Nvidia Is STILL Cheap at $5 Trillion? | Feat. Brad Freeman

In this episode, I sat down with Brad Freeman, the founder of Stock Market Nerd and one of the most thorough independent equity analysts I've come across. Brad is a University of Michigan finance graduate who previously worked as an analyst at a registered investment adviser. He eventually launched Stock Market Nerd to give individual investors the kind of detailed institutional quality research that is often difficult to find that is without the hype, sensationalism, or sugar coating that tends to dominate financial media. His approach is grounded in fundamentals, valuation, risk management, and understanding what you actually own, not simply following a ticker or chasing momentum. In this conversation, we covered a wide range of different stocks and business models, going through earnings results and the opportunities that potential different stocks have. Whether you already follow Brad's work or are discovering him for the first time, I think you're going to get a lot out of this discussion. Anyway, please enjoy this conversation with Brad Freeman, the stock market nerd. Ladies and gentlemen, please welcome the great and powerful Brad Freeman. >> Just Brad Freeman. No, no great, no powerful necessary, but how are you doing great and powerful Tanner? >> I'm doing well, man. I'm happy that you're back. I have not seen you on the show in a while. >> Yeah, too long, for sure. >> Um, what's called We were just talking about Palunteer. This has actually been a name that I know that you've been actually considering a little bit most recently. The obviously the the valuation's changed pretty drastically. >> Yeah. Yeah. Yeah, I just need a time machine to go back and buy it when it was around 100. Um like I was so tempted to do and didn't do and then you look up a split second later and it kind of got away from you or not you but me I guess. Um but yeah, they it was it's all been for Palunteer. I mean what a what an amazing company. They I just have there were there was about a year of people figuring out whether app layer part of the AI wave was going to monetize while they were doing it better than anyone else and have continued doing it better than anyone else. And um they talk a lot of smack and they deliver results that warrant even more smack than they talk. So it's just yeah they're awesome. Um nothing wrong with the company at all. Nothing nothing but right things with the company. >> I I like how conservative you are. You have your time machine. You'd go back and buy it at 100. >> Oh yeah man. I should go back to eight. I I need to I need to go further back in the time machine. You're right. >> Uh I I do want to talk to you though about uh a lot of the mag sevens. you practically cover them all, maybe without Tesla or something like this. I don't know if you do cover those names, but uh for the most part, a lot of the actual big tech companies. Um I'm curious on the state of sort of the capex spend, artificial intelligence, how do you sort of wrap your head around all this? I don't think you've been sort of sold into the AI craze like potentially I have or some of the other ultraables or permables as you would put it. Well, um I definitely wouldn't call myself an AI infrastructure bear. I think you'd have to >> No, no, not not bear. >> I know that's not what you're insinuating. Kind of stick your head in the sand and ignore everything to >> to be not I mean at least a little optimistic about everything that's happened over the last few years, but in terms of ROI or in terms of quality of capex and do I think they're making the right decisions? Absolutely. I think um this is a case where public market um incentives and long-term what what's right for a company don't always align. And I think it's part of the reason why you see some companies just get so big in private markets and kind of refrain from going public because it's a lot easier to make I guess decisions that that don't always fixate on maximizing a quarterly EBIT number beating a sellside site EPS number by 2 cents instead of 1 cent because the whisper number said you had to for your stock to go up 7%. I I mean that that's that's the game that public markets play every 3 months. And if you want to some sometimes create more space and more runway for more profitable growth and becoming bigger in the future, you have to kind of sacrifice in the near term uh the things that make everyone happy. So I think that I mean I don't think that that's definitely what's happening right now. Um, Meta is the one that people are most worried about just because they don't have that or at least right now I guess right now they don't have that uh public cloud business where they're renting um compute to a lot of customers for very near-term returns and and and in high margin revenue. Um, they're kind of there's been a ton of rumors about them getting into that as as you know already. But um, yeah, I I am I'm of the opinion that that capex is a good thing. Um, I'm of the opinion that capex is based on near-term and in and clear demand signals that people with a lot better data and a lot closer conversations with customers have than anyone on X and and people offering opinions. So, that to me is is a phenomenal signal that they still see things that that are are very rosy at least for the for the near term. And and that doesn't mean they can't double negative, but but they they can always pull back on on capex. don't have to spend a gazillion dollars in two years like some of them are still saying they're going to be. But as of right now, everything looks really good. And even for Meta, I mean, they they talk about using AI dollar or AI investment dollars all the time to accelerate monetization um via more engagement and and and higher ad pricing. Um, so it just I think all these companies are are doing the right thing and and even if um not all of them are getting credited for it right now. Uh I think they will be in the future and and and not and then I'll get off the sermon in a second because I want to hear your take. But the the plan B is really good too. I mean, if if you if you have too much compute sitting around, which that we're I don't think we're really close to an a scenario where that happens, but if you do, especially for a company like Meta, um you you just pull back on capex, you maybe rent out a little bit of the compute, and you see