Bullish on Elon: 9 Mega AI Hardware Stocks | NOW

Everyone, me Kevin here. Boy oh boy, I am going to break down nine stocks in this video. And I have to say a lot of people have been asking me, Kevin, what do you think about Tom Lee saying 2027 is going to be one heck of a rally? And I have two things to say about that. One, the guy always thinks there's going to be a rally. Two, he's not bullish enough for 2026. See, I actually think that, and we mentioned this in our SpaceX analysis videos before SpaceX went public, I actually think Elon Musk is going to spend every dime that he raises like a drunken sailor on hardware. And literally last week, their earnings call told us and their financials told us that 85 cents out of every dollar of capex is going right into AI hardware. So in this video, we are going to break down which stocks could be great AI hardware opportunities. uh given that we expect Elon will drunk like spend like crazy on macro and mini hard plus the coming Terrafab which there are stocks in here that relate directly to Terapab as well. I just want to be really clear because sometimes people who only read titles or just don't actually watch the video don't get it. So maybe if I put it at the beginning of the video I could get over this. We have over 7 figures of exposure to SpaceX in our venture capital fund. We bought this puppy at like $330 uh billion. Obviously, that means we're up like 5x. Okay, great. We'll see when we actually get the shares. We don't hold the shares yet. Even though some lockups have started, we have no idea when the shares are actually going to show up for us. when I make videos that outline when I would be willing to buy more of SpaceX stock sub $80. That doesn't mean I think it's going to $80. It means I don't want to buy it unless it's sub $80. I wouldn't add more like our original position. But this video isn't about investing in SpaceX. It's not to be bearish on SpaceX. It's not to be bullish on SpaceX. The only thing this video does is say if we believe that Elon is going to spend like a drunken sailor, where are the beneficiaries gonna be? Okay, now that I got that out of the way, let's get started and we'll cover these nine stocks. Keep in mind, this does not include memory on purpose. Memory is going to be a totally different video. We might even do some of these stocks as a deep dive. You could leave a comment, ask me if you want any kind of deep dives, but we're just going to focus on nine different stocks outside of memory. So, first rack count. Base case. Current Foxcon order for Macro Mini Hard 13,000 racks. That's about 52.5ish billion dollars of spend. That order is already in. The fact that that order is going to Fox Con is really going to impact one of the stocks on this uh nine sheet list. There is also this opium circulating right now because of this semianalysis piece that everybody on X is talking about. I when the article dropped left a comment within minutes of their post and I'm like, "Hey, you guys you guys have an error in your piece. Nobody gives a fly in Hoodie duty." But the semi analysis bull case is that we're not actually going to see 13,000 racks ordered for macro mini hard. That's the current projection. The current projection from semi analysis on a bull case is that we'll actually see 68,800 rack orders. So 68800 divided by 13,000 is basically 5.3x the orders, which works out to somewhere like $275 billion of spent, maybe even as much as $320 billion of spent. And this is where people say, okay, well, like what's this predicated on? Is this predicated on net income projections? Well, that's the issue I have with the semi analysis piece. You know, my my argument is how can you argue Elon's going to earn $15 to $20 per GPU hour and then in the same damn article say Anthropic's only going to pay $3 per GPU hour. Like, you can't you can't bias to the most bullish direction in both ways by giving it as a discount to the LLMs and a premium to Elon. That doesn't work because the LLMs are paying Elon, right? Like if you're going to use 15 per GPU hour, use it to both. Of course, nobody's replied. So, whatever. But people on X or people who just do little GPT summaries of stuff, they don't care cuz they don't have the patience to understand nuance. And that's okay cuz it creates opportunities for people like you and me. So, my opinion though is that it doesn't really matter because Elon doesn't really care. This is between you and me, okay? Doesn't really care about the earnings. I know, I know that sounds crazy to say, but I think Elon will literally expand supply no matter what because he's drunk on the idea of, "Oh my god, we need so many data centers. Like, we need to get to space and then we're going to have like millions of chips that we're going to have to make for all the Optimus robots. Oh my gosh." Mind you, we're like a decade away, right? On day after Christmas, doesn't matter. Doesn't matter whether FSD happens or orbital satellites happen. Doesn't matter. None of that freaking crap matters. All that matters is that the richest guy in the world believes it. And if the richest guy in the world believes it, he's going to blow a lot of money whether he gets an ROI or not. And there are some big stocks that are going to benefit from this upfront. The first one on the list is Nvidia. It doesn't matter if Elon makes an ROI, they are going to go every single time an Elon order comes in. It's no surprise that Jensen cozies up to Elon and calls him, you know, the greatest ever whatever, right? The goat. It's because he's a big freaking customer. It's a whale. You know, like if you're a real estate agent and you sell $500,000 homes and you're working with a first-time VA home buyer and they're going to buy one home and then a whale comes in and they're like, "Hey, we want to buy 10 $500,000 homes. Who are you going to answer the phone to first?" Right? I