ThePrivatePublicInvestor

Celsius Q1 Update

The Private Public Investor — Sun, 24 May 2026 15:03:15 GMT

For the better part of 7 years I have been watching Celsius Holdings.

It’s the longest I have consistently tracked a name in the market on record.

And I think the time is now to build out a position, especially at the currently discounted valuation.

This Q1, Celsius delivered a double beat, yet the stock sold off.

While the integration of Alani executed near flawlessly, that was overshadowed by the core Celsius brand losing market share to Alani Nu. Domestic dependency on Pepsi is also deepening and near-term margins are suddenly feeling tariff whiplash in aluminum.

The past couple of quarters have fundamentally made investors re-think their thesis and where future growth will be driven from. The core Celsius brand? Alani primarily? Will Rockstar ever get on its feet? Is international growth a primary growth strategy?

I’ll tell you what I think.

Let’s jump in.

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Financials

Revenue landed at $782.6M, +138% YoY
Adj. EPS came in at $0.41 vs. the Street at $0.29-0.30
Adj. EBITDA came in at $195.5M, beating consensus by ~28% and the corresponding margin expanded 3.8% to 25.0%, recovering from the Q4 trough at 18.6%

Per normal, no formal full-year 2026 revenue, margin or EPS guidance was issued or updated.

The stock closed +4.45% on earnings day before drifting back toward $30 over the following session(s). That reaction tells me the street is “iffy” on the future roadmap of Celsius, which is exactly where asymmetric trades are born.

Integration

Gross margins suffered this period, down to 48.3% from the low-mid-50’s in Q1-Q2 2025. The primary reasons for this GM compression was increased promotional activity, aluminum price increases and increased freight costs from integration commotion and weather-related drama.

These negative external market dynamics coupled with the Alani/Rockstar acquisition integration have impacted the overall margin profile this past quarter — there’s been a lot of short-term noise with Celsius’ business.

Regarding integration, the Alani Nu synergy target of $50M was captured in full, with management formally calling the integration complete on the call rather than pointing to it as a forward milestone.

In addition, distributor termination cleanup that was hanging over the balance sheet at $264M in December dropped to $40M by quarter-end, with $224M paid out in cash.

Great news!

Jarrod Langhans (CFO) also said the following on the call:

"We do have visibility into the low 50s and beyond with the initiatives and the programs that we have in place... probably as we look at 2026 in particular, Q2 is probably more of a side-step-type activity and then Q3 and Q4, where you're going to see the stair step and then continue on to 2027 with further stair steps."

So the back-to-50’s gross margin plan is structurally there, but the exact timing of this inflection will depend on external market factors — raw material costs (aluminum) and freight costs.

And get this.

Adj. EBITDA reached $195.5M, beating the Street's estimate by nearly 28%.

Gross margin was down during the period but Adj. EBITDA beat by 28% (and no, these weren’t caused by any crazy adjustments).

This means that operating leverage is already being realized post-integration on a cost basis, but revenue hasn’t caught up yet because the Company has been so focused on making the past 6 months of acquisition / integration as smooth as possible.

Now that Celsius has these brands mostly integrated (Rockstar still pending), the flow-through of the topline to the bottom line will inflate EPS meaningfully over the next 24 months.

The Multi-Brand Portfolio

The legacy Celsius brand grew +6% to $348M while Alani Nu came in at $368M, up ~60% PF.

On an LTM basis through Q1 2026, legacy Celsius and Alani Nu are roughly co-equal contributors at approximately $1.25-1.35B each. On a run-rate basis, Alani Nu has already passed legacy Celsius.

Rockstar landed at $66.6M with retail sales down 13% YoY, and Fieldly was clear that 2026 is a stabilization year on that brand rather than a growth year. The team has been focused on Rockstar SKU reconfiguration and resetting the brand maturely, rather than raw growth during integration.

And if you’re unsure about why Celsius acquired Rockstar in the first place, Rockstar essentially gives the portfolio access to convenience channel, gas station shelf and the male traditional energy consumer, which are areas where legacy Celsius and Alani both underpenetrate.

The combined market share of the brands of ~21% sounds great, but the legacy Celsius brand falling about 90 basis points YoY, from 10.8% to 9.9%. Not a great number to see. It’s what the business is built on.

But, the business model is changing, and Celsius is becoming a multi-brand portfolio.

The acquisition of Alani does show management is intelligent about competition and is focused on growing the business into a multi-brand portfolio long-term.

International Growth

International revenue came in at $35.3M, up 55% YoY, with Europe doing the heavy lifting at $25.4M (+36%) and the Asia-Pacific market a smaller base — $7.0M, and growing rapidly YoY at +212%.

That 55% growth looks fantastic, but some investors realized international share of total revenue shrank from 6.9% to 4.5%. This may seem troublesome, but this is simply because the U.S. business is growing that much faster, especially with Alani still on its rapid growth curve.

As of recently in March, Celsius formed an exclusive distribution agreement with Suntory Beverage & Food Spain, with Portugal next on the European footprint under the same partnership.

Fieldly framed the approach as one built on “key markets, strong local partnerships, disciplined launch plans and sustained marketing and distribution support.”

This is literally the SAME EXACT playbook Coke/Monster executed on — find a strong local distributor that already has the route, lean on their reps and skip the cost of building your own international infrastructure from scratch.

It’s a capital-light approach and ramps faster.

For now, I view the international growth plan as set-up to succeed — and just getting started.

What Am I Doing with My Money?

Celsius is currently a top 5 portfolio holding in my portfolio.

I plan for it to be a top 3 position sometime during the next few months, which means I will be continuing to accumulate shares.

This recent earnings report wasn’t great or bad. It was just good.

And good is where asymmetric opportunities are born.

Disclaimer: The information provided in this publication is for informational and educational purposes only and does not constitute investment, financial, or other professional advice. ThePrivatePublicInvestor and its authors are not registered investment advisors or broker-dealers. All opinions expressed reflect personal views as of the date published and are subject to change without notice. While efforts are made to ensure accuracy, no guarantee of completeness or reliability is given. Past performance is not indicative of future results. The author may hold positions in securities discussed. Use of this content is at your own risk.

Nike's Slow Climb Back

The Private Public Investor — Sun, 17 May 2026 12:31:08 GMT

I bought Nike too early.

Yes. I will be the first to say that I was too early in Nike.

I was overly excited with the appointment of CEO Elliott Hill and the turnaround story of the legacy brand.

I knew it was a turnaround and I knew turnarounds take time, but I underestimated what a distribution-led turnaround actually requires — which is to say I underestimated almost everything that matters about how Nike runs its business.

When a company’s competitive advantage runs through how it sells, where it sells, who it sells to, and how that ecosystem reinforces itself over decades, the rebuild isn’t a turnaround in the usual sense.

It’s an overhaul of the operating model itself, and that takes years… not quarters.

Q3 FY26 (CY Q1) was the quarter that made that reality unavoidable for me, and it’s also the quarter that, in my read, marked the floor.

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The Beat Nobody Cared About

The earnings report itself wasn’t bad.

Revenue of $11.28B came in ahead of $11.24B
EPS of $0.35 beat the Street’s $0.29
Gross margin landed 0.4% above consensus.

None of that mattered, because the Q4 guide was ugly.

Management estimated Q4 revenue (next fiscal quarter) to be down 2-4%, against Street estimates calling for positive growth. Greater China was also guided down approximately 20%.

JPMorgan downgraded the next day and cut its price target from $86 to $52, and twenty other analysts followed inside two trading sessions.

Not good.

The stock fell more than 15% the day after and hit a 12-year low of $43.17 forty-eight hours later.

12 years ago was when the iPhone 6 launched…

Also not good.

A distribution-led turnaround that's also a brand reset is structurally different from the kind most retail investors are used to seeing.

When the problem is the product, you can fix it in a design cycle. 18 months and a few good launches and the story can turn around.

When the problem is how you reach the consumer and what they think of you when you get there, you're untangling years of decisions compounded together over time.

Too much sold direct. Too little shelf space at wholesale. Aged Classics clogging the marketplace. Wholesale partners lost trust. Digital pricing that trained the consumer to wait for a discount. And a brand that drifted from sport toward lifestyle while HOKA and On built credibility in the lanes Nike used to own.

Every one of those issues feeds the others, and you can't fix one in isolation without making another worse.

Pull sell-in down to clean the marketplace and revenue plummets.
Push promotions to move inventory and you reinforce the discounting habit.
Rebuild wholesale relationships and DTC margins suffer during the transition.

This is the spot Nike has been in, and the slowest-moving piece is Greater China, where Matt Friend (CFO) was honest enough this quarter to call the challenges "structural".

I think this statement rattled some investors, and honestly, Friend fback itand the team should have put that on the record a year ago.

Where is the Floor?

Underneath the ugly numbers and guidance, the operational picture IS doing what the team originally explained during the announcement of the Nike “Win Now” strategy.

North America gross margin fell (3.6%) on the surface but absorbed a (6.5%) tariff hit in the process, which means the underlying gross margin actually expanded by roughly +2.9% in the most important geography Nike operates in.

North America wholesale also grew 11%, Running was up over 20% globally, and February was the first month in 2 years where every channel in North America posted positive growth simultaneously.

Friend (CFO) gave the market the one number I wanted on the call: gross margin expansion begins in Q2 FY27, with Q1 FY27 as the final quarter of material tariff headwind.

As a reminder, Q2 FY27 for Nike is Oct-Dec of CY2026 (Q4)

I’d watch for Nike to deliver there.

In addition, late this year is when the “Win Now” actions are scheduled to be complete and the deliberate revenue drag from clearing aged, underperforming inventory falls off.

Elliott Hill (CEO) closed the call with a Camp Nou metaphor (FC Barcelona’s home stadium). Skim the quote if you don’t want to read in its entirety:

“Before we move to your questions, I want to leave you with an image that stayed with me from this quarter. I was in Barcelona meeting with athletes and leaders from FC Barcelona, a partner of ours since 1998, and I stood on the pitch at Camp Nou. If you’ve ever been there, you know it is more than a stadium. It is one of the most imposing stages in sport, a place built for pressure, belief, and unforgettable moments. And right now, Camp Nou tells another story, too.
Above the pitch, there is scaffolding. In the corners, there are cranes. Entire sections are unfinished. The stadium is being rebuilt tier by tier, piece by piece to accommodate over 100,000 supporters. The work is still underway. Capacity right now is limited and it requires patience and perseverance. And still, the supporters are in full voice. The players are still stepping on to the pitch focused on competing and winning. And all around them, the work is transforming what their home, their club will become.
What stayed with me was the reality of both things being true at once, competing today while building for tomorrow. FC Barcelona did not choose between performing in the present and preparing for the future. They are doing both at the same time. Standing there, looking up at the half-built stadium, it occurred to me, this is NIKE right now. We are taking deliberate actions that we believe will restore the health and quality of our business even when these actions create pressure in the near term.
We are removing what is not working. We are rebuilding parts of the foundation that needed to be rebuilt. And at the same time, we are continuing to innovate, to compete and to create for the future. That takes conviction. It takes patience, it takes belief, and it takes focus. Camp Nou is being rebuilt for the next — not being rebuilt for the next match, it is being rebuilt for the next era.
That is exactly how I think about the work we are doing at NIKE. I came back to help return this company to greatness and to build it the right way for the long term, to protect what has always made NIKE special and to modernize it for a new generation of athletes and consumers. So while the work is not finished, the direction is clear. Our focus is clear. And our comeback is within reach. And this fall, we look forward to sharing a fuller view of that path ahead at our Investor Day.”

That’s a fantastic, confident and patient response after a tough investor call.

Hard not to respect that response from Elliott Hill. He’s handling the pressure the right way.

That’s a CEO who isn’t pretending the timeline went as planned, and the recent insider buying could back it up.

Hill bought roughly $1.0M of stock at $42.27 on April 13
Tim Cook bought $1.06M at $42.43 three days earlier

There has been notable selling as well.

Bill Ackman (Pershing Square), who had been long on the turnaround since 2024, exited Pershing Square’s entire Nike position in late 2025 at approximately a 30% loss.

This is a contradiction worth naming. Trying to say only bulls are showing up at the bottom would be incorrect.

What I’m Actually Doing Here

Nike isn’t the asymmetric opportunity I thought I was buying a year ago.

It’s a staple consumer brand in the middle of a multi-year operational rebuild, and the stock is going to move slowly upward through late Q3 and Q4 of this calendar year as the “Win Now” actions complete, inventory health normalizes, and the China drag stabilizes.

I believe the floor on this business is meaningfully higher than the recent trading has implied.

Now, none of that adds up to a stock that doubles in twelve months.

Rather, it equates to a stock that grinds back over the next eighteen.

So I’m long, but I’m not adding, and I’m not selling.

Nike has become a value anchor in the portfolio rather than a high-conviction growth bet. It’s a position I hold because the floor is visible.

Sure, there are better short-term opportunities, and I’m putting capital toward them elsewhere. But every portfolio needs a couple value names to anchor the portfolio. Nike has become one of them for me.

The work is taking longer than I’d like, too.

But the direction is clear.

April Portfolio Update (#1)

The Private Public Investor — Sun, 10 May 2026 21:55:45 GMT

The portfolio returned 323.53% in April and crossed $1M for the first time. AMD leaps did roughly 90% of the heavy lifting.

And yes — this really is a coincidence. I’d already planned to start monthly portfolio updates this spring, before April happened. The timing is genuinely coincidental and honestly a little inconvenient, because every future month will look pedestrian by comparison.

Quick note: Paid subscriptions are coming soon. The next monthly update will be the last one going out to free subscribers — more on what changes at the end.

One disclosure up front: I haven’t publicly disclosed my long-term AMD or Nike options before now. They aren’t core to my investing strategy and this was a one-off opportunity, and the most confident I’ve ever been in a position.

Too good to pass up.

The leaps have since exploded.

Let’s get into it.

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April Compounded at +323.53%

The portfolio compounded 323.53% in 30 days.

The total account value of the portfolio crossed $1M+ by month-end, with $45.5K in cash and $6K in crypto.

The inflection started April 23, where AMD exploded, inflating the leaps on AMD by near 100%. Micron also began its second wind, having generated a 100%+ in the past month. AMD leaps did the heavy lifting, contributing ~90% to the total portfolio gains during April.

Since my options have driven a majority of the gains in April, let’s look at how my portfolio would have done without the owning the AMD leaps:

In this image, I am taking just my individual portfolio performance vs my Roth, since I house all of my options in my Roth IRA (seen in holdings screenshot blow).

Even stripping-out the options, the portfolio still returned ~29% vs. the market at ~10% during April.

The AMD Position I’m Not Selling

I’m holding 33 AMD call contracts across four expirations: $300 strikes for Dec 2026, and $350 strikes for Dec 2026, June 2027, and Dec 2027.

My blended cost basis approximately $35.08 per contract, and the blended price of the options today is $185.87.

Am I selling? I am thinking about selling a portion and replacing it with stock. The Dec-26 expiration leaps will be my first sleeve of options to cash out.

But.

My thesis hasn’t even started playing out yet on AMD.

The April runup came from data center strength and a shift in market psychology around the GPU-to-CPU ratio in AI buildouts approaching 1:1.

This is the warmup longer-term.

My actual thesis is the rollout of the MI400 and the Helios rack-scale platform. We haven’t seen a single dollar of topline contribution from this yet. No margin expansion. Nothing is flowing through the P&L, and I don’t think the analysts have been pricing in the actual demand this emboldens.

I keep asking myself: How am I supposed to sell when the thesis hasn’t delivered yet?

The hardware story is definitely already getting transparent, but the new tech hasn’t reached the customer yet.

If AMD gets this right and they continue closing the gap of ROCm vs. CUDA, they can easily compete with Nvidia on both axes, hardware AND software. That’s when this becomes a company that can rival Nvidia in scale, not just be the credible #2.

I’m holding all 33 contracts. I’ll flag the Chat if that changes and I decide to sell.

YTD Performance is 400%+

YTD return is +401.28% through May 8, outperforming the general market by ~393%.

And YTD excluding the options contracts, the portfolio outperformed the market by 23.5%+.

ThePrivatePublicInvestor Portfolio: +31.4% YTD
S&P500: +7.9% YTD

Realized profit YTD sits at +$70,036 in gains versus $15,240 in losses (net +$55k) — I am continuing to rebalance the portfolio as big gainers such as Micron have exploded the past year, and I’ve decided to take gains on most of those shares.

2025 in Review

For context, 2025 closed at +31.50% with a 95% gain/loss ratio.

A choppy three quarters were carried by a Q4 rally that peaked near +100% in mid-October before consolidating into year-end.

That 2025 chart is the reminder that drawdowns happen and consolidation occurs, but staying patient with your conviction pays off. And sometimes the market is very sudden.

And to clarify this point:

April 2026 was a moment, NOT a baseline.

2025 is more reflective of a normal year in the market.

My annual goal, on average over time, is two-fold.

Beat the market and/or
Achieve 15%+ annual return

If both happen, I’m a happy camper.

Current Portfolio Holdings

A few names worth flagging here:

1. Coinbase (49 shares): This thesis needs to be revisited with the CLARITY Act, but I am comfortable with the regulatory outcome and think Coinbase will succeed long-term.

2. Veeva (172 shares): I called the CRM attrition fear overblown two quarters ago. Holding this position for the long-term and will continue accumulating shares over the coming months. I would like this to be a top 3-4 holding.

3. Nike (363 shares + 20 leaps at $90 strike, Dec 2026): Nike has been a lagger, and these options have lost almost all of their value. Clothing is a sentiment-driven industry, and Nike is still viewed as a dinosaur. Hoping Nike posts a clean quarter before year-end that finally puts the turnaround on the tape. That’s when we exit the options. I will be holding the stock for the long-term.

4. Adobe (160 shares): Adobe has also been a lagger, but this red avalanche has occurred with the rest of the software names in the market. One thing to note: I am thinking of offloading some Adobe shares and loading up in NOW. Would like to have cash on the sidelines still and don’t want to be overexposed to software, as I already own Veeva Systems and Adobe.

5. Micron (15 shares): I’ve offloaded most of my shares in Micron this year, as I believe the sentiment on memory chip stocks is becoming overinflated and expectations will start to dramatically outweigh performance. At some point, any outperformance won’t be able to move the stock.

The rest of my positions in EL, BMNR, ASPI, AMZN and META have not changed in size and I remain bullish on these going forward into the remainder of 2026 and into 2027.

Paid Subscription Detail

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Deep dives, earnings notes and market commentary go paid-first — with select pieces still released free.

Founding member pricing locks in for life and goes live before that transition (pricing detail to come).

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Five Macro Catalysts in the Next Five Days

Wanted to note here at the end that this week is loaded with events, so stay tuned-in!

Warsh confirmed as Fed chair
April CPI (Tuesday)
April PPI (Wednesday)
April retail sales (Thursday) — same day Trump flies to Beijing
Trump-Xi summit (Friday)

Prefer the polished PDF version? LINK HERE

AMD: Mile 6 of the Marathon

The Private Public Investor — Sun, 26 Apr 2026 12:31:04 GMT

AMD just printed an all-time high above $340 on Friday without a single piece of company specific news.

Intel blew out Q1 estimates and guided with a story of a severe shortage of CPUs — analysts immediately connected the dots and inferred that if CPU demand is melting up THIS hard, AMD is a HUGE structural winner.

AMD has certainly rallied dramatically from their semi-volatile, no-man’s land malaise since October of last year, but I believe this is only the beginning of AMD’s to-be, most dramatic rally in the lifetime of the company.

