These 3 AI Stocks Could DOUBLE After the Biggest Sell-Off in Years

See you next time. >> Just a no-brainer. And um if you can buy all these 2027 2028, you will be very very happy. What's up everybody? It's LG Det here and welcome to Milk Road Stocks, a daily market show that had a worse October than the hedge funds and doesn't even have a risk manager to blame. So hedge funds just dumped tech stocks at the fastest pace in a decade. Meanwhile, Anthropics S1 shows it now brings in $28 in revenue for every dollar it spends on compute, up from 40. and SK Hinx grew revenue 328% yet Korean chip stocks trade at 2.8 times Ford earnings the cheapest in 20 years. So today Melvin our leading portfolio manager is on the show to explain what exactly causes selloff and why the selling looks largely done. Plus what Anthropics filing and the memory shortage mean for the AI trade and the three stocks Melvin is buying during this dip. And if you've been curious about what exactly those hedge funds actually hold and what other famous investors like Gavin Baker or Bill Aman actually have in their portfolios, we built a brand new website where all of that information is available for free. Plus, you can get notifications whenever those big names actually make a trade. So check it out at milkroad.com. And a reminder that our podcast today is free and that it wouldn't be possible without our partners at the online platform that makes it easy to compare term life insurance options and get a free no obligation quote. Keep an ear out for more information about them later in the show. >> What's up, guys? Um, I'm back with another video. So, what a crazy time we're living in right now, especially if you're investing in AI. Over the last couple weeks, uh, we've seen hedge funds dump technology stocks at the fastest pace in at least over a decade. And, uh, some of these funds have lost close to 10% in just one month. AI infrastructure stocks have gotten absolutely hammered. Um and suddenly everyone seems to be questioning whether this AI buildout is actually sustainable. But while investors are have been selling these companies um the underlying businesses have only continue to get stronger. Anthropic just filed this S1 um yesterday giving us one of the most clearest looks at um how quickly the AI industry is growing. Um Meta on the other hand is raising hundred billion dollars to in to fund their capex. Broadcom just put together a $63 billion financing deal with Anthropic. SpaceX just secured a $40 billion financing agreement as well. Um, so we're talking about enormous amount of capital being raised to build out the AI infrastructure. At the same time, investors are dumping the companies that could benefit from all that spending. And then there's the whole memory trade, right, which I think is one of the most interesting opportunities in the market right now. SK Heinix dropped his um earnings last night. absolutely ridiculous. Revenue is growing 300%. Um operating profit surging over 600%. Management is essentially essentially warning that shortage sto shortages could last uh past 2030. And despite all of this, Goldman Sachs says Korea semiconductor um sector is now trading at 2.8 times forward earnings, which is the lowest valuation in 20 years. Think about that. We're seeing record amounts of profit, enormous demand, yet some of the cheapest valuations we ever seen in decades. Meanwhile, the macro condition isn't exactly helping. Oil is trading about 100 now. The 10-year Treasury is around 5% somewhere around there. At the time of this recording, uh Fed meeting just happened and uh they decided to hold the rates, but there is a lot of worry from investors that there's a potential rate coming in um in December. So, there's a lot going on. I think we're at a pretty interesting point in the AI trade. So, today the purpose of this video is I want to break down what actually causes massive selloff that we've been seeing because I think a lot of people are missing the bigger picture. We'll also talk about the hedge fund positioning including some of the pretty significant like activities like in terms of like call options that I'm seeing from institutional investors. Um, we'll also go through S1 anthropics S1 and what that means. And also I want to go through the memory memory industry a little bit more and what that means for stock your favorite stocks like Micron and SKH Highix and Samsung. And finally, I want to give you some like three stocks that I'm buying during this entire dip. So that's the whole purpose of this entire video. So let's talk about what happened with uh over the last two three weeks uh with especially with hedge funds because I think that's really important that you grasp this because according to Goldman's um um sachs in the last in the five trading session through October 15th hedge funds sold u at least stocks at the fastest pace in 10 years. Think about that for a second that this was not a normal profit taking. This was an enormous reduction in exposure. And during this and during that same time, NASDAQ 100 fell roughly five 5.5%. It's worst week since April 2025 when we had the whole liberation day. And semiconductors were hit the hardest in term in terms of dollar. Uh but this wasn't just an AI sell-off. Like I said, Goldman was seeing selling across global equities at roughly two standard deviation from normal. Uh basically funds were taking risk off the table everywhere and the tech and semiconductor was in the middle of it was the center of it. Morgan Stanley was seeing the same thing across their brokerage. Um its prime brokerage desk described three standard deviation um global selling event driven by semiconductors