📊 Warren Buffett Steps Down

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Happy Sunday.

Google’s search dominance is facing pressure.

• Shares of Alphabet fell over 6% this week after reports surfaced that Apple is exploring new AI-powered search engine partners for Safari.

The two companies currently have a longstanding deal, worth $20B annually, that makes Google the default search engine on Apple’s Safari browser.

A shift away from Google would mark a major change in their relationship and pose a threat to one of Google’s most valuable distribution channels.

Apple appears to be seeking new ways to boost growth.

• Services chief Eddy Cue recently revealed that Safari searches declined for the first time ever in April, likely due to the rising popularity of AI tools.

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

• Morningstar curated a list of 12 undervalued consumer cyclical stocks.

• Average investor spends just six minutes on research before buying.

• 58 wallets have made a combined $1.1B in profits on $TRUMP.

• IRS lost 31% of tax auditors due to DOGE.

• Credit Suisse must pay $511M for helping US taxpayers hide over $4B.

• Trump has ordered a 100% tariff on foreign-made movies.

• Ford says tariffs will reduce its adjusted EBITDA by $1.5B this year.

• Bill Ackman made another $900M investment into Howard Hughes.

• Uber trips increased 18% YoY to 3B in Q1.

• Skechers will go private in a $9.4B deal with 3G Capital.

• China has cut key lending rates by 10 points to boost economy.

• US companies announced $234B in buybacks in April.

• Ferrari delivered 33 more cars in Q1 as operating profit jumped 23% YoY.

• Doordash acquired restaurant booking platform SevenRooms for $1.2B.

• Global debt hit a record high of over $324T.

• Spain took a $454M impact to its economy after recent blackout.

• FOMC kept interest rates steady between 4.25% and 4.5%.

• Coinbase is acquiring Deribit for roughly $2.9B.

• Bill Gates is giving away $200B over the next 20 years.

• Match Group plans to lay off 13% of its staff to reduce costs.

In today’s newsletter:

• 🐐 Warren Buffett Steps Down

• ➕ The Rule of 40

• 💾 AMD’s AI Chip Sales Surge

• 🐭 Disney Has Gone Nowhere

• 🥗 Sweetgreen Can’t Turn A Profit

Let’s jump right in.

📣 Together With Ryse

Big Tech Has Spent Billions Acquiring AI Smart Home Startups

The pattern is clear: when innovative companies successfully integrate AI into everyday products, tech giants pay billions to acquire them.

Google paid $3.2B for Nest.
Amazon spent $1.2B on Ring.
Generac spent $770M on EcoBee.

Now, a new AI-powered smart home company is following their exact path to acquisition—but is still available to everyday investors at just $1.90 per share.

With proprietary technology that connects window coverings to all major AI ecosystems, this startup has achieved what big tech wants most: seamless AI integration into daily home life.

Over 10 patents, 200% year-over-year growth, and a forecast to 5x revenue this year — this company is moving fast to seize the smart home opportunity.

The acquisition pattern is predictable. The opportunity to get in before it happens is not.

INVEST BEFORE BIG TECH MAKES THEIR MOVE

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Six decades of outperformance.

This past weekend, Warren Buffett, widely regarded as the greatest investor of all time, announced he will step down at the end of the year.

• Greg Abel, currently CEO of Berkshire Hathaway Energy, will take over as his successor.

Since Buffett took control of Berkshire Hathaway in 1965, the stock has surged 5,502,284%, compared to a 39,054% gain for the S&P 500.

• The outperformance is so extreme that Berkshire could drop 99% and still have outpaced the index over that span, according to Barron's.

Today, Berkshire is one of the 10 most valuable companies in the world with a $1.1T market cap.

The company also reported Q1 earnings last Saturday, with operating earnings down 14%, driven by a drop in insurance underwriting profit.

• Berkshire’s cash pile, however, climbed to a record high of $347B.

It’s rare to see a company beat expectations, raise guidance, and still watch its stock plunge, but that’s exactly what happened with Palantir this past week.

• The company reported Q1 revenue of $884M, beating the $863M estimate, with adjusted earnings in line with expectations.

• It also raised its full-year revenue forecast to $3.895B at the midpoint, above its previous $3.75B outlook.

Shares initially fell 15% before ending the week down 5%.

• At 160x forward earnings and 89x sales, Palantir is priced as one of the most expensive stocks in the market.

So is it all hype, or is there real strength underneath?

