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👉 Bitcoin & Stocks at All-Time Highs

👉 Bitcoin & Stocks at All-Time Highs

Hims & Hers, Palantir, and DraftKings

Happy Sunday, everyone.

What a week we’ve had! Between the election results, new all-time highs in the stock and crypto markets, and Miami getting upset by Georgia Tech — I’m exhausted.

The good news is there’s a lot to still look forward to.

With that being said, I want to be extremely clear when I say this — if you are not yet someone who identifies as part of the “investor class,” I want to really encourage you to do so. If you’ve been passively reading investing newsletters or listening to investing podcasts — let this message be the one that finally causes you to start investing!

It doesn’t have to be with thousands, or even hundreds — just start with what you have and continue to build upon it over time. Make a plan that enables you to continue your investing journey every month — allowing you to eventually have hundreds of thousands (or millions) invested throughout your lifetime.

Retire with dignity.

It’s never too late — you got this!

Also, I highly recommend checking out Public.com if you’re just getting started.

On Public, you can invest in stocks, options, bonds, crypto, ETFs, and more with AI-powered fundamental data and custom analysis. Plus, 6.9% yield with our Bond Account, exclusively on Public.

_{This is not a paid endorsement by Public, but we do receive an affiliate payout for new customers driven through the link above.}

Portfolio Updates (YTD Performance):

For all of our PAID subscribers, I want to confirm that I’ve updated the portfolio tracker in its entirety — so be sure to give it a once over when you have a moment. Additionally, I’m pleased to announce the $2M Dividend Growth Portfolio has officially crossed the $500K mark!

As you all might remember, I began publicly building a Dividend Growth Portfolio at the start of 2023 so that anyone and everyone could both follow along, share in my wins, and learn from my mistakes. I gave myself a 7-15 year time horizon to build this portfolio to $2M in value — allowing me to live off of the dividends and retire.

Now only 22 months later, we’ve surpassed the $500K mark. More importantly, we dramatically outperformed the stock market in 2023 and are dramatically outperforming it again in 2024.

Double Finance (Large Market Beaters Strategy)

Frec (S&P 500)

As you can see above, there’s a ton of cash spread across a ton of platforms / asset classes. With that being said, the most interesting asset class for me right now is cryptocurrency. With a Trump presidency around the corner, Bitcoin reached new all-time highs earlier this week — lifting up other altcoins with it.

I invested $15K earlier this week into Solana and fully expect it to reach all-time highs again very soon (+25% return from here). I’ll also be adding another $10K into Ethereum as soon as the money clears my account (Monday is a bank holiday, so assuming Tuesday / Wednesday).

I fully expect 2025 to come with ups, downs, and some insane volatility. With that being said, I’ve been dollar cost averaging into Bitcoin and other cryptocurrencies for the last 20-months now with the objective of cashing in when things finally turn the corner and reach new all-time highs.

One of the biggest mistakes I made during my investing career was not cashing in on a cryptocurrency when I was up +$550K in profit in 2021. Today, I sit up only +$200K in profit. I won’t be greedy this go-around, and will cash out as we continue to trend higher. For now, I’m in it to win it and expect continued momentum throughout the remaining 7-weeks of the year.

Week in Review — Too Long, Didn’t Read:

Palantir is building AI for the US Government, Arm Holdings is trading at 72X price-to-earnings, DraftKings shared disappointing guidance, AppLovin and Hims & Hers get adding to the “darlings of 2024” list, the Fed cut by 25 bps and there’s a 64% chance that they do it again in December, Consumer Sentiment hit a seven-month high, and the ISM Services readings continue to climb higher.

Key Earnings Announcements:

Palantir is building AI for the US Government, Arm Holdings is trading at 72X price-to-earnings, and DraftKings shared disappointing guidance.

Palantir (PLTR)

Key Metrics

Revenue: $725.5 million, an increase of +30% YoY

Operating Income: $113.2 million, an increase of +182% YoY

Profits: $149.4 million, an increase of +103% YoY

Earnings Release Callout

“We absolutely eviscerated this quarter, driven by unrelenting AI demand that won’t slow down. This is a U.S.-driven AI revolution that has taken full hold. The world will be divided between AI haves and have-nots. At Palantir, we plan to power the winners.”