and AI infrastructure. um even the week before the funds have already been moving out of AI names and getting into defensive sectors like consumer staples, utility and real estate. So where did that lead positioning? Goldman had hedge fund net leverage at 40, if you look at the screen 48.6% a one-year low. Morgan Stanley had a US short long-term leverage around 49%. Two sets of data are essentially telling us the same thing. hedge funds had dramatically reduced their exposure. But here's what's interesting though. Even after all that selling, technology still represented about 235.5 of Goldman's global prime um brokerage book, which is which is around 90th percentile over over uh 5 years. In other words, they they basically haven't abandoned tech. They're still in it. They just decided to reduce a lot of the risk. So then October 22 happened last week. All three of Goldman's main hedge fund strategist strategies have lost more than 1% in the same session. Something we haven't seen since like the COVID days. Meta dropped around 7%, Nvidia fell around 4%, NASDAQ lost about uh I think two 2.6%. Um and look at the look at how bad the performance got gotten on the screen. technology focused hedge funds were down about 10% for October at that point and Asia focused funds around 9% and fundamental long short funds were about 3.8%. Now imagine you're managing billions of dollars and you're down 10% in a single month. Your risk team isn't just going to let you sit there. they're going to tell you to cut exposure to to the entire market and that creates more selling regardless of whether the like fundamentals haven't changed. And this is actually something that Charlie from NORA explained really well in his last note. A lot of the hedge funds, a lot of the largest hedge funds operate using what are called multimmanager strategies. Basically what that means is they have different portfolio managers running different strategies under one hood. Each one of these managers have like very strict risk limits. So when a portfolio manager starts losing too much money, the fund can force them to reduce their exposure or close them entirely. And the here's where things get interesting though. A lot of these funds actually hold very similar positions. So when one fund starts selling, it pushes the prices lower, which forces another fund to sell and then another, you basically essentially get this domino effects where stocks are being sold not necessarily because something's wrong with the underlying companies like I said, but because these funds are forced to reduce their exposure and to protect their gains from earlier this year. Guys, I'm just going to pause there to tell you about one of my biggest problems in the market, which is seeing what some of the big names in the world actually hold in their portfolios. I'm talking about like Gavin Baker, how much SpaceX does he hold, how much Nvidia does he hold, Kathy Wood, Peter Teal, Ken Griffin. We always hear about these big names, but nobody actually shows you individually what stuff they hold, which is why we went and built a website that does exactly that. So, we have relaunched milkroad.com to basically aggregate all of these insider portfolios, we're calling them, and basically puts it all into one spot and lets you set alerts to tell you when they make moves. I'm talking like Warren Buffett, freaking Donald Trump is on there, Ray Dalio, all these big names you hear about. You can see their full holdings updated in real time on milkroad.com. So, make sure you check that out and sign up today. >> What's more interesting is the short positioning. Goldman data reported by Bloomberg shows that short selling was outpacing long buying by roughly 5 to one. Short leverage reached the 99 percentile of the last 5 years while net leverage was close to three-year low. So funds weren't just like selling their position. They were also betting against the market. And that in sets up a really really interesting situation because when shorts gets that crowded, it doesn't takes it doesn't take much force to fund for funds to cover their positions. Like for example, maybe it's a strong earnings report. Maybe it's a good news on the AI spending like we've seen in anthropic S1. Maybe the Fed is less hawkish. Any of those could trigger a shot sharp move higher. And we're already starting to see some signs of that positioning unwind reversing because let's just look at the market now market this week has largely started to go up and uh I think shorts are they have to cover their shores so the market's going to you know continue to rise and what's even more interesting is what's happening in the options market. Um according to NRA again someone bought 70,000 January calls on 380 calls on Apple um representing about 570 million Delta exposure some about 50,000 January calls on Google 430 million in Delta another 42,000 in Microsoft like January 585 calls there is there's a massive amount of calls being bought from these hedge funds potentially um into these um into these MAG7 stocks. So either they're hedging or they are betting that market's going to significantly go higher after the earnings report. And it's not just there. We're seeing like massive call options. We're also seeing a coreweave. Somebody bought 170 million worth of coreweave calls like um last week. Nebas 25.7 million or 80 million. Um DRM was another 85 million. So, we're seeing like massive massive amounts of calls, call options that are being bought bought up right now because I think we're about to take a turn in the market come November because October is historically just a bad month overall for markets. Just the cyclical cyclicality of