For a high-conviction bearish trade, consider shorting quantum computing stocks like Rigetti (RGTI) and D-Wave (QBTS), which are viewed as fundamentally flawed and overvalued. As a "growth at a reasonable price" investment, Taiwan Semiconductor (TSM) is highlighted as a winner due to its remarkable revenue growth and fair valuation. Conversely, Apple (AAPL) is presented as a potential short opportunity, criticized for its expensive valuation and for lagging peers in AI investment. For a high-risk, high-reward speculative play, consider a small position in Biohaven (BHVN) ahead of its key drug approval decision, as a positive outcome could send the stock toward $50. Finally, watch medical device maker Baxter (BAX) as a potential contrarian buying opportunity after the stock recently hit a 20-year low.

Biohaven (BHVN)

• The speaker performs a deep dive on Biohaven, which is trading at $18 with a $1.8 billion market cap. The analysis focuses on its lead drug candidate for ataxia, Trorilazole (also called Rilazole).
• Management & History: The management team is described as "very capable" and "the goat." They previously sold most of Biohaven to Pfizer for approximately $14-15 billion, and this is the remaining portfolio of assets. This track record makes it "hard to bet against these guys."
• Financials: The company is burning a lot of cash, estimated at $600 million this year, and has some debt. The speaker notes they "need some cash" but can likely raise more money or monetize other drugs in their portfolio.
• Clinical Data: The data for Trorilazole is mixed and a "toss-up."
  • An early study (201s) was "somewhat in favor of placebo."
  • A subsequent study (206) also showed "no efficacy" with a p-value of 0.75.
  • However, pooled data from a real-world evidence (RWE) study looks "much more robust" with a highly significant p-value of less than .0001.
  • The company previously received a "refusal to file" from the FDA, which was not a good sign.
• Investment Thesis: The stock has fallen from $50 to $18, suggesting market expectations for approval are very low.
  • JP Morgan estimates a 40% chance of approval, which could send the stock to the $30s.
  • The speaker speculates that if the drug (Viglexia is the potential brand name) gets approved, the stock could go to $50. An options trade is mentioned: $20 calls for $5, which could turn into $30 (a 6x return) if the stock hits $50.
  • Even if the drug is not approved, the speaker believes the stock may still be a good investment because it would clear the way for the market to focus on the rest of the "really good" portfolio.
  • The final sentiment is a cautious buy: "Biohaven's a buy at any price," but also, "I'd rather not gamble." The speaker leans towards buying a small position, viewing it as a good long-term hold where you could buy more if it drops on a negative FDA decision.

Takeaways

• Biohaven is a high-risk, high-reward biotech stock centered around a near-term FDA decision for its ataxia drug, Trorilazole.
• Bull Case: The highly respected management team has a history of major success. The rest of the company's drug portfolio is considered strong. Market expectations are low, so a surprise approval could lead to a significant stock price increase (potentially to $40-$50 from $18).
• Bear Case: The clinical data for the lead drug is inconsistent, with multiple studies failing to show a clear benefit. The company is also burning through cash quickly.
• Actionable Insight: The speaker suggests this could be a "buy a little here" situation. An investor could start a small position before the FDA decision. If the drug is not approved and the stock falls, it could be an opportunity to buy more, betting on the strong management and the rest of the drug pipeline. If it is approved, the initial position would see significant gains.

Quantum Computing Sector (RGTI, QBTS, INQ, BTQ)

• The speaker expresses an extremely bearish view on the quantum computing sector, stating he is short these stocks and that it is a "good majority" of his portfolio.
• Rigetti (RGTI): Called a "garbage company" that is "going to zero." The speaker claims RGTI has the "worst of the superconducting" technology and that it's not clear if it can be scaled. He also notes that the founder, Chad Rigetti, has sold his stock and started a new company. A chart pattern is pointed out as a "head and shoulders," signaling a potential breakdown.
• D-Wave (QBTS): Described as "complete garbage." The speaker is frustrated by its high valuation.
• IonQ (INQ): The speaker mentions he was short INQ at $80.
• BTQ: Referred to as a "fake company" with "no revenue" that is "going to zero." The speaker mocks retail investors using platforms like TradingView that show an incorrect market cap of $5 million when it is actually over $1 billion.

