Transcription
This is the greatest investing opportunity of our lifetime, and it's not even close. Now, look, I've made a lot of money over the past six years. This is next level. This is a whole different story. Way bigger, way more violent. And as always, the cynics, and the doubters, and the skeptics, they're going to miss out. I don't care. I'm here to show you how the top investors are going to use this setup to create generational wealth and change their lives. Don't click nothing. Don't smash nothing. Don't buy nothing. Just listen to me.
Now, the stock market is 100% the best wealth creation mechanism of all time. That's a fact. Okay. But the other fact is that it happens slow, right? 90% of the time, this wealth creation happens through a slow compounding process. Then you look back, and after seven years, the S&P just doubled your money, right? But every few years, we have a huge, massive leap, an outlier. And that leap is what we have right now. That leap is what I want to talk to you about. The 7%, the 10%, the 12% you're going to make on the S&P 500. That is super important. But that's not the topic of today's video. I think we're on the brink of a massive, huge leap that happens every couple of decades. And it happened in the industrial revolution. It happened when personal computers came out, right? It happened when the internet was introduced back in 1995, right? And it, of course, happened with mobile phones. And now we're in this AI moment.
And in today's video, I'm going to reveal everything. I'm going to show you every single category in AI, which is going to make a lot of money, generational wealth. I'm going to show you every single company that's going to dominate every single category, every single stock, which I think is set up for this massive leap, everything. Then, at the end of the video, I'm actually going to rank them by tiers. Tier one, two, three, four, five, so you can see the whole ranking, not just the whole list. And at the end, I have a little surprise for you. It's going to be the one stock I've never talked about, but we'll talk about that at the end of the video.
So, let's first and foremost break the myth right now. If you go on social media, you'll see a lot of discussions that this market is very, very close in its patterns to what happened in the dot-com crash of 1999. Right now, the major issue with this argument is that the dot-com collapse never produced so much money, and so much profit, and so much revenue, and so much efficiency. Cisco, for example, which was a victim of a massive capex push, and then it stopped. Right? Nothing to do with compute. GPUs get obsolete after a few years, they get replaced. The compute life cycles are not telecom. To assume that Nvidia is Cisco is a silly argument. And you have, of course, the pets.com argument, right? Doesn't apply. The companies that are making the money right now in AI are the Mag 7, are the biggest companies in the world, not some startup from Kakami, some sort of website, right? We have deep integration into productivity tools that are increasing revenues and profits, and we're actually having a massive impact on the economy that is so big that to claim that this is pets.com is a little bit silly.
Now, another misunderstanding, which I think is kind of phasing out right now, is this: "Oh, only generative AI is going to make money. The LLM is where the money is, the chatbots." No, this is not where the money is, right? This was hype. This is the shiny chatbot that is super cool, but it's not where the money is, right?
Another thing I want to talk to you about is the famous Michael Burry thesis that this is all a bubble and it's a self-feeding loop, etc., etc. But let's address this real quick. So, Michael Burry is saying that right now the market is about to pop. Now, Michael Burry is known to come out with these warnings every once in a while, right? But to say that this is 1999, we can just match up the numbers with what happened in 1999, right? So, the invention of the internet is attributed to the launch of Netscape in 1995, right? Just like ChatGPT came out in November of 2022. NASDAQ, for those four years where Netscape was released, did 400%. So far, since the release of ChatGPT in 2022, in the same period, we've done 120%. We're about a quarter of what we did in the 1999 dot-com crash. Okay, look at the P ratios. The P ratio back then was 33. It's currently 24. It's not even close to 1999. I think that debate is a little bit ridiculous, if you ask me.
So, I think AI is for real, but that doesn't really help us as investors. I mean, everybody with half a brain understands that AI is real. The big question is, how do you make money off that, right? So, if AI is real and we're not close to 1999, I also would say that we're extremely early. I think this is the second or the third inning of a very, very long baseball game, and there's a lot of money to be made.
Okay, so there's going to be obviously lots of trash, just like we had in 1999, because there's going to be a lot of pretenders. You have to be very, very careful, right? Every time we have a huge leap, there's going to be free riders, okay? And there's going to be shiny large language models. But ignore all of this smokescreen. This is garbage. What I want you to focus on is one thing and one thing only: these three categories. This is where the money is going to come from over the next 10 years in the AI leap: infrastructure, productivity, and industry-specific AI solutions. This is what we're going to talk about in today's video. And when I go over all the stocks that fit into this, and then when I'm going to rank them based on my tiers, and then you'll see the entire chessboard. I'll also talk to you about how I think is the right way to structure this AI picks and shovels portfolio. But let's not get ahead of ourselves.
