Transcription
Now, there's a fundamental change going on in AMD's business model. Everybody has to understand that came out in the conference call. AMD more than doubled its long-term total addressable market, that TAM estimate. The company now expects the server CPU market to grow at an annual rate over 35%, reaching more than $120 billion by 2030. This is insane because before, they were kind of expecting that 18 to 20% range. So, the CPU opportunity now is way bigger than anyone had anticipated, including Lisa Su and the team, right?
The really exciting thing for me about AMD and why I invest in the stock is the GPU opportunity, 'cause our GPU business is about to take off like a rocket ship over the next 3 to 4 years, essentially, right? And it really, the party really starts over the summer and then really just ramps over for the next several years, right? But now, the CPU opportunity's looking way bigger than anybody anticipated. The CPU to GPU ratio shift, and they talked about this on the conference call. Listen to the conference call on thousandnextstocks.com. Traditionally, the industry used one CPU for every four to eight GPUs, a one to four or one to eight ratio. CEO Dr. Lisa Su noted that as inferencing and agentic AI workloads become more complex, the ratio's shifting more toward a one to one configuration. High-performance CPUs are needed to coordinate tasks and move data between the accelerators. Oh my gosh.
Ladies and gentlemen, when I talked about Palantir years ago, right? It was a stock that was set up for an incredible run. And the day they launched AIP, it was a fundamental shift in that business model. Why? Prior to that, Palantir had a sales cycle that took months. And once they launched AIP, we're talking about a sales cycle that went to hours or days, right? Fundamental change in the business model. We've got to look out for these. When a business is going through a fundamental change in the business model for the better, the stock's going to fly like you never seen. We have two fundamental changes in the business model for AMD. One is pushing heavy into GPUs. Two, CPU demand. Now we're talking about a one-to-one ratio, where it used to be one to four or one to eight. That's two fundamental changes for the business model going on simultaneously for the next several years. AMD could go to a thousand or two thousand dollar stock. And that's not even the most bullish assumption in regards to AMD here, ladies and gentlemen. Oh my gosh.
Now, AMD, as of right now, is a $687 billion market cap, right? The biggest bulls out there in regards to AMD, they believe that over the next five years, AMD is going to become the biggest company in the world. Bigger than Nvidia over the next five years. Now, you might say, "How's that even possible?" Well, AMD is in a sweet spot. AMD's GPU business about to take off, and they've, you know, they've done a good job catching up with Nvidia on the GPU side, so that makes their opportunity big there. And they have undercut price in regards to price, and they've done more of an open-source type model versus kind of like a walled garden situation like Nvidia has, which could mean for a much bigger opportunity for AMD long term. Think about Android, how many Android phones are sold each year versus iOS, right? Apple's still very successful, that doesn't mean Nvidia can't be successful, right, with your walled garden approach. It's just, if you want to talk about total numbers, like, you know, being open is can be very, very helpful, right? But then, also, Nvidia's almost basically irrelevant when it comes to CPU. Like, the CPU business is basically irrelevant for them, right? Intel is like a big player in the CPU market, right? But AMD is positioned perfectly, 'cause they've got the CPU side and the GPU side. They're the most well-positioned company in the world. In the world. To benefit for the next several years from CPU and GPU demand, guys. This is incredible. This is absolutely incredible. I feel so thankful to be part of this stock, right? You can have nothing but gratitude. And the biggest bulls believe that this is going to be a $5 trillion plus company. It's going to take out Nvidia, right? To become the biggest of the big. It's possible. It is possible, ladies and gentlemen, okay?
