Summary
Highlights
The presenter introduces five stocks he believes will create millionaires by 2026, emphasizing that he is personally invested in all of them. He will rank them from least to most favorite.
TSM is the fifth stock, considered the least favorite of the five but still a strong contender. It has shown significant growth (250% in 5 years) and is crucial for AI data center build-out, manufacturing 90% of the chips. Despite recent gains, the presenter believes it's still early in its growth cycle due to strong earnings and revenue forecasts, and its robust moat and pricing power. TSM is trading at 28 times forward earnings, still considered cheap given its growth trajectory.
BLV is the fourth pick. While not a 'sexy' growth stock, it offers a strategic play if interest rates decrease. BLV tracks bond prices, which rise when bond yields fall. Currently down 35% over 5 years but up 10% from its base, it's presented as a good place to park capital during market volatility, offering a monthly dividend, especially if interest rates are expected to decline.
Meta is the third stock, showing compelling valuation. It's up 167% in 5 years but only 49% from its recent April low. Meta is currently trading at roughly 25 times earnings, which the presenter considers a good value. A key factor highlighted is the eventual slowdown in capital expenditures (Capex) for data center build-out, which will increase earnings per share. Revenue and EPS are projected to grow significantly year over year.
Amazon is the second stock, deemed underappreciated. It's only up 39% in 5 years and still 8% off its all-time highs. Amazon trades at about 32 times earnings, slightly higher than Meta, but possesses an extremely strong moat and pricing power in e-commerce and cloud services (AWS). Similar to Meta, a flattening of capital expenditures from 2025 to 2027 is expected to significantly boost earnings per share. The presenter has sold long-term puts on Amazon, expecting the stock to rise as earnings grow.
UnitedHealth Group is the top pick. Despite a recent 62% stock drop, the presenter considers it overblown. He capitalized on the dip by buying shares, calls, and selling puts, making significant profits. The fundamental analysis shows solid revenue growth. Although 2024 EPS estimates were revised down, the stock fell more than the earnings decline. The market is forward-looking, and 2027 EPS is projected to rebound to 2022 levels, suggesting the stock price should follow. The presenter highlights its fair valuation before the dip and its current undervaluation as a buying opportunity, even Warren Buffett bought in.