HAPPY MONDAY TO THE STREET
Apple (AAPL) is throwing a "Welcome Home" party in New York tomorrow. The guest list? All gadgets. Expect a square-screened smart home hub, a new homeOS, and a faster Apple TV, plus a HomePod Mini whose six-year wait bought it a new chip and a pink paint job.
As for gains? History says don’t hold your breath. Apple shares slipped on roughly 3 of 4 announcement events through 2021. Past performance, future results, you know the drill. But worth noting the tech giant has often found its footing in the weeks that follow...
🟨 | US stocks were mixed today, with the DJIA lifted by positive analyst chatter, while the Nasdaq Composite slid on Chinese chip fears.
📈 | One Notable Gainer: Meta Platforms (META) rose on speculation it's about to roll out a new AI model codenamed Watermelon.
📉 | One Notable Decliner: IonQ (IONQ) fell after buying cybersecurity firm Elisity for $1.3B, dragging other quantum stocks down with it.
— Brooks & The Street Sheet Team
MARKET SNAPSHOT
S&P 500 Heatmap. Credit: Unusual Whales
Market Movers
EBAY, SANDISK, SALESFORCE
📉 | Sandisk (SNDK) slid after China's CXMT said it will start producing next-gen memory chips.
📉 | Lumentum (LITE) fell as investors took profits in optical AI plays.
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Card-Carrying Bull
BMO joined the club. The bank initiated coverage of premium credit card provider American Express at Outperform.
Analyst Andrew Bauch argues the Street is fixated on the wrong worries. Rival premium cards and heavy reinvestment dominate headlines. But the stats tell another story: young customers just keep signing up for fee-paying products.
Fees Compound Interest
The firm sees that younger cohort driving long-term growth. Bauch predicts card-fee revenue will compound as the premium ecosystem keeps scaling. The analyst calls AmEx one of the steadiest long-run growers in his coverage.
Fees, retention, merchant reach, and closed-loop data all feed one another, per Bauch. BMO expects that flywheel to push billed business growth 1 or 2 points ahead of the Street over the next two years.
Paying in Full
AXP shares are in the red this year, thanks to rising costs and market fears that macro and geopolitical jitters could crimp cardholder spending.
The Street is near-evenly split on its future outlook. Of 32 analysts covering the stock, 17 rate it a Buy or Strong Buy, while 15 say Hold.
But BMO is betting the holdouts come around once they see the rewards.
Do you own any shares of American Express (AXP)?
OVERHEARD ON THE STREET
🛢️ | President Trump defended easing restrictions on Russian diesel exports for six months, despite sharp bipartisan pushback.
🇪🇺 | The EU, meanwhile, sanctioned nearly 1,600 Russian people and firms tied to drone and missile parts.
🏅 | American economists Robert Hall and Michael Woodford won the Nobel Prize in economics for models that help manage economic shocks.
💘 | Bumble (BMBL) is in advanced talks to go private at a roughly $1B valuation, down from a one-time $14B.
FRIDAY'S POLL RESULTS
Do you own any shares of Penguin Solutions (PENG)?
▇▇▇▇▇▇ 🐂 Yup, I’m holding
▇▇▇▇▇▇ 🐻 Nope, not interested
▇▇▇▇▇▇ 👀 No, but I’m interested
And, in response, you said:
🐻 Nope, not interested — “I saw the Solution that the Penguin had on Batman, not good for the good guys.”
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