Snowflake conducted an investor day this week in which it discussed its opportunity, innovation and roadmap. There were no multi-year financial targets offered, but plenty of other insight to glean. CEO Sridhar Ramaswamy began the event with how Snowflake needs to (and is) getting better and where it goes from here. Ramaswamy again acknowledged how Snowflake fell behind in product velocity and more specific areas like GenAI. He’s pleased with the progress the team has made in revving up that, with rapid product debuts like its Arctic GenAI model serving as decent pieces of evidence.

Snowflake has a fantastic data core. It can seamlessly ingest massive sums of structured and unstructured data from any public cloud and a near-endless roster of data integration partners. Its upcoming hybrid table product will also plug an important product gap by unlocking demand for transactional and analytical workloads. Snowflake has specialized in analytical workloads to date.

This means customers can tear down database silos and enjoy broader interoperability. That represents more data-rich context to guide analytics and app creation. With new support for Iceberg (open source) data tables, Snowflake is also making it easier for customers to onboard data into its environment for better algorithm seasoning and stickier usage. It also debuted its Polaris open source catalog to bolster support for Iceberg and open source data sharing. While this is a clear headwind for its storage business (10% of revenue) it could be a clear tailwind for consumption as clients enjoy access to more data and more opportunities to use it.

Snowflake thinks it needs to improve with collaboration, data apps and AI innovation. Starting with collaboration, it is already delivering a significant network effect to its customers. 33% of customers have “stable edges” (or open data sharing with the Snow ecosystem) vs. 24% Y/Y. This not only creates a richer data ecosystem, but routinely helps it win customers from clients like Fiserv, which requires its vendors to use Snowflake sharing.

Its “Notebooks” product is another pillar for data collaboration. Databricks is considered to be well ahead of Snowflake here, but SNOW just released its competing product. Notebooks are collaborative and secure virtual environments for data science work. They allow for working on workflows remotely with colleagues in multiple source code languages.

Data apps are the second area of improvement. Candidly, I don’t see this as an area where Snow needs to improve. I see this as an area where their market needs to mature and evolve to a point of inspiring more usage. As with MongoDB (earnings review sent this week), consumption-based data and app-building models will be valuable, but aren’t highly needed right now. What is needed is the hardware foundation already laid out in the Nvidia section of this article. That is where the money is being made today. Not in apps stemming from this work… yet.

Snowflake is positioning its product suite to enjoy monetization when the sector is ready. Its native apps launch is a key focus area here. The product is fully sandboxed, which ensures the apps are separated from the core data engine. That ensures customers build apps and work in the environment without impermissible data access/sharing. That removes some anxiety and friction associated with unleashing data to somewhat unpredictable GenAI models. By combining complete data ingestion and analytics capabilities with app creation, Snowflake can “bring work to the data” for customers and cut transfer and storage costs in the process. 

This is why Iceberg (open source) storage eroding demand for Snow’s competing storage service actually could turn out to be a net tailwind. Storage represents 10% of its business. The other 90% should enjoy higher consumption from giving customers easy access to more of their data on Snowflake’s platform. This should mean more app creation, more collaboration and more querying.

Within AI, Snowflake isn’t trying to compete with giant model builders like OpenAI and Meta. Instead, it is attempting to combine all of the disparate parts of GenAI to “deliver everything in a simple, tightly integrated way” and with full data access. It will offer full service, out-of-the-box GenAI app support with governance and maintenance handled by SNOW. It will use GenAI to help with data migrations, easier data engineering and chatbots to help with querying. It also wants to provide data scientists the ability to “talk to data” and lower skill set requirements tied to complex data analytics.

An important GenAI app for Snowflake is Cortex Analyst. This is a product extension of Cortex AI, which just added new chatbot functions and no-code tools/broad LLM access, reducing app-building and querying friction. Cortex AI is what Snowflake calls its “AI layer.” It’s a slew of GenAI-powered tools to (as Snowflake always says) bring AI, application-building and analytics right “to a customer’s data.” Cortex can summarize and derive meaning from seemingly unstructured text, help beginners write SQL, gauge human sentiment from jumbled data and help with sharpening pattern recognition to tighten forecasting. Cortex Analyst is the conversational tool that SNOW is using to realize its vision of helping analysts “talk to your data.” And with complete access to a client’s data to nurture these apps, Snow thinks its broader interoperability will help lower model hallucination rates (wrong answers) significantly. Great models still give incorrect answers 25% of the time. SNOW is determined to help lower this. Airbnb, Canva and Kraft-Heinz are early users of Snow native apps and its Cortex work.

