In case you missed it:

Next week, earnings season ramps up. I will be publishing reviews on SoFi, Meta, Tesla, ServiceNow, Apple and probably Microsoft. 

My Axon Deep Dive will also be published next weekend.

For next quarter, revenue guidance missed by 3%, $0 EPS guidance missed by $0.05 and 34.5% GPM guidance missed by about 2 points.

Intel trades for 126x forward EPS as they aggressively invest in their future and struggle to capture near-term demand. As of right now, EPS is expected to grow by 14% this year and by 119% next year.

Unless you are making a geopolitical-related bet, I don’t see why anyone goes with this over AMD for CPU exposure, this over AMD or Nvidia for high-performance chip exposure or this over Taiwan Semi for foundry exposure. Intel could turn back into a great and strategic company for U.S. national security and diversification away from sharp reliance on Taiwanese supply chains. The Foundry segment will just take several years to come to fruition, even with powerful allies like the U.S. government tilting the odds of success in their favor.

Nu is now the largest private sector financial institution in Brazil by customer count. They have over 112M customers there as of today vs. 110M Q/Q. For Q4 (ended on New Year’s) they probably added somewhere around 2M for the quarter. That compares to the few quarters before that being around ~2.5M adds. Not surprising to see this slowing and I fully expect that to keep happening in that country. The gradual nature of the slowing is what we want to see, as there’s no chance they can keep accelerating customer growth in Brazil specifically at this point. They already have over 60% of the adult population in the app. The Brazilian growth engine will be driven more by cross-selling & ARPU gains than customer growth going forward (with still solid customer growth). 

Fortunately, they have miles & miles of runway there, as their gross profit market share is a small fraction of their customer market share. For context, they have 5% gross profit share despite having a 30% primary bank account share. That’s a 6x revenue opportunity just from their existing base as they match the suites of century-old incumbents and win customers thanks to their elite user interface and inherent cost advantages. Gross profit share looking like primary bank account and customer market share is a matter of when not if, in my opinion.

Their customer ARPU is tiny compared to large incumbents. That’s a byproduct of being behind incumbents in rolling out and scaling products like high-net-worth credit cards and more secured loan types. They’re quickly catching up and I expect the profit-to-customer market share gap to close and support more profitable compounding in that nation. And elsewhere, Nu’s customer growth is in its early stages.

Greenoaks Capital & Altimeter Capital filed arbitration claims against the South Korean government. This is essentially a request to a panel of judges to have the case resolved by an independent 3rd party instead of Korean lawmakers. Both funds believe that PM Kim Min-seok is practicing “selective enforcement” of laws and “discriminatory treatment” just because Coupang is U.S.-listed and stealing share from smaller domestically and Chinese-listed customers (because their service is far superior). In my opinion, they are so incredibly right. AliExpress and Temu have been shamelessly and intentionally abusing data privacy laws in that country for years and they don’t seem to care nearly as much as when it happens by accident at Coupang. 

I can only wonder why that is. Why are you so much more focused on Coupang’s treatment of labor when you know others are far worse? Why was Min-seok so quick to loudly and publicly call one of their largest private sector employers liars? Why were they so eager to say Coupang’s findings were unsubstantiated when we have absolutely no reason to believe they’re being anything but candid? Why don’t they seem motivated to be fair to this organization? To me, the answer is clear: bias favoring Chinese-listed competitors. Fortunately, there are powerful forces pushing back aggressively against the Korean government to make sure they don’t act maliciously. It’s not clear whether or not these arbitration claims will be approved or rejected. But I think the accusations of government bias against Coupang are well placed.

Interestingly, the Korean Prime Minister is actually in D.C. right now and was quoted talking about this issue in articles that came out tonight. He denied discriminating against Coupang and said there’s “no need to worry about that.”

I don’t really care about him saying that. It’s crystal clear to me that he’s biased and not acting purely in good faith… and what else is he going to say? I do, however, care that he knows large, powerful funds in the U.S. are closely watching the situation and demanding equitable treatment. That’s comforting to me. And it’s especially comforting as it comes amid the House Ways and Means subcommittee’s hearing where members of both parties ripped the Korean government’s treatment of this U.S.-listed company to shreds… calling it a witch hunt several times. Korea has a vested interest in being on good terms with the USA, and the USA is telling them that's not possible unless you act impartially. Korea knows it can’t punish Coupang to favor Chinese rivals as geopolitical ties evolve and the Korean/Chinese bond gets tighter. The U.S. private and public sectors have shown a determination to see Coupang treated fairly.

I’m not selling any shares.

