United States

• Global Fund exposure in NVIDIA Corp (NVDA US) has moved to record levels after a doubling of the share price this year.
• New positions from UniNachhaltig Global, JP Morgan Global Focus  and BNY Mellon Global Equity (3.36%) were among a total of 14 funds who opened exposure to NVIDIA Corp in 2023.
• Growth and Aggressive Growth funds are at maximum levels of ownership, whilst Value managers are showing some hesitancy here.

• US Mutual Fund exposure in Ford Motor Company hits all-time lows with just 11 out of 295 funds holding a position.
• Ford Motor Company is now the 6th most widely held Auto stock after Tesla, General Motors, Rivian Automotive, Harley Davidson and Oshkosh Corp.
• Ford tops the list of unloved companies in the US, with the vast majority of active managers expecting Ford to underperform.

• Steel Dynamics had a disappointing second quarter with revenues below Wall Street expectations though they did manage to report improved net income and EBITDA.
• The management noted increased pricing and metal spread across flat-rolled and long-product steel operations.
• Steel Dynamics’ net income stood at $812 million, operating income at $1.1 billion, and EBITDA at $1.2 billion.

• Impinj warned revenue would decline sequentially in the third quarter due to weaker than expected demand from retail apparel customers. The shortfall started  towards the end of the second quarter
• Impinj increased inventory in the first quarter and more so in the second quarter. Inventory within the channel has also increased compared to the first quarter
• Impinj’s stock continues to price the downward revenue scenario as a short-term event. Previous downturns have lasted more than one quarter

• Equifax delivered a mixed result in the recent quarter, with revenues below market expectations but managed to surpass the analyst consensus regarding earnings.
• Last quarter, the company faced a challenge, particularly in the mortgage and hiring markets.
• While the U.S. mortgage market weakened, they delivered adjusted EPS and EBITDA margins above guidance.

• Texas Instruments delivered a positive result and managed an all-around beat last quarter.
• The decline in gross profit from the prior year was principally brought on by reduced revenue, higher capital expenses, and the shifting of LFAB-related costs to the cost of revenue.
• For the third quarter, Texas Instruments’ team anticipated the sale to be in the $4.36 billion to $4.74 billion range, with $1.68 to $1.92 earnings per share.

• United Airlines delivered an all-around beat in the most recent quarterly result.
• The strategic initiatives, including aggressive pilot hiring, fleet expansion, and route optimization, have paid off and put United on a path toward delivering impressive earnings per share.
• We give United Airlines Holdings a ‘Buy’ rating with a revised target price.

• SAP delivered a mixed set of results in its most recent result with revenues above Wall Street expectations but below-par earnings.
• RISE with SAP and GROW with SAP have been well-received offerings, driving significant cross and upsell opportunities across their portfolio.
• SAP’s approach with SAP Business AI is unmatched in the industry, delivering relevant, reliable, and responsible AI solutions to customers, with plans to introduce new premium RISE offerings and an uplift of up to 30% in the fall.

• Alcoa delivered a solid result and managed an all-around beat in the last quarter.
• The company had a mixed last quarter and reported slightly higher revenue and increased shipments but experienced challenges due to market conditions.
• Despite lower alumina and aluminum prices, they improved net loss due to the nonrecurrence of specific charges.

• Verizon Communications delivered mixed results for the previous quarter, with revenues below the analyst consensus.
• Revenue from wireless services increased and their consumer wireless strategy, which combines segmentation with budgetary restraint, is seeing positive results.
• By enticing consumers to purchase premium plans, which increases ARPA, myPlan has already assisted the Verizon Consumer Group in achieving noticeable operational gains.

• Google, Microsoft, and Facebook reported earnings.
• Let’s discuss their capex plans and what that means for our new data center champion, Nvidia.
• I think it’s pretty straightforward that Nvidia has revenue beats for the foreseeable future.

• Elon Musk has killed Twitter’s last and greatest value by renaming it X. As in, fill in whatever the heck it is now. 
• Twitter’s strong, globally recognized brand worth had been worth much as $20 billion—its last and only valuable asset.
• Incredibly, it gets worse. Hundreds of other companies already own rights to the X name and logo—including META and Microsoft. 

