⁠Investing visuals
NVIDIA is inches away from being the most valuable company in the world.

Here's the company at a glance👇 https://t.co/3g2kb52w9A
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⁠Quiver Quantitative
RT @QuiverCongress: JUST IN: @RepAndyBiggsAZ just introduced legislation to allow NASA to establish a research center for deep space and interplanetary research.

Follow here for updates. https://t.co/i2MUWh9n3g
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AkhenOsiris
If even Emirates Bank is seeing the fruits, AI is so fucking on like donkey kong.

Jokes aside, been hearing similar anecdotal stories from non-tech and definitely not tech-savvy companies. Maybe 2025 is an inflection year of sorts.

Third-party contact works in digital transformation at Emirates Bank.

GenAI deployment going very well for them across a number of functional areas. The efficiency gains are definitely there.

Seems like 1) all this new Gen AI functionality mostly gets deployed across $AMZN, $MSFT and $GOOGL, and 2) Gen AI functionality boosting cost efficiency more than revenue for companies so maybe economic impact is more on margins.

Highlights
-Centralized team understands business requirements and deploys GenAI against it

-Vast majority of development on $MSFT Azure / OpenAI. Using infra deployed locally.

-In HR, mainly using AI to screen thousands of job applications per open role. Ranks candidates along w/ description. Have had good success here and have hired candidates that were top-ranked by AI.

-Use AI to help HR write job descriptions

-Use AI to help onboard new customers. Have to run names through various checklists and lots of little things can go wrong as many people share names. Keep a human in loop for exceptions.

-Use AI when screening new customers to see if any negative media or involvement that warrants attention.

-Use AI to help with regulation. AI digests new regulatory articles that are lengthy / nuanced, summarizes changes, and then reviews all existing contracts to see which ones may need to be amended. Also important that AI can translate different languages so can not only read regulation in Arabic but also see what changes to contracts in English are required.

-Use AI in contact center to help agents. AI can provide proposed solutions which is helpful for agents running into a new issue. AI also very helpful because have customers from Russia / China / etc. and might need agent to be able to read their statement to resolve issues. AI can translate all this.

-There is demand for local AI models bc Arabic has multiple dialects.

-Don’t fine-tune models but do have to put in place a lot of guardrails to reduce hallucination. - TechStockFundamentals
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⁠Quiver Quantitative
Intapp stock has now risen 101% since Representative Josh Gottheimer's purchase in April.

He is the only member of Congress who we have ever seen trade $INTA. https://t.co/Ld3hNE3MPy
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⁠Stock Analysis Compilation
Polen Capital on Exlservice $EXLS US

Thesis: Exlservice is leading the charge in data transformation with 95% renewal rates and strong AI partnerships—discover why this overlooked tech player is a must-watch

(Extract from their Q3 letter) https://t.co/d0Pltn6pQV
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⁠Dimitry Nakhla | Babylon Capital®
A snapshot view of $BKNG & $ABNB ✈️

$BKNG NTM P/E: 24.13x
$ABNB NTM P/E: 33.05x

$BKNG 3-Year EPS CAGR*: 17.02%
$ABNB 3-Year EPS CAGR*: 19.91%

Is $ABNB 37% valuation premium over $BKNG justified? … 💬

*Forecasted EPS Growth 2025-2028 📊 https://t.co/RPZoGEofXL
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⁠Dimitry Nakhla | Babylon Capital®
Less than 2 months ago I stated:

“Today at $672💵 $ASML appears to be a STRONG consideration for investment, albeit with extreme volatility”

$ASML shares increased +14% since ✅
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See the analysis below for a detailed explanation of WHY it was a strong consideration then👇🏽 https://t.co/AKReJSOSHA

A sober valuation analysis on $ASML 🧘🏽‍♂️

•NTM P/E Ratio: 27.32x
•10-Year Mean: 31.07x

•NTM FCF Yield: 3.41%
•10-Year Mean: 3.11%

As you can see, $ASML appears to be trading below fair value

Going forward, investors can receive ~13% MORE in earnings per share & ~10% MORE in FCF per share🧠***

Before we get into valuation, let’s take a look at why $ASML is an excellent business (*Financials in USD*)

BALANCE SHEET✅
•Cash & Short Term Inv: $5.57B
•Long-Term Debt: $5.24B

$ASML has a strong balance sheet & 31x FFO Interest Coverage

RETURN ON CAPITAL✅
•2019: 17.5%
•2020: 21.6%
•2021: 43.8%
•2022: 48.0%
•2023: 48.7%
•LTM: 38.0%

RETURN ON EQUITY✅
•2019: 21.4%
•2020: 26.9%
•2021: 49.0%
•2022: 59.4%
•2023: 70.4%
•LTM: 49.2%

$ASML has excellent return metrics, highlighting the financial efficiency of the business

