Summary
Highlights
The speaker introduces his investment approach, seeking high-growth companies that are not yet household names but have significant upside, alongside undervalued mega-cap stocks. He aims to identify companies that can withstand inflation and will benefit when interest rates decrease. The video will cover 8 such stocks for September.
Vertiv Holdings is a crucial supplier for data centers, providing liquid cooling and high-efficiency power systems to manage the increasing heat and power demands. They reported strong Q2 revenue growth (35% year-over-year) and a substantial backlog of $7.9 billion. The cooling market is projected to double by 2030, with liquid cooling growing over 20% annually. Vertiv's PEG ratio of 0.8 suggests it is undervalued compared to the S&P 500 (PEG of nearly 2), indicating significant growth potential.
Arista Networks develops high-speed Ethernet switching and software essential for modern data centers. They are a founding member of the Ultra Ethernet Consortium and offer EOS smart AI features for optimized AI cluster networking. Arista reported Q2 revenue up 30% year-over-year with strong gross margins over 60%, consistently beating earnings forecasts. Analysts predict over 15% upside for the next 12 months.
ASML holds a near monopoly in manufacturing the most advanced chips, making them the gatekeeper for all advanced semiconductor production. Their high-NA EUV tools are moving into production, enabling smaller features and more transistors for the next wave of AI. Their installed base guarantees recurring revenue from services and upgrades, making their growth sticky and free cash flow durable.
Broadcom has transformed itself to benefit from the AI boom, with AI chip and networking revenue hitting $5.2 billion in Q2, up 63% year-over-year. Their backlog has surged to $110 billion, providing long-term visibility. New product lines and custom accelerators are opening higher-margin pathways with hyperscalers like Amazon and Microsoft. VMware software revenue also contributes to recurring cash flow.
Super Micro builds rack-scale systems for AI, shipping Blackwell-class racks with liquid cooling as the default. Their capacity has ramped up to 5,000 racks per month, including 2,000 liquid-cooled units, driving annual output towards $2 billion. Their ability to quickly ship full liquid-ready racks makes them a key integrator for AI data centers, especially as hyperscalers race to bring Blackwell clusters online.
TSMC is the world's largest contract chipmaker, holding 70% of the global foundry market. Almost every leading chip designer relies on TSMC for critical production. Their 3nm technology accounts for 24% of wafer revenue, with 2nm planned for 2026. TSMC also dominates advanced packaging with 'CoWoS' (chip on wafer on substrate), essential for AI accelerators like Nvidia's B200 and AMD's Mi300. Nvidia has secured over 70% of TSMC's CoWoS capacity for 2025. TSMC's consistent growth and dominance in both logic nodes and memory stacks make them a crucial toll booth for advanced computing.
Alphabet is highlighted as a potentially undervalued mega-cap growth stock despite not always grabbing AI headlines. It trades at about 23 times earnings, below its 5-year median of 25 and significantly lower than peers like Microsoft (36) and Nvidia (nearly 40). Its free cash flow yield is a healthy 4.5%, higher than the S&P 500 average. This indicates a durable growth business at a cheaper entry point than other tech giants.
MongoDB builds flexible document-style databases using JSON, making it easier for developers to handle fast-changing or unstructured data. Their cloud service, Atlas, automates scaling and performance. Recent quarterly revenue hit $591 million, up 24% year-over-year, with Atlas growing 29%. Partnerships with AWS, Azure, and Google Cloud facilitate enterprise adoption. MongoDB Atlas can handle both traditional and AI data, simplifying AI application development. The speaker anticipates a stock price surge once they achieve two consecutive quarters of positive margins.