If You Missed 15x on Nvidia, Buy These Stocks Now

Finance-focused summary of the subtitles

Macro / market setup

• Question posed: “Does the market need good news to keep stocks moving higher?”
• S&P 500 valuation context
  • The S&P 500 was referenced around 7,100 and 7,500.
  • Forecast index earnings: $334 for the 500 companies.
  • At 7,500, implied valuation was said to be about 22x P/E, near the 10-year average, and below recent peaks of 28–30x.
• Earnings momentum (recent)
  • Investors saw about 27% earnings growth.
  • 84% of companies beat expectations.
• Risks flagged
  • Inflation: consumer prices +3.8% YoY; wholesale prices +6% YoY (warning that inflation may keep working through).
  • Consumer weakness: commentary from Whirlpool CFO; appliances shifting toward fewer big-ticket purchases.
  • Geopolitics / energy: a Strait of Hormuz blockade freezing 20% of global oil supply, with risk of renewed US strikes.
• Expectation / positioning
  • Limited positive catalysts ahead; potential for a recurring ~5% correction.

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AI theme: “what’s next” and ETF framework

Core investment theme: AI infrastructure bottlenecks—memory (DRAM/storage), chip/infrastructure, and power.

AI ETFs mentioned (and what they target)

1. Roundhill DRAM ETF (DRAM)

   • Narrative: AI memory shortage driving upside.
   • Performance: up ~99% in 6 weeks since launch (described as doubling money in <2 months).
   • Fund size milestone: reached $6.5B assets quickly (per speaker).
   • Holdings concentration:
     • 9 stocks total; only 4 available in US markets (pure-play US memory).
     • Foreign memory access noted: Samsung, SK Hynix, Nanya Technology.

2. Wedbush AI Revolution ETF (IVES)

   • Focus: broader AI transformation (30 companies).
   • Performance: up ~16% YTD.
   • Examples / included names: AMD, Micron (MU), Broadcom (AVGO), Nvidia (NVDA), plus other less-pure-play names (e.g., Apple, Shopify). Broader discussion also mentioned IBM, Salesforce.

3. Wedbush AI Power and Infrastructure ETF (IVEP)

   • Focus: data center power generation bottleneck (30 stocks).
   • Described as least “pure” because many energy providers have other revenue streams.
   • Example: Southern Company (SO)—data center revenue grew 42%, but remains a small portion of $31B total sales; overall growth ~5%/year.
   • Specific power names were emphasized later (see “Pure-play stock picks”).

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Shortlisting methodology / “adjusted valuation” framework (explicit steps)

The speaker uses a price-to-sales (P/S) adjusted for growth approach:

1. For each company, compute P/S (price-to-sales multiple).
2. Estimate expected revenue growth (from analyst forecasts).
3. Calculate:
   • Adjusted valuation = (P/S) ÷ (revenue growth rate)
4. Compare adjusted values to identify best relative deals, even after major run-ups.

This is applied across:

• DRAM holdings (memory)
• IVES chip-related names (semiconductors)
• IVEP power-related names (data center power)

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DRAM (memory) details: top picks + key numbers

US memory “pure plays” in/connected to DRAM focus

• Micron Technology (MU): expected revenue growth 89%
• Seagate Technology (STX): expected revenue growth 35%
• Western Digital (WDC): expected revenue growth 10%
• SanDisk (SNDK): expected revenue growth 112%

Valuations (P/S) cited

• Seagate (STX): 15.8x P/S (most expensive)
• SanDisk (SNDK): 15.3x
• Micron (MU): 15.0x
• Western Digital (WDC): 14.3x

Growth-adjusted “best buys” (Adjusted valuation = P/S ÷ growth)

• SanDisk (SNDK): 0.14 (speaker’s “best” in the group)
• Micron (MU): 0.17
• Seagate (STX): 0.45
• Western Digital (WDC): 1.35 (distant fourth)

Context on prior performance

• SNDK: +3200% return over the last year (per speaker).
• Other big run-ups over ~last year:
  • MU +714%
  • STX +665%
  • WDC +894%

Rationale / linkage to AI demand

• Memory bottleneck + AI infrastructure buildout and accelerating compute demand.
• Hyperscalers cited: Alphabet, Meta Platforms, Microsoft, Amazon
  • Spending: $725B this year
  • Growth: increasing 35–60% per year
• AI usage/statistics cited:
  • 57% of companies have AI agent programs in production.
  • 1 in 4 large companies spending >$5M/year.
  • Anthropic: usage +8000% over first 3 months of the year (speaker corrected “80-fold” to “8000%”).
• Bottleneck framing includes RAM, SSD, and high-capacity HDD for AI data centers.

