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Happy Sunday!

After a stiff drop on Monday, sparking fears of the possibility of a recession due to concerns like the unwinding of the yen carry trade, the S&P 500 made an impressive recovery.

The index regained nearly all of its losses, ending the week relatively flat.

While many are calling this the craziest week of the year so far, it's crucial to remember that market volatility is common and expected.

The key is to stay focused on the long term and not get swayed by short-term fluctuations.

As legendary investor Peter Lynch once said, “Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.”

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

• Coca-Cola $KO must pay the IRS $6B in back taxes and interest.

• S&P 500 CEOs are making 268x the typical worker’s wage.

• TSMC’s $TSM sales jumped +45% YoY in July.

• Jamie Dimon $JPM predicts up to a 40% probability of a soft landing.

• Goldman Sachs $GS raises recession odds to 25%.

• Airbnb’s $ABNB bookings rose 8.7% in Q2 and further slowdown is expected.

• The Nikkei’s 12% drop was the largest one-day fall since 1987.

• Lucid $LCID has received a $1.5B commitment from Saudi Arabia’s Public Investment Fund.

• Robinhood $HOOD saw Q2 revenue jump 40% YoY.

• Disney $DIS will raise the prices of its streaming services up to 25%.

• Disney’s $DIS streaming unit reached profitability, with operating income reaching $47M.

• Duolingo’s $DUOL monthly active users increased 40% YoY to 104M.

• Apple $AAPL has a 38.7% share in the worldwide tablet market.

• CVS $CVS is planning a multiyear, $2B cost-cutting program.

• Warner Bros $WBD wrote down its television networks by $9.1B.

In today’s newsletter:

• 💰 Warren Buffett’s $277B Cash Pile

• 📉 Bumble’s Bee Sting

• 🍕 Super Micro’s Stock Split

• 🦾 Palantir’s Revenue Growth

• 🚖 Uber Is Now A Cash Machine

Is a recession around the corner?

Nobody knows for sure, and accurately predicting one is nearly impossible. 

However, if anyone is prepared, it's Warren Buffett and Berkshire Hathaway.

Last weekend, Berkshire Hathaway released its Q2 earnings, revealing a record-breaking $277B cash pile. 

In Q1, the cash pile sat at $189B, and Buffett’s recent strategic moves of selling nearly 50% of his Apple shares and offloading Bank of America have helped significantly boost this figure.

With $277B on the sidelines, Buffett can comfortably earn a risk-free return through treasury bonds while waiting for the next big opportunity. 

His cash position now surpasses the market cap of well-known companies like Netflix, AMD, McDonald's, Disney, and Airbnb.

Things continue to look good at Palantir.

Palantir is known for its data analysis tools used by companies and governments, often in defense and intelligence.

The company announced earnings this week and raised its annual revenue forecast for the second time this year. 

They now expect annual revenue to land between $2.74B and $2.75B, exceeding analyst estimates of $2.7B.

Adjusted operating income is projected to hit $970M at the midpoint, surpassing the $882.9M consensus.

In the current quarter, Palantir blew past estimates for both overall sales and net income.

As the company continues to deliver profitable quarters, they remain eligible for inclusion in the S&P 500 index.

And just when the outlook couldn’t look any better, Palantir announced a partnership with Microsoft on Thursday, where the company’s data analytics software will be offered through Microsoft Azure. 

As we’ve come to know, stock splits have no fundamental impact on a company in the long run.

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

On Tuesday, Super Micro announced a 10-for-1 stock split effective October 1st as part of its Q4 FY24 earnings release.

The company had a mixed quarter overall.

Adjusted earnings fell below expectations, coming in at $6.25 compared to the anticipated $8.07. 

On the other hand, revenue slightly exceeded analyst estimates, reaching $5.31B against the expected $5.30B.

For the next quarter, Super Micro is projecting revenue to hit $6.5B at the midpoint, above the estimated $5.46B.

However, EPS is expected to be $7.48 at the midpoint, below the consensus of $7.58.

With shares having climbed nearly 80% this year, expectations are everything when it comes to these high flyer names.

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Investors are swiping left on Bumble.

Bumble's stock has plummeted over 25% following the release of its Q2 FY24 earnings. 

What caused this dramatic drop?

The company missed revenue estimates for the current quarter, next quarter, and reduced its full-year forecast. 

For the current quarter, Bumble reported $268.6M in revenue, missing the $273.2M estimate.

