Aaaah, it’s Sunday again. Every week you get the Overview Of The Week and every week, I hope you enjoy reading it as much as I do writing it.

Before we dive in, I’m leaving on holiday starting Wednesday. Sardinia is a great place to blow the dust off my Italian. I studied the language 30 years ago, but the last time I spoke it was 12 years ago.

It’s the very first time since I launched Potential Multibaggers as a paid service 6 years ago that I’m taking almost 2 weeks off.

That means there will probably be no Overview Of The Week next week and the week after that. But there might be an odd article. Writing is one of my favorite activities next to reading, so maybe I can’t resist the temptation. But in the first place, I want to be present with my family and the friends who join us. So, it is possible that you don’t get any articles in the next two weeks. Next to my Italian, my chess game should improve in those two weeks as well.

I’ll be on our internal discussion platform for paid Multis but probably not as much as usual. And I might post some vacation posts in our Casual Corner channel, the only channel that’s not about investing.

Multi Flo (and countless other Multis) have noticed that when I’m not at home, the markets tend to react very negatively to that, so brace yourself for the next few weeks. You could find some buying opportunities.

Articles In The Past Week

This is only the second article this week. One of the main causes was the abundance of material Axon has put out since the earnings. But it was a great investment of my time. I had already done a deep dive when I picked Axon, of course, but this taught me a lot more about the future of the company. And it left me even more optimistic about the company.

You can read the article about Axon here.

Next to that, I also continued my deep dives in some companies that are on the watchlist and could become a new pick. Don’t expect it any time soon.

Memes Of The Week

Just one meme this week. Not as much an investing meme, but still funny. Thanks for sharing, Multi bep.

Interesting Podcasts Or Books

This week, I did some catching up with one of my favorite podcasts, Invest Like the Best with Patrick O’Shaughnessy.

Very often, I don’t know the guests, but they always are very interesting. The first episode I listened to was with John Kim, on money raising. It was great to hear the other side of investing, which is not often talked about and how it is a game of trust. You can listen to it here.

The second episode illustrated what I like about this podcast. It was totally different and went in all directions but all interesting. Jeremy Giffon argued that internet fame, and especially that on X, where you have to have an opinion, is now worth more than money. But that was just one thought. You can listen to the full episode here.

The markets in the past week

Let’s check.

The Nasdaq continues to be the biggest loser, down 2.13%. The Russell 2000 lost 1.09% and the S&P 500 0.61%.

Subscribe now

The Greed & Fear Index stayed in FEAR territory.

Quick Facts

1. Optimism and Creative Destruction

This is not really a quick fact, but a quick thought.

One of the things I repeat over and over again is that optimism wins. That’s not naive but reality. If you look at history. Things just get better over time, with shorter periods of setbacks. Very much like the stock market, in other words.

But it’s also a warning signal for investors. Very often, the companies that play on defense lose. The new and better paradigm will almost certainly win and if you don’t adapt, you’ll be disrupted and perish. Joseph Schumpeter called this creative destruction, the idea that the economy can only stay vital when the new destroys the old.

That’s also how you have to look at the Mag7 capex boom. The risk of NOT investing so much is much higher than that of investing too much. Multiple Mag7 executives have already said this aloud, but many investors don’t seem to realize that it’s either going all-in or be disrupted. That’s why Alphabet announced more investments and that’s why others will invest more as well. They know that their very existence is at stake.

Morgan Stanley still expects a big jump in capex in 2027, but only a small one in 2028.

Source

2. The Worst July In 22 Years?

This week, I saw this table.

Source

This is about the Nasdaq. As you can see at the top, the average gains for July are 3.45% but right now, it’s down 7.08%. If this holds, it would mean the worst July month since 2004.

But you should also see this in the context of April and May, which were exceptional. You can’t have higher upside with deeper downside. The Nasdaq has been much more volatile than the S&P 500, but which would you prefer to have held in the last 20 years?

This is something many investors still don’t appreciate enough. The short-term volatility is the entrance price you pay for higher long-term returns. So, the choice is yours. What will you focus on? The short-term drops or the long-term climbs?

I see that most choose the short term. 99% of the news about investing, be it on mainstream media or social media, is about the short term. That leaves an edge for investors who look at the long term. It sounds easy, but it’s not. You have to have the stomach for it.

By the way, this image also fits into this picture. You have to know that the S&P 500 is up 8.5% and the Nasdaq 7.5%.

Source

In other words, up to now, the average individual investor is underperforming the indexes by about 20%.

Just to be sure, this is not looking down on the individual investor, as I am one myself. Every single investment strategy will underperform the indexes at certain moments and sometimes for a few years in a row. Look at the year before the dotcom bubble popped and how Warren Buffett did compared to the Nasdaq 100.

That’s an underperformance of 122%. But look at the next three years.

It’s important that you know what game you play and that you accept the ups and downs that come with every approach. The current winners are tomorrow’s losers and vice versa. That’s why yearly returns don’t mean anything.

Below: this week's news on the picks and much more. The perfect moment to join the Multis.

Subscribe now

Read more

When I picked Axon (AXON) in early April, I wrote that I didn’t want the stock price to skyrocket soon, so I could build out my position calmly. Well, the market didn’t listen. The stock is up about 35% since the pick. But fortunately, I didn’t follow up my own advice, as you could see in my buys for the PM Forever Portfolio. I bought faster than I’m used to because I saw the opportunity.

I’m happy for every Multi who started buying with me. But a 35% paper gain in three months says nothing about whether the thesis is right. Stocks move on sentiment over the short term and on fundamentals over the long term. And the long term can feel really long. Sometimes, it’s 3 years, sometimes 5 or even 7.

And on May 6, Axon released its Q1 2026 earnings, the first quarter it reports as a Potential Multibagger.

In the weeks after the earnings, management also spoke at the William Blair, TD Cowen and J.P. Morgan conferences, and hosted a webinar with three police chiefs.

I went through all of the material. That’s why this is just the first article this week. It was a lot to go through. This article is the result of all the material. I’ll try to give you the best insights from all of the sources in this article.

Let’s start with the numbers.

Subscribe now

The Numbers

• Revenue: $807 million, up 34% YoY, beating the consensus by $27.7 million, or 3.6%. This was the ninth consecutive quarter of 30%+ growth.

• Software & Services revenue: $355 million, up 35%.

• Connected Devices revenue: $453 million, up 33%. Within Connected Devices, Platform Solutions (counter-drone, fixed cameras, drones, VR) was the strongest grower with 95% YoY growth.

• AI product revenue: up more than 700% YoY (from a small base, but still great growth). AI bookings up 140%.

• Dedrone: revenue up over 300% for hardware and software. Bookings up 500%.

• Annual recurring revenue: $1.5 billion, up 35%.

• Net revenue retention: 125%, up from 123% a year ago and the fifth straight year of Q1 improvement.

• Future contracted bookings: $14.3 billion, up 44%.

• International revenue: up more than 100%, now 20% of total revenue for the second quarter in a row.

• Non-GAAP EPS: $1.61 versus $1.47 last year, a beat by $0.01.

• Adjusted EBITDA: $201.6 million. 25% EBITDA margin.

• Adjusted gross margin: 61.6%, down from 63.6% a year ago.

• Free cash flow: negative $54.6 million, versus roughly break-even last year.

You can see some of the numbers on this earnings slide.

You probably noticed two ugly ducklings in that list: the negative free cash flow and the falling gross margin. Don’t worry, we will get back to this. But first, something in the income statement that most coverage of this quarter got wrong in the other direction: net income.

GAAP net income was $169.3 million, versus $88 million in Q1 last year. Almost a double. Great quarter for profitability, you’d think, right? But if you go to the reconciliation tables in the appendix, you see a line called “Other (income) loss, net” of $189 million. That’s mostly gains on Axon’s investments, so the stakes it holds in other companies. In other words, more than the entire GAAP net income this quarter came from investments going up in value.

The best profitability numbers are the $201.6 million in adjusted EBITDA at a 25% margin and the 75.8% adjusted gross margin in software. Those are earned by the business, not the company’s investments.

Non-GAAP EPS grew only 10% while revenue grew 34%. Interest expense jumped from $7.8 million to $28.6 million because of the $1.8 billion in senior notes raised for the Carbyne and Prepared acquisitions. That’s a conscious move and I don’t care too much about this. The acquisitions were worth it for the long term, in my opinion. I just wanted to point it out.

Free cash flow was negative $54.6 million. That looks bad, but it isn’t.

Q1 is always Axon’s weakest cash quarter because of bonuses, sales commissions, and one of the two semiannual interest payments are all reasons. But the biggest driver was an inventory buildout. CFO Brittany Bagley said that without the inventory investments, free cash flow would have been positive even with all those Q1 payments. president Josh Isner explained the logic behind the buildout on the call:

Given the expanding geopolitical risks, the competition for key components and the growing demand of our products worldwide, we are investing in inventory with durability in mind. We never want inventory to be the reason we cannot maximize our growth and impact.

When hardware companies start to pile up inventory, investors often get nervous but with Axon, it’s safe: its products don’t go obsolete. TASER life cycles are 15 years or so, body cameras definitely more than 5 years, and president Josh Isner mentioned at the J.P. Morgan conference that TASERs launched in 2010 still sell today. This proves that this inventory buildout is not a risk.

Axon said it didn’t suffer from the high memory costs because it had already bought before. This shows the power of having inventory. CFO Brittany Bagley said that the memory impact on gross margin is not even meaningful enough to mention it separately.

On top of that, the full-year free cash flow guidance stayed at approximately $450 million.

Guidance

Axon raised its full-year revenue guidance from 27-30% growth to 30-32%.

The adjusted EBITDA margin guidance stayed at 25.5%, versus 25% in Q1, so management expects operating leverage in the second half of the year.

I also liked that the capex guidance went down, from $185-215 million to $160-190 million. So Axon guides for faster growth and lower spending at the same time. That also makes the free cash flow target of around $450 million attainable, despite the inventory buildout.

Future contracted bookings grew 44% to $14.3 billion. Management expects to recognize 20% to 25% of that as revenue over the next twelve months. That’s $2.9 to $3.6 billion of revenue that’s already signed, against a full-year guidance of roughly $3.6 billion. In other words, most of this year is already under contract. As long as bookings grow more or less in line with revenue, the 30%+ growth can go on for years and I love to see that. It was another part of my investment thesis.

The AI Era Plan: From Curiosity To Default

In Part 1 of my deep dive, I called Draft One the crown jewel of Axon’s AI. And this shows. Revenue grew more than 700%, AI bookings grew 140%, and Josh Isner said that nearly all large domestic law enforcement agencies now include AI in their purchases.

Founder and CEO Rick Smith on the call:

Just yesterday, I hosted a collection of chiefs in San Francisco. Two years ago, when I queried the room who used AI, it was almost 0. Today, it’s 100% are using AI tools in their personal lives daily, but they know those tools can’t be used on government data.

So, every chief now uses AI privately but they are not allowed to use ChatGPT or other LLMs for evidence. But they can use Axon’s AI, as that has all the necessary compliance. That’s why these deals are getting bigger and bigger. There were mentions of contracts of $50 million, $150 milllon and even $200 million with big cities.

The economics of the AI bundle are great. The original Officer Safety Plan from 2017 cost $99 per officer per month, the OSP 10 Premium costs $370 and with the AI Era Plan on top, it’s $569. That means that the revenue per officer is up almost six times over the years. But still, the customers feel like the winners because new products like Axon Vision are added to the plan automatically. That’s how you get NRR of 125%.

It has to be mentioned, though, that adoption is not completely frictionless. In a customer webinar Axon hosted in June, Chief Darrell Lowe of Redmond, Washington said his prosecutor’s office simply won’t accept AI-generated reports, which makes Draft One unusable for his department. But that’s the kind of resistance that should be expected.

That same webinar also gave a strong data point to support Axon. Chief Doreen Jokerst of Overland Park, Kansas, said that her drone-as-first-responder program gets to scenes 26% faster than her officers.

And how does management think about its own position in this race? Josh Isner, in his typical style:

The Kentucky Derby was last week, the Belmont is in a few weeks, we look at ourselves like Secretariat at the Belmont. We want to be accelerating ahead of everybody in AI.

For the non-horse-racing readers: Secretariat won the 1973 Belmont by 31 lengths, still the record. Modesty is not Isner’s biggest talent. Execution is, fortunately.

I picked Axon in April. The stock is up 32% since then. I’m happy for every Multi who bought with me. If you didn’t, the big question is, of course, if it’s too late now.

Below: my answer, the growth engine almost nobody talks about yet, my proprietary Quality Score for Axon, and much more.

Don’t want to miss opportunities like this anymore?

Subscribe now!

Read more

It’s Sunday again and it’s summer. I hope you enjoy both and that this Overview Of The Week even enhances that enjoyment.

Before we go into the rest of the content, two things.

