Congress Bought These 6 Stocks… But Sold THIS One

Overview

The presenter reviews six congressional stock purchases—AppLovin, Qualcomm, Lam Research, Caterpillar, AT&T, and Taiwan Semiconductor (TSM)—as well as a disclosed Microsoft sale. The central point is that congressional trading can be a research prompt, but it is not an investment thesis. The presenter bases the ranking on business outlook, valuation, and cash-flow assumptions, while noting that lawmakers’ motives are unknown and their transaction prices may differ from those available to other investors.

The video also cites Nancy Pelosi’s portfolio as having gained 942%, compared with 302% for the S&P 500 over the same period. No dates are specified for that comparison.

Stocks and Valuation Discussion

AppLovin (APP)

AppLovin is an advertising platform. According to the video, the stock was around $228, down 66% year to date and at 52-week lows. Revenue grew 61% year over year, with future growth forecast to slow to about 29%. EPS grew 78% and is forecast to grow 63% over the next 12 months. Analysts expect EPS of $15.61 this year and $19.61 next year.

The stock’s forward GAAP P/E is about 14.6, and its forward PEG is 0.44. The presenter’s DCF uses $3.95 billion of latest-year free cash flow (FCF), rising to an analyst-estimated $5 billion in 2026, followed by 10% growth. The model yields $397 per share, or roughly 74% upside and a 43% margin of safety.

Sensitivity cases are $283 at 5% growth and $556 at 15%. A reverse DCF implies that only 1.8% growth is needed under the model’s assumptions.

The main caution is that price-to-sales is 11.3, about 907% above the sector, and the valuation depends heavily on the assumed $5 billion FCF starting point. The presenter wants to see results before treating the share-price decline as a market error. An earnings report is expected Wednesday after the close.

Qualcomm (QCOM)

Qualcomm was around $165 after an 11% one-day drop, about 37% below its 52-week high. Revenue grew just 2% year over year, while EPS fell 17% and is expected to be roughly flat in the near term. Analysts forecast EPS of $10.52 in September 2026 and $10.17 in 2027.

Its P/E of about 18 remains above its five-year average of 14. The presenter’s DCF assumes 2% growth and gives a value of $187—about 14% upside and a 12% margin of safety. Scenarios range from $137 at -2% growth to $278 at 7%.

Net debt/EBITDA is below 1, but the presenter says the limited valuation cushion and earnings outlook warrant caution. The stock goes on the watch list pending its report, expected Wednesday after the close, alongside Apple’s report.

Lam Research (LRCX)

Lam Research, a semiconductor-equipment maker, was around $239, up 40% year to date but 45% below its 52-week high. Latest-quarter revenue was a record about $8.2 billion. Analysts expect strong growth, including $9.65 EPS for fiscal 2027. The stock trades at around 24 times earnings, close to its five-year average, and leverage is effectively near zero.

The presenter’s model assumes FCF rises from $4.9 billion in 2026 to $10.5 billion at the forecast start, then grows 15% annually. That produces a value of $317—about 33% upside and a 25% margin of safety. A lower-growth case is $227, while the reverse DCF implies roughly 11% growth.

The main caution is that the large initial FCF increase is an analyst forecast that needs confirmation. Wall Street’s average target is $364, with some forecasts as high as $500.

Caterpillar (CAT)

Caterpillar was around $622, down 42% from its high of $1,073, despite a 9% year-to-date gain. Recent results included about $20.7 billion in revenue and $7.20 adjusted EPS. Its approximately $78 billion order backlog provides visibility, but is not yet realized sales, margin, or cash flow.

The presenter’s DCF starts with $12.5 billion of 2026 FCF and assumes 12% growth, giving a value of $747. Other valuation measures cited are a weighted estimate of $880, a multiples-based estimate of $966, and a dividend-discount-model estimate of $932.

Net debt/EBITDA is 0.6, compared with an industry norm cited as 2.5. Risks include tariffs and production-capacity constraints. The presenter ranks Caterpillar below the leading opportunities because its forecasts and fair value remain uncertain.

AT&T (T)

AT&T was in the $20 range, with a dividend yield of 5.2% and a forward P/E of about 8.9. The presenter notes that the yield is below its five-year average and does not, by itself, establish that the stock is undervalued.

Revenue grew 3.5% year over year, with about 2% long-term growth forecast. EPS fell, with roughly 5% near-term growth expected. Net debt/EBITDA is about 3, materially higher than for the other companies discussed.

