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- 🛩 Tarmac Delay
HAPPY FRIDAY TO THE STREET.
At long last, it’s not just the grass that’s looking greener!
All three major indexes closed May with a gain, including a 6% pop by the S&P 500, which clawed its way back to a YTD rise as well. The catalyst? More tariff uncertainty! But hey, guess it’s better than “certainly bad”, right?
…right? 😅
🟨 | US stocks were little changed as cracks showed in the US-China trade truce.
📈 | One Notable Gainer: It was a beautiful day for Ulta Beauty $ULTA ( ▲ 0.3% ) after the company delivered rosy earnings and a gussied-up profit forecast. The Lipstick Index is flashing candy red.
📉 | One Notable Decliner: One little luxury consumers are cutting back on? Mall shopping sprees. Gap $GAP ( ▲ 2.62% ) looked threadbare after projecting flat current quarter sales year-over-year amid tariff turmoil.
— Brooks & Cas
Sponsored by RYSE
The pattern is clear: when innovative companies successfully integrate AI into everyday products, tech giants pay billions to acquire them.
Google paid $3.2B for Nest.
Amazon spent $1.2B on Ring.
Generac spent $770M on EcoBee.
Now, a new AI-powered smart home company is following their exact path to acquisition—but is still available to everyday investors at just $1.90 per share.
With proprietary technology that connects window coverings to all major AI ecosystems, this startup has achieved what big tech wants most: seamless AI integration into daily home life.
Over 10 patents, 200% year-over-year growth, and a forecast to 5x revenue this year — this company is moving fast to seize the smart home opportunity.
The acquisition pattern is predictable. The opportunity to get in before it happens is not.
STOCK HEATMAPS
S&P 500 Heatmap. Credit: Finviz
All Stock Heatmap. Credit: Finviz
Global ADR snapshot. Credit: Finviz
Market Movers
MARVELL, PALANTIR, REGENERON
$MRVL ( ▼ 1.72% ) Marvell Technology slides as Wall Street weighs in on results, guidance (SeekingAlpha)
$PLTR ( ▼ 7.77% ) Trump Taps Palantir to Compile Data on Americans (NYT)
$SNY ( ▲ 0.53% ) / $REGN ( ▼ 0.38% ) Sanofi, Regeneron Respiratory Drug Delivers Mixed Results in Key Trials (WSJ)
$ZS ( ▲ 1.36% ) Zscaler jumps on strong results fueled by AI growth (CNBC)
$NVDA ( ▼ 1.36% ) CEO Jensen Huang to Sell $800 Million of Nvidia Stock (Barron’s)
OVERHEARD ON THE STREET
Reuters: President Trump accused China of violating its trade deal with the US, warning of a tougher stance ahead.
AP: US inflation, measured by the PCE index, slowed in April despite tariffs, with core prices rising at their lowest rate in over four years.
CNBC: Trump praised Elon Musk at a White House farewell event marking the end of Musk’s leadership of the DOGE.
CNN: JPMorgan $JPM ( ▼ 0.86% ) CEO Jamie Dimon warned that America’s greatest threat isn’t China but “the enemy within”.
Bloomberg: The Trump administration is preparing to expand tech sanctions on China by targeting subsidiaries of already-sanctioned firms.
Tomorrow's Trade Idea, Today
SOUTHWEST IS READY FOR TAKEOFF
Strategic Shakeup
2025 has been one long tarmac delay for Southwest Airlines $LUV ( ▲ 0.59% ). Its stock is more or less flat year-to-date. But after unveiling major changes in recent months, Deutsche Bank $DB ( ▲ 2.64% ) believes the iconic carrier is finally ready for takeoff.
The bank recently upgraded Southwest’s stock from Hold to Buy and lifted its price target to $40, nearly a 20% upside. Its optimism comes on the back of a transformative deal with activist firm Elliott Investment Management last year, which added six new directors to the board and retained CEO Bob Jordan.
Elliott’s 11% stake and the board’s nearly 200 years of combined experience signal a major pivot, potentially positioning the airline for substantial operational improvements and stronger governance.
A New Era of Growth
Analyst Michael Linenberg believes Southwest is undergoing the largest transformation in its history. The company’s new leadership is expected to drive significant changes that could result in higher returns for shareholders.
Some such changes have already been announced, such as the rollback of its controversial open seating and its longtime “bags fly free” policy. But the analyst believes the winds of change continue to blow behind the scenes — and he sees more tailwinds than headwinds in Southwest’s future flight path.
Its refocused strategy and revamped boardroom have Linenberg convinced it is entering a “new era of change” that will enhance efficiency, competitiveness, and profitability.
Stronger Financials on the Horizon
The airline stock is already outpacing broader market trends, up nearly 20% in the last month and nearly 30% over the last twelve.
Looking ahead, Deutsche Bank forecasts meaningful revenue and earnings growth over the next two years. Return on invested capital, a key metric, is also expected to improve significantly.
The broader Street, for its part, is far from sold on the stock. At present, only 5 of 23 analysts covering the stock have given it a Buy rating. But Linenberg cited historical data showing airlines that increase ROIC tend to outperform in share price, suggesting Southwest could soon soar to cruising altitude.
Are you bullish or bearish on Southwest Airlines (LUV) over the next 12 months? |
Sponsored by RYSE
AI is making traditional home products obsolete at breakneck speed.
Tech giants like Amazon, Google, and Apple are spending billions to control every switch and surface in your home.
The message is clear: adapt or get left behind.
One company is capitalizing on this movement, turning one of the home’s most overlooked products — window blinds — into an AI-powered smart device. With 200% growth, they’re leaving old-school competitors behind.
Their patented technology doesn’t just survive in the new AI ecosystem — it thrives, gaining value with every voice assistant sold.
This could be your last chance to get ahead of an unstoppable AI-driven transformation.
ON OUR RADAR
AP: The Supreme Court allowed Trump to end a parole program protecting about 500,000 migrants.
Fortune: Germany, which stores 1,200 tons of gold at the Fed, is facing growing calls to repatriate the reserves amid rising fears over US stability.
CNBC: The GOP budget bill will increase taxes on investors from discriminatory foreign countries by up to 20%.
Reuters: HSBC $HSBC ( ▲ 0.49% ) will exit its US business banking operations as part of a strategic shift to focus on markets in Asia and the Middle East.
WSJ: Taylor Swift acquired the master recordings of her first six albums from Shamrock Capital Advisors, gaining full control over her early music.
THURSDAY’S POLL RESULTS
Which do you think will outperform in FY 2025?
▇▇▇▇▇▇ US equities
▇▇▇▇▇▇ Foreign stocks
And, in response, you said:
Foreign stocks — “Up nicely now, but I don't think it will last much past early 2026.”
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