“In areas like AI where we got a late start, we’ve shown the ability to accelerate time to be world-class.” – Snowflake CEO Sridhar Ramaswamy

“We are delivering innovation at a very different pace today.”

EVP of Product Christian Kleinerman

As you can see below, Snowpark adoption is going extremely well. This is its application-building platform that frees developers to work with data in any source code language. With it, developers can process and visualize data and build apps (through Snowpark Native Apps). Snowpark is their data-equipped playground to build new things. Notebooks and collaboration are understandably highly important in app work, creation and delivery. Snowflake’s former product void in this area was holding back this product’s potential.

This is the only new product included in FY 2025 guidance, but that will soon change. Cortex AI adoption strength is leading the team to think the product can meaningfully contribute to FY 2025 revenue. That should mean some modest upside vs. the current forecast. 

From a go-to-market perspective, its shifted focus to rewarding workload consumption growth is working well so far. Still early here.

Aside from the Polaris catalog launch, which includes partnerships with all 3 hyperscalers and more, Nvidia and Snowflake announced a new partnership as well. Snowflake is adopting Nvidia’s NIM framework to power AI applications from within Snowflake’s app. Everyone in the world wants to be using Nvidia’s software for their accelerated compute transformations. SNOW just made it easier for shared customers to do just that.

“Data is the essential raw material of the AI industrial revolution. Together, NVIDIA and Snowflake will help enterprises refine their proprietary business data and transform it into valuable generative AI.” – Nvidia Founder/CEO Jensen Huang

Snowflake’s investment case today is a bit weird. It’s investing heavily in GenAI infrastructure and innovation, which is weighing on margins. It likely over-earned last year while it under-spent on R&D, and we are seeing the catchup. So what does that mean? It means that you’re paying 150x EBITDA for a company showing negative EBITDA growth this year. That’s a lot more expensive than other best-in-class names like CrowdStrike and Cloudflare, which are both very pricey but are growing faster on the top line.

This doesn’t mean Snow is un-investable. It means investors must be confident in these investments bearing fruit and the profit engine exponentially brightening next year and beyond. Sell-side expects a 55% EBITDA CAGR in calendar 2025 and calendar 2026. I’d argue bulls need that to come in a lot better, considering that growth gets you to 66x EBITDA for calendar 2026.

Is this outperformance possible? Sure. Is it guaranteed? No. 2026 is a long way away. The Cortex AI contribution note is a solid positive hint… more positive hints are needed. I reject the notion that Databricks (fiercest competitor, but not yet public) will prevent Snow from succeeding. With the limited private market data we have, it does look like Databricks is ahead in innovation (especially notebooks), but this field is massive and Snowflake already has a sticky, client base. All it needs to do is give its clients all of the tools they’ve been requesting. That’s now happening at an accelerated pace.

This is a special company. Its share price sharply falling, to me, is more a function of it being relatively overpriced versus everything else. Its multiple demands perfection and does not forgive growing pains.

The headline stemming from the last SBUX earnings report was a breathtakingly large cut to demand and margin guidance. That weakness is coming from a few places. Its occasional consumer in the USA is weakening, its business in the Middle East is showing macro fragility, and its recovery in China has been slower than expected with more pricing competition than it initially forecasted. This three-pronged concoction of headwinds led to it cutting 18% Y/Y EPS growth to nearly 0%. That is not normal for a company like this one.

And while macro is hurting this business a tad, there are reasons to believe that its improving execution can help it weather this storm. Starbucks is struggling with throughput and wait times. People are ordering their drinks and canceling baskets out of frustration with delays. This isn’t an issue of demand. It is an issue of letting people who want to spend money at Starbucks do so in a convenient fashion. Give the people what they want and when they want it.  Caffeine and sugar are addictive… wait times are not.

Starbucks is pretty much at the mercy of Middle Eastern and Chinese macro cycles. It also can’t control irrational price wars in China, although those pricing wars seem to be diminishing, per CFO Rachel Ruggeri. What it can control is store efficiency, product offering and brand messaging.

