Below are highlights from the I/O Fund’s recent Q2 2025 webinar from Lead Tech Analyst Beth Kindig and Portfolio Manager Knox Ridley. In the webinar, they cover the outlook for 2025, impact of tariffs, key factors for Nvidia, AI, crypto and other trends and catalysts the I/O Fund is closely eyeing to fill our new idea pipeline.
The webinars are not an earnings call or prediction, as anything can happen during an earnings season. It’s an opportunity for us to go over our fundamental research with our members.
Introduction, Impact of Tariffs on Growth
Kindig covers the material, fundamental shift that the market has faced recently, the possible impacts of tariffs on the tech sector, and why no tech stock may be immune.
2025 Portfolio & Pockets of Resiliency
Kindig discusses how the portfolio in 2025 will look different than 2024, how the I/O Fund is preparing for different scenarios, and what qualities stand out in tech stocks.
Nvidia’s Blackwell and Taiwan Semiconductor
Kindig covers what supply chain signals are telling investors about Nvidia’s Blackwell GPU shipments and delay, positive news for H2, and why TSM may be resilient due to its pricing power.
Energy & AI
Kindig discusses the massive projected increase in AI energy demand, why the US will prioritize energy, and how time to power is what matters most for the data center industry.
Bitcoin
Knox Ridley covers the outlook for Bitcoin, and signs that crypto demand is growing.
Bull & Bear Case
Knox Ridley recaps how the indexes have played out since the Q1 webinar, and discusses the I/O Fund’s bull and bear cases for the broader indices through the rest of 2025.
2025 Game Plan
Ridley discusses the I/O Fund’s game plan, how it is managing heightened volatility with hedges and deploying cash when the time is right.
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Please note: The I/O Fund conducts research and draws conclusions for the Fund’s positions. We then share that information with our readers. This is not a guarantee of a stock’s performance. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis.
Two weeks ago, Knox Ridley was asked to present at the Seeking Alpha Investing Summit in New York. The topic of the presentation was “How to Safely Invest in Tech: The Million Dollar Question,” a topical question that we believe has not been answered. Tech investors either buy with no risk management measures in place, or they are too safe and do not participate fully in the life-changing returns that tech has to offer. As a result, we’ve seen investors hold the wrong stocks for too long, the right stocks for not long enough, or approach tech investing as a long term buy and hold strategy that has led to large losses.
With audited returns of 131% since inception, compared to the NASDAQ-100’s 82%, portfolio manager, Knox Ridley, lays out how we have successfully maintained an overexposure to the right tech stocks, while navigating the inherent volatility within tech. We also discussed our views on AI and if we view it as a bubble, as well as our views on crypto currencies. The entire presentation can be viewed on Seeking Alpha here.
Below are a few highlights of the event. Knox Ridley discusses the importance of a catalyst within proper tech investing, how the investing community is already confusing AI, and how the our team is preparing for a potential weak spot within the economy.
If you are a tech investor who would like know our plans for participating in the upside tech has to offer, and how we minimize the downside, we encourage you to attend one of our weekly webinars. Every Thursday at 4:30 EST, portfolio manager, Knox Ridley, goes through various broad market charts, as well as discusses our game plan on various stocks and crypto currencies that we currently own or want to own. Learn more here.
Please note: The I/O Fund conducts research and draws conclusions for the Fund’s positions. We then share that information with our readers. This is not a guarantee of a stock’s performance. Please consult your personal financial advisor before buying any stock in the companies mentioned in this analysis.
Watch Knox's webinar replay as he discusses the state of the market, as well as individual positions in the I/O Fund portfolio. This week, we are opening up the weekly webinar to all of the I/O Fund subscribers. Whenever we are approaching what could be a significant inflection point in the markets, we want to inform all of our members so that they are prepared. This week, we will be discussing the risks present in this market, the various scenarios that we see playing out in 2024, as well as doing a deep dive into the FAANGs and Bitcoin.
Below is an excerpt from the I/O Fund team on what to expect for the upcoming earnings season. We hold quarterly webinars before the earnings season kicks off to discuss our positions and what we are looking for from earnings results. In the webinar, we also identify trends/catalysts that we are eyeing to fill our new idea pipeline.
The webinars are not an earnings call or prediction, as anything can happen during an earnings season. It’s an opportunity for us to go over our fundamental research with our members.
