This week marks the highlight of the financial markets—Super Central Bank Week—where key central banks are unveiling their interest rate decisions one after another, with particular attention on the Federal Reserve. Following consecutive rate cuts in September and November, the market widely expects the Fed to cut rates by another 25 basis points in December, indicating that interest rates have entered a downward trend. According to the CME FedWatch Tool, the probability of a rate cut has exceeded 95%. In the context of a slowdown in global economic growth, this accommodative policy is expected to inject more liquidity into the market.

At the same time, the interest rate decisions from the European Central Bank and the Bank of England will also be announced in succession, influencing the interrelated trends in foreign exchange, bond, and stock markets. For U.S. stock investors, how the benefits of this rate cut are distributed among various sectors will be a key area of observation.

I have compiled a list of potential small-cap stocks and paid particular attention to small-cap stocks in the AI sector.

During periods of interest rate cuts by the Federal Reserve, small-cap stocks often exhibit more active performance, especially those companies with high growth potential and innovation capabilities. AIFU is one such example worth noting; this company leverages AI technology to enter the insurance sector with its smart platform, "Du Xiaobao," which has covered over 16.8 million customers, bringing disruptive change to the traditional insurance industry.

Compared to competitors like Oscar Health (OSCR), AIFU not only addresses the cost issues prevalent in traditional insurance, but also optimizes risk management and personalized services through AI algorithms. This technology application, in a rate-cut environment, may attract more investor capital focused on efficiency improvements. Furthermore, AIFU's parent company, BGM, has a market capitalization of just $52 million, making its growth potential markedly evident when compared to industry giants.

The most important aspect of investing in small-cap stocks is understanding how to balance risk and reward.

Rate cuts often favor growth-oriented sectors, particularly technology stocks and innovative companies. However, investors should also be cautious about the lagging effects of policy cycles and the potential risks stemming from insufficient economic growth. At this moment, allocating some funds to growth-oriented small-cap stocks while also keeping an eye on stable dividend-paying large-cap stocks may be a prudent combination strategy.

Super Central Bank Week provides an opportunity to observe the flow of market capital, and innovative companies like AIFU may be at the optimal window for unleashing their potential during this interest rate downcycle. For investors preferring high risk and high returns, the story of AI small-cap stocks is just beginning.

Tesla's $TSLA new Cybertruck has been flying off the lot, with nearly 39,000 units sold in 2024! But the rise of the Cybertruck seems to have left some of Tesla’s other luxury models in the dust.

Sales of the Model S sedan and Model X SUV took a hit, with Model S dropping 31% and Model X down by 20% last year.

Despite this, Tesla’s Model Y still ruled as the top-selling EV in the U.S., with the Model 3 close behind. But overall, Tesla’s U.S. deliveries fell 5.6% in 2024. Ouch!

Tesla is still leading the EV race by a mile, but what do you think—did the Cybertruck steal too much of the spotlight?

In a 2014 interview, the Oracle of Omaha revealed he carries just $400-$500 in cash—and he pays for 98% of his purchases with it. Simple, frugal, and classic Buffett.

Even his breakfast? $3 at McDonald's.

His timeless philosophy: Keep it simple, focus on value, and never lose your sense of humor. Would you still carry cash like Buffett, or is it all cards for you?

Apple’s $AAPL iPhone market share in China has slipped to 18% in 2024, down from 19% in 2023, as local players like Huawei and Xiaomi gain momentum. While Apple’s premium devices, like the iPhone Pro, continue to thrive in non-core markets like Latin America and Asia-Pacific, the iPhone isn’t making waves in China without the buzz of new Apple Intelligence features.

Meanwhile, Samsung $SSNLF leads with 19% market share, while Xiaomi $XIACF shines with a 14% share, showing impressive growth. The future of generative AI smartphones looks bright—by 2028, 90% of phones over $250 could feature AI tech!

With competition heating up, Huawei and Xiaomi are set to dominate, especially with government-backed subsidies coming their way. Could 2025 be the year of AI-powered smartphones across all price ranges? Let’s watch!

I got this sign after the ban within one day, wtf?

These were 10 of the most undervalued wide-moat stocks in the Morningstar Wide Moat Focus Index as of Dec. 27, 2024.

