Julian Lin

High conviction growth and quality investor - value matters.

[Julian Lin @JulianLinStocks]

Was on the Investing Experts @SeekingAlpha Podcast with @RenaSherbill where I discussed the safest preferred stock I have ever seen with a 9.5% yield, and why $IIPR is also a conviction buy at a 15% yield
$MSOS
https://t.co/Ab5GIIO8gR
https://t.co/JPPPOjRGm6

[Julian Lin @JulianLinStocks]

question though - have you used something like Claude Cowork in earnest?

There's a 10x increase in compute going from Google Search to AI Chatbots. That transition is still going underway.

Then there's another >10x increase in compute going from AI Chatbots to Agentic AI.

How are we not early?

[Julian Lin @JulianLinStocks]

@amosk1120 and become profitable

[Julian Lin @JulianLinStocks]

@stockgeekTV @dharmesh price was 3x current levels in September
He also already owns 1.4 million shares.
Insider buying quite significant here.

[Julian Lin @JulianLinStocks]

respectfully confused about this take. I find it hard to be bullish operators yet bearish the landlord

I expect no issues redeeming these notes. Not at all.
"substantial doubt about going concern" is merely due to the company not having the entire cash in hand at the time of writing. But let's be real, there isn't a liquidity issue here. Leverage is lower compared to operators and (more crucially) much lower compared to typical REITs.

Yes there are tenant defaults...but the stock is cheaper than the operators, with far more predictable revenues, and a bulletproof balance sheet.

What exactly am I missing? Honest question.

[Julian Lin @JulianLinStocks]

@SamaHoole how many times per week - it's 2 sets per workout, but how many sets weekly?

[Julian Lin @JulianLinStocks]

@Keisan_Crypto You can run a similar model on $MNDY without the Anthropic and just cash and reach similar conclusions regarding valuations, profitability.

[Julian Lin @JulianLinStocks]

4/ Bottom line: SaaS stocks bottom when profit margins explode AI-style.Not because growth re-accelerates (what everyone hoped for).But because profits go nuclear. Software isn't the victim of AI. It's the ultimate beneficiary—just not the way Wall Street scripted it.
#AI #SaaS #Investing #Stocks $MNDY $CRM $NOW
$MSFT

@saxena_puru

[Julian Lin @JulianLinStocks]

1/ 🚨 AI is NOT killing software stocks. It's handing investors the cheapest entry in a decade.Everyone's panicking about "seats dying." Wrong lens.The smartest move? Buy the CHEAPEST software names on sales multiples—even the ones that look most at risk.

[Julian Lin @JulianLinStocks]

3/ Run it harder: Assume seats fall 75% → still only ~10x earnings at those margins.I doubt seats drop that much. But I expect margins to blow past 50% as AI does the heavy lifting.

[Julian Lin @JulianLinStocks]

@torovictorioso gross retention rate is below 100%, but by definition it is always below 100%. It is among the highest at 97% to 98%.

Their "dollar-based" retention rate which is probably whata you're thinking of is very high though, among highest in sector at 115+%

[Julian Lin @JulianLinStocks]

I think this is a time when the best way to approach software is to buy the cheapest on sales multiples, even if they look most at risk for disruption.
If AI really does kill seats, then I would expect software companies to be readily able to cut even harder. Take for example something like $MNDY at 1.2x EV/S
If we assume seats fall by 50%, revenues plummet by around 50%. New EV/S is 2.4x but if the company can get to 50% margins (fairy tale pre-AI but very realistic if we assume non-tech customers are cutting seats so hard) then the stock would be trading at just 5x earnings. Can redo the model assuming seats fall by 75% and stock still trades at 10x earnings. I doubt seats fall by that much, but I also expect software margins to move higher than 50%.

Software stocks will re-rate primarily when profit margins rise in an AI kind of way. Software stocks indeed are beneficiaries of AI, but perhaps not for the reasons that investors had been hoping for (profits over re-accel in growth).

[Julian Lin @JulianLinStocks]

@3Plantey2 to be fair "trash" like $MNDY is really "that" cheap

[Julian Lin @JulianLinStocks]

@Mr_Neutral_Man sorry for your loss. You forgot some ketchup.

[Julian Lin @JulianLinStocks]

@KnoxMarlow @Mr_Neutral_Man so I can agree that preferreds typically have downside of common. But that is typically due to high leverage. In the absence of leverage, preferred does have far less downside than the common.

[Julian Lin @JulianLinStocks]

these businesses actually are better than they look. The lack of GAAP profitability is of course weighed down by 280e, but there's a lot of excessive management compensation at a lot of the operators. $GTBIF is amazing, visionary, but the profit engine is probably replicatable at others too.

[Julian Lin @JulianLinStocks]

@dunbelievable @Crussian17 they are not.

[Julian Lin @JulianLinStocks]

The software pain will end due to one or a more of the following catalysts:

Insider buying
Aggressive margin expansion plans
PE takeout

Growth isn't the answer (even if the stocks may appear to sell off on decelerating growth).
$MSFT $CRM $ADBE $HUBS $MNDY $WIX $GTLB $TEAM