Amazon, Cloud And AI

 

Amazon.com Inc's value is derived 71 % from its cloud computing business, according to Wolfteam Ltd.'s projections and estimates.

Amazon's Amazon Web Services business on its hand is driven to a large extent by heavy computing connected with Bitcoin mining and companies using AWS.

Artificial intelligence, AI computing is another factor driving the growth of Amazon's AWS and other cloud services. Predictive modelling analytics requires enormous computing power, which is now readily available in the pay as you go model of cloud computing services. The need for complicated modelling is only going to increase, thus raising the intrinsic worth of Amazon AWS and respectively the intrinsic value of Amazon, Inc.

Gold Is Undervalued On Several Factors

 

Gold is undervalued on geopolitical tensions, Bitcoin's rise and money tightening by the Federal Reserve.

The only thing holding a remarkable rise of the price of gold up until now was the relatively high target for the Federal Funds Rate of 5.50 %. Now, that the Federal Reserve is intent on lowering the interest rate target and another geopolitical conflict emerged, the price of gold could reach 2 500 USD a troy ounce in 2024, according to Wolfteam Ltd.'s estimates.

Gold mining stocks are thus undervalued.

Can Bitcoin Reach 100 000 USD This Year?

 

 

The chance of Bitcoin's price touching and surpassing 100 000 USD in 2024 is 71 %, according to Wolfteam Ltd.'s projections and estimates.

Several factors are in place for Bitcoin's price to grow: the Federal Reserve targeting lower interest rate levels in 2024, enough computing power to drive artificial intelligence, AI which drives Bitcoin mining and the Bitcoin price action upward.

The computer chips and GPUs produced by NVIDIA, Intel and AMD are now enough to help drive the algorithms powering artificial intelligence, AI and Bitcoin mining. This provides for exponential development of AI and the associated products like artificial intelligence, machine learning, predictive statistical analysis and Bitcoin.

The power of computer chips to process neural networks information modelling is now very high and complex modelling, impossible ten years ago can be performed. 

In addition, regulators are seemingly benevolent towards Bitcoin and other cryptocurrencies. That said, regulators and law upholding institutions are there to ward off criminal activity in Bitcoin, cryptocurrencies. And there is always the possibility that Bitcoin could be pressed by regulators and outright banned, which will hinder AI's process.

In short, the stars seem to be aligned for Bitcoin's price to relatively soon touch and cross the level of 100 000 USDs.

AI And Bitcoin

 

The artificial intelligence, AI hype is primarily driven by Bitcoin and the blockchain algorithm, according to Wolfteam Ltd.'s projections and estimates. NVIDIA is the most prolific AI stock and its growth is primarily driven by GPUs and server chips needed to mine Bitcoin.

The blockchain algorithm requires huge computing power which drives the computer chips manufacturing and software production.

Oil Is Grossly Undervalued On Stable Global Economic Growth

Oil is grossly undervalued on geopolitical conflicts. The global economy is moving along well.

Barring a global recession the intrinsic worth of oil is 110 USD. 

Oil majors like Exxon Mobil, Chevron, BP, Shell, Total and medium sized oil drilling companies like Occidental Petroleum, Marathon Oil Corporation, Chesapeake, Devon Energy and Petroleo Brasileiro are undervalued.

The upside for oil majors is 60 %, while medium sized oil companies could gain 120 % in the next 3 years, if the world does not slip into an economic recession lead by either the technology or the banking sector.

Tesla's Intrinsic Worth

Tesla's intrinsic worth is 120 billion USD, according to Wolfteam Ltd.'s projections and estimates.

And this includes the electric vehicle production technologies, software programmers, AI engineers and staff.

Apple. AI

 

Apple chose to use Google Gemini in its search engine.

Apple is striving to show it does not gather and utilize users data of iPhone, iPad, Macintosh users. By using Gemini's AI Apple is outsourcing data gathering to Alphabet's Google and Apple is unrelated to user data gathering and analysis.

This is a risk for Apple. Investors and analysts might claim that Apple is not fully utilizing AI.

However, by remaining free of user data usage and manipulation scandals, Apple could well increase a lot its intrinsic value in the future.

