Here's What I'm Buying If the Market Drops Again
Summary
Couch Investor states that despite recent market shakiness, the overall investment landscape is in a good place. Couch Investor advises increasing cash reserves before earnings season to be prepared for potential overreactions or pullbacks, even from companies reporting good results if too much growth has already been priced in. Couch Investor plans to capitalize on broader market pullbacks to add to his existing positions in high-conviction names.
Mentioned Stocks
Reasoning: Couch Investor mentions Rocket Lab as trading at a good price today, suitable for long-term investors. Couch Investor suggests that a price closer to $70 would be ideal, but confidently states that buying at $75-$76 would not be a mistake for a long-term investor.
Reasoning: Couch Investor considers AMD quite expensive at its current valuation (P/E 177x, forward P/E 62.2x) after being up 144% year-to-date. Couch Investor anticipates strong growth acceleration (43% this fiscal year, 55.6% in fiscal 2027) driven by the upcoming MI400 series and its data center business, which Couch Investor believes justifies the current premium for future performance. Couch Investor acknowledges owning enough but would consider adding more if there's a significant pullback, ideally under $500, maybe closer to $480 or even $450.
Reasoning: Couch Investor believes the market misunderstands Palantir's potential, finding analyst growth projections (72% this fiscal year, 45% next) conservative compared to management's outlook (potentially 70% in fiscal 2027). Couch Investor points to management's consistent track record of meeting or exceeding goals, especially regarding free cash flow, and suggests that high forward multiples are misleading given analyst underestimations. Couch Investor recently bought Palantir again at $107 per share and would prefer to buy more shares if it pulls back closer to $100 per share.
Reasoning: Couch Investor views Alphabet as one of the clearest winners in the AI race due to its vertical integration (TPUs, YouTube, Google Search), high profitability, and robust revenue growth expectations (21.2% this fiscal year, then 19.4%, 17.4%). Couch Investor also highlights the excellent growth in Google Cloud revenue and believes the company is resilient enough to survive any potential crash in the AI narrative. Couch Investor would ideally buy more if the stock drops under $300, considering its current P/E of 26.6x (forward P/E 27.6x) reasonable for its growth and market position.
Reasoning: Couch Investor justifies paying a premium for Axon due to its projected 30% growth for the next several years. Couch Investor is bullish on its role in drones and defense and believes it has the potential to become a $100 billion company from its current $44 billion market cap, driven by increased vertical integration and margin recovery. Couch Investor recently bought more Axon shares at around $400 and would still prefer to buy it under $500, ideally closer to $400.
Reasoning: Couch Investor argues that the market misunderstands Reddit's value, particularly its conservative growth projections and underestimated licensing deals with major AI companies. Couch Investor sees significant upside potential in optimizing average revenue per user (ARPU) compared to peers like Meta, and views AI as a huge tailwind for the platform. Couch Investor recently opened a position and would like to build it up further, hoping for a pullback to $160-$170 to add more shares, although Couch Investor wouldn't mind buying at $200.