McD's Orders Up AI, Thai Luxury Shoppers, and More Stories That Speak to Our Portfolio
We continue to see expanding AI adoption, high-end retailers go from China to Thailand and more.
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We can joke that McDonald’s MCD is cooking up a “McAI” plan, but when Goldman Sachs GS rolls out an AI assistant, things really are starting to heat up. Those two artificial intelligence news nuggets are among the many reports we've spotted this week that speak to our investment strategies at the Pro Portfolio. Others include stories about cybersecurity, defense spending, and a potential extension of the CHIPs Act. Let's dig in:
Artificial Intelligence
“Microsoft Corp. is raising the price of its package of Office apps for consumers, a bet that subscribers will be willing to cough up more for access to new artificial intelligence tools. The Microsoft 365 family subscription, which offers access to Word, Excel and other apps for as many as six people, will now cost $130 a year, a 30% increase, the company said in a blog post Thursday. The version for individuals is rising 43% to $100. The price changes take effect immediately for new subscribers and will affect existing ones when they renew.” Read more here
McDonald’s has announced a multi-year extension of its partnership with artificial intelligence company Cognizant, which was first signed in 2017. According to the companies, McDonald’s will leverage Cognizant’s technology to enhance labor and operational efficiencies by supporting the chain’s global finance systems and human capital management, including payroll processing, franchisee management, data management, and legal applications. Read more here
Goldman Sachs is rolling out a generative AI assistant to its bankers, traders and asset managers, the first stage in the evolution of a program that will eventually take on the traits of a seasoned Goldman employee, according to Chief Information Officer Marco Argenti. Read more here
Google has agreed to a new investment of more than $1 billion in generative AI startup Anthropic… The fresh funding builds on Google’s past investments of $2 billion in Anthropic and 10% ownership stake in the startup, as well as a large cloud contract between the two companies. Anthropic is most well known for its Claude AI chatbot. Read more here
Position: Amazon AMZN, Alphabet GOOGL, Elastic ESTC, Meta META, Microsoft MSFT, ServiceNow NOW
Artificial Intelligence, Data Privacy
LinkedIn has been sued by Premium customers who said the business-focused social media platform disclosed their private messages to third parties without permission to train generative artificial intelligence models. According to a proposed class action filed on Tuesday night on behalf of millions of LinkedIn Premium customers, LinkedIn quietly introduced a privacy setting last August that let users enable or disable the sharing of their personal data. Read more here
Artificial Intelligence, Digital Infrastructure
Demand for artificial intelligence chips is set to grow in the coming years as health care, education and financial sectors adopt more services from AI agents such as Microsoft Corp.’s Copilot, said Julian Ng, chief executive officer of Singapore-based GVT. That’s a boon for up-and-coming equipment suppliers such as GVT, as chipmakers need to invest in their production systems. “We are riding on the AI wave,” Ng said in an interview. Those saying AI is a bubble are wrong because many industries are yet to adopt the technology, he said. Read more here
Position: Applied Materials AMAT, Marvell MRVL, Nvidia NVDA, Qualcomm QCOM
Artificial Intelligence, Digital Infrastructure, Rebuilding America
President Trump announced Tuesday billions of dollars in private sector investment to build artificial intelligence infrastructure in the United States, although Elon Musk soon cast doubt on the size of the investment. OpenAI, Softbank and Oracle are planning a joint venture called Stargate, Mr. Trump said in a White House briefing… Executives from the companies are expected to commit $500 billion into Stargate over the next four years… In the briefing, Ellison said 10 data centers for the project were already under construction in Texas, and that more were planned. Sources previously told CBS News that Stargate would start with a data center project in Texas, and eventually expand to other states. Read more here
The unit of Blackstone dedicated to investments in the energy industry has agreed to acquire Potomac Energy Center, the asset manager told Reuters on Thursday, in a deal symbolizing the allure to investors of power plants sited near data centers…The boom in artificial intelligence and data centers is driving power demand to record levels, with growth expected to persist for the rest of the decade. This is making generation assets increasingly attractive to buyers, especially so for gas-fired power plants which can provide the consistent power output that data centers require. Read more here
