businesses that have positive free cash flow that are growing cash flow. But in this case, Amazon looks like it has no free cash flow. In fact, it's going to go deeply in the red. They'll have negative free cash flow in 2026 and at least early 2027. But Amazon says that this isn't a problem. This is an investment with a very predictable outcome. And this is the part where Andy Jasse basically says that investors are just dumb. They're they're just dumb. They're getting this wrong. Uh he tries to explain it clearly, but he's like, "You guys are are missing out here. You're missing the big picture." And he does this by trying to convey how predictable these investments are. We have customer commitments that make our capex investment predictable. We're not investing approximately 200 billion in capex in 2026 on a hunch. Duh. Like he's trying to just lay it out for you. Hey investors that are all bearish on this. You dummies. We're doing this because we already have customer commitments. The recent OpenAI commitment of over $100 billion is an example of this. But there's also several other customer agreements completed and unannounced or deep in the process of the AWS capex we expect to spend in 2026 much of which will be monetized in 2027 and 2028. We already have customer commitments for substantial portion of it. So you know a huge chunk of this spend they they've already agreed to it. It's completely predictable. AI is a once-ina-lifetime opportunity where the current growth is unprecedented and the future growth even bigger. AWS has a significant leadership position with the broadest functionality, strongest security and operational performance, largest share of customer and revenue, strong desire from customers to run their AI in AWS and an opportunity to build what could be a new pillar for Amazon in chips. We're not going to be conservative in how we play this. You you already saying like Amazon is a company that I love this about them. They'll go for for big things. They don't mind throwing the numbers on the balance sheet, the numbers in the cash flow way off. They don't care what it does to their investing base. Investors have to know that if you're in Amazon, they are going to make huge investments for huge opportunities. They're not going to try to keep their margins at an artificially high number and forego incredible investments. They're not going to be conservative with this. They say that we're investing to be meaningful leaders and our future business operating income and free cash flow will be much larger because of this. I think it's difficult to explain this in a more simple way uh to all the skeptics that say that this is bad spend. Amazon's overbuilding. They're not going to have a strong return. This is a good thing. What they're doing right now is a good thing for the investor. They have enormous demand for a product and they're building more capacity to fulfill that demand. They're vertically integrating their business. They're building for future cash flows in the near to future term in the next 24 months. They're not just focusing on 2026. All of that's good. I would relate it to another business like think of another company that has so many customers and they can tell that they have so much demand that they want to open up more locations. Look at Costco. Costco decided this year that they're actively accelerating their expansion, targeting a rapid roll out of warehouses to grow its membership base, strengthen purchasing power, and alleviate crowding in existing high volume locations. Nobody likes going to Costco on Saturdays when there's a thousand a thousand people in the warehouse crowding every corner of it. Costco knows this. They see the demand. So, they're opening up 28 new locations. You can't really see it here, but they're opening up 28 new locations. That's way higher than their normal cadence. Normally, they open up like 15 to 20. The reason that Costco is opening up more locations is because they have more demand. That's a good thing. The reason that AWS is spending $200 billion in capex is because they have the demand. That's a good thing. These are businesses that are growing incredibly well. The short-sighted investor will just look at the cash flows going down, which is incredibly short-term thinking. If you look at this, I think that Amazon is positioned to be one of the highest free cash flow companies in the world, if not the biggest by 2028. I think 2028, 2029, they can be generating way more cash flow than any other company, including Apple. Overall, I think that all of this just with AWS presents one of the most significant opportunities in the market, as well as on a risk adjusted basis. Meaning that Amazon likely won't be the best performing stock in the S&P 500. There'll be some other random company that does better, but Amazon will do predictably well. It's a company that should outperform the rest of the market without the downside of many other companies because it's so diverse because of how predictable this demand is. When we