This Tiny AI Stock Has EXTREME Potential

Here's a detailed summary of the YouTube video transcript, maintaining the original language and technical precision:

Key Concepts

• Short Squeeze: A phenomenon where a heavily shorted stock experiences a rapid price increase due to short sellers being forced to buy back shares to cover their positions.
• Buying Momentum: The force or trend of increasing buying activity in a stock.
• Short Interest: The total number of shares of a stock that have been sold short.
• Margin Call: A demand from a broker for an investor to deposit additional money or securities into their account to cover potential losses on a leveraged position.
• Support Level: A price point at which a stock's price has historically stopped falling and started to rise.
• Higher Lows and Higher Highs: Chart patterns indicating an uptrend.
• Fundamental Play: An investment strategy based on a company's intrinsic value and financial health.
• Short Squeeze Stock: A stock primarily driven by short squeeze dynamics rather than fundamentals.
• Outstanding Contract Revenue: Revenue that a company has a right to receive from contracts that have been signed but not yet fulfilled.
• Performance Obligations: Commitments made by a company to deliver goods or services to a customer.
• AI Supply Chain: The network of companies and technologies involved in the development and deployment of artificial intelligence.
• Symbiotic Relationship: A mutually beneficial relationship between different entities.
• Capex (Capital Expenditure): Funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, and equipment.
• Opx (Operating Expense): Ongoing costs incurred by a company to operate its business.
• Recurring Revenue: Revenue that a company expects to receive on a regular basis.
• Hyperscalers: Large cloud computing providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud.
• REIT (Real Estate Investment Trust): A company that owns, operates, or finances income-generating real estate.
• Embedded Value: The present value of future profits or benefits expected from an asset or business.
• Supply Constrained: A market situation where demand exceeds the available supply.
• Anchor Tenant: A major tenant in a commercial property that helps attract other tenants.
• Equity Stake: Ownership interest in a company.
• Proof of Concept: Evidence that a concept or idea is feasible and can be successfully implemented.
• Yolo Trading: A high-risk trading strategy involving investing a large amount of money with little research.

Market Update and Short Squeeze Analysis

The video begins by highlighting the recent success of a short squeeze play on Open (OPGN). The stock was initially called out on August 28th for its short squeeze potential at around $443 and subsequently hit highs of over $1021 by the morning of the broadcast. The presenter notes that Open calls were alerted to members on September 3rd, and the bullish sentiment for the stock persists.

The core mechanism behind a short squeeze is explained as: Short Interest x Buying Momentum = Squeeze Potential. A higher short interest combined with increased buying momentum amplifies the likelihood of a significant price surge. The presenter argues that short sellers in OPGN became overly greedy, expecting the stock to go to zero, which is deemed unlikely. As the stock price moves further away from zero, short sellers face increasing unrealized losses and potential margin calls, forcing them to buy back shares, which further fuels the price increase.

Chart Patterns and Trading Strategy for Short Squeeze Stocks: The video emphasizes observing chart patterns in short squeeze candidates. These stocks often exhibit a cycle of massive pumps followed by dumps, but with each dump, a higher low (support level) is established. This affirmation of buyers at higher support levels signals renewed buying interest and can trigger another momentum wave.

The key takeaway for trading these stocks is to avoid chasing them during their sprint (pump). Instead, the recommended strategy is to buy them when they are "breathing" (dumping) and showing affirmation at a support level. The presenter advises against entering OPGN at its current high, suggesting waiting for a pullback to a higher low, potentially around $7-$8, and observing signs of an uptrend before considering an entry. This approach is framed as avoiding "yolo trading" and acknowledging that OPGN is a "hot potato" – a short-term play rather than a fundamental investment.

Oracle and the AI Ecosystem

The discussion shifts to Oracle (ORCL), which experienced a massive surge following strong earnings. The company added approximately $250 billion in market value in a single day. Key data points cited include:

• $455 billion in outstanding contract revenue expected for the quarter ending August 31st, a more than four-fold increase from the same quarter last year.
• Reports of OpenAI signing a $300 billion data center deal with Oracle.