NVIDIA Is More Than 60 % Overvalued

 

NVIDIA, the poster child of the current artificial intelligence, AI boom is overvalued by more than 60 %.

Yes, AI will change profoundly our world, but akin to the dot-com boom and bust in 2000, the artificial intelligence, AI expectations are getting ahead of themselves.

Wall Street equity research analysts are forecasting too optimistic revenue and earnings per share for the Magnificent 7 Apple, Microsoft, Alphabet, Amazon, Meta, Tesla and NVIDIA and generally technology stocks.

On the other hand, Wall Street economists are forecasting too rosy economic growth and employment numbers.

The global stock markets rally and the global economy and labor market are a 'house of cards' at the moment, in Wolfteam Ltd.'s view, which any macroeconomic negative shock, mid-sized bank failure or negative developments could tumble and cause a 60 % + stock market fall measure by leading US and global stock market indices and a - 6 % economic recession in the first year, - 4 % recession in the second year and -2 % recession in the third consecutive year. Stocks fall and recession numbers that come close, but do not equal Great Depression numbers.

Again, NVIDIA as the most famous stock driving the AI stock market rally is intrinsically overvalued by more than 60 %.

Reddit Is Still Undervalued

Reddit's intrinsic value is 17 billion USD, according to Wolfteam Ltd.'s projections and estimates.

IPOs And The Stock Market Rally

A window for Initial Public Offerings or IPOs has opened as Reddit, Astera, Galderma staged multi billion USD IPOs in the US and Switzerland.

IPOs are usually good for the stock market rallies because by selling shares in IPOs venture capital funds and asset managers get liquidity in the form of electronic money, which gets freed and invested in other startups and both private and public larger companies. Since its is invested in many in number companies the money freed form the IPOs is actually multiplied. And since the money also goes in other public stocks this fans stocks prices higher.

In addition the news coverage of initial public offerings brings in even more investors' money flows. All asset managers, hedge funds, pension funds and individual investors have fee cash to invest. A flurry of IPO new in both mainstream and financial media makes these investors invest the free money.

Thus new IPOs are attracting new money to the stock market and supporting stock market rallies.

Reddit IPO Tomorrow

 

With 800 million USD in revenue in 2023 and 156 mln. USD net loss in 2022 Reddit Inc is worth 17 billion USD, much above the likely valuation on the New York Stock Exchange IPO tomorrow of around 6.5 billion USD, according to Wolfteam Ltd.'s projections and revenues.

Reddit's data is just too valuable as Alphabet's recent  purchase of Reddit's user comments data for 60 million USD to power and teach Google search to improve its algorithms showed.

Reddit could vie for a partial Meta's Facebook social networking alternative in the long run.

Bitcoin, Cryptocurrencies Stocks Plays

Coinbase, Robinhood Markets, Nu Bank Holdings Ltd. and Microstrategy are ways one can invest in the current Bitcoin boom.

Bitcoin's price could touch 100 000 USD this year, in Wolfteam Ltd.'s view.

Coinbase, Robinhood Markets, Nu Bank Holdings Ltd. and Microstrategy can double from current levels in 2024. Robinhood Markets looks particularly undervalued in the current environment, according to Wolfteam Ltd.'s projections and estimates.

AI Technology Stocks Bubble

 

AI technology stocks are in a bubble. AI stocks are overvalued by 54 % on average, in Wolfteam Ltd.'s view. The Nasdaq Composite could correct by more than 60 % in the next three years.

Wall Street investment banks' equity research analysts present too rosy, optimistic forecasts for AI stocks' future revenues and profits partly influenced by the recent upwards movement of AI stocks prices, according to Wolfteam Ltd. It is true that success usually begets success, but sometimes expectations can fall off a cliff.

Wall Street investment banks' economists present too optimistic forecasts of the US and global economy by recent economic performance and apparently trusting too much the ability of the Federal Reserve to handle any economic dislocations.

In Wolfteam Ltd.'s view the next financial crisis will be triggered by the negative wealth effect of AI stocks falling more than 50 %, which will cause an economic recession or macroeconomic dislocations, which will spread via the loan and general economy channel to the banking sector. And again major Wall Street banks could face difficulties. 