mean, I actually have right here a 5090 uh GPU and and these things, honestly, these are a total beast. I mean, it's really remarkable because the vast majority of what you see here is just cooling. But this very chip I bought probably for somewhere around $2500 when it first came out, which was already a premium. These are currently selling for about $4,900, which means they've gone up nearly double in value. We've got, you know, most of this is obviously cooling, right? Uh you've got the heat sinks in here. You've got three fans. Some of the models for the smaller chips, they'll sell with two fans. Uh you got some of the capacitors in the back right here. Under this is actually where the die sits and the brain. Uh the die is really the chip, right? Uh this is just the printed circuit board, that PCC right here. And most of this, like 85% of this is frame and cooling. And uh that actually becomes relatively important for what we're going to talk about because a lot of these other stocks uh relate to some of the other components of these GPU chipsets. So uh Nvidia has obviously confirmed a direct deal with Elon Musk. Uh and Elon calls Nvidia's chips just simply the best. at 13,000 racks of GB300 server racks, you're going to start seeing guidance increase for Nvidia probably starting in the fourth quarter of 2026. And this is something that I consider part of the second hardware rally post ceasefire. Let me just be clear about that. In our course member liveream, we've been projecting that there will be a second hardware rally. This is what we were talking about in July when we're buying the dip in July because Leo fold is getting blown up. I'm not trying to pitch you on this. I'm just trying to give you just like insight like this is what we've been talking about. Okay, some of these things like it's it's okay. I'm just going to share with you. Appreciate you being here. The second hardware rally is mostly in my opinion driven by Elon spend because it's going to massively revise up projections that these companies are giving for actual growth. And mind you, when we look at Nvidia, this puppy is sitting at a 75% gross profit margin. And they bring to the bottom line out of all of their 81.6 billion of revenue, they bring 71.4% to their net income. That's insane. Some of the stocks that we're going to look at are sitting at like 9% net, 18% net, 20%, 28% net. Those are normal net income margins. 71.4%. I mean, this is in in like the memory world for this AI blow. It these are insane margins. And of course, the biggest issue for Nvidia and one of the reasons it's been stuck at plus or minus $200 is because people have been worried about growth forecasts and the potential for those growth forecasts to turn negative in the future. But even though there's that potential for those growth forecasts to turn negative in the future, the one thing that could actually turn that negative to a positive for longer is Elon. Right now, Nvidia is only up 20% uh year to date since being the despite being basically the largest direct beneficiary of SpaceX. And it has nothing to do with the monetization of Twitter. It has nothing to do with the monetization of uh ads on you know through Grock or Gro subscription subscriptions and it really has nothing to do with contract renewal for SpaceX which is a big debate people debate like can Anthropic or will Anthropic or Google actually renew at these crazy rates or they only doing it because they're trying to pump their investments in SpaceX. Nvidia doesn't give a flying f. If Nvidia actually ends up the beneficiary of the all-in like $320 billion version, that's going to lead to an extra what maybe $100 billion to $150 billion of revenue for Nvidia. That's about 30% over the 2028 fiscal year estimates for Nvidia. I mean, think about it. just just look at it right now. So right now at $81 billion, uh if you annualize that out, that's about $324 billion. So if you add another, you know, $140ish billion, that's going to be somewhere close to 30% more in annual revenue for this company because of one buyer. And that one buyer is somebody who is drunk on AI. And maybe he's going to be right. Maybe he's going to be just so perfectly brilliant about this and timed it excellently. He's done fantastic things in the past. You know, betting against Elon is, you know, you have to time it right. You know, you can you can bet against Tesla at the top. You know, you could somebody and I feel bad for them, but I saw actually just somebody I just bookmarked this. Somebody just put a $3.2 million $3.3 million short in for SpaceX. uh and uh they they post the screenshot here, but what blows my mind is uh they actually kind of mislead people because they really only put $1.5 million in. They just put it in on a 2x leveraged ETF on the, you know, the short side. And I'm like, bro, you're going 2x short when it's literally at its fib bottom. Like Friday morning, people thought I was bearish on it. And and again, when people watch the full videos, I I even said Thursday morning, I'm like, "Look, people can't reasonably sell their lockup shares yet cuz they don't have them yet. This puppy is going to retrace and its next test is 133. We said that, you know, when it was like 114. Look at it. 13 33 is literally the first retracement line and that's where we stopped. I feel bad for the guy shorting right now, but again, this is not a SpaceX video. It's supposed to be about these these stocks." SpaceX right now is expecting to use the GB300 in most of these new facilities, but Macro and and Mini Hard, you know, by the time they actually start getting ready to install these GPUs, Reuben might be available. And if Reuben is available and we end up getting to a full 10 gigawwatts that Elon ends up spending, which would require raising a lot of capital, more on that in just a moment, well then Nvidia's revenue could actually