GrubHub Data Lifted, Surviving on Credit and More Investing Stories You Missed
Let's look at the latest cyber hacks, AI news, state of the consumer and more stories that speak to our investing strategies at the Pro Portfolio.
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Amid a busy week of more wild headlines thanks in part to the second administration of Pres. Trump, it was easy to miss some of the important, but under-the-radar business stories. Worry not. We scanned the screens for a collection of reports that speak to our strategy at the Pro Portfolio. Let's dig in:
Aging of the Population
The number of family caregivers who support older relatives in either home-based or residential care settings increased by 32% between 2011 and 2022 — a sharp rise that can be attributed to an increase in the number of caregivers living with recipients. Researchers also say this could be partially tied to rising preferences for aging in place. Read more here
Position: Labcorp LH
Artificial Intelligence
Ridesharing company Lyft and artificial intelligence firm Anthropic said Thursday (Feb. 6) that they are working together to create AI products to serve Lyft’s riders and drivers. The first phase of the collaboration is already underway, with Lyft’s customer care AI assistant being powered by Anthropic’s AI model, Claude, via Amazon Bedrock… Read more here
Over the next three years, 92 percent of companies plan to increase their AI investments. But while nearly all companies are investing in AI, only 1 percent of leaders call their companies “mature” on the deployment spectrum, meaning that AI is fully integrated into workflows and drives substantial business outcomes. Read more here
Position: Alphabet GOOGL, Amazon AMZN, Elastic ESTC, Meta META, Microsoft MSFT, ServiceNow NOW
Artificial Intelligence, Cloud Computing, Digital Infrastructure
Google plans to increase capital investments to $75 billion this year in an effort to expand its AI and cloud capacity, CEO Sundar Pichai said Tuesday in the company’s Q4 2024 earnings report. The company spent $52.5 billion in capital expenditures in 2024. Google will direct the majority of its growing CapEx to relieving capacity bottlenecks through upgrades to infrastructure, including cloud servers and data centers… Read more here
On Alphabet's earnings call with Wall Street analysts, the company said 4.4 million software developers now using Google's Gemini AI training model, double the number from six months ago. But management said Google ended 2024 with "more (AI) demand than capacity.” Read more here
Position: Alphabet, Marvell MRVL, Nvidia NVDA
Artificial Intelligence, Digital Lifestyle
Meta, Amazon, Snap, Samsung, Baidu, Xiaomi and Google, through its Android XR operating system, are betting on smart glasses to be the next popular connected wearable. About a dozen smaller companies — such as Viture, Even Realities, Brilliant, Solos and Halliday — are also making smart glasses, using the artificial intelligence (AI) of popular large language models like ChatGPT. Unlike the bulky augmented reality/virtual reality (AR/VR) headsets of old, these AI-powered smart glasses are encased in traditional frames of various styles so users don’t look out of place in public. But all of them carry serious electronics to power AI capabilities like online searches and translations. Read more here
Position: Alphabet, Amazon, Meta, Qualcomm QCOM
Cash-Strapped Consumer
While 21% of overall credit users reported that they would not have been able to afford essential expenses without using credit, this number jumps dramatically for those living paycheck to paycheck with difficulty paying bills. A staggering 43% of credit users in this group said they could not afford essential expenses without credit. Read more here
The first month of the year is often slower for retailers following the busy holiday season, but Costco’s strong results keep proving that it is no ordinary retailer. The warehouse club has been firing on all cylinders lately, attracting budget-conscious shoppers across the income spectrum. Read more here
Cadbury-parent Mondelēz International forecast a bigger-than-estimated drop in its annual profit on Tuesday, signaling pressures from higher costs, including from surging cocoa prices, sending its shares down nearly 6% after the bell. Prices of cocoa — a key ingredient in chocolate — have increased relentlessly over the past year, forcing companies such as Mondelez to hike prices of their products. That has pushed budget-strained consumers, who were already grappling with a cost-of-living crisis, toward cheaper alternatives. Read more here
As egg prices have skyrocketed due to bird flu, some restaurants passing on the added cost by asking customers to pay per egg. Rather than hiking prices on their menus, which are costly to reprint, they are letting diners know upfront that each egg in an omelet, breakfast burrito and French toast comes with a fee. Read more here
‘This is a new era of food insecurity,’ a Feeding America researcher says. Food banks across the nation are seeing a similar story: A post pandemic wave of demand for food driven by working people caught in America’s cost-of-living crunch. Read More Here
Given a large portion of the population is affected by financial strain, cash flow shortages are not an isolated issue. According to the report, 22% of consumers experience cash flow shortages occasionally, while 13% report facing such challenges frequently. Millennials are particularly impacted by these financial difficulties, with 17% saying they experience cash shortfalls regularly. By comparison, only 6.6% of baby boomers and seniors face similar challenges. Read more here
Position: Amazon, Costco COST
Cybersecurity, Data Privacy
Food delivery company GrubHub disclosed a data breach impacting the personal information of an undisclosed number of customers, merchants, and drivers after attackers breached its systems using a service provider account… depending on the affected individual, the attackers gained access to names, email addresses, and phone numbers, as well as partial payment card information (including card type and last four digits of the card number)… Read more here
