How I'm Investing With The Market at All Time Highs

Ajouté : 2026-05-28

[00:00:00]In today's video, I really just want to go through some things that I have been seeing in the markets because these markets are starting to remind me of 2020 and 2021. Not across all sectors, but in some sectors, I am seeing a significant amount of euphoria and people are not really caring about valuation or fundamentals at all anymore. It seems like it has really become how exciting can we make the story around this stock and then the stock will just shoot up like 100 to 500%. Which is exactly what was happening in 2021 when Euphoria was running wild. So I want to run through a few different stocks really quickly to show you the type of stocks that have been working in this type of market and then I want to show you some screenshots of the sentiment that I am seeing online from many different investors. and it's kind of just going to be like um a more rapidfire video where I just share my thoughts on the market's temperature.

[00:00:57]But before we get into all of that, I want to start off by taking a look at SpaceX's S1 filing and all of their financials and ultimately the valuation of SpaceX because the valuation is projected to be around $2 trillion when it hits the market now. So I want to run you through their financials and explain if I think 2 trillion is worth it for SpaceX and then we will get into the other conversations later on and I will share what I am focusing on in this market as a fundamentals focused value investor. So it's going to be an action-packed video. I'm excited for it and let's start by hopping into SpaceX's financials. All right, so the first screenshot here shows us SpaceX's first quarter financials versus the first quarter of 2025. And we can see that its revenue overall was up 15.4% year-over-year. However, its operating income was negative 1.9 billion and SpaceX had a total loss of $4.3 billion just in the first quarter. So SpaceX's topline is growing, but the company is losing a significant amount of money.

[00:01:56]This next screenshot shows us the connectivity segment of the business, which is really just Starlink. And we can see that Starlink produced about $3.3 billion in revenue in the first quarter and revenue grew by about 32% year-over-year. So Starlink is actually growing very quickly and this is great to see. Then we can also see that Starlink produced income from operations of about $1.2 billion. So Starlink is actually a very profitable business for SpaceX overall. And if we go $1.2 $.2 billion of operating income divided by $3.3 billion of revenue, then this means that Starlink's operating margin is about 36%.

[00:02:32]Which is very good. So again, this is a very profitable segment for SpaceX overall. This next screenshot shows us the AI segment of the business, and it only grew 12.5% year-over-year in the first quarter, and it produced a loss on operations of -2.5 billion. This is at the same time as there is a massive AI wave going on with anthropic and open AI. So these numbers for the AI business are pretty dang underwhelming. The fine print below also says that there was a $100 million decline in X's advertising revenue, which also is not ideal to see.

[00:03:10]This next screenshot shows us the space segment, and the space revenue was down 28% year-over-year in the first quarter, and it lost $662 million from its operations. The space segment is spending a lot of money on research and development, which is probably related to the Starship program. And I also think that the revenue from the space business is probably more volatile depending on when launches actually happen. So, if we take a look at the full year for 2025, space revenue was only up 7.6%.

[00:03:42]Which was still pretty underwhelming for me. And for the full year, the business still lost over $600 million on its operations. Now, if we take a look at the fullear financials for 2025, for the entire business, we can see that revenue was up 33% to $18.7 billion. However, the company as a whole lost $5 billion in 2025. And again, personally, I think that these numbers are pretty underwhelming for SpaceX. This next screenshot shows us the AI revenue for the full year, and it came in at $3.2 billion for 2025, which was up 22%.

[00:04:17]However, this segment lost $6.4 billion for the entire year in 2025. So, yes, the revenue is growing, but it's losing billions of dollars. Now, what's also interesting is Twitter was doing roughly $5 billion in annual revenue before Elon Musk acquired it. And the AI revenue segment from SpaceX is substantially all from X. That is what their own internal filings say. And this means that X's revenue has declined by 38% since Elon Musk bought it back in 2022.

[00:04:52]This is definitely not ideal to see.

