The Market’s Next Move & AI’s Gold Rush

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We’re living in two different markets right now. On one hand, the latest inflation data is giving us reason to breathe a little easier. January’s 2.4% CPI reading, an eight-month low, suggests the Federal Reserve’s long and arduous battle might finally be bearing fruit. This is the kind of news that typically sends markets into a frenzy of green arrows. Lower inflation theoretically paves the way for a less hawkish, or perhaps even a dovish, pivot from the Fed. That’s the textbook scenario.

But then, we look at the other hand. The Trump administration is doubling down on deregulation, particularly with the rollback of the 2009 “endangerment finding” on greenhouse gases and the easing of metal tariffs. This adds a layer of complexity. While deregulation can be a powerful tailwind for specific industries by cutting costs and red tape, it also introduces uncertainty about long-term environmental policy and trade relationships. Simultaneously, geopolitical tensions are simmering, with the U.S. deploying significant naval power to the Middle East. Add to that a partial government shutdown at the Department of Homeland Security, and the picture becomes decidedly less clear.

This environment creates a fascinating, albeit nerve-wracking, dynamic for investors. We have positive economic data clashing with political and geopolitical crosscurrents. It’s a market that rewards nuance and careful stock selection, rather than broad, sweeping bets. The days of “a rising tide lifts all boats” feel distant. Today, you need to know exactly which boats are built to withstand a potential storm, which have their own powerful engines, and which are simply drifting.

So, what’s our forecast? Cautious optimism, with a heavy emphasis on “cautious.” The inflation data provides a fundamental underpinning for a potential market rally. If this trend continues, we could see renewed confidence and a rotation back into growth-oriented sectors that have been battered by interest rate fears. However, the geopolitical and political headlines are a wildcard that cannot be ignored. A single escalation in the Middle East or a major policy shock from Washington could erase any gains in an instant.

Our strategy remains focused on quality. We’re looking for companies with strong balance sheets, proven business models, and clear paths to profitability that are not entirely dependent on the macroeconomic weather. The AI sector continues to be a supernova of activity, but even there, discernment is key. As valuations soar into the stratosphere, the difference between a revolutionary technology and an overhyped stock becomes the most important distinction an investor can make.

Enough talk. It’s time dive deep into the AI arms race, dissect the struggles of a media giant, analyze the shifting automotive landscape, and explore the geopolitical tremors that could shake the global economy. Let’s get into it again.

The AI Gold Rush: Valuations, Innovation, and the New Digital Arms Race

It’s difficult to overstate the seismic shifts happening in the artificial intelligence sector. This is a fundamental rewiring of the technological landscape, and the market is scrambling to price in a future that is arriving faster than anyone predicted. The past week has given us a front-row seat to this spectacle, with two major announcements from OpenAI and Anthropic that signal an acceleration of an already frantic pace.

Anthropic’s Jaw-Dropping Valuation: Is It Justified?

Let’s start with the headline that made jaws drop across Silicon Valley and Wall Street: Anthropic, a key competitor to OpenAI, has raised a colossal $30 billion in a new funding round, catapulting its valuation to an eye-watering $380 billion.

To put that number in perspective, a $380 billion valuation places Anthropic in the same league as some of the most established and profitable companies on the planet. It’s a figure that demands scrutiny. How can a company, still relatively young in the grand scheme of things, command such a premium? The answer lies in the numbers behind the number. The company disclosed that it has over 500 customers spending more than $1 million annually. More impressively, it counts 8 of the Fortune 10 companies among its clientele.

This suggests that Anthropic has successfully crossed the chasm from a research-focused lab to a provider of mission-critical enterprise solutions. The revenue traction is real, and it’s growing at a pace that private markets are willing to pay an enormous premium for.

What does this mean for investors? Direct investment in Anthropic is, for now, limited to venture capitalists and private equity. However, the ripple effects are massive and create opportunities across the public markets. The “picks and shovels” play is more relevant than ever.

