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☕️ The one earnings report that matters this week, imho

Jun 02, 2025

Howdy 👋

The markets were in a nasty mood this morning or so went the story.

Not really, but we’ll play along.

The facts present a very different picture.

Roughly 98% of SP500 companies have reported and of that… 64% have reported positive revenue surprises and 78% have reported positive EPS surprises.

Once again, a) the Street has gotten it wrong with the constant fear mongering and b) companies are making serious headwinds on operational efficiency AND sales!

While we’re at it and before I forget, the blended EPS growth rate is now 13.3%, the 2nd consecutive quarter in a row of double-digit growth. 

It’s not a surprise to me – and I trust not to you either - that the markets are now within a few % of February highs as I type - there's still a lot of fuel in the tank. 

So why does the rally feel so “fragile” to so many?

Because there's still tariff uncertainty.

Here’s the thing, though.

Investors who know how to play the game and who understand the bigger picture also know that AI and big data – among a few other themes we talk about regularly - are going to drive our world for decades - which is why I have no problem investing into any weakness if it surfaces.

Here’s my playbook.

1 – The one earnings report that matters this week, imho

The ever-brilliant Stuart Varney asked me for my take on CrowdStrike earlier this morning, which reports after the bell later today. Long story short, it’s a no-brainer as the expression goes. He also asked me about Palantir which continues to track higher.

I hope you’re on board.

A new generation of millionaires is being printed and predictably, many investors are missing the run again despite having sworn up down and sideways that they wouldn’t.

Here’s my full take. (Watch)

Don’t think this is important?

I’d urge you to reconsider that premise.

CrowdStrike has returned 153.02% since I brought it to the OBA Family’s attention versus 25.66% from the S&P 500 over the same time frame. A nearly 6 to 1 performance advantage.

History, btw, suggests there are 10-15 CrowdStrike’s out there right now in various stages of maturity, several of which are OBA Faves.

What’s more, the profit potential is accelerating!

To be fair, I could have been entirely wrong – this is a super tough business – so I am not telling you this to brag.

The point I want to make is that innovation has never failed to produce huge profits for those who get on board early and stay along for the ride. Ever.

Playing to win is very different than playing not to lose! 💯

2 – My new year end S&P 500 target

If you’ve been reading along for any length of time, you know I don’t mince words.

I am starting to wrap my mind around the S&P 500 finishing the year at 6,500, perhaps even 6,600. AI is still accelerating, revenue and earnings, too. At the same time, inflation is falling like a rock in many categories.

Investors who have sat this one out since April because they thought they were being smart very likely realize that they’ve made one helluva mistake, and a very expensive one at that.

FOMO could propel things higher faster and, history suggests, will.

It won’t be a straight line — nothing ever is — but the path is clear for those who know where to look.

That’s really the rub, isn’t it?

Many investors are so busy playing not to lose that they wouldn’t know how to play to win if they tried.

Shame.

Investing in opportunity is always more profitable than cowering in fear.

Just sayin’.

3 – Tariff tangle = Tactical opportunity

President Trump’s surprise move to double U.S. steel tariffs to 50% has the market scrambling.

U.S. steelmakers including Nucor and Steel Dynamics have popped on the news. (Read)

But - and you knew this was coming - rising input costs mean downstream pain for autos, appliances, and construction.

Meanwhile, European prices drop as supply floods their market. That’s bad news for BMW and Orsted — both could feel the squeeze.

What to do?

The proverbial cat is outta the bag, which means that it’s time to invoke “Keith’s Rule of the Back Page” – meaning that it's time to look at stories on the "back page" that haven't hit yet.

Like what happens when tariffs go away or at least get squared away.

In other words, starting to bet against US steel companies like NUE, STLD and other steel related names that have popped today.

The easiest way to do that is to short, avoid or buy putskies while they're cheap.

Meanwhile, and if you're following along with US steel makers and have bought into the rally:

well done, and
make sure to have some very tight trailing stops in place for the simple reason that when this trade fails, it'll fail fast

Keith's Investing Tip: Policy risk moves fast — profits move faster, but only if you’re ready.

4 - Paradromics just pulled a Neuralink

Paradromics just pulled a Neuralink — first human brain implant, done and dusted. At the University of Michigan, no less. (Read)

Smooth procedure.

Zero drama.

Exactly what you want when you’re literally wiring someone’s brain.

And while the headlines scream “medicine,” make no mistake: this is the starting gun for something far bigger — the commercialization of cognition.

A race to commercialize thought.

Paradromics’ tech reads individual neuron signals which is like neural eavesdropping with a front-row seat at the show.

Still private, yes. But smart money’s already flowing — into medtech infrastructure:

Chipmakers

Signal processors

Surgical robotics

AI layers

I hope you’ve got this covered somewhere in your portfolio because there’s a very good chance that it’ll cost you significantly if you don’t. It is only a matter of time before truly customizable medicine arrives, and implants have a significant role to play in that process.

The OBA Family, of course, has been tracking this for quite some time and if that’s helpful, I’d love the opportunity to welcome you on board by earning your trust, goodwill and business.

If you’ve got this covered, again, EXCELLENT!

MyPOV: The fortune isn’t in the device — it’s in the ecosystem it needs to exist. And, while we’re at it… a reminder that missing opportunity is always more expensive than trying to avoid risks you cannot control.

5 – Should you be like Buffett?

The Oracle of Omaha now owns 5% of the entire short-term Treasury market, and of course many retail investors are racing to follow suit. (Read)

ETFs like SGOV and BIL – which focus on ultra-short T-bills – have pulled in billions this year as investors are trying to dodge volatility and prepare for market uncertainty.

Should you be doing the same?

Depends.

The OBA Family beat Buffett to the punch with SGOV, which I recommended in October ’23 as a great place to stash cash, earn a decent chunk of change, and hedge against the Fed’s Follies.

It’s still a great choice, btw.

Which brings me to what I really want you to think about.

Many folks try to imitate Buffett but that’s dangerous for several reasons.

First, you’re not Buffett. (And neither am I.)

He’s got tens of billions in float, can move entire industries with a quote, and gets sweetheart deals nobody else does—often behind closed doors – using tactics you cannot possibly hope to emulate.

Second, timing. The Oracle plays a long game—decades, not days—and has said publicly he’s content to wait for opportunities no matter how long they take. Most retail investors don’t have that kind of patience or cash cushion.

Third, his risk tolerance and access to information are not yours.

MyPOV, investing is not a competition.

Borrowing someone else’s playbook only works if you’ve also got their stadium, their team, and their scoreboard.

At the risk of being self-serving, this is exactly the why I built One Bar Ahead® the way I did… to be personalizable, not prescriptive. A tool you can shape to fit your goals, your risk tolerance, and your time horizon.

Investors around the world tell me frequently they love how OBA meets ‘em where they are... not where Wall Street thinks they should be.

Keith’s Investing Tip: Cookie-cutter strategies are for cookie-cutter results. You deserve better.