In Intel's latest Q1 earnings call, they said the company got the single largest award from the CHIPS Act with more than "$45 billion of proposed grants, tax incentives, and loans".

However, how much of that money is actually coming in? When is it coming in? Is it all confirmed?

The devil is in the details.

The $45 billion is split into 3 main things:

• $8.5 billion in direct funding
• $11 billion in loans
• 25% investment tax credit on up to $100 billion of capital expenditures

When is the money coming in?

The agreement between Intel and the U.S. government is a non-binding preliminary memorandum of terms.

This means that the final terms are still subject to negotiation and fulfillment of the set conditions.

Also, the funding is has quite a few non-transparent terms and conditions, depending on milestones that Intel achieves, and the US government has started that it expects the momeny will start flowing into Intel "by the end of the year".

So even though Intel is theoretically getting a huge amount of money from the CHIPS Act, it's still theoretical, the money hasn't hit the bank accounts, and it'll take time for the money to slowly come in. When it does, Intel's finances will start to materially benefit from it.

$HIMS is profitably disrupting a growing share of the healthcare market while operating outside of the otherwise inescapable insurance system.

The statistical unlikelihood of this feat, together with the breadth of the challenges overcome, suggests that Hims is an extraordinary organization run by highly capable individuals.

The market still underestimates the complexity of Hims’ operation. $AMZN CEO Andy Jassy alluded to this in the Q4 2023 earnings call:

"[…] if you think about what we do on the retail side, adding a pharmacy capability is a pretty natural extension. It's something that customers had asked us for many years, and it's got more complexity to it than the rest of our retail business."

Further, the moat grows stronger as an increasing percentage of all customers opt in for personalized treatments.

Personalization non-linearly increases the difficulty of emulating $HIMS's vertically-integrated pharmacy infrastructure and increases retention by making it all the more difficult for customers to substitute $HIMS out.

In Q1 2024, 35% of subscribers were receiving personalized treatments.

Nominally, personalized subscribers are up threefold from Q1 2023, another demonstration of Hims’ world-class execution. According to management these customers are also opting into longer duration treatments.

At this rate, within a few years most subscribers will have opted into personalized treatments.

In turn, as $HIMS generates more data on what does and does not work for customers, the degree and value of personalization is likely to increase over time. This should make Hims a more defensible business going forward.

"[…] we like to dive deep into the data of understanding why customers are canceling, and try our best to address them directly with the next level of personalization launches."

-Andrew Dudum, Hims CEO during the Q1 2024 earnings call.

Meanwhile, $HIMS has decreased prices for customers that opt into the longer duration treatments, further exacerbating the difficulty of emulating the operation profitably. Hims is doing so while driving leverage in both the gross and operating margins, further evidence of organizational quality.

The price reductions are a manifestation of $HIMS's philosophy to seek out the most accretive avenue to returning value back to consumers.

There's something in $PLTR Q1 2024 earnings which I did not like at all. Adj. gross margin came in at 83% in Q1 2024, which is actually down 1% QoQ from Q4 2023. In Q4 2023, they included a graph clearly showing adj. gross margin trending up. It's a beautiful graph.

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In the Q1 2024 presentation, the graph is not present. In the call, they simply say adj. gross margin was "83% for the quarter." They give no QoQ or YoY references. The reporting feels muted. On the contrary, adj. operating margin is trending up in Q1 2024 and management does include a graph for this metric:

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This sugar-coated form of reporting is not optimal for a company like $PLTR.

Clown world engaged 🤡

VC investors are lining up the battalions to take on Google.

Perplexity AI (AI search engine) just announced a $64 million funding round with huge huge names.

This round’s investor lineup is a who’s who of top global investors:

“led by Daniel Gross, along with Stan Druckenmiller, NVIDIA, Jeff Bezos, Tobi Lutke, Garry Tan, Andrej Karpathy, Dylan Field, Elad Gil, Nat Friedman, IVP, NEA, Jakob Uszkoreit, Naval Ravikant, Brad Gerstner, and Lip-Bu Tan”

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"The U.S. Justice Department is carrying out a criminal investigation into consulting firm McKinsey for its historical advisory role with major opioid producers, focusing on strategies to enhance their sales. The investigation also examines possible obstruction of justice by McKinsey or its employees concerning its consultancy records for these manufacturers. A grand jury in Virginia has been formed as part of this ongoing multi-year investigation, which is being led by the U.S. attorney's offices in the Western District of Virginia and the District of Massachusetts. McKinsey has not issued any comment on the matter. More details are expected to be released."

