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Happy Monday.
For our American readers, Happy Presidents Day. Given the market is closed today, we are releasing the Week in Review now and the Investing Week Ahead tomorrow morning (Tuesday).
Please see a couple of important callouts below before we dive in!
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Now let’s dive right in.
Portfolio Updates (YTD Performance):
The portfolio has been off to a hot start this year, with YTD total returns hovering around +12.5% — far exceeding the S&P 500’s +4%.
The bulk of these returns are coming from our “Long Risky” subsection of the portfolio — 14 growth names who are up +39% this year, with the highest performing name up +150% since January 1st.
On the flip side, it’s interesting to see our “Long Technology” names only in the green by a fraction of a percent this year. Remember, these are the “Big Tech” names we all know and love. It seems like they’re experiencing some consolidation as investors are moving their money away from Big Tech and into riskier high-octane growth names.
As a reminder, if your portfolio isn’t up +12.5% already YTD — consider subscribing to GRIT Premium and unlocking portfolio access! All 43 positions in my portfolio are included in that subscription.
Week in Review —TLDR:
Monday.com’s AI-actions 5X’d to 14M in January, Robinhood is no longer a “meme stock,” and Shopify’s flywheel is in full-effect, Airbnb had its best day in the markets, Intel could be split into two companies, Trump signed an order for reciprocal tariffs to be planned, Inflation for Consumers rose +3.3% YoY, Inflation for Producers rose +3.5% YoY, and Retail Sales took a beating.
Key Earnings Announcements:
Monday.com’s AI-actions 5X’d to 14M in January, Robinhood is no longer a “meme stock,” and Shopify’s flywheel is in full-effect.
Monday.com (MNDY)
Key Metrics
Revenue: $268.0 million, an increase of +33% YoY
Operating Income: $10.0 million, compared to -$1.1 million last year
Profits: $23.0 million, an increase of +87% YoY
Earnings Release Callout
“As we look to 2025, we are excited to double-down on our AI efforts, with a focus on AI Blocks, Product Power-ups, and our new Digital Workforce of AI Agents. We believe AI can be a game-changer for our customers, giving them the ability to transform their workflows and scale faster than ever before.”
My Takeaway
Monday.com has been a long-term position in my high-octane subsection of the portfolio, and after this earnings I’m officially up +182% since opening the position early-2023. Shares of the stock rallied +30% after delivering strong Q4 results, improving their key KPIs, and providing solid 2025 guidance.
As I’ve been alluding to for quite some time now, AI 2.0 is here — which means the Software applications building with and leveraging AI will be major winners during this next iteration. Monday.com stated there were 3M AI-actions on their platform in Q3, 10M during Q4, and now 14M during the month of January alone. Their customers are adopting the technology at a blazing fast rate, positioning Monday.com for success.
Finally, their dollar-based net retention rate has now ticked higher for 4 consecutive quarters. This was catalyzed by a strong shift upmarket with customers spending $100K or more with them — growing by +12% quarter-over-quarter and +45% year-over-year.
I remain bullish on the company’s ability to deliver exceptional earnings results as we head into what is likely a two or three year AI 2.0 cycle.
Robinhood (HOOD)
Key Metrics
Revenue: $1.0 billion, an increase of +115% YoY
Operating Income: $558.0 million, an increase of 15X YoY
Profits: $916.0 million, an increase of 30X YoY
Earnings Release Callout
“We hit the gas on product development in 2024 with a new platform for active traders, Gold Card launch, an expanded UK and EU product suite, and much more.
Q4 was a record-breaking quarter that caps off a record-setting year in 2024 For both the quarter and full year, we reached new highs for Assets Under Custody, Net Deposits, Gold Subscribers, Revenues, Net Income, Adjusted EBITDA, and EPS. We’re entering 2025 with strong momentum as we remain focused on delivering another year of profitable growth."
My Takeaway
For those of you who’ve been following along since the beginning, you might remember the Robinhood trade during March of 2024 — I traded their earnings, made out like a bandit, then never opening a long position. Unfortunately for me, the stock is up +284% since then.
With that being said, now expected to deliver billions in revenue in 2025 and $1.5B+ in profits — the company is very much “in the green” and no longer a “meme stock” from Covid. The question is “Do we buy at these valuations?”
Here’s what we know:
1) Revenue is expected to grow by double-digits in 2025 vs. 2024 due to product innovation, market share gins, and expanding into new markets worldwide.