your free cash flow number go a lot higher. Um for Google and Amazon, you you have probably have lower cloud growth that you have to figure out how to plug that gap somewhere else. But the free cash flow number that everyone's worried about um being so negative. It's not it's not a new normal like I think many are assuming it it is. It's a matter of let's cut capex by 30 billion next year and watch free cash flow magically spike higher. And that will happen. I'm not sure when it will happen, but it will. And and so yeah, I I don't I don't worry that much about these companies making good decisions and I don't worry about them making pivots when when it when they're when they think they made a good decision and it turned out to be wrong. um alla metaverse 2022 in year of efficiency. >> I was talking with Chris Patel yesterday and he believes that um some of these companies like Google and Meta are being blinded by you know competition being so strong that these companies are more worried about what their balance sheets look like or sorry less worried about what their balance sheets look like and more worried about falling behind and potentially losing market share. Do you think that there that we could be in a phase right now where um these companies are overspending and that they could actually be getting themselves into a lot of trouble? Or do you think that they're good capital allocators? Because Chris was making some statements yesterday about how Google might not be a good capital allocator right now. >> I think well I think it's almost inevitable that they will overspend at some point. I think to to get to the perfect amount of capacity and then stop at the perfect time is not a real I I don't I don't think that's gonna happen. I mean um I that'd be really cool that pat pat yourself on the back if we could pull that off. But there is going to be a time where there is overspending and over capacity. I just think they think the economic gain from getting to that point from get from going from where we are now to wherever that point is where we have too much is that there is not only too much profitable revenue to make but there there's too much I mean compute delay around the world to ingrain yourselves in developer ecosystems um and and and and like data lakes and all these things that create sticky customer relationships to make sure that not only you're you're buying your AI workloads on on AWS or through Azure through wherever you're doing it um but that your core workloads which AI is directly supporting are also there too so that you can have this sticky holistic relationship where you're not it's the same it's kind of the same thing as app layer point solution versus platform like you want to everyone wants to be that platform everyone wants to sell a lot more tools to customers because they stick around for longer um so yeah now how does a company like Nvidia and don't hurt my feelings it's obviously last time we spoke it was the biggest position in my portfolio it still is Um, and the stock hasn't moved, I don't think, since the last time we spoke. So, >> just look at the five-year chart and then and then and then uh yeah, only you're only up 986% over the last 16 months. I'm playing all this violin for you right now. >> No, it's just the AMD guys that have been trolling me over the last 18 months saying I should have rotated every dollar I've ever had into it. >> Well, there's a time another use case for time machine. So, >> yeah, exactly. But how does that fit into the equation for you right now? Um, does that company look cheap? H how do you sort of value the biggest company in the world right now? >> Um, and you can fit in the other n the Broadcoms, the AMDs and sort of just the entire infrastructure. >> Sure. Uh, well, I think the the the news with like Black Rockck and KKR last week with the the financing and um maybe creating financial markets behind GPU sales and compute. I think that's really big for Nvidia just because they have it's sort of almost like on a much bigger scale. It's almost like Uber with autonomous vehicles. Like they're they're investing in a lot of companies because they're trying to bring a lot of um more more customers through the finish line. So they have more business to uh have more supply on their platform. Nvidia is kind of doing it in sort of a related way in that they're funding a lot of members of their supply chain to make sure that all of these pieces of their supply chain are healthy. Also to make sure that their potential um customers can keep buying their GPUs and and renting them out to other people. Um, so that that costs a lot of money and and I mean no one has I mean very few companies in the world have a balance sheet that looks anything as is as as close to as amazing as what Nvidia has. But it's still really nice to see all these massive institutions step in and commit that I think what was it $500 billion of maximum funding over the next few years in terms of creating these capital markets um for not leaning solely on Nvidia to foot the bill for everything which means when whenever this cycle does end and I don't know if that's going to be in two year it certainly doesn't look like it's going to be in the next few quarters but a year two years five years I don't really know um they're not holding all these assets that are maybe um not as in favor as they as they were during the hot part of the cycle. So, it just it creates a lot more balance sheet flexibility for them to ramp up the buybacks to um do a lot more things without worrying about uh Cororeweave or some of these other partners having cash on the balance sheet or they not worrying as much about about these supply chain partners having enough cash on their balance sheet um to fulfill their commitments and to fulfill their orders and to make sure their piece of Nvidia's backlog is looking safe and healthy. Um, so, so I think that's good. That was really good news for Nvidia. That was a good development. And in terms of cheap or not cheap, um, it's it's as as crazy as it sounds, I mean, what is it right now? It trades for should have had this pulled up already. 