• Facebook exceeded 3 Bn MAU for the first time, and MAP is now approaching 4 Bn.
• DAU/MAU engagement looks steady across all regions.
• While ARPU exhibited considerable strength, please note the material weakness in YoY comparison.

• Verizon’s share price continues to fall amid speculations and low interest in slow-growth businesses.
• The business is stabilizing and on-track to deliver much needed top and bottom line growth, according to the company.
• No matter how you look at it, being bullish on Verizon Communications Inc. (NYSE:VZ) takes a real contrarian view with ability to endure pain and keep a long-term focus.

• Despite the positives, we are worried about a potential nominal earnings decline and its effect on Meta’s price multiples.
• The company’s second quarter financial results communicate robust growth.
• However, risks remain, and we are concerned about the potential nominal Earnings decline and the effect onMeta’s priceMultiples.

• ATEN reported higher revenue and earnings in the second quarter signaling improved business environment compared to the first quarter
• ATEN reported second quarter revenue of $65.8 million compared to our forecast of $62.4 million
• In North America large enterprise and tier-one service providers are reassessing their purchasing activity is not new

• NTGR is beginning to experience stability in demand and inventory within its connected home segment suggesting growth could be around the corner
• The lower inventory levels at retail partners should result in fewer promotion activity as NTGR is now projecting the return of seasonal strength in the third quarter
• NTGR reported second quarter revenue ahead of expectations with connected home revenue being the factor for the outperformance

• There can be no doubt that gold has intrinsic value, as it is a rare commodity. But even if it wasn’t rare, like sand or manure, it would still have intrinsic value, just much less than it currently does.
• The question I have been asking is how much of the gold price reflects its intrinsic value, and how much is something else?
• Gold is a monetary asset and, as a result, is valued above and beyond its intrinsic value.

• Worldcoin’s launch was one of the most unique and controversial in recent years.
• Much of the controversy stems from the understandable skittishness with Worldcoin’s goal (creating a global identity network) and sci-fi-like methods of achieving this goal (eye scans).
• This has been nicely summarized by the MIT Technology Review. 

• HighPeak closed a secondary offering of ~14.8 million shares of common stock on July 21, 2023.

• The shares were priced at $10.50, netting the company proceeds of ~$151.2 million.

• Members of the management team and board of directors purchased ~10.0 million, or 68% of the shares sold

• IRDM reported second quarter results showing continued growth in service revenue. Commentary related to direct to device and an increase in equipment revenue that drew the ire of investors
• IOT had a larger increase in the number of subscribers than we were expecting, resulting in service revenue remaining towards the higher end of the 9% to 11% growth forecast
• We believe IRDM is managing the business for the longer term and not for a specific quarter, which could contrast with investor expectations related to equipment inventory

• Insulet Corp (PODD US), with expanding user-base and product innovation, is well-positioned to face competition in the US patch pump market. Large and underpenetrated target market offers immense growth potential.  
• Insulet raised Omnipod 2023 revenue growth guidance to 21–25% from 17–22% previously. The U.S. Omnipod revenue growth guidance has been raised to 27–31% from 21–26% earlier.
• For 2023, Insulet expects gross profit margin of 65–66%, compared with 61.7% in 2022. Insulet has reaffirmed high-single-digit operating profit margin for 2023 compared with 2.9% in 2022.

• The US rig count has declined in recent months as operators have curtailed activity in the face of declining oil and natural gas prices.

• According to the Baker Hughes rig count, total US working rigs had declined to 669 on July 21, 2023, from 755 on March 31, 2023.

• ICD’s fleet of pad-optimal super-spec rigs primarily serves customers in the Haynesville, Permian, and Eagle Ford regions.

• IBM delivered a mixed result in the recent quarter, with revenues below market expectations, but it managed to surpass the analyst consensus regarding earnings.
• The last quarter demonstrated strong execution of their hybrid cloud and AI strategy, with solid growth in their software and consulting segments.
• Additionally, their enterprise AI initiatives, including the Watsonx platform, show promising results with multiple use cases across various industries.

