The world today was engineered to be ephemeral and noisy. This is a terrible combination for an investor. 

On Twitter alone, there are 456,000 messages sent every minute. On Facebook, there are 510,000 comments posted every minute and 293,000 status updates. Outside of social media, there are 16 million text messages sent every minute and 156 million emails. 

For an investor, the antidote to noise is quality stock analysis. Due diligence requires dozens of hours per equity, and it takes hundreds of hours every year to produce a free newsletter with quality analysis. I/O Fund strives to offer some of the team’s best analysis for free, and we believe the consistency and depth of what we provide for free is hard to replicate. 

We offer this in the most challenging sector for investors, which is hands-down the tech sector. The tech sector is unusually challenging because it involves many different verticals – artificial intelligence, crypto, consumer, media, cloud, and more. It’s also the highest risk and highest reward sector in the market. Due to sudden price movements in both directions, the stakes are high. Perhaps we are biased, but quality analysis particularly in the tech sector can be hard to come by.

Below are highlights from our free newsletter during a strong year for AI and crypto. Although numerous investor favorites rose more than 100% during the year, many other popular tech stocks declined significantly. We offered our readers clues and insights for the leading stocks in AI semiconductors and software, providing unparalleled depth and quality to our free readers.

Nvidia to Surpass Apple’s Valuation

Right out the gate in 2024, the I/O Fund’s free newsletter expanded on Lead Tech Analyst Beth Kindig’s highly regarded 2021 prediction that Nvidia would surpass Apple’s valuation within 5 five years; which at the time, this prediction was inconceivable as it would require not only Nvidia to go up more than 300%, but also for the tech leader Apple to plateau.

Source: Twitter

Kindig explained why she would deliver on this prediction a whole 2 years early in the February 2024 analysis, Nvidia Stock Gained $1.5 Trillion To Surpass The FAANGs - Apple Is Next. In the analysis, she pointed out that it was not just the consistency and magnitude of Nvidia’s multi-billion dollar revenue beats, but the expansion of its margins and earnings as revenue grew >200% for multiple quarters as it approached a $90 billion annualized scale.

From Kindig’s August 2021 prediction to the February 2024 update, Nvidia posted some staggering growth numbers:

• Data center revenue grew 676% to $18.4 billion. Data center revenue scaled from a $10 billion run rate to a $75 billion run rate in 2.5 years, a feat that took AWS 6 years to accomplish.
• Nvidia’s total revenue increased 240% during the period driven by blazing data center growth, versus a 43% increase for Apple, with iPhone revenue rising just 4.5% from fiscal 2021 to fiscal 2023.
• Nvidia’s quarterly EPS grew nearly 400% during the period, versus just 14% for Apple.
• Nvidia’s operating margin increased from 47% to nearly 67%, while Apple’s expanded from 28% to 34%.

The I/O Fund provided a handful of reasons that would propel Nvidia to quickly become the world’s most valuable company. This included the long runway for AI accelerators – AMD’s executives forecast the market to reach $400 billion by 2027 – with Nvidia taking the lion’s share. Nvidia’s accelerated product roadmap to a one-year release cadence lets it continue to pry away Big Tech capex, while the software opportunity beckons, already reaching a $1B+ run rate. These tailwinds combined with a valuation that was “eerily low” at the time considering the rapid ascent shares had made through 2023.

Supply chain and demand signals point to 2025 being another strong year for Nvidia as Blackwell comes to market, with the I/O Fund tracking these data points to assess Nvidia’s growth potential in the year to come. The I/O Fund has published numerous free analyses on Nvidia’s Blackwell; some of this explaining back in May why there was still room in the stock price as Kindig called out institutional analyst estimates being too low (which later materialized). Kindig also boldly wrote that delays on Blackwell were overblown, and we have gotten yet another confirmation from Nvidia’s management team at CES that Blackwell is shipping on time. The I/O Fund’s ongoing consistency and accuracy on this stock dating back to 2018 for up to 4,000% returns has been unparalleled --premium members received nine real-time buy alerts below $20 in 2021 and 2022; learn more here.

• Nvidia Q1 Earnings Preview: Blackwell And The $200B Data Center
• Nvidia Stock: Blackwell Suppliers Shrug Off Delay Ahead Of Q2 Earnings
• Here's Why Nvidia Stock Will Reach $10 Trillion Market Cap By 2030
• Nvidia Stock Is A Buy On Dips Before Blackwell Arrives In 2025
• Nvidia’s Stock Has 70% Potential Upside For 2025

Bitcoin to $100K+

Portfolio Manager Knox Ridley provided two crucial updates on the I/O Fund’s game plan for Bitcoin, with his first update from April 2024 increasing the Fund’s target zones. At the time, Bitcoin was an overlooked asset compared to the over-hyped Mag 7, yet the asset has delivered superior returns compared to all of the great large-cap tech stocks in this bull cycle, minus Nvidia, while having a low inverse correlation to tech.