However, the Federal Reserve has shrewdly raised rates, so the Federal Reserve has room to lower interest rates levels in the face of an economic crisis.

Oil Is Undervalued On Geopolitical Uncertainty

With the Russia Ukraine and the Israel Hamas war oil seems undervalued.

Warren Buffett is often a proponent to the thesis that since gold is not a revenue generating asset it is not worth as much as a revenue producing asset. Actually, gold is a revenue producing asset because once it is dug out of the ground it can be sold and generates revenue. Furthermore, the gold mining companies that mine, dig out and clear out gold deposits, pay out dividends, which is revenue to asset managers like Warren Buffett.

The same is true for oil.

With two super regional conflict raging oil does seem undervalued. Also what is going on in the Red Sea and the Yemen Houthis attacks on ships carrying oil and liquefied natural gas also exudes upward pressure on the price of oil.

Oil super majors like Exxon Mobil, Chevron, BP, Shell, Total and mid-sized oil drillers like Occidental Petroleum, Marathon Oil Corporation, Devon Energy, Chesapeake are undervalued, according to Wolfteam Ltd.'s projections and estimates.

How Long Will The AI Boom Last?

The current artificial intelligence, AI technology boom will lead to a bust, akin to the dot-com boom and bust in 2000 in 3 years, according to Wolfteam Ltd.'s projections and estimates.

The Nasdaq Composite could correct 80 % from its peak within 5 years, in Wolfteam Ltd.'s view. The Magnificent 7 Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla AI technology stocks' market capitalization imply too high growth rates for revenue and profits. 

At Apple's Price/Sales ratio Apple's revenue must grow by 20 % 5 years in a row to substantiate Apple's current market capitalization of 2.66 trillion USD. 

Microsoft's Price/Sales ratio of circa 15 presupposes even more stunning growth of 25 % for 7 straight years to substantiate Microsoft's current market capitalization of 3.09 trillion USD.

Wall Street equity research analysts driven by the recent Magnificent 7 Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla price action keep coming with overoptimistic, unrealistic estimates for the Magnificent 7 Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla's future revenue and profits, even though the US and the World's economy is practically stagnating with growth rates in the statistical margin of error.

These overoptimistic forecasts of revenue and profit of Wall Street equity research analysts are most probably forced partially be influence from the investment banking, mergers and acquisitions, IPO, stocks sales and debt sales underwriting departments. Much what Eliot Spitzer fought against.

Investment banking, especially mergers and acquisitions and IPO underwriting is a very lucrative sales business, while the analysis or equity research and risk management divisions of investment banks are pushed aside as 'second fiddle' so investment banks can drum up sales and trading, investment banking business and lending business for corporate banks, according to many articles, rumors and Wolfteam Ltd.'s view, also from the personal banking experience of the Wolfteam Ltd.'s founder.

This brings too optimistic forecasts for he Magnificent 7 Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla and generally technology stocks' future revenue and profits. And on their side asset managers and hedge fund managers do not want to pay for equity research and they use the overly optimistic equity and fixed income research of Wall Street investment banks and thus their stocks and fixed income portfolio choices are practically influence by too rosy revenue and profit forecasts and the AI technology stocks bubble keeps blowing.

If the Nasdaq composite does correct by more than 80 % this will cause a global recession of 5 % in one year and 3 % recession in the next, in Wolfteam Ltd.'s view.  For a change global central banks could decide not to intervene and the market could clear from inflation generating zombie companies. 

How Valuable Can NVIDIA Become?

NVIDIA can become the world's most valuable company on the AI boom we are experiencing, surpassing 3.2 trillion USD, the recent market capitalization of Microsoft.

NVIDIA's market capitalization could touch 5 trillion USD, before the artificial intelligence, AI technology driven boom goes bust.

NVIDIA is currently overvalued by 65 %, according to Wolfteam Ltd.'s projections and estimates.

Amphenol Corporation Valuation

 

Amphenol Corporation, a leading provider of high-technology interconnect, sensor and antenna solutions is overvalued.