NVIDIA ($NVDA): The most obvious beneficiary. Anthropic’s models, and those of its competitors, are insatiably hungry for computational power. Training and running these massive language models require tens of thousands of high-end GPUs. Every dollar of funding that flows into an AI company like Anthropic indirectly becomes revenue for NVIDIA. NVIDIA’s dominance in this space makes it the primary infrastructure provider for the entire AI revolution. The company’s continued ability to innovate and stay ahead of the hardware curve is critical, but for now, it remains the undisputed king. Its forward P/E ratio may look high, but when you factor in the explosive growth of its key customers, the argument for continued upside is compelling.

Microsoft ($MSFT) and Alphabet ($GOOGL): These tech titans are playing both sides of the AI coin. Microsoft, through its deep partnership with OpenAI, and Google, with its own formidable AI research labs (Google DeepMind) and cloud services, are at the center of this universe. A rising tide of AI adoption, regardless of which specific model wins, lifts their cloud businesses. Google Cloud and Microsoft Azure are the platforms where these models are deployed, scaled, and managed. The more data processed and the more models run, the more their cloud revenues soar. Alphabet, in particular, is in a fascinating position. It’s a direct competitor to OpenAI and Anthropic through its Gemini family of models, but its cloud platform also stands to benefit from their growth. This diversified exposure makes it a slightly more conservative, yet powerful, way to play the AI boom.

Arista Networks ($ANET): As data centers are built out at a record pace to handle AI workloads, the networking infrastructure that connects all those GPUs becomes critically important. Arista specializes in high-speed, low-latency data center switches, which are essential for the efficient training of large AI models. The company has been consistently taking market share from legacy players and is seen as a best-in-class operator in a niche but vital part of the AI ecosystem. As cloud providers and large enterprises expand their AI infrastructure, Arista’s products are a non-negotiable component.

The Anthropic valuation is a signal. It tells us that the smartest money in the world believes the enterprise AI market is going to be astronomically large. While the $380 billion figure may seem like a bubble to some, it’s also a reflection of a technological shift on par with the internet or the smartphone. The challenge for public market investors is to find the companies that will provide the critical infrastructure and platforms for this revolution without overpaying for the hype.

OpenAI’s Codex-Spark: The Speed of Thought

While Anthropic was making waves with its valuation, its primary rival, OpenAI, was not sitting still. The company unveiled GPT-5.3-Codex-Spark, a specialized variant of its latest model designed specifically for a single, high-value task: coding.

Capable of processing over 1,000 tokens per second, Codex-Spark is built for real-time collaboration. Imagine a developer writing code, and an AI not just suggesting the next line, but refactoring, debugging, and optimizing the entire block of code nearly instantaneously. This moves beyond the “autocomplete on steroids” functionality of earlier coding assistants and into the realm of a true co-pilot, a digital partner in the creative process of software development.

The implications are profound. For corporations, this could mean a dramatic increase in developer productivity. Projects that used to take months could be completed in weeks. The cost of software development could fall, and the pace of innovation could accelerate even further. This is a deflationary force for the cost of technology, which is a massive tailwind for the entire economy.

For investors, this development reinforces the theme of AI as a productivity multiplier. Companies that successfully integrate tools like Codex-Spark into their workflows will gain a significant competitive advantage.

Growth Stocks to Watch:

• GitLab ($GTLB): As a comprehensive DevOps platform, GitLab is at the heart of the software development lifecycle. The company has already been integrating AI features into its platform, and tools like Codex-Spark are a natural fit. As AI becomes an indispensable part of coding, the platforms that seamlessly integrate these capabilities will become even more essential. GitLab’s all-in-one approach could make it a primary beneficiary as enterprises look to standardize their AI-powered development tools.

• Datadog ($DDOG): More code, and more complex code, means more need for monitoring and observability. Datadog provides a platform that allows companies to see how their applications and infrastructure are performing in real-time. As AI-generated code is deployed into production, the need to monitor its behavior, performance, and potential for unexpected errors will be paramount. Datadog is perfectly positioned to be the “single pane of glass” for this new, more complex software world.

• CrowdStrike ($CRWD): The speed of AI-assisted development also means the speed of AI-assisted vulnerability creation. As code is generated more quickly, the potential for security flaws to be introduced also increases. CrowdStrike, a leader in cloud-native endpoint security, uses AI in its own platform to detect and respond to threats.

