The Foxhole

Apple's near record highs, yet the AI crowd still writes it off as a laggard. I think they're misreading the strategy.

🎧 Worth the listen: Ben Thompson on why Apple's AI restraint is a strategy, not a stumble.⚠️ Not so fast: One author strips out the refunds and argues Apple (AAPL) looks overvalued.📊 One risk to weigh: See the single risk flagged against Apple, and the marks on its valuation.

Apple’s (AAPL) stock is near record highs (full disclosure I own), up 36% in the past year, yet it is still seen as a laggard in the eyes of the AI crowd. And yes, it’s only tipped in about US$14 billion in capex this year compared to the more than US$650 billion from Amazon, Alphabet, Microsoft and Meta combined.

But I don’t think that is Apple ‘losing the race’... I think it’s choosing not to run it. With 2.5 billion devices in people's hands, it was never going to be about having the best model for Apple. The name of the game is distribution, just like it’s been for the past 18 years with the App Store. Being last here is discipline, not defeat. The key caveat being if another company creates a new and preferred interface for AI; which could leave Apple’s digital toll booth fruitless.

Are the big AI spenders worth owning over those that distribute it?

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mitchell_lawler

Gold miners still look inexpensive because the market thinks we're near the top of the cycle. Given what's happening to the dollar, I'm not so sure.

📊 The gap being overlooked: US gold industry earnings are up 2,655% in ten years. Market cap is up just 627%.
⛏️ Dig deeper: Why a community author thinks this gold miner is 74% undervalued.

Gold stocks are sitting near record highs, yet on the fundamentals, some are arguably still decent value. Over the past decade, US gold industry earnings are up 2,655%, while market value is up just 627%. Profit has outrun price more than four to one. So why won't the market re-rate them? Possibly because it thinks this is the top, that gold is about to roll over and take those earnings with it, the way other past cycles have.

This assumes we're at peak gold, and I'd push back on that. US debt just crossed US$40 trillion, the government is paying 5.25% to borrow for thirty years, and central banks are swapping dollars for gold.

Do you think we're at the top of the cycle, given the predicament the US dollar may now face?

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mitchell_lawler

Moderna nearly tripled overnight, and every other mRNA stock jumped with it. I think that could be a trap.

🧬 The breakthrough: mRNA therapy reached its goals in a late-stage melanoma trial.
🔬 Same tech, different bet: One author sees potentially 192% upside in this Moderna peer.
🧫 Tap into more: 84 biotechs expected to turn profitable within three years.

This week Moderna (MRNA) and Merck's personalized mRNA cancer therapy hit its main goals in a late-stage melanoma trial. Early data, but a first, and Moderna nearly tripled. Then the halo spread to other mRNA names, rising 20% or more in a day.That might be problematic.

Ultimately mRNA is a delivery method, not a guarantee. The same platform can carry a breakthrough or a dud, because what decides the outcome is the target, the biology and the data behind each specific program. Moderna's win tells you almost nothing about whether the next company's candidate works. That’s why I think the next move isn't to buy the theme, but instead, to open up each one's story and judge it on its own merit.

Do you think this is a rising tide lifting all boats?

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mitchell_lawler

Google (GOOG) just paid US$10 million for a dead airline's emails. I think some companies are sitting on undervalued data goldmines, just waiting to strike a deal. But which can monetize it without going broke?

📧 Dead airline, live data: Google paid US$10 million for a bankrupt airline's data.📚 Skeptical of the hype: One author calls RELX (REL) an undervalued data goldmine.
💬 Comments into cash: Another values Reddit (RDDT) 96% higher on its AI data.

Google just won a bankruptcy auction for the internal data of Spirit Airlines, the collapsed budget carrier, and paid US$10 million for it. This included around 100 million employee emails, 500 million Teams messages, spreadsheets, pricing models, and operations records. The purchase is yet another bid to get an edge on AI.

What Spirit’s data offers is an insight into how a real company operates behind the scenes, and that messy internal record is exactly the thing you can't scrape off the open internet.

If a bankrupt airline's emails fetch US$10 million, what is the data sitting inside the healthy companies you own actually worth? The market rarely puts a number on the decades of proprietary data locked in their systems, and that information is quickly becoming valuable in the eyes of data-hungry model builders.

However, there’s a catch… the richest data (customer records, health data, etc.) is often exactly what privacy laws bar from being sold. Plenty of data-rich companies may never earn a cent because of this. The beneficiaries will be the ones that can dig it up without digging themselves into a hole.

What company do you think is sitting on a treasure trove of data?

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