Starting with store efficiency and throughput, its new CEO brought in high-level employees from Toyota to essentially morph Starbucks workflows into an assembly line. Its “Siren Craft System” perfects processes and optimizes machinery to drive this vision. In early test stores, it’s saving 10-20 seconds per order. By comparison, all of the throughput work for SBUX over the last few years has led to a 1 second boost to speed. This could be extremely impactful. There’s no required CapEx to bring this upgraded flow to life.

From a product perspective, it’s trying to tap into more of the Dutch Bros energy drink magic to augment its afternoon and evening demand. The new summer-berry refresher has done very well since the May launch. It has 0 calorie energy drinks coming later this year and plant-based offerings to better cater to younger customers.

Marketing precision and brand value communication are very important too. Starbucks believes it has done a poor job with communicating value to its customers. Its new rewards program, which launched last month, should help address this, along with targeted Monday promotions going forward. Most interestingly, it’s opening up its mobile app to non-loyalty program members for the month of July. This app is right up there with Chipotle in terms of its quality reputation. This will allow non-rewards members to tap into mobile ordering and expose them to the localized Starbucks promotional engine. It thinks this alone could drive $1 billion in incremental revenue for the next three years. 

To me, this decision should be made permanent. It has 75 million weekly active users and 33 million loyalty program members. Give these 42 million incremental users more value. Mobile orderers and app users buy from SBUX with materially higher frequency. Why not give everyone access to the app and keep the rewards program exclusive to members? That’s what makes sense to me, and a strong July reception could easily lead to that happening. This is how it can drive personalized experiences to ALL of its consumers and convey real value to its occasional buyers (where it struggled the most in Q1).

There has been a lot of criticism levied towards the continued Starbucks store proliferation as  some markets struggle. I don’t think that’s fair. Its cash on cash returns are fantastic in both China and the USA (40%) and it continues to see new openings as accretive and “incremental to the overall business.”

Finally, Starbucks is well on its way to realizing its $4 billion in cost savings over the next 4 years.

There is no way around how ugly that Q1 showing was. But this is a world-class brand with significant expansion levers and a backdrop that shouldn’t be this bad forever. The tidbit on signs of rationalizing price competition in China is encouraging. I think this is a decent candidate for a turnaround and fixing its customer service should be the main driver.

Jensen Huang’s (NVIDIA Founder/CEO) Computex keynote drew the kind of crowd and excitement normally reserved for rock stars. Maybe it’s the leather jacket… or maybe it’s the historic financial run we’ve seen this company make over the last two years. Probably a combination. Here, I’ll dig into the details of the conversation and offer some views on the investment case.

Huang opened the chat with a bit of a history lesson. He brought us through IBM’s creation of the CPU/general computing 60 years ago and the subsequent personal computing and mobile computing revolutions. A third revolution is now unfolding as the world shifts from general compute (GP) to AI-enabled accelerated compute (AC).

Nvidia is powering this current infrastructure revolution with both world-class hardware and a suite of software tools to accelerate adoption. Let’s start with hardware. Nvidia’s latest superchip framework (combining specialized CPUs and its latest GPUs) is called Blackwell. Unsurprisingly, it delivers large performance and efficiency gains over its most recent architecture called Hopper. Nvidia is making sizable advancements every year, and is delivering this innovation with explosive boosts in performance. Nvidia routinely delivers 60x performance and 100x speed boosts just from clients switching from a GC-enabled framework to AC. These edges coincide with just a 50% rise in cost. Blackwell deepens those advantages even more.

This is why Nvidia is winning today. It drives massively more computer power with a small relative increase in hardware cost. In turn, this means more value and lower total cost of ownership.

And while Huang has trained us to expect these massive, frequent leaps forward, their impact still shouldn’t be taken for granted. In previous cycles, other legacy powerhouses like Intel operated on a 2-3 year cadence for delivering new chip platforms. We will get into why this is so vitally important in the investment case section of this post.

Blackwell includes two of its latest-and-greatest GPUs infused together by a 10 terabyte/second link. Nvidia’s clients need an ability to tie more of these GPUs together to boost capacity for their dense data processing and model building needs. That’s where its DGX supercomputer offering comes in handy. These combine 4 Blackwell chips with brand new switches to bolster connectivity. It’s called an NV Link Switch (5th gen) and can blaze a connection between several DGX systems to exponentially raise Blackwell superchip connectivity capacity.

