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 Gainers📈 & Losers📉

Our Biggest Gainers & Losers of the Day in the $100,000 Build Portfolio

For the 13th December 2024:

• It’s the Last Time, I Promise! 😇 

• Unbiased Market News 📰 

• Your FOMO Starts Here 😱

It’s the Last Time, I Promise! 😇 

I promise this is the last time. For a while anyway. And I’ll make it quick! But when a stock is up over 24% in a single day, you know I have to talk about it.

Especially when it’s joined the $1 Trillion club for the first time! Any guesses?

Ok, fine. I’ll tell you. It’s Broadcom (again!) 

A couple days ago I told you about how they’ve teamed up with Apple to help with a new AI project. A week before that I said I thought they have the potential for a 33% gain.

*Spoiler alert* They’ve gained around 27% since then.

So why the huge jump today? Well, do you remember me saying this?

That’s right. They reported earnings yesterday after market close & the winning streak is still very much alive. And from their future projections there is no sign of slowing down soon. The big stat?

👉 $60B to $90B in custom AI chip revenue by 2027.

The plan is already in motion. Those AI chips are already in the post to Big Tech Titans like Google & Meta. If they can strike a deal with other big boys like Amazon & Microsoft? Expect another day like today. 🥵 

Experts Are Loving It 🥰 

The number cruncher’s held up scorecards of approval for Broadcom today.

• Blayne Curtis, Jefferies:
  Called Broadcom’s guidance a confidence boost. He upped his price target to $225 & kept a Buy rating.

• Joseph Moore, Morgan Stanley:
  Called Broadcom’s results a "relief" & a reason for "long-term enthusiasm." I think everyone agrees, Joe. Price target = $233, up from $180.

• Mark Lipacis, Evercore ISI:
  Thinks the Street is underestimating Broadcom’s AI chip opportunity. Sounds like he’s trying to be edgy to me. We all see the potential here. New price target: $250, up from $201.

The Bigger Picture 🖼️ 

Broadcom’s Hock Tan painted a pretty picture on the earnings call. He talked about:

1. Massive AI demand: A $60B-$90B revenue projection by 2027 from just 3 customers. (Google & Meta are two of them)

2. Room to grow: If Microsoft & Amazon hop on board, that $90B might be just the start of things

3. Synthetic data explosion: AI-generated data is about to multiply what humans can produce. The demand for AI chips is going to be insane.

Zoom Out 🔭 

Broadcom’s jump into the trillion-dollar club didn’t happen by accident. With AI booming & demand for custom chips surging, I don’t think this is a one time pop.

Do I think you might get some pull back after a day like today? Maybe. Will it matter if you’re planning to hold Broadcom for the long term? I doubt it.

There were chart annotations from last week.

We’ve flown past my 11% target & still got 7% to go until my $240.

I’m going to join the crowd & give my price targets a small boost.

At this point, the question isn’t "should I buy Broadcom?" It’s "how big can AI really get?" 

“Pretty darn big” seems like the answer. 😅 

Unbiased Market News 📰

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Your FOMO Starts Here 😱 

Staying on the AI train but you might be able to catch this one before it leaves the platform.

Micron reports it’s earnings on the 18th December after market close. Last time around we saw a 20% pop the next day. With the demand for AI & Micron’s track record with earnings beats, I wouldn’t be shocked to see it happen again

🤖 Micron + AI = 💰️💰️💰️ 

AI is eating memory the way I go through Pringles on a Netflix binge. From data centers to mobile phones, every chip Micron makes is feeding the AI revolution.

Last quarter, Micron’s sales grew by 93% YoY, pulling in $7.75B. No, that’s not a typo. They practically doubled revenue in a year when it was already in the billions.

The MVP’s turned out to be:

• Data Centers: Up 152% YoY

• Storage: Up 127% YoY

• Mobile: Up 55% YoY

And the guys in charge aren’t standing around smelling the roses. The CEO is calling fiscal 2025 their "best competitive positioning ever."

To me, that translates to “We’re just getting started!” 

Valuation Cheat Code💸

Micron’s fiscal 2025 earnings per share (EPS) could hit $9. At today’s price (~$100), that’s a 10x price-to-earnings (P/E) ratio. For context, the average tech stock trades at somewhere around 20-25x.

So what does that mean?

It means Micron is ridiculously cheap.

If we dig into earnings it’s the same story. Analysts think EPS should hit $13 by 2026. At that rate, you wouldn’t be unreasonable to expect Micron to be at somewhere around $150. That’s 50% upside from current price; 🤯 

Technical’s Back it All Up 📈

I love it when the technical analysis marries up nicely with the fundamentals. It usually means you’re on to a winner.

Micron’s been bouncing around $80-$115 for the best part of this year with a brief visit to highs of $155. We haven’t been below $95 since September & here’s the best part…. That’s right around where price is right now!

So why is that a good thing?

With the fundamentals looking as solid as they are, there isn’t a likely reason for price to be driven down further. If we’re at a support level with likely good news on the way, the downside risk is minimal.

Being able to buy at a support level also maximises your upside so it’s a win-win. And if there’s a break above $115 I’d be shocked if we didn’t see old highs again into 2025 for a 50%+ gain.

What’s Next?💥

Time to get that calendar out again. Make sure you’ve the 18th December highlighted.

That’s when Micron reports earnings & it could be a banger. Keep your eyes out for the revenue number. It’s expected to be somewhere around $8.7B which is an 85% YoY jump.

I really think a beat here will give daily gains that look like a meme coin. To be clear, I’m buying for the long term not just for earnings. But it’s always nice to see your positions go green sooner rather than later.

That’s all! See you same time tomorrow 👋 

P.S Hit reply & let me know what you thought of today’s newsletter. All feedback is welcomed ❤️