Below are two clips from the Portfolio Manager, Knox Ridley, and Lead Tech Analyst, Beth Kindig, where we share highlights with our Essentials Members. For the full webinar including the IOF portfolio, consider upgrading to the Pro or Advanced tiers. Information can be found here.
Clip One: Broad Market and Themes
Portfolio Manager Knox Ridley provides an overview of the broad market. He says that following the bond market is the best way to understand how the economy is performing. The shorter the duration of the yield curve, the more is determined by the FED policy. The 3-month yield went to new highs and it suggests that the FED will raise interest rates in May. The 2-year yield did not follow, meaning that after this hike, most likely the FED will pause. The FED always follows the bond market. Looking into the financial sector, not just the regional banks, even global banks charts are concerning.
Bitcoin is an important them to watch, and the IOF had held exposure here since 2019. We do this with technical analysis and have been able to carefully add at bottoms while taking gains near the top.
Most people think that Bitcoin is correlated to high beta tech. However, this is not always true. When the recent bank failures happened, Bitcoin started to rally. Knox points out that Bitcoin was created in 2009 for the inherent faults in centralized money. If banks fail and Bitcoin continues to rise, we are going to invest in this trend.
Knox also discusses that energy futures appear to be breaking out. If Gas gets above $3, then the setup to new highs will be triggered. Gasoline prices were the sole cause for a lower-than-expected CPI. He has a buy plan for this.
Clip Two: Our Strategy and Trends We Are Watching
Lead Tech Analyst Beth Kindig believes that we are still in a “needle in a haystack” environment for tech stocks, which means there are few high-quality tech stocks in the new macro. What has helped our portfolio is to be focused on those that meet strict criteria, which has helped us hold higher allocations, and has resulted in better returns.
Fundamentally, on a revenue and earnings basis coming out of Q4, Beth firmly states we have not bottomed, rather the market is front running the bottom. It’s true the market is forward-looking yet Q1 will determine if the market is correct (and there will be a H2 rebound) or if the market is too early, and the rebound is further out for the tech industry.
Semiconductors are an exception in this regard because semiconductors have a lot of visibility. You can more easily track that supply is coming back online, and that demand is filling a backlog. For other verticals, we will approach the earnings season with an open mind while waiting for evidence that cloud or ad-tech, for example, are bottoming in terms of revenue growth and/or bottom line growth.
Trends we are watching:
The Inflation Reduction Act is a trend we are closely following. We want to drill down and ensure that the companies that are participating in this trend are expanding their margins.
Our thesis on Bitcoin is that when there was economic uncertainty in the past in Japan or Venezuela, those countries flocked to the safe haven of Bitcoin. Our initial report on Bitcoin said that providing safe haven for people’s financial security should be worth much as an iPhone, any e-commerce platform or a search engine. The addressable market for Bitcoin is quite large, like any other tech company. Our more recent write-up on Bitcoin can be found here.
Google Antitrust lawsuit is the second biggest lawsuit and there are a lot of small-cap and mid-cap companies that are going to benefit from the breakup of the monopoly. We share more stock picks on this trend with our Advanced and Pro Members.
AI/ML is another trend that we are closely watching.
Conclusion:
We are pleasantly surprised to see our defensible portfolio perform so well during the rally while reducing risk should the market turn. Nvidia and Bitcoin were the two top performers across the tech industry in Q1 and we held this stock and asset at a high allocation. There were many others that returned 30% or more this past quarter.
In addition, we use an automated hedge so we can hold quality positions at high allocations more comfortably during any downward swings.
Biggest takeaway is the H2 rebound needs to be confirmed in the upcoming earnings, and our Essentials Members should keep in mind there are very few strong tech stocks right now. What we mean by this is that earnings results for Q4 almost-across the board showed a deceleration on the top line and a worsening bottom line. Our strategy is to invest in those that are outliers in this regard, that are able to report with real evidence an improvement in the top line, bottom line or both. We will be patient and wait on any that are not able to show a reversal on the deceleration.
Last quarter, our webinar clips pointed toward the semi rebound being investable and Knox had provided an Essentials report that clearly stated the semis were most likely to lead the next bull market. Although we are not convinced the Q1 bull market will sustain, this analysis we provided for our Essentials Members could not have been more spot-on in terms of helping our readers prepare for the next leg up. We hope to continue to bring you top-notch information that silences the noise for more focused, and beneficial investment decisions.
