Is AI A FAANNG Killer? TSLA Thoughts, UBER Valuation, META’s New Headset, And Much More
Here’s the transcript from today’s live Q&A chat. As always, don’t forget to follow us on Twitter @TradingWithCody!
Q. Did you see Bill Gates’s comments on Amazon with regards to AI? I know you’re not bullish on the FAANG stocks and see limited upside but we’re still holding on to Amazon. Any credence to what Gates said about Amazon?
A. AI is certainly going to impact lots of industries, is going to help corporate America expand margins and will eliminate some mindless jobs, but I’m not sure it’s going to kill most of FAANNG or Amazon specifically with all its critical mass, distribution, and so on. I still own META, AMZN, AAPL, NVDA and GOOG in my personal account of course, as they are and have been for years — “forever positions” for us.
Q. [Last week’s} Chat is my signal to buy more INTC and RKLB, and clearly represents the sentiment & rush into other semi’s(anything but INTC). Transformative technology, like Rocket Lab’s, don’t go up in a straight line or correlate well to indices. The space revolution narrative will trend at some point. If you’re a trend / momo trader, you’d have gotten long semi’s / big tech a while ago. Cody is focused on the next 10,000 trading days, not the next 100. The thesis on these plays will take time.
A. I don’t disagree. Thanks for the kind words too.
Q. Cody if RKLB executes their plan…what kinid of price target u got for 5 to 10 years.
A. I’ll be shocked if Rocket Lab is still a private company in five years as I think Boeing or some nation will buy the company for $20 a share or something at some point.
Q. Current thoughts on TSLA? what’s your view on Cybertruck impact? Seeing some articles saying people are underestimating what the demand will be and one even said Cybertruck could surpass Model Y.
A. Here’s what I wrote about Cybertruck back in 2019 when Tesla revealed it for the first time: “TSLA’s down 5% after revealing the Cybertruck last night. My wife watched the reveal and ordered us one. Some of the folks in the Chat Room are disappointed in the design and think it’s silly. I think it’s awesome!” And here’s what I wrote about the Cybertruck three days later: “TSLA Tesla ( – The Cybertruck. It’s truly Revolutionary on several levels. #1) It’s pure function over form. Honestly, why does it matter what the vehicle looks like if it’s better and safer and performs the functions its designed for better than its predecessors (and even creates new functions that no vehicle has ever included before, including a pressurized version someday being the official truck of Mars). #2) The exoskeleton frame. You get more room inside and you can use the weight of the steel frame as protection for the whole vehicle, making it sledge hammer- and bullet-proof. And imagine all the little trees and other obstacles you can simply drive through when you’re on the ranch. After more than a century of building a car around a steel frame with different covers on it, we’ve finally got a new design. #3) The form is strangely beautiful — and it grows on you. Dollars to donuts, will it be five or ten years before the majority of cars and trucks hitting the market have an exoskeleton and are a knockoff design of the Cybertruck? #4) The topline truck’s specs are a true gamechanger with the 500-mile range being the most Revolutionary. 14,000 pounds towing? Faster than a Porsche? Air up your own tires or run air compressor tools from the vehicle? Am I dreaming? 2022 can’t come soon enough and my wife has us one of the first in queue with our preorder for that top of the line Cybertruck with a tri-motor and we’ll also include the ATV upgrade when it’s time. #5) I’ve talked to people as disparate as urban hipsters to owners of a rural well drilling company who can’t wait to get their hands on this Cybertruck. And everybody has been talking about Tesla and the Cybertruck and the smashed unbreakable windows at the debut event (I think it was done on purpose) getting Tesla tens of millions of dollars in free marketing for the vehicles they’re already selling…speaking of which, it’s not really about the Cybertruck for the next couple quarters or years. Like I’ve been saying since we bought this stock earlier this year at much lower levels, it’s all about how many cars the company sells (Model 3 for the next couple quarters and Model 3 and the upcoming Model Y for the next couple quarters) and I think demand is just fine and supply and margins keep improving (China Gigafactory 3 is part of that).” I CAN’T HARDLY WAIT TO GET THE CYBERTRUCK AND GIVE MY WIFE MY MODEL S PLAID.
Q. Also, big thanks as I just closed out the last of TSLA June $170 calls I bought back in Dec when stock was at $140-150 and you were writing that if they sell 2M cars this year the risk reward looked great.