Okay. So, what I like to see when I look at a business or an investment, I like to see two things. Because I think a lot of people focus on understanding the trend, and a lot of people understand the trend. AI is important. AI is generating so much money. It's not 1999, but understanding this is half the problem. The other half of the problem is that you have to find gaps. If you don't find gaps, you make less money. If you figure out the AI trade and you get on this AI company and you ride it out, you'll make money, no doubt. But if you find gaps where companies are misunderstood and mispriced, you'll make more money, which is what ultimately the goal is, right? Both are key elements in my investing strategy. I want to see the quality go up, and of course, having to do with the AI. But also, I want to see the price stagnate or even possibly actually maybe doing this, come down. Okay? I want to see the trend, and I want to see the gap. This is my ultimate investing setup. This is what I'm looking for. But it's not the exclusive way where I invest. Sometimes good stocks are priced accordingly, and sometimes that's even good enough for me to jump in, even though there's no gap. But for this ultimate big splash, this is what I want.
Now, I'm going to show you in today's video both the idea of a company that's priced accurately but still has so much potential that it is investable, but also the opportunities to make the big splash. What I think is going to happen though over the next five years in the market is this breakdown. And I'm going to grade it F to A+. I think 60% of investors will chase the hype names that have really almost no fundamentals, but a lot of noise, a lot of hype, and they're going to shoot up like a star and then flame out. And they're going to try to hit a home run with every single investment. That's an F. 60% of people are going to fail. Okay. Another 20% will say, "Well, I'm not getting into this. I'm, this is too much for me. I'm just going to stay with my normal stocks." And they're going to miss out on this. Well, that's a C, because I mean, you still survive, but you miss out, right? 10% will make good quality choices. That's a B minus. They're going to write it up. They're going to make some money. That's wonderful. But 10% will score A+. They will find quality AI stocks with pricing gaps. This is proven quality and upside all in one with a bad price. Imagine going into a store trying to purchase an iPhone and finding out, hey, today we're selling these iPhones at $200 a pop. Yesterday it was $1,000. I mean, you're going to go crazy, right? Only in the stock market, somehow this concept is misunderstood.
Okay, so let me show you what I mean. Okay, in the AI infrastructure game, there's really three ways to make money over the next five years. I'm talking about generational wealth, massive amounts of money. What am I talking about? So, if this is the AI chessboard for the next five, ten years, right? There's really three categories that are going to go ballistic: obviously infrastructure, which is going to feed into two categories: number one, productivity, and number two, business-specific solutions. Now, I'm going to walk you through each category, and then I'm going to show you the stocks that are actually going to dominate each of these, which is going to be kind of the first step of building this AI portfolio that you want to have, because that's certainly the goal here. Right now, not every stock here that I'm going to talk about has to be in your portfolio. The idea here is to do research, to make your own decisions, right? I'm not telling you to buy every stock here, but I'm showing you some quality names that are going to be dominant in their category where you go in and you research and you find out and you pick the ones that fit you, right?
So, let's talk about infrastructure. Number one, we're talking about the cloud providers, right? This is the real estate. Number two, the semiconductors. These are the engines. Then you have the energy and the cooling. Well, these are the gas station guys, right? Of course. Then you have the data infrastructure and the architecture, for example, the blueprints for these cars, right? All of this is infrastructure. I'm going to go deeper into this in a second. Okay?
Then we have the productivity layer. This is the AI automation, the robotics. Essentially, how we automate using AI, whether it's done through stuff like self-driving, for example, Tesla, or robotics, for example, Tesla, right? Or we're talking here, of course, about software efficiency, okay? Software that makes jobs into AI automation. We'll talk about that as well. Here we have a stock I've never talked about. Okay. And of course, in the business-specific solution, we have the operating system that is supposed to take all of this AI and use it and utilize it efficiently in a scalable manner to generate dollars. All of this is going to comprise of the AI global chessboard. And as a smart investor for the next five years, you have to dip your toes in all of these categories. Now, you can do it in different ways. I'll talk about in a second. But this certainly has to be the ground level of how you think about building that portfolio.
So let's talk about the first layer. This is the infrastructure layer. First of all, all of this exists on real estate. That real estate is the cloud services. Okay? This is the Amazon, the Google, the Microsoft, and now the Oracle of the AI world where the real estate is owned by these guys. Okay? All of them facilitate these farmers who farm these lands. Amazon, Google, Microsoft, Oracle are the cloud infrastructure layer, and they will all make a lot of money. This is the biggest. This is going to be the fastest growing. This is the most integrated with businesses, and this one has a lot of B2B clients who cannot take one, two, or three. They'll have to stay here. Okay?