2) Early-January metrics tell us net deposits in the month is the second highest month ever — which means their momentum is starting off strong in 2025.
3) January equities, options, and crypto trading volumes are all up 2-3X from a year ago’s January — option volumes were at all time highs.
4) Gold subscribers, event contracts, and new products like Legend, index options, and futures are all seeing continued adoption.
I’m going to argue the company will be able to maintain this growth and momentum throughout 2025 and likely 2026 — which tells me the stock can go higher. How high? It’s hard to say. But I’m going to open a small speculative position and will buy any weakness.
Shopify (SHOP)
Key Metrics
Revenue: $2.8 billion, an increase of +31% YoY
Operating Income: $465.0 million, an increase of +61% YoY
Profits: $1.3 billion, an increase of +96% YoY
Earnings Release Callout
“2024 was a stand-out year for Shopify. We seized every opportunity to fuel our growth and it showed in the results quarter after quarter. Heading into 2025, we are committed to making entrepreneurship more common and further establishing Shopify as the go-to commerce platform for businesses of all sizes. With our proven track record, the agility of our platform, and our relentless focus on merchant success, we like our odds in this evolving technology landscape, and are excited about the opportunities it brings for Shopify and our merchants.”
My Takeaway
Shopify delivered another strong top and bottom-line quarter with impressive underlying momentum showcasing their ever-expanding flywheel. At a segment level, subscription revenue growth accelerated +27% YoY but MRR came in -2% below expectations due to a change in trial programs.
Overall, Q4 was a strong quarter for the company. Looking forward, Shopify has a strong product roadmap in several areas including Enterprise, Plus, advertising, and payments — which could keep deceleration modest over the next year.
Shopify continues to expand their enterprise merchant base through the additional of global brands like Reebok, Champion, Barkbox and major sports franchises like FC Barcelona, the Los Angeles Lakers, Miami Heat, and more.
In Payments, their penetration expanded by 2% to 64% — while Shop Pay GMV accelerated 8% to 50%. Their Shop App native GMV grew +84% YoY driven by the roll out of new features and personalization such as cart syncing, merchant home feed, etc.
Finally, the company continues to make progress internationally, with their international merchant base up +50% outside of North America.
I remain a bullish shareholder in the company.
Investor Events / Global Affairs:
Airbnb had its best day in the markets, Intel could be split into two companies, and Trump signed an order for reciprocal tariffs to be planned.
Airbnb (ABNB) Saw Best-Ever Day in the Markets
Source: Airbnb Newsroom
Airbnb shares surged +14.5% on Friday, marking their best day ever, after reporting stronger-than-expected fourth-quarter earnings. The company posted earnings of 73 cents per share on $2.48 billion in revenue, surpassing analyst estimates. It also swung to a profit with $461 million in net income, compared to a $349 million loss in the same period last year. Gross booking value reached $17.6 billion, while nights and experiences booked grew +12% year-over-year.
Airbnb (ABNB) Stock Performance, All-Time Chart, Seeking Alpha
CEO Brian Chesky emphasized plans to expand Airbnb into a comprehensive travel and living platform, investing $200–$250 million in new business opportunities. Despite the strong quarter, Airbnb provided light guidance for the current quarter, citing last year’s boost from Easter and an extra day in February.
“We want the Airbnb app — kind of similar to Amazon — to be one place to go for all of your traveling and living needs…
A great business could get to $1 billion of revenue. And you should be able to expect one or a couple of businesses to launch every single year for the next five years.”
Broadcom, TSMC Weigh Possible Intel Deals That Would Split Storied Chip Maker
Broadcom and TSMC are exploring potential deals that could split Intel into two, with Broadcom eyeing its chip-design business and TSMC considering its factories. These discussions are still preliminary, and neither company is working together on a bid.
Intel has been struggling against TSMC and Samsung, falling behind in producing the most advanced chips, which has made it an acquisition target. The U.S. government, which sees Intel as crucial to national security, would need to approve any deal involving foreign control of its factories, especially given Intel’s $7.9 billion funding under the 2022 CHIPS Act.
Intel has already begun separating its manufacturing unit, making it easier to spin off or attract outside investors. The company is also searching for a new CEO after Pat Gelsinger was ousted in December.
Retooling Intel's factories to fit TSMC’s production methods would be costly and complex, with additional concerns over U.S. immigration restrictions affecting TSMC's workforce.