explode to, you know, well, well, the total spend basically could explode from those estimates that we saw of two, you know, 320 to $275 billion that could explode to like 400 to 480. It gets ridiculous. And then Nvidia's portion of that would be even greater. So their 2028 estimates solely because of Elon Macro hard, MiniHard, Terraab, original Colossus expansions solely because of Elon, we could literally jack up the estimates for Nvidia. You could potentially be having to increase their estimates to the tune of 50%. So the estimates might ironically be low for the coming years. And really the person you have to look to for the capex cycle is Elon. The I mean if the guy's essentially we'll still for the purposes of this video still call him a trillionaire even though that he's sort of like on the margin of that. Oh my gosh you're a marginal trillionaire. You're only a 900 billionaire you know whatever. Like if that's what he wants to blow his money on fine. Now, what's interesting about this is plus Reuben, which is much more expensive per rack. You know, a rack probably is around $4 million. You need Envy Link, which is another 500k to million per rack. And Infiniband, you need Nvidia paid out on shipment. Yeah, there's a risk that Google ends up cancing if uh Elon can't deliver on time, but honestly, I think that's unlikely because Google's locked up. And if Google cancelled and SpaceX would tank and they would just shoot themselves in the foot and they'd have to report bad earnings. There's no way Google's cancelling. They're tied to the balls of Elon. Then on top of this, you have the Vera Rubin CPU coming, which I think a lot like the market honestly I think has forgotten uh that there is a CPU coming from Nvidia. Now, I know a lot of Nvidia bulls are like, "I know, Kevin. That's just like, don't tell them. I want to keep buying it cheap." But, um, it's actually a fantastic thing. I have, uh, an AMD CPU that's, uh, probably I mean, the one of the computers that I have is probably somewhere around a 10 grand computer. I mean, it's just the best AMD CPU, the best power supply, the 5090s in there. We got some CPU. We got actually, we just ordered another six90s. Um that's for for what we're doing with reinvest but um but yeah I mean like AMD is a good CPU but Vera CPUs are ARMbased server CPUs and while some analysts are including them in their price targets I don't think people realize that if Elon buys every one of those Vera CPUs the pricing power is going to be massive on the CPU side alone and this is where things get really interesting because we could actually look at the valuation for NVIDIA. So, if we go to uh the app.mmeke.com web page, which uh uh you know, course members have access to all of this and uh and then of course you can download this. You could use the app on your phone too. Meet Kevin app on Android or Google. But if we go to the app.mmekevin.com website, the web portal for this, uh we've got some notes from me obviously, but we we'll skip some of that since we're talking about it. Um the moving average on pricing power did have a little dippy-dood law. Some of these dips on pricing power are expected to be temporary. Uh and and really their margins are right back to 75% in the last earnings. We're actually going to update this software to where we use a little bit more of an exponential moving average which will give more weight to what pricing power has done recently and it'll actually pump up the pricing power valuation uh of of u our algo for this. Uh but what's really interesting is this particular stock uh I think has a new valuation target based on uh you know probably a mid2s to higher twos peg ratio uh that that moves this stock to $795 to $850. That's roughly where we price this thing as a fair value. Now momentum can drive this higher or lower like leopold could drive this lower. Momentum could drive this higher but the company right now is trading for a 25p ratio. Its forward growth projections are 34%. Per year for the next four years which means it's trading for less than a one peg right now which is crazy. The current peg I have right here is.76. That's really low and that's a price to earnings growth ratio. we use that over just PE ratios. If you just use PE ratios, I think you're unfairly looking at the stocks because you're not factoring in the growth. Uh but you know, one of the reasons why memory stocks look low on growth. And this is really a topic for a different video, but it applies to Nvidia too is people believe that the growth will be cyclical and therefore the growth rates won't last. And so that's where somebody like Elon can obviously help that spend go. Uh but you know it's it's not just Elon like we have some AI uh sort of uh or I should say some uh insights on the AI right here. The Blackwell inference ramp acceleration the NVL link 72 uh deployment or yeah deployments are scaling across hyperscalers. Uh this accelerates token generation economics directly compressing inference costs by 60% versus prior generations. there's going to be even more compression in token and costs uh for the Vera Rubin uh you know level products when they come out. It's going to be really incredible. Uh in addition to that uh the CPU TAM expansion here which I think is critical. The new ARMbased Vera Rubin CPUs co-designed with Reuben GPUs target Agentic AI orchestration. This alone creates a $20 billion revenue opportunity per year. Not huge right now, right? Because if you look at that $20 billion out of their annual of like 324, it's you know what, maybe 7 8% or whatever. But I actually think Elon could drive so much demand for these that the prices go up and you actually get higher margin CPU, right? And then of course network revenue that is critical. That's going to be important for our next stock as well. And there's more that you could see in here as well, which I think