Nvidia Stock is EASY $$$ ($1500+ coming)

welcome in folks it's a threepiece here today three videos up for me to react to first one up Nvidia stock is absolutely parabolic they are inches away from taking over Microsoft is becoming the biggest company in the world I want to hear this analyst explain why he believes Nvidia is going to $1,500 now Nvidia is about to do a stock split so basically this is a call on Nvidia after the stock split going to $150 a share which is considerable upside from where the stock is right now so we'll speak about that I want to react to that then we're to get into this video regards to Tesla expect negative revisions from Tesla looking forward to getting that one reacting to that one and then last one up here Ron Baron speaking about Elon Musk and Tesla in general looking forward to getting into that one in this video here today appreciate youall joining me as always all ask in return hit that like button down there takes less than 3 seconds and make sure you're subscribed to the channel 45,500 plus subscribers strong now at this point in time all right guys let's get into Nvidia on Nvidia it's already been a huge year for the stock obviously shares though up over 130% so far just in 2024 surpassing that $1,000 milestone for the first time a few weeks ago and just this morning hitting another record high but it hasn't just been this year right nvidia's dominance sending shares skyrocketing over 500% in the last two years take a look at that extreme climb there and that coming as investors double down on AI hype all of nvidia's momentum leading to a lot of bullet iist across Wall Street Bank of America becoming the latest hiking their price Target on Nvidia this week from $1,320 to $1500 this is now the highest call on Wall Street for the chip giant the analyst behind the call VC Arya is Bank of America's senior semiconductor analyst and he joins us now VC thank you so much for being here with us to talk about your bullish call on Nvidia I'm curious why, 1500 why not doubling your price Target on this name considering the amount of bullishness and the fundamentals that back it up sure good morning thank you for having me uh so I think there are two aspects to it uh the first is uh where we are in the cycle of converting uh data centers to accelerated uh Computing right the concept of the data center is not new it's been around since the 1940s but then we have these multi-decade infrastructure upgrade Cycles from the Mainframe uh to the micro computer uh to cloud computing and now we are at the of what I think would be a decade long conversion over to accelerated Computing what is accelerated Computing it's a way of taking a lot of very intensive data processing Ts that have to do with images with voice with video with the processing of these large language models and converting the data center with new kinds of semiconductors to make sure that processing can be done very efficiently we are just at the start of this cycle we think that the spending could be anywhere between $250 to 500 billion a year and thenia meeting the charge um and I know there is often this comparison to let's compare it to Intel of the past or let's compare it to Cisco of the past or other parts of the technology upgrade Cycles but what is different is that Nvidia is bringing a combination of silicon of systems of networking of software of developers and that is unprecedented so to you come to your question you know um technology stocks the price targets really move because of the size of the market uh because of their execution and even at this $1,500 the would essentially be trading at one times their earnings growth rate if you look at the S&P 500 uh it's trading at two times their earnings growth rate so I would claim that even at this kind of price level it's actually trading below where the broader Market is in terms of the price to earnings uh to growth ratio High Target on the street for you VC for NVIDIA what is the significance that you see in deals like the one that let me say this okay I'm shocked I'm absolutely shocked that that's the highest price Target on the street somebody needs to have a $2,000 price Target on this right I was calling this out six plus months ago talking about Nvidia in this cycle before it's all said and done it's going to go to $1,500 to $2,000 right and um which once the split happens that'll be $150 to $200 right and then I think it will likely Peak there will likely be uh you know you'll see a slowing a major slowing in the business there will be uh you know customers won't order as much that then AMD will actually start seeming like more of an actual competitive Threat by that that point in time which they really haven't up until this point in time right and then you'll get more of these big techs to create some of their own custom chips um and then you'll see kind of like demand weaken overall and then long-term demand's going to be there for NVIDIA right longterm the business going to be there but it's these businesses go through Cycles these they go through very hot like 3 to five year chip Cycles right we're in year two of that chip cycle so likely next year will'll be another great year for NVIDIA in regards to this chip cycle and then maybe 2026 or 2027 they start to see you know a pretty nice slowdown now the stock will have topped way before that though that's important thing to understand the stock price will Top probably minimum 6 months if not 9 to 12 months before the business actually tops so it's important to understand kind of you know these stocks price things in in the future that's going to happen right so um but yeah shocked I me crazy that no one has a $2,000 price Target on this stock it just seems like it should it should that is being reported this morning potentially going to be taking the chips Tesla was supposed to be getting from Nvidia here yeah uh I think there is a race going on U between technology companies of various types uh we have seen that uh across the cloud players um you know who have raised their Capital spending forecast uh to over 40 to 45% growth last year we were thinking that growth would 20% it's already 40 to 