I am writing this article in real-time, as I am performing this analysis on the current valuation of AMD.

I didn’t prepare this analysis ahead — rather I am currently working through excel and conducting this analysis in real time.

I want to lay my thoughts out here regarding the current valuation of AMD, and where I realistically see this company’s stock price performing over the remainder of 2026 and forward.

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The Street’s View on the Valuation

The majority of the market’s view on AMD is that it is considerably overvalued when compared with Nvidia, and I would highly disagree with this statement.

Let’s take a look at the below analysis I ran comparing AMD vs Nvidia on a P/E basis and P/S basis through 2028 based on street consensus.

Based on the current street view, AMD is overvalued on an earnings basis but trading at a discount on a revenue basis.

This makes sense given the current state of AMD’s business.

AMD has lagged Nvidia for the past several years, but has been picking up the pace in compute innovation and breadth.

With the rollout of the MI400 GPUs, the Helios rack-scale architecture, Venice EPYC and the Ryzen AI 400 series all hitting through the back half of 2026, AMD is on the precipice of the most aggressive product cycle in the company's history.

And this will be reflected in their revenue first and flow down to earnings afterwards.

The CPU shortage Intel just exposed will only add fuel to this rally. The Meta $60B / 6 GW deal, the OpenAI 6 GW commitment and Oracle's 50,000 MI450 Helios cluster ALONE imply a step-function in 2026/2027 financials the equity analysts are still scrambling to model.

Bank of America frames it as:

$15-20 billion of revenue per gigawatt of installed AI capacity.

With 12+ gigawatts already locked in across these three deals + implied incremental hyperscaler interest after the Intel earnings = the contractual revenue floor through 2028 is enormous for AMD.

I think we are at mile 6 of the marathon. Still 20 miles to go…

My 5-Scenario Model Build

I built a 5-scenario model — Low / Below Average / Base / Above Average / High — for FY2026, FY2027, and FY2028.

Base case is calibrated to current Street consensus (about $47B revenue / $6.50 EPS in 2026, about $70B / $11.75 in 2027, about $88B / $15.20 in 2028), which itself is meaningfully more bullish than my late-2025 Deep Dive.

Goldman alone raised its 2027 revenue from $45.9B to $68.7B on the back of the Meta $60B / 6GW deal, the OpenAI 6GW commitment, and Oracle's 50,000 MI450 Helios cluster going public in Q3 2026.

A few things jump out when you look at this side-by-side.

Base FY2026 revenue of $47.2B (+36% YoY) lands on consensus EPS of $6.48. Solid year but nothing crazy!

The full financial inflection will likely land in FY2027: $69.9B revenue (+48% YoY) and $11.76 EPS in the Base case consensus from analysts.

But here's the nuance I think MOST investors miss here with AMD… and this is a pattern I’ve seen with product rollouts with other companies across the stock market related to their share price.

The market won't WAIT until 2027 actuals cross the wire to price this in. Markets are forward-looking.

The MI450 first ships in Q3 2026
Helios racks ship in volume Q4 2026

Each one of those quarterly rollouts (Q3'26 in early November, Q4'26 in early February '27) will be the proof point the Street uses to de-risk the 2027 ramp.

I think a meaningful portion of the 2027 financials get baked into the stock price in mid-to-late 2026 as those quarterly actuals confirm trajectory.

We're already watching this dynamic play out with AMD actually.

The Meta deal hit on February 24th and the stock moved hard before a single dollar of that $60B printed for AMD.
DA Davidson upgraded last Friday on no company news, just the Intel Q1 earnings.

Each of these proof points compresses the gap between "someday" and "now," and each announcement / step pulls forward the multiple expansion.

Now the Base case in this model reflects Street consensus. I want to be very clear about that, because I am not personally anchoring on Base.

—> I'm leaning Above Average to High

Goldman's recent revision to $68.7B FY2027 revenue is already anchoring ABOVE my Base column.

The reality is most analysts don't fully understand the AMD story yet.

P/E vs P/S: Why I'm Weighting Sales More Heavily

I anchored at four target share prices — Spot Price Today / +25% / +50% / +100% for various non-GAAP EPS estimates. Then I sensitized the implied multiple through every scenario.

P/E is the multiple a majority of retail investors + Wall Street loves, and rightly so for most business valuation in the public markets.

It absolutely matters here for AMD too, and at an Above Average FY2027 EPS of $14.73, a $425 share price (+25% from spot) implies a ~29x P/E and a $510 share price (+50% from spot) implies a ~35x P/E.

That's pretty standard / usual for a semiconductor name like AMD.

And for a semiconductor name on the cusp of a generational product cycle, P/E still lags reality.

The pull-through from a $60B Meta contract or a 50K-GPU Oracle deployment hits revenue first (point-of-sale revenue recognition).

Earnings will catch up over the next couple of quarters, and could even ramp with ASP increases and operating leverage compounding.

That’s why I weight P/S heavily here.

At Above Average FY2027 revenue of $82.2B, a 12x P/S — where AMD trades on FY26 consensus today — implies ~$600/share, +75% from spot.

A NVDA P/S multiple of 20x+ implies ~$1,000 / share….

And the discount to NVDA across forward years is 40-55%.

NVDA has CUDA, software margin, services mix and execution credibility AMD hasn’t earned yet, yes, and I am not pretending it does.

But that gap is too wide for a company with comparable revenue growth from a smaller base.

The market is paying for software economics AMD hasn’t earned — it’s not paying for the multi-year revenue ramp and operating leverage after this massive product rollout.

The Bear Argument

Meta's 160M-share warrant + OpenAI's 160M-share warrant = ~320M potential dilution, roughly 20% of the share count.

Lisa Su has effectively bought hyperscaler co-engineering by handing them equity, creating shared incentives for AMD to grow in a trillion-dollar business.

But the dilution is real and it caps optical EPS even on revenue beats.

The bears aren't wrong about that BUT they're just wrong that it kills the thesis.

Upcoming Earnings

Q1 earnings come out on May 5th, so watch out for:

MI450 ramp commentary from Lisa Su, specifically whether “Q3 first ship, Q4 volume” holds firm
- Any slippage gets punished
Server CPU revenue trajectory — if it grows meaningfully QoQ, the agentic-CPU thesis Intel mentioned in earnings will get the green light.
- I’m not sure of this contributing to AMD stock price appreciation in the short-term though
Any new hyperscaler partnership color
- Incremental customer wins will cause the share price to rocket

But, remember, Lisa Su ALWAYS sandbags, so do not be surprised if that trend continues. If it does, AMD will likely shed some of it’s recent gains.

Good luck out there with the upcoming week with some big earnings — let me know if you have any questions on this valuation writeup!

AMD to the moon 🌕

This Time Isn’t Different

The Private Public Investor — Thu, 02 Apr 2026 12:02:50 GMT

"Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria."

— Sir John Templeton

Let me be blunt.

Almost every bearish indicator I track is flashing red right now.

I always treat markets like this the same — I buy incrementally throughout the downturn and through the recovery.

Sometimes it may feel like you’re doing everything wrong in times like this.

That is normal for investors 1-10 years into their investing journey, including me (currently 7 years in).

I still feel like I’m doing things wrong sometimes!

But, for some reason, I picked up a good trait in the family and can stomach these downturns, however long and deep in the red (test me market!).

But I will say, I used to feel very worried in times like this.

But over time, incremental preparation compounding over time simmers those worries and gives comfortability in decisions.

I’m not here to scream doomsday, but I want to show you what the overall market dashboard actually looks like so you can make your own decisions.

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The Sentiment Picture is Ugly

The market is currently in a state of "Extreme Fear" (Index: 0-25), supported by deeply oversold technicals (RSI: 27) and a yield curve that has recently normalized to a +51 bps spread, which is historically a high-risk signal for an impending recession.

The VIX has been moving between 25-30 the last few weeks, remaining below the spike of 40 often seen at definitive bottoms.

I called this out earlier this week as a sign of the market potentially reaching a bottom in the coming couple of months.

The Indicators

The CNN Fear & Greed Index almost hit 10 this week, with the index sitting at 16 today, April 1st.

We are in deep Extreme Fear, the lowest reading of 2026, and comparable to the COVID crash and 2022 bear market lows.

Below depicts the LTM trend of the index.

Separately, the AAII Investor Sentiment Survey shows bearish readings at 49.8%, nearly 19 points above the historical average.

Bullish sentiment has sat below average for six consecutive weeks.

The University of Michigan Consumer Sentiment final March reading also came in at 53.3, which is a bottom 1st percentile historically.

People are scared.

Google Trends searches for “recession” and "stock market crash" have reached a one-year high, showing a significant acceleration as we’ve moved into Q1 2026.

Moody’s puts recession probability at 48.6%.

Goldman raised theirs to 30%.

Bear market talk is mainstream.

The CBOE SPX put/call ratio has also surged to ~1.3x, as it seems investors are aggressively hedging at the index level, which is the classic defensive posture you see during risky times.

The put/call ratio serves as a diagnostic for fear, measuring the volume of bets placed on a downturn against those betting on a recovery.

BUT, in the current climate, we are witnessing sentiment divergence:

While the daily Volume Ratio has spiked as traders scramble for downside protection (buying puts), the Open Interest Ratio (total # of active contracts actually held in the vault) is hitting a 1-year low.

This tells the story of a “washout” in progress.

While the broader crowd is currently in a state of panic-buying insurance through purchasing puts, the smart money is quietly closing out their bearish positions and taking profits.

This could mean institutional big money is preparing for the clouds to break and the market to turnaround green.

I believe this means one thing, that has stood true historically:

—> Stay invested and prudently buy

The Technicals

The S&P 500 sits roughly 5-10% below its January all-time high (on the upper end if you discount the past couple days rally, and probably will go lower after Trump’s announcement after market close yesterday).

The index is trading below both its 50-day and 200-day moving averages, and a death cross confirmed around March 28-29.

We have since bounced from that death cross, which could be market support, but I don’t bet on moving averages. Algorithm traders (algos) could easily have been the reason for this short term bump the past couple of days.

The relief day rallies have been low-conviction, short-covering events that evaporate within a day.

More notably, the VIX closed at ~25 on April 1, up ~70% YTD from the 13-15 range where it started the year.

Historically, when the VIX spikes above 30-40, the S&P 500 has delivered strong forward 12-month returns

Above 30% on average when VIX exceeds 40, with positive returns over 90% of the time since 1990.

We’re not quite at that 40 threshold yet, but we’re certainly knocking on the door.

The Macro Picture is Ugly Though

Oil first. The oil shock derived from the Iran conflict isn't just about gas prices.

Oil is used in plastics, fertilizers, pharmaceuticals, personal care products, clothing and more — it touches virtually every corner of the economy.

Those cost increases are already showing up on factory floors, with Chinese plastic suppliers raising prices roughly 15% according to CNBC.

And the full pass-through to consumer prices typically takes three to six months, meaning the worst of this inflation is potentially ahead of us, and is a reason why investors are pulling out and the market is red.

Core PCE already sits at 3.1%, which is well above the Fed's 2% target, while the labor market is softening (January added just 130K jobs; February shed 92K).

—> That puts the Fed in a brutal spot.

Futures markets have pushed the probability of a rate hike by year-end to 52%, but raising rates into a weakening economy risks tipping the U.S. market into recession.

The Fed cannot cut with inflation re-accelerating, and it cannot tighten without crushing growth.

This is CLASSIC stagflation — and the market hates it.

Stagflation: High unemployment + inflation + slow economic growth

Meanwhile, the yield curve has un-inverted after its historic 2+ year inversion, and this is actually a dangerous signal.

Recessions typically begin after the curve normalizes, not during the inversion.

We’re there now.

And then there’s AI.

The Magnificent 7 are down 20%+ from their highs.

Approximate as of 3/31/2026:

$MSFT: Down 31-33%
$META: Down 25-33%
$TSLA: Down 25-27%
$AMZN: Down 20-22%
$NVDA: Down 19%
$GOOGL : Down 15-20%
$AAPL: Down 12%

The hyperscalers plan to spend $650-700B in 2026 capex on AI, yet we haven’t seen the margin pull-through yet.

The market is waiting to see this spend pay off with MASSIVE revenue acceleration and subsequently margin pull-through.

I personally think analysts don’t really understand the scaling of AI and what that actually looks like compounding over time (parabolic growth), but that’s a story for another time.

—> We are in a digestion phase of AI.

Note: Andrei Jikh has been my go-to economic “keep up-to-date” YouTuber I watch regularly, and I highly recommend everyone reading this to check out his channel.

https://www.youtube.com/@AndreiJikh

So What’s Priced-in?

A lot, actually.

All of what we just talked about is pretty common knowledge.

Tariff uncertainty at current ~10.5% effective rates.
The Fed being on hold (51% probability of zero cuts in 2026).
AI multiple compression.
SaaS disruption fear, possibly even overdone
Consumer sentiment is already terrible.

What’s not fully priced in is a prolonged Strait of Hormuz closure pushing oil above $130 or higher, AND whether AI capex actually translates to revenue.

Those are the 2 big whammies the market is waiting on.

Now, I know what some of you are thinking.

This time is different. AI is transforming everything. The geopolitical landscape has fundamentally shifted. Fiscal policy dynamics are unprecedented.

And those folks are right!

Today’s market does have unique characteristics.

But people say “this time is different” every single cycle.

They said it in 1999 about the internet. They said it in 2007 about housing. They said it in 2021 about stimulus. They said it in 2022 with the inflation crisis. They said it during the tariff crises 12 months ago last April.

Human behavior does not change.

But, I’m not waiting for confirmation, as the market will have already moved dramatically up by then.

And if it’s bad news?

Great, I have cash to buy more.

Just remember: Stay invested, prudently buy into the market periodically, stay knowledgeable, be patient and stick to your plan.

Claude Cowork & In-app Plug-ins

The Private Public Investor — Mon, 23 Mar 2026 02:03:14 GMT

I just started using Claude Cowork and the in-app plugins this past month, and it has dramatically increased my productivity, accuracy and total output.

I’ve realized THIS is what all the buzz is regarding “I now have a junior analyst and operations assistant living on my desktop!”

Cowork is where the real acceleration of workflow starts, and where we can enable tools to work for us in the background.

I usually wouldn’t post about something like this, but I feel it’s that important, and can save everyone reading this, hours during the work week.

In this post I’ll show you what Cowork actually is, how skills and plugins fit in, and a few concrete workflows you can steal for your own investing process and everyday work.

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What is Claude Cowork?

First let’s start out with what Claude Cowork is.

Claude Cowork is a platform capability that allows users to sync their drive and company information into one prompted conversation.

It’s essentially a mode inside Claude where the AI can plan and execute multi‑step tasks on your behalf instead of just responding one message at a time.

Anthropic describes Cowork as using the same agentic architecture as Claude Code, but packaged for non‑technical knowledge work right inside the desktop app.

Cowork works directly with a folder or project on your computer, reading, editing and creating files. This allows AI to continually live within your workflow, instead of starting from almost ground-zero within a chatbot.

I’ve been using this at work for a multitude of tasks such as data cuts, modeling questions, market landscaping, industry deep dives, company specific questions and other simple tasks like notes summaries, quick data pulls and general questions that require drive-level context (aka specific folders).

Doing these things regularly within Cowork has legitimately saved me 15-20 hours a week… and has provided more value at the same time.

For Substack, it's a great resource because the AI can continually learn from current posts, portfolio holdings, and general activity across the app.

It’s also great for measuring audience demographics and content-specific interests, and subsequently giving you trend-level feedback based on your highest or lowest performing pieces.

Regarding personal investing (the audience likely reading this), there are a multitude of ways you can leverage this, which I will get into later in this writeup.

I'll be the first to admit this is ironic given the writeup you're reading, but the best way to learn Cowork is to just buy it and start tinkering.

Doing always beats analyzing through instructions and tutorials, in my opinion.

As always, I would really appreciate if you shared this post and subscribed to ThePrivatePublicInvestor, as I try my hardest each week to give you custom, in-depth analysis on stock investments, market insights and portfolio strategies.

Application Plugins

Two capabilities that contribute to the efficiency of Cowork are skills and plugins.

Regarding plug-ins, I have only used Excel and PPT, which is a small subset of what is available within Claude.

Within Excel, Claude can perform some pretty incredible data analysis.

At Work

Back when I worked in investment banking, we would get a data dump from a client we would be representing to sell their company, and we would then have to sift through this data to build out a robust financial model, including other helpful analyses to present potential buyers with in the sale process.

This data can get messy.

Very messy.

This would historically take days-to-weeks for an analyst like me to sift through, and still does for banks getting held up on incorporating this AI technology due to “compliance barriers”.

In my role in private equity, on the other side of the transaction process, we perform robust data analysis when given access to a company’s “data dump” within a virtual data room, including the bankers financial model and ancillary data analyses, if provided.

I can now sift through this data and build out unique, insightful data cuts within minutes.

Yes.

Minutes.

And this applies to both the Investment Banking and Private Equity examples.

Data analyses has never been faster with the Claude excel plugin.

—> This past week, I don’t think I would have slept without the Claude excel plugin with the abundance of work that had to be done.

I ended up getting ~6-7 hours of sleep each night, so thanks Claude!

In addition to the Excel plugin, the PPT plugin is also extremely useful for building out presentations.

Let’s say you have a slide master for a particular presentation you reuse every x amount of days/weeks/months.

You can instruct Claude within PPT to create a new, updated presentation based on information in your folder/drive, utilizing the slide master.

The final output does require a bit of manual massaging, but it gets you beyond baseline that much faster, and will only improve over time!

There are a multitude of other use cases for this that I’m sure you as the reader will be able to come up with.

Excel Plugin for Personal Investing

For investing, I usually run a quick financial forecast that looks something like the below.

It’s very simple, but it gives me a good high-level idea on whether an investment is attractive based on the numbers.

Historically, I would have to go into public filings and pull the numbers.

When AI chatbots came out (Nov-2022), I would have to feed the chatbot the annual filings and ask it to compress the numbers into certain line items, so I could then plug those numbers into the above template.

With Cowork, all you have to do is download the annual filings, make sure your Cowork is synced up to that folder that holds the annual filings and give Claude instructions to update the template.

I’d like to preface with the fact that Claude can be synced to a broad folder that holds a bunch of your stuff — it doesn’t have to link up to a smaller, more specific folder.

If you have a more detailed model or would like to see things in a different view, just ask Claude to do so within excel.

Building Skills & Tasks for Passive Workflow

What are Skills?

Skills are reusable procedures/instructions that Claude can load and run when relevant. Think of these as “mini‑playbooks” that includes instructions for tasks like parsing out data, financial modeling, custom analysis and searching for new investment opportunities based on a set list of criteria.

You can create as many skills as you want.

When you want to use a skill, you can invoke that specific skill directly by typing a forward slash “/” followed by the skill name.

An easier way to use a skill within a prompt is to simply describe your task in natural language, and Claude will automatically run the appropriate skill.

To navigate to creating a skill, reference the below screenshot:

An example of this skill would be when running a DCF or public comparables valuation.

Similar to the valuation forecast I outlined a couple paragraphs above, I built a skill around this called "quick-valuation" that instructs Claude to pull the last two years of financials from whatever annual filings are sitting in my synced folder, compress them into the key line items I care about, and populate my forecast template.

I always start with analyst projections, then make my own to compare the two so I have a relative market benchmark.

I literally type one sentence now, instruct Claude to run the skill, and the template is filled out and ready for me to sanity-check / massage.