A. Rock on and thanks for remember that I was pounding the table and buying calls on TSLA when the stock was at its lows and was hated.
Q. I’ll ask another… once cybertruck is available do you think it helps or hurts RIVN?
A. On the range from helping to hurting, I think the Cybertruck will probably help a little bit with making people feel comfortable about EV trucks but it won’t really have much impact on Rivian overall.
Q. Doesn’t it feel like the market is sleeping big time on Uber? The company is humming and will (hopefully) be profitable this year. Add in the enormous potential upside with self driving cars (and their partnership with Waymo), the stock should be a lot higher than the current levels, no?
A. UBER’s done a great job of creating critical mass, lock in and using AI to generate new business over the last five years and will likely do so over the next five years too. The company could be generating $100 billion in revenue and more than $5 per share in earnings in five years which would probably make it a $100 stock or so, up from $39 today.
Q. Good afternoon. I have been reading about all the revenue that UBER will be getting on the advertising push. I want to add to my position? Your thoughts.
A. Uber’s advertising business will become significant in the next few years. A small CPM (cost per thousand) for each ad shown to people riding in an UBER would add up to significant/billions of high market revenue in coming years.
Q. Is UBER a buy at these prices?
A. See my prior, more details answer on this above but long story short — though I’m not buying more UBER here I do think there’s some good upside potential in the name in coming years.
Q. What is the current rating on ROK? Already have a decent sized position. Would you be supportive of buying a smaller tranche here?
A. I’d rate ROK a 7+ out of 10 on the Revolution Investment rating right now. The stock’s gotten a bit pricey since we bought it at much lower levels about a year ago but it’s still the best Onshoring Revolution play on the planet. I always tell people that if you want to buy more of any stock, start small and give yourself some space to buy a little more in a week or two.
Q. Does the ad-supported model and crackdown on passwords change the thesis on Netflix?
A. Netflix revolutionized TV and movies and is going to try to monetize its base as best they can in coming years. Not much has changed in that regard and they are executing as usual. Just not a cheap stock here but still an amazing company as I’ve been saying for 15+ years.
Q. Any thoughts on the new Reality Labs headset and its pricing? Feel a little rich. Kind of like META stock!
A. Until VR headsets are the size and weight of sunglasses, I think there’s a limited market for them. In five years or less, they might be small and light enough to go mainstream, but not this year or next.
Q. Also, at what price would you buy more bitcoin? Or are we still waiting for all the other coins to bottom before jumping back into bitcoin?
A. We bought a little BITO for the hedge fund recently as noted and I’d be a serious buyer of more bitcoin near $20,000 and I’d probably nibble a little more here and there on any weakness in coming weeks anyway.
Q. What’s your take on $AVGO? I read that their chips are not flexible or adaptable enough to be a threat to NVDA.
A. I am not a fan of Avago/Broadcom, the roll up tech company. They seem to reach for / be desperate for new acquisitions to keep their growth up and I think there’s potentially some funny numbers in their reports. I own some AVGO puts in the hedge fund that we bought recently. The market cap is huge and Wall Street seems to love this company so be careful as always.
Q. Hope all’s well with you and the fam. Are you/Bryce/the market at the stage yet where you can point to any almost-assuredly-loser AI (or faux AI) companies that you see destined to go to zero near or mid-term (as you’ve designated in the past in other categories)? Are we at the juicy shorting stage yet?
A. Thanks for the kind words. I do think C3.ai is a big loser from these levels but not sure it’s going to zero. I think most AI stocks are probably better shorts than buys at this moment but you obviously have to be careful fighting this AI Frenzy. It’s like everybody on TV these days is suddenly a Revolution Investor and are sure that AI is going to create trillions of dollars of value in the next five years but I think it’s going to be a bit bumpier, lumpier and harder than they are letting on to.
Q. I also want to short CVNA.
A. Well, it’s been a terrible short all year so be careful. I do think the company is doomed and won’t be around in two years but there’s a lot that can happen along the way. Maybe use some puts dated out 90 days or more and don’t go crazy on making it a huge bet or anything.
Q. Miami Heats or Denver Nuggets?
A. Nuggets in 5. Jokic is one of the top 3 players in the league right now. That said, I’ve been watching Michael Jordan games on YouTube occasionally lately and I guarantee he’d still beat anybody in the league.
I leave you with this picture of our colt doing his thing. Have a great weekend all!