• One useful metric for software companies is the Rule of 40, which adds revenue growth to free cash flow margin.

• A score above 40 suggests healthy, efficient growth.

Palantir scores 69, a strong signal that the business is operating with real momentum.

• But even with a strong Rule of 40, investors still have to decide whether the company can deliver on the sky-high expectations baked into its valuation.

Lisa Su isn’t backing down from a fight.

Last Tuesday, AMD reported Q1 earnings that beat both earnings and revenue estimates. 

Key figures:

• Adj. EPS: $0.96 (+55% YoY) vs. $0.94 Est.

• Revenue: $7.44B (+36% YoY) vs. $7.13B Est.

• Q2 Revenue Forecast: $7.4B vs. $7.25B Est.

Lisa Su called it “an outstanding start to 2025,” citing strength in AMD’s core businesses and growing momentum in data center and AI.

• The Data Center segment led the charge with $3.7B in revenue, up 57% YoY.

• Client revenue rose 68%, while Gaming fell 30% due to weaker semi-custom sales.

• Embedded revenue declined 3%.

While guidance came in ahead of expectations, AMD said it will take an $800M inventory charge tied to new U.S. export controls on AI chips.

• The company expects a $1.5B hit to full-year revenue due to the restrictions.

Disney delivered a surprise hit this quarter.

There was a lot to like from the earnings report.

• Adjusted EPS came in at $1.45, beating expectations of $1.20.

• Revenue also topped forecasts at $23.62B, ahead of the $23.14B estimate.

The company saw revenue growth across all major segments and an unexpected gain in Disney+ subscribers.

• Disney+ added 1.4M subscribers, reaching 126M globally, despite earlier expectations of a decline.

• On the experiences side, Disney announced plans for a new theme park and resort in Abu Dhabi.

Shares climbed 18% this week, but remain down 4% YTD.

• And zooming out, Disney’s stock has been essentially flat over the past decade.

Consumers aren’t biting on $16 salads.

Sweetgreen reported earnings that saw them cut their full-year guidance.

• The company now expects same-store sales to be flat in fiscal year 2025, down from its earlier forecast of 2% growth at the midpoint.

• It also lowered its revenue and adjusted earnings outlook for the year.

While revenue has steadily grown from $274M in 2019 to $685M over the last twelve months, profitability remains elusive.

• Sweetgreen has never turned a profit since going public and posted a net loss of $89M in the most recent twelve-month period.

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Notable Companies Reporting Earnings Week of May 11th, 2025:

Here’s what I will be watching this week:

• Monday: Monday.com $MNDY, Simon Property Group $SPG

• Tuesday: JD $JD, ON Holding $ON

• Wednesday: Cisco $CSCO

• Thursday: Walmart $WMT, Alibaba $BABA

EarningsHub helps me stay on top of earnings, forecasts, and AI-powered call recaps.

It’s free, and perfect if you want to track every major company reporting.

Buys

• Vicente Gonzalez (D)

  • Company: Apple ($AAPL)

    • Amount Purchased: $100K - $250K

• Jefferson Shreve (R)

  • Company: Intuit ($INTU)

    • Amount Purchased: $100K - $250K

  • Company: Ecolab ($ECO)

    • Amount Purchased: $100K - $250K

  • Company: Apple ($AAPL)

    • Amount Purchased: $100K - $250K

Sells

• Jefferson Shreve (R)

  • Company: Microsoft ($MSFT)

    • Amount Sold: $250K - $500K

  • Company: Meta Platforms ($META)

    • Amount Sold: $117K - $330K

  • Company: Broadcom ($AVGO)

    • Amount Sold: $100K - $250K

Buys

• International Flavors & Fragrances ($IFF)

  • Insider: Erik Fyrwald (CEO)

    • # of Shares Purchased: 24,300

    • $ Amount: $1,797,456

    • SEC Forms: [1]

• KKR ($KKR)

  • Insider: Robert Scully (Director)

    • # of Shares Purchased: 13,250

    • $ Amount: $1,503,733

    • SEC Forms: [1]

Sells

• Roblox ($RBLX)

  • Insider: David Baszucki (President & CEO)

    • # of Shares Sold: 1,899,997

    • $ Amount: $137,161,289

    • SEC Forms: [1]

• CVS ($CVS)

  • Insider: Larry Robbins (Director)

    • # of Shares Sold: 1,473,932

    • $ Amount: $137,161,289

    • SEC Forms: [1]

🤝 Review of the Week