Brian Nelson

Microsoft’s First Quarter Fiscal 2026 Results Solid

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Image Source: TradingView By Brian Nelson, CFA On October 29, Microsoft (MSFT) reported excellent first quarter fiscal 2026 results with revenue and non-GAAP earnings per share coming in ahead of expectations. Revenue increased 18% (up 17% in constant currency), while operating income jumped 24% (up 22% in constant currency). Non-GAAP net income was $30.8 billion, increasing 22% (up 21% in constant currency), while non-GAAP diluted earnings per share came in at $4.13, increasing 23% (up 21% in constant currency). Management had the following to say about the results: Our planet-scale cloud and AI factory, together with Copilots across high value domains, is driving broad diffusion and real-world impact. It’s why we continue to increase our investments in AI across both … Read more

Booking Holdings Looks to Robust Growth in Fourth Quarter

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Image Source: Booking Holdings By Brian Nelson, CFA On October 28, Booking Holdings (BKNG) reported better than expected third quarter results with both revenue and non-GAAP earnings per share exceeding the consensus forecast. Revenue grew 13% compared to the third quarter of 2024, or 8% on a constant currency basis. Room nights increased 8% compared to the third quarter of 2024, while gross bookings advanced 14% compared to the same period a year ago, or 10% on a constant currency basis. Adjusted earnings per share and adjusted EBITDA expanded 19% and 15% year-over-year, respectively. Management had the following to say about the results: We are pleased to report a strong third quarter, with 8% room night growth and double-digit gains … Read more

Visa Expects Low Double Digit Earnings Growth for Fiscal 2026

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Image Source: Visa By Brian Nelson, CFA On October 28, Visa (V) reported better than expected fourth quarter fiscal 2025 results with both revenue and non-GAAP earnings per share exceeding the consensus forecast. Net revenue increased 12%, or 11% on a constant currency basis, while non-GAAP net income increased 7% to $5.8 billion, or $2.98 per share, the latter up 10% and better than the $2.97 consensus. Payments volume increased 9% in the quarter, while total cross-border volume totaled 12%, with processed transactions increasing 10%. Visa’s management had the following to say about the results: In our fourth quarter, continued healthy consumer spending drove net revenue up 12% to $10.7 billion. For the full year, Visa delivered strong performance, with … Read more

UnitedHealth Group Raises Full Year 2025 Earnings Outlook

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Image Source: TradingView By Brian Nelson, CFA On October 28, UnitedHealth (UNH) reported better than expected third quarter results, with revenue and non-GAAP earnings per share exceeding the consensus forecast. Third-quarter revenue grew 12% year-over-year, to $113.2 billion, while adjusted earnings came in at $2.92 per share. In the quarter, UnitedHealthcare revenues grew 16%, while Optum revenues grew 8% year-over-year. Cash flow from operations were $5.9 billion, or 2.3x net income. Its medical care ratio (MCR) of 89.9% was in line with expectations that it outlined in the second quarter. Management had the following to say about the quarter and outlook: We remain focused on strengthening performance and positioning for durable and accelerating growth in 2026 and beyond, and our … Read more

What Is Gold Really Worth?

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“What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As ‘bandwagon’ investors join any party, they create their own truth – for a while.” — Warren Buffett (2011 annual letter to shareholders) Image: Gold prices have surged since 2020, and they recently hit an all-time high. Image Source: TradingView By Brian Nelson, CFA Stocks have quite a few variables that can affect their intrinsic value estimate, but what about gold’s intrinsic value? Does gold even have value? And if so, how … Read more

Thinking Slow: 3 Research Blind Spots That Changed the Investment World

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Dear members: — Daniel Kahneman in his text Thinking, Fast and Slow (1) divided the human psyche into two systems. The first system is instinctive and emotional, often set on autopilot, while the second system is slower and more logical, requiring a calculating conscious. Many of the maxims the investment world takes for granted today suffer from conclusions that are made rapidly, almost without thinking, driven by our first system, creating what I call research blind spots. — In World War II, Allied bombing raids were suffering from very high casualty rates. It was estimated that for those pilots that were flying at the beginning of the war, only about 10% survived, a terrible loss rate. Bombing was crucial to the Allied … Read more

Your Role as a Choice Architect

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“As we’ve shown time and time again, you don’t need to look far to beat the market return (or, by comparison, to have a healthy diet). If something is not on the menu at Valuentum, it means the chef has something better cooking in the kitchen.” — Dear members: — Richard Thaler in his groundbreaking book Nudge (1), co-written with Cass Sunstein, talked about the role of the choice architect. A choice architect is basically someone or some organization that has the responsibility for organizing the context and content in which people make decisions. — A good example of a choice architect might be a cafeteria worker that has to decide how to organize the food in a buffet line … Read more

Ford Reports Record Third Quarter Revenue

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Image Source: Ford By Brian Nelson, CFA On October 23, Ford (F) reported better than expected third quarter results. In the quarter, revenue hit a record $50.5 billion (up 9% year-over-year), net income was $2.4 billion (up from $0.9 billion in the year-ago period), while adjusted EBIT came in at $2.6 billion (flat compared to last year’s quarter), inclusive of $0.7 billion of adverse net tariff-related impacts. Operating cash flow was $7.4 billion (up from $5.5 billion last year), with adjusted free cash flow coming in at $4.3 billion, up from $3.2 billion in last year’s quarter. Adjusted diluted earnings per share was $0.45, down from $0.49 in the same period a year ago, but $0.09 better than expectations. Management … Read more

IBM Raises Full-Year Revenue Growth and Free Cash Flow Outlook

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Image Source: TradingView By Brian Nelson, CFA On October 22, IBM (IBM) reported third quarter results that exceeded consensus expectations on both the top and bottom lines. Revenue of $16.3 billion was up 9% (7% in constant currency), as software revenue grew 10% (9% in constant currency), consulting revenue grew 3% (2% in constant currency), and infrastructure revenue grew 17% (15% in constant currency). Operating (non-GAAP) gross profit margin totaled 58.7% in the quarter, up 1.2 percentage points, while its operating (non-GAAP) pre-tax income margin totaled 18.6%, up 2 percentage points. Year-to-date, net cash from operating activities came in at $9.2 billion with free cash flow of $7.2 billion. Management had the following to say about the quarter: This quarter … Read more

Tesla Faces Earnings and Margin Pressure But Free Cash Flow Soars

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Image Source: Tesla By Brian Nelson, CFA On October 22, Tesla (TSLA) reported mixed third quarter results, with revenue beating the consensus forecast, but non-GAAP earnings per share missing expectations. Total revenue increased 12%, to $28.1 billion, but total gross profit increased a modest 1%, as its GAAP gross margin was squeezed 185 basis points in the period. Income from operations came in at $1.6 billion, which dropped 40% year-over-year, as its operating margin fell 501 basis points. Adjusted EBITDA fell 9% with its adjusted EBITDA margin dropping 348 basis points. Non-GAAP net income fell 29%, while non-GAAP earnings per share fell 31% in the quarter. Management summarized its quarterly performance as follows: In Q3, the Tesla team achieved record … Read more