Which Stocks Scott Galloway Is Bullish on for 2025
In this episode of Money Rehab with Nicole Lapin, guest Scott Galloway provides an analysis of the stock market, addressing both past predictions and his outlook for 2025. He reflects on the successes and misses of his earlier forecasts, including the performance of companies like Alphabet, Nvidia, and Tesla.
Looking ahead, Galloway outlines his bullish sentiments on OpenAI and Uber, while maintaining a neutral stance on Eli Lilly's GLP-1 drugs. The discussion also covers the broader economic landscape, touching on factors like the US economy's resilience, potential political impacts, and the deflationary effects of technological advancements like AI and disruptions to industries like fast food.
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1-Page Summary
Evaluating Past Stock Market Predictions
Scott Galloway's previous predictions: hits and misses
As Scott Galloway notes, his earlier predictions showed mixed results. He accurately foresaw the strong performance of Alphabet and Nova Nordisk, as well as Tesla's struggles due to perceived overvaluation. However, Galloway underestimated the resilience of McDonald's and the meteoric rise of Nvidia.
Providing New Stock Market Predictions and Analysis
OpenAI: bullish outlook
Galloway praises OpenAI's market position, akin to the "OpenVidia monopoly." With revenues estimated at $12 billion next year and a $150 billion valuation, he considers OpenAI reasonably priced and a leading force in the sector.
Eli Lilly's GLP-1 drugs: neutral stance
While acknowledging the disruptive potential of Eli Lilly's GLP-1 drugs on industries like fast food, Galloway suggests market expectations for this innovation have already been priced into the stock.
Uber: bullish sentiment
Galloway conveys a bullish view on Uber, citing its dominant market position, robust operational platform, and strong management team as key drivers.
Discussing the Broader Economic Outlook
The US economy outperforms expectations
Despite recession fears, the US has achieved the highest GDP growth (8.5%) among G7 nations since 2020, along with the lowest inflation. However, Galloway notes the uneven distribution of prosperity contributes to negative public sentiment.
Political factors and their potential impact
Galloway postulates a Trump administration could spur protectionist policies exacerbating inflation, while a Harris administration may maintain the current trajectory.
Technological advancements bring deflationary forces
Galloway highlights AI's potential to drive productivity gains and cost reductions. He also foresees GLP-1 drugs disrupting the fast food industry by curbing consumer demand.
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Counterarguments
- Scott Galloway's past predictions might not be a reliable indicator of future performance, as past success does not guarantee future results.
- OpenAI's valuation and revenue projections could be overly optimistic, considering the volatile nature of tech investments and potential regulatory challenges.
- The market's pricing of Eli Lilly's GLP-1 drugs might not fully account for future competition or regulatory hurdles that could affect the company's performance.
- Uber's bullish outlook may overlook potential risks such as increased competition, regulatory challenges, and the company's history of profitability issues.
- The US economy's performance metrics might not fully reflect underlying economic issues such as income inequality, debt levels, or structural unemployment.
- The assertion that a Trump or Harris administration would follow a certain economic policy could be too speculative without considering the influence of other political actors and global economic conditions.
- Technological advancements may not necessarily lead to deflationary forces; they could also lead to job displacement and other economic challenges that could offset productivity gains.
- The impact of AI and GLP-1 drugs on industries might be overestimated if consumer behavior, regulatory environments, or technological limitations do not align with Galloway's predictions.
Actionables
- You can diversify your investment portfolio by researching and investing in companies that are leading in AI and pharmaceutical innovations, as these sectors show potential for growth and deflationary impacts. Start by using financial news websites to track companies mentioned for their advancements in AI and GLP-1 drugs, then use investment apps to make small, incremental investments in these companies, ensuring you're not putting all your eggs in one basket and staying within your risk tolerance.
- Enhance your career resilience by upskilling in areas related to AI and biotech, as these industries are poised for growth. Look for online courses or local workshops that offer introductory lessons on AI, machine learning, or biotechnology, which can provide you with a foundational understanding that could be attractive to employers in these industries or related fields.
- Stay informed about economic policies and their potential impact on the market by following diverse news sources and financial analysts. Create a habit of reading articles from a mix of political and economic perspectives to understand how different administrations' policies might affect your investments and job market, and use this knowledge to make more informed decisions about your finances and career planning.
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Evaluating Past Stock Market Predictions
Scott Galloway's previous stock predictions were a mix of hits and misses
Scott Galloway, known for his market expertise, has made predictions that have shown varied outcomes.