Number two, in the semiconductor layer, we have Nvidia, which is going to dominate GPUs. AMD is going to make very similar strides. We have TSMC, which is a monopoly in semiconductor production. ASML, which is a monopoly in the machine that builds a machine, the lithography machine. And Micron, which essentially is becoming a quasi-monopoly in high bandwidth memory, at least for the next five years. Then, of course, we have the energy and the cooling, because somebody has to power this and cool this. And in this layer, we have BE that provides on-site solutions, VRT with the cooling, and CG with nuclear power, which is super important for the AI world. Then we have data infrastructure, for example, monitoring DataDog for connectivity, and MongoDB for database. Then, of course, we have the architecture, the blueprints, okay? For these, it's owned by Cadence and ARM, and they're essentially just sitting there printing money, no matter who wins.
As you can see, these green check marks, they're there because all of these stocks appeared many, many, many months ago on my top stocks list in my academy over at patreon.com/domnash. Go check it out. If you want to actually have access to these sort of stock analysis tools, check out the academy of 34,000 members in the academy. And it's not because of my beautiful hair or my Michigan t-shirts.
Now, the second layer I want to show you here is what I call the productivity layer and the business-specific solutions. Okay? Here we have the cybersecurity with CrowdStrike, Zscaler, and Fortinet. All on my list, by the way. All of them are doing different things. For example, here we have the firewalls. Here we have the endpoint security. Here we have the access. Palantir is literally the only operating system for AI for business-to-business operations and AI implementation at scale. On the automation and robotics, we have Tesla, both on FSD, robo-taxi, and robotics. We'll talk about that in a second. And in software efficiency, we have UiPath, ticker PATH, stock I never covered. And that's a stock that has one of those setups I told you about. We'll talk about it also in a second. Okay?
So, you have the list, but now it gets interesting because now I'm going to show you something cool, right? If you look at Palantir, for example, a lot of people say, "Well, Tom, it's too late for Palantir." Well, I mean, that's already done, you know, 10x. And yes, I've done 10x, but I don't know if you've done 10x, but you can still make a lot of money on it. Why? Look at the setup right now. Okay? You have to look for gaps. Is there a gap? Let's check it out. Right. Palantir is a prime example right now. Okay? It's a $400 billion market cap company. Okay? It's up only 3% over the past 12 months. Okay? It has no debt. It has almost $8 billion of cash. Revenue growth is 70%, expected to grow 100% next year. 32% operating margin, an increase of almost 200% in operating margin from last year. Free cash flow $2 billion, an increase of 90% from last year. This is a $500 stock trading at $130, which means you have a 4x potential here. Why are you obsessing about the P ratio and why are you obsessing about the fact that it has done 10x from where it used to be in 2022? Who cares? Look at the objective data: great business, massive growth, AI exposure, and this stock has done nothing over the past year. But as I imagine, nobody wants me to talk about Palantir because I've done plenty of that. That's not a video about Palantir, but Palantir is just one example. There's others.
For example, we have Microsoft, an even bigger company, a company that's up actually 93% since we added it to the top stocks list, right? MSFT is the ticker. It's a $3.7 trillion company. This is a behemoth. But look, over the past 12 months, it's down 10%. The stock price. It's growing at 15% for a $4 trillion company. The operating margin is 45%. It's actually up. It's increasing. The P/E is down from 33 to 29.5. And if you look at this business between Azure, essentially being a massive staple in cloud, and the entire business enterprise that they have, the software enterprise that they have, the integration of Microsoft into corporate America, into B2B, is one that cannot be severed. Between cloud and that, Microsoft is looking at massive growth over the next five years. And as you can see, the numbers are not lying. And according to my model, this is a $1,400 $100 stock, which means it's currently trading at $400. The actual value, intrinsic value that I see here is $1,420, which means it has a massive 250% upside in the next five years. And that's a $4 trillion company. It's not some Kakami startup or small cap or penny stock. This is a massive company trading at a huge discount, even though it's taking over the AI world along with the Amazons of the world and other companies as well, which I'm going to show you.
Look at this. Okay, what about Amazon? Just mentioned that ago, right? Amazon just did a little spike of 27%. But I've been on that for a while. It's actually up 72% since we added to the top stocks list, right? But check Amazon out. Amazon is up 27%. Essentially, just the S&P 500. If you would have set the S&P 500, you would have done 27%. Look at the P/E, it's down from 30 to 26 over the past year. Revenue growth is 12%. $716 billion. Cash is up 22%, $123 billion. The operating margin is $85 billion, and net income is up 17%. It's now $91 billion. This is a $2.5 trillion company and it's trading at $267, where the real value should be $1,000 plus. So, in my view, based on my model, this is a 300% upside in the next five years.
