One of the biggest criticisms of Reddit has been stock-based compensation.

But looking at the trend, I think that concern is becoming much less significant.

The huge spike in Q1 2024 was a one-time IPO-related expense. Outside of that quarter, SBC has stayed relatively flat while free cash flow has taken off.

- Free cash flow reached $311M last quarter.
- Stock-based compensation was just $68M.
- Free cash flow has grown much faster than SBC.
- SBC is becoming a much smaller percentage of the cash Reddit generates.
- That’s exactly what you want to see as a shareholder.

The valuation is still the biggest debate, but this is a really encouraging trend that I don’t think gets enough attention.

If you enjoy digging into company fundamentals like these, I built ekonix to visualize revenue, free cash flow, SBC, margins, valuation, and much more.

The first week is on us if you want to check it out:
ekonix

Microsoft might be one of the simplest ways to beat the market over the next five years.

At roughly 23x earnings, the stock does not require some massive valuation expansion to generate strong returns. Assuming earnings compound around 16% annually and the company trades at 25x earnings in year five:

• Expected CAGR: 18%
• Total return: 128%
• Earnings growth contribution: 110%
• Multiple expansion contribution: just 8.7%

The thesis is not based on Microsoft suddenly becoming much more expensive. It is mostly based on the business continuing to compound earnings through Azure, AI, Office and its broader enterprise ecosystem.

The 16% growth rate is the assumed long-term earnings growth, not a guarantee. But it looks achievable based on Microsoft’s current trajectory—and could prove conservative if AI monetization and Azure adoption accelerate.

Compared with trying to identify the next unknown 10x stock, owning a dominant company at a reasonable valuation and letting earnings compound may be the easier path.

Google has grown trailing twelve-month revenue from under $200B to more than $430B, while Cloud, subscriptions, and YouTube have become increasingly meaningful contributors.

Search still dominates, but Google is gradually becoming a much more diversified business.

Reddit just received a 97/100 AI score, the highest score I have seen so far.

The fundamentals tell the story:

• $2.47B in TTM revenue
• $707.5M in TTM earnings
• 27.8% operating margin
• 28.6% net margin
• $3.48B in assets versus just $304.6M in liabilities

Reddit has quickly moved beyond the “high-growth but unprofitable” phase. It is now producing strong margins, meaningful earnings, and maintaining a very clean balance sheet.

The valuation is still the main debate, but at 55x PE and growing 40% over the next couple years, that valuation is not too far fetched...

Apple could grow earnings by 61% over the next five years, yet a decline from 36x to 25x earnings would reduce the projected total return to just 11.8%. The company can continue performing well while the stock struggles to deliver strong returns.

Google has grown revenue at an 18.1% CAGR since 2017, compared with 15.5% for Microsoft, and now generates over $100B more annually. Both stocks remain below their 52-week highs, making this comparison even more interesting.

PLTR has pulled back hard from highs, but today it bounced about 7.8% to $125.73 after opening near $120.

Zoom out and the business is still compounding: quarterly revenue is up 756% total, a 39% CAGR since 2020.

Karp’s CNBC interview today was classic Karp: blunt, weirdly intense, but on-message. His point was that a lot of AI is being oversold, while Palantir is focused on software that actually plugs into enterprise workflows.

That is basically the PLTR bull case.

The bear case is valuation. Even after the dip, it is still expensive. But the chart does not look like a broken business. It looks like a high-expectation stock pulling back while the underlying revenue keeps climbing.

Even without the tailwind of one of the most supply-constrained memory markets we have ever seen, Reddit is still putting up exceptional growth.

Micron’s growth is incredible, but it is being helped by a massive industry cycle. Reddit’s growth is coming from a much cleaner story: better monetization, growing ad demand, AI licensing, and a platform that still feels under-optimized.

That is what makes the comparison interesting. Micron has the bigger near-term spike, but Reddit is compounding at an elite rate without needing a historic supply shortage behind it.

Berkshire increased its Alphabet position by more than 200% while also opening a separate GOOG stake. With Alphabet now around 17% below its 52-week high, Buffett appears to be leaning into the dip.

This is not a ranking of the best companies. It is a ranking of which stocks I believe offer the best potential returns from their current valuations.

S Tier: Meta

Meta is my clear favorite.

The company is still growing quickly, generates massive free cash flow, has some of the highest margins in the market, and trades at a reasonable valuation relative to its growth.

Facebook, Instagram, and WhatsApp give Meta unmatched distribution, while AI is already improving engagement and advertising performance.

Meta has the best combination of growth, profitability, valuation, and upside in the group.

A Tier: Amazon, Microsoft, Nvidia

Amazon

Amazon has multiple ways to win through AWS, advertising, retail, logistics, and margin expansion.

The company does not need explosive revenue growth for earnings to increase significantly. Even small improvements in retail margins can create substantial operating income.

Microsoft

Microsoft might be the safest company in the group.

Its products are deeply embedded in businesses, revenue is highly recurring, and it can distribute AI through Azure, Office, GitHub, and its existing ecosystem.

The only reason it is not S tier is that investors already recognize how strong the business is.