You can get as simple or as granular as you want with these — I have skills for everything from building comps tables to grammar / syntax checks with my Substack drafts before I publish.

The key thing to understand is that once you build a skill, you're essentially training Claude on how you work, so it gets better at your specific process every time you refine the instructions.

For more detail on Skills, read the Skills section of the below post from Claude Cowork right here on Substack!

Claude Cowork

Projects vs Skills vs Connectors vs MCP

Most people do not need a bigger Claude setup…

2 months ago · 19 likes · 1 comment · Claude Cowork

Scheduled Tasks

A great way to keep workflows updated is through scheduled tasks.

Creating a task looks something like the below window:

I like to create tasks for portfolio referencing, check-ins and earnings season workflow.

Portfolio Check‑Ins

I keep a simple spreadsheet with positions, thesis and notes (which I will share later for paid subscribers)
I use Cowork to generate a weekly “portfolio check‑in” report summarizing key news on my current positions.
- This saves me time from separately googling things, and rather gives me a memo/quick read on all news for my current positions
- I also ask it to send me any public research reports on my current positions or companies in my watchlist if reports are released during a particular week

Earnings Season Workflow

I created earnings folders for each earnings season (Q1, Q2, Q3 and Q4).
For each holding, I have Cowork:
- Summarize earnings calls / reports
- Pull important points and quotes from the earnings release and transcript
- Compare guidance vs prior quarter and flag what changed

Again, these are just examples of workflows I use Cowork for — you will probably find other use cases as well. Please share if you have any good ideas!

I promise you that getting ahead of the ball here and doing these things will pay massive dividends in the future as you become more familiar with Cowork and the AI platform advances itself.

How to Make Cowork Part of Your Routine

My rule of thumb: anything I do more than twice that involves documents or data becomes a Cowork candidate.

For investing, that’s repeatedly summarizing filings, updating a model, or looking into new investment opportunities.

For everyday work, it’s compiling reports from scattered notes, extracting learnings from disparate data, uncovering unique data-driven insights, or simply turning a pile of links into something coherent.

If you decide to try this, start small:

Pick one workflow, create a dedicated Cowork project, and treat Claude like a junior you’re training with clear instructions, a tight scope and review its work before you rely on it.

I’d also recommend following for better guidance on how to use Cowork to the best of its ability.

For more information on Cowork and the in-app plugins, I would highly recommend looking at the brief course below from Anthropic that outlines how to set up Cowork, navigate the application, create tasks and skills and how to work responsibly in the application.

Just click the image below:

Adobe Q4 Update

The Private Public Investor — Sun, 15 Mar 2026 13:02:34 GMT

“Earlier today, we announced that I will be transitioning from my role as CEO after over 18 years and 100 earnings calls! Over the coming months I will be working with Frank Calderoni, Adobe’s Lead Director, and the Board of Directors to identify my successor and to ensure a smooth transition. Until then, I will continue to lead Adobe as CEO and will stay on as Chair of the Board to support my successor just as John and Chuck did when I took on this role”

— Shantanu Narayen

1. CEO Transition

2. FireFly & AI Monetization

3. Financial Performance

4. Innovator’s Dilemma

5. Watch Items

6. Bull Case

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CEO Departure

Let’s get this out of the way.

Yes, the CEO of Adobe has left.

The man who took over ‘Adobe Systems’ back in 2007 before the Financial Crisis.

The man who took Adobe through the financial crisis and built one of the most successful enterprise SaaS companies in the world.

Under Narayen's 18 years, Adobe grew from a sub-$1B packaged software company to a $25B+ cloud subscription juggernaut, multiplying the stock price more than sixfold versus ~350% for the S&P 500.

Narayen’s tenure is one of the greatest CEO runs in enterprise software history.

This does sting for long-term Adobe holders!

But, note that Narayen will stay on as Chair of the Board while the company finds his replacement.

I don’t think this departure is necessarily a bad thing. I think it’s natural, and will be a planned, orderly transition.

Narayen is approaching his mid-60’s, and with the world changing so rapidly today, I think it does make sense that he is resigning as CEO.

The board has appointed Lead Director Frank Calderoni to chair a special committee that will evaluate both internal and external candidates…. and the internal bench is deep.

The frontrunner in my view is David Wadhwani, President of Creativity & Productivity. Wadhwani was previously CEO of AppDynamics and actually helped architect the original Creative Cloud shift during his first stint at Adobe.

CNBC has previously reported that Wadhwani was being groomed for the role and former Adobe executive Brad Rencher called him “made in Shantanu’s image”

Wadhwani is currently the executive leading Adobe’s AI transformation and Firefly strategy, which is exactly the skillset needed for this next decade!

Anil Chakravarthy, President of Customer Experience Orchestration, is the other internal contender. He joined from Informatica and oversees the enterprise CXO business (smaller business segment).

Regardless of who gets the appointment, I actually think this is a net positive on a 2-3 year horizon.

Adobe needs a forward-thinking leader who will aggressively push AI-first product innovation and isn’t anchored to legacy business decisions.

Narayen framed the opportunity perfectly on the call:

“Our mission to empower everyone to create represents an even larger opportunity in the AI era.”

Narayen also highlighted that AI-first offering ARR more than tripled YoY, and that Adobe surpassed 850M MAU (monthly active users) across Acrobat, Creative Cloud, Express and Firefly (17% YoY growth).

As always, I would really appreciate if you shared this post and subscribed to ThePrivatePublicInvestor, as I try my hardest each week to give you custom, in-depth analysis on stock investments, market insights and portfolio strategies.
With a subscription to the ThePrivatePublicInvestor, you will receive insight into my personal portfolio, along with each position I own and the related weighting, along with my personal watchlist, custom templates for valuation and modeling (coming soon), additional in-depth analysis on my portfolio holdings, decision-making investment guides, and the personal chat feature for the community.
As this channel grows, paid subscriptions will start to be incorporated, so subscribe early and stay subscribed to receive ‘founding member’ pricing and exclusive benefits.
With that, enjoy this piece and let me know if you have any questions!

Firefly Growth Ramping

Let’s talk about the AI monetization story because this is where the thesis gets hot.

Firefly ARR was $250M+ in Q1, with subscription/credit pack ARR growing 75% QoQ. Generative credit consumption also grew 45%+ QoQ, with video-generative actions surging 8x YoY.

Creative freemium MAU crossed 80M, up 50% YoY, which is a direct feeder in Adobe’s paid conversion funnel.

This is an intentional strategy for conversion.

The monetization architecture/strategy is smart.

First, users get a base amount of generative credits included in their subscription.

Once they exceed that limit, they buy credit packs or upgrade plans.

—> This drives higher ARPU without requiring new seat additions, which is exactly the model I highlighted in my original deep dive.

Even if just 15-20% of Creative Cloud users exceed base AI usage and spend an incremental $10-15/month, that’s hundreds of millions in high-margin revenue!

And remember, Adobe isn’t directly competing with the new, innovative AI models to realize this growth within their existing customer base.

Adobe’s partnerships with Runway (video AI), OpenAI (Sora integration in Firefly Studio), and Google (Gemini models) create a model-agnostic platform, so, if someone builds a better model, it still runs inside Adobe’s software.

Consequently, Firefly Enterprise new customer acquisition grew 50% YoY, with over 2,500 custom models created via Firefly Foundry since launch.

GenStudio and AEP & Apps ARR each ALSO grew over 30% YoY, and there are 650 customer trials underway for Adobe’s agentic web products (LLM Optimizer, Sites Optimizer, Brand Concierge).

The enterprise AI pipeline is building, and customers are buying in….

Q1 Performance: Beats across the Board

Now let’s dig into the general report.

Total Adobe ARR: $26B+, +11% YoY
Q1 Revenue: $6.4B vs. $6.3B expected — BEAT (+12% YoY reported)
Q1 Non-GAAP EPS: $6.06 vs. $5.86 expected — BEAT (+19% YoY)
RPO: $22.2B+, +13% YoY, which is strong forward visibility!
Operating Cash Flow: ~$3B (+19% YoY), which is a Q1 record apparently!
Non-GAAP Operating Margin: 47%+

That’s a great earnings report if you ask me.

Note: there was some tax noise I noticed in the EPS calcs as well, so stripping those out would have realized even more margin expansion and, thus, a larger EPS beat.

One thing I’d like to note here is the accelerating growth of Adobe, which is highly attractive for a mature enterprise SaaS business like this.

The below table shows that Adobe’s product suite is not becoming less attractive or archaic for business or creative users, but rather augmented from AI and AI model integration.

In more detail:

Subscription revenue across both business segments hit ~$6.2B (+13% YoY)
The Business Professionals & Consumers segment grew to ~$1.8B (+16% YoY)
Creative & Marketing Professionals grew to ~$4.4B (+12% YoY)
Acrobat AI Assistant ARR tripled YoY
Express is now used in 99% of U.S. Fortune 500 companies

Guidance also came in pretty good with revenue of $6.4-6.5B (slightly above Street), non-GAAP EPS of $5.80-5.85 (above consensus of $5.68-5.70).

The Innovator’s Dilemma: Is Adobe Falling into the Trap?

Clayton Christensen’s Innovator’s Dilemma warns that incumbent companies get disrupted when they over-serve high-end customers while ignoring cheaper, good-enough alternatives that eat them from below.

Is Adobe falling into this trap? I’d argue no.

Adobe is doing something most incumbents fail to do, which is investing aggressively in the disruptive technology itself rather than protecting legacy revenue streams. They are also focused on democratizing access to this technology through their model-agnostic strategy.

Firefly, Adobe’e new AI platform for creative workflow, isn’t a defensive product, but rather an all-in-one creative AI studio with a broad portfolio of the industry-leading models, a $250M+ ARR business growing 75% QoQ and a clear future monetization framework.

Also, Adobe markets to everyone. Not just their high-value customers.

The one area where the Innovator’s Dilemma does have relevance in conversation is the Stock business decline.

Management admitted this erosion is “happening faster than planned”.

The traditional stock photography/content licensing business (about $450M ARR) is getting cannibalized by Adobe’s own Firefly tools, free AI alternatives and likely competitors.

This is a self-cannibalization trade-off, but I’d rather have Adobe cannibalize its own revenue than let Midjourney or Figma do it for them.

In case you missed it, here are some of the best investing insights for 2026:

What to Watch Going Forward

Despite the strong numbers this quarter, there are legitimate risks that I am not agnostic to:

CEO Succession Uncertainty: Until a successor is named, there’s lost strategic at a very critical time.

An internal pick like Wadhwani would signal continuity and aggressive AI execution, which I think is the right move, but if this gets prolonged, it could extend uncertainty and a continued decline on the stock price.

Competitor AI Momentum: Figma, MidJourney and Canva are strong competitors in the space and are not slowing down.

Figma, for example, is growing at 40% topline and announcing strategic partnerships, such as with Anthropic, integrating Claude Code for AI-powered workflows.

MidJourney also continues to release newer and newer AI models on its platform, challenging industry incumbents like Adobe to keep up.

Canva, Adobe’s biggest competitor, hit $4B in ARR, growing 35% YoY, with 95% Fortune 500 penetration. Their anticipated H2 2026 IPO will bring additional capital and competitive visibility, encroaching on Adobe’s territory.

The SaaSpocalypse: This is the major reason why Adobe’s stock has taken a gigantic hit the past year. About $300B in software market value was wiped in early February 2026 alone!

$IGV, the iShares SaaS ETF, is down (~25%) the last 6 months.

The entire SaaS sector is getting re-rated to lower multiples based on fears that agentic AI will destroy seat-based licensing models, and anyone will be able to vibe-code their way through custom workflows.

I believe this risk is overblown, but it is yet to be seen with certainty whether these re-ratings are appropriate or justified.

Stock Business Erosion: As mentioned, this headwind is accelerating faster than planned and creates a drag on total ARR growth. But, Firefly is accelerating faster than the decline in this business and could successfully replace the traditional creative software offering going forward.

Cash Position & Buybacks: Adobe repurchased roughly 8.1M shares in Q1, leaving ~$3.9B remaining on the $25B authorization. The buyback program was approved in March of 2024, so they’ve burned through almost ALL of that in 2 years.

Adobe’s $25B buyback program will be exhausted by mid-2026, ~2 years ahead of its formal expiration.

Given 7 consecutive buyback program renewals, I would guess they will reinstate this program.

The Semrush acquisition does create a temporary funding pinch, but I don’t think this will be a huge deal considering the operating FCF that Adobe produces.

I’d be on the lookout regarding the size of this buyback program though, as historically, each sequential buyback program has doubled compared to the last, which would infer a $30-40B buyback program this go-around.

A more conservative sizing could acknowledge a tighter balance sheet and growing R&D dollars needed for AI investment.

I’m guessing this announcement will be during the June 2026 earnings call.

I’m Bullish and Staying Long

Despite the SaaS’pocalypse noise, I’m supportive of the bullish thesis on Adobe and think the following are justifiable reasons to invest / stay invested:

Commercial Safety Moat: Firefly is trained exclusively on licensed content with full IP indemnification.

Enterprises will need legal certainty for AI-generated content, and this is a massive differentiator versus Midjourney or other open source tools that can’t offer the same protections.

AI Growth Acceleration: AI-first ARR tripled YoY.

Firefly ARR is growing 75% QoQ, generative credits are growing 45% QoQ and MAU are growing 17% YoY.

The AI business is growing rapidly and faster than anticipated.

Cheap Valuation: Adobe trades at roughly 15-17x trailing P/E, which is about 63% below its 10-year average.

The forward P/E is lower around 11-14x and the PEG ratio sits at 0.90 (which below 1.0 is traditionally considered undervalued).

For comparison, ServiceNow trades at 53-73x trailing, Intuit at 28-30x and Salesforce at 21-25x.

Adobe is the cheapest large-cap SaaS stock by trailing P/E, despite generating $10B+ in annual operating cash flow and carrying 47% operating margins and an expanding bottom

Wall Street Doesn’t Like It

The analyst community is already cautious.

TD Cowen cut its price target to $325 from $400 CNBC (Hold)
Benzinga HSBC lowered to $302 from $388
Goldman Sachs holds sell rating at $290
Piper Sandler has warned that Adobe sits in software categories “among the least insulated from AI disruption”
UBS reduced to $340 from $375 (Neutral)
Stock Observer Citi trimmed to $315 from $387, expecting an uneventful quarter
Oppenheimer had already downgraded to Perform in January

RBC Capital was among the few bulls, maintaining Outperform with a $430 target.

I like that the Street doesn’t like Adobe now… it only creates opportunity for more upside if the big money decides to jump in later!

Overall

Adobe is accelerating topline growth at 12% for the most recent quarter, with compounding EPS at 19% and trading at a valuation usually reserved for ex-growth businesses.

The math REALLY doesn’t add up unless you believe AI permanently impairs Adobe’s business.

I think these Q1 results suggest the opposite…

The P/E Multiple

The Private Public Investor — Sun, 08 Mar 2026 12:02:56 GMT

"The stock market is filled with individuals who know the price of everything, but the value of nothing."

— Philip Fisher

The P/E Multiple: A Good Refresher or Helpful Guide

Most investors learn about the P/E ratio (“earnings multiple” or “multiple” or “P/E” for purposes of this discussion) in the first 5 minutes of their investing journey.

Price divided by earnings… seems simple enough!

But I’ve noticed over the years that most investors, usually the new’er’ retail investors, are still using it incorrectly years later… or at least looking at it from a narrow scope.

Today I want to fix that.

Let’s start from first principles, then discuss how to use the metric on a relative basis and dig into some one-off, use case strategies to make this metric more dynamic.

Feel free to skip around this post —> I know many of you are familiar with some of these concepts but maybe are newer to other concepts.

Let’s dive in.

1. What You’re Actually Looking At

2. The Forward P/E

3. Run-Rate Analysis

4. Growth Adjusting with PEG

6. Relative Expansion & Contraction

7. Comparing to Industry & Peers

8. When the Multiple Breaks Down

9. The Balancing Act of Putting it All Together

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What You’re Actually Looking At

When you pull up a stock on Yahoo Finance or Google and see a P/E ratio, you’re almost always looking at a trailing twelve months (TTM) figure.

That’s the current stock price divided by the last four quarters of reported earnings per share (EPS).

It’s backward-looking. And that’s fine as a starting point!

But the direction of the earnings multiple matters just as much as the ratio itself.

A stock trading at 30x earnings that was at 40x six months ago is telling you a different story than one at 30x that was at 20x.
Is the multiple compressing because earnings are growing into the valuation?
As in, the denominator is growing faster than the numerator
Is it expanding because the market is getting ahead of itself?
As in, stocks are trending to the upside, pushing up valuations

Tracking the trend helps tell the story of how the market has viewed the valuation of the business over time.

Pairing this ‘valuation over time’ with other aspects of your investment thesis such as your financial model (projections, KPIs, etc.) can help craft a more fulsome investment thesis.

So, remember to track the trend, not just the snapshot.

Forward P/E: The Market’s Expectations

Stocks are priced based on future earnings, not historical earnings.

The trailing P/E tells you what the market paid for yesterday’s business while the forward P/E tells you what the market is paying for what this business is expected to look like in the future.

—> This is arguably the most important variation of the metric in my opinion.

The forward P/E uses analyst consensus estimates for the next twelve months of earnings as the denominator (aka Wall Street’s estimates), rather than the company’s reported, actual last twelve months of financial performance.

This is why it matters:

Imagine a company just went through a rough year. Maybe they had company or a complete product portfolio restructuring to meet market demand.
The trailing P/E might look absurdly high, say 60x, because the company just had a bunch of expenses to realize on their P&L.
But, if analysts expect earnings next year to double because they are betting on or “pricing in” a successful turnaround of the business, the forward P/E could be 25-30x.
Those are two completely different investment stories. Ignoring the forward P/E because the trailing number looks “expensive” could mean you miss a turnaround thesis playing out.

But it’s not just turnarounds, that was just an example. Let me give you a better example:

Let’s think of a high-growth tech firm that just finished some heavy R&D spending on a new product. Its trailing P/E might be 100x because past earnings were suppressed by all of that R&D spending.
However, if the business is rolling out or just launched that new product, next year’s earnings could quintuple.
Let’s say the forward P/E being priced in is 20x: the stock is actually cheap relative to its imminent scale.

—> Using only trailing data is like driving a car by only looking in the rearview mirror; it tells you where you’ve been, but the forward P/E shows you the turn ahead.

Here’s my challenge to you:

Don’t just look up the forward P/E. Build your own.

Even a simple model works. Take your projected revenue, apply the margin you think is realistic, back into EPS, and divide the current price by that number.

Now you have your own forward P/E.

Compare it to the Street’s consensus. If the Street says 25x forward and your model says 18x, try to understand that gap.

Are you more bullish on margins?
Are analysts underestimating a revenue headwind?
Are they being too conservative on a new product rollout?

Try this for practice even if it seems like a waste of time. Writing this down will help you conceptualize this concept.

This is the difference between reading someone else’s opinion and forming your own.

Run-Rate Analysis: An Alternative Lens

A strategy I’ve taken from my experience in the private markets and applied to valuing public companies is applying a run-rate to a company’s last fiscal quarter or quarters. This involves:

Taking the most recent quarter’s EPS, annualizing it (multiply by four), and using that as your denominator in the P/E ratio. This gives you the “last quarter run rate” P/E.

Why does this matter?

Because businesses change.

If a company just posted a breakout quarter, maybe margins expanded? Maybe a new revenue stream kicked in?