[00:04:54]That is a significant decline to the company's revenue at the same time as it has also built out Grock and started AI subscriptions. So now let's take a quick look at the cash flow statement and we can see that SpaceX produced $6.8 billion of operating cash flow in 2025 which was up roughly 20 to 30% year-over-year. So SpaceX's operations are actually producing billions of dollars of cash flow and that is good to see. However, the business also had capital expenditures of $20.7 billion in 2025, which means that there was a net cash outflow of about $14 billion and the business was definitely losing money. This is the same story for 2024 where they produced negative free cash flow of about 6 billion. So, yes, SpaceX is producing positive operating cash flow, but it is still very free cash flow negative. This next screenshot shows us the financials of every different business segment over the years. And we can clearly see that Starlink is the profit generator for the whole company as it's the only business segment producing positive net income and it is by far the largest revenue contributor to the company as well. We can also see that Starlink has very little capex and the vast majority of SpaceX's capex is related to AI which is mostly Grock which is also the most underwhelming part of the business in my opinion. The revenue chart also shows us that the other businesses are not really growing that much and ultimately what I gather from these charts is that Starlink is the revenue growth driver and the profit driver behind SpaceX's entire business. And I think that this is very bullish for Amazon because Amazon is starting their LEO program which is a direct competitor to Starlink and Starlink is clearly showing us that the margins are very high, the growth is very strong and now they are going to have a real competitor from Amazon Leo.

[00:06:44]So I think that Amazon's LEO business could be a cash generator for Amazon in the future as well. All right, moving on to the next screenshot. This one is SpaceX's total addressable market projections and they believe that their total addressable market is $28.5 trillion which is almost as large as the entire US economy. They say that AI infrastructure is a $2.4 trillion TAM.

[00:07:09]Consumer subscriptions are $760 billion.

[00:07:12]Advertising is 600 billion. Enterprise applications are 22.7 trillion. And like what does all of this even mean? And how does Starlink really plan to capture more of that $600 billion digital advertising market when their advertising revenue is actually going down? Their AI revenue is also very low and not really growing that much. But they say that they have $2.4 trillion TAM and AI infrastructure. So to me, this slide looks like it is meant for marketing hype and to get potential investors very excited about the future opportunity of the company. But the reality is that I do not think that SpaceX is going to capture even a fraction of all of these different TAMs.

[00:07:57]Like $600 billion in advertising, I don't think that they're going to even get, you know, like 1% of this number.

[00:08:04]So sure, there's a massive TAM here, but how much is SpaceX actually going to get and by when? That is the real question.

[00:08:11]Okay, you have a $28.5 trillion TAM, but is this going to be the TAM over the next hundred years, the next decade or what? That's really what I think. I I think that this is really just marketing material. Now, one thing that is good for SpaceX is they signed an agreement with Anthropic for $1.25 billion per month in revenue until May of 2029 for data center capacity. This is $15 billion per year in revenue to SpaceX, which nearly doubles their revenue versus their 2025 figures. And this is great for SpaceX if it can actually be maintained and realized over the next few years. So, after going through SpaceX's financials, I do have to admit that I was pretty underwhelmed because SpaceX is a company that I've been following for a very long time, and I'm actually quite bullish on the long-term potential of this business, and I really do hope that they succeed. So, when they announced their S1 filing, I immediately went through it. I took a look at all of the numbers and I kind of was like, "Okay, really?" Like, really, this is this is what SpaceX is. I I don't know.

[00:09:15]I don't even know what I was expecting, but I guess I was expecting more than uh what they put out because this business is doing about $18 billion in revenue.

[00:09:24]It's not really growing all that much.

[00:09:26]Starlink is really the only business segment that looks like it's growing and it really looks like it's the gem of the entire company. The space business is not growing that much and the AI business is just a a freaking money pit.

[00:09:38]And overall that has led to SpaceX losing a significant amount of money and not producing any profits. Now, I do understand that this is more so a growth business and when you're in a growth business, they like to reinvest a significant amount of cash flow back into itself and produce no profits while it's growing. And I actually believe that this is what SpaceX is doing, especially with their Starship program, which I actually think is fine, by the way. But what it comes down to is valuation. And I think that, you know, SpaceX could be the most exciting company on the planet. It arguably is, but I think that doesn't mean that it's worth an infinite price. And I have a screenshot pulled up on my computer right now that says the valuation target for the IPO is between $1.75 and $2 trillion. And if SpaceX actually IPOs around a $2 trillion valuation, then it would be trading for 105 times sales based on their 2025 numbers and over 300 times operating cash flows. And it would be one of the largest companies in the world.