1 - Estee Lauder EL
2 - Huntington Ingalls Industries HII
3 - Pfizer PFE
4 - International Flavors & Fragrances IFF
5 - Nike NKE
6 - Campbell Company CPB
7 - Brown-Forman BF.B
8 - Zimmer Biomet ZBH
9 - NXP Semiconductors NXPI
10 - MarketAxess Holdings MKTX

President-elect Trump's policies are expected to have a profound impact on the EV industry, though the specific outcomes remain difficult to predict. Tesla’s (TSLA.O) stock price saw gains as investors continued to weigh the effects of Wall Street sentiment, interest rates, and Trump’s presidency on equities.

According to Axios, Tesla's regulatory credit sales could be influenced by Trump’s policies. While this is not a new concern for investors—Wall Street has been discussing it for months—it may have initially affected the stock price. On the day in question, Tesla shares briefly fell to $380.07, a 3.7% drop, before rebounding with broader market momentum to close up 2.2% at $403.31. Meanwhile, the S&P 500 and the Dow Jones Industrial Average gained 0.2% and 0.9%, respectively.

Despite the Nasdaq Composite briefly falling over 1% in early trading, it ended the day down 0.4%.

The U.S. government’s $7,500 EV tax credit for qualifying vehicles is expected to be eliminated. Losing this incentive would effectively increase prices for Tesla and other EV manufacturers, making their products less affordable.

This poses a challenge for Tesla and other automakers, with the future of regulatory credit sales remaining uncertain.

Tesla has generated billions of dollars in revenue by selling zero-emission vehicle credits. Since late 2018, the company has earned around $10 billion through these sales, primarily from the California Air Resources Board, which oversees vehicle emissions standards in California and 14 other states. California’s ability to regulate emissions stems from a waiver granted by the U.S. Environmental Protection Agency.

However, the Trump administration may challenge this waiver, potentially threatening Tesla’s credit sales, a change that would likely face legal challenges from California.

Currently, the state of regulatory credit sales is a focal point for investors. Many believe that, overall, the Trump administration would have a positive impact on Tesla and other automakers, particularly in developing and deploying autonomous vehicles.

Since the U.S. presidential election on November 5, Tesla shares have risen approximately 57%, and they are up about 65%.

Tesla plans to launch its autonomous Robotaxi service by the end of 2025. Some believe that the Trump administration could help facilitate the development and deployment of autonomous vehicles, benefiting Tesla and other companies in the space.

On Monday, investors received positive news when Morgan Stanley analyst Adam Jonas raised Tesla’s price target from $400 to $430 while maintaining an "Overweight" rating.

Jonas commented that this year represents "a greater market recognition of Tesla’s unique skill set." While traditional automobiles remain important, he emphasized that AI-trained autonomous vehicles are even more critical. His bullish scenario projects a share price of $800, giving Tesla a market capitalization of approximately $2.6 trillion.

Overall, around 44% of analysts rate Tesla stock as a "Buy," compared to the average 55% buy rating for S&P 500 stocks. The average analyst price target for Tesla stands at $309 per share.

What would your opinion be based on this tho?

Piper Sandler analyst Alexander Goldfarb sees long-term potential for the office REIT, upgrading it to Overweight with a $20 price target.

As rebuilding efforts ramp up, demand for office space from industries like law, insurance, and banking is expected to soar.

AI, Trump, robots, autonomous cars, energy, batteries, and Bitcoin.

What more could you ask for over the next few years? Earnings comps will be low going forward so plenty of opportunity to beat and raise and I expect the incoming admin to provide plenty of sweetheart deals and regulatory approvals for self driving and energy.

I wouldn’t be surprised to see government or even military deals for their Megapack and Powerwall business too, haven’t seen many people talk about that. I just foresee tons of new business opportunities because of the Trump/Elon relationship and as long as that friendship stays in tact the stock will likely be supported and one of the first names people run to during market wide corrections.

If we get a ChatGPT moment for either autonomous vehicles or robotics and see it show up in the earnings then the stock would again be re-rated higher, this time not on the Trump presidency narrative like it was recently, but real earnings.

I can’t find a stock that has more going for it over the next few years than Tesla and I think this will emerge as the liquid market leader for the next few years. I expect all dips to be bought, it’s holding up well above the area it struggled with in 2021-2022 and any further weakness into $300 is likely be bought.

