Behind the video
3 Hidden AI Revolution Stocks to Buy Now
Overall Thesis
The host favors Zeta Global, Duolingo and Zillow as attractively valued application businesses that can benefit from AI through better products, proprietary data and stronger customer relationships. He owns all three and argues that falling model costs could improve their economics even if the AI infrastructure bubble bursts.
Narratives
The host sees Duolingo's selloff and modest earnings and cash-flow multiples as an investment opportunity because AI can improve its learning experience rather than displace demand. He endorses the stock for long-term investors while watching user engagement, revenue growth and margins.
Key Arguments
- Voice interaction can make learning more natural and engaging.
- AI can accelerate course development and expansion into a broader education platform.
- Translation tools do not eliminate consumers' desire to learn languages.
- The host cites a price-to-earnings multiple below 15 and price-to-free-cash-flow multiple around 14.
- Lower model costs could improve economics.
- A substantial buyback program could retire shares at depressed prices.
Risks acknowledged
- Revenue growth has decelerated to a stated quarterly rate of 26.5%.
- Monthly active user growth has been relatively stagnant.
- The host has not yet seen AI-driven growth reflected in financial results.
- Revenue reacceleration and margin expansion remain uncertain.
ZETAZeta GlobalThe host presents Zeta as an attractively valued AI application business and identifies it as a position he has been adding to recently. He expects sustained growth to support margin and valuation-multiple expansion, with Athena, proprietary data and the Palantir partnership strengthening the business.
Key Arguments
- A stated valuation of 3.3 times sales compares favorably with Palantir's much higher sales multiple.
- Proprietary data combined with customer data creates a differentiated marketing platform.
- Athena makes the platform more conversational and can identify additional marketing opportunities.
- The business has demonstrated strong revenue growth and improving operating leverage.
- The host cites management's history of beating and raising guidance.
- Falling AI model costs could improve profitability.
Risks acknowledged
- Political advertising contributes volatility to reported growth.
- The multiple-expansion thesis requires continued strong revenue growth.
- Athena and the recent Palantir partnership have not yet contributed visible quarterly results.
ZZillow GroupThe host endorses Zillow as an unusually cheap stock with attractive investment risk-reward and long-term AI tailwinds. He believes its consumer audience, proprietary housing media and agent workflows can strengthen its platform rather than leave it vulnerable to chatbot displacement.
Key Arguments
- The host cites 2.4 times sales, roughly 11 times forward earnings and nine times forward free cash flow.
- Its large consumer audience connects agents and rental owners with potential customers.
- AI-generated follow-ups and offer workflows can make the platform more useful and increase agent retention.
- Proprietary media, interactive floor plans and visualization tools differentiate the service.
- Rentals and mortgages have shown strong growth while residential operations are outgrowing the housing market.
Risks acknowledged
- The housing market remains relatively slow.
- Chatbots can perform some housing-related tasks, although the host believes Zillow's data and media provide an advantage.
Predictions (1)
Hedges & Caveats
- Zeta's multiple-expansion thesis depends on maintaining revenue growth above 30% for another couple of years.
- Duolingo's revenue growth has decelerated and monthly active user growth has been relatively stagnant.
- The host is watching whether Duolingo's AI features improve user engagement and revenue growth.
- The US housing market remains slow amid elevated interest rates.
- Lower AI model costs are a conditional business benefit rather than a stated stock-price target.
- No specific share-price targets or firm investment-return deadlines are supplied.