Beat The Denominator

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.

The Federal Reserve's surprise restart of Quantitative Easing (QE) is expected to devalue the US dollar, creating a strong tailwind for scarce assets. Consider buying Bitcoin (BTC), which is viewed as significantly undervalued at its current price of $93,000 and serves as a primary hedge against this monetary expansion. A specific trade to capitalize on this environment is MicroStrategy's preferred shares, as their price is expected to rise towards a target of $100.01 to close the yield gap with falling government bond rates. This strategy benefits from the company's ongoing acquisition of more Bitcoin, which de-risks the preferred shares. The long-term bull case for Bitcoin is further supported by the potential for a $2 trillion market in Bitcoin-backed credit.

Consider CorMedix (CRMD), a highly profitable healthcare company trading at an exceptionally low P/E ratio of 5.66 despite its projected 120% forward revenue growth. The company's sales are expected to nearly double to $400 million in 2025, driven by its FDA-approved anti-infection product, DefenCath. For a higher-risk opportunity, look at KULR Technology Group (KULR), a deep-tech battery safety company whose stock is beginning to be valued for its core business beyond its Bitcoin holdings. The investment thesis is that the market is correcting a major mispricing, offering potential for continued upside as the company grows. When investing in such volatile small-cap stocks, it is crucial to use common stock rather than options and be prepared for significant price swings.

The core investment thesis is to own Bitcoin (BTC) as a long-term hedge against inflation, as it is seen as deeply undervalued. For amplified exposure to Bitcoin, consider MicroStrategy (MSTR), which is behaving like a leveraged investment on BTC's price. CleanSpark (CLSK) is presented as a top pick, positioned for a potential short squeeze with 27% of its float shorted and an imminent hyperscaler deal announcement expected. This Bitcoin miner is considered extremely cheap, suggesting significant upside potential from its current valuation. For investors with a higher risk appetite, Solana (SOL) offers a higher-beta alternative that can outperform Bitcoin during broad crypto market rallies.

A near-term opportunity exists in a MicroStrategy preferred stock, nicknamed "Stretch," which is expected to return to its 100 par value by December or January. This trade is supported by catalysts including an anticipated Federal Reserve rate cut and a recent dividend increase. For long-term investors, MicroStrategy (MSTR) common stock is a high-conviction investment for leveraged exposure to Bitcoin. The company is using its stock premium to aggressively accumulate more Bitcoin, a strategy viewed as highly beneficial for shareholders. Both MSTR and Bitcoin are considered undervalued, with a significant rebound anticipated by 2026.

Consider MicroStrategy Preferred Stock (STRC), as a dividend increase and an expected Fed rate cut on December 10 could push its price from $98 to its $100 target. This asset also offers an attractive 10% dividend paid monthly, making it an income-focused play. For long-term investors, MicroStrategy (MSTR) may be bottoming around $178, presenting a potential entry point for this high-volatility, Bitcoin-proxy stock. The crypto Fear & Greed Index is currently in "Fear," a contrarian indicator that has historically signaled buying opportunities in assets like Bitcoin (BTC). However, be aware that Bitcoin has a historical pattern of dropping on Sunday evenings due to the CME gap.

Novo Nordisk (NVO) is viewed as a compelling buy at its current price, as previous political risks have faded while its growth outlook remains strong. Key upcoming catalysts for NVO include its expansion into the India market and the potential development of an oral weight-loss pill. In contrast, Netflix (NFLX) is considered significantly overvalued and faces a major long-term threat from AI-generated content. Investors seeking a dominant tech leader may find better value in cheaper, faster-growing names like NVIDIA (NVDA) or Google (GOOGL). Duolingo (DUOL) is a stock to watch, but it only becomes a potential buying opportunity if its price falls by more than 30% from current levels.

