TacticzHazel

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[TacticzHazel @TacticzH]

This AI buildout is probably the greatest thing that could've happened to investors.

The scale and speed is unmatched.

And it doesn't look like it's ending soon.

But keep this in mind: Hyperscaler's CAPEX spend shows up us revenue across the value chain.

Companies benefiting from the AI buildout have seen steep appreciation in revenue growth.

But looking at the hyperscalers side, it sits on the balance sheet and depreciates over the next 5, 10 or even 20 years depending on the asset.

The cash-based view of this CAPEX boom is not just roses and butterflies.

The "cost" is spread over years while the "revenue" lands now.

You might think: nothing special, all completely legal.

That's just how accounting works. And that's true.

But it does provide a significant risk.

Hyperscaler's earnings have a strong headwind coming their way.

Depreciation will keep rising for years as the asset base grows.

Free cash flow is already being crushed, but on the surface, EPS looks fine.

Cashflow is actually ending up down-chain, therefore DRAM and other Semi, and semi-adjacent plays have boomed these last years.

But when the CAPEX growth slows or stops, and it will, supplier revenues crater fast while hyperscaler earnings actually improve.

However, in this day and age, the market is pricing supplier earnings as if this capex cycle is permanent.

It's not.

Although part of it probably will be.

But a large part is also a one-time buildout.

When that build slows, and it eventually well, revenue across the board will take a hit.

And on top of that, depreciation from everything already built will provide further balance sheet headwinds.

I'm not saying this will hurt the sector anytime soon. But it is something to be weary of. Because when hyperscalers start slowing down, so will the whole AI buildout.

[TacticzHazel @TacticzH]

🤣🤣

[Andrew Kuhn @FocusedCompound]

Finally got my hands on the sell-side analysis that explains why SpaceX is worth $1.75 trillion

[TacticzHazel @TacticzH]

@capybaraReborn Good luck! Can't blame you for it.

But always very risky to short companies with so much momentum.

I'm not ballsy enough

[TacticzHazel @TacticzH]

@babyfolio Interesting, most of these would be on my list of NOT to buy today haha.

[TacticzHazel @TacticzH]

I am getting 2021 flashbacks.

Revenue has become irrelevant, let alone cash generation.

Small cap has somehow become synonym for quality.

Story over reality.

Pump and dumps left and right.

Overvalued IPO's hitting the market

Everyone flocking in the same themes (and doing fcking well, hooray).

A handful of companies are holding the market up.

Now we wait for a bunch of SPACs and we can actually call a top.

The best way to play this?

Play it like 2021. Ride the wave up. Ride it hard.

But be ready for when it comes down. It will.

The 2021 retail favorites are now all-forgotten.

$ROKU, $PTON. $DM, $GOEV, $SPCE, $ZM, $TDOC, $RIVN.

Surely some of the names are going to hold up, or bounce back.

So did, $PLTR, $HOOD, $SOFI and a whole bunch of other names

Just be ready for that downside. It will come eventually

We all think we can handle it, until it actually happens.

The second half of the year will be volatile.

Make sure you have a plan in place. Either get out in time or be ready to add to your high conviction plays.

During drawdowns, cashflow will matter again.

Consistency, margins, growth and not just a story.

Pick the right ones.

[TacticzHazel @TacticzH]

@InvestingVisual Good luck Jan

[TacticzHazel @TacticzH]

@GabGrowth Indeed. In the end it all boils down to cashflow.

That's where we should be looking as investors

[TacticzHazel @TacticzH]

@salfunjazz We are doing just that. Although I wouldn't call it a bubble

[TacticzHazel @TacticzH]

I am getting 2021 flashbacks.

Revenue has become irrelevant, let alone cash generation.

Small cap has somehow become synonym for quality.

Story over reality.

Pump and dumps left and right.

Overvalued IPO's hitting the market

Everyone flocking in the same themes (and doing fcking well, hooray).

A handful of companies are holding the market up.

Now we wait for a bunch of SPACs and we can actually call a top.

The best way to play this?

Play it like 2021. Ride the wave up. Ride it hard.