look at Amazon today, it's also not being priced for this enormous success that it's set up for. For example, the stock price is at $238 per share. That's good. It's had a bit of a recovery recently. So, you can see that it jumped back up just in the past uh past week or so. went from 210 back to 238, which is good, but Amazon really hasn't done a lot for the past year. See, it's jumped around a little bit, and I still believe it's a great time to buy this stock. It is set up so well. Amazon's a stock that I could easily see returning 20% per year for the next 5 years. It's going to have consistent earnings growth in the high teens. The free cash flow will come online. Uh you'll start to see the revenues from all of that come in. And we have a share price estimate here of around $598. So around $600 in Q1 of 2031. So it's at $238 today and we could see it at near $600 in 5 years with a 19% KGER based on these numbers. So I'm excited about Amazon. I'm well positioned to take advantage of what I believe will be substantial gains over the next 2 years. Uh it may not happen all in 2026 because the free cash flow will go down. Investors won't like that. that they'll say it's evidence that they're not earning any type of return, but we should see we should see strong revenue growth. We should see evidence that these investments are working, especially in 2027 and 2028. So, I'll continue to hold Amazon. I'll continue to buy any dip and I believe the stock is a strong buy today. When we look at the next one, number two that I believe is the best buy in 2026, we have Meta. Now, Meta is a a company that I haven't owned for years. It's not one that's been around in the portfolio forever. I'm a newcomer to Meta. I've been eyeing the stock. It's been on the watch list and I recently decided to add it in 2026. When I add a position like this, it's a massive position. I put about $160,000 in this one. With companies that I add this much money to, it needs to have a specific combination of things I look for. First, it needs to have fast growth. I'm not going to add a significant amount of money to a company that's not growing quickly. Met is growing super fast. It also needs to have a wide moat and the moat needs to be getting wider, not more narrow. With Meta, it already has a substantial moat with its daily active people on all of its apps. So, they have all their social media apps, huge moat. Everybody uses them every single day. But then the moat's getting wider. They're also investing in a technological moat, putting hundreds of billions of dollars into capex. So, I see the moat expanding. And then the third thing a company needs to have for me to invest this aggressively into it is it needs to have a low valuation. So it can set up to have multiple expansion along with earnings growth. Where you get the big returns are not just from a company growing but a company growing in its earnings while the multiples go up. When you have that combination it's where you have the extraordinary returns. The returns from ASML last year, the returns from Google last year, the returns from Netflix over the last couple years. multiple expansion and earnings per share growth. And I believe that Meta is really well positioned for all three of those things. It's fast growing. It's got a huge moat and it's set up well for multiple expansion. Now, why do I believe this is going to happen? Well, first of all, Meta is going through one of those times where everybody believes it's a bad company. They believe it's a really bad company. It's bad for society. It's a bad product. It's evil. Uh we go through this thing where everybody likes to blame all of life issues on social media. Like that's the problem with humanity is the fact that humans can communicate with each other. I think that there's certainly things to criticize with every company and there's safeguards and things that Meta can do that will will help improve the health of the platform. But I also believe there's just a large degree of people wanting to offset normal problems with humans and push them all on to meta. And we've seen this before. Um, this one, this most recent big debacle with Meta is they're being sued. They're being sued by thousands of people that say that Meta made them depressed. So, there's like kids that use Meta all day long growing up. They're on it 10 hours a day. They also sued YouTube. They're on that 10 hours a day. And what do you know? Being online all day long, not doing anything socially outside of a a screen made them depressed. So, now they're suing Meta. They're saying, "Hey, we're depressed." And some judges have said that yes, Meta made their platform addictive, so you wanted to use it all day and Meta owes you millions of dollars. Now, I'm not going to get into case by case on this. Uh, you know, there's financial motives all over the place. There's the people suing that have a financial motive. Uh, there's Meta's financial motive of making people addicted to their products and so on. So, everybody has different