Amphenol Corporation is overvalued, according to Wolfteam Ltd.'s projections and estimates. With 12.55 billion USD in revenue,  declining at - 0.54 %, net profit margin of 15.36 %  for 2023 Amphenol's intrinsic value is 48 billion USD, in Wolfteam Ltd.'s view, compared to Amphenol's current market capitalization of 65.61 billion USD.

This is an excerpt from Amphenol's fourth quarter 2023 financial results:

Fourth Quarter 2023 Highlights:

• Record Sales of $3.33 billion, up 3% in U.S. dollars and down 1% organically compared to the fourth quarter of 2022
• GAAP Diluted EPSof $0.83, up 1% compared to prior year
• Record Adjusted Diluted EPSof $0.82, up 5% compared to prior year
• GAAP Operating Margin of 20.7% and Record Adjusted Operating Marginof 21.2%
• Record Operating and Free Cash Flow of $842 million and $739 million, respectively
• Acquired TPC Wire & Cable, Airmar, LID Technologies and PCTEL

Full Year 2023 Highlights:

• Sales of $12.55 billion, down slightly in U.S. dollars and down 3% organically compared to the full year 2022
• Record GAAP Diluted EPS of $3.11, up 2% compared to prior year
• Record Adjusted Diluted EPS of $3.01, up slightly compared to prior year
• GAAP and Adjusted Operating Margin of 20.4% and 20.7%
• Record Operating and Free Cash Flow of $2.53 billion and $2.16 billion
• Completed ten acquisitions
• Returned nearly $1.1 billion to shareholders

How Long Will Bitcoin's Price Keep Rising?

 

When Bitcoin's price nears 100 000 USD, Bitcoin's price could correct by more than 30 %.

Many investment algorithms will use the 100 000 USD target to sell off the Bitcoin rally. Bitcoin's price will reach 100 000 USD in 2024, in Wolfteam Ltd.'s view on safe haven demand, the Federal Reserve lowering interest rates and money multiplication via venture capital funds' fintech startups investments

Inflation And The Federal Reserve

US inflation came out higher than expected yesterday.

Despite inflation being higher than target, the Federal Reserve will lower interest rates in 2024 3 or 4 times due to political pressure. Lower rates spur economic growth, which is good for both Joe Biden and Donald Trump. Fed's chair Jerome Powell will hedge his bets, in Wolfteam Ltd.'s view.

How To Value AI Stocks?

Hot AI stocks like currently the Magnificent 7 AI technology stocks Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla can be modeled and valued using the discounted cash flows model, comparables and asset base approach like all other companies.

The difference and what stock market participants seem to be projecting is the much higher, intangible value of the information these companies possess. That is why 6 of the above companies, outside Tesla are worth more than 1 trillion USD. The stock market seems to think that the Magnificent 7 technology stocks can monetize much better the information gathered during their activity.

The Magnificent 7 AI technology stocks Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla are overvalued by 44 % on average, according to Wolfteam Ltd.

Reddit Starts Its IPO Roadshow. A Reddit IPO Valuation

Reddit starts this Monday the road show for its much awaited IPO.

According to media reports Reddit could be valued at as much as 6.4 billion USD.

This is significantly down from the last money raising round of Reddit, which valued the social networking and comments company at 10 billion USD.

According to Wolfteam Ltd.'s projections and estimates the projected IPO value of 6.4 billion USD significantly undervalues Reddit.

With 800 million USD in revenue for 2023 and 156 million USD loss for 2022, Reddit's intrinsic value is 17 billion USD, in Wolfteam Ltd.'s view. Recently Alphabet Inc, the Google owner signed a deal to purchase  and use the information stored in Reddit's comments for 60 million USD. The idea is to use Reddit's comments board to train Alphabet, Google's algorithms, including the artificial intelligence, AI chat bot Bard, lately Gemini Large Language Model of Alphabet. Such a deal could open a whole new revenue avenue for Reddit, which could bring hundreds of millions of recurring revenue for Reddit a year.