[00:10:41]That valuation simply is just unjustifiable to me. And I think it is a reflection of how euphoric this market has become. I mean, we're talking about a $2 trillion valuation now for a company doing, if you want to talk about their anthropic revenue, maybe $30 billion in revenue and still losing a significant amount of money. I understand that SpaceX is a very innovative company with a very bright future and a potentially 28 trillion TAM, but I think valuation and the price you pay for even the most exciting businesses is still very important. And to be clear, SpaceX is actually a company that I would happily invest in at the right price. I don't know what that price is right now because I don't think it's even worth doing because it would be like 80% lower than where the stock is going to IPO.

[00:11:31]But yeah, there's there's no way that I'm buying this IPO. And Brookfield Corporation has shares of SpaceX and I'm kind of hoping that they just dump them on day one. just get rid of those shares, take the profits, and run because this just looks like a lot and a lot of euphoria to me. And as I said, I think it's kind of a reflection of the market right now because I'm seeing this euphoria in a lot of other places. So with that being said, let's now discuss some of the stocks that have been working in the market and some of the stuff that I have been seeing out there. All right. So, the first stock I want to discuss is the ticker symbol ASTS, which is AS Space Mobile. So, back in 2024, this was a $221 cent stock, and it is up roughly 5,300% in just the past couple of years. And if we zoom in here, it's recently rallied over a 100%. Just in the past couple of weeks now, like on May 5th, this was a $64 stock. So, this stock has been seeing a ton of momentum. It's being talked about everywhere I look online and it's now trading for a price to sales ratio of 592.

[00:12:42]If we go take a look at the company's financials, we can see that it has done about $85 million of revenue in the trailing 12 months. Now, if we take a look at a quarterly basis, we can see that they're doing about $15 million of quarterly revenue. So, on an annualized basis, maybe about $60 million of revenue. If we look at their cash flows, this company has never produced any money. $91 million in operating cash flow in the trailing 12 months and its free cash flow in the trailing 12 months is now $1.4 4 billion which means that the company is relying on dilution right here. They've diluted about 1.3 billion in the past year and taking on debt to fund the business. And I took some time to dive into what this business does.

[00:13:24]And to put it simply, they are a satellite communications company. So with SpaceX IPOing and with the space industry being very hot right now because of that IPO, this business is seeing a lot of hype and a lot of momentum and they are actually working with some of the satellite and space companies. But for me, it always comes back to, okay, what is actually a fair price to pay for this business? Because a $50 billion market cap for a company doing anywhere between 60 to $80 million in revenue seems just too far out there, man. Like that is that's just too high to to put that in perspective. For this company to produce a 5% earnings yield, it would have to get to $2.5 billion in profits tomorrow. And that's the thing about businesses, valuations, and stock prices. You really have to realize that the business is one thing and the stock price is another. And when stock prices run so far ahead of the business like this, what that ultimately means for you as the investor is you're paying for a significant amount of future business success and future business growth. And that increases your risk massively because if ASS goes on to produce $20 billion in revenue and let's say only $1 billion in free cash flow, which would still be a successful company by far, the price today still looks way too high. And that's what I mean. You're paying for so much future profit potential that you increase your risk significantly. And even if the business has a good outcome, then you can still end up losing money. And this is the type of stuffs that I'm seeing across the board. So, let me show you another example. This next stock is Applied Materials with the ticker symbol AAT.

[00:15:08]And it's actually in the S&P 500 and is a massive company with a $356 billion market cap. This stock has been basically going straight up due to the semiconductor shortage and the supply crunch. So, investors are believing that this business is going to see a massive amount of profit growth while the semiconductor shortage is going on. It is now trading for a 42 price to earnings ratio and a 35 forward PE. And if we take a look at its financials here, we can see that its revenue has not really been growing all that much.

[00:15:39]The revenue has been growing by about 3.5% annually since 2022. Now, I understand when you're investing in these type of companies, you're investing for the future, not the past. But when you're buying this stock at a 40 price multiple, it means that you're expecting this revenue to be basically going vertical very very soon, which could happen. But I think that it's a pretty tall order to ask. And I think that this is a scenario where the stock price may be getting a little bit detached from the underlying fundamentals. And this is the story that I am seeing across pretty much every single semiconductor stock that I take a look at. Let's take a look at KLAC, which is another one that's actually in the S&P 500. This one has basically been going vertical as well.

