My Stock Market Q4 Game Plan by Adam Khoo

Portfolio and Reported Performance

• Adam Khoo reported that his portfolio was up 26.61% year to date for the first nine months of the year. He said it had gained about 290% over eight years, compared with roughly 200% for the S&P 500.
• He said he moved 99% of his funds from a personal joint account into a corporate account in February, citing potential U.S. inheritance-tax exposure on the personal account.
• His strongest year-to-date contributors included cybersecurity stocks: Fortinet (+139%), CrowdStrike (+131%), and Palo Alto Networks (+115%). He also cited SOXX (+80%), ASML (+57%), Veeva Systems (+35%), Apple (+26%), Nvidia (+22%), and Palantir (+18%).
• Underperformers included Nike (-43%), LVMH (-41%), Copart (-32%), Pool (-28%), and Booking Holdings (-26%). He said Nike was less than 0.5% of his portfolio, illustrating the importance of position sizing.
• Elsewhere, he showed gains from his cost basis of Fortinet (+212%), CrowdStrike (+217%), Palo Alto Networks (+148%), Alphabet (+221%), Nvidia (+209%), Amazon (+119%), Meta (+114%), and Microsoft (+67%). These figures appear to use a different comparison period from the year-to-date figures above.

Portfolio Construction and Strategy

Khoo described a three-basket portfolio:

• AI infrastructure: 17% — Companies and funds involved in building AI infrastructure, including Nvidia, ASML, Broadcom, SOXX, and AIPO.
• Hyperscalers: 26% — Alphabet/Google, Microsoft, Amazon, and Meta. He views these as diversified businesses with both AI-related spending and other revenue sources.
• “Anti-bubble”/AI beneficiaries: 57% — Companies not primarily building AI infrastructure but which may benefit from AI-driven productivity, including cybersecurity, banks, insurers, and healthcare.

His rationale is to participate in continued AI investment while maintaining exposure to businesses he believes could be more resilient if AI capital spending slows. He said the timing of any slowdown or “AI bubble” reversal is unknowable, and that his approach is to build a portfolio able to withstand different outcomes rather than predict the turning point.

Framework for Holding, Selling, and Adding

• When a stock falls, first determine whether the cause is sentiment or deteriorating fundamentals.
• If revenue and profit have weakened, assess whether the problem is temporary and cyclical or structural/long-lasting.
• He said he would hold, but not add to, LVMH, Copart, and Pool, viewing their weakness as cyclical. He believes Nike can recover but expects the turnaround to take at least one to two years; he would not add until revenue and profits improve.
• He said Booking Holdings had fallen mainly on concerns about AI agents disrupting its business, rather than weaker fundamentals. He cited its inventory and access to discounts as potential advantages.
• He would continue holding Fortinet, CrowdStrike, and Palo Alto Networks despite considering them overvalued in the short term, because he expects substantial long-term growth over the next three to five years.
• For additions, he prefers buying on pullbacks near technical support and at or below estimated intrinsic value, rather than chasing an upswing.

Market Outlook and Valuation

• Technical indicators he cited showed an uptrend: the 20-period moving average above the 40-period moving average, the 50-day SMA above the 150-day SMA, and rising 150- and 200-day SMAs.
• As of October 12, he cited the S&P 500 forward P/E at 19.1×, versus a five-year average of 19.8× and a 10-year average of 19.1×. He compared this with 22× at the start of the year.
• He said the S&P 500 had risen 14%, while earnings had grown 28% in Q1 and 38% in Q2; the full-year earnings-growth forecast he cited was about 32%. On that basis, he said the market could have room to rise and that a further 5–10% gain over the next three months would not surprise him, while emphasizing that this was uncertain.
• Citing 19 U.S. midterm-election cycles since 1950, he reported that the market was higher three months after November in 95% of cases (average +8.1%, median +8.6%) and higher six and 12 months afterward in 100% of cases. Average gains were 16% at six months and 22% at 12 months; medians were 14% and 23%, respectively. He noted that historical outcomes do not guarantee future performance.

Company Views and Figures Cited

• Amazon: His largest position and preferred single stock, based on its diversification and potential from AI and robotics. He cited intrinsic value of $233, described the shares as somewhat overvalued, and said he would wait for a pullback toward value or support before adding.
• Microsoft: He described it as undervalued, citing intrinsic value of $570, but said he would prefer to buy on a pullback near support.
• Alphabet/Google: He described it as undervalued, citing intrinsic value of $374.
• Meta Platforms: His favored hyperscaler for potential growth, in part because of a newly launched consumer AI-agent app and new hardware. The subtitles refer to the app as “Muse” or “News”; they report 7 million downloads in under 30 days, compared with 75 days for ChatGPT, about 165 days for Grok, and 180 days for Gemini to reach 3 million downloads. Khoo cited a conservative intrinsic value of $900 (about 17% above the price) and alternative estimates of $1,300 and $2,000, based on higher growth assumptions. He said those estimates were assumptions, not guarantees.
• Nvidia: He cited a current price of $224, intrinsic value of $309 (about 27% upside/undervaluation), and a forward P/E of 14×. He also highlighted its potential role in robotics and AI-agent computing.

AI-Agent Opportunities and Risks

• He suggested AI agents could pressure advertising-dependent websites, some intermediaries, and service platforms. He specifically cautioned about less-diversified businesses such as Pinterest, Snap (Snapchat), Reddit, Tripadvisor, Angie’s List, Cars.com, Upwork, and Fiverr.
• He said Booking Holdings may be better protected than some intermediaries because of its inventory and access to discounted bookings, while acknowledging disruption risk.
• Potential beneficiaries he named included AI-platform companies Meta, Microsoft, and Alphabet; payment networks Visa and Mastercard; Shopify and Walmart; and compute/infrastructure providers Nvidia, Broadcom, and TSMC.
• He said Amazon and Google could face pressure to advertising revenue but may offset it through other businesses, including cloud, e-commerce, and logistics. He viewed Amazon, Google, and Meta as diversified, while noting that outcomes are uncertain.

Assets and Sectors Mentioned

• Stocks and companies: Fortinet, CrowdStrike, Palo Alto Networks, ASML, Veeva Systems, Apple, Palantir, Nike, LVMH, Copart, Pool, Booking Holdings, Nvidia, Broadcom, Alphabet/Google, Microsoft, Amazon, Meta, JPMorgan, S&P Global, UnitedHealth, HCA Healthcare, Visa, Mastercard, PayPal, Shopify, Walmart, TSMC, Pinterest, Snap, Reddit, Tripadvisor, Angie’s List, Cars.com, Upwork, and Fiverr.
• Funds and instruments: SOXX, AIPO, and Global X Defense (exact ticker not specified); the S&P 500 and Nasdaq were used as benchmarks.
• Sectors and themes: AI infrastructure and capital spending, cybersecurity, cloud computing, robotics, advertising, e-commerce, logistics, payments, banking, insurance, healthcare, defense, luxury goods, consumer spending, and travel bookings.
• The subtitles also mention “IPO” among portfolio performers, but the exact security is unclear.

Disclosures and Cautions

• Khoo presented the portfolio results and holdings as his own, noting that his community receives regular portfolio updates.
• He repeatedly cautioned that market forecasts and intrinsic-value estimates are uncertain, and that short-term prices can fall even when he sees long-term value.
• No explicit “not financial advice” disclaimer appears in the subtitles.

Presenter/source: Adam Khoo; Adam Khoo channel.