Here, I want to offer some perspective on the importance of zooming out, appreciating the underlying reality, and thinking clearly about the next step of portfolio growth.

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Looking at Share Prices All Day?

As much as we look at our screens for “advice” on what’s going to happen next, let me remind you of what you already know: watching share prices all day brings you nothing but stress.

The one thing I know delivers strong returns consistently is time in the stock. I’ve been through countless sell-off periods: Trump’s 2018 China tariffs, Covid, the 2021–2022 tech reset, 2024 inflation worries, 2025’s Liberation Day, and 2026’s Iran situation. Through it all, I’ve found that stressing over the day-to-day has never been constructive.

In fact, in the majority of those sell-offs, if I had simply avoided the news entirely, my results would have been much better.

But I had learned this lesson by 2025 (better a slow student than a “never learn” student, right?).

Practical Advice

Never take investing personally. There are good investments and bad investments. Neither is a reflection of who you are. There’s so much you can’t control that looking at the share price and thinking it reflects you or your strategy is not only silly but foolhardy.

As you know, the market has been incredibly choppy of late. This has been the case for most of the time since last October, aside from a brief respite in April and most of May.

In the market, there’s always some story circling around, like a pendulum swinging from “everything is rosy” to “everything is doom and gloom.” There are favourites, as you know, such as inflation and interest rates; but there are many more, such as the debt ceiling, Iran, the midterms, and others.

My advice is to recognise that these factors are outside our control. We can control only three variables:

• What we buy

• How much we buy

• The price we pay

Nothing more is in our control.

I have learned from experience that there’s no such thing as a bad investment—only a bad sizing of a position. To this end, I’ll always tell you that you should only put 5% of your portfolio at risk. Why? Because in the past, I was so determined to fight the market and increase the size of my positions, but over the years I found this was destructive on many fronts. As a result, I’m now much more sensible. That was a very slow learning curve, you don’t need to repeat my mistakes.

But this process didn’t come naturally—it took me years to learn. I’m sharing this advice, like all of it, from my own experience. You’re under no obligation to follow my suggestions; you’re welcome to build your own process. Just keep in mind that if you do, your results may look different from mine.

I’ve found over time that companies that become increasingly profitable in the coming years will see their share prices move higher. It’s nearly like magic, as long as the profits continue to increase. As a result, I back companies where I see an explosion in profitability over the next 12 to 18 months relative to where they are now.

And finally, the valuation we pay has to make sense. By that, I don’t mean that, relative to where profits are right now, the stock is cheap. Rather, relative to where the business is headed, in time the stock will appear cheap right now—in hindsight.

Key Takeaway

Let’s zoom out and get a different perspective. Keep in mind that where the share price has come from tells you almost nothing about where it’s headed next.

What matters is the business in front of you: its increasing profitability. Focus there, and learn that more action and trading won’t bring you better performance. There are periods, like right now, where you just have to breathe deeply and wait.

Moderna (MRNA) has a lot of moving parts, and it’s easy to get overwhelmed by all its details. But I seek simple stories. And so, the bull case, as I see it, is very straightforward.

The business is currently burning through substantial free cash flow. There’s a litigation payment that took place in July, of roughly $1 billion, while the underlying business is going to burn through about $2.5 billion this year. These are massive sums. Moderna is hemorrhaging cash.

But now, it has recently announced a massive update. They are developing a personalized mRNA immunotherapy together with Merck. You don’t need to understand all the different phases of this trial and its potential impact into the back end of this decade.

Instead, what we need to know is that there’s a very high chance that in the next 2 years, by mid-2028, Moderna could reach free cash flow breakeven. That’s it.

Yes, there are risks, obviously, and I discuss them, but I’m confident that together with Merck’s experience and network, the drug will be FDA-approved in the next 12 to 18 months, and with the 50-50 profit share, Moderna’s profitability will improve massively.

As a result, I assert a price target of $210 by late 2027.

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Sorry I couldn’t share this Affirm analysis on Friday—so many companies reported back-to-back that covering them all in one go proved too challenging.