First, you will notice that this Overview Of The Week is early this week. That’s because tonight (here) I want to watch the World Cup final.

Secondly, normally, I would have been at Chapters this week, but the evening before I was traveling to Hamburg, I decided not to go. The reason was, in the first place, my health. I had felt very tired after returning from Vail a few weeks ago and I decided to listen to my body. Secondly, I found out that there was a live stream of the Capital Market Day this year. Of course, I missed the direct contact and conversations with management, but as I had that last year, I thought I could skip a year. I’m feeling less tired now and that is more important. And you can still expect my article on my insights from the Capital Markets Day of Chapters in the upcoming week.

Articles In The Past Week

This is the third article this week.

The first article was the Best Buys Now article.

In the second article, we analyzed the Rubrik earnings.

Memes Of The Week

Maybe you have seen this picture of a 19-year-old Lionel Messi giving a bath to a baby Lamine Yamal. The two protagonists of the World Cup final did a Unicef campaign.

I saw a great parody of this picture.

Interesting Podcasts Or Books

This week, I started a new book called Endure.

The book explores the limits of human performance. It basically challenges that physical barriers are fixed. Think of pain, fatigue, heat and other limiting factors. It says that the brain is much more important than the physical limits and we can endure more than we think. I only started it and I’m very curious to read more.

The markets in the past week

I saw many X accounts blowing up a lot this week. Here are a few.

This again shows how dangerous a non-diversified, leveraged portfolio is.

But the markets didn’t do that badly, of course.

Still, the Russell 2000 dropped 0.52%, the S&P 500 1.55% and the Nasdaq 2.9%, which is quite a bit for an index drop in one week.

The Greed & Fear Index dropped further into FEAR territory.

Quick Facts

1. Kimi K3: DeepSeek 2.0

As a Belgian, the first association I have with the name K3 is this hugely popular children’s music group called, you guessed it, K3 (named after the three original members, whose names all started with a K: Karen, Kristel and Kathleen.

But this week, a different K3 got on the stage, not just in Belgium and the Netherlands, but worldwide. Kimi K3 is a big new AI model from the Chinese company Moonshot AI. It was launched on July 16, 2026. It’s intended to be fully open-source, with weights promised for July 27.

But the main shock came from the fact K3 outperformed American in some tests. Especially the Frontend Code Arena test was a shock to many.

Kimi K3 also came close to Anthropic’s Fable and OpenAI’s Sol overall.

Source

There are several concerns about the frontier models from OpenAI and Anthropic, but it ultimately comes down to lower costs and open-source.

Here you can see that costs are much lower.

In times when AI budgets skyrocket, this may be an important factor for many companies with heavy coding work or running agents.

The open-source part means that everyone with GPUs can adapt it and run it privately, remove usage limits, and build on top of it.

Kimi K3 beats the other models on frontend coding, long coding sessions, at a thrid of the price and soon without limits (because of the open-source part). That means OpenAI and Anthropic will either have to keep dropping their prices, which will hurt them as they already lose money, or make much better models, which is also expensive.

Of course, this shocked the US tech scene, just like DeepSeek did. But it’s probably also very similar to DeepSeek that it is really good for AI. In January 2025, I wrote a full article about DeepSeek.

This is a sentence I wrote in that article: “It’s also clear that DeepSeek did something Chinese companies are good at: copying.” Read that sentence again, but replace DeepSeek with Kimi.

I have not checked it myself this time because it’s probably already fixed anyway, but you could see this everywhere on the net.

This works through distillation. Distillation starts with insights from another model by sending inputs to the teacher model and recording the outputs. Those outputs are then used to train the student model, in this case, Kimi K3.

Probably, Moonshot AI has done this through Anthropic’s API. This clearly violates the terms of service of the models, but you can’t block it.

This is clearly negative for Anthropic and OpenAI. They make a lot of money on their top models, and companies may choose to host their own models based on Kimi. But this is not so bad.

As Gavin Baker reasons, if only OpenAI and Anthropic controlled the whole AI market, they might end up buying too much of the supply. Think of areas where there is more demand than supply: chips, power, data center capacity etc. If there are more players, there’s a bigger market. That’s why Nvidia’s Jensen Huang supports open-source models. They need the same hardware, and more competition means less pricing power from customers.

On top of that, Kimi K3 is not very efficient with tokens. In other words, it uses more words/thinking than some rivals. The real cost per finished task is higher than it looks.

Don’t forget that LLMs (ChatGPT, Claude, Grok, Llama, etc.) have never been seen as the end goal but as an intermediary step on the way to AGI (Artificial General Intelligence).

American companies will now adopt to this new reality as well and get a kick in the behind to keep innovating as efficiently as possible, just like with DeepSeek.

But this kind of X post is very, very misleading.

First, you only see the spending of a few companies. Secondly, this is also about inference, the application of the AI. If you have the top model, but there’s not enough capacity to run it, your lead is completely worthless. The US companies show they lead to China, not that they are less efficient.

What does this mean for chips, memory, and power? That there will only be needed more of it. BlackRock CEO Larry Fink even thinks that there will be futures for those three classes soon. That means they are seen as a new asset class. He thinks it’s important enough to treat it as a scarce commodity essential to the world economy, like oil, and therefore it should be able to be traded and hedged. Weird times.

I also think that there are some deals to be done with the fallen angels in the last weeks. Think of Micron, for example. The stock is off 30% from its highs, but Morgan Stanley thinks the company’s gross margins will jump from a whopping 85% already to 89.5%.

Source

It’s healthy that there is a pullback, but I think that will be it, a pullback, not the start of the ‘popping of the AI bubble’ as many claim. Of course, there’s never certainty in markets, but from following it this closely, I don’t see the signs in reality that many claim the stock prices give.

On an aside, it was also announced that Moonshot AI, the company behind Kimi, wants to list on the Hong Kong Stock Exchange soon, using the momentum of the K3 release. At the same time, it’s collecting money from the private market, by finalizing a round that values it at $30 billion. Its competitor, DeepSeek, is also rumored to be planning an IPO soon.

2. Volatility And What It Might Mean

Below:

Why momentum stocks just had their biggest monthly drop since 2008 (and what it means for the market)

Why I think the “overvalued market” talk is itself overvalued

And much, much more!

If you want to read this, see my Best Buys Now and much more, subscribe now.

Read more

Rubrik (RBRK) reported its fiscal Q1 2027 results (yes, they are a year ahead of the calendar) on June 4, but I hadn’t written about them yet. The stock dropped after the earnings, but that was not that surprising. It had already run up close to 90% from the April lows before the earnings.

Six days later, management held its first Analyst Day in Las Vegas, and after that, the market reacted positively. Of course, I include the additional insight I got from that day in this article.

Let’s start with the results.

Subscribe now

The Numbers

• Subscription ARR (annual recurring revenue): $1.57 billion, up 32% YoY. Net new subscription ARR of $103 million.

• Subscription revenue: $374 million, up 41%.

• Total revenue: $387.1 million, up 39% and beating the consensus by $20.75 million. That’s 5.7%, strong for a revenue beat.

• Non-GAAP EPS: $0.16, versus the consensus of -$0.03.

• Subscription NRR: approximately 120%.

• Customers with $100K+ in subscription ARR: 2,946, up 24%. Larger customers now make up 88% of subscription ARR. Customers spending $1 million or more grew over 50%.

• Cloud ARR: $1.39 billion, up 43%, now 89% of subscription ARR.

• Non-GAAP gross margin: 82.9%, up from 80.5% a year ago.

• Free cash flow: $74 million, more than double last year’s $33 million. FCF margin came in around 19%, up from 12%.

For companies growing so fast, it’s always good to look at the Rule of 40. If you add revenue growth and FCF margin together, the sum should be above 40 to be a strong company. Rubrik has a Rule of 58. That’s very strong.

Rubrik started as a backup and recovery company, first with hardware, then in the cloud. When you were attacked by ransomware, you can simply turn back the clock to the second before the hack. From there, it also expanded into identity security and, more recently, into securing the AI agents that enterprises use on their own systems.

With its new offerings, Rubrik is positioned where it should be: at the intersection of cybersecurity and agentic AI. A while ago, some believed that Anthropic’s Mythos model would end the company, but that’s definitely not the case.

But back to the past, because there’s something you should understand there. Rubrik used to sell physical boxes bundled with software. Customers got a free hardware upgrade every few years as part of the deal. Rubrik has been moving away from that for a while now, toward selling pure cloud software subscription, Rubrik Security Cloud, or RSC.

The old hardware bundles left behind a small accounting trace, though. Customers who gave up their right to a free hardware refresh got a cloud credit instead, and when they use that credit, it shows up as a one-time bump in revenue. Rubrik calls this “material rights.”

Material rights are shrinking fast, from $13.4 million a year ago to $8.5 million this quarter, and that shrinkage makes the reported revenue growth look softer than it really is. If you leave it out, then revenue grew 43%, not 39%. That’s even stronger.

At the Analyst Day, CFO Kiran Choudary said cloud ARR is now 89% of subscription ARR, up from roughly 60% a couple of years back, and much higher than the 80% long-term target Rubrik gave at its IPO.

He expects it to reach around 90% within four to six quarters and then to stay stable. For regulated and self-hosting customers, the legacy solution is still the best way to secure their data.

Source Analyst Day slides

I heard some investors claim that rising prices for servers, HDDs, flash, and DRAM are a problem for Rubrik. Founder and CEO Bipul Sinha denied this on the earnings call:

Rubrik has no real impact from the hardware market dynamics... the enterprise data protection part of our business is a relatively smaller part of our business now.

Rubrik doesn’t own the servers in a customer’s data center, nor does it own the cloud infrastructure. It mostly sells software. This reminds me of Cloudflare. Just like Cloudflare, Rubrik stays asset-light, without the huge capex spending. In these times, this is an overlooked competitive advantage.

The gross margin has now gone up five years in a row: 70% in FY23, then 77%, 78%, 82%, and 83% this quarter. And free cash flow margin nearly doubled in a year, from 12% to 19%.

This shows that the growth is combined with efficiency.

On the Analyst Day, the company also gave long-term targets.

These look all very good, although the “low single digits” for share dilution is a bit too vague for me.

Subscribe now

“The Cybersecurity Industry Is Dead”

That title is a direct quote from founder and CEO Bipul Sinha on the Analyst Day. His logic is that the old industry was built to prevent and detect attacks from human hackers using human identities. That world doesn’t exist anymore. Attackers use AI models that find vulnerabilities at machine speed, and a growing number of the “employees” in companies are AI agents, not humans. That means that a compromised agent isn’t a stolen password; it’s an insider attack. So:

You can’t respond by human speed, which is at best 10 bits per second, to an AI attacker, which is going million to billion bits per second. You will be out of business.

For a few weeks, the story was that this powerful model would kill the cybersecurity industry. But that’s very uninformed. It will definitely kill companies that still work in the old way, but the best have already adapted to AI and they will not be obsolete, but even more crucial.

Rubrik turned its own platform into an agent called Rubrik AI. It continuously monitors, builds a recovery runbook before an attack happens, and only brings in a human for the final yes or no. Chief Product Officer Anneka Gupta demoed this live at Capital Market Day, walking through a fictional ransomware attack in a Microsoft 365 environment in which the recovery plan was already built by the time the IT admin logged in.

Obviously, the cybersecurity market is not dead. Management put a $125 billion 2029 TAM (total addressable market) on the table for Rubrik.

Big TAM numbers often make me sigh deeply, but in this case, I think this is not outlandish.

Rubrik’s track record of how quickly each new product category has scaled after launch is also convincing.

Co-founder and CTO Arvind Nithrakashyap calls this the platform’s “complementary network effect”: each new product makes the existing ones more valuable, so the adoption compounds.

This is the breakdown of the revenue.

Chief Business Officer Mike Tornincasa runs the incubation team internally called Rubrik X. Products that came out of his team have grown at roughly 100% CAGR over five years, versus around 50% for the company overall, and now make up more than 40% of total company ARR.

To me, this also answers the question of how Rubrik can continue to grow so fast. At this scale, most slow down. Rubrik doesn’t.

The newest product from the Rubrik X team is Rubrik Flex. It’s a single contract that gives a customer access to the whole platform, and they can spend their commitment across whatever products they want. Announced at the Analyst Day. We have seen similar products at CrowdStrike (Falcon Flex).

The first Flex deal was a Global 2000 insurer that signed a contract for $6 million per year and over $30 million in total over five years. They started with three products and have room to grow into the rest.

Below:

The $50 million business Rubrik built from scratch in barely a year (and how it recovers customers 100x faster than Microsoft!)

Why "AI controlling AI agents" is the answer to the Mythos bear case

Five Selling Rules for Rubrik,

If the stock is still a buy after running 90% from the April lows.

And of course, much more.

Don't want to miss opportunities like this one again?

Grab your 20% discount now!

