Summary
Highlights
The speaker expresses concern that his biggest fears for the stock market are materializing, drawing parallels to 2018. He emphasizes the importance of considering worst-case scenarios before investing. The S&P 500 and Nasdaq (Q's) are at all-time highs, but the potential for a significant downtrend after rate cuts is a key concern. He differentiates between a dramatic 2018-style crash and a potentially milder 'inverse 2018' scenario, suggesting a possible 8-12% S&P 500 drop rather than a 20% cliff. He plans to implement hedges in late September if the market continues its upward drift.
The speaker highlights significant stock movements, including Warner Bros and Paramount's potential merger, which is causing concerns for Netflix. Micron (MU) is noted for a 7.4% surge due to the high demand for memory in complex chips, driven by the AI sector. The speaker believes Micron could reach over $200 within 6-12 months due to its perfect market positioning, despite being a cyclical company not typically favored for long-term holds. Nvidia and AMD's accelerated growth further contribute to Micron's favorable outlook.
Adobe (ADBE) released earnings, beating expectations with an EPS of $5.31 vs. $5.18 and revenue of $5.99 billion vs. $5.91 billion. The company reported an 11% year-over-year revenue increase and projected strong fourth-quarter earnings. The speaker dismisses concerns about AI making Adobe irrelevant, noting that AI's positive effects on Adobe will be more apparent in 2026 and beyond. He presents bull, base, and bear cases for Adobe, projecting significant annual growth even with conservative estimates, branding it 'free money' due to its predictable, recurring revenue model.
A CNBC segment features Rick Santelli and Steve Liesman discussing CPI and jobless claims. Jobless claims surprised at 263,000, signaling a potential shift in the labor market. Santelli suggests a 50 basis point Fed rate cut might be warranted given the economic data, a surprising stance for him. The discussion highlights distrust in government data and the Fed's data-dependent approach. The speaker notes that while the market is excited about rate cuts, they can also signal a fearful economic outlook, as seen during the 2008-09 financial crisis.
Former Goldman Sachs CEO, Lloyd Blankfein, discusses market risks, emphasizing a 'wall of worry.' He notes that despite potential risks, the setup for markets appears benign as interest rates are about to be lowered into a bull market. Blankfein stresses the importance of running 'bear case scenarios' for investments, acknowledging that while current market conditions feel good, history shows corrections are inevitable. He, however, remains 100% invested in equities due to the current environment and the 'epic moment' of AI, particularly favoring large, innovative companies.
The speaker shares personal reflections on a tragic shooting involving Charlie Kirk, emphasizing the erosion of free speech and the radicalization observed on social media. He then shifts to discussing recent stock activity, notably Oracle's 36% surge, which boosted Larry Ellison's net worth by nearly $95 billion. He reveals selling his Whirlpool (WHR) position due to concerns about a Supreme Court ruling on Trump tariffs, which could negatively impact Whirlpool's competitive advantage. He views Salesforce (CRM), Nike (NKE), and Honest (HMST) as current buying opportunities.
Salesforce (CRM) is identified as a 'building giant' position for the speaker, with an aim to rapidly build a substantial holding before Q2 2026. He emphasizes the quick movements of tech stocks once their narratives shift, citing Google and Oracle as examples. Despite current negativity and skepticism about AI disruption, the speaker believes Salesforce's entrenched position makes it resilient. He highlights the delayed but massive impact of AI on software companies, projecting significant revenue growth for Salesforce in 2026 and beyond, especially from its AI and Data Cloud segments.
Nike (NKE) is presented as a strong long-term investment, with the speaker holding a significant position. He plans to complete his Nike purchases by month-end, advocating for diversification to avoid overexposure, even in high-conviction stocks. He underlines Nike's strong brand, marketing prowess, and market dominance, asserting that it has 'no competition' due to its unparalleled investment in brand building. Despite recent challenges from inflation and internal management issues, he views Nike as deeply discounted and an essential buy for long-term believers.
Honest (HMST) is discussed as a potentially 'boring' but promising small-cap stock. The company, which sells diapers, wipes, and beauty products, has undergone a significant turnaround under new leadership, particularly in improving margins and achieving profitability. The speaker notes its strong balance sheet, with ample cash and no debt, and anticipates potential share buybacks in 2026, which would boost earnings per share. He believes the stock is undervalued and capable of reaching $10 soon if current execution continues.
The speaker dedicates a significant portion to discussing negativity and 'hate' in the financial community, specifically referencing criticism towards Joseph Carlson. He stresses that no investor bats 100% and that tearing down others is unproductive and detrimental. He contrasts genuine criticism, like that directed at Kathy Wood's ARK performance, with unwarranted attacks. He urges viewers to control what they can—income, expenses, investment research, and personal behavior—rather than succumbing to short-term market fluctuations or negativity. He reaffirms the market's long-term upward trend, emphasizing that short-term pullbacks are normal.
Dan Niles discusses the potential for an AI adoption slowdown, cautioning against confusing stock prices with fundamental realities. He highlights MIT's study showing 95% of companies not seeing AI returns and meta's struggles with its AI team. Niles interprets Nvidia's missed data center revenue as a warning sign, suggesting that current market rises are primarily driven by anticipated rate cuts and easy money, rather than strong fundamentals. The speaker largely disagrees, arguing that earnings, not rate cuts, have been the primary driver of market performance for years, especially for tech giants like Apple, Google, Amazon, and Nvidia.
