Transcription
So far, 2025 is turning out to be an excellent year for some stocks and a catastrophic year for others. Following the earnings reports of Salesforce and other companies, I went and investigated with Perplexity what the characteristics of good stocks are and what the characteristics of bad stocks or bad companies are. What should we look at, and could it be that this is actually the best opportunity we can have in excellent companies like Salesforce, like Adobe, and other companies? So we will look at those that are simply not succeeding this year, dropping between 22% and 27% since the beginning of the year. Of course, there are those that are rising, and they are rising significantly, but what happens with those that are falling, and these are large companies? So we will look at how the market finished today. We will look at some news that arrived in the last few hours, and immediately after that, we will dive in and try to decipher what the DNA is that we need to look for in good companies right now, and what the DNA is that we simply need to stay away from. We will do this fundamentally, and then we will also just look at the chart, and it will probably be much, much simpler. Ready for it? Let's go. [Music] So, what's up, friends? Thanks for coming back, as usual. Welcome to all the new joiners. For those who don't know, I'm Mich from America. I bring you everything that's happening from the other side of the world in a language only we understand. And as usual, everything you see is of course my opinion only. It is not a recommendation for action and it is of course not financial advice. This is how the market trading ended today. Notice how the charts look. The S&P is up 10.83%, the Dow is up 0.73%, the Nasdaq is up 0.93%, and the Russell is up 0.26%. When you see the Russell up 0.26%, you can infer that an interest rate cut is approaching. Why did this happen? Because we had a jobs report. Notice, except for one sector, utilities, everything is green. From consumer discretionary, industrial, financial, all are green. As we said, a strong day in the markets. When we look at additional parameters like the VIX, the volatility index, it drops to 15.2, meaning there is no fear in the market at all. Perhaps at the end of the week, I will make you a special video explaining what happens if this year is different. The dollar strengthens to 98.2. Bitcoin at 110, Ethereum at 4300, fuel at 63. In short, we don't have much to complain about, and especially we don't have anything to complain about when the yield is 4.16%. This, of course, signals to the market that it has room to breathe and can start running. So if you've made it this far and you're still not subscribed to the 192,000 subscribers, you are more than welcome. Towards the end of the week, you have a tab here called Courses. One of the most frequent questions is, "Mich, tell me, how do I learn all of this?" There is a whole free course here, you are welcome. And another thing related to the weekend. In my opinion, or I assume, on Saturday or Sunday, all the tickets for the conference will be sold out. So if you still want them, now is the time. If, when you are watching this video, go to the link which, if I remember, will be here in the description. It will be the first link. Go and book them because after that, there will simply be no more space. It's not a personal matter. And if you are already at the weekend and want to analyze stocks, and want to talk about stocks, and want to understand what's happening in general, not just on the weekend, but in general, you are more than welcome to join us on the platform called Discord, which is actually the community. That's where it resides, where it communicates and shares ideas and does all the things you would want to be a part of. So yes, yes, you are more than welcome to join us. We will start with this chart, which, as I said, I will make a special video about this topic at the end of the week. Negativity is with us again. They have returned to being negative. This is the AAII, the American Association of Individual Investors. And why am I encouraged by this? Because if sentiment is negative, then everything looks good, and this is very important to us because negative sentiment means everyone is preparing for the downside, and if everyone is preparing for the downside, perhaps we will get a surprise. We will talk about this during the weekend. This is the jobs report from today, and it shows that there are more initial jobless claims than people think and expect. What does this mean? More people are looking for jobs. What does it mean that more people are looking for jobs? The labor market is weakening. What does it mean that the labor market is weakening? They need to lower interest rates. Add to this the website, add to this all the things. In short, at the upcoming meeting, they will lower interest rates. We talked about this, I don't remember if it was in the morning video or the live stream. Who said they would only lower by 25 basis points? Maybe suddenly the Fed will surprise. I don't believe the Fed will surprise. This is not a Fed that surprises. But until then, there are still 10 days. Who knows what data we will receive. There is no doubt that all the Fed governors, what is called, from the various states, most of them are already saying they are lowering interest rates. Now it's just a question of how much. Broadcom announced results at the end of trading, and its revenue was slightly lower, but at the end of trading, it rose by about 3%. But the big story is what its CEO is saying. He mentioned that there is a secret order, not a number, but someone who placed an order of $10 billion plus, plus, and therefore this dramatically improves