Behind the video
The NEXT Frontier: THESE 3 Stocks Boom
Overall Thesis
AI could create healthcare investment opportunities by accelerating personalized cancer treatments, improving medical data businesses, and supporting acquisitions. The host is enthusiastic about Moderna's upcoming cancer therapy presentation and views Eli Lilly as a more diversified, lower-risk investment, while remaining cautious about Tempus AI.
Narratives
MRNAModernaThe host is enthusiastic about Moderna's personalized cancer therapy and the potential for AI to accelerate treatment development and broaden access. He presents the October 24 presentation as a major catalyst with sharply different upside and downside outcomes.
Key Arguments
- AI can accelerate identification of cancer-specific targets and increase the number of targets used in personalized treatment.
- Faster processing could reduce costs and enable more patients to receive treatment.
- The therapy could potentially expand to additional cancers.
- The upcoming presentation could support renewed investor interest after the decline of Moderna's COVID-related growth.
- The host owns Moderna and describes buying around the $135–$145 area.
Risks acknowledged
- The presentation could deliver bad news.
- The investment depends heavily on one treatment and carries substantial clinical trial risk.
- A disappointing presentation could erase recent stock gains.
- The $220 target mentioned is Bank of America's target, not an independently adopted host target.
The host sees promise in Tempus AI's faster-growing, higher-margin data and applications business. He does not own the stock and considers it too early to conclude that the company will become a winner.
Key Arguments
- The AI data and applications business is described as growing 28%, compared with approximately 20% for the legacy business.
- The AI segment has better margins and is growing faster.
- The business offers software exposure to AI adoption in healthcare.
Risks acknowledged
- Underlying profitability is not expected until 2028.
- Reported positive net income included approximately $102 million of stock investment gains.
- The host remains uncertain about the company's eventual competitive success and does not invest in it.
The host views Eli Lilly as a diversified way to participate in AI-enabled healthcare, comparing its role to an S&P 500-style healthcare investment. He considers its valuation reasonable and its acquisition capabilities attractive, without stating a definite stock-price or return forecast.
Key Arguments
- Capital, profitability, reputation, and scale allow Eli Lilly to acquire promising startups and software.
- Acquisitions provide exposure to emerging healthcare innovations without relying on one clinical trial.
- The host cites a PEG ratio around 1.9 as attractive relative to his preference for ratios below two.
- He calls Eli Lilly the lowest-risk investment among the featured alternatives.
Risks acknowledged
- The company already exceeds a $1 trillion market capitalization.
- The stock has already performed well, although the host still considers its valuation reasonable.
- Lower risk is a relative assessment rather than a guarantee of positive returns.
Hedges & Caveats
- Moderna's presentation could disappoint, causing substantial losses.
- Moderna has concentrated exposure to a single treatment and significant trial risk.
- Tempus AI's reported profit largely reflected stock investment gains rather than underlying operating profitability.
- The host considers it too early to identify Tempus AI as a winner in healthcare data and applications.
- The host discloses exposure to two of the three featured companies and explicitly confirms holding Moderna.
- The discussion is not personalized financial advice.