I Asked AI to Predict My Stock Investment – It Was 100% Accurate

Okay, so I've asked Perplexity's newest finance integration. It's connected with the SEC how to analyze the future trajectory of a stock that we bought back in March 2024. I'm blown away, quite frankly. It has provided a step by step analysis as to exactly why it's done well, but also it has provided the analysis of maybe three or four people in less than 10 minutes as to why it's going to continue to do well. Let's take a look. So I asked it. I bought Daddy GoDaddy in March 2024. Can you please explain whether it's caught future earnings expansion potential and whether it will continue trending higher based on current holders and research? I spoke to it. That's why the grammar's rubbish. But it doesn't matter. It's still perfectly picked up exactly what I wanted. So it's patted me on the back here. It says your March 2024 investment in GoDaddy has proven highly successful, delivering approximately 64 returns over 15 months. Yes, it was. We got a little bit less because we were in and out, but that's because we risk manage it. The stock has not only caught up, but has significantly outperformed market expectations, supported by strong fundamental improvements, including AI driven customer acquisition margin expansion and robust cash flow generation. With analyst price targets ranging from 214 to 240 bucks and continued momentum in applications and commerce growth, the investment thesis remains compelling for future earnings expansion. So it just carries on like that. But these are the things that I was so impressed by. It creates charts out of thin air and they're fantastically branded charts. Some of these charts are better than things that I've seen produced by people doing it themselves, whether it's on Canva or whatever with actual designers. I'm going to show you the next one. It's ridiculous, but the way that it breaks it down as a story as well almost is brilliant. I mean, it's using examples and comparisons here. The stock's trajectory has been particularly impressive when compared to sector peers, with GoDaddy returning 51% over the trailing 12 months versus the Zach's computer and technology sector 7%. It's saying 51% over the trailing 12 months, not from where we bought it. If anyone wants to talk about a discrepancy there, this outperformance stems from the company's successful execution of strategic initiatives, particularly around AI integration. And it just kind of continued that bit. But this is the bit that I was completely astounded at. This is ridiculous. Like I Don't know the customization here as to what you can do. Can you tell it to show it in green, red, whatever. But this is fantastic and it's correct as well. I'm just like blown away here. It's creating a full report out of basically nothing. Let's keep going. Those companies profitability metrics have shown remarkable improvement with normalized EBITDA reaching 364.4 million in Q1 2025, a 16.4 increase from the prior year. Yep, this is one really, really strong thing with GoDaddy. They keep increasing pretty much everything as you can see from the there up from previous levels demonstrating operational efficiency gains. Fantastic. That's what you want to hear from the stock. Any operational efficiency gains means thicker margins, more earnings. This margin expansion represents approximately 900 basis points improvement massive over the past four years indicating sustainable operational leverage in the business model. I mean look at this. Are you not absolutely mesmerized by this? This has done this within four minutes. Four minutes. I couldn't do that in four minutes. I couldn't do that in an hour. I'm at making graphs on, on Excel and charts. But look this like even being able to take it. 900 basis points of cumulative margin expansion. This is why I'm saying this is like financial analyst level but coming from an AI, it's not a difficult concept but just to display it in this way rather than oh yeah, this is, you know, a certain revenue increase. It's almost like being promotional which is fantastic. That's what you want from a company. You want, you know, a presentation based on financials to almost be promotional in that way, sort of showing the best side of the data. That's the way that I look at things anyway. Especially when you want to make an investment case cash flow generation remains robust with free cash flow of $1.4 billion for full year 2024 up 20 year over year. Unbelievable. Such a good company. Now this is the most impressive bit. If you're impressed already, this is literally the most impressive bit. The earnings expansion potential for GoDaddy appears substantial. Love that. That's why I'm so long it driven by several key growth factors that position the company for continued outperformance. Company's AI platform GoDaddy Iro Aero has gained significant traction with 50% of paid subscriptions now originating from Iro's experience. People love AI clearly demonstrating that AI integration is effectively driving customer acquisition and improving customer lifetime value. Who said AI is useless? I mean this is just, this is what you want to hear really. GoDaddy's applications and commerce segment represents the highest growth and highest margin opportunity with segment a bit to margins of 60 46.7% in Q4. Fantastic. Love it. But again look, you know it's creating charts on the