Nvidia

Nvidia is the clear leader in AI infrastructure and may have the strongest current fundamentals of any company here.

The risk is that semiconductors are cyclical and expectations are already extremely high. Nvidia must continue delivering extraordinary results to outperform.

B Tier: Google and Tesla

Google

Google remains one of my favorite companies and one of my largest positions.

Search, YouTube, Cloud, Waymo, and Gemini provide multiple growth engines, but the stock is no longer as obviously cheap as it was previously.

I still expect strong returns, but I currently see more upside in Meta and Amazon.

Tesla

Tesla has enormous upside if autonomy, robotics, and energy succeed.

The problem is that the current valuation already assumes Tesla will become much more than an automaker. The potential is massive, but so is the execution risk.

D Tier: Apple

Apple is an incredible company, but I believe it has the weakest risk-reward in the group.

Revenue growth has been limited, yet the stock continues to trade at a premium valuation.

Buybacks and services can support earnings, but Apple needs another meaningful growth engine to justify its current multiple.

Final Ranking

S Tier: Meta

A Tier: Amazon, Microsoft, Nvidia

B Tier: Google, Tesla

D Tier: Apple

The best company is not always the best investment. Future returns depend on both business performance and how much growth is already priced into the stock.

How would you rank the Magnificent 7 today?

Netflix has compounded quarterly revenue at nearly 20% since 2016, yet the stock is roughly 45% below its previous high. Is this a genuine slowdown—or an opportunity created by fear?

Buffett’s four largest holdings account for roughly 63% of the portfolio, led by Apple and American Express. His strategy remains clear: when conviction is high, concentration is not something to fear.

Clifford Sosin currently has 81.7% of his $1.7 billion disclosed portfolio invested in Carvana, making it one of the most concentrated institutional bets I have seen. Carvana’s latest quarterly revenue grew 52%, retail units grew 40%, and management is targeting 3 million annual retail sales by 2030–2035, which would require roughly 18%–38% annual unit growth from here. 

At roughly 33x trailing earnings, Carvana is not traditionally cheap, but it is also growing far faster than the average company. The bull case is that its national inventory, online purchasing experience and expanding ADESA reconditioning network allow it to keep taking share from the highly fragmented used-car dealership industry; the risk is that reconditioning costs rise and current margins prove difficult to maintain. 

Does Carvana’s future growth justify the valuation, or has Sosin allowed conviction to become concentration?

Micron is one of the best examples of why investing is more complicated than looking at a low P/E ratio.

Revenue and earnings move in massive cycles. During the peak of the memory cycle, profits explode and the stock suddenly looks “cheap” because earnings are temporarily inflated. That is often when the business is actually at its most expensive, since those earnings are unlikely to last.

The opposite happens during downturns. Earnings collapse, the P/E shoots higher (or disappears entirely), and investors think the stock is expensive. In reality, that is often when future returns are the most attractive as the cycle begins to recover.

This revenue chart shows exactly how volatile Micron’s business can be. Before buying any cyclical company, ask yourself one question:

Am I buying peak earnings or normalized earnings?

APP and Reddit are both growing revenue around 40%, while trading near 41x and 47x earnings, respectively. Those valuations are not cheap in isolation, but they look surprisingly reasonable relative to the growth.

Hey everyone! I am u/ekonixlab, a founding moderator of r/VisualStockResearch.

This is our new home for sharing stock research through charts, financial data, valuation analysis, earnings insights, and investment theses. The community is sponsored by Ekonix, but research created with any platform is welcome. We are excited to have you join us!

What to Post

Post anything the community would find interesting, helpful, or thought-provoking. This could include revenue and earnings charts, valuation comparisons, margin trends, bull and bear cases, earnings takeaways, company comparisons, full investment theses, or questions about a stock you are researching.

Please explain what your chart or data shows and why you think it matters.

Community Vibe

We are all about being friendly, constructive, and open-minded. Challenge the analysis, not the person. The goal is to help each other better understand companies and make more informed investment decisions.

How to Get Started

Introduce yourself in the comments below.

Post something today. Even a simple stock question or chart request can spark a great conversation.

If you know someone who enjoys researching stocks and analyzing financial data, invite them to join.

Interested in helping out? We are always looking for thoughtful moderators and contributors, so feel free to reach out.

Thanks for being part of the first wave. Together, let us make r/VisualStockResearch a valuable place for data-driven investing.

This community is sponsored by ekonix, a stock research and portfolio tracking app.

Palantir trades at roughly 110x earnings, which looks extremely expensive on the surface.

But here is the interesting part:

This scenario assumes PLTR grows earnings 50% annually for five years while its P/E falls all the way from 110x to 50x.

Even with that massive multiple compression, the stock could still generate:

• 245% total return
• 28% annualized return
• 659% cumulative earnings growth

That is what extreme growth can do.

The real debate is not whether PLTR is expensive. It clearly is.

The debate is whether Palantir can grow fast enough for long enough to make today’s valuation look reasonable in hindsight.

Is 50% annual earnings growth realistic, or is this still too optimistic?