But some clients need even more connected capacity than that. Enter the  SpectrumX networking technology. SpectrumX is designed to support 10,000s of GPUs with two more generations planned to raise that to the millions. Nvidia is presently enabling more scaled and complex computing than anyone else.

Existing GP software infrastructure just doesn’t scale to handle the increasingly complex data processing requirements. Still, making that transition is easier said than done, so Nvidia has a suite of software products that make adoption and usage delightfully straightforward. Cuda is its software platform built to facilitate hardware adoption. It helps distribute work across the CPUs and GPUs within its hardware. CPUs still work fine for step-series, formulaic tasks with rigid instructions. This distribution optimizes performance and cost at the same time.

All apps and software that are switching to AC must essentially be rewritten. Nvidia provides the software tools to make new app creation easier. Cuda Deep Neural Network (CuDNN) is its library for industry-and-use-case-specific GenAI applications enabling sectors like telco to turn their GC networks into AC networks.

Unifying all of its software are Nvidia Inference Microservices (NIMs). This software includes Cuda and CuDNN and runs on top of AC data centers (or “AI factories”). NIMs are pre-trained models and software to “bring AI factories and apps to life.” All an end customer needs is Cuda, the compute capacity and then to download a NIM. From there, its desired, out-of-the-box AC, GenAI app is ready to use. Nvidia isn’t just leading in hardware innovation, it’s ensuring it has the software tools in place to optimize the pace of the new computing revolution.

The Nvidia investment case today is difficult to gauge. It’s very easy to look back 6 months and think “I should’ve bought it or bought more.” But that’s not productive. What is productive is looking forward and determining if the investment case is still compelling.

To do that, there are two very subjective questions that need to be answered: how long does this boom cycle last, and will anyone catch Nvidia during it? The end of this boom cycle does not seem to be near. Nvidia is still talking up supply constraints into next year and Micron is offering more concrete long term guidance than it typically does. It seems like the GenAI chip boom will rage on for a bit.

And for Nvidia? It’s somewhat difficult to imagine anyone catching them at this point. They’re launching new platforms with giant efficiency gains every 12 months. They’re like a Ferrari currently being chased by a horse. Best of luck to the horses.

STILL, Nvidia trades for 23x forward sales at the moment. November 2021 is the only time it has ever gotten that steep of a multiple. Today, however, 23x sales might somehow make sense. Its pricing power is so incredible that 23x sales coincides with a 35x EBIT multiple with EBIT growing well in excess of 35% Y/Y at the moment.

The ironic thing about Nvidia is that 23x sales could be very cheap, fairly priced or very expensive. If any of the other chip makers do figure out how to emulate what Nvidia is doing in any capacity, that will erode the historic elasticity of demand that it’s currently enjoying. Will that happen? And if so, when? That is what to contemplate as you decide what to do with this name. 2024 is looking to be another banner year for Nvidia. We’ll get a feel for how 2025 will look when mega-caps like Meta (most likely) offer 2025 CapEx commentary later in the year.

PayPal CEO Alex Chriss gave an interview this week outlining the company’s transition year progress and the path forward. We’ll share all of the important notes here. Some of this is new and some is a refresher of ideas we haven’t covered in a while.

Chriss now thinks PayPal has the correct team in place needed to win. The team is clicking and leaning into the shorter list of priorities Chriss created at the beginning of his tenure – branded checkout, unbranded checkout, Venmo and driving profitable growth. This week, PayPal added Alteryx’s interim CFO and Chief Accounting Officer (CAO) as its new CAO.

The company has revamped its data analytics architecture, allowing it to leverage the vast insight it has within its gigantic two-sided network. It has realigned incentives, teams and budgets to accelerate innovation and it has removed opaque accounting disclosures that made it tough to track this business. There is a “long way to go,” but Chriss thinks they’re off to a “heck of a start.”