And now let's cover Tesla. Tesla requires a little bit more business analysis than others, right? So, right now, there's a lot of arguments against Tesla. Revenue growth is slowing down, right? Minus 3%, low margins. The capex spend is insane, $9 billion per year. The very high P/E ratio, etc., etc. And it's only up 27% just like Amazon over the past year, right? But look at the numbers. The numbers are solid. $95 billion revenue, $6.2 billion free cash flow, six times more cash than debt. It's not a bad setup considering the fact that the company is phasing out, phasing out completely out of the vehicle business, which means that Tesla is finally not a car company. And it's going into FSD, energy, and robotics. Three elements where Tesla is going to dominate and monopolize in self-driving, in energy storage, and in robotics. Now, out of all of these, I would say that the biggest one is robotics. I think robotics is going to be the biggest secular trend we've ever seen in our lifetime, even bigger than AI. And I think Tesla is sitting at the forefront of this, and most people are going to miss out because Elon is bad, or because the vehicle data isn't as good. They can't see this pivot happening. But if you think about a Tesla, between the manufacturing expertise, the battery expertise, the electric motors, the vision sensors, and the AI, and all the money and the insanity of Elon and the best teams, I think it's pretty silly to bet against Tesla and robotics. And if this is the biggest secular trend and they're in the pole position, why would you not say, "Hey, 27%, that's it. Just S&P 500." I mean, this is probably a way bigger company than people think it is right now in 2026. And it's actually up 208% since we added it to our top stocks list.
Now comes the interesting part. Okay, this stock I've never covered on this channel. It's called UiPath. Ticker is PATH. Path. Okay? So, this is a company where the free cash flow over the past four years went from $68 million to $350 million. Okay? Over the past 12 months, it's down 25%. By the way, it's a company that automates everyday activities by employees by AI. Essentially, a software automation business. Okay? Down 25% over the past 12 months. Revenue is growing at 13%, now at $1.6 billion. Operating margin went from 56% just four years ago to plus 4% now. Free cash flow went from $68 million to $350 million now. No debt, $1.5 billion in cash, 15 forward P/E, and four times sales. Massive gap. And it's sitting primely on this AI automation. Why would you not look at this and say, "Hey, this is super interesting, and the stock is down 25% over the past year."
Now, if I had to, I would rank these companies this way. But make no mistake about this ranking. There are no bad companies here. Look at the bottom, right? Look at the bottom. All are must-have stocks. Everything I showed you in today's video is a must-have stock in the AI chessboard, right? But these are the tiers that are in my mind, right? Number one, I have Palantir and Tesla. They're my top-tier stocks. And that's why they are 60% of my portfolio. The other 40% is the S&P 500, right? They have the most upside of any stock in the stock market right now. But they also have a lot of risk because both of them have their own issues, which I've discussed plenty. Tier two is where the safe money is: Amazon, Microsoft. Okay? These two have been mispriced by the market completely. One is down, one is lagging the S&P 500. Great upside and very low risk because these are massive behemoth businesses. In the third tier, we have the stocks that have went up significantly but also have massive upside: the Nvidias of the world, the Googles, the TSMC, the ASML. These are monopolistic monsters, but they're priced in accordingly. Tier four is where we have the question mark. Can Oracle convert its database business into the cloud? Can AMD actually generate enough business to compete with Nvidia? Can Micron become from a cyclical memory provider in five, six, seven years into an actual business with a moat? Right? For the next five years, they're good, right? But what happens next? Some question, some uncertainty. And then everything else is in tier five. One through five are all wonderful companies, but this is how I rank them. It doesn't mean that this one is worse than this one, or this one is better than this one. It's just my way of thinking about it. If you want my honest opinion, all of these, all of these are what I would put in a perfect AI portfolio.
Now, there's one more stock which I think has an insane setup, and I'm going to reveal it this Saturday. This Saturday, May 16th, at 2 PM, I'm going to reveal the stock on my masterclass on investing, which I'm running live, free on this channel. Register below. There's a link. Register, claim your spot. I'll see you on Saturday, May 16th, 2 PM. I'm going to reveal that stock. I'm going to analyze it, break it apart. Going to show the whole process of how I invest. Come. It's free. It's education for you guys. And as always, if you'd like to join the academy, 34,000 members, patreon.com/domnash, you'll get access to my top stocks list, to the Discord, to the community, and you'll be able to DM me personally and chat with me and ask me questions. I'll see you on Saturday, May 16th. Peace out.