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- What’s Under The Tree? 🎄
What’s Under The Tree? 🎄
PLUS: Utilities, But Make It Sexy 💅
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Gainers📈 & Losers📉
Our Biggest Gainers & Losers of the Day in the $100,000 Build Portfolio
For the 29th December 2024:
What’s Under The Tree? 🎄
High Net Worth Investments 🤝
Utilities, But Make It Sexy 💅
AI Investment Research Plan 🔍
What’s Under The Tree? 🎄
Christmas is over. Time to pack away the decorations & take down the tree. But what’s this?
It looks like there’s a gift under the tree that’s been missed! I’m talking about AMD so let’s unwrap it. 🎁
AMD might be the best give you can give yourself this year
The Back Story 📖
AMD stock has been on cruise control for the past 12 months. When I say cruise control, I mean it’s down nearly 16% while all other semiconductors are halfway to the moon. But that’s exactly why they could be the best buy.
AMD is down for the year but that might mean there’s just more money to be made
AMD is gunning for Nvidia’s AI throne 👑
Meet the MI300X.
It’s AMD’s new AI chip, designed to give Nvidia’s H100 GPU a run for its money. Why should you care? Because Nvidia can’t make enough of their chips to meet demand. That leaves the door wide open for AMD to break in & steal Nvidia’s clients that don’t want to wait around.
Data centres are coming in hot, too.
AMD’s Data Centre revenue is up 100% year over year which means they’re pulling in 52% of total revenue (vs. 28% last year).
Nvidia still bullies this space (their Data Centre business makes up a massive 88% of total revenue 🤯), But the numbers tell us AMD’s got momentum & their slice of the pie is getting fatter. 🍰
AMD’s Stock Is on Discount
Here’s the stuff that makes me want to open my wallet.
AMD’s P/E ratio is 24.4X. That makes them 22% cheaper than Nvidia’s 31.5x.
I really think Investors are sleeping on AMD’s AI potential. The growth is in the numbers & if their Data Centre arm keeps growing, it’s only a matter of time before the market starts to jump on board.
I want to be there first in the best seats. 💅
If AMD keeps beating earnings (which they do pretty consistently) & hits $6-$7 EPS, there’s no reason you couldn’t fairly value them somewhere around $225 to $250 per share.
That’s put the low end upside somewhere around 80%. Wall street analysts aren’t as keen as me but they still have an upside target of over 46%.
Wall Street analysts have an average price target of $183 for AMD
Risks to Watch⚠️
Those sort of percentage gains don’t come for free. There’s some risks you have to be aware of.
Competing with Nvidia is a brave move. Nvidia’s gross margins & free cash flow are leaps & bounds ahead of AMD. That doesn’t mean AMD is dead in the water. We’ve seen they’re still able to grow & at a super impressive rate. It’s just whether they can keep it up when the competition is that impressive which is brings me to my next point…
Nvidia being behind on delivery is a massive win for AMD.
But if AMD stumbles on ramping up its shiny new MI300X chip or its next-gen AI accelerators (MI325X & MI350, dropping in 2025), this whole growth story could fall apart.
And obviously there’s the risk that demand for AI etc falls off a cliff & the market takes a turn but I wouldn’t lose any sleep over this one. I think AI’s going to be in hot demand for a little while yet.
My Plan 🗺️
At $125ish , this stock feels like a gift from Mr. Market 🎅. Who am I to turn down a gift?!
I added a little to my position on Christmas Eve which makes them 0.5% of the portfolio right now.
Risks considered, I think that size is about right. 2025 could be the year they catch up with the other semiconductors.
Growing data centre revenue, a solid product lineup to fight Nvidia & a juicy valuation.
If they look like they’re following the roadmap for 2025 I might add a little more size down the line.
High Net Worth Investments 🤝
Long Angle: Where HNW Investors Access Institutional-Grade Alternative Investments
Long Angle is a private, vetted community that connects high-net-worth entrepreneurs and executives with institutional-grade alternative investments.
