Ideas
Massively overweight stocks as recession risk low
Lee says he is massively overweight stocks relative to bonds and commodities. He does not see a recession, expects roughly 2% GDP growth with potential for 3% if government size is reduced, expects business conditions to improve from deregulation and tax-cut extension, and thinks bond-market stabilization after the refinancing wave can help equities take off.
Overweight tech despite short-term rate pressure
Lee is massively overweight technology. He views AI as a turning point in technology history: data is growing exponentially, companies need huge compute infrastructure and software to process it, and top tech earnings growth should exceed even bullish Street estimates. Higher rates may cause short-term multiple pressure, but he will ride the volatility and add on panics.
AI is multi-year exponential growth theme
Lee calls AI a once-in-a-lifetime technology shift. Data creation is exponential, so companies will need massive compute infrastructure and software; cloud providers are already soaking up GPUs and charging a markup; corporate AI demand is far from its edge; and AI monetization could be far larger than current pricing suggests, such as with Copilot. He expects the trend to last many years.
Nvidia cheap on growth, more upside
Lee is bullish on Nvidia because the GPU upgrade cycle is not one-and-done. At CES, Jensen Huang said Nvidia's newest GPUs offer three times the compute for the same price, or the same compute for one-third the price, which should drive demand as data grows exponentially. He notes Nvidia has been flat for six to seven months despite substantial earnings growth, trades around 27-28x forward earnings on his view, is likely to beat estimates, and has much more room to run.
Top 10 S&P earnings growth persistent
Lee says the top 10 S&P 500 names, the Magnificent Seven plus three, should deliver 30%+ earnings growth over the next 12 months with substantial margins. He thinks they can beat those estimates and repeat that growth in 2026 and 2027 as the economy improves and data growth accelerates.
Cloud providers earn high GPU rental margins
Lee argues cloud providers have scarce GPUs that companies cannot easily buy themselves, forcing firms to pay a markup to use Amazon, Google, Oracle, and Microsoft clouds. He cites Jensen Huang saying cloud providers buy GPUs for a dollar and rent them for five, implying strong pricing power and far-from-peak AI demand.
Rate stabilization would make software year
Lee says if rates stabilize, this will be the year of software, because every corporation is data-driven and needs tools to pull more data points and put them to work. If rates do not stabilize, technology may pause until there is more rate clarity.
Palantir far ahead, many multiples higher
Lee calls Palantir his all-time favorite stock and the single greatest thing he has seen. He says it is far ahead of anyone else in the industry and believes the stock can be many multiples higher in a couple of years.
TikTok ban would be huge for Meta
Lee says if TikTok is banned in the US, it would be massive and very bullish for Meta. He calls Meta the single greatest advertising platform ever created, with unmatched data about users, and notes it is buying as many Nvidia GPUs as it can to mine that data. Rate stabilization would add further upside.
Bond volatility before Treasury market stabilizes
Lee does not think inflation is reaccelerating significantly and does not expect rates to jump materially higher because of inflation or dollar fears. Instead, he says the $9T avalanche of Treasury refinancing will create bond volatility; the bond market should stabilize before the issuance ends, and that stabilization could be the trigger for equities to take off.
Mobileye could 10x revenue on AV deals
Lee likes Mobileye as the only independent self-driving software provider outside Tesla and Waymo/Google capable of Level 3 autonomous driving. He says it already has a VW deal; expected new OEM announcements with GM, Ford, Honda, or others could create an easy case for 10x revenue growth in five years. The stock has fallen from $40-$50 to around $16, improving the setup.
This The David Lin Report video, published January 16, 2025,
features Mike Lee
discussing SPY, XLK, Artificial Intelligence, NVDA, Top 10 S&P 500, AMZN, GOOG, ORCL, MSFT, IGV, PLTR, META, IEF, MBLY.
11 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Mike Lee
· Tickers:
SPY,
XLK,
Artificial Intelligence,
NVDA,
Top 10 S&P 500,
AMZN,
GOOG,
ORCL,
MSFT,
IGV,
PLTR,
META,
IEF,
MBLY
