This portfolio update follows the completion of Q1 earnings results (for companies reporting their 31Mar or 30Apr quarters). NVDA was the last of my portfolio companies to release its Q1 results (28May). I intend to continue posting detailed portfolio updates on a quarterly basis, typically after the end of an earnings reporting cycle. For more frequent updates on the portfolio composition, I post regularly on X (formerly Twitter). The posts there can be seen by following @gauchorico. I have also been posting weekly changes to the portfolio on X.
PRIOR PORTFOLIO UPDATES
PORTFOLIO PERFORMANCE
It’s been a volatile start to 2025 after the portfolio gained 82.7% in 2024. The portfolio reached a YTD high on 17Jan at +6.8% and a YTD low on 4Apr at -28.6%. The portfolio’s YTD return finished May at +3.7% compared to the S&P 500 (Total Return) index at +1.1%.
| DATE | GauchoRico Portfolio (YTD) | S&P500 Total Return (YTD) |
|---|---|---|
| Jan25 | 5.0% | 2.8% |
| Feb25 | -6.5% | 1.4% |
| Mar25 | -19.2% | -4.3% |
| Apr25 | -12.1% | -4.9% |
| May25 | 3.7% | 1.1% |
The GauchoRico portfolio’s cumulative return in the 8.41 years (through the end of May 2025) since the start of 2017 is now +1042.2% compared to the S&P 500 (TR)’s return of +205.0%. In those eight years and five months, the portfolio’s CAGR was +33.5% compared to +14.2% for the S&P 500 (TR), which includes dividends.
| Year | GauchoRico Return | GauchoRico Cumulative Return | S&P 500 (TR) Return | S&P 500 (TR) Cumulative Return |
|---|---|---|---|---|
| 2017 | +61.6% | +61.6% | +22.8% | +22.8% |
| 2018 | +55.9% | +152.0% | -5.2% | +16.5% |
| 2019 | +41.8% | +257.3% | +31.5% | +53.2% |
| 2020 | +245.6% | +1134.7% | +18.4% | +81.4% |
| 2021 | +27.7% | +1477.3% | +28.7% | +133.4% |
| 2022 | -71.4% | +350.5% | -18.1% | +91.1% |
| 2023 | +33.9% | +503.0% | +26.3% | +141.4% |
| 2024 | +82.7% | +1001.5% | +25.0% | +201.8% |
| 2025* | +3.7% | +1042.2% | +1.1% | +205.0% |
| * through 5/31/2025 |
TWO PORTFOLIOS
The GauchoRico Growth Stock Portfolio’s goal is to maximize long-term CAGR. To achieve this, there will be occasional large drawdowns like the one during October 2021 – October 2023. There were previous large drawdowns such as one in 2015-2016 and one in 2008-2009. In addition, there were some more minor, but still large, drawdowns. In fact, between 18Jan and 4Apr 2025, the portfolio dropped 33.1%. After experiencing the 2021-2023 portfolio crash, I began to reevaluate my willingness to endure such large drawdowns. In the following three blog posts, I discussed the topic of asset allocation with the Growth Stock Portfolio being only one piece of my total assets:
July 2022: When Should the Game Change?
July 2024: How I Changed My Money Game
May 2025: Safe Bucket and Investing for Fixed-Income: What are the Risks?
While the Growth Stock Portfolio remains a very important component of my overall financial management, I recently decided to create a separate Fixed-Income Portfolio with the goal of providing income for my living expenses. I manage and track the two portfolios completely separately. Going forward, I’ll also provide occasional updates on the Fixed-Income Portfolio.