A specific MicroStrategy fixed-income security, referred to as "Stretch" and trading near a price of 98, is identified as a high-conviction trade. The investment thesis is that an anticipated Federal Reserve interest rate cut on December 9 will act as a direct catalyst, causing the security's price to increase. For Bitcoin, consider buying during predictable price dips that often occur on Friday afternoons and Sunday nights. These dips are seen as temporary opportunities caused by leveraged trader liquidations. The long-term fundamental case for Bitcoin is viewed as superior to gold due to its verifiable and finite supply.

Consider Nebius (NBIS) as a hyper-growth opportunity, with deals from Microsoft and Meta expected to drive revenue up 10x to 20x over the next 12 months. Marathon Digital (MARA) is presented as a deep value play, as its stock is trading below the value of the Bitcoin it holds on its balance sheet. Hims & Hers (HIMS) is viewed as a significantly undervalued long-term investment with a potential price target above $40, driven by its global expansion into markets like Canada and the UK. Watch for CleanSpark (CLSK) to potentially re-rate higher as it pivots from Bitcoin mining to providing data center services for AI hyperscalers. The long-term bull case for Tesla (TSLA) is based on its future potential in AI, specifically its Optimus robot and Full Self-Driving technology, not just car sales.

Hims & Hers Health (HIMS) is presented as a significantly undervalued growth company, with its newly acquired painless micro-needle technology acting as a major long-term catalyst. The investment thesis for Tesla (TSLA) is expanding beyond EVs, as Wall Street has not yet priced in the massive potential of its Optimus robotics project. For high-risk, high-reward exposure to Web3, consider Solana (SOL), a blockchain protocol positioned to take market share from Ethereum. A potential value play is DeFi Technologies (DEFI.NE), which offers discounted exposure as it has been trading for less than the value of its SOL holdings. For a lower-volatility yield opportunity, MicroStrategy's "Stretch" instrument is expected to return to its $100 price target following a recent yield increase.

Hims & Hers Health (HIMS) is presented as a compelling long-term buying opportunity, with its recent stock decline seen as disconnected from strong business fundamentals. The company's key advantage is its vertically integrated, direct-to-consumer model that bypasses the slow and complex insurance system. Investors should watch for future growth catalysts like the rollout of at-home lab testing and personalized AI recommendations. Conversely, traditional lab service companies like LabCorp (LH) are identified as being at high risk for long-term disruption from this new model. Competitors such as LifeMD (LFMD) and Amazon (AMZN) are considered less attractive as their reliance on insurance integration makes them less agile than HIMS.

For long-term investors, consider holding Bitcoin (BTC) for at least four years, as recent price drops are seen as temporary liquidations rather than fundamental shifts. Aggressive investors can gain amplified Bitcoin exposure through MicroStrategy (MSTR), but must be prepared for extreme volatility and avoid using options. For a more conservative approach, MicroStrategy Preferred (STRC) is designed for stability and targets a 10% annual yield, acting as an income-focused alternative. Alternatively, the iShares Bitcoin Trust (IBIT) offers direct exposure to Bitcoin's price through a straightforward ETF. The core strategy across these assets is to hold through volatility for multi-year gains and avoid high-risk leverage.

Consider MicroStrategy (MSTR) as a leveraged investment in Bitcoin, with an expected performance of 1.5 times that of Bitcoin itself. The recent dip in Bitcoin to the $84,000 - $85,000 range is viewed as a buying opportunity as institutions are reportedly accumulating. For income-focused investors, the preferred stock Stretch offers a compelling 10.75% yield, which has become safer following a recent company cash raise. This entire strategy is supported by the conviction that interest rates will fall, with a potential cut as soon as December 2024. A lower interest rate environment is expected to be a significant tailwind for risk assets like Bitcoin and MSTR.

MicroStrategy (MSTR) has significantly de-risked its business by raising cash to cover its dividend for the next 21 months, making it a more resilient investment. The stock is a leveraged vehicle for Bitcoin exposure, designed to amplify BTC's price movements by approximately 1.5 times. For investors who are long-term bullish on Bitcoin but expect short-term volatility, MSTR's strengthened balance sheet presents a compelling opportunity. Be aware that prominent year-end Bitcoin price targets have been revised down to a range of $85,000 to $110,000. Given current market irrationality, investors are advised to avoid options and leverage, focusing instead on buying and holding quality assets for the long term.