22 times forward earnings and earnings growth over the next two years looks like 91% this year, 40% next year, 22% the year after. So, the growth multiple is way under one. Um I it's if if if you are of the opinion that this this infrastructure cycle has legs and again 2027 capex commentary for mega caps looks pretty good for that. Um the fact that the scares we've gotten from from meta about maybe having access compute have definitely been false alarms and and kind of >> those blew over quick. >> Yeah, for sure. Um so I don't I don't think I don't think cycle longevity looks like a pressing issue right now. Um, but whenever that hap and whenever that happens, Nvidia is not going to be the first comp person to say the cycle's over. Like it's going to be unpredictable and quick and sudden if it's like any other cycle. So I I don't know when that happens, but as long as status quo remains or even remains kind of this good right now, um, it looks super attractive from a valuation point of view um, in my in my mind at a $5 trillion or whatever it is market cap. Kind of wild to say. Um, but yeah, peg peg under one for a name like this. Um, as as long as those estimates look good, yeah, looks good to me. >> So, what I wanted to do is play a little game with you. You you cover a wide variety of stocks. I also know that you stick within the areas that you know and um what I what I want to do is have people essentially put in a ticker in the chat. I've got some of my own that I that I want some um you know, commentary on and then we'll just do a little bit of a lightning round of what your thoughts are on the company. you you don't have to say, you know, buy this, sell this, just this is what you're thinking about the name or very quickly, I don't cover that name. >> Okay, perfect. As long as I can be like, I have no idea, we're good. Yeah. Okay, awesome. I I will I I promise I will say I don't know instead of making up a stupid answer for a company I don't know anything about. >> Perfect. Um I want to start right where uh I've been looking a lot into which is some of the Neoclouds. And I guess we'll kind of lump together both Nebius and Coreweave. Some of your thoughts >> about as levered directly and purely to the AI infrastructure cycle as you can possibly be. Um large beneficiaries of access compute demand and data center demand as long as that lasts. Their ARR numbers are probably going to look amazing. Um I don't know what their profit numbers um over the long term are going to look like after IBIDA because depreciation is a super important expense for them and I don't think anyone valuing them on gross profit for IBIDA should be doing that. Um so that I don't know haven't done enough work on those names but revenue and demand numbers are probably going to look unfathomably good um for as long as this supply demand imbalance in in AI compute lasts and it doesn't really look like SpaceX leasing out compute anthropic or maybe Meta doing the same thing is going to have any impact on that. It looks like supply demand imbalance is firmly intact and Nebius had an amazing quarter. These companies are killing it right now. >> Uber um uh I misunderstood blue chip. Uh I think um I think they are going to be the the demand aggregator for all these tiny little AV fleets that are forming that no one has heard about. I think there's going to be Whimo. I think there's going to be Tesla and I think there's going to be Uber. Um I don't really know what's going to happen to Lyft. Um maybe Zuk with Amazon buys them for and tries to merge or maybe Uber just grabs them to to take to take a little bit of market share. Um but I think there is a a um a large three-headed monster forming in the AV land over the next 10 years and while we get from point A to point B, Uber is just going to keep compounding at a mid- teens clip, trading at a very cheap multiple for a long time a massive scale. Um so I high on the company for sure. >> Really quick because I argue with >> one more thing, sorry. didn't love the fact that Whimo was kind of pulling back from their relationship. That kind of upset me a little bit. Yeah. It made the bullishness a little bit more cautious than if you would have asked me maybe three or four weeks ago. >> Yeah. I didn't I I've not been following Uber super closely, but my understanding was I think they launched in Phoenix with uh Uber and Whimo and that they had like some of the highest utilization that they've ever had and some for some reason they're pulling back on that relationship. I didn't understand that. So there was a it was a very small like a dozen or two dozen car experiment in Phoenix. They're also in Austin and Atlanta. That partnership apparently is getting renewed for 27. Um I think there were some disagreements over um pace of rollout, over maintenance responsibility. I I think that companies just kind of got into some bickering um arguments or bickering um yeah bickering matches and uh and and and that led to Phoenix kind of fizzling out. But I think it definitely makes it more likely that Atlanta and Austin are also going to fizzle out at some point. Um, which just makes it all the more likely for Uber to perfectly piece together um, this web of vendors coming to market. And and like talked about with Nvidia a little bit, they're having to invest billions of dollars from their own balance sheet to make sure these companies are succeeding and getting to commercial scale. >> Uh, Apploven. >> Oh my goodness. um either a oneoff event with weird model up update timing and it truly was a model cadence thing and they and they got it updated and now everything's rosy and they're back to killing it every quarter or that was the first excuse of of of a new trend of excuses um of why things don't look quite as good because in adtech it is very very hard to over several year period um convince companies that you can monetize the impressions that you've already earned better with us than than you can on your own. Especially in the age of AI um where everyone is making targeting and and data collection and analytics a lot easier. Um so when I hear apploving I think the third quarter is so important for them. Um talked about this with Shai on our podcast two weeks ago. if they if they give another weird excuse like uh we didn't ship this update in time for a little more revenue to flow in like last quarter >> or something else happens, you're going to hear trade desk 2.0 murmured over and over and over and over and over again. Everyone is going that that is going to be the comp um that everyone points to and I think it's going to be fair. Um but >> it's only it was one quarter. Um every the best companies in the world have had bad