💻 Raspberry Pi Surges 54% After IPO

MARKET UPDATE

Good Morning Investor! Shares of Google-backed firm Tempus AI ($TEM) surged 9% on Friday, after having made its debut on the Nasdaq. Meanwhile, shares of Hasbro ($HAS) surged over 6% off the back of an analyst upgrade from Bank of America who see a 40% upside in the stock.

TODAY’S BIG HEADLINES

Raspberry Pi Surges 54% After IPO

Adobe Calms Investors’ Concerns Over AI Disruption

Amazon’s Satellite Internet Business Goes After Starlink

COMPUTER HARDWARE & SOFTWARE

Raspberry Pi Surges 54% After IPO💻

Chip Off the Old Block: Thursday morning saw a fresh and fruity new entrant to the public markets. Raspberry Pi ($RPI.L) officially made its debut on the London Stock Exchange (LSE), kicking off at roughly £280 per share—the very top of its expected range. Fast forward two trading days, and the stock is basking in the glow of a 54.32% rally, closing at £432.10 per share. This rapid ascent values the company at a juicy £734 million ($930 million).

• Raspberry Pi designs and develops low-cost single-board computers (SBCs) and compute modules for industrial customers, hobbyists, and educators around the globe. Their mission? Making computing as accessible as an all-you-can-eat fruit salad for young minds everywhere.

Why Raspberry Pi is the Apple of SBCs: Sure, a Raspberry Pi computer doesn’t pack any revolutionary hardware punches. There are plenty of competitors like Orange Pi, Asus Computing, and Libre Computer Project. But Raspberry Pi has a secret ingredient: a massive, engaged community that shares free software and resources. It’s the tech equivalent of a cozy neighborhood where everyone shares their WiFi password.

• Add to that an extensive range of free educational content, and you’ve got a user experience as smooth as a well-blended raspberry smoothie.

• This creates a competitive moat similar to GoPro’s in the action camera world—attachments galore make the device's excellence almost secondary.

The financials: Unlike many tech companies that hit the IPO scene with starry eyes and red ink, Raspberry Pi is already profitable. The company nearly doubled its profits in 2023, reporting £38.2 million ($48.41 million), up from 2022’s £18.5 million ($23.44 million). This growth was fueled by the release of the Raspberry Pi 5, a hit with tech enthusiasts and educators alike.

• Since its inception in 2012, Raspberry Pi has sold 60 million SBCs, with 7.4 million of those flying off the shelves last year. This brought in a tasty revenue of $265.8 million, up 41% year-over-year. With a total addressable market (TAM) of £16.7 billion ($21.2 billion), the sky's the limit for this innovative company.

• Raspberry Pi also dipped its toes into the semiconductor market in early 2021 with the launch of its RP2040 microcontroller, proving they’re not just a one-trick pony.

London’s New Darling: London’s stock exchange has been craving a success story, and Raspberry Pi might just be the juicy headline they needed. With many UK tech companies like ARM ($ARM) opting for IPOs on the NYSE or Nasdaq, lawmakers are hopeful this positive buzz around Raspberry Pi continues, giving the LSE a much-needed boost.

SOFTWARE & SAAS

Adobe Calms Investors’ Concerns Over AI Disruption🙇

No Photoshop Needed for These Gains: Friday morning was a canvas of success for Adobe ($ADBE), the creative wizard behind Photoshop and After Effects. The company’s shares experienced their largest single-day surge since 2020, skyrocketing over 14% following stellar quarterly earnings. It seems Adobe didn’t just meet expectations; it painted over them with a flourish.

The Upgrade We All Wanted: The software giant didn’t just exceed expectations; they added a touch of AI magic to the mix. Here’s the highlight reel:

• Revenue: Up 10% year-over-year, hitting $5.31 billion, slightly above the anticipated $5.29 billion.

• Adjusted EPS: A dazzling $4.48 per share, surpassing estimates of $4.39 per share.

