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Palantir 1, naysayers 0

Nov 02, 2023

Good morning! 👋

Did the Fed just blink?

The market sure seems to think so after Team Powell kept interest rates unchanged while upgrading its assessment of the US economy. As I thought might be the case, he did not rule out a rate increase at the December meeting (which, as you know, I think will happen).

Still, I’ll take it because there’s plenty of money on the move and profits up for grabs.

Here’s my playbook.

Palantir: No surprise here

The only people caught by “surprise” today were Wall Street analysts who have repeatedly poo-hoo’d the stock. (Read)

Palantir’s Q3 earnings beat analysts’ expectations on top and bottom lines:

Q3 revenue increased 17% from $478 million a year earlier to $558 million this go-round.
Palantir raised revenue guidance for the full year to $2.216–$2.22 billion.

‘Nuff said.

You know what to do.

Peloton skids

And at the other end of the spectrum, we have Peloton. (Read)

We’ve talked about this so many times.

It’s not innovative, nor is it some sort of brand-new way to ride a bicycle or even a “connected fitness company,” which seems to be Wall Street’s spin. Peloton is a stationary bicycle with a fancy interactive screen—that’s it!

The company’s Bike and Bike+ programs will not work because they will struggle to convert new users to paid subscriptions, something I told you about long ago when Wall Street was falling all over itself to hype this to unsuspecting investors.

Sales are dropping and are now down from $616.5 million a year earlier to $595.5 million. Everybody is looking to the holiday quarter, but I think even that’s gonna fall flat.

Go ride a real bike!

Flavoured water is still very profitable $SBUX

Starbucks just reported fourth-quarter earnings and revenue that beat analysts’ expectations—a “double” in Keithspeak. (Read)

Same-store sales rose 8% as a result of higher average checks and a 3% increase in customer traffic. What interests me, though, is that net sales climbed 11.4% and now are over $9 billion.

I don’t own Starbucks, and I’m not likely to, because I think there are more attractive investment alternatives out there with the potential for much bigger returns. But this is a great thing to see because it means great companies can still put up solid numbers.

Something we talk about all the time.

Nobody is worried about Wegovy users except the go-fast crowd

It’s been a popular story for several months now...

New weight management and appetite management drugs could lead to a sharp drop in everything from junk food to fast food, to beer and wine, and more. Stocks and companies making those things have sold off sharply as a result.

I have repeatedly told you, “Fugettaboutit!”

Executives would be ahead of this problem, which, funny enough, they’ll view as an opportunity to change their menus, adjust their pricing, and produce new product offerings.

Looks like I was on to something!

There’s news out of London this morning that Carlsberg and AB InBev aren’t particularly worried. (Read) They’re both huge companies with very savvy executives, and if I’m right, they could be great investments too.

Meanwhile, a new report from Goldman Sachs suggests that the weight loss drug industry has become so popular that it could be a $100 billion market by 2030. (Read)

I wonder which company is gonna put weight loss drugs in their foods (and drinks) first.

Now that would be an investment and a half! 😉

Small-business owners: “Buy now, pay later” at Amazon

This is a very interesting development.

Amazon is rolling out its very first “buy now, pay later” checkout options for millions of small-business owners who use its online store, according to a report from CNBC this morning. (Read)

I’m not certain whether this speaks to Amazon’s dominance in the small-business space as a supplier or to the fact that millions of small-business owners are struggling to make ends meet and simply need to maximize their purchasing power.

It makes me wonder, though... Costco has long been a venue for small-business supplies, as have some of the online retailers where small-business owners can order in bulk, small though that may be.

The other thing that comes to mind is that this strikes me as a great move for Affirm, which has had its share of struggles since Peloton collapsed because it was a key supplier for that company’s overpriced laundry hangers (a term I use only halfway tongue-in-cheek).

I’m not sure the relationship will move the needle long term, but both Amazon and Affirm are higher this morning.