But be ready for when it comes down. It will.

The 2021 retail favorites are now all-forgotten.

$ROKU, $PTON. $DM, $GOEV, $SPCE, $ZM, $TDOC, $RIVN.

Surely some of the names are going to hold up, or bounce back.

So did, $PLTR, $HOOD, $SOFI and a whole bunch of other names

Just be ready for that downside. It will come eventually

We all think we can handle it, until it actually happens.

The second half of the year will be volatile.

Make sure you have a plan in place. Either get out in time or be ready to add to your high conviction plays.

During drawdowns, cashflow will matter again.

Consistency, margins, growth and not just a story.

Pick the right ones.

[Gab @GabGrowth]

100% agree with this. More than ever, i’m prioritising the large majority of my portfolio in free cash flow producing, preferably profitable businesses with secular tailwinds, not merely a “bottleneck” thesis.

[Rebound Capital @rebound_capital]

Totally agree with Tacticz here.

I'm by no means a deep-value investor. I like growth names (as they make you money) and usually buy them in temporary drawdowns (hence the name).

But in today's market, I am unable to wrap my head around the level of optimism required to buy certain names.

Today's market has new words to describe stocks:

1) Over-earning commodity player = Bottleneck!

2) Smallcap is better risk reward than Large Cap as the upside is 10x - 100x -1000x !!!

Wild times.

PS: I'm not bitter that others are making money. My portfolio is doing well, and I own semis. Just highlighting bubble-like behavior now that I am seeing it.

[TacticzHazel @TacticzH]

If we get a large correction a lot of high beta, regardless of sector will drop.

Safer names, companies who generate a lot of cash flows and have real moats and growth paths are the way to go imo.

The obvious place would be to look for sectors that are lagging right now. Healthcare, Energy, maybe even SaaS and EM. Although I think they will have trouble too

[TacticzHazel @TacticzH]

🚨 $NVO Launches the Wegovy pill in UAE.

This is the first country outside of the US to make the pill available.

Foundayo is yet to be approved in the region.

The TAM here is not really huge, but it does underwrite Novo's ambition to market the Wegovy pill globally, as soon as possible.

[TacticzHazel @TacticzH]

@ParadisLabs Congrats! One of the most inspiring growth stories here on X.

Keep it up and you'll be at 100k in no time

[TacticzHazel @TacticzH]

@jiahanjimliu Great read Jim. Thanks for sharing!

[TacticzHazel @TacticzH]

🚨 $NVO Launches the Wegovy pill in UAE.

This is the first country outside of the US to make the pill available.

Foundayo is yet to be approved in the region.

The TAM here is not really huge, but it does underwrite Novo's ambition to market the Wegovy pill globally, as soon as possible.

[TacticzHazel @TacticzH]

@crux_capital_ Shorting into something with so much momentum is just suicide

[TacticzHazel @TacticzH]

@SavaSavvich Is it though

[TacticzHazel @TacticzH]

I'm up about 20% YTD.

Why the hell does it feel like I'm unperforming?

I do think I have a nicely balanced portfolio that will also do well if we see an AI buildout drawdown.

Only 25% is dedicated to AI/Semis.

I’ve been rotating a bit more towards SaaS and EM, which I think are due for a nice little uptrend in H2 (which has already started for SaaS).

Interested in my portfolio?

I post a monthly update and give updates about my buys/sells on my SS.

Link in bio and comment below.

[TacticzHazel @TacticzH]

@redliuheng Okay

[TacticzHazel @TacticzH]

@baiming_ @DrewCohenMoney Literally everyone was going on about China

[TacticzHazel @TacticzH]

Remember when everyone said $ASML had no moat and China was taking over?

That was just one year ago.

Still one of the best and most obvious ways to play this AI buildout narrative.

[TacticzHazel @TacticzH]

@joinyellowbrick I think timeframe matters. One , year or maybe 5 year performance or underperformance is kinda irrelevant imo.

We are in a raging bullmarket, surely some smaller caps will outperform the big boys.

High beta rules.

But will it stay that way?