Investment Thesis

Affirm (AFRM) continues to impress me. The business isn’t just growing faster than investors expected, but it’s doing so while rapidly expanding its free cash flow profile.

Simply put, the stock now trades at 19x forward free cash flow as it heads toward $1.4 billion of free cash flow. That’s a 40% jump on top of this year’s already impressive 63% surge!

On that basis, I see AFRM as a clear bargain and reaffirm my $100 price target by early 2027.

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Rubrik (RBRK) delivers a mixed earnings report. On the one hand, their growth outlook has been raised. Again. For the second time this year.

Superb, right? Well, the issue here is that Rubrik’s growth is demonstrably decelerating. There’s no hiding this. Thus, this continues to overhang this story.

Meanwhile, from my perspective, as an Inflection investor, I am bullish as the business continues to ramp up its free cash flow and is now expected to reach approximately $340 million, up more than 40% y/y.

All in all, I reaffirm my price target of $150 per share by the end of 2027 (calendar year).

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Marvell (MRVL) saw its share price drop after hours as investors focused on free cash flow coming in lighter than expected.

Reflecting on the earnings call, I’m actually more bullish now than when I first recommended the stock to you. If you’ve been following my work for a few months, you know I don’t suffer from commitment bias: if I’m wrong, I’m out, and I don’t second‑guess.

Where I was wrong on MRVL is only in being too conservative. The crux is that I now expect free cash flow to be materially higher than my initial estimate. I see a credible path to around $5 billion of free cash flow at some point in fiscal 2028.

A quick note on timing: Marvell is already in fiscal Q3 2027, and fiscal 2028 starts in February 2027. From here on, I’ll refer only to Marvell’s fiscal years.

Look, I obviously recognise the key risk to my thesis: when will the AI capex boom end? Even so, given the size of the backlog, the Google partnership, and Nvidia’s outlook from yesterday, I view this as a compelling risk‑reward setup. I’m asserting a price target of $440 by late 2027.

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HPE (HPE) is set to report earnings for the final quarter of fiscal 2026.

The reason why I’m bullish on HPE isn’t that its outlook for fiscal 2027 is going to be that impressive when they report next week. On the contrary, I see their outlook as rather pedestrian. And that’s precisely the setup. Because expectations are incredibly subdued too!

I’ve highlighted already numerous times this month that I’m slowly diversifying away from pockets of ultra-growth, into businesses that are cheap, with more moderate growth prospects.

I already did this with CareDx (’‘CDNA’‘) and RingCentral (’‘RNG’‘). And I sold Zeta (’‘ZETA’‘) yesterday to free up capital to continue down this path.

Accordingly, HPE’s outlook for 2027 isn’t that fantastic. But on the other hand, this comes on the back of a strong period this year. And that’s the beauty of this opportunity. Expectations are very much muted here.

Hence why I’m bullish on HPE with a price target of $120 per share by the end of 2027 (note: that is calendar year; not to be confused with HPE’s fiscal year).

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• There’s a lot to take in when you first start using my service, and it’s completely normal to feel a bit overwhelmed at the beginning. So much new information can come your way all at once, I get it!

• Please remember to be patient with yourself. Give yourself the time to get to know how my DVR service works. As you become more familiar with my Inflection process, things will start to feel clearer and more natural.

• Trust can’t be rushed, so please give yourself a month or two to get to know the service. I know you’ll be eager to jump in, but starting slowly will help you build confidence in my process and get comfortable with my style. Allow things to unfold naturally—as with any relationship, trust grows best with time.

• At the start, you can ignore most of my service. Apart from when I make a TRADE ALERT in the email subject line! The rest of the time, please feel free to ignore my emails. But when I make the TRADE ALERT email, that’s the time you need to act. And do so straight away.

• I use a variation of the PEG ratio for my analysis. But instead of earnings, I use free cash flow. So, I’ve added this to the spreadsheet for your ease of use (lower down).

