- GRIT
- Posts
- 👉 Trump Spooks the Market...
Together with Equable Shares
👉 Week in Review — Too Long; Didn’t Read:
Key Earnings Announcements:
On Cloud reported record gross profit margins of 64%.
Nebius raised their 2026 capital expenditure guidance to $25 billion.
Applied Materials' largest customers now providing 8-quarter rolling forecasts.
Investor Events / Global Affairs:
Trump’s China trip was “incredible.”
SpaceX approved a 5-for-1 stock split ahead of IPO.
Markets are sliding after Trump’s Iran warning reignited oil supply fears.
Berkshire Hathaway’s new CEO is shaking things up.
Economic Updates:
Inflation climbs to highest level since 2023.
Consumers keep spending regardless.
Let’s dive right in!
👉 Best and Worst ETF Performers of the Week
👉 Equity Investing Doesn’t Have to Be All-or-Nothing.
Equable Shares and their Hedged Equity ETF (HEDG) is an actively managed strategy designed to seek long-term capital appreciation while incorporating an options-based hedge to help mitigate downside risk.
In a market environment where volatility can test even disciplined investors, HEDG is designed to offer:
Exposure to large-cap U.S. equities
A structured options overlay
A strategy built around risk management
Built-in downside protection
For investors looking to balance growth potential with a more measured risk profile, HEDG seeks to provide an alternative approach to traditional equity investing.
Explore the strategy at equableshares.com/fund/HEDG.
👉 Key Earnings Announcements:
On Cloud reported record gross profit margins of 64%, Nebius raised their 2026 capital expenditure guidance to $25 billion, and Applied Materials' largest customers now providing 8-quarter rolling forecasts.
On Holdings (ONON)
Key Metrics (in CHF)
Revenue: $831.9 million, an increase of +15% YoY
Operating Income: $174.3 million, an increase of +45% YoY
Profits: $103.3 million, an increase of +82% YoY
Earnings Release Callout
"The results we present today - highlighted by record net sales and a gross profit margin of 64.2% - demonstrates our unique ability to scale rapidly while expanding our profitability. Growth is strong across both Direct-to-Consumer ("DTC") and Wholesale channels, reflecting On's ability to deepen engagement with existing consumers, while continuing to build new fans across the globe."
My Takeaway
On Holding reported a record-breaking first quarter for 2026, delivering exceptional performance that sent a clear signal of the brand's global momentum — achieving significant growth across all regions and channels while simultaneously expanding its profit margins.
Diving into the business highlights, the growth was broad-based but geographically led by the Asia-Pacific region, which exploded with 61.4% constant currency growth. APAC now accounts for over 20% of the company's total sales, driven by intense consumer demand in China and South Korea. Both the Direct-to-Consumer and Wholesale channels saw double-digit growth, but the apparel segment was a key highlight, surging 45.1% as On successfully expanded its product portfolio beyond footwear. The brand also noted strong reception for new lifestyle launches like the Cloudtilt, expanding its reach to casual, sneaker-focused consumers.
Gross profit margin expanded by 430 basis points to reach a record 64.2%. Management noted this was achieved through strict full-price discipline and lower freight costs, which more than offset the negative impact of higher U.S. tariffs on goods imported from Vietnam. This gross margin expansion cascaded down the income statement, lifting the Adjusted EBITDA margin to 21.0%. The company remains well-capitalized with over CHF 1.0 billion in cash to fund its continued global retail expansion.
Management's commentary emphasized the success of their premium strategy. By focusing on full-price sales, disciplined operational execution, and highly desirable products, the company is proving its "unique ability to scale rapidly while expanding profitability." The success of the apparel line and lifestyle footwear indicates that On is successfully evolving into a comprehensive athletic and lifestyle brand.
Looking ahead, ONON reiterated their full-year 2026 net sales guidance — over 3.5 billion in revenue. Management raised its profitability outlook, now projecting gross profit margins of at least 64.5% and adj. EBITDA margins of 20%.
Long ONON.
Nebius Group (NBIS)
Key Metrics
Revenue: $399.0 million, an increase of +684% YoY
Operating Loss: -$128.0 million, compared to -$120.0 million last year
Profits: $621.2 million, compared to -$104.3 million last year
Earnings Release Callout
"We continue to see unprecedented demand across the market. Compute and cloud needs are vastly exceeding capacity as more industries embrace AI and companies move beyond experimentation to real-world applications. We are seeing this demand first hand, and are capturing it with our full-stack AI-native cloud from infrastructure and multi-tenant cloud through inference solutions and agentic platforms."
My Takeaway
The company posted massive triple-digit top-line growth and secured industry-defining contracts, sending a clear signal to the market that the artificial intelligence compute supercycle is accelerating.
The company reported a GAAP operating loss of $128.0 million, as heavy operating costs associated with rapidly scaling data centers outpaced current recognized revenue. However, the unit economics are vastly improving, with operating costs as a percentage of revenue collapsing from 336% to 132%. This leverage allowed Adjusted EBITDA to swing to a positive $129.5 million. The reported GAAP net income of $621.2 million looks impressive but was heavily skewed by a non-cash valuation markup on equity investments.
The quarter was defined by massive deal-making and physical expansion. The company announced a blockbuster agreement with Meta valued at approximately $27.0 billion over five years to supply AI infrastructure. Nebius's annualized run rate crossed $1.92 billion by the end of March, driven almost entirely by its core AI cloud business. To complement its infrastructure, the company acquired Eigen AI for $643.0 million, pushing deeper into inference and agentic platforms.