Now, you may say, "Okay, if if AMD does that, where's the stock price go?" Look at this. $3,000 plus dollars a share. If this goes to where Nvidia's at now, $3,000 plus dollars a share. So, that makes my bull case of what, $2,000 or $2,500 look like, "Oh, it's not that bullish." We could be talking about stock 5 years from now is $3,000, right? But keep in mind, that's the most bullish assumption you can possibly get out there. But you may say, "Is that possible? Is it possible?" Well, think about Nvidia for instance, right? Nvidia mid-2014 was a $10 billion market cap, and now it's the biggest company in the world, 5 trillion. Who would have ever thought that, right? That is crazy. Absolutely crazy. Lisa Su, you guys remember this video from 8, 9 years ago? The guy on the F1 circuit interviews people before the race. He didn't even know who Lisa Su was. Had to ask her if she spoke English. Said, "Do you speak English?" >> [laughter] >> We've come a long way, right? And now they think she's one of the most important CEOs in the world when she was getting asked if she even spoke English. Like, come a long way, right? Come a long dang way. I remember the first time I ever spoke about AMD stock on the channel, it was over 9 years ago. AMD at that time was a $13 stock. It had just gone through a 470% run the previous year. Right? And people thought like, "Oh gosh, like that was it. Like it's a bubble, $13 a share, right?" Uh Um so, just understand there could be a lot bigger numbers ahead for AMD stock. A lot bigger numbers, so I feel thankful to be a shareholder of this stock. Um I feel thankful for the team over there at AMD. I feel thankful for my other stocks that are paying fortunes of money to AMD over the next several years, like Meta and A and and Amazon and Google. They're going to be buying so many GPUs and CPUs from AMD, it's not even funny. And then the Open AIs and Anthropic and all these other companies, but um man, what a time. You can just enjoy it. You can just enjoy it, right?
You know, when will I look to get out of AMD? Let me speak about that before we move on here. When I start sniffing out revenue growth deceleration coming, I'll start to position out of AMD. That doesn't mean I'll sell all my shares, but I'll sell a significant portion. That's not for a while. We're going to be, we're going to be accelerating the revenue growth rate for quite a while. I was a minimum a year, but potentially 2 years of revenue growth acceleration before the deceleration phase starts. So, I mean, it just doesn't even make close to financial sense to start to position out yet. But, I'll get there. We'll get there. And then we'll start to position out and start to take profits and redeploy that elsewhere. But, for right now, it's party on, man. You know, this is like the phase when Palantir went to like $30 range. And, you know, coming off of where the stock was, the stock was like $6, $7, $8 stock in 2022, right? Made that run to 30, and people thought like, "Can't go up anymore. Like, that's it, right?" Then it ran to 200 plus. And so, AMD's at a phase right now where it's at 400, people like, "Oh my gosh, this run has been insane from $100 to $400." You know, you think it's expensive now, just wait till it's $1,200.
Hey there, it's Jeremy. I hope you really enjoyed that clip here today. What I'm showing you right now is 1000xstocks.com. This is a specific software that has been designed to save you time. It's a one-stop shop for long-term investors to know how the company is doing, listen to what management has planned for the future, and compare companies next to each other. Which big tech is the most undervalued? Is that small-cap company you heard of actually worth investing in, or are there red flags? Get the front row to the conference call, be able to access the management, which information is right to make an educated decision. Get all that information through 1000xstocks.com. You can access that through the description area. You can apply for access to 1000xstocks.com, or you can go to 1000xstocks.com.
All right, you guys, so AMD, right off the bat here, okay? Listen. We're talking A+. It's an A+ earnings for AMD. Revenue growth was 38%, cost of sales up 33%. You already got have major leverage in your business model. Talk total cost of sales was up 31% for the quarter. That's not bad when your revenue is up 38%, right? So, that means gross profit's going to explode. It's exactly what we saw. Gross profit was up 45% for the company to $5.4 billion. R&D was up 39%. Marketing, general administrative was up 41%. So, those numbers were a little high. They were a little higher than I would like ideally 'cause revenue was up 38%. But, do keep in mind, AMD's revenue growth rate's about to accelerate quite dramatically over the next several quarters. So, I'm not too worried about it, right? Total operating expenses up 35% for the company. So, operating income ended up being up 83%. Crazy number. Crazy number. My gosh, 83% operating income. Net income up 95%. Guys, we haven't even got to 450 numbers yet. 450 numbers are coming. >> [laughter] >> Oh my gosh, wait till the 450 numbers come. We have operating income up 83%, net income up 95%. We haven't even got to 450 numbers. >> [laughter] >> Do you know what's going to happen when the 450 hits? Oh my gosh. A diluted EPS up 89% for the company year over year. Just amazing numbers. Amazing numbers out of AMD. They beat pretty much across the board from what I saw. Also, the guidance was ahead of where Wall Street was at, right? And keep in mind, they guided above what Wall Street was expecting and guess what they're going to come in and do? They're going to come in and beat those numbers as well. So, it's not like they're going to put out numbers that they can't beat. You know Lisa Su, she knows the game. She knows the game of Wall Street. She's going to come in smash those numbers, right? So, obviously unbelievable.