is really exciting. Uh red flags uh would be things like uh you know delays for the H200 to China. Less worried about this. I think the market has really unpriced a lot of this with China. We we don't even get a lot of volatility anymore when there's China news on this particular company. Obviously a heavy reliance on vendor financing the circular financing. The hyperscalers represent 50% of data center revenue exposing Nvidia to a potential capex deceleration. Of course, like we already know that the whole argument here is that Elon is like he's going to spend. And the thing about Elon is as long as the stock performs okay, like it stabilizes somewhere, which it probably willish around here, um, he's going to be able to call up banks and just borrow more and more money and he's going to blow every single dollar of that on hardware. Now, the next one, Marll. Okay, so Marll is fascinating because they create custom silicone for companies like AWS and Microsoft. They call them XPUs, basically AS6, uh, and and products that, you know, other competitors to Nvidia could use in their server racks or their data centers. The problem is you don't want to buy Marll XPUs and then get excluded from using Nvidia products, right? Well, don't worry. There's a solution. Smart good old Jensen has said, "No, no, no, no. If you need to use Obviously, we prefer you buy Nvidia." He's literally said this on stage. It's great. Obviously, we'd rather you buy Nvidia, but if you do buy the XPUs from Marll, we have this new architecture called Envy Link Fusion. And it's a fancy way of saying keep using your A6, your XPUs, whatever you want. If you want to adopt the NV link fusion architecture, we can enable you to integrate with our Nvidia hardware like our GPUs or our Vera CPUs or whatever. This now lets basically Nvidia absorb these other chips of the data center and Nvidia to just take control of everything. Now, Google TPUs have not yet joined the Envy Fusion partnership. Marll is one of the first adopters, but a lot of people actually see that as a structural advantage for Marll because while Nvidia wants to do this in the data center. Come here, baby. Come here. Come here. Come here. Come here. Right. Uh Marll is like, "Hey, I got these chips over here. I want you to hug me, daddy. How do I get in?" Uh here we'll make this little product for you and it'll let my arm do this right now. This is interesting for SpaceX because the Terrafab D3 chips and the AI6 chips, D3 for orbital, AI6 chips for like FSD and Optimus robots, AI5 and AI6 chips, they're going to need Envy Link Fusion to run alongside of all this Nvidia stuff good old Elon is blowing money on. So NVLink Fusion gets more wellknown, more popular, and indirectly suggests that ASIC manufacturers like Marll can continue to sell their custom silicone to anyone without somebody being worried that they're not going to be able to be incorporated into like the Terafab or whatever. So technically, you could see Marll chips inside of the Terraab. Now, those are likely to be custom Tesla products, especially since they want to fabricate themselves or Starlink or SpaceX products. Again, they want to manufacture the stuff themselves. That's fine. Sort of be like, you know, a parallel competitor to Marll, but that's okay. The whole idea is the more popular Envy Link Fusion becomes, the more customers are comfortable buying products like the Marll custom chips. Great. So you've got like not a direct beneficiary here. It's more of a, oh, okay, this makes Envy Link Fusion likely more popular and people's radar. Hey, we need chips today. Hey, let's go buy some more Marll chips. Obviously, then there are other uh long shots for Marll as well. uh CPOS, you've got uh the future base station uh AI ideas which is sort of the AI ran that Jensen and Marll CEO talk about. This is really the idea that in the future, you know, your cell phone like a, you know, a Google phone or your iPhone or your iPad or whatever will be able to run a lot of inference directly, but you'll need access to underlying data. And the way you could get that is potentially from base stations where T-Mobile has its antennas or whatever, right? and Marll and uh Nvidia have partnerships to produce the chipsets that would enable exactly that. So rather than only the data centers having the data, some of that data center workload also sits at base stations or these sort of nodes for 5G and 6G technology. That's more the future call option. Near-term, it's like, okay, this popularizes NVLink. Probably good for Marll. Where's their valuation sitting? Valuation, we got them at about a $370 uh fair value represents about a 69% upside from here. Forward growth sits at about 35%. $4 of EPS for Jan 27. Average growth of 35% is out four years. Uh right now, they're sitting at about a 15 peg, I want to see. Let's see here. We'll find it. We got the moving average, the insights, uh 143 is the current PEG ratio for this. Uh and uh fundamentals, you know, put this around that 350 377ish range. Momentum could drive this higher or lower. Margins have been expanding, which is nice. I like seeing that on the chart. Uh we've got, if we jump down over here into insights, we could see there it is. One of the first things you see is the strategic partnership with Nvidia to integrate custom silicone and optical networking directly into the NVIDIA ecosystem. Jensen still really likes copper as much as possible. Uh Marll thinks we're going to transition to fiber optics even inside of the racks and the data centers themselves which are mostly copper right now. If we get to the point where like a Broadcom isn't pushing just copper, uh although they do have some optical options as well, and we really transition to optics, huge upside opportunity for Marll. So, it's not clear if Terrafab will be an Ethernet-based data center or an optics-based data center. If you figure