☕️ Apple clocks Cook out and Eli Lilly’s $2.9B bet

Howdy! 👋 

Markets are red out of the gate this morning as traders digest two things: new strikes in Iran and Fed Chair Kevin Warsh’s hawkish comments last Friday from Jackson Hole. 

Both are par for the course – in fact, I have repeatedly urged you to be leery of a late summer/early fall flush. 

What I’d rather focus on is earnings because that tells you where the money is going and who’s making it. As far as I’m concerned, investing in optimism has never looked better. 

The markets are still on track for a winning month. 

Case in point and according to FactSet as of last Friday: 

• 97% of S&P 500 companies have reported, with 86% beating on earnings and 77% beating on revenue. 

• The blended earnings rate is 52% which, if it holds through the balance of the quarter, will mark the highest earnings growth rate reported by the index since Q2 2021. 

I don’t expect the markets to stay down for long. 

Remember… 

Short-term fear always makes long-term opportunity cheaper! 

Here’s my playbook.  

1 – Every finance minister on Earth is in one room this week — and growth is the only word that matters 

Finance ministers and central bank governors from the world's largest economies are gathering today and tomorrow in Asheville, North Carolina where they’ll be hosted by Treasury Secretary Scott Bessent. (Read) 

I’d love to be a fly on the wall. 

They're there to talk about reviving global growth amid trade disputes, mounting debt, and the fallout from the Iran conflict… the usual. 

This year could make for some interesting new developments. 

The US holds the G20 presidency and Bessent's stated goal is putting growth at the center of the agenda. 

G20 meetings are normally a bunch of hot air, but this one could kick off another round of global growth so I’m very keen to see which industries and sectors are mentioned and in what context. 

You? 

2 – Lilly just bought itself a shortcut 

Eli Lilly is spending up to $2.875 billion to buy a small biotech called Merida Biosciences. (Read) 

I’m super excited. 

Your immune system makes antibodies to fight off bad stuff. Sometimes it goes rogue and makes antibodies that attack your own body instead — that's what drives diseases like Graves' disease and Thyroid eye disease (TED).  

Merida's technology is designed to selectively find and destroy just the specific bad actors causing the disease, while leaving the rest of the immune system alone. Think of it as a precision strike instead of carpet bombing. 

I recommended Lilly to the One Bar Ahead® Family as a complement to other world-class names already in the mix and haven’t been disappointed. It’s returned 20.21% since I did versus 6.22% from the S&P 500 over the same time frame.  

I cannot encourage you strongly enough to have exposure to names that will drive the next generation of targeted therapies, AI-accelerated discovery and gene-editing breakthroughs – particularly if they’re making smart moves like Lilly. 

Hopefully you’ve got that covered, but if not and you’d like some help in this department, I’ll be here. 

3 – Unka Tim clocks out  

Today's the day that Apple CEO Tim Cook clocks out and John Ternus, the company's longtime hardware chief, steps in. (Read) 

Cook's sticking around as executive chair — think advisor, policy guy, and occasional Steve Jobs whisperer — but the day-to-day is now Ternus's show. 

As I said back in April when this was first announced, I believe this is a smart move at the right time. 

Ternus isn't some outside hire learning the ropes. He's been at Apple 25 years and built much of the stuff you're already holding — iPhone, AirPods, the custom silicon that makes Macs great. 

MyPOV: Leadership changes at great companies get treated like a funeral when, in fact, they usually tend to be the opposite. Ballmer to Nadella. Jobs to Cook. Page to Pichai. Every one of those "scary" transitions turned into a monster run for shareholders.  

I have no reason to think this time around’ll be different. 

In fact, I’ll be shocked if it isn’t. 

Apple remains one of the most undervalued of all the big tech names out there imho. 

You know what to do. 

4 – ChatGPT now has a side hustle 

Forgive me for getting on my soapbox for a moment but this really burns my jets. 