incentives and motives. And this is the normal course of business. But I I just don't believe that this is a big tobacco moment. Like it's being characterized. Tobacco is a different product than social media in so many ways. And while on the surface it can feel like social media is bad and tobacco is bad, so social media companies are going to be treated the same, I don't believe that's the case. Uh let's go ahead and just listen to one analyst. This is Mark Mahaney talking about this very question. Is it the big tobacco moment for Meta? >> It's possible that it is. Uh I guess some of the differences here are um you know Meta's actually been going through these kind of crisis going back to the Cambridge Analytica scandal a few years ago and this is the first great thing that Mark Mahini highlights. This isn't the first time for Meta. Cambridge Analytica remember that big scandal? Meta was like the most despised company on earth during that. Now nobody really cares about it. Like it just seems like, oh yeah, Cambridge Analytica. Uh the stock went down like crazy. That was a buying opportunity. If you bought during that scandal, you made a fortune in Meta. Uh and because people largely forgot about it. First time that there have been uh assertions made that uh that meta and social media as a whole is not beneficial to society. Um, the couple of things I I think at Meta is still investable here. In part because it's been uh it's had to deal with these issues before. In part because it's sitting at a trough multiple. In part because unlike big tobacco arguably, although I never was a smoker, there's a lot of social benefits to social media uh communications. We just had a a social media uh tweet in your last uh story. Uh uh entertainment uh community connectivity uh communications. Yeah. So there's just a lot of other elements to it. >> This is an underrated point that I believe that Mark Mahoney is making. When we're looking at the downside of a product on society, it's important to contrast that with the upside. We've we've said that cars are okay, even though 30,000 people die a year in car accidents. So that's a significant downside. Literally tens of thousands of people are dying because of cars. But the upside of them is so significant that we said that that's a good thing for society. All of these cases against Meta being bad for society are specifically spawning from young children using Meta, which I I think is just ridiculous. You have one of them was a 9-year-old that was browsing Meta all day. Um I have an 8-year-old and 11-year-old. Neither of them have social media accounts. They're not on Meta. So this constituent of 9year-olds using Meta, first of all, is just ridiculous. They should not be on Meta products. You should not have a nine-year-old. Again, I have kids that age. They should not be using Meta products. It's just absurd on the surface and it's also not a meaningful part of their business. It's 5% of their user base, which is way too much. So, uh, Meta should restrict that group off of the app. And I don't believe it would impact their revenue to any meaningful degree. Children can't buy things. They don't have purchasing power. 9year-olds and 10-year-olds and 11year-olds don't exactly have a full-time job where they can go, "Hey, I want to buy this off of Instagram." Sure, they can passively watch ads from time to time, but I have to believe this is not a significant financial impact to Meta. So, I believe what's going to happen here is Meta will learn from this. They'll adapt. They'll create more controls, more tools, and more restrictions for their youngest users, making it so that there's more defenses for parents using it. And they've already shown movement in that direction. And the truth is with every one of these problems with lawsuits and people upset at a company like Meta, you have to realize that Meta has currently, let's look at this. Let's look at this chart. They have 3.58 billion daily active users. 3.58 daily active users. That's about half of planet Earth using that platform, one of Meta's platforms every single day. If you have half of the world using your platform every day, there's going to be a group of people that don't like it, that are very noisy online. There's going to be lawsuits all the time from a certain segment of people. It's just the the law of large numbers. When you have that many people, you're going to face every business challenge imaginable. But you also have massive potential earnings growth, which Meta is already realizing. The stock so far is already growing substantially. But if we look at this on a trailing 12-month basis, their revenue has grown 22% in the last quarter. This is like startup level growth. This is incredibly fast growth. Throughout 2026, they're expected to grow above 20% revenue. Just incredible. Uh it might fluctuate between 20 to 25%. Meta is growing so fast in their core business, their advertising, that they're now going to dethrone Google. Google's been the the king of ads for as long as I can