their forecasts. And yes, they currently see a backlog of $110 billion, a record high, it's crazy, but let's put this in context, not negative context, but so you know, this happened to us during COVID, and it's happening to us now. I want you to understand what, at least for those new to the market, should know about this phenomenon. The phenomenon is as follows: if you know there is a two-year waiting time, what do you do? You place an order. You say, "Put in an order, at most we'll cancel it, who knows where we'll be in a year anyway." And this is one of the... uh... one of the illusions in such large numbers. When we see such large numbers now, we immediately say to ourselves, "Wow, surely many buyers." It's not certain that all these things will materialize. That's why it's called a backlog, not revenue. Revenue is money that is counted. Even then, not fully, because revenue needs to be recognized. It's a bit more complex. No, the truth is, revenue, if recognized. Again, you don't record it. It's not that important. For the purpose of the matter, a high backlog is excellent. You just need to remember that it hasn't all materialized. Meaning, you can't put $100 billion into Excel. Excel will absorb everything. Put in $120 billion, it doesn't matter, but it's not entirely real. But undoubtedly, it shows that AI is here and very strong, and it's not giving up, and people are ordering like crazy, and it won't help, they are ordering like crazy. AI and Broadcom are signaling this. This will, of course, affect all markets, affect all chips, and so on and so forth. And Google's Waymo continues to expand, and it will likely start picking up people from the airport. It will examine this issue, mainly at a small airport in Phoenix, but it doesn't matter at all. Again, we are at the forefront, and Waymo is advancing significantly in all autonomous driving. We will talk about the competitor in the market soon. A forecast for a Tesla Lached driverless robotaxi service on October 31, 2025. This year, October. We are in September, that's a month and a half, a month, in three weeks. And see what happened in the last few days. From 23%, which by the way was decreasing, we have now jumped to 71%. This is solely based on Elon Musk's tweet, and in general, a 71% chance that Tesla will launch a driverless robotaxi, without a human driver, without a person on the side, already by October 31, 2025. This, of course, explains why the stock also rose today, and this, of course, explains why the stock can now gain very, very strong momentum. So follow Tesla, follow its stock. This doesn't mean it will happen. What we do know is that currently, in first place for downloads in the App Store in this field, Tesla has risen to first place. Why? Because it released the robotaxi app for everyone to download. Is this the harbinger that there will be robotaxis by October 31st? I don't know. There's no other way to describe this increase. Okay? Since September 3rd, yesterday, the day before yesterday, yours to today, it suddenly rose from 23% to 71%. And yes, someone always knows, but now you know too. If you think they are wrong, you can of course take the opposite bet and say this will never happen, and you will make a lot of money. I am not encouraging bets, I am just updating you. Rivian is going to lay off 1.5% of its workforce, mainly in back-office positions. Bitmain, BMNR, is updating today that it can dilute. It doesn't need approval because it has already received approval. Diluting doesn't mean issuing shares. This will, of course, affect the stock price. Every time it rises. Now what is it doing? It's not diluting for no reason. It is raising money and buying Ethereum with it. Every time it feels that Ethereum is falling, it might do this, it might not. In short, what can I tell you? Know, prepare. Don't panic. It is what it is. And Intel. I feel like I've read this news before, I'm aware, but this time I'll read it again, and it says the following: 2026 is the most important year. Make it or break it. This is the year that will determine whether there will be success or not. And I want to tell Intel employees the following: I've heard this sentence many times. Almost every new CEO takes a year, and he says this. This is the most important year, and it never succeeds. I don't know if it will succeed this time or not, but 2026 will undoubtedly be a year. The stock indicates that the market itself doesn't believe in it. Will you, Intel employees, create the turning point? Will you be the ones to cause the big change? He knows, and this means that now is the time to talk about who is in and who is out. The idea of who is in and who is out came from a slide I saw on CNBC during Scott Wapner's show around 3 PM, which said "In and Out." Stocks that are in and stocks that are out. All year to date, MongoDB is up 32%, Snowflake is up 41%. In contrast, Adobe is down 24%, and Salesforce is down 29%. You love Adobe, you also love Salesforce. There are good reasons for this, large companies, giant companies. So how can it be that their stocks look so bad? So I went on a journey with Perplexity and researched it over and over again. Perplexity. For those who don't know, I made a video about it last weekend. Three tools for investing. By the way, there's a link on the homepage in the community. How you can get a year for free if you are a PayPal customer with Perplexity Pro. Do it, a free year, $20 times 12, $240, they give it to you as a gift. Take it and run. So I researched this topic, and I want to bring you the insights, and they are as follows: Why are MongoDB and Snowflake rising? These stocks are rising because they had high profitability, accelerated growth. Each company has its reasons. The adoption