This Stock Won't Stay Cheap For Longer

本站添加: 2026-06-03

[00:00:01]You could not live with your own failure.

[00:00:05]Where did that bring you?

[00:00:10]Back to me. Hey everyone and welcome back. I'm quite happy that stocks bring you back to me as well. So in today's video, as you can see, we celebrated a couple of days of SAS companies being green. Well, guess what? Today, well, today a lot of them were back in the red. We can see here Microsoft being down 4%, Google down 3.8%. There's a specific reason for that. We'll talk about that. But Palanteer down 5.2, Crowd Strike was down 1.7. After hours is actually up on another excellent quarter. Same with Palo Alto. But look at this. Service Now was down 6%. We've got Accenture down five, data dog down three, into it down close to 9%. Adobe 4.3 CRM close to 4% etc etc. So again with this SAS apocalypse maybe post SAS apocalypse moves these types of days were bound to happen right as we've discussed yesterday a lot of these names have gone up significantly over the past couple of weeks and so sometimes yes they do cool off a little bit. So, let's not panic, right? Let's not go from, oh, all of these companies are worthless, and now that the stock is up, oh, all of these companies are great again, and now we're back to, oh, it's down, so those are bad companies. No, those are still good companies. If you looked at the report, not all of them, but if you looked at what they reported, their guidance, the comments, a lot of them are still very good companies. Now, in this video, I do want to focus on Google, what they have done, and how that affects the overall market. I also want to share my thoughts on new holdings. New was down around 7 to 8% or so. CFO transition. We'll talk about that and then I'll share my broader thoughts on well the high-flying names, the core we of the bunch. I'll maybe start by sharing my opinion on well what I'm doing personally with well AMD, Nebus, Micron, etc., etc. As you know, I've already taken profits from Micron, from Rocket Lab, from AMD. I did not do it with Nebus. Selling covered calls is something that I've been doing and I think if you know how to use that option option then I do think it's a very very powerful weapon especially in this type of market. Now not everybody has access to options or can do covered calls. So okay then it's a different story. And if you feel more comfortable by taking profits, which I've seen the comments over the past couple of days and weeks, a lot of you have done it. You've secured insane amount of profit. So, first of all, congratulations. Second of all, if you think it's the right move for you, go ahead. You don't have to prove anything to anyone. Now, if you are comfortable with saying, you know what, I invested. I have a good average.

[00:02:58]I have some cash already on the side.

[00:03:00]So, whatever happens with the market, I don't care. Then, okay, that's also completely fine. Me personally, I didn't touch Nebuse. I am playing the covered call strategy with that one. With the rest, I did take some profits already and it sits in cash. It did allow me to open a position in Axon. Axon did go up quite significantly as well over the past couple of days, but I do intend to grow that position and then eventually I do think that the market will pull back a little bit. Now, will we go up so much that even with the pullback we are going to come back to prices that are higher than today? It's possible. And guess what? As long as I'm exposed, I'm going to be making money. So, that's not really a problem here. Now, talking about the Google situation here. So, if you don't know what I'm talking about, Google announced a proposed $80 billion equity capital raise to expand AI infrastructure and compute. We'll read through the thing in a bit. But this means that Google, yes, Google, that huge company, is willing to dilute shareholders. I mean Duche it's $80 billion for a multi-t trillion dollar company. It's not that much. Okay, it's not that much but still they could have raised that. They could have done a couple of things here. Now the reaction of the market today was okay a little bit negative. People are saying yeah but that's because Google is already overvalued and things like that. Well, not not so sure because if Berkshire Hatway is investing $10 billion in Alphabet in a private uh placement, then maybe it's not that overvalued, right?

[00:04:35]Yes, it's true that the stock did go up a lot. And that's the thing, Alphabet keeps increasing capex, keeps investing an insane amount of money in this whole buildout. The business is doing exactly what it should be doing. the stock finally got rewarded. Yet when you look at a Microsoft, we don't see the same reward. If you look at a Meta, we definitely do not see the same reward.

[00:05:02]And that's not because Meta's business is not doing well. Meta's business, the core business is actually doing much better. It's doing much better because they are investing that much, right?

[00:05:14]better ads, more time spent on the apps, more time spent on the apps, more ads get viewed, more money, etc., etc. And of course, they're investing quite a lot in physical AI, in AR, VR, and a lot of other things. And of course, their own models. All of that costs money. But the thing that the market doesn't seem to understand or maybe want to understand for one reason or another is not that oh Google is doing this because okay it it makes sense for them but Meta is doing approximately the same but it doesn't make sense for them and so we're not rewarding that company. We're only rewarding one sort company. Maybe it's because Google has Google Cloud and Meta does not. May maybe maybe although as we've seen time and time again if they overbuilt Meta if Meta overbuilt then I do think that they can pop up such a business just like that because they have already an insane amount of demand.