that out and you figure out it's one or the other, that's either bearish or bullish for Marll. It's probably more like base case and bullish for Marll. It's something to pay attention to in Elon's commentary, right? Uh interconnect growth acceleration. Great. We've got uh forecast up their optics revenue, custom silicon designs, $10 billion targets. Uh data center interconnect business, great switch. And we could read you could pause the screen here and read some of this. Uh there's a lot of very exciting information about what uh this company is doing. Uh so but that's just a little overview. Okay, great. Now let's get on to the next company. So the next one is a much smaller company. Uh this one I mean you have to look Marll is sitting at right now $191 billion market cap. Nvidia sitting at a $5.4 trillion market cap. This next one we're going to talk about is Teeny, which does increase potential volatility. Well, relatively teeny. It's still a decently sized company. Uh, this company is called Lattis Semiconductor, LSCC. This is a field programmable Gatorade, uh, you know, company. So, they manufacture these. Uh each server rack historically has had one to two of these and we're expecting these to go to maybe three to four per server rack. Now keep in mind these are relatively cheap products. So it it's not like you're getting massive revenue from here. Although server revenue does represent about 38% of Lattis's revenue and that's expected to grow. But because they're cheap, their upside is lower. Uh but because it's a small company, it could have more volatility to the upside, especially as we see more FPGAAS inside of actual rocks. They also bought a for firmware and platform management play that should increase their margins even more. But keep in mind, every single GB300 and Vera Rubin has embedded F uh GPA. And so let's look at a potential price target for these. So their margins unfortunately as they've been trying to integrate the firmware company that they bought and recently have been falling a little bit. Management does expect that those are going to increase. Their current PEG ratio sits at just 0.42 which is on the low side. Uh that is based on the growth that we have been seeing and that's some analysts expect going forward which is essentially a doubling of earnings per share. If we see slower growth and we see closer to 40 or 50% growth which some other analysts expect then the future stock price for this might be lower. So right now it trades at a 61% or 61 PE ratio. If you expect 100% growth that's how you get less than a one peg. But if you're expecting 40% growth then you're at about a 1.5 peg. Now, the average estimates we have over the next 2 years are very volatile. There is no good 4-year estimate for the company. It's too small. So, I think on the high side, the upside valuation could be $763 bucks. On the lower side, it could be around $225, which obviously gives it uh less potential growth. If we jump into here, LL uh LSCC, you can see it's about 130 bucks. uh it's come down during the Leo fold era over here and again it's about an $18 billion market cap. So uh that small component manufacturer uh inside of Iraq uh I think these things are like a few bucks a piece honestly. Uh let's find out how much is an LSCC field programmable gate array product inside a server rack like GB300. Let's find out. Let's just see what it says. So, a few bucks. Uh, yeah. Okay. So, an individual chip inside of a server rack uh from um from Lattis typically cost $15 to $50. So, so these are cheap. And again, the idea is, hey, can they latch on and get multiple of these inside of each motherboard? Right. Look at this. A single completed server rack can contain $1,500 to $5,000 worth of Lattis hardware and integrated firmware. Kind of interesting, right? Smaller, more speculative. So, obviously more risk. Now, let's get into the next one, which is actually cooling chips. Now, uh on my AMD CPU on, you know, sort of my main larger computer, I water cool it. This puppy is fan cooled right here and it's got these three massive fans and it needs a lot of cooling. That little die gets really really hot especially if you're running 4K products on it. So only imagine data centers how much cooling they need. And this is obviously where Vertive comes into play. every GB300 rack at 125 kilowatts of power, which you know, one of those racks is like two and a half times our average household, you know, hourly power usage. So, that's crazy. And then they've got thousands of these racks, right? But anyway, they require liquid cooling and chillers. Nvidia is going to get paid regardless of whether or not the SpaceX contracts renew. But guess who else is also going to get paid? Vertive and uh LSCC right so that's a good thing for these puppies now when we actually think about this we kind of for vertive think okay what are the margins for this company and how much pricing power do they really have a decent amount of pricing power if you jump over here to their margins uh we can see that their operating margins have been growing close to 20% on operating margins and gross margins are sitting around 37%. For a manufacturer at 18.8% and growing, this is actually pretty decent. The company's got a forward uh earnings per share estimate of $6.68. Forward growth expectations over the next four years about 23% per year. Uh maybe if you just use the next three years, you get to about 28% average growth. That's because there's actually a negative at the end. But because Elon is drunk selling or drunk drunk buying here, selling, you know, his his maybe financing, right, or shares available, the sucketing, but it but really buying this hardware, uh we could potentially see their margins move up and we could see a higher average growth rate. So, if we assume about a 28% average growth rate over the next 3 years, this particular stock could