45% there is a race between these different technology companies to be the first to support the next large language model to make sure that they are the destination of choice for a lot of startups who are trying to uh really kick start their own generative AI uh applications and then this Market is broadening from these cloud service provider to a lot of Enterprise verticals and in this most recent quarter Nvidia did call out that automotive and Automotive customers which I assume includes Tesla are part of that really large uh you know vertical so we see the spreading from cloud customers towards Automotive towards Healthcare a lot of drug Discovery is being done with this infrastructure financial services are benefiting from it and then the last uh but not least part that we will start to see more is the rise of this infrastructure among Sovereign right so we have seen India uh Europe uh Japan every country and region the Middle East they are trying to make sure that they are able to uh use their culture their language to really go and train these large language models and being V is just at the start of uh that and that could be a really large infrastructure upgrade cycle as well Vic you mentioned customers and it makes me think about Intel's latest chip announcement and the executiv is really speaking about this idea that their chips are not necessarily for the hyperscalers they're for more of the Enterprise customers they're going to be a little bit more affordable to what extent do you see that as a winning strategy for Intel moving forward particularly given the amount of headwinds facing that stock over the course of the past year here what what so absolutely I think we have to give Intel uh the credit that uh they have very uh strong Enterprise incumbency uh they are the brand name one of the most trusted names in uh Enterprise infrastructure but broadly speaking you know Intel is facing this challenge where they have been behind in uh AI they have the incumbency but they don't quite have uh the deployed base uh the range of uh software Developers for example Nidia has 5 million developers on their Cuda uh platform so a lot of the Enterprises as they start to look towards uh their AI infrastructure the first name they turned to is idia for the reason that there's a lot of developers who are already familiar with nvidia's infrastructure and number two as these Enterprises start to uh scale out they look towards Cloud instances and that too is where they find a lot of Nvidia based instances so broadly speaking if I look at the overall AI chip Market uh today we think it's about100 billion or so this year and very is about 80% of that custom chips from broadcom Marvel and others are another 10 or 15% and then you have this long tail which has AMD which has Intel which has a number of uh startups and even as I uh look forward over the next three to five years as this Market doubles or triples from here we think that ratio will stay relatively in that range that Nvidia will continue to have 80% you know we think custom chips will have another 10 or 15% and then you will continue to have this long tail of companies that have a presence the benefit from the rising ties in this market but they're never quite able to achieve the escape Velocity that the leader in the market has and by the way that is not too uncommon if you look at other parts of Technology search social you know e-commerce operating systems you see the leader that has the early start that has the scale the incumbency the relationship with developers caiming 80 plus% of the market and we see exactly the same thing in the AI chip Market as well yeah you know trying to expect Intel to be any sort of major competitive threat here or thinking like that the play like Intel's really underperformed nvidia's done great so I could get outperformance I can get some Alpha in playing Intel instead of playing Nvidia it's it's the same thought process as thinking like Jack in the Box is going to outperform McDonald's moving forward like or it's the same thought process of thinking like oh gosh I don't know back in 2012 that Blackberry was going to outperform um Apple because Apple got to the smartphone first but Blackberry will be play ketchup and look how that worked out right like like it's just ridiculous it's just ridiculous like Intel's been a Serial disappointing company over and over again and um nvidia's been continually an outperforming company and so if you want to play anything in the space you got to play the big dog you got to play the winner winner chicken dinner and that is NVIDIA right so what would change that it's either you got to play that or you got to play Nothing in regards to the chip space yeah moving forward Vic and I I would love to get your answer on that in the context of some of the cloud providers that are trying to compete with Nvidia I was just in Amazon's chips lab aws's chips lab last week taking a look at some chips that they have coming out here and I'm curious what you think would make some of the cloud players like an Amazon a formidable opponent to Nvidia no absolutely I think uh we have to look at uh the cloud service providers as uh in some way competing with Nvidia but even more so being very strong customers uh for the company you know developing chips and developing cloud infrastructure are are two different uh skill sets right so if I'm developing a custom chip in a cloud only that cloud can use it it's not going to scale you know any chip that Amazon develops it's not going to be used by Google it's not going to be used by Microsoft it's not going to be used by Oracle or meta so in some ways it is serving a very specific need that you know Amazon might have similarly the chips that Google develops the TPU they serve very specific needs very what Nvidia has developed is a so-called you know Merchant reconfiguration programmable infrastructure uh that can be deployed across a very wide range of workloads both for when these Cloud companies are handling internal workloads you know such as search you know such as e-commerce such as uh YouTube or you know uh you know Tik Tok like uh video uh recommender