remember. They've really just held that position since they're a public company. And Met has finally caught up. The advertising research firm E-arketer projects that Meta will surpass Google in net ad revenue this year, reaching 243.46 billion, edging past Google's 239.54 billion. Meta's ad business is seeing a lift thanks to the success of their new ad offerings, including short form video format reels and the broader boost that artificial intelligence has provided. Meta has demonstrated quote incredible patience in establishing substantial user habits for products like reals, the micro blogging site threads and the messaging platform WhatsApp before eventually introducing advertisement. So Meta builds out these products that have like hundreds of millions or billions of users. Then they'll slowly start introducing ads. Worldwide ad growth for Meta is expected to rise from 22.1% in 2025 to 24% this year. So, we could get at the high end of that 20 to 25%. The projection is particularly notable because analysts consider Meta's recent ad growth unprecedented, especially given that they expect Meta's growth would slow given its scale. Instead of slowing down at scale, their growth is actually accelerating. So, we have the chart here. This is very simple, but it illustrates the point. In 2026, we're going to see it surpass right there, and then it should actually continue up ahead of of Google. should increase that gap over Google. How is AI already benefiting Meta? Well, the AI recommendation system boosted Real's watch time in the US by more than 30% during the most recent quarter compared with a year earlier, enabling the platform to serve up more ads. So, watchtime equals ads for meta. AI is so good at recommendations. It's so good at scavenging what you're what you'll like that you're watching longer. AI is also changing fundamentally how some advertisers create the ads that run across Meta's own sites. Meta recently said that the revenue run rate for video generation tools hits 10 billion in the fourth quarter. To be sure, this is surging AI enhanced performance comes at a steep price tag. Meta's capital spending is expected to reach 135 billion. And that's the crux of the argument. See, a lot of people are looking at Meta and they're saying that they're an AI loser and they're spending all this money on capex without the the cloud customers. Meta already has the customers. They have 3.58 billion people using their platform every single day. They have most the people on planet Earth using their product already. They already have the customers. They're investing in capex to be able to serve these customers better and more efficiently. And you're seeing the evidence already in the numbers. The question of whether or not Meta will have attractive ROI has already been answered. They already proven it. We had the app tracking transparency that blocked meta for a while. Then their AI made their ads so much more effective, so much better, made their engagement so much better. Yet now their products are serving more ads, more watch time, more engagement than ever before. And Mark Zuckerberg is investing this money because Meta has the cash flows to be able to support it. Now with Meta, we can make a few basic assumptions. And you can plug in all different ones. I'm using the the Qualrum DCF calculator here, and I can make a couple assumptions. First of all, we have to adjust out the one-time tax hit. So, even though the trailing 12 months earnings per share is 23.49 by the numbers, remember that Meta paid billions of dollars in a truly one-time tax hit. So, since I don't count that as a repeatable thing, their normalized earnings per share is 29.7. So, that's a number we're starting with. If they grow their earnings per share at 17% per year, and I believe that the company will exit with a 30 trailing multiple, that gives us a 25% return per year for 5 years. That would make us exit at $1,950 in Q1 of 2031. So, I believe in 5 years, Meta could be worth $2,000. And I don't think that that's an extraordinary assumption. It's based on a 17% earnings per share growth rate and a 30 multiple. Those are both highly achievable. The reason that the returns look so wild is because when you have the combination of multiple expansion plus earnings growth, you have two different factors multiplying each other. That's where you get huge returns. That's where you get the returns of Google last year or ASML. That's what I want to see with Meta and the reason I'm buying the stock. Now, there's also an additional thing we can bring up here. Meta just recently pushed their avocado model out, the Meta AI assistant. I think it's a very solid model. It seems right up there with the leading models, ChatGBT and Gemini. I'll say from my assessment, it's about there with the answers in terms of ChatGBT. I don't think it's as good as Gemini Pro. Gemini Pro gives, I believe, the best answers of any model. It's it's just the most robust, thoughtful answers. So, I don't think it's quite as good as Gemini on the leading