“Even the most dominant companies can become prisoners of their own success.” – 01:41
Evelio Silvera, Co-Founder of Bull Street Media, joins Remy Blaire to discuss the latest market trends and earnings reports.
The segment begins with a market overview, noting that the Dow is slightly below flat and the S&P 500 is pulling back after reaching record highs in the previous session. Remy highlights the release of PCE figures, which show a month-over-month change in core PCE, and mentions other significant economic data from the week, including GDP figures and NVIDIA’s Q2 earnings.
As the conversation shifts to NVIDIA, Evelio shares his insights on the company’s earnings report, which has garnered attention for its impressive top and bottom line results. However, he raises concerns about a concentration risk, pointing out that two anonymous customers now account for 39% of NVIDIA’s revenue, a significant increase from 25% a year ago. Evelio emphasizes the importance of revenue diversification, cautioning that even the most dominant companies can become vulnerable due to over-reliance on a few clients.
The discussion then moves to CrowdStrike, which experienced a rally following a double beat in its earnings report. Despite a slight dip in Q3 EPS guidance, the market appears optimistic, with an average price target of $483. Evelio discusses CrowdStrike’s strong annual recurring revenue growth and expanding margins, indicating that the company is on a solid path to recovery after facing challenges. He underscores the value of patient capital in the cybersecurity sector, suggesting that CrowdStrike’s resilience makes it a strong investment.
Finally, Remy and Evelio explore the buy now, pay later (BNPL) sector, focusing on Affirm, which recently reported its first profitable quarter. Evelio praises the company’s execution and notes that BNPL has evolved from a cash-burning disruptor to a profitable operation. He highlights the competitive advantage of Affirm’s transparent fee structure compared to traditional credit card rates, suggesting that the installment payment model is likely to remain popular, even amid tighter credit conditions.