[00:06:09]They admitted it already a couple of times right now. So to me it's just a matter of time until the market recognizes that what they are doing with Meta stock right now does not make any sense. a low 20 PE for this company over 20 what 14 billion dollars in revenue generated growing close to 30% it doesn't make much sense yes capex is going up quite a lot yes free cash flow is coming down right now we've seen that happen before we've seen that happen with a lot of other companies but the valuation does not make any sense now let's let's look at what Alphabet is trying to do proposed offering current underwritten offering, $30 billion underwritten public offerings, consisting of $15 billion in depository shares representing mandatory convertible preferred stock and 15 billion in class A common stock and class C capital stock and ATM offering $40 billion at the market offering program for class A common stock and class C capital stock overtime expected to begin in Q3 only of 2026. That's not all. Alphabet has reached an agreement to sell $10 billion of stock to Berkshire Hataway in a private placement comprised of $5 billion in class A common stock at a price of $35,181 which is lower than where we're at right now and $5 billion in class capital stock at a price of even lower than that $348.20 $20.

[00:07:43]Now, the use of proceeds here of course is going to be well buildout, right?

[00:07:49]They talk here about Alphabet's own momentum for the business, which we've talked about time and time again, but it's quite clear that Alphabet sees just an insane amount of momentum, an insane amount of demand, and they just want to move as fast as possible. Now if again if it's just a 3% deep or whatever then I do think that the market is signaling you know what it makes sense we look at the business we look at the momentum it makes sense I wouldn't be surprised if other companies start to do the same although the Amazon the metas they have done other things if we look at Amazon capex $200 billion for the year they did a over $42 billion multicurrency bond sale which is non-dilutive it's corporate debt. Microsoft $190 billion or so capex for the year. Free cash flow and standard debt. That's basically their primary funding right now. Meta125 to $145 billion in capex for the year.

[00:08:49]$25 billion bond sales here as well.

[00:08:51]Non-diluted corporate debt. But that said, and also with Alphabet, by the way, if SpaceX is going public, if Entropic is going public, Alphabet has a stake in these types of companies. So they can sell that stake at I don't know how much profit and then put it back into share buybacks or put it back into again a uh buildout and it's just pocket change for for that type of company. But if it works out for Alphabet, I would not be surprised to see the other companies start to do the same. As long as their core businesses are showing strength or even momentum, why shouldn't they push forward? It makes sense. And it also sends even a bigger signal to the broader market that this is real, that the whole AI ecosystem, the whole buildout is going to continue. The demand is there. I don't know if you've listened to Jensen yesterday, but yes, he's a good marketing guy. Talked about Marll. Marll is the next trillion dollar company according to him. Marll is at, I think, $250 billion or so right now in market cap. Stock soared almost 30% today. Now, will it reach a trillion dollars? Remains to be seen, but the demand is there. The demand is there across the board. There are bottlenecks, of course. Yes. But the demand is definitely there. It's not just GPUs.

[00:10:10]It's not just memory. It's networking.

[00:10:13]It's whatever whatever you think is important is in demand right now. And I don't see that stopping anytime soon.

[00:10:20]That said, that said, it is very important to understand that chasing companies that are worth $50 million, $100 million, $200 million, zero revenue, etc., etc., it's not based on fundamentals, okay? It's based on momentum. It's based on maybe gambling a little bit here as well, which fine, if you want to trade those names, be careful. But yet, looking at valuations for these types of names doesn't make any sense. You are buying them because yes, all of these sectors have momentum.

[00:10:51]You're buying them because maybe company X is in demand, has a contract with Nvidia and so you think that company Y might also get a contract with Nvidia or maybe with AMD, maybe with Broadcom, maybe with Apple, maybe who knows, right? This is what we've seen happen.

[00:11:07]Now, a lot of these companies are really going to be making a lot of money, but also a lot of other companies are just are just not going to do anything. their stock might go up and that's about it.

