Market Sentiment Is Quickly Changing
Summary
Joseph provides an in-depth analysis of the 'vibe shift' in the stock market, where investors are moving back into big tech companies that spend heavily on capital expenditures (capex). He emphasizes that the narrative has shifted from criticizing these companies for overspending to rewarding them for massive growth and AI monetization. Joseph specifically points to Amazon's latest earnings as a catalyst for the broader market rally, noting that its cloud division, AWS, is growing faster and more profitably than many expected. He also reviews his personal portfolio performance, noting significant gains in his largest positions like Google and Amazon.
Looking forward, Joseph discusses the upcoming earnings for several high-growth companies and shares an optimistic outlook for 2027 based on Tom Lee's predictions. Joseph notes that the market is currently a 'coiled spring' ready to rebound as macro pressures like yen carry trade deleveraging subside. He maintains a strategy of holding dominant network businesses that benefit from secular trends in AI, food delivery, and digital payments.
Mentioned Stocks
Reasoning: Joseph is extremely bullish on Amazon following its earnings report, noting that AWS growth accelerated to 36.7%. He highlights the stock hitting $285 and emphasizes the massive $496 billion backlog as evidence of sustained demand. Joseph previously predicted the stock was undervalued at $240-$260 and believes it remains attractive given the profit margin expansion in cloud services.
Reasoning: Joseph describes Texas Roadhouse as one of his best investments and a 'compounding machine.' With the stock at $211, he remains bullish due to its exceptional operational efficiency and the potential for margin expansion as beef and labor inflation subside.
Reasoning: Despite being down $13,400 on the position, Joseph continues to hold and remains bullish. He believes the integration of AI characters to allow for conversational practice has fixed a major product flaw and will eventually improve the company's financial metrics.
Reasoning: Joseph is skeptical of FICO, noting its stock is down 32% this year and trading near $1,000. He points to the erosion of its regulatory moat and the competitive 'war' with distributors as reasons why its previous premium valuation (PE of 100) was no longer justified.
Reasoning: Joseph owns S&P Global and prefers its stability over FICO. He highlights the 11% organic revenue growth and the strength of the ratings and indices businesses, noting that the company grows earnings per share much faster than its revenue.
Reasoning: Joseph recently bought Uber, viewing it as a massive network business similar to Visa. While acknowledging risks from robo-taxis, he believes Uber can simply license that technology. He is focused on the scaling of Uber One memberships and its international growth potential.
Reasoning: Joseph recently bought DoorDash as part of a split buy. He believes the company has an 'unbreakable moat' in the US food delivery market with a 60% market share that is expected to grow to 70%. He values the convenience the service provides to increasingly wealthy consumers.