• IPAR continued to experience momentum in demand in the second quarter with preliminary sales ending up at $309 million compared to our Street high estimate of $283.7 million
• IPAR’s management is taking a conservative approach with sales forecast given the supply chain and sales volatility in certain regions. 
• The strength in second quarter sales was across multiple brands and in both segments

• Intuitive Surgical managed to exceed analyst expectations in terms of revenue as well as earnings.
• Cholecystectomy and hernia repair procedures grew more frequently in general surgery.
• SP procedure growth was accretive in the quarter, with a 40% global increase driven by accelerated growth in the United States.

• Kinder Morgan had a disappointing performance in the last quarter with revenues below Wall Street expectations.
• The natural gas and terminals businesses outperformed with increased transport and gathering volumes, while the CO2 business beat the production plan.
• Kinder Morgan’s strong performance in various segments and ability to adapt to market dynamics demonstrate its resilience and expertise in the energy industry.

• Las Vegas Sands managed to exceed analyst expectations in terms of revenue as well as earnings.
• With its scale and substantial investment, Las Vegas Sands is well-positioned to benefit from this trend.
• We give Las Vegas Sands Corp. a ‘Hold’ rating with a revised target price.

• LyondellBasell stock offers a high dividend yield of 5.5% and improving cash flow coverage.
• Some major headwinds are dissipating and this puts LyondllBasell in a very good position to improve its profitability profile.
• LyondellBasell (NYSE:LYB) delivered nearly 16% total return since December of last year, when I took a deep dive into the company’s operations and explained why the stock is attractive for anyone looking for attractive risk-reward opportunities.

• Topline grew +9% FXN. While Google Services revenue growth was flat in 1Q’23, it was 5.5% YoY in 2Q’23, with growth re-accelerating in every component of Google Services.
• Despite cost optimization efforts by customers, Google Cloud maintained its momentum with ~28% YoY growth (same as it was in 1Q’23).
• So, on an apple-to-apple basis, Google Services margin would be slightly lower this quarter than reported (say, ~$500 Mn opex for Google Brain).

• APLD released 4Q earnings last night. The stock performed well, +14%.
• The key highlight was the huge guidance. In this post I will run through how the numbers make no sense.

• Jamestown, North Dakota (JT) – 100MW – JT has been operating since 2022. It has ~100MW of capacity and has been running at full capacity over the past two quarters, according to comments made on the company’s 3Q and 4Q earnings calls. Here is a snip for the 3Q call.

• Lockheed Martin Corporation delivered a positive result and managed an all-around beat in the last quarter.
• Lockheed had revenues of $16.7 billion, an increase of 8% year on year, and double-digit growth in both Aeronautics and Space.
• We give Lockheed Martin Corporation a ‘Hold’ rating with a revised target price.

• Omnicom Group delivered a mixed set of results for the previous quarter, with revenues below analyst expectations but managed earnings beat.
• Organic growth for the quarter was impressive and the company’s liquidity is strong while its cash flow supports its principal cash uses, including dividends, purchases, and share repurchases.
• Omnicom made considerable headway on its AI strategy by incorporating generative AI into Omni, their market-leading technology platform, and forming important first-of-their-kind technological partnerships.

• Stars are aligning and both Steno Research and 3Fourteen research are now energy bullish.
• Last week at Steno Research we looked at the potential for a bounce in Manufacturing PMI numbers and we thought it would be natural to look at both hard and soft data through the lens of one of the most important signals in the energy markets, namely the flip from contango to backwardation.
• In general it can be said that the flip brings more volatility to soft data than hard data. Given PMIs general tendency to converge with hard data and its current levels (Almost GFC bearishness) we feel like there are plenty of reasons for betting on higher Manufacturing PMI numbers.  

• Conagra Brands delivered a mixed set of results in its most recent quarter, with revenues falling short of Wall Street expectations.
• As Conagra made significant headway on its cost-saving initiatives and consequently saw a significant rise in service standards, its supply chain kept becoming better.
• Conagra Brands further expanded its product line by introducing more than 50 new items across its frozen, grocery, and snacking divisions.

