Fast Money traders reveal their stocks of the week

Key Concepts

Coinbase, digital assets, trading platform, Vertiv, picks and shovels, data revolution, Nvidia, power and cooling, drone company, Quantum stocks, EV to sales, military contract, Elon Musk, AeroVironment, market cap.

Coinbase and the Digital Asset Market

The speaker highlights Coinbase as a key player in the digital asset market. The core argument is that Coinbase is more than just a trading platform; it's an infrastructure play. The speaker emphasizes the "flywheel" effect between Coinbase's trading business and its platform, suggesting a self-reinforcing cycle of growth and investment. The speaker believes Coinbase is making significant investments to remain relevant and avoid obsolescence in the evolving digital asset landscape.

Vertiv and the Data Revolution

Vertiv is presented as a "picks and shovels" play in the data revolution, similar to Nvidia. The speaker argues that for every dollar spent on silicon (like Nvidia's chips), $3 to $4 are spent on power and cooling infrastructure. This ratio is used to justify Vertiv's potential, as it provides essential components for data centers. The speaker expresses confidence in Vertiv's growth prospects, noting that the stock is breaking out to new highs.

Drone Company and High-Risk Investments

The speaker discusses a drone company (unnamed) that experienced a 28% increase in stock value during the week. This is characterized as a "moonshot" type investment, implying high risk and high potential reward. The valuation is extremely high, with an EV to sales ratio of 200x. Despite the high valuation, the speaker is already invested and willing to increase their position, citing a military contract and Elon Musk's statement about the future of warfare involving drones as justification. The speaker acknowledges the need for more contracts and profitability. The speaker chose this smaller drone company over AeroVironment because AeroVironment has a market cap of $18 billion.

Conclusion

The speakers discuss three different investment opportunities: Coinbase as a key infrastructure player in the digital asset market, Vertiv as a "picks and shovels" play in the data revolution, and a drone company as a high-risk, high-reward "moonshot" investment. Each investment is justified based on different factors, including market trends, industry dynamics, and potential for future growth. The discussion highlights the importance of considering both the potential upside and the risks associated with each investment.