quarters have messed up. So, if they get back to their old ways um on Q3 and Q4, then they're they're they're fine. Yeah, >> I got super burnt on the trade desk. I I I started buying in um after that first quarter where they dropped from 140 down to like 60 and then I was buying and then the next quarter there was uh a reaceleration and Kokai is off to the races and you know we we are now going to see this new AI platform start to uh really show off strengths but I find if you get two quarters wrong in like a one-year period that that was the end of that. So, um, >> yeah. >> Yeah. >> And now I'm not I'm not buying in Napovven. I'm not buying Zeta. I'm not touching any of these names because I'm so scared of the trade desk. >> I'm not PTSD. >> Boring. Am I too boring for thinking Meta and Google are the best at names in adtech? And why go anywhere else? I don't know. May maybe I am. But yeah. >> What what I say on my channel a lot is I want to own the user now. Like at the end of the day, the only thing that um I'm focused on like Reddit, Google, Amazon. Um, >> yes, only impressions. >> Yeah, because at at the end of you don't know what they're going to be able to build, how much they're going to be able to bring in house and the vertical integration starts by owning the user. >> I totally agree. >> So, just really quick, do you want to speak on Zeta if you have any thoughts there? >> I don't know much about it. Can I ask you about Spotify? Speaking of users and um what do you think of that name? Um, if you know anything about it. >> I don't know anything about Spotify. >> Okay. Because it's it's on the watch list. I've been talking to a lot of people trying to maybe put in the portfolio. I was just I'm just collecting collecting feedback, but sorry to sorry to go impromptu and in and ro roll ro roll ro roll ro roll ro roll ro roll ro roll ro roll ro roll ro roll ro roll ro re re re reversal but >> yeah um no you know you know what company I've been really uh spent my whole weekend looking at Bending Spoons. >> Bending Spoons. >> Bending Spoons. >> I is that am I >> It's uh very very new. They just went public like a month ago. >> Okay. um Italian-owned like uh think of like Constellation Software, Birkshshire Hathway. They uh acquire businesses outright uh fix them up. So they acquired Eventbrite, AOL, Evernote, Streamyard, the platform that we're using right now. Um and they buy these companies that are sort of forgotten SAS names. Air Table, they just bought that name. Um and hold them for the long term. So they've done over 50 acquisitions but have never sold a business in their life. Um >> and uh extremely different company growing at triple digits obviously taking on a lot of debt but during this sort of SAS apocalypse they're acting as if a private they're acting like a private equity business buying up these companies but not to flip them to to hold them and bring in the cash flow. >> Interesting. >> Yeah. Sort of like toma Bravo almost a little bit but not re not really. >> Yeah. It's it's it's it's a little interesting but expensive. The you know people obviously that see them making a name for themselves in very quick succession. Um so yeah they're like a $25 billion market cap when maybe you could see some comps being probably half that. But >> you know >> they started >> they started in 2013 with their own capital. So like it's pretty wild to create a $25 billion company just acquiring businesses. They they have not created a thing themselves. >> Absolutely. Good for them. >> But um what's called we talked about Uber app loving. Um there were a couple people saying some things in the chat. Mart Libre. >> Um, another one of those, oh, that I'll go right back to our capex conversation where the thing the right thing to do is not always what public market investors want. And Libé is in aggressively build out their competitive mode and make sure C Limited and Amazon. Don't encroach on their market share in Brazil. Um, make sure they're one of the largest financial institutions in Latin America. um make sure that their their loyalty program has as many perks as anyone else and their fulfillment network is as fast as anyone else. Um right now that means a lot of pressure on the bottom line. Um which is why the stock has been under so much pressure over the last really five years now. Um but I think I I I am I think it's an amazing company. Um and I think there's going to be I don't know there's no guidance here. Um if you are if you like you you need to be super patient. Um, and you need to be okay with a leadership team that does not care about what public investors want. Um, and that's going to do exactly what they want to do. And that's building a hundred-year company, but there's going to be a year or a quarter where they pull back just a little bit on on um all the capex and all all theum opex um growth. And it's sort of like Amazon like they are so in control of their of their P&L like their their profit growth is going to explode at some point, but who knows when? and they are going to spend for as long as they feel like it's the right decision to spend, which I don't think is going to end at least in 2026. Um, so buckle up and zoom out if you want to own this name. For sure. >> Yeah. Yeah. Um, in that same similar vein, I don't know if you Well, I do know that you look heavily into New Bank, but if you also look into DLO at all. >> I don't look as much into DLO. Um I I love big um safe and boring when I'm when when I'm venturing outside of the USA. Um so Marcato Libre, New Bank, uh S Limited, like those kind of names really just the the the mo I don't I don't like um diamonds in the rough when you're when you're um XXUSA. I I really um go for comfort there. But a lot of a lot of people love that name. The growth, it's it's like a rapid grower. a little bit of gross margin pressure, but making up for it with OPEX leverage kind of thing. >> Yeah, a lot of bit of uh lot of bit of gross margin pressure, but I mean work, >> you know, TPV, I think, is grown at like 93%. So, >> Shopify made gross margin moving from almost 60% to 40% work very well. So, you you can build a great business while accepting that. Um, so not not a deal breaker. >> Yeah. No. Um I I know you have some some comments about some retail apparel names, but uh any thoughts on Nike? >> Yeah, I uh yeah, if swing trade maybe I I have stopped kind of looking at the name and following