James Cakmak on Palantir, Tesla, and Apple: Investment Strategies

Palantir Investment Strategy

• 💡 Palantir has experienced a historic run, reminiscent of Nvidia's trajectory, but its current valuation at $160 makes it more challenging to invest in.
• 📌 When first purchased in the $20 range, each new contract added 3-5% to topline revenue growth, making the multiple cheaper than it appeared.
• 🎯 It's considered a position that must be owned in a portfolio, but at a smaller size compared to six months prior.
• 🚀 The company is expected to permeate every aspect of corporations globally.

Tesla: Long-Term Optionality

• 🧠 Elon Musk deserves his compensation, and his continued leadership as CEO is seen as a positive for Tesla.
• 📈 Tesla is a company that requires a longer-term view due to significant embedded optionality, encouraging investors to look past near-term challenges in auto sales.
• ⚠️ The days of Tesla solely as a car company are likely past; its future optionality lies in areas like robotics or competing with companies like Waymo, making it a speculative part of a portfolio.

Apple and Market Frothiness

• 📊 Apple was repurchased a couple of weeks ago after selling it prior, as earnings estimates overshot to the downside, creating a more favorable risk-reward balance.
• 💰 The broader tech market's run has been driven by multiple expansion, not earnings expansion, indicating a frothy market.
• 🔍 Companies with the most visibility, recurring revenue, and ability to sustain growth rates, such as Apple, Spotify, and Netflix, are places to consider.
• ⚠️ Apple's valuation at 27 times earnings is considered rich, and potential tariffs and increased cost of goods sold present near-term challenges for maintaining high margins.