The worse the sentiment, the cheaper the opportunities —— TSLA / MSFT / SOFI / META

Friends who have recently stayed in the market should all share the same feeling: this market is not short of volatility, but what it lacks is solid confidence.

Good news doesn't necessarily lead to a rally; but any hint of bad news is often exaggerated to trigger a sell-off. The current default state of the entire market is one of caution, where 'less is more.' This isn't just my gut feeling:

The latest sentiment survey by AAII as of February 11 shows 38.5% bullish, 38.1% bearish, and neutral at only 23.3%. In simple terms, both sides are arguing fiercely, but in reality, nobody really knows what's going on. This kind of market environment is the trickiest because prices don't follow fundamentals—they're entirely driven by sentiment. Meanwhile, CNN’s Fear & Greed Index also dropped to 36 on February 13, officially entering the fear zone, showing an obvious cooling in market sentiment.

Here, I want to share with you the most honest thought I have:

Most opportunities that can make you a fortune aren’t about companies suddenly becoming amazing—it’s when the market gets so scared that it skyrockets the discount rate applied to future cash flows.

Once fear sets in, risk premiums surge, and the market uses an absurdly stringent standard to price a company's future cash flows—even if the company itself hasn’t deteriorated, its stock price will still be hammered down first.

Think about it: what exactly do we mean by 'wrongful selling'? It’s not about giving you a rock-bottom price to pick up bargains—it’s when the market goes crazy and uses a quarter’s worth of issues to completely crush the certainty of the next three years; using trivial noise from the present to erase long-term growth options altogether.

Because of this logic, my portfolio constantly revolves around just four stocks: TSLA, MSFT, SOFI, and META. The reason is simple: each holds one of the scarcest 'gateway assets' right now—the entry points into the physical world, enterprise workflows, personal financial relationships, and attention, respectively.

When sentiment turns sour, the market tends to make a very basic mistake: labeling them with outdated tags. TSLA is seen merely as a carmaker, MSFT as a traditional software subscription company, SOFI as a high-risk lending platform, and META as nothing more than a cash-burning machine. The excess returns we aim to capture lie precisely in the pricing discrepancy caused by these 'identity mismatches'.

To avoid sounding too abstract, let me provide the latest price anchors here, all based on figures from around the US stock market close on February 17: TSLA at approximately $410.63, MSFT at roughly $396.86 (static PE about 30.1), SOFI at approximately $19.51, and META at roughly $639.29 (static PE about 31.5). Listing these isn’t to suggest they’re bargain buys ready to soar, but rather to highlight that current valuations already heavily factor in extremely high uncertainty discounts imposed by the market.

Let’s start with TSLA—honestly, bulls and bears could argue about this stock until the end of time. I’ve heard the same bearish arguments so many times they’ve given me calluses: price wars, weak demand, margin pressures, Elon Musk’s erratic moves—you name it.

But in my view, the most critical mispricing point for TSLA is that the market is still measuring it with the 'automaker' yardstick and hasn't realized that its focus has long shifted to 'physical AI.' More importantly, it has already presented hard data to prove that it's not just relying on storytelling to hype emotions.

Go through its recently released Q4 and full-year 2025 earnings report. Don’t just focus on how many cars were sold—look at the cash flow: $14.7 billion in annual operating cash flow, $6.2 billion in free cash flow, and its cash plus investments surged to $44.1 billion. Moreover, they clearly stated that in 2026, the focus will be on investing heavily in AI infrastructure and the Optimus humanoid robot. The Robotaxi in Austin started removing safety monitors in January.

Many people say these are all pie-in-the-sky ideas that won’t make money. I’ll ask one question: Is a vision with clear implementation milestones the same as one where they don’t even dare to draw up plans? The significance of this information has never been about 'delivering profits tomorrow,' but rather turning what everyone used to call 'long-term stories' into tangible milestones that can be monitored step by step.

When the market sentiment is poor and emotions run cold, the market is at its laziest, directly assigning zero value to these long-term options. But as long as they are making progress step by step, even if it’s slow, the market will eventually have to recalculate its worth.

Of course, let me put it bluntly: TSLA’s risks are very real—the pace of technological delivery, regulatory uncertainty, and whether the short-term auto business can maintain costs and cash flow. But precisely because these risks are laid bare, the market applies such a significant fear discount. Our task has never been to argue with the bears about who’s right or wrong but to focus on these 'quantifiable milestones' and use hard data to filter out baseless faith.

Now let’s talk about Microsoft. This stock’s undervaluation is deeply hidden. Many people ask, 'How can Microsoft be undervalued when its performance is so good?' Let me tell you, undervaluation doesn’t mean a stock has to fall hard to be considered mispriced—it’s about the market failing to understand what kind of money it’s actually making.