Broadcom (AVGO) Stock Performance, 5-Year Chart, Seeking Alpha
Taiwan Semiconductor Manufacturing Co. (TSM) Stock Performance, 5-Year Chart, Seeking Alpha
Intel Corp. (INTC) Stock Performance, 5-Year Chart, Seeking Alpha
Intel’s struggles have led to a decline in market value, missing out on the AI boom that has benefited rivals like Nvidia and AMD. All of this could lead to an interesting twist in the company’s 2025 storyline.
Last Week’s Tariff Updates
Source: Associated Press
President Donald Trump signed a plan imposing reciprocal tariffs to match import taxes set by other countries, aiming to eliminate trade imbalances. While Trump claims the move is fair, critics argue it could increase costs for U.S. consumers and businesses.
The tariffs, which will be determined over the coming weeks, may trigger retaliatory measures from trade partners like the EU, Canada, Mexico, and China. Trump has already imposed a 10% tariff on Chinese imports and plans new tariffs on computer chips, pharmaceuticals, and other industries.
His administration argues that these tariffs could boost government revenue and enable better trade negotiations. However, analysts warn they could also increase inflation and slow economic growth, similar to the effects of his first-term tariffs. The plan also faces political risks, as inflation concerns helped Trump win reelection, and further price increases may test voters’ patience.
Despite these concerns, Trump dismissed economic worries, stating, “There’s nothing to study. It’s going to go well.”
“I’ve decided for purposes of fairness that I will charge a reciprocal tariff. It’s fair to all. No other country can complain.”
Major Economic Events:
Inflation for Consumers rose +3.3% YoY, Inflation for Producers rose +3.5% YoY, and Retail Sales took a beating.
Inflation for Consumers (CPI)
The consumer price index (CPI) rose +0.5% in January, bringing the annual inflation rate to 3%, both higher than expected. Core CPI, which excludes food and energy, increased +0.4% for the month and +3.3% annually, also above forecasts. Shelter costs, a major inflation driver, rose +0.4%, while food prices jumped +0.4% due to a +15.2% spike in egg prices from avian flu disruptions.
Energy prices climbed +1.1%, with gasoline up +1.8%, contributing to inflationary pressures. Following the report, markets tumbled, and expectations for a Federal Reserve rate cut shifted to at least September. Fed Chair Jerome Powell cautioned against overreacting to one report, emphasizing the importance of the personal consumption expenditures (PCE) index for policy decisions.
“The ‘wait and see’ Fed is going to be waiting longer than anticipated after a red-hot January CPI inflation report. This report puts the final nail in the coffin for the rate cut cycle, which we believe is over.”
Inflation for Producers (PPI)
Source: Bloomberg
The producer price index (PPI) rose +0.4% in January, slightly above expectations, while core PPI, excluding food and energy, matched forecasts at +0.3%. Despite the higher-than-expected headline number, Wall Street viewed details of the report as showing easing inflation pressures, with healthcare costs, airfare, and brokerage services declining. Over the past year, PPI increased +3.5%, keeping inflation above the Federal Reserve’s +2% target, delaying expectations for a rate cut until at least October.
The Federal Reserve focuses more on the personal consumption expenditures (PCE) index, which is expected to show a slowing inflation rate when released later this month. Revisions to December’s PPI data showed a higher-than-initially-reported +0.5% increase, further complicating inflation expectations. Goods prices surged 0.6%, driven by a +10.4% rise in diesel fuel and a staggering +44% jump in egg prices due to avian flu-related supply disruptions.
“The components that feed into the Fed’s preferred PCE price measure were, on the whole, very tame… Overall, better news than yesterday on price inflation, but core PCE still comes in well above the 2% target.”
Retail Sales
Retail sales fell +0.9% in January, much worse than the expected +0.2% decline, following a strong +0.7% gain in December. Excluding autos, sales dropped +0.4%, while the "control" group, which influences GDP calculations, fell +0.8%. Consumers cut spending across categories, with sporting goods, online sales, and auto purchases seeing significant declines. Some analysts attributed the drop to bad weather and a pullback in auto sales after strong December incentives.
Following the report, markets remained slightly negative, and traders increased bets on a potential Fed rate cut by June. Meanwhile, import prices rose +0.3% in January, with fuel costs up +3.2%, contributing to inflation concerns.
“The drop was dramatic, but several mitigating factors show there’s no cause for alarm. Some of it can be chalked up to bad weather, and some to auto sales tanking in January after an unusual surge in December due to fat dealer incentives. Especially considering December was revised up strongly, the rolling average of consumer spending remains solid.”
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