Please note, we are very different compared to other research services since we run a top-performing audited portfolio (this has led to 174% better returns compared to Ark and results that are double the Nasdaq in the same time period). We do not publish a flurry of stock tips or information to our Members as we feel this works against an investor to chase new information rather than to remain focused on a couple of high quality positions. We are here to make money as investors, not to be entertainers or marketers.
Instead, what we offer is active management – where are we adding?, when are we taking gains?, and why?. We manage roughly 10-15 positions for Pro/Advanced in the same manner and we strongly feel being focused is what will make a choppy 2023 successful.
In addition, we provide broad market information, which cannot be underestimated in terms of its importance. In fact, we place this information above our stock tips as broad market is truly in the driver’s seat right now. We want the broad market aligned with our portfolio decisions. This helped us buy at the October bottom and it has helped us remain in a wait-and-see mode going into Q1. Notably, we notified you that we took gains in NVDA and AMD as “bird in hand is worth two in the bush” when it comes to a tech rally. These are high conviction positions for us and you’ll know when we start to buy again.
Thank you for your Membership and we look forward to keeping you updated on how we are managing key positions and the broad market for 2023. We know you have a choice in services, and we sincerely appreciate you being part of the IOF Community.
Webinar Invitation: September 24th at 1:30 PM PST (US Time zone)
In this market update webinar, we will discuss the price action and setups for ZM, DOCU, SE, BTC, ZI, SHOP, ROKU
When: Sep 24, 2021 01:30 PM Pacific Time (US and Canada)
Topic: Market Update – Broad Market, ZM, DOCU, SE, BTC, ZI, SHOP, ROKU
Please click the link below to join the webinar:
https://us02web.zoom.us/j/84450009933
Passcode: 13245
Or One tap mobile : US: +12532158782,,84450009933# or +13462487799,,84450009933#
Or Telephone: Dial(for higher quality, dial a number based on your current location): US: +1 253 215 8782 or +1 346 248 7799 or +1 669 900 6833 or +1 301 715 8592 or +1 312 626 6799 or +1 929 205 6099
Webinar ID: 844 5000 9933
International numbers available: https://us02web.zoom.us/u/keb315YvaK
Recently I joined Tim Beyers and Brian Feroldi on The Motley Fool podcast. In the hour-long interview we discussed cloud stock valuations, trends I’m bullish on, why I think Zoom Video and Shopify are the best cloud stocks, my prediction that EVs would pullback (they later did) and why that’s a buying opportunity, and why I continue to be long FUBO due to the company being centered between two important microtrends albeit extremely early.
Here’s a brief summary of our conversation which occurred on February 9th prior to tech stocks selling off, and yet the information is even pertinent now. If you want to watch the full video, it is available below the article.
Cloud Valuations Leading cloud stocks were trading at 50x sales when I was first interviewed by Motley Fool (minute 35:15 – 40:00). I emphasized that I don’t buy big positions in this range.
We also discussed the high likelihood that cloud stocks would soon revert to the mean of approximately 30x sales for leaders and 20x sales for average companies.
That’s exactly where we are at now, so I don’t see the sell-off as a big surprise. As I write this on March 4th – we are in the healthy pullback range as leaders often hit the forward 30 P/S range and average growth in cloud stocks the 20 forward P/S range.
What is unusual is the sheer number of cloud stocks forecasting growth in the range of 30% to 40%. We won’t know who is going to pull ahead of the pack until we see what Q1 reports due to the tougher comps from last year.
Please note, data was pulled approximately two weeks ago.
In the past, momentum traders could pile cloud leaders growing in the range of 50% to 70% and make their bets that those forecasting top growth would perform. Nine times out of ten, the company met its forward guidance. This year we don’t have that luxury as the category faces harder comps.
Towards the end of the interview, I was asked my favorite cloud stocks for 2021. I said it was easy to get creative here but I prefer to stick to the tried and true during years where the market doubts a tech vertical. I named Shopify and Zoom Video as my favorites as their bottom lines are exceptional and on par with Salesforce. This is one way to tell if a company has product-market fit, as they do not need to use sales and marketing budgets to drive growth.
Cloud stocks are going to test momentum investors who don’t study underlying fundamentals. Our fund is 2/3 long-term buy and hold and 1/3 momentum and we continue to hold cloud stocks in our buy and hold portfolio.
How I Find Stocks
Instead of using stock screeners, I like to invest in mega trends. It’s more forgiving for the companies. Companies positioned at the center of powerful trends can pivot or change the business model and the outsized demand will overlook those mistakes.