Read more

Today, it’s the 15th of the month and you know what that means: the Best Buys Now!

Earnings season is about to start again, and every time, like clockwork, the same thing happens: Suddenly, everyone becomes a short-term thinker. A company beats on revenue and EPS, but misses on some metric nobody really cared about three months ago, and the stock drops 15% in a day. Or it guides “cautiously” and gets punished for being honest.

And sometimes, a company beats on revenue, EPS and raises guidance, mentions a new partnership or initiative and the stock shoots up 25%.

I’ve learned to like those days. Because one quarter tells you very little about a great business. Not positive, not negative. But the quarters, taken together, and the clear scores that every company gets here tell a story. Sometimes, that’s a fairy tale, sometimes a horror story, sure, but it’s also important to remember that many fairy tales look like horror stories when you isolate parts of them. That’s why one or even a few quarters don’t tell the full story and I will always err on holding too long, not selling too early.

In the Best Buys Now, I often pick stocks that are a bit out of favor, and that can stay out of favor for a while. Some of these names will test your patience over the coming months or maybe even years. That’s fine for me as I am patient. But know yourself and know what your behavior is.

And as usual, I put my money where my mouth is. Every one of these picks is a stock I’ll buy myself for my PM Forever Portfolio.

Just one last remark before we start: while the picks are numbered, that order is completely random. It’s not a ranking, and number one is not “better” than number five.

As you know, I let go of a fixed number of stocks. Sometimes I see more opportunities and pick more stocks; sometimes I see fewer and pick fewer. That doesn’t mean there aren’t more opportunities. Maybe it’s just that I don’t see them. Maybe there are opportunities in oil, silver, or a defense contractor that I don’t see. I don’t focus on those domains and probably never will. They are not my expertise and that is because I’m just not as passionate about these.

But enough introduction now. Let’s dive in.

1. Mercado Libre

Mercado Libre was in the Best Buys Now last month as well, and it is up 12.67% since then, but I include it again, as I still see it as cheap right now.

If you want to know why, my 35-minute webinar about Mercado Libre tells you everything you need to know.

Below: the four other stocks I'm buying for my Forever Portfolio this month.

One is down 44% in a year with the lowest valuation ever.

One is a SaaS name the market thinks AI will kill (the numbers say the opposite).

One is a well-known stock I've never owned before.

And one is in healthcare and is still underestimated, in my opinion.

I'll buy all four right after this article is published.

Don't want to miss opportunities like this one again? Subscribe now!

Subscribe now

Read more

The US and Belgium are out of the World Cup. The Iran war is back (again), oil is expected to spike again and Senator Lindsey Graham suddenly passed away at the age of 71. People got killed by fires in Spain and the situation in Ukraine is still awful. And there was much more to be sad about this week.

But if you look at the history of our species, things have only improved. The short term often looks dire, but over the long term, it’s simple: Optimism wins. There are horrible episodes in our history (think of the wars, famine, diseases and so much more), but over the long term, life gets better. If you have not read the book Factfulness by Hans Rosling, I can only recommend it wholeheartedly.

Many things went really well this week. People got married, got children, got a new job, or heard they were cured. But there’s a huge filter that eliminates all those things. It’s called the dramatic attention filter. If it’s not dramatic, it just doesn’t reach you.

Source

That’s also how the stock market is. You often hear about the bad things, or the things that have the potential to be bad. But you don’t hear how so many thousands of companies do outstanding things to serve their customers, to improve their products, yes, even to make this world a better place. As investors, that’s what we bank on, and it’s this that sets us apart from traders. Traders need the drama to profit. We want the quiet performance over the long term.

Articles In The Past Week

This is the third article this week.

In the first one, I analyzed Chapters Group’s results in more detail.

The second one was not really an article but a webinar of 35 minutes in which I talked about Mercado Libre, my biggest position. You can find it here.

Memes Of The Week

This is the first meme this week.

No comment, haha.

Our Multi Meme King Flo posted this one.

When cab drivers play with leveraged positions, we are usually much closer to the top than to the bottom.

Then there was the Terry Smith situation. He has a big fund, Fundsmith, and he changed his approach dramatically. More about it later in this OOTW. First, the memes.

I made this meme myself.

Interesting Podcasts Or Books

Every now and then, I feel a bit tired or drained, and when I want to listen to a podcast at such a moment, or I do it when I have to pay too much attention to what I’m actually doing (like cooking something I haven’t cooked before), I listen to a light podcast episode.

For me, the Market Cap Game Show, a quarterly returning game show on David Gardner’s Rule Breaker Investing podcast, is the ideal combination of light entertainment and still learning something.

The concept is simple: two contestants guess the market cap of a company. You can listen to the most recent Market Cap Game Show here:

The markets in the past week

During the summer, I always check my portfolio less frequently, which I actually think is a good thing. So, what have the indexes done this week?

As you can see, the pattern we have already observed a few times in the last few weeks was back: the big difference between the Nasdaq and the S&P on the one side and the Russell 2000 on the other side.

The Russell 2000 dropped 0.61%, while the S&P 500 was up 1.23% and the Nasdaq 1.74%.

The Greed & Fear Index is based on the S&P 500. Therefore, it was not unexpected to see it climb to NEUTRAL from FEAR.

Quick Facts

This week, there was a lot to do about Terry Smith’s letter to shareholders, in which he changed his approach. Multi Gorki summarized it very well on our platform for paying Multis:

The reason is simple: Terry Smith lost a lot of his AUM (assets under management). AUM is now £12.3B, down from £29B in 2021. That’s down 58%. Ouch. But the fund has underperformed the index in the last 5 years, so that’s not really surprising.

This is also the reason why funds often underperform the index. At the moment they want to buy more, when their stocks are undervalued, they have to sell because people are asking for their money back. And reverse as well: when there’s a ton of money available to invest (like in 2021), a big majority of stocks are overvalued.

This is what Smith changed. From ‘do nothing’ to a turnover of 52% in a single quarter, that’s wild.

Now, don’t get me wrong. I think it was time Smith did something. More, even, he should have done something earlier already. I think he forgot a bit that the market prices stocks for growth and forward potential.

Take Zoetis, for example. In the last 5 years, it grew its revenue by 3% per year on average. That’s just not a company that will outperform.

With some price hikes, EPS growth averaged 6% per year over the last 5 years, which is still below the S&P 500 average (8.3%).

If you want a Fiscal subscription to get these insights as well, you get a 15% discount through this link.

Below: the Cloudflare deal with OpenAI that just changed the AI search game.

One Potential Multibagger up 34% in the last month and one up 56% in the last two weeks before this one.

Why Nubank's just-announced Mexican banking license is important.

The two stocks in the PM Forever Portfolio that report in the upcoming week.

Much, much more.

Don't want to miss the best stocks again?

Subscribe now

Read more

Two weeks ago, I was in Vail for the Intelligent Investor Conference. I pitched Mercado Libre there and I decided to make a video about this as well.

So, here you can watch the recording.

I hope you enjoy it and of course, you can use the comment section for questions!

In the meantime, keep growing!

Kris

Read more

Chapters Group (MDCKF) published its 2025 annual report several weeks ago, and this is the first time I get to walk you through its earnings since the stock became a pick.

As a European company, Chapters Group does not report the way American companies do. There is no quarterly call with a Q&A where eight analysts ask about the next twelve months.

Chapters Group reports a half-year and a full year, under German HGB accounting. The original report is partly in German and the Shareholder Meeting, which will be held in July, is completely in German, as that’s the rule in Germany.

I will be attending the Capital Markets Day and the Shareholder Meeting again next week, just like I did last year. Oh, and if you wonder, yes, there is simultaneous translation from German to English at the Shareholder Meeting, and the Capital Markets Day is fully in English. My German is also good enough to understand what management says on the Shareholder Meeting.

The preliminary figures were already released in March, so the annual report is the detailed version. The stock is up about 11% since I made it a Potential Multibaggers pick. Not great, but I’m in this for the long term. Maybe even more worrying for some Multis, there is no P/E, because the company reported a loss. How come? Let’s find out.

Subscribe now

Read more

Congratulations to the USA for its 250th birthday. It’s incredible what happened in those 250 years and how the country became the leader of the free world.

This is just the first article this week. There are multiple reasons for that.

The first is my jet lag after my week in Vail. On Monday and Tuesday especially, I really felt it, but even now, my biological clock is not reset yet.

Usually, it takes me just two days to recover, but the altitude in Vail probably plays a role. The village lies at more than 2,500 m (more than 8,200 ft) and the mountain even more than 3,500m (11,500 ft) and you definitely feel that. My Garmin watch warned me that during my first night, my oxygen level was just 85% and that I was either sick or at high altitude.

The second reason is that we had a belated birthday celebration for our daughter. Her birthday was three weeks ago, the day before the exams started, so we only had a small family celebration then (I wrote about that in the OOTW as well). Now, she had time to celebrate with her friends. We went to a trampoline park (the girls called it a “trampo park”) and they went swimming in a subtropical swimming pool with multiple glides and a wild river ride. There was a sleepover as well.

The first two reasons why this is the first article this week are personal, in other words, but the third is not. I went into research mode this week, and maybe (!) there’s a new pick crystallizing. It’s not sure yet, and if I decide to release a new pick, it may not be in the upcoming week. We’ll see. But I learned a lot this week and I enjoyed it.

I’ve also been working on an earnings review, but it’s not fully finished yet. I might have pushed it out yesterday if I really wanted it, but it didn’t feel finished enough yet. It needs some sanding, so to speak. So, probably, that’s an article I will publish tomorrow. At the same time, the Muse doesn’t come on command, so maybe it could be later this week.

It’s something I don’t often talk about, but I really try to make my articles as good as possible. I used to play guitar and sing and I composed my own songs. Some came in 15 minutes, some took months before they were finished. With articles, it’s less extreme (I have never written an article in 15 minutes and never worked on one for months in a row) but it’s a bit the same process. It’s only finished when it feels finished, not before.

Sometimes, I almost don’t change anything from the first draft, sometimes the rewriting takes more time than the writing. The Chapters Group is in the second category. The reason I don’t often talk about this is because it doesn’t matter for you. The article should always be good, full stop, whether I struggled with it or not.

That’s also why I still write the old-fashioned way. AI can’t make articles that are anywhere near satisfactory for me. It’s way too middle-of-the-road, faceless, without character. I also see it immediately in other people’s articles or X posts.

Let’s dive into this handwritten Overview Of The Week!

Memes Of The Week

Just one meme this week, shared by our Meme King, Flo.

Interesting Podcasts Or Books

This week, I listened to Chris Mayer, the author of the great book 100 Baggers talk about his new book The Investor’s Odyssey in Investing By The Books. You can find the episode here.

Because of this, I saw that the previous episode of Investing By The Books had Tom Russo on Common Stocks and Uncommon Profits, a fantastic investing book by Phil Fisher and one of the books that inspired me the most for Potential Multibaggers. I have not listened to that one yet, but it’s on my list for the upcoming week. You can find it here.

The markets in the past week

So, what did the indexes do this week? Let’s check.

As you can see, the Russell 2000 was down 0.46%, but the S&P 500 was up 1.76% and the Nasdaq 2.12%.

The Greed & Fear Index is still in FEAR but it’s up from EXTREME FEAR last week.

Quick Facts

1. SK Hynix On The Nasdaq

On Friday, SK Hynix will start trading on the Nasdaq under the ticker SKHY.

There’s a huge memory boom going on, as many of you will know and that is visible in the numbers. Bernstein estimates that SK Hynix could post a 90.9% gross margin in its DRAM business for Q2. Others see around 80%, so this is a surprising call. In Q1, this was already at a record 72%.

HBM remains the main thing, but conventional DRAM and NAND prices are also shooting up. And SK Hynix is a great player. If it had been on the American markets years ago, I would have bought it. I didn’t want it when it traded on the Korean market because of the lack of top-notch info and the costs associated with buying there.

Now, we will get an easier way to buy the stock, as SK Hynix is scheduled to begin trading on Nasdaq this Friday, July 10.

The offering could raise as much as $29.4 billion. SK Hynix plans to invest in new fabs and manufacturing equipment to add capacity.

I don’t think I will buy shares soon, but I’m happy it comes to a big market. And if I buy, I will let you know, of course.

2. AI Capex Slowing? Nope

There have been some voices saying that the AI capex boom is slowing.

Last week, I shared this.

And the average token pricing is down as well, albeit moderately.

But using cheaper models and lower token pricing has not resulted in slowing the AI infrastructure spending. Usage is growing much faster than prices are declining, according to JP Morgan.

JPMorgan estimates that token usage on OpenRouter jumped a whopping 70% month over month (!) in June, up 20x from last year. The message is simple: cheaper AI makes users use it much more.

Chinese and other low-cost models are winning a larger share of token volume, as already mentioned last week. In particular, developers, startups and AI agents use them. U.S. models accounted for only 35% of usage in June, down from 56% in April.

