This Stock Is Beating Apple & Microsoft

In partnership with

Happy Sunday!

Hope you all had a great, relaxing weekend.

Just as Roaring Kitty has returned, we are also back for another exclusive edition of the newsletter!

Some key data bites from this week that you should know: 

• April CPI inflation increased by 3.4% YoY, in line with expectations.

• Microsoft $MSFT plans to invest $4.3B in France to build a data center.

• 14 billionaires are now at or above $100B.

• Squarespace $SQSP is going private in a $6.9B all-cash transaction.

• Global EV sales jumped 18% in Q1 2024.

• 79% of S&P 500 companies have beaten profit expectations this quarter.

• Alibaba’s $BABA Q1 net income fell 86% YoY.

• 14% of millennials are purchasing a home with a friend or group of friends.

• Netflix’s $NFLX ad-supported tier has reached 40M monthly users.

• A group of senators have proposed $32B annual AI spending by 2026.

In today’s newsletter:

• 📉 $1.5T Wiped Out From Pandemic Giants

• 🍟 McDonald’s Menu Prices Have Surged

• 🐈 The Return of Meme Stocks

• 🐐 Warren Buffett’s Stock Portfolio

• 🚀 The Dow Jones Hits 40,000

• 💻 Dell Is Outperforming Microsoft & Apple

Let’s dive right in!

There’s no denying that the Covid pandemic was a unique time period during our lives.

It brought significant changes to our lifestyles, many of which still impact us today.

Companies like Zoom, Peloton, and Chewy thrived during lockdowns due to remote work, home exercise, and online pet product orders.

However, an analysis done by the Financial Times based on Bloomberg data found that 50 of the key pandemic winners have collectively lost about $1.5T in market value since 2020.

Trends from Covid didn’t last, interest rates surged, and competition heated up, leaving these companies and their stock prices in the dust.

Unlike Zoom, Peloton, or Chewy, there’s one company that has stood the test of time and many consider to be recession resistant: McDonald’s.

I rarely eat fast food, but McDonald’s definitely has the best fries out of any fast food chain that I’ve tried.

That being said, did you know that McDonald’s menu prices have collectively doubled since 2014 across popular items?

This was the highest among any fast food chain analyzed by FinanceBuzz.

These price increases have far surpassed national inflation, which saw the cost of goods increase 31% since 2014.

The result? Less customers have been visiting McDonald’s, with global same store sales at 1.9% in the last quarter.

That figure was below the 2.1% Wall Street was expecting.

Last year, the New York Post reported a Big Mac combo in Connecticut charging a whopping $18, prompting backlash.

In the latest earnings call, the CEO Chris Kempczinski said the company has to be “laser-focused on affordability.”

The company recently announced a $5 meal deal to regain customers, which was met with disappointment.

It feels like we’re back in 2021.

It all started with a Sunday night tweet of a gamer leaning forward posted by Keith Gill.

Keith Gill, better known as Roaring Kitty, was one of the main protagonists behind the meme stock rally during the pandemic.

This was the first time he posted on social media in three years.

Between Monday and Tuesday alone, GameStop jumped nearly 100%.

According to the data firm S3 partners, GME shorts suffered roughly $2.2B in losses between Monday and Tuesday.

AMC also joined the fun, surging by roughly 100% over Monday and Tuesday as well.

The massive price jumps across both stocks resulted in them getting halted 38 times on Tuesday alone.

Since then, both stocks have tanked as the meme rally has started to fizzle out.

📚 Recommended Reading

Want to catch up on the markets daily for free in under 5 minutes?

Check out The One Read.

They provide market highlights, important news, and economic analysis in an easy to read, simplified format.

Don’t waste time filtering through all the stories in the financial world, sign up now and receive their update after market close!

The GOAT just updated his portfolio.

Berkshire Hathaway released its 13F for Q1 this week, allowing us to take a peak into how Warren Buffett is investing.

Buffett sold out of HP, and reduced his positions in Paramount, Apple, Sirius XM, Louisiana-Pacific, and Chevron.

During the recent shareholders meeting, Buffett indicated he was solely responsible for the Paramount investment, which was sold at a considerable loss.

He also sidestepped when asked why he sold Apple, hinting at tax reasons.

Aside from that, the filing revealed a $6.7B investment in Chubb, a property and casualty insurer.

Buffett was granted confidential treatment to keep this purchase secret for the last two quarters.

The position is now his ninth largest, but only makes 2.03% of his portfolio.

To top off Berkshire’s activity, the company also added to Liberty SiriusXM and Occidental Petroleum.

