In case you missed it:

Macro Housekeeping:

Quick note on the negative GDP reading from this morning. That was entirely related to the aforementioned import front-loading we’ve extensively covered in portfolio management articles. Imports reduced the GDP reading by nearly 5 points (lots and lots of gold imports especially), with that hit a full 1.5 points larger than the help from higher inventory levels. Consumption was actually a bit better than expected, with 1.8% Y/Y annualized growth vs. a little over 1% growth expected. Real final sales to private domestic purchasers, which excludes net export and government spending noise, rose by 3% Y/Y and is stable.

My detailed Microsoft earnings review will be published this week. For now, the brief snapshot of financials.

Results:

Guidance & Valuation:

MSFT trades for 28x EPS. EPS is expected to compound at a 12% clip for the next two years.

Balance Sheet:

Sales Trends:

Margin expansion will not be a priority until Fiscal Year 2026. There’s too much to fix.

Starbucks is not currently providing forward guidance.

I do not think the P/E chart is currently accurate or relevant. Estimates will keep falling following this report.

Setting the Table:

Brian Niccol is now 7 months into his journey with Starbucks. Considering how poorly the company had been run for years, the global organization was a complete mess when he took over. As I said when he joined, in the earnings preview and as I will say again now, this was always going to take some time; this was never going to be a good quarter. It’s important to focus on signs of progress with customer experience and underlying trends to gauge if things are heading in the right direction. Progress was the theme of the call and will be the theme of this section.

His optimism in the Back to Starbucks turnaround has morphed into “confidence” and he potentially “sees more opportunity than he imagined.” Let’s find out why.

Fixing Starbucks – Throughput:

Wherever it finds throughput gains… transaction growth follows. This is a core focus. 

Starbucks is all-in on labor rather than endlessly adding more equipment to perfect throughput. That marks a shift in Starbucks attempting to gain cost efficiencies through labor cuts in recent years, per Niccol.

As of last quarter, Niccol abandoned pretty much everything the old team had been working on aside from the Siren Craft system. This system includes its Clover Vertica coffee machine (seamlessly brews coffee in under 30 seconds), cold brew equipment and food warming machines. Implementing all of this required heavy CapEx and lengthy store disruptions. So? Starbucks is “not moving forward” with anything but Clover Vertica. This marks the last strategic initiative from the old team that Niccol has now eliminated. They may use the system in some suburban stores that do a ton of drive-thru business, but no longer anywhere else. It is adamant that more effectively staffing its stores will push it towards its 4 minute order fulfillment goal far faster and more affordably than Siren Craft would have. 

Through its new mobile order sequencing and prioritization algorithm, which finished a successful pilot in 400 stores, it’s ready to step on the gas pedal here. It’s preparing to push this new approach to 3,000 total stores this year. This confidence is in response to the algorithm already reducing in-store order fulfillment timing by 2 minutes and enabling its drive-thru channel to beat the 4 minute target. Simply put, this takes a lot of the guesswork out of order triaging, thus helping staff members know what to do next. It’s no longer a “just wing it” approach like it has been for years.

In addition to the algorithm, Starbucks’s new service model also includes explicitly stated standards and “streamlined workflows.” As part of this, it also launched a new “Shift Marketplace,” allowing employees to trade or add shifts within their local geography. This improved last-minute shift fill rates by 10x and is leading to more stable labor allocations. All in all, its new labor approach was successfully deployed in 700 stores. This year, the pilot will expand to 3,000 more stores just like the order sequencing model. Both initiatives are top priorities and are being implemented in tandem. 

All of this work is already reducing service delays in its stores with no impacts to mobile ordering. Specifically, it’s boosting sub-4 minute order fulfillment rates to 75% of peak volume. It’s confident that this will delight customers more frequently and drive transaction volume over time.

Fixing Starbucks – Improving the In-Store Experience & Store Growth:

Customer responses to handwritten notes, hand-delivered beverages, re-instituted condiment bars, ceramic mugs, free refills and expanded guest seating have been quite positive. It’s seeing customers stick around its locations more frequently, and will use this positive signal to keep driving a better brick-and-mortar experience. Its “Heritage” initiative will soon be implemented across New York City and Southern California to improve lighting, seating and the overall ambiance. These plans come with an obsessive focus on minimizing CapEx and store disruption. What a concept. While they reshape the pipeline, they will also work on reducing CapEx per new store to improve already strong cash-on-cash returns. While this happens, it sounds like new store growth will temporarily slow. While it remains confident in its ability to 2x U.S. stores, the existing footprint needs some love.

