0:00 With Nvidia becoming the most valuable company in the world, it is no surprise that everyone's asking a very logical question. Where can I find the next Nvidia? Well, Wall Street thinks they found it. They're saying quantum computing stocks could be the next big payday for investors. Now, today we are going to break down three quantum computing stocks that are all getting attention right now and show you why they might or might not be the opportunity people think they are. We're going to marry the story and the numbers together, assessing the quality and then the price of the business. Because at everything money, it's never about chasing the next hype cycle. It's always about building a system and process that's going to help you make sound investing decisions for the long run. So, Tip Ranks put out an article that's
0:47 getting a lot of attention. It's based on picks from VJ Rakesh, a top rated analyst at Mizuo. In this article, he makes the case that quantum computing could be the next breakthrough tech. In simple terms, quantum computers don't process information like the regular computer you have at home or the office. They process massive amounts of data all at once, making them drastically faster and far more efficient. Now, Rakesh believes that quantum computing could see 10,000x performance improvements and the total adjustable market growth from 1 billion in 2025 to over 200 billion by 2035. That is 200x growth in 10 years. Now, the three stocks that he has
1:33 flagged as strong buys are Regetti, which is a superconducting quantum player that's building its own chips. ION Q, the first pure play quantum stock on the NYC, focusing on networking, cyber, and sensing. And finally, D-Wave, ticker symbol QBTS, the original pioneer. They're all in on quantum annealing, which is different from the other two, and are now trying to move into gatebased systems. Doesn't that sound exciting? But here's where we need to slow it down because this is where real investors start asking the important questions. I'm here to remind you, price is what you pay, value is what you get. That's the single biggest thing that new investors miss. They confuse a great story with a great investment. Guys, our fifth and most
2:20 important tenant of principal driven investing is a great story becomes a bad investment if you pay the wrong price. So, let's analyze these stocks and see if the numbers and the story align together. All right, so the first company we're going to break down is Regetti, ticker symbol RGTI. They're a superconducting quantum computing leader. They're actually building their own chips and selling full systems in working with Amazon, Microsoft, and even the Department of Energy. So, what part of that sounds bad? Nothing great so far. Now, I don't know how big their business is with Amazon and Microsoft Department of Energy, but that's the point of my process. My process is to kind of start from the top and go my way down until I have to get into the more nittygritty detail. Now, they've got
3:06 serious momentum. They have 18 systems deployed and new technology boasting a 99.5% gate fidelity. What does that mean? I have no idea, but it sounds really good. And they're even aiming for, you ready for this one? Over a,000 cubits by 2027. That sounds like real progress. But let's remember progress does not mean profits. And to be honest with you, it sounds like Greek to me. And it probably sounds like Greek to you. And remember, one of the other principles, the tenants of our principal driven investing is if we don't understand it, we don't buy it. With that said, I'm not telling you to understand the technology. I'm not understanding to understand what Quibbitz is and what all this stuff is and a kneeling and blah blah blah blah blah. What I'm asking you to say is, can
3:52 you translate this into what you can foresee in the future for this company? That's what matters. I don't need you to be able to figure out how to to take a line from Tommy boy. I don't need to take my head up a bull's ass. I just take the butcher's word for it. I don't need you to be in the company in the factory saying, "How are you putting this car? How you doing?" No. But it's about understanding, is this applicable to a market? Does that market have a lot of potential? And if I pay today the price they're asking, can I get a good return on that? That's it. So all this other these other words, they're great. They're awesome. Don't be upset if you don't understand them. I don't either. Frankly, I could not care less. Now, analysts are forecasting massive topline growth. That means revenue growth. But the question becomes, will these companies continue to burn cash and
4:38 dilute shareholders as they build out their future? Guys, the cash burn is easy to explain. Diluting shareholders is something that a lot of people skip in their analysis. But luckily for you, we're one of the only, if not the only YouTube channel who cons who talks about this ad nauseium. What this means is when companies want to raise money, they have two ways of doing it. They can either borrow money, which is take on debt, or they can bring on more investors, which means issue more shares. Now, the problem with issuing more shares is if you're a shareholder before that, you get diluted. So, let's say a company has 10 shares outstanding. You own one. You own 10% of the business. They need to raise some money. So, they issue five more shares. They go from 10 shares to 15. Well, guess what? about how many shares you own now. You
5:23 still own one, but now instead of one out of 10, you own one out of 15 shares. You went from 10% ownership to 6.66%. You have been diluted. That's a problem for a lot of these small companies. They're growing. They dilute the hell out of shareholders. So, let's take a look at this company year to date. It's up 13% up 130% in its history, guys. $7.4 billion market cap. But good news, they make a ton of money. Just kidding. They did revenue of 7.5 million. Guys, I've got a thousand apartments upstairs. That's one of my four really successful businesses. My apartments alone do more than that per year in revenue. Now, does this company have more potential in the short run than my than my company? Absolutely.