end up getting to a pretty wide range here. And it really just depends. It's a smaller company, so it just depends on that growth rate. We're going to go 23, we're going to go 28. The uh growth rate we're going to be using here is going to be 28.2%. At 28.2% with those climbing margins, we're looking at a fair value potentially of $390. Uh, so I think between 270 to 390 is probably a range for Vertive. Uh, if I pull Vertive right now, you could see it's actually sitting already at that 270 range. So, the upside's a little bit more restrained on the more conservative end of that estimate. Definitely still a potential though on the more bullcase scenario. This one also more volatile though, just because we don't have as many estimates for this one going forward. Uh, smaller companies. is I mean this is a it's a hundred billion dollar market cap so it's not that small but some of the companies just don't get as much analyst love as some of the giant companies uh let's go take a look at some of the notes for Vertive here so what I find interesting here is that operating margins are rising we've seen this on the chart that is good and that has been accelerating in the quarter this is what changed this quarter this is on the uh again the meet Kevin appre and system convergent management highlights The strategic pivot towards converged pre-fabricated solutions which bundle power thermal and IT uh IT infrastructure increases per site content capture shortens development cycles and creates higher switching costs basically structurally sucking more people into that uh you know vertive ecosystem. Nvidia is already kneedeep in them. So this is really like I like to call it an Nvidia proxy. Management confirmed that incremental service margins service margins aligned with the 30 to 35% range. It's a smaller portion of their income but service is something to pay attention to as well as the 800vt DC architecture. This is something that Jensen has talked about. Uh I think the I think this might be Vera Rubin Vera Rubin. Uh let me see here. DC Vera Rubin architecture uh will include 800 uh volt uh DC power architecture. That's what I thought. And remember I said earlier in the video that I think Elon is going to end up moving to Vera Rubin as soon as they come out. The way to look at that is the GB300 essentially doesn't require the 800vt DC architecture but you can use it. So if somebody builds it builds a data center with 800 volt DC, you could still use the GB300 and you need it for the next in infrastructure set the um Vera Rubin sets. Anyway, I think this is really uh useful to know that uh Vertive is uh is is part of this stack as well across the entire IT stack for broader liquid cooling deployments, not just chip level cooling. The actual data centers themselves got hot too. You ever been in a room with a lot of these puppies running? It It gets toasty. But anyway, uh I love this line. The order backlog is Elongating to 12 to 18 months delivery windows. This is going to be another thing where, you know, I think Elon goes in and says, "Look, man, I'll pay more. Get me ahead of the line." He doesn't care, man, if the company loses money. It's like in the Economist interview where they're like, "Hey, but you know, when are you guys going to make money?" He just sort of beats around the bush and laughs it off. Like he's trying to get to Mars, man. He doesn't care about EPS next quarter. Whatever, man. These companies do. So, um, uh, let's see here. Bring your own power and micro grid integration. The rise of behind the meter energy solutions is driving demand for Verivives's integrated powertrain and bees control technology. By positioning itself as a system level orchestrator for micro grids and direct current architecture, Vertive is capturing adjacent revenue streams that complement traditional data center infrastructure deployments. Yeah. So basically there's a lot of talk that uh these future data center expansions are trying to do everything in their power. pun intended to not rely on the grid. It is politically unpopular. It is uh time delay unpopular mostly because the grid say, "Hey, we can't support you. You're just going to have to wait." And the data center sucks, you know. So, a lot of these data center companies are or builders are incorporating not just um Bloom Energy style fuel cells, but also solar, wind, whatever they can. Nuclear. probably still too early for obviously, right? Uh and of course gas turbines are are are the big uh fun one right now, which uh this company Boom I know is um trying to take their supersonic jet engine designs and and sell them as gas turbines, which I always think is very interesting. Uh but but yeah, I mean this is this is a very interesting one. This company has a forward uh guidance for growth of only about 15.7%. Honestly, might be pretty low. net margins around 17% and uh they expect to make $1346 per share at the end of 2026. That puts us, you know, slightly bel slightly below a one peg, honestly. So, so there's definitely some upside on this stock from the valuation. We've also got margin expansion, which is fantastic. Increases their cash flow as well. We've got um uh you know, an expansion of where they're putting their products. Of course, there are some risks on relying on supper suppliers. Those are some of the risks. I've already read through all of this. So, anyway, that's how we get to about that $390 price target. Obviously, potential upshots there on pricing power with Elon. Uh, and that's what you're really going to need to kind of keep seeing that push here on Vertive. The next one is called Eaton. Eaton is an interesting one because even though they are also a well electrical supply manufacturer and a water cooling provider, data center orders are up 85% year-over-year. They're quote unquote leading the 800vt DC transition and their margin is expanding expanding. You've