We called it the night of the stars on "Mad Money" last week, but the problem with a night of stars is that they all tend to blend in, and that's not how I want things to be remembered, especially after this big decline.
So, let me go over my impressions of Twitter (TWTR) , Salesforce (CRM) , Fisker (FSR) , Nvidia (NVDA) , and Airbnb (ABNB) , surely the biggest guest list if only because we have never has more than three guests at once.
First, let's go over the two the market got wrong. Let's start with Jensen Huang and Nvidia. The quarter just reported was superb, as usual, but the conference call brought out lingering fears of 2018, where Nvidia ended up with some slowing end markets, crypto and data center. The latter soon accelerated, but because of an oddity of not knowing whether its cards were being used in gaming or mining, the company saw an inventory glut when bitcoin crashed.
This time around the data center spend is accelerating, because of the move to the cloud, and the company has a real hand on crypto, which could be a good business and Nvidia will have its own Ethereum mining chips that can be monitored. The market was wrong on both counts. Can Nvidia close on the Arm Holdings deal giving it the best full suite of chips for every fast growing market? After doubting Jensen on the ability to close on Mellanox, I am not going to make the same mistake this time around. This stock is way too cheap versus next year's numbers-not this year's-and it's a buy.
The insanity of the decline in Salesforce.com is incredible. Anyone who runs a subscription business knows to look to deferred revenue as the key metric and the deferred was much better than expected. Is the Slack (WORK) deal holding the stock back? No one integrates big deals, think, Tableau and Mulesoft, than Marc Benioff, so what's the issue here? Have you thought about what happens if Dell (DELL) and HP (HPE) both load up with Slack and not Microsoft's (MSFT) products? I have.
The stock of Fisker leaped 32% after my interview with Henrik Fisker. Hey, it was good, but 32% good? I don't know. That said, Fisker's got the asset light model: the best auto designer in the world matched with great electric vehicle technology, a buyer's plan that is so pro consumer you have to adore it, and two great manufacturers, Magna (MGA) and Foxconn, to actually build the cars. The Ocean is one of the most beautiful and exciting cars I have seen. The price is right for the car; in a Tesla world that means the stock might be undervalued.
The two best for last: Twitter and Airbnb. I think that Ned Segal, the CFO of Twitter, is sitting on the biggest raw gem in this market, the dark horse contender for the fourth biggest ad market after Facebook (FB) , Amazon (AMZN) , Alphabet's (GOOG) Google. Twitter had historically underspent on tech. It's finally getting around to subscriptions and direct ads and think both are going to push the current revenue streams aside in just a few years. I know it's hard to value; I would say that what matters is that Twitter's growing now at the same time it is beginning to be a must buy for all consumer packaged goods company. It seems absurd up here. I would say wait until it comes in to buy, but, absent a broad market selloff, you aren't going to get that chance because Twitter is being re-rated upward at the same time that Facebook is being rerated downward; no coincidence, going from bad to good is more powerful than good staying at good. Twitter will, ultimately, end up great.
Finally, there's Brian Chesky, the CEO of Airbnb, who showed you how his model has about the best leverage I have seen of any scalable enterprise. He monetizes something he doesn't own -- your house. He does it all on one platform that doesn't cost him much to operate and has an amazing brand name. His model's also much cheaper than hotels, which have gotten prohibitively expensive and since travel is the one thing most people will do when the pandemic is over and he has an unlimited supply of rooms, no wonder its stock rallied 13% Friday. In a night of stars, Chesky, took the honors.
Yes, all five are buys, although I would like Fisker's stock to pull back. But only two are on sales: salesforce and Nvidia, so those are my favorites with Airbnb, then Twitter and Fisker, in order for the next big run.