ALLOCATIONS
| 5/31 | 4/30 | 3/31 | 2/28 | 1/31 | 12/31 | |
|---|---|---|---|---|---|---|
| NVDA | 22.1%* | 20.0%* | 22.2%* | 21.5%* | 16.8%* | 18.1% |
| MELI | 21.3% | 22.1%* | 21.2% | 21.2% | 19.3% | 17.4%* |
| AXON | 16.8% | 15.6% | 15.7% | 13.3% | 11.1% | 10.6% |
| AMZN | 13.1% | 13.4% | 15.0% | 12.2% | 11.8% | 11.4% |
| RDDT | 11.9%* | 9.0% | 8.8% | 2.4% | — | — |
| TSLA | 8.4%* | 6.2%* | 6.1%* | 19.5%* | 25.7%* | 27.3%* |
| SNOW | 2.6% | 2.3% | 2.3% | 2.3% | 2.1% | 1.9% |
| APP | 1.0% | — | — | — | — | — |
| IOT | — | 1.1% | 1.1% | — | — | — |
| ROOT | — | 4.1% | 4.3% | 5.1% | 6.7% | 5.3% |
| BORR | — | — | — | 0.9% | 1.1% | — |
| ASPN | — | — | — | — | 5.3%* | 5.8%* |
| Cash | 3.4% | 6.6% | 4.8% | 2.2% | 0.4% | 3.3% |
The allocation details described below are as of May 31, 2025. Three of the eight positions in the portfolio are leveraged with long-term call options. TSLA: Of the 8.4% position, 0% is in shares and 8.4% is in Dec2026 $330 and $350 call options. NVDA: Of the 22.1% position, 16.6% is in shares and 5.6% is in Jan2027 $125 call options. RDDT: Of the 11.9% position, 10.9% is in shares and 1.0% is in Jan2027 $100 call options. The portfolio composition includes 82.3% shares, 3.4% cash, 14.9% long-term call options, and -0.5% short-term puts.
PORTFOLIO CHANGES
Changes since 28Feb 2025
My last portfolio update was on 28Feb 2025. I no longer report my detailed changes in my portfolio updates, but I have been reporting my allocation changes (buys, sells, and conversion between shares and LEAPS) on a weekly basis on my X account: For more granular updates, see @gauchorico.
EARNINGS RESULTS
Since the last portfolio update, all portfolio companies reported their latest quarterly results. I’ll review them in the order they reported.
TSLA (reported results on 22Apr)
TSLA reported very early in this earnings cycle so I wrote my thoughts on TSLA and the Q1 results in a separate post.
Since that post, Elon left his assignment at DOGE and committed to again focusing on his enterprises. Also, on 29May, it was revealed that Tesla Model Y cars have started driving autonomously in Austin, TX, and TSLA would in a few weeks begin autonomously delivering purchased cars to customers’ homes.
AMZN (reported results on 1May)
AMZN reported Q1 results on 1May. Again, I’d like to refer back to my 1Dec portfolio update (see section in AMZN). My view of AMZN remains the same.
I expect AMZN to continue to benefit from AI, both through digital efficiencies as well as through automation within its fulfillment centers and distribution network. AMZN continues to add automation and robotics to its fulfillment centers and buildings, which lower costs and improve the customer experience by offering faster delivery times to a higher proportion of shipped goods. More and more goods are getting delivered the same or next day.
CEO Jassy discussed the uncertainty and the potential impact from tariffs on AMZN and consumers. There were several key points. First, AMZN is not as uniquely affected as other retailers that import products, either directly or indirectly, and will be impacted by tariffs. Second, AMZN’s scale with its more than two million global sellers can best help consumers find what they need (alternatives) even when there are shortages of some specific items. Third, during times of uncertainty, consumers tend to gravitate toward retailers with a broad selection, fast delivery times, and a strong reputation; this happened during the pandemic and will likely occur again if tariffs result in product shortages and price increases.
AMZN, as well as the other hyperscalers plus Tesla and Apple, develops and utilizes its own application-specific integrated circuits (ASICs) to reduce the cost of compute, which not only lower operating costs and increase profitability but also help mitigate GPU supply constraints (i.e., NVDA GPUs have been supply constrained for a while). Specifically, AMZN’s Trainium and Inferentia chips are for LLM training, inference, and powering Bedrock, AMZN’s service offering a selection of foundation models. The big news in May was that NVDA introduced NVLink Fusion, which will enable NVDA GPUs and ASICs, including AMZN ASICs, to coexist in the same ecosystem; this should make it faster, easier, and less costly to integrate custom ASICs with NVDA GPUs within data centers. Overall, AMZN continues to make progress on lowering its operating costs, not just within its retail/fulfillment business but also within AWS.
AMZN’s share price fell into the $160s during April (after Trump’s reciprocal targets were announced on 2Apr) from its all-time high of $242 in February.
