The 4 Big Themes of 2023Feb 27, 2023
Every Friday we host a live 1:1 discussion via discord with Moby Premium members at 12pm EST.
This gives you the opportunity to ask us any questions you have on the markets, the economy, crypto, and more!
Here are the 4 key things we went over:
Why inflation once again spooked the market
- Who the real winners are going to be in AI
What the healthcare battle will look like over the next 5 years
How investors can shift their perspective for the long term in this market
And if you're too busy to listen to the entire recording, below we included a compact summary of what went down.
To get all the juicy details, just listen to the entire recording. And now, onto the summary👇
With inflation looking stickier and stickier, it's time to look at longer-term narratives that will materialize regardless of how long the Fed has to keep us in a punishing rates environment.
And we're seeing two solid themes emerge that will dominate 2023. We've already talked about the first and that's the emerging use cases for AI and Large Language Models like ChatGPT and Google's Bard product.
But meanwhile, better tech is about to unlock a lot of competition in the healthcare space.
Both of these narratives are full of head fakes and ideas that are less optimal, so let's cut through the noise and see where the real value is.
There's a lot more to cover here, so let's dive through the details.
Who Are The Real AI Winners?:
Despite all the hype being spent on Microsoft and Google in the last month -- that's not where AI is going to be valuable in the immediate term.
If both companies can reduce costs enough to allow AI to become a normal part of search, that will prove valuable. But that technology and scale are not currently here.
So where is AI CURRENTLY providing value?
This week, we're going to be doing a lot of posts on companies that are driving a lot of value with AI.
To give you a preview, one major area is cyber security.
One of our standout stocks, Palo Alto Networks ($PANW) just delivered a barn-burner of an earnings call last week.
One major driver for the current value at PANW is AI. Palo Alto Networks is currently using AI to continuously re-secure its customer base.
Utilizing AI allows PANW to scan for, identify, and mitigate millions of lower-level threats every single day.
This is making PANW's product cheaper, more effective, and margin-positive. Check out more detail from us when we post a full update on PANW later this week.
Meanwhile, another big AI winner was NVIDIA when their stock popped on the back of some positive AI chip news.
While we're medium-bullish on NVIDIA moving forward, AI may not be much of a real tailwind for them and this may be more of a head-fake.
The Healthcare War is Set:
Meanwhile, another big narrative is set to keep materializing this year, and that's the disruption of primary care healthcare writ-large in the US.
We've been covering major moves from the likes of United Healthcare to consolidate and centralize entire patient care ecosystems in the fractious health landscape in the US.
Two big players have fully established themselves in the last month.
This week, Amazon completed its acquisition of One Medical -- cementing its move into potential healthcare dominance.
Amazon has the data infrastructure and capital necessary to make big moves and survive bigger mistakes. Their recent push into affordable pharmacy is another sign their going for the whole pie here.
Meanwhile, CVS is taking a different approach by announcing its acquisition of Oak Street health.
A lot of the local health infrastructure built by CVS in the last few months has been centered around Medicare and treating medicare recipients. Oak Street is a PCP entirely built around medicare as well.
So, rather than attacking the whole health industry at once, CVS is going from the top down. Medicare is a solid strategy because medicare enrollment is set to explode by 2030 as the main block of Baby Boomers moves into the program.
Furthermore, medicare patients need more consistent care and have more predictable demand. By tackling the highest-need cohort first, CVS can establish efficiencies that will help them expand into other areas of primary care.
All of these pushes center around an attempt to completely own the patient/ doctor relationship.
Establishing total ownership of all the data in a cohort's healthcare creates a lot of opportunities for cost-cutting and optimization -- which allows for a lot of revenue generation.
Both Amazon and CVS are playing this really well -- so it begs the question: who will win?
And the Moby analyst team has a pretty simple answer to that: healthcare in the US is simply too large for there to be a single winner.
We like both CVS and Amazon's early-mover advantages, and we're excited to see other areas where healthcare can be improved and optimized in the US.
Wrapping this Up:
It's really important to keep an eye on these long-term narratives as things keep getting cloudier in 2023.
We're already looking forward to the next CPI print in a few weeks to get verification on just how sticky inflation is.
Until then, we'll keep monitoring for more of these longer narratives to ensure we find as much upside as this volatile market can provide.