Cloudflare shares spiked last week following Q4 earnings despite an underwhelming Q1 and 2025 guide that came in slightly below expectations, as multiple key metrics supported management’s commentary for a revenue reacceleration in 2025. Below, I break down the most important metrics from the report and what it means for growth for Cloudflare as AI inference takes the stage. The I/O Fund recently entered five new small and mid-cap positions that we believe will be beneficiaries of increased AI spending after Big Tech projected capex of $320B+ for 2025. Advanced members received real-time trade alerts for each trade. Take advantage of our limited-time promotion for $50 off monthly Advanced plans – learn more here.

Palantir’s Q4 report exceeded expectations, driving shares past the $100 mark with a massive beat and raise. The launch of AIP just six quarters ago has fueled a remarkable 23-point revenue acceleration, solidifying Palantir’s position as a leader in AI-driven growth. Compared to rivals like Snowflake and MongoDB, Palantir continues to dominate in AI revenue expansion. With Q4 revenue hitting $827.5 million—far surpassing forecasts—Palantir’s trajectory signals a strong path toward sustained high growth.

DeepSeek shook the market to start the week, sending AI heavyweight Nvidia down 17% on Monday, wiping out $600 billion in market cap, while other AI hardware names fell up to 30%. This is enough to make any investor panic, and it boiled down to one mission-critical question – did the model’s release fundamentally rewrite the AI capex story? The market’s readthrough is that Big Tech has now been overspending on AI. However, The I/O Fund believes that readthrough is wrong, it’s not that the United States is overspending; it’s that we will accelerate spending to stay ahead. In this analysis, I provide evidence that DeepSeek is not the black swan that killed Nvidia overnight, and touch base on what investors should keep an eye on price-wise moving forward for Nvidia. The I/O Fund recently entered five new small and mid-cap positions that we believe will be beneficiaries of this AI spending war. We discuss entries, exits and what to expect from the broad market every Thursday at 4:30 p.m. in our 1-hour webinar. Learn more here.

Big Tech’s earnings are just around the corner, with Microsoft and Meta kicking the season off on January 29th. The upcoming December quarter reports will offer a glimpse into AI spending trends to close out 2024 and an initial view for 2025, where Microsoft has already penciled in at least $80 billion in spending for AI-enabled data centers compared to $62 billion originally estimated. Analysts had initially estimated capex of ~$200 billion for Big Tech in 2024, an increase of ~30% YoY. In the first half of 2024, Big Tech spent nearly $104 billion, a 47% YoY increase. Through Q3, that sum had surged to $170 billion, up 56% YoY. Our latest checks suggest that Big Tech is on track to spend at least $236 billion in capex in 2024, 18% higher than analyst estimates and representing YoY growth of more than 52%.

Ethereum has long been the frontrunner in decentralized apps (dApps) and blockchain innovation, but its scalability challenges have left the door open for competitors like Solana. Launched in March 2020, Solana has surged over +28,000% since its debut, compared to Ethereum’s +1,500%, offering a faster, more efficient alternative through its unique Proof of History (PoH) protocol. This protocol enables Solana to process up to 65,000 transactions per second without sidechains, making it a superior layer 1 solution in terms of speed and security. With Ethereum’s shift from Proof of Work (PoW) to Proof of Stake (PoS) addressing some scalability issues but raising concerns about centralization, Solana continues to push ahead, supported by innovations like the upcoming Firedancer upgrade, which promises to boost transaction speeds to over 1,000,000 per second. While the broader adoption of blockchain remains in its early stages, Solana’s advancements position it as a compelling contender for long-term layer 1 dominance.

The Best of I/O Fund’s Free Newsletter in 2024 highlights top-performing tech stocks, Bitcoin insights, and AI-driven market trends. Discover how I/O Fund delivered unparalleled analysis on Nvidia, Bitcoin, Meta, Amazon, and Palantir. With in-depth research into AI power consumption, cloud growth, and tech’s biggest movers, our free newsletter provides investors with actionable insights and proven strategies to navigate the high-stakes tech sector. Stay ahead with expert analysis that uncovers opportunities and helps manage risk in the most dynamic industry. Learn more and sign up today!

Below, I review five of the top stocks of 2024, selected based on their price action, fundamentals and presence withing leading tech themes. Choosing a top 5 means many great stocks were left off this list, yet this sample helps to form conclusions around how 2024 shaped up versus years past, centered around leading, core thematic opportunities.

The I/O Fund is tracking multiple supply chain signals indicating Blackwell sales will likely far exceed the GPU sales we saw in 2023 and 2024 combined – to the tune of bringing Nvidia to $200 billion in data center revenue.

Broadcom’s stock surged 35% in two days despite a mediocre Q4, as management offered investors a picturesque addressable market forecast for 2027. Q4 was not the blowout report the market made it out to be, as Broadcom fell just short of revenue estimates while guiding Q1 barely above consensus. Despite this, the market did solidify that momentum continues to build for AI stocks entering 2025.

Semiconductor stocks will come into focus in 2025 as geopolitical tensions rise. China is likely to retaliate following Trump’s most recent threats of 10% additional tariffs to all Chinese goods. This escalation in tariffs and retaliation is expected to have an impact on semiconductor sales in China, particularly affecting chipmakers with higher exposure to China.