• My best advice is:

1. Start small, maybe as little as 10% of your portfolio. DVR stocks are Inflection businesses. This means that there are going to be bad and good periods, until investors come around and buy into the new narrative. Like a wave, it moves up and down organically. Just as you can’t fight a wave, you can’t fight a stock.

2. Buy 5 stocks that are BUYS. Equally-weight them. This is crucial. Don’t buy your favorite only!

3. Never put more than 5% into any DVR stock. No matter what. Period.

4. In the past, I used to split my 5% allocation into 2 tranches. But after looking back over 2 years of data, while a cheaper price does typically come at some point after the recommendation, I’ve not found that trying to time my second entry to be worth the stress. In short, buy 5% when I recommend and sit on your hands.

5. To repeat myself: give yourself time to trust my process. Allow yourself an open mind to trust and follow my process. If you follow my TRADE ALERTS, you will get my outperformance.

I update this post twice a month. Once around the 1st of each month and once mid-month (this month, this took longer than normal, sorry!).

• Every Monday morning, before the market opens, I highlight 5 stocks that you can buy if you are looking for good places to invest. That being said, all stocks listed as a BUY (in blue, below), are stocks you can buy with confidence at any point.

• While stocks that are a HOLD (in yellow or pink, below) are stocks that I’ll soon sell. Do not buy stocks that are listed as a HOLD (in yellow/pink).

Finally, and this is really important: I will make unpopular decisions at any point to drive outperformance. I’m not afraid of destroying my best ideas, and you shouldn’t either.

ENOUGH READING? SHOW ME THE PORTFOLIO:

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• Sell Zeta (ZETA). Take your capital plus your 40% return.

• After selling ZETA, there’s space in the portfolio for 1 new position.

• I’ll continue to diversify into positions outside of tech.

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Why Sell ZETA Now?

I recommended ZETA to you a year ago, on 27 August 2025.

Looking back, the stock spent most of that time underwhelming, lagging not only the Nasdaq but also weighing on DVR’s overall performance. I suspect many who bought Zeta a year ago likely gave up out of boredom or exited when their stop loss was hit.

I’ll admit, I hoped to squeeze out $30 from Zeta. But despite several near-misses, the stock has remained stubbornly around $28. Given my renewed focus on diversifying beyond tech—and with Zeta sitting so close to its price target—it feels prudent, even wise, to call it a day here.

Why Am I Diversifying Outside of Tech?

This echoes what I’ve been saying over the past month. I’m not entirely satisfied with how I managed the portfolio in 2026. Yes, the AI infrastructure trade was running hot, and I delivered strong performance—up just over 19% year-to-date versus the Nasdaq’s 11%. That’s a fair amount of outperformance, and I’m proud of it.

I did raise cash when the market was running hot, which was a win. But in hindsight, I could have done even better by deploying 10% to 15% of the portfolio into areas completely unrelated to growth AI names.

Recently, I’ve made progress. I invested in RingCentral—a mature, slow-growth business that should be more resilient to interest rate shifts. And just yesterday, I bought and recommended CareDx. I’m moving in the right direction, and I’m determined to keep going.

At the same time, I recognize that AI tech has been relentlessly volatile since October of last year, with only two months of calm (April and May 2026). That tells me many investors have likely already blown themselves up—their accounts and enthusiasm for AI infrastructure severely diminished.

So, it doesn’t make sense to aggressively exit the AI trade right now. These companies continue to grow at astonishing rates, delivering strong returns on capital, aspects that define Inflection investing.

While I want some diversification—around 10% to 15% of the portfolio—I intend to keep the majority of my capital tied to what I believe remains one of the strongest growth areas in the market.

The Bottom Line

A 40% return on Zeta in just one year is a testament to the power of conviction and discipline—a satisfying result in a market that has tested both.

It reflects the core of my Inflection strategy: manage risk and know when to take profits, even when perfection remains out of reach

However, to be clear, I’m not complacent. The path ahead demands the same discipline that got us here: I’ll continue to follow the Inflection principles, focus on the process, and know that the profits will come, even if they are bumpy.