it as of a couple quarters ago. The only one I really paid any attention to at all is on on running or on holding I guess is the the company um enterprisewide name. But yeah, I don't like apparel as an investment um opportunity. haven't definitely a byproduct of bad picking in the past. I mean, I own Lululemon a couple years ago. I think I lost 30 or 40% there. Got out what at what felt like a bottom and sure sure enough it was not a bottom. Um hopefully Michael Bur um makes some money on that at some point, but he he's got a movie and Substack and and whatever, so he's fine. I shouldn't worry about Michael Bur. But yeah, clothing is really hard. I mean, you you have to figure out the how the minds of an 18-year-old kid works and and how their preferences change. Like people saying 67, whatever the hell that means. Like th those are the people that you have to understand like that that you have to know when they like a button in a certain place or collar or this color is not in vogue anymore or and if you mess up one time, there are no switching costs. Like you can just walk to the next store right next door um and buy a different t-shirt. And if the the economy is not amazing, the very first thing, the easiest thing to cut out besides maybe um Starbucks coffee or or or or something like that is buying a new t-shirt and stretching out the life of your existing t-shirts. Um not to mention the fact that we're I mean it's not like it's not like a cyber security industry or data infrastructure industry where you're going to get um sector growth well above GDP. Like you're not getting that either. So what you get is these really hot brands that come and go all the time. I mean, you can throw uh like energy drinks into into there, too. You can um throw a lot of like a lot a lot of different kinds of um consumer discretionary models into there. But these hot brands come um they get influencers to pick them up and partner with them. They have really long store growth runways that they can um that they can open up all over the country and and traffic growth looks amazing for a while because their brand awareness is really low and they can um spend a lot on marketing and and reach a lot of new people very easily. So very efficiently um find new ways to grow. But at some point um brand awareness closes in on on 100% or wherever the ceiling is um slows down and then you are at the mercy of cyclical tailwinds and headwinds um that eb and flow. you're at the mercy of that 18-year-old person um who who knows what they're going to want from you in a month. And if you guess wrong, you're going to have so much inventory on hand that nobody wants. You're going to have to discount like crazy. Margins are going to suffer. Your brand quality is going to suffer. Um so on running right now is doing the best out of any of them in terms of avoiding the temptation to flood inventory with wholesalers and and maximize revenue growth at every turn. Um, but even then it it's just best house, bad neighborhood, and and I like other neighborhoods better for for investing. >> Yeah, that's uh that's really interesting. The only one that I've really played in the past like Aritzia um but they're probably not at the uh sort of 100% brand awareness quite yet. I think they're sort of building out and are in specific pockets of Canada and breaking into America right now. So um that was many years ago. Um I wanted to also touch on uh SoFi. >> Okay. What's that? >> Yeah, I don't uh I don't cover that name. Um current thoughts on SoFi in this rate environment. uh doing everything they need to do to make sure when macro backdrop cooperates a little better and and they can um macro backdrop is really not that bad right now. Like they are they're performing very well. Um it's just sentiment is not very good because people are kind of fearing more rate hikes and and what what's that going to do to forward guidance? But they already have more hawkish policy in their forward guidance than what's currently expected. I I don't I don't think we're getting more than a couple hikes this year. I'd be pretty shocked. So this this year should look pretty good. Next year should look pretty good barring some macro collapse, which is always possible, but you probably need um some kind of rate cut or dovish pivot um from the Fed to really have the stock price moving in the right direction. But while all that happens, the company's moving in a great direction. So to me, it's just kind of coiling spring like they they member growing members compounding rapidly. Um cross-selling is um reaching some pretty impressive inflection points as of last quarter in terms of product growth ramping way more quickly than member growth which is that that's the flywheel working. Um so everything that >> has to look good underwriting underwriting precision is great. They they're doing they're people are are not happy that they are shifting um some of the loan lending demand back away from um lending platform business to their own balance sheet. But why would why' they raise all that money if they're not going to stash really high margin loans on on their balance sheet and and start making a lot more net net interest income from them to meet their 2028 targets and go from there and to create all this visible revenue like they talked about in the earnings call to fund all these growth investments that they have. Um so maybe the stock doesn't work in in the immediate term. Maybe we don't see it go back to 30 35 or 40 in the next six months or wherever it topped last time. Um, but as long as they keep doing exactly what they're doing and just nothing needs to be fixed, well, maybe the tech platform could could look a little better and then they could they could uh they could start delivering some big wins there. But from from an overall company perspective, keep delivering that topline compounding, keep delivering that margin expansion even at a slower pace doesn't really matter. Um, in my in my opinion, if they're going to show these growth investments working so well, um, and the stock will work eventually. It's going like it's I don't know when. Um, I don't have a crystal ball. I know you're not asking me to, but I know some people would love me to give them a date. Um, but company performing very well. Stock maybe not going to get credit for it immediately, but it will get credit at some point. They are putting themselves in a