Personally, I like to use 2 quarters for businesses because it strips out possible single-quarter noise such as macroeconomic supply/demand changes or maybe something like raw material price volatility. Using the last two quarters smooths that out while still giving you something more current than the full TTM figure.

The TTM number is dragging along three older quarters that no longer reflect the current business.

The run rate P/E can give you a more insightful snapshot of what the business actually looks like right now.

Quick example: say a company earned $1.00 EPS over the TTM, but the most recent two quarters came in at $0.35 and $0.40. Annualizing those two quarters gives you $1.50 ($0.75 × 2).

On a $40 stock, the TTM P/E is 40x, but the run-rate P/E is ~27x. Very different valuation!

You can also get creative here by stripping out one-time charges, normalizing for seasonality if the business is cyclical or adjust for SBC if it’s distorting GAAP earnings.

The point here is to get closer to the true earnings power of the business.

Try this as well:

—> Compare your run-rate P/E to the forward P/E

If the run rate P/E is 27x and the consensus forward P/E is 22x, the market is expecting earnings acceleration.

Is that realistic?
What needs to happen for the business to get there?
Where is that margin expansion coming from?
- Is there new technology in place that will help accelerate this?
- Did they make recent hires in the previous year that will ramp during the next year(s)?

Ask these questions first.

If you think the margin acceleration is coming, you might have a compelling entry point.

If you think the Street is too optimistic, maybe wait it out. I’ve found this to be a useful quick-check in my analysis.

Note that run-rate analysis is only helpful for companies without dramatic seasonality. For example, this wouldn’t be super helpful for a company like Abercrombie if you are run-rating the last 2 quarters of the calendar year (inflated financials from the holiday season).
Run-rate analysis would be helpful for valuing a company like Adobe with more recurring-based revenue without seasonality.
Performing this run-rate analysis for metrics like ARR for tech businesses are a popular use case — but this run-rate analysis can be applied to multiples such as P/E as well.

One more practical note:

If a company is days away from their earnings report, be cautious about making valuation judgments based on the current P/E. That denominator is prone to change short-term, and as investors, we don’t want to hinge on short outcomes.

In case you missed it, here are some of the best investing insights for 2026:

Growth Adjusting Your P/E

Once you’re comfortable with forward P/E, the next step to rounding out our understanding of earnings multiples is asking:

“Is this P/E justified given how fast the company is growing?”

I personally use this ratio less than most people, but the PEG ratio, in theory, addresses this question on a relative basis.

PEG = P/E ratio ÷ expected earnings growth rate (expressed as a #, not a %)

So, broadly, a PEG below 1.0 suggests a stock may be undervalued relative to its growth, while above 1.0 signals the market may be paying a premium.

So, a stock trading at 30x earnings with 30% expected growth will have a PEG of 1.0

Let’s say you’re comparing two companies in the same industry providing a very similar product/service offering.

Company A trades at a 20x P/E with projected 10% growth for the next year (PEG of 2.0)
Company B trades at 35x with 40% growth (PEG of 0.88)
On a P/E basis, Company A looks cheaper
On a PEG basis, Company B is the better deal
Company B looks cheaper because you’re paying less per unit of growth

This ratio is ONLY useful for comparing businesses in the same sector though, as a PEG ratio for a utility business would be much different than a AI-enabled SaaS business.

It does have its drawbacks due to it’s:

Reliance on forecasts, which are not always accurate
Ignores capital structure (cash and debt levels)
Meaningless measure for smaller companies with little profitability
Ignores businesses with cyclicality such as in energy or materials

The PEG ratio should be used as an additional metric to round-out an analysis, not a standalone measure of growth relative to earnings power.

Relative Expansion & Contraction:

I’ll start by saying I use this methodology a lot, as it’s great for relative analysis.

A stock can grow earnings 15% a year for five years, but if the P/E compresses from 30x to 15x over that same period, due to investors becoming bearish on the stock or future of that industry (like SaaS businesses in the market right now) your return is roughly flat.

Also, a company with “okay” earnings growth can deliver huge returns if the market re-rates the business, which can expand the multiple (this would be the inverse of the above, as investors would become bullish on the company or industry).

An example of this is the “picks and shovels” of the AI infrastructure industry, such as businesses who provide cleaning services to fabs, or electrician businesses that service datacenters.
- These businesses may not have had crazy historical growth, but the growth expectations are sky-high due to the future buildout needs of AI infrastructure.

Think about what actually drives multiple expansion:

Improving growth expectations
Business model transformation (transaction-based to subscription revenue, for example)
Market sentiment turning positive on a sector

Multiple contraction is the opposite:

Slowing growth
Deteriorating sentiment
Competitive threats
Commoditized products

Understanding what could expand or contract the multiple is just as important as analyzing the earnings themselves.

This is also when comparing a company’s current P/E to its own historical range becomes very useful!

Let’s look at Adobe, as I think this company is undervalued currently, compared to where it’s traded historically on an earnings multiple.

Adobe is trading at a ~15x multiple right now, when it’s traded at a ~45x average multiple over the last decade! Even if we take a more recent 5-year average, the multiple stands at 40x!

This is where it comes down to your own personal conviction.

Some folks believe this business’s service offering will become commoditized, which will re-rate the SaaS multiple down, which has driven the stock price meaningfully down over the past ~6 months, hence the “SaaS’pocalypse”.

I don’t think this is true, which would lead me to believe that this P/E is offering up a great deal!

—> This is where real risk/reward can become asymmetric

Your total return from a stock is a combination of earnings growth and the change in the multiple the market assigns to those earnings.

Comparing to the Industry

Stop comparing against the S&P 500’s overall P/E as your benchmark.

The spread between sectors is massive.

Energy stocks might trade at 7-8x earnings while tech trades at 30x+!

Comparing your Sandisk semiconductor play to P&G’s P/E is comparing apples to oranges. I hope you get this one, haha. Always compare within the sector, and ideally within the specific sub-vertical and provide similar services (sometimes you will have to broaden your comparisons, but you get my drift).

Even within the same industry, you need to ask why a company trades at a premium or discount to its peers. A company growing revenue at 25% deserves a higher multiple than another business growing topline at 5%.

Margin profile matters as well. Same with capital intensity.

A software company trading at 35x with 80% gross margins is fundamentally different than a manufacturer at 35x with 30% margins.

Simply ask the question: is this premium or discount justified by the underlying business quality?

A stock trading at 2x its sector average P/E isn’t overvalued if it’s growing 3x as fast, and a stock trading at 20% of its sector average might be cheap for a reason (classic value trap)!

Dig into the why before making a judgment.

When P/E Breaks Down

Firstly, don’t use the P/E ratio when a company isn’t profitable or is barely profitable. It’s useless. A company earning $0.01 per share trading at $50 technically has a P/E of 5,000x. It doesn’t mean crap.

Think of Tesla back during their growth cycle in 2020 when their stock skyrocketed 700% —> they just became profitable that year and were valued at $750B+ by the end of the year!

For early-stage or high-growth companies that are reinvesting aggressively, you’re better off using a revenue multiple (EV/Rev) to get a sense of valuation relative to the scale of the business.

Even for profitable companies, watch for earnings that are inflated short-term by one-time expenses, heavy SBC or accounting changes.

P/E also doesn’t reflect capital structure!

Two companies can have the exact same P/E, but one might be loaded with debt generating those earnings while the other is debt-free.

Always ask : are these earnings real, recurring and representative? And what is the strength of the balance sheet?

The Balancing Act of Putting it All Together

It’s never just one metric. It’s the interplay between all of them.

When I look at a stock, I’m running through a mental back and forth:

What’s the TTM P/E?
How does that compare to the forward multiple?
What does the last two-quarter run rate tell me?
Is the market pricing in acceleration or deceleration of growth?
Is the PEG ratio telling me I’m paying a fair price for growth?
Where is the P/E relative to the historical range and sector peers?
What catalysts could drive multiple expansion?
What headwinds could compress the multiple?

When you layer these frameworks on top of each other, a picture emerges.

Maybe the run rate P/E is compressing, the forward P/E looks reasonable, the PEG is below 1, and the stock is near the bottom of its historical valuation range while the business is inflecting with tailwinds ahead.

—> That’s what a compelling setup looks like.

This balancing act is what real fundamental analysis looks like, and once you get good at it, you’ll be able to run that checklist above in 15min, especially with the power of AI these days.

It’s not about memorizing formulas.

It’s about developing the instinct to cross-reference multiple signals and form a novel view.

Takeaway This

The P/E ratio is a starting point.

Use the TTM to orient yourself, the forward P/E to understand what the market expects, the run-rate to gauge the business right now and the PEG to contextualize the growth.
Study the historical range for expansion and contraction signals and compare multiple with relevant peers.
Layer these frameworks.

Some of these ratios won’t work for certain businesses and you’ll have to use other analyses’ in your mental toolkit to evaluate the business. Just remember to think.

That’s the toolkit. Now go use it!

Celsius Q4 Update

The Private Public Investor — Sun, 01 Mar 2026 13:02:06 GMT

Energy Drinks Everywhere

You may have noticed that energy drink stocks are still on a tear.

Red Bull sold a record ~14B cans in 2025 (+10.2% YoY), with global sales jumping 8.6% to about $14B+.
Monster had a banner Q4 as well with net sales rising 17.6% to $2.1B, the first time the quarter topped $2B.

The whole category is booming, which makes the backdrop for the Celsius story much more interesting, as the 3rd biggest player now competes in a much fiercer landscape.

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Q4 & FY2025 Earnings

Celsius’ Q4 & FY2025 earnings were very strong:

Q4 revenue of $721.6 M (+117% YoY)
FY2025 sales of $2.5B (+86% YoY)
Q4 Adj. EBITDA doubled to $134.1M (+113% YoY)
FY2025 Adj. EBITDA was $619.6M (+142% YoY)
Adj. EPS of $0.26 in Q4 (+86% YoY)
Adj. EPS of $1.34 for FY2025 (+91% YoY)

In short, Celsius exceeded expectations on topline growth, EBITDA and EPS across the board, except for gross margins.

Gross margins were 47.4% in Q4 (down 2.8% YoY) due to integration costs, including Rockstar’s lower-margin mix, tariffs and one-time Pepsi distribution transition fees. However, full year gross margins finished at 50%+ (roughly flat vs. 2024).

Adj. EBITDA margin expanded massively with scale this last report — as Celsius transitions to a multi-brand business, the operating leverage is showing up in the financials.

Management also on the earnings call that as the remaining integration work completes for Alani and Rockstar, margins should rebound to low-50s% in 2026.

Celh Q4 2025 Investor Presentation Final Version

1.53MB ∙ PDF file

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The Core Celsius Brand

I drew this up as a major risk in my last post on Celsius.

Investors have been worried about the legacy Celsius brand deteriorating with slower growth YoY.

Based on the latest earnings report, the underlying Celsius brand is still growing.

For Q4, Celsius legacy brand sales were down (8%). This may seem very weak, but U.S. tracked retail sales for the legacy brand actually increased 12.8% during Q4.

The gap between the 8% revenue decline and 12.8% retail growth was attributed to “integration-related timing dynamics” and the sequencing of orders from Pepsi…

Moving Alani Nu into the Pepsi system was a majority contributor in the temporary noise and order misalignments for the legacy brand.

The legacy brand did grow revenue 7.5% for FY2025 and maintained their 10.9% dollar share (essentially market share) of the U.S. energy drink category!

In addition to that, Circana tracker data shows ACV (All Commodity Volume) for the legacy brand has reached nearly 98.5%. Total business ACV reached 99.5%.

—> Essentially, this means that if you walk into almost any store in the U.S. that sells energy drinks, you are very likely to find a Celsius on the shelf.

That is very impressive, but does show us that revenue growth from improved distribution from the legacy brand will be much tougher, as they are already everywhere. Further growth will have to come through more shelf space with existing wholesalers, improved marketing and current customer wallet sell-through.

The Company also guided for a projected 17% increased shelf space for the legacy brand in 2026, which bolsters the foundation for the legacy brand going forward.

Legacy Celsius growth is certainly moderating from its hyper-growth days, but it’s doing so at very high volume and under complex integration conditions, so this feels reasonable and makes me comfortable with the performance.

Alani Nu Integration

This was the main highlight for the earnings report.

Alani Nu added about ~$1B of revenue for 2025, including a record ~$370M in Q4.

YoY retail sales for Alani Nu soared +101% in 2025, driven by aggressive distribution and consumer demand, as the brand has been successfully integrated into Pepsi’s system (not fully).

Alani also released new flavors during the period, which sold out in record time! This flavors include ‘Cherry Bomb’ and ‘Lime Slush’.

One of the craziest stats in the presentation was that the Alani brand surged to 94.2% ACV by the first week of Feb 2026, versus ~87% ACV when Pepsi took over in early Q4. That’s astonishingly successful integration.

—> More ACV means more shelf space and sales velocity.

In addition, Alani Nu's Q4 revenue of $370M (PF growth of 136%), run-rated through 2026 gets you ~$1.5B. Prior to the Alani Nu acquisition, Celsius’ Q1-25 LTM revenue was $1.33B at the time.

This will be a much larger business.

Once Alani becomes full integrated, I think we’ll see extended revenue growth through 2026, along with beneficial synergistic cost realization.

Management noted the Alani transition will be fully complete by end of Q1 2026, which includes supply chain, back office and commercial operations

Rockstar Integration Continues

As a reminder, Rockstar rights for the U.S. was acquired in late August 2025 for $585M. This remains the weakest link of the business.

Rockstar contributed $45M for Q4, and its underlying U.S. sales were down (~10%) in Q4 and (~11%) in FY2025.

Honestly, that decline isn’t surprising to me, as the brand was already in a slump prior to the acquisition, and is now in the process of a distributor handoff.

BUT, at CAGNY, Fieldly described a two-phase strategy for the integration here:

Stabilize by sharpening positioning, improving execution and focusing on the SKU set
Then rebuild by modernizing the brand for today's consumer

—> Management framed this rebuild of the brand as a "handful of years,“ so this transition will be slow

Based on the earnings report, Pepsi is on track to fully transition Rockstar into its system by this summer and project annual revenue post-integration is ~$250M.

We don’t have evidence of the recovery yet, but the integration is proceeding as planned and we’ll be watching to see if the retail declines slow… and eventually show signs of true reversal.

A successful turnaround would allow Celsius to optimize the portfolio, streamline sales teams and leverage Pepsi's network to drive further synergies.

CAGNY 2026 Strategic Foundation (1 week before earnings)

On February 19, leadership presented at the Consumer Analyst Group of New York (CAGNY) conference, revealing key data on portfolio scale and distribution, which actually caused an 8-10% jump in AH trading.

The most impactful data points from CAGNY were distribution-related:

Shelf Space: Expanded by over 25%, with an additional 17% increase forecasted for the legacy Celsius brand and a 100%+ increase for Alani Nu during the upcoming spring reset (when stores refresh their products and Alani supply chain distribution becomes fully integrated), primarily in convenience stores.
Market Reach: The fulsome portfolio now sells through more than 250,000 retail outlets at 99.5% ACV (already talked about this)
Consumer Engagement: 52% of repeat consumers purchase products 5 or more times. This shows brand loyalty and a sticky customer base. The brand is expanding into new occasions as well, with 37% of consumers now drinking Celsius with meals and 33% in social settings.

Celsius Cagny Presentation 2026 Final

7.53MB ∙ PDF file

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The Aggregated Portfolio

Celsius is fast becoming a multi-brand player.

As of Q4 2025 the combined Celsius/Alani/Rockstar brands command roughly 20% of the U.S. energy drink category by dollar share (+8% YoY).

This combination of brands is the #3 portfolio behind Red Bull and Monster.

Each brand occupies its own niche as well:

Celsius hits the health/fitness consumers
Alani Nu resonates with females/premium functional space
Rockstar covers the traditional energy segment (maybe a bit more gamer’ish / adventure oriented)

This multi-brand approach allows the Company to go to retailer and say “We have a shelf solution for every energy drink segment.”

This is a major advantage over its competitors Monster and Red Bull.

I also think one of the biggest growth categories within the energy drink market is the zero-sugar segment, and the Celsius (legacy) brand, Alani Nu and Rockstar collectively drove ~33% of the zero-sugar energy sub-category growth in 2025. This should continue through 2026.

Wall Street’s Upgrade Cycle

Post-earnings reactions were overwhelmingly positive, led by BofA’s upgrade from Underperform to Buy, raising their price target to $65.

Broader Analyst Wave:

B. Riley: Raised to $85
JP Morgan: Raised to $77
Needham: Raised to $75
UBS: Raised to $72
Piper Sandler: Raised to $65
Deutsche Bank: Raised to $56

Consensus on Celsius now stands at a Strong Buy with an average price target of $64–68, implying 20–30% upside from where the stock sits today.

What’s Next?

What I’m watching for is:

Margin stabilization: We’ll want to see gross margins tick back up now that integration and distribution shifts are nearly finished. Synergies should be realized as SG&A leverage continues.
Legacy organic growth: I want to see continued, stable growth from the core brand, with no signs of deceleration.
Rockstar’s integration progress: I want to see stabilized Rockstar sales and ACV lift as it comes fully onto Pepsi’s system.
International momentum. This is a huge growth vector, with the Company having almost no exposure abroad. The international business grew ~24% this past year to ~$92.8M, but I want to see this growth accelerate. If Celsius can replicate the U.S. growth playbook abroad, that’s huge long-term upside.

At the end of my last write-up on Celsius, I mentioned:

“I am definitely formulating a plan for selling these shares within the next several months unless organic growth accelerates, integration synergies are successful, distribution is seamless (doesn’t have to be perfect), and the business continues to execute on their core offering.”

This last earnings report certainly got me more comfortable with my current ownership in the business, and I plan on holding these shares for most of 2026.

I would still say I am cautiously optimistic, but this quarter’s execution definitely puts Celsius right on the path we mapped out:

The base Celsius brand stayed strong enough
Alani is integrating on schedule
The setup is laid out for Rockstar to follow
International growth is getting stronger

In addition to this, the current forward P/E of ~28-30x (well below its 5-year median of ~77x) illustrates a reasonable valuation for a company growing revenue 85%+ with a path to mid-50s gross margins with one of the most popular energy drink brands for younger consumers.

While execution risks regarding inventory timing and stabilization remain, the risk/reward profile has shifted meaningfully in favor of shareholders heading into the remainder of 2026.

If the team stays focused and avoids any more negative surprises, the multi-brand thesis story looks alive and well.

Coinbase Deep Dive

The Private Public Investor — Sun, 22 Feb 2026 19:48:18 GMT

I first invested in Bitcoin in 2017.

I transferred $300 into Coinbase and bought $300 of Bitcoin and Ethereum.

I was so excited. I thought I was going to be rich.

But no. One year later, Bitcoin was trading at ~$3,700/coin and Ethereum materially lower. I quit. I concluded that crypto was dumb and just a gambling addition.

But later in 2020 around Covid, Bitcoin exploded again. Then fell. Then exploded again in mid-2023/early-mid 2024.

I wasn’t invested in either of those 2 runs… and it made me very angry! Although, I also realized I was more of a stock investor than a crypto trader.

I started to realize Bitcoin traded in cycles. Lately, I’ve read into the supply/demand patterns and delved into the world of Stablecoins and Tokenized Deposits.

There is actually material utility within crypto and Blockchain technology as a whole.

^That is objective, not an opinion.

I want to be part of this era of crypto/blockchain adoption and believe, apart from outright owning crypto, that Coinbase will be a direct beneficiary.