However, it beat earnings expectations with $0.22 per share, compared to the $0.13 estimate.

While the number of Bumble app users paying increased by 15% to 2.8M, average revenue per paying user fell 9% to $25.79.

For the next quarter, Bumble’s projected adjusted EBITDA sits at $78.5M at the midpoint, falling short of the estimated $91.5M. 

Expected revenue of $272M at the midpoint also missed the $296.1M forecast.

For the full year, Bumble now expects annual revenue to grow between 1% to 2%, significantly lower than the previous forecast of 8% to 11%.

The company has made significant changes this year, including a shake-up of the CEO and executive team, laying off a third of its workforce, and redesigning the app experience. 

However, these efforts have not yet driven substantial growth in the short term.

Is the U.S. consumer struggling?

Uber doesn’t seem to think so.

CEO Dara Khosrowshahi confidently stated during this week’s earnings call, “…the Uber consumer is in great shape. Our audience is bigger than ever and using our services more frequently than ever…we’re not seeing any softness or trading down across any income cohort.”

Here’s a quick rundown of the company’s latest earnings:

• Adjusted Earnings: $0.47 vs. $0.31 Est.

• Revenue: $10.7B vs. $10.57B Est. (+16% YoY)

• Gross Bookings: $40B (+19% YoY)

• Trips: 2.8B (+21% YoY)

• Free Cash Flow: $1.7B

• Cash, Cash Equivalents, & Short-Term Investments: $6.3B

After years of struggling to generate consistent profits and cash flow, Uber has turned things around, now boasting record profits and growth at scale.

The company also saw Monthly Active Platform Consumers surge by 14%, from 137M in 2023 to 156M in 2024.

All three of its segments—Mobility, Delivery, and Freight—experienced double-digit adjusted EBITDA growth YoY.

Looking ahead, the company expects growth to continue, and issued the following guidance (midpoint) for Q3:

• Gross Bookings: $41B vs. $41.18B Est. (+20.5% YoY)

• Adjusted EBITDA: $1.63B vs. $1.62B Est. (+49.5% YoY)

Notable Companies Reporting Earnings This Week:

• Monday (8/12):

  • Barrick Gold $GOLD, Monday.com $MNDY

• Tuesday (8/13):

  • Home Depot $HD, Nu Holdings $NU, Sea Limited $SE, Flutter Entertainment $FLUT, On Holding $ONON

• Wednesday (8/14):

  • Cisco $CSCO, UBS $UBS

• Thursday (8/15):

  • Walmart $WMT, Alibaba $BABA, Applied Materials $AMAT, Deere & Company $DE, JD.com $JD

• Friday (8/16):

  • Flowers Foods $FLO

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

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Buys

• Ro Khanna (D)

  • Company: The Bank of Nova Scotia ($BNS)

    • Amount Purchased: $150K - $350K

• Laurel Lee (R)

  • Company: Apple ($AAPL)

    • Amount Purchased: $15K - $50K

    • Description: Purchase of 25 Jan 2025 $215 Put Contracts

Sells

• Laurel Lee (R)

  • Company: Apple ($AAPL)

    • Amount Sold: $15K - $50K

    • Description: Sale of 25 Jan 2025 $230 Call Contracts

Buys

• Block ($SQ)

  • Insider: Roelof Botha (Director)

    • # of Shares Purchased: 434,405

    • $ Amount: $25,001,587

    • SEC Forms: [1]

• ZoomInfo Technologies ($ZI)

  • Insider: Henry Schuck (CEO)

    • # of Shares Purchased: 1,500,000

    • $ Amount: $12,736,650

    • SEC Forms: [1]

• MGM Resorts ($MGM)

  • Insider: Paul Salem (Director)

    • # of Shares Purchased: 147,500

    • $ Amount: $4,986,090

    • SEC Forms: [1]

Sells

• Ryan Speciality Holdings ($RYAN)

  • Insider: Timothy Turner (President)

    • # of Shares Sold: 2,000,000

    • $ Amount: $124,900,000

    • SEC Forms: [1]

• Stryker ($SYK)

  • Insider: Ronda Stryker (Director)

    • # of Shares Sold: 190,000

    • $ Amount: $61,457,149

    • SEC Forms: [1]

• Blackrock ($BLK)

  • Insider: Laurence Fink (Chairman and CEO)

    • # of Shares Sold: 29,450

    • $ Amount: $24,833,598

    • SEC Forms: [1]

🤝 Review of the Week