Position: Eaton ETN, Marvell MRVL, Nvidia NVDA, United Rentals URI, Vulcan Materials VMC
Artificial Intelligence, Digital Lifestyle
Samsung unveiled how SmartThings, its smart home platform, will introduce AI features that allow users to simplify their everyday life through ambient sensing technology and generative AI… Samsung shared that SmartThings will use advanced sensor technology, like millimeter-wave (mmWave) and sound sensor devices in users homes, to understand customers’ daily activities like cooking or sleeping and create the ideal environment. Read more here
Samsung Electronics Co. is banking on an artificial intelligence overhaul and tweaked hardware designs to sell its new line of Galaxy S25 smartphones. The company launched three new devices at an event Wednesday in San Jose, California: the S25 starting at $799, a larger S25+ and the top-tier S25 Ultra priced from $1,299 and up. Read more here
Position: Qualcomm (QCOM), Universal Display (OLED)
Cash-Strapped Consumer
Consumer stress has intensified, with an escalating share of credit card holders making only minimum payments on their bills, according to a Philadelphia Federal Reserve report. In fact, the share of active holders just making baseline payments on their cards jumped to a 12-year high, data through the third quarter of 2024 shows. Read more here
Position: Amazon AMZN, Costco COST
Cash-Strapped Consumer, Digital Lifestyle
Free shipping is an online shopping feature that 66% of consumers take into account when selecting an online store…The second-most sought-after online shopping feature, an easy checkout process, was mentioned by half of consumers, the report found. Three features — the ability to track deliveries, the availability of fast delivery, and easy and convenient return and refund procedures — were each mentioned by 46% of consumers. Read more here
Position: Amazon AMZN, Costco COST
CHIPS Act
…Taiwan’s biggest chip company is confident the Trump administration will continue funding its projects in the U.S… During his campaign for the White House, Trump publicly criticized the bill and its price tag, arguing instead that tariffs were a more effective strategy to onshore chip manufacturing. The President-elect also accused Taiwan of “stealing” U.S. chip business. However, industry experts have told CNBC that they expect Trump to leave the policy mostly intact due to its bipartisan support in Washington. Read more here
Position: Applied Materials AMAT
Cybersecurity
Residents across the United States are being inundated with text messages purporting to come from toll road operators like E-ZPass, warning that recipients face fines if a delinquent toll fee remains unpaid. Researchers say the surge in SMS spam coincides with new features added to a popular commercial phishing kit sold in China that makes it simple to set up convincing lures spoofing toll road operators in multiple U.S. states. Read More Here
The Federal Trade Commission (FTC) is taking action against General Motors (GM) and its subsidiary, OnStar, for unlawful collection and selling drivers' precise geolocation and driving behavior data from millions of vehicles. The U.S. government organization proposes a settlement in which the automotive giant will be barred from sharing drivers’ sensitive data for five years. Read more here
Hackers are distributing close to 1,000 web pages mimicking Reddit and the WeTransfer file sharing service that lead to downloading the Lumma Stealer malware. Read more here
Position: Elastic ESTC, First Trust Nasdaq Cybersecurity ETF CIBR, Microsoft
Luxury Buying Boom
As sales of luxury brands in China crater amid a wider slump in consumer spending, some of the world’s most exclusive labels are turning their gaze on Thailand… Of the 26 luxury international brand-name store openings in Southeast Asia over the past 12 months, Thailand accounted for the most with 11, Luxurynsight data show. Read more here
“A growing number of companies, including a seller of vintage goods and a budget hotel chain, are poised for a strong 2025 as increased demand from foreigners boosts earnings outlooks. Japan welcomed almost 37 million inbound visitors in 2024, data released last week by the Japan National Tourism Organization showed. That’s almost a third of the country’s population. Those numbers are set to increase to 40.2 million this year, driven by the weak yen and the World Expo 2025 in Osaka, travel agency JTB Corp. predicts. Read more here
Position: None
Safety & Security
European Commission industry chief Stéphane Séjourné said he agreed Europe needs to invest more in its defense capacities but argued that it would be impossible to do so if Trump launches a trade war with Europe. 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.