fly. It probably could be a better scale here but also it's not that bad. It kind of shows it right. It's not, it's not a big deal. Wow. Okay. It's taken that from bar chart. Insane. Didn't know that. So if you look at the outlook here, investment thesis for continued upward trending seams appears well supported by multiple fundamental factors. GoDaddy's transformation but domain registrar to a comprehensive small business platform that's very interesting positions it to capture expanding wallet share from its customer base. I love that Wallet share. I've never heard of that before. That's brilliant. Fantastic. The company's customer retention rate of approximately 87% that's unbelievable as well. So this is why I like godaddy because people just don't deviate from it. You know when you talk about domains you go straight to godaddy generally. Fantastic. The company's strategic focus on cost optimization and profitability enhancement combined with organic growth initiatives creates a favorable setup for earnings expansion. Love that. Management's guidance for continued margin expansion. Targeting ebitda margins around 31% provides clear visibility into profitability trajectory. A company that is targeting 31 margins on effectively, you know, their earnings, what more could you want? That's the case made. They keep expanding earnings while maintaining that margin. The share price has to keep going up and this AI feature I think provides that multiples expansion for them. Look beyond that. Anyway, you know it's saying here that there's a a price target suggesting 19 to 33 additional upside potential fundamental trends support and sustained momentum in the applications. Whatever it looks, it looks compelling as a case. But I think the key thing for me here is this AI platform from Perplexity and this integration has literally streamlined everything in one go. You can see that it's a fantastic display of how an investment report should really look. But I think the most mind blowing thing for me is really the charts and the ability for it to pull all of these together. This is literally writing an article for you. It's fantastic. But the thing is that the benefit here is that you can add so much of your own desired context to it. I think that's the real key. Let's see what happens if I say okay now can you please include any competitive risk from other companies in the sector versus GoDaddy, who is the biggest competitor and is there a real risk of them subduing godaddy's share price? Right, let's see what happens there. Right, it's creating a plan. Let's see how quick it takes. It says nine minutes. It didn't take nine minutes before. It's about one. So let's have a butcher's and see. It might take a little bit longer here. This for me is fantastic. Look, I'm not the smartest cookie at doing all data analysis and you know, this, that and the other. If I'm able to trust this with, you know, how you would normally do it in a test you would look at this and then you say okay, well is this correct against the actual, you know, report or earnings, whatever I've checked it is. If this can speed up and help me to understand things where my big, big blind spots are, that's fantastic. You know that, that it basically allows you. And I think that's the key thing about what I, what I, what I'm noticing with this. I've played with it for about half an hour already. But what I'm really noticing with this is that it really opens up your blind spots. It allows you to delve into things that you probably don't have the required knowledge of. It seems very objective as well, which I quite like. It's not, you know, confirming anything. It's, it's just trying to show you the information and produce it in as best a way as possible. I'm excited by it because as I said, it can really, really open up people's, people's blind spots, especially if you're a beginner. The thing is though is that it's interesting because you have to know what questions to ask it, of course, and that's where expertise comes in. That's where understanding what makes money in markets comes into things. And that's where, you know, trying to push it in the right way to understand, okay, well should I go down this, this avenue with my research or should I go down that avenue? Which avenue is going to provide me with the actual actionable and profitable pathway here? You know, is there a point in asking it, you know, is it susceptible to interest rates or not? Don't know. Is there a point in it asking perhaps what are the time lags associated with interest rates within the is it applications and commerce industry? That might be a more pertinent question because AI is then able to say, ah, okay, between this period and this period and this period and this period the share price went lower because interest rate expectations are increasing. By this way you need to know these things to be able to prompt it in the right way. Here we go. So we've got GoDaddy competitive risk analysis, threats to market position and share price. GoDaddy faces substantial. God, we don't like that. We love that. I love when there are substantial competitive pressures because what that means is that the market is good. It means that the market is experiencing capital flows into it. People want to desperately get involved in this market. Whenever someone says oh, who's the competition? Oh, I don't like that there's