00:00folks in today's video we're going to go
00:01through Tom Lee's top stock to buy to
00:04get filthy rich off of and never have to
00:07work again this is a fairly unknown
00:09small cap trading in the Russell 2000
00:12and one that you absolutely will hear a
00:14ton about over the coming months and
00:16years I dug through countless hours of
00:18Tom Le's interviews and press releases
00:20to bring you this video and I know
00:22exactly what you are thinking why
00:24exactly do we care what Mr Tom Lee
00:26thinks well he is one of the most highly
00:28regarded financial analyst
00:30and is a co-founder of one of the most
00:32renowned independent research boutiques
00:34fundstrat Global advisors but to be
00:37specifically has made many many correct
00:39predictions he was one of the earliest
00:40Wall Street analysts to recognize
00:42bitcoin's potential back when it was
00:43trading at just a th000 bucks during the
00:45early stages of the pandemic Lee
00:47predicted a strong recovery in the stock
00:49market driven by the unprecedented
00:51fiscal and monetary support obviously
00:53that turned out to be very very correct
00:55the market rebounded sharply after that
00:57initial crash in March 2020 just like he
01:00had predicted Lee has also predicted for
01:02years that the biggest tech stocks would
01:04outperform the broader markets by Leaps
01:05and Bounds obviously that has also been
01:07true Lee also correctly anticipated the
01:09rise in inflation in 2021 due to supply
01:12chain disruptions and increased demand
01:14as economies reopened his insights
01:16helped investors navigate the
01:17inflationary environment and saved a lot
01:19of people tons of money as well as made
01:20people tons of money Lee also famously
01:22nailed the 20203 rally now obviously
01:25past performance doesn't equal future
01:27returns and Lee has been wrong in the
01:28past two but nonetheless given his
01:30overall Stellar track record it makes
01:32sense to pay attention to what he is
01:33saying and in today's video we're going
01:35to go through four major points a Tom
01:37Le's Market predictions for the next 12
01:40months B why he believes small caps
01:42specifically are going to soar C Tom
01:45ley's criteria for picking stocks and
01:47then once we understand all of that
01:48context we're going to give you what you
01:49came here for which is D the stock to
01:52get rich off of and some analysts expect
01:55the stock to increase more than 500% by
01:572030 and perhaps way sooner and as
02:00always if you're the one taking the risk
02:01you got to be the one doing the ultimate
02:02Frisk make sure to do your own due
02:04diligence on all ideas presented here
02:06also quick plug today's video is
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02:25down below completely free okay so we
02:27need to start with Tom ley's forecast
02:29for the rest of this year see Lee
02:31predicts that strong earnings in
02:32trillions in sideline cash will push the
02:35S&P 5 hundo to continue rallying through
02:37the end of this year and into next year
02:39he bases this on revised earnings
02:41estimates of $285 and a higher PE
02:44multiple of 20 to 21 why is this though
02:46well Lee claims that the market is
02:48lacking cash with thinam margin debt
02:50still down 20% since October 2021 and if
02:54you look over at the fed's data on money
02:56market funds we can see that he's right
02:58the total sideline cash and money market
03:00funds is about 6.4 trillion right now
03:02that's a lot of Mula in other words Lee
03:04sees these trillions of dollars
03:06eventually moving out of money market
03:08funds and a large chunk of that
03:10inevitably going into equities if
03:12monetary policy eases aka the FED Cuts
03:14rates this could happen much much faster
03:16as lowering rates will drive money out
03:18of money markets and treasuries into
03:20equities in search of better returns
03:22obviously equities are outperforming
03:24treasuries right now even though
03:25treasuries have a really high rate at 5
03:27to 6% but but at the same time hey
03:30that's a risk-free rate and people have
03:32been very very cautious about the stock
03:34market even though it has been rallying
03:35to newer and newer Highs but the minute
03:37that rates start going down and dropping
03:39like a rock all of a sudden there's
03:41going to be no choice and they got to
03:42invest all of these trillions of dollars
03:44somewhere and that's either going to go
03:45into real estate or equities maybe some
03:47into cryptocurrency but the volume of
03:49trillions of dollars a lot of that is
03:51just simply going to go into the stock
03:53market and that is the argument that Tom
03:54Le is making here in terms of the
03:56overall economy and its relation to the
03:57stock market Tomley also predicts that a
04:00global labor shortage of about 80
04:02million workers by 2030 will drive a
04:04significant increase in tech stocks he's