got liquid cooling integration and synergies blah blah blah blah blah. Great. A lot of good things. There is a red flag that's listed over here. First of all, we got four days to cover uh elevated short squeeze risk. Fine. But I want you to see this. The balance sheet strength is absolute trash. Why is it 006? Let me show you. I'm going to use the annual report. This is using the last quarterly. So, I'm actually using the older report right here. But I just want you to see it on an annual basis what's going on over here. So, uh first of all, look at their current debt. their current debt. None of this is deferred, mind you. This is literally current portion of long-term debt, accounts payable, other current liabilities, acred compensation. All of this is straight up debt. $9.3 billion. That's grown in the last quarter. So, you can see that delta, right? It's getting worse. On top of that, look at that. Long-term debt, pension liabilities, postretirement benefits. Here we have our first deferred income taxes, but it's a drop in the bucket compared to other current liabilities. Dude, I've got uh you know what? 9 to 11 billion of current debt plus another 12 long. And if I come up here to cash, bro, where's the cash? I got like 700 maybe $800 million of cash. The cash is exploded. Like there's no cash. It's gone. When I say exploded, as in that typically means go up. No, in this case, it's just gone. right now. They have accounts receivable and they have inventory, but man, they are running a tight ship. So, if I actually go over here to financing, uh, they still have to pay dividends. For some reason, they're repurchasing shares at all-time highs. That blows my mind as well. And so, of course, they're having to borrow more than they're refinancing because they're limited on cash. So, some issues here with Eaton, uh, that even though they could do well on these orders from SpaceX, we'll see. There are some red flags here. You've got $1346 of earnings per share. So, if I divide into that 448 price we've got right now, I'm looking at a 33 PE ratio on forward growth of 1573 puts me at about a 2.1 peg already with 17% margins. Dude, the there's not much room left in this puppy. Uh, and so sometimes I, you know, I don't only want to mention companies that that's like, oh yeah, this is really exciting. It's like, I can be excited about this, but but much less excited than others. You know, I mean, the upside is way lower. Uh, you know, maybe their growth will really impress to the upside. But, you know, as you can see, we've got red flag on balance sheet and on the moving average, which is pretty clear. Uh so you know from when when you look at the chart itself and its margins are you know while we had that talk about a 90 you know 90 basis point move in the quarter we're still kind of seeing this curvature over here that's not as ideal uh for this particular play. Next one is Schneider Electric. This is a French company. A lot of people are excited about them for data centers but data centers only make up about 20% of their revenue. It is an ADR an OTC stock. ADR, American Depository Receipts, French company again. So it gets a little bit more complicated to value because they forecast $11.76 of earnings per share, but you have to actually divide that by five to get the earnings per share for an ADR. So that's $2.35. All right. So 70 divided by call it $2.35 divided by 235. That puts me about 30 times PE with maybe growth of about 1463. I'm already at about a two peg for this puppy. They've only got net margins around 13 to 14%. And so the fair price for this one, I hate to say it, is actually probably upside down at just $58. So not as excited about this from a momentum point of view, not as excited from a valuation point of view. So I'm not going to spend too much time on this one. Instead, we're going to go to Dell Technologies. Now, Dell Technologies is an interesting one because there's a massive potential risk that Wells Fargo just reported where they saw SpaceX send their order to Foxcon for the GB300 servers. They might literally be skipping Dell and going direct. Nope, not guaranteed, but that's a big issue because the reason Dell has been skyrocketing so much is because of this backlog for frankly AI server margins. AI server margins are still expected to be mid-s single digits. They don't clearly disclose the AI server margins because honestly they're they're not that great, but they do a lot of value on these. And so people really get excited about Dell stock and and I get it. It's a low margin business, but it's a high volume business. This company uh is kind of also at a relative high. If you look at Dell over here, we're at Yeah, relative high. It's at a high $453. Holy smokes. $453. If I divide that by their forward forecast EPS, I got a PEG ratio of 24.5. And we're looking at growth of maybe 1944 on average over the next four years puts you at about a 1.26 PEG, but they're at like 8% margins. So, it's hard to justify much more than the PEG ratio where they currently sit. Now, I want to just be fair and disclose this because this is a beta product. We're still working on perfecting this. This is incorrect because the fundamental estimate inside this fair value estimate for Dell is that they're only going to grow at 10%. That is getting revised up to about 19%. So, the realistic forward value is closer to where they sit now. So, again, less lower on the fundamental upside. I do just want to report that this is an error on our platform. Uh and so I want to make that clear. Okay. Hopefully that's helpful. All right. Now, before we get to the next stock, we got to take a quick break and talk about how much we love something called free cash flow yield. The software companies are really good at free cash flow yield. Like a Service Now or Salesforce. Salesforce sits at like a 13% free cash flow yield. so good and