Julian Emanuel from Evercore believes the AI-driven bull market will continue despite potential near-term pullbacks, which he views as buying opportunities. He attributes current market choppiness to macroeconomic factors like inflation data and tariff rulings. Emanuel emphasizes that companies are increasingly moving from cost-saving to revenue generation through AI, which bodes well for earnings in 2026. The speaker reinforces the idea of not being overly concerned with short-term market movements, reiterating that the long-term trend for major companies is upward, driven by earnings and innovation.
The speaker introduces 'thousandx.com' for running stock projections, offering both intermediate (bull, base, bare cases) and advanced options. He explains the importance of running projections for long-term investing, focusing on average revenue growth, net income growth, and fair P/E ratios by a target year (e.g., 2029), rather than short-term fluctuations. He demonstrates running a projection for Meta, showcasing how even under a 'bare case' scenario (10% revenue Growth, 12% net income growth), an investor could still see positive annual returns, reinforcing Meta as a strong buy.
He analyzes the fast-casual restaurant sector, noting significant year-to-date drops for Chipotle (-34%), Cava (-42%), and Sweetgreen (-75%). Sweetgreen is currently unprofitable. Chipotle trades at a rich 32x forward P/E given its expected 7% revenue growth, suggesting it's only a buy if it can return to double-digit growth. Cava, despite a high P/E, is growing much faster (27% revenue growth) and has significant expansion potential. He shares his Cava projections, indicating strong growth potential under bull and base cases, but cautioning about risk if the bare case materializes.
Celsius Holdings (CELH), an energy drink company, is highlighted as a 'must-buy.' The stock has been a tremendous performer for the speaker and remains significantly below its 2024 highs despite strong fundamentals. He details several bullish catalysts: overcoming prior 'overordering' issues with PepsiCo distribution, the acquisition of rapidly growing Alani Beverage, and the virtually 'gifted' acquisition of Rockstar Energy. PepsiCo's role in distributing Alani is expected to skyrocket Celsius's future growth. The speaker emphasizes Celsius's strong leadership and positioning against struggling competitors like Red Bull and Monster, projecting it to become a top-tier beverage company.
ELF Beauty (ELF) is identified as another 'must-buy,' showcasing significant gains for the speaker. He emphasizes its strong growth trajectory and the recent acquisition of Road Beauty (founded by Hailey Bieber), which has just entered Sephora. This acquisition is expected to boost ELF's revenue and average selling prices, capitalizing on Road Beauty's popular products and strong social media presence. The speaker asserts that ELF is the only option for investors seeking growth in the cosmetics industry, predicting continued stock appreciation as revenue growth accelerates, potentially reaching over $200 per share.
Google (GOOGL/GOOG) is called 'easy money' due to its vast ecosystem of 3 billion+ users across products like Android, Chrome, and YouTube. The company's strong income statement and consistent revenue growth are highlighted. The speaker emphasizes Google's strong balance sheet and robust 'moat' against disruption, noting that concerns about government antitrust actions are subsiding. He points to consistent share buybacks as a significant driver of EPS growth. Even under a 'bare case' projection (7% revenue, 8% net income growth), Google is expected to deliver positive returns, reinforcing its status as a safe and profitable investment.
Adobe (ADBE) is reiterated as a 'must-buy,' with the speaker presenting highly conservative bull and base case projections. For his bull case, he assumes only 10% average annual revenue growth and 12% net income growth, still yielding a 20-25% compound annual growth rate. His base case, with 8% revenue and 10% net income growth, projects a 15-21% CAGR. Even a dramatically bearish scenario results in a negative return, but he stresses the unlikelihood of such minimal growth for Adobe. He calls Adobe 'free money' due to its predictable, high-margin, recurring revenue streams and potential for further growth through share buybacks.
Nike (NKE) is once again highlighted as a 'hated stock' but a beautiful return opportunity. The speaker, a significant shareholder, emphasizes Nike's unmatched marketing, advertising, and branding power, asserting that it faces 'no competition' due to its ability to continuously invest in its brand. He dismisses other athletic wear companies as temporary trends that fail to sustain long-term investment in their brands. He acknowledges that consumer downturns and past management missteps have impacted Nike, but with inflation easing and strong leadership (Elliot Hill's return), he sees Nike as a rare opportunity at a discounted price, urging long-term investors to buy now.
Salesforce (CRM) is reiterated as a newly acquired 'must-buy,' with the speaker already seeing gains. He addresses its past 'dead money' status due to overvaluation and underappreciation. He emphasizes the rapid growth of its Data Cloud and AI segments (120% year-over-year revenue growth), projecting significant acceleration in overall revenue from 2026-2028. The anticipated Informatica acquisition in 2026 will further boost revenue. He believes his initial bullish projections were too conservative and plans to revise them upward, highlighting CEO Marc Benioff's exceptional leadership and salesmanship. He also contrasts Salesforce's valuation favorably against Palantir (PLTR), arguing Salesforce is significantly undervalued.
AMD (AMD) is presented as a 'very heavily bought' stock for the speaker, with current gains exceeding $100,000. Under his bull case, he projects 30% annual revenue growth and 40% net income growth, driven by its 350 and 400 series chips, leading to a 37-51% compound annual growth rate. His more conservative base case still anticipates 25% revenue growth and 35% net income growth, yielding a 27-32% CAGR. He remains confident in AMD's future, led by CEO Lisa Su, and sees no reason to take profits despite significant appreciation, expecting the stock to reach over $400. Even a 'disastrous' bare case for AMD still results in flat to low single-digit returns.