Utilizing technical analysis and on-chain data In the analysis We Are Raising Our Bitcoin Targets To $106K - $190K, Ridley explained that the I/O Fund was now raising its target zones for Bitcoin to $106,000 to $190,000, up from the previous zone of $75,000 to $130,000. Bitcoin was trading in the mid-$60,000 range at the time, with Ridley saying that “the $42,750 support region holds on any ongoing volatility, then we have no reason to doubt the uptrend in place.”

Ridley provided another update to the Bitcoin thesis at the end of July 2024 in the analysis, Bitcoin Update: Next Stop $100,000; Bitcoin finally surpassed that historic level as 2024 came to a close. He explained that Bitcoin had “a full corrective pattern in place that ended around $54,000 in early July,” which “suggests we are in the early stages of the next rally.”

The I/O Fund had systematically been accumulating since the start of this cycle while raising our critical supports along the way -- below is the history of Bitcoin buy alerts that the I/O Fund issued to our subscribers in real-time since early 2023.

Source: I/O Fund

Notably, our firm assisted our readers in capturing immense upside from the two top-performing large-cap tech positions in 2023 and 2024 with Nvidia and Bitcoin; the fact we also provided ongoing entries and risk management for these mega-winners should not be understated in terms of the value we have delivered. To refer our newsletter to your friends and family, please click here.

Meta to Outperform Snapchat

In the January 2024 analysis, Social Media Stocks: One Metric Shows Meta’s Clear Leadership, the I/O Fund pointed out what separated Meta as a clear social media leader and why Snapchat would struggle with monetization. Since then, Meta shares have risen nearly 65%, while Snapchat has declined -28%.

Meta was demonstrating improvements in ad pricing with strong ad impressions growth of >30% in Q2 and Q3 2023, while average revenue per user (ARPU) accelerated in those quarters; whereas Snapchat was struggling to effectively monetize its user base. Additionally, we explained that Meta was much more efficient with spending, maintaining R&D spending below 40% of gross profit while improving ARPU, significantly improving operating margin, and investing in AR/VR and AI technologies. Snapchat was “spending around 80% of its gross profit dollars on R&D,” a disproportionately high amount on R&D relative to peers while failing to increase ARPU and monetization within its user base.”

We pointed out that what makes Meta a clear leader is that “it can maintain a high level of R&D spend … while remaining a cash cow with strong operating cash flow and free cash flow growth,” with OCF margin nearing 60% in Q3 2023 and OCF tracking for 50% YoY growth to $75 billion in 2023.

In a follow-up analysis in March 2024, Top 3 Ad-Tech Stocks For 2024, we said that Meta’s “key metrics [were] supporting a return to >40% operating margin for the full year and a possible >33% net margin, driven by increasing ad pricing, strong engagement trends and impressions growth, aided by the release of numerous AI features.” Q3 2024’s results put this prediction very close to coming true, with 9M operating margin at 39.6% and net margin at 35.8%.

The I/O Fund is also closely analyzing the supply chain to identify overlooked beneficiaries of the AI infrastructure buildout, sharing this information as well as potential buy and sell plans and real time trade alerts with premium members. The I/O Fund recently entered two separate beneficiaries for gains of 23% and 17% since November. Learn more here.

Amazon’s Cloud Acceleration

In the February 2024 analysis AI Driving Acceleration For Big 3 Cloud Stocks, the I/O Fund discussed how AI was impacting cloud growth at Microsoft, Amazon and Alphabet. For Amazon, the I/O Fund explained that in Q4 2023, “AWS finally accelerated in Q4 for the first time in 2 years, with Amazon reporting 13.2% growth in Q4, up just over 1 point from Q3’s 12%.” However, the more important metric was AWS’ operating leverage improving in the second half of 2023, with operating income growth at 3x the rate of revenue in Q4.

At the time, AWS was generating the majority of Amazon’s company-wide operating income (67% of 2023) due to its higher operating margin (27% in Q4 2023), which we had said was “a trend that can strengthen with AI driving accelerated customer and revenue growth and decreased costs.” This has played out, with AWS reporting a 37.8% operating margin in Q3 2024.

