📊 Nvidia's Stock Split

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Happy Sunday!

I hope you all had an excellent weekend. Want to hear an interesting stat?

In Q1 2024, Americans earned approximately $3.7T from interest and dividends, adjusting for seasonal variations. This represents a staggering increase of 381% from four years earlier.

By the end of 2023, the total wealth held in stocks, real estate, and other assets reached the highest level ever recorded by the Federal Reserve.

While this surge in earnings and asset values is positive news, economists are raising concerns.

With more Americans having ample cash flow to spend despite rising prices, the Federal Reserve will have a much harder time achieving their inflation target.

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

• GameStop $GME posted Q1 sales of $882M, down 29% YoY.

• The median short interest on S&P 500 companies sits at just 1.7%.

• Berkshire Hathaway $BRK.B owns roughly 3% of the entire T-bill market.

• Spotify $SPOT is increasing its individual premium plan from $10.99 to $11.99.

• US Oil & Gas M&A hit $200B in the past year.

• Roaring Kitty has 5M shares of GameStop worth $160,400,000.

• Dollar sales for “spicy” food and beverages increased 9% YoY.

• Six stocks were responsible for more than 75% of the S&P 500’s gain in May.

• Robinhood $HOOD acquires crypto exchange Bitstamp for $200M.

• US job openings in April dropped to 8M, the lowest in 3 years.

• Tesla $TSLA plans to spend up to $4B on Nvidia $NVDA chips this year.

In today’s newsletter:

• 🏋️ 6 Companies Run The S&P 500

• 📊 Bill Ackman’s Stock Portfolio

• 🥤 Coca-Cola Is Still The King

• ䷖ Nvidia’s Stock Split

• 📈 $10,000 Invested In Nvidia

Let’s dive right in!

30.33%—that's the slice of the S&P 500 pie taken up by its top 6 holdings now.

This is up from 26% at the start of the year, and is largely fueled by Nvidia's astounding rally.

The AI chip maker has shot up over 150% this year alone and added a whopping $1.6T in market value along the way.

Back in 2020, the S&P 500 broke its typical standard with top holdings exceeding 20%, and now it's at its most concentrated levels ever.

While many investors favor indices for broad diversification, concerns are being raised with regard to just how top-heavy they’ve become. 

Not all investors are a fan of diversification. Bill Ackman is a prime example.

This week, the billionaire privately sold a 10% stake in his hedge fund Pershing Square for $1.05B.

This move comes as the fund prepares for an IPO, which is atypical in the hedge fund world.

The IPO, currently planned for late 2025, is expected to value the firm at over $10B.

Bill Ackman’s public equity portfolio is heavily concentrated, with $10.7B AUM holding just 6 names.

According to the fund’s 2023 annual report, the portfolio has delivered a 5 year annualized return of 31.2%.

This is nearly double the 15.7% produced by the S&P 500 during the same time period.

Is Pepsi losing its fizz?

In a surprising turn of events, Dr. Pepper now holds the second highest market share in the U.S. carbonated soft drink market, surpassing Pepsi.

This marks a stark shift from 1995 when Pepsi's market share was more than double that of Dr. Pepper.

Over time, Pepsi's market share has declined steadily while Dr. Pepper's has risen, thanks in part to consistent marketing, new flavors, and a strong presence on TikTok.

Dr. Pepper, dating back to 1885, is one of the oldest soda brands in the U.S., predating even Coca-Cola and Pepsi.

However, in the ongoing Soda wars, Coca-Cola remains the undisputed leader, boasting an incredible 19.2% market share.

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It’s the moment many investors have been waiting for.

Nvidia conducted its 10-for-1 stock split after market close Friday.

Shareholders will receive nine additional shares for every share they own.

The first day of Nvidia’s split-adjusted trading will be on Monday.

It’s important to remember that stock splits have no fundamental impact on a company.

The split divides a company’s existing shares into multiple ones, lowering the price per share without changing the company’s market value.

Instead, the split is like rearranging a pizza into more slices. You still have the same amount of pizza, just cut differently.

5 years ago, if you would have told anyone that Nvidia and Apple would have the same market capitalization, no one would have have believed you.

On Wednesday, Nvidia’s market cap closed above $3T for the first time.

The company also surpassed Apple to become the second most valuable company in the world.

Since then, Nvidia shares have slightly retreated, with Apple reclaiming its second spot by a small margin.

If you had invested $10,000 into the chip maker back in 2010, that position would be worth roughly $3.2M today.

Even if we reduce the timeline to 5 years, Nvidia returned +3,423%, or 34x its initial value.

📚 Recommended Reading

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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!

Notable Companies Reporting Earnings Next Week:

• Tuesday (6/11):

  • Oracle $ORCL

• Wednesday (6/12):

  • Broadcom $AVGO

• Thursday (6/13):

  • Adobe $ADBE

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

Buys

• Earl Blumenauer (D)

  • Company: Ecolab ($ECL)

    • Amount Purchased: $15K - $50K

  • Company: JPMorgan Chase ($JPM)

    • Amount Purchased: $15K - $50K

• Virginia Foxx (R)

  • Company: Energy Transfer ($ET)

    • Amount Purchased: $3K - $45K

Sells

• Carol Miller (R)

  • Company: McKesson ($MCK)

    • Amount Sold: $30K - $100K

• Sheldon Whitehouse (D)

  • Company: Diageo ($DEO)

    • Amount Sold: $15K - $50K

Buys

• Salesforce ($CRM)

  • Insider: Mason Morfit (Director)

    • # of Shares Purchased: 428,000

    • $ Amount: $99,796,760

    • SEC Forms: [1]

• Shift4 Payments ($FOUR)

  • Insider: Jared Isaacman (Chairman & CEO)

    • # of Shares Purchased: 29,669

    • $ Amount: $2,053,931

    • SEC Forms: [1]

Sells

• T-Mobile ($TMUS)

  • Insider: Marcelo Claure (Director)

    • # of Shares Sold: 3,037,622

    • $ Amount: $546,821,208

    • SEC Forms: [1]

• Cava Group ($CAVA)

  • Insider: Ronald Shaich (Director)

    • # of Shares Sold: 2,550,290

    • $ Amount: $222,512,803

    • SEC Forms: [1]

🤝 Review of the Week