# EVALUATION OF 10 A.I. STOCKS WITH 3 DIFFERENT METRICS

To the question: "In stock evaluation, between the P/E ratio, the PEG ratio and the Potential Payback Period
(PPP) as explained at www.stockinternalrateofreturn.com, which metric seems the
most meaningful, precise and reliable?"

ChatGPT gives this answer: "In evaluating stocks, the Potential Payback Period (PPP) appears to be the most
meaningful, precise, and reliable metric compared to the P/E ratio and the PEG ratio." Read the full
explanation by ChatGPT at https://chatgpt.com/share/294601ab-81da-4689-9bfc-2b3222499186

On a very important point ChatGPT specifies that, compared to the PEG ratio, "the PPP is a superior metric
in terms of rigor and reliability for adjusting the P/E ratio by incorporating the projected earnings growth
rate." https://chatgpt.com/share/30290d3d-b430-44ad-b78c-da88daddaa8e

Let’s apply the three available metrics to evaluate and compare the hottest stocks among those being
propelled by the artificial intelligence revolution.

ChatGPT has identified 10 most interesting stocks: Nvidia, Alphabet, Microsoft, Amazon, Meta Platforms,
Advanced Micro Devices (AMD), Tesla, Palantir Technologies, Salesforce, Adobe.
https://chatgpt.com/share/cecf8c8d-40ba-47da-b2b4-7bb60e996f3a

All sorts of simulations for all variables can be performed instantly at

https://stockinternalrateofreturn.com/instant_calculations.html

In the above table, interest rate r = 4.20% for all stocks.

# STOCK SELECTION

Based on the P/E Ratio

1- Meta Platforms (22.5)

2- Alphabet (28.3)

3- Microsoft (33.7)

As of July 2024, the average P/E ratio of the NASDAQ is around 33.

Based on the PEG Ratio

1- Meta Platforms (1.07)

2- Alphabet (1.49)

3- Microsoft (1.87)

The 10 stocks in the table are all "overvalued" with all PEG Ratios above one (PEG > 1).
The above three stocks are the less "overvalued".

Based on the PPP

1- Meta Platforms (10.25)

2- Alphabet (12.15)

3- Nvidia (12.39)

When the long-term risk-free interest rate is at 4.20%, the PPP should not exceed 16 years, corresponding to
a stock internal rate of return of also 4.20%, without taking into account any risk premium.

According to ChatGPT, "The evolution from the P/E ratio to the PEG ratio
and finally to the Potential Payback Period (PPP) reflects an increasing sophistication in stock
valuation methods, each incorporating additional financial metrics to provide a more comprehensive
assessment."
https://chatgpt.com/share/b0e75570-53b1-4c28-ae90-513a37c436da

Rainsy Sam