“While stores still give us great internal rate of returns by most standards, our standard is higher. We've historically done better. I think we can do better, and we will.”

New CFO Cathy Smith

Furthermore, its new store pipeline also needs some re-thinking. It was not tethered to growth markets and size of opportunity (for whatever reason) like it should have been. That’s changing.

Fixing Starbucks – Marketing:

The old team essentially abandoned nationwide brand marketing campaigns to focus solely on its rewards members. They turned their back on casual Starbucks customers, and the business suffered accordingly. Q2 marked a new brand campaign, including a free Monday coffee that generated its “second highest Monday gross sales day ever.” Customer intent, or customers ranking Starbucks as their top coffee option, set a 2-year high and its social media engagement tripled Q/Q. These are all abstract pieces of evidence pointing to SBUX finding its footing. But? As these items take hold and build, the team is convinced that they will lead to profitable growth going forward.

Fixing Starbucks – The Menu:

Like order prioritization, menu decisioning became trial and error for Starbucks under the previous team. They abandoned carefully crafted, stage-gated processes for rolling out new items because they thought they knew better. Boy were they wrong. Starbucks is now re-implementing “an agile test-and-learn approach” to more thoughtfully introduce new items. Speaking of which, in the coming months, Summer-Berry Refreshers are coming back along with a new espresso beverage that has tested well. It also started… well… listening to its customers. It removed sugar from its matcha lineup and enjoyed 40% Y/Y growth for that beverage type. It added a new Cortado (Spain-inspired espresso) which has “quickly become a popular core offering. It’s testing scalable freshly baked food processes and borrowing from successful launches in the UK to expedite rollouts elsewhere. Interestingly, it’s also working on a “new health and wellness platform,” which will debut later in 2025.

For the afternoon day part, it’s toying with adding more sparkling drinks, “sippable coffee drinks” and snacks to improve overall volumes. This will require full rollout of electronic menu boards, so that it can display a more streamlined array of relevant options for every time of day, rather than everything all the time. This is already done in 25% of U.S. stores.

In addition to adding all of these potential new items, Starbucks also needs to cut a lot of existing options that are creating more clutter than financial success. It must do this to make room for the new innovation and the types of impactful limited-time-only releases that have made Chipotle so successful. Last quarter, it told us about plans to cut the menu size by 30%, and there were no updates to that on this week’s call.

Fixing Starbucks – Early Signs of North American Progress:

All of these signs remain quite subtle, but less so than 3 months ago. While all of these aforementioned fixes need more time to fully work, there are early signs of things improving in North America. Qualitatively speaking, partner engagement is rising and employee turnover set a new company low. Quantitatively speaking, discounting is down and “quality transactions are driving more of the sales.” Market share, and brand scores in the USA and Canada both ticked higher and comparable sales in Canada turned positive Y/Y — thanks to 12.5% food growth. Vitally, marketing outside of its loyalty program is working as intended, as non-member traffic “saw stabilization” throughout the quarter. That continued to improve into the current quarter. Perhaps the most important sign of progress is that comparable store sales trends overall were better than they’ve been in a year. They’re still -1% Y/Y and nothing to celebrate, but are moving in the right direction, despite an increasingly tough backdrop. Again… things look very ugly from a headline financial perspective. But comps get easier as these fixes work their magic. Things won’t remain ugly for very long if these trends continue.

“I know from experience that when you focus relentlessly on the customer, you take care of your people, improve your operations, and carefully manage costs, the financial results will follow.”

CEO Brian Niccol

“So I like where we're headed. I think we're going to build back with better transactions, which sets us up for, I think, some great growth going forward. And I think margins will be part of that growth story in the longer term.”

CEO Brian Niccol

Fixing Starbucks – The International Turnaround is Leading:

8 of its top 10 markets delivered flat or positive comp growth. In the UK, it started taking market share once more thanks to the successful food launches. Japan enjoyed its 16th straight quarter of positive same store sales and stores in the Middle East reversed negative sales trends too. In China, near-term changes are helping a bit, as it stays committed to that market. Still, Niccol did tease being “open to how they achieve that growth.” To me, this says a licensing deal to create a more asset-light Chinese business model is likely. Allowing a Chinese counterpart to economically benefit from SBUX’s growth is what that government wants. That’s the reality. This would take the potential target off of its back in that important growth market. 