• These impressive results stand out even more considering industry peers like Salesforce ($CRM), MongoDB ($MDB), SentinelOne ($S), UiPath ($PATH), and Veeva Systems ($VEEV) have been dialing back their full-year sales growth guidance. Looks like Adobe found the secret sauce while others are still in the kitchen.

The Creative Cloud Has a Silver Lining: Adobe’s Digital Media segment, home to its Creative Cloud subscriptions, was a star performer. This segment’s sales hit $487 million, smashing expectations of $437.4 million. Clearly, Adobe’s cloud is more silver lining than stormy weather.

• The company has also been flexing its AI muscles, integrating AI to generate real financial benefits. As an analyst from Piper Sandler noted, “The increasing availability of AI-powered solutions is expected to drive further user acquisition.” Adobe’s AI strategy isn’t just smoke and mirrors—it’s a cash machine.

• Adobe kept shareholders happy by repurchasing 4.6 million shares, or about 1% of its total float. It’s like giving investors a limited-edition print of success.

Wall Street Whispers: Despite the rally, Adobe’s stock is still down nearly 10% year-to-date, reflecting investor jitters about potential AI disruptions. But if Adobe keeps painting by these numbers, those concerns might just fade into the background.

MEGA CAPS

Amazon’s Satellite Internet Business Goes After Starlink🛰️

Enter Project Kuiper: The space internet scene is heating up, and Elon Musk’s Starlink now has a new rival: Amazon ($AMZN). The ecommerce giant just scored a deal with South American telecom company Vrio. Vrio will use Amazon’s satellite internet business, Project Kuiper, to beam internet to seven South American countries: Argentina, Brazil, Chile, Uruguay, Peru, Ecuador, and Colombia. This strategic move could give Amazon a significant leg up in the satellite internet race.

Space Race Showdown: While the satellite internet industry is crowded with players, Starlink is the reigning champ with around 6,000 satellites in orbit. This impressive fleet is courtesy of SpaceX’s budget-friendly launch expertise.

• Project Kuiper, on the other hand, is still in the rookie phase. It currently has just two prototype satellites, both launched last year. But 2024 is set to be a game-changer, with plans to launch 3,236 satellites into low-Earth orbit, creating its own shiny "constellation."

Two Slices of the Same Pie: Kuiper is positioning itself as a direct competitor to Starlink, with both targeting the same market: high-speed broadband for remote areas.

• Starlink has already bagged several lucrative military contracts, ensuring long-term stability, along with deals to provide broadband services to planes and shipping containers.

• Kuiper, however, is zigging where Starlink zags by targeting telecom companies. Last November, Kuiper inked a deal with a slew of major Japanese telecom companies.

• In September of last year, Kuiper also partnered with British telecom giant Vodafone to help roll out expanded 4G and 5G services across Europe and Africa. It's clear that Kuiper is not just aiming for the stars but is also digging deep roots here on Earth

MORE NEWS

Additional market-moving events🌎

Tesla Deliveries on Hold: Deliveries of Tesla’s iconic Cybertruck vehicle have been temporarily suspended yet again, due to a windshield wiper motor issue. (COC)

More Fines for Big Tech: Apple & Meta could soon be facing charges from the European Commission for violating Digital Markets Act (DMA) rules. (Financial Times)

Benz Builds EV Chargers: Mercedes-Benz will be building charging hubs across North America which will feature new 400kW DC fast chargers built by Chargepoint. (The Verge)

Set Your sights: FTC Chair Lina Khan is planning on going after the “big tech mob bosses” Nvidia, Microsoft and OpenAI. (Fortune)

OUR PICKS

Our selections performance👾

On Monday the 11th of March, we released our “two superperformers” stock picks which we believe will provide significant outperformance compared to the S&P 500. Then on the 10th of June we released our next stock selection.

Here’s how the three stocks have performed since:

• Evolution AB: 1,056.00 SEK (📉-19.54%)

• Hims & Hers Health: $23.75 (📈+64.13%)

• PayPal: $60.64 (📉-6.38%)

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