But the money tells a different story. Models from OpenAI, Anthropic, Google and xAI still collected more than 85% of total spending. Customers appear willing to pay higher prices for the strongest models when performance matters.

The hardware market shows the same thing. Rental prices for Nvidia’s A100, H100 and B200 all increased in June. The A100 rose 6.3% from May, while the H100 posted its seventh consecutive monthly increase. Even older GPUs remain valuable as companies match each workload with the most economical chip. This is pretty crazy if you know that the A100 was launched in May 2020 and the H100 in March 2022. That also means that Michael Burry’s call that 5 years of depreciation time was egregious is simply ignorant.

Memory is even crazier. JPMorgan says the price for 16-gigabit DDR5 has shot up 740% over the past year. AI servers need more memory capacity and bandwidth, while HBM production consumes manufacturing resources that might otherwise serve conventional DRAM. That’s why there’s so much demand for Micron, SK Hynix and Samsung.

Storage suppliers like SanDisk, Western Digital and Seagate also benefit from prices far above last year’s levels, but NAND has started to soften a little bit.

So, up to now, the consistently higher infrastructure still demands bigger and bigger demand from customers.

Below:

• Why I think the Mag7 is set for a comeback nobody's pricing in

• The CCP AI propaganda that's fooling millions of people on X right now

• The study of 21,559 companies that proves AI won't kill jobs (and what it means for your career or company)

• The Multibagger pick President Trump just bought (and what happened right after),

• And of course much more.

  Don't want to miss these valuable insights?

  Subscribe now

Read more

I’m starting to write this Overview of the Week in the back of an Uber, driving to Denver Airport.

I’m not constantly glued to my screen, as the scenery is simply too beautiful.

It’s Saturday afternoon here now, and I will arrive home around 4.30 pm on Sunday. I know I’ll need a few days of recovery from the jet lag. Those of you who have been flying east know that that’s always the worst, as you ‘lose’ time while flying.

I loved the conference a lot again. The best thing about it is not necessarily the ideas, but the conversations with some of the world’s smartest and most successful investors. They are great at poking holes in your thesis, asking the best questions and adding valuable context.

As I already shared last week, I presented about Mercado Libre.

If you want my full presentation, you can download it in the paid part of this article.

Articles In The Past Weeks

Because of my stay in Vail, this is just the second article this week. I know you are used to more, but most services don’t provide half as much content as I do for this price.

On Monday, I published the Topicus earnings analysis, updated the Quality Score and valued the stock. You can read that article here.

By the way, Constellation Software was widely discussed during the conference. ;-)

Memes Of The Week

Two memes this week. They may be outside some people’s comfort zone, so feel free to scroll past them. But I found them too funny not to share.

This is a parody of Benjamin Graham’s book The Intelligent Investor.

The second one is about SpaceX.

I don’t know much about technical analysis, but this one looks pretty correct, haha.

Interesting Podcasts Or Books

On the flight to Denver, I read about 70% of this book on Nubank. It’s self-published, and that means that there are a few things a good editor would have weeded out (like a paragraph that’s repeated), but it’s well-written and great to get extra insight on the company. I intend to read the rest on my flight home, although I might also try to sleep.

The markets in the past week

How did the markets do this week? As I was fully immersed in the conference, I actually have much less of an idea than I normally do. Let’s have a look.

That’s pretty crazy. The Nasdaq was down 4.6% this week, while the S&P 500 only lost 1.95% and the Russell 2000 was up 1.02%. I can’t remember such a big difference between the weekly returns of the indexes.

The Greed & Fear Index dropped to EXTREME FEAR.

Quick Facts

1. Apple Wants To Buy Banned Chips

Apple is lobbying the Trump administration for permission to buy memory chips from China’s CXMT (ChangXin Memory Technologies).

The Pentagon has classified CXMT as a Chinese military company. Apple reportedly contacted the Commerce Department more than a month ago and has also approached White House officials and political allies. Its goal is of course to lower the cost of memory. But I doubt that this will be successful. CXMT is blacklisted because of its ties with the Chinese military. I would be very surprised if the White House approves this. I mean, do you want almost every American to have a Chinese spy chip in his pocket? I don’t think so.

At the same time, Apple raised prices for iPads and MacBooks, saying it could no longer absorb the jump for the expensive memory chips.

Source

2. $100K Is More Than 10% of the Journey to $1 Million

Compounding growth is a hard concept to understand and I saw a great post this week that shows how many get it wrong.

Suppose you want to go to $1 million. On paper, $100,000 is only 10% of $1 million. But measured in time, it can represent more than 25% of the goal.

If you invest $10,000 a year and earn an average annual return of 7%, it would take 30.7 years to reach $1M. The first $100,000 would take 7.8 years. That means the first $100,000 consumes about 25.5% of the total timeline.

Then compounding starts doing more of the work and things speed up. Going from $900,000 to $1 million takes only about 1.35 years, almost six times faster than reaching the first $100,000.

At the start, things may feel slow, because most of the growth comes from your own contributions. Later, the compounding returns accelerate.

The first $100,000 is the hardest. Charlie Munger already said that.

Source

Below for paying subs:

Why the Mag7 turned into the Drag7

Why companies are suddenly cutting AI spending,

Why Alphabet's stock was down on surprising news

My full Mercado Libre Vail presentation to download, and of course, much more.

Don't want to miss opportunities like this one again?

Become a paying subscriber.

Subscribe now

Read more

A few weeks ago, Topicus (TOI:CA) (TOITF) reported its Q1 2026 results. I started the earnings analysis last week, but I couldn't get it out and so, I'm finishing it on the plane on my way to Vail, Colorado.

As you probably know, I have a second service called Best Anchor Stocks, mostly run by Leandro. He is a Topicus shareholder and wrote a short earnings analysis for Best Anchor Stocks subscribers. This article took Leandro’s article as a basis, but I added some context, a different angle here and there, and a couple of extra things from the filings.

And as always, I’ll update the Selling Rules, the Quality Score and the valuation at the end.

The Numbers

Topicus grew revenue 23% year-over-year to €435.7 million, up from €355.6 million. This acceleration came with EBITA margin expansion, as expenses grew less than revenue, at 20% YoY.

Organic growth (growth that doesn’t come from acquisitions) was 5%, the average since Topicus became a public company.

Maintenance and other recurring revenue grew 7% organically this quarter, the median over all quarters.

You can see a more detailed breakout here.

That recurring revenue accounts for €316 million of the €436 million, or about 72.5% of revenue. It is the sticky, predictable, high-margin business. The fact that this grew by 7% organically is an indication that there is no negative impact from AI so far.

Licenses came in at €11.5 million (+23%), and hardware and other were €9.9 million (+35%), but those are not really meaningful for revenue. Professional services generated €98.2 million (+19%). Organic growth was slightly negative here, but I have no problem with that, because services are always the lowest-quality part of any VMS business.

Net income dropped by 21.4% to €55.1 million from €70.1 million a year ago, and diluted EPS dropped from €0.54 to €0.41.

This sounds like a problem, right? But it isn’t. It’s just accounting noise.

Topicus’ Q1 2025 net income was inflated by a €32.8 million non-cash gain on its Asseco shares. The company bought a large stake in Asseco in January 2025 at 85 PLN per share, but the stock was already trading higher than that, so it booked a paper gain. That’s what causes this drop, which is only accounting.

If you exclude that, pre-tax net income this quarter was €64.4 million, versus €47 million of underlying pre-tax income last year (after removing that €32.8 million). So, the normalized growth is 36%.

This is exactly why, with Topicus, you can’t just read the headlines. The cash flows are another example. The metric that matters most for Topicus is free cash flow available to shareholders (FCFA2S). That’s the cash Topicus can give to shareholders if it stopped with acquisitions after taking out everything that goes to minority partners and to Constellation, the parent. It’s the cleanest number on what the business actually earns and I’m happy the company always provides it.

Operating cash flow rose 3% to €280.5 million, and FCFA2S 2% to €165.4 million. After a 23% revenue quarter with expanding margins, you’d expect more than 2-3% cash growth, right? So why did it grow so little? There are two main reasons.

Behind the paywall, I look at that, Topicus’ enormous acquisition firepower, the three numbers that challenge the AI bear case, the hidden value in Asseco and, most importantly, whether a stock down 51.6% is now genuinely cheap. As always, I also update the Selling Rules, the PM Quality Score, the valuation and my Buy-Hold-Sell rating.

If you want the full value, subscribe now!

Subscribe now

Read more

I’m going to start this Overview Of The Week in the same manner as last week: happy Father’s Day! Last week, we celebrated it in Belgium but today, the US and many other countries celebrate fathers.

I hope you enjoy or enjoyed your day if you are a father and celebrating this day. With Juneteenth, it was a long weekend.

In the upcoming week, I’m going to Vail, Colorado, for the Intellectual Investor conference of my good friend Vitaliy Katsenelson. This is a picture from two years ago.

As you see, the group is not that big, and that’s on purpose. It’s on an invitation-only basis, and Vitaliy doesn’t accept more people. That’s why the presentations are a bit longer, and you get to know the people much better. The level is very high, and it’s a joy to be invited again.

I’m already looking forward to the presentations. Mine will be about my biggest holding. Seasoned Multis know that this is Mercado Libre. This is the title page of my presentation.

As I’m flying to Vail and back this week, I will have a bit less time to write, but it will be a very inspiring week. In such weeks, the soil gets fertilized, so to speak. I don’t often get direct investment ideas, but I can talk about certain topics, themes, and technologies with people with deep knowledge, and that sometimes triggers an idea.

Articles In The Past Weeks

This is the third article this week.

In the first article, I selected the Best Buys Now for this month. So far, the selection had a good start.

In the second article this week, Zack and I analyzed CrowdStrike.

Memes Of The Week

Just one meme this week, shared by the Potential Multibaggers Meme King, Flo.

Interesting Podcasts Or Books

This week, I listened to a very interesting podcast episode of Stock Club. Guests were Neeraj Khemlani and Matthew Ankrom, the people behind the book The Coffee Can Investor.

They talk about what it takes to find 100 baggers. You can listen to it here.

The markets in the past week

How did the markets do in this four-day week?

As you can see, it was another volatile week but the indexes ended in green. The S&P 500 was up 0.93%, the Russell 2000 gained 1.22% and the Nasdaq 2.43%.

Weirdly enough, the Greed & Fear Index remained firmly in FEAR territory.

Quick Facts

1. The SpaceX IPO (pt. whatever)

I get some questions, some pretty arrogant, on how wrong I was on the SpaceX IPO.

This is supposed to be the evidence on how wrong I am.

Well, you can guess I got the majority of the questions on Tuesday, June 16, when the stock was up 25% from where it opened, not on Thursday, June 18, when it was just up 13% from that open.

I don’t know how many times I have to repeat it, but I’m not a trader and I’m not interested in short-term returns. I’m an investor, not a trader. Investor comes from the Latin

I studied Latin for 6 years (and now on Duolingo again as a refresher), and that means I know the origin of the words speculator and investor. They are not the same.

The Latin word speculator means an observer, a spy or someone who examines something. But that’s inherently short-term. Later it was used for someone who anticipates future developments and takes a short-term position based on that judgment.

People who have listened to the fantastic David Gardner will know the origin of the word investor. It comes from the Latin word investire, which means: to clothe. If you invest in a company, you wear the clothes of that company, as it were, as if you become a part of the team. That’s totally different and inherently meant for the long term.

So, I don’t care a bit what the SpaceX IPO does over the short term. What I do know is that I could see myself become an investor if the stock drops a lot. And for those who think that’s not possible, don’t forget that in the next few months, the market will be flooded with shares. Right now, the float is just 4%-5%, but that is about to change pretty quickly. This is the vesting schedule.

Source

If the stock drops a lot in the next year, I might consider investing in SpaceX. Right now? No, thanks, not interested at all.

Below: the stat that proves why you should never try to time the market, the table that shows which AI infrastructure stocks are still cheap (and matches what I just put in the Best Buys Now), why one of my picks jumped 32% in four days, and of course, much more. Don't want to miss opportunities like this one again?

Subscribe now

Read more

Wow, what a trip this has been so far.

I picked CrowdStrike (CRWD) as a Potential Multibagger on June 29, 2020, almost six years ago exactly, at $98.10. That means it is almost a 7-bagger. But in typical Potential Multibaggers style, it has been very volatile and, I’m sure, will remain so.

This is how multibaggers go. Everyone wants to celebrate a multibagger, but very few have the stomach to hold on to stocks through the ups and downs.

Don’t be mistaken in thinking that CrowdStrike was an easy hold. It first became a threebagger in a relatively short time and then went back to square 1 in January 2023.

That means the stock was down 65% from the top. Of course, as always, the cynics were ready to chime in: to get back to even, the stock has to almost triple.

There are two problems with that.

