📊 Apple’s iPhone Sales in China Plummet

1) The Return of Netflix 2) EA Cuts Outlook 3) Countries With The Most Data Centers and more!  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

January 26, 2025   |   Read Online In partnership with Happy Sunday! The TikTok saga continues. Yesterday evening, NPR reported that the White House is working on a plan to enable Oracle and U.S. investors to take over TikTok's global operations. ByteDance would retain a minority stake, but Oracle would control the algorithm and data collection. Earlier this week, President Trump signed an order refusing the enforcement of the TikTok ban for 75 days. Meanwhile, TikTok's rivals are preparing for its potential downfall. Meta is reportedly offering TikTok creators cash bonuses up to $50,000 to post on Instagram first. Other platforms, like X, LinkedIn, and Snapchat, are rolling out new features to attract users amid the uncertainty. Some key data bites from this week that you should know: President Trump plans to impose 25% tariffs on Canada and Mexico on 2/1. Walmart is paying its top regional store managers more than $600,000. JPMorgan CEO Jamie Dimon saw his pay increase to a record $39M. BlackRock CEO Larry Fink said Bitcoin could reach $700,000. Duolingo saw a 216% spike in US users learning Chinese due to TikTok ban. Billionaire wealth climbed $2T in 2024, 3x faster than year before. Costco could see nearly 20,000 employees go on strike by end of the month. US wine sales declined 6% in 2024. eToro has filed for US IPO and is targeting a $5B valuation. Hedge funds have charged almost $2T in fees since 1969. In today's newsletter: 🍿 The Return of Netflix 😓 Seth Klarman's Struggles 🕹️ EA Cuts Outlook 🍎 Apple's iPhone Sales in China Plummet 🏢 Countries With The Most Data Centers Let's jump right in. Partner With Us 📣 Together With HubSpot Want to get the most out of ChatGPT? ChatGPT is a superpower if you know how to use it correctly. Discover how HubSpot's guide to AI can elevate both your productivity and creativity to get more things done. Learn to automate tasks, enhance decision-making, and foster innovation with the power of AI. Download the free guide with actionable prompts and tips to make your work more productive. Netflix's growth shows no signs of slowing down. The company crushed earnings this week, sending shares up 14%. Q4 2024 Key Numbers: 🟢 EPS: $4.27 vs. $4.20 Est. 🟢 Revenue: $10.25B vs. $10.11B Est. (+16% YoY) 🟢 Paid Memberships: 301.6M vs. 290.9M Est. (+44% YoY) 🟢 FY25 Revenue Guidance (Midpoint): $44B vs. $43.5B Prev. Est. What primarily drove the stock higher? A record-breaking 18.9M new subscribers in Q4, fueled by hits like Squid Game Season 2, the Jake Paul vs. Mike Tyson fight, Carry-On, and the Christmas NFL games. Looking ahead, Netflix plans to strengthen its core business by focusing on series and films users love, expanding live programming and gaming, and growing its ad business. The company raised its 2025 revenue guidance and operating margin outlook, reflecting this confidence. Prices are rising too. The ad-supported tier will increase $1 to $7.99/month, while the premium tier jumps $2 to $24.99/month. Demand for the ad-supported option remains strong, now accounting for over 55% of sign-ups in markets where it's available. Is there any investor who truly compares to Warren Buffett? Probably Seth Klarman, often considered the second-greatest investor of all time. But even Klarman's Baupost Group has faced challenges in recent years. Per Bloomberg, clients have pulled roughly $7B over the past 3 years, bringing AUM down to $23B. Why?  The fund has delivered just 4% annualized returns since 2014, underperforming both the S&P 500 and many multi-strategy hedge funds. In response to this, Baupost recently cut almost 20% of its investing team and narrowed its focus on fewer types of investments. As of Q3 2024, the fund's public equity portfolio sits at $3.5B, tightly concentrated across 20 companies. The next update on the portfolio will arrive on February 14th, when 13F filings are released for Q4. Are EA's repetitive game releases finally catching up to them? The company had a brutal week, with shares plummeting nearly 20%. Weak demand for its soccer franchise and Dragon Age forced EA to slash its full-year net bookings guidance far below earlier forecasts. Net bookings, which include physical game sales and online revenue, are now expected to hit $7.08B at the midpoint, down from the previous $7.65B estimate. For those of you that don't know, EA's soccer franchise, EA Sports FC, underwent a rebranding in 2023 after the company's partnership with FIFA ended. Things aren't looking great for Apple in China. According to Counterpoint Research and Bloomberg, iPhone sales in the region fell 18.2% during the December quarter. The slump in China contributed to a 5% drop in global iPhone sales during the holiday period. Additionally, Apple lost its top