04:06been very very bullish on tech stocks
04:08for the last 5 to six years I know
04:09that's not a very contrarian opinion but
04:12but he's been projecting some of the
04:13most bullish numbers for tech stocks for
04:15many many years and every single time
04:17he's come out when tech stocks have
04:18reached a new high people have said oh
04:20he's just an endless endless perable who
04:23has no sense of when things are in a
04:25bubble or when things are about to pop
04:27but he's been right over and over and
04:28over again and now he expects the
04:30technology sector share of the S&P 500
04:33to grow from its current 30% to 50% 50%
04:37half Le argues that artificial
04:38intelligence will play a crucial role in
04:41boosting productivity to address the
04:42labor shortage that he projects and he
04:44estimates that companies will spend
04:46about 3.2 trillion annually in AI
04:49technology $3.2 trillion spent just on
04:52AI is a massive massive industry that's
04:55going to drive a massive massive
04:57increase in industry and lots and lots
04:58of companies are going to come out of
05:00the Woodworks making hundreds of
05:01billions of dollars that today aren't
05:03making anything that means a lot of
05:05opportunity for wealth creation and
05:07folks historically Global labor
05:09shortages have led to substantial growth
05:10in tech stocks as seen between 1948 and
05:131967 and 1991 to 1999 and he believes
05:16that's going to happen again he
05:18specifically talks a lot about Nvidia
05:19he's a big fan of the company he
05:21believes that with its substantial
05:22annual revenue it still poised to
05:24benefit a lot more significantly from
05:26the AI wave and Lee also believes that
05:28Nvidia like a lot of other stocks with
05:30real results are not really in a bubble
05:33like the era because it's high-priced
05:35scarce chips offer a more sustainable
05:37value compared to the low pric products
05:39of the dot era but bigger than this he
05:42believes the overall S&P 5 Honda will
05:44hit 15,000 by 2030 he said quote I think
05:47we Tred to look at a normalized
05:48situation and in a normalized world if
05:50this is a normal S&P cycle following
05:53demographics S&P should be potentially
05:5515,000 by the end of the decade to me as
05:57you move into a longer time frame that's
06:00probably where I think we're moving
06:01towards the least said you look at fun
06:03strats own data on this well the PE
06:05ratios when they made this chart show us
06:07at around mid-range historically but if
06:09you believe fun strat's ideas on forward
06:11PE ratios well we are probably still
06:13somewhere trading mid-range again given
06:16the expected growth they you're seeing
06:17over the coming years okay but now I
06:19want to talk about his stance on small
06:21caps which leads us to the main stock of
06:22this video but first here's the thing
06:25Tomley started this year by saying that
06:26small caps will outperform the S&P 500
06:29by at at least 50% in 2024 and he has
06:32projected earnings valuations and
06:34revenue growth of small caps he has
06:35projected their set to outshine large
06:38caps in 2025 he's frequently highlighted
06:40parallels with 1999 when small caps
06:42outperformed by 650 basis points
06:44annually totaling a communative 113%
06:48over 12 years he explains that small cap
06:50stocks actually exhibit faster Revenue
06:52growth averaging 6.9% compared to 5.5%
06:56for larger caps a difference of 140
06:58basis points or nearly 25% faster growth
07:01across all quintiles additionally Lee
07:04highlights the earnings growth potential
07:06of small caps projecting a 19% increase
07:09in earnings per share surpassing the S&P
07:11500's 12% EPS growth with their lower
07:14price to earnings ratio small cap stocks
07:17appear more affordable and attractive to
07:19investors Lee also notes that
07:21institutional investors have been
07:22underweight in small caps for years
07:24creating an opportunity for a turnaround
07:26as small caps begin to outperform and
07:29again he loves to draw parallels between
07:30the 1999 situation which again led to 12
07:33years of small cap outperformance okay
07:35but Charlie if he's so bullish on small
07:37caps what are his favorite ones and
07:39which is the one you should buy if you
07:40want to get unbelievably and filthy rich
07:43in order to find that stock you have to
07:45understand the criteria that Tom Lee
07:47uses in order to find his favorites and
07:50he's been very very vocal about the
07:51factors that he uses and I've compiled
07:52them in a notepad here today but Tom
07:54Lee's strategy for picking stocks
07:56includes the following components one
07:58valuation metrics he focuses on the PE
08:00and the PB ratios to find undervalued
08:03stocks your price to earnings and your
08:04price to bookings number two he uses the
08:06earnings and revenue growth he
08:07identifies companies with strong