engines or when it is serving a lot of Enterprise customers to their uh public Cloud which is why I I mentioned that if you uh you know take a step back and look at the broader accelerated Computing Market I do think that 10 to 15% will be these custom chips but they will have several different custom chips you know across each of these specific Cloud infrastructure but because they don't quite have a way to go from one Cloud to another Cloud their a range of workl you know their applicability their their scale tends to be limited to just that uh Cloud infrastructure yeah a lot of people are very confused in regards to this they hear about Amazon's development chips and meta's development chips and Google's development chips right and they get very confused and they think like basically they think these companies are going to like create their own chips that basically they're not going to have a need for NVIDIA chips anymore moving forward and that's just not reality right um if that was the case it would already have happened by now right now what this could do is hurt nvidia's growth rates longer term if these companies come out with their own chipsets and in these particular chips help with their custom Cloud so maybe they don't have to order as many in video chips in the future right um so that's something that's a little longer term of fear when I see longer term I'm really talking about like 2026 2027 2028 those sorts of years in the future and maybe they don't they aren't as reliant on Nvidia at that particular time right I'm sure they're still going to be order and still going to be doing a lot of business with Nvidia but they're just not as relying now that's an interesting time period on where maybe you potentially see some sequential quarter over quarter actually declines in Revenue by that time Nvidia stock will have already started a major downtrend right which is why there's a decent probability that nvidia's stock price could top I would say if I had to put odds in I would say probability is NVIDIA if think about like a 5year top in the stock price probably happens this year or maybe next year and then you'll probably go through kind of a slow trickle downward cycle for NVIDIA for a few years right and then you'll start like the next upward cycle but then it takes a while to get back to where it previously was right um and so you know then Nvidia could actually potentially become a dead money stock for potentially several years and it it happens I mean the next stock we're about to get into Tesla Tesla's been dead money for years right um you know when's in whens Tesla get back to $300 to $400 a share um I mean we'll speak about that right now right we'll we'll we'll speak about when when Tesla gets back to where it used to be $300 to $400 a share right by the way I made some changes with THX stocks.com here um let me know what you guys think about this but basically the way I'm laying everything out now is starting out with trailing 12-month PE then going into forward PE and then 2year forward PE which not a lot of services really cover that particular metric then from there going into trillion 12 month earnings per share growth current year earnings per share growth expected earnings per share growth right and then next year um or E EPS growth excuse me right and so focusing on kind of the EPS there then going into Revenue tring 12 month Revenue growth current year expected Revenue growth next year Revenue growth then going into the margins gross margin net margin trailing 12 month price to sales ratio forward price to sales ratio and then getting into some more very Advanced metrics like even for instance like 2-year stack like no one's really showing twoyear stack expected earnings per share growth in some of these sorts of metrics two-year stack expected Revenue growth like no one's really covering those sorts of things right so I thought that would be some cool metrics and even like the 2-year out forward P like Services could provide that but like I don't see anybody really doing it so I'm like that's something I think is valuable out there but anyway some changes that I made thx.com if you want to apply for access to that go to 1000x stocks.com and once you get in the product we'll send you your steel membership card in the mail okay woo things a beast you can keep it in your wallet if you ever need to protect yourself you just throw it at somebody yeah I mean it's a good defense mechanism all right let's get into Tesla myasa growth rate is dipping according to Cox Automotive it says first quarter sales Rose 2.6% year-over-year but that was Far Below the 4 6% growth seen in 2023 my next guest sees a few themes at play here including China hybrids pricing uh in what he is calling an EV winter joining us now for more is Dan Levy senior Autos Analyst at Barkley Dan welcome good to have you with us is the EV Market globally too beholden to government policy in other words subsidies on the one hand and penalties uh on the other for for cars that don't live up to certain emissions or mileage standards Tyler thank you so much for for having me look uh when we think about what's driving EV penetration the the analogy we've used is you know carrot sticks and tambourines right that how do you get a Don and move carrot sticks and tambourines how do you drive EV penetration carrot sticks and tambourines the carrots and the sticks are government and so for the foreseeable future government is going to play a very critical role in driving that uptake certainly from the carrots whatever incentive subsidies but also from the regulations and that's just not going away even if it's slowing or gets pushed out there is still a regulatory mandate in places like the US and Europe especially do you expect that some of those regulatory mandates having to do with the kinds of cars that will new cars that can or will be sold in this country in by 2035 will be changed you I I it's hard for me to believe that that ultim Ely no internal combustion engine automobiles new ones will be sold in this country in 10 years the the regulations are definitely fluid right uh we saw that already with EPA plans that were