🏰 Anduril’s $14B Game Plan

Good afternoon! Trump Media ($DJT), the social media company majority-owned by former President Donald Trump, reported a tough financial quarter with a net loss of over $16 million. Revenue for the quarter dropped to just $836,900, a 30% decrease from the same period last year. Despite generating only $3.79 million in revenue over the past 12 months, Trump Media boasts a market cap of nearly $5 billion—a valuation largely driven by Trump's name and influence rather than the company’s financial performance.

Even with these financial challenges, Trump Media is relying on its balance sheet, with $344 million in cash and no debt, to sustain operations. As Trump gears up for his presidential run against Vice President Kamala Harris in November, the stock’s high valuation underscores the power of his brand, even as the company struggles to turn a profit.

MARKETS

• The market rollercoaster has come full circle: The S&P 500 and Nasdaq have erased their losses from earlier in the week as recession worries took a backseat and investors seized the opportunity to buy the dip. Meanwhile, the Dow clawed its way into the green by the closing bell, though it's still shy of a full recovery, remaining comfortably above this week’s low points.

• Treasury yields dipped slightly as investors sought refuge in bonds, nudging yields just below the crucial 4% threshold.

• While most of the market was on a bumpy ride, oil had a stellar week, fueled by geopolitical tensions in the Middle East that threatened to choke supply and push prices upward.

STOCKS
Winners & Losers

What’s up 📈

• Doximity ($DOCS) skyrocketed 38.74% after the medical platform exceeded earnings expectations and raised its guidance, benefiting from its investment in the DoximityGPT AI model.

• Sweetgreen ($SG) surged 33.37% following a robust earnings report and an optimistic sales outlook for 2024.

• Expedia ($EXPE) advanced 10.21% on an earnings beat, successfully navigating through a potential consumer spending dip.

• Unity Software ($U) climbed 8.22% despite lower year-over-year revenue, still surpassing Wall Street’s expectations.

• Nikola ($NKLA) increased 8.21% after posting a surprisingly strong quarter with sales up by 318%.

• Take-Two Interactive ($TTWO) rose 4.35% on better-than-expected earnings, though questions remain about the impact of its Gearbox acquisition and the release date of GTA 6.

What’s down 📉

• Five9 ($FIVN) tumbled 26.49% due to a weaker-than-expected outlook for the upcoming quarter and the rest of the year.

• New Fortress Energy ($NFE) plunged 23.62% after missing both earnings and revenue targets last quarter.

• Array Technologies ($ARRY) dropped 21.02% despite beating analyst estimates, as the company lowered its fiscal year guidance.

• Insulet ($PODD) declined 8.81% even after an earnings beat, with concerns over the cost of unused insulin devices weighing on the stock.

• Capri Holdings ($CPRI) fell 4.86% as slowing sales from financially strained consumers put pressure on the company founded by Michael Kors.

• e.l.f. Beauty ($ELF) slipped 14.43% despite surpassing earnings estimates and offering an upbeat fiscal year outlook, as investors worry about stiff competition.

DEFENSE
Anduril’s $14B Game Plan: Autonomous Weapons Factories

The defense tech startup Anduril Industries, famous for being named after a fictional sword used by The Lord of the Rings character Aragorn, and founded by Oculus teen prodigy Palmer Luckey, just secured a cool $1.5 billion in new funding. This brings its valuation to a jaw-dropping $14 billion, just seven years after it launched. And what’s on their shopping list with all that cash? Autonomous weapons factories, because why build a regular factory when you can build one that churns out high-tech war machines like it’s no big deal?

Cracking the Government Code

Anduril has quickly climbed the ranks to become a serious contender in the defense world, a sector where newcomers rarely survive, let alone thrive. The company has somehow cracked the government contract code by consistently delivering on time, on budget, and with tech that’s making the old guard sweat. They recently outmaneuvered giants like Lockheed Martin and Boeing to snag a contract with the U.S. Air Force for developing uncrewed fighter jet prototypes. So yeah, Anduril is playing with the big boys now.

Meet Arsenal-1: The Mega Weapons Factory

Now, let’s talk about Arsenal-1, Anduril’s planned 5-million-square-foot megafactory. This isn’t your average assembly line. Think of it as the Willy Wonka factory of autonomous military systems. The plan? Produce tens of thousands of these systems annually, with a workforce that could number in the thousands. Anduril’s Chief Strategy Officer, Chris Brose, says Arsenal-1 is just the start—they’re already eyeing additional locations, including one abroad. The goal is to scale defense production in a way the industry hasn’t seen in decades, potentially saving the day when global conflicts demand rapid resupply.

Why It Matters

The timing couldn’t be more critical. The ongoing conflict in Ukraine has highlighted a glaring issue: the U.S. and its allies don’t have enough military equipment stockpiled for a prolonged conflict. Anduril’s ambitious plans to ramp up production are designed to address this shortfall. As Brose put it bluntly, "America and our allies don’t have enough stuff." With a global stage set for potential conflicts, investors are betting big on Anduril’s ability to deliver.

What’s Next?