Because customers are fiercely competing for GPU allocations, Nebius is requiring upfront prepayments. This resulted in an incredible $2.25 billion in operating cash flow for the quarter and pushed deferred revenue past $4.7 billion. Furthermore, the company fortified its balance sheet by raising over $6.0 billion, highlighted by a $2.0 billion direct equity investment from Nvidia and heavy convertible note issuances. Nebius ended the quarter sitting on $9.30 billion in cash, providing an impenetrable financial moat.
Management’s primary narrative was the urgent need to build faster and secure physical power. Volozh highlighted that they have broken ground on a gigawatt-scale facility in Missouri and secured 1.2 GW of power for a new AI factory in Pennsylvania, pushing their total contracted power capacity past 3.5 GW.
Looking ahead, the company reiterated their 2026 full year guidance of $3.2B in revenue and $8B in ARR. They raised their CapEx guidance to $25B.
Long NBIS.
Applied Materials (AMAT)
Key Metrics
Revenue: $7.9 billion, an increase of +11% YoY
Operating Income: $2.5 billion, an increase of +16% YoY
Profits: $2.8 billion, an increase of +31% YoY
Earnings Release Callout
"Applied Materials delivered record quarterly performance, and we now expect our semiconductor equipment business to grow more than 30 percent in calendar 2026. The rapid global build-out of AI computing infrastructure combined with Applied's strong leadership positions in leading-edge logic, DRAM and advanced packaging provide an exceptionally strong foundation for sustained, multi-year revenue and profit growth."
My Takeaway
The semiconductor equipment manufacturer easily surpassed Wall Street’s expectations on both revenue and earnings per share. The Semiconductor Systems segment was the primary growth engine, delivering a record $5.97 billion in revenue. This segment was heavily driven by foundry and logic customers, alongside a notable 18% jump in DRAM revenue as memory makers expanded capacity for AI workloads.
The Applied Global Services division also posted record revenue of $1.67 billion as fab utilization increased globally. Strategically, the company announced the acquisition of ASMPT's NEXX unit to deepen its capabilities in panel-level advanced packaging, a critical technology for next-generation AI accelerators.
Applied generated $845 million in operating cash flow but reinvested heavily, spending $635 million on capital expenditures to support its own growth. Despite this heavy reinvestment, the company continued to reward shareholders, returning $765 million through a combination of share repurchases and a newly increased quarterly dividend.
CEO Gary Dickerson expressed deep confidence in the multi-year trajectory of the business, noting that the global build-out of AI infrastructure provides an exceptionally strong foundation for growth. Management also highlighted that their largest customers are now providing rolling 8-quarter forecasts, giving the company unprecedented visibility into demand through 2027 and beyond.
Looking ahead, the company expects revenue to hit $9B next quarter, a +23% increase. They raised their broader calendar 2026 semiconductor equipment growth outlook to over 30%, communicating to Wall Street that the AI infrastructure supercycle is still accelerating.
Long AMAT.
👉 Investor Events / Global Affairs:
Trump’s China trip was “incredible,” SpaceX approved a 5-for-1 stock split ahead of IPO, markets are sliding after Trump’s Iran warning reignited oil supply fears, and Berkshire Hathaway’s new CEO is shaking things up.
Trump’s China Trip Ends With Big Optics, Few Concrete Details
Brendan Smialowski / AFP via Getty Images
President Trump wrapped up his two-day trip to China calling it “incredible,” but despite the high-profile meetings and elaborate ceremonies, the visit produced few concrete agreements. Trump highlighted potential deals involving Boeing aircraft and U.S. soybean exports, though China has not formally confirmed the commitments.
The broader takeaway is that both sides appear focused on stabilizing relations after years of escalating tensions over trade, Taiwan, technology, and geopolitics. Chinese President Xi Jinping emphasized the importance of avoiding conflict over Taiwan, while Trump signaled both countries want the Strait of Hormuz reopened and Iran prevented from obtaining nuclear weapons.
One notable theme throughout the visit was the emphasis on personal diplomacy. Trump repeatedly praised Xi publicly, while China rolled out extraordinary levels of pageantry — including state banquets, military ceremonies, and a rare visit inside Zhongnanhai, the leadership compound in Beijing. Analysts viewed the symbolism as China attempting to reset the tone of the relationship without making major policy concessions.
Markets may care less about the optics and more about whether these discussions eventually translate into actual trade agreements, tariff reductions, or geopolitical stability. For now, the trip appears more important diplomatically than economically.
“President Trump and President Xi agreed that the United States and China should build a constructive relationship of strategic stability on the basis of fairness and reciprocity. President Trump will welcome President Xi for a visit to Washington this fall. The two countries will support each other as the respective hosts of the G20 and APEC Summits later this year.”
SpaceX Approves 5-for-1 Stock Split Ahead of Historic IPO
Subscribe to GRIT Premium to read the rest.
Become a paying subscriber of GRIT Premium to get access to this post and other subscriber-only content.
Already a paying subscriber? Sign In.
A subscription gets you:
- • WEEK IN REVIEW: Full access to the internet's best recap of the markets, every single week. This includes comprehensive earnings breakdowns, portfolio updates, and more. This is the perfect compliment to the "Investing Week Ahead" post that you already receive at the beginning of each week.
- • MONTHLY LIVESTREAMS: Join Austin Hankwitz live every month to dive deep into his portfolio, explore the latest trends, discuss any changes he’s making, and cover market-moving topics.
- • PORTFOLIO ACCESS – Austin Hankwitz, Warren Buffett, Bill Ackman, and other professional / billionaire investor portfolios.
- • MONTHLY STOCK DEEP DIVES – Comprehensive stock analysis on an individual ticker, delivered at the end of each month.
- • RESOURCES – A wide variety of investment resources for both beginners and advanced investors to accelerate your portfolio.