The first false assumption is that everyone picked the absolute top. If you picked the absolute bottom, everyone would accuse you of cherry-picking, and they would be right. But if someone cherry-picks negatively, it just passes as if that’s normal. My irritation about this is one of my pet peeves.

Secondly, the percentages make it seem impossible. To be exact, the stock would have to win 186% to get back to the top. Including the stock price, that’s almost a triple. Sounds hard, right? But the stock just has to regain the lost dollar amount. Math is somewhat misleading here. Not factual, of course, but psychological. It makes it sound almost impossible or very hard. But if you look at the bottom, this often happens and usually very quickly.

Just look at what CrowdStrike did from January 2023.

As you can see, the stock is more than a 7-bagger from that point. I looked at when it exceeded its previous top. The poetic beauty of the facts is that it was exactly a year after that bottom.

As long as a company keeps performing fundamentally, the stock return will come. Sometimes it goes swiftly, sometimes you have to exercise years of patience. That’s the entrance ticket for outsized returns.

This is what Charlie Munger said about this.

But enough musings. It’s time for action. And Zack will help me. He will analyze the earnings, although I also contributed a few elements. Even when someone else writes, I still analyze, so I don’t lose touch with the stock.

After the analysis, I take over again for the Selling Rules, the PM Quality Score update and the Valuation to see if CrowdStrike is still attractive at this price, or if it would be wise to sell or trim. Take it away, Zack.

Hi Multis

Leading up to earnings, CrowdStrike went on a generational run, more than doubling from the AI-fear lows set earlier in the year.

The sentiment on X went from “CrowdStrike is going to be replaced by Claude!” to “CrowdStrike is overvalued!” in a matter of months.

CrowdStrike stock run(Fiscal.ai)

So what happened in the past 4 months? Did something fundamental change? Read on to find out.

Headline Numbers

Let’s first dive into the numbers.

Revenue grew to $1.39B, 26% increase year-over-year, exceeding estimates by 1.7%.

Annual Recurring Revenue (’ARR’) grew to $5.51B, growing 24% year-over-year.

As a reminder, for SaaS companies, ARR is often a better indicator than revenue because it more accurately reflects current and future obligations due to the nature of GAAP revenue recognition.

Net New ARR which came in at $256M, up 32% year-over-year indicating continual expansion of contracted revenue with existing and new business. A related note: both SGNL and Seraphic closed in Q1, contributing $7.8M of acquired net new ARR to this quarter.

Charting ARR over the past few quarters, we see the reacceleration of revenue continue after an initial slowdown in the quarters prior:

The growing ARR is also reflected in the increased module adoption that continues to march up and to the right:

ARR and adoption charts(Fiscal.ai)

There’s one more forward-looking number worth paying attention to: RPO or Remaining Performance Obligations. That’s revenue that is already under contract but that can’t be booked as revenue yet because CrowdStrike still has to deliver the services. RPO came in at $8.8B, up 29% year-over-year. That’s growing even faster than ARR and revenue. Probably, that’s a result of the bigger and longer contracts that CrowdStrike can sign.

Subscription Gross Margin came in at 78%, or 81% on a non-GAAP basis. Both were up by 1% compared to their respective quarterly numbers from last year.

Operating Income (Loss) was ($30.6M) compared to ($118.7M) in FY 2026. Non-GAAP income was $325M compared to $201M in FY2026. The biggest contributors to the swing in income were a reduction in expenses related to the July 19th incident (damages from the big outage), which dropped over 50% compared with last year, and reduced SBC (stock-based compensation) as a percentage of revenue.

While operating income is still in the negative on a GAAP basis (mostly due to SBC), we see that Operating Cash Flow continues to grow every quarter, reaching a record high of $591M, growing 54% year-over-year.

Net Income (Loss) was $27.8M compared to ($104.3M) in Q1 FY2026. Non-GAAP net income was $283.4M compared to $184.7M in Q1 FY2026. GAAP net income got an $18M boost from gains on strategic investments. CrowdStrike has a venture fund, the Falcon Fund, and probably one or a few of those investments did very well.

Earnings Per Share (diluted) on a GAAP basis was $0.11 compared to a loss of $0.42 in Q1 FY2026. Non-GAAP Earnings Per Share (diluted) was $1.10 compared to $0.73 in Q1 FY2026.

Free Cash Flow was $468.5M compared to $279.4M in FY2026 while maintaining a stellar 34% free cash flow margin.

Cash and cash equivalents stood at $4.55B. This rock-solid balance sheet continues to provide security and massive optionality via future acquisitions or buybacks.

In Q1, CrowdStrike repurchased $176 million in shares at an average price of $365.63, leaving approximately $1.3 billion remaining under their current authorization. Management noted they will remain opportunistic in returning capital while staying focused on capturing the significant growth opportunities ahead.

CrowdStrike also announced a 4-for-1 stock split, the company’s first as a public company. While stock splits are purely cosmetic, they can increase liquidity for both shares and options. Shares will begin trading on a split-adjusted basis on July 2, 2026.

Guidance

For Q2 FY2027, management guided:

• ARR: $5.793B – $5.795B (24% YoY growth),

• Net new ARR: $284M – $286M (28 – 29% YoY growth)

• Revenue: $1.436B – $1.442B (23% YoY growth)

For the full year FY2027:

• ARR: $6.531B – $6.556B (25% YoY growth); a slight raise.

• Net New ARR growth: raised to 27.7% at the midpoint which is a 520 basis point increase from prior guidance, implying $1.279B – $1.303B of net new ARR. This is a meaningful revision and signals that management sees future business expansion in the pipeline.

• Revenue: $5.915B – $5.959B (23 – 24% YoY growth); a slight raise.

• Free cash flow margin: At least 30% for the full year

Overall, these were incredibly solid numbers across the board, showing clear signs of top-line reacceleration and improving operational leverage as they shake off the final impacts of the July 2024 incident.

Now let’s move on to what CEO George Kurtz referred to as the “Mythos inflection moment”.

The Mythos Moment

First, a quick recap of what transpired over the past few months:

A shift began at the RSA Conference in late March 2026, slightly before Mythos was even announced. Founder and CEO George Kurtz mentions that every meeting he had that week boiled down to the same thing:

Every meeting was literally the same meeting all over. Help us protect these AI workloads that are running on the endpoints. All the developers are running it, marketing is running it, accounting is running it. We heard just crazy stories about AI run amok.

Organizations want to move faster in adopting AI without compromising security.

Then, in April 2026, more fuel was added to the fire with Anthropic releasing a new frontier model referred to as “Mythos,” which demonstrated an ability to identify software vulnerabilities and construct sophisticated cyberattacks at an unprecedented speed and scale.

Claude Mythos(Anthropic)

Source: Anthropic

Now, any reasonably technical person or AI agent can potentially conduct serious cyberattacks against enterprise infrastructure, and cybersecurity’s role in the enterprise has evolved overnight. Founder and CEO George Kurtz:

For the first time in my career, the market’s view of cybersecurity’s role has shifted from being viewed primarily through the lens of risk management, compliance, and protection to being recognized as a strategic accelerator and a critical enabler of AI adoption.

The funny thing is that if you have been following CrowdStrike for a few years, George Kurtz has said this forever. So, it was with pride that he said this. Cybersecurity is now a necessity for enterprises that want to leverage and accelerate AI quickly, as deploying AI across an organization without proper security controls is too risky. Secondly, on the defensive end, frontier AI models (e.g. Mythos) have increased the attack surface and lowered the barrier for adversaries, increasing the security gap enterprises were already facing.

In response to this potential threat, new programs were created: Anthropic’s Project Glasswing and OpenAI’s Trusted Access for Cyber (’TAC’).

CrowdStrike was the only cybersecurity company selected for both, underscoring its leadership in this space. These programs gave enterprise companies early access to frontier models to ensure that necessary cybersecurity guardrails were in place before the models were released to the public.

This quarter, CrowdStrike also took the initiative in launching Project QuiltWorks.

Source: CrowdStrike

This is an industry-wide coalition of the world’s top AI companies, consulting firms, and cyber insurance companies, all under one roof, with the goal of providing auditing services with the CrowdStrike platform to identify vulnerabilities within companies.

As you can imagine, all of this serves as a new marketing and sales pipeline for the business, positioning CrowdStrike as the thought leader and best-of-breed in this space.

It’s ironic how what initially started as a threat to the CrowdStrike business is now a sales generator. I mentioned that in last quarter’s analysis of the “AI Threat” and it looks like it’s playing out exactly as I saw it then:

To flip the script, rather than a threat, AI and the “agentic workforce” represent a massive new market for CrowdStrike. AI adoption means a new attack surface that must be secured. As it grows, CrowdStrike becomes an even more necessary layer of protection for the AI stack. We are already seeing this reflected in the growth of the modules (Identity, Endpoint, AI-DR, etc.) mentioned earlier in this article. CrowdStrike is set to benefit from this AI revolution, not be replaced by it.

This entire pivot was further proof to me of just how much the market is driven entirely by narratives. Especially in an environment with volatile price action, you can clearly see how negative narratives drive down prices, which then fuels an even more negative narrative. The cycle repeats endlessly until the story finally turns. Keep in mind, this whole roller coaster happened despite zero evidence of fundamental weakness.

So the narrative flipped, the fundamentals are stronger than ever, and the stock just doubled in four months. I bought back then, based on the valuation, which is in the paid part below.

Below: the customer behavior that proves how sticky this platform is, the AI giants that are now building on top of CrowdStrike, the exact price I’d buy more of this stock at, and what I’m doing with my position after a 7-bagger.

Don’t want to miss opportunities like this one again?

Subscribe now

Read more

It’s the 15th of the month and that means that you get the Best Buys Now.

Before we dive in, I just want to set the record straight, as there are some newer Multis who might not know this. The Best Buys Now are not short-term opportunities. In other words, this is not for traders.

That doesn’t mean that I sometimes don’t add stocks that I think have short-term potential. I added BE Semiconductor Industries to my 10 Stocks For 2026, for example. The stock is up about 140% year-to-date.

AMD was in the Best Buy Now in March 2023, and it’s up almost 500% since then. Nvidia was a Best Buys Now in June 2022 and it’s up a whopping 1,155% since then.

But sometimes, it can take years before a stock takes off. In April 2023, I picked Datadog at $67.32. For more than 3 years, it underperformed but then it shot up like a rocket in the last few months. That pick is more than a three-bagger now. That’s just sometimes how the market works.

There are many more big winners, like CrowdStrike (up 587% since the Best Buys Now of January 2023), Cloudflare (up 420% since that same Best Buys Now), ASML (more than a threebagger since the Best Buys Now of October 2023), and many others.

There have been misses as well, of course. There were stocks like Fiverr, which was in the Best Buys Now a few times and which I ended up selling. The same goes for Paycom and other stocks. But one Nvidia, AMD or CrowdStrike wipes out the losers and then some. That’s how I invest.

And then there’s a category that underperforms but that I still believe in strongly for the long term and I’m convinced they will have their Datadog moment, that moment that made it worth waiting for.

But enough introduction, let’s go to the picks of this month. Just one remark, while the picks are numbered, this is completely random, not a choice of one above the other.

1. Broadcom

Broadcom (AVGO) was a Best Buys Now in February 2025 and it’s up 62% since then, but I think it’s attractive again.

After the Q2 earnings on June 3, the stock fell 20%.

There could be a few extra reasons (like the SpaceX IPO sucking up money), but I think there were two main reasons for the drop. The first was that guidance was not raised for the year, the second was that guidance for Q3 gross margin was 74%, down from from 77.1%.

But the margin guidance was lower because the mix changed. Broadcom sells high-margin software and lower-margin custom chips, and when chips grow faster than software, the margin will drop. It’s that simple.

There was a single $10 billion custom-chip order that will be in Q3. CEO Hock Tan already announced that last year.

Revenue was up 48% to $22.2 billion, AI chip revenue up 143% to $10.8 billion. The problem is not demand, but TSMC capacity. You can see this in the booking, orders for later delivery. They were above $30 billion, while only $10.8 billion was shipped. Customers don’t do a one-time order but are making reservations for the next few years.

But Broadcom is more than a chipmaker now. Almost 40% of AI revenue comes from networking, the switches and optics that move data between chips. And that’s one of the bottlenecks in data centers.

Broadcom launched a new platform with Apollo and Blackstone that will finance over 20 gigawatts of compute capacity through 2028. In other words, Broadcom helps finance the buildout.

I think the valuation looks good after the drop. Just look at the forward PEG.

That’s a 2026 PEG of 0.47, a 2027 PEG of 0.30 and a 2028 PEG of 0.45. That’s all very cheap.

As you can see, I added the number of analysts, because the more analysts, the higher the reliability of the consensus. Beware, it’s still an estimate and it could be quite wrong. And don’t forget that Broadcom has a history of consistent outperformance versus the consensus.