position to be rewarded when sentiment for the overall industry improves. >> Well, actually that goes into my next question, which was what day do you think it will go up? Um, >> what day does it reach an all-time high? >> I I do have two questions. So, first, um, what did you think about whenever we were, you know, sort of $30, $32 back then? Was that nearing some form of overvaluation or or fair value based on your assumptions? >> Um, go ahead. >> Well, I guess it's people will roll their eyes, but I have a fortunately a real-time feed of primary source transactions um that from the newsletter. So, I was trimming pretty pretty meaningfully um when it when it was crossing 30 last time. Not because um I thought that's it like that that's that that that that's the ceiling for the company. I don't think it's it's even remotely close to the ceiling for the company, but it was getting to a growth multiple that was more fair and and it had moved from a point to being grossly undervalued to more fairly valued. And I was buying hand over fist when it was grossly undervalued. And it had gotten to a point where it was as big as these other big bellweather anchor holdings in the portfolio. The profit it was up a lot. So just kind of harvesting some profits and um taking advantage of of of that of that opportunity with riskreward maybe not as good as it was when the stock was at four and a half in 2022. Uh the next thing and I'm uh shy posted about Piper Sandler initiating an overweight rating on SoFi like $22. How like like this I know you're not you're not answering for Piper Sandler, right? But you've read a lot of these reports. Why is it that you might not have seen this one, but they I think guided or modeled out for 22% revenue keagger through 2028 on a 27% adjusted Ibida kagger. Why do they have such conservative models versus what SoFi has said themsself? Like like what gives them credit to do that? I don't think sellsiders are willing to look out a few years in the future for for a company taking a lot of credit risk and not bake in some kind of probability for what happens if macro sucks like what what like we need we need to bake in some kind of um margin margin for safety for if unemployment crosses 5% and so needs to pull back on loans and if that happens we don't want to drastically drastically change our models and look like idiots. Um, so it's it's better for it's better for them to be be a little too low in their forecasts than to be too materially too high. Um, so to me it's just it's covering their behinds and making sure um they don't look too wrong um if if ugly parts of macro unfold and um they're okay looking a little wrong if if Soofi does meet their guide. So, I it's it's just a lack of lack of an understandable lack of willingness to kind of um forecast with 100% certainty that the macro outlook that SoFi has embedded in that MA multi-year guide is for sure going to come to fruition. >> Uh I'm going to switch it up on you a little bit um because I want your opinion on this name. I I've never been a fan of this company. I'll preface it that way, but I I don't know your response. Uh, what are your thoughts on Netflix? >> I This is why I have so much respect for Spotify. Not to change the subject a little, but I I'll I'll get back to it. I promise. Um, and and and maybe for a third company like Axon. What Axon's biggest competitor is Motorola. They they have to out innovate Motorola. And And I I have a lot of respect for Motorola. Great company. But that's that's doable for a company like Axon. >> They've been out innovated before. Yes, company like Spotify has to beat Apple, Amazon, and Google and in in a in a in a field that entails offering the same content with a different interface and hopefully having more of that content, but basically having a very similar product and tying it together in a a neater bow with maybe better personalization algorithms and that kind of thing. That's really hard to win in and they somehow are figuring out how to win. I think that is the exception to the rule. I mean, think about Teddoc and what happened to them when Amazon decided to snap their fingers and get into Tellah Health. I mean, the these big big big companies that don't need to make any money on a specific product are very hard to to win against in um sustainable fashion. And right now, Amazon, Apple, and Google are spending a ton of money on content and are pushing very hard into streaming. And they're coming out a lot a lot of great stuff. I mean, my my social circle, anecdotally speaking, talks a lot about shows from Netflix, but now a lot of other streaming platforms, and it used to be all Netflix, and that used to be all anyone talked about, and that's not true anymore. Um, so between that and the fact that um they can they can outspend Netflix and the they haven't built decades of really really close and tight relationships with creators and artists that >> maybe don't want them to lean in as aggressively to AI based content creation because they feel a little bit threatened that you're you're going to maybe try to replace us. So Netflix, I think, also has to be a little more careful with replacing costs with uh with with compute and and and I don't think Amazon and Apple and those companies need to be quite as careful. I think that that's that's not as big of of a of a factor as the fact as the reality that Apple and Amazon and Google can spend an absolute fortune and a half compared to anyone on the planet and operate at razor thin margin and make it make sense from an economic point of view. Netflix has to make their EBIT margin from their streaming library and and that's not true for these other companies. So, I just I I don't love the investment. Um I love the company. I think it's an amazing story, but I think maybe um yeah, I'm not the the days of dominant market power are are over. I think that's pretty clear. That's not required for them to win in such a massive field. But I I don't love the the investment case right now. >> Yeah. But on the other hand, and this is speaking from someone who I don't want to share of, um, you know, Netflix, but it's not like we've been in some stagnant high price while the, you know, bare case is potentially building. The stock is also quite down. Does that change the potential thesis that, hey, you know what, this stock might not be as dominant as it once was, but the valuation is reflecting that, or