An exceptionally brutal day on Wall

Street.

>> Decidedly red, especially the NASDAQ.

>> Meta and Microsoft shares have fallen

and after [music] hours trading. That's

where the pain really is. Investors are

panic selling some of the best stocks on

the market. And the bigger the decline,

the bigger the opportunity, especially

if we know which stocks to [music] buy

and which ones to avoid. So, in this

video, I'll cover everything you need to

know about this AI stock selloff and

which ones I'm buying as a result. Your

time is valuable, so let's get right

into it. AI stocks around the world saw

heavy losses late last week after Oracle

and Broadcom reported earnings and

sparked new fears of an AI bubble.

Oracle stock had its worst single day

percentage decline since the dotcom bust

after they reported lower than expected

revenues and much higher AI spending.

That caused their free cash flows to

collapse to negative $10 billion for the

quarter, which is twice as low as

analysts expected. Oracle's AI buildout

is turning out to be much more expensive

and much slower to make money than

investors anticipated. And Wall Street

is worried that the same thing is

happening at other AI companies. And

just one day later, Broadcom stock had

one of its largest market cap losses in

history, losing around $220 billion in a

single day after they reported earnings.

The difference is that Broadcom beat

analyst expectations on revenue and

earnings per share, but the stock

dropped anyway. That's because

Broadcom's management warned investors

that gross margins could go down as

custom AI chips became a bigger part of

their overall portfolio and that

Broadcom wouldn't see much revenue from

their multi-billion dollar agreement

with OpenAI in 2026. Both Oracle and

Broadcom stocks are down over 10%. And

this is where Wall Street just made a

huge mistake. Let me show you why.

First, custom chips are nothing new to

Broadcom or to their shareholders.

Broadcom helped design and manufacture

multiple generations of Google's tensor

processing units or TPUs. Meta Platforms

training and inference MTIA chips and

the custom chips that Bite Dance uses to

help power Tik Tok's content

recommendation algorithm. And just 2

months ago, Broadcom announced that

they're partnering with OpenAI to

co-develop and deploy around 10 gawatt

of custom accelerators for Chat GPT,

GPT5, and their other frontier models.

So, of course, investors shouldn't

expect much from that deal in 2026,

which starts in just 3 weeks. Especially

since Advanced AI accelerators take a

lot of time to design, manufacture,

test, optimize, and deploy. And by the

time Broadcom delivers OpenAI's custom

chips, there will be even more demand

for them, which means Broadcom is very

well positioned to win even more

multi-billion dollar contracts from

other AI companies. In fact, on their

most recent earnings call, Broadcom said

that they had a $73 billion backlog of

AI orders over the next 18 months,

including $21 billion from Anthropic.

And it's not just their backlog.

Broadcom's current revenue is also

accelerating, growing by 28%

year-over-year with AI chip revenues up

by 74% over that same time frame. Now,

compare that to Oracle. Broadcom's

revenue has been growing at a compound

annual growth rate of 19% over the last

10 years. That number is just 5% for

Oracle. And while Oracle looks like

they're consistently beating Broadcom in

terms of earnings per share, the

opposite is true. Broadcom's earnings in

2024 included a one-time $4.5 billion

tax charge as part of a supply chain

realignment that I covered when it

happened. and Oracle's earnings per

share were only so high this past

quarter because of a one-time $2.7

billion gain from selling their stake in

Amper Computing. But the biggest

difference between Broadcom and Oracle

is their free cash flows. Broadcom has

been steadily growing their free cash

flows over the last decade, while

Oracles have been in decline and now

they're at -10 billion, which means they

need to finance their AI buildouts and

other major capital expenditures with

debt. My point isn't just that investors

are making a mistake on Broadcom by

treating it like Oracle. My point is

that the market is treating all AI

stocks like their Oracle right now,

regardless of their actual quality. And

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so Oracle and Broadcom's earnings

