PREPARE ASAP for The New AI Trade... (Tesla Stock)
Overall Thesis
Position for post-midterm election rally and the emerging AI trade, with Tesla as a key beneficiary, while expecting near-term volatility but not a major correction.
Narratives
The speaker views AppLovin's roughly 50% decline over two and a half months as an overreaction to a minor earnings miss, calling it a likely opportunity given management's projected 30% compound growth.
Key Arguments
- Stock fell from ~$620 to $316 despite only barely missing earnings
- Management projects 30% compound growth for the next 10 years
- Seen as a sign the broader 'broadening trade' is still early
Predictions (1)
The speaker names Marvell among AI hardware stocks he remains bullish on, citing continued demand for data center connectors as a potential winner even as he rotates focus to the new AI trade.
Key Arguments
- Continued demand from data center connectors
The speaker views Tesla as the best way to play the 'new AI trade' of robotics and automation, citing Robotaxi scaling and Optimus production as catalysts. He believes Tesla is mistakenly grouped with beaten-down AI hardware stocks despite strong execution, and expects Wall Street to re-rate the stock higher over the next 6-12 months.
Key Arguments
- Robotaxi continuing to scale and Optimus nearing production
- Tesla is wrongly grouped into the AI hardware category which is out of favor
- Retail investors love Tesla and the execution/valuation gap is widening
- George Soros fund increased its Tesla stake 64% last quarter after being short for years
The speaker expects short-term volatility into the midterms due to hedging by large institutions, followed by a strong multi-month rally once hedges are removed in October. He draws on historical precedent of a 9-10 month rally following midterm elections.
Key Arguments
- Wall Street is hedging now for midterm-related event risk (Iran, Fed)
- Hedges typically get removed in October once uncertainty clears
- Historical pattern shows strong rallies in the 9-10 months following midterms
Predictions (1)
The speaker expresses bullishness on Qualcomm as part of a group of AI hardware names he still likes, particularly citing wearables demand, though he prefers rotating into software/robotics broadly.
Key Arguments
- Potential demand from wearables
The speaker is bullish on AMD if it continues to take market share from Nvidia, viewing it as one of the potential winners remaining in AI hardware.
Key Arguments
- Potential to steal market share from Nvidia
Hedges & Caveats
- INVEST AT YOUR OWN RISK AND NEVER LISTEN TO ANYTHING SAID IN THESE VIDEOS AS FINANCIAL ADVICE. BECAUSE ITS NOT.
- Volatility expected around midterm elections
- Acknowledges uncertainty in market direction despite bullish positioning
- References portfolio hedging strategies as risk management