REVENUES✅
•2013: $7.22B
•2023: $30.42B
•CAGR: 15.46%

FREE CASH FLOW*
• $ASML FCF is very sporadic due to heavy capital expenditures & isn’t necessarily the most reliable way to analyze the company’s value

NORMALIZED EPS✅
•2013: $3.17
•2023: $21.65
•CAGR: 21.18%

SHARE BUYBACKS✅
•2018 Shares Outstanding: $426.40M
•LTM Shares Outstanding: 393.80M

By reducing its shares outstanding ~7.6%, $ASML increased its EPS by ~8.2% (assuming 0 growth)

MARGINS✅
•LTM Gross Margins: 51.1%
•LTM Operating Margins: 30.7%
•LTM Net Income Margins: 26.4%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive ~13% MORE in EPS & 10% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $ASML has to grow earnings at a 13.61% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2025 - 2027 EPS growth over the next few years to be more than the (13.61%) required growth rate:

2024E: $20.22 (-4.0% YoY) *FY Dec

2025E: $24.66 (21.9% YoY)
2026E: $31.31 (27.0% YoY)
2027E: $38.22 (22.8% YoY)

$ASML has a decent track record of meeting analyst estimates ~2 years out. HOWEVER, let’s be conservative & assume $ASML ends 2027 with $35.00*** in EPS (~8% below current estimates) & see its CAGR potential assuming different multiples:

29x P/E: $1,015💵 … ~15.2% CAGR

28x P/E: $980💵 … ~13.9% CAGR

27x P/E: $945💵 … ~12.6% CAGR

26x P/E: $910💵 … ~11.2% CAGR

As you can see, $ASML appears to have attractive return potential EVEN if we assume greater or equal to 26x EPS (below its 10-year mean, current multiple, & justified given its quality, moat & growth rate)

Today at $672💵 $ASML appears to be a strong consideration for investment, albeit with extreme volatility

Additionally, we have some margin of safety by relying on a lower multiple, lower growth rate

As I’ve stated before, given its volatility, however, it’s wise to piece into $ASML — this way, you enhance your margin of safety while also positioning yourself to “win-win” if the stock moves up or down in the short-term 💵

#stocks #investing
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𝐃𝐈𝐒𝐂𝐋𝐎𝐒𝐔𝐑𝐄‼️: 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐍𝐎𝐓 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐀𝐝𝐯𝐢𝐜𝐞. 𝐁𝐚𝐛𝐲𝐥𝐨𝐧 𝐂𝐚𝐩𝐢𝐭𝐚𝐥® 𝐚𝐧𝐝 𝐢𝐭𝐬 𝐫𝐞𝐩𝐫𝐞𝐬𝐞𝐧𝐭𝐚𝐭𝐢𝐯𝐞𝐬 𝐦𝐚𝐲 𝐡𝐚𝐯𝐞 𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐭𝐡𝐞 𝐬𝐞𝐜𝐮𝐫𝐢𝐭𝐢𝐞𝐬 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭.

𝐓𝐡𝐞 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐢𝐬 𝐢𝐧𝐭𝐞𝐧𝐝𝐞𝐝 𝐟𝐨𝐫 𝐢𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐩𝐮𝐫𝐩𝐨𝐬𝐞𝐬 𝐨𝐧𝐥𝐲 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐜𝐨𝐧𝐬𝐭𝐫𝐮𝐞𝐝 𝐚𝐬 𝐢𝐧𝐯𝐞𝐬[...]

𝐭𝐦𝐞𝐧𝐭 𝐚𝐝𝐯𝐢𝐜𝐞 𝐭𝐨 𝐦𝐞𝐞𝐭 𝐭𝐡𝐞 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐧𝐞𝐞𝐝𝐬 𝐨𝐟 𝐚𝐧𝐲 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐨𝐫 𝐬𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧. 𝐏𝐚𝐬𝐭 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐬 𝐧𝐨 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞 𝐨𝐟 𝐟𝐮𝐭𝐮𝐫𝐞 𝐫𝐞𝐬𝐮𝐥𝐭𝐬.

𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 𝐜𝐨𝐧𝐭𝐚𝐢𝐧𝐞𝐝 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐭𝐰𝐞𝐞𝐭 𝐡𝐚𝐬 𝐛𝐞𝐞𝐧 𝐨𝐛𝐭𝐚𝐢𝐧𝐞𝐝 𝐟𝐫𝐨𝐦 𝐬𝐨𝐮𝐫𝐜𝐞𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞𝐝 𝐭𝐨 𝐛𝐞 𝐫𝐞𝐥𝐢𝐚𝐛𝐥𝐞, 𝐛𝐮𝐭 𝐢𝐬 𝐧𝐨𝐭 𝐠𝐮𝐚𝐫𝐚𝐧𝐭𝐞𝐞𝐝 𝐚𝐬 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐧𝐞𝐬𝐬 𝐨𝐫 𝐚𝐜𝐜𝐮𝐫𝐚𝐜𝐲. - Dimitry Nakhla | Babylon Capital® tweet