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Executive Summary

Coinbase is no longer a crypto casino (revenue is no longer driven solely on fees from trading volume).

It hasn’t been a casino for a while now, but the market still treats it like one and that’s where the opportunity sits.

Coinbase is down over 60% from its $400+ all-time high last July. The bears have had their days, and frankly, some of their arguments are valid.

Crypto prices are soft. Q4 showed a $667 million GAAP net loss for Coinbase.

Sentiment is ugly and could get worse.

But, while everyone is staring at Bitcoin’s price chart over the past years, Coinbase has been rebuilding itself into a regulated financial infrastructure company; what the internet is calling “a tollbooth” on the rails that institutional money is increasingly forced to travel through.

Assets on the platform have grown 3x over the past three years, with Coinbase now storing over 12% of all crypto globally.

In 2025, total revenue grew 9% to $7.2B despite a soft Q4, with subscription and services hitting $2.8B, up 23% YoY and now 41% of total topline revenue.

Transaction revenue is still $4.1B and very cyclical (floats with trading volume), but the other pieces — USDC, cold storage custody, Coinbase One and derivatives are what actually drive the valuation debate now.

The question for this investment opportunity isn’t whether crypto is going to have another bad quarter. It probably will.

The question is whether Coinbase has built enough durable revenue to survive it, whether it can withstand the multitude of regulatory changes and statues going through government, and whether the long-term structural tailwinds via stablecoins, tokenized assets and regulatory clarity can be materialized and implemented successfully within the economy.

Let’s dive in.

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An Updated View on How Coinbase Makes Money

Before we go further, it's worth grounding ourselves in how this business actually makes money. There are really two buckets of revenue.

In summary:

59% of the business is transaction based
41% of the business is subscription / recurring based

—> If you are already familiar with the business model as of late, feel free to skip this section

Bucket 1: Transaction Revenue ($4.06B in 2025, ~59%)

This is the legacy business, which essentially can be boiled down into fees charged when someone trades crypto on the platform. It breaks down into three pieces:

Consumer trading ($3.32B): This is you or me buying Bitcoin on our phone. Coinbase charges a % spread on each trade, typically around 1-2% for simple trades. This is still the single largest revenue line, but it’s the most volatile. When crypto sentiment dies, this number can fall off a cliff within weeks.
Institutional trading ($480M): Hedge funds, asset managers and other institutional corporations trading in large amounts. The fees are much lower per trade (think 0.05-0.06% of volume) because they are enormous orders.
- This line item surged in 2025 due to the Deribit acquisition, which instantly made Coinbase the global leader in crypto options and derivatives. Deribit hit all-time high revenue in Q4.
Other transaction revenue ($253M): These are fees from instant transfers (when you move money to your bank account quickly), Base network transaction fees and payment processing.

Note: Consumer trading margins have been trending down as competition from Robinhood, Kraken and others intensifies — this bucket will always move with crypto sentiment

Bucket 2: Subscription & Services Revenue ($2.83B in 2025, ~41%)

This is the new Coinbase — the part the market undervalues, in my opinion. These are revenue streams tied to assets sitting on the platform, not people actively trading. It breaks down into four pieces:

Stablecoin revenue ($1.35B): Through the partnership with Circle (issuer of USDC), Coinbase earns a share of the interest dollars generated by the reserves backing USDC, which are parked in T-bills and cash equivalents (essentially a revenue-sharing agreement).
- Think of it like this: every dollar of USDC sitting on Coinbase is effectively a deposit earning Treasury yields, and Coinbase gets a cut of that rate
Blockchain Rewards / Staking ($677M): When you “stake” your Ethereum or Solana through Coinbase, the network pays you rewards for helping validate transactions. Coinbase takes a 25-35% commission on those rewards. (I honestly don’t know the exact nature of how this technically works in the blockchain system).
- This revenue is denominated in crypto, so when ETH or SOL prices drop, the dollar value of rewards drops too. The nature of this actually caused a decline recently on their P&L in Q4
Interest and Finance Income ($247M): Interest earned on customer cash balances held at banks + income from Coinbase’s institutional lending business.
Other Subscription & Services ($555M): This comprises of Custodial fees (charged to institutions like BlackRock for storing crypto assets), Coinbase One subscription revenue (paid platform subscribers) and other platform services.
- Coinbase holds over 80% of U.S. Bitcoin and Ethereum ETF assets in custody

“Bucket 3”: Other Revenue ($298M in 2025)

This consists of corporate interest income and other miscellaneous items. This is not a driver of the thesis but worth noting, as $11.3B in cash generates meaningful interest income on its own.

The flywheel in the shareholder letter describes the the business pretty well:

Build trust → assets concentrate on Coinbase → users and institutions adopt more products around those assets (staking, borrowing, trading, payments) → revenue grows and is reinvested back into better products and compliance

The Business Model Shift

If you asked me about Coinbase in 2021, I would’ve told you it was a leveraged bet on retail trading crypto euphoria.

Revenue went up 80% when crypto pumped and fell off a cliff when it crashed. That was the old Coinbase!

—> The new Coinbase looks meaningfully different

In 2025, the company generated $7.18B in total revenue, with subscription revenue making up a much larger portion of sales YoY.

This subscription number is 5.5x higher than the 2021 cycle peak!

Inside that subscription bucket, the standout revenue piece is stablecoin revenue, which produced $1.35B in 2025, up 48% YoY. Stablecoin revenue alone now represents ~20% of Coinbase’s total revenue.

Note: In the last period, the ‘Other Subscription & Services’ line item and ‘Interest & Finance Income’ line items have been lumped together for reporting standards, so those 2 bar graphs may have slightly off numbers… but you get the point

The reason this breakdown matters is that it tells you what kind of company Coinbase is becoming versus what it was.

If you model forward several years and assume subscription revenue grows at 15-20% annually while transaction revenue grows steadily or stays flat, you get to a business where the majority of revenue is recurring and asset-based rather than trading-dependent.

Now that is a business that I want to own!

Small caveat: This isn’t true “SaaS” though. If ETH drops 50%, the dollar value of staking rewards, custody fees and even some USDC flows will fall too, even if nobody leaves Coinbase’ platform/ecosystem. I like to think of this as a more stable stream of revenue.

In case you missed it, here are some of the best investing insights for 2026:

Stablecoin Utility is an Asset to Coinbase

If you’re going to own Coinbase, you have to understand stablecoins because this is a big part of where the thesis lives or dies in my eyes.

Quick and Dirty Explanation: Stablecoins are digital dollars on a blockchain and settle 24/7, near-instantly, with no correspondent banks, no three-day wire delays, and no cut-off times.

A USDC transfer from Chicago to Singapore takes minutes and costs cents
A traditional international wire takes 2-5 days and can run $25-50 in fees, plus FX spreads

The traditional system is expensive! To drive this home further, look at the below table for baseline fees for transferring wires domestically and abroad traditionally through layers of banks and other financial institutions (SWIFT), where fees are racked up:

This is why stablecoin transfer volumes hit $33T in 2025, up 72% YoY. Institutions understand the cost value now.

The total stablecoin market cap is now around $308B. A Coinbase research report projected this market could grow nearly fivefold to reach $1.2 trillion by 2028!

USDC specifically sits at roughly $74B of this market share.

And don’t forget that Coinbase is the primary distribution and ecosystem partner for USDC through its relationship with Circle!

Every USDC token is backed by reserves (mostly T-bills) that generate interest income, and Coinbase gets a cut of that yield on both the dollars of USDC held directly on its platform and a share of the dollars circulating off-platform.

Dollars Held on Coinbase Platform: $17.8B in Q4 2025, an all-time high
Dollars Held Off Platform: $58.4B (average)

This is where the “tollbooth” internet slogan comes from.

And as long as USDC exists and sits in or near the Coinbase ecosystem, Coinbase earns a spread on the underlying Treasury interest income.

It's rent on money other people parked in your building

The GENIUS Act (passed in Jul-25) supercharged this system by giving stablecoins federal legitimacy (basically approved as legal infrastructure). Before GENIUS, financial institutions such as pension funds couldn’t touch USDC without legal risk.

The Genius Act essentially legalized stablecoins and defined what a compliant stablecoin is and set strict rules for who can issue them and how they must be managed (tied to asset, 1:1 ratio, etc.)

As the GENIUS Act bypassed this legal statute, suddenly, pension funds, banks and other financial institutions could hold USDC without legal risk, which is what propelled USDC's market cap to $74B in 2025.

Every incremental dollar of adoption in USDC is another dollar generating reserve income that flows back to Coinbase.

The Ethereum Network Effect (in addition to USDC!)

USDC is not the only part of the stablecoin market that benefits Coinbase.

Ethereum is the backbone of the stablecoin market — over 80% of the world's stablecoin supply lives on the Ethereum blockchain and its networks

So when…

USDC grows
Stablecoin volumes surge
Institutions settle tokenized assets (bank’s version of wiring cash using the blockchain network)

…the vast majority of that activity flows through Ethereum's network, and Coinbase is embedded at every level of that stack.

Coinbase captures roughly 60-65% of U.S. crypto exchange volume and custodies over 80% of U.S. Bitcoin and Ethereum ETF assets.

They also stake about 11% of all staked Ether globally, earning a 25-35% cut of the rewards.

And Base (Ethereum network layer allowing for faster and cheaper transactions) is rapidly becoming the commerce platform where Stripe, Shopify and other payment integrations route USDC transactions.

Essentially, Coinbase is deeply woven into the Ethereum ecosystem that stablecoins depend on, and if stablecoins win, Ethereum wins. And if Ethereum wins, Coinbase is collecting fees at multiple layers of that stack, from trading to staking to custody and settlement.

Finding this content valuable? Share it with your network! This helps tremendously, as others are able to find these opportunities, get ahead of ball in the market and start seeing compounding returns! Your support really does make all the difference and is the reason I do this every week, so thank you!

The CLARITY Act & the Billion Dollar Fight

The CLARITY Act (Digital Asset Market Clarity Act) is the final boss of legislation the crypto industry needs, and Coinbase’s business is highly leveraged on this passing through government.

The CLARITY Act is considered the next step in establishing a comprehensive U.S. regulatory framework, working in tandem with the already enacted GENIUS Act.

The Genius Act also said that companies who issue stablecoins (like Circle) are banned from paying you interest. Congress didn’t want stablecoins to look like unregulated bank accounts.

The Loophole: The law didn’t say anything about exchanges. So, Coinbase (an exchange) says, “Hey, we aren’t the issuer! We’re just an affiliate. So we can still pay our users 3% or 4% rewards on their USDC.”

Banks are obviously furious about this, as it can cannibalize THEIR business. If you can get 4% rewards on Coinbase for a something like USDC that is just as safe as a bank account, you’ll likely move your money out of Chase or Wells Fargo to Coinbase!

The SEC and CFTC (Commodity Futures Trading Commission) are both claiming they are in charge of crypto and are constantly suing companies like Coinbase.

The SEC wants control of tokens that act like company stocks
The CFTC sees Bitcoin as a "commodity" (like digital oil or gold), so they want to control Bitcoin and Ethereum (for context, the CFTC controls commodities)

So the CLARITY Act is attempting to employ the official rulebook for the U.S. crypto industry that elects who's in charge and who controls/oversees what.

Coinbase wants democratization and banks want concentration

Current status of this:

Coinbase’s Move: In January, Brian Armstrong (CEO) withdrew support for the bill. He basically said he’d rather have no law at all than a law that lets banks kill his business.
The White House: Emergency meetings are being held right now (as of late Feb, 2026) to find middle ground. From reading online, it seems they are suggesting a compromise where you can get rewards for using the coins (buying coffee, etc.) but not just for letting them sit just there.

For Coinbase, the stakes are existential for the USDC revenue line. If CLARITY bans all rewards on idle stablecoin holdings, the $1.35B USDC revenue could be wiped out.

If the compromise lands on banning passive yield but allows activity-based rewards for transactions and staking, Coinbase can likely adapt.

It does look like insiders are selling out of their COIN stock, so one must tread carefully jumping head over heels into this position.

The California Problem

While Washington is getting all the attention right now, there is another major risk.

The California’s Digital Financial Assets Law (DFAL), passed in late 2023, says that starting July 1, 2026, any company exchanging, storing or transferring digital assets for Californians needs a DFAL license or at least an application on file with the state government.

Why does this matter for Coinbase you ask?

After doing some digging, California represents roughly ~20% of Coinbase’s domestic business (note this is an estimate by me, see below for further detail).

About 27% of California adults own crypto, and during a 2023 legal dispute (around the time of this legislation), it was revealed that ~600,000 of Coinbase’s 3.5M nationwide staking accounts were held by Californians (600,000/3.5M=~20%).
Applying a conservative ~20% estimate to 2025’s $7.18B in revenue, California represents approximately $1.4B in topline revenue.

Coinbase will almost certainly get licensed, but the cost of maintaining this California-specific compliance (unique disclosures, fee-tracking systems, etc.) will compress California profitability.

The DFPI has actually already brought enforcement actions against smaller firms like Coinme and Nexo, so they’re serious about this legislation.

Mitigation

The law was signed in October 2023, so in my opinion, the market has had over two years to absorb the law’s implications, including a 2024 amendment that pushed the licensing deadline from 2025 to 2026.

—> Coinbase is ready for this

Even though margins may compress a bit, I think this legislation will actually strengthens Coinbase’s moat, as smaller competitors won’t be able to justify the costs of compliance in California and will pull out.

This leaves Coinbase and a handful of large players as the only game in town long-term. But in the near-term, I will submit to the fact that there may be a slight margin headwind.

Slicing the Financials

I’ll start out by saying it’s tough to really play with the data on Coinbase, as this industry is changing so rapidly with regulatory statutes, so it’s hard to really lean heavily on anything.

Revenue Diversification

In 2023, Coinbase had 4 products generating $100M+ in annualized revenue.

By 2025, this number is 12, which accounts for institutional derivatives (Deribit), retail derivatives, Prime financing, Base (app + chain), and Coinbase One.

Half of those 12 products generate over $250M, and two exceed $1B.

I really like how the breadth of the Coinbase portfolio is expanding — it makes me more confident in the long term stability of the business.

Looking Beyond the Q4 Market Tumble

Here's where most analysis on Coinbase goes wrong

People look at the Q4 numbers and see the $667M GAAP loss and declining revenue, and assume the business is deteriorating but it’s really not.

The market deteriorated in Q4:

Bitcoin dropped 12%
Ethereum dropped 13%
Solana dropped 16%

And because a majority of Coinbase's P&L is mechanically tied to crypto prices, the income statement absorbed that. So let’s look at the stock pre-Q4 and view this on a run-rate perspective.

The better way to gauge what this company actually would have performed is to look at Q3, when crypto was relatively stable, Deribit was fully integrated and the product suite was ramped.

Q3 delivered $1.87B in revenue, $801M in Adj. EBITDA (43% margin) and $433M (23% margin) in net income.

Annualize it and you get roughly $7.5B in revenue, $3.2B in EBITDA, $1.7B in earnings. Against a $38B market cap, that’s 12x EBITDA and 22x earnings.

On a run-rate basis, this is not expensive.

Run Rate Comparison:

Run-rate revenue: $7.5B (5% higher)
Actual ‘25 revenue: $7.2B
Run-rate GAAP net income: $1.7B (30%+ higher)
Actual ‘25 GAAP net income: $1.3B

Transaction revenue fell because volumes dried up.

Subscription revenue barely moved.

The Company has also recently marked down strategic investments and crypto-related investments associated with recent acquisitions and crypto related holdings for unrealized losses (also have to do this for gains). This had a negative impact on GAAP earnings.

So falling prices and write-downs are some of the main reasons for the poor performance

But, some investors don’t have the gut to make it through volatile times in the crypto market like this, which totally makes sense and I do not blame them.

Balance Sheet

The balance sheet is very strong for Coinbase, with $11.3B of cash on the books.

The company also has $2.8B in crypto related assets as collateral, which brings total available liquid assets against their $7.2B in debt to $14.1B. This is ample coverage and conservative liquidity.

This is also an industry where competitors (FTX, Voyager, BlockFi, Celsius) literally went bankrupt during the last downturn, so this is a competitive moat for Coinbase.

AND they’re confident enough with their balance sheet to actually use it for buybacks, with $1.7B in buybacks since November. I like this a lot.

Downside Coverage

Annualizing the Q1 2026 guided midpoint recurring revenue side of the business (~$590M), and you get ~$2.4B in recurring revenue… and this assumes a soft market.

Total Coinbase revenue at the bottom of the last crypto winter in 2023 was $3.1B. The subscription piece of the business alone now covers 85% of that! This is a much more stable business than it was two years ago, and if crypto sentiment recovers, you’re looking at material growth on the P&L. I like to view this recurring piece of the business as the floor going forward.

The Forecast

Note: Forecast assumes 3% share reduction a year via buybacks

Take this forecast with a grain of salt, as the stock price and future roadmap for the next 1-2 years depends heavily on the regulatory statutes going through government at this time.

I’ve assumed a pretty conservative, base case revenue forecast for Coinbase.

We have topline revenue being driven by a 15% CAGR, growing to $14.4B, roughly double where revenue sat in 2025. This is conservative compared to what the subscription bucket has been doing historically, with 23% YoY growth in 2025.

I am simply using the last 4 quarters of YoY growth averaged out.

Net margins sit at 18% today, and we have them growing to 25% by 2030, growing to $3.6B, roughly triple where net income sat in 2025.

This assumes margins will expand faster than revenue, as the business will realize operating efficiencies over time as crypto and blockchain technology becomes more integrated into the global financial system.

It also assumes since subscription revenue is higher margin than transaction revenue, and compliance costs are largely fixed once built (via recent acquisitions and near-term headwinds with regulatory statutes), the business will expand margins steadily.

I don’t think 25% margins is a crazy assumption to make in 2030, as the business will be much more mature and scaled.

The multiple is important here. At 25x earnings on $6.45 EPS (2026E), you get $161/share, which is dead flat.

At 35x you get $226.

For the past 5 years, Coinbase has traded at a ~60.0x P/E, and the projected forward P/E ratio for the next 3 years (according to analysts) is ~25.0x. I think we are being reasonable here with the 25-35x range.

The theory here is that as subscription revenue crosses 50% of the mix, the market will re-rate Coinbase from a cyclical exchange to more of a fintech infrastructure stock.

If that happens, we could see $353-$494 by 2030.

The 2.1x MoM over five years is solid (16-25% annualized), but the real asymmetry can playout to much further upside if stablecoins become a common global settlement layer, the CLARITY ACT goes Armstrong’s way and RWA tokenization takes off. I am not betting on that happening though, as that is more of a gamble.

Concluding Thesis

Look, Coinbase is not a clean investment.

The CLARITY Act could go sideways, the California DFAL can add compliance drag and if crypto enters another prolonged winter, the transaction side of the business will struggle.

I'm not pretending otherwise, but at $165, the market is pricing this like it's still the old Coinbase.

Subscription revenue is 41% of the mix and growing at 23% a year, which within 18-24 months, it could be the majority of revenue. This would transform the business into a majority recurring revenue model, which is hard to ignore as an attractive asset.

The bet is on stablecoins becoming more prevalent in settlement transactions (not a fad), custodial services becoming the picks-and-shovels play as institutions pour into and store digital assets, and blockchain technology will gradually moving into the financial system (the same way cloud computing went from skepticism to common between 2008 and 2015).

The base case projection gets you to a 2.1x MoM over five years at a 25-35x P/E multiple on expanding margins, and that assumes 15% revenue growth, which is actually conservative relative to what the subscription bucket has been doing.

