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5 Seemingly Unstoppable Stocks I'd Sell Right Now
AAPLApple(AAPL) The Motley Fool·2024-12-27 09:06

Palantir Technologies - Palantir's Gotham and Foundry platforms lack large-scale competition, making it a company with a sustainable moat [1] - Palantir has successfully shifted to recurring profitability, demonstrating the effectiveness of its operating model [1] - More than 142millionofPalantir′s142 million of Palantir's 391 million net income in the first nine months of 2024 comes from interest income, accounting for 36% of net income [4] - Palantir's shares are valued at 75 times trailing-12-month sales, which is significantly higher than other market leaders [11] - Palantir's Gotham platform has a limited addressable market as it is only usable by the U.S. and its immediate allies [15] - Palantir's shares have gained 380% year-to-date and over 1,200% on a trailing-two-year basis [30] Nvidia - Nvidia's GPUs are the top choice for AI-accelerated data centers, giving it substantial pricing power [31] - Nvidia has added close to 3.1trillioninmarketvaluesincethestartof2023[6]−NvidiafacescompetitionasitstopcustomersaredevelopingtheirownAIchips,whichcouldleadtoalossofvaluabledatacenterspace[26]−NoNvidiaboardmemberorexecutivehaspurchasedsharesontheopenmarketinthepastfouryears[12]−IftheAIbubblebursts,Nvidiawouldbethehardest−hitcompany[21]Tesla−Tesla′spretaxincomeinthefirstninemonthsof2024isover503.1 trillion in market value since the start of 2023 [6] - Nvidia faces competition as its top customers are developing their own AI chips, which could lead to a loss of valuable data center space [26] - No Nvidia board member or executive has purchased shares on the open market in the past four years [12] - If the AI bubble bursts, Nvidia would be the hardest-hit company [21] Tesla - Tesla's pretax income in the first nine months of 2024 is over 50% derived from unsustainable sources like regulatory tax credits and interest income [7] - Tesla's core profit segment, EV production, has seen a significant margin decline over the last two years due to competition and demand issues [36] - Tesla's shares are up 86% year-to-date, with most gains occurring since Election Day [32] - CEO Elon Musk's overpromising and underdelivering on innovations could negatively impact Tesla's valuation [27] - Investors are optimistic about potential easing of autonomous driving regulations under the incoming Trump administration [22] Apple - Apple's P/E ratio has doubled to over 42 since the start of 2023, despite its growth engine stalling [8] - Apple's Services revenue is growing by double digits but only accounts for a quarter of its net sales [23] - Apple's EPS growth is primarily due to aggressive share repurchases, masking pedestrian operating results [28] - Apple's entrance into the AI space with Apple Intelligence has made it popular among investors [33] - Apple is less than 100 billion away from reaching a 4trillionvaluation[17]MicroStrategy−MicroStrategy′songoingacquisitionofBitcoinhasmadeitaliquidproxyforbettingonthedigitalcurrency[18]−MicroStrategyhasbeenleveragingconvertibledebttopurchaseBitcoin,ariskystrategygivenitslowoperatingcashflow[24]−MicroStrategy′sDec23prospectusseekstoincreaseitssharecountby10billion,whichcouldleadtosignificantdilution[25]−MicroStrategy′sBitcoinportfolioisvaluedat4 trillion valuation [17] MicroStrategy - MicroStrategy's ongoing acquisition of Bitcoin has made it a liquid proxy for betting on the digital currency [18] - MicroStrategy has been leveraging convertible debt to purchase Bitcoin, a risky strategy given its low operating cash flow [24] - MicroStrategy's Dec 23 prospectus seeks to increase its share count by 10 billion, which could lead to significant dilution [25] - MicroStrategy's Bitcoin portfolio is valued at 43.75 billion, but investors are assigning a 100% premium to its Bitcoin assets [29] - MicroStrategy's shares are up 468% year-to-date and over 2,100% over the trailing-two-year period [34] Market Overview - The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have gained 15%, 27%, and 33% respectively in 2024 [14] - Factors like the rise of AI and Donald Trump's November victory have contributed to the broader market's lift [19] - History suggests that stocks do not move up in a straight line for extended periods [19]