08:09earnings and revenue growth potential
08:11number three Market sentiment and fund
08:12flows very very important he analyzes
08:14investor behavior and fund flows to spot
08:17Trends and tries to get in before the
08:19trend really realizes itself number four
08:22macroeconomic factors he considers
08:24interest rates inflation and economic
08:26growth in his analysis a lot of funds
08:27they don't consider these things because
08:29they are morons they think oh the
08:30company is just based on the underlying
08:32business but no no no the company
08:34success is also based on the economic
08:36environment that it's in where interest
08:38rates are the inflation how those things
08:40are being managed by the Federal Reserve
08:41so on and so forth number five he looks
08:43at historical parallels he uses
08:45historical Market comparisons to predict
08:47future Trends obviously past performance
08:49can't predict future returns but at the
08:51same time they are very very useful
08:53because history while doesn't have to
08:54repeat itself it often Rhymes right
08:57number six diversification and Market
08:59breath he loves talking about Market
09:00breath he looks for signs of broadening
09:02Market participation Beyond Mega cap
09:04stocks because once the big cap stocks
09:06realize themselves so fully that all of
09:09a sudden the best deals are in the small
09:10cap sector well all of a sudden there's
09:12a lot more growth to be had in that
09:14small cap sector because those stocks
09:16can run up 3 four 500% easily and they
09:18can be very very very under capitalized
09:21number seven he looks at sector
09:22rotations he examines shifts in sector
09:24performance and invests accordingly
09:26number eight Catalyst events he likes to
09:28identify upcoming events or changes that
09:29could impact stock performance number
09:31nine technical analysis he uses charts
09:33and Technical indicators to time Market
09:35entries and exits and of course Risk
09:37Management number 10 he implements
09:38strategies and looks to find stocks that
09:41inherently have the liquidity and the
09:43ability to mitigate investment risks on
09:45so you go through this list and which
09:47stock fits it the most which stock which
09:48stock that he's a fan of fits all 10 of
09:51these criteria well again it took me a
09:52long time to dig through his interviews
09:54and his tweets and his other forms of
09:56communication but I found a few stocks
09:58that really fit this definition formly
09:59of course in the large cap space there's
10:01Nvidia which as we mentioned earlier he
10:03sees as still very very undervalued
10:05especially when compared to Cisco which
10:07didn't have anywhere near the pricing
10:09power or Competitive Edge that Nvidia
10:10has today but again I personally can't
10:13make the argument for this being a
10:15life-changing stock at this point it's
10:17already up so much we've talked about it
10:19for years but it's already up so much
10:20that at this point it's definitely not a
10:22life-changing stock if it goes up
10:23another 2x that's great but is that
10:25life-changing not really but in the
10:27smaller cap space that's where you're
10:28going to start finding your lifechanging
10:30stocks and when I looked in the smaller
10:32cap space well I found a category that
10:34he calls granny shots I'll read this
10:36quote on what that is quote granny shots
10:38are thematic based stock picks and we
10:40have three General thematic views about
10:42the next few years Millennials Ai and
10:45automation Lee said we also have some
10:47tactical portfolios and what granny
10:49shots is doing is taking stocks that
10:52appear in multiple lists so you read
10:54this and you want to find a stock that
10:56not just fits all of the aformentioned
10:57criteria but also Services demand along
11:01the lines of Millennials Ai and
11:03automation those three Trends so I went
11:05and I dug through the small cap stocks
11:07that he's talked about even further and
11:08the main one I found that fits all of
11:10the criteria just mentioned is smci and
11:14sure enough if you go to his Twitter
11:15you'll find him calling it a # super
11:18granny which I mean that's much better
11:19than just a regular granny a super
11:21granny so let's dive into smci and what
11:24exactly they are smci is super micro
11:27computer Inc and it's a global leader in
11:29performance high efficiency server
11:31technology and Innovation super micro
11:33product portfolio includes a broad range
11:35of servers storage systems and
11:37networking solutions cing to various
11:39Industries including data centers cloud
11:40computing Enterprise it and the internet
11:43of things iot but why exactly does Mr
11:46Tomley like it well Tomley I believe is
11:48enthusiastic about the super micro
11:50Computer stock for several key reasons
11:52that fit along the lines of his criteria
11:54number one strong financial performance
11:56smci has demonstrated consistent
