Jonathan's early May Portfolio Review

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It is time for another portfolio review. I did aim to get this out at the end of April, but time constraints did not allow it, and also I thought I would wait until some of my companies had reported this week.

Like most on here, my portfolio took a big hit in mid February, partly due to Deepseek, and then partly due some more to tech selling off over tariffs. At one point this year (just 1 month ago actually on April 5) I was actually down by 36% YTD.

Many of my oversize gains of 2024, where I was up 70%, had been wiped out. But thankfully over the last few weeks things have taken a turn for the better - and the last 3 days in particular since APP and PGY have reported have been extremely positive.

Here are things as they stand today:

AppLovin (APP) - 26%
Nebius (NBIS) - 22%
Nvidia (NVDA) - 14%
Celestica (CLS) - 12%
AsteraLabs (ALAB) - 10%
Pagaya (PGY) - 9%
Credo (CRDO) - 7%

I am fully invested, as I have always been. I don’t like cash sitting around and not working for me. My returns since 2020, when I started following this board, are

2020 +14%
2021 +26%
2022 -66% (ouch)
2023 +5%
2024 +70%
2025
Jan +4.6%
Feb -2.5%
March -26.2%
April - 27.3%
YTD as at May 9 -12.5%

But even after my outsized gains last year I am still down 63% from my all time high back in Oct 2021 (which means I still need another +170% from here to get back to where I was nearly 4 years ago!)

Part of my gains, and then losses again this year, can be attributed to SMCI. I bought back in again at the start of the year because I was confident they would meet the filing deadline (which they did) and my stock doubled, and then some, in a matter of a few weeks. Then I managed to time it absolutely perfectly and sell out at the absolute very top at 66 a share as I explained in my post here

But then a few weeks later I bought back in again at 50 (mistake) only to see it fall back to 30 when I eventually sold out when they had to downgrade their numbers on their recent pre-earnings report two weeks ago. That was the final straw for me and I sold all of it and split the proceeds between APP, CLS, and ALAB. I don’t like it when companies have to amend their own forecasts and projections to the downside.

APP is my largest holding and I was mightily impressed by their ER this week. They silenced all of the recent short reports by putting up such incredible numbers. Adam Foroughi is a first class CEO. I was very impressed by his blog post on why they they are bidding for Tiktok, even though he admitted it was a long shot. But as he said, building one of the world’s best advertising models was also a long shot, but they did it.

APP has been in my portfolio for over a year now. I first bought it at $75 back in April of 2024. I have huge confidence in this company. Today it sits at 335. But I think it will return to 500 plus later this year or early next.

Nebius is not held by many on this board any longer I think, but it is still a top tier company for me. I think their next ER on May 20 will surprise many to the upside, and that their guide of reaching annual revenue run rate of 750m - 1B by the end of this year is very achievable for them (even though their revenue for the whole of last year was only 117.5m).

They have had another significant shot in the arm this week when Jeff Bezos announced this week that he had invested $72m into Toloka (which is part of Nebius and specialises in AI data from training to evaluation).

They are a very new company with not even a whole year of earnings reports under their name yet and even though their last 3 Q’s have been up YOY by +430%, 766%, 466% - it is their guide for the ARR this year, and how they are meeting that, that is the thing to watch. I feel this is the company that has the most potential for upside, especially as the market cap is only 6.6B today.

I am very happy to continue to have NVDA as my 3rd largest holding. I do not need to worry about this company, or get too weighed down in the myriad of articles and analyst projections on it. Instead, I just focus on their quarterly reports and news releases. As long as they keep growing as they are (obviously things have slowed down from the triple digit gains - to the high 60’s at the moment) then I sleep easily at nights. I am looking forward to their update next month on the continued transition to Blackwell. I can see them re-taking the most valuable company in the world again soon.

Celestica is again not held by many, if any, on Saul’s board. But I have held it for 17 months or so now and have continued to do very well with it. I first bought it at $38 in Feb 24 and have watched it rise up to 140 and then down again to the 60’s with all of the tariff related news. Today it is approaching 100 again. In their ER last week they made it very clear that tariffs were not an issue for them and that a lot of their manufacturing was in the US and all over the world (not just in Canada where they are based) and that demand was so high that they were able to pass all of the tariff related costs onto customers. The market liked their report and it is up significantly since.

I was puzzled by the muted response to ALAB’s earnings a few days ago. I thought their report and numbers were spot on. They blew past expectations, again, and the commentary from management about demand for their products was very optimistic. Slowly the market is catching on to how good their report was, but there is still a long way to go until I break even with this stock. My average price is at $130 and today it sits at 70.

