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Key Takeaways Costco may be overvalued, but its stable profitability indicates that it can catch-up in five years Growing the number of warehouses still makes sense, despite the lower returns Its own Kirkland brand, and eComm will contribute to margin expansion The special dividend is a working capital optimization tactic that also incentivizes investors to hold Membership fee increases may degrade loyalty, and act as a negative catalyst for the stock Catalysts Kirkland Signature's Growing Presence on Shelves Could Increase Margins Costco is a customer-centric company, with a $300B market cap and $246B in annual revenue. Its substantial purchasing power allows it to negotiate favorable deals with suppliers, enabling it to pass on savings to its members.

Key Takeaways Coca-Cola’s PE ratio has risen to the high 20s due to a recent revival in profit growth. However, several non-recurring factors have driven these improvement in margins and growth.

Catalysts Robust Revenue Growth : In the third quarter of 2024, SMCI reported impressive revenue growth. Their revenue reached $3.85 billion, which represents a remarkable 200% year-on-year increase .

PayPal exhibits a robust financial position with a substantial cash reserve and consistent profitability. The company's strong balance sheet enables investments in growth initiatives, irrespective of the prevailing economic conditions.

Key Takeaways Increased licensing and production costs will see Disney's profitability decline or they'll pass on these increasing costs to subscribers and risk alienating them. Competition from non-traditional media platforms like YouTube or Tik-Tok could draw younger audiences away from Disney's services.

Key Takeaways Adopting new technology like AI, AR/VR and browser-first cloud software will keep Adobe on top of the creative industry. AI Integration will empower commercial users and help onboard new users by making workflows simpler.

Key Takeaways Shrinking stock buybacks will turn away investors who are seeking guaranteed capital returns. Caterpillar being late to electrify and automate their heavy machinery could see customers shift to more technologically advanced competitors.

Key Takeaways Competition from free Office Productivity software will likely cause seat growth to decline for home and commercial customers Increased smartphone compute power and diminishing compute needs will see Notebook sales decline A shift towards PC and mobile gaming will be detrimental to Xbox console sales and services Catalysts Stagnating Growth in Microsoft Office Revenue Microsoft’s Office suite has been a staple in workplaces and home offices for years, but competition from free cloud-based alternatives like Google Docs and other vendors like Apple, Cisco Systems, Meta, IBM, Okta, Proofpoint, Slack, Symantec, Zoom, and numerous web-based and mobile application competitors are jeopardising this key revenue stream. The issue for Microsoft here is simple; what matters most to customers is convenience, cost and simplicity, and with Office providing a similar product at an elevated price for consumers means that plenty of users which switch to alternatives like Google Moreover, there was a significant price hike in Microsoft 365 and Office 365 business prices by as much as 20 percent in March 2022.

Key Takeaways Google’s dominance in search, and digital advertising industry growth will remain in tact. Cloud computing trends will support Google Cloud revenue growth Alphabet may implement AI slightly slower, but won’t fall behind Current estimates on costs per generative AI query are prohibitive to profitability Until processing power improves and makes generative AI cheaper, Google is unlikely to lose much market share.