CareDx (CDNA) is a high-upside opportunity. The company is built to deliver earlier warning signs and, as a result, significantly reduce the need for invasive biopsies — a powerful value proposition that’s only going to matter more over time, as care becomes increasingly individualised.

The setup here is compelling: momentum is strong, and the business is on track to grow in the mid-teens in 2027. But the real kicker is that CareDx is already delivering robust profitability today. This isn’t a story about future profits; it’s about a business that’s already firing on all cylinders.

Yes, there are some noticeable risks that I discuss in this analysis.

But at 24x forward free cash flow, CDNA offers an attractive risk–reward profile for a company with this kind of growth and margin profile.

I see a path to a $75 price target by the end of 2027 — and I wouldn’t be surprised if we look back and see this as an obvious Inflection point.

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Erock (EROC) is expected to deliver tremendous growth in 2027. More specifically, its growth rates are expected to reach as much as 200% y/y revenue growth as it converts the majority of its contracted backlog of $1.7 billion.

This business is a new IPO. So, there are potential issues with the insider lock-up agreements ending around the end of December, with a large block of previously restricted insider shares becoming eligible for sale.

On top of that, there are some additional blemishes, such as the sustainability of these growth rates once the hardware sales start to moderate.

Despite being upfront and clear about recognising its risks, I contend that this stock offers investors a positive risk-reward, with a price target of $25 per share by the end of 2027.

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SiTime (SITM) is a business that I’m bullish on. And I know that SiTime isn’t a well-known name. I recognise this aspect. But don’t let its unfamiliarity put you off from backing it. SiTime is delivering exceptionally strong organic growth rates.

And yet, there are a couple of issues with this investment thesis, such as the impression that the stock is expensive. Plus, they’ve made a large acquisition this year, which obfuscates their clean, underlying growth rates.

Those two are worthy considerations, but only if you think about where the business is right now. But as I frequently remind you, you must think forward, look out to this time next year. You must position yourself and think about what investors will think then. Because that’s where the money is made, not overstressing the present.

I admit those risk factors and shed light on them. But despite these concerns, I’m confident that this business offers investors tremendous upside relative to the risk-reward profile.

Consequently, I have a price target of $1,500 by the end of 2027.

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Sandisk (SNDK) is a business that I’m bullish on, as I believe that AI is now running into a memory-capacity problem.

Thus, my thesis here is straightforward: given SanDisk’s recently announced long-term targets, I believe that, without needing faultless execution, the business is priced at 10x this year’s free cash flows. This is an incredible bargain for a business with these eye-watering growth rates.

Yes, there are key risks to this thesis, which I discuss here.

But when all is considered, I see a price target of $2,500 by the end of 2027.

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Intuitive Machines (LUNR) is a rapidly growing business. It aims to provide lunar infrastructure.

The setup here is straightforward: the business is expected to reach free cash flow breakeven in Q4 2026, so that it enters 2027 as a self-sustaining and profitable enterprise.

This change, from consistently needing to raise capital to maintain its operations to being a profitable enterprise, drives a strong re-rating in its share price. This is a classic Inflection opportunity.

And yet, presently, Intuitive Machines has substantial issues that I’m upfront and transparent about. Not only does Intuitive Machines have a chequered history of unsuccessful moon landings, but it has also grown at a very rapid rate through significant, large, and expensive acquisitions, which have muddied its overall clean, organic growth rates.

Accordingly, we have a combination of rapid acquisition-driven growth and an as-of-yet unprofitable business. These characteristics continue to weigh down its stock.

Hence, as you’ll see, I’m frank about the risks facing investors in this business. And despite it all, I still stubbornly maintain that my price target is $50 by late 2027.

I believe that this business is still viewed by investors with a negative taint, but within two quarters we’ll get visibility into its path to profitability, which will bring support to its share price.

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Nebius (NBIS) delivers a mixed earnings report. On the one hand, there are many positive aspects, including Nebius’ ability to yet again bring in more than $2 billion in cash flows driven by customer prepayments. This, for me, is the core of my bull thesis.