things. Uh, but November and December, especially after midterm election, after 6 months, you start to see enormous gains happening in the markets. So, I think hedge funds are maybe positioning for that as well. So JP Morgan's strategist over there um also suggested that there's a lot of de-risking that already happened obviously and potentially limiting any additional downside. They also view that financial pressure around Neoclad companies are manageable. So [snorts] I think like a lot of the selling that has already been done is largely done. I don't think we're going to see any more like significant selling anymore. Just from my opinion just look at the just look at the market. I think market is finally confident that um earnings especially coming from earnings we're seeing phenomenal reports the anthropic S1 um they're all just pushing the markets higher and in within like the next 20 30 minutes Microsoft and Google's reporting and Google actually just released a their model this morning about two hours ago and right now I believe they're number two behind um Anthropic in terms of u model capabilities. So, it's really interesting that the battle is really starting to heat up. Um, so let me show you the next chart because now look at this chart comparing NASDAQ 100 with semiconductors. NASDAQ was 100 was roughly only around five below its all-time high as of yesterday. But the semiconductor ETF, if you look at the chart, was still approximately 17% below its June peak. Now, that's a big pretty big disconnect, right? And one of the big reasons I'm paying so attention to the semiconductor and the AI trade right now is because because if the fundamentals haven't changed nearly as much as the stocks suggest. So that's the opportunity here. Nothing about the AI bullcase has changed in the last couple months. If anything like all the data post that's coming out of AI is only making the thesis stronger. And then there's like this whole argument that's happening about the valuation. I keep hearing people say that technology stocks are in a bubble. No, it's not. We're on in an AI bubble. Why? Just look at this chart. As of October 23rd, the S&P 500 sector was trading at approximately 19 times forward earnings. Its 5-year average is at 20 uh 25. It 10year average is 23. So technology stocks are actually trading below both historical averages. Now that doesn't mean every technology stock is cheap. No. But it does challenge idea that entire sector is trading at some ridiculous valuation because it's not. Just look at the look at the numbers that I'm showing you. So when I put all this together, here's how I'm looking at it, right? Hedge funds positioning got extremely crowded. We know that these funds started losing money. risk managers managers forced them to release exposure and short selling accelerated the move even lower but as I said underlying AI demand hasn't disappeared and we're starting to see some of that selling pressure ease as I said while in institutional investors are essentially positioning themselves for a potential recovery now I want to talk about the anthropic S1 that just came out uh the other day I I think this is one of the most bullish things that that really Anthropic released at least in in quite some time. So, Anthropic is actually planning to go IPO around November 16th um under ticker ent um and it's looking to get roughly a $ 1.5 trillion valuation that could be higher or lower. It all depends, but I think the data that they released the other day was just like it blew my mind because look at this look at this chart. Let's start with the revenue because these numbers are crazy. In the in the second quarter of 2025, Anthropic generated roughly 787 million in revenue. One year later in Q2 2026, that number has increased to 11.6 billion. I believe Q3 was 16 or 18 billion um if my memory serves me right. And in the first quarter of this year, the company generated approximately $4.7 billion. And so revenue basically more than doubled in one in just one quarter. And across the 6 months, they generated 16.3 billion in revenue compared to 1.16 billion in the first same time last year. So we're roughly talking about a,300% year-over-year revenue growth. Like these are numbers that investors have never heard of. This is truly unheard of. But here's where a lot of people does get confused after, you know, reading this one. Anthropic reported an 80.7 uh billion dollar net loss for first half of 2026. Of course, if you read that headline, you're going to be like, "Oh my god, it's it's terrible." But if you actually look at what's actually driving it, because approximately 72.4 4 billion of that loss came from a non-c cash accounting charge related to convertible notes and other financial instruments. So essentially as anthropics like valuation increased the accounting value of those oblation increased as well creating like these massive reported loss. So, but like if you actually look at what happened in the second quarter, Enthropic actually became profitable on an operating basis generating approximately 974 million in operating income. That's pretty remark remarkable turnaround from like the 1.67 billion on operations on on the first quarter. So, we're not just seeing like revenue grow at this incredible pace because we're also starting to see the economics of like the business of their fundamental business improve dramatically and the gross margins I think it was around 12% in the first half of 2025. Now, it's at 85% in as of the first half of 2026. One of the biggest arguments surrounding AI has been that these companies would never be able to make money running their models. That assumption was that inference