initially put out last year and already revised modestly uh lower earlier this year we know that if uh in November Trump is elected those regulations probably get softened as well and certainly anything beyond 2030 is more aspirational more than anything else so it's going to be fluid uh there there's a balance between pushing for decarbonization but also recognizing where consumers are and where automakers are in this journey and the cost considerations for them I just want to talk for a moment Dan about uh Tesla losing share you're seeing it in China you're seeing it in Europe you're even seeing it in the US uh where does that leave the stock yeah the losing share year to date 2024 EV penetration on a global basis 19% so they're basing off a one quarter cuz we haven't even we haven't even been through you know I don't even think the numbers are out for the second quarter yet in China you're seeing it in Europe in terms us uh where does that leave the stock yeah you know the fundamentals for Tesla are are in a a tricky position right now and we generally expect negative revisions they can't be out this we're still in June they can't be out yet so that's just part of that is the volume Outlook has certainly come down we're at flat volume this year and even that you know some people would say is going to be tough to achieve and next year it's modest volume growth um I think I think part of the challenge here is that they are relying very heavily on model 3 and Y and as good product as they are uh there is a model concentration challenge right the US it's natural that they're going to see some share erosion just given how strong a share position they're at roughly half the market that's just a function of lack of competition but Europe and especially China are are very competitive so they'll remain a leader on the EV front but the competition is tougher and they have a bit of a model concentration challenge model concentration uh I just don't agree with any of this just to be quite Frank uh you know I think Tesla's doing just fine with the three in the Y out there in the marketplace and I think they'll continue to right cybertruck obviously ramping volume next year I think it's going to be massive for this company a lot bigger than a lot of folks anticipate let's get into this one Ron Baron on supporting Elon mus pay package and musk and Tesla the markets and much more we want to welcome billionaire investor R there's no doubt China as a whole different ball game China's Market's ridiculously competitive they've got a lot of really good vehicles at really attractive pricing in China that you just don't really see in Europe and you certainly don't see in the United States overall all right now Baron Capital the chairman and CEO there and um Ron it's always great to see you thank you for for coming in today JY said don't use the word billionaire you didn't you didn't unfortunately we did because we have to call it like it is all right multi-billionaire fine there you go so so before we talk about this I just want to know did you guys see over the weekend the article on the front page of the New York Times do you read the New York Times at all no I yes so passing by a news stand you could have seen needles in my eyes you could have seen it and basically it was talking about how Elon has brought the internet Broadband satellite to the Amazon in Brazil brought the amaz people don't have clothes and now they have the am now they have the internet unbelievable what he's done unbelievable changing the world yeah but have you heard the other part of that story yet oh have you guys heard the other part of the story so supposedly obviously I don't live in this uh remote Amazon tribe in uh Brazil right and supposedly there 2,000 people in there okay and so he brought internet to these folks okay and supposedly what I heard word on the street is now these individuals in this tribe are now addicted to the p word and they're also uh addicted to social media and supposedly uh the the older folks in the tribe say the younger folks are now getting extremely uh lazy and they use some word about they learning the white man's ways or something like that and uh and so yeah it was I don't want to go into more detail than that but it was very negative overall from what I heard and so um you know internet it has a lot of good things but it could also bring some bad things along with it like many other things in life and so yeah that's a whole situation if you want want to look further into that whole um thing you can look further into it a big deal in Ukraine too on the war front before we jump into what you think about Tesla and the pay package uh whether you're going to vote in support of that why don't we talk about how much you own because I was looking and it looks like I I've known you've been a very longtime holder some of your funds own 2.7% 3% 2.8 the funny thing is like like hearing that story I I couldn't disagree with it they' being addicted to the p wward and then also them uh you know using social media and getting more divisive and getting lazier I'm I I I heard that and I'm like I could believe that you know what I mean like like I'm like that probably sounds about right like they got internet and that happened to them like yeah yeah that makes about sense the baron Partners Fund is almost 30% long position in Tesla so you you are a massive shareholder um it's also $113 cost so you know uh so we've owned it since 2014 2016 between 2014 so I met him in 2010 2014 and 16 it took me four years he said what took you so long 2014 to 16 we invested $400 million made about $5 billion at the peak now we made about $4 billion sold about a quarter of our stock 3 years ago how much do you hold now though in total how many I don't remember the number um but it's a big percentage of our assets it's 7even or 8% of our assets in total um so what do you think about this pay package this is a pay package that shareholders approved once this Delaware judge has overturned it and now it's going back to the shareholders again how will you vote your shares we're voting for for the package uh but before I talk about that uh there's three