The stability PayPal saw through the end of last quarter lasted through the first week of June. There were no changes to guidance here. As the largest player in checkout, PayPal simply needs to make the customer experience even better and merchant adoption even easier.. Through passkeys and Face ID, it is rapidly addressing product gaps within its worst checkout channel (mobile). It has been leaving revenue on the table as frustrated guests are not willing to deal with the added PayPal checkout friction vs. others. That cannot continue and priority one is making sure it doesn’t.

“Particularly on mobile, we've just had an inferior experience. I mean, obviously, that's a large growth opportunity in checkout overall and one that we've been punching below our weight in… There are customers that are trying to check out today with PayPal, and we're failing them. Latency is too high, the friction is too high. As we fix that, that drives short-term incremental transaction margin improvement. ”

CEO Alex Chriss

Beyond fixing mobile, PayPal’s omni-channel push is important. Its cards offer compelling cash-back rewards and its popular buy now, pay later function should easily be extendible to stores — like it already is for Shopify.

PayPal has a great opportunity to differentiate within a highly commoditized sector. The millions of merchants on its platform are eager to connect to the hundreds of millions of consumers on the same platform. PayPal’s rich data profiles on each customer essentially create “wish lists” or a highly procured, granular, by-person picture of demand. This can morph “spray and pray” advertising into something much more targeted and can motivate merchants to profitably offer unique promotions to PayPal’s consumers. That is how you stand out amid a sea of buttons. PayPal’s newly announced advertising platform plans to nurture these strengths further and turn into yet another profitable revenue driver starting next year. It already has the scale, now it needs the systems, targeting algorithms and go-to-market. All in process.

While PayPal can push updates to individual consumers in real-time, it needs large merchants to adopt its latest-and-greatest checkout themselves. It cannot be unilaterally implemented. Luckily, PayPal has a great value proposition. It drives conversion uplifts, offers smart receipts for more targeted marketing and now has Fastlane as a secret weapon in its arsenal. This will be fully rolled out right before the holidays.

Fastlane can recognize any returning customer upon checkout. This is huge. It means that 60% of friction-packed guest checkout can transition from manual data entry to just a few clicks with data pre-loaded. PayPal can emulate the convenience of digital wallets for guests. That is the luxury of its massive payment dataset and is something that nobody can match. For a mid-sized airline, Fastlane delivered “the most exciting conversion lift they’ve ever seen in their history.” These new pieces of utility, as well as its new no-code, GenAI-powered integration tools to shrink onboarding from weeks to hours, are accelerating merchant adoption. And that adoption directly coincides with more branded market share.

On the Venmo side of things, engagement remains robust. They just need to do a better of job adding compelling money-in and money-out products. Copy Cash App. They also need to improve communication around these products. My Venmo credit card is a great product. I get more than 2% blended cashback and the face is a QR code, which makes on-the-go peer-to-peer payments easy. So why have I never met anyone else with this card? That needs to be fixed.

Venmo customers are dying to use this platform to power more of their financial lives. Through checkout, a high-yield savings offering, and more cards, Venmo is finally focused on monetization. Beyond interchange revenue, more Venmo value will lower the proportion of funds entering the platform and immediately leaving. That should be a fantastic lever for net interest income growth.

Pricing conversations are “never fun” but the added services PayPal is debuting (like Fastlane) are reducing pushback. Chriss is “encouraged” to the point of “moving forward on pricing to value.” PayPal Complete Commerce Platform (Braintree for the little guys) continues to deliver a 2x average revenue per client uplift for PayPal.

So far this quarter, PayPal is tracking ahead of its low double-digit non-GAAP EPS growth guidance. Great to hear. Chriss also thinks there’s more to do with cutting non-transactional OpEx. There’s still more bloat to address and more automation to infuse.

“The start of 2024 is looking strong for us.”

CEO Alex Chriss

I think it’s becoming clear that PayPal is turning a corner. Signs of its new products working early on are clear, focus has been effectively reset, the profitable growth engine is turning back on and antiquated product offerings are being addressed. I do think there will be more fits and starts in terms of Mr. Market’s sentiment toward the stock.  When you fall from $300 to $60, it becomes a “show me” story. Reviving large, legacy business models never happens in a linear fashion. Risks like strong competition from Apple and Google haven’t vanished, but PayPal no longer seems to be actively trying to lose. Chriss is the right man to steer this ship, and my optimism surrounding the next few years of PayPal is briskly rising.

