Welcome, folks, as we get ready for another installment of our weekly Hypergrowth Investing podcast, where we discuss all things investing, such as artificial intelligence (AI), electric vehicles (EVs), and more. We normally release these on Wednesday, but a scheduling hiccup prompted us to schedule for Thursday at 7:30 a.m. Make sure to tune in!
If you’ve been following updates here or on our website, then it’s no secret that we’re super bulls when it comes to SoFi (SOFI). Indeed, last year, when the stock was languishing under $5, we called it the buy of a lifetime. Well, so far in 2023, even before we hit February, SoFi stock is already up 50%. And on Monday of this week, it saw an especially large pop after the firm reported excellent fourth-quarter earnings.
Despite its rapid ascent this month, we still believe SoFi stock is the buy of a lifetime. In 2022, higher interest rates and a slowing economic backdrop were supposed to hinder lending activity and consumer spending and, ultimately, diminish SoFi’s revenue and user growth trajectory. But as we’ve seen from the company’s second-, third-, and now fourth-quarter earnings results, that could not be less true.
Now investors are seeing SoFi’s flawless execution in spite of the tough macro environment, and they’re getting excited. If the company can perform this well under these conditions, imagine what it can do when the macro meaningfully improves. This ongoing success speaks volumes about the importance of a robust management team – especially in an industry as competitive as fintech.
SoFi is outperforming in a space with tons of room to grow. And that’s why we think the stock will keep flying higher.
How to Play AI Stocks
This week, we’re revisiting an investment theme that’s ensnared the world’s attention – AI. But it doesn’t seem like the sector lends itself to transparent investment opportunities. So, how do we play this one?
ChatGPT was the “iPhone moment” for the AI Revolution. Though the tech has been around, one consumer product in particular grabbed the world’s attention and showed them all the industry’s possibilities. And that means we’re going to see a lot of AI stocks that were crushed in 2022 become the leaders of a 2023 resurgence.
Take C3.ai (AI), for example. It’s an enterprise AI software company that provides solutions for a lot of legacy firms, allowing companies to build out software similar to LEGO. C3.ai precodes several applications, and its customers can choose which aspects they want to integrate. The company has been growing rapidly and has a highly profitable business model with strong gross margins – yet it was crushed in 2022’s anti-growth environment.
That’s what we’re seeing in the space right now – lots of AI stocks with fantastic technologies that were beaten down for macro reasons and are now ready to rocket. Look for the companies using AI to drive real-world economic value, likely achieved through innovative software and hardware; think robotics and self-driving.
We also discuss clean energy, EVs, and the housing boom in this week’s episode, which you can watch here now.
On the date of publication, Seth Kuczinski did not have (either directly or indirectly) any positions in the securities mentioned in this article.