Takeaways

• Extreme Bearishness: The speaker holds a strong conviction that publicly traded quantum computing companies are overhyped and fundamentally flawed.
• Shorting Opportunity: This sector is presented as a primary shorting target. The core thesis is that the technology is far from commercial viability, the companies are burning cash with no clear path to profitability, and valuations are disconnected from reality.
• Risk: This is a volatile, high-risk trade. The speaker acknowledges being down on the position at times and the stocks can be prone to sharp rallies on news or hype.

Big Tech & Market Outlook

The speaker provides a quick overview of major tech stocks, expressing a generally cautious or "toppy" feeling about the market.

• Meta (META):

  • The stock dropped ~11% after earnings due to high Capital Expenditure (CapEx) guidance, which scared investors.
  • Despite the drop, the speaker "kind of likes Meta" because it "keeps beating" earnings.
  • He considers buying the dip but is hesitant due to general market weakness.
  • Takeaway: A potential buying opportunity for a fundamentally strong company. The speaker suggests a possible pair trade: long META and short Apple.

• Apple (AAPL):

  • The speaker is bearish, calling the stock "really expensive" and a "good short."
  • He criticizes the company for not investing heavily in AI, noting its CapEx isn't growing like its peers.
  • The earnings report showed weakness in China revenue and some product lines, which supports the bearish thesis, even though the company guided for a record holiday quarter.
  • Takeaway: Viewed as overvalued and lagging in the AI race. It's presented as a potential short candidate.

• Taiwan Semiconductor (TSM):

  • The speaker is bullish on TSM, highlighting its "remarkable" 30% revenue growth and reasonable valuation at 19 times earnings.
  • He sees it as a potential "winner" and a better value than other large-cap stocks like NVIDIA or even non-tech companies like Walmart.
  • Takeaway: A classic "growth at a reasonable price" (GARP) investment. TSM is seen as a way to get exposure to the semiconductor boom without paying the extremely high valuations of other players.

• NVIDIA (NVDA):

  • The speaker notes its "unbelievable" $5 trillion market cap and that it had the "best news they've ever gotten."
  • He seems to like the company the most among the big tech names due to "insatiable demand" but also finds it "very tricky" to analyze at its current valuation.
  • Takeaway: Acknowledged as the leader with incredible demand, but the valuation makes it a difficult and "tricky" investment.

• Amazon (AMZN):

  • The speaker thinks Amazon is "actually pretty good." He believes its true earnings are obscured by heavy investment, and it could be trading at a much lower multiple (like 15 times earnings) if it chose to show more profit.
  • The earnings report showed a beat on revenue and re-acceleration in AWS, causing the stock to jump.
  • Takeaway: Bullish view. The company is seen as cheaper than it appears on the surface due to its practice of reinvesting heavily in the business.

Other Stock Mentions

• Abivax (ABVX):

  • A clear winner for the speaker, who says, "I hope you brought it with me. We, I think, doubled our money at this point."
  • He calls it one of his "favorite biotech picks." The stock is seen hitting 106.
  • Takeaway: A successful bullish biotech call. The speaker remains positive on the stock.

• Sarepta (SRPT):

  • The speaker confirms he is "still in Sarepta" and has not changed his mind, indicating a continued long position.
  • Takeaway: Continued bullish stance on this biotech company.

• Baxter (BAX):

  • The speaker notes that Baxter hit a 20-year low after cutting its profit forecast.
  • He says, "I might have to do something about that," implying it could be a contrarian buying opportunity.
  • Takeaway: A value/turnaround play to watch. The significant drop has put it on the speaker's radar as a potential long investment.

• Opendoor (OPEN):

  • Mentioned as a stock that is falling, down 6-7%. The speaker seems bearish, lumping it in with the "Eric Jackson portfolio" that is "going to zero."
  • Takeaway: Bearish sentiment. The stock is associated with other high-risk, money-losing companies.