The launch of Codex-Spark is a reminder that the AI race isn’t about building the biggest, most powerful general model. It’s also about creating specialized, highly-optimized tools that solve specific, high-value problems. The productivity gains promised by these tools are what will ultimately justify the sky-high valuations we’re seeing in the sector. The gold rush is on, and the companies providing the tools, platforms, and security for this new era are poised for significant growth.

A Mouse in a Trap: Disney’s Billion-Dollar Blunders

The Walt Disney Company ($DIS) has long been the gold standard for intellectual property and brand management. From Mickey Mouse to Star Wars, its portfolio of characters and stories is the envy of the entertainment world. However, recent events suggest that the magic may be fading, and the kingdom is facing threats from both within and without. The past week has been particularly brutal for the House of Mouse, with two significant blows that call its current strategy and its ability to protect its most valuable assets into question.

The ‘Snow White’ Financial Disaster

First, the stunning news that the 2025 live-action remake of “Snow White” has reportedly lost an astonishing $170 million, and that’s before accounting for what will surely be a massive global marketing budget. The film’s production costs spiraled out of control, reaching a reported $336.5 million. This makes it one of the most expensive films ever made and, given its performance, one of the biggest box office bombs in Hollywood history.

For years, the company has relied on a strategy of remaking its animated classics into live-action blockbusters. For a while, it worked wonders. “The Lion King” and “Aladdin” were massive hits. But audiences are growing tired of the formula. There’s a palpable sense of creative bankruptcy, a feeling that the company is strip-mining its own legacy rather than building a new one.

The “Snow White” debacle is particularly damaging because it suggests a complete lack of fiscal discipline and a disconnect from audience sentiment. How does a production budget balloon to such an astronomical figure? It points to a lack of oversight and a culture where spending is not tethered to a realistic expectation of returns. For a company that prides itself on operational excellence, this is a glaring failure.

From an investment perspective, this is a major red flag. The studio entertainment division is a key pillar of Disney’s business. When that pillar is not only failing to generate profit but is actively incinerating hundreds of millions of dollars, it puts immense pressure on the other segments, like Parks and Streaming, to pick up the slack. It also raises serious questions about the leadership of the studio and their creative decision-making. Can they right the ship, or will we see more of these nine-figure write-downs in the future? The market will be watching the performance of their next few major releases with an eagle eye.

The ByteDance IP Heist

As if a financial black hole wasn’t enough, Disney is now facing a brazen assault on its intellectual property. The company has sent a cease-and-desist letter to ByteDance, the parent company of TikTok, accusing them of distributing a pirated library of Disney’s most iconic characters. The letter alleges that ByteDance treated characters from Star Wars, Marvel, and Disney’s classic animation library as if they were “free public domain clip art.”

This is a direct attack on the very heart of Disney’s value. The company’s entire business model is built on the careful cultivation and monetization of its IP. The accusation that a company as large and sophisticated as ByteDance would engage in such widespread and blatant copyright infringement is shocking.

This incident highlights two critical risks for Disney. First, the challenge of protecting IP in a digital world where content can be copied and distributed globally in an instant. While Disney has a formidable legal team, fighting this battle across multiple jurisdictions against a well-funded adversary will be costly and time-consuming.

Second, it brings into focus the complex and often fraught relationship between U.S. media companies and Chinese tech giants. ByteDance is not just any company; it’s a major global player with deep roots in China. This legal battle could have broader geopolitical implications, especially given the existing tensions between the U.S. and China over technology and trade.

Investor Takeaway: A Tarnished Crown

For investors in Disney ($DIS), the picture is looking increasingly troubled. The stock has been a significant underperformer for years, and these latest developments will do little to inspire confidence. We are seeing a confluence of negative factors:

1. Creative Stagnation: The failure of “Snow White” suggests the live-action remake strategy is broken, and there’s no clear “next big thing” to replace it.

2. Lack of Fiscal Discipline: The ballooning budget points to serious operational issues within the studio division.

3. IP Vulnerability: The ByteDance issue shows that even Disney’s fortress of intellectual property is not impenetrable in the modern digital age.

4. Streaming Uncertainty: While not in this week’s news, the broader challenge of making the streaming service, Disney+, consistently profitable remains a major overhang for the stock.