of AI applications that the company produces, especially by large clients, to reduce their burdens. Okay? And the company raised its forecasts. Okay? Soon we will do, let's call it a DNA checklist for a company worth investing in. Snowflake, on the other hand? Its results are also improving far beyond what analysts expected. This shows that it has resilience. Resilience is durability. It is also benefiting from the aggressive push for generative AI. In other words, if you are in AI, and you influence AI, and you also drive companies to improve thanks to your AI, you are in. You are in the stocks that are rising. What happened to Adobe and Salesforce? Adobe is seeing a very significant decline. Why? Because its revenues are falling. The forecast is conservative, meaning a calm, conservative forecast. That's the word I was looking for. And the whole generative AI issue, the company that could perhaps ride the wave in the best way, and had the best starting position because it had all the customer data, and essentially everyone is eating its breakfast. One of the most common opening lines on Twitter for people involved in AI is, "This app just killed Adobe." The latest app is Google Gemini. Gemini has actually released Nano, a real one, that's its name, with which you can create images, insert images, edit, do many things. This, of course, kills Adobe. So the first problem is: Is AI killing your business? First problem. Second problem: Conservatism in reporting results, and then, of course, it affects revenue growth, profit growth, and of course, analyst disappointment. Salesforce ticker CRM. Adobe's ticker is ADBE for those who don't know. Salesforce ticker CRM. In a red situation, almost everywhere on Twitter, you will hear or read the sentence that says, "This app just killed Salesforce." Why? Because Klarna started the experiment which essentially said, "We can set up customer service without Salesforce, and we need fewer salespeople because of AI." And Salesforce's model is to sell based on licenses, based on people, based on heads, what is called. The model is declining, and therefore the company is declining. By the way, if you ask Marc Benioff, the CEO of Salesforce, he will tell you, "Absolutely not. We have many orders over a billion dollars, we are growing, and everything." But the market is not convinced. You can read various studies done by Morningstar and others, but ultimately, the market is not convinced. And then I went in and said, "Okay, what is actually creating the gap between these companies?" So the first gap is very high demand for cloud and AI solutions, which MongoDB and Snowflake have, which Adobe and CRM do not. The second is competitive pressure born from AI. Meaning, if you succeed in generating money, in monetizing from AI, you or your clients, you will see an uplift. If you are measured based on representatives, you will see a decline. By the way, this also explains why Nice's stock, for example, is falling. Why? Because it sells based on representatives. And if AI reduces service representatives, reduces sales representatives, then anyone who prices themselves at 20 times the number of representatives, and the number decreases, will receive less money. You understand the story. But it doesn't end here. I told Perplexity to find, based on what you just discussed, other such companies. We'll talk about it in a second. Other such companies. But I told it, in the S&P 500, it went and researched and found the following companies as examples: Atlassian, the stock fell 30% because AI-powered tools, because other AI-driven tools threaten its software model. Okay, that's the ticker. Team, TTD, and Gartner. By the way, both have seen significant declines. Why? At least partly because it is estimated that spending on inefficient marketing will decrease, and other AI products will be able to do what these companies have done until now, relatively for free, for free. Marvell and Super Micro Computer, which is very interesting because they are more in the chip sector, they are also not exactly soaring, okay? Why? Because of their business data and their products, which are not necessarily AI-focused, and therefore they are not seeing growth. Okay? So, so I went, and to finish everything, I said, let's make you a blueprint. What is a blueprint? Five things, five KPIs, key performance indicators, indicators that you can track. And yes, I am deliberately speaking fundamentally for a moment. In a moment, we will simply look at the chart. First, revenue growth rate. If you see that the company you are investing in, its revenue growth rate is not increasing, as we look, when we look at the comparison, remember that when I look at a company, I compare you, for example, Nvidia. Nvidia. We want... sorry. We want this chart, and let's take Salesforce because we talked about it. CRM. There's no keyboard. CRM. Sometimes this... you want to see. Look on the right side here. I always look at the revenue growth rate. This is the orange line. We want to see it rising, not falling. The same applies to profitability. We want to see it rising, not falling. Let's just, for example, see how it looks at MDB, MongoDB. MDB. Pay attention to what's happening annually. What do we have here? After it stabilizes, it starts to rise. Okay, this is what we want to see in these companies. This is not happening yet. Let's look at Adobe. Adobe. It's starting, but the market hasn't recognized it yet. It's starting because I told you, wait a second, we'll talk about the opportunity. So, first, we want to see revenue growth. Second, we want to see that customers are not leaving or reducing their engagement. Third, we want to see that R&D expenses as a percentage of revenue are decreasing, meaning