too much competition. That's the stupidest thing to ever think about when there's loads of competition. It means that people want that product or service. It means that you should, you need to be in that market because it means that money is going to flow to you. As long as you build an okay product and you put it out there and you market it, it's going to get capital going to it. So we've got Amazon web Services. I don't consider them a threat even in this because they already take up so much anyway. They power so much. I think they are in a different bracket to them so not really a threat. And as we can see, look, GoDaddy's second anyway. Being second to Amazon is a good place to be in, a very, very good place to be in. And they're second by a wide margin as well. The Second by what? 200 and. 226 basis points. Fantastic. AWS's threat materializes primarily through its ability to offer enterprise grade hosting solutions at competitive prices. Shopify represents the most direct threat E commerce platform. Specialized focus on online retail gives it significant advantages in serving merchants who need comprehensive selling tools. So AWS has the biggest threat, Google Cloud as well. And Shopify. If you wanted to basket these stocks together that could be a good play. Not only because you're quite diversified across different verticals and whatever then, but also because it's nice and concentrated. So you could buy Shop, you could buy Google, you could buy Amazon and you could buy GoDaddy. That could be a very, very lovely basket to hold. It really could be. And then you're also hedged out of the competitive risks. Seeing this, this brilliant bubble chart has just shone up some ideas in my head. So again another plus for AI. This is fantastic. Wow, look at this. So this is giving you a threat impact on the different segments. Okay so we've got threat type E commerce cloud infra website Build domain reg, AI, no code and social media core platform. So domain rig it wins. Cloud infra it's winning as well. E commerce, it's down, website build down. But I think for GoDaddy, Domain REG is absolutely massive. Right. The no code movement could particularly impact GoDaddy's applications and commerce segment as businesses gain access to sophisticated E commerce tools without requiring traditional hosting services. While current no code solutions have limitations in handling complex requirements, they're rapid improvement. Trajectory suggests they could capture significant market share. Brilliant. That is another growth factor. No code is still in its infancy. I think if we see something that's still in its infancy and yet they're trying to build on it, you know their, their AI row or arrow, whatever the it's called, that's brilliant. Immediate share price pressures. Now this is where we can discount things if we know certain things about the market. Let's have a read. Several Factors could pressure GoDaddy's share price in the near term including including continued market share erosion to Shopify in E commerce and pricing pressure from budget competitors like Hostinger who has achieved 57% growth while offering lower prices. That could be an interesting company to look at. I don't know if they're listed though. Market share erosion represents the most significant medium term risk, particularly as competitors like Shopify continue growing at three to four times Godally's rate. I think though that this isn't necessarily that big a deal purely because Shopify does operate in a different vertical really. Loyalty massive one market leader, huge one. Like these things don't just go away in the short term which is why when they're talking about, you know, erosion of market share, I think you can maybe discount that a little bit, especially in the short term. Financial strength is another massive, massive thing that investors are going to look at. Why are they going to pile so much capital into a prospective and really, really speculative bet on a smaller company that hasn't necessarily created the legacy that GoDaddy has. One of the things that we talk about in the finc academy is legacy. Especially when it comes down to US companies that are trading at a big, big discount. They're a massive large cap US company and they're trading at a large discount for maybe a spurious reason. You probably need to find a reason to get along them. While GoDaddy faces legitimate competitive threats that could impact its share price, the risk of competitors can completely subduing the stock appears moderate rather than severe. Shopify poses the highest risk of growth prospects in the applications and commerce segment while AWS threatens market share in hosting services. However, GoDaddy's domain leadership, strong customer retention and improving margins provide defensive moats. Love defensive moats. That should support continued profitability. The most likely scenario involves continued but gradual market share pressure rather than dramatic disruption suggesting potential share price volatility but not collapse. Investors should monitor competitive responses in AI development companies. Diversified revenue stream and strong financial position provide cushions against competitive pressures through growth. Though growth rates may moderate compared to faster growing competitors like Shopify. That's all fine though. The fact and what we can take from this entire study