things I want to discuss with you today number one is contracts of course then I want to talk about uh elon's ecosystem you know all the different things he's doing and then uh and then Elon I want to talk about that what he's accomplished so about uh the contract so first of all uh he was you know when we started these know numers are pretty cool uh then uh we started uh when I met him in 2010 uh they were doing 2,000 cars a year and then in 2014 I was 31,000 cars that's when we started buying in 2016 76,000 cars last year million 8 uh so a significant growth and he made promises uh if he met these metrics of uh IA of revenues of market cap uh that he would get this extraordinary compensation and the compensation uh when uh when he started uh when the contract was signed it was the company's ma market value was $53 billion uh it got us high as a trillion that's now 550 billion I think in the next 10 years we're probably to make four or five times our money again in Tesla so so he's created tremendous wealth for people and he was paid uh if his contract is en forced which I think it should be uh he's paid uh $56 billion so it's like winning the lottery you know if you and Joe was talking about before he win a lottery you don't tell someone I'm sorry you won so much money you have to give it back I remember thinking at the time that the compensation deal was a crazy setup but I also remember thinking at the time that I never thought he'd hit any of the of the metrics he hit every one of the metrics so it's hard to imagine taking that back and clawing it back exactly and so that's that's exactly how we viewed it I said man if he hits this this is fantastic we're going to do so well and again I mean you should have another contract going from this point going forward where it's incentive the same way I'm hoping see this is a difference between people like myself or Ron Baron or just people that invested prior to 2020 in testle right we made so much money off this stock and we okay the the pay package before we were fine with that right and so to take it back down we're like why but then you got the after the 2020 after crowd right which those folks have made any money on Tesla those folks if anything they've probably lost money on Tesla unless they happen to buy um the the great dip that was in the end of 2022 into the beginning of 2023 almost everybody else has lost money on Tesla if you invested you know post 2020 right and so those folks are looking at and they're like why is Elon going to get this big pay package when I haven't even made any money on the stock or I potentially lost money on this stock right and I understand their point of view it makes sense I get it um but I also understand you know people like myself Ron Baron or others that it invested before 2020 and we made so much money off the stock and we're like he you know it was agreed upon before why why shouldn't he get the deal right so number one the contract uh so 73% in 2018 73% of the uh of investors uh approved it uh all of the disinterested parties uh who are directors they improved it and the people he has who are directors uh these are not uh you know just you know flakes uh they are alar Ellison one of the wealthiest men in the world hero mizono he was the head of the Japanese uh you know pension fund the largest pension fund in the world $1.5 trillion uh uh Kathleen Thomas Walgreens boots so he had really and of course Robin denholm who came later but they all approved this and they all F this with a fair uh uh you know Fair agreement so basically number one uh all the disinterested uh uh directors approved it number two the will that's the will of the company the will of the company and the will of the shareholders so I think he should be you it's a legally binding contract and then who sued uh you had an individual uh who was a shareholder For Hire with nine shares nine shares uh sued and uh it took him five years uh to get the derivative suit certified but uh class action wasn't so he doesn't really represent all the shareholders uh and the the lawyer who represented them when you talk about getting lucky he has applied to the court for payment of $5.6 billion $5.6 billion and uh and then uh he is asking for the payment to be made in shares of Tesla stock which are depressed because of this lawsuit it's crazy and and uh so so I think that uh you know it's really unfair the way they're addressing this and I think that uh he he he earned it and he deserves it and he should be paid it you've said for a long time when we've asked you what your biggest concern about Tesla would be is the keyman theory that that so much is writing on on Elon Musk being there if he's not there you don't think the company is worth the same so what do you think happens if this package is not approved what will Elon do um I can't see inside of his mind but I know that he has created tremend this value for everyone I know he has a big stake in Tesla uh but you know I when I started in business in 1970 uh one of the people who really helped me at the very beginning of my career was Jay pritzker uh he Tom pritzker's dad and he's the founder of hayatt and we were talking about arrangements and he said Ron uh if you need to have a contract uh then you're doing business uh to uh you're doing business with wrong person uh you can't rely on a contract uh to do and you have to he's a handshake guy so if I say I'm going to do something I do something we said as a Tesla as a company Elon if you perform this is what you're going to get how are you going to know back and renig on that especially when all the directors and all the shareholders approv it it's crazy 100% yeah right on in regards to that so uh you know I I don't really have any more to add in regards to that situation I already kind of shared my opinion overall okay appreciate you guys joining me as always thanks so much for being here if you are looking to apply for Access for thx.com you can go to 1000x stocks.com and go ahead and apply I'll put that as my pin comment down there today along with uh may my patreon in case you want to support my content through patreon much love and have a great day