it's still not worth being touched right now? Absolutely. I think it's a lot I mean a lot more attractive at 22 times earnings. It was at 50 times earnings 10 12 months ago. So yeah or 14 months ago. So yeah, definitely that helps a ton. Cheaper companies don't have to perform as well um to make it make sense. So um yes um that that's never my favorite part of a of of a bull case is I know you you are of the same opinion, but that does help a lot in terms of riskreward. cheaper um means that you you can perform in more underwhelming manner and and not be punished. So yeah. >> Yeah. And to be fair, I still own Netflix and uh I don't know how many years I've said that I was going to stop paying for Spotify because I pay for YouTube Premium. Uh so I have YouTube Music for free and I still haven't done it. So um I don't know. There's something there that's that's sticky or I'm I'm too lazy to switch. Who knows? Um, another company, and I don't know if you cover this one, but Adobe. >> Um, I don't know a ton about it. Uh, I I think, uh, content creation, um, that that's pretty lowhanging fruit for AI. Uh, vibe coding use cases, uh, for that kind of thing are more straightforward than data engineering or analytics or things like that. Um, but at the same time, vibe coding and AI does better when you have a ton of data and a ton of experience and a ton of edge case mastery that can only be developed from operating at scale for decades. And that's Adobe. Um, so the onus is on or it's it's up to them to kind of out innovate the disruptors and they have I don't I don't know enough to offer a strong opinion on whether they're able to do that. Uh, but I don't think that maybe while I I don't think that AI is a death sentence for them, but I do think it's a pretty pressing risk that they need to respond very well to. Um, yeah. >> Yeah. Uh, I don't know if there's any others, if there's any in chat that uh potentially we missed. Uh, we we talked about a lot of the semi-names. Uh, Palunteer was one that I definitely want to touch on. Uber, Netflix, uh SoFi talked about a lot of Ladam. Is there any names that potentially uh we didn't talk about that you you do want to make sure that you do say something about because maybe people aren't paying attention to. >> Uh, no, that was that was a a pretty pretty fun uh whipound. Uh, I think um, yeah, >> all over the place. There was no there was no uh wasn't alphabetical or anything. >> Yeah. Yeah. No, no, that's that that was fun. I love when there's no script and kind of just >> really quick. >> Yeah. >> Can I ask you about memory, >> please? Uh I would say aside from Neoclouds, that is another one of the most purely directly tied to um AI uh supply scarcity as as as you can possibly think of. um have had some headlines about Nvidia maybe figuring out how to operate uh the new Ruben platform with lighter HBM um more companies like uh Cerebras coming in and and maybe changing memory architecture and and where it's actually processed to make it more efficient and and and kind of like that as versus GPU um debate that's been happening over the last couple years. That's kind of that's sort of what's happen maybe not maybe not a great comparison but on the memory side uh just different architectures for uh where that memory is stored in process that are becoming maybe more popular and maybe could take some use cases away from HBM that's being used for pretty much everything. Then you have Apple that's trying to figure out how to maybe get the green light for some Chinese supply because I mean they're that's their middle finger to Micron basically. But but but in fairness, Micron is putting their middle finger up to Apple right now because for years and years when there were supply gluts, Apple like really really really dug in on on on demanding price concessions and just just just being tough on Micron and making making a positive gross margin even 1% impossible to maintain for a while. So they're right they're doing what they're supposed to be doing. I mean they they have the market power that that that's shifted aggressively and they should be taking advantage. Um I it's it's another one of those do do you buy it here? Um I don't know. I I personally would would probably go for something like Taiwan semi semime or Nvidia um over a Micron or or someone or or SanDisk or someone like that just because I like big and boring. Um especially when you're exposing yourself to a cycle that has so many unknowns and and so little predictability on timing. uh because maybe aside from Oracle and the Neoclouds, this is going that the memory names will be blown up the most aggressively whenever this ends. Again, that could be in 10 years. I have no idea when that's going to happen, but I do know if if this cycle looks at all like any other cycle we they've all we we've ever had um that there will be a point where we have too much memory. There will be a point where pricing pressure um starts to kick in a little bit and margins start to contract a little bit on the memory side and then it will go from slowly and then kind of all at once type deal. Um, so I don't want to be in memory because I don't have a great sense of when that happens and I don't have a great idea of the perfect sign to look for for getting ahead of when that happens. Um, but I I do think if you are an AI infrastructure bowl, that's a more aggressive uh way to play it if if you're looking for that higher higher risk, higher reward kind of mentality, which sometimes I shy away from a little bit in certain situations. Um, candidly I take the ETF route for uh, AI infrastructure exposure just because um, there is a lot of change constantly happening in the industry and there there I mean Broadcom was the ASIC uh, design king for for a year and now and now there are a lot of um, new competitive pressures emerging from Marll and other companies that that are maybe taking pressure away from ASIC. So just just these constantly moving chess pieces in in AI infrastructure. Um, not to mention the fact that mega caps are pushing so so so hard to do more and more on their own. Um, so I love the ETF route just because I feel like I'm going to get I'm going be just just the ETF exposure route is me saying I don't think this cycle is over, but I don't know who the winners from today are going to be and I want to get paid no matter who that is and I'm okay with getting paid a little bit less