Detractors point to the fact that Reddit has been loss making in the last several years. Reddit's comments board model is very scalable and with higher revenue Reddit could soon start making profits. Palantir was notoriously loss making exhibiting negative net profit margins of between - 20 % and - 40 %, but now Palantir, the scalable AI company is profitable and worth 57.59 billion USD on public stock markets.

Reddit possesses a treasure trove of information, which could quickly evoke new artificial intelligence, AI revenue streams for Reddit. In addition, via the meme stocks in mania in 2022, Reddit is very popular on Wall Street and many Wall Street investment banks' equity research analysts are likely to put in favorable research reports for Reddit.

Initially, immediately after the IPO Reddit's stock price and respectively market capitalization could fall as many insiders and many Reddit users sell their stock, which could turn Reddit into an even more undervalued company. Facebook, owned by Meta Platforms is the long dominant social network. Snapchat, owned by Snap Inc and Pinterest turned to be only a partial competition to Facebook. If Reddit achieves even a partial further success in social networking, which Wolfteam Ltd. believes it will, Reddit's market capitalization could even surpass 20 billion USD in the next 3 years. Reddit's brand is well known, which could provide further value to Reddit.

All in all, Reddit is undervlaued, according to Wolfteam Ltd.

Bitcoin Is The Main Reason Behind The AI Boom

 

Bitcoin is the main reason behind the AI boom, in Wolfteam Ltd.'s view.

Bitcoin mining or the creation of Bitcoins requires the usage of the complicated hashing tree algorithms or blockchain, which require powerful computing power. Translation: one needs powerful computer chips, GPUs to create Bitcoin.

The demand for powerful computer chips drives upwards the market capitalization of NVIDIA, surpassing 2 trillion USD. NVIDIA's computer processing chips or GPUs were mainly used by electronic games  players who turned out to be the most prolific Bitcoin miners. NVIDIA's wealth creation drives the increase of the market value and the stock price of others from the Magnificent 7 technology stocks, namely Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla by powering with computer chips  Apple, Microsoft, Alphabet, Amazon, Meta and Tesla's software and hardware

NVIDIA currently has higher market capitalization of 2.19 trillion USD than all from the Magnificent 7 technology stocks, but Apple and Microsoft, chiefly influenced by the current Bitcoin, cryptocurrencies boom.

Coinbase Could Surpass Its All Time High

Coinbase Global Inc, the cryptocurrency exchange could surpass its all time high of 342.98 USD achieved on 12 November 2021, according to Wolfteam Ltd.'s projections and estimates.

Bitcoin's price could surpass 100 000 USD in 2024, a record high, in Wolfteam Ltd.'s view, which will drive up the prices of all major cryptocurrencies and even more obscure cryptocurrencies to record highs.

These possible developments will increase the trading fees revenue for Coinbase, because higher cryptocurrencies prices will bring new investment flows and cryptocurrencies trades from existing and new cryptocurrencies investors. The Bitcoin, cryptocurrencies trading volumes that are routed through Coinbase could increase exponentially, if more hedge funds and asset managers start to enter Bitcoin, cryptocurrencies investments. Bitcoin, cryptocurrencies' low liquidity is what deterred hedge funds and asset managers up till now, but higher Bitcoin, cryptocurrencies prices will translate naturally into higher liquidity.

All these possible developments will turn into probable higher revenues and profits for Coinabse, increasing the fundamental investor base for Coinbase, which could drive the company's stock price and market capitalization to record highs.

Bitcoin's Meteoric Price Rise

 

Bitcoin's price has gone sky high in the last couple of weeks, breaking its all time record high of 64 400 USD recorded on 12th November 2021.

General risk on sentiment and the Federal Reserve signalling it is close and ready to lower the target for the Federal Funds Rate and thus lower interest rate levels in the USA and by extension the global economy, since the Federal Reserve is the most influential global central bank.

Bitcoin's price could surpass 100 000 USD in 2024 in Wolfteam Ltd.'s view.

Higher Bitcoin prices generally beget even higher Bitcoin prices, momentum effect plus general technology risk on sentiment driven by artificial intelligence, AI and the Federal Reserve lowering the Federal Funds Rate target and thus lowering interest rate levels will be the main contributors to Bitcoin possible future price rise to 100 000 USD in 2024.