What needs to happen for the story to change? We need to see a clear sign of a creative renaissance from the studio. This means new, original stories that capture the public’s imagination, not just endless sequels and remakes. We need to see evidence of rigorous cost controls being implemented. And we need to see a successful resolution to the IP dispute that reaffirms the company’s ability to protect its crown jewels.

Until then, Disney feels like a value trap. The brand is iconic, and the assets are world-class, but the execution has been poor. The stock may look cheap compared to its historical highs, but without a clear catalyst for a turnaround, it could remain in the doldrums for a long time. It’s a classic “show-me” story, and right now, the company is showing us more reasons to be concerned than to be optimistic.

Shifting Gears: The Automotive Sector in Transition

The automotive industry is in the midst of a once-in-a-century transformation, and the road ahead is proving to be anything but smooth. This week’s news provides a perfect snapshot of the complex forces at play: the grueling path to EV profitability, the push and pull of government regulation, and the strange new world of autonomous vehicles.

Rivian’s Painful Path to Profit

Let’s start with Rivian ($RIVN), the electric truck and SUV maker that has long been seen as one of the most promising challengers to Tesla. The company just reported its full-year 2025 earnings, and the results are a classic “good news, bad news” story.

The good news: Rivian achieved its first-ever annual gross profit, posting $144 million for 2025. This is a monumental milestone. For years, the narrative around EV startups has been their massive cash burn and their inability to make money on the vehicles they sell. Reaching gross profitability proves that Rivian’s underlying business model can work. The company can, in fact, build and sell its vehicles for more than the direct cost of the materials and labor required. A significant driver of this was its software and services joint venture with Volkswagen, highlighting the growing importance of high-margin, recurring revenue streams in the auto industry. Full-year revenue was also respectable, rising 8% to $5.37 billion.

Now for the bad news: The company still posted a net loss of $3.6 billion for the year. While this is an improvement from the $4.75 billion loss in 2024, it’s a stark reminder of the immense costs associated with scaling an auto manufacturing business. R&D, sales, general, and administrative costs are still overwhelming the gross profit. The company ended the year with $6.59 billion in liquidity, which sounds like a lot, but at the current burn rate, it’s a finite runway.

This puts Rivian in a precarious position. The company is heading into a critical year where it needs to ramp up production of its next-generation, lower-cost R2 platform. This will require massive capital expenditures, putting further strain on its cash reserves. The market for high-end EVs is also becoming more competitive, and broader economic uncertainty could dampen consumer demand for expensive trucks and SUVs.

Rivian’s story is a microcosm of the entire non-Tesla EV space. The journey from a promising startup to a sustainably profitable automaker is long, expensive, and fraught with peril. Reaching gross profitability is a crucial step, but it’s just one step on a very long journey. Investors in Rivian need to have a strong stomach and a long-term time horizon. The company has a great brand and desirable products, but the execution risk remains incredibly high.

Trump’s Deregulatory Drive: A Tailwind for Old Auto?

Adding another layer of complexity to the automotive world is the Trump administration’s aggressive deregulatory agenda. This week, the White House announced two major moves: the rollback of tariffs on metal and aluminum goods and, more significantly, the revocation of the 2009 “endangerment finding.”

This 2009 finding was the legal foundation upon which the EPA built all subsequent regulations targeting greenhouse gases from vehicles. By revoking it, the administration is effectively dismantling the federal government’s authority to impose strict emissions standards and fuel economy mandates. The White House is billing this as the “largest deregulation in American history,” claiming it will save consumers an average of $2,400 per new vehicle.

This is a potential game-changer for the legacy automakers like General Motors ($GM) and Ford ($F). For years, these companies have been forced to invest billions of dollars to meet tightening emissions standards, a significant portion of which has gone into their EV development programs. A relaxation of these standards could dramatically reduce their compliance costs and R&D burden in the short to medium term. It allows them to continue selling their highly profitable gasoline-powered trucks and SUVs with fewer penalties.