RDDT (reported results on 1May)
RDDT was added to the portfolio as a new position in late February after the great Q4 earnings results. I continued to add heavily to the position in March and May, pushing the allocation up despite the sharp decline in the share price since my initial purchases (first shares were bought at $174). Some have asked me why I’ve added heavily to the RDDT position. When a stock price falls sharply after an initial purchase, it’s common to feel scared or that one has made a mistake. Shares continued to fall reaching a YTD low below $80 on 7Apr. That calculates to more than a 50% decline from my initial share purchases, enough to shake most investors’ confidence in their investment. What was the reason for the steep decline in share price? I’d guess contribution from each of the following: 1) a large and fast share price run up to the $220s since the $34 IPO price last March, 2) fear of a steep tariff-induced U.S. recession that would lead to a decline in ad spending, and 3) fear that Google’s search business is getting disrupted by AI. Let’s examine the third reason further.
In October 2023, RDDT adopted Google Cloud’s Web Risk API to protect against malicious links and phishing threats being posted on Reddit. A few months later (February 2024) Google and Reddit expanded their partnership. The previous link is to RDDT’s press release about the expanded partnership. Google also described the partnership expansion. DAUs and WAUs on Reddit surged upward since the Google partnership expansion: in 2023 the Y/Y growth in DAUs was 5%, 7%, 15%, and 27% in each of the respective quarters (Q1-Q4). In 2024, the DAUs Y/Y growth surged to 37%, 51%, 47%, and 39% in each of the respective quarters (Q1-Q4). The referrals coming from Google search results to specific Reddit pages undoubtedly contributed greatly to RDDT’s DAUs 2024 growth. Likewise, revenue growth in 2024 increased to 62% from 21% in 2023. In addition, Google pays RDDT licensing revenue, with estimates exceeding $60M annually. Clearly, RDDT benefits greatly in terms of DAUs growth from having internet search queries directed from Google searches to Reddit pages, and increased DAUs leads to increased ad revenue to RDDT. Next, I’ll speculate about the real value that Google derives from RDDT’s content.
RDDT hosts more than 100,000 communities that discuss all sorts of topics. These communities are not only a goldmine (for RDDT) to attract advertisers who want to target very specific consumers but also a human content generation engine about all sorts of topics. Google could use this information to improve the performance of its search engines, but perhaps the more important value of RDDT content to Google is for large language model (LLM) improvement. RDDT now has more than 400M weekly average users who have detailed discussions about many different highly specific and focused topics. Content from these discussions can lead to insights that improve LLMs or the prompt results for users of LLMs. Google, Meta, MicroSoft (OpenAI), Amazon (Anthropic), X.ai, and others are competing to develop the best AI models, which can be defined as those that provide the best answers to user prompts. Content is needed to train the best LLMs, and content can be obtained from open sources and additional content can be proprietary, such as user generated content on platforms such as Instagram, Facebook, X (formerly Twitter), and Reddit. X.ai recently purchased X in an all stock deal valued at $33B and is already using content from X to improve its Grok LLMs and search/prompt results. X has an estimated 250-300M DAUs. By comparison, RDDT has 108M DAUs and content generated by these users is unique, valuable, and extremely rich and targeted to specific topics. Google isn’t the only AI company that sees value in RDDT’s content and large community of users. In May 2024, OpenAI and RDDT entered into a partnership, which encompasses both AI and advertising. RDDT is getting paid for its content multiple times: by advertisers, Google, and OpenAI, and there could be more partnerships and licensing arrangements with additional partners in the future.
Perhaps Google search will get disrupted by LLM prompting, and perhaps such disruption will result in an eventual slowdown of referrals from Google search results to RDDT pages (which leads to additional new users to the RDDT community). Perhaps this is the main fear of investors and the cause for the recent stock price plunge. However, I’m not concerned for several reasons. First, the disruption won’t happen overnight, and, in the meantime, Google search will continue feeding RDDT referrals, leading to further DAUs increases for RDDT. Second, because RDDT threads and posts are also valuable for enriching results from AI prompts, disruption of Google search by LLMs can still positively impact RDDT user growth. Hence, the force that could disrupt Google search can also be beneficial to RDDT. Finally, RDDT content will retain its collective value to both advertisers as well as current and potential partners regardless of whether the Google search business shrinks.
