Video summary

I Can’t Believe How Cheap These 3 Stocks Are Right Now!

Main summary

Key takeaways

Finance

Tickers / Companies Mentioned

  • Alibaba (BABA)
  • ServiceNow (NOW)
  • Salesforce (CRM)

No ETFs/commodities/bonds/crypto were mentioned in the subtitles.

Key Finance Takeaways (By Stock)

1) Alibaba (BABA) — “cheap” vs AI/cloud growth narrative

Market prices / performance references

  • Trading below $70 recently; low around ~$58
  • Previously ran up to ~$190
  • Pulled back to ~$125
  • “Right price” ranges stated:
    • Low: $110–$140
    • High: $300–$350
    • Middle: $190–$224
  • Stock analyzer output (middle case): ~17.5%/yr (within the host’s desired return framework)

AI / fundamentals cited

  • Announced a new AI chip ~3x more powerful than prior chips
  • CEO/business metrics (cloud + AI):
    • Annualized AI-related product revenue > $5.5B
    • Growing at triple-digit rates
    • AI is ~30% of cloud revenue, expected to cross 50% within one year

Valuation / capital structure

  • Market cap: ~$300B
  • Enterprise value: ~366 vs market cap ~302
  • Implied debt noted: ~$65B
  • Free cash flow (FCF):
    • Last year: ~$11B
    • 5-year average: ~$21B
  • Multiples:
    • ~26x free cash flow
    • ~19x earnings
  • Dividend:
    • Uses ~$4B of cash flow
    • ~1.6% dividend yield

Profitability / growth

  • Profit margin:
    • 10-year: ~14%
    • 5-year: ~9.5%
    • 1-year: ~10.5%
  • Revenue growth:
    • 10-year: ~26%/yr
    • 5-year: ~7.4%/yr
    • Last 3 years: ~5.6%/yr

Cash flow / investment spending

  • Capex increase called out:
    • ~$4B (years ago) → ~$1.6B (10 years ago) → ~$13B (recent)
  • Framing: capex rising for data centers to compete in AI, pressuring FCF—while buybacks and longer-term payoff are expected.

Explicit recommendation / positioning

  • Host says they’re building a position again:
    • Previously owned shares and “lost them” via covered calls around 135–140
    • Stock peaked near 190, then fell
    • Host mentions using cash-secured puts to reacquire shares
  • Thesis: long-term China play (Alibaba as a beneficiary over decades)

2) ServiceNow (NOW) — quality software + AI replacement skepticism

Market prices / performance references

  • Stock jumped:
    • +14% in one day
    • +24% in one week
  • CEO purchase cited: bought at ~$105
  • Stock analyzer valuation/targets:
    • Low: $87
    • High: $240
    • Middle: $144
  • Host comment: not excited if only expecting around ~10% return; implies a need for a more compelling entry.

Company moat / AI thesis

  • Business described as mission-critical workflow software for enterprises
  • CEO argument (Bill McDermott, as quoted/depicted):
    • AI won’t replace ServiceNow because companies would need to rebuild the system
    • Companies would pay ~10x more to operate it
  • Host agrees AI is changing, but not replacing “everything” like NOW.

Shareholder returns

  • Insider buying / CEO confidence:
    • ~$3M of stock purchased at ~$105
    • CEO pay tied to stock price
  • Notable investors mentioned:
    • President Trump took a position
    • Chuck Akre initiated a position (described as high-quality/discount style)

Valuation / cash flow / balance sheet

  • Market cap: ~$138B
  • Enterprise value: ~$145B
  • Debt cited: only ~$8B, so EV is close to market cap
  • Free cash flow:
    • ~$4.6B last year
    • ~$3.1B/year over last 5 years
  • Multiples:
    • ~30x free cash flow (host calls it still “high”)
  • Profitability/efficiency:
    • Profit margin improves:
      • 10-year: ~10%
      • 5-year: ~12%
      • 1-year: ~12.6%
    • Gross profit margin: ~76%
  • Acquisition pace:
    • ~$2.5B acquisitions in last 5 years
    • Framed as less than a year of FCF, implying internal growth dominates

Growth

  • Revenue growth: 20%+ over last 10 years, 5 years, and 3 years (as stated)

Analyst estimate / future expectations

  • EPS:
    • From ~$4.17 to ~$9.27 over ~6 years (as stated)
  • Revenue:
    • $16B to $44B over next ~7 years
  • Growth rate cited: ~12% revenue growth annually

Explicit recommendation / positioning

  • Host plans to wait for a better price given their framework yields a modest expected return.