would remain so expensive that the companies would have to keep subsidizing usage. Well, anthropic numbers just pooped. It's wrong. That's wrong. Inference, as we know, is highly profitable business, you guys. This is why you see Anthropic signing a 50 million billion dollar deal with SpaceX because they can turn that intelligence back for more money. That is their business plan. Like, it's so profitable. I think the market is still underestimating how profitable um anthropic business really is and I think it's going to continue to climb as well because look at this slide that I just put up. In the first quarter of 2025, Anthropic generated only 40 cents in revenue for every dollar spent on the computer compute and infrastructure. By the second quarter of 2025, that improved to 57 cents. By fourth quarter, it was 69. Then in the first quarter of 2026, it jumped to 1.40. And in the second quarter, it reached $28. So, Anthropic just went from generating 40 cents in revenue for every dollar of compute spending to more than $2. So, that's 5.2 times incre improvement in efficiency in just five quarters. And you have to understand, Anthropic is still relatively a very brand new company. It's been around since like 2022 or 2021. So like they've been only in the field for about 3 to four years now. And you can see how quickly their profit margins, their compute costs, everything is just over overall improving. So now I want to emphasize something here because I think it's incredib this is actually incredibly bullish for like infrastructure trade if you think about it because even if models become commoditized which is which is what I think they are cheaper inference can actually be really bullish for inference infrastructure because think about it as the cost of running per individual task is declining. We saw like token prices decline dramatically over the last like couple months, couple like basically ever since TAGT got released, right? But it all ultimately led to being people using more and people investing more and companies building out their infrastructure more. This is like this is Jeans Paradise at its finest. So we all know how good anthropic business has been. Now let's talk about the catalyst that I'm watching. Um because according to sellside investors are now looking for October annualized revenue update with approximately 78 billion is what they're looking to beat. Um there's also potentially like discussions about company Anthropic reaching like 100 billion in annualized revenue run rate by the end of the year. Now imagine anthropic reaches those 100 billion in revenue. huge catalyst for the AI infrastructure trade. And there's also other things that was extremely bullish on Anthropic. I'll just like quickly highlight them. Their net revenue retention for customers were 900%. That means like customers are now essentially spending nine times what is it spent earlier years. So if you spend a million dollars, you're spending 9 million. Fortune 500 companies are only like represents less than 0.1% of their expense of their company's total expenses. That's onetenth percent. Think about how much room there will be when there's like enterprise adoption happening all across these Fortune 500 companies. Anthropic will gain massively massively from that. Now let's talk about the get into the part where I'm like most interested in which is like the infrastructure spending. According to the filing, Anthropic has approximately 542 billion to 567 billion in committed like future commitment and if you add up all the agreements total is somewhere around 637 billion of that they have to pay up. Um some of the largest are 162 billion in TPU capacity which is Google. Um 120 billion into Nvidia. SpaceX is I think like 100 billion or something. Um, Google is at 114 as I said. Then they have like Microsoft and Lambda. So they have $637 billion worth of commitments and um they actually have currently $137 billion worth of uh worth of cash um that are in like short-term treasury and whatnot. So they're collecting interest on that and they're looking to raise $200 billion or hundred billion in IPO. So they essentially would have around $230 billion in cash when this is all said and done which is which is insane to think about. I think Warren Buffett has or Burkshire Hathaway has like 325 or $350 billion in cash. So these guys will have a massive massive amount of war just to go on a spending spree. Um and uh they will continue to like make more from their revenue as well. That's what we have to think about as well. Did you know that roughly one in every two American adults could have a driver's license scan sitting on the dark web right now? That's someone you live with, or worse, it's you. And that makes today's sponsor, Aura, very welltimed. If you're in the US, you can use Aura's 14-day trial to check whether your driver's license or other personal information has been exposed completely for free. 