International is a big reason why Starbucks jumped from 13.5% of stores with positive comparable sales in Q1 to 25% in Q2. UCAN helped a bit… but international growth helped more. It sounded like that has risen to 42% so far this quarter.

Macro:

Starbucks sources coffee from 28 countries, with a heavy reliance on Latin America, where tariff policy is more favorable. It does source merchandise from China, but it’s actively working on changing that; moving a t-shirt and mug supply chain should be rather seamless. From a coffee commodity pricing perspective, as we talk about a lot, Starbucks is quite proactive with its hedging program. This has allowed its average cost of coffee to materially lag headline commodity pricing.

From a consumer point of view, while SBUX is far from immune to any potential recession, it’s focused on what it can control. And the ironic part? There are so many easy fixes to make to improve results that this version of SBUX may fare better (in terms of profit growth) during an economic downturn than a previous version would have. Comps will be so wonderfully easy for a while and repairs to the business model should be material. That can help offset an economic downturn.

“I don’t know how consumers will trend but I’m confident that we’re building a globally resilient business.”

CEO Brian Niccol

Starbucks App Updates:

Starbucks will add mobile order scheduling. Not only is this convenient, but it should push the firm closer to its throughput goals without adding much cost to the model.

I think two things are true about this quarter. First, the results were awful as expected. There’s no way around that. But? I think the putrid financial performance is now a backward-looking reflection of the old team’s blunders. And secondly? Brian Niccol is clearly the best person for this job. While I am always cautious with charismatic leaders like he is, his track record is second to none and my faith in him is sky-high.  I think the signs of a turnaround have begun to pop up and I expect this quarter to mark the beginning of a Starbucks comeback. He is doing all of the right things… and while this massive mess of a business can’t be fixed overnight… he’s righting the ship even faster than I thought he would.

Tomorrow morning, I plan to boost my stake in the company from 2.8% of total holdings to 4.0% – marking a roughly 43% increase. I am confident in this position. I would welcome more multiple contraction to keep building out the stake beyond what it will be tomorrow morning after the purchase.

Robinhood is a next-generation brokerage business quickly expanding into core financial services like savings accounts, event contracts and eventually so much more. It pioneered commission-free trading, has a slick user-interface, and boasts a compelling subscription (under Robinhood Gold) that has continued to briskly attract more users.

More Growth Metrics:

Robinhood raised expense guidance from $2B-$2.1B to $2.085-$2.185B. This was solely related to closing its TradePMR acquisition. Bitstamp M&A closing this summer would add more costs to this outlook.

While we don’t get more than expense guidance, it did say that April net deposits were $6.5B. This gives it a great chance to match Q1’s strong performance. Equity trading is at a 4-year high, Crypto volume of $8B likely means more Q/Q volume declines (which is expected).  Finally, it now has 3.3M gold subscribers as of today. That marks a slower pace of adds vs. Q1, but still a solid rate of expansion.

Robinhood trades for 34x forward EPS. EPS is expected to fall by 20% Y/Y this year and rise by 17% Y/Y next year. Estimates could move a bit higher following this report, although they may not based on the modestly raised expense guidance.

Win Active Traders:

Robinhood remains fixated on winning the hearts and minds of active traders. These are the consumers that will engage the most frequently with its transaction-based products and drive the highest, stickiest ARPU.

With this in mind, it will remain focused on upgrading its desktop product called Robinhood Legend. So far this year, it has added improved latency, index-level options, new indicators, joint accounts and more charting options. And? They will continue to listen closely to consumers to rapidly instruct more iterating. Event contracts are another exciting piece of this opportunity. Last month, Robinhood created a dedicated page for betting on a wide array of outcomes. This still includes sports (about 50% of total volume), although the regulatory backdrop there remains highly fluid. Fellow DraftKings or Flutter bulls should be rooting for Robinhood being allowed to offer sports contracts. Why? Because although Robinhood will surely take a bit of market share, the market is massive and this would allow everyone to immediately enter 50 states at federal tax rates. It would be a big win for Robinhood and the field. Since launching this product 6 months ago, overall contracts crossed 1 billion.