That’s why I prefer to invest in trends rather than use screeners. Tech needs to be forgiving, because growth tech companies are trying to take over the world.
I need a big trend so I don’t lose conviction if there’s a bad earnings report or other short-term issue. Investing in trends helps me to stay patient while the management executes.
SPACs:
We chatted about SPACs prior to the selloff in this interview and I had said “proceed with caution” yet look for gems. The way we do this is by investing very small percentages in speculative names – as low as 0.5%. From there, we layer either as the company breaks out on strength OR we layer in at lower prices if we have a higher-than-usual conviction.
Here’s a breakdown as to our strategy, which is spearheaded by Knox Ridley, our research site’s portfolio manager.
Early trend, 1%. These trends haven’t showed up yet in earnings.
Some Evidence, 2% to 3%. We see some evidence for these trends in earnings.
Overwhelming Evidence, 5%. These trends have overwhelming evidence in earnings.
The Bull Case for Fubo
FuboTV is centered in a crucial trend, which is live sports streaming. The bear argument on Fubo is that licensing fees are too high for the company to improve margins and become profitable. This is negated by the Sportsbook launch which is coming much sooner than I originally thought. My best guess is we will see institutions initiate prior to the Olympics yet before the Sportsbook launch.
Comcast has announced a 9% stake in Fubo and Disney has a 5% stake in the company. They will want to run sports betting through a separate brand as these are family-friendly entities.
Sports are seasonal and Q1 should not be compared to Q4, yet the bears will attempt to hammer on this. At our fund, we do not compare Pinterest’s Q4 to its Q1, for example, as we understand that smart money does not do this either.
In the interview, the point I make is that live sports OTT is the holy grail as the majority of cable subscribers continue their subscriptions for this purpose. In fact, all of the cord-cutting leading up to this point (about 10-15 years) is equal to the cord-cutting opportunity of live sports fans. We do not see Fubo as a sports licensing business just as I did not see Roku as a hardware business. You can access my previous analysis on Fubo here and a library of analysis on Roku here.
Instead, Fubo is a live sports OTT business that will drive monetization through its Sportsbook. Subscribers are willing to pay $65 per month for Fubo because it offers access to a wider range of live sports.
Fubo announced last January that it plans to offer sports betting in a separate app, which is a model that worked for Sky Media in the U.K. While you’re watching live sports, you can open a separate app and make a bet with your friends. This is ideal for casual betting rather than serious gambling. With many states in debt and legalizing sports betting, this is a tailwind.
You could say, “Why don’t you go with DraftKings?” Fubo has the same size audience that DraftKings did in 2019. Yet, the valuation of DraftKings is 3-4 times higher than Fubo and fully valued. I also think Fubo will do well with casual betting compared to DraftKings.
Chinese Electric Vehicles:
The interview from February 9th was especially timely in regards to EVs as I had said they were trading at historic valuations and could see a 30-40% haircut. We like this trend so much that we started to layer in around the time of the interview and as the market has sold off, we’ve continued to build our exposure to Chinese EVs.
I’m bullish on Chinese EV companies due to China’s desire to reduce its dependence on foreign oil. The country does not produce oil like we do in the United States.
Another reason I like Chinese EVs is because nationalist China will probably want its domestic car companies to be in the top three for sales. Apple is number 4 or 5 in China for smartphones (depending on the quarter). I wouldn’t be surprised to see Tesla to follow the same path as Apple in terms of ranking in China. This is important because China’s lack of oil plus its population is a nice combination.
The I/O Fund is invested in high quality leaders of the most important tech microtrends. When we enter or exit a stock for the I/O Fund, premium subscribers receive alerts by email and text, plus regular in-depth analysis from technology analyst Beth Kindig.
Want to know more? To receive in-depth analysis on popular technology stocks, and alerts for key entries and exits, subscribe at research.beth.technology.research.beth.technology.
Access the full interview here:
Interview timestamps:
0:00 Introduction
1:33 Cloud valuations
5:00 Okta and Alteryx
6:45 Research Process: How I invest in major tech trends
9:00 AR/VR Trend: Unity, Apple, Snapchat
18:00 SPACs
21:40 Opendoor
22:40 Star Peak Energy Transition Corp.
26:30 Cloud earnings
28:00 Portfolio Management: When to enter and exit