On the other hand, and perhaps I’m being too critical, NBIS hasn’t raised its 2026 revenue outlook, which aligns squarely with some of the bears following this name. More specifically, many investors have been vocal that Nebius would struggle to grow at such a rapid pace.

For my part, I think that’s largely splitting hairs. When we boil it all down, Nebius is this year expected to grow by more than 550% Y/Y. Those are simply ridiculous growth rates. Some mishaps in execution are to be expected! And when you are asked to pay 5x forward sales for this quality business, I see the risk-reward as highly enticing.

In sum, I reaffirm my price target of $300 by the end of 2027.

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CoreWeave (CRWV) delivered an earnings report that allowed shareholders to sigh in relief. Not only is CoreWeave growing faster than expected, but its non-GAAP operating profits are expanding at a rapid rate.

Meanwhile, the main blemish when it comes to CoreWeave is that, for it to reach its growth ambitions, it’s burning through CapEx through capex at an alarming rate. Indeed, its 2026 CapEx requirements amount to more than half of its market cap. And that’s for 2026 alone, with more capex required in 2027!

For my part, I’m not perturbed by this as I fully buy into the need for dramatically more compute power. This has been the main refrain coming out of hyperscalers this whole earnings season, as a consistent and loud chorus. And CoreWeave points to its backlog of more than $125 billion to support its growth vision.

What’s more, I believe that we are now finally at the stage where a lot of these negative elements, namely their incessant need for additional capital, have already been priced in.

All in all, I remain patient (breathing deeply) and very bullish on CRWV. I continue to stick to a price target of $215 by early 2027.

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Lumentum Holdings (LITE) delivers impressive guidance. This AI infrastructure company’s free cash flows are set to soar in the next twelve months, precisely why I recommended this stock to you.

The issue here is even if I’m ‘’eventually’‘ right, this recommendation hasn’t been for the faint-hearted. In fact, during June and July, those 60 days alone, this stock was down 45%. Enough for even the most devout shareholder to get anxious.

On the plus side, I’m in awe that Lumentum’s profitability is expanding at such a rapid rate that the stock now looks absurdly cheap at somewhere about 38x free cash flow. I know! A complete bargain.

Accordingly, I reaffirm my price target of $1,400 by late 2027.

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Affirm (AFRM) is a rapidly growing free cash flow-generating machine priced at just 23x free cash flow. There’s more to this thesis, but that’s really the crux of it, and why I’m bullish.

To flesh that out a smidge, I’m bullish on AFRM on several fronts. Not only is Affirm the leading US-focused Buy Now, Pay Later provider, but it’s also a business with rapidly increasing free cash flow prospects. And, importantly, it provides my portfolio with diversification away from the AI trade. Three compelling reasons in one company.

So, simply put, I believe AFRM is a bargain, and I reaffirm my price target of $100 by early 2027.

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Applied Optoelectronics (AAOI) makes high-speed optical cables, the plumbing, as it were, for data center connectivity. To move data around fast, hyperscalers are demanding huge amounts of connectivity.

And so, the thesis here is very straightforward. For 2027, Applied Optoelectronics should deliver more than 170% y/y revenue growth rates. This is substantially faster revenue growth than analysts expect.

That being said, this earnings report also delivered a major risk that investors have been concerned about with AAOI for some time now. Namely, that Applied Optoelectronics will massively ramp up its capex, so that they are burning through considerable free cash flow sums.

Hence, they’ll need to dilute investors by at least 10% in the coming 6 months. I address this risk factor head-on in this analysis.

Nevertheless, altogether I continue to affirm a price target of $300 by late 2027. So, here are the bad and good aspects in backing AAOI right now.

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• Take the loss on AppLovin (APP).

• With huge sadness, I take this loss.

• After taking this loss, I’ll have space in the portfolio for 3 new positions.

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With Sadness and Regret

I recommended APP to you at $500 on 13 Feb 2025. That’s more than 1 year ago. I was so positively bullish, but completely wrong.