they are becoming more operationally efficient. And fourth, profit margins are improving. And fifth, how many customers are adopting their products. Okay? Okay, if you follow these five KPIs and examine them, you will find the companies that can suit you. But I am here to tell you that there is a parallel way to this, which I believe will find it much earlier than when it happens. Let me explain why. Salesforce reported two days ago. The next time we hear from Salesforce about business data, really, if it reports something, some crazy contract that no one knew about and it will have to report, that's another three months. What happens during these three months? Adobe, also about two months. The way... I'll call it parallel, I'm not trying to say better or worse. I think it really depends on you how you prefer. The parallel way is to look, because sorry, before the parallel way, let's look at the charts. Why charts? There are people who monitor this all day. They meet with clients, they meet with the CEO, they meet with this person, they talk, and suddenly they start saying, "Listen, something is happening here, there's a feature, people are working on Saturdays, on Sundays, something is happening." How will you see this before the earnings report? This is Adobe's stock. Do you agree with me that this is not happening yet? Meaning, currently, the general trend is a downward trend. In a moment, we will talk about what we do see here now. Look at Salesforce. What do you see here? A general trend. A downward trend. Look, for example, at Snowflake. A general trend. An upward trend. Look at MDB, MongoDB. A general trend, a consolidating trend, rising, right? Okay. So what is our way? To look three months ahead. Let's start with Salesforce. Look at what you see in Salesforce. What you see in Salesforce is that it has already hit a very strong floor, one, two, three, four, five times, in the price range between 226 and 232. In other words, every time it reaches this price, it is bought. If it is below the 150-day moving average, the general trend is downward, but this is exactly the time when we can start following it, and it's really not the time to buy it, because you don't know if the situation will improve. But if it breaks the descending highs line that started at 296 and went all the way down to 274, here in the area of 261, it will indeed be below the 150-day moving average, but we will start to see a change in direction. We will see this long before the financial reports come out, and then it is very possible that we will catch it before it changes direction upwards, because if we catch it in this transition, given that it breaks through, and I can't say if it will break through, we have almost 40% here until the price it was at 369 and 367. By the way, for those who want to know, this is called a double top. The same story. We can see this with Adobe. And notice with Adobe, a no less interesting story, because Adobe, one, two, three, four, five times, jumped exactly at the same point at the price of 332.01. Notice, today it also jumps exactly at the same point, creating a hammer candle, which, of course, often signals the beginning of a change in direction upwards. In the case of Adobe, as in the case of Salesforce, we don't need to wait for the results report to say something is changing. All we need to do is draw trend lines and say, as soon as it crosses the trend line, for example, at the price of 355, something is happening. Now, I can't tell you if this means it's consolidating and will rise, etc. I do know that something will happen, and there is a legitimate question to ask: they look bad, why are you looking at them? My assumption is as follows: at the head of Adobe stands an excellent CEO, correct. The stock is not good right now, and yes, they had challenges, and yes, they were not managed well enough. At the head of Salesforce stands an excellent CEO. When I say excellent, I mean, in terms of experience, better than any CEO you know. Okay? Both are excellent. It cannot be that they are not doing everything to change the situation. And yes, they are aware of the situation, and yes, they are aware of their situation. Processes take time. The market knows to sniff it out, to find it, to smell it, long before. Would I bet against Adobe? No. Would I bet against Salesforce? No. Would I bet against Marvell? No. Would I bet against TTD? No. I would not bet against any company. What I would do is wait for it in the next round, but in a good way, so that when it changes direction, I catch it at the beginning of the rise. And why catch it at the beginning of the rise? Because if you don't catch it at the beginning of the rise, you know what happens, right? The beginning of the rise is when it breaks through, not now. What happens when you don't catch it at the beginning of the rise? You know, you chase it when it's running and say, "Damn, I missed it." So you have the trend line, you have the 150-day moving average. You like fundamentals, check the fundamentals. Whatever is convenient for you, each at their own pace. I personally think that on the chart, we will see it much earlier. Until the fundamental explanation arrives for why we see this on the chart. Do you think these companies will completely collapse? Maybe. Maybe they are the ones we will leave behind. The rockfill of AI. Perhaps we will continue to follow live in a few more hours. Tickets for the conference, for the community, everything is here. For those who are not there, they simply don't exist. Until the next video, until the next live stream, I was Mich from America. Thanks for watching. I hope this added a lot of value and a slightly better understanding than how you arrived at the video. Bye. [Music]