Expect Anduril to keep scaling, with the $1.5 billion war chest enabling them to expand their manufacturing capabilities and continue developing cutting-edge defense tech. The investors behind this latest funding round—including Sands Capital and Founders Fund—are clearly convinced that Anduril is the next big thing in defense. They’re not just throwing cash at a flashy startup; they’re betting on Anduril to reshape the future of military production. And with Arsenal-1 on the horizon, Anduril seems ready to do just that.

NEWS
Market Movements

• Google ($GOOGL) and Meta ($META) have joined forces to target teens with Instagram ads on YouTube, reportedly bending Google’s own rules, according to the Financial Times.

• UK regulators are launching a formal investigation into Amazon’s ($AMZN) $4 billion investment in AI startup Anthropic, as governments ramp up scrutiny of Big Tech’s moves in the sector.

• Duolingo ($DUOL) is on a winning streak, reporting a net income of $24.4 million—a staggering 500%+ YoY increase—marking its fifth consecutive profitable quarter. The platform now boasts over 100 million daily active users and 8 million paid users.

• TKO Group Holdings ($TKO), the parent company of WWE and UFC, is thriving, with record quarterly revenue of $851 million, driven by UFC’s 29% annual revenue growth.

• Cisco ($CSCO) is planning another round of layoffs, its second major job cut this year.

• Tesla’s ($TSLA) board is under scrutiny from Elizabeth Warren, who’s raising concerns about Elon Musk’s corporate ‘entanglements.’

• Humane’s AI PIN numbers aren’t looking so good. Over $1 million worth of the $9 million in pins and accessories originally sold have been returned. Between May and August, more Pins were returned than purchased.

• Stellantis ($STLA) is laying off 2,450 plant workers due to the discontinuation of the Ram “Classic” pickup truck.

RETAIL
Costco Cracks Down: Membership Scanners Coming to All Stores

Heads up, Costco ($COST) fans—your days of sneaking into the warehouse without a membership card are officially numbered. Costco announced it's rolling out membership scanners at the entrances of all its locations. Over the coming months, instead of casually flashing your card at the door, you’ll need to scan it, whether it’s physical or digital. And don’t even think about borrowing mom’s card for that sweet rotisserie chicken—Costco’s tightening up its security.

Card Sharing Crackdown

So, what’s behind this crackdown? Costco’s CFO Richard Galanti mentioned that since the pandemic, more people have been trying to sneak in using someone else’s membership. Not cool, folks. Costco isn’t playing games anymore. They’ve already started testing these scanners earlier this year, and the results have them feeling confident about rolling them out nationwide.

This move isn’t just about keeping non-members out—it’s also about speeding things up inside. By scanning at the entrance, there’s no need for employees to check cards at registers or self-checkout, meaning a quicker in-and-out for everyone.

Membership Fees: The Real Money Maker

Why is Costco so serious about memberships? Because that’s where the big bucks come from. Last year alone, Costco raked in $4.6 billion from membership fees. These fees are crucial to Costco’s profits, and with nearly 128 million members, the warehouse giant has a lot to protect. Starting September 1, those fees are going up for the first time since 2017. The basic Gold Star membership will rise from $60 to $65, while the Executive Membership jumps from $120 to $130. Plus, the maximum 2% reward for Executive members will increase to $1,250 from $1,000.

What It Means for You

If you’re a member, make sure to bring your card—and a photo ID if your membership doesn’t include a picture—every time you visit. Guests? They’ll still need to be accompanied by a member to get in. This move is Costco’s latest effort to ensure that only paying members enjoy the perks, like that famous $1.50 hot dog combo.

So next time you’re headed to Costco, don’t forget your card. With these new scanners, Costco is serious about keeping its benefits exclusive—and its lines moving faster.

Calendar
On The Horizon

Next Week

After a mellow week on the economic front, things are about to get a bit more lively. The main event? The Consumer Price Index (CPI) report dropping on Wednesday. This report is like the market’s thermometer for inflation—if it shows inflation cooling off, we might see some serious market enthusiasm. But if it disappoints, brace yourself for more turbulence.

Tuesday brings the Producer Price Index (PPI), giving us a peek into the manufacturing sector's health. Then, on Thursday, we’ll see how Americans are flexing their spending muscles with July’s retail sales numbers. And to wrap it up, the University of Michigan’s consumer sentiment survey on Friday will clue us in on how folks are feeling about the economy these days.

Earnings season is winding down, with around 90% of the S&P 500 having already spilled their quarterly beans. But don’t tune out just yet—there are still some heavy hitters to watch out for.

Earnings:

Monday: Buzzfeed ($BZFD), Barrick Gold ($GOLD), and Monday.com ($MNDY)

Tuesday: Home Depot ($HD), Tencent Music Entertainment ($TME), and Asics ($ASCCF)

Wednesday: Cisco ($CSCO), RWE ($RWEOY), UBS ($UBS), Tencent ($TCEHY), Dole ($DOLE), and Vestas ($VWDRY)

Thursday: Walmart ($WMT), Alibaba ($BABA), Deere ($DE), JD.com ($JD), Applied Materials ($AMAT), and H&R Block ($HRB)

Friday: Berkshire Hathaway ($BRK.A)