Here’s where the free part ends. If you are a paid sub, keep reading, as there’s much more.

When you join Potential Multibaggers now, you get the 6 other Best Buys Now and my entire investment system:

✅ Best Buys Now: every month, the 5 best stocks to buy

✅ My Proprietary Quality Score: rating companies on 17 quality metrics nobody else uses

✅ Deep Earnings Analysis: thorough breakdowns that reveal what really matters

✅ Valuations & Buy/Hold/Sell scales: cut through the noise and know exactly when to act

✅ 15,000+ Word Deep Dives: each pick gets 4-5 extensive articles so you understand exactly what you own.

✅ Private Community: direct access to me and 800+ serious long-term investors.

Subscribe now

Read more

Because of a technical flaw, this Overview Of The Week was not published yesterday. I’m very sorry, but here it is.

Happy Father’s Day to all Belgian fathers!

Yes, in Belgium, we celebrated this a week earlier. If you are Dutch, American or in many other countries, it’s next week. If you are in Switzerland or Lithuania, it was last week.

My wife and daughter spoiled me this morning with a delicious breakfast.

Articles In The Past Weeks

In the past weeks, you got four articles, but this week, the pace dropped a bit and this is ‘only’ the third article this week.

In the first article, I looked at Kinsale and its Q1 results.

Yesterday, you got an analysis of the outstanding Cloudflare results.

Memes Of The Week

This week, you couldn’t ignore the SpaceX IPO. And of course, this meme is as true as it is funny.

This is another one about the SpaceX IPO.

Because of the IPO, Elon Musk became the first trillionaire ever. The difference with the other billionaires is so big that we are all actually closer to Larry Page, Sergey Brin, and Jeff Bezos than they are to Musk. Pretty crazy. That gave rise to this meme, I guess.

This week, there was also the launch and suspension of Fable 5, the version of Anthropics Mythos for the general public. The American government thought it was too dangerous for foreign use, including Anthropic’s own overseas employees. Pretty wild. That’s when you get situations like this.

Interesting Podcasts Or Books

This week, I listened to The Compound and Friends. The theme was the state of the market and why the knockout punch everyone expects doesn’t come. Interesting stuff.

Oh, one tip, if you are only interested in the investing stuff, you can start at minute 10. Before that, they talk about basketball and other things. You can listen to the episode here.

The markets in the past week

Last week, the market indexes lost quite a bit, mostly because memory stocks dropped sharply. How about this week?

As you can see, it was a volatile week and the indexes only got in the green on Thursday and Friday. The S&P 500 was up 0.65% and the Nasdaq 0.70%. The Russell 2000 was up 3.90%, which is actually what you want to see, as it means the market strength is broadening. If you don’t know what I mean, I refer to the podcast episode above.

Weirdly enough, the Greed & Fear Index dropped further into Fear territory.

Quick Facts

1. The SpaceX IPO

Last week, I said not to buy the SpaceX IPO. This week, some said that I was apparently wrong. I think they read me wrong, haha. I’m not a trader. I’m an investor. There’s a fundamental difference between the two.

Now, some also thought I said I would never invest. I have not written that in any way or form.

I just never invest in IPOs.

This is what I wrote in 2020 already:

Why I never buy IPOs

I wait for at least 2 quarterly results, preferably even more, but normally at least 8 or 9 months after the IPO. There are several reasons for that.

1. FOMO or fear of missing out: a lot of investors don’t want to miss out on the next ‘hot’ stock but fear of missing out is not the best investing principle. You buy a stock not because the company executes so well or because you are impressed by the conference calls but simply because so many people tell you it’s so exciting.

There seems to be huge social proof and as human beings, we’re very susceptible to social proof. If so many pundits are upbeat about it, it must be a good investment, right? Well, maybe. But wait for it and you can have proof in the quarterly results. You can judge for yourself then instead of believing others.

2. The bank-fueled hype machine: banks buy the shares of companies that want to IPO and then sell them at the IPO. That means that if the bank buys for $31, like nCino and shares jump 150% that they pocket that difference. That’s why they will do everything in their power to push everyone in the industry to hype stocks before the IPO. And you know how it goes in a business where everybody knows everybody: most will simply do what they’re expected to do and will contribute to the hype. As an outsider, I am a bit more skeptical.

3. Execution. Very important: I want to see how a company executes under the eye of the world for at least a few quarters. Public scrutiny is something else than operating as a private company. The expectations come from outside analysts now and missing earnings in your first few quarters paints a whole different picture.

4. The lock-up period: After 6 months (mostly) the lock-up period expires so insiders can sell as many shares as they want. Management and early investors often seek to cash out at least a part of their holdings and that means that millions of shares flood the market.

5. Price drops: That selling often causes the price to drop, so plenty of time to buy then. I’ll give some examples of the best stocks, although I picked them randomly. I just had a look at them and they fitted into a pattern that I often see.

This is Shopify in its first 6 months of trading:

Then look what happens over the next three months, after the lock-up has expired:

In investing, patience is a virtue. Don’t be the ball but be the player that controls the ball. And think who can take advantage of hyping you up for an IPO.

I added more examples than just Shopify, but I didn’t want to make this too long.

That’s why this visual is so good.

Now, it’s very hard to pinpoint the exact buy point before it goes up. But I can wait out ‘dead money,’ unlike funds, which are judged on their quarterly performance.

So, if SpaceX’s stock drops enough, I might be interested. But don’t expect a second Tesla. Why not, you may ask? Well, because of this.

A whopping 25,420% gain? Up more than 250x? That would mean SpaceX would have to grow into a company with a market cap exceeding $500T. To give you some perspective: the total market of all American stocks is $79.5T, and the market cap of the whole world is $136T.

I’m happy to wait for the drop. And I’m pretty sure it will come. When? It could already start in three months, but more likely between 6 and 9 months.

Now, if you hold IPOs long enough, that can still work out. Look at this table. But also look at the difference in P/S between SpaceX and the rest of the IPOs.

But of course, there is Elon Musk. He knows how to pump the stock of his companies. I mean, if you can keep up this stock's momentum with those fundamentals, you can do it with another stock as well, right?

Now, I’m not dunking on Elon. That would be utter stupidity. Long-term Multis also know I owned Tesla in the past but took my gains. I admire Elon deeply and after reading Walter Isaacson’s great Elon biography, that admiration even grew.

But that doesn’t mean I can’t say Elon’s a stock pumper. Part of that is naive optimism, as he always thinks that things will be rolled out much faster than possible. Just like Steve Jobs, he has a reality distortion field. That’s a power, as he can bend reality into the shape he wants it to be over the long term, but over the short term, it makes them almost impossible to work with and irritating when it comes to setting expectations.

A new example of this came today when Elon replied to a post on X.

To be honest, I would be surprised if SpaceX’s revenue would be greater than $1T in 2031. I can’t say it won’t reach that in, let’s say 2038 or so, but even that is very uncertain.

Sometimes, people have trouble seeing the negative pendant of geniuses, but I don’t. It makes these incredible people, who change the world we live in, much more human to see them multi-faceted, just like we are all not one thing, but many things at the same time.

2. There’s TSMC And The Rest

This week, I saw this image.

This again shows how important TSMC (TSM) is for chips. All other foundries combined only have a quarter of the whole market.

Here’s where the free part ends. If you are a paid sub, keep reading, as there’s much more.

When you join Potential Multibaggers now, you get my entire investment system:

✅ Best Buys Now: every month, the 5 best stocks to buy

✅ My Proprietary Quality Score: rating companies on 17 quality metrics nobody else uses

✅ Deep Earnings Analysis: thorough breakdowns that reveal what really matters

✅ Valuations & Buy/Hold/Sell scales: cut through the noise and know exactly when to act

✅ 15,000+ Word Deep Dives: each pick gets 4-5 extensive articles so you understand exactly what you own.

✅ Private Community: direct access to me and 800+ serious long-term investors.

Subscribe now

Read more

Cloudflare (NET) reported its Q1 2026 results on May 7. I didn’t find the time to cover them right away and then I saw that it had its annual Investor Day on June 9. I waited a bit so I could cover both in one article. And here it is.

We’ve owned Cloudflare since I picked it at $39 in 2020, and that definitely helped me to unpack everything and put certain things in perspective.

Let’s walk through the numbers first.

The Numbers

• Revenue: $639.8M, +34% YoY. That’s the same growth as Q4. It beat the consensus of around $622M by about $17M or 2.7%.

• Non-GAAP EPS: $0.25

• Non-GAAP operating income: $73.1M, or 11.4% of revenue, up from $56.0M a year ago.

• Free cash flow: $84.1M, up from $52.9M in Q1 last year.

• Free cash flow margin: 13%

• RPO: $2.543B, +36% YoY. RPO is the remaining performance obligation. That’s revenue already under contract but not yet booked because the service still has to be delivered.

• DBNRR: 1118%. (dollar-based net retention, how much customers Cloudflare had a year ago are spending now, including the churn of customers that stopped).

• Large customers (over $100K a year): 4,416, +25% YoY. This is now 72% of revenue, up from 69% last year, and grew by 38%.

• Very large customers: deals over $1M grew 73% YoY. Cloudflare added as many $5M+ customers in this quarter as it did in all of last year.

Cloudflare has said on multiple occasions that investors should not focus on the DBNRR, but I still read a lot of takes saying it was bearish that DBNRR dropped from 120% in Q4 to 118%.

Cloudflare said that its sales teams focused on new businesses, and not as much on the expansion of existing customers. But still, retention was great.

Founder and CEO Matthew Prince on the call:

Our quarterly gross retention reached its highest level in four years, reinforcing that customers understand Cloudflare is a must-have rather than a nice-to-have.

Gross retention is different from dollar-based net retention. It looks at what you had in revenue from your customers last year and you withdraw all the churn of customers who left, but you don’t count what they spent more. So, the maximum is 100%. The highest gross retention in four years means very few customers are leaving.

The focus on new customers paid off. New business grew at its fastest rate since 2023.

Guidance went up as well. Management raised the full-year guidance to $2.805 billion to $2.813 billion, about 30% growth at the midpoint. For Q2, Cloudflare guided to $664 million to $665 million, also around 30%. I’m pretty confident the real result will be higher.

Also important: network capex is expected to be 14% to 15% of revenue for the year, which is still almost nothing compared to the tens of billions the hyperscalers are investing into data centers. And knowing this team, they’ll probably beat all of it.

The 20% Layoff

On the same day it reported this quarter, Cloudflare also announced it was letting go of about 1,100 people, about 20% of the company. That’s the news that made all the headlines, and I understand why it shocked people.

A company growing 34% laying off a fifth of its employees sounds bad. But when you look at what Cloudflare said about this, and at what it has been doing internally, it’s a very different story.

The cuts hit every function and every part of the world, with one exception: the salespeople who carry a quota and sit in front of customers. Those were barely touched, and management still expects its sales capacity to grow this year. The whole reorganization will cost $140 million to $150 million (about $40 million of that non-cash), mostly in the second quarter, and it should be done by the end of the third. The free cash flow targets for the year didn’t change.

So why do this now, when things seem to be going well? Because Cloudflare has ramped up the use of its own AI tools internally for the last six months. The results convinced management to act.

Cloudflare has been pretty cautious with AI internally, but that changed in November. Since then, people suddenly got much more productive, in some cases two times, ten times, even a hundred times as productive. Matthew Prince described it in his typical colorful language:

It was like going from a manual to an electric screwdriver.

The numbers the company shared were impressive. Cloudflare’s use of AI is up more than 600% in three months. In engineering, 97% of the team now uses AI coding tools, all of them running on Cloudflare’s Workers platform. People in finance, HR, and marketing all use AI intensely. That’s on an internal system the company built and calls Cloudflare OS. On the Investor Day, a few interesting examples were given.

The layoff is the consequence of that. Prince was clear about what it was and wasn’t:

This isn’t a cost-cutting exercise or an assessment of individuals’ performance.

To me, this is a clear signal that the second AI wave has begun. The first wave of the AI boom rewarded the companies that built the data centers, the chipmakers and memory suppliers. A lot of that (but maybe not everything) is now priced in. The next wave will reward the companies that take all that AI and turn it into real earnings by changing how they operate. Cloudflare is one of the first to do that systematically.

It also helps to compare this to the other layoffs we’ve seen this year. Plenty of big technology companies have cut staff, but most did so because they had to. Often, that was to compensate for their enormous data center investments. Cloudflare cut while growing 34% and raising its guidance. That’s a very different situation. And it’s actually a very good thing to do.

The other thing I appreciated was the honesty. Cloudflare paired the layoff with what it called industry-leading severance, and instead of hiding behind the usual corporate language, Prince called it a hard day and said the people leaving will go on to build great things. He also made clear this isn’t a company shrinking. He expects to have more employees in 2027 than at any point in 2026. When an analyst asked why he would do this right after such a strong quarter, he put it like this:

We’re the fittest we’ve ever been, but we’re gonna get even fitter to win the next chapter.