What the I/O Fund had seen in February 2024 was a combination of increased customer migrations, larger and longer duration contracts, increased incremental revenue QoQ, and opportunities to better monetize the suite via AI. These factors were the necessary ingredients for AWS to show “a sustained AI-driven acceleration,” even though its quarterly growth rates lagged Azure and Google Cloud. AWS growth has now re-accelerated to 19%.

In a follow-up article in May, Amazon Stock: Nearing $2 Trillion Club From AWS Growth & Ads Catalyst, we provided evidence that AWS was a primary contributor to Amazon’s push to the $2 trillion milestone. We noted that AWS was contributing more than 60% of Amazon’s total operating income despite contributing less than 20% of total revenue, one reason that gross profit margin has quickly approached 20% and operating margin reached double-digits for the first time ever, at 10.7%. Growth from AI quickly reached a multi-billion dollar run rate, while improvements in operating leverage at AWS aided Amazon’s bottom line and stock price -- shares have risen nearly 30% since the February 2024 analysis.

Honorable Mentions

The I/O Fund was also quick to call out a fundamental acceleration for one of 2024’s best performing AI stocks, alongside another AI-exposed ad-tech winner and an AI theme that quickly came to the forefront thanks to Nvidia.

1) Palantir’s Revenue Acceleration

In December 2023, the I/O Fund outlined four cloud stocks set to see revenue accelerate in 2024, with Palantir one of the four. We had said that Palantir was “exhibiting multiple signs of acceleration heading into 2024 with an improved fundamental backdrop driven by increasing AI demand. Palantir’s Artificial Intelligence Platform (AIP) is driving a significant acceleration in its US commercial business, while underlying metrics and the bottom line are rapidly improving: Palantir posted its first GAAP profitable quarter in February and has since reported four consecutive GAAP profitable quarters.”

We explained that “revenue growth is poised to accelerate in Q4 and through 2024, boosted by AI demand, a reacceleration in Palantir’s US government segment, and continued strength in the US commercial segment stemming from [AIP].”

Palantir’s shares ended 2024 as the S&P 500’s best performer with a 341% return.

2) Taiwan Semiconductor’s AI Revenue

In April 2024, the I/O Fund discussed Taiwan Semiconductor’s (TSMC) revenue acceleration stemming from the strength of AI/HPC revenue, with April sales surging after Q1 showed strong advanced node revenue growth and record HPC revenue.

We discussed how TSMC was “riding the enormous wave of demand from Big Tech,” with HPC revenue rising 3% QoQ to $8.68 billion in Q1 2024, “a fresh record despite the first quarter typically being seasonally weaker.” Additionally, we said reports of “Nvidia and AMD fully booking out TSMC’s advanced packaging capacity through the end of 2025” lent “to a strong AI-driven outlook.”

April’s sales numbers gave us confidence that TSMC was “on track to land in the upper half of or above the guided range” for Q2 revenue -- it ultimately beat estimates by $500 million, the largest in more than two years.

3) AI Power Consumption

In June 2024, the I/O Fund published a thematic analysis on AI power consumption, and the rising power draw from next-generation GPUs. This analysis was underpinned by the “rise of generative AI and surging GPU shipments [which] is causing data centers to scale from tens of thousands to 100,000-plus accelerators, shifting the emphasis to power as a mission-critical problem to solve.”

We explained how Nvidia’s Hopper and AMD’s MI300X accelerators consume 50% to 75% more power than the prior generation, while Blackwell represented “up to a 300% increase in power consumption across one generation of GPUs with AI systems increasing power consumption at a higher rate.”

With power draw now quickly becoming mission-critical for data centers to address due to each generation of GPUs becoming increasingly more powerful than the last, we pointed out that this was driving a shift to liquid cooling.

For 2025, the I/O Fund has worked to identify key Nvidia suppliers with Blackwell on deck to ramp significantly, sharing our in-depth research on the AI networking stack. Sign up to join our upcoming webinar, held every Thursday at 4:30 pm EST, where we discuss buy zones for the stocks we cover plus a special, one-hour 2025 webinar held on January 14th. Learn more here.

Please note: The I/O Fund conducts research and draws conclusions for the company’s portfolio. We then share that information with our readers and offer real-time trade notifications. This is not a guarantee of a stock’s performance and it is not financial advice. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis. Beth Kindig and the I/O Fund own shares in NVDA, TSM and BTC at the time of writing and may own stocks pictured in the charts

Recommended Reading:

• Five Top Tech Stocks Of 2024: Year In Review
• Where I Plan To Buy Nvidia Stock Next
• Nvidia Stock Is A Buy On Dips Before Blackwell Arrives In 2025
• Nvidia’s Stock Has 70% Potential Upside For 2025