OpenAI announced today that its ad business inside ChatGPT has crossed $1 billion in annualized revenue run rate — a milestone the company hit in roughly 200 days flat. (Read) 

Sam Altman calls it a "diversified business model." 

I’m gonna call what’s happening for what it is. 

You – and every ChatGPT/OpenAI user - are the business model. 

How? 

Every free-tier and Go-subscriber conversation is now real estate, and OpenAI just found a tenant… again, you. 

Ads are rolling out in more than 40 countries, self-serve access just opened across India, Europe, the Middle East and North Africa, and OpenAI is reportedly chasing $2.5 billion in ad revenue for the year — all while it tries to justify an $852 billion valuation ahead of an IPO. 

I'm with Anthropic. 

When OpenAI first floated ads back in January, Anthropic said flatly that a conversation with Claude is no place for a sponsor. Then put real money behind the words — a Super Bowl LX campaign built entirely around the tagline "Ads are coming to AI. But not to Claude."  

The real message is – imho – if your chatbot is any good, it doesn’t need a side deal with an advertiser to survive. ChatGPT lags in just about every category I’m familiar with speaking anecdotally. 

That’s neither here nor there. 

What matters is something not a lot of people are thinking about… a real deal with the devil. 

Every ad-supported platform in history has followed the same arc — free access first, trust second, monetization third, and the user's attention gets auctioned off somewhere around step three.  

Search did it.  

Social media did it.  

Streaming did it.  

Now it's AI's turn, and the tell is always the same: when a company starts calling its users a "diversified revenue stream," check your pockets. 

This is a governance and trust story dressed up as an earnings headline. Whichever AI lab keeps the clearest wall between "helping you" and "selling to you" is the one that keeps the long-term customer relationship — and that relationship is the actual asset here, not the weekly active user count. 

Any wonder my money’s still on Apple which has made privacy its mantra all along??!! 

OpenAI is still private so there's no ticker to chase. But it is a reason to pay closer attention to how every AI platform you already own or use are built. Meta, Anthropic, Grok … the lot of ‘em. 

Keith's Investing Tip: The fastest way to spot which company respects you as a customer is to look at what they're selling when you're not paying attention. Whoever gets greedy first tends to pay for it later in user trust and, eventually, in the numbers. Investors, too. 

5 – BEWARE: Imposters are working overtime again — this time on X and WhatsApp 

I've got to say this again because apparently it needs repeating. 

It saddens me, frankly. 

Scammers are running fake accounts on X pretending to be me, then steering people into WhatsApp groups where somebody masquerading as yours truly - "Keith" - hands out trading calls, stock picks and commentary I never wrote, never said and never will. 

None of it is real and none of it is me. 

I don’t run investment groups on WhatsApp. I don't DM people trade alerts. I don't ask anyone for money, crypto, or "verification fees" to join anything. And never will – I don’t even have a WhatsApp account! 

These criminal operations are particularly dangerous because they piggyback on trust I’ve spent decades building and spend it in about thirty seconds. They lift my photos, my name, sometimes clips of my own TV appearances, our trademarks, our intellectual property… and use all of it to make the pitch feel legitimate right before they ask for money or account access.  

If anyone reaches out claiming to be me on X, WhatsApp, Telegram, Signal or anywhere else, assume it's fake and block/report on the spot. To law enforcement if necessary. DO NOT ENGAGE THESE CRIMINALS under any circumstances. 

I will never ask you to move to a private chat app to "join" anything. And I sure as heck will NEVER ask you to move money. Verify everything through keithfitz-gerald.com or my verified channels directly — not through a link somebody slid into your DMs. 

Keith's Investing Tip: The fastest way to spot a fraud is to ask why “they” need you to move fast, move private, and move money — all at once. Sigh. 

Bottom Line 

“Conventional wisdom” is often the path to substandard results.   

The sooner you learn to think differently, the sooner your portfolio can thank you.    

You got this — I promise. 

As always, let’s MAKE it a great day and start to the week. 

Keith 😀