6:09 So, we can't discount the fact that the future has a lot more potential. But when you're burning through $70 million a year and when you have net income and negative home 350 and you have all these other numbers which aren't very great at some point people will say where's our profit because not everything's going to be like Amazon where they lost money for 17 18 years before they made a profit because they were massively growing. This is 7 and a half million in revenue. Let's go look at their revenue by year financials income statement. Oh boy. Actually, it's not good. 735,000, 8.2 million, 13 million, things are looking up. 12, 10.8. They're actually declining now. I don't know why. I have no idea
6:54 why. But guys, look at a company like Microsoft right now to look at another metric. A good way to compare companies within an industry, actually, let's go to Nvidia. Nvidia is very expensive in my opinion, but a way to compare chipmakers, look at their price to sales ratio. It divides their market cap by their revenue. Nvidia is at 22.85, which is hefty for a company like this. Let's go back to our good friend Regretti Computing. Good news, guys. It's at 986. That is 45 times more. 45 times more. Again, who has more growth potential from today? We're Getty. But at what point is it too expensive? Now, we
7:39 talked about dilution. Let's go back to our income statement. This is where the problem is. And I'll actually show it to you in our eight pillars here. They have increased their shares outstanding by 185%. Guys, that's not 1.85 times. That's 2.85 times more shares. So, instead of 10 shares, they now have 28.5. Instead of you owning 10% of the business, you now own about 3% of the business. So guys, what I'm seeing so far is a little worrisome, a little scary because you've worked hard for your money and your goal is to put that money to work for you, right? Well, the biggest wealth destroyer I could ever imagine is overpaying for companies, trying to chase the next hype. This is starting to feel like maybe it's that.
8:25 Now, it doesn't mean that it's for sure that. Listen, we always hear about the stories about the companies like Amazon, but remember that's called selection bias. We only hear about those stories because we're those are the ones that succeeded. We didn't hear about the 10,000 other ones or the thousands of other ones that didn't make it. That's the big key here. Look at electric vehicles. Do you guys even remember how many electric vehicles existed six, seven years ago? How about auto companies in general since 1900? Thousands and thousands and thousands and thousands of auto companies and airlines have gone under when they tried to grow. You've worked hard for your money. This is why I want you to listen to this. I don't want you feeling overwhelmed. I don't want you feeling alone when something doesn't make sense to you. There's a reason for that. I want you to learn these things. I want you to learn what all these metrics mean because this will help you in your
9:11 investing journey. It's important that these things are there for you so you can understand how to look at a company. And I've made it very easy. We have an absolutely free cheat sheet that'll explain all of these metrics to you. Just click the link below. It'll be sent to you within a matter of minutes. It'll give you access to all of these, what they mean, how they're calculated, and how they're important. That's really important for me because this is why I teach on YouTube. I don't want to just be spitting out, go buy the stock, go buy stick stock for two reasons. One, it's against the law. And two, I'm trying to teach people how to fish. I want you to apply what you know. There's somebody out there watching this video right now, probably multiple people who are experts on this. I am not. So when you apply these same ideas to this kind of company, you're going to do extremely
9:56 well. What if this company hit it huge and all of a sudden they're generating 10 years from now $5 billion in revenue and they're generating a billion and a half in profit. Okay. Well 1.5 billion in profit times 20 for a multiple is a $30 billion company. The company's currently seven and a half billion. So you can forex your money in that time, right? Maybe because remember the one thing I talked about. First off, Forex, is that enough for a company like this? This is a very risky company. I can't even put assumptions in here. I don't know what anything's going to look like here. And to go from 7.5 million to 5 billion in the next 5 years, 10 years, whatever the number is. That's a very difficult. If you had a 100 companies there that were like this, how many would make it there? Would even one make it? Do we need to go to like a thousand companies before four
10:43 or five make it? My whole point is the story is awesome. They got a lot of potential. But for everyone that makes it, how many don't make it. You've worked hard for your money. It's okay to make 7 to 10% returns a year and let your money work for you. This is too difficult to understand the future. I have no idea what their future looks like. And even if I did, that dilution scares the crap out of me because in order for this company to get to the billions in revenue, they're going to have to burn through tons of cash. and they're going to burn through that cash by issuing more shares. So guys, I just can't do stock analyzer. I think it'd be damaging for the process. But don't worry, I am going to do stock analyzer on a stock very shortly. Now guys, I want you to remember the best investors don't try to pick home runs or shoot for