• This is our first report on Aflac Incorporated, a prominent player in the American insurance industry.
• The year’s first quarter proved promising for Aflac, as the company reported solid earnings results despite a material yen weakening.
• The operations in Japan saw continued sales improvements, driven by the rollout of new and refreshed products, particularly the cancer insurance policy.

• J.B.
• Hunt Transport Services delivered a disappointing set of results as the company was unable to meet the revenue as well as the earnings expectations of Wall Street.
• Revenue for the quarter decreased 18% from the prior year on a consolidated GAAP basis.

• As most AI heavyweight stocks (e.g. Nvidia, Microsoft) have already soared, some investors may be left feeling that they have missed the AI bandwagon.
• We believe there’s a delayed “AI winner” which the market is still sleeping on: EPAM Systems.
• With the stock back at ~$230, the risk-reward here is highly attractive in our view.

• Wheat futures soared as much as 9%, the biggest jump since 2012, as Russia threatened ships sailing to Ukrainian ports, escalating a conflict over exports from the key Black Sea region.

• Russia’s defense ministry said that all ships headed to the ports from Thursday will be considered as potentially carrying military cargo.

• It also said flag countries of vessels sailing to Ukraine will be considered as on Kyiv’s side in the conflict.

• Visa continues to deliver as the company fully capitalizes on recent macroeconomic and industry-wide tailwinds.
• The expectations for the upcoming quarter are high and the second half of the fiscal year is also likely to be more challenging.
• This creates certain risks for the share price that are not necessarily priced in at the moment.

• BTC volume dominance has slipped 8% since the start of July following the Ripple ruling, which instantly caused altcoin markets to rally.
• BTC dominance across the top 25 centralized exchanges is currently at its lowest level since April, at 27%.
• Offshore exchanges have experienced a more extreme drop in BTC trading activity, partially due to a spike in South Korean altcoin volume.

• Qualcomm has announced a partnership with Meta to run the Llama 2 Large Language Model on mobile devices and PCs from 2024 on.
• The deal could open up a new wave of LLM usage for everyday consumers on mobile, PC, and VR/AR headsets, potentially boosting Qualcomm’s market position.
• In the year’s artificial intelligence gold rush, Nvidia (NVDA) surged to a $1 trillion market cap.

• This is our first report on one of the largest private sector banks in Brazil, Itau Unibanco.
• The loan portfolio showcased growth despite signs of a slowdown, with the SMEs loan portfolio registering an increase of 9.2% for Q1 2023 compared to Q1 2022.
• We initiate coverage on the stock of Itau Unibanco Holding S.A. with a ‘Hold’ rating.

• This is our first report on Monolithic Power Systems, one of the largest semiconductor-based equipment companies.
• Revenue from communications also increased due to a slight increase in revenue from the 5G infrastructure.
• We initiate coverage on the stock of Monolithic Power Systems, Inc. with a ‘Hold’ rating.

• This is our first report on Discover Financial Services, a prominent consumer finance company.
• Net interest income grew significantly, supported by an expanding net interest margin driven by higher prime rates.
• Additionally, the company introduced Discover Financial Health Improvement Fund to improve the financial well-being of low- and middle-income individuals, communities, and small enterprises.

• In 2Q23, Intuitive Surgical (ISRG US) recorded 15% YoY revenue growth to $1.76B, driven by growth in da Vinci procedure volume and an increase in the installed base of systems.
• 2Q23 procedure growth was 22%, compared to 14% for 2Q22 and 26% last quarter. Areas of strength included general surgery and gynecology for benign conditions, particularly in the U.S.
• The company now expects 2023 procedure volume growth of 20–23%, up from previous estimates of 18–21% growth. Significant material supply chain disruptions or hospital capacity constraints are not expected.

• This is our first report on insurance behemoth, AIG.
• In Q1 2023, AIG reported a net income of $3.9 billion, marking a significant turnaround from the net loss of $7.9 billion reported in Q1 2022.
• Concurrently, AIG continues to monitor market conditions and regulatory approvals as it considers reducing its ownership interest in Corebridge via a secondary offering, amongst other options.