The regulatory path is messy and the crypto cycle is unforgiving, but the floor on this business is dramatically higher than it was two years ago.

I like the setup and I like the uncertainty. This is usually when opportunities present themselves.

The Paradox of Greatness

The Private Public Investor — Sun, 15 Feb 2026 14:01:51 GMT

“Great businesses aren’t always great investments, and great investments aren’t always great businesses”

Nvidia is a Great Business

I want to start with saying NVIDIA is arguably one of the best companies on the globe.

With 60%+ revenue growth, ~70% gross margins and 50%+ net margins, Nvidia is a beast business that has taken the world by storm in this AI driven era of the economy.

Nvidia has had a CRAZY run in the market these past few years, driven by their dominance in AI hardware.

Total returns have exceeded +1,120% over the last 5 years! The company also became the world's first $4 trillion company this past summer, with revenue growing from $27B in FY2023 to over $130B in FY2025.

Unfortunately I missed out on this one!

Regardless, we sit here today on February 15, 2026, and I think there are better opportunities in the market.

In this article today I’m going to tell you why… let’s jump in!

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As always, I would really appreciate if you shared this post and subscribed to ThePrivatePublicInvestor, as I try my hardest each week to give you custom, in-depth analysis on stock investments, market insights and portfolio strategies.
With a subscription to the ThePrivatePublicInvestor, you will receive insight into my personal portfolio, along with each position I own and the related weighting, along with my personal watchlist, custom templates for valuation and modeling (coming soon), additional in-depth analysis on my portfolio holdings, decision-making investment guides, and the personal chat feature for the community.
As this channel grows, paid subscriptions will start to be incorporated, so subscribe early and stay subscribed to receive ‘founding member’ pricing and exclusive benefits.
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Pricing Power will get Tested

AMD is coming to the market later this year with its MI400 series, which is expected to offer competitive compute performance at materially lower prices (some early price signaling is at a 50% discount).

If AI customers can get comparable compute capabilities for meaningfully less cost, customers will migrate portions of their compute infrastructure over to competitor chips like AMD.

If customers move some of their business away from Nvidia’s closed-system, Nvidia may have to retaliate with lowering their prices, which will materially affect their bottom line, negatively affecting EPS and signaling bearish sentiment in the market, materially driving down the stock price.

Nvidia must maintain their ability to price their chips and compute stack at a premium by continuing to offer the latest and greatest technology on the market.

I don’t think this is sustainable.

Ecosystem Strength Creates Incentives to Escape

AI infrastructure buyers would really like if other semiconductor players like AMD came into the market with competing technology at scale, as this would allow them to escape the ecosystem lock-in that Nvidia is trying to push into the market.

It’s similar to the Apple smartphone story. We all wish we weren’t locked into the Apple ecosystem. But we are. And it’s likely too late for this to change.

Full concentration risk for customers means total pricing and relationship control from the other side (Nvidia’s side), which customers do not want, especially with a revolutionary technology like AI that will change the future of humanity.

Hyperscalers such as Meta, Amazon and Google don’t want to get locked into buying solely from Nvidia. This is also a reason these conglomerates are developing their own chip technology — they don’t want to get stuck into the ecosystem and want customization of their infrastructure.

A Nvidia-dominated battleground in semiconductor development would not allow for this.

As hyperscalers start to develop their own chips (Amazon with Trainium, Google’s TPUs, Meta’s MTIA, Apple currently creating one) and competition starts to rise from competitors like AMD, the incentives to escape from the closed Nvidia ecosystem rises day after day.

Priced to Perfection

This isn’t an argument that Nvidia is wildly overvalued on traditional metrics like earnings or revenue.

It’s an expectations argument.

Earnings releases are now events where anything short of a flawless ‘beat-and-raise’ will disappoint investors. When the bar is set at “another historic quarter,” execution has to be nearly perfect every quarter.

That asymmetry matters for material increases in price per share.

The stock doesn’t just need strong numbers. It needs continued blowouts

Sky-high double-digit revenue growth
Sky-high triple-digit earnings growth
Expanding guidance
No hints of slowing capex from hyperscalers

That’s a tough standard to maintain indefinitely!

Overcrowded Ownership

Lastly, and this is a softer argument, but the ownership profile in the public markets for Nvidia is saturated.

Nvidia has become the default AI trade.

Everybody and their mom wants to be a shareholder of Nvidia.

With the fugazi-fugazy days of AI over, everyone wants exposure to this new technology innovation. And with most people not familiar with public equities, the default option is to invest in Nvidia.

This includes institutional portfolios, passive index funds, retail flows and financial advisors. When everyone already owns the stock as their AI proxy, marginal new buyers becomes harder to find.

I believe that stocks move on incremental demand and if positioning is already heavy, even strong fundamentals don’t guarantee upside acceleration.

I Could be Wrong!

None of this changes the core reality that Nvidia is a phenomenal business.

It may continue to innovate, growth rapidly and compound earnings at an impressive rate, and I may miss out on another massive Nvidia run.

But for me personally, the risks, increased competition and high performance hurdles are too strong for me to take part in betting on continued upside.

I sold my entire Nvidia position last week for $192/share.

If you think differently about Nvidia’s future roadmap and growth and earnings potential, please feel free to leave a comment — I’d love to chat about it.

Enjoy the rest of your weekend!

Earnings Week Volatility

The Private Public Investor — Tue, 10 Feb 2026 00:37:02 GMT

Hope everyone enjoyed their Superbowl weekend!

Last week was a BIG week. One of the most action packed weeks I remember since April tariffs in early 2025.

But volatility is fun… I love it.

Usually means there are great opportunities in the market. Great businesses on sale.

Despite this, Index-level moves weren’t crazy, but under the surface was ugly in software and anything touching tech.

The S&P500 was actually flat YTD this week while some retail investor portfolios were getting smoked, some by 50%+.

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Why Markets were Red this Week:

Capex Budgets: Between Google, Amazon and other hyperscalers, investors are looking at ~$600B of planned AI and datacenter Capex spend for 2026. Investors were looking for ROI on historical Capex spend during this earnings season, and it has not shown up credibly thus far. Tbh, I don’t know why investors were expecting it this early. These things take time, especially when it’s a new, innovative technology.
Software Valuations: The S&P ‘Software and Services’ index was down ~8% this past week, wiping out about $1 trillion of market cap value as investors are suddenly price in AI displacement / disruption risk to legacy enterprise SaaS providers such as Intuit, ServiceNow, Adobe, Salesforce, Workday, Hubspot and many more.
Rates: The 10‑year sits around 4.2%, offering an attractive yield for the first time in awhile. Vanguard’s CIO was actually on TV telling people to tilt their capital exposure toward bonds. This will naturally compress multiples investors are willing to pay.
Macro & Policy Noise. Investors are pulling back because new data showed job growth is weaker than expected (hypothetically signaling a cooling economy). This combined with new Federal Reserve chair Kevin Warsh has created a “de-risk” mood in the market amongst investors, with some floating to safer bets.

I do think after this week of hurt, we should see a modest recovery in the market… but that is not certain whatsoever. I can also see the market selling off further. A 5-10% correction in the indices / S&P500 would not surprise me at all.

With that market summary, let’s now jump into this week’s earnings, specifically 4 positions in my portfolio: PYPL, AMD, EL and AMZN

As always, I would really appreciate if you shared this post and subscribed to ThePrivatePublicInvestor, as I try my hardest each week to give you custom, in-depth analysis on stock investments, market insights and portfolio strategies.
With a subscription to the ThePrivatePublicInvestor, you will receive insight into my personal portfolio, along with each position I own and the related weighting, along with my personal watchlist, custom templates for valuation and modeling (coming soon), additional in-depth analysis on my portfolio holdings, decision-making investment guides, and the personal chat feature for the community.
As this channel grows, paid subscriptions will start to be incorporated, so subscribe early and stay subscribed to receive ‘founding member’ pricing and exclusive benefits.
With that, enjoy this piece and let me know if you have any questions!

PayPal Q4 Earnings

PayPal had a pretty poor performance this quarter, and canning Alex Chriss did not help with the stock performance. PayPal announced before the bell on February 3rd, reporting a double miss:

Revenue miss of $8.68M, missing expectations of $8.82
EPS miss of $1.23, missing expectations of $1.29

PayPal also reported lackluster 2026 guidance:

FY2026 Adj. EPS guidance to decline by mid single digits % YoY
Transaction margin dollars to be roughly flat or slightly down

Management also withdrew its prior 2027 long-term outlook and stated the Company will now provide guidance only 1-year at a time due to the pace of change in the industry.

For my portfolio, this report informed me that my thesis was not materializing, and it would likely take awhile before the Company does execute on my envisioned thesis.

The new strategy of the new product roadmap and branded checkout re‑acceleration has been failing, and I think there are better opportunities in the market.

Part of the thesis was also my belief and confidence in Alex Chriss turning around the organization. Since he has been pushed out, I have decided to sell my full position in this stock.

I took a ~35% loss on this position, which is a tough loss. I do believe the rest of my portfolio will make up for this during 2026, and I will still outperform the market.

I did learn a lot with this trade, to be honest:

I didn’t understand the value proposition fully when entering this position, and was not super familiar with the payment processing (FinTech) industry
- Can’t make this mistake going forward — know the industry well, the competitive threats and the KPIs a company tracks
- There’s also usually a reason for low valuations of a business when the rest of the industry is trading higher; it’s not always disconnect, but rather objective
Do not put too much confidence in management; focus on the numbers, competitive moat and financial performance
- Numbers and the moat speak louder than management usually. Even if management is a stellar group of individuals, the business may not be strong and capable of turning around

At the end of the day, PayPal might still work out from here, but it no longer fits what I’m trying to target and build in my portfolio.

There’s too much strategic drift and uncertainty around the core checkout business, and there isn’t enough evidence that the turnaround will materialize.

I’d rather accept the loss, free up my mental bandwidth and redeploy that capital into other names where the growth runway, competitive moat and leadership are all heading positively in the same direction.

Advanced Micro Devices Q4 Earnings

AMD earnings showcased superb performance in Q4 and FY2025.

AMD’s beat on revenue and margins.

Q4 Revenue: $10.3B (+34% YoY)

Data Center Revenue: $5.4B (+39% YoY)

GAAP EPS: $0.92

This ramping revenue growth was driven mainly by EPYC CPU adoption and the GPU portfolio scaling rapidly.

But, the stock got hammered AH because guidance came in slightly below expectations and investors were pricing in nonstop upside.

Wall Street was looking for more near-term AI revenue upside rather than the softer guide that was delivered.

AMD actually experienced their worst single-day decline since 2017, falling over 17%. What do I call that? Stupidity. Dumb. Short-sighted. That’s what I call that.

Remember though: Lisa Su rarely overspeaks

In a post-earnings CNBC interview, she said demand for AI compute has been “accelerating at a pace I would not have imagined” over the last 60-90 days.

Su also signaled:

Real pull-through demand later this year as MI400/MI450 volumes ramp
CPU orders have been strengthening over the last 60+ days
AMD expects data center revenue to grow >60% annually over the next 3–5 years

Although revenue performance was impressive and “technically” beating expectations (despite the stock getting hammered), earnings (EPS) results were lackluster on a GAAP basis, which helped drive the stock down AH.

Analysts and the rest of the market are tied to the financial engineering of margins with GAAP vs NON-GAAP accounting adjustments.

GAAP EPS: $0.92

Non-GAAP EPS: $1.53 (64% uplift purely from accounting adjustments)

Let me bridge this for you below:

Starting Point: $0.92 GAAP EPS

Stock-Based Compensation: +$0.29 (shareholder dilution and non-cash)
Amort of Acquisition Intangibles: +$0.34 (Xilinx/prior acquisitions and non-recurring)
Other Adjustments: ($0.02)

Ending Point: $1.53 Non-GAAP EPS

Let’s look at the full year 2025 adjustments:

Starting Point: $2.65 GAAP Diluted EPS

Stock-Based Compensation: +$1.00 (shareholder dilution, non-cash)
Amortization of Acquisition-Related Intangibles: +$1.38 (Xilinx/prior acquisitions and non-recurring)
Release of Reserves for Uncertain Tax Positions: ($0.52) — one-time IRS benefit from reasonable cause relief for dual consolidated losses which was approved in Q2 2025; this won’t repeat in 2026
Other Items: ($0.34) — miscellaneous items

Ending Point: $4.17 Non-GAAP Diluted EPS

The argument here is that headline beats for Q4 and and full-year 2025 are being manufactured through these adjustments, not through genuine business improvement.

AMD needs to show that the underlying GAAP margins can hold and expand as they scale, rather than relying on adjustments and one-time benefits. The operational momentum is great, but the multiple paid for the business is increasingly being questioned by the market.

But it’s important not to throw the baby (the business) out with the bathwater (the accounting).

The company outlook is still more bullish than ever:

AMD has the stage to showcase their banner year with the rollout of the MI400 series and the Helios architecture, which Lisa mentioned on the earnings call will have no delays.

In addition, AMD’s FCF is legitimate. 2025 FCF hit $5.5B versus $2.4B in 2024; there is definitely some real growth and operational leverage being realized.

The data center segment’s 39% Q4 revenue growth in Q4 is also genuine demand, not “accounting magic” like the margin story.

Lastly, the Company is clearly winning share in high-performance GPUs, continuing to grow their CPU and gaming business and scaling AI inference workloads.

Estée Lauder Q2 2026 Earnings

Estée Lauder reported their Q2 2026 earnings last Thursday (Feb 5th), beating top and bottom line estimates for the quarter.

Quarterly Adj. EPS of $0.89 per share, surpassing estimates of $0.83–$0.84
Quarterly Revenue reached $4.23B (~6% YoY), slightly exceeding expectations of $4.22B

The Company also raised 2026 guidance, but did warn of a $100M tariff hit in the second half of the CY. The overall guidance fell short of analyst estimates.

The guidance triple-miss led to one of the worst performing earnings report reactions for the Company, with the stock tanking ~20% before / during market open.

This was an overreaction, in my opinion, and I think Citigroup agrees, as they upgraded the stock to Buy on Friday (Feb. 6), suggesting they believe the 20% pullback offers an attractive entry point, as the company’s ‘Beauty Reimagined’ strategy continues to improve the underlying fundamentals.

Back to the earnings report:

Organically,

Skincare and fragrance grew ~6%
Haircare grew ~5%
Makeup fell (~1%) (seems to be the problem child)

From a regional standpoint, China performed very well with roughly +13% organic growth, with strong brand contributors to this growth from La Mer, Tom Ford and Le Labo, both online and in travel retail.

Europe/UK/Middle East/Africa grew +2%, while the Americas were flat, which tells me the demand recovery isn’t fully back (but rather in progress).

Overall, the 3 big bullish signals in this report (besides WholeCo revenue and earnings) were:

Double-digit growth in China
Significant operating margin expansion (14.4% vs. 11.5% in prior year)
Accelerated product innovation
- China Innovation Center
- High growth categories (dermatological beauty and luxury fragrance)
- AI and predictive analytics for predicting trends

I really liked seeing the increase in online sales, which grew to a record 31% of FY25 sales, driven by more brands rolling onto Amazon and other popular platforms such as TikTok Shop.

Estée Lauder actually first launched on Amazon with the debut of Clinique in March 2024, and since then have introduced more brands to the platform, including Too Faced, Bumble & Bumble, Lab Series, flagship Estée Lauder and several more, with the most recent debut to Amazon being Bobbi Brown, which was released on Amazon last fall in November.

The Company now has 12 brands available on the Amazon Premium Beauty store in the U.S.

Separately, during the earnings call, CEO Stéphane de la Faverie framed remaining FY2026 as the inflection point in the Company turnaround.

He said “With three fiscal years of sales decline and operating margin erosion behind us, we enter fiscal 2026 with signs of momentum and the start of our turnaround, a return to top-line growth… and the pursuit of a solid double‑digit operating margin in the years ahead.”

This is great news and signals to investors the “Kitchen Sink” earnings reports are over, and Estée Lauder is on its way towards profitable growth as the turnaround continues.

I remain bullish on the turnaround, but there are 3 key obstacles the Company must overcome if they are to succeed:

Tariffs and Resulting Margin Drag
- Didn’t seem to be an issue this latest quarter
Travel Retail and Asia Volatility
- Weak conversion and volatile Chinese travel demand
Sluggish America Consumer and Category Mix
- American growth flat and makeup is still slightly declining while the market is growing

So, Estée Lauder must defend premium pricing, reignite core brand growth, boost new brand performance and sustain China momentum, while preserving margin gains and navigating the economic headwinds ahead.

Amazon Q4 2025 Earnings

A classic MAG7 reaction this earnings season.

Report objectively strong revenue and earnings with a high capex budget, and then selloff after hours.

I would say Amazon’s Q4 2025 headline numbers were objectively strong:

Net sales: $213.4B (+14% YoY) beating estimates of $211.5B
Earnings: EPS of $1.95, just a penny shy of the estimated $1.96

1. AWS (Cloud Computing)

AWS continues to outperform with revenue growth accelerating to 24%, its fastest rate in over three years. This was driven by GenAI services and their custom Trainium/Graviton silicon.

2. North America

The retail business remained highly efficient with operating margins improving to 9% (up from 8% last year). North America same-day delivery also saw a 30% increase in Prime member usage.

3. International

Revenue growth came in at 17%, although it was heavily bolstered by currency conversion rates. Operating profit dipped to $1.0B from $1.3B last year, as the business has been trying to cost cut to gain market share in emerging regions.

4. Advertising

This is not a reported segment, but definitely an important part of the business to mention. Advertising revenue reached $17.3B (+22% YoY), and Prime Video ads are now reaching an audience of 315M, which is providing a margin boost to the retail business.

Guidance came in at:

Amazon’s projected $200B of Capex came in sharply higher from an already massive $125B‑ish run‑rate.

Aaaannnnnd it spooked investors who thought the AI buildout would be a bit more gradual… causing Amazon to selloff 10%+ after hours.

For context, most of that spend is going into AWS infrastructure:

Data centers
Custom silicon (Trainium)
Networking gear
Low-orbit satellites
Robotics and logistics automation

Amazon is really leaning into the AI arms race, which has honestly surprised me.

Along with the increased Capex spend, Amazon has been laying off numerous corporate positions, totally around 30,000, with 14,000 last October and 16,000 this past January.

At the same time, it has over 1M robots in its fulfillment network with plans to automate hundreds of thousands of warehouse roles over the rest of the decade…

… investors are waiting patiently to see if the operating leverage will be realized here. I DO think this will take longer than the market expecting (maybe a year or two rather than a quarter or two).

There’s two different stories you can subscribe to here:

Bull Case: Capex pays off big, FCF explodes, AWS sustains 20%+ growth with expanding margins and robotics/AI investments deliver notable operating leverage, North America retail and ads compound at double-digits, and the International segment flips to high-teens growth
Bear Case: $200B Capex drags FCF negative through 2027–2028 without clear AI ROI, AWS decelerates amid hyperscaler competition, retail margins revert under consumer slowdowns and operating leverage disappoints

These are two extremes, but you essentially have to lean one way or another if you hold Amazon in your portfolio, or refuse to own shares.

I am going to subscriber to the former —> I own 250 shares of Amazon and will hold these shares confidently for years to come.

My Personal Portfolio

The Private Public Investor — Sat, 07 Feb 2026 21:31:46 GMT

It’s finally here! I’m officially sharing my full investment portfolio with my subscribers, including my personal watchlist to keep track of new opportunities.