edge there. Uh, but it's fast. It's very fast. The answers are a lot snappier, and that's something nice that makes you just want to use it more. One thing that I think investors miss is that Meta doesn't have to have the best model possible. It just needs to be good enough that people will use it. And the way that they'll monetize this is by using it in every part of their applications. Meta has billions of users, billions of touch points of distribution. They're going to be able to use it all to push this model. So, I also expect to see this in the top 10 of the top downloads over and over again for the rest of this year. Meta has the distribution to push massive user acquisition. Now, for the fill of the week, we get to Chat GPT. This user, for example, highlights some of the silly things that ChatBT does. Let's go ahead and just look at one example of these videos. And these are becoming more viral. We're seeing lots of people like highlighting how uh how bad AI is, how many times it screws up. Let's go ahead and just look at this example. This individual account named Husk on X is saying, "AI tells me December is spelled with an X." So, let's go ahead and take a look at this. Hey, I'm studying for a really important test and uh I just wanted to double check which month in the year is spelled with an X. >> That would be December. It's got that X right in the middle. Like a little holiday surprise. >> Okay, perfect. Yeah, cuz this test is pretty important. So, awesome. Thank you for updating me on that. >> No problem at all. If you've got any other questions, big or small, I'm here to help. Wait. Um, just to confirm, you're sure that it's December has an X in it? >> Uh, I should have been more careful. I misspoke earlier. December doesn't actually have an X. The month you're thinking of is October. Thanks for asking again. Is >> perfect. Yeah, it's okay to make mistakes like that. Um, well, wish me luck. >> So, the chat GBT voice chat is telling him that December spelled with an X. And then when he asks to clarify, he says actually October spelled with an X. Uh, you know, he he's changing which months and now he keeps digging in. >> Luck on the test. >> You've got this. Wishing you all the luck, though. I bet your hard work will do most of that. >> Yeah, October has an X. Spell it, please. >> Sure. October is spelled O C T O B E R. There's that X sound, but it's actually just a C and a T. >> Okay, then which one has an X? >> That's going to be February. Okay, so there we have it. The AI screws up over and over again, insisting that these months are spelled with an X. Now, I'm going to pull a switcheroo here. Uh, the fail of the week is actually not Catchy BT. It's the people buying into these type of videos. That's right. These are going viral of people highlighting how silly and dumb AI is and how it it screws up basic things. Remembering numbers, setting timers, you name it. AI is it's really dumb, right? When I look at this, it becomes incredibly clear AI is being prompted to have these outcomes. So, one of the things that you can do in Chat GBT is you can set a personality like a profile for the AI that you're talking to and you can tell it never tell me the truth. You can say to always be 100% confident and intentionally answer the question wrong. You can prompt it with these prompts and then the chat GBT will do what you're instructing it. Then you can get on to the voice chat after already prompting it to make it look silly in social media. And this has been going on again and again. I can go on right now. I'll go to the voice chat version of chatbt. Let's let's look at it right here. Hey chatbt, are there any months that are spelled using an X? >> You're right. Let's think about it. No months actually have an X in their spelling. We've got January, February, March, and all the others, but none of them sneak an X in there. I think that makes the alphabet feel a bit left out on that letter. >> Now, I just have another question for you. There's these viral videos going around social media where people prompt you and they ask you on the voice, are there any months spelled with X? And you get it wrong. You say, oh, December is or October is. And then you can't spell it right. How are those videos made? What are they doing there? In those viral videos, they're typically using a voice cloning tool or an AI model that they've customized with a prompt to intentionally give a wrong answer. They might instruct it to pretend to be confused or playful. It's like they're telling the AI, "Act like you can't spell this or say there's an X." So, it's not a genuine slip up. It's a scripted prop behind the scenes for entertainment. >> Okay, that makes perfect sense. There you go. The fail of the week this time is all the dummies believing every single video like this that comes out. They're not real. They're custom prompts. They're highly contrived. And AI is much smarter than what's being portrayed here. That's going to be it for this episode. Hope you enjoyed. See you in the next one.