I respect this move a lot. I’m sure Cloudflare will take on many more employees once the new system is in place. Right now, there’s overcapacity. But the companies that will win over the long term are those that can leverage the efficiency gains at a larger scale and I think Matthew Prince knows this better than anyone else.

Sales productivity went up year-over-year for the ninth quarter in a row. Hiring of new salespeople grew at its fastest pace since 2023. We already saw that customer bookings grew the fastest since 2023. They also filled the pipeline at the fastest pace in five years and beat their internal plan for the quarter by more than they have in any first quarter since 2021, during that crazy COVID peak.

The customers keep getting bigger, too. Large customers now make up 72% of revenue, up from the high 50s a few years ago.

The Agentic Internet, Cloudflare’s Biggest Tailwind

Below: Cloudflare’s premium role in the agent traffic, why OpenAI and Anthropic both build on Cloudflare, the "Google Zero" problem of the internet and how Cloudflare seems to be the only one working on a solution, why the dropping gross margin is actually good news. And of course much more, like the valuation.

The value you get for your subscription is priceless!

Subscribe now

Read more

Kinsale (KNSL) reported its Q1 2026 results quite some weeks ago, but I had not covered them yet. Since the earnings, the stock is down about 13%.

If you zoom out a bit more, you see that Kinsale has the worst drop since it became a public company in July 2016. The stock is down almost 45%.

Last quarter, when premium growth slowed to 1.8%, I made the case that the slowdown was intentional and good. Kinsale was leaving underpriced business, to the competition.

So which is it this time? Is this a disciplined company riding out a soft market, or has the growth story simply ended? That’s an important question, as it means more or less the same as: Is the investment thesis still intact?

The Numbers

Gross Written Premiums: $482.0 million, down 0.5%. Yes, down. As far as I know, it’s the first decline. This is probably the main reason Kinsale’s stock dropped. Let’s part it for now, but obviously, we’ll get back to this.

Net Written Premiums: up 5.6%. Gross down, net up. We get back to that later as well, of course.

Net Earned Premiums: $406.9 million, up 11.2%. Earned premium is the part of written premium that gets “used up” as a policy runs off, and it is the part that shows up as revenue. It lags written premium.

Underwriting Income: $94.5 million, up 40%.

Combined Ratio: 77.4%, down from 82.1% a year ago. The combined ratio is the loss ratio (claims paid out) plus the expense ratio (the cost of running the business). Under 100% is an underwriting profit. So 77.4% means Kinsale kept about $22.60 of every $100 in premium as pure underwriting profit. That’s before a single cent of investment income. This remains very impressive.

Net Income: $112.6 million, or $4.88 per share, up 26.1%.

Net Operating Earnings: $117.8 million, or $5.11 per share, up 37.7%. Operating earnings leaves out the ups and downs of the stock portfolio, so it shows the insurance business more cleanly.

Operating Return on Equity: 24%. The average US insurer sits somewhere in the low teens, so this is still outstanding.

Book Value Per Share: $85.31, up 25.6% in a year. Great result.

Net Investment Income: $55.4 million, up 26.5%.

Float: now $3.3 billion.

Here’s an overview from the earnings slide deck.

So: EPS up almost 38%, a 24% ROE, book value growing at 25%, a combined ratio under 78%. Read these numbers and you wonder why the stock is anywhere near its lows. The top line growth and the quality of the earnings are the reason.

Below, for paid subs: why the biggest division is shrinking on purpose, the new competitors that worry me more than the giants, and what I'm doing with my position on Monday.

4000 words you can’t read as a free sub.

Subscribe now

Read more

Pfew... Yesterday was a deep red day. After such a day, I appreciate the weekend even more than in other weeks.

And of course, weekend also means a new Overview Of The Week.

Articles In The Past Weeks

We are keeping up the pace. This is again the fourth article this week. Let’s look back at the three previous articles.

In the first article this week, I presented you the second part of the deep dive on the newest Potential Multibaggers pick. It’s already up 30%, but if you want to hold for the long term, reading this can help you decide if you still want the stock.

In the second article of the week, we dissected Celsius Holding’s earnings.

Yesterday, I published the third article of the week, another earnings deep dive. This time, the outstanding Datadog earnings reflected the fundamental change the company has undergone over the last few quarters. We looked at what changed.

Memes Of The Week

It’s funny how people react to this section. Some people love it and others hate it. Now, if you hate it, you can scroll past this section, but if you love it, you would have to miss the memes otherwise, so I’ll keep them in.

This is not really a meme but from the Potential Multibaggers community. The Friday bloodbath left some traces, haha.

Bryan Johnson, the millionaire health freak who became even more famous because of the Netflix documentary Don’t Die: The Man Who Wants To Live Forever, also posted a stock market meme about Friday’s market action.

I also laughed hard with this one because it’s so true for so many investors.

This one went viral on X because of the funny cross-reference between the comics and movies and the chip company.

The high token costs also created a few memes, like this one.

Earlier this week, the market was much better than Friday and this inspired Multi bep for this funny thought.

Interesting Podcasts Or Books

This week, I listened to an episode of David Gardner’s podcast Rule Breaker Investing. David Gardner is one of the best investors of the last decades. He has picked multiple 100+ baggers like Amazon, Tesla, Nvidia, and several others. And yes, he kept them.

He recently turned 60, and in that context, he made an episode titled “60 Thoughts As I Turn 60.“ He puts them in three categories: investing, business and investing. Recommended!

The markets in the past week

The markets were down substantially, by 2.5% for the Russell 2000, 2.8% for the Nasdaq a whopping 5.1%.

Last week, I wrote:

In exactly two months (March 31 to now), the Nasdaq is up a whopping 29.71%. That’s crazy. And unsustainable.

I hate the word correction, because it implies that the market has done something wrong. But right now, I think a correction would be welcome.

Now, sometimes, you have to be careful what you wish for. But what feels bad for the short term can be very healthy for the long term.

The Greed & Fear Index dropped from Greed to Fear.

Quick Facts

1. Don’t Buy SpaceX’s IPO

What a coincidence (not). Just a week before SpaceX’s IPO (scheduled on Friday), the company announced that Google will rent computing power from SpaceX for $920 million per month for 32 months. That means an additional $ 29.44 B in revenue.

But mind the details. It’s $920 million per month. Not a $29.44B contract. The difference is in this sentence:

After December 31, 2026, the agreement may be terminated by either party upon 90 days’ notice.

Google owns 6% of SpaceX. At the expected IPO value of $1.75T (yes, a T), that means that it has an investment of $105B in SpaceX at that valuation. So, it’s not that it doesn’t want to help SpaceX.

It even inspired someone to make this GIF. It’s a bit cynical, but you can’t say it’s total nonsense.

Source

And some other suspicious things are going on. This for example.

If you still believe price targets, please let this convince you to stop attaching any credibility to them.

But back to SpaceX and why you shouldn’t buy the IPO. It’s quite simple. You are the exit liquidity. That’s a fancy name for being the sucker to pay insiders, VCs and early investors at peak hype valuations.

Before the Google deal, SpaceX traded at 94 times the 2025 revenue. That’s not a typo. 94x forward revenue, not profit. That’s bonkers.

Suppose that SpaceX grows its revenue by 50% without the Google deal. That’s very strong growth. That would mean $28B in revenue. Add one year of Google revenue and you have $39B. Very strong, but that still means SpaceX’s valuation is 45 times revenue.

If someone wants to buy Potential Multibaggers for 45 times the forward revenue, please contact me.

Still not convinced not to buy the SpaceX IPO? Look at this.

Ok, if you want to buy, I know what you are going to say: SpaceX is an exceptional company. Well, here are some other exceptional companies like Cloudflare, CrowdStrike, Facebook, Shopify, Palantir, and multiple others.

Source

Focus on the last column. The stocks of these outstanding companies that went public that year dropped by 55% on average within a year.

I may buy SpaceX at some point, but not at the IPO.

2. Bullish For Nvidia

I don’t know if people think about what happened in the context of Nvidia. This is pretty important.

SpaceX doubles the price of operation to rent out its GPUs to Google. This means two things:

1. There are still not enough GPUs to quench the chip thirst. Nvidia ramps up its production continuously, but it can’t follow the demand. Google decided, therefore, to rent the GPUs from SpaceX.

2. This also shows that Nvidia’s GPUs are probably better to run Gemini on than Google’s own TPUs. Why would Google pay double the market price for GPUs if its own TPUs are cheaper than that market price to start from. It would simply make no sense.

Jensen Huang has said on several occasions that Nvidia’s Blackwell costs twice as much as an ASIC chip, of which Google’s TPU and Amazon’s Trainium are examples. So that means Google pays four times as much for GPUs as it would if it simply deployed its own TPUs.

There is something interesting that Jensen Huang adds to the price. He says that even if Blackwell is twice as expensive, the compute power, efficiency, energy efficiency, etc., means that Nvidia’s GPUs are twice to eight times as effective. Google seems to admit that with this rent.

3. An Earnings Bubble?

This week, I read this interesting post.

The argument is simple and correct. While many compare this to the dotcom bubble, probably because AI a revolutionary tech innovation, this looks more like the build-up for the Great Financial Crisis.

These charts are shared to convince people that this is different than the dotcom bubble.

Source

Do you know why that’s convincing? Because it is different than the dotcom bubble.

In the buildup to the Great Financial Crisis, banks and home builders also posted big earnings gains. But they poked them up with very risky behavior.

Now, don’t get me wrong. What happened then was much riskier than what happens now. Now, the financial system will probably not in danger.

What I mostly mean is that people want to predict the next bubble by making it fit into the mold of a previous one.

Right now, I have the same opinion as the takeaway of what I showed you earlier. Yes, this is a bubble. Yes, it will pop. But probably not now yet.

4. When Good News Is Bad News

Over the short term, the market doesn’t trade on the economy but on interest rates.

We saw a big drop in the indexes this week. Most of that was from Friday. The Nasdas lost dropped 4.18% in a single day. The reason? The job report came in, and it blew all expectations out of the water. The US economy added 172,000 jobs in May, double the expected figure.

The market had been counting on rate cuts, but with higher interest rates and this strong jobs report, the odds of a rate hike are higher than of a cut.

But there’s a caveat. The job report looks like a blow-out economy, but if you look closer, there’s something else going on.

Just to be clear, the trend is cooling. Higher-wage cyclical jobs are still shrinking, and those are usually a better indicator of the trend, not people temporarily hired for the World Cup.

The takeaway for Multis? Nothing about the fundamentals changed this week. The price is a fickle market trying to price a company’s next decade and more. That’s an impossible exercise and that’s why emotion over the short term matters a lot. In the long term, a company’s return is determined by fundamentals, though.

When you join Potential Multibaggers now, you get my entire investment system:

✅ Best Buys Now: every month, the 5 best stocks to buy

✅ My Proprietary Quality Score: rating companies on 17 quality metrics nobody else uses

✅ Deep Earnings Analysis: thorough breakdowns that reveal what really matters

✅ Valuations & Buy/Hold/Sell scales: cut through the noise and know exactly when to act

✅ 15,000+ Word Deep Dives: each pick gets 4-5 extensive articles so you understand exactly what you own.

✅ Private Community: direct access to me and 800+ serious long-term investors.

Read more

Datadog (DDOG) reported its Q1 2026 results on my mother’s birthday (May 7), and I had not reviewed the earnings yet. Now that I have, I can say it was potentially the best quarter this company has ever delivered. And the market agreed. The stock is still up 58%, even after the drop in the last few days. It was up 90% just a few days ago. Crazy.

If you want the best stock screener, the best charts, the best analyst estimates, the best earnings calls, Morningstart research, and sooooo much more, join Fiscal and get 15% off.

I keep repeating this, but it’s good to see this live for long-time Multis. Stocks can do nothing for years and then suddenly shoot up like a rocket over a small period of time. As long as the company keeps performing and the fundamentals stay intact, this often happens. But it can take years of patience. Years of nothing and then suddenly everything. That’s the stock market for you.

Datadog’s outstanding quarter also crushed one of the most superficial bear cases I heard about Datadog: that AI is going to eat it. At the end of the article, you’ll understand why this is ridiculous.

The Numbers

Datadog’s Q1 revenue came in at $1.006 billion, up 32% year-over-year. The consensus was $960 million, so this was a $46 million beat, or 4.8%. It was the first time Datadog crossed a billion dollars in a single quarter. A nice milestone.

This was the fourth consecutive quarter of accelerating revenue growth, and not by a bit. Just look at this beautiful climbing line.

It’s impressive that Datadog can do this at this scale.

CFO David Obstler said on the call that ARR (annual recurring revenue) growth accelerated in each month of Q1, and management said the trend continued in April. I think that’s one of the reasons why the market reacted the way it did to these earnings.

