☁️ Salesforce Is Building An Empire

Happy Friday!

I hope you all had a great week. October's inflation eased to 3%, down from 3.4%, with core inflation at 3.5%. This demonstrates that inflation is continuing to fall, releasing some pressure on the Fed. However, this is still above the Fed’s 2% target, which means we are likely to stay at a restrictive level for the foreseeable future.

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

• In Q3, U.S. GDP growth was revised to a higher 5.2% annualized rate, up from the initial 4.9%, indicating robust economic performance.

• Elliott Management has taken a $1B stake in Phillips 66 $PSX and is pressing for a board revamp.

• General Motors $GM initiated a $10B share buyback, increased their dividend, and revised financial guidance for 2023.

• Cyber Monday saw U.S. consumers spend $12.4B online, a 9.6% increase from the previous year.

In today’s newsletter:

• ☁️ Salesforce Delivers A Strong Quarter

• 🐐 A Legend’s Final Portfolio

• 🧨 Is IPO Season Back?

Let’s dive right in!

☁️ Salesforce Delivers A Strong Quarter

The Numbers:

• Earnings: 🟢 $2.11 Beats $2.06 Est.

• Revenue: ⚪️ $8.72B Meets $8.72B Est.

The Quarter:

Salesforce exceeded analysts' expectations in its fiscal third-quarter earnings, reporting an 11% increase in revenue to $8.7B, despite a slowdown in growth due to economic uncertainties and high interest rates. The company saw current remaining performance obligation of $23.9B, up 14% year over year.

The company enhanced profits through expense reductions, including a 10% job cut and office space reduction.

Future Guidance:

Looking ahead, Salesforce raised its fiscal 2024 operating cash flow growth forecast to 30 - 33% and estimates fiscal fourth-quarter revenue between $9.18 - $9.23B, up 10% year over year. This outlook is in line with analysts' expectations.

Mike Spencer, the executive VP for investor relations, stated that while there is early adoption of the company's new data-cloud and AI application features, AI's contribution to this year's revenue is not significant and will take time to become a major revenue driver.

🐐 A Legend’s Final Portfolio

On Tuesday, Charlie Munger, Warren Buffett's long-time partner and vice chairman of Berkshire Hathaway, passed away at 99.

Munger was instrumental in shaping the company's long-term investment strategy, leading to significant growth and success.

Known for preaching a concentrated approach to investing, Munger actively managed the Daily Journal Corporation’s securities portfolio, which as of Q3 was roughly valued at $159M.

Charlie’s final portfolio was comprised of just 4 stocks: Wells Fargo, Bank of America, Alibaba, and U.S. Bancorp.

🧨 Is IPO Season Back?

IPO season may be cooking up again. On Monday, Shein, the Chinese fast-fashion company valued at $66B, confidently filed for a U.S. IPO. The company, which has grown rapidly over the last few years, is looking to expand its global footprint and change perception about its business practices.

Reddit is also in discussions for a potential IPO as early as Q1 2024. The company was previously working with Morgan Stanley and Goldman Sachs on the listing in 2021, and was considering a valuation of up to $15B. However, the plans never materialized, and this year, Fidelity slashed its valuation to $5.5B.

Finally, Kim Kardashian's Skims, valued at $4B, also has an IPO on its horizon. Co-founder Jens Grede indicated that, “Skims deserves to be a public company - when the time is right.”

While it might be exciting to see a lot of companies looking to IPO, it’s important to remember that nothing is final until the company files a public S-1.

Notable Companies Reporting Earnings Next Week:

• Monday:

  • GitLab $GTLB

• Tuesday:

  • AutoZone $AZO, Ferguson $FERG, MongoDB $MDB, Nio $NIO, SentinelOne $S, Asana $ASAN

• Wednesday:

  • Brown Forman $BF.A, Veeva Systems $VEEV, Chewy $CHWY, GameStop $GME, C3 AI $AI

• Thursday:

  • Broadcom $AVGO, Lululemon $LULU, Dollar General $DG, DocuSign $DOCU

• Friday:

  • Hello Group $MOMO

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

Buys

• Exelixis ($EXEL)

  • Insider: David Johnson (Director)

    • # of Shares Purchased: 120,409

    • $ Amount: $2,602,038

    • SEC Forms: [1]

• Qorvo ($QRVO)

  • Insider: Walden Rhines (Director)

    • # of Shares Purchased: 5,000

    • $ Amount: $465,950

    • SEC Forms: [1]

Sells

• Walmart ($WMT)

  • Insider: Robson Walton (Director)

    • # of Shares Sold: 1,255,931

    • $ Amount: $196,030,952

    • SEC Forms: [1], [2]

• Meta Platforms ($META)

  • Insider: Mark Zuckerberg ($CEO)

    • # of Shares Sold: 112,036

    • $ Amount: $37,705,526

    • SEC Forms: [1], [2], [3], [4]

• Airbnb

  • Insider: Brian Chesky (CEO)

    • # of Shares Sold: 202,596

    • $ Amount: $25,794,701

    • SEC Forms: [1]

  • Insider: Joseph Gebbia (Director)

    • # of Shares Sold: 174,478

    • $ Amount: $22,228,529

    • SEC Forms: [1]

🤝 Review of the Week