64% of financial institutions said their organization had experienced cybersecurity incidents in the past 12 months. Researchers found that 71% of respondents reported zero-day attacks as the key concern to safeguarding applications and APIs, followed by dwell time (43%) and lack of visibility into the application layer (38%). Read more here
Position: Alphabet, Elastic, First Trust Nasdaq Cybersecurity ETF CIBR, Microsoft
Energy Pain Point
Arizona Public Service, Salt River Project and Tucson Electric Power on Feb. 5 jointly announced that they have been monitoring emerging nuclear technologies and have a shared interest in evaluating their potential, in response to growing power demand around the state. Read more here
Southeast Asia’s only nuclear power plant, completed four decades ago in Bataan, about 40 miles from the Philippine capital Manila, was built in the 1970s but left idle due to safety concerns and corruption. It has never produced a single watt of energy. Now the Philippines and other countries in fast-growing Southeast Asia are looking to develop nuclear energy in their quest for cleaner and more reliable energy. Read more here
Position: Eaton ETN, VanEck Uranium & Nuclear ETF
Luxury Buying Boom
Estee Lauder may trim as many as 7,000 jobs by fiscal 2026, more than 11% of its workforce, after the global beauty cosmetics maker lost money in its most recent quarter as reported a 6% sales slump. The New York company behind such brands as MAC, La Mer and Aveda tempered its profit outlook as the economies of China and Korea slow, in addition to global geopolitical uncertainty. Read more here
Weak consumer spending in China, which is grappling with youth unemployment and a property crisis, has been a major concern for the luxury goods industry and has slowed demand recovery in the region, significantly impacting brands such as Canada Goose. Read more here
In order to establish their presence in the Indian market and satisfy the rising demand for luxury goods by Indian consumers, up to 27 new international retail brands entered the country in 2024, nearly doubling from 14 in 2023, according to real estate consultant JLL. According to the company, 60 foreign merchants have entered the Indian market in the last four years in an effort to satisfy the country’s ongoing demand for international brands. Read more here
Safety & Security
“The Kingdom allocated approximately $78 billion to the military sector in the 2025 budget, which constitutes 21% of total government spending and 7.1% of Saudi Arabia’s gross product,”…The statement further noted that the Kingdom has witnessed a 4.5 percent annual defense growth since 1960, adding that it has become the fifth largest defense spender worldwide and the largest in the Arab world. Read more here
As the Philippines beefs up its defensive posture, pivoting from internal security to territorial defense, the government has lined up a series of acquisitions in line with the new plans… Funding comes from the 2025 national budget that President Ferdinand Marcos signed into law Dec. 30, 2024. It included 271.9 billion pesos (US$4.65 billion) for the Department of National Defense (DND), a 12.3% hike compared to a year earlier. Read more here
The combination of Russia’s war of aggression in Ukraine, instability in the Middle East and broader global power shifts means that Europe must take greater responsibility for its own security. The European Commission estimates that an additional €500bn in defence investment is needed over the next decade. Read more here
Position: Lockheed Martin LMT
The Strategies Behind Our Thematic Models
Aging of the Population - Capturing the demographic wave of the aging population and the changing demands it brings with it.
Artificial Intelligence – Software, chips, and related companies that facilitate the collection and analysis of large data sets and autonomous generation of solutions given non-machine language prompts.
Cash Strapped Consumer - Companies poised to benefit as consumers stretch the disposable spending dollars they do have.
CHIPs Act – Capturing the reshoring of the US semiconductor industry and the $52.7 billion poised to be spent on semiconductor manufacturing.
Cybersecurity - Companies that focus on protecting against the penetration of digital networks and the theft, ransom, corruption or destruction of data.
Data Privacy & Digital Identity - Companies providing the tools and services that verify authorized users and safeguard personal data privacy.
Digital Infrastructure & Connectivity -The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment.
Digital Lifestyle - The companies behind our increasingly connected lives.
Digital Payments - This model focuses on companies benefitting from the accelerating structural adoption of digital payments and financial technology (FinTech).
Energy Pain Point - Companies poised to prosper from rising power demand.
EV Transition - Capturing the transition to EVs and related infrastructure from combustion engine vehicles.
Guilty Pleasure – Companies that produce/provide food and drink products that consumers tend to enjoy regardless of the economic environment and potential long-term health hazards associated with excessive consumption.
Homebuilding & Materials – Ranging from homebuilders to key building product companies that serve the housing market, this model looks to capture the rising demand for housing, one that should benefit as the Fed returns monetary policy to more normalized levels.
Luxury Buying Boom - Tapping into aspirational buying and affluent buyers amid rising global wealth.
Rebuilding America - Turning the focused spending on rebuilding US infrastructure into revenue and profits.
Safety & Security – Targeted exposure to companies that provide goods and services primarily to the Defense and security sectors of the economy.