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And some policies don't even need a medical exam or blood test depending on eligibility. You've already done the hard part, which is building a life worth protecting. This is the step that makes sure it's covered. Go to sillions.com for your free no obligation quote. >> Cool. Now, let's talk about memory because what does all this compute need? Memory, right? And I think this is one of the most genuinely like most interesting opportunities in the entire market because when you look at what's happening with uh supply, demand, and valuation and SKH Highix had his like earnings last night. It was incredible. Like company reported 78.9 billion in third quarter revenue growing 328% year-over-year. Massive beat from expectations. Operating profit s 632 billion uh sorry 632% to approximately 62.8 billion operating margins around 80%. Revenue also increased 32% sequentially operating profit jumped another 38%. The whole point I'm trying to make was it was an incredible quarter. Actually cost me jumped up like 6% because of that because Samsung also jumped up. MU also jumped up because of how good their earnings call was as well. And uh as we know the biggest growth for all this, I'm not going to get into too much of this is because of HPM, HPM demand. First you have DRAM which is like the memory for computers and servers. Um those are your like information. Those are your memory to access information quickly. Then you have NAND which is used to store information like SSDs, right? Like and then you have high bandwidth memory which is what is used in AI accelerators. Um and then so though that's like the gist of like the memory and uh what I found like to be really interesting in the earnings call was SKH Highix believes memory shortage could continue through 2030 and management says DRAM and HBM productions are effectively sold out through 2019. So think about that for a second. We're talking about an industry where customers are already securing like production capacity years into the future. And it's not just high memory that we're seeing growth in. It's conventional DRAM. It's NAND pricing increase. Like there's a lot of catalyst like coming to memory like on the way and they're selling more chips as demand increases and top on top of that as I said they're able to like charge more now. Um and what's interesting is like how customers are responding to this. We are we all know LTA agreements are long-term agreements. SK High Heinix has signed 14 major customers including some of the largest cloud providers in the world and covering more than like 50% of its like planned production capacity for 2027 and 2028. So these cloud providers and these companies are hungry for memory man and they just can't get enough. And uh what was what was also interesting is that according to reports from like South Korea, Alibaba, Tense and Bidance are negotiating like long-term deals with suppliers like SK Highness and like Samsung for deals worth up to 10 years. 10 years. We're talking about a decade deals. So how could you have more not have visibility into the into your future earnings when you're signing 10 years? 10year deals. We all know like the debate that's going around with Chinese memory manufacturers and how CMT could produce this and that and how they could overtake that how like this could be potentially bad for Micron and all that. It's just all just a bunch of nonsense to be honest. Yes, there is some valid concerns but even ch Apple right we know Apple was trying to make deals with um CMT for some time now. Now, even if the government somehow agrees to it, which there's no chance that the US government will approve Chinese memory to be sold in the US, CMT actually said no to China or no to Apple because they don't have enough memory to like even have enough for their own country, let alone give it to give it to Apple. So, what I'm trying to say is memory is a big big huge bottleneck in the industry still. And they also announce announced that company is planning to give back $und00 trillion one or roughly $75 billion in buybacks. And uh that is going to put a massive pressure upward pressure on their price because once you start the buybacks, your stock is going to just go up. Man, that's usually how it works. $75 billion of buybacks that they're going to be issuing. Insane number. So, how could you not be bullish on memory here? And what's what's crazy is look at this. Look at what Cosby is trading at. Cosby is trading at 2.8 times forward earnings as of like last week. That's the lowest valuation we've seen in like 20 years. And to put that in context, historical has been 10 10 times forward earnings. The US is trading at 19 times forward earnings right now. But this is how big the opportunity is. And I think it's it's massively massively undervalued right now. And actually this morning I saw some interesting trading data from um I believe it was JP Morgan. and foreign investors actually bought $288 million of Skhinix and uh while domestic institutions bought $177 million um and then they also bought up Samsung 280 million of foreign buying and 297 from domestic institutions. So, we're ma massively seeing an influx like of money coming into these companies and more earnings they do the more money it's going to come in and uh that's that's just how that's just how it works. So, what should you do here? What should you buy here? So yes, you can buy SK Hinix, you can buy Micron, you can buy Samsung, they'll all be fine. They'll all do well. But I think Samsung is a better buy at these moment because I think biggest reason is because of their foundry business. [snorts] And unlike SKH Highix and um Micron, Samsung isn't just a memory company, right? It also has one of the largest semiconductor foundry business which essentially means it manufactures like chips designed by other companies similar to what TMCC does. And for years Samsung has struggled to compete with TMCC particularly when it comes to their manufacturing yields customer adoption and profitability. They are still not profitable by the way um their foundry business but I saw some projections that they're working towards that and they'll be likely be profitable by 2028 but I think that's where the opportunity lies because if Samsung can turn that business around investors will start to value that company very differently. We're already seeing some signs of