RDDT’s Q1 2025 results were very strong showing a continuation of the 2024 growth. Revenue (Y/Y) grew a very solid 61.5%. Guidance for Q2 was for $430M, and, if RDDT beats by around 6% like it did in Q1, Q2 Y/Y revenue growth would come in at 62%. The Q1 earnings results should have led to a stock price jump after the Q1 results were announced, but, surprisingly, the stock price declined, so I continued to add aggressively to my allocation and even bought some long-dated call options when the shares sank below $100/share.
Looking at RDDT’s revenue more granularly, we can see that while licensing revenue grew 66% Y/Y in Q1, licensing revenue has not grown sequentially since Q3 2024. If licensing revenue continues to be stuck at the ~$33M/Q level, then its growth will drop to 20% in Q2. I’ll be watching that in the Q2 result. However, the $430M guidance gives me high confidence that Q2 will be another quarter of great growth, regardless of whether licensing revenue resumes high growth.
RDDT’s other key performance indications were also very strong with DAUs growing 31% Y/Y and ARPU growing 23% Y/Y.
RDDT’s business has become a money printing machine. RDDT is not only profitable, it’s GAAP profitable. In Q1, FCF margin exceeded 32%, gross margin remained over 90%, the cash pile continue to grow (adding $110M), debt remained zero, and share dilution was very reasonable. The enterprise value is $21.7B and the run rate FCF is $506M, giving a EV/FCF multiple of 43. With revenue growth at >60%, >90% gross margins, and non-GAAP OpEx growing at only 17% RDDT is in an excellent position. I would happily own the shares if I thought that revenue growth of >30% could be maintained for multiple years. Currently, RDDT is the portfolio’s holding that I’m most likely to increase allocation.
BORR (exited positions prior to earnings)
BORR was a speculative value play, so its inclusion in the portfolio was tenuous. I exited the position after a substantial loss. Part of the decision to exit was to take advantage of NVDA’s share price fall. When I sold BORR for a 34.7% loss, I redeployed the proceeds into NVDA Jan2027 $110 calls options, which I recently sold for a 31.2% gain. BORR’s value is dependent on the price of oil, and, with oil prices trading around the low $60s, most oil-related stocks are feeling the pressure. I decided that I no longer want to bet on the price of oil going up, particularly given that both short-term and long-term forces are lining up against higher oil prices. These trends include probable supply increases from OPEC in July, a possible deal with Iran on its nuclear program (possible more supply added), willingness for increased drilling in the U.S. under the Trump administration, and the continued long-term trend of the world moving away from fossil fuels to renewable energy.
APP (reported results on 7May)
APP is a new position in the portfolio. I purchased an initial small position after the Company reported its Q1 results on 7May. I need to do more research into APP before deciding whether to change the allocation. Stay tuned.
AXON (reported results on 7May)
AXON reported its Q1 2025 results on 7May, and it was another great one. AXON continued to grow revenue above 30% y/y with a 31% result in the quarter. ARR also continued its solid growth with a 34% y/y result. The 2025 annual guidance was raised slightly. As has been the trend in recent quarters, growth of higher margin software and services continues to outpace growth of lower margin hardware offerings. This continued trend helps AXON keep both its overall growth rate and its margins higher. The dollar-based net retention rate remained at a multi-year high (123%). DraftOne, AXON’s products that writes police reports and was launched in April 2024, was the fastest adopted product in the Company’s history and already has about 30,000 user seats. At its annual customer conference in April, AXON announced new products including several new AI products and services as well as new integrations such as one with Ring, a leading smart security company. A record high 96% of revenue came from customers on subscription plans. AXON’s main growth opportunities remain to be in enterprise and international. However, there’s also plenty of room for growth from expansion within AXON’s existing customers; on a revenue per officer basis, AXON has the potential to see more than $600 in products and services but currently sells less than $100. In March, AXON refinanced its outstanding debt (due in 2027) and increased its debt load. AXON’s debt is now $1.75B, up from about $680M, but, unfortunately, the new interest rate is between 6.15% and 6.25%. Interest rates have risen since 2023, but I was still surprised that AXON couldn’t secure better terms for the loans given that the Company has such a strong business with reliable, recurring revenue. The annual debt service expense will now exceed $100M. Hopefully, AXON can refinance its debt soon. Overall, I continue to be very pleased with my AXON investment and intend to maintain a large position.