Subscribers: Check your email or the live chat for a link to the full portfolio. I’ll share this bi-weekly. Short-form portfolio is shown as a link on my profile homepage.

Subscribe now

This is a snapshot of where my capital is allocated today, including position sizes, cost basis, and unrealized gains/losses.

I’ll update this bi-weekly as share positions change — this is meant to be a living reference point that’s continually updated.

I’m sharing this for transparency and context — so when I write about a company, you all can clearly see what level of capital I have behind the thesis.

Regarding the Portfolio:

Followers and non-subscribers will have access to:
Portfolio positions (only share count)
Subscribers will have access to:
Detailed portfolio including position sizes, cost basis, unrealized gains/losses, portfolio size, along with my investment watchlist

—> As this publication continues to grow, subscriptions will transition into paid subscriptions for full access to my portfolio and template library for financial models, valuation models, summarized thesis’ for each portfolio position, and last 4Q earnings’ summaries for each portfolio holding.

If you would like to see my detailed personal portfolio, subscribe to receive an email with a Google Sheets link to view

⬇️ Personal Portfolio ⬇️
(Click on image; share counts updated as of 2/6/2026 close)

View-only. Not investment advice. Do your own work.

This is not a model portfolio or a list of recommendations. It’s simply where my capital is allocated today, along with names I’m actively tracking as market dynamics change.

As always, I would really appreciate if you shared this post and subscribed to ThePrivatePublicInvestor, as I try my hardest each week to give you custom, in-depth analysis on stock investments, market insights and portfolio strategies.
With a subscription to the ThePrivatePublicInvestor, you will receive insight into my personal portfolio, along with each position I own and the related weighting, along with my personal watchlist, custom templates for valuation and modeling (coming soon), additional in-depth analysis on my portfolio holdings, decision-making investment guides, and the personal chat feature for the community.
As this channel grows, paid subscriptions will start to be incorporated, so subscribe early and stay subscribed to receive ‘founding member’ pricing and exclusive benefits.
Let me know if you have any questions!

The Mega Backdoor Roth

The Private Public Investor — Mon, 02 Feb 2026 00:21:13 GMT

"Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it"

— Albert Einstein

What Is the MEGA Backdoor Roth?

As we kick off the new year and folks are already thinking about their 2026 strategy for their retirement contribution plans, I want to highlight a strategy that higher-income individuals can use to max out their Roth accounts.

Historically, you’ve probably been told:

You make too much money to contribute to a Roth IRA, or
The most you can put in your 401(k) is $24,500 (2026 limit)

—> Both of those statements are technically true, but kinda false in practice.

By utilizing a specific maneuver within your workplace retirement plan, you can ignore the income phase-outs and ~triple your Roth contributions.

Here is your guide to the Mega Backdoor Roth:

—

The MEGA backdoor Roth is a legal strategy that allows you to contribute up to an additional $47,500 in 2026 to a tax-free Roth account, even if your income exceeds Roth IRA limits.

It's simply a secret for maxing out retirement savings…

A strategy for people who have already maxed out their standard 401(k) contributions.

The IRS allows up to $72,000 total into your 401(k) each year (this limit includes employer matches). For the people that max out their 401(k)s with $24,500 annually, there's still a massive gap remaining, and the MEGA strategy lets you fill it with after-tax money that converts to Roth.

As always, I would really appreciate if you shared this post and subscribed to ThePrivatePublicInvestor, as I try my hardest each week to give you custom, in-depth analysis on stock investments, market insights and portfolio strategies.
With a subscription to the ThePrivatePublicInvestor, you will receive insight into my personal portfolio, along with each position I own and the related weighting, along with my personal watchlist, custom templates for valuation and modeling (coming soon), additional in-depth analysis on my portfolio holdings, decision-making investment guides, and the personal chat feature for the community.
As this channel grows, paid subscriptions will start to be incorporated, so subscribe early and stay subscribed to receive ‘founding member’ pricing and exclusive benefits.
With that, enjoy this piece and let me know if you have any questions!

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Step 1: The Three Buckets

To understand the strategy, you have to look at the three ways you can put money into a 401(k):

Pre-tax: You get a tax break now, pay taxes later (Limit: $24,500 in 2026)
Roth 401(k): You pay taxes now, it’s tax-free later (Limit: $24,500 in 2026)
After-Tax (The Secret Bucket): This is different from a Roth 401(k). You pay taxes now, but the earnings are usually taxable later also... UNLESS you use the Mega Backdoor Roth conversion strategy

Step 2: How the Strategy Works

Contribute “After-Tax” money: Once you hit your $24,500 limit for the year, some 401(k) plans allow you to keep contributing into the “After-Tax” bucket until you hit the total plan limit (which is $72,000 for 2026)
The Conversion: Immediately move (convert) that After-Tax money into a Roth IRA or a Roth 401(k)

By moving this capital into a Roth account, future growth and interest becomes tax-free forever. If you leave it in the “After-Tax” bucket though, you’d eventually have to pay taxes on those gains in the account.

These contribution limits change each year for 401(k)s and IRA’s, so I’ve outlined below how things changed YoY:

2025 IRA/Roth IRA: $7,000
2026 IRA/Roth IRA: $7,500
2025 Total Plan Limit (401k+After Tax Account): $23,500
2026 Total Plan Limit (401k+After Tax Account): $24,500

Note: If you are age 50–59, your total 2026 max limit is $80,000. If you are 60–63, it's max $83,250 due to the new SECURE 2.0 "super catch-up" rules.

—> Example

Let’s say you are under 50 and want to save as much as possible:

Your Contribution: You max out your 401(k) at $24,500
Employer Match: Your company puts in $10,000 as part of their matching program
The Gap: The IRS allows a total of $72,000 in your 401(k) — you’ve only used $34,500
The “Mega” Contribution: You can contribute an additional $37,500 as After-Tax funds and then convert them to Roth

Can you can do this?

You can only do this if your employer’s specific 401(k) plan allows two specific things:

After-tax contributions: Not all plans offer this
In-service distributions or conversions: Your plan must allow you to move that after-tax money into a Roth IRA or Roth 401(k) while you are still working there

Just ask your compliance or HR department if you can do this. If they don’t know, tell them to find out… lol!

Why do it?

High Income: You can do this even if you earn $1M+ and are technically disqualified from a regular Roth IRA (although you can always do a backdoor conversion)
Higher Limits: You can put away nearly triple the normal Roth limit.
Tax-Free Growth: All the money you move into the Roth account side grows and is withdrawn totally tax-free in retirement.

Usually high-earners who care substantially about retirement and financial comfortability down the road are the individuals who pursue this strategy.

—> I personally don’t do this and would rather just contribute the max $24,500 401(k) amount to my Roth.

This is just my personal opinion though, as I think there’s a life balance between being conscious of your monetary goals at retirement, but also realizing the utility of money is greater at a young age… unless you make a WHOLE lot of dough!

Step-by-Step: How to Execute at Schwab

I personally use Charles Schwab as my brokerage, so below is step-by-step instructions on how to execute on this through the desktop app.

Note: Always do this type of stuff on your desktop, as mobile doesn’t always have the same capabilities.

Making After-Tax Contributions:

Go to workplace.schwab.com and log in with your credentials
Click “Manage Account” from the main menu
Select “Change Contribution”
Look for an option labeled “Employee After-Tax Def” or similar
Enter the dollar amount you want to contribute after-tax each pay period
Click “Save Changes”

Setting Up Automatic Conversion (Recommended):

To avoid leaving after-tax contributions unconverted (which would accumulate taxable earnings), set up automatic conversion:

Log into workplace.schwab.com
Go to “Manage Account” > “In-Plan Roth Rollover”
Confirm you’re a U.S. citizen or resident
Select “Automatic In-Plan Roth Rollover Only” and click “Get Started”
Click the toggle to turn “On”
Check the box: “I understand and agree to the information provided”
Click “Submit” to finalize

This automation ensures your after-tax contributions convert to Roth immediately with each payroll, minimizing taxable earnings.

Manual Conversion (If No Automatic Option):

Log into workplace.schwab.com
Select “Move Money” or “Online Transfer”
Choose “From: After-Tax 401(k)” and “To: Roth 401(k)” (or Roth IRA if rolling out)
Enter the amount
Click “Submit”

If you don’t have the capital to do this or don’t have interest in putting this much money aside into retirement, again, that’s totally understandable. In the game of life, I don’t think it’s worth it unless you make a YACHT LOAD of money.

The Critical Timing Factor

Every day your after-tax contributions sit unconverted, they earn interest or investment gains.

Those earnings become taxable when you convert.

So don’t wait too long to convert — this is why I think automating the conversion is the best idea — then you don’t have to think about it as well.

Conclusion on the MEGA Backdoor Roth

The MEGA backdoor Roth is a powerful tool for high-income earners looking to maximize tax-free retirement savings.

By understanding the three contribution buckets and executing the conversion strategy, you can leverage the $72,000 annual limit to your advantage.

For someone earning $500,000 annually, contributing an extra $47,500 to the Roth compounds meaningfully over time. At an 8% annual return over 30 years, that single year's contribution (the $47,500) alone grows to ~$480,000, entirely tax-free.

Multiply that across three decades of contributions, and the compounding advantage becomes substantial. Whether through Schwab, Fidelity or another platform, find out if your employer offers this — the mechanics are straightforward once you know if your plan supports it.

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The Future of Edge AI with FPGA's

The Private Public Investor — Sun, 25 Jan 2026 23:19:57 GMT

When AMD announced it was paying $35 billion for Xilinx in October 2020, I had no idea what an FPGA was…

Most of the Generative AI boom so far has been centered around GPUs and data centers, but the next chapter won’t live 100% in the cloud, but rather, will move to AI at the edge.

We’ve already seen a partial move of conversation past the narrow-focused raw compute scaling of power for datacenters via GPUs — with the newer talk of the town surrounding memory, as players like Micron and Sandisk have blasted higher in the past year.

The retail public is learning more every day on the tech stack of the semiconductor industry, as it has become the new ‘oil’ of the current world and economy as we see it.

Field-programmable gate arrays (FPGAs) are hardware that operates like software, and if we can make this chip technology cheap and usable enough, it could have massive potential for the world of AI and neural networks.

In this writeup, I want to unpack why FPGAs are genuinely a revolutionary technology, how much potential these chips actually have and how players like AMD, Intel’s Altera and Lattice Semiconductor might still turn them into the go-to brain for AI at the edge.

As always, I would really appreciate if you shared this post and subscribed to ThePrivatePublicInvestor, as I try my hardest each week to give you custom, in-depth analysis on stock investments, market insights and portfolio strategies.
With a subscription to the ThePrivatePublicInvestor, you will receive insight into my personal portfolio, along with each position I own and the related weighting, along with custom templates for valuation and modeling (coming soon) and the personal chat feature for the community.
As this channel grows, paid subscriptions will start to be incorporated, so subscribe early and stay subscribed to receive ‘founding member’ pricing and exclusive benefits.

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What are FPGAs and why do they matter?

FPGA technology is much different from a CPU, GPU and an ASIC.

CPUs are chips that are designed to handle a single task efficiently. GPUs use parallel processing to handle multiple tasks a once, but each task slower than a CPU. An ASIC is a single-purpose machine used for one singular job — less flexible than a general purpose CPU, but much faster.

An FPGA is a type of chip that can be programmed and reprogrammed after it is manufactured to perform any task. It’s the most flexible chip technology on the market.

Unlike a CPU running software instructions over and over, or a GPU executing thousands of data vectors in parallel, an FPGA can be architected as custom hardware for your exact workload.

Let’s think about this using an analogy of transferring cargo from one location to another, with these different chip technologies representing the “vessel” for transferring the cargo:

CPU (The Commercial Jet): It finishes one mission (task) at a time incredibly fast. If the mission changes mid-flight, it can pivot instantly. It can also travel anywhere (flexibility)
GPU (The Cargo Train): It isn’t faster than the commercial jet, but it has 500 cars moving simultaneously. It’s perfect for when you have 10,000 identical cargo crates (or data) to move at once.
ASIC (High-Speed Monorail): This is a permanent structure that is custom-built to move (process) one specific thing. It is the fastest and cheapest way to move the cargo, but the structure cannot be moved or changed (not flexible)
FPGA (The LEGO Delivery): I like this LEGO analogy for the FPGA — a vehicle made of modular blocks. Before a trip/shipment, you can rebuild the chassis to be a cargo tanker. The next day, you can rebuild it to be a flatbed F-150. The next day, you can rebuild it to be a helicopter. It’s flexible, and it’s hardware that acts like software.

The Edge AI Application and Sweet Spot

For anyone who isn’t caught up on “AI at the Edge,” — it’s simply running inference AI locally on devices rather than in the cloud.

Why is this important?

Because latency. Latency can kill user experience.

Classic examples of this are autonomous vehicles (AV), military drones and medical devices.

An AV can’t afford a 1-second round trip to the cloud to decide whether to brake…
A military-grade drone camera can’t tolerate cloud dependency for threat detection or aerial maneuvering…
Your Intuitive Surgical ‘Da Vinci’ robotic system performing surgery can’t wait for network delays…

FPGAs have 4 concrete advantages over other chips:

Ultra-low latency
3-4x power efficiency over GPUs with specific use cases
Runtime reconfigurability for algorithm evolution
Sensor capabilities

In more detail:

Ultra-low latency: A GPU processes data in batches. It waits for a buffer to fill, then processes everything at once. This batching introduces variable latency, usually milliseconds, depending on workload.

FPGAs don’t batch. They process data as it arrives, processing “pixel-by-pixel,”.

Extreme power efficiency: A GPU like NVIDIA’s H100 consume lots of energy.

FPGAs can deliver comparable inference performance at a fraction of the power. In some edge AI workloads, FPGAs use 3-4x less power than GPUs while maintaining low latency. That translates directly to longer battery life, which illustrates the efficiency of this chip technology.

Flexibility: Once an FPGA is deployed and integrated within a system, you’re not locked into a fixed architecture of compute. You can reprogram it to adapt to evolving AI models without purchasing new hardware.

This is valuable in uncertain environments such as AVs, military technology and medical devices where the environment constantly changes and the variables are unknown. The algorithm can freely change.

Direct sensor integration: Let’s think about our real-world examples again. Your AV “x-amount” of cameras, possibly LIDAR, radar and other technical sensors. Your Da Vinci robot has performance video processing, 3D visualization and precise motor control.

FPGAs excel at sensor control and taking multiple high-speed data streams, processing them in parallel and making decisions instantly.

IMPORTANT: GPUs and CPUs struggle here because they’re designed to pull data into memory, process it, then push out results.

FPGAs are architected for streaming data.

So Why Isn’t Every Company Rushing to FPGAs?

Because the reality is that FPGAs carry a high cost and complexity for programming that people can underestimate and is a brutal barrier for businesses.

According to a recent industry survey from Logic Fruit:

39% of engineers cite a “Time-Consuming design process” as the biggest obstacle to FPGA development. Another 30% mention high development costs as an issue.

According to another survey from Logic Fruit:

44% of participants think that FPGAs will eventually replace ASICs due to the demand for more adaptable and reprogrammable hardware solutions.

According to research, this could be the biggest threat to mainstream FPGA adoption. When you’ve validated your AI workload and know it won’t change, an ASIC delivers superior performance and power efficiency. ASICs are expected to grow at a 30%+ CAGR in the AI chipset market, which is much faster than FPGAs’ projected 10-15% growth.

Another 31% of respondents emphasized the growing integration of IoT and AI since FPGAs provide the flexibility and processing capacity needed for these cutting-edge technologies.

So there is a real debate around the viability of FPGAs and whether they will be the future of AI compute at the edge.

But here’s where I think it gets interesting on the cost front… FPGAs are actually getting cheaper!

The low-end FPGA market (small devices for the edge) is projected to dominate by unit volume.

Companies like Lattice and AMD are now building specifically for this segment using mature and cost-optimized manufacturing.

FPGAs are now cheap enough for applications where you need deterministic latency, real-time reconfigurability and sensor fusion. This is a different market than it was five years ago, and it opens up actual volume opportunities in automotive, medical and industrial robotics.

With this, I do think the pragmatic and conservative roadmap is to assume GPUs will continue to be used broadly for flexibility and breadth, CPUs will be used for interconnecting with GPUs and the natural plugin hardware for laptops, ASICs will be used for fixed, high-volume workloads….

… and FPGAs will be used for niche applications where you need custom hardware acceleration, extreme power efficiency and the ability to iterate in real-time with ultra-low latency.

The Market Reality and Size

The global FPGA market is valued at roughly $10-12 billion in 2025, expected to reach $18-20 billion by 2030, which is a 10-15% annual CAGR.

The overall AI semiconductor chip market is worth hundreds of billions of dollars, with an annual CAGR of ~30%.

Doing rough math in excel based on the below image, FPGAs represent maybe 5-10% of the overall market, with slow growth relative to the broader AI chip boom.

This may seem very small, but I think this $ market opportunity is very relative, and it depends on the discoverable use cases of FPGAs, which could change the TAM overnight. These markets are where you would need low-latency and real-time processing with evolving algorithms.

Use Applications

FPGAs will dominate specific niche industries:

Autonomous vehicles
Industrial robotics
Telecommunications infrastructure
Aerospace & defense (drones and other tech)
Medical devices

I also think mobile edge AI (smartphones), running local inference computation constantly everyday, could have important use cases (could be getting outside of my wheelhouse here though, I’m no AI tech expert).

If FPGA technology is acceleratingly adopted by these industries as the age of robotics and general AI advances, there could be a huge opportunity here.

That said, I am sure that cloud inference will continue to be dominated by GPUs, CPUs and ASICs. FPGAs will only complement these rack-scale stacks within datacenters.

So who could benefit the most from the FPGA Market?

The competitive landscape is pretty concentrated and narrow here, with AMD’s Xilinx subsidiary dominating 50%+ of the market, with Intel’s subsidiary, Altera, following with 35% and Lattice Semiconductor being the only other viable player at 5% (Image source: FPGATEK).

This market share data is actually a bit outdated, but based on skimming other recent articles, the markets share is relatively the same, with Xilinx increasing towards 60%, Altera losing share, down to 30%, Lattice increase share up to 6-8% (bit jump!), and the others filling the remaining gap (even more concentrated!)

Intel has really screwed up on the FPGA front, as they’ve been hyper-focused on the datacenter trend the past few years, restructuring their business with new management and have been trying desperately to catch up to NVIDIA, and recently, AMD. Altera’s FPGA business has suffered due to this.

Regarding the other competitors in the space:

AMD (with Xilinx) is going after high-performance AI engines for cloud, 5G and high-end edge. This is where the big money is, and Xilinx is the most powerful competitor.

AMD now has a complete computing portfolio: CPUs, GPUs, DPUs, FPGAs and accelerators. You don’t need to spec GPUs from NVIDIA for one component and FPGAs from someone else for another. For customers building edge AI systems, this is extremely valuable, as the whole stack is being offered to you from one supplier.

Lattice has alternatively doubled down on small, low-power FPGAs for edge compute, rather than chasing the biggest and fastest devices for datacenters. Lattice is basically playing a very different game from AMD and Intel, and that’s exactly what makes them interesting for edge AI.

They’re not trying to beat AMD or Altera, but rather, they’re trying to be the best in a specific niche. This is extremely valuable, as this is the company’s main focus.

So… yes… AMD, Lattice and Altera (Intel) would benefit disproportionately if this FPGA technology takes off in the future with edge AI applications.

Intel only if they get their s*** together!

