The YouTuber suggests avoiding Applied Materials, despite its S&P 500 inclusion, due to its high 42 P/E ratio and 35 forward P/E, which he believes is detached from its modest 3.5% annual revenue growth since 2022. He argues that such a high multiple implies an unrealistic expectation for future revenue acceleration.
“But when you're buying this stock at a 40 price multiple, it means that you're expecting this revenue to be basically going vertical very very soon, which could happen. But I think that it's a pretty tall order to ask.” — ▶ 23:50