MELI (reported results on 7May)
MELI reported another solid quarter for Q1 2025. Like last quarter, MELI reported 37% Y/Y net revenue growth and 45% y/y growth in income from operations; this is an amazing result given the scale at which MELI operates. Items sold grew 28% y/y compared to 27% in the previous quarter, and unique buyers grew 25% y/y compared to 24% in the prior quarter. 111% Y/Y adjusted free cash flow growth! The FinTech segment also showed solid performance across the board.
In addition to reporting outstanding financials results and very strong KPI metrics, MELI provides some additional benefits to shareholders, particularly those who invest predominantly in U.S. companies. MELI operates in local Latin American currencies; if the U.S. dollar weakens, then MELI will experience a tailwind, reversing the headwind that MELI investors have had while the U.S. dollar was strong/strengthening. Also, MELI operates exclusively within Latin America, and, so far, Latin America has mostly sidestepped Trump’s tariff attention. Thus, MELI provides investors some currency and geographic diversification. I’m pleased to continue to hold MELI as one of the portfolio’s largest holdings.
On 21May, MELI announced that founder and CEO Marcos Galperin would be stepping down at the end of 2025 after 26 years at the helm. Galperin has done an extraordinary job leading MELI, and investors might feel some angst from this announcement. I would encourage investors to read Galperin’s letter explaining the departure and announcing his successor. I’m not concerned and view this transition akin to MicroSoft’s when Bill Gates stepped down as CEO.
ROOT (reported results on 7May)
ROOT reported Q1 FY2025 results on 7May. ROOT has been a great contributor to the portfolio’s growth. In a short time, I’ve made great profits from owning the shares and trading the volatility. ROOT was never going to remain in the portfolio for the long-term as I didn’t think that ROOT would be able to maintain its growth for the long run. I had been reducing the allocation leading into the earnings results, and, after the report was released, I sold the remainder of the position. I put much of the proceeds into RDDT. The revenue for Q1 was good, but the policies-in-force growth slowed, which points to slower revenue growth to come. Perhaps, policy-in-force growth will rebound, and perhaps ROOT will be a great investment going forward. I was ok taking my capital and profits and then redeploying into companies in which I have stronger long-term confidence.
SNOW (reported results on 21May)
SNOW reported Q1 FY2026 results on 21May. Some of the financial metrics weren’t as good in Q1 as they were in the prior quarter. For instance, product revenue growth slipped from 28% Y/Y growth in Q4 to 26% Y/Y in Q1, yet the company beat the Q1 guidance by 3.8%. While NRR remained high at 124%, it dropped from 126% in the previous quarter. RPO growth, on the other hand, showed an increase from 33% Y/Y growth in Q4 to 34% Y/Y growth in Q1. Full year product revenue guidance was increased by $45M at the top end of the range, which boosted the product revenue growth guidance from 23.6% to 24.9%. Overall, the Q1 results were above expectations, causing the stock to rise and reach a 52-week high the day after the earnings result. For me, the results don’t warrant any change in portfolio’s allocation. The results were good enough for me to continue to wait for my thesis to play out: I expect AI use cases for SNOW to increase and revenue growth to reaccelerate. This hasn’t happened yet, but I’ll continue to wait and watch.
NVDA (reported results on 28May)
NVDA has been in the portfolio since August 2023. It’s become arguably the market’s most followed stock. That distinction attracts not just long-term investors but also momentum traders, speculators, and investors who chase stocks that have had strong past stock appreciation. Thus, NVDA shareholders aren’t patient enough to let the thesis continue to play out. Fears over NVDA surfaced several times in recent months, including: 1) Blackwell launch getting delayed, 2) DeepSeek leading to a decline in the need for compute, 3) quantum computing disruption of GPUs, 4) CapEx spending decline on AI compute by the hyperscalers, and 5) export controls on NVDA GPUs. Each time one of these fears hit the news, the stock price declined. Yet, each time the news was not true or not nearly as bad as feared. The one exception was the recent export controls for the China market. In fact, in some cases, the news was actually positive (e.g., DeepSeek leads to an increase in overall compute demand, not less).
