Hi Multis
I asked David to write an article in which he looks back on the Q3 results of the Potential Multibaggers stocks and he peers into the future with a Q4 preview. In the upcoming week, the first Potential Multibaggers stocks start reporting and this article looks at those reporting companies. What can we expect and what will we focus on?
I ended up contributing more than I expected to this article, adding (and deleting) quite some content and making significant edits. So, you can see this as a collaborative effort and that’s why I added who did what. I give the word to David.
Hi Multis
David here.
In this preview, I’ll provide a brief overview of our Q3 analysis, review stock performance from Q3 to today, and share our preliminary expectations for Q4.
Kris has already written extensively about Potential Multibagger picks over the past few weeks as markets have remained highly volatile and many stocks have pulled back meaningfully.
From my perspective, there is no reason to panic. Markets will always fluctuate; it’s one of those sayings where history doesn’t repeat itself, but it often rhymes. The same can be said about the market.
Software-related concerns on Wall Street have pushed markets broadly lower, particularly across the technology sector. The concern is that AI’s impact may be more widespread than initially expected. There is little doubt that AI will have a profound impact on both our daily lives and the companies around us.
I view this impact largely as a positive, and as Kris has noted in several recent articles, some of these concerns appear overstated. Fundamentals across the AI landscape remain strong, but we are still early in the cycle and continue to need substantial investment in hardware, tools and agents to support growth.
From experience, it takes time before tools become truly reliable and even then, issues often persist. While modern tools make software development easier, they primarily help startups reach an initial Minimum Viable Product (’MVP’) more quickly. However, MVPs are exactly that, minimal. They still require extensive refinement, security assessments, and debugging.
I spoke with several specialists, who warn about this trend: when non-technical professionals build tools, the results are often faster to market but riddled with bugs and security vulnerabilities. This can be useful for demonstrating an idea’s potential, but little more than that.
Beyond that, these tools can certainly assist experienced developers but the broader implications matter more. Most Potential Multibaggers are IT-heavy companies with deep expertise and strong engineering teams. I prefer to see these companies leverage new tools to enhance their product offerings, which they are already doing, and generate incremental revenue as beneficiaries of the AI wave.
When I began writing this article a few days ago, several stocks were already down meaningfully, including names with strong buy ratings. Recent pullbacks have only made these opportunities more attractive, in my view.
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