Lemonade is rolling out new risk pricing for Tesla Full Self Driving (FSD) users. They’ve been in data collection and Tesla team collaboration mode for a few months. The work they did with Tesla is not exclusive. They merely tweaked a data pipeline to let Lemonade access needed insights that power these discounts. Other insurers can do the same thing if Tesla lets them, but none have yet.

All of this work has led to the first version of their autonomous car insurance pricing.  Because data shows Tesla’s software is 50% safer than a human driver, LMND plans to offer a 50% discount on FSD miles. That’s the luxury of knowing risk more precisely, you can price it more accurately. 

Legacy competition can’t. For humans, they overcharge safe drivers to fund undercharging dangerous drivers. Those safe driver plans are ripe for undercutting and winning for Lemonade. And these same competitors cannot begin to match the understanding LMND has in autonomously driven risk pricing. They don’t have a decades-long head start this time. Instead, they have decades of clunky systems built and stitched together that will inherently slow them down. That’s part of the reason why I like this name so much. You don’t have to beat Amazon and Apple… just State Farm and Progressive. That’s not easy, but it is easier in my opinion. Simply put, Lemonade feels very confident in their FSD risk-pricing capabilities and confident in their ability to undercut these others as they more effectively measure autonomous risk. This is just another sign of them being the fast moving disruptor in a space dominated by giant and slow incumbents.

 I think this week’s news extends the firm’s underwriting granularity in a way that will make them a leader as car insurance goes autonomous. This is Lemonade flexing its superior customer understanding muscles. They’re able to collect data more completely via telematics than most others & they’re able to use this data more effectively than others.  So they know exactly how to price risk on a per mile basis and based on who (or what) is actually driving.

Lemonade’s thoughtfully built integration with Tesla announced late last year was the prerequisite for this. It allowed FSD owners to seamlessly connect to the Lemonade app to access (now discounted) plans more conveniently. That preliminary integration now means this new pricing mechanism can be easily accessed. It allows Lemonade to keep collecting data and considering software updates to perpetually adjust risk pricing as FSD improves. That means a 50% discount is theoretically a starting point that should grow from here. And as the integration is native, customers can enjoy this updated pricing automatically. No work needed.  This is exciting. While I wouldn’t call this a formal partnership, the two sure are cozying up together just a bit. And again, they are actively working together to a certain extent.

In terms of the immediate benefit, this won’t be part of Q4 results. For Q1, this will only be in Arizona. From there, as we move closer to 2027 I do think this could turn into a material accelerant for its small and quickly-growing auto business.

Finally, I saw some on social media saying “Root has done this for almost a decade.” That’s not true. Root offered much smaller discounts that were perceived as a gimmick and marketing campaign in 2017. They had no native integration with Tesla, no ability to match the depth of these deals and no ability to tweak pricing in real-time through Tesla’s interface. They still have none of this.

Since prediction markets came out, I’ve been religiously tracking state-level volume data to gauge whether or not this new competitive threat is slowing DraftKings down. Up until these last two weeks, that was not happening, which was encouraging. The last two reports out of New York, however, have not been good. They represent nearly flat Y/Y volume growth compared to roughly 10% Y/Y growth in the preceding months.

I consistently ridicule and criticize authors from Bloomberg who talk about sharp weekly revenue swings as a red flag. That’s them telling us they don’t get how these business models work. As the market maker, DKNG is taking risk when it takes bets. If most of the public was on the winning side, they would lose money and revenue suffers. Volume excludes this outcome noise, as it simply shows how much traffic and conversion DKNG is attracting on its app. Calling revenue growth for a single week a red flag is identical to saying “DraftKings is no longer a good investment because the Panthers didn’t beat the Rams last week.” And this week? Revenue out of New York rose 48% Y/Y because of good outcome luck. Should we celebrate that? Of course not. Doing so would be identical to saying “the Bills beat the Broncos so this is now a good investment." Weekly revenue swings are pure noise and to be ignored for the long term investor. As long as their expected take rate (revenue/bet volume) is trending higher, their expected value is rising and their actual take rate will rise with time.

But? Weekly volume swings are more important to me and more of a signal in my mind. They’re still noisy, as they can be influenced by event timing, how popular competing teams are from year to year (no Patrick Mahomes, Joe Burrow, Baker Mayfield or Lamar Jackson this year), and where games are played. I’m citing New York State data, so it’s over-indexing to Buffalo Bills data. The Bills played two home playoff games last year, which naturally attracts more New York state volume; they played two road games this year. And next week will probably be weak too, considering the Bills played in last year’s NFC champ game and are not in it this year. Furthermore, DKNG toggles promo rates on a regular basis. Sometimes they lean into revenue maximization… sometimes volume. Yet another reason why this may be a nothing burger.