There’s definitely one thing Warren Buffett is a fan of, and that’s long term investing.

Here’s why: The Dow Jones Industrial Average has hit 40,000 for the first time in history.

The index has reached significant milestones over the the last few decades, each reflecting pivotal economic phases. 

It first reached 10,000 in March 1999 during the dot-com boom, then doubled to 20,000 by January 2017.

This double from 10,000 to 20,000 took nearly 18 years as the markets recovered from the the dot-com crash and the Great Recession.

In less than four years, by November 2020, it soared to 30,000, buoyed by optimism around COVID-19 vaccines and monetary policies. 

And this week we hit 40,000 in just over 3 years, despite decade high interest rates and above average inflation.

As we see from the chart, the stock market has been incredibly resilient.

Although many predicted the Dow Jones would reach all-time highs, let's discuss a development that was truly unexpected.

Dell is now outperforming both Apple and Microsoft over the last 5 years.

Dell’s 5 year return sits at 324.89%, outpacing Apple and Microsoft’s 301.84% and 228.11%, respectively.

In the last year alone, Dell’s stock is up a whopping 213%.

So what exactly is fueling Dell’s surge? You probably guessed it - investments in AI.

Dell is excelling in building AI servers for other companies, leveraging none other than Nvidia’s hot AI chips.

In fact, in Nvidia’s annual conference in March, Nvidia’s CEO Jensen Huang said, “…nobody is better at building end-to-end systems of very large scale for the enterprise than Dell.”

The company will be reporting earnings on May 30th, which will allow us to see if AI demand is still running hot.

📣 A Message From Our Sponsor

How Good is Your Financial Advisor

We are now in Q2 and your financial advisor probably just withdrew more fees from your account. Now is the perfect time to ask: How much is my advisor really charging? Are hidden fees hurting my returns?

Enter Rainbook, the first solution for investors to easily answer these questions - for free. Rainbook’s Advisor Analyzer® is the ultimate no-cost solution to evaluate your money manager.

Don’t wait until the next set of fees are withdrawn - get the full picture on your advisor with Rainbook today.

Notable Companies Reporting Earnings Next Week:

• Monday (5/20):

  • Palo Alto Networks $PANW, Trip.com $TCOM, Zoom $ZM

• Tuesday (5/21):

  • Lowe’s $LOW, AutoZone $AZO

• Wednesday (5/22):

  • Nvidia $NVDA, TJX Companies $TJX, Target $TGT, Snowflake $SNOW, Williams-Sonoma $WSM

• Thursday (5/23):

  • Intuit $INTU, Medtronic $MDT

• Friday (5/24):

  • Booz Allen Hamilton $BAH

All of the companies that are reporting earnings next week can be viewed here.

Buys

• Kevin Hern (R)

  • Company: The Toronto-Dominion Bank ($TD)

    • Amount Purchased: $250K - $500K

• Rick Allen (R)

  • Company: Ameriprise Financial ($AMP)

    • Amount Purchased: $50K - $100K

• Doug Lamborn (R)

  • Company: NetApp ($NTAP)

    • Amount Purchased: $45K - $150K

Sells

• Mikie Sherrill (D)

  • Company: UBS Group ($UBS)

    • Amount Sold: $300K - $600K

• Mark Green (R)

  • Company: NGL Energy Partners ($NGL)

    • Amount Sold: $265K - $550K

Buys

• Red Rock Resorts ($RRR)

  • Insider: Lorenzo Fertitta (Vice President)

    • # of Shares Purchased: 800,000

    • $ Amount: $40,312,000

    • SEC Forms: [1]

• Akamai Technologies ($AKAM)

  • Insider: Thomson Leighton (CEO)

    • # of Shares Purchased: 22,000

    • $ Amount: $2,038,960

    • SEC Forms: [1]

• Warner Bros. Discovery ($WBD)

  • Insider: Gerhard Zeiler (President)

    • # of Shares Purchased: 100,000

    • $ Amount: $830,000

    • SEC Forms: [1]

Sells

• Regeneron Pharmaceuticals ($REGN)

  • Insider: George Yancopoulos (Board Co-Chair, President & CSO)

    • # of Shares Sold: 100,000

    • $ Amount: $97,430,272

    • SEC Forms: [1], [2]

• Uber ($UBER)

  • Insider: Dara Khosrowshahi (CEO)

    • # of Shares Sold: 500,000

    • $ Amount: $32,964,000

    • SEC Forms: [1]

🤝 Review of the Week