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Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of more than 15,000 subscribers striving to be better investors with an edge in the market.

Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

This article is designed to truly give you that EDGE in the day ahead!

Grab your afternoon pick me up and let’s dive in.

Market Talk

The market was higher to start the week as the momentum from last week continued to carry stocks higher.

3 Stories Moving the Market

These are some of the biggest stories so far this week that are having an influence on market action.

Buffett cuts stake in Apple as cash pile soars to a record high

In the first quarter, Warren Buffett's Berkshire Hathaway reduced its substantial stake in Apple by around 13%.

Berkshire reported that its position in Apple was now valued at $135.4 billion, or approximately 790 million shares, still making it Berkshire's largest holding.

This marks the second consecutive quarter of Berkshire trimming Apple shares, with approximately 116 million shares sold this time. Buffett cited tax reasons and potential future tax increases as factors for the sale.

Buffett did express continued confidence in Apple at the annual shareholder meeting, saying that it was “extremely likely” that Apple will remain Berkshire’s largest holding at the end of 2024..

Meanwhile, Berkshire's cash reserves hit a record $188.99 billion, indicating a challenge in finding suitable acquisition targets. The company did use its significant cash hoard to increased its stock buybacks to $2.6 billion in the quarter.

Apple announces new iPad Pro with M4, iPad Air tablets

Speaking of Apple, the company announced new versions of its iPad Air and iPad Pro tablets this week, the first updates since October 2022.

The iPad Pro comes in 11-inch and 13-inch sizes, featuring a thinner design at 5.1 millimeters and using OLED displays for vibrant colors. It introduces a new technology called "tandem OLED" and is branded as Ultra Retina XDR. Pricing starts at $999 for the smaller model and $1,299 for the larger one with 256GB storage.

The iPad Pros use the M4 chip, emphasizing its power for AI tasks like background isolation in videos. The Pros also pair with a new Magic Keyboard case costing $249 or $299 depending on size and an updated Apple Pencil Pro for $129.

The new iPad Air models, 11-inch and 13-inch, feature Apple's M2 chip and start at $599 and $799 respectively for 128GB storage. 

Stanley Druckenmiller cut his Nvidia stake in late March, says AI may be a bit overhyped short term

Stanley Druckenmiller significantly reduced his stake in chipmaker Nvidia earlier this year, citing concerns about the AI boom being overhyped in the short term.

He trimmed the position after Nvidia's stock surged from $150 to $900, acknowledging his shorter investment horizon, saying “I’m not Warren Buffett — I don’t own things for 10 or 20 years. I wish I was Warren.”

Druckenmiller initially invested in Nvidia after being introduced to it by a colleague who emphasized AI's significance over blockchain. Despite cutting his Nvidia holdings, he remains bullish on AI's long-term potential, comparing it to the internet's transformative impact. Druckenmiller believes AI's true potential might not fully materialize for several years though.

Additionally, he has invested in Microsoft and Alphabet as AI plays in the past year.

📚 EDGE-UCATION: Who is Stanley Druckenmiller?

Stanley Druckenmiller is a prominent billionaire investor and hedge fund manager. He is widely regarded as one of the most successful investors in the world as he has averaged 30%+ annual returns for over 30 years.

Druckenmiller gained fame for his tenure as the lead portfolio manager for George Soros's Quantum Fund in the 1980s, where he was known for his remarkable track record of consistently high returns.

The bet that made him famous was a $10 billion short against the British pound in 1992. Druckenmiller and Soros identified weaknesses in the pound's position within the European Exchange Rate Mechanism (ERM). They believed that the Bank of England would be unable to maintain the pound's peg to the Deutsche Mark at the agreed-upon rate, and that it would ultimately be forced to devalue the pound.

They were right and the British government announced its decision to withdraw the pound from the ERM on September 16, 1992, leading to a significant depreciation of the pound and major losses for the Bank of England. Meanwhile, Soros and Druckenmiller made billions in profits from their short positions, solidifying their reputations as legendary investors.

Druckenmiller later founded his own hedge fund, Duquesne Capital Management, which he managed until 2010 when he closed it to focus on managing his own wealth through his family office, Duquesne Family Office.

Druckenmiller is known for his macroeconomic approach to investing, and his insights into market trends and economic fundamentals are highly valued in financial circles.

Earnings Brief (Edge+)

These are some of the biggest earnings reports so far this week that are having an influence on market action.

*Note - our full breakdown of these reports will be sent out in our Earnings Recap later this week.

Monday - 5.6.2024

Berkshire Hathaway shares are up +1.4% this week. Here are the key numbers from the report:

• Earnings per share: $5.19 vs. $4.47 expected

• Revenue: $89.87 billion vs. $87.04 billion expected

Simon Property Group shares are up +3.0% this week. Here are the key numbers from the report:

• Funds From Operations per share: $3.07 vs. $2.76 expected

• Revenue: $1.44 billion vs. $1.31 billion expected

Realty Income shares are down -0.7% this week. Here are the key numbers from the report:

• Funds From Operations per share: $1.03 vs. $1.02 expected

• Revenue: $1.26 billion vs. $1.15 billion expected

Tuesday - 5.7.2024

Disney shares are down -7.1% this week. Here are the key numbers from the report:

• Earnings per share: $1.21 vs. $1.12 expected

• Revenue: $22.08 billion vs. $22.10 billion expected

Celsius Holdings shares are down -2.8% this week. Here are the key numbers from the report:

• Earnings per share: $0.27 vs. $0.20 expected

• Revenue: $355.7 million vs. $390.0 million expected

Wednesday - 5.8.2024

Uber shares are down -7.3% this week. Here are the key numbers from the report:

• Loss per share: -$0.32 vs. -$0.24 expected

• Revenue: $10.13 billion vs. $10.11 billion expected

Shopify shares are down -16.1% this week. Here are the key numbers from the report:

• Earnings per share: $0.20 vs. $0.17 expected

• Revenue: $1.86 billion vs. $1.84 billion expected

AirBnB shares are down -7.8% after-hours. Here are the key numbers from the report:

• Earnings per share: $0.41 vs. $0.23 expected

• Revenue: $2.14 billion vs. $2.06 billion expected

The Trade Desk shares are up +2.4% after-hours. Here are the key numbers from the report:

• Earnings per share: $0.26 vs. $0.22 expected

• Revenue: $491.3 million vs. $480.5 million expected

A Look at the Economy (Edge+)

This is usually where we break down the biggest economic reports of the week that are having an influence on market action, but it’s a quiet week on the economic front and we have nothing to report.

Please enjoy this picture of a grey seal pup in lieu of the reports:

The Second Half

The second half of the week is very quiet with only a handful of key earnings and the consumer confidence report on deck.

Earnings Reports

There are several major earnings still on the way this week. Here at The Investor’s Edge we will be watching:

• Wednesday (after-close): AirBnB, and The Trade Desk

• Thursday: No major reports

• Friday: Enbridge

Here is the calendar of earnings releases scheduled for the rest of the week:

Economic Reports

Here is the calendar of events scheduled for the remainder of the week:

The quiet week continues as consumer confidence and initial jobless claims are the only reports scheduled.

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Thank you for reading this edition of the Mid-Week Wrap-Up.

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.