On the surface, this looks like a huge win for them. It could lead to higher profit margins and free up capital that can be returned to shareholders or reinvested more strategically. However, there’s a long-term risk. The rest of the world, particularly Europe and China, is moving full-steam ahead with electrification. If U.S. automakers slow down their EV transition because of relaxed domestic regulations, they risk falling dangerously behind on the global stage. They could find themselves with a product lineup that is uncompetitive in key international markets.

This policy shift creates a clear divergence. It’s a headwind for Tesla ($TSLA) and other pure-play EV makers, as it makes their gasoline-powered competitors cheaper and reduces the regulatory pressure on consumers to switch to EVs. It’s a short-term tailwind for GM and Ford, but it could be a long-term strategic trap. Investors will need to watch how these legacy automakers balance the short-term profit opportunity with the long-term necessity of electrification.

Waymo’s Awkward Human Problem

Finally, in a story that feels like it’s straight out of a sitcom, Alphabet’s self-driving car unit, Waymo ($GOOGL), is reportedly asking DoorDash ($DASH) drivers for help. The task? To assist in closing the doors of its autonomous vehicles, which customers are apparently leaving open.

While amusing, this little anecdote is surprisingly insightful. It highlights the “last mile” problem of automation. You can solve 99% of the complex challenges of autonomous driving—navigating traffic, obeying laws, identifying hazards—but the system can still be foiled by a simple, unpredictable human behavior.

It shows that even for the undisputed leader in autonomous vehicle technology, the path to full, unassisted deployment is filled with strange and unexpected hurdles. The real world is messy, and humans don’t always behave as a programmer would expect.

For investors, it’s a dose of reality. The dream of a fully autonomous robotaxi network generating massive, high-margin revenue is still a long way off. While Waymo’s technology is incredibly advanced, the operational logistics of managing a fleet of vehicles interacting with the public are non-trivial. This doesn’t diminish the long-term potential of the technology, but it does suggest that the timeline for widespread profitability might be longer than the most optimistic bulls believe. It reinforces the idea that Alphabet is a good way to get exposure to these “moonshot” projects, as its core search and cloud businesses provide a massive, profitable cushion to fund this long-term research and development.

The automotive sector is a battleground of competing technologies, shifting regulations, and immense capital demands. The winners will be those who can navigate the path to profitability, adapt to a rapidly changing political landscape, and solve the messy problems of integrating new technology into the real world.

Geopolitical Tremors: Tensions Rise at Home and Abroad

While technology and earnings often dominate the market narrative, investors must never lose sight of the geopolitical landscape. The ground beneath the global economy is constantly shifting, and political decisions made in Washington, Munich, and the Middle East can have profound and immediate impacts on asset prices. This week, a number of developing stories have raised the temperature, reminding us that risk can emerge from unexpected quarters.

A Carrier, a Campaign, and a Question of Crude

The most significant development is the U.S. deployment of the aircraft carrier U.S.S. Gerald R. Ford and its escort ships to the Middle East. This is not a routine deployment. The carrier group was redirected from the Caribbean to join the U.S.S. Abraham Lincoln in the Persian Gulf. This concentration of naval power is being explicitly framed as part of President Trump’s “pressure campaign” against Iran. Adding fuel to the fire, the President suggested that regime change in Iran might be “the best thing,” and reports indicate that preparations are underway for potential military operations.

For the market, the implications are immediate and clear, and they all center on one commodity: oil. The Persian Gulf is the world’s most critical chokepoint for maritime oil trade. Any hint of conflict, or even just the heightened risk of conflict, can send oil prices soaring.

• Impact on Oil Prices ($WTI, $BRENT): We have already seen a slight uptick in crude futures following this news. If tensions escalate further, or if there is any disruption to shipping through the Strait of Hormuz, we could see a rapid spike in oil prices. A “geopolitical risk premium” will be priced into every barrel.

• Energy Sector ($XLE): Higher oil prices are a direct benefit to oil and gas producers. Companies like ExxonMobil ($XOM), Chevron ($CVX), and smaller shale producers would see their revenues and profit margins expand significantly. The energy sector, which has been a volatile performer, could quickly become a market leader in this scenario.

