It doesn't have the same ring as FAANG, but G.U.N=Google. Upstart. Nvidia

Here are our favorite 3 going into back half of year:

1) GoogleDigital advertising continues to dominate search engine usage and has crushed the last 2 quarters on blowout EPS and Revenue growth. We expect 50-60% revenue growth for remainder of year. Google has skillfully integrated Youtube into their business and are making billions from that acquisition. On another front- Google is one of the most advanced (if not the most) AI companies that is likely to continue to challenge others in bringing strong products/services to market. This is a mature company with investments that make it a growth/value play (Youtube, digital ads, and possibly cloud) and put up a absolutely incredible quarter in July- just to recap:

The company reported earnings of $27.26 EPS on 61.8 billion in revenue, far exceeding analyst expectations. Google advertising was up 69% from last year, stemming from retail. Youtube revenue grew 83% from the prior year to over $7 billion. This is without their cloud division delivering impressive profitability, which could really make this stock jump in next 12-36 months.


2) Upstart: Upstart is an artificial intelligence (AI) lending company focused on the automation of loan approval. The process of using artificial intelligence is based on over 1,000 variables. AI is a superior loan product with improved economics that can be shared between consumers and lenders. Since 1989, FICO has been the gold standard for evaluating consumer credit worthiness, which has failed to approve some borrowers based on factors that are part of FICO. Currently, Upstart is also breaking into the automobile loan segments, as they rolled out the service in January. Five of their bank customers will be using their auto loan services, as well. In a CNBC interview, CEO stated, he would not be surprised to see hundreds of customers by end of next year. 

Overall, their growth is explosive and in a 1-5 year explosive growth trajectory. In January Goldman predicted annual revenues of $350M for 2021 and $408M for 2022. They will do north to 750M this year

Currently Upstart is trading in the 13-15x revenue range and we see them doubling revenue next year. 30x revenue is more reasonable of valuation for a company of this caliber, not withstanding their massive auto loan opportunity. We see Upstart growing massively over next 3-5 years and a 1 year price target of $500 within a year.

Their latest quarter may have been one of biggest beats we have seen:

Revenue July 21: $195M (895.5% growth)

Net income July 21: $37.28M (702.03% growth)


3) Nvidia: - This is a story of digital transformation and it is just getting started. We are of the belief the best is yet to come and Jensen Huang at the helm, makes this a MUST have in your portfolio. Nvidia is in the parallel processing world which they happen to specialize in: artificial intelligence, data centers, graphics, virtualization, autonomous vehicles, factory automation and with potential arm acquisition, in mobile. Remarkably, Nvidia started out as graphics card company, where they have 83% market share, but have transitioned into all Internet of Things sectors. Nvidia's sustained growth is remarkable as we look into their latest quarter YoY numbers:

Revenue reported in July 2021 came in at 6.5 billion-up 68% from a year prior.  

Net Income reported in July 2021 came in at $2.37B- up an amazing 281.67%.

The arm holdings deal is set to be decided on by regulators by October 14th, which could catapult this stock to high 270-80s. More importantly, setting them up to be a behemoth. 

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