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☕ The single most underpriced AI company on the planet

Feb 05, 2024

Good morning! 👋  

The S&P 500 just closed out its fourth straight week of gains. Then, of course, Fed chair Jerome “Jpow” Powell struck again by dashing hopes for an interest rate cut in the near term. 🤦‍♂️ 

Stay focused! 

Roughly 80% of the S&P 500 companies have reported and beaten estimates which were slightly higher than normal! Remember, volatility is a travelling companion, not something to fear. 

Invest in the best, ignore the rest. 

Speaking of which... 

Here's my playbook. 

1 - There's a new GOAT in town 

Microsoft CEO Satya Nadella has been in charge for a decade.  

When he took over the company was mired in mediocrity, seemingly couldn’t do anything right and had a market capitalization of just over $300 billion. 

Today it’s worth $3.02T and one of the most valuable in the world. Every $1,000 invested a decade ago would be worth $12,904.54 today, an annual return of 29.08% according to finmasters. 

People have challenged me constantly the entire time ... it’ll never happen, it can’t get any bigger, the law of big numbers... pick your poison... yada, yada. 

Yet, here we are. 

Microsoft is the absolutely undisputed leader when it comes to generative AI, cloud computing and more. Shares are closing in on the $500 price tag I set last year at a time when people were ready to throw it out with the bathwater. 

I think it could take out $700 or split, perhaps both. 

2 - Palantir could be the single most underpriced AI stock on the planet 

Love it or hate it, Palantir is a disruptor. 

Just like Tesla, Apple, Amazon, Microsoft, and dozens of other companies that have come before it. Eventually Team Karp puts up such good numbers that Wall Street can't poo-hoo it. 

The window is closing and any investor who is not on board risks being locked out of the house. 

PLTR reports after the bell today. 

3 - Musk's madness 

The Wall Street Journal is out with a take-down of Tesla CEO Elon Musk today alleging drugs, conflicts and more. It’s as nasty a bit of work as I've seen in a long time. 

I’m not going to defend the guy because these are very real concerns if what’s being reported is true. But I learned a long time ago that the last thing you want to do as an investor is to jump to conclusions, especially when you don’t know all the facts. 

  • Steve Jobs was as ruthless as it comes yet look at where Apple is today. Look up “Team FDA” sometime and you’ll see what I mean. 
  • Carly Fiorina bought a private jet and increased her salary 3x while 30,000+ HP employees were sent packing. She exploited loopholes in sanctions to sell millions worth of computer equipment to Iran. 
  • El Zucko reportedly once said that, “You can be unethical and still be legal; that’s the way I live my life.” 
  • Micheal Bloomberg, Richard Branson, Mark Johnson, and Oprah Winfrey have all had a toke. Former President Bill Clinton didn’t inhale all the way back in 1992. 

To a point I made with the fabulous Stuart Varney ahead of the bell earlier today, visionary leaders often have their challenges. Even so we want to own big tech, including Tesla anyway. (Watch) 

4 - Uncle Ronnie wasn’t lovin’ it today 

McDonald's reported Q4 results this morning ahead of the bell beating estimates but missing on revenue as international markets lagged. (Read) 

Management noted specifically that turmoil in the Middle East is taking a toll on international sales. Still, China and Japan reported positive same store, sales growth. Meanwhile, domestic, same store sales growth rose 4.3% boosted by menu prices.  

Remember, McDonald's is a tech company that happens to make hamburgers. 

Pass the fries! 

5 - People don't think about Apple as AI, but they should

I do a phenomenal amount of writing every single day so I’m constantly on the lookout for anything that can help me do my job faster, better, and more effectively. 

Lately, I've been experimenting with speech recognition engines from all three of the biggies: Google, Microsoft and Apple.  

Apple’s version – imho - is light years ahead in terms of clarity, speed, the ability to recognize accents and specialized vocabulary. My guess is that Team Cook has significantly more advanced capability than the public recognizes. 

And shares are down as I type??!! 

I, for one, can't wait to see what Cook does when he rolls out when he's ready to "spill the beans" on AI. 

Bottom Line  

There is no shortage of people thinking about big things.  

Just a shortage of those thinking big enough.  

As always, let’s finish the week strong and MAKE it a great day! 

Keith 😊 

 

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