that happening, right? Like if you look at Samsung has been ramping up it second generation two nanometer manufacturing process. Um and now they're securing like new foundry like orders like it's in a major deal with to manufacture uh chips with Tesla uh with production expected to begin in 2027. Um so and companies are increasingly looking ways for to alternative to TMC and this is like the similar trade to like why I bought AMD because I think being number one is great but some investors also look at number two as well because you want to hed your bets. So I think Samsung is is that is that is in that moment right now and uh I think they're going to do incredibly well over the next few years. So that's number one. Number two, my favorite stock is uh Nebas. I think you should be buying as much Nebias as possible. I bought a lot. If you wanted to like if you want to check out what I bought, you can always go check it out in Milk Road Pro. Like it's just a dollar um to try us out. I've been average dollar cost averaging this 155 last week. Easily easily could double even by this end of the year. I think they're roughly at around 172 right now. Um, it reached as high as 299 I believe this year, meaning it fell around 40% roughly and over the last month alone, it's like down 25%. Now, let me talk about why the investors have been selling because there's a pretty big disconnect between what's happening with the stock and what's happening with the underlying business. Um, first concern is like dilution and debt, right? And this is something that's been affecting the entire neocloud industry. A lot of this as we know started with core view which has been the center of financing concerns around like AI infiltrate right AI infrastructure and coreview has accumulated an enormous debt burden as it continues growing. They're borrowing billions and billions of dollars and uh they're not going to be pro profitable till like probably 20 2029 or 2030 because of all the all the amount of money it takes to build out these data centers because these are not cheap. One gawatt costs like approximately $60 billion 50 to$60 billion to build out and the prices are going up. When you start looking at memory prices and you know other bottlenecks in the industry it's only going to go higher. Look at this chart that I'm I just put up. So understand, you have to understand why the market's concerned, right? Like just look at Cory's interest expense um in the second quarter of 2026. Corby spend roughly 640 million on net interest in expenses alone. And compare that with um 45 million for Nebius and 68 million for iron. That means quarterly like Nebius's quarterly interest burden was 14 times more than Nebius. And what's more concerning is that core itself has indicated that every 100 basis points increase in interest rate could roughly add 30 million to his quarterly interest expenses. So that's like roughly another $120 million annually from just a 1% increase in borrow borrowing costs. Luckily uh I don't think the rates are going to go up anytime soon. So I think they're fine. Now I'm not saying that Corv is going to bankrupt or business isn't growing. Demand for AI infrastructure is clearly there but there's but this is exactly why investors are becoming more concerned about how these companies are you know financing their you know expansion. [snorts] Corv generated roughly 2.6 billion um in revenue during the second quarter but it also has 640 million in net interest expense. As I said, that's roughly quarter of their quarterly revenue. And when you're spending that much, like just servicing debt, it's becomes much harder to grow or, you know, become profitable in the long term. And I think Corvy in terms of financing, I think they're doing just fine in my opinion. They actually have hundred billion worth of backlog that they can convert over the next like several several years. Um and also Corv is the best NeoCloud there is. If you look at like cluster max rating from um semi analysis, Corv is up there along with Nebas. The bond market will be more than happy to fund these these number one and number two companies and number three companies. But I don't know about like number 10 to like 50 or 10 to 100, 10 to 200, like those are when you start to see these additional financing problems that comes into play. But core is just fine. But if you actually look at the next slide, I just want to compare something real quick. Now, here's why I think like Nebia starts looking a little different because if you compare the balance sheet across the NeoCloud industry, Nebus actually appears to be in a much stronger financial position than a lot of its competitors. So, one comparison put Nebius at approximately 11 times net debt to IBIDA compared with around 12 times for Cororee. That means both companies are still carrying considerable leverage relative to their earnings, but Nebius has a slightly lower ratio. And when you look at companies like Iron, Wolf, Cipher, Apply Digital, Hot, you name it. Several are still generating like negative IBIDA, which makes traditional leverage comparisons difficult because their earnings haven't reached like positive levels yet. Now I want to be careful with that comparison because 11 times net debt to IBIDA ratio is still very high and negative IBIDA doesn't automatically mean a company has a worse balance sheet because some of these businesses have substantial cash reserves or still are in the early stages of bringing infrastructure online. But what I find interesting is that is the interest burden, right? Nebius is currently paying significantly less interest expenses than Corv as I said uh which gives it more flexibility