Non-GAAP EPS was $0.60, beating the consensus of $0.51 by $0.09. Non-GAAP operating income was $223 million, good for a 22% operating margin. Free cash flow was $289 million with a 29% margin.

Datadog ended Q1 with about 33,200 total customers, up from about 30,500 a year ago.

When you plot this on a chart, which Fiscal can do, of course (get 15% off here), you see something interesting.

Customer growth is not responsible for the revenue acceleration we saw. So, what is? This.

If you wonder why the green lin, with customers with ARR of more than $1M stops a quarter earlier, it’s because Datadog only provides once a year. But you see the trend. It’s big customers that power the growth. There were about 4,550 customers with an ARR of $100,000 or more, up 20.7% from 3,770 a year ago. For the biggest customers, it’s probably even more. Don’t forget that Datadog has usage-based billing and with more AI, that means more usage, as I have always said, long before the market agreed.

Net retention has not moved in a long time. It’s always 120% or a bit higher.

The Core Business Keeps Accelerating

For most of 2025 and until a month ago in 2026, software stocks were beaten to a pulp on the fear that AI was going to disrupt or replace SaaS. The narrative was that LLMs and coding agents would make a lot of cloud software obsolete. Anything that wasn’t directly an AI play looked vulnerable.

And then Datadog reported. It was the turnaround for software, it seems. CEO Olivier Pomel on the call:

Non-AI customer revenue growth accelerated again this quarter to mid-20s percent year-over-year, up from 23% last quarter and 19% in the year ago quarter.

So, the non-AI part of Datadog’s business, the part that the market wrote off, just posted its third consecutive quarter of accelerating growth. From 19% to 23% to mid-20s. Or put differently, traditional SaaS customers accelerated their Datadog spend. SaaS dead? Hahaha.

This is the Anti-Non-AI Bubble I have talked about for months now. The SaaS market is much bigger than everyone seems to factor in now. Founder and CEO Olivier Pomel confirmed how much growth Datadog can still have just by taking market share alone already. From the J.P. Morgan conference two weeks after the earnings:

We’re the leader in observability, we’re #1 there, but we still have only 13.6% of the market according to Gartner. So this tells you how early it is in the market for us, how much opportunity there is ahead of us, even factoring out all of the new developments with AI.

The AI-native cohort, of course, is also growing rapidly. Datadog now has 22 customers spending more than $1 million annually on AI-related work, and 5 spending more than $10 million. And Pomel disclosed at the recent Investor Day in February that AI-native customers represent about 11% of Datadog’s total revenue today, up from 5% in 2024, and just 2% in 2023.

But many seem to forget that the other 89% is everything else, and that part is accelerating faster than it has in years. Datadog is in a premium position. it gets the AI tailwind on 11% of its revenue (and growing fast), and the SaaS tailwind on 89%. What a great double engine!

The Training Reversal

There was something else that caught my ear on the earnings call that I really liked. CEO Olivier Pomel on the call:

Interestingly, last year, when we reported earnings, we said we’re mostly interested in inference workloads and training is not really a market for us yet. Now we actually see training becoming a market.

That’s an important reversal. So, what changed? Pomel explained the mechanism in more detail at the J.P. Morgan conference:

Models went from being mostly pre-trained to being largely post-trained. The post-training was becoming increasingly specialized to different types of verticals. The stacks that are used for post-training also are becoming richer and richer. And we saw instead of having 5 to 10 companies doing that, now there were 50 to 100.

Twelve months ago, training wasn’t a market for Datadog but now it is. How can this change so fast? Olivier Pomel explained at the J.P. Morgan Conference that the kind of training had changed.

Pre-training is the huge, expensive first step in which a model learns from scratch on incredible amounts of internet data. Only 5 to 10 companies worldwide could afford that. Post-training is what comes after: based on the pre-training, you can teach the model to be good at something specific, like coding, or medical questions, or customer support. It’s cheaper and easier, and now 50 to 100 companies are doing it, but that could soon be 500 or 1,000. This is a very interesting development and another reason Datadog looks well-positioned to profit from AI.

In Q1, Datadog brought in two new deals with the AI research divisions of two of the world’s largest tech companies. One was a 7-figure deal, the other even an 8-figure deal. These are hyperscalers with top-notch engineering talent and a strong culture of building everything in-house, but they still came to Datadog. That says a lot.

Olivier Pomel on the earnings call:

Hyperscalers typically have a culture of building everything themselves, and they certainly have the balance sheet and the human capital to support some of that build-out. Like if there was ever a set of companies for whom it makes sense to do it themselves, that would be those companies. And yet, we see that they have the same issues.

Don’t forget that Anthropic also signed a bit contract. We discussed this last quarter.

Below: the rest of the AI story, why every huge AI company uses Datadog, and what I'm doing with the stock right now.

When you join Potential Multibaggers now, you get my entire investment system:

✅ Best Buys Now: every month, the 5 best stocks to buy

✅ My Proprietary Quality Score: rating companies on 17 quality metrics nobody else uses

✅ Deep Earnings Analysis: thorough breakdowns that reveal what really matters

✅ Valuations & Buy/Hold/Sell scales: cut through the noise and know exactly when to act

✅ 15,000+ Word Deep Dives: each pick gets 4-5 extensive articles so you understand exactly what you own.

✅ Private Community: direct access to me and 800+ serious long-term investors.

Subscribe now

Read more

Celsius Holdings (CELH) reported its Q1 2026 results on May 7, and the stock kept dropping. It’s now 12.4% lower than before the earnings.

Year-to-date, the stock is down 34% and from its 2024 all-time high, it’s down almost 70%.

The real question is, of course, whether the market is wrong and gives us an opportunity to buy, or if the weak stock price is a sign that there’s more.

Let’s look at the numbers first.

The Numbers

• Revenue: $782.6M, up 138% YoY, beating the consensus by $22M or 2.9%.

• Adjusted EPS: $0.41, up 128% YoY, beating the consensus by $0.12 or a whopping 41.4%.

• GAAP EPS: $0.33, up 120% YoY.

• North America revenue: $747.3M, up 144% YoY.

• International revenue: $35.3M, up 55% YoY.

• Brand split: Celsius $348M (+6% YoY), Alani Nu $368M (+60% pro forma YoY), Rockstar $67M.

• Gross margin: 48.3%, down from 52.3% last year in Q1, but better than the 47.4% in Q4 2025.

• GAAP net income: $110.1M, up 148% YoY.

• Adjusted EBITDA: $195.5M, up 181% YoY. EBITDA margin of 25.0%, up from 21.2% last year.

• Buybacks: 700K shares for $24.1M at an average price of $35.39. $236.1M still left of the $300M buyback program.

So on the surface, the results look really strong. Celsius posted substantial beats of the consensus, with better margins. And yet, the market didn’t seem to care. Let’s look into more detail.

The Celsius Brand Problem

I start here because I think the 6% growth for the Celsius brand is why the market doubts the company’s growth story. For the first time, Alani Nu was bigger than Celsius. Revenue for Alani was $368M, compared with $348M for Celsius.

A part of that is seasonality. Celsius is the fitness brand of the portfolio, and apparently, people drink fitness drinks more in spring and summer than in January and February. Alani Nu is more seen as an everyday brand. For full-year 2025, Celsius did $1.46 billion and Alani Nu (acquired in April 2025) did roughly $1 billion. So, on an annual basis, Celsius was still bigger last year. But Alani Nu posted 60% revenue growth versus 6% for the Celsius brand. Is it in trouble? Monster grew more than 20%. That 6% growth for the flagship brand looks very weak.

At the Deutsche Bank conference on June 2, John Fieldly explained what’s going on. Before PepsiCo, Celsius was distributed by more than 300 independents. This is important to know.

To get shelf space at certain retailers, Celsius often did custom flavors. Fieldly gave an example. A convenience chain of 300 stores didn’t believe Celsius would sell, so the company created a Cherry Cola exclusively for them. It worked, and therefore, they could also sell Celsius on the shelves. That flavor only existed for those 300 stores. And there were many flavors like that.

In the PepsiCo system, that approach doesn’t work. If you have national distribution, you need national consistency. So Celsius is removing all regional flavors and focusing on the national flavors. Fieldly:

We want to have a consistent portfolio around the country. As we say internally, we want to keep the fast cars on the track.

Each flavor removal immediately results in lost revenue. That’s a big part of why the Celsius brand grew only 6% this quarter.

The core Celsius 12-oz cans grew 11% in convenience stores. So, that proves Fieldly’s story. The assortment is shrinking, but what remains of the legacy brand is doing well.

Fieldly also said something at the conference you don’t often hear from a CEO:

Especially on Celsius, we should have had more innovation. That would have added more complexity with the integration of Alani and Rockstar, but we should have had more innovation, and we’re cycling over 6 innovations versus last year.”

So Celsius underinvested in flavor innovation on the flagship brand. The reason was the integration of Alani Nu and Rockstar. Understandable. Last year, there were 6 innovations, so that makes the comps tougher. Management will continue to focus on the integration now but go full-in on innovation in 2027.

Alani Nu: Firing On All Cylinders

If the Celsius brand looks weak but is better than it looks at first sight, Alani Nu is firing on all cylinders. I think we can already say now that this was a killer acquisition for Celsius. That it would overtake Celsius in sales so fast was really unexpected.

Revenue was $368M, up about 60% pro forma. Pro forma means this is against Alani Nu’s sales last year, before Celsius bought it. Scanner data, which measures what consumers bought, even showed the brand up 100% YoY.

So consumer demand grew faster than the reported revenue number suggests. That’s important, and it’s worth explaining why the two numbers are quite a bit apart.

The company gave us a breakdown:

Alani Nu sold $230.7M in Q1 2025, the quarter before Celsius bought the company. But not all of that was from the US energy drink market. Take out $32.6M from Canada and from non-energy products like protein bars, and you get $198.1M of U.S. energy drink sales. That’s the right number to compare this quarter with.

From there, scanner data shows U.S. energy drink sales grew 85% YoY, not the 100% I mentioned earlier. The difference is Cherry Bomb, a limited-time flavor that Celsius shipped to stores in Q4 2025. Consumers bought most of those cans in Q1 2026, but the company already booked revenue when the cans shipped, so the revenue was in the Q4 results. Without that distortion, growth would have been 85%.

Apply 85% growth to that $198.1M, and you get about $168M of additional revenue. That’s the white bar.

Then there’s a $ 26.5 M deduction. When Alani Nu was sold directly to retailers like Walmart, Celsius booked the full wholesale price. Now that Alani Nu is being sold through PepsiCo’s DSD (Direct Store Delivery) system (which means Pepsi trucks deliver cans straight to store shelves instead of to a retailer’s warehouse), Celsius sells the cans to Pepsi first, and Pepsi takes a cut before reselling them to retailers. So even if the same number of cans are sold to consumers, the revenue Celsius reports per can is lower.

So the takeaway is: consumer demand for Alani Nu grew by 85%. That’s phenomenal growth. Of course, even if Pepsi takes a part of that, volume is much bigger and on top of that, Celsius also had to pay its previous distributors, but in another way.

At the Deutsche Bank conference, Celsius shared that Alani Nu’s availability in convenience stores went from 65% in January to 91% in May. That’s a sea change.

Normally, when a brand expands distribution that fast, sales per store go down. The new stores are usually lower quality and it takes time for shoppers to find the product. With Alani Nu, sales per store actually went up over those five months.

The bear case on Alani Nu is that it’s a flavor brand, riding LTOs (Limited Time Offers), like Cherry Bomb and Lime Slush, that are fashionable for a few months and then disappear.

The fear is that once the LTO cycle slows, the brand fades. But the data shows the opposite. The brand is reaching more stores and the consumer is buying more per store, not less. That’s a really strong indicator that the brand has staying power.

There’s a related concern: that Alani Nu is just stealing sales from Celsius. Fieldly was asked this directly at the conference. His answer was that there’s some overlap, but Alani Nu is also reaching consumers that Celsius wasn’t. I think he’s right, and the proof is in the share number. If Alani Nu were just stealing Celsius’s sales, then the core Celsius brand wouldn’t have grown by double digits on a normalized basis (see above for that).

The market got the two big numbers wrong. The question is whether it’s also wrong about the rest, the margins, the Costco threat, and the current stock price. Below are my answers.

Subscribe now

When you join Potential Multibaggers now, you get my entire investment system:
✅ Best Buys Now: every month, the 5 best stocks to buy
✅ My Proprietary Quality Score: rating companies on 17 quality metrics nobody else uses
✅ Deep Earnings Analysis: thorough breakdowns that reveal what really matters
✅ Valuations & Buy/Hold/Sell scales: cut through the noise and know exactly when to act
✅ 15,000+ Word Deep Dives: each pick gets 4-5 extensive articles so you understand exactly what you own.
✅ Private Community: direct access to me and 800+ serious long-term investors.

Subscribe now

Read more