renewed fears of an AI bubble and now

the market is treating all AI stocks the

same. But like I just showed you, not

all AI stocks are the same. Some are

crushing analyst expectations,

accelerating revenue growth, and growing

free cash flows, while others are doing

the opposite. That's because some of the

best positioned AI companies are

actually ones with strong revenue

streams across many different nonAI

products, services, and software that

can carry them through these kinds of

downturns. So, these are the top three

stocks that I'll be investing in if

prices continue to fall. Let's start

with AMD. AMD stock is down by 15% over

the last month because of intense

competition in data centers, not just

from Nvidia, but now Google is also

starting to sell their custom TPUs to

other companies. And now AMD is down by

almost 5% after Oracle and Broadcom's

earnings. Investors are spooked because

AMD trades at around 100 price

toearnings ratio. But if you've been

watching this channel for a while, you

know that the PE ratio is a terrible

valuation metric for companies with high

earnings growth. AMD is expected to more

than double their earnings next year,

primarily from growing their data center

business by around 80% per year for the

next 3 to 5 years. A lot of that growth

will come from AMD's massive deal with

Open AI, where they'll deploy up to 6

gawatt of Instinct GPUs, which could be

worth over a hundred billion in data

center revenues for AMD. And like I said

when this partnership was announced, the

real win for AMD here is validation for

their Instinct and Rockom ecosystems,

which means they could see more huge

deals for data center accelerators from

other AI companies like Anthropic, just

like we saw with Broadcom. Another

benefit AMD has in this specific

situation is that their revenues aren't

totally tied to AI. Around 43% of AMD's

revenues come from their client and

gaming segment, which focus on PC CPUs,

GPUs, and semi-custom chips for game

consoles. This is the segment that was

actually responsible for the vast

majority of AMD's revenue growth last

quarter because it grew by 73%

year-over-year compared to their data

center segment, which was up by 22%. And

don't forget that around half of AMD's

data center sales are from their epic

line of CPUs, not their Instinct AI

accelerators. I usually point that out

as a negative because I want my

investments to have as much exposure to

AI as possible. But in this case where

investors are panic selling AI stocks,

it's actually an upside because AMD is

very well diversified, much more than

the market is currently giving them

credit for. In fact, discounted cash

flow models like Simply Wall Street's

calculate AMD's fair value to be around

$380 per share, while the stock is

trading at around $210, making AMD more

than 40% undervalued at today's prices.

Set another way, AMD stock would have to

almost double to reach its fair value

today, thanks to the insane revenue and

earnings growth that they're expecting

over the next few years. Like I said at

the start of this video, this is a big

opportunity for long-term investors. And

now you can see why. Another stock

that's trading well under its fair value

is Meta Platforms. According to DCF

models, Meta Stock is 23% undervalued,

which means it has a 30% upside from its

current price, even though it's one of

the biggest money printers on the

planet. Meta is selling off mainly

because investors are nervous about its

AI and infrastructure spending that it's

gotten so big that it could hurt their

near-term earnings and free cash flows,

just like they did with the metaverse in

2022. In their most recent earnings

call, Metaguided their 2025 capex budget

up to $70 billion. That's versus around

$40 billion in 2024, and they warned

that their AI spending in 2026 will be

even higher. Wall Street is worried that

Meta Platforms won't be able to make

money on their AI investments for years

to come, just like Oracle. But Meta is

nothing like Oracle. Meta is already

monetizing AI today, mainly through

better ad targeting, automated tools,

and AIdriven shopping. Meta uses machine

learning to optimize who sees what ads

where and when, which leads to higher

conversion rates and lets Meta charge

more for each impression. And as of

Meta's latest earnings, the annual

revenue from their AI advertising

infrastructure is already over $60

billion, which means a large share of

their current ad revenue is effectively

AIdriven. On top of that, Meta is

rolling out chat bots across Facebook,

Instagram, WhatsApp, Messenger, and

their hardware devices that will further

personalize ads and content for more

than a billion monthly active users. For

example, a user can ask Meta's AI to

compare different cameras for travel,

and that will directly feed back into

the kinds of ads that that user will be

shown, not just for cameras, but for

other things that can be useful on the

go. My point is, Meta has a clear and

obvious path to monetizing their AI

infrastructure. And of course, they need

a lot of infrastructure because roughly

3.5 billion people use at least one Meta

app every single day. And around 4

billion people use at least one of their

apps each month. That's roughly half the

people on the planet. And just like AMD,

Meta's revenues are extremely

diversified outside of AI, mainly in

advertising, commerce, and payments, as

well as augmented and virtual reality

devices. The third stock that I think

Wall Street is making a big mistake on

is Microsoft, which is probably the most

well- diversified company on the planet

between products, software, and services

like LinkedIn and GitHub, Visual Studio

and SQL, Microsoft 365 and Teams, and

Azure and Xbox. The list goes on and on.

Microsoft is also on track to invest

around $80 billion in 2025 to build out

AI data centers, which was a big

increase from what they spent in 2024,

and they're going to increase it again

in 2026. And just like Oracle, investors

are worried that Microsoft won't be able

to monetize their AI infrastructure

quick enough for shareholders to see

real returns on all of these

investments. According to Wall Street

analysts, the main challenge is that

models, data centers, and power costs

are already exploding. While user

adoption and pricing are still ramping

up, that causes a lot of concern about

long-term margins and free cash flows

from all these AI applications. But just

like with Meta Platforms, Microsoft's

earnings showed that AI was already a

major contributor to Azure's strong

sales growth, to rising co-pilot

adoption in Microsoft 365 and to solid

overall growth in profits even after

their increased capital expenditures,

which means Microsoft must already be

monetizing AI. DCF models calculate the

fair value of Microsoft stock to be

around $600 per share, which implies a

25% upside from today's price of around

$480. That's a 25% upside on one of the

biggest and most powerful companies

sitting at the center of the entire AI

revolution. So hopefully this video

helped you understand why AI stocks

dropped over the last week. the big

mistake that Wall Street is making by

treating every AI company like it's

Oracle. And of course, three stocks with

a wide variety of revenue streams in and

outside of AI, making them great stocks

to get rich without getting lucky. And

if you want to see what else I'm buying

to get rich without getting lucky, check

out this video next. Either way, thanks

for watching and until next time, this

is Tickerol U. My name is Alex,

reminding you that the best investment

you can make is in you.