While the team is not ready to offer multi-year financial targets, Chriss did hint at them working towards that point.

SentinelOne founder/CEO Tomer Weingarten gave an interview this past week. It centered around execution, competition and go-to-market. We will cover all of the important details here.

SentinelOne has rapidly scaled towards $1 billion in annual revenue and will likely cross that annualized target late this year or next year. Throughout this explosive growth phase, the team did not put the go-to-market foundation in place needed to foster decades of scaling. It was highly effective at rolling out great products, but operational execution has been lacking. It needs to combine what it sees as best-in-class tech (as evidenced by strong competitive win rates and retention levels) with better selling. It’s now focused on revamping renewal, enablement, channel partnerships, processing and quoting systems to create a fine-tuned engine for selling to match its great tech. Tomer sees all of this work translating into a growth acceleration in the second half of the year and into next year.

Conversion rates in competitive bids also remain very strong, but SentinelOne is simply not included in a lot of these conversations. To remedy this, it’s aggressively building out its value-added reseller partner roster and is planning to get more liberal with marketing spend. Its fixation on turning FCF positive led to more spend scrutiny than a typical hyper-growth company with a fortress balance sheet. Macro called for that approach. Now that it’s FCF positive, it’s ready to lean in heavily. Competition isn’t its growth bottleneck… tech is not its growth bottleneck… brand building, product awareness and its ability to spend to bolster that awareness are the bottlenecks. That bottleneck is now going away. SentinelOne today is sort of similar to what we hope and think Lemonade will look like in 2026. It’s inflecting.

“I treat this as an opportunity… we know exactly what needs to be done… we’ll do it extremely quickly.”

Founder/CEO Tomer Weingarten

“The amount of marketing we can [responsibly] do is what constrains our growth… our competitors are not constrained… we didn’t have that luxury up until now… I'm doing a fraction of the marketing that they're doing, still growing 40% and still winning market share in an incredibly competitive market.” – Founder/CEO

Tomer was asked about risks to the acceleration SentinelOne guided to for the second half of the year. He called that risk fairly low, sees the pipeline activity pointing to ramping strength and knows exactly what to fix to drive faster net new annual recurring revenue (NNARR).

The Runway:

SentinelOne has been working hard on rounding out its cloud, identity and data security use cases to better match King CrowdStrike’s product suite. Still, it really hasn’t focused on driving cross selling. 70% of its business came from new logos this quarter vs. about 33% for CrowdStrike. The lack of cross-sell traction is frustrating, but the untapped potential is also exciting. It’s not losing these customers to other vendors. They are ripe for cross-selling.

It has also already demonstrated a consistent ability to sell non-endpoint products to small and giant clients alike. It just feels like it’s still in land-grab mode, with endpoint being the path of least resistance. It is much easier to cross-sell more products to existing customers vs. trying to displace competitors. It is setting itself up for years of robust cross-selling to greatly extend its growth runway.

Competition:

Tomer called the competitive landscape stable. He also hinted at still believing his tech is better than CrowdStrike. I think it’s pretty set in stone today that CrowdStrike and SentinelOne have the best endpoint tech. Who is number one between the two is highly subjective – especially in endpoint. What matters is that the market is enormous, and several players will find success. SentinelOne can grow to be a much larger company.

I guess Bank of America liked what they heard as well. The firm named SentinelOne a top small/mid cap pick. They see what I see: a company that has inflected to profitability. It’s ready to rev the growth engine with enterprise-level systems now being put into place.

Robinhood’s Chief Brokerage officer gave an interview with Piper Sandler this week. There wasn’t much to learn from the chat, but we’ve included all of the important nuggets here.

Since lowering its margin loan rate from 8% to 5.7%-6.5%, it has enjoyed a 10% spike in margin balance in just 10 days. 25% of this is from brand new customers. The 1% asset transfer match, along with the gold card, more account types and other tools, is helping to lower customer attrition rates from 15% to 4%. That’s a massive improvement.

Index options and futures trading are coming in the second half of 2024 due to popular customer demand. The Robinhood gold membership (now with 1.7 million total members) will likely add more value in the near future. That will put price hikes on the table for this $5/month subscription.