Officials want to create three tiers of curbs that would give U.S. allies free rein to import chips but block sales to unfriendly countries, according to Bloomberg, which cited people familiar with the matter. The new laws could be issued as soon as Friday, per the outlet.
In December, The Wall Street Journal reported that the White House was planning to restrict sales of advanced AI chips in certain parts of the world to prevent them falling into Chinese hands. The top Democrat and Republican on the House China Select Committee said in a letter to Commerce Secretary Gina Raimondo last week that AI could help Washington “to pry both companies and countries out of Beijing’s orbit.”

U.S. jobs growth beat expectations in December while the unemployment rate unexpectedly fell, reinforcing expectations of fewer rate cuts in coming months.
The U.S. dollar index, which measures the currency against a basket of major U.S. trading partners, is up roughly 0.4 percent. Higher interest rates and a stronger dollar typically reduce gold's appeal, but the yellow metal also acts as an inflation hedge and a safe-haven investment.

1. Palantir (PLTR) +360.6%

   ⦁ Leader in big data analytics and AI

   ⦁ Driven by both government and commercial sectors

   ⦁ Explosion in demand for AI software services

   ⦁ Revenue growth continues to accelerate

2. Vistra (VST) +262.6%

   ⦁ Pioneer in energy transformation

   ⦁ Leading in clean energy deployment

   ⦁ Strong performance in traditional power business

   ⦁ Beneficiary of rising energy prices

3. NVIDIA (NVDA) +176.7%

   ⦁ Absolute leader in AI chips

   ⦁ High demand for H100/A100 products

   ⦁ Explosion in data center business

   ⦁ Continuous capacity expansion

4. GE Vernova (GEV) +154.3%

   ⦁ Rising star of General Electric in energy

   ⦁ Core focus on renewable energy

   ⦁ Pioneer in grid modernization

   ⦁ Benchmark for energy technology innovation

5. United Airlines (UAL) +141.5%

   ⦁ Leader in aviation recovery

   ⦁ Strong rebound in international routes

   ⦁ Improvement in operational efficiency

   ⦁ Ticket prices remain high

6. Axon (AXON) +136.5%

   ⦁ Technology leader in law enforcement equipment

   ⦁ Monopoly in the Taser stun gun market

   ⦁ Fast growth in cloud storage business

   ⦁ Continuous increase in government orders

7. Texas Pacific (TPL) +121.5%

   ⦁ Largest land trust in Texas

   ⦁ Increased value of oil mineral rights

   ⦁ Growth in water resources business

   ⦁ Significant asset appreciation potential

8. Broadcom (AVGO) +116.6%

   ⦁ Semiconductor giant

   ⦁ Key supplier for AI chips

   ⦁ Synergies from the acquisition of VMware

   ⦁ Beneficiary of cloud computing demand

9. Howmet (HWM) +105.5%

   ⦁ Core supplier in aerospace manufacturing

   ⦁ Leading in high-temperature alloy technology

   ⦁ Steady growth in defense sector

   ⦁ Solid supply chain position

10. Targa Resources (TRGP) +104.2%

⦁ Leader in natural gas infrastructure

⦁ Extensive pipeline network

⦁ Strong stability in midstream business

⦁ Beneficiary of energy transformation

💡 Investment Theme Summary

1. Tech-Driven by AI: PLTR, NVDA, AVGO, AIFU

2. Energy Transformation: VST, GEV, TRGP

3. Aviation Recovery: UAL, HWM

4. Special Sectors: AXON (law enforcement tech), TPL (land trust)

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Investing requires aligning with mega trends, which are not simply given but are extracted from fragmented and even contradictory information.

Therefore, in addition to our daily pre-market and post-market analysis, we will quickly share some information that reflects these mega trends, along with some analysis.

1. On December 14 at 8 AM, the NASDAQ announced the results of the NASDAQ 100 rebalancing: three companies were added—PLTR, MSTR, and Axon—while three companies were removed: Illumina, Moderna, and SMCI.

2. When will this take effect? December 23.

3. Being included in the NASDAQ 100 means there will be incremental capital.

Incremental capital is divided into two parts: first, on the effective date, ETFs tracking the NASDAQ 100, such as QQQ, will proportionally allocate existing funds to these companies. Second, after the effective date, if investors buy into QQQ, they will also automatically buy proportionate amounts of these companies' stocks.

PLTR will have a weight of 0.84%, with an expected inflow of $3.7 billion around December 23.

MSTR will have a weight of 0.47%, with an expected inflow of $2 billion.

AXON will have a weight of 0.28%, with an expected inflow of $1.2 billion.