After all the AI hype, many still think Microsoft’s advantage lies in having the best models. That’s completely wrong. Its strongest point is that it has locked down the entry points for enterprise workflows worldwide. Think about it: When a company decides to invest real money in AI, what’s the first thing it considers? It’s not about how flashy the model is; it’s about whether the solution can be seamlessly integrated into the Office suite or Azure they’re currently using—without changing existing processes or retraining employees, and ready to use right away. That’s its hardest competitive moat to cross, and others simply can’t take it away.

The recently released FY26 Q2 earnings report shows rock-solid numbers: Microsoft Cloud revenue hit $51.5 billion, up 26% year-over-year. Even more impressive is the commercial remaining performance obligation, which surged to $625 billion. What does this mean? Companies aren’t just buying one-year services on a trial basis—they’re locking in budgets for the next few years with Microsoft. That’s what I call effortless profit.

When sentiment is weak, the market only focuses on how AI investments are pressuring its gross margins, capex rhythm, and depreciation dragging down profits. But zooming out, what Microsoft is doing now looks more like collecting a 'next-generation IT tax.' Companies only have so much IT budget, and eventually, it will shift from elsewhere to whoever holds the entry points and cloud platforms.

Of course, this stock isn’t without flaws, and the risks mostly lie in valuation and timing. It’s unlikely to give you overnight doubling excitement, but similarly, when market sentiment improves and risk premiums decline, it’s also the stock most likely to deliver a stable recovery trend.

Among the four, SOFI is the most unjustly treated. Whenever the market panics, fearing a weak credit cycle or tighter regulation, growth-oriented financial stocks like this are immediately lumped into the 'high-risk junk' category and indiscriminately sold off, regardless of their fundamentals.

However, what many people fail to notice is that SOFI's core change lies in its gradual shift from the 'high-risk narrative' previously assigned by the market to verifiable data showing 'manageable risk.' Look at its Q4 earnings report — it truly speaks for itself: GAAP net profit of $1.735 billion, diluted EPS of $0.13, adjusted net revenue of $10.13 billion, up 37% year-over-year, adjusted EBITDA of $3.176 billion with a profit margin reaching 31%. Its membership surged to 13.7 million, an annual increase of 35%. The real value of these figures isn't just about rapid growth but the fact that its profitability model has stabilized convincingly.

SOFI’s competitive advantage isn’t about earning spreads on loans; it’s about locking users into its ecosystem. From savings, borrowing, wealth management, to insurance and investment, everything happens within its platform. User stickiness is growing, creating a snowball effect. What it aims to build isn’t merely a lending platform but a financial operating system for the younger generation.

Of course, the risks associated with this stock are very real: If macro conditions worsen and bad debts rise, the market will sell first and ask questions later. Therefore, trading SOFI requires strong discipline — you can be bullish on its long-term logic, but you must not overlook the dual threats of credit risk and regulation, as they directly dictate the floor of market sentiment.

Lastly, there’s META, which is incredibly polarizing: despite explosive performance, the market constantly criticizes it for 'burning cash.'

I truly believe many confuse 'spending money' with 'burning cash.' For a company like META, which controls one of the world’s top attention gateways, the return path on its AI investments is much shorter than for most companies. It doesn’t need to struggle to get users to pay for large models. By simply refining its recommendation algorithms with AI, increasing user engagement by ten minutes, or improving ad conversion rates slightly, the money comes back effortlessly.

Here’s the Q4 earnings report: quarterly revenue hit $59.89 billion, up 24% year-over-year, with full-year revenue surpassing $200 billion. Then came the guidance for capital expenditures between $115 billion and $135 billion by 2026. The media cried out, 'More cash-burning!' I couldn’t help but laugh because META is leveraging its rock-solid advertising cash flow to secure leadership in the next-generation internet landscape — from recommendation algorithms, content creation, to VR devices and AI tools, all meticulously laid out.

In the short term, valuation will undoubtedly be pressured by rising costs. However, as long as its ad efficiency continues to improve, the market will eventually realize how worthwhile these expenditures are. Of course, risks must be acknowledged: regulatory compliance and policy changes remain constant threats, amplifying event-driven volatility. On the flip side, these uncertainties also contribute to the sentiment discount the market assigns to it.

Looking at these four stocks together, you’ll see that what the market fears isn’t whether they’re currently profitable but the 'uncertainty of the future.' Once fear sets in, the discount rate goes up, and share prices fall accordingly. But as long as companies continue delivering solid data, when market sentiment stabilizes and the discount rate drops, a valuation recovery naturally follows.

This is why my personal approach has always been one simple rule: never bet on market sentiment for price targets; instead, allocate positions based on data.

The more panicked the market gets, the more I focus on reading financial reports; the greater the volatility, the more confident I am in buying in batches; the louder the online arguments, the more I concentrate solely on measurable hard metrics — everything else is just noise.

One last note: all of the above are my personal investment insights and do not constitute any form of investment advice.

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