Now, what levels did I tell you guys were important for next in regards to stock? I told you guys what was it? Uh 3, I think it was 365 to 480 or excuse me, 365 to 380. Why was that the big range? That was the very top of what analysts were expecting for their price targets, right? We just blew through that. And what did I tell you guys? We're going deep into the 400s if we blow through that. Now, we're above even the most bullish analysts on Wall Street. As of at least last week, unless there's some analysts that came out just in the last like couple days and put a 400 plus price target on the stock. We're above everybody. So, even the most bullish analysts, the stock is now ahead of where they're at. Which means what? We have a gauntlet of upgrades coming for AMD over the coming weeks and over the next month. Specifically over the next 7 days. You are going to see Wall Street firm after Wall Street firm upgrade their price targets one after another after another. It is going to be a flood for the next several weeks, but specifically a lot of them are going to try to get out there in the next, I would say, three trading days, essentially, right? It's going to be insane. You're going to have people upgrading the stock left and right talking about GPU demand, talking about CPU demand. This gets fed out to the algorithms, obviously. It gets fed out to all the Wall Street firms, the hedge funds, builds more momentum. All of a sudden AMD becomes the most exciting, um, hottest stock in the stock market, right? And so, um, you know, which MU I feel like has been that stock. Well, MU and SanDisk, some of those memory chip plays, but I feel like, you know, AMD's with the move AMD's on right now, it's trying to take that mantle as terms of like the hottest stock in the market, like the one you got to be in, right?
Now, where's the stock headed, okay? Here's the deal with AMD. Listen. Based on my projections for the stock, right? We've got a long run ahead of us. My bull case for AMD, right? Has the stock going to way over a thousand dollars. I mean, if we just look next year, based upon my bull case, I have the stock being a five hundred to maybe even a six hundred plus dollar stock in 2027, right? Keep in mind, in my bull case, this stock could go between fifteen, you know, seventeen hundred dollars and two thousand dollars in the next few years. So, even paying four hundred, it's not that bad if that happens. But, keep in mind, my bull case is always going to be a little more aggressive, right? Base case, I try to be a little more conservative, but my base case still has the stock getting to a thousand dollars, basically, right? So, even at four hundred, if in the next few years the stock goes to a thousand plus, it's still a buy, right? Um and keep in mind, my base case, I think a lot of people will look at my base case and actually say that's too low. If you look at my numbers, I have, I have 35% revenue growth, which is what Lisa Su's talked about, but people are saying, you know, with the GPU demand that's coming for AMD and then the CPU demand now, right? And everything they have going on there, a lot of people feel like 35% revenue growth is actually way low. So, I'm not ready to revise my numbers quite yet. I'll listen to the conference call, I'll do it through 1000xstocks.com, and I'll get back to you, okay? We'll see. I might have to pull my numbers up here a bit as far as revenue growth expectations, but this was my base case and still is my base case as of right now. But, I'm just telling you, a lot of people are going to feel like these numbers are too low, and we're going way above this. My net income growth of 45% might end up being way too low. Look at the leverage they're getting. We haven't even got to 450 series. And look it, we're talking about net income growth of 95% off of revenue being up 38%. Guys, my base case as of right now is probably way low. Way low. I might have to up these numbers dramatically. I'm going to get back to you on that. I got to do, I got to listen to the conference call. I got to do a lot of thinking in regards to this. But, I'm just saying like, as I look at it now, I think my base case is too low. Like I always want to be a little conservative with my base case, but honestly, this is probably way, way too conservative the more I look at it, right? And 47 billion for 2026, they might blow way through 50. I mean, I'm just going to be honest with you guys. They're probably going to blow through 50 even. So, yeah. AMD, the more I look at AMD, the more I'm confident the stock's probably going to a thousand or higher, right? Which means there's still a long train ride ahead, right? And there's never a guarantee, you know, they could screw up a bunch of stuff or I don't know, suddenly no one wants to use AI anymore, like, you know, like we run through scenarios of just like craziness that happens. But, I mean, it looks more probable that this stock heads to a thousand than heads back to 200. So, just something to keep in mind in regards to AMD. What a stock, man. What a stock. This could be my first stock that I ever make. Have I ever made multiple million dollars on a stock? I might have. I know I certainly made it over a million dollars a few times on stock. But, I'm trying to think, have I ever made like 3 million, 4 million just on one stock? I don't think so. This might be my first. I don't know, we'll see. We'll see. Can't get too excited, right?