• This is our first report on Prudential Financial, Inc., a major global player in financial services and insurance.
• Prudential kept transforming throughout the quarter to become less reliant on the market and better able to produce steady, long-term growth.
• The company also had the financial strength to navigate the changing macroeconomic climate because of its rock-solid balance sheet.

• This is our first report on PNC Financial Services Group, a major bank and financial service company.
• Despite a rise in the accumulated other comprehensive loss by $400 million during Q2, the tangible book value rose to $77.80.
• We initiate coverage on the stock of PNC Financial Services Group with a ‘Hold’ rating.

• Digital Realty Trust, Inc. is executing a phenomenal strategy, with additional pipeline developments coming online soon.
• Digital Realty is faced with cyclical valuation concerns, we think they will be short-lived.
• Digital Realty Trust, Inc. (NYSE:DLR) presents an interesting talking point

• Welcome to the final series of our “Business Cycle Week”, where we cover how a possible rebound in manufacturing might affect asset markets, and if markets are already starting to position for it.
• Commodities is the only asset class we need to tick off, and what a way to end the business cycle week with the most cyclical asset of them all, looking to benefit the most from a rebound in manufacturing.
• Commodities have had a rough 2022 (and start of 2023) as USD strength and a lack of Chinese demand have held commodities prices down, despite the scarcity that characterizes the market currently.

OpGen has announced that Curetis (its German subsidiary) has met its objectives agreed under its extended R&D collaboration with FIND (a global non-profit alliance for diagnostics), triggering a $0.2m milestone payment to OpGen. Under the expanded scope of the feasibility study for the Unyvero A30 RQ platform, OpGen was required to provide three more deliverables: an antimicrobial stewardship module, a ‘data everywhere’ concept and next-generation sequencing (NGS) strain analysis. While successful completion of the feasibility stage supports Unyvero A30’s applicability in low-to-middle income countries (LMICs), it also paves the way for a subsequent R&D agreement with FIND in developing LMIC-specific Unyvero A30 antimicrobial resistance (AMR) solutions. We await further details from management on the next potential steps of the collaboration.

• FedEx Corporation delivered a mixed set of results for the previous quarter, with revenues well below analyst expectations but managed earnings beat.
• Though total revenue declined due to soft demand and yield pressure in international markets, the company maintained revenue quality with disciplined pricing.
• In the quarter, they launched FedEx Sustainability Insights to improve consumer access to emissions information.

• Foot Locker delivered a disappointing set of results as the company was unable to meet the revenue and earnings expectations of Wall Street.
• The company remained optimistic about the back half of the year, with several key launches and brand collaborations planned.
• Despite challenges, Foot Locker continues to focus on its omni-connected retail experience, with plans to open new prototype stores next year.

• Expeditors International of Washington delivered a mixed set of results in its most recent result, with revenues falling short of Wall Street expectations but above-par earnings.
• In addition to their impressive brokerage operations, Expeditors has successfully leveraged technology and digital solutions to streamline their processes and enhance customer experience.
• We give Expeditors International of Washington a ‘Underperform’ rating with a revised target price.

• Capri Holdings delivered an all-around beat in the previous quarter as earnings per share and revenue both climbed by high single digits.
• All its houses saw an increase in revenue, with Versace, Jimmy Choo, and Michael Kors all experiencing double-digit growth.
• They kept growing footwear sales across all brands, with Versace, Michael Kors, and Jimmy Choo all seeing increases in the low double digits and Jimmy Choo in the high single digits for women’s footwear retail sales.

• Digital Turbine delivered a mixed set of results for the previous quarter, with revenues above analyst expectations but below-par earnings.
• The company had an 11% decline in fiscal ’23 revenue due to soft advertiser spending and macro headwinds impacting their On Device Solutions and App Growth Platform businesses.
• Digital Turbine aims to build alternative app stores with equity positions in companies like Aptoide, easing app porting and payment management and tapping into the in-app purchasing market.