Leveraging collective expertise and scale, members access top-tier opportunities across private equity, private credit, search funds, litigation finance, energy, hedge funds, secondaries, and more.
Investing hundreds of millions of dollars each year, Long Angle negotiates preferential terms and exclusive allocations.
No membership fees.
Utilities, But Make It Sexy 💅
Utilities, boring, right? WRONG.
There’s nothing boring about a dividend cheque, backing cleean energy & a 20%+ upside.
Let me tell you about NextEra Energy.⚡️
Big Utility Energy🏗️
NextEra isn’t your classic dinosaur utility stock. It’s more like the Tesla of the utility world. Here’s why:
Biggest Utility in the U.S.: Powering up 5M+ Floridians via Florida Power & Light.
Renewables GOAT. They’re the world’s largest generator of renewable energy. Think solar & wind on steroids.
Stability: During the ‘08 meltdown (RIP Lehman Bros), NextEra delivered a 14% return while the S&P 500 tanked 29%.
And that’s probably one of the best things about a reliable utility company. Even when the market is throwing a tantrum, everyone still needs somebody to turn the lights on.
NextEra is one of the best examples of a company that’s able to stay cool, calm & cash-flowing in a downturn.
Dividends That Hit Different
They don’t just hoard the cash, either. Over the past 25 years, they’ve raised their dividend every. Single. Year.
Dividend aristocracy at it’s finest.
Yield isn’t bad & high scores for everything else. Solid pick for dividend investors
Yield currently sits at just under 2.9% & the dividend has averaged a CAGR of 8%. It’s expected to grow another 10% year on year in 2025.
All other factors aside, this is an income investors wet dream.
The Renewables Megatrend🌍
Here’s why I think they’re a solid bet for the future.
Younger generations have the environment more front of mind than ever. NextEra isn’t just a utility company. It’s a renewable’s power house.
Clean energy is expected to dominate by 2030. Companies that are already ahead of the curve will be infinitely more efficient than those trying to play catch up.
I will say, renewables in general can be volatile. Political winds change (looking at you Trump), energy prices fluctuate & investors get jittery.
The good news is NextEra has a foot in both camps. Stable utilities & fast growing clean energy. That should help to buffer over the volatility in the short term.
So, Is It Good Value? 🛒
When a company has stable & predictable dividends like NextEra, you can use them as a pretty good measure of value.
It’s called a Dividend Discuont Model or DDM for short.
It calculates what a stock’s really worth based on all the future dividends you’ll get (discounted to today’s value).
That pulls out a number somewhere around $82/share which is 14% upside from current price. Wall Street seems to be a little more optimistic. Average target sits at $87.15 which is 20.86% upside.
Combining technical analysis & fundamental valuations, I’ll be shooting for a price target around $85. A middle ground between all these numbers. 😅
The Fine Print⚠️
Before you go all-in, some things to keep in mind.
Long-term contracts & energy price swings can add a little turbulence. Make sure you know what happens on the ride before they strap you in.
Another thing.
Politics matter in energy. A Trump W last election cycle spooked solar stocks & NextEra took a 5% hit. It trended down as much as 12% since.
I think the long term trend on renewables is only going one way so that Trump discount is only more reason to buy. That’s what I’m doing anyway.
Clean energy, growing dividends, undervalued price… what’s not to love?
AI Investment Research Plan 🔍
AI could turn $10,000 into $1M in the next few years? – here’s how
Artificial Intelligence is being called the next $100 trillion industry—and early investors could have a rare chance to profit.
Renowned investor, James Altucher, believes AI will be the biggest financial opportunity of the decade. He has a history of making accurate predictions about emerging technologies, and his latest focus is on AI.
Altucher claims that a $10,000 investment in the right AI stocks could turn into $1 million or more in the coming years.
But this opportunity won’t last forever. He predicts that the window to get in on these AI investments will end very soon— and in this video explains how everyday investors can take advantage of this “wealth window” before it’s too late.
Plus, he’s also revealing one of his top AI stock picks for free. Don’t miss this chance to get in early on what could be the biggest tech revolution yet.
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