Today’s Market Takes
Trade Call on AMD Based on Undervaluation and Growth Catalysts
"Let's start with AMD. AMD stock is down by 15% over the last month because of intense competition in data centers, not just from Nvidia, but now Google is also starting to sell their custom TPUs to other companies. And now AMD is down by almost 5% after Oracle and Broadcom's earnings. Investors are spooked because AMD trades at around 100 price to earnings ratio. But if you've been watching this channel for a while, you know that the PE ratio is a terrible valuation metric for companies with high earnings growth. AMD is expected to more than double their earnings next year, primarily from growing their data center business by around 80% per year for the next 3 to 5 years. A lot of that growth will come from AMD's massive deal with Open AI, where they'll deploy up to 6 gawatt of Instinct GPUs, which could be worth over a hundred billion in data center revenues for AMD. And like I said when this partnership was announced, the real win for AMD here is validation for their Instinct and Rockom ecosystems, which means they could see more huge deals for data center accelerators from other AI companies like Anthropic, just like we saw with Broadcom. Another benefit AMD has in this specific situation is that their revenues aren't totally tied to AI. Around 43% of AMD's revenues come from their client and gaming segment, which focus on PC CPUs, GPUs, and semi-custom chips for game consoles. This is the segment that was actually responsible for the vast majority of AMD's revenue growth last quarter because it grew by 73% year-over-year compared to their data center segment, which was up by 22%. And don't forget that around half of AMD's data center sales are from their epic line of CPUs, not their Instinct AI accelerators. I usually point that out as a negative because I want my investments to have as much exposure to AI as possible. But in this case where investors are panic selling AI stocks, it's actually an upside because AMD is very well diversified, much more than the market is currently giving them credit for. In fact, discounted cash flow models like Simply Wall Street's calculate AMD's fair value to be around 380 per share, while the stock is trading at around 210, making AMD more than 40% undervalued at today's prices. Set another way, AMD stock would have to almost double to reach its fair value today, thanks to the insane revenue and earnings growth that they're expecting over the next few years. Like I said at the start of this video, this is a big opportunity for long-term investors."
Alex (Ticker Symbol: YOU)
The speaker highlights AMD as an attractive trade opportunity due to its sharp undervaluation relative to DCF fair value estimates and strong growth catalysts, particularly in its data center business and AI partnerships. Despite short-term selloffs driven by broader market panic, AMD's diversified revenue sources and significant growth potential position it as a compelling long-term investment.
Updated Buy Call on Lululemon Stock
"Furthermore, I calculated a fair value for Lululemon stock using my proprietary discounted cash flow model and I get a similar conclusion that the stock looks undervalued. I calculated an intrinsic value of $268. Lululemon stock price even after this increase is at $207. Even after applying a margin of safety, Lululemon stock still looks undervalued. So, I have updated my rating on Lululemon stock as a buy. even after this increase."
Parkev Tatevosian, CFA
The speaker reinforces his bullish stance on Lululemon by highlighting his DCF analysis which values the stock at $268 against a current trading price of $207, and confirms his updated buy rating despite recent price gains.
Bond Market Breakdown in 2026 Driven by Fiscal & Monetary Madness
"If we don't have a recession, if we don't have a credit crisis, we are going to have a blow up in the bond market just because we have so much fiscal and monetary madness going to happen in 2026. And I think if those bond yields go north of 6% I think that completely submarines the housing market and completely blows up the credit bubble obviously and also the equity bubble."
Adam Tagger (Thoughtful Money (with Adam Taggart))
The speaker warns that in 2026, absent a recession or credit crisis, excessive fiscal and monetary policies will trigger a collapse in the bond market. He explains that if bond yields rise above 6%, it will severely impact the housing market, credit conditions, and equity valuations.
Macro Correction and Recovery Forecast for 2026
"He's expecting a 20% plus correction in the first half, followed by a magnificent recovery up to new all-time high of about 7700 in 2026. This is a pretty amazing call and it's very similar to what I talked about in my latest market update video and I recommend you to watch it if you're interested. But he did mention that this is normal after multiple years of 20% plus gains. And if you look at the history over the last 20 years in terms of the S&P 500, anytime we have two or I should say three positive years, the fourth year tends to be a really negative year."
The Patient Investor
The insight highlights Tom Lee's forecast of a significant 20% correction in the first half of 2026 followed by a robust recovery to record highs. It underscores historical market patterns where strong consecutive years often lead to a subsequent downturn, raising concerns about market cyclicality. This macro commentary cautions investors to be aware of structural risks and cyclical downturns tied to economic and electoral uncertainties.
Meta Platforms: Undervalued with a Clear AI Monetization Path
"Another stock that's trading well under its fair value is Meta Platforms. According to DCF models, Meta Stock is 23% undervalued, which means it has a 30% upside from its current price, even though it's one of the biggest money printers on the planet. Meta is selling off mainly because investors are nervous about its AI and infrastructure spending that it's gotten so big that it could hurt their near-term earnings and free cash flows, just like they did with the metaverse in 2022. In their most recent earnings call, Metaguided their 2025 capex budget up to 70 billion. That's versus around 40 billion in 2024, and they warned that their AI spending in 2026 will be even higher. Wall Street is worried that Meta Platforms won't be able to make money on their AI investments for years to come, just like Oracle. But Meta is nothing like Oracle. Meta is already monetizing AI today, mainly through better ad targeting, automated tools, and AI-driven shopping."
Alex (Ticker Symbol: YOU)
The speaker discusses Meta Platforms as an undervalued opportunity with an estimated 30% upside based on DCF models. Despite market concerns over high AI and capex spending, Meta is already successfully monetizing its AI capabilities, especially in advertising, which makes it a promising long-term investment.