Since my last portfolio update and leading into the Q1 FY2026 earnings release, there were some important developments relating to NVDA. Most of these were very positive.
The hyperscalers and Meta reported their earnings results and fears about a sharp decline in CapEx were dispelled. CapEx spending is still on track for a strong for the remainder of 2025.
The Trump administration rescinded the Biden administration’s diffusion rule, which was set to limit export of GPUs. In addition to plans for Stargate in the U.S., there are now announced and approved plans for very large GPU powered data center projects in Saudi Arabia, Qatar, and the United Arab Emirates. Not only will this provide tens of billions in revenue to NVDA, it also locks the wealthy Middle East countries into NVDA’s ecosystem, essentially blocking out China.
New export controls on China was the one negative development for NVDA. Based on previous export controls, NVDA had developed the H20 GPU for the China market. Export of H20 into China was abruptly restricted on 9Apr. NVDA announced that it would take a $5.5B charge against H20 inventory. During the Q1 earnings call, however, NVDA reported that this one-time charge was reduced to $4.5B as NVDA found reuse opportunities for some of the components contained within the H20 GPUs. Worse than this $4.5B charge, is the loss of the China market. NVDA estimates that its market share in China has already plunged from 95% to 50% due to export restrictions. CEO Jensen Huang stated that the H20 (derived from the Hopper line) cannot be downgraded further, and export restrictions, if maintained, would mean NVDA missing out on about $50B per year (and growing) in revenue from China. The Trump administration has been haphazard and arbitrary in making policy decisions so it’s possible that NVDA will be allowed to address the China market in the future. However, Huawei, one of China’s leading semiconductor companies, is stepping up and in to fill the hole left by the lack of availability of NVDA GPUs in China.
Jensen gave a keynote presentation at Computex 2025 in Taiwan on 19May. There were many announcements but several stand out as the most important. First, Blackwell is now in full production. Second, Blackwell Ultra (B300) specs were announced along with confirmation that launch is expected in Q3 with full production in Q4. NVDA continues its fast new product introduction cadence. Third, NVDA announced RTX Pro Servers, a Blackwell rack, targeting the enterprise IT market. To date most of NVDA’s GPUs have been sold into the hyperscalers. Enterprise can provide NVDA with another strong growth vector. Finally and most important, NVDA announced NVLink Fusion. This product will enable custom ASICs to be integrated more closely into NVDA’s ecosystem, which will further strengthen the ecosystem and increase NVDA’s dominance.
NVDA reported its Q1 FY26 results on 28May. Despite the 9Apr restriction on H20s into China, NVDA delivered very strong top line revenue and revenue growth. NVDA lost $2.5B of H20 revenue in Q1, yet guidance was still beat by 2.5%. Furthermore, NVDA will lose an additional $8B of H20 revenue in Q2. Most surprising was the $45B Q2 guidance in the face of the lost $8B; NVDA would have guided for $53B in Q2 revenue representing 76% Y/Y growth. This shows that revenue growth does not seem to be decelerating, and NVDA’s position continues to strengthen. Tailwinds from AI are still blowing hard. My thesis has been that these strong tailwinds will last longer than other investors expect, leading to higher growth for longer and a greatly extended boom phase in a historically cyclical market. The following quote from Jensen during the Q1 earnings call explains where NVDA is today compared what was the predominant thinking at the start of 2025.
I would say compared to the beginning of the year, compared to GTC timeframe, there are four positive surprises. The first positive surprise is the step function demand increase of reasoning AI, I think it is fairly clear now that AI is going through an exponential growth, and reasoning AI really busted through. Concerns about hallucination or its ability to really solve problems, and I think a lot of people are crossing that barrier and realizing how incredibly effective agentic AI is and reasoning AI is. So, number one is inference reasoning and the exponential growth there, demand growth.
The second one, you mentioned AI diffusion. It’s really terrific to see that the AI diffusion rule was rescinded. President Trump wants America to win, and he also realizes that we’re not the only country in the race. And he wants the United States to win and recognizes that we have to get the American stack out to the world and have the world build on top of American stacks instead of alternatives.