11:29 the stars. They eliminate bad investments first. They focus on the ones with real value, avoiding hot trends like EVs and meme stocks in 2020, which can destroy wealth if you pay the wrong price. The story behind Regetti right now is intriguing and exciting. It has investor attention, but as we've seen, the valuation is heavily disconnected from the fundamentals. Ion Q and D-Wave look very similar. They're investing in the future, but are producing very little revenue, massive cash flow losses, and issuing tons of shares. This makes it very hard as an investor to make a realistic assumption about the future. Warren Buffett says, and I'm paraphrasing here, your job as an investor is to pick a company where you can reasonably understand how much they're going to make in the next 5, 10,
12:17 20, 30 years and pay a reasonable price for them today. We don't know where this company's going to be. In fact, if you're a betting person, this company's probably going to be gone in the next 5, 10 years. Could they make it? Absolutely. But if you have a hundred companies like this, how many of them they're going to be gone in the next five or 10 years? Look at all these people out there. So guys, I want to show you a different stock. One that has the attention of our community members, not because of hype, but because of fundamentals and value. And the reason I want to show you the stock that our community loves so much is that you can see a stock that really has a lot of potential when being analyzed. Now, that company is PayPal. And guys, it's a stock I own. But remember, never buy a stock because anybody in the world, I don't care if it's a YouTuber or Warren Buffett, say to buy it. Your job, our
13:03 job here is to teach you a process and your job is to apply the things you understand to companies you can understand. Now, PayPal is transitioning from a pure payments processor into a broader commerce and financial services platform, driving consistent, albeit not very exciting, revenue growth with digital payments, with Venmo, and with buy now pay later services contributing meaningfully to its volume and earnings. In addition, management has outlined a multi-year plan targeting accelerating transaction margins and earnings per share growth through 2027. In recent weeks, we've seen PayPal announce a strategic partnership with Open AI along with announcing its application for a US banking charter as they look to
13:49 strengthen their reach and deepen their integration. Now, I want to show you guys how disciplined I am, and I'm not saying that to pat myself on the back. Dalton, our in-house analyst, sent me a a Twitter screenshot. Remember, I own PayPal, but the one thing I always tell people is I don't understand banks. When he sent me the Twitter screenshot that said they've applied to be a bank, I said, "Might be time for me to reconsider." Not because I think PayPal is not a good investment. Because the second you become a bank, the numbers change completely. The understanding changed completely. The analysis changed completely. Now, if they don't become a bank or until they become a bank, I'm going to write out whatever I think is correct. That's really important to understand. Now, PayPal in the meantime is a 57 billion market cap business.
14:37 They've got great margins, 46 47% gross margin and 14 to 15% bottom line margin. But here's what I like even more. Higher free cash flow than net income. They're selling currently for 10 times free cash flow. 10 times free cash flow. PayPal, the owner of Venmo. They're not sexy, but they are still growing. I want to show you guys these numbers because the the issue that people had was the growth story. 6.7% per year in the last three years, 10% a year in the last five, 14% in the last 10. And yes, they did make six billion acquisitions along the way. Our community members have an intrinsic value on this bad boy at 95 and have it as a buy. Now guys, I want you to keep in mind, you're probably thinking, "Well, yeah, cuz Paul owns it." Guys, there are companies that I own in here
15:23 that everybody has a hold or a sell. There are companies I don't even touch and everybody has a buy. This is what I love about our community. It's literally independent thinkers who who are okay thinking for themselves and being different. That's how you're successful at this. So, let's go check out the eight pillars on this company. Eight pillar thriller. And the biggest ones, the most, and by the way, they're starting to buy back more and more shares. bought back 19%. A lot different than Regetti. They've bought back 20% of their shares here, while Regetti has almost triple the number of shares they have. Now, buying back shares in and of itself is not the beall endall. It's not great, but I like the fact they're buying 10 times free cash flow shares back. Returns on capital are getting better. Return on equity is high. By the way, the return on equity is a big metric for banks. They have a high
16:09 return on equity. So, that is awesome. Now, let's see what analysts think about the company. Well, steady growth here. This is earnings per share growth. 16% 9% 13.5 17. And guys, what's great is as long as the stock stays low and they keep buying back shares, these earnings per share will keep going up and up and up. Even if they only grow earnings 6 7% a year, if they're buying back enough shares cheap, their earnings per share will go up 10 to 12% a year if you buy enough shares back cheap. And for this dying company that has 5% 6% 7% 6 and a half and 7% revenue growth. Last time I checked, that's not much uh that's not what dying companies do. But again, the perception has changed. Why has the perception changed, though? This is what
16:55 I want to show you. This is the chart. This is a $310 stock. Now it's not. I saw this and said, "But wait, the fundamentals didn't plummet." And when I saw this, I was like, "But wait, the fundamentals didn't 3x, 10x, whatever this is, 3x, 4x." This is what I do as an investor. I see a big price change and say, did the fundamentals get that much better or worse? That's what's important. So now we have a story-ish, we have numbers, some numbers. I always tell people, start with stock analyzer. Put in reasonable assumptions for low, middle, and high. That way you figure out should I go spend more time on this or not. So I go to PayPal. The last time I did PayPal, I did a 10-year analysis.