Now, a stock that gained us 2,000% or so is Palantir, right? Incredible stock. Now, this is a very controversial stock right now 'cause people are looking at the numbers like, "Oh my gosh, what is going on here?" And the stock price goes down. People like, "What?" So, Palantir's earnings, this was an A++. This is like ridiculous. Like, I don't know know any other way to put it. It's just ridiculous, okay? Like, you have AMD reporting an A+ quarter, great report by AMD. Palantir's just on another level right now, right? Revenue growth 85%. Cost of revenue only up 25% with revenue up 85%. I don't think I've ever seen a 60 full percentage point gap between revenue and cost of revenue. That's ri- diculous. What? Gross profit went up 99% for the company year over year. Sales and marketing was only up 35%. R&D was up 19%, G&A was up 12%. Total operating income up 24%. Income from operations up 328%, interest income up 32%, other income up 2,250%, income before income tax up 298%, net income up 303%, diluted EPS up 325%. Okay, so what's going on with Palantir? Why is the stock going down? Right? It went down on these earnings, an A++ quarter, numbers way ahead of where analysts were expecting, guidance way higher than anybody was expecting, and yet the stock goes down. And keep in mind, it's not like this stock was at some all-time high going into these earnings and it was like, "Oh my gosh, like the stock was so ridiculous, it was like, you know, way up there." No, it didn't. It was already down probably 25, 30% from all-time highs and now it just went down more, right? So what's going on here with Palantir? Well, I think a few things, okay? One, so much negativity around SaaS right now, so [snorts] much negativity it's not even funny around SaaS related companies, and Palantir gets put in that SaaS related category. These stocks, just no one wants them, right? No one wants them right now. They might want them a lot 6 months from now, 12 months from now, 18 months from now, but right now, as of today, no one wants them. It doesn't matter who you are, which should make you feel better if you're buying ServiceNow stock right now or Salesforce or some of these other companies, because just dude, if they don't even want to buy Palantir right now, what do they want to buy? If they don't want to buy Palantir with 85% revenue growth and like 300% net income growth or whatever the number was, it was so ridiculous, you think they want to buy ServiceNow or Salesforce? No, they don't want to buy anything in this space right now, right? One thing to factor in. Two, listen, they're going to have to comp these numbers. These are brutal numbers to comp next year, right? Tough. Like, yeah, it's tough. Like the, the growth rates are probably going to be a lot slower. It's still going to be very, very strong, but compared to this number, like, you know, it's going to be more lame, right? And this is something I warned about a while ago, the game of Wall Street, right? When you're accelerating growth rates, it's so exciting, but, you know, we're about to go through a deceleration cycle for Palantir, where the growth rate, you know, they're growing revenues right now 85% or whatever, eventually they're going to start growing revenue 70%, 60%, 50%. These numbers are still incredible, but when you're growing 85%, blah blah blah, like all these people are like, "Mhm." So, that's going on with the company. It's gotten a lot cheaper.
