Recent sell-offs across the AI sector are creating buying opportunities in high-quality companies whose fundamentals remain strong. Consider dips in Nvidia (NVDA), which is viewed as significantly undervalued on a growth-adjusted basis and a better value than competitor AMD. Nebius (NBIS) is presented as a deeply undervalued opportunity, with revenue projected to grow 10x to 20x over the next 12 months while already being profitable. A major near-term catalyst is expected for CleanSpark (CLSK), which is in final talks to provide power to a large hyperscaler. This makes CLSK an attractive investment before a potential contract announcement causes the stock price to increase significantly.

Artificial Intelligence (AI) Sector

• The speaker is extremely bullish on the AI sector, viewing it as a fundamental innovation on the scale of electricity and potentially bigger than the internet.
• The market is currently treating AI stocks like a bubble, similar to the dot-com era, but the speaker believes this is a mistake.
• A recent sell-off across AI stocks was triggered by Oracle (ORCL) announcing higher-than-expected spending (CapEx). The speaker views this as a "nothing burger" and an overreaction, creating buying opportunities in unfairly punished stocks.
• The speaker notes a strange market environment where stocks with stellar earnings are not increasing in price, and the market seems to be looking for any reason to sell.

Takeaways

• The speaker believes the market is fundamentally undervaluing the long-term potential of AI.
• Recent sector-wide sell-offs, triggered by news from a single company like Oracle, are seen as irrational and may present buying opportunities in high-quality AI names that were dragged down.
• Despite the bullishness on specific stocks, the speaker is generally cautious about the overall market's stability and is personally building a cash reserve. This suggests that while opportunities exist, investors should consider pacing their buys.

Nebius (NBIS)

• The stock experienced a significant intraday swing, dropping 7-8% in the morning before recovering to end the day up 1%. The speaker sees the initial sell-off as completely unjustified.
• Valuation: The speaker considers NBIS to be extremely cheap, noting it has been trading under 0.05 on their proprietary valuation model for weeks and that the market is "entirely ignoring it."
• Growth Projections:
  • Expected to grow revenue by 10x to 20x (1,600% to 2,000%) over the next 12 months.
  • Company guidance for 2026 is an Annual Recurring Revenue (ARR) of $7.9 billion, a massive increase from the current trailing 12-month revenue of $551 million.
• Fundamentals:
  • The company is already EBITDA positive with a 19% EBITDA margin.
  • Its capacity is completely sold out, indicating massive demand.
• Hidden Assets:
  • Nebius owns 28% of ClickHouse, a competitor to Snowflake, which the speaker estimates could be worth $6 billion.
  • It also owns AVRide, a "wildcard" asset that could be worth around $1 billion.

Takeaways

• The speaker views NBIS as a deeply undervalued growth opportunity that the market is overlooking.
• The combination of explosive revenue growth guidance, existing profitability, and sold-out capacity suggests strong business fundamentals.
• The value of its stakes in ClickHouse and AVRide may not be fully reflected in the current stock price, offering potential hidden upside.
• The morning sell-off and subsequent recovery highlight the stock's volatility but also the opportunity for investors who believe in the company's long-term story to buy on dips.

Nvidia (NVDA)

• The stock dropped over 2% on the day of the podcast, which the speaker attributes to the general AI sector sell-off rather than any company-specific issue.
• Performance & Demand: The company had "stellar earnings," and CEO Jensen Huang confirmed that their GPUs are sold out.
• Guidance & Growth:
  • The CEO projected $500 billion in sales over five quarters, implying a future revenue run-rate of $400 billion annually.
  • The speaker believes this points to growth closer to 200%, making official analyst estimates of 69% seem extremely pessimistic.
• Valuation:
  • On a growth-adjusted basis, the speaker claims NVDA is the cheapest MAG 6 stock, even cheaper than Meta.
  • The market is seen as being scared by the large market cap and not properly valuing its future earnings. The speaker argues it's not even getting a 15x multiple on future cash flow, which is low compared to a company like Costco at a 50x multiple.
• Competitive Moat:
  • The CUDA software architecture creates a powerful ecosystem that is difficult for competitors to replicate.
  • Its long-standing, high-volume relationship with chip manufacturer TSMC gives it priority access to manufacturing capacity, an advantage that is hard to copy.
  • The speaker notes that competitor AMD is more expensive on their valuation metrics, making NVDA the better play as the market leader.

Takeaways

• The speaker believes NVDA is significantly undervalued relative to its massive, near-term growth potential.
• Investors should look past the large stock price and market cap and focus on the growth-adjusted valuation, which appears highly attractive.
• The sell-off is viewed as a buying opportunity, as the company's fundamentals and market leadership remain exceptionally strong.
• Nvidia's competitive advantages in both software (CUDA) and hardware manufacturing (TSMC relationship) create a durable moat.

CleanSpark (CLSK)

• Similar to other AI-related names, the stock was down heavily in the morning before recovering to close up 6%.
• Upcoming Catalyst: The CEO confirmed on the Q3 earnings call that they are in talks with two hyperscalers (large cloud computing companies like Amazon, Google, or Microsoft) for providing power.
• Prediction: The speaker is confident that CLSK will announce a contract with a hyperscaler, likely for its Sandalsville, GA site. They predict the stock will "pop a lot" when this news is released.
• Valuation:
  • The speaker believes the stock is "way too cheap."
  • They dismiss the stated 12x P/E ratio as a poor metric for this business.
  • The speaker's own calculation puts the company at a 2.5x EBITDA multiple, while noting it trades at a 10.5x EBITDA multiple. Both are presented as attractive.
• Price History: The speaker believes the "normal price" for the stock was $22 about a month and a half prior, and the subsequent drop was due to macro factors (crypto prices, government shutdown fears), not company performance.

Takeaways

• A potential contract with a hyperscaler is a major, near-term catalyst that could cause the stock price to increase significantly.
• The speaker sees the current price as an attractive entry point before this potential catalyst is announced.
• Like the other stocks mentioned, morning sell-offs are presented as potential buying opportunities for investors who are less cautious about the overall market.