In addition, the money recycled to venture capital funds due to lower interest rates will feed technology entrepreneurship, including Bitcoin, cryptocurrencies projects entrepreneurship, which will bring further fundamental base for Bitcoin's price rise.

Microsoft's AI Pivot

Microsoft recently tried to diversify its AI investments by investing in Mistral.

We are currently living in an AI technology bubble and Microsoft is one of the poster children of this AI boom and possible bust.

Microsoft is trying to tread carefully, because it can be accused of harvesting user data. That said, Microsoft is overvalued by 44 %. AI will change our lives, but not as fast as Wall Street equity research analysts and investors forecast, according to Wolfteam Ltd.'s projections and estimates.

The Federal Reserve And Interest Rates

 

The Federal Reserve will most likely lower the target for the Federal Funds Rate 4 times this year, mainly on political pressure, according to Wolfteam Ltd.'s projections and estimates.

US Inflation is stubbornly higher that the Federal Reserve PCE inflation target, but that could be deemed transitory again and interest rates levels could still be lowered four times in 2024.

This will make naturally stocks cheaper since both the interest rates levels and growth are used to discount profits and terminal value to arrive at a valuation, value for common stocks. And now interest rates levels are expected to decrease, which will also speed up the revenue and profit growth of companies since now companies will be able to take out cheaper bank loans, financing, driven by lower interest rates.

Bitcoin And Gold Could Go Up In Tandem

 

Bitcoin and Gold could start rising simultaneously influenced by global geopolitical uncertainty,  according to Wolfteam Ltd.'s projections and estimates.

Investors search intensively for a safe haven in times of tumult like nowadays. Bitcoin is virtually untraceable,  mined independent from governments, while gold has long had a safe haven status.

The demand for Bitcoin and gold could well explode in the next three years.

How High Can Coinbase's Stock Price Go?

Coinbase's stock price could reach 450 USD in 1 year, according to Wolfteam Ltd.'s projections and estimates. Or Coinbase's market capitalization could go from the current circa 50 billion USD to around 110 billion USD.

The current Bitcoin, cryptocurrencies boom is driven by the Federal Reserve hinting at lower interest rates and artificial intelligence, AI taking over the world.

 

Microsoft And AI

 

Microsoft hedged its AI bets by investing in the French AI startup Mistral, apart from its 49 % stake in OpenAI, the producer of the ChatGPT neural network artificial intelligence, AI chat bot.

Microsoft could have antitrust problems on one hand.

That said, revenue from artificial intelligence, AI globally pure could surpass 1 trillion USD in the next 10 years. Microsoft via its 49 % stake in OpenAI is at the forefront of artificial intelligence, but at 3.09 trillion USD market capitalization, Microsoft is overvalued, according to Wolfteam Ltd.

Actually, due to the controversy surrounding the recent ouster and hiring back again of the CEO of Open AI, the maker of ChatGPT Microsoft's stake in OpenAI is not that valuable, in Wolfteam Ltd.'s view. And the future revenues and profits from Microsoft's 49 % stake in OpenAI, when discounted to the future are not that valuable any more. That is most probably the reason why Microsoft is hedging its AI bets by investing in Mistral, the french AI startup.

Actually, with both its OpenAI and Mistral investment, Microsoft could face antitrust issues.

That said, however, Microsoft currently has the most distinct AI strategy, which is working relatively well. The disadvantage of Microsoft's clear AI strategy and focus is that it depends on data collection and this hindrance could bring minuses to Microsoft, which the company wants to avoid.

All in  all, Microsoft is overvalued, but Microsoft has the most clear cut, distinct AI strategy, which made Microsoft recently the most valuable company in the world.

Bitcoin And Computer Chips. NVIDIA

 

NVIDIA is booming with its revenue increasing several times year on year.

All this is to a large extent due to the fact that NVIDIA microprocessors, GPUs computer chips are used to mine Bitcoin.

Bitcoin is nearing an all time high of circa 68 000 USD. Bitcoin's boom is reflected in NVIDIA's boom, since NVIDIA computer chips were first used and are still used by people playing electronic games and now those same people playing electronic games are the main people mining or creating Bitcoin using NVIDIA's GPU computer chips.