I genuinely wished that APP would finish at my $750 target by this summer. Oh my, how much I wanted a different outcome for APP.

If only SITM’s results and APP’s results could have been swapped around, I would have been so happy.

The reason why I’m calling it a day is straightforward. This is what I wrote in the risks section of my analysis:

I will always follow the Inflection setup. I want to back companies with rapidly growing free cash flows. I’m very patient when that’s happening, when I see a true explosion in free cash flow. And completely unforgiving when that’s not the case.

As it turns out, AppLovin delivered a poor quarterly report. For a business that is supposed to be a high-quality, high-growth business, this quarter’s report delivered investors the cardinal sin.

Not only does the low end of its revenue guidance come in below analysts’ estimates, but more importantly, its free cash flow margins this quarter compressed by 1,600 basis points from 61% last year to 45% this year. Yes, I know, timing issues played a role here.

But when we take the year as a whole, including management’s guidance for their EBITDA to free cash flow conversion to normalize to 75%, I’m not confident they’ll smash through my estimated $4.7 billion free cash flow figure.

There’s no sugarcoating anything here. This report did not live up to my expectations.

I ask that you put aside your emotions. Look at this objectively. The Inflection setup is simple: I want to own businesses where free cash flow is exploding higher. That is no longer happening here.

That’s the issue with buying growth companies. When they are growing at rapid rates, they beat estimates, raise guidance, smash through expectations, so that valuations are less crucial to the overall thesis.

But when a company reaches a certain size and starts to moderate, then valuations start to become much more pertinent. What were niggling questions under the surface that people had but nobody seriously considered will soon start to weigh on the stock.

Today, the share price is $350. And it wouldn’t surprise me to see it moving towards $300 or less in the next 6 months, as the growth-minded shareholder base rotates out and a new ‘’more value-minded’‘ shareholder base takes their place.

To be clear, it’s not that I think paying 25x free cash flow for a business clearly growing at more than 40% is expensive. That’s not what I’m stating.

I’m trying to explain that when a business starts to decelerate its growth trajectory, all the positive aspects such as rapidly improving operating leverage, exploding free cash flow, and compelling narratives will go out the window.

You end up pushing a boulder up the hill, and at some point, six months down the road, you capitulate, exhausted at an even lower price point than it is at right now. Even if it seems unbelievable right now. I’ve seen this movie happen countless times.

The Bottom Line

I own this mistake. I recommended AppLovin at $500 on 13 February 2025 because I genuinely believed this was a business capable of delivering exceptional free cash flow growth.

Unfortunately, I was wrong, and I take full responsibility for that. It’s so frustrating to see a position that I was so bullish on not work out.

But investing is about adapting when the facts change, not defending past decisions.

The Inflection framework remains unchanged: we want to own businesses where free cash flow is accelerating, and when that is no longer happening, we move on.

Taking a loss is never easy, especially when it is a company like AppLovin that I was so deeply attached to and so incredibly bullish on for such a long time.

I badly wanted this investment to succeed, and admitting that I was wrong is painful. But successful investing is not about avoiding mistakes. To outperform, you must recognise your mistake and adapt. Discipline is sometimes doing the unpleasant things because it’s part of the process. That’s what allows DVR to continue to outperform.

SiTime (SITM) delivers strong earnings results, with guidance pointing to exceptionally strong organic growth next quarter

I’ll be blunt and preempt readers’ questions. Yes, I would buy it here, even after the stock is already up more than 30% premarket.

And yes, I know, the business looks on the surface to be priced at 208x forward free cash flow. But I believe that multiple could come down to less than 150x forward free cash flow as we look into 2027.

Depending on when you signed up to my service, you may recall that my original price target for SITM was $615 by mid-2027.

But as I got to know this business better, I then did a very rare action and more than doubled my price target to $1,500, but allowed myself a little more time, until late 2027.

I know that SiTime isn’t a household name. But don’t let that consideration put you off. This business offers investors an attractive risk-reward.

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