11:58impressive Financial growth in recent
12:00quarters the company has consistently
12:01surpassed earnings expectations and
12:03reported substantial year-over-year
12:04revenue for instance in the most recent
12:06quarter SCI reported a 200% increase in
12:09Revenue compared to the same period last
12:11year in terms of AI and Technology
12:13integration talking about his thematic
12:15themes while smci is clearly well
12:17positioned within the booming AI sector
12:19the company has a key partnership with
12:21Nvidia supplying servers optimized for
12:23AI applications highlighting its
12:25critical role in the AI infrastructure
12:27Market this partnership and the overall
12:28demand for AI Technologies are
12:30significant significant growth drivers
12:32for smci have been during this Market
12:35cycle and likely will continue to be so
12:37in terms of Market position and
12:38valuation well despite some volatility
12:40smci remains a top performer in the S&P
12:425 hundo its valuation metrics are
12:45extremely appealing with analysts
12:46projecting significant upside potential
12:48regardless of the fact that the stock
12:49has gone up a lot already in terms of
12:51the stocks price targets well analysts
12:53are projecting the stock will finish
12:552024 up 45% from current levels which
12:59which would put it at
13:01$1,229 a share but then hit
13:031,793 by year end 2025
13:07$2,591 at year end 2026 and you fast
13:10forward to 2030 you hit 5,95 a share
13:13which is about a 52% return from current
13:15trading prices by 2036 you hit 6,725 a
13:19share now obviously we know how markets
13:21work if markets get more eoric and
13:23bubbly they can price in years of growth
13:25in advance and if they get dysphoric
13:27they can discount years that have
13:29already passed but you got to remember
13:31bigger picture with smci even though
13:33it's gone up a lot the last year or two
13:35it's still only a 49 billion dollar
13:37company and it's expected that tens of
13:39trillions of dollars will be spent over
13:41the coming decade on the AI Revolution
13:44and if smci can just capture a fraction
13:47of that market share it would be
13:48dramatically undervalued at these
13:50current prices it's very very
13:51interesting a lot of people will shot on
13:52a stock that's gone up for a while just
13:54like they'll shot on a stock that's gone
13:55down for a while but the fact of the
13:57matter is that when you're buying into a
13:58stock that's gone up for a while at
14:00least you're in a momentum period you're
14:02not going to get a good deal on that
14:04stock as you would if it was going down
14:05and you found it before everybody else
14:07likes it but at the same time I mean if
14:08you're buying in during a market
14:10awareness stage when the stock is still
14:12way below its potential well you're
14:14still not getting a bad deal and you're
14:16able to ride the momentum as more and
14:17more investors are positioning into Ai
14:19and and different components that are
14:21needed for AI to be realized well it
14:23makes sense to pay attention in terms of
14:25expansion and scalability while smc's
14:27ongoing expansion efforts include new
14:29manufacturing facilities to meet the
14:31growing demand for liquid cooled data
14:32centers and they're expected to drive
14:34further growth these facilities will
14:36enhance the company's ability to deliver
14:38high performance Computing Solutions
14:39globally in terms of strategic
14:41Partnerships again you got that Nvidia
14:42but you also have the company's
14:43inclusion in high-profile projects such
14:45as Elon musk's xai supercomputer
14:48initiative which further underscores its
14:50strategic importance in the tech
14:51ecosystem these Partnerships are likely
14:54to bolster this company's market
14:55presence and its revenue streams but in
14:57summary Tom Le's positive outlook on
15:00smci in my view at least is based on its
15:02robust financial performance strategic
15:04positioning in the AI Market attractive
15:06valuation expansion capabilities and key
15:10Partnerships these factors collectively
15:12make smci a compelling investment in the
15:15small cap segment and one that you
15:17should not sleep on now it's also
15:19important to note bigger picture that if
15:20you've studied Tom Lee at all you know
15:22that Tom Lee also emphasizes the Russell
15:242000 Index as a whole by mat which
15:26includes a broad array of small cap
15:29he is very very bullish on small caps
15:31overall I talked about before he
15:32believes that small caps are going to
15:34outperform large caps in 2025 and so a
15:37Russell 2000 Index if we're being fair
15:39to Tom Lee's public predictions is also
15:42a pretty solid investment anyways folks
15:44that caps off today's video let us know
15:46what you think down below make sure to
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16:00have a good one folks we'll see you in