[00:16:26]It's trading for a 55 price to earnings ratio now, a 41 forward PE. If we take a look at their financials, they've actually been growing pretty solid over the years at about 16% annually. But even still, you can see that the revenue is growing, but it's not really seeing that much of an acceleration, whereas the share price has just been going vertical. And I think that this is another example of maybe the share price getting a little bit detached from the underlying fundamentals and the price multiple even on a forward basis getting a little bit high. Now this isn't just happening in the semiconductor industry either. This is even happening in the construction industry now. So this company right here is Quant Services with the ticker symbol PWR. And you can see that this stock has also just gone straight up just straight vertical. Its price to earnings ratio is now right below 100. Its forward PE is now 52.3.

[00:17:22]And if we take a look at this business's financials, you can actually see that its revenue is growing strong. And since about 2022, they've been compounding revenue by about 20% per year. This business is involved with the data center buildout. They're one of the companies in the construction industry actually building out the data centers.

[00:17:40]But I think once again that the price multiples and the price of these businesses are getting a little bit ahead of their skis. Like a 52 forward price to earnings ratio for a construction business that's historically been a very cyclical industry. And I have another example with another stock called Argan Inc.

[00:18:02]with a ticker symbol AGX. Once again, you can see that it share price has just gone absolutely vertical. is trading for a 69 price to earnings ratio now a 60 forward PE and if we take a look at its revenue you can see that it's been extremely cyclical historically and it actually hasn't grown for about four to five quarters now and this thing is now trading for a 60p and I think that this is actually a better example of how stocks within the construction industry even if they have a little bit of exposure to data centers have seen their price multiples go nuts and seen an insane amount of buying. Now, I also have another screenshot here that I took of the S&P 500's heat map. I believe that this was on Monday. And this screenshot really just shows you what the theme of the market has been for the past month or so now. I want to say it's been like this for quite some time. And in the screenshot, we can see that the semiconductor industry, except for Nvidia, has been going up substantially.

[00:19:02]Micron was up another 21% just the other day. AMD up another 8%. So this one segment right here has been really leading the market higher and higher and higher. Then we have semiconductor equipment and materials computer hardware and then industrials which are the companies that are involved with the buildout of AI and data centers. And when I take a look at the screenshot, it seems very clear that the market is being led higher by basically the AI wave. Semiconductors, semiconductor equipment and materials hardware and the companies involved with the AI data center buildout. But the other companies like Visa, Mastercard, Birkshshire, Microsoft, Nvidia, even Amazon, Consumer Defensives, Healthcare, and even some utilities are all being left behind. And what this ultimately means is if you're not exposed to this handful of stocks or this select few industries, then you're being left behind by the market in a very large way. And as someone who does not invest in semiconductors or the AI theme, it's pretty clear that I have been left behind by the S&P 500 this year. And that's completely fine by me.

[00:20:10]I have given up trying to keep up this year. And it is what it is. Because for me to try and keep up in this market environment, I would need to go long the names on your screen. And I think that many of them are trading for very high prices now or prices that I'm not comfortable with or they are just not in industries that I necessarily feel like I have an edge in or a circle of competence in like I don't want to be buying Micron here. Definitely not. I don't want to be buying Intel here and I don't want to be loading into SanDisk and the other hardware type companies.

[00:20:42]So yeah, for an investor such as myself, I have been left behind by the market this year. And I've noticed that a lot of other people have, and that's okay.

[00:20:52]All right, you're not going to beat the market every single year. It is what it is. So, I want to show you some screenshots now of how I'm seeing people react to starting to underperform or even having some stocks in their portfolios that maybe aren't keeping up with the AI wave and all of these types of stocks. So, I'm going to show you those screenshots now. So, here's the first one that went very viral over the past couple of weeks. So, this person says, "Fully exited Mastercard today.

[00:21:20]Sad to see it go. Honestly, Mastercard is still a worldclass business. 60% operating margins, 175 billion transactions per year, a toll booth on the global economy. But look at the chart. Mastercard over the last year is down 14% whereas the S&P 500 is up 25%.

[00:21:37]That is a 39% gap on a stock I was holding while the rest of my portfolio is ripping. I don't care how good a business is. If it's underperforming the index by nearly 40% over a year, that capital needs to be somewhere else.

[00:21:50]Opportunity cost is real on this one.