• Broader Market Impact: For the rest of the market, a sustained spike in oil prices is a major negative. It acts as a tax on consumers, reducing discretionary spending. It increases input costs for businesses, from airlines (Delta ($DAL), United ($UAL)) to industrial manufacturers, squeezing their margins. Most importantly, it’s inflationary. A surge in energy prices could completely undo the progress seen in the recent CPI report, forcing the Federal Reserve to maintain its hawkish stance or even consider further tightening. This is the nightmare scenario for the market: a geopolitical conflict that reignites inflation and puts the brakes on economic growth.

Investors should be closely monitoring this situation. Exposure to the energy sector could be a prudent hedge against this specific risk. It’s also a reason for caution regarding consumer discretionary and industrial stocks that are sensitive to fuel costs.

Alliances and Assurances in Munich

Meanwhile, at the Munich Security Conference, U.S. Secretary of State Marco Rubio was on a mission to reassure nervous European allies. His speech emphasized the enduring nature of the transatlantic alliance, stating, “We are part of one civilization – Western civilization.” This comes as Ukrainian President Volodymyr Zelenskyy, also in Munich, called for a 20-year U.S. security guarantee and a clear timeline for EU membership as part of a long-term peace framework.

Rubio’s words are meant to calm fears in Europe about the reliability of the U.S. as a partner. These reassurances are critical for maintaining a united front and for the stability of the European economy. A strong, unified NATO alliance is a powerful deterrent and a force for economic stability.

Zelenskyy’s request, however, highlights the long road ahead. A 20-year security guarantee is a massive commitment for the U.S., and the path to EU membership for Ukraine is complex and will take many years. This signals that while the acute phase of the conflict may have passed, the region will require significant, long-term investment and support for reconstruction and security.

This has implications for the defense sector. Companies like Lockheed Martin ($LMT), Northrop Grumman ($NOC), and RTX Corp ($RTX) will likely see sustained demand as the U.S. and its NATO allies continue to replenish stockpiles and invest in next-generation military technology to bolster their defensive posture. The call for long-term security guarantees suggests that defense budgets are likely to remain elevated for the foreseeable future.

A Shutdown at Home

Back in the U.S., a different kind of political risk has emerged: a partial shutdown of the Department of Homeland Security (DHS) after Congress failed to pass a funding bill. While a partial shutdown of a single department is not as economically damaging as a full government shutdown, it’s another sign of the political dysfunction and brinkmanship in Washington.

The immediate economic impact is limited, though it could cause disruptions in areas like airport security screening (TSA) and trade processing (Customs and Border Protection) if it drags on. The bigger impact is on market sentiment. It creates an atmosphere of uncertainty and shows that even basic functions of government are subject to political squabbling. This can make both domestic and international investors nervous about the stability and predictability of the U.S. political environment, which can lead to them demanding a higher risk premium for holding U.S. assets.

From geopolitics to domestic politics, the message for investors is that non-financial risks are elevated. This week serves as a potent reminder to stay diversified, consider hedges against specific risks like an oil price spike, and pay close attention to the headlines coming out of Washington and other world capitals.

Corporate Corner: Winners, Losers, and Shifting Strategies

Beyond the macro themes of AI and geopolitics, the day-to-day business of individual companies continues to drive stock performance. This week, we saw notable stories, from a grocery delivery service finding its footing to a streaming company changing its game plan. Let’s look at the key movers and what their stories tell us about the broader market.

Instacart Delivers for Investors

Instacart ($CART), which now trades under the name Maplebear, saw its shares surge 14% in after-hours trading. The catalyst was a strong Q4 revenue report and upbeat guidance for the future. The company posted revenue of $992 million, comfortably beating Wall Street estimates of $974 million.

This is a significant win for a company that has had a rocky road since its IPO. The post-pandemic world has been challenging for at-home delivery services, with many questioning if they could retain customers as normal life resumed. Instacart’s strong revenue performance suggests that the convenience of grocery delivery has become a sticky habit for a sizable portion of the population.

However, the report wasn’t perfect. Earnings per share came in at 30 cents, well below the 52 cents analysts were expecting. This indicates that while the company is successfully growing its top line, profitability is still under pressure. The costs of labor, marketing, and technology required to run this complex logistics operation are substantial.