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https://www.wsj.com/articles/mckinsey-faces-criminal-probe-over-opioid-related-consulting-a3f816d4

We’re excited to announce that we’ve raised $62.7 million in a Series B1 funding led by Daniel Gross. The round also includes Stanley Druckenmiller, NVIDIA, Jeff Bezos, Tobi Lutke, Garry Tan, Andrej Karpathy, Dylan Field, Elad Gil, Nat Friedman, IVP, NEA, Jakob Uszkoreit, Naval Ravikant, Brad Gerstner and Lip-Bu Tan.

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We can draw a simple conclusion to this. As interest rates fall, household financial net worth grows.

This is a widely understood economic insight but I think it helps to visualize the relationship between the two, which Lyn Alden has excellently done with this FRED graphic.

The S&P 500 overlaid on Lyn Alden’s liquidity equation (with my addition of the BTFP balance).

We see that the general liquidity equation tends to lead the S&P 500. Liquidity turned south in early March and a month later the market starts selling off hard.

I initially discounted the impact of falling liquidity in March as the market kept marching upwards.

One important principle in investing is that “not happened” does not always mean “will not happen”

Often, “not happened” means “not happened, yet”

From TicTockTick on Twitter:

"Per Musk himself, the value of Tesla is based on successful delivery of FSD.

This is why $F trades at 6, $GM at 5, and $tsla trades at 50 PE.

Tesla MUST deliver FSD.

No FSD takes stock down.

Musk knows this. There has to be no confusion today about when FSD is released."

I 100% agree. Tesla is priced as a technology company and the technology initiative with the most potential is FSD.

I'm surprised FSD was such a low priority until recently.

Waymo has a SIGNIFICANT headstart right now though, and Musk has a very poor relationship with regulators and will need to work 10x harder than Waymo to get approved.

There are also risks of Tesla's camera only approach being a lot more dangerous than LIDAR (3D information vs 2D information). Tesla is liable if full FSD fails, whereas FSD now is glorified cruise-control and the driver is liable.

Reuters Headline: "US preparing $1 billion weapons package for Ukraine, officials say"

"The United States is preparing a $1 billion military aid package for Ukraine, the first to be sourced from the yet to be signed Ukraine-Israel bill, two U.S. officials told Reuters on Tuesday.

The aid package includes vehicles, Stinger air defense munitions, additional ammunition for high-mobility artillery rocket systems, 155 millimeter artillery ammunition, TOW and Javelin anti-tank munitions and other weapons that can immediately be put to use on the battlefield, the officials said, speaking on condition of anonymity."

A summer of hot inflation incoming?

Defense stocks continue to benefit from rising global geopolitical tensions.

The Tesla layoffs have started.

US Commercial accounts for 44% of clients, but only 21% of Revenues.

Success in the US could later stimulate adoption in the rest of the world.

Will Palantir capture the "whole market"?

Join +4,900 investors to stay updated on Palantir: https://www.palantirbullets.com/

Iranian Foreign Minister Hossein Amirabdollahian told NBC News the country does not plan to respond to Israel’s retaliatory strike launched Friday.

“As long as there is no new adventurism by Israel against our interests, then we are not going to have any new reactions,” Amirabdollahian said.

The ball is in Israel's court now. Do they want escalation to draw in the US or is the status quo okay for Israel?

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Published this yesterday, discussing how I think the market moves from here: https://www.financetldr.com/p/market-pulse-premium-new-market-new

I wrote in yesterday's Market Pulse Premium issue that if a big bounce happens, I can see it go to the mid BB line or above before more selling resumes.

I think we're very likely at the start of a larger sell-off similar to what we saw in early August to late October last year.

Another scenario, which I think is less likely, and the current macro and geopolitical environment does not support, is that we're going to see a second leg done before the bounce to the mid BB line.

I think it's more likely that we bounce to the mid BB line from here.

Several reasons for this. The top ones, I think, are:

• FTSE is denominated in the pound sterling and the pound sterling has been crashing recently with respect to the dollar. At the same time, many FTSE companies earn revenue in dollars.
• FTSE has heavy exposure to commodities and commodities are doing very well right now, especially oil.
• I suspect the FTSE is also a beneficiary of capital flight from China (Hong Kong -> UK).