Investors Are Confused

Joseph Carlson After Hours•Feb 26, 2026

Summary

Joseph provides a comprehensive review of recent earnings reports, focusing on the theme of 'market confusion.' He observes that while Nvidia reported blowout earnings with 73% revenue growth, the stock traded down, reflecting investor uncertainty about the sustainability of AI spending. Joseph highlights a massive transfer of free cash flow from hyperscalers like Microsoft and Amazon to Nvidia, noting that investors are currently fearful of a 'SaaS apocalypse' driven by AI disruption.

Joseph references an interview with Nvidia CEO Jensen Huang, who dismisses the idea that AI will replace software as 'illogical.' Huang suggests that AI agents will instead use existing software tools like Salesforce and ServiceNow as 'systems of record.' Joseph emphasizes that many high-quality stocks are currently trading at their lowest valuations in a decade due to these overblown fears. He maintains a bullish outlook on his core holdings, emphasizing that fundamental growth in users and revenue remains the most reliable indicator of long-term success.

**Nvidia (NVDA):** Joseph describes Nvidia's performance as 'out of this world' after reporting $34.9 billion in free cash flow in a single quarter and projecting 65% year-over-year revenue growth. He believes the stock is currently taking a breather despite a reasonable forward P/E of 23 and argues it will eventually move higher. Joseph notes the company has almost no dilution and exponential cash flow growth.

**Intuit (INTU):** Joseph highlights that Intuit is trading at its lowest valuation in a decade across nearly every metric, including price-to-earnings and free cash flow yield. He argues the tax business is more resilient to AI than investors fear due to regulatory burdens and the complexity of tax law. He expects Intuit to successfully navigate the AI landscape given its strong fundamentals and 17% trailing revenue growth.

**Duolingo (DUOL):** Joseph argues that Duolingo is unfairly categorized as a company destined for AI disruption, noting that its revenue and user growth have shown no negative impact since the release of ChatGPT. He contrasts this with Chegg, which saw an immediate revenue decline following AI's rise. Joseph plans to hold the stock as long as daily active users (DAUs) and paid subscribers continue their upward trajectory.

**Mercado Libre (MELI):** Joseph views the recent 10-14% stock drop following an earnings per share miss as a potential opportunity, comparing their heavy investment in logistics and AI to the early playbooks of Amazon and Netflix. He points out that the company continues to grow revenue at a staggering 40%+ rate. He cautions investors that the high free cash flow yield is partially due to fintech 'float' and should be adjusted for a more accurate valuation.

**Meta (META):** Joseph mentions this is a brand new position for him that he has been buying as the price trades down. He believes Meta offers a more attractive value proposition than Salesforce, growing four times faster on an organic basis while trading at a similar forward P/E. He remains very bullish on the company despite it being currently 'in the red' for his portfolio.

**Salesforce (CRM):** Joseph states that Salesforce is currently undervalued and that its shift toward 'Agentic AI' is a solid move by Marc Benioff. Although he recently sold his position to pivot into Meta, he believes the company is not in danger of being destroyed by AI. He notes that operating margins have improved significantly despite slowing revenue growth.

Summary

Mentioned Stocks