So as long as Bitcoin's price keeps rising, NVIDIA's revenue an profits will keep booming and the artificial intelligence AI stocks like the Magnificent 7 Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla and AMD, Palantir, Arista Networks will keep rising, according to Wolfteam Ltd.

Reddit IPO. Valuation And Strategy Perspectives

Reddit, the user friendly social network filed to go public, do an Initial Public Offering, IPO.

At its last private funding round, Reddit was valued at 10 billion USD. With circa 800 million USD of revenue for 2023 and net loss of 156 million USD for 2022, Reddit's intrinsic worth is 27 billion USD, according to Wolfteam Ltd.'s projections and estimates.

Meta Platforms Inc, the owner of Facebook, WhatsApp, Messenger and Instragram social networks has a market capitalization of 1.28 billion USD. There is definitely room for another dominant social network, outside Facebook and partly LinkedIn.

Viable candidates are Snap Inc, Snapchat's owner, Pinterest and Reddit. All these social networks can take at least a partial piece of the hundreds of billions of USD a year advertisements revenues going to social networking globally. The problem is that from Snap Inc, Snapchat's owner, Pinterest and Reddit only Pinterest is relatively consistently profit making, while Snap Inc and Reddit are regularly reporting losses and negative net profit margins ranging from - 20 % to - 40 % even per quarter.

Snapchat's strategy is seemingly aimed at the young auditorium. Snap Inc, Snapchat's owner is trying to make its young user demographic engage more with the platform and hopes as its audience starts maturing advertisements revenue will flow in.

Reddit is also trying to drive more user engagement, riding on the success the Meme Wall Street mania surrounding GameStop 2 years ago. Reddit has to work more on its user interface, though. Reddit recently signed a deal for Alphabet, the owner of Google to be able to crawl, scrape its user produced comments to educate its artificial intelligence, AI learning algorithms. The deal Reddit and Alphabet, the owner of Google inked is for 60 million USD. This is an entirely new revenue stream for Reddit to monetize. Data is the new oil. Algorithms need data to produces better insights and Reddit's user produced comments is a treasure trove of information. And people are still infinitely better at thinking than machines. So Reddit's user produced comments undoubtedly entail hard earned insights and information, which can help artificial intelligence, AI learning algorithms learn and ultimately improve our lives.

All in all, Reddit is grossly undervalued.

This Time Technology Companies Have Revenues

 

 'This time technology companies have revenues' is a phrase often heard uttered by Wall Street equity research analysts, investors, hedge fund managers, asset fund managers to substantiate the current AI technology stocks boom, which is a bubble, according to Wolfteam Ltd.'s projections and estimates.

'This time technology companies have revenues' is used to differentiate the current AI stocks boom from the 2000 internet dot com boom and bust, where the Nasdaq corrected around 80 % and many of the poster children technology stocks of the 2000's dot com boom and bust did not have revenues and went out of existence.

The poster children of today's artificial intelligence, AI stock market bubble are the Magnificent 7 or Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla along with other smaller AI stocks like Arista Networks, AMD, Palantir etc.

Yes, the aforementioned stocks have revenue and billions, sometimes hundreds of billions of USD of revenues a year, but they are still overvalued by circa 44 % on average, especially the Magnificent 7 AI technology stocks. Yes, the AI bubble is not yet as big as the Nasdaq 2000 dot com boom and bust and the Nasdaq Composite may not fall circa 80 % from its peak, if the AI bubble bursts within the next couple of months.

The current AI bubble, however, will go on blowing for three more years, according to Wolfteam Ltd's projections before the Nasdaq Composite falls by around 44 % to mark the end of the current AI boom.

Many of the Magnificent 7 or Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA and Tesla along with other smaller AI stocks like Arista Networks, AMD, Palantir will survive, if not even most of them. And AI will take a gradual, also pacey course of development after the bust and will go on transforming our lives. What is more, out of the ashes of the current AI boom new artificial intelligence, AI companies producing both software applications and hardware will appear and drive the next phase of the artificial intelligence, AI revolution, that will change our lives.