as it continues expanding. Of course, that gap could narrow as you know Nebius draws additional financing and takes on more debt. But for now, they're doing just fine. And u I think Nebius is just an incredible company and you should be buying as much as possible. I'm adding at these levels. This is a no-brainer. Now the next company that I want to talk about is that I've been actually buying is Credo. Um I think this is where this is another stock where the market is completely overlooking how important the underlying technology is to become the AI infrastructure buildup. Credo closed I believe around 1670 around right now. They actually reached as high as 302 earlier back in June. So we're talking about a stock that's down roughly 45% from its peak. Now I want to explain why investors have been selling because I think some of the concerns are legitimate but at the same time they're not. I think the market is missing like the bigger opportunity here. So the first main concerns that it caused large selloff obviously like the leverage on mine right like that that caused like a massive downfall but but other than that competition is is another factor. Companies like Marll, Max linear, Cisco are all competing in different parts of these networking market and investors are basically worried that competition could put pressure on credo's pricing and market share and the third conversion into optical networking because while the opportunity is still enormous, right, this is actually a developing part of the business and investors want to see whether credo can actually exe execute their strategy. Now, let me double click on the competition part a little bit more because last week a company called Max Linear recently announced that it plans to enter the next generation 1.6T active electric cable market which is what Credo specializes in and their most growth in. Max Linear CEO said the company wants to capture 20 to 30% of that market over the next like couple years and investors heard that and sold off credo completely because the assumption was that another competitor is coming about to take a major part of his business. We how many times have we heard this? We heard this so many times. We heard this with memory. We heard it was this neocloud. We were hearing this again. But what's what I found interesting during that conversation was Max Linear's own CEO acknowledged that Credo currently controls 93 to 95 99% of the active electrical cable market. So they're not even worried. And according to if you look at the next chart according to Evercore ISI research um Credo accounted for approximately 86% of the entire install base of active electric cables as of first quarter of 2026. >> [snorts] >> And this chart is like incredible because it shows how quickly the market has been growing because back in 2021 the installed base of you know electric cables had practically non-existent but by 2026 it surpassed 10 million cables and with Credo responsible for basically everything and this is only going to continue to grow. I think this is an incredibly ever growing business and um Credo will do incredibly well. Maybe I should have mentioned what Credo does in the beginning. So CTO essentially makes like technology that allows data to move between ships like servers and networking equipment at these like high-speed levels. Like their biggest like line is like it's called zero flap active electric cables or AEC's which is what what I was talking to you about earlier. These chips essentially help maintain like signal quality, allowing like data to travel at higher speeds over long distance than conventional like passive copper cables. So that's that's what they essentially do. But this is like a huge huge like important piece of the market because data needs to move at incredibly speed incredible speed and Credo helps do that. And they have also tons of other businesses that line that they're expanding as well. So, I'm not I'm not really worried about Credto. I think this is a buying opportunity. Um, you should be buying as much as you can. Um, I think the stock could easily double by sometime next year. So, like this is a no-brainer. So, buy Credo if you can. So, those are basically the three companies that I think you should be buying. If you can buy Samsung, which you can buy in Interactive Brokers, you should buy Nebius because NeoCloud, they're the best Neocloud there is. Um, and they have so little debt. And you should also be buying Credo here. So, these are three stocks are just a no-brainer. And, um, if you can buy all these, your 2027 2028, you will be very, very happy. So, and I'm [clears throat] also buying other stocks as well. It's not just this. It's not just this. So if you want to like check that out, you can go sign up for Milkro Pro. It's just a dollar, guys, and come check out all this all everything that we're buying. So yeah, hope this helps clear any clarity or any doubts that you had in your mind. And uh I will see you on the next one. Thanks guys. Thanks for listening to Milk Road. If you enjoyed the show, make sure you like and subscribe. And if you're struggling to find winners in the market, that's exactly what Milkro Pro is built [music] for. Our analysts have called some of the biggest winners early and Pro lets you see what they're buying next, every trade they make, and the research behind every position. Check out Milk Road Pro at the link below. Everything you hear on Milkroad is forformational purposes only. These are our personal opinions, not financial advice, and we may own some of the investments we talk about. Always do your own research and make the decisions that are right for you. See you next time.