Ethan Billings, a securities analyst at TD Securities’ Washington branch, publicly recommended in the WhatsApp trading strategy group to gradually start buying tech stocks beginning April 20. The strategy has led to significant profits. Below is a detailed breakdown of the recommended tech stocks.
Alphabet (GOOGL) The Cash Cow of Search & AI’s Next Frontier
Investment Thesis
Alphabet dominates digital advertising (Google Search + YouTube) while aggressively pivoting to AI and cloud computing (Google Cloud). Its moat is unshakable , cash flow is enormous , and valuation is reasonable for a tech giant.
Core Strengths
Search Advertising Monopoly
– Google handles 90%+ of global searches, generating $237B in ad revenue (2023).
– Operating margins: 28%—far healthier than Meta’s volatile ad biz.
YouTube’s Dual Revenue Stream
– Shorts now hit 50B daily views(vs. TikTok’s 80B), monetization improving.
– Subscription revenue ($40B/year) growing 20%+ via Premium/Music.
Google Cloud Profitability
– $33B revenue (2023), +26% YoY, now profitable (5% operating margin).
– Vertex AI adoption rising—big contracts with Pfizer, Goldman Sachs.
AI Leadership (Gemini + TPUs)
– Gemini Ultra rivals GPT-4, integrated into Search (SGE) and Workspace.
– In-house TPU chips reduce reliance on Nvidia (cost advantage).
Long-Term Growth Catalysts
AI-Powered Search (SGE):
– Search Generative Experience could boost ad prices (higher CTRs).
– Threat to SEO industry—Google directly answers queries.
Cloud + AI Synergy:
– Enterprises adopting Gemini for Docs/Gmail automation.
– Margin expansion as cloud scales (target: 10%+ op. margin).
Other Bets (Waymo, Quantum):
– Waymo robotaxis expanding in SF/Phoenix—potential IPO by 2026.
Valuation & Verdict
– PE: 24x (below 5-yr avg of 28x).
– DCF Fair Value: $160-$180 (assumes 5% ad growth, 20% cloud growth).
– Action: BUY for long-term holders**. Reliable cash cow with AI upside.
Tesla (TSLA) – The High-Stakes Bet on EVs, FSD & Energy
Investment Thesis
Tesla is more than an automaker—it’s a tech/energy disruptor betting on FSD, robotics, and storage. But its stock is priced for perfection, requiring flawless execution.
Core Strengths
EV Cost Leadership
– $36k/car production cost (industry’s lowest).
– Giga presses + 4680 batteries cut costs further.
FSD & Robotaxi Potential
– $3B/year FSD revenue (10% take rate)—could 10x if L4 achieved.
– Robotaxi unveil in 2024 (Elon’s “Tesla Network” vision).
Energy Storage Boom
– Megapack demand surging ($6B revenue in 2023, +80% YoY).
– IRA subsidies boosting U.S. solar/storage projects.
Microsoft Corp. (MSFT) — Cloud Computing & AI Powerhouse
Core Strengths:
Azure Cloud: Second-largest cloud provider globally with a 24% market share and over 30% growth, ensuring strong enterprise customer retention.
Office 365: Subscription-based revenue model with over 80% gross margin.
OpenAI Partnership: Major shareholder in OpenAI, integrating ChatGPT and Copilot across its product suite.
Financial Metrics (TTM):
* Revenue: $228 billion
* Net Profit: $72 billion (Net Margin: 31.6%)
* Gross Margin: 70.1%
* Debt Ratio: 42% (Manageable)([Thoughts Mag][1])
Long-Term Growth Drivers:
* Azure AI services saw a 50% revenue increase in 2023, indicating strong demand.
* Expansion of enterprise software offerings like Teams and Power Platform.
Risks:
* Antitrust scrutiny in the EU regarding Teams.
* Intense competition from AWS (Amazon) and Google Cloud.
Valuation: P/E ratio of 35x, reflecting AI growth premium.
NVIDIA Corp. (NVDA) — AI Chip Dominator
Core Strengths:
GPU Market Share: Over 90% share, with the H100 chip becoming the gold standard for AI training.
Data Center Revenue: Accounts for 80% of sales, with major clients like Microsoft, Meta, and Google.
Financial Metrics (TTM):
* Revenue: $60.9 billion (126% YoY growth)
* Net Profit: $29.8 billion (Net Margin: 48.9%)
* Gross Margin: 74.3% (Highest in the chip industry)
Long-Term Growth Drivers:
* Global AI chip market projected to reach $120 billion by 2027, with NVIDIA leading.
* CUDA ecosystem creates high developer lock-in, making it difficult for competitors like AMD to replace.
Risks:
* Geopolitical tensions affecting exports to China, where 25% of revenue is generated.
* High valuation with a P/E ratio of 90x, requiring sustained high growth to justify.
Valuation: Short-term volatility expected; long-term DCF target price exceeds $1,000 if AI demand continues.
Amazon.com Inc. (AMZN) — E-Commerce & Cloud Computing Leader
Core Strengths:
AWS Cloud: Market leader with a 34% share and operating margins over 30%.
E-Commerce Scale: North American market share of 38%, supported by a robust logistics network.
Financial Metrics (TTM):
* Revenue: $574 billion
* Net Profit: $30.4 billion (Net Margin: 5.3%, driven by AWS)
* Free Cash Flow: $36.2 billion
**Long-Term Growth Drivers:
* Advertising revenue reached $48 billion in 2023, growing 25% year-over-year.
* Expansion into international markets like India and Latin America.
Risks:
* Retail profit margins under pressure due to inflation and logistics costs.
* Regulatory challenges, including antitrust lawsuits from the FTC.
Valuation: P/E ratio of 60x, above historical averages, but supported by AWS growth. DCF analysis suggests a target price range of $180– $200.
Disclaimer: The information provided in this press release is not a solicitation for investment, nor is it intended as investment advice, financial advice, or trading advice. It is strongly recommended you practice due diligence, including consultation with a professional financial advisor, before investing in or trading cryptocurrency and securities.