in my view is that they're looking to maintain that 31 EBITDA margin that everything is basically expanding and it looks like their AI services are really continuing at a good pace. Now there's a really nice phrase that I like which is during a gold rush, sell pickaxes, don't know who made it, I'm gonna steal it, even though I definitely did not create it. And this is basically what GoDaddy are doing. You know, if you think of some of my favorite stocks, Caterpillar, they make diggers. They literally have a duopoly maybe with JCB whereby they are, you know, the primary and a couple of others of course, maybe not geopoly, then oligopoly. They then have, you know, that, that ability to be selling the tools to the people doing the constructing, digging the holes, spending all the expensive capital on those things and taking on all the risk. There's far less risk with making diggers than there is with creating land developments. Okay, I think this is where we can start really thinking about other avenues. And what I mentioned before about the macro side of things is with regards to interest rates. So let's have a think about that and let's ask it some questions. So what are the risk of interest rate volatility on GoDaddy? Can you note any time lags between share price declines and rising interest rates expectations or even the opposite? What is the verdict on interest rates and GoDaddy shares? Perhaps include something to do with the consumer expectations within the applications and E commerce segment. Let's ask you that really long question and what I can do in the meantime is have a rant about interest rates I guess. So where are we in the interest rate cycle? Well, we seem to be ticking down. We had NFP today, 136k beat expectations. Brilliant. This is what we want. We want Goldilocks scenarios, we want growth positive, we want people in work. Because really the biggest risk to the US economy at the moment is unemployment. Ticking higher. And we get that rate volatility because the Fed has to go, what is going on? That is basically my base case for the US Economy. When we start getting that and when we start really thinking about, okay, what does macro data mean? Macro data, if it's shifting too fast, creates surprise. What does surprise create? You know, uncertainty. What does uncertainty create? Spikes up in volatility. So we already had a big, big spike in volatility, naturally, stemming from the tariffs. And also, don't forget, at the start of August last year, we had a massive spike in volatility. Not as big as the tariffs, however, it was still very, very big. So we've had two major spikes in volatility quite recently, which in my view, if we look at things from a statistical perspective, we shouldn't really be seeing that many more. And I think this was highlighted, actually, from when Trump put the 50 tariffs on the EU. And I think the Vix went up to like, 28 previously when it had occurred back in, in, in March, April, when the market went bananas. Oh, sorry. No, it was, it was May. It was early May, wasn't it? When the market went bananas? You know, the VIX has spiked up to 60. What that means is that there's fatigue over that narrative. They, you know, they don't really like the narrative anymore. It's boring. They know where the bands were. It's going to be 145. It was brought down to 25. Now they're still discussing, you know, the approximate ranges of where tariffs with China will be, for instance, and what we need to try and work out here going forward, the US Economy is how subdued is the unemployment data going to be? Are we okay? Are we not? The interesting thing is that from today's nfp, we've seen that federal jobs have been going down, government jobs have been going down and decreasing, while private sector jobs have actually been increasing. Now, during Biden, it was largely the opposite. During Biden's tenure, what we saw from 2021 was actually we, if, if we had taken out, I think, most of the federal jobs, we would have seen actually a relatively big unemployment spike. We would have seen NFP negative for many, many months. And that's even, you know, if we discount the revisions lower. So even with the higher numbers that we kept seeing, seems like there's lots of data issues with, with, with data agencies these days. If we'd have just kept the higher numbers, we still would have seen negative NFP without those government jobs. And obviously with Doge, with Trump and Musk, deciding to, you know, get rid of a lot of government departments, you know, get rid of foreign aid and things like that, U.S. aid, I think we've seen that tick down. Now naturally there, there could be a time when we do see like mass redundancies out of absolutely nowhere. But still earnings are robust. Earnings are still going up and I don't think there's necessarily the requirement to do that. Credit card debt in the US is still very low. Delinquencies are very low. It's well, well below 2008 when we had the big credit crunch. Maybe there is an issue with car loans. We see a lot of Americans with, you know, thousand $1,500 car loans for no reason. You know, they buy a car at 100 grand and they're paying back over five to 10 years, like 150, 200 grand. You're thinking, oh my God, what are you doing? So there's definitely an issue there. Santander is a bank actually that doesn't check many of the validities on income. So they have been