spot in the market to Chinese rival Huawei Technologies, who saw sales increase 15.5% YoY. With the region accounting for 17% of Apple's total revenue in Fiscal 2024, China remains a critical market for the company. The company has struggled to drive demand for its latest generation of iPhones, whose new AI features are still unavailable in the country. Meanwhile, Apple recently released statistics that show that 76% of iPhones released in the last four years use the latest iOS 18. It looks like we might just be getting started in the AI boom. This week brought a flurry of announcements from companies unveiling various major AI investments and initiatives. The biggest? A $500B project called Stargate, announced by President Trump alongside OpenAI, SoftBank, and Oracle, to build cutting-edge AI infrastructure. However, Elon Musk, one of Trump's closest allies, has raised questions about whether the funding actually exists. Outside of AI, Trump also revealed that Saudi Arabia's crown prince plans to invest $600B in the U.S. over the next four years, though details on what remain unclear. Meta also made waves with plans to construct a massive 2GW+ data center, covering an area comparable to a significant part of Manhattan. The company is committing up to $65B in CapEx this year while aggressively expanding its AI teams. A few weeks ago, Microsoft revealed plans to invest $80B in AI-enabled data centers, with over half of the investment staying in the U.S. As of March 2024, research from CloudScene, Statista, and Visual Capitalist shows the U.S. leads the world in data centers with 5,381—far ahead of Germany in second place with 521. 📣 Presented By Bill.com Sharper vision, smarter spending with BILL Here's an offer that'll bring 2025 into focus. Learn how BILL Spend & Expense can give you more visibility into your spend —and get a pair of Ray-Ban Smart Glasses as a thank you.1 Request a demo 1 Terms & Conditions Apply. See offer page for more details. The BILL Divvy Card is issued by Cross River Bank, Member FDIC, and is not a deposit product. 🫰 Market Mirage. Jamie Dimon said the U.S. stock market is inflated by any measure - CNBC 🫧 Bubble Phase. Billionaire David Einhorn said the market has entered the "fartcoin" stage of the cycle - BI 💊 AI Medicine. Google DeepMind CEO expects to see drugs designed by AI to be in clinical trials by year end - PYMT 🏘️ Barron Ventures. Barron Trump is launching his own luxury real estate company - QZ 🍻 Liquor Reliance. Heavy drinkers make up the overwhelming majority of alcohol sales - WSJ Courtesy of our paid partner, EarningsHub. Notable Companies Reporting Earnings Week of January 26th, 2025: I use EarningsHub to track earnings, estimates, and receive AI summaries of investor calls. If you'd like an all-in-one earnings tool and see all other companies reporting, I definitely recommend you check it out! View Full Calendar Here! Major Trades Published 1/20 - 1/24. Trades may be those of family members. [Source: 2iQ] Buys Nancy Pelosi (D) Company: Palo Alto Networks ($PANW) Amount Purchased: $1M - $5M Description: Exercised 140 call options purchased 2/12/24 & 2/21/24 (14,000 shares), strike price $100, exp. date 12/20/24 Company: Nvidia ($NVDA) Amount Purchased: $500K - $1M Description: Exercised 500 call options purchased 11/22/23 (50,000 shares), strike price $12, exp. date 12/20/24 Company: Vistra Corp ($VST) Amount Purchased: $500K - $1M Description: Purchased 50 call options, strike price $50, exp. date 1/16/26 Company: Nvidia ($NVDA) Amount Purchased: $250K - $500K Description: Purchased 50 call options, strike price $80, exp. date 1/16/26 Company: Alphabet ($GOOG) Amount Purchased: $250K - $500K Description: Purchased 50 call options, strike price $150, exp. date 1/16/26 Company: Amazon ($AMZN) Amount Purchased: $250K - $500K Description: Purchased 50 call options, strike price $150, exp. date 1/16/26 Company: Tempus AI ($TEM) Amount Purchased: $50K - $100K Description: Purchased 50 call options, strike price $20, exp. date 1/16/26 Sells Nancy Pelosi (D) Company: Apple ($AAPL) Amount Sold: $5M - $25M Description: Sold 31,600 shares Company: Nvidia ($NVDA) Amount Sold: $1M - $5M Description: Sold 10,000 shares Major Trades Published 1/20 - 1/24 Buys TKO Group Holdings ($TKO) Insider: Ariel Emanuel (CEO) # of Shares Purchased: 224,428 $ Amount: $32,314,894 SEC Forms: [1] Ardelyx Inc ($ARDX) Insider: David Mott (Director) # of Shares Purchased: 199,000 $ Amount: $992,672 SEC Forms: [1] Sells Oracle ($ORCL) Insider: Safra Catz (CEO) # of Shares Sold: 3,805,082 $ Amount: $705,455,414 SEC Forms: [1] Trade Desk ($TTD) Insider: Jeffrey Green (President and CEO) # of Shares Sold: 922,158 $ Amount: $113,826,516 SEC Forms: [1] Tempus AI ($TEMP) Insider: Eric Lefkofsky (CEO and Chairman) # of Shares Sold: 1,207,065 $ Amount: $62,023,231 SEC Forms: [1] How was today's newsletter? 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