đź’µ Meta To Spend Billions

1) Meta To Spend Billions On Nvidia Chips, 2) Banks Love High Interest Rates, 3) The Growth Of A Betting Behemoth, and more!

Author

Carbon Finance
January 23, 2024

It’s Tuesday.

Welcome to the +375 subscribers that have joined us in the last week.

Yesterday, the Dow Jones Industrial Average closed above 38,000 for the first time in history.

The S&P 500 also closed at a new all time high.

It’s important to remember that market highs usually brings a high degree of fear and panic among investors.

As always, it’s important to maintain a long term perspective and leverage volatility and fear to your advantage.

Some key data bites you should know: 

  • Coca-Cola $KO plans to invest $1B/year in India to expand operations.

  • In January 2024, drugmakers raised prices on 775 brand-name drugs by a median of 4.5%, higher than the rate of inflation.

  • JPMorgan Chase $JPM raised CEO Jamie Dimon's compensation to $36M following the bank's record profits in 2023.

  • Macy's $M rejected Arkhouse and Brigade Capital's $5.8B private takeover bid due to financing and valuation concerns.

In today’s newsletter:

  • đź’µ Meta To Spend Billions On Nvidia Chips

  • 🏦 Banks Love High Interest Rates

  • ♠️ The Growth Of A Betting Behemoth

Let’s dive right in!

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đź’µ Meta To Spend Billions On Nvidia Chips

In 2023, Meta Platforms soared with a 170% return, boosted by strong earnings and cost-cutting in their "year of efficiency."

And on Friday, the company’s stock reached an all time high, scrubbing the brutal hit it took in 2022.

The company continues to invest big in the future, having spent about $34B on research and development in the last twelve months.

Recently, CEO Mark Zuckerberg shared Meta's ambitious AI plan on Instagram.

He revealed the company’s plans to buy 350,000 Nvidia GPUs for developing advanced, human-like AI.

These GPUs, priced at around $30K each, will cost Meta approximately $10.5B, based on estimates from Tom’s Hardware.

🏦 Banks Love High Interest Rates

In the past two weeks, major US banks have unveiled their fourth-quarter earnings for 2023.

Driven by the Fed’s rapid rate hikes, these banks have seen a surge in net interest income, reaching record levels.

The Fed's strategy, aimed at curbing inflation by reducing consumer spending, has significantly boosted banks' earnings.

They're now able to charge higher interest rates on loans and earn more on their reserve holdings.

Notably, industry giants like JPMorgan, Bank of America, Citigroup, and Wells Fargo collectively reported over $250B in net interest income for 2023.

This marks a substantial increase of roughly 19% compared to the $213B earned in 2022, demonstrating the significant impact of monetary policy on banking profitability.

đź“š Recommended Reading

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♠️ The Growth Of A Betting Behemoth

You might be familiar with popular betting platforms like Betfair and Fan Duel, but have you heard of Flutter Entertainment?

This company owns these well-known brands, along with others like Paddy Power, Sky Betting & Gaming, Pokerstars, and Sportsbet.

Recently, Flutter Entertainment shared its Q4 2023 earnings.

Despite falling short of analysts' expectations, the company's shares on the London Stock Exchange soared by 20%.

This surge came after news that Fan Duel snagged additional market share to reach a dominant 51% net revenue share in the US sportsbook market.

Adding to the excitement, Flutter Entertainment is gearing up for a big move.

The company is on track to debut on the NYSE on January 29th.

🕶️ Vision Pro Snub. YouTube, Spotify, and Netflix are not launching new apps for Apple's $AAPL mixed-reality Vision Pro headset - BB

🎉 Reddit IPO. Reddit is planning to IPO in March, selling about 10% of shares, as the first major social media company to go public since 2019 - R

🏦 Citi Restructure. Warren Buffett encouraged Citigroup $C CEO Jane Fraser to continue with the bank's reorganization, following a 20,000 job cut plan - FT

🇨🇳 Short Sell Block. China's biggest brokerage has halted short selling for some clients due to significant declines in the country's stock markets - BB

Notable Companies Reporting Earnings This Week:

  • Monday (1/22):

    • Brown & Brown $BRO, Logitech $LOGI, United Airlines $UAL

  • Tuesday (1/23):

    • Johnson & Johnson $JNJ, Procter & Gamble $PG, Netflix $NFLX, Verizon $VZ, Texas Instrumentals $TXN

  • Wednesday (1/24):

    • Tesla $TSLA, ASML $ASML, Abbott $ABT, ServiceNow $NOW, IBM $IBM, AT&T $T

  • Thursday (1/25):

    • Visa $V, Intel $INTC, T-Mobile $TMUS, Comcast $CMCSA

  • Friday (1/26):

    • American Express $AXP, Colgate-Palmolive $CL

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

Major Trades Published Since 1/16. Trades may be those of family members. Buys and sells may be options trades. [Source: 2iQ]

Buys:

  • Bill Keating (D)

    • Company: Boeing ($BA)

      • Amount Purchased: $15K - $50K

  • Jerry Moran (R)

    • Company: Berkshire Hathaway ($BRK.B)

      • Amount Purchased: $2K - $30K

  • Sheldon Whitehouse (D)

    • Company: Snowflake ($SNOW)

      • Amount Purchased: $1K - $15K

    • Company: Eli Lilly ($LLY)

      • Amount Purchased: $1K - $15K

    • Company: Coca-Cola ($KO)

      • Amount Purchased: $1K - $15K

Sells:

  • Mark Green (R)

    • Company: NGL Energy Partners ($NGL)

      • Amount Sold: $100K - $250K

  • Bill Keating (D)

    • Company: Simon Property Group ($SPG)

      • Amount Sold: $15K - $50K

  • Jerry Moran (R)

    • Company: Halliburton ($HAL)

      • Amount Sold: $15K - $50K

  • Sheldon Whitehouse (D)

    • Company: Target ($TGT)

      • Amount Sold: $15K - $50K

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