Scott was correct in predicting the strong performance of Alphabet and Nova Nordisk, as well as the struggles of Tesla
Alphabet (Google's parent company) and pharmaceutical company Nova Nordisk both outperformed market expectations, with Alphabet up 27% year to date and Nova Nordisk up 16%. Galloway, who has been historically bearish on Tesla, correctly predicted its struggles. He highlighted his perception of Tesla's overvaluation as a car company and its tumultuous product releases which he referred to as a "shit show". He noted its high trading revenue ratio, which starkly contrasts with the industry standard that ranges from 0.2 to one times revenues, while Tesla was trading at seven to eight times. Galloway observed that after Tesla's product announcements, the company's stock typically decreased, marking a divergent outcome as compared to other mobility services like Uber and Lyft, which saw increases.
However, he underestimated the resilience of companies like McDonald's and the meteoric rise of Nvidia
Despite his keen insights on some companies, ...
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Evaluating Past Stock Market Predictions
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Counterarguments
- While Galloway was correct about Alphabet and Nova Nordisk, it's possible that these predictions were in line with broader market trends that favored tech and healthcare sectors, which could have made these predictions less about individual company insights and more about sector performance.
- The assertion that Galloway correctly predicted Tesla's struggles could be challenged by considering the broader context of the automotive industry and economic conditions that may have affected all manufacturers, not just Tesla.
- Highlighting Tesla's high trading revenue ratio as a negative could be countered by arguing that this ratio reflects the market's view of Tesla's growth potential rather than just its current revenue, which is a common perspective for growth stocks.
- The decrease in Tesla's stock after product announcements could be attributed to the "buy the rumor, sell the news" phenomenon common in stock markets, rather than a direct reflection of the company's performance or prospects.
- The resilience of McDonald's could be attributed to its strong brand and global presence, which may have been underestimated in Galloway's analysis, suggesting that brand strength and market position can sometimes outweigh other market factors.
- The 4% decrease in Warner Brothers Discovery's valuation might be within a normal range of market fluctuation and not necess ...
Actionables
- You can create a simple stock performance tracking spreadsheet to monitor companies that intrigue you, noting predictions and actual outcomes. Start by choosing a few companies you're interested in and make your own predictions based on your research or gut feeling. Record these predictions in a spreadsheet along with the date, then track the stock's performance over time. This will help you learn from your predictions and refine your investment intuition.
- Develop a habit of reading quarterly earnings reports of companies you're interested in to understand the factors influencing their stock performance. Begin with one company and gradually add more as you become comfortable with the financial jargon and analysis. Look for key indicators such as revenue growth, profit margins, and future guidance provided by the company, which can give you insights into potential stock performance.
- Eng ...
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Providing New Stock Market Predictions and Analysis
Scott Galloway provides his latest investment outlooks, discussing various companies and their potential in the current market.
Scott is bullish on OpenAI, citing its strong market position and favorable valuation
Galloway states that OpenAI, particularly through its partnership with NVIDIA, has carved out a significant market share, which he likens to the Wintel monopoly of the '80s and '90s, dubbing it the “OpenVidia monopoly.” Noting its reasonable trading metrics, he commends OpenAI's current valuation. The company is trading at eight times forward revenue with estimated revenues of $12 billion next year and a present valuation of $150 billion. This positions the company effectively against average SaaS and other AI companies. Galloway's analysis indicates that OpenAI is leading in the sector and carries an attractive price, resulting in his bullish perspective.
Scott is neutral on Eli Lilly's GLP-1 drugs, as he believes the potential is already baked into the stock price
While recognizing the disruptive potential of Eli Lilly’s GLP-1 drugs on industries like fast food, Galloway remains cautious regarding their immediate impact on the company's stock valuation. He articulates his neutral stance, suggesting that market expectations for this innovation have already been factored into the stock price.
Scott is bullish on Uber, recognizing its domina ...
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Providing New Stock Market Predictions and Analysis
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Counterarguments
- OpenAI's strong market position and favorable valuation might not fully account for the rapid pace of change in the AI sector, where new competitors can emerge and disrupt existing players.
- The comparison to the Wintel monopoly might be overly optimistic, as the tech landscape has significantly more players and is subject to different regulatory environments that could prevent a similar dominance.
- Trading at eight times forward revenue assumes continued growth and market expansion, which may not materialize if there is a market downturn or if OpenAI faces unforeseen challenges.