than if I would if I guessed the right winner in this area. >> No, I mean that's a genius strategy, right? And one that most often really works is like I know that there's going to be more spend. I don't know who the checks are being written to, but it's going towards infrastructure. And that's that's uh of course that makes a lot of sense. >> You know, I probably would have done better this year instead of just betting purely on Nvidia if I would have saw some of that AMD uh AMD benefit. Um >> well, fiveyear chart. That's that's all that's all I'll say. >> Yeah. Yeah. No. Five. Five year. I'm good. I'm good. >> You're doing well. You're Tanner's doing well. Don't you worry about Tanner, listeners. He's doing great. >> Well, you know, still worry about me. Uh >> yeah. Yeah. Worry about him the appropriate amount. Not too much for too little. >> Stock market nerd. Brad Freeman. Brother, thank you for jumping on. Um I don't know if there was something that we didn't cover. I feel like, you know, your your coverage super is uh very extensive. Um but we kind of did do a lightning round. We kind of went through a lot of things very quickly, but um, SAS Apocalypse. How you feeling about that? Buying opportunities. >> Um, it's it's definitely I mean been a fun couple months of sticking your neck out for for some of these companies and and having them rebound. I think um we've gotten to a point where sentiment has the extreme unconditional um unanimously negative sentiment is is over. Um and I think I mean you Atlassian getting rewarded for a great quarter, workday getting rewarded for an M&A rumor. These companies enjoying a ton of multiple expansion um service now I think 30 or 40% off the low. So I think we are at a point now where it does matter if you are a winner or a loser and well actually or we go up or we go down another 50% from here and like if as long like we're at a point right now where if markets just chop around a little bit and we don't get another aggressive selloff or another aggressive move higher I think it's going to become more ind more discriminate in terms of um this company had a good quarter so that doesn't mean every single software company in public markets gets to go up 10% the next day and and and like it it or this company had a bad quarter and vice versa. It does it doesn't mean every company gets unanimously sold off. So, I think results will start to matter more. Um the durable themes of of who's going to win in the AI age and in the app layer and and and data infrastructure and things like that will start to matter more. Um and and you'll start to see even more divergence in performance from from stocks of companies that are still nearing their 52- week lows and and probably lower to go and and and companies that have aggressively bounced back and probably higher to go even even at higher multiples. So, um, maybe more of a stock pickers market versus a few months ago where I think you could have thrown a dart at at at any company in IGV and been rewarded just because everything had gotten so unfairly punished. Now, I want to ask you a little bit of a question. Um, I think that your style of investing is so out of the um, you know, the popular uh, well, I mean, obviously you're you're you're you're buying popular stocks, but um, I feel like a lot of what goes really viral online is like sensational momentum driven picks. And I think that you're definitely focused on artificial intelligence, but still from a fundamental investor point of view, you're focused on free cash flow, actual growth of the companies. Are these companies getting stronger? Um, I don't know if you'll take that as as what you like to do fully, but um, does your career ever advance out of um, Substack or writing articles? Do you I'll just get to my the question within the question. Are you ever going to manage money? >> Oh, I don't know. >> I feel like the way that you invest is the way that I think of money managers investing capital rather than being sensational. >> I really I appreciate that because the the the the business is formed to give people access to good info and good ideas for a price that isn't ridiculous. Um so, um and doing so in a way where I'm not directly touching money. But, um I I do think so. And and I don't think it's going to be for a while just because you know that we're I mean I'm I'm 29 so this is I think year six or something like that. I I need more time to to show myself and prove to myself that my ideas are better than average. And I I do I I can create value for people by by charging them to to touch their money. Um and I think I maybe a solid decade of of that would be great. So half halfway there kind of deal. Yeah. Um, but as of right now, I have a lot of fun with the with the uh the newsletter Discord combination and now mixing in some more podcasts. Um, but yeah, I I would I would definitely I would I will I I will in the future when it is when it is painfully obvious to me that I deserve to, which I will be the last person to decide that um and everyone will be rolling their eyes at me the in the entire way. I I get asked um pretty frequently um and and so uh and that's very flattering if if if you're a subscriber and have asked me. I I really appreciate it and I'm sorry that my answer is no right now. Um it might be yes in the future. Um but uh yeah, I I want to I I want to show the world and myself that that I I am great at this. Um and I don't think I have done that for a long enough period of time to uh warrant charging people for touching their money. Well, Brad Freeman stockarketnerd.com. Appreciate you coming on and uh as you explore more podcasts joining mine in front of my audience. Uh I think everyone really enjoyed that. So, thanks for coming on. >> Please. Yeah. And and and Tanner and I have have a weekly thing, too. So, we we'll we'll do a little switcheroo and have you on and and and and did I say Tanner and I have a weekly thing? >> You did. I was gonna I was gonna >> and I have a weekly thing. Um so, we'll do a little switcheroo. And and there we go. here named her. Um, but >> you used to have a weekly thing. >> Yeah. Yeah. Ma, man, made it almost an hour without any stu any any slip ups, but had to have one. So, yeah. This is not AI, so now people know it's not AI. >> Yeah. Yeah. Exactly. Well, thank you, brother. Appreciate you jumping on. >> Have a wonderful rest of your day and talk soon. All right.