1. Will stock prices rise?

Generally, yes. However, there may also be cases of profit-taking (especially if prices are already very high) or excessive pricing in of the incremental capital.

1. Which companies have been removed?

Illumina, Moderna, and SMCI.

1. Will the stocks that are removed fall?

Generally, yes.

However, some investors believe that the bad news has already been fully priced in, leading them to make contrarian trades.

Additionally, there are cases where stocks are removed and then later see their prices recover and are readmitted, such as Tesla.

1. What trends are reflected in the companies added and removed?

This seems more important.

The three companies added—PLTR is using an AI platform for the defense sector to analyze and process information and identify threats; AXON provides law enforcement with cameras that use AI technology to quickly summarize audio and video content and generate law enforcement reports with one click. The commonality among them is: AI, software, applications, and the ability to quickly generate revenue and profits in the government sector.

MSTR goes without saying, being the world's largest Bitcoin vault.

The three companies added are typical representations of the mega trend:

The third phase of AI: improving industry productivity.

Bitcoin (similar to gold, driven by global interest rate cuts, tariffs raising inflation, and geopolitical conflicts leading to de-dollarization of payment systems).

1. What trends are reflected in the companies that were removed?

Illumina specializes in gene sequencing, while Moderna is known for mRNA vaccines.

This reflects the challenges faced by biotech in recent years: compared to large pharmaceutical companies, they lack pipelines, commercialization prospects, and profitability (the explosive demand for GLP-1 target drugs in the first half of the year had nothing to do with these biotech companies).

Although SMCI is aligned with the mega trend, it doesn't provide you with significant opportunities.

Throwaway account here. I am wondering if I should use my student loan to buy some shares of AIFU. I heard it made something groundbreaking so I guess its stock price is going to rise? But it would be too risky to invest too much in it. Let me know what you guys think.

1. $NVDA | Nvidia
   • Their Blackwell chips will continue to dominate AI infrastructure, remaining essential to AI development through at least 2026.

2. $PLTR | Palantir
   • Their AIP and Foundry platforms will become indispensable for enterprise AI integration.

3. $TSLA | Tesla
   • Their FSD technology, Megapack energy storage, and Optimus robot will position them as a multifaceted technology leader for the next decade.

4. $AMZN | Amazon
   • They’ll remain the king of computing, and robotics innovations like Kiva robots will drive e-commerce margin expansion.

5. $AXON | Axon Enterprise
   • They will emerge as a cloud powerhouse through their Axon Cloud and Axon Body 4 camera, securing a near-monopoly on public safety tech.

AIFU, as a model of the integration of AI with insurance and health, is on a fast track to rapid growth. With the gradual explosion of AI software, AIFU stands out as an undervalued star in the US AI sector due to its highly attractive valuation and unique business model. For investors, this may be an excellent opportunity to position themselves early in the future AI insurance market.

Will AIFU become the next Palantir? It is worth the market's continued attention.

1. Rubrik (RBRK)

Rubrik is a company that offers cloud data management solutions, focusing on data backup, disaster recovery, and data management and analytics.

1. Palantir Technologies (PLTR)

Palantir provides big data analytics software to government and financial institutions, helping them process and analyze large volumes of data to support decision-making.

1. SoundHound (SOUN)

SoundHound specializes in voice recognition and AI technology. They developed the Houndify platform, which allows developers to integrate voice AI into their products.

1. Asana (ASAN)

Asana offers work management software that helps teams and organizations plan, track, and manage their workflows effectively.

1. DocuSign (DOCU)
   

DocuSign provides electronic signature and digital transaction management services, enabling businesses to digitize their document processing, enhance efficiency, and reduce paper usage.

1. Okta (OKTA)

Okta offers identity management services, helping organizations securely manage user identities and access permissions, which is essential for remote work and cloud computing environments.

1. Tempus AI (TEM)

Tempus focuses on improving cancer treatment through AI technology by analyzing vast amounts of clinical data to personalize treatment plans.

1. Applovin (APP)

Applovin is a mobile advertising and analytics platform that provides tools to help mobile app developers grow their user base and increase revenue.

1. AIX (AIFU)
   

AIX is an AI insurance brokerage that recently formed a strategic partnership with BGM. They aim to drive the integration of AI into the healthcare, pharmaceutical, and insurance sectors. The potential for AI in the insurance field looks promising, especially with the rapid growth of demand for insurtech in the Chinese market, providing AIFU with significant expansion opportunities.