👓 Meta Has its iPhone Moment

MARKET UPDATE

Good Morning Investor! On Thursday, the Swiss Central Bank cut rates by a quarter percentage point in its third trim of the year, Chip stocks saw a unanimous rally after Micron ($MU) reported soaring demand for its high-bandwidth memory (HBM) chips, apparel retailer H&M saw its share price plummett 8% after reporting lackluster earnings, and lastly, European fintech darlings Klarna and Adyen ($ADYEY) have teamed up to bring BNP services to physical stores.

TODAY’S BIG HEADLINES

Gold Keeps Breaking Records Despite Rate Cuts

Meta Has its iPhone Moment

Snapchat Targets Recapturing Market Share

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COMMODITIES

Gold Keeps Breaking Records Despite Rate Cuts🥇

When Bling Becomes King: The world’s most recognizable precious metal just became even more precious, thanks to the Fed. (No, we did not mistype.) After the Federal Reserve cut interest rates for the first time since 2020, gold hit a record last week — with prices climbing past $2,670. And this week, just shy of its last record, the shiny commodity is inching closer to new highs.

Gold's Glittering Comeback Tour: Investors have turned to gold as a safe haven to hedge against a weakening dollar, which has been losing value faster than a ice cream cone in the Sahara due to rate cuts and softer economic data. The greenback is now on a three-week losing streak, losing significant ground to the likes of the British Pound Sterling. With the labor market struggling, analysts are also buying on fears that the Fed might cut rates aggressively — potentially inducing an inflation comeback. It's like preparing for a zombie apocalypse, but instead of stockpiling canned goods, everyone's hoarding shiny rocks.

Gold's Got the Midas Touch: The SPDR Gold Trust ($GLD), the largest gold-backed ETF, is up 29% YTD — outpacing the S&P 500's 21% year-to-date, and the Nasdaq's 20.6% showing. It's like watching a race where the tortoise suddenly straps on a jetpack and leaves the hares in the dust. Despite uncertainty over future rate cuts, investment banks and analysts are betting that there’s more to come. Goldman Sachs and UBS expect the yellow metal to pass $2.7K next year, while Citigroup predicts it could break $3K per ounce (a forecast that probably made their analysts need a lie-down). Some analysts think gold could chill out a little after its meteoric run, but with the Fed in focus, the bulls seem to have the upper hand.

• Currently, the surge is being driven by fear and uncertainty, the two most reliable fuel sources in the financial world. If neither scenarios of aggressive cuts and an inflation surge take place in the coming twelve months, there's a good chance that the shiny rock will take a chill pill and level off. But until then, it's party time in Fort Knox!

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ARTIFICIAL INTELLIGENCE & AR

Meta Has its iPhone Moment👓

Meta Takes One Giant Leap: On Wednesday, Meta ($META) hosted its annual Connect conference, unveiling a smorgasbord of new software and hardware that had investors drooling like Pavlov's dogs at a bell factory. These announcements included a cheaper version of the company's VR headset, dubbed the "Quest 3S" (because size matters, but price matters more), which will sell at a retail price of $300 vs the $500 price tag of the Quest 3 headset. Meta also showed off new AI chatbot capabilities for its services, and the real showstopper of the event, Meta unveiled its new "Orion" AR glasses, which from a technological standpoint, looked very impressive.

• Given Meta’s acquisition of VR headset makers Oculus back in 2014, along with a potential investment of up to 5% in the eyeglasses maker EssilorLuxottica (EPA: EL), we all knew that this device was on the horizon, but I’m sure nobody had been expecting it to be this good, this soon.

The Latest Fashion in AR: The Orion pair of Augmented Reality (AR) glasses are still too complicated and expensive to manufacture right now, and are therefore not available for sale as of yet, but Meta decided to show everyone regardless, likely to calm shareholders down about the obscene amounts of capital being burned by the Reality Labs division. During the conference, Zuckerberg went on to claim that the device is the “holy grail” device that will one day replace smartphones. Was this Meta's iPhone moment? Or just another case of premature innovation?