- Being bullish on OpenAI assumes that current valuations are sustainable and that the company will continue to outperform its competitors, which is not guaranteed.
- The neutrality on Eli Lilly's GLP-1 drugs might underestimate the potential for further breakthroughs or overestimate the market's current understanding of these drugs' impact.
- The assumption that the potential of Eli Lilly’s GLP-1 drugs is already baked into the stock price may not account for the broader implications of healthcare cost savings or the potential for off-label uses.
- Being bullish on Uber assumes that the company can maintain its market dominanc ...
Actionables
- You can explore investment opportunities in AI by researching companies that partner with industry leaders like NVIDIA, as these collaborations may indicate a strong market position.
- By identifying companies that have strategic partnerships with tech giants, you can potentially find investments similar to OpenAI's relationship with NVIDIA, which could signal a strong market position. For example, look for startups or mid-sized companies announcing collaborations with established tech firms and consider their market potential and growth trajectory.
- Consider diversifying your investment portfolio with companies that have a dominant market position in emerging technologies, such as ride-hailing or food delivery platforms.
- By investing in companies that are market leaders in their respective sectors, you might replicate the strategy of investing in a company like Uber, which has a dominant market position. Research and identify other companies that have a large user base, a user-friendly interface, and are exploring new avenues for platform growth, as these factors could contribute to a strong market presence.
- Evaluate the potential impact of new pharmaceuticals on related industries and co ...
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Discussing the Broader Economic Outlook and Factors Impacting the Economy
The American economy's recent performance and the factors influencing it are the subjects of discussion, particularly in relation to the global economic landscape and how the upcoming US presidential election could impact future economic policies.
The US economy has shown robust growth, despite widespread perception of a recession
Scott Galloway addresses the public sentiment around the economy and contrasts it with actual economic performance.
The US has experienced the highest GDP growth in the G7 since 2020, outpacing other mature economies
Since 2020, the US has grown its GDP by 8.5%, which outshines its G7 counterparts. The Eurozone has experienced a 3.5% growth, Germany 2%, and Britain 1%. Galloway highlights the US economy's resilience, as it has achieved the most robust growth of any mature economy along with having the lowest inflation amongst G7 nations, which typically is a challenging balance to maintain.
However, the uneven distribution of prosperity has contributed to the negative public sentiment
Despite these achievements, Scott Galloway points out that the nation's prosperity is not evenly distributed. Many Americans, notwithstanding broader economic growth, are unable to afford basic necessities. Personal economic struggles, such as the inability to pay bills or afford childcare, contribute to a negative perception of the economy among those who aren't sharing in the overall prosperity.
The impact of the 2024 election on the economy will depend on the policies of the new administration
Scott Galloway offers his insights into how future administrations could shape economic outcomes.
A Trump administration could lead to more protectionist policies and exacerbate inflationary pressures
Galloway postulates that a return to a Trump administration could introduce protectionist policies like 100% tariffs and restrict immigration, which he metaphorically describes as "the ultimate nitro and glycerin for inflation." This combination could pose challenges for the economy.
A Harris administration would likely maintain the current economic trajectory
In contrast, Galloway believes a Harris administration is likely to maintain the current economic traj ...
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Discussing the Broader Economic Outlook and Factors Impacting the Economy
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Counterarguments
- The robust growth of the US economy might not be sustainable due to underlying issues such as debt levels, trade deficits, and potential asset bubbles.
- The measurement of GDP growth may not fully capture the well-being of citizens, and alternative metrics might present a different picture of economic health.
- The assertion that a Trump administration would exacerbate inflationary pressures is speculative and does not consider the potential positive effects of protectionist policies on domestic industries and employment.
- The assumption that a Harris administration would maintain the current economic trajectory does not account for unforeseen events or policy shifts that could alter the economic course.
- Technological advancements may lead to job displacement and could exacerbate inequality if not managed with effective social policies.
- The ...
Actionables
- You can diversify your investment portfolio to include technology-focused funds that capitalize on the deflationary impact of AI and healthcare advancements. By doing so, you're positioning yourself to potentially benefit from sectors that are expected to grow due to technological innovations. For example, consider low-cost index funds or ETFs that track companies in the AI space or those developing GLP-1 drugs.
- Consider enhancing your job security by acquiring skills in high-growth industries like technology and healthcare. Online courses in data analysis, machine learning, or healthcare management can make you more attractive to employers in these fields, which are poised for growth due to technological advancements and healthcare innovations.
- You m ...
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