But we can’t talk about winning active traders without discussing Robinhood Cortex. This was one of the 3 main products it introduced at its March Robinhood Gold event. It’s coming later in the year for Gold Subscribers, with an initial focus on options trading first and crypto currencies second. The options product will include its “Trade Builder.” This offers step-by-step options trades and strategy suggestions based on your underlying stock thesis. If you think something is a clear buy for the next few years and want to express that optimism via options, it will likely point you to a menu of LEAPs. It also debuted a slick new interface for options chains that is available today. Eventually, Cortex will be used for all facets of Robinhood’s apps. It will be leaned on to query data and turn price alerts into contextualized alerts with explanations for the sudden move. It calls these “Stock Digests.” Generally speaking, it will provide timely and condensed information on technicals, breaking news and Robinhood community investment trends. The company will use world-class reasoning models from partners, its own data and a strict data quality filter to ensure hallucination rates are as low as they need to be with investment help.

Going forward, the company expects signs of success here to be market share gains across all asset classes. And the trends here are already quite good.

Gain Wallet Share:

Robinhood Banking is a key product within this initiative. It is how the company will ideally win more primary banking relationships and a higher percentage of a customer’s overall assets. As previously announced, the Robinhood credit card app is rebranding to Robinhood Banking – coming late this year. This will be the company’s official entrance into online banking through a 3rd party partnership with Coastal Community Bank. HOOD already had a scaled direct deposit business with 4% yield on cash held, but now it’s morphing this into a more formal checking and savings account suite with more bells & whistles like automated tax filing. Onboarding for account creation and direct deposit takes just a few clicks, with the entire process happening natively on the app. It will offer joint accounts, goal-oriented savings buckets and children’s accounts with allowances. This will feature the same 4% account APY and will integrate with the Robinhood Gold card.

Aside from this, Robinhood Strategies is the main product to discuss. This is the firm’s new investment advisor. It offers a “hands-off” way to invest your money, with a combination of autonomous service and authority to approve or modify recommended actions. The product is curated by members themselves, with an onboarding questionnaire used to understand customer preferences and risk tolerance to point them to ideal allocations. It’s a very similar concept to the robo-advisor products we see from so many others, but there’s an interesting cost structure here. There’s a 0.25% asset fee (like for typical robo-advisors) but also a fee cap that limits costs for service at $250 per year for Gold subscribers. Considering advisors can routinely cost thousands and sometimes millions for especially wealthy clients, the $250 cap (depending on how good the service is) should be popular. This product already has 40,000 users and $100M in managed assets, with the TradePMR acquisition (a digital Registered Investment Advisor) expected to support this expansion further. TradePMR will include the addition of $40B in new assets for Robinhood.

Robinhood Gold:

Robinhood Gold continues to maintain 5x assets under custody and 4x retirement account adoption for members vs. non-members. It is working as intended, with the scaled rollout of its credit card being the next real test of its unit economics. They’ve rightfully gone slowly to ensure the underwriting models are ready for growth. Now they’re ready to lean in. It doubled gold credit cardholders from 100,000 to 200,000 this month and will keep accelerating issuance for its 3M person waiting list. Repayment trends so far are quite good early on. We shall see how this does as it scales. Leadership is confident.

Go Global:

Robinhood now has 150,000 customers across the UK and Europe. Its planned purchase of Bitstamp is on schedule to close this summer.

It has plans to launch in APAC with its new Singapore headquarters and has its eyes on 3 more licenses for more international expansion this year.

More on Futures, Crypto and Active Traders:

Since the broad rollout of futures contracts this quarter, they’ve seen very nice adoption with 4.5M contracts already traded. They expect this to keep accelerating, as it unlocks a way to take bearish positions on certain assets. They don’t currently allow equity shoring, so that should be popular for active traders. Robinhood sees futures eventually turning into another $100M business (it has 9 of them currently). It’s already up to $20M per year. 

Speaking of active traders, Robinhood sees the shift from beginners to this demographic as insulating it from macro cycles to a certain extent. This will always be a cyclical business given the nature of how it collects revenue, but I think that makes sense. Active traders are more prone to trading sideways or market corrections than a typical beginner.

In terms of crypto, while trading meme coins has turned into a nice business for them, they have their sights set on much more. I think that’s highly important, considering crypto is a wildly cyclical asset class. Expansion beyond spot trading can help the highs and lows to not be so severe. Tokenization is the main price here, as it sees this unlocking access to private investments and other asset classes previously reserved for the ultra-wealthy. We’ve seen SoFi get into private investment access, with a SpaceX and Anthropic offering. It seems like Robinhood will follow suit with this approach as regulations allow.