[00:11:19]So be very careful with that. And then you can say, "Yeah, but that usually happens with bubbles." Agreed. Yes. No, no questions about that. But the real companies, the strong companies, the one with real businesses, I do believe that yes, the party will go on. For how much longer? I don't know. But when you look at what's happening with the market right now, when you look at what's happening with these big companies, how much they're spending and how much they're actually making already right now, then you have to say, you know what, I I think the demand is much bigger than what the market thought. And especially everybody that's been calling this a bubble and the top for the last two years, well, they've of course been horribly wrong and now maybe they're playing catchup or well, they just want a a fearmonger. And apparently Google's mandatory convertible stock sale is going to be overs subscribed. If you look at the size here, it's battling with the biggest equity sale ever. It might even trump the SpaceX IPO target, which when you think about it is is just crazy. And by the way, with Google, right, it did reach $400 per share. We did have a post earnings jump. As you can see right now, it is going to fill that earnings gap, which is usually a good thing. We could go a little bit lower, maybe towards that $350 or so. The 200 day moving average does sit much lower than that at around $300 per share. That would be ideal. I don't know if that's going to happen or not, but that gap here, in my opinion, is going to get filled. As for Meta, you can see that we're back here around $600 per share, which has been a sort of a support area for the past couple of weeks. Although, you can see still a tiny tiny gap here between $575 and $590.

[00:13:12]Will we fill that gap? I don't know. If we do, great. I'll grab more shares. But it does seem like 600 is for now a solid support area. I think with Meta, it's just a matter of time until the market pushes this one back towards 700 and then eventually $800 per share because the company will show that the core business is extremely strong and extremely profitable. And yes, maybe maybe when they start launching more and more models and those models are at the top of the rankings, I think the stock will also be rewarded because they will have let's say something to show for.

[00:13:50]although they already have something to show for which is called the core meta business. Moving on to new holdings as you can see just below $12. Let's call it $12 which has been a type of support area even post earnings dump right here.

[00:14:05]We did go a little bit lower today at around $11.40 but $12 has also been sort of a support area back here in August of 2025 and even June 2025. Could this be the support? Again, the RSI is quite low.

[00:14:20]Yes, could very well be. Now, why did it happen? Why is it down 8%. Well, as you can see, change in CFO. They appoint Rob Livingston as CFO. The current CFO, Gume Lago, is transitioning to a role of special advisor after 5 years as CFO and 7 years at new. Now the new CFO brings more than 30 years of experience in financial services across North America, Europe and Asia. He joins new from Visa where he recently served as CFO for North America the company's largest business. Over more than 12 years at Visa he led corporate finance and investor relations for Visa, served as CFO for Visa Europe and board member of Visa Europe Limited and had business leadership roles in China and Canada. So in the payment space, in the financial space, he's not an amateur. As for the outgoing CFO, he will remain close to new as an adviser. Now, the group will also have a dedicated chief financial officer CFO for the Brazil row, completing a global and local finance leadership structure already established in Mexico and Colombia. So what's the problem here? Well, the problem with new is that one, it's it didn't really have that much momentum. Let let's be honest.

[00:15:42]Why is that? Because the market fears that they are not having the full focus on their core markets in Latin America and now they want to go after the sexy thing which of course is the expansion in the United States. Now suddenly a departure or not really a departure cuz I mean it's only going to go in effect July 13 plus he's staying around. So okay, it's a bit it's a bit different but seeing that right now while the market already fears that the pivot in strategy although there there still isn't really such a big pivot in strategy for new right they they keep saying time and time again we are still investing a lot and putting most of our attention in our core markets while also looking at other opportunities which is completely fine. Now the the lucky thing here with new is that it was not priced at a premium. It's not trading at 50 times earnings or sales or whatn not. So the riskreward still makes a lot of sense, right? Even at $12, okay, CFO transitioning things like that. Fine.

[00:16:47]Market doesn't like change. We can understand that. But it's not like this was priced to perfection or anything like it. This is still a very fast company, very strong business, growing very fast in their core market still.

[00:17:00]And even if even if they're not super successful in the expansion in the United States, even if they take just a small percent of it, that's going to have a huge impact on a business like new. And so to me, I'm going to buy more shares of new personally because I still believe in a long-term trajectory of this business of the vision of the CEO as well. So in my opinion, an opportunity, but I understand why the market reacted the way it did. And so all in all, that's about it. I do think that the AI trade or the momentum from the market is still going to be heavily focused towards AI, data center, these types of tech sectors. I do think that some of these SAS names are getting more love than before. That's for sure. So, that's a good thing. Now, if you have losers in your portfolio that have not participated in this bull run, I do still think there is time to jump on the ship. Although, don't go chasing names that are trading at extreme valuations that don't make much sense. But yeah, if if we think that the market is going to continue to reward the names that are attached to AI and not the others, then you could say it's opportunity cost.

[00:18:13]Although, if you have any long-term vision, then I guess if you own great companies, just continue to own them and eventually the market will figure it out. With regards to Meta, it is in the whole AI story yet not participating in this whole bull rally, but eventually I do think it will just like Google did mid last year. Hopefully I do get to buy even more Google if it drops lower. So all you know that's about it for me in today's video. See you all in the next one. Bye-bye.