00:00 Josh
Our goal here to help cut through that noise, to navigate the best moves for your portfolio. I’m here now with Laffer, Tangler Investments CEO and CEO CIO, that would be Nancy Tangler. Nancy, great to see you.
00:13 Josh
We’ll start, Nancy, with one you like. It’s a crowd favorite. It’s AMD. Now, we should know, I mean, this one, look at that chart. It’s up about 80% in 2025, phenomenal run. Most on the street, by the way, still like this one. You do too. Let’s walk through some of the reasons why. Your first reason,
00:30 Josh
it’s the C suite, exceptional leadership and execution. Walk me through it.
00:37 Nancy Tangler
Okay, Lisa Su joined in 2014, 0% market share in CPUs, 41% share now. When she went to the board and said, I want to be in the AI business, she had overwhelming support. I want to, I want to work with a CEO or be an investor alongside a CEO that has vision and can execute.
00:54 Josh
Remarkable run. Uh, the second reason, it’s strong growth outlook.
00:58 Nancy Tangler
Yeah, so at their investor day recently, they gave guidance for 80% data center growth, 35% revenue growth, and earnings are expected to grow next year at 64% with a PE that’s below 30. So you’ve got a price earnings to growth ratio of about 0.5 times. That’s pretty low when you’re buying a growth stock. So we think valuation and growth are there, and that’s why we one of the reasons why we like it.
01:14 Josh
The point being even after an 80% rocket ship, valuation’s still attractive.
01:18 Nancy Tangler
Yeah, and it’s come down, you know, on all the worries about AI bubble, debt, open AI. So it’s down 20% giving those who missed it a chance to get in.
01:25 Josh
Third reason, you say this is one you’d commit capital to, positioned for the AI shift to inferencing. Explain that.
01:31 Nancy Tangler
Yeah, so they’ve got a great lineup in inferencing chips. The the training chips are really uh Nvidia’s sort of bailiwick. We’re shifting now and they’re going to be re re uh reintroduce or introducing the M1450, M1450, that’s an inferencing chip. I think this is um really going to just be a tailwind to the company’s growth rate. And they’ve they’ve um counselled, you know, 30 to 40% growth for the next three to five years.
01:51 Josh
All right, you’ve made your case, Nancy, convincingly, eloquently as always. But of course, we have to remind people, what are before you pile in, what are some downside risks you got to think about?
02:00 Nancy Tangler
Yeah, it it’s the AI trade. I mean, if if by chance we’re in a bubble, this would be one of the stocks would get hurt. You saw the sell off last month. Uh that was around that, just some people taking profits. I think you just want to pay attention to is AI continuing to grow? Is there a shift in sentiment or guidance from the the management team?
02:13 Josh
All right, so you say buy AMD. Now we have to talk about one you’d avoid. And that’d be TXN. This stock has gone basically nowhere this year. I mean it’s actually in the red in 2025. Let’s go through the reasons why you say, you know what? I’m still avoiding this. Slowing dividend growth signals slowing confidence.
02:26 Nancy Tangler
Yeah. So we used to love this name when Rich Templeton was the CEO. It was a return all free cash flow to shareholders. Dividend growth was in the double digits, they they bought back shares. He left, then he came back, little indiscretion in the C suite, so he had to come back. and they just haven’t got regained their mojo. So they’ve they’ve reduced dividend growth, which tells me they’re less confident about future earnings growth.
02:54 Josh
Second reason you say this one it’s still one to avoid, guidance cut and slower recovery.
02:58 Nancy Tangler
Yeah, so they just reported, they cut the guidance for the fourth quarter, and they basically said that their customers are uh are waiting on the sidelines. So, you know, juxtapose that against what you’re seeing in the AI space. It it is it is a reason to have caution.
03:12 Josh
Final reason you’re steering clear, you say customer hesitation and weaker growth profile.
03:18 Nancy Tangler
Yeah, I mean just more of the same. So their their customers are not building their respective factories. And and this remember, this is a company that’s industrial, automotive. We we haven’t seen a lot of growth in manufacturing in the country and we haven’t seen a lot of growth in the auto business. So they are experiencing slowdown. Now they’ve reduced inventory, so that that has put them in at least decent position, but slow growth.
03:41 Josh
Finally, Nancy, let’s ask you, how could you be wrong on TXN?
03:45 Nancy Tangler
Well, if the economy were to come roaring back and it may, and you start to see auto companies, you know, producing, demand for autos going up, and industrial, the industrial space growing, the old economy industrial space, this name, because they’ve reduced inventory will experience, I’d say pretty rapid earnings and margin growth. And and you’ll be collecting, but in the meantime, if you own it, you’re collecting the dividend. So, uh, you know, if we see that, we we may go back in.
04:13 Josh
For now, buy AMD and avoid TXN. Nancy, always great to see you. Thank you so much. Thanks, Josh. And thank you all for watching. Goodbye or goodbye.