Transcription
Hello everyone, at the gathering in Sydney, I mentioned that this market has a lot of uncertainties. For instance, Tesla dropped from 480 to around 370 after rising from over 200 to 480. I didn't dare to buy in at the low because the uncertainty surrounding Trump is too strong. I told everyone that a decision would be made by the end of February.
However, there are two stocks I must hold onto: Palantir and Tempus. I've mentioned this many times, but this time I will only talk about Tempus and AI. Since that gathering in Sydney, Palantir has risen from over 70 to 112, and now it's back to 110. Tempus has gone from over 40 to 112, and now it's also back to 110.
Palantir is becoming more widely recognized. Let me discuss Tempus and AI. First, based on past technological advancements, when a new technology emerges, the first to benefit are those who create technological tools. It's like a gold rush; the shovel sellers get rich first. The shovel makers are companies like NVIDIA and TSMC.
In the second phase, I have to ask, who will strike gold? Who will prosper in AI? It will definitely be AI applications. To put it in perspective, it's like the internet. Initially, those who thrived were the internet providers, like Cisco. Later, it was the internet applications that became successful, such as Google and Microsoft.
What is Tempus AI? It is a company that will be able to make significant profits by integrating AI data into daily life, greatly enhancing your quality of life. These companies will make a lot of money.
What kind of companies will make big profits? They usually have three key elements that determine whether these application companies will succeed: First, you need sufficient computing power. Second, you need smart algorithms. Third, you need data.
In all applications, Tesla is actually close to succeeding with its full self-driving technology, applying AI to automobiles and then to robotics. However, I firmly believe that what is urgently needed and can generate a lot of money is healthcare.
Palantir focuses on improving operational efficiency for companies or governments using AI and big data. That's a different matter. Healthcare is a global concern because medical costs are rising, pushing many healthcare systems to the brink of collapse. The UK's NHS is nearing collapse.
So, what does Tempus AI do? First, it has gathered a vast amount of data. Google is one of its partners. It has collected astronomical amounts of data and collaborates with 85% of pharmaceutical companies and 65% of global healthcare institutions. It has read all the academic journals and advanced medical reports worldwide, creating a comprehensive AI dataset.
From this AI data, it can perform several functions: diagnostics, drug research, and personalized precision medicine.
How is its revenue structured? First, it assists in diagnostics. It is actually an expert in cancer detection. I asked doctors, and its accuracy in reading scans has reached 94%, surpassing many professional radiologists. If it can improve its accuracy further, no one will be able to ignore it; they will have to pay for its services.
Currently, 60% of its revenue comes from healthcare institutions that use its system to assist in diagnoses. For example, any doctor determining whether a patient has cancer or not would use this system for reference. If its accuracy reaches a certain level, insurance companies will have no choice but to rely on it.
This accounts for 60% of its revenue. The remaining 40% comes from partnerships with pharmaceutical companies that utilize its medical knowledge and case studies to develop new drugs using AI.
Additionally, it is now developing some B2C business. Why? Because it made a purchase three weeks ago for two reasons. First, Nancy Pelosi bought in. She is a stock market guru, and her investments are usually significant, but this time she didn't invest heavily, so don't overestimate this.
Second, it developed a system called Olivia. Anyone can register and input their medical history, combining electronic medical records. It can connect various data sources, including videos, doctors' notes, medical reports, heart rate data, and even your Apple Watch.
This system monitors your health and can provide regular summaries. If any issues arise, it will immediately offer suggestions. You can also ask it about your current condition and what you should or shouldn't eat.
Currently, it is overwhelmed with registrations because so many people want to sign up. I believe that initially, it won't charge for this service, but once the system matures and proves beneficial, charging $50 or $20 a month will be acceptable to many, as its system is more knowledgeable and accurate than most doctors.
Now, let's look at its financial figures. This quarter, its revenue is $600 million, slightly missing this year's target, but next year it is projected to reach $1.2 billion. A few months ago, it suddenly spiked, and I advised against buying because it jumped to $80. It has since come down slowly.
I warned against buying because it has negative cash flow. Recently, it acquired a company called Ambry Genetics, which specializes in cancer and rare disease diagnostics, for $600 million. This acquisition is expected to bring in over $70 million in sales and $40 million in gross profit. By 2025, its cash flow is expected to turn positive.
This is crucial. Whenever these companies transition from negative to positive cash flow, their stock prices soar. Remember Tesla? When it released the Model 3, its stock skyrocketed.
Now, Tempus AI shows similar signs. First, we need to consider a few things. Is this company going to make a lot of money? I believe personalized precision medicine and AI big data in healthcare are the future trends. We spend a lot on healthcare; the U.S. spends 16% on medical expenses. We desperately need to reduce costs and improve accuracy, and one way to do this is through AI.
This is where Tempus AI comes in. Second, I read a paper stating that collecting data like Tempus AI's is becoming increasingly difficult due to stricter regulations. Tempus AI has established a reputation and gained trust, allowing it to integrate such vast amounts of data. Its competitive moat is deep because it continuously increases its data pool, which has reached astronomical levels.
Moreover, it is constantly updating and iterating its learning process, making it increasingly difficult for competitors to catch up. In the foreseeable future, I don't see any rivals that can match it.
Of course, it has its risks. One risk is the potential for privacy breaches, which could severely damage its reputation. However, the chance of someone catching up to it is minimal. This situation creates a possible cash flow that it can sustain.
What is its current market value? It's around $7 billion, which is very low. $7 billion is six times its projected sales for the coming year. Do you know how many times Palantir's sales are valued? Its current market cap is $200 billion, which is 200 times its sales.
Don't think that 200 times is unreasonable. Years ago, Netflix was also valued at 200 times its sales, and it kept rising. I can tell you that at a turning point, it can reach sales of 200 times. That's quite scary.
Now, Tempus AI is only at 6 times its sales. If it successfully transitions to a B2C subscription model, the potential is limitless. As more data accumulates, insurance companies will eventually be forced to use it.
Let me explain. It only charges $10 for a diagnostic. Before a doctor makes a judgment, insurance companies will require them to consult this system. Why? Because they want to verify the doctor's judgment. They can make a second consideration based on its suggestions.
If the doctor fails to use this system and makes a significant error, they could face serious consequences. If the system identifies an issue with the doctor's judgment, the doctor could be held liable.
Therefore, it will become essential for everyone to consult this system because insurance companies will mandate it due to the risks involved. After using it, you can dispute its findings or choose not to believe it.
Third, it will provide advice on whether to undergo surgery, chemotherapy, or targeted therapy, potentially saving you treatment costs. You might have been misdiagnosed.
Once it reaches a certain threshold, it will rapidly gain traction because Tempus AI, especially after acquiring this company, is on the path to positive cash flow. I have a lot of confidence in it.
However, I am not telling you to buy. Even so, I am continuously holding onto Tempus AI because this is the moment to seize opportunities. I am not urging you to do the same, as its market value is low.
A stock worth several billion can become worth hundreds of billions. Finding such opportunities is a lifetime pursuit. You should research this yourself. Essentially, in the short term, I believe this is the most promising stock.
That's all for this segment.