an issue for a good 10 years now. So there's a couple of things there. I'm not saying, you know, any of this is actually going to happen, but unemployment and, well, generally the employment situation is the most important, important factor. Today's NFP has provided a perfect time actually for the market to tick higher because it's roughly around loads of moving averages 200 day, it's just above on the ES. So S&P 500. If you look at it on the Futures ES Mini, it's above the 200 day and above 2050 as well. So it's a perfect pocket for the market to shift higher. Let's have a look at what AI has done so far, investigating the relationship between interest rate changes and stock market reactions, including how interest rate expectations influence stock prices and the timeline of Federal Reserve policy transmission. Love that. If you didn't know the actual Federal Reserve policy transmission takes between 18 and I think it's 60 months for it to actually start feeding through to the economy, which is insane, right? Everyone was saying, oh, we need to cut rates now. Markets respond, the consumer doesn't. Consumer responds way, way later. Need to analyze simplified timeline. Go Daddy's debt exposure. Nice. So we're introducing now some more fundamentals. We're looking at debt, we're looking at interest rate sensitivities and how that might affect things. Right, here we go. This will probably be the last bit, but this is, this is interesting. So interest rate volatility and Godaddy risk assessment time dynamics and consumer impact analysis analysis. GoDaddy's relationship with interest rate volatility presents a complex picture that defies conventional wisdom about technology stocks and borrowing costs. Interesting. Let's see. Despite carrying substantial variable rate debt exposure, the company has demonstrated remarkable resilience during the Federal Reserve's most aggressive tightening cycle in decades with its stock gaining 64%. We know that because I've been longing. The analysis reveals nuanced timing dynamics and sector specific factors that significantly influence GoDaddy's performance beyond traditional interest rates rate sensitivity models. Brilliant. So we're insulated from interest rate sensitivity and if it's appreciated while interest rates have been going up now, there's going to be a big caveat after this. It should really benefit the stock as well when it goes down. However, it does matter the reason as to why interest rates are cut. Of course, if interest rates, you know, meet a gradual path downwards, you know, we might get a 25 basis cut every six months or something because we, we can just do that. But if we're going, you know, 50 basis points a quarter, oh no, why are we doing that? Why are we cutting 50 basis points here? Is it because people are losing their jobs en masse? Does it mean that we have to really, really liquefy the economy? These are the questions that you have to ask yourself for these things. So if we go into debt structure and interest rate risk. Odali maintains a total Debt load of $3.8 billion a year as of March 2025 of approximately 65 consisting of variable rate debt tied to secured overnight overnight financing rate plus applicable margins. Right. So they've got a hedging strategy that mitigates much of this exposures through interest rate swap. So they've hedged 79 of its variable rate debt. This leaves only 514 million as unhedged variable rate exposure. We don't even need to read any more of this. I'll tell you why. Because they've nullified the issue of interest rate risk. They've effectively whoever is their CFO is a legend. And you start to then be able to piece together from understanding things like this about companies, you start to piece together, okay, the team and the board actually know what they're doing. This isn't an uncommon thing to occur to happen. But with the trajectory of the share price, with margins being as they are, with all of these factors of increasing financials quarter over quarter, it just gives you a good sense of the company that they're stable, they know what they're doing and it's unlikely that there's going to be any considerable volatility that is going to cause the share price to decrease in the future based off of their actions. There could be external factors, there could be anything that happens. You know, competitor comes and you know, completely wipes them out. Fine. But from an internal perspective of doing the right things, these are the things that we can look for. They've only 100 basis point increase in interest rates would result in approximately $5.1 million in additional annual interest rate expense. That is so, so, so low. Oh my God. That is unbelievable. That is unbelievable. That is fantastic. No wonder the stock's gone up so much. Jesus Christ. I didn't even know that before I bought the stock because it looked lovely and it was part of our strategy that we use, obviously. During this 14 month period, GoDaddy stock surged from 106 bucks to 180 bucks. Yep, we were holding them through there while borrowing costs remained at peak levels. That is the beauty of hedging. And anyone who is a CFO or a treasurer or owns their own business that has significant exposure to FX rates, for instance, come and chat to me because this is what I help with as well. Not so much in the interest rate swap space, but in FX hedging. What is this showing? Small business investment patterns. Wow, that's a great chart. Again, this is perfect from AI, you know, showing us exactly what we need to see because I asked it, what are the effects on the consumer? The applications and commerce segment which generates the Highest margins at 46%, 6.7% EBITDA and grew 16.5 year over year in Q1. 