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MOS: Nvidia’s financials could be better. The 50/100 is okay, but the MOS of 0% doesn’t show a lot of upside potential at the moment. When you take a closer look at the Net Income and EPS, they both look great year over year, but the last few quarters have declined. Meaning: Semiconductors are located in more products than we think. With Nvidia, their chips are going into video game systems, computers, data centers, cars, and more. Moat: There are a few big players in the chip industry, including AMD, Intel, and Micron, but due to the need for chips, most of these companies can thrive. They also have an extensive customer list, including Microsoft, Dell, HP, and AWS, and as long as they continue to provide innovative products, they will continue to maintain large enterprise contracts. Management: Jensen Huang previously served as a director at LSI Logic and a microprocessor designer at AMD prior to founding Nvidia in 1993. The Glassdoor rating is 4.6, and the CEO approval is 98%. Both are incredible scores and show the Huang has built a lot of respect within the company. Is Nvidia stock a good buy? Of the 4Ms, the only M that doesn’t look good is the MOS. However, the stock has bounced between On Sale and Watch over the last five years which tells us it can definitely go On Sale again. As for the other 3Ms, they look fantastic! It’s important to point out that Nvidia has some big customers, including Microsoft, Dell, HP, and AWS. Once you have large enterprise customers, it’s wise to continue to provide value and innovate, which Nvidia has proven to do very well over the last 30 years. There are competitors in this industry that dream of obtaining large customers, like Nvidia. I currently hold AMD in my portfolio, which is another strong semiconductor company. Of the competitors to AMD, I have to say Nvidia is my favorite because of the customer list. As of December 2022, this stock is down over 50% from its all-time high. This is definitely a stockpiling opportunity if you own this stock because when the market rallies, Nvidia will most likely generate some big returns for investors.

How does Tesla make money? Tesla generates revenue through 4 categories Automobiles Energy (Includes Solar Roofs and Solar Panels) Leasing Services, accessories, and other Here is a breakdown per category Automobiles – 87.4% Energy – 3.9% Leasing – 2.6% Services, accessories, and other – 6.1% Meaning: We know EVs are the future as auto manufacturers around the world compete for market share. The challenge with all auto manufacturers is supply chain. I personally like software companies because you don’t have to source metals, plastics, and components to generate sales. With automobiles, the supply chain costs are high. When you compare Tesla to a company like Apple, you still have to source raw materials but the materials required to sell one unit can fit into the palm of your hand. With automobiles, you need thousands of pounds of materials to sell one unit. Although the world has enough raw materials today, the impact on the environment to manufacture, mold, and shape materials is something to consider. Management: When I invest in a company, I want the CEO fully dedicated to one company. Yes, they can serve on the board of other companies, as a lot of CEOs do, and yes they can invest in other companies, as a lot of CEOs do, but the CEO needs to be focused. Aside from Tesla, Elon Musk also spends time on SpaceX and The Boring Company. Now, with Elon’s acquisition of Twitter, he’s more distracted than ever. In my opinion, this was the worst time to buy another company, especially a company like Twitter, which does not complement the Tesla brand. When one company buys another company, or in this case a CEO buys another company, it’s wise to complement the ecosystem. Examples include the following: Microsoft buying Activision Blizzard – This was a wise investment because Microsoft sells Xbox, a top-selling video game system. Activision Blizzard is one of the largest video game publishers with popular games including Call of Duty and Overwatch. Intuit buying Mailchimp – This was a wise investment because Intuit serves small and mid-sized businesses. Mailchimp, also serves small and mid-sized businesses. The acquisition will allow intuit to cross-sell Mailchimp to its audience and allow Mailchimp to cross-selling intuit products to its audience. PayPal buying Venmo – Ths was a wise investment because PayPal already has a large consumer base. Venmo became a more popular consumer money transfer platform than PayPal and in this case, instead of trying to beat the competition, PayPal acquired the competition. Now PayPal can offer other consumer products to the Venmo consumer base including Honey. As the article above from cnn.com states, Musk is indeed a part-time CEO. Shareholders are not getting their full attention and with the competition at the front gates, the castle may fall. In this circumstance, Tesla’s revenue growth may not continue as it has in the last few years. A quick look at the Glassdoor rating shows Tesla has a 3.6/5.0 and a CEO approval of 73%. That’s actually not too bad. Ideally, we want to see a 4.0/5.00 and a CEO approval of 80%. Both are very close. The question is, how will these scores look a year from now? Distractions from Twitter can’t be good for the Tesla culture. Moat: EV competition is catching up and even passing Tesla. VW is a big global threat, especially in Europe. We also have Chinese companies threatening global sales including BYD, SGMW, SAIC, Chery, and GOC. GM and Ford will continue to challenge Tesla in the US and globally as well. Yes, Tesla has a strong brand moat but the market is becoming saturated and will likely become more saturated over the next 10 years.