Consider buying On Holding (ONON) due to its strong brand momentum and projected 31% revenue growth, making it an attractive growth-at-a-reasonable-price opportunity. In contrast, legacy brand Nike (NKE) should be avoided as it faces negative sales growth, declining profitability, and a significant risk of a dividend cut. The dividend payout ratio for NKE is an unsustainable 82%, and a cut could severely impact its stock price. Investors should also be cautious with Lululemon (LULU), which is experiencing slowing growth and losing market share to trendier competitors like Aloe Yoga. This market shift suggests that nimbler brands like ONON are successfully capturing sales from established industry giants.

Recent sharp drops in Bitcoin (BTC) are often caused by the liquidation of high-leverage traders, not fundamental issues with the asset. Investors should avoid using high leverage, as these positions are frequently targeted and wiped out, especially during low-liquidity periods like weekends. For long-term believers, these liquidation-driven price drops can be viewed as market noise or potential buying opportunities. This volatility is often isolated to crypto and does not necessarily signal a downturn in the broader stock market like the S&P 500. The core strategy is to maintain a long-term investment mindset for Bitcoin, focusing on its fundamentals rather than reacting to short-term price swings.

Investors should watch for an official announcement from MicroStrategy (MSTR) regarding a new corporate strategy, which could involve holding USD cash reserves or buying back its own stock. This potential de-risking move aims to attract traditional investors and could be a positive catalyst for the stock's stability. The strategy is based on a highly bullish outlook for Bitcoin (BTC), with hypothetical options trades suggesting a belief it will stay above $80,000. Longer-term, growing acceptance of Ethereum (ETH) and Solana (SOL) by major Bitcoin advocates signals potential for their increased adoption in decentralized finance. This maturation of corporate strategy at MSTR demonstrates growing confidence in crypto as a mature financial asset class.

Consider Nebius (NBIS), an AI infrastructure provider projected to grow revenue over 1,000% in the next 12 months. The company has secured massive deals with Microsoft and Meta, yet trades at a forward price-to-sales ratio of just 2.5, making it appear "ridiculously cheap." Another high-conviction opportunity is Hims & Hers Health (HIMS), which is viewed as an "insane steal" at its current price, down roughly 50% from recent highs. Management supports this view with a $250 million share repurchase program, backed by strong recurring revenue and customer growth. Similarly, AI-driven beauty company Oddity Tech (ODD) is described as "dirt cheap" and presents a comparable deep-value growth opportunity.

Consider Bitcoin miners like CleanSpark (CLSK) and Marathon Digital (MARA), which are pivoting their energy infrastructure to capitalize on the high-demand AI theme. Their key advantage is the ability to rapidly deploy modular data centers, giving them a significant edge in meeting the urgent demand for AI computing power. KULR Technology Group (KULR) is presented as a deeply undervalued opportunity, as the market has overlooked its core high-growth business in space, defense, and advanced batteries. Even after a significant rally, the stock is considered cheap as the market begins to recognize its value beyond its Bitcoin holdings. For a specific trade, a MicroStrategy (MSTR) preferred stock is targeting a return to $100, potentially catalyzed by an anticipated rate cut around December 10.

Consider tax-loss harvesting by selling a losing position in a crypto-related stock and immediately buying a highly correlated but distinct alternative to maintain market exposure. For Bitcoin exposure, investors holding MicroStrategy (MSTR) at a loss could swap into Metaplanet, and vice versa. In the Ethereum ecosystem, a losing position in SBET can be swapped for BMNR, while Solana investors can swap between UPEXI and DFDV. Those with significant losses in leveraged products like MSTX or MSTY could sell to harvest the loss and reposition into MSTR stock or options. Be cautious swapping nearly identical spot ETFs like IBIT and FBTC, as this carries a high risk of being a disallowed wash sale.