• Orion is, at the most basic level, a fancy computer you wear on your face. The challenge with every face-computer has long been their displays, which have generally been heavy, hot, low-resolution, or offered a small field of view.

When Off-the-Shelf Just Won't Do: The tech being used in these glasses is fascinating, with Meta custom designed everything from the silicon being used, to the Micro LED projectors inside the frame that beam graphics in front of your eyes via waveguides in the lenses. It's like they're trying to penetrate our minds with their technology. But Perhaps the standout feature which is lacking in any device currently on the market, is the ability to interact with the device using a neural interface.

SOCIAL MEDIA

Snapchat Targets Recapturing Market Share 👀

Snap's Desperate Dash for Cash: Some Snap streaks have outlasted even the best friendships, and that's the kind of lasting impact Snap ($SNAP) is aiming for in its business strategy. Unfortunately, their financial streaks are less "days of consecutive snaps" and more "days of consecutive losses." Social media platform Snapchat has been suffering some significant losses recently, with its stock down over 34% year-to-date. It's like watching a ghost trying to catch its own tail. The culprit of the selloff? Snapchat is being very poorly run, with profits as elusive as a good filter on a bad hair day. Stock-based compensation is at an all-time high (because nothing says "successful company" like paying your employees in IOUs), and losses are widening.

• Let’s not forget, Snap has some serious competitors in the space, including the likes of Meta ($META), Musk’s X, and TikTok

When "Simple" Means "Please Don't Leave Us": Snap’s new redesign, dubbed “Simple Snapchat,” intends to streamline the user experience by reducing its five-tab layout to a more digestible three-tab format — hoping to make it easier for creators to monetize content. The app’s monthly active user base has already swelled to 850 million, and users are now spending 25% more time on video content compared to last year. It's unclear if this is due to improved content or just collective procrastination reaching new heights.

• With increased engagement, the business plans to fill users’ feeds with more ads and midroll content. However, the success of this redesign depends on finding the right balance between simplicity and functionality without driving away its core users.

Chasing the Youth: Snap is investing ~$1.5 billion this year in AI and machine learning to improve its recommendation algorithms, aiming to capture more screen time from Gen Z and boost ad revenue. Snap projects its revenue will rise to $5.35 billion this year — up 16% from last year, according to Bloomberg. Much of this growth is driven by advertising, as the company has started adding new ad blocks in previously unused areas like the chat inbox and Snap Map to increase revenue. Because nothing says "user-friendly" like turning every nook and cranny of your app into a billboard.

• Snap’s vision for the future centers on its latest augmented reality glasses, Spectacles 5.0. While there is excitement around the AR glasses, Spiegel mentioned to The Verge that he doesn’t expect them to become a “meaningful business until the end of this decade.”

MORE NEWS

Additional market-moving events🌎

TikTok Ends Music Streaming Service: TikTok will close its streaming platform on Nov. 28, after just two years, giving competitors like Spotify ($SPOT) and Apple Music ($AAPL) a boost. TikTok now plans to partner with existing services instead of competing. (YF)

From Charity to Enterprise: OpenAI is working to strip control from its nonprofit board and give Sam Altman equity for the first time. (Reuters)

Tepper Goes All in on China: David Tepper’s big bet after the Fed rate cut was to buy ‘everything’ related to China. (CNBC)

Meta Spurns EU’s AI Safety Pledge: Meta ($META) declined to join the EU’s voluntary AI safety pledge, focusing on AI Act compliance instead. This contrasts with Microsoft ($MSFT) and Google ($GOOGL), who opted in. (YF)

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OUR PICKS

Our selections performance👾

On Monday the 11th of March, we released our “superperformers” stock pick which we believe will provide significant outperformance compared to the S&P 500. Then on the 14th of June we released our next stock selection. Lastly, on August 6th, we initiated a position in Celsius holdings.

Here’s how the stocks have performed since:

• Hims & Hers Health: $17.71 (📈+22.39%)

• PayPal: $80.08 (📈+32.06%)

• Celsius: $31.32 (📉-22.44%)