so freaking juicy right now. But there is actually a hardware company that has almost as much free cash flow yield as some of these software companies. It is insane and it is actually the next company on our list. Take a look at this. This is a chart of free cash flow yield. That's basically just how much free cash flow you make divided by your market cap. So if your market cap's hundred billion and you make $5 billion of cash flow, that's a 5% yield, right? Simple math. Look at this. Nvidia sits close to 2%. Marll sits like Palanteer close to 1%. Eton is a little over 2%. Dell's a little over 2%. Vertive's like 2 and 12%. Right. Okay, cool. Where's Nphase? What? Almost 7% free cash flow yield. And folks, that is probably one of the only things to like about Nphase. Well, maybe not the only thing, but one of the few. Mostly because in their last earnings call they did kind of talk up delaying a little bit the IQ solid state transformers. That's probably a data center play for 2028. It's going to take time. They're literally right now doing requests for proposals and they're talking about how they're learning a lot. H so it's going to take some time unfortunately for for this to be a real data center mover and to kind of get priced in by markets. Uh but hey, maybe it'll get priced in in 2027. probably unlikely to perform until they start selling or until interest rates come down. Both of those don't feel like a near-term play. So, Nphase, not a near-term play, but it is cheap. Worth paying attention to that. Uh, it is a stock that has a $2 forecast earnings per share for the end of the year. The stock right now is only trading for like 40 bucks or something like that. $41 if we pull it up. Uh and so if we divide Nphase which has plummeted since uh you know COVID because of the lack of interest in solar uh if we look at NPhase right now at about 42 bucks I'll take $42 I'll divide it by the $24 of projected EPS that's 20.5 on a PE ratio they're expecting growth to be in the neighborhood of 18.6%. That puts them at about a 1.1 peg. At 27% net margins, they probably deserve to be around 70 to $70 as a stock. And the upside play is really interest rates coming down, free cash flow in the meantime, and a data center call option. That's that's my take on end phase. So undervalued setup. Obviously, uh you know, margins are are decent. If I go to operating margin, uh it's gotten a little low on the operating margin side. Their actual operating margins are also forecast to nearly double. So, this is expected to accelerate as they finally bottom out on some of that solar revenue that's really been plummeting since co. So, this company has its risks. I think a fair value for this stock is probably around 77 bucks plus a call option on interest rates and a 2028 data center play. Something to keep in mind on this. Not a big favorite right now. It's kind of like the stepchild of the bunch if you will. Nothing against stepchildren. All right. Next one that we got to look at and the final one that we've got to look at is ARM. ARM is really interesting because not only do companies like Nvidia pay licenses per CPU core, not GPUs. They don't pay for the GPUs, they pay for CPU cores, which we're seeing more and more cores of, which leads to more revenue for ARM on a license basis. You have to know with ARM, you've got really big connections to China in terms of how related party revenue shows up. They're not actually dual listed. They're just listed over here. And then you get this related party income that just gets stated from the Chinese side, which is a little weird because it could lead to these crazy fluctuations in that stated income from them. Bizarre. Uh you also have them now getting into hardware manufacturing, which I think is a really big cash flow risk for the company. It's one of the reasons on the cash flow chart they sit so freaking low. Uh that said, uh OpenAI and Meta are buying their custom silicon expected to ramp up in 2027. their AGI CPU revenue is expected to come out by fiscal 2031, but the custom silicon is a pricey play because of the capex that it's going to cost to get there. In my opinion, this company has about $223 of earnings per share projected for March of 2027. And the stock right now, yeah, let's pull it up and then we can do a P ratio here. stock right now sits at oo $282. $282 divided by $223 of EPS puts me at $126 times. I do have forecast growth sitting at 47.4 for this company over the next four years. But that still already puts me at a 2.67 peg. It basically puts me where you already want to be for the valuation for this company. Plus, you've got capex risks. So, I like the cash flow yield of Nphase, but it's it's honestly like almost a little value play out of all of these because it's in a declining industry. It benefits in the future maybe from data centers as a call option and it benefits from interest rates coming down in the future and that makes it a bit of a value play right now just generating cash. The big favorites from Elon Musk's buying spree in my opinion, hands down, Nvidia, Marll, and Lattis Semiconductor in declining order. The others are okay, but you could obviously see my analysis exactly on those. Uh, Nvidia is dirt freaking cheap. Out of all of these, Nvidia is dirt freaking cheap. None of this obviously in this video is personalized financial advice, but Nvidia is dirt freaking cheap. Anyway, uh I hope you like this sort of overview and uh we'll see you in the next video. Thanks so much for watching and we'll see you. Goodbye and good luck. >> Why not advertise these things that you told us here? I feel like nobody else knows about this. >> We'll we'll try a little advertising and see how it goes. Congratulations, man. You have done so much. People love you. People look up to you. >> Kevin Praath there, financial analyst and YouTuber. Meet Kevin. Always great to get your take.