Black Friday and Cyber Monday e-commerce sales broke records again this year, with Adobe pointing out that US sales increased 10.2% YoY to $10.8 billion on Black Friday while Cyber Monday sales rose 7.3% YoY to ~$13.3 billion. Peak sales hit $15.8 million per minute on Monday evening.

Nvidia once again posted a $2 billion beat to consensus revenue estimates in Q3, reporting YoY growth of nearly 94% to over $35 billion in revenue. Data center revenue more than doubled in the quarter to over $30 billion with Hopper driving the second largest data center beat in company history.

Nvidia’s stock broke to all-time highs recently, trading at $148 in early November and $147 yesterday. The stock has left many investors wondering “what comes next” after the unrelenting, historic surge that began seven quarters ago.

Big Tech’s AI spending continues to accelerate at a blistering pace, with the four giants well on track to spend upwards of a quarter trillion dollars predominantly towards AI infrastructure next year.

Palantir proved again in Q3 that it’s undeniably one of the stronger AI software stocks in the market outside of the cloud hyperscalers. The company reported visible AI-driven growth and persisting business momentum for AIP, strong revenue acceleration to 30% YoY, combined with strong profitability – a rare combination for growth stocks.

In December 2022, we boldly stated that “Bitcoin is a buy” when it was trading around $17,000. We were positioning for a new bull cycle and projected a target between $75,000 - $132,000. Despite Bitcoin being down nearly 80% from the 2021 highs and the FTX scandal, by March 2024, Bitcoin hit $73,757, close to our lower target. We rely on technical and on-chain analysis for Bitcoin, which helped us call the 2022 low and predict upper targets. We now adjust our targets to $82,000 - $106,000 for risk management and plan to reduce our crypto exposure by ~50% on the next push to all-time highs.

Tesla is arguably one of the most advanced AI companies in the world, yet its stock is dictated by margins. Over the past three years, Tesla’s average gross profit per vehicle has declined by 60%, falling from more than $14,400 in Q3 2021 to less than $6,000 in Q2 2024, highlighting the difficulty Tesla has faced in a high-interest rate environment.

In this article, I break down how Palantir’s AIP is putting it a step above peer Salesforce, MongoDB and Snowflake with visible AI growth, and its undeniable ‘secret sauce’.

In this report, my team will address the risks brewing in the market. The strange behavior in the bond market could be signaling that the FOMC has made a policy error. This coupled with key tech stocks trending lower against the S&P 500’s advance, has my firm cautious for the time being.

In an interview with Darius Dale, Beth Kindig stated: “We ultimately think you can get Nvidia lower than where it is trading now. We are likely to take gains between $120 and $150 based on technical levels. The valuation has finally caught up to the fundamentals, and we have about six to nine months before Blackwell arrives.” Beth stresses the importance of using technical analysis, as tech investing is sentiment-driven and has proven to have stellar returns in the past. I/O Fund has a history of buying Nvidia at low prices. The first entry was $3.15 in December 2018 and provided 9 buy alerts below $20 for Nvidia.

Below, I look at the demand environment for leading cybersecurity stocks CrowdStrike, Zscaler, Palo Alto, and Fortinet, and which ones have key metrics hinting toward underlying strength.

We’re still in the early innings of AI, but the pace of transformation that AI is driving is unlike any other technology seen before, and that was evident at Communacopia. Below, I dig in to the four things that investors must know about AI.

Chipmakers Qualcomm, Intel and AMD are working to bring AI-capable PCs to the “mainstream”, delivering powerful neural processing units to PCs for on-computer AI operations. AI PCs are not only a consumer market, rather will also be driven forward by enterprises and developers seeking to upgrade their employee PCs.

The lead we see from Microsoft today on AI revenue streams is critical enough and predictive enough that it points toward Azure surpassing $200 billion by 2028, catalyzed by the OpenAI investment.

Direct liquid cooling doesn’t lie as it’s intricately linked to the Blackwell launch, implying that Blackwell would indeed ship by Q4 – and Nvidia just confirmed that (multiple times) in Q2’s release.

Bulletproof Nvidia showed an unusual bout of weakness this past month following a report from The Information that Nvidia’s new AI chips are delayed. The report asserts that Nvidia’s upcoming artificial intelligence chips will be “delayed by three months or more due to design flaws,” resulting in a final flush of selling where the stock was down (-15%) in 7 days.

Arm Holdings is the third-best performer of 2024 in AI-related semiconductor stocks with a 56% YTD return, behind only Nvidia and Taiwan Semiconductor.

The major theme over the past month in Big Tech and AI semiconductors has been the durability of demand: essentially, what is Big Tech’s return on more than $150 billion in capex over the last twelve months (primarily for AI infrastructure), and if the companies can generate a substantial enough return from AI products to continue catalyzing GPU demand and revenue for Nvidia.

Bitcoin is the best performing asset in market history. There is no stock or asset that has come close to delivering the returns of this digital currency --- it has greatly outperformed all FAANGs, and all outliers in the history of the markets. Yet, Bitcoin is also unusual in that its volatility is equally as historic, capable of regular +70% drawdowns that inevitably push to new highs within an average of 2.5 years.

Optimism around the Fed could spark a continuation of the relief rally in the Russell 2000 and further rotation out of the Mag 7. Below, we look at the pros and cons of a Mag 7 rotation and how we plan to personally handle this shifting landscape.