Business Products:

Robinhood will eventually offer 401K products for businesses, as well as stock plan administration for public companies. It is laser-focused on expanding to more institutional use cases through its Bitstamp M&A and planned features like these.

I need to separate the business from the investment for this section. I admire the company deeply. They move rapidly and test boundaries in an industry that needs significant reform. They debut products faster than anyone else in the space and have built several scaled businesses under the Robinhood umbrella.

At the same time, this investment case is just not for me. The majority of this business is still crypto and options contracts and those two things are inherently hyper-cyclical. They’re rightfully expanding away from these areas, but they’re expanding to other macro-sensitive products such as balance sheet risk-carrying credit cards. I have enough cyclical exposure in the portfolio. While I do think they are a sorely needed part of the industry, I also gravitate to the less flashy, more conservative disruptors within it. I see a future in which Robinhood does well and think the team deserves immense credit for their level of consistent execution. I simply prefer other, quieter investments. Admire the firm. Don’t hate the investment. But I also don’t love the investment.

Q2 revenue guidance, which “reflects a wider range of outcomes,” beat estimates by 0.5%. Q2 is the first full quarter where Temu and Shein cutting USA ad spend will hit Meta’s business. Considering this, I found the small beat to be quite heartening. It is wildly difficult to model how much of the lost demand will simply be sold to other buyers and at what price. This gives us our first tangible view from the company itself. And? The view is much better than feared in my mind. Beyond revenue, OpEx guidance was slightly lowered for the year while CapEx guidance was raised from $62.5M to $68M to support accelerated compute investments. Nvidia and AMD shareholders should love hearing that. Meta sees vast opportunity in the realm of AI and wants to spend more to capture that opportunity. This CapEx remains highly fungible and can be reallocated if need be. Most of it is also for core AI work connected to near-term revenue opportunities.

“So even with the capacity that we're bringing online in 2025, you know, we are having a hard time, meeting the demand that teams have for compute resources across the company.”

CFO Susan Li

“Specifically, we have seen some reduced spend in The US from Asia-based e-commerce exporters. We believe this is in anticipation of the de minimis exemption going away on May 2. A portion of that spend has been redirected to other markets, but overall spend for those advertisers is below the levels prior to April.”

CFO Susan Li

Meta trades for 22x forward EPS and likely closer to 19x-20x following this report. EPS is expected to grow by 4% this year and by 16% over the next two years (61% growth last year).

Table Setting:

On the Q4 call, Zuck talked about 2025 being the year where AI investments translate into year financial progress. This quarter, he split Meta’s AI work into 5 tangible categories that can drive the business today and into the future. The majority of this section will focus on that. All five of these categories rely on the powerful foundation of data centers, models and world-class distribution that make Meta special. The importance of this enabling bottleneck-free scaling on its AI work cannot be overstated.

And as one quick aside here, there’s been some negativity surrounding the Llama 4 model launches. All I’d say is those launches were the student models. The teacher model (Llama 4 Behemoth) has not yet been released. Everyone should be reserving judgement until that happens. For a review of the Llama 4 release, click here (section 9).

“Even with our significant investments, we don't need to succeed in all of these areas to have a good ROI. But if we do, then I think that we will be wildly happy with the investments that we are making.”

Founder/CEO Mark Zuckerberg

AI Work – Better Advertising:

Meta envisions a future where merchants can pick an objective and a desired cost per acquisition. After that, Meta will handle everything else. They’ll take all the guesswork out of designing messaging, content and uncovering potential users. This frictionless process, it thinks, will morph traditional advertising into “an AI agent that delivers measurable business results at scale.” And it thinks rising productivity stemming from GenAI will create more time for engaging entertainment on its apps. So? AI here means better ad relevance and more impressions. That’s an encouraging combo.

For some tangible examples of how this work is helping the core business, consider its new GenAI ads rec model (called GEM). On Reels, GEM is already boosting ad conversion rates by 5%. And perhaps more encouragingly, it’s allowing Meta to double ad performance on the same amount of compute and data. This is helping power 30% Y/Y growth in advertisers using its AI tools. For Advantage Plus automated campaign building, its updated campaign creation tool is testing well early on; Meta is now adding image generation and video expansion to Advantage Plus Creative. As a reminder, this service creates several different ad iterations, split-tests them, and selects the best one for a given user cohort. Lastly, its incremental attribution feature helps advertisers find larger, yet still hyper-relevant audiences for their products. This is lifting ad conversion rates by 46%. Tangible results… all thanks to its AI work.