The presenter’s DCF assumes 2% growth and values the stock at just under $21, slightly below the market price. A blended estimate is just under $23, with a 6% margin of safety. Wall Street sees about 29% upside, with a stated target range of $20–$34, but the presenter gives more weight to the limited upside in the DCF.

AT&T may suit income-focused investors, but it ranks lower for growth and valuation.

Taiwan Semiconductor (TSM)

TSM was up about 34% year to date but down 6% on Friday. The video cites a five-year gain of 256%. Several lawmakers’ purchase disclosures are mentioned, though their motives are unknown.

Analysts forecast EPS of $17.50 this year and $23.40 next year. The stock is described as trading at roughly 17 times forward earnings, below its five-year average multiple.

The presenter’s model starts with $47 billion in 2026 cash flow and assumes 20% annual growth, producing a value of $490—about 21% upside and a 17% margin of safety. At 15% growth, the estimate falls to $358. The presenter calls 20% a demanding assumption, despite historical growth of 34% over five years and 25% over ten years.

Cash exceeds debt, but Taiwan-related geopolitical risk is a key consideration. Wall Street’s average target is $584, with a high estimate of $1,000.

Microsoft (MSFT)

Microsoft was around $520. A congressional disclosure showed a sale of $250,000 in October, while other lawmakers also disclosed purchases. The presenter cautions that the sale does not represent a unified congressional view.

Wall Street’s average target is $633, with a range of $440–$870. EPS forecasts are $20 for fiscal 2027 and $24.20 for 2028.

The key concern is cash conversion amid rising investment spending. Operating cash flow is forecast to grow, but FCF was about $60 billion over the latest 12 months versus $74 billion in 2024. The video cites a 94% year-over-year decline in an FCF growth measure and expects a further 10% decline.

The DCF assumes cash flow rises from $50 billion to $70 billion in 2028 and $180 billion by 2030, yielding $566—about 9% upside and an 8% margin of safety. A lower-growth case gives $452, below the current price.

The presenter’s stance is “hold and watch,” not to sell merely because a politician sold. Stronger evidence of sustained FCF recovery is needed.

Market Context

• The presenter describes a rotation beneath relatively flat S&P 500 performance from late May to October, with technology weakness alongside strength in other groups. The takeaway is that index-level stability can conceal large differences among stocks.
• Tom Lee’s interpretation is that some investors may be forced to sell and that institutional confidence ahead of the midterm elections is weak. The presenter explicitly says this is not confirmation of who is selling.
• November has historically been a strong month, but the presenter cautions that historical averages do not guarantee a repeat.
• Mike Wilson discusses a 6–12 month outlook and the possibility of a delayed recovery, drawing an analogy to 2018 and Federal Reserve tightening. These are market views, not certainties.

Valuation Framework and Ranking

The presenter compares analyst expectations and business performance with historical multiples, balance-sheet measures, fair-value estimates, and DCF scenarios. A recurring caution is that results can change substantially when the starting cash-flow estimate or assumed growth rate changes.

Ranking for a long-term investor seeking growth and appreciation:

1. TSM — Preferred overall combination of earnings growth, balance-sheet strength, and valuation, subject to growth assumptions and geopolitical risk.
2. Lam Research — Attractive operating results and potential discount, but the forecast FCF jump needs confirmation.
3. AppLovin — Highest modeled growth potential and the largest valuation gap, but volatile and dependent on cash-flow and earnings forecasts.
4. Qualcomm — Some modeled upside, but weak near-term earnings expectations; reassess after results.
5. Microsoft — Strong business and balance sheet, but limited modeled upside and a demanding FCF recovery assumption.
6. Caterpillar — Strong results and backlog, offset by valuation and execution risks.
7. AT&T — Income appeal, but limited modeled upside; an income-oriented investor might rank it higher.

The presenter distinguishes AppLovin as the highest modeled-upside stock from TSM as the preferred researched opportunity.

Disclosures and Cautions

No explicit “not financial advice” disclaimer appears in the subtitles. The presenter says congressional disclosures are not a recommendation: lawmakers’ motives are unknown, trades are disclosed after they occur, and an investor’s purchase price may differ.

Forecasts, analyst targets, and DCF outputs are assumption-dependent and not guaranteed.

Presenters and Sources

• Presenter: Dividend Talks; the individual presenter is not named in the subtitles.
• Named market commentators: Tom Lee and Mike Wilson.
• Research and valuation references: Seeking Alpha, Simply Safe Dividends, Wall Street analyst consensus, and the S&P 500.