3) Salesforce (CRM) — aggressive buybacks + improving FCF

Market prices / performance references

  • “Up huge today”: +10% today
  • Host notes it just reported earnings.

Earnings / guidance numbers

  • Reported:
    • Revenue: $11.13B (beat)
    • EPS: $3.88 vs $3.12 expected (beat)
  • Guidance:
    • Full-year revenue guided to ~$46B
    • “Higher earnings” (as stated)

Major buyback statistic (core thesis)

  • In 90 days, Salesforce bought back $27B of stock
  • Framed as ~16% of the business (host’s interpretation)
  • Example given: 100 shares → 84 shares (share count reduction illustration)

Valuation

  • Trading at ~12x free cash flow
  • FCF improving:
    • ~$14.8B last year vs ~$10.3B over last 5 years
  • Free cash flow described as “much higher than net income.”

Capital structure / risk note

  • Debt:
    • Market cap: ~$183B
    • Enterprise value: ~$243B
    • Implies ~$60B debt (host calls it more than expected)
  • Debt affordability:
    • With ~$14B FCF/year, host says it’s still manageable.

Profitability / shareholder payouts

  • Profit margins:
    • ~11% (10-year)
    • ~12% (5-year)
    • ~18.73% (last year)
  • Dividend:
    • ~$1.5B dividend (host says it’s affordable)

Growth expectations (analyst + host)

  • Analysts quoted:
    • EPS: ~$11.88 to $24 in ~7–8 years
    • Revenue growth: ~41.9%
      • Host frames it as “growing $42B → $89B” for that horizon (transcript wording suggests doubling)
  • Host summary: revenue roughly 2x over that period.

Explicit recommendation

  • Host uses stock analyzer framework:
    • Low $210
    • High $577
    • Middle $353–$355
  • Model-based return: ~16.5%/yr (based on host’s middle assumptions using FCF)

Methodology / Frameworks Explicitly Used

“Everything Money process” and “stock analyzer”

For each company, the host runs an assumption-based valuation (the “everything Money process” / “stock analyzer tool”), including:

  • Setting future revenue growth assumptions
    • Examples mentioned: 3–10% or 7–10% ranges
    • For NOW specifically, a prior model cited 7/11/15% revenue growth
  • Setting profit margin targets
    • Examples mentioned: 12/15/18, 30/33/36, 12/16/20
  • Setting free cash flow targets aligned with margin assumptions
    • Examples mentioned:
      • BABA: 15/18/21
      • CRM: 25/30/35
  • Assigning a terminal multiple / PE for the distant future:
    • BABA: terminal PE 14/18/22
    • NOW: terminal PE 16/19/22
    • CRM: terminal PE 14/18/22
  • Using a desired return rate of ~9%
    • Described as a “margin of safety” concept (distinct from what the market is expected to do)
  • Computing price ranges (low/middle/high) and expected returns based on the current stock price

Key framing emphasized by the host

  • Don’t take YouTube titles literally.
  • Don’t trust “stories” without paying the right price.
  • Margin of safety is necessary for single-stock investing.

Key Disclosures / Disclaimers (As Stated)

  • Host explicitly says: “Do not take our titles literally.”
  • Mentions the content is for education via channel/community.
  • The subtitles referenced do not contain a clear “not financial advice” disclaimer.

Presenters / Sources Mentioned

Presenter / host

  • Everything Money (channel name referenced; no individual name provided in subtitles)

Company executives

  • Bill McDermott (CEO of ServiceNow)

Investors / public figures referenced

  • Chuck Akre (Akre Capital; mentioned as initiating a ServiceNow position)
  • President Trump (said to have taken a position in ServiceNow)

Earnings coverage source

  • Host references their “Everything Money Plus” channel as covering Salesforce earnings.

Original video