My Takeaway

Eviscerated they did — wow.

Palantir has emerged as one of the biggest winners from the rise of AI since late-2022, with their stock price up now over +800%. The question is “Can this valuation be sustained, and can the company sustain momentum as we head into 2025?” The market believes yes, which is why they continue to bid up the price of their stock — but let’s dig in and find out.

During the quarter, PLTR saw +54% YoY growth in US commercial revenue with customer count rising by +77% YoY. The main driver of this growth was the company’s genius go-to-market strategy — offer AIP bootcamps for enterprise customers to teach them how to use the products. Once they realize the products’ capabilities, they’re sure to become buyers — and it worked.

In May, the Biden Administration put forward a memo for “Advancing governance, innovation, and risk management for Agency use of AI.” In October, a new memo was published — defining AI as the “era-defining” technology with significant growth relevance to national security. This new memo put US AI capabilities as a national security priority and a technological edge the US cannot lose.

Palantir grew their US Government revenue by +40% YoY, and considering their product is so differentiated I would imagine this figure to accelerate under a Trump presidency.

During the quarter, Palantir cemented a strategic partnership with L3Harris Technologies — once a competitor to the company. I anticipate more of these partnerships will take place in the future.

I’m not sure I’m ready to chase this one higher just yet. It’s trading at an “unsustainable” 28X 2026 revenue multiple.

The reason I have quotations around “unsustainable” is because conventionally speaking, this valuation multiple is absurd. But if the last two years have taught us anything about AI, the growth that AI can catalyze for some of these “biggest winners” (like Palantir) is also absurd.

Arm Holdings (ARM)

Key Metrics

Revenue: $844.0 million, an increase of +5% YoY

Operating Income: $64.0 million, compared to -$156.0 million last year

Profits: $107.0 million, compared to -$110.0 million last year

Earnings Release Callout

“This has translated to a financial outlook that is significantly better than what we expected a year ago. In Q2, we exceeded the high-end of our guidance range for both revenue and non-GAAP EPS. Licensing revenue was again above plan. Our royalty revenue was a record for a Q2 and matched our highest royalty revenue quarter to date. These strong results derive from our growth strategy that promotes multiple long-term drivers.”

My Takeaway

First, I highly recommend reading their Shareholder Letter if you’re an investor in the company — they do a great job breaking everything down.

Wall Street believes the company’s recent licensing boom foreshadows a greater proliferation of Arm-based AI devices in the coming years. This, alongside the rising royalty rate from V9 and CSS adoption, gives confidence on royalty growth of +30% or higher for 2025 and 2026. Their royalty rate grew by +43% thus far in 2024, with no signs of a slowdown in sight.

Wall Street also thinks the Qualcomm fight is a distraction for investors — adding “we do not think there is a risk here of Qualcomm not remaining a licensee.” Arm management has stated their guidance is based on an assumption that it will not prevail in the dispute, however, Wall Street believes a negotiated settlement somewhere in the middle is the most likely outcome (providing additional upside to Arm’s outlook).

Analysts believe Arm Holding’s valuation of 72X forward Price-to-Earnings is justified, making it one of the most expensive semiconductor stocks. With that being said, very few other stocks have visibility into 20% or higher revenue and earnings trajection in the coming years like Arm does — their argument for the expensive valuation.

Personally, I don’t own shares of the stock, and don’t plan on buying any in the near future.

DraftKings (DKNG)

Key Metrics

Revenue: $1.1 billion, an increase of +39% YoY

Operating Loss: -$298.6 million, compared to -$286.7 million

Net Loss: -$294.9 million, compared to -$281.8 million

Earnings Release Callout

“We achieved healthy results across our core value drivers in the third quarter with efficient customer acquisition and promotional reinvestment as well as improvement in our structural sportsbook hold percentage.

The midpoint of our inaugural fiscal year 2025 revenue guidance equates to 31% year-over-year growth, and we are well-positioned to deliver $900 million to $1 billion of Adjusted EBITDA in 2025.”