[00:21:53]Every pound sitting in Mastercard was a pound not compounding in Nvidia, ABGO, or CAT. This is probably the hardest lesson in investing. Letting go of a stock you love because the numbers aren't working. Your feelings don't make you money. The data does. Never sell unless a thesis breaks. Sometimes the thesis is fine and the stock just isn't performing at all. Even on a longer time frame, that's enough. Good company, wrong timing, so my capital is redeployed elsewhere. Now, what this reads like to me is someone who is making decisions entirely off of what the share price does. And funny enough for myself, I'm actually getting more interested in Mastercard because it has been underperforming while the underlying business is continuing to grow and compound away. Because when you have a business where the fundamentals are continuing to improve quarter after quarter after quarter, cash flows are continuing to go up. They're buying back shares, revenue is growing, and the share price isn't responding or doing anything. That leads to the price multiples compressing greatly. And Mastercard in specific is now trading for its lowest forward price to earnings ratio I believe since something like 2018. So I agree with this person that the underlying fundamentals of Mastercard still look like they are intact. They're growing and they look phenomenal. The business looks solid.

[00:23:13]However, they are making the decision to let go of Mastercard and sell it and rotate into the other stocks that have been going up over the past year because Mastercard has been lagging. And I simply don't think that this is a winning long-term investment strategy because what this person is essentially doing is rotating out of a stock that actually looks very attractive right now into the stocks that have been running already and are now arguably very expensive. It's like just think about that. You're basically selling low to go buy high. And another thing is past performance is not an indicator of future returns. And I know that this saying is overused, it's overhyped, whatever, but it's true. Just because Mastercard has not performed well over the past year or two doesn't mean that its future returns are also going to be poor. And I have many stocks in my portfolio that are in this exact same boat. They are posting fantastic results. Their fundamentals are growing.

[00:24:06]The business and everything, the thesis is still intact. But the market doesn't want these stocks right now because that liquidity needs to move and rotate into what is currently working in the market which is semiconductors, hardware, industrials and construction type companies that are all exposed to the data center buildout. This can be very very frustrating for investors. As I said, my portfolio is underperforming this year. I have no shame saying that because those are the things that you need to be invested in to keep up right now. So, for myself, since those are the stocks that are working, and I think that they're arguably getting a little bit euphoric and bubbly, what I'm doing is I'm not changing anything at all. I am remaining focused on the businesses and their fundamentals and their prices and not on what I would say are the the euphoric themes that are currently working in the market. Because the longer that my businesses continue to compound and grow their free cash flow and earnings per share while their stocks are sideways or even going down, it means that I am getting better and better deals on every new share that I purchase. I don't know when the market is going to finally wake up to the fact that they still have strong fundamentals and they're growing incredibly well, but I do have faith that one day the market will price these businesses properly and price them based on their fundamentals.

[00:25:30]That's the way that I invest. That's the way that I think true long-term investing should be done is based on the business behind the share price and not based on what the share price is doing.

[00:25:40]So, for myself, I'm going to continue focusing on the businesses behind the share prices and buying them at what I think are very attractive prices today.

[00:25:48]I know that the S&P 500 is at all-time highs, but I truly believe that there is still a significant amount of value in the market. Just take a look at Skyward.

[00:25:57]Take a look at BAM. Take a look at Mastercard, Visa, Microsoft, even Nvidia. Arguably, Marcato, Libre, New Bank, Meta, Brookfield Corporation, KKR, Apollo. There are so many stocks in the market where their fundamentals are continuing to grow. They're at all-time highs and their share prices are still depressed and in massive corrections.

[00:26:18]So, for myself, those are the stocks that I'm going to be focusing on. That's where I'm focusing on deploying all of my capital. And I have completely given up trying to keep up with this rally that we're seeing in the market because it's not my strategy. It's not what I invest in. And the strategy that I use that has worked well for me over the years is still applies today in my opinion. And I actually think that if you're a stock picker who can understand value and analyze fundamentals, then this market is surprisingly attractive because so many stocks have been left behind and there is so much value in the stocks that have been sold to chase the market higher and to chase the rally.

[00:26:56]But with all that being said, that is going to wrap up today's video. I really wanted to make this a quick video, but I think that I got a little bit carried away and started rambling there. But I really just wanted to share, you know, what I'm seeing in the market, how I'm responding, and how I'm keeping a level head while I think that we're seeing some euphoric times again. So, if you enjoyed this video and you made it to the end, then please let me know down in the comment section and leave a like on it. Also, if you're new here and you want to see more content like this, then please consider subscribing because my channel is fully dedicated to trying to identify value in the markets through all market cycles and environments. And if that resonates with you, then again, consider subscribing. But thank you all again so much for tuning in.