☕ Palantir, Tesla, Nvidia – my take on the action

Howdy! 👋 

Here we go again. 

WWTFD? 

… As in What Will The Fed do? 

Traders have taken a weaker jobs report to mean that the Fed’s less likely to raise rates – and all three indices are in the green for now. 

I wouldn’t count on it… the Fed that is. 

Rates are for traders, but profits are for investors. 

So… if you’re an investor, focus on finding companies producing ‘em. And if you’re a trader, knock yourself out. It’s okay to be either. 

Markets reward knowledge, not guesswork. 

Here’s my playbook. 

1 – Karpus Maximus on CNBC – my take 

Palantir CEO Alex Karp had at it yesterday on CNBC. (Watch) 

Critics are painting his appearance as a nervous breakdown or worse. 

Hardly. 

First, Karp clearly laid out what he sees ahead, and the inherent fallacy associated with frontier AI models.  

Karp was driving at something I run into all the time… the world’s best and most successful executives know that protecting their business model is critically important.  

Competitors – meaning every other AI model out there that Karp harped on – require that you load UP your data, design prompts that feed into somebody else’s models, which means they get to see how your business operates and what you deem as important, before feeding that back to you with specific results. 

Not tracking? 

This would be like Coca-Cola being required to hand its secret formula to a lab that also formulates recipes for Pepsi — and then being forced to trust that lab to keep quiet about what it sees while paying for the privilege. 

Palantir, on the other hand, keeps everything private and is entirely auditable every step of the way. 

Second, nearly everything he said went in one ear and out the other around the table. 

I found the blank looks priceless. 

The average critic cannot be bothered to understand the difference between what Palantir does and what “competitors” do so they wind up parroting false information, misleading narratives and half-baked thinking. 

Third, Karp confirmed what I’ve been saying all along with hard, unambiguous numbers. 

I’m paraphrasing but here ya go… “We have much more demand than we can supply. If you just look at our financials you can see, 2 years out, you can see $15-$18B in free cash flow.”  

Think about that.  

Karp said that Palantir could 4-5X in the next few years. 

Exactly what I’ve said all along. 

Perhaps I am naïve but I found it astonishing that not one person at the table had an apparent interest in exploring that line of thinking on anything other than a cursory level despite the fact that it is ostensibly their job. 🤦‍ 

I hope I own enough shares. 

Keith’s Investing Tip: Founders know their companies better than anybody else so when they make statements that are grounded in fact and knowledge, smart investors would be wise to pay attention. 

Trade idea: Obviously, own Palantir as an investment. BUT get ready. Shares are now up ~23% off recent lows and my guess is that it’s only a matter of time before there’s another short attack. Tactically speaking, that presents a potential short-term play using putskies while premiums are cheap and volatility is comparatively lower than it’s been in a while.  

If I’m correct, that’d be a GIFT to long term investors. 

2 – Nvidia just took a page from the 1849 Gold Rush  

Nvidia announced it's offering fast-growing AI start-ups a new deal: swap access to scarce compute power for a slice of future revenue. (Read) 

Two partners are already lined up — Sharon AI in Australia and Firmus Technologies in Singapore — with a combined shot at more than 200,000 GPUs, including a new data center in Indonesia big enough to power a small city. 

This is exactly the picks-and-shovels thesis I've been pounding the table about.  

When gold miners were scrambling in 1849, the smart money wasn't panning for nuggets — it was selling shovels and taking a cut.  

Just sayin. 

Keith’s Investing Tip: People talk all the time about picks and shovels but then fail miserably when that opportunity is staring ‘em in the face. Don’t!

3 – Tesla is now worth more than the next 59 car makers combined 

Tesla is now worth more than the next 59 car makers combined. It’s also 1.2X the size of the entire rest of the publicly listed industry. 

Tip of the hat, btw, to XFreeze who has also picked up on this! 💯 

Where to next? 

I said last year that I believe that Tesla will reach a $20 trillion valuation and you know who agreed with me.  

Call me crazy but I think $TSLA is just getting warmed up. 

Keith’s Investing Tip: Love him or hate him, your job as an investor is to pay attention. Profit potential is directly correlated to the ability to change your mind when presented with accurate information that contradicts your perception and your beliefs. 

4 – Can you spell ulterior motive? 

OpenAI has proposed handing the U.S. government a 5% stake in the company, according to the Financial Times — worth roughly $42.6 billion at OpenAI's current $852 billion valuation. And he wants to rope the competition in too. (Read) 

Sam Altman is framing this as sharing AI's upside with the American public. 

I was born in the middle of the night, just not last night.  

Chances are you were, too.  

My guess is that Altman knows that his company is likely falling behind, probably can’t come anywhere close to the valuations being assigned to it and needs political cover. 

Because, you know, nothing says “I believe in my product so much that I want to rope the investing public into the same insurance policy.” 🤦‍ 

Pick a lane, Sammy. 

A CEO offering up “public good” right before what could be a super-hot, widely anticipated IPO is a valuation defense mechanism wearing a public service announcement costume. 

Keith’s Investing Tip: Buy the best, ignore the rest.® 

5 – It’s Issue Friday – hooyah! 

Keep an eye on your email if you’re a part of the One Bar Ahead® Family! 

Tomorrow is the 4th of July so we’re publishing a day earlier than usual.  

Good thing that great ☕️ is a major food group around here! 😀 

Bottom Line 

Do yourself a favor.  

Don’t chase yesterday’s trends.   

Instead, position for tomorrow’s inevitabilities.  

Your portfolio will thank you. 

Now and as always, let's MAKE it a great day. 💯 

You got this — I promise! 

Keith 😀