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IVES (AI Revolution) chip-focused picks + key numbers

Speaker’s approach within IVES

IVES is described as less “pure,” so the speaker focuses on chip makers, including:

• AMD, Nvidia (NVDA), Broadcom (AVGO), Intel (INTC)

Revenue growth forecasts (next year)

• Intel: ~7% growth (described as “just a dream”)
• AMD / Broadcom / Nvidia: ~43% to 55% range (speaker gives a group range; later uses specific comparisons)

P/S multiples cited

• Broadcom: 30x P/S
• Nvidia: 26.5x P/S
• AMD: 19.5x P/S

Growth-adjusted comparison (speaker’s values)

• AMD: 0.46 (least expensive on adjusted basis)
• Nvidia: 0.48 (slightly more expensive, but close)

Profitability preference used for the final lean

• Nvidia EBITDA margin: 61%
• AMD EBITDA margin: 20%
• Even with near parity on adjusted P/S, the speaker would go with Nvidia due to higher profitability and faster translation of growth into earnings.

Historical note

• Speaker claims buying AMD in January last year when it was 6x P/S, with ~170% return (as stated).

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IVEP (AI Power & Infrastructure) pure-play power picks + key numbers

Power/data center demand names singled out

• Bloom Energy (BE)
• Vertiv Holdings (VRT)
• Quanta Services (PWR)
• Coherent (COHR)
• Monolithic Power (MPWR)

Growth forecast range cited

• Quanta Services (PWR): includes mention that Quanta is 18% growth
• Bloom Energy (BE): 61% forecasted growth (on-demand power for data centers)

Valuations (P/S) cited

• PWR: 3.8x P/S (least expensive)
• BE: 31.4x P/S (most expensive)
• Emphasis remains on adjusting by growth.

Adjusted valuation results

• Quanta Services (PWR): 0.21 (least expensive on adjusted basis)
• Coherent (COHR): 0.40
• Vertiv (VRT): 0.44
• Bloom Energy (BE): 0.51
• Monolithic Power (MPWR): 0.98 (relatively expensive)

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Explicit stock picks / “best deals” compiled by speaker

The speaker suggests:

• Hold some DRAM ETF exposure for foreign memory names.
• For a “pure-play AI portfolio,” focus on:
  • SanDisk (SNDK)
  • Nvidia (NVDA)
  • Quanta Services (PWR)
• Additional “best adjusted valuation” ranking within the DRAM group:
  • MU (0.17) and STX (0.45) as next tier (with WDC weakest on adjusted basis).

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Weekly earnings watchlist (key events + numbers)

Nvidia (NVDA) — earnings Wednesday

• Catalyst: US approval to sell H200 chips to 10 Chinese companies.
• Stock reaction: shares up >4% on the news.
• Expectations:
  • Nvidia typically beats revenue/earnings forecasts; outlook matters most.
  • Speaker expects Jensen Huang to discuss orders and potentially upgrade next quarter sales growth targets beyond $87B forecast.
• Full-year targets referenced:
  • Full-year revenue target: >$371B
  • Growth: 72% vs last year (as stated)
• Peer comparison (next-year sales growth expected):
  • Nvidia: 55%
  • Broadcom: 45%
  • AMD: 43%
• Caution: after a 74% run over the last year, the speaker notes mixed earnings-day history:
  • fell 3 times out of 4 on earnings days,
  • including a 5.5% drop last quarter.
• Tone: speaker “would be definitely buying on any dip.”

Home Depot (HD) — earnings Wednesday

• Stock: down 11% YTD so far.
• Consumer risk: expected to echo worries about consumer pulling back on big-ticket purchases (inflation/war uncertainty).
• Forecast:
  • Quarter sales growth expected: 4%
  • Risk: management may pull back full-year forecast of 4% growth
• Valuation cushion:
  • Trading around 22x earnings
  • 1.9x sales
  • Speaker says these are below last year’s average valuation.
• Market-implied move: options imply about a 4.6% move on the report (could be higher on a downgrade).

Walmart (WMT) — earnings Wednesday

• Framed as the “ultimate measure of consumer health.”
• Pattern: shares down in 3 of last 4 earnings reports.
• Anecdotal bullish factor: some local Walmarts reportedly underpricing gasoline by up to ~30 cents/gallon vs nearby stations since late February to attract customers.
• Guidance expectations:
  • Quarterly revenue growth expected: 6.5%
  • Full-year revenue growth forecast: 6%
• Caution/focus: watch profitability/earnings if gasoline is used as a loss leader, even if revenue surprises upside.

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Risk management / portfolio protection trade

Explicit options hedge idea tied to S&P 500 correction risk:

• SPDR S&P 500 ETF (SPY): $747
• Proposed put spread:
  • Buy $745 puts expiring June 18
  • Sell $740 strike (described as selling the 740 strike)
  • Pricing given:
    • Buy $745 puts for $12.25 each
    • Sell $740 strike for $10.45 each
  • Net cost: $1.80 per share
• Expected payoff scenario:
  • If S&P 500 falls 1% over the next 5 weeks
  • Spread worth $5/share → about 177% return on the spread
• Tone: not “sell all stocks”—more short-term protection.

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Disclosures / disclaimers

• The subtitles mention promotional content (Seeking Alpha Premium trial and discount).
• No explicit “not financial advice” disclaimer appears in the provided subtitles.

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Presenters / sources

• Presenter: Joseph Hope
• Brand/source mentioned: Seeking Alpha Premium (for analysis/tools)