The presenter then maps out the symbiotic relationship within the AI supply chain, illustrating how Oracle fits into this ecosystem:

1. Nvidia sells GPUs to Oracle.
2. Oracle uses these GPUs to build data centers and offers cloud services on top.
3. Nvidia rents compute back from Oracle.
4. OpenAI, Microsoft, XAI, Alphabet, Amazon, and other major companies rent compute back from Oracle.

This circular business model, characterized by massive capital expenditure (capex), mutual selling, and renting of capacity, highlights the immense demand for AI compute. The presenter argues that even competitors are cooperating to meet this demand, creating a feedback loop where companies like Nvidia profit multiple times over from the same scarce GPUs.

Justification for AI Investment: The presenter addresses skepticism about the sustainability of this spending by pointing to early returns. An example cited is Google eliminating 35% of managers overseeing small teams, suggesting that companies are already seeing significant efficiency gains from AI investments. This justifies further multi-billion and even trillion-dollar investments to ensure future dominance and maximize efficiency. The argument is that it's a "do or die" situation for companies with the capital to invest in AI compute.

Apply Digital (APLD) - A Small AI Data Center Play

The video then pivots to a specific stock recommendation: Apply Digital (APLD), a small player in the AI data center space. The presenter highlights that APLD was previously presented on April 24th, 2025, at $4.53, with a prediction of significant upside, which was met with pushback. Since then, the stock has surged to highs of $17.73, a 4x increase in share price alone.

The presenter emphasizes a commitment to evidence and proof over promises when evaluating investment opportunities. APLD's core business is leasing data center capacity to clients requiring computing power, positioning it favorably in a supply-constrained market with high demand.

Key Factors Motivating APLD's Trajectory:

• Long-term locked-in leases already exceed APLD's entire market cap, indicating substantial embedded value for shareholders.
• Leverage to the AI super cycle: APLD is positioned as a landlord of scarce resources (power and data center real estate) in a supply-constrained AI compute market.
• REIT-style business model: APLD focuses on owning and renting out infrastructure, converting capex into predictable operating expense (opx) like subscription revenue, rather than competing in AI model development.
• Anchor tenant backed by Nvidia: Coreweave, APLD's largest customer, is directly backed by Nvidia and has a $30 billion backlog, validating and ensuring demand for APLD's capacity.
• Nvidia's equity stake in APLD: This further aligns incentives and enhances credibility.

Proof of APLD's Trajectory: The presenter summarizes the evidence for APLD's potential as: "APLD is turning large upfront investments into durable recurring cash flows. And it's doing that and compounding week after week, quarter after quarter, year after year." This proof of concept is crucial in the rapidly growing data center industry.

The presenter contrasts this evidence-based approach with investing based on "feels" or "energy," stating that Zip Trader prioritizes conviction derived from tangible proof. The expectation is that APLD will continue to deliver and execute more leases, especially with hyperscalers, given the overall industry demand.

Trading Strategy for APLD: Similar to short squeeze stocks, the recommendation for APLD is to wait for a dip to support, a pullback of 10-20%, rather than chasing the current momentum.

Disclosure: The video mentions that Zip Trader recently alerted another round of APLD calls to Discord members, detailing expiration dates, strike prices, and the rationale behind them.

Conclusion and Call to Action

The video concludes by reiterating the importance of evidence-based investing and the potential of APLD as a data center play within the AI boom. The presenter encourages viewers to consider the presented data and make their own judgments.

A final call to action is made for viewers to like the video and subscribe to help with YouTube's algorithm. A reminder is also given about a 25% off sale for the Discord community, which ends tomorrow, offering access to options alerts, price targets, and the full Zip Trader experience. The presenter signs off, promising to see viewers in the next video.