AI Work – More Engaging Experiences:

Constant work on content recommendation algorithms continues to help engagement. Over the last 6 months, this work has boosted Facebook, Instagram and Threads time spent by 7% Y/Y, 6% Y/Y and 35% Y/Y, respectively. Video time spent overall is up 10% Y/Y as well. They’re finding that Llama models are able to “understand content more deeply than traditional recommendation systems” to create more interesting content matching for users. It infused Llama into Threads recommendation systems to enjoy a 4% boost to time spent on that app from that change alone. Speaking of Threads, it’s up to 350M MAUs and is slowly ramping up ad load. The company will continue to obsessively work on optimizing recommendation systems to keep these trends looking great.

With the new Edits app, Meta is making it far easier for creators to make quality content, with the help of a suite of GenAI tools to expedite work and create new possibilities.

AI will eventually also create brand new content formats. Zuck sees a future in which we interact with our content feeds in an entirely personal way. That experience was once impossible to scale, but is now feasible with GenAI. In the past, they’ve teased AI personalities like Snoop Dogg, and it’s easy to see how these can be directly injected into app feeds to create more granular interactions.

AI Work – Business Messaging:

Like GenAI makes the aforementioned Snoop Dogg experience possible, it also makes scaled business messaging possible too. That’s simply too expensive for the vast majority of businesses to do manually. Even for the ones who can… it’s an inevitable margin drag. Enter GenAI and Agentic AI. This can help drive engaging, spot-on customer interactions at far lower cost. And? The potential financial impact seems quite large. In Thailand and Vietnam, business messaging is already a large business because of the cost of labor. That places both nations in the top 11 for messaging revenue for Meta, despite both being lower than 30th for overall GDP. In other nations where labor costs are more prohibitive, Meta AI can greatly help… and that help can be quite lucrative.

“In the next few years, I expect that just like every business today has an email address, social media account, and website, they'll also have an AI business agent that can do customer support and sales. They should be able to set that up very easily given all the context that they've already put into our business platforms.”

Founder/CEO Mark Zuckerberg

AI Work – Meta AI

Meta AI is nearing 1B MAUs already. It just debuted a new Meta AI app with a “personalized interests feed” including Reels and other content across FOA. Early reactions to it were called good; this will be complementary to its other apps and also tightly integrated into them.

“I think that the Meta AI app as a standalone is going to be particularly important in The United States to establish leadership as the the main personal AI that people use.”

Founder/CEO Mark Zuckerberg

Just like all other Meta products, it will take its time on monetizing this business. Eventually, Zuck sees a compelling future including better product recommendations (helped by all of that aforementioned advertising work), sponsored listings and a premium service for those who need more compute.

AI Work – AI Devices

Ray-Ban is absolutely killing it. Last quarter, Zuck said this was the year when Ray-Ban needed to take off if it was going to be a massive success. That’s happening. Meta sees 10M units sold for this 3rd generation product as possible, which has historically been the magic number for predicting future global consumer hardware success. MAUs rose 4x Y/Y, as sales tripled and satisfaction ratings remained high. It’s adamant that building the hardware its apps run on will create better overall experiences. And? It also places Meta’s future firmly in its own hands.

“More than a billion people worldwide wear glasses today, and it seems highly likely that these will become AI glasses over the next five to ten years.”

Founder/CEO Mark Zuckerberg

Bonus AI Work – Internal Efficiency:

Meta is still on track to have models emulating mid-level developers this year.

Another impressive quarter and strong guide despite very real Chinese seller headwinds. What a company… what a team… what an easy stock to invest in. I continue to love seeing Meta near the top of my portfolio and am glad to have significantly added into the recent turbulence. 

This company has the scale of a mega-cap and the mentality of a startup. They obsessively seek improvement at every turn, and in doing so, stay far ahead of the competition. Not only are they the highest-quality social media company on the planet (by a mile), but they’re now the leader in next-generation hardware. Ray-Ban is ahead of anything else on the market (along with its Orion concept glasses), and it is quickly turning into a real business for this company. With Threads, business messaging, and Meta AI also rapidly gaining scale… the optionality here is wonderfully broad and the firm’s ability to take advantage of it is painfully obvious.