My Takeaway

As you all know, DraftKings is a recent position in my portfolio — and I’m happy to report it’s up +13% in just a few weeks! With that being said, there’s a lot about this quarter I’m pleased with, and a few things that disappointed me. Let’s dig in!

Their $1.1B in revenue during the quarter came in slightly below Wall Street’s $1.12B expectations, while their adj. EBITDA was -$58M compared to Wall Street’s -$82M expectations — a good thing if you’re focused on profitability like I am! However, the company is lowering their 2024 revenue guidance to $4.9B from $5.1B — not good. Additionally, they’re lowing their adj. EBITDA guidance to $260M from $380M — very not good.

However, the reason for the lower adj. EBITDA is not an operational flaw — it’s simply from unfavorable sports outcomes (i.e. their customers are winning their bets and DraftKings has to pay them out).

Some big takeaway from the call include:

1) Unfavorable outcomes are inherent in the business for short-term periods — but become less prevalent as scale builds and product categories broaden.

2) Missouri online sports betting will lead to incremental upside net of the customer acquisition required for new markets.

3) Adj. EBITDA flow-through (30% today, 50% long-term) improves over time, as the customer acquisition drag becomes a smaller and smaller percent of revenue.

4) The company will opportunistically buy back their stock — Wall Street expects $400M in 2025.

All in all, I have mixed feelings about the quarter — but not enough to make a decisive decision to sell my position. I’m still very bullish on the industry, and DraftKings’ ability to monetize the growing OSB secular growth trend in a profitable manner over the coming years.

Holding shares, and will continue to buy more.

Investor Events / Global Affairs:

AppLovin and Hims & Hers have become two of the darlings of 2024.

Applovin (APP) Has Risen Nearly +650% YTD

Source: Investopedia

AppLovin’s stock surged +46% following a robust earnings report and optimistic guidance — bringing its 2024 gain to well over 600%. The company exceeded revenue and earnings expectations, with Q3 revenue up +39% to $1.2 billion and net income up +300% year-over-year.

AppLovin’s AI-driven ad technology, AXON 2.0, has significantly boosted ad targeting. This is especially true in its online ad business, resulting in a +66% increase in software platform revenue.

For Q4 — AppLovin anticipates $1.24–$1.26 billion in revenue, well above analyst estimates. Wall Street has praised AppLovin’s profitability and adjusted profit margin of 78%, with Wedbush raising its price target.

CEO Adam Foroughi’s net worth spiked by over $2.5 billion, reaching more than $7.5 billion.

AppLovin Corp. (APP) Stock Performance, 1-Year Chart, Seeking Alpha

“In all my years, It’s the best product I’ve ever seen released by us, fastest growing, but it’s still in pilot. [E-commerce] is looking so strong that it’s something that we think will be impactful to the business financially in 2025 and then for the long-term.”

— Adam Foroughi, CEO of AppLovin

Could Hims & Hers (HIMS) be the next Palantir (PLTR)?

Source: Hims & Hers

Hims & Hers Health reported Q3 earnings that beat analyst expectations, driven by strong subscriber growth and improving profitability. As a result, shares rose nearly +16% over the last week. Adjusted earnings per share reached $0.32, far exceeding the $0.10 estimate, with revenue up +77% year-over-year to $401.6 million.

Subscriber numbers grew +44%, totaling 2 million, with over 1 million using personalized solutions. Hims & Hers raised its full-year revenue guidance to $1.460–$1.465 billion, above prior forecasts.

The company also benefits from GLP-1 weight-loss and diabetes drugs, though it includes semaglutide, which remains on the FDA shortage list despite recent regulatory changes affecting similar drugs. Analysts noted this could impact Hims & Hers’s total market size but expect continued profitability and strong cash flow.

I’m thrilled that I started buying this stock around $7.

Hims & Hers Health Inc. (HIMS) Stock Performance, 5-Year Chart, Seeking Alpha

"Our execution against a strategy that brings customers convenient, transparent, and affordable access to care designed specifically for them is allowing us to reach millions of individuals across the country.”