• Enterprise Products Partners delivered a mixed set of results for the previous quarter, with revenues below the analyst consensus.
• Enterprise Product Partners remains on track with significant projects, aiming to put approximately $3.8 billion into service this year.
• We give Enterprise Products Partners a ‘Hold’ rating with a revised target price.

• Fastenal had a disappointing second quarter of 2023 as it failed to meet the revenue expectations of analysts despite a 5.9% increase in daily sales.
• Its overall business activity has moderated since March, culminating in June with a 4.7% daily sales growth.
• We give Fastenal Company a ‘Hold’ rating with a revised target price.

• Lennar managed to exceed analyst expectations in terms of revenue as well as earnings.
• The last quarter proved to be successful as the company maintained its focus on production, cash flow, and inventory management.
• Additionally, Lennar diligently managed its operating costs, keeping SG&A at significant lows while maintaining a sharp focus on cash flow and bottom-line results.

• Adobe delivered a solid result and managed an all-around beat in the last quarter.
• In the quarter, they generated $659 million in Document Cloud revenue, up 14% year on year.
• Additionally, Adobe introduced a brand-new version of Adobe Express with Firefly generative AI capabilities, which is revolutionizing the way everyone creates and distributes exceptional content.

• Lumentum Holdings delivered a disappointing set of results as the company was unable to meet the revenue as well as earnings expectations of Wall Street.
• The company’s commercial lasers business is also expanding into high-growth areas such as solar cells, advanced semiconductors, electric vehicles, and display manufacturing.
• We give Lumentum Holdings Inc. a ‘Hold’ rating with a revised target price.

• Welcome to the second research piece in our “Business Cycle Week”.
• In this edition of the series on the business cycle, we will focus on whether FX markets sniff out the cycle ahead of other asset markets.
• Is the USD a bellwether of global trends or is it just a saying?

• Herein we revise and update MLKN estimates following MillerKnoll’s FY23 earnings report and FY24 guidance.

• Our 1QFY24 diluted non-GAAP EPS estimate is now $0.20, down $0.10 from our previous (reduced) $0.30 estimate.

• Our FY24 annual estimate is now $1.82 (down from $2.00), below the midpoint of the $1.70-$2.00 management outlook.

Immix has shared interim data from the Phase Ib/IIa trial evaluating IMX-110 in combination with tislelizumab for solid tumors. As of the data cut-off (7 July 2023), it was found that three of four participants with metastatic colorectal cancer (mCRC) showed tumor shrinkage and one of four experienced tumor control; all patients had stage IV relapsed/refractory (r/r) mCRC and had received a median eight lines of prior therapy. Dose escalation is proceeding, and dosing of the second cohort of patients in the Phase Ib portion of this study is complete. The higher dose cohort (Cohort 3) of patients with solid tumors is currently being enrolled, aiming to establish the recommended Phase II dose. With no severe adverse events reported to date, and with the early signs of efficacy, we believe these results are encouraging for the clinical development of IMX-110. We anticipate a steady flow of data readouts throughout H223 and FY24.

• Welcome to your weekly maverick energy newsletter from both sides of the pond.
• Stars are starting to align for energy as i) the business cycle seems to be holding up better than feared, ii) the USD is weakening and iii) ongoing supply negative news (prolonged Saudi Arabian supply cut and Russia abandoning the grain deal).
• Time to go long energy?

• Ever since our 5/30/23 ETF Pathfinder, our view has been that we cannot be bearish unless a key support level breaks (at the time, that was 4050 on the SPX).
• The S&P 500 is now above 4300-4325 — a level that, in January this year, we had anticipated would cap upside for 2023.
• We believe 4300-4325 will act as major support moving forward, and we are bullish as long as the SPX is above 4300; we discussed this in our 7/3/23 ETF Pathfinder.

• Ally Financial is about to release its Q2 2023 earnings tomorrow as tightening within the auto loans market continues.
• The deposit mix will be a key area to watch as it will have a major impact on the company’s return on tangible common equity.
• The company is expected to report its second quarter of 2023 on Thursday.