AI Frenzy Is Alive And Well

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The PCE came in just as expected. Yes, inflation jumped the most in a year but it wasn’t “out of control” that investors feared. Fed Bank of Atlanta President Raphael Bostic also assured that the path will be rocky, and there is nothing to be alarmed about. He expects to start cutting rates as soon as this summer. With that being out of the picture, Dell Technologies’s stock price skyrocketed by about 20% after reporting “killer” earnings results. Dell’s revenue for the fourth quarter fell 11% from a year ago quarter, but its net income jumped by 89%. But the buzzword was AI. Dell said its Infrastructure Solutions Group’s revenue was down 6% year-over-year but up 10% from the third quarter. But the bulk of that revenue came from “AI-optimized servers.” COO Jeff Clarke said its AI-optimized server saw a 40% jump in orders sequentially and backlog “nearly doubling.” - “Our strong AI-optimized server momentum continues, with orders increasing nearly 40% sequentially and backlog nearly doubling, exiting our fiscal year at $2.9 billion,” Chief Operating Officer Jeff Clarke said in the release. As an icing on the cake, Dell boosted its annual dividend by 20% which CFO Yvonne McGill called a “testament to our confidence in the business.” Michael Dell Dalio: Not a bubble. Billionaire investor Ray Dalio didn’t think the stock market is in a bubble now. He built his own “bubble indicator” which measures valuation, sentiment, new buyers and unsustainable conditions. And he concluded that the market “doesn’t look very bubbly.” - “When I look at the U.S. stock market using these criteria, it — and even some of the parts that have rallied the most and gotten media attention — doesn’t look very bubbly,” he wrote. Some investors compared Nvidia’s phenomenal run with Cisco during the dot-com bubble. But Dalio pointed out that Nvidia’s two-year forward price-to-earnings ratio is around 37 right now, while Cisco was trading at 100 multiples back in the dot-com bubble. - “The market was pricing in far more speculative/long-term growth than we see today,” he said. Ray Dalio (Photo: REUTERS/Brendan McDermid) Is This The Best Growth/Value Stock On The Market? Today’s Stock Pick: Funko, Inc (FNKO) The toy business is notoriously difficult to penetrate because people are as fickle about toys as they are with fashion. One day, fidget spinners were the fad. Two years from now, it seemingly disappeared from the face of Earth. It is very, very, very difficult to invent your own toy category. But if you are lucky enough to break through a toy category, then you have a marvelous business that you can own for decades. Take Lego for example. It owns the niche of toy bricks, and it remains a staple of any child’s toy chest. It is difficult for any competitor to penetrate this niche. Why? Lego has exclusive deals with all popular brands like Disney, Marvel, Star Wars, Harry Potter and so on. We see similar things with American Girl, Barbie, and Hot Wheels. And these toy brands are incredibly powerful because of the exclusive toy category they own. Recently, LinkedIn founder Reid Hoffman gave the following advice to aspiring entrepreneurs, in his Masters of Scale interview with Peter Thiel: - “I believe if you want your company to scale, your goal is not to beat the competition. Your goal is to break free of competition entirely.” - “In an ideal world, you do this by going where the competition isn’t. You invent your own game and master it.” Funko has invented its own game within the toy industry. Or, at least, their own very unique aesthetic. They have cute, bobblehead-like designs that look fantastic on many famous characters. Some Funko Pop figurines have become collectibles worth thousands of dollars (Source: WealthyGorilla) Funko has acquired rights and applied their unique aesthetic to just about every popular entertainment category under the sun. Some examples: Disney, Game of Thrones, The Office, NFL, Pokemon, and so on. (Source: Funko) And you might be surprised to learn that 36 is the average age of their collectors. This is a good thing since 30-something year old collectors have larger discretionary income. In the graph below, you will see how well Funko has tapped into this lucrative category. The growth has been extremely steady since its IPO in 2017: (Source: Funko) Endless product lines: Funko truly has an unlimited number of products they can monetize on its brand. It expands to clothing, backpacks, accessories, stickers, games, and even NFTs. And it is getting into content production. In other words, its potential growth has plenty of white space ahead of Funko. Right now, Funko’s signature figures make up 77% of its revenue. And Funko’s only adding new products recently. The saturation point is far away for Funko. (Source: Funko) Bottom Line: Funko invented their own game and dominated it. Their signature figurines span almost every single facet of entertainment and pop culture. And they want to take those figurines to two new continents as part of the expansion of its international market. All in all, Funko is one of the best growth/value stocks in the stock market. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](