2025 demonstrates distinct sensitivity to interest rate environments through its impact on small business formation and digital investment patterns. Small businesses represent GoDaddy's core customer base of approximately 21 million customers globally and their investment decisions in website development and E commerce capabilities directly correlate with interest rate cycles. Lovely. Consumer confidence surveys indicate that spending intentions on discretionary items remain remains subdued even after rate cuts begin as households prioritize debt reduction and savings rebuilding. We have noticed that, so we saw a tick up especially at the start of this year in our model for growth, which is basically a playoff of consumer discretionary versus consumer staples. Consumer staples are well bid at the moment. I really like Walmart, Costco as well. Target not so much, but Walmart and Costco are good selections in this specific environment. If you. It's nice for 2025 basically, especially with Trump's bring back America kind of volatile, kind of insane, that kind of thing. So the. Yeah, it's basically saying what I've already said. GoDaddy's performance during the recent cycle demonstrates that sector specific factors can override the broad macroeconomic relationships to do with monetary policy transmission channels. So changes in interest rates that would generally affect other companies aren't affecting GoDaddy in the same way. Explains it here. So doing it from recurring revenue from domain registrations, high customer retention rates of 87 massive. And the essential nature of digital services. But I think the key thing here is internally if you take it from a decision making perspective, they got very switched on people. They've hedged their interest rate exposure massively which is excellent conclusion. Let's skip this bit. We know this bit as well. We've spoken about Ira already. The comprehensive analysis reveals that GoDaddy's relationship with interest rate volatility is far more nuanced. And by nuanced it means they're insulated from interest rate volatility. They're a fantastic company. They know exactly what they're doing with their balance sheet. Timing Dynamics show that GoDaddy's stock performance often leads rather than follows interest rate expectations, suggesting that investors focus more on the company's growth prospects and competitive positioning than on borrowing cost fluctuations. Perfect. We can just focus on what they do as a company and not on what the macro variables do. Macro tells a nice story for some companies that aren't hedged. Yes, you have to focus on it massively for godaddy you don't have to. You can ignore the macro. You can focus on moving averages and that is it. Why don't we do that? Focus just on moving averages. And I've got an idea after this video as to what I'm gonna what I'm gonna be focusing on as a basket going forward. I've got a very, very interesting perspective of this. Let's cap this off for investors. The evidence suggests that interest rate volatility represents a secondary consideration for GoDaddy relative to execution on growth initiatives, market share expansion and technological innovation while refinancing risks in 2027 merit monitoring. The company strong fundamentals and essential service positioning provides substantial protection against interest rate driven volatility. So let's think of GoDaddy. Fantastic margins, fantastic earnings. Clearly got a very, very smart board. They are insulated from interest rate volatility which basically means that they're interest rated kind of in a way directly from a lot of macro factors. As long as unemployment stays good, we should really see that GoDaddy remains supported from exogenous variables like the macro environment. Now, speaking about the AI, can you see why I'm so impressed by this? We have been able to take a view on a company that we're already involved in, that we know the fundamentals of, but then to reinforce our view of that, I think this is possibly going to be one of the biggest game changers for retail investors who, as I've said, have many blind spots, me included. I have so many blind spots you have no idea. But the ability to walk through a story and walk through a narrative and just keep asking it questions and be shown exactly what you need to know and also things that you didn't know that you needed to know. There's about four charts there that I didn't know that I needed to know. It's unbelievable. This is why if you go to the effort of understanding the things that, you know loosely drive markets and the questions that you need to ask and you can learn all that by going through the Think Academy. Absolutely. Then you're able to craft your own thesis as to what you do going forward in combination with the understandings of how to execute the right trade, what to actually look for from a momentum and a trading perspective and a trending perspective. But I really, really hope this was useful. That was really fun. That was so enjoyable. And yeah, any questions hit me up on any of the socials.