And so, AI diffusion happened, the rescinding of it happened at almost precisely the time that countries around the world are awakening to the importance of AI as an infrastructure, not just as a technology of great curiosity and great importance, but infrastructure for their industries and start-ups and society. Just as they had to build out infrastructure for electricity and Internet, you got to build out an infrastructure for AI. I think that, that’s an awakening, and that creates a lot of opportunity.
The third is enterprise AI. Agents work and agents are doing — these agents are really quite successful. Much more than generative AI, agentic AI is game-changing. Agents can understand ambiguous and rather implicit instructions and able to problem solve and use tools and have memory and so on.
And so, I think this is — enterprise AI is ready to take off. And it’s taken us a few years to build a computing system that is able to integrate and run enterprise AI stacks, run enterprise IT stacks but add AI to it. And this is the RTX Pro Enterprise server that we announced at COMPUTEX just last week. And just about every major IT company has joined us, super excited about that.
And so, computing is one stack, one part of it. But remember, enterprise IT is really three pillars; it’s compute, storage, and networking. And we’ve now put all three of them together finally, and we’re going to market with that.
And then lastly, industrial AI. Remember, one of the implications of the world reordering, if you will, is a region’s onshoring manufacturing and building plants everywhere. In addition to AI factories, of course, there are new electronics manufacturing, chip manufacturing being built around the world. And all of these new plants and these new factories are creating exactly the right time when Omniverse and AI and all the work that we’re doing with robotics is emerging. And so, this fourth pillar is quite important.
After the recent developments and the Q1 results and earnings call, my thesis for NVDA has not merely been reconfirmed; it has been strengthened. And the stock price is 12% below its 7Jan high.
FINAL THOUGHTS
In my last portfolio update, I wrote that we are in uncertain times. Chaos and uncertainty are despised by the market. The chaos and uncertainty has continued and shows no signs of abatement. My concerns haven’t dissipated. As an investor, I’d be crazy not to consider the risks and the potential outcomes that could stem from risks that weren’t even on my radar until a few months ago. Any investor should examine each risk and consider implications not only for each portfolio company but also for one’s overall financial picture. Today, I see risks that extend into new realms such as the rule of law and order, investor and property rights, currency value and exchange rates, and even personal rights and freedoms. I’ve asked myself whether the United States’ system of capitalism, laws, and freedoms will be assured going forward. Contemplating these questions is a futile exercise unless one takes action once new serious risks are identified. I’ve been asked the question: what am I doing about it?
With respect to the Growth Stock Portfolio, I’ve taken no specific actions, although owning a large allocation in MELI gives me some comfort that greater than 1/5 of my entire portfolio is not tied to U.S. based companies or markets. However, I continue to believe that, in general, companies based within the U.S. continue to provide the best overall investment growth opportunities among equities. Thus, my Growth Stock Portfolio continues to be dominated and comprised primarily of U.S. based companies with stocks trading on the U.S. stock exchanges. The Growth Stock Portfolio remains my engine of capital appreciation. However, for 18 months, I have been diverting funds from the Growth Stock Portfolio into a safe bucket, and today this safe bucket comprises a significant portion of my net worth. In the long-run, I’d like to be in a position such that my financial independence would be preserved even if all of my U.S.-based assets were to become worthless or inaccessible. During the past three months, I’ve made significant changes to the safe bucket, most significantly to the Fixed-Income Portfolio contained within the safe bucket. I’ll explain these changes in more detail when I report my first Fixed-Income Portfolio update (probably sometime in July). For now, I’ll report that I’ve greatly reduced my U.S. government bond holdings, moved funds out of U.S. dollars, invested in Singapore REITs, and locked in yield by moving a significant portion of my Fixed-Income Portfolio into longer-duration CDs. The Fixed-Income Portfolio is a work in progress, and I expect to continue to reallocate assets in an effort to mitigate the risk that I see.
The opinions, thoughts, analyses, stock selections, portfolio allocations, and other content is freely shared by GauchoRico. This information should not be taken as recommendations or advice. GauchoRico does not make recommendations and does not offer financial advice. Each person/investor is responsible for making and owning their own decisions, financial and otherwise.