17:40 Now guys, revenue growth four, six, and 8%. Nothing to write home about. Slow and steady wins the race. Profit margin. I did 13, 14.5, and 16. But we're going to focus here on free cash flow. I did 16, 19, and 22 because the last 10 years they've averaged 19%. 22 is if they keep growing their if they can if they can get their high eight n% revenue growth with their good gross margin they could start pushing 22%. Now what is the PE and price of free cash flow 10 years from now? Now those of you who've been in our community for a while probably wonder where's the old pees guys I saw people getting too attached to what the current PE was. If the current PE is 10 I don't want you putting in 10. Why? Because what I want you to think about
18:26 is, okay, the market average is 15 or 16. You should pay higher for great companies, lower for bad companies. All right, so what makes a great company? Increasing returns on capital, good margin, buying back good shares, good management, etc. So I look at this saying this is probably a pretty decent company. I put 16, 19, and 22 times earnings and free cash flow. And then finally, what is my desired return? Well, I always do. What's the intrinsic value? Nine or 10% return. But remember, if you want to buy an individual company, you have to put in your margin of safety, which means a higher desired return. How much higher? I don't know. That's up to you. How much do you trust PayPal? How much you know PayPal? How
19:11 much do you rely? All these things matter. For some of you out there, 16%. Some other people, 12%. It all depends on the person. Guys, I know exactly how it feels to be paralyzed by fear in the stock market. You're probably thinking, "I know I should invest, but what if I buy the wrong stock? What if I lose everything?" I had those exact same fears 25 years ago. I made massive mistakes. I followed hype. I followed tips and I lost money. But critically, every mistake taught me a valuable lesson about investing. And that's exactly why I decided to build everything money to take that knowledge and turn it into the tools I needed to make better investing decisions. Now, I want to share that knowledge and those tools with you and build the community that I wish I had back then. So, join
19:57 our community and you'll learn how to see a company's value, how to make smart choices, and most importantly, how to sleep at night knowing that you aren't gambling anymore. You're now an investor. So, start your 7-day trial today. Let's take the fear out of investing together. So, I hit the analyze button. The stock's currently at around 60. This is why it's interesting in me. A low of 94, a high of 215, a middle of 144 on the cash flow model, which means low side 16% return, high side 28.8, middle 22.5% discounted cash flow return. Guys, I wish I had 30 or 40 companies like this because not all of them are going to do great, but overall I'm probably going to do pretty well. Now guys, I know you probably came in here hoping to hear about the next
20:42 Nvidia and you might be a little disappointed, but what you really need to realize is that you don't need hype to build wealth. In fact, quite the opposite. You need patience. You need discipline. And you need to have a process in understanding what you are buying. This is exactly what we do here at Everything Money. So, if you're tired of getting burned by the next big thing and not understanding what it is, watch our next video linked on your screen where I show you how to buy individual stocks the right way. Most people follow hype. Most people chase headlines and they miss the real opportunities because they're worried about looking stupid and going against the grain. But you're watching this and you've gotten this far in the video because you want to learn and be better. Our full investing course changes all of this. You're going to learn how to build a real foundation,
21:29 how to value companies, how to spot opportunities, and how to buy with confidence. This is the edge you need. It's a skill that can lead to market beating returns in the long run, and worst case, you'll sleep better at night. So, click now, start learning how the pros, the real pros, build real wealth. Thank you for your time.
