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Making sense of investing through visuals | MBA & 10 years in tech | Long term investor | Not financial advice | Join 5000+ readers:

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@ventafricaapp @The_FinanceDave You guys didn’t even notify someone I can’t make withdrawals what’s happening @ventafricaapp

[Investing visual @linvestngVisual]

@ventafricaapp Please what’s happening to vent I can’t make withdrawal at all

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I just published my deep dive on $AAOI, covering:

• Photonics 101
• Industry direction
• Products breakdown
• Opportunities
• Red flags

And much more after spending ~100 hours researching this fascinating high risk/high reward business.

Link is in comments & bio!

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With $AAOI trading at ATHs, it's easy to jump aboard the hype train.

HOWEVER.

Every investor should be aware that $AAOI's culture is in pretty bad shape, based on multiple sources. A quote from a former employee:

"Senior management is dysfunctional and decisions are often driven by personal relationships rather than what makes the most sense for the business."

And this is just one example.

If you hop over to Glassdoor, the review section is filled with comments like this. Given $AAOI's prior execution missteps, this is not a good look and definitely something every $AAOI investor should be aware of.

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Most expensive software stocks right now:

Outliers:
• $PLTR 48x
• $NET 26x
• $CRWD 16x

The rest:
• $SHOP 10x
• $PANW 10x
• $DOCN 10x
• $DDOG 10x
• $IOT 9x
• $FROG 9x
• $SNOW 9x

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Which stock is your favorite buy right now?

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$AMZN is firing on all cylinders:

• Chip division at $20B run rate
• AWS AI revenue above $15B annually
• Various Trainium generations heavily booked with all latest Anthropic models trained on them

What a business!

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POV of being a software investor right now:

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As the market keeps selling off every software name, it's a great time to remember Jensen Huang's quote earlier this year:

"Agentic AI will not replace the software industry but rather become its primary user, driving demand rather than cannibalizing it."

Though not all software is created equal.

Here's how I think about the main beneficiaries vs those who are at risk as someone who's been working in tech for over 10 years:

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The SaaSpocalypse continues.

Nearly $2 trillion in market value has been erased over the past 12 months.

It is the largest drawdown in absolute market capitalization ever.

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A little while ago, I wrote a longer piece about software in the age of AI:

https://t.co/1vae61yxqJ

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$GOOGL invested $900M in SpaceX back in 2015. It might become the best buy of the century.

That $900M is now on track for a 133x return on investment.

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We’re living in the golden age of builders.

Perplexity adding $50M ARR in a single week goes to show how early we still are in the AI (r)evolution.

How I think of the four phases of growth and business best positioned to benefit:

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A day in the office of oil traders:

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MAG7 past 5 year performance:

• $AMZN +33%
• $META +92%
• $MSFT +54%
• $AAPL +108%
• $GOOG +176%
• $AVGO +561%
• $NVDA +1,185%

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This is pretty crazy: $MSFT is having its 3rd-largest drawdown in 20 years, wiping out $1.25 trillion in 6 months.

That's the entire market cap of $TSLA.

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$AMZN invested $8 billion in Anthropic late 2023.

That stake is now valued at $60.6 billion, roughly 3x their quarterly net income and a 7x return in just two years.

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$ALAB might be one of the most under appreciated AI connectivity plays right now.

> In a great position to benefit from both the copper and photonics era

> Pristine balance sheet with $1.1B in cash

> Strong free cash flow, founder led, stock down 60% from 52-week highs.

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Best performing $SPY stocks this year:

• $SNDK +199%
• $LITE +112%
• $CIEN +80%
• $WDC +75%
• $MRNA +74%
• $LYB +72%
• $DOW +70%
• $APA +66%
• $GLW +64%
• $TER +63%