Now, there's also a worry I've seen with in regards to Palantir, okay? This is a new worry. This worry has to do with basically the belief that Palantir's underinvesting right now. Their margins going up so fast, their R&D's not going up at nearly that clip, right? So, there's a belief that Palantir's underinvesting, which is going to set the business model up for problems a few years from now, right? Not today, but a few years from now, because they're underinvesting. That's the belief. I don't necessarily have that belief, but, you know, it is a worry that's out there right now. So, when you have a multitude of these things going on, listen, Palantir's gotten a lot cheaper. It's gotten a lot cheaper than it was 6 months ago, right? You look at the stock 6 months ago, what was the stock? 200? 208? Something like that. Now, we're talking about a stock that's in the 130s. Earnings and revenue that's way stronger than even bulls like myself expected, right? That's a lot cheaper stock now. The stock price has come down a lot. The earnings have been way better than myself or anybody anticipated. It's actually which much more attractive now. Palantir is the most attractive, price-wise, that I've seen in quite some time. But, that doesn't mean the stock price is necessarily going up in the short term. There's just so much negativity about anything that's in the relation of SaaS type companies. And Palantir gets, you know, for right or wrong, gets put in that category. And so there's a belief that you don't need Palantir. All you need is Gemini. All you need is ChatGPT for your business, right? Um we'll see about that. But like, you know, you in the short term, there's just nothing you can say to people though, you know, make them feel different. If they feel like that, they feel like that, so they feel like all these stocks are unownable, right? So that is what it is with Palantir.
Now, let's talk about a stock that has treated us not well, and that's Pain Pal. We call it Pain Pal, but it is PayPal, okay? So revenues look really good. I was excited when I saw this number. I was like, "Oh, let's go, baby." Revenue up 7% for PayPal. That's a good number. 7% revenue growth is a good number for Pain for PayPal. I believe TPV, total payment volume, if I recall, was up 11%. I think on a, you know, FX neutral basis it was up 8 or 9%. That's good. That's a good numbers for PayPal. Where things went off the rails and why this report got a D grade was not nothing to do with that. It was around expenses. Transaction expense up 12%, customer support and operations up 12%, technology and development up 9%, restructuring 12% hit, total operating expenses up 10% when your revenue's only up 7%. That's going to mean bad things for your profitability. Operating income down 3% year-over-year. They also had this um one-off expense here versus an income at the same time last year, so that was like a 230% increase there. Net income fell 14%, diluted EPS was down 6%. It wouldn't have been as dramatic if it wasn't for that other income expense situation, but still, operating income still was down year-over-year. It's a D report for PayPal. The go only good news is for PayPal, the valuation is so darn cheap that, you know, it it doesn't mean much for the stock, right? It's not like, "Oh, the stock's going to crash now." Like, no, the stock already crashed. So, it's hard, I mean, even with a D grade report like that, it's hard to get that stock down anymore. People are just like, you know, you it's either a don't own for people or it's a buy, you know? So, that is what it is.
Revolve, this is a small cap company, e-commerce company, apparel company. They gave a B grade for their income statement here. Net sales, look at this. 16% growth year over year. Man, we hear so much about the consumer getting sliced and diced by inflation, all these negative things. A retailer, an e-commerce retailer, growing 16% net sales, that's impressive. Cost of sales up 14%, that's good. That means your gross profit's going to be in a good place. Yep, and it was up 17% for the company year over year. Fulfillment up 15%, so that's less than gross profit, less than sales, I like that. Selling distribution, 16% less than gross profit, same as net sales as far as a percent. Where they had a problem here is marketing. Marketing was up 28% for the company. That's a big number. Big number. Now, do keep in mind, when you spend like that for marketing, that might actually be good for your business model in future quarters, right? You don't always see the the benefit right away. You could see the benefit next quarter or the quarter after and things like that, right? G&A only up 12% for the company, much less than net sales, was up much less than gross profit, so that's good. But, total operating expenses up 18%, which is higher than gross profit, higher than net sales on percentage basis, right? Which is not good, but once again, it's really because of that marketing line item. If it wasn't for that being so dramatic, we would have been fine here. Income from operations only up 7%, much less than gross profit, so that's means you have some sort of expense problem, and that was the marketing we talked about, right? And then, other income, they had a 200% increase here, so that was really good. So, income before income tax up 19%, net income up 21%, diluted EPS up 25% for Revolve here. You know, good report, not great, but good. And um this stock will be going higher over time, right? Tomorrow, who knows? Your guess is good as mine, but over time the stock's going a lot higher. It should be a $50 to $100 stock long term. Cash and cash equivalents $335 million. Their total liabilities is $293 million. Think about that. They have more in cash and cash equivalents than their total liabilities for the whole company. It'll be a $50 to $100 stock over time. You know, might not be tomorrow, but over time.