I will not make excuses for slower volume growth for very long. It’s just that there are several confounding variables at play that can make volume growth noisy for a few weeks at a time. I cannot impulsively react every time there’s a swing. Volume growth should not stay noisy for a few months at a time. If these reports continue to look bad, that could indicate prediction markets are having a sharper impact. I am cautiously optimistic that growth will normalize, considering limited customer overlap and the strong growth we saw throughout almost all of 2025. We’ll see.

ServiceNow announced a new integration that will embed OpenAI models & agents (including its voice & computer use agents) right into its platform. NOW has committed to a minimum level of consumption & revenue for OpenAI. I like this. NOW is positioning itself as the agentic orchestrator & monitor more than anything within this technology wave. It needs to have world-class & popular agents seamlessly work on its platform for that to happen. OpenAI is obviously a piece of making that happen and ensures more of a developer’s favorite tools are accessible within NOW.

Separately, Bernstein named it a top application pick for the 2H of the year. They think software narrative could remain bad for a little while longer. They also think NOW is very well positioned and talked about CIO surveys being more favorable for them than any other software name they cover. Finally, the analyst sees the 2H 2026 AI revenue ramp leadership has been talking about is likely coming.

Finally, Oppenheimer is optimistic about NOW’s Q4 2025 earnings report based on their internal data. They think the combination of low expectations, GenAI momentum and resilient demand creates a favorable setup. They also think a lot of the recent M&A risk drama is noise.

The Feb 1 tariffs aren't happening. The U.S. said they’re making progress diplomatically on Greenland. This is yet another example of geopolitical and global trade drama being more bark than bite.

There was a modest mid-week selloff in Uber this week tied to Tesla starting Robotaxi rides in Austin without the safety monitor. This is just a piece of news that makes people more optimistic about Tesla's pace of rollout. And Tesla is one of two players (Waymo) that could threaten Uber's fantastic network effect if they're able to take a commanding share of this space. Several more competitors are well on their way and make me optimistic about future market fragmentation that Uber can thrive from. From now to then, there will continue to be considerable headline risk.

I’m seeing unconfirmed rumors that Google is carving out a dedicated external sales team for its budding TPU business.  Waymo also expanded to Miami. Finally, Google’s Gemini just keeps taking more market share (as of last week):

Citi expects above consensus revenue and EBIT for Amazon this quarter. It also expects 22.5% Y/Y AWS growth and a strong performance for the marketplace following healthy holiday data and market share gains. Price target $320. Next, Amazon’s Andy Jassy told CNBC this week that tariffs are finally starting to show up modestly in price increases on their platform. If that’s true for them, it’s true for basically everyone else if not everyone else.

Anthropic cut their profit target because they’re spending more than expected on Google Cloud Platform (GCP) and Amazon Web Services (AWS). Good news for those two cloud giants.

RBCs 3P data on Shopify is pointing to market share gains and a modest beat and raise. Merchant growth accelerated by 6 points sequentially to 18% Y/Y growth, according to their channel checks.

Citizens JMP downgraded The Trade Desk to market perform based on macroeconomic uncertainty, long-term growth rate risks and ramping Amazon competition. Basically what we've been talking about. This isn't surprising but it just adds to the wildly aggressive negative sentiment in this name. Either everyone is right and they are in permanent growth decline. Or? They re-accelerate this year based on better execution and much easier comps. The upcoming earnings call will tell me a lot about whether or not they can do that. If so? 17x forward EPS and plenty of upside in my opinion. If not? I'll seriously consider an exit.

William Blair Starbucks Upgrade this week. The reasoning is based on optimism about U.S comp store sales growth acceleration, the Back to Starbucks turnaround plan working and belief that they can compound EPS at a 15-20% clip over the next 5 years.

Jefferies says buy the Meta dip. Why? Discount to Mag7 names, estimate risks skewed to the upside, 2026 AI traction (see alert I just posted with new Similarweb data), strong app momentum and an explosion in WhatsApp revenue. They also see Meta addressing concerns about their 2026 CapEx guide on the call. Next, Meta seems to be making a ton of great progress in Meta AI adoption in recent weeks under new AI leader Alexandr Wang:

Goldman upgraded On Holding to a buy due to growth optimism, strong observed holiday trends, consumer resilience and an attractive entry point.

Uber and Lyft are nearing approvals to operate in Israel.

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