Early results from the Robinhood credit card were called “promising” with it driving more engagement. In my view, the company is relying on people carrying credit card balances and a large deposit halo effect to make 3% cashback profitably. I’m extremely torn about whether or not I think this will be able to last across the next nasty part of the cycle when crypto isn’t rocking and deposit levels aren’t soaring with new launches. If they can figure this out, it should be a fantastic level for smoothing cyclicality. If it doesn’t work out, this credit risk (with a relatively low credit customer) could quickly become a concern. We shall see. What is undeniable is that Robinhood is rapidly debuting products that are capturing the hearts and minds of young consumers. The product velocity has been excellent, and now the balance sheet maintenance will become more important… even with its $4.7 billion cash pile.

Robinhood has not seen any material volume spike from the renewed meme stock craze. I actually view this as a large positive, as it shows the average client is becoming more serious and more responsible, which should motivate retention and higher levels of deposits over the long haul.

“I think some were thinking this is like the days when we were viewed as a meme-stock brokerage. And the point that I made to them is 80% of the people who started during that era are still with us and they've evolved. They've grown up and they're investing in trading in other ways. They've opened retirement accounts and just become customers that have sort of continued on in their investing journey.”

Chief Brokerage Officer Steven Quirk

CrowdStrike was added to the S&P 500 on Friday afternoon. This means a significant boost to passive investing demand for the company, as any fund or ETF that emulates the S&P 500 now needs to hold Crowdstrike.  It is extremely well deserved. As I indicated in the earnings review, this was an “inevitable when not if.” Well? The when is now.

Disney is close to ironing out incentives and credits with the Florida Oversight Board, paving the way for a $17 billion parks investment (including a new park). I like this news for two reasons. First, it indicates that relationships with Florida’s governing bodies are being mended. Disney has committed to “quieting down” on the culture wars. The reality is that taking strong political stances on polarizing issues can alienate a large chunk of people. In the cold world of Wall Street, it doesn't matter if Disney is right or wrong. What matters is that they’re growing profits at a strong clip. That’s reality.

And that leads us to the second reason why I like this news. Parks are the highest-return business for Disney. It is sitting on massive pieces of vacant land ripe for expansion. It has significantly more intellectual property to mine and is seeing strong success with every single recent global park expansion. This not only bolsters its potential profits but should also nurture its film and TV divisions too. Why? Disney’s magic is in its ability to drive omni-channel experiences for fans to deepen engagement and loyalty. A gigantic piece of this is bringing a fan’s favorite characters to life at its parks. Lean in.

CrowdStrike and Lululemon reviews were sent during the week along with Zscaler and MongoDB reviews.

GTLB trades for 119x earnings. Earnings are expected to grow by 80% Y/Y.

Samsara is currently inflecting to profitability across all relevant metrics. It trades for about 18x gross profit, with gross profit expected to grow by about 28% Y/Y. 18x gross profit makes it one of the most expensive names in the market.

DraftKings filed a 7.5 million share shelf offering on Friday. This represents about 1.6% potential share dilution. As a reminder, a shelf offering does not mean the offering is occurring. It gives DraftKings the flexibility to quickly offer these shares in the future.

Amazon will begin testing its robo-taxis in Austin. Amazon, Disney and Comcast are also close to closing a $76 billion, 11-year deal for NBA content rights. Comcast will reportedly pay $2.5 billion per year, leaving about $4.4 billion in annual content spend between Amazon and Disney. Sports are expensive. Sports are a wonderful driver for subscriber growth and cross-selling.

Lyft offered 3-year financial targets including 15% annual volume growth, EBITDA reaching 4% of bookings by 2027 and 90%+ FCF conversion.

ServiceNow’s COO interviewed with Piper Sandler this week. There was really nothing interesting in the transcript besides it saying the AI revenue pipeline is really strong. It launched several new AI products at an investor event last month.

Meta added a slew of chatbots and automated customer service tools for business messaging across its apps. This should drive GenAI monetization, although Meta’s massive revenue base means this will probably be somewhat immaterial on its own. It’s a process.

CrowdStrike debuted a product to offer guardrails and instructions for customers to more quickly become eligible for cyber insurance. It also won a long list of awards this week across endpoints and other product buckets.

We ran out of hours in the week to finish everything. We missed a Progyny investor conference that will be covered next week. If there’s a major news event to cover during the week, we’ll likely slip it into that article.