Pagaya is actually my longest held company that I still have in my portfolio today. I bought it in 2023. I am still underwater on it - but after the meteoric rise in the last 3 days where it gained 23% on the day after their ER and then some more yesterday - I am only down about 16% on this stock right now. It is a company that is undervalued on all metrics, and they have just passed a significant milestone of achieving GAAP profitability for the first time ever. And not only this, but they have stated they intend to focus on profitability going forward and that they have no intentions of diluting shareholders anymore. This is significant - because they have done a lot of dilution of shareholders in the past. Still, I believe management even though many don’t, and I am pleased that they achieved profitability a whole quarter earlier than they said they would.

Credo is my smallest holding at 7%. Nothing has changed since I last wrote about this stock in my previous review, but I am looking forward to their updated numbers next month.

Wishing everyone a successful May, and as ever, thanks to Saul for this incredible board. We haven’t heard from Saul for a while, but we hope you are well, enjoying life, and able to relax with family and friends in your retirement from the board.

Best wishes

Jonathan

My previous portfolio reviews

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Thanks for the updates, Jonathan! Regarding $NBIS, I’m curious about your thoughts about it VS $CRWV. I still own a position in $NBIS, but I rolled some of the funds from it to $CRWV. They are both < 4% position of my portfolio now.

Personally, I’m slightly more bullish on $CRWV, because it has the first-mover advantages. Here’re the pros of cons in my view between the two businesses:

$CRWV:

  • pros:
    • First-mover advantages. CRWV already had $2B+ revenue run rate while $NBIS is at least half year away to reach close to $1B ARR. By the time, the big customers may have already landed to CoreWeave.
    • CoreWeave signed 5-year $11.9B contract with OpenAI right before IPO, which should not have been included into their S1. In S1, they reported $1.9B 2024 revenue and $15.1B RPO. So with the OpenAI contract, I think they could report more than $25B RPO in the upcoming Q1 report and will likely post more than $5B revenue for entire 2025. This gonna be massive. And I suspect that, because $CRWV hasn’t had any earning reports yet, the market may have underestimated its potential top-line numbers.
  • cons
    • $CRWV had ~$8B debt at end of 2024. And they also have $15 billion in long-term lease commitments, which, though not in balance sheet, could potentially be a long-term liability or at least a hidden leverage. So, this company has very high risk if the AI demands do not turn out to be as high as anticipated.

$NBIS:

  • pros:
    • No debt and $2B cash. So less stress on cash burns (for now). It could start to have debts soon if they want to expand quickly to catch up with competitors though.
    • Lower valuation multiples than CoreWeave if they achieve their goals.
  • cons:
    • Because they have not built the planned GPU capacity yet, $NBIS is a little bit like a story stock still. There are risks in terms of execution. For example, they just missed 24Q4 guidance.
    • I think the multiple business lines could diverge Nebius’s focus. I’m especially concerned about the self-driving business because it can also burn cash very quickly, though arguably each of the businesses could just succeed by their own.

Luffy

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Thanks monkeydluffy. I like your pros and cons for both.
I haven’t looked fully into Coreweave, but I do feel that Nebius is a better investment.
I didn’t invest in Coreweave’s IPO, though I thought about it carefully at the time and I nearly did. I was put off by their significant debts, and I also felt that Nebius had much more to offer so I would stick with them.

Nebius management had proved at Yandex that they could build a whole ecosystem around their search engine. This is already happening at Nebius. They are more than just an AI data centre. They are building an AI ecosystem with all of their different businesses. And this will happen so much more as more AI opportunities arise.

Yes, an investment in Nebius is a bit of a story stock, as you say, in that one is hoping that Arkady can do the same for them as he did at Yandex. But a proven CEO with a great team of engineers around him, and a bold target for ARR with no debt and 2B in cash really caught my attention. Plus it is a lot smaller than Coreweave and I feel that it can grow faster than them too
Here’s hoping that both companies do really well.

Jonathan

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What do you think of Nebius giving up voting control of Toloka? Since they no longer have majority voting control the revenue and expenses of Toloka will not be counted for Nebius. Which in 2024 was approximately 22.5% of the companies revenue.

Drew,
Thinking of investing

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As I understand it, Nebius retained more than 50% of Toloka’s shares after the sale, it only gave up its majority in voting shares.
We’ll get more details in their ER on the 20th, but I see this as a very positive development. The market clearly liked it too with the shares up another 8.5% in the AH last night.

Jonathan

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The other reason for the AH increase on Friday was the news about their 28% stake in Clickhouse (which I think is a competitor to Snowflake.)
NBIS was up 8% AH at this Click House news:

CLICKHOUSE VALUED AT $6B IN NEW ROUND
Nebius owns 28% of ClickHouse. The market cap of Nebius is $6.7B. That means that excluding their stake in Click House, it’s market cap is about $5B.

Nebius has $2.45B of cash. So minus cash, you are paying only $2.5B for all the other business.

Jonathan

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