— Andrew Dudum, Co-Founder and CEO of Hims & Hers

A Quick Note:

In honor of Canadian Remembrance Day Week — we’re proud to spotlight a powerful book by one of our GRIT supporters, Scott Saxberg. His debut novel, Those We Carry, is a WWII drama inspired by real events from his family’s history, preserved in the regiment diaries of his great uncle. It’s a moving love story about the people who shape our lives and the memories we carry with us.

“An authentic story of love and war, vividly detailed.” — Kirkus Reviews

Get your copy on Amazon: https://a.co/d/imkOh2S

Learn more about Scott’s writing at scottsaxberg.com

Major Economic Events:

The Fed cut by 25 bps and there’s a 64% chance that they do it again in December, Consumer Sentiment hit a seven-month high, and the ISM Services readings continue to climb higher.

Fed Cuts Rates by 25 Basis Points

Source: Reuters / Kevin Mohatt

The Federal Reserve cut its benchmark interest rate by -0.25% to a target range of 4.50%-4.75%, marking its second consecutive rate reduction. This adjustment, aimed at balancing inflation control and employment support, was widely expected and received unanimous support from committee members.

Fed Chair Jerome Powell described the move as a “recalibration” to sustain economic growth and labor market stability while gradually guiding inflation to the 2% target. Stocks rose, with all major indices hitting record highs — while Treasury yields declined after the announcement.

Source: CME FedWatch Tool

The Fed hinted at possibly cutting rates again in December before pausing to assess economic conditions. Powell emphasized that the recent election and change in political leadership will not influence the Fed's near-term monetary policy decisions.

The CME FedWatch Tool (above) currently shows a 64.6% chance of a rate cut in the December Fed meeting.

“This further recalibration of our policy stance will help maintain the strength of the economy and the labor market and will continue to enable further progress on inflation as we move towards a more neutral stance.”

— Jerome Powell, Chairman of the Federal Reserve

Consumer Sentiment Reaches Seven-Month High

US consumer sentiment reached a seven-month high in early November, driven by optimism about the economy and personal finances. The University of Michigan’s preliminary sentiment index rose to 73, surpassing most forecasts, while the expectations index climbed to its highest level since mid-2021 at 78.5. Americans anticipate slower inflation, projecting a 2.6% rise in prices over the next year—the lowest since 2020.

The survey, conducted before Donald Trump’s re-election, highlighted consumers' focus on how upcoming policies might affect inflation. Though concerns about high prices remain, improved income prospects have bolstered confidence in long-term economic conditions.

“Consumers have consistently expressed that the future of the economy is contingent on who wins the presidential election. Going forward, the impact of the next administration’s economic policies on inflation are likely to be top of mind for consumers and drive the trajectory of their confidence in the performance of the economy.”

— Joanne Hsu, Director of the Surveys of Consumers at the University of Michigan

ISM Services Continues to Rise Steadily

The ISM Services PMI rose to 56.0 in October, surpassing the forecast and marking the fourth consecutive month of expansion. The increase was driven by strong gains in Employment and Supplier Deliveries indexes, although Business Activity and New Orders saw slight declines.

Each of the four subindexes remains above the 2024 averages, with ongoing concerns about political uncertainty and impacts from recent hurricanes and labor disruptions. Despite fluctuations, the index highlights a steady expansion in the services sector — which is critical in a predominantly services-oriented economy.

“The increase in the Services PMI® in October was driven by boosts of more than 4 percentage points for both the Employment and Supplier Deliveries indexes. The Business Activity and New Orders indexes both dropped by at least 2 percentage points. Each of the four subindexes are now above their averages for 2024. The Supplier Deliveries Index remained in expansion in October, indicating slower delivery performance.

Concerns over political uncertainty were again more prevalent than the previous month. Impacts from hurricanes and ports labor turbulence were mentioned frequently, although several panelists mentioned that the longshoremen’s strike had less of an impact than feared due to its short duration.”

— Steve Miller, Chair of the Institute for Supply Management (ISM)

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