The key takeaway is that the market, for now, is prioritizing growth and guidance over bottom-line perfection. The upbeat forecast from management gave investors the confidence that the growth trajectory is sustainable. This is a recurring theme in the current market: if a company can demonstrate a clear path to capturing a large market and continue to grow its revenue, investors are often willing to forgive a near-term earnings miss.

Instacart’s challenge now is to translate that top-line growth into sustainable profitability. It’s a positive step, but the company still has much to prove.

Roku’s Quest for Profitability: The Bundle Battle

Roku ($ROKU) announced plans to introduce streaming bundles, a strategic pivot aimed at boosting profitability and attracting subscribers. This is a fascinating move that shows how the streaming landscape is maturing.

For years, Roku’s primary role was as a neutral platform—the “operating system” for TVs that gave users access to all the various streaming apps. Its revenue came from selling its hardware (streaming sticks and TVs) and, more importantly, from taking a cut of advertising and subscription revenue generated on its platform.

The move to create its own bundles signals a shift. Instead of just being a gateway, Roku wants to become a curator and a direct seller of content packages. This could be a powerful move. With millions of users on its platform, Roku has a massive amount of data on viewing habits. It knows which combinations of services are most popular and can use this data to create compelling, attractively priced bundles.

Why the change? Profitability. The platform business is good, but creating its own high-margin bundles could be even better. It also helps combat subscriber churn. In a world with dozens of streaming services, users often subscribe to one service to watch a specific show and then cancel. A well-priced bundle could encourage them to stick around.

This puts Roku in more direct competition with cable companies and other streaming giants that are also trying to bundle services. It’s a smart strategic evolution, but it’s not without risk. It requires careful negotiation with content partners and a deep understanding of consumer pricing sensitivity. Roku’s stock has been under immense pressure, and this move is a clear attempt to change the narrative and create a new, more profitable growth engine. Investors should watch to see if these bundles gain traction with consumers.

A Flurry of 52-Week Lows: What’s Happening to Growth Darlings?

In a stark contrast to the AI frenzy, a whole host of former market darlings hit new 52-week lows this past week. The list includes:

• DraftKings ($DKNG)

• The Trade Desk ($TTD)

• Pinterest ($PINS)

• Zillow ($Z)

• Intuit ($INTU)

• Booking ($BKNG)

• Domino’s Pizza ($DPZ)

• Flutter ($FLUT)

This is a diverse group, spanning online gaming, advertising technology, social media, real estate, and finance. So what’s the common thread?

Many of these are high-growth, “long-duration” assets. Their valuations are heavily dependent on profits that are expected far out into the future. In a higher interest rate environment, the present value of those future earnings is discounted more heavily, which puts pressure on their stock prices. Even with inflation cooling slightly, rates are still significantly higher than they were a few years ago, and the market is recalibrating its expectations.

There are also company-specific issues. The online gaming space ($DKNG, $FLUT) is facing intense competition and high marketing costs. The ad-tech world ($TTD, $PINS) is navigating changes in privacy rules and a potentially softer advertising market. The real estate market ($Z) is still grappling with higher mortgage rates.

The case of Intuit ($INTU) is particularly interesting. As a stable, profitable software company (maker of TurboTax and QuickBooks), it’s not the typical high-risk growth stock. Its inclusion on this list suggests that even high-quality companies are not immune to a broader market re-rating. It may also reflect fears that AI could eventually disrupt its core tax preparation business.

This list serves as a crucial reminder of the importance of diversification. While one part of the market (AI hardware) is booming, another part (last year’s growth winners) is in a deep downturn. It shows that sentiment can shift quickly and that no trend lasts forever. For contrarian investors, lists like this can be a fertile hunting ground for potential bargains, but it requires careful due diligence to distinguish between a temporarily beaten-down stock and a company with fundamentally broken prospects.

Disclaimer: The content provided in this newsletter is for informational purposes only and should not be considered as financial or investment advice. The views expressed are those of the author and Stock Region and do not represent a recommendation to buy or sell any security. All investments carry risk, and you should consult with a professional financial advisor before making any investment decisions. Stock Region is not liable for any losses or damages arising from the use of this information. The market is volatile, and past performance is not an indicator of future results.