For more information on the specific products each company offers, I’d recommend skimming the below website:

https://fpgatek.com/fpga-manufacturers-and-their-products/

So, Could FPGAs Be the Answer to AI on the Edge?

FPGAs are genuinely a revolutionary technology for AI, as mentioned in the beginning of this writeup... that’s for sure, but I think this is only for specific use cases until the TAM gets broadened when companies investigate, research and reveal other use cases.

If you’re building an autonomous vehicle and need to put together multiple high-speed sensors with sub-millisecond latency while running neural network inference, FPGAs are a better choice than GPUs.
If you’re utilizing inference AI on a military-grade, weaponized drone that runs on battery power, FPGAs’ power efficiency and sensor capability enhancement can improve this product immensely.
If you’re building medical imaging devices where latency is critical to patient safety and health, FPGAs are imperative and give you deterministic timing that GPUs can’t match.

These are significant markets, but they’re not the majority of AI deployments.

So FPGAs will likely not be the highest revenue-generating chip anytime in the future, but I do think this industry is a bit overlooked with the current craze with raw datacenter compute.

What’s a more likely ecosystem of AI chips is where different technologies thrive in different domains:

Datacenter cloud training: GPUs, CPUs and ASICs dominate
Cloud inference: Mixture of GPUs, ASICs and FPGAs, depending on latency/throughput trade-offs
Edge inference: FPGAs, edge TPUs, and other specialized processors
Real-time embedded AI: FPGAs and ASICs

BUT, if FPGAs can carve out 10-15% of edge AI workloads in medical devices, robotics, autonomous vehicles and industrial applications, and those markets are growing at, say, 25%+ annually, then even a niche FPGA player could see 20-30% revenue growth for a sustained period of time.

Celsius Holdings Pulse Check

The Private Public Investor — Mon, 19 Jan 2026 14:03:46 GMT

“In retail, if you are off-shelf, you are not selling... We live or die each day by our supply chains. If you lose distribution, it can set you back six months or put you out of business altogether.”

— John Fieldly, CEO

During sophomore, junior and senior year of college, I was pitching Celsius Holding’s stock in a club, in class or just to campus friends or brothers in my fraternity.

I happened to enter college at Miami University (Ohio) when the energy drink market started erupting… and I started drinking them right away!

I actually ended up pitching Celsius during my sophomore year of college when trying to get into a finance club. The stock hovered around ~$7/share at the time! The below is where the Company has traded during the past ~5 years:

Attached below is one of my Celsius stock pitches from college — would love for all of you to take a look!

Group Project 2 Final Deck

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I still remember the day during my Finance 401 class (during my senior year) when Celsius and Pepsi announced their partnership (Aug-22), where Pepsi would provide a $550 million equity investment for an 8.5% stake in the business, while also securing long-term distribution control.

I remember walking outside of the classroom to call my friends to see if they were invested. Fun times.

A major reason for the Pepsi deal was to gain immediate access to college campuses.

This made tons of sense to me, as my age group was the largest consumer of energy drinks. During an earnings call, CEO John Fieldly stated that Pepsi had exclusive distribution contracts with campuses covering approximately 61% of the U.S. college student population (a channel that was previously difficult for Celsius to access).

The partnership allowed Celsius products to be sold in campus cafeterias, coolers and vending machines as part of the Pepsi distribution agreements.

Since the good ol’ days of college, Celsius exploded to almost $100/share in mid-2024, then got pummeled back down to the $20’s those next 6 months before 2025… and has now traded back up to around $50/share.

I’ve followed this company, led by innovative CEO John Fieldly, for a long time, and feel like I can provide some helpful context for investors looking into this opportunity as an investment.

As always, I would really appreciate if you shared this post and subscribed to ThePrivatePublicInvestor, as I try my hardest each week to give you custom, in-depth analysis on growth investments, value stocks and other market insights and portfolio strategies.

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Investment Thesis:

The market currently views Celsius through a fragmented lens — a high-growth brand, struggling with distribution noise coupled with an expensive valuation.

I believe this is fundamentally incorrect.

By early 2026, Celsius has completed its transformation from a single-product company into a multi-brand energy platform.

Institutional investors are still treating Celsius as a hyper-growth compounder that must prove 40% revenue growth indefinitely. The business is definitely sitting at a rare intersection of hypergrowth and operational maturity.

The ‘bears’ also focus on the lack of a traditional moat and intense competition from Monster.

The market is missing the Pepsi Synergy Effect.

We are entering an era of massive operating leverage that the “Fair Value” models online aren’t fully capturing.

With this operating leverage, together with Celsius’ multi-brand portfolio growth, international expansion and potential for rapidly expanding margins, I think Celsius is poised to benefit from multiple catalysts going forward.

Do I think it’s a screaming buy? No. It was in the $20’s when I was buying earlier in 2025! Despite the 100% run up, I do think the company has potential for increased future gains, per the above.

Current Industry Narrative vs. Ground Reality:

Lately, institutional and retail investors and analyst forums have been obsessed with competition, inventory destocking and pure Celsius-brand organic growth.

Competitive Landscape

Regarding competition, Celsius is the only energy drink brand in history to materially steal market share from Monster and Red Bull… and it is continually stealing away market share.

Celsius now commands a 20%+ share of the U.S. energy market across Celsius, Alani Nu and Rockstar brands.

As the integration of Celsius, Alani and Rockstar further matures, Pepsi will be able to control distribution more strategically, while pairing this with brand perception and marketing from the Celsius team.

People also forget how intelligent and robust Celsius is from a brand strategy and household penetration angle.

At 34% penetration with 65%+ repeat purchase rates, Celsius isn't a niche growth brand anymore, but rather a category anchor in the energy drink market.

To contextualize: Monster took 8+ years to reach 40% US household penetration. Celsius achieved 34% in roughly 2-3 years of scaled distribution (post-PepsiCo 2022 deal)

Alani Nu's rapid 22% penetration post-acquisition signals the Celsius ecosystem is now able to accelerate category acceptance, not just grow existing category share.

This metric matters more than brand equity or pricing power analysis for an investor because it predicts revenue durability and operational leverage.

High-penetration profiles have lower customer acquisition costs (CAC), higher lifetime value (CLV/ATV) and greater channel stickiness.

Multi-Brand Portfolio Strategy

One of the biggest questions I had from the last 6 months was the reasoning behind the Rockstar deal with Pepsi. I found this evident after reading a quote from John Fieldly:

“We’re building a portfolio that reaches more consumers during more occasions, and we’re doing it with discipline, collaboration, and a commitment to organizational excellence”
— John Fieldly, CEO

John wants Celsius to be the one-stop shop for all fitness/wellness related communities.

Rockstar does not address the same target market as Celsius.

Rockstar targets adventure, thrill-seeking, and high-octane energy consumers like extreme sports enthusiasts, as well as gamers and creatives.

This is much different than the modern “live-fit”, wellness and functional crowd.

Celsius is targeting control of shelf space here, not add-on, complementary health and wellness brands.

This may upset some folks, as they admired Celsius to solely stand for the fitness and wellness community, but this is not the practical business move for Celsius going forward.

As brands like Celsius mature, inorganic growth and product line expansions are imperative for sustained, future growth. Becoming a multi-brand portfolio is a part of this.

Operating Leverage

Let’s dig into the operating leverage a bit more.

One detail often overlooked in these types of growth narratives is when a company transitions from scaling revenue to scaling profits.

I think Celsius is becoming more of a margin expansion story after these last few acquisitions. Their latest margin profile expansion can be seen below:

2024: 46% gross margin
Q3 2025: 51.3% gross margin (+530 basis points YoY)

While their margins have been improving, Celsius has also been investing into their distribution infrastructure and inorganic growth to further this story.

Manufacturing Efficiency – Celsius invested $75 million in a second production line (Big Beverages, a co-packer) at its North Carolina facility in Nov-24. This investment in vertical integration reduces per-unit costs and gives pricing control over aluminum, which is actually the company’s largest COGS input.
Favorable Mix – Multi-packs and club store sales (higher margins) are growing faster than single-serve convenience. International markets, while small (est. $100M annualized run rate by year-end 2025), can carry higher ASP and potentially higher margins (if you are selling in the right areas of course).
Alani Nu & Rockstar Synergies – There are an abundance of operating synergies to be realized from these recent acquisitions. Management announced expectations to achieve $50 million in run-rate cost synergies within two years post-close.
- Consolidated purchasing power via procurement and sourcing for aluminum, sweeteners, and ingredients (negotiating favorable discounts for three brands instead of one)
- Co-packing and production consolidation into larger, more efficient manufacturing across fewer facilities
- Headcount reduction / reduced overhead for back office and marketing & advertising departments
- Logistics and freight consolidation via warehouses and optimized shipping lanes

If gross margins stabilize at 50%+ in 2026 (highly probable given infrastructure investment), and operating expenses grow slower than revenue (via operating synergies), Celsius can enter a classic high-growth (but maturing) business cycle.

International Expansion

As U.S. growth arguably matures (outside of such growth investments like Alani), utilizing Pepsi’s international distribution network will be vital to push international growth.

International revenue is very small, currently only representing ~3% of topline revenue as of Q3 2025.

The $25 million Q3 metric converts into a $100M annualized run rate by year-end 2025. This may seem immaterial, but the international segment grew 30% QoQ and is only ~3% of total revenue.

Monster generates $400-450M in EMEA alone!

Celsius’s 88% grocery penetration in UK and France (achieved in under 12 months) proves the model actually does work internationally — the team just has to put real effort behind it.

In addition, the company is putting the ‘people’ foundation in place for proper international expansion, per the latest Q3 key messages slide, specifically #7 below —

#7 indicates Celsius hired a new President of Celsius International, further strengthening its leadership team to pursue growth internationally. This hire was specifically for leading growth abroad, which was hinted at during the earnings call.

Organic Growth of Legacy Brand

The organic growth of the flagship product that built the Company’s reputation is showing deceleration in growth. Below is a timeline of their legacy Celsius revenue and revenue growth the last several period:

2023: Revenue of $1.318 billion, a 100%+ increase from 2022, largely driven by the expansion of its distribution partnership with PepsiCo
2024: Revenue of $1.356 billion, a ~3% increase from 2023. Growth slowed significantly due to inventory optimization efforts and reduced distributor issues.
Q1 2025: (7%) from distributor issue carryover
Q2 2025: +9% — modest recovery
Q3 2025: +13% scanner growth (but heavily dependent on inventory timing and promotions) — management presented this as evidence of momentum

I don’t think this means Celsius is fading from popularity, but rather is the maturing segment of the business. This can be seen in their market share gains below:

2023 legacy market share: ~10%
2025 legacy market share: 11.8%
2025 YTD legacy market share: ~12%

This is much slower growth than the brand’s 2021-2023/24 growth, which moved from ~2% to roughly 10-11% during that time frame.

If the legacy Celsius brand organic growth falls to somewhere around 10-11% in 2026, and Alani Nu moderates materially from 100%+, the consolidated company growth will be less than consensus and ultimately drive the stock price down.

Potential Risks (Which are Manageable)

In my opinion, the hay days of making big money in Celsius are gone.

The company scaled extremely quickly in the public markets post Covid, rising 1,000%+ due to their best-in-class marketing and advertising strategies, along with their enabled-scale with the Pepsi distribution network.

After this hyper-growth era, the Company has experienced several issues that must be addressed before deciding to invest. The risk of legacy Celsius organic growth would have been in this list, but we’ve already discussed this.

Risk #1: Pepsi Distribution Integration and Dependency

PepsiCo owns ~11% of Celsius, holds board seats and retains competing energy brands (Mountain Dew Kickstart, Mountain Dew Amp).

Balancing distribution and brand allocation by location/region is a challenging task, and Pepsi has had historical hiccups with Celsius product distribution (Celsius’ fault more so).

—> Following the Aug-2022 partnership, Celsius experienced rapid growth, prompting Pepsi to aggressively load inventory to avoid shortages.

In 2023, this created a false impression of "stunning" sales because revenue was recognized when products were shipped to Pepsi, not when consumers bought them.

By early 2024, it became clear that Pepsi had stocked far more, estimated at $100–$120 million worth, than immediate consumer demand required.

The inventory issues decimated the stock price in 2024, which fell ~52%, and investors feared the brand's popularity was fading.

However, the stock rebounded sharply in 2025, surging 100%+ as inventory levels normalized and consumer sales remained intact. Celsius may have learned their lesson here.

Personally, I don’t think the ‘dependency’ argument has a lot of merit — Pepsi wants Celsius in their distribution network and intends to start rolling out their multi-brand portfolio internationally.

Risk #2: The Sarah Katz Caffeine Safety Act

The Sarah Katz Caffeine Safety Act (introduced March 2025), a bill introduced by Congress, would mandate high caffeine labeling for beverages exceeding 150mg per serving.

Celsius obviously contains 200mg which is above this threshold.

Severe restrictions could force reformulation or sales channel loss, although I highly doubt this is likely.

Canada and the UK actually already have imposed caffeine caps. Canada has a 180mg cap on energy drinks sold in the country.

Energy drinks over 180mg caffeine are allowed in the UK, but must have warning labels for ‘high caffeine’ content. Their government is also currently consulting on banning sales of these high-caffeine drinks (over 150mg) to children under 16.

The U.S. is following in suite, but a full ban is very low probability and labeling/age-restriction is more likely. I full restriction on caffeine content similar to Canada is likely 0% in my opinion.

Concluding Thoughts for Investment

For context, I personally own 600 shares of CELH at an avg. price of $27, which I started buying at during the holidays in 2024.

I am definitely formulating a plan for selling these shares within the next several months unless organic growth accelerates, integration synergies are successful, distribution is seamless (doesn’t have to be perfect), and the business continues to execute on their core offering.

I would like to see the next earnings report before making a decision, even though John Fieldly did say to expect Q4 to be ‘ugly’.

The market's skepticism on 2026 execution is understandable but could be misplaced, offering a compelling risk-reward for investors willing to tolerate volatility.

The stock is not a screaming bargain, and the valuation is justified only if growth sustains.

Thus, Celsius is fairly priced relative to its intrinsic opportunity, and could experience compounding growth going forward if the Company executes on vertical integration of recent inorganic growth, expands internationally and withstands the potential risks ahead of them.

Please comment if you own the stock of have any opinion on it!

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CES 2026

The Private Public Investor — Mon, 12 Jan 2026 05:22:00 GMT

“CES gathers the global tech ecosystem for significant deal-making, partnerships, and idea-sharing, serving as the stage where ideas become reality”

— Kinsey Fabrizio, President of CTA

Executive Summary

After watching some content from CES 2026 (Consumer Electronics Show), I’ve decided to give a quick update since I’m guessing most of y’all don’t want to sit and watch every video, synthesize the new announcements / technology and decide what’s next in AI.

One thing is for sure. Artificial Intelligence has evolved past a ‘venture-capital’ wager, and is confidently going to become foundational infrastructure in our economy and every corporate ecosystem.

—> That’s obvious.

For us investors, I think the question should now be how to position ourselves across layers of the value chain to maximize returns while managing the concentration risk in the upstream infrastructure layer, which is currently dominated by players like Nvidia, AMD, Micron, TSMC, etc.

While exploring these alternative AI opportunities, it’s important to remember that companies like Nvidia and AMD still own the foundation of the compute economy, and their technological innovation ripples through the ecosystem, influencing all AI innovation.

In this article, we’ll explore the innovation battle between infrastructure giants Nvidia and AMD, while also laying out their future AI hardware and software discussed at this conference.

Let’s dive in.

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Nvidia GPUs to Full AI Stack Platforms

Let’s start with the obvious — Nvidia.

Jensen first unveiled the Vera Rubin platform: a rack-scale, next-generation AI supercomputing architecture that integrates CPUs, GPUs, networking and DPUs designed for both training and inference workloads at massive scale.

This was actually not a typical, next generation chip refresh. First off, this Rubin unveil was shown months earlier than usual, signaling accelerating demand for larger and more complex AI models.

The Rubin platform aims to make the world's most advanced AI accessible and affordable, supporting the next wave of AI development for the MAG7 and major cloud providers / enterprises.

More specifically, the platform achieves a ~10x reduction in inference token costs and requires ~4x fewer GPUs for training, compared to the Blackwell predecessor.

When I first read this, I was confused that Nvidia did this, as this would likely cannibalize their own chip sales?

However, from NVIDIA’s perspective, this is a calculated move to prevent market stagnation and maintain their monopoly. If this doesn’t make sense, let’s try to understand it from how Jensen framed it on stage… through an analogy / theory.

Jensen is betting on the phenomenon called the Jevons Paradox:

“As technological progress increases, the efficiency with which a resource is used, and the rate of consumption of that resource actually rises, because it becomes cheaper and more useful”

This causes demand to increase, leading to increased resource consumption.

So the logic here is that if a token costs 1/10th as much to produce (via the Rubin platform), developers won't just pocket the savings but rather build and utilize models that are 100x more efficient.

Agentic AI and reasoning heavy models require a massive amount of tokens to operate, and Nvidia is making this more financially viable while also betting that this will lead to more chip demand when compared to the cost.

In addition to the new Rubin platform, Nvidia is making strides on the consumer front.

The chipmaker announced partnerships with consumer electronics manufacturers to embed its AI processing capabilities into laptops, tablets, and even home entertainment systems.
This strategic expansion matters because Nvidia's extraordinary valuation—trading at roughly 35x forward earnings—depends on the company finding new growth avenues beyond its core business.
The data center segment, whilst still growing at impressive double-digit rates, cannot indefinitely sustain the explosive revenue increases that have propelled Nvidia's share price upward by more than 240/cent over the past two years.
— Winvesta

This illustrates Nvidia is starting to move beyond its dominance in data centers to bring AI into the consumer market, which is a market worth ~$150 billion.

AMD’s Yotta-Scale Vision & Broader AI Compute Strategy

AMD responded with its own vision, although it wasn’t taken as well by investors, as the stock slightly decreased after the conference.

AMDs stage announcements included the upcoming MI400 series, the Helios rack-scale platform, new Ryzen AI processors, an updated gaming CPU and software developments.

First, I want to respond to Nvidia’s development’s with AMD’s new technology, as both advancements seem similar, but I want to make the distinctions clear.

NVIDIA’s pivot to extreme token efficiency with the Rubin platform is surely a competitive move and something AMD has taken notice to.

Nvidia is trying to convert the AI infrastructure demand market from a ‘chip demand’ model (where you pay for whatever chips you can get) to more of a ‘system utility’ model (where you only buy the most efficient system) .

While Nvidia’s GPUs are more token efficient, AMD’s Instinct MI455X (also debuted at CES 2026) boasts a massive 432GB of HBM4 (which is memory!).

While NVIDIA is winning on compute efficiency (petaflops per token), AMD is competing on model fit.

Larger memory on-chip allows AMD to fit massive, multi-trillion parameter models / ultra-long context windows onto fewer GPUs

For customers like OpenAI who want to avoid complete ecosystem dominance by Nvidia, keeping models on fewer chips can sometimes save more money

Nvidia’s token efficiency is also a byproduct of their new NVLink 6, which is a technology that helps a rack’s components (GPU, CPU, accelerator, DPU, etc.) compute more efficiently, in lockstep.

AMD uses a more general, open-source alternative called UALink. If they can integrate this elegantly within their new Helios rack, this will be a hyper-lucrative opportunity for the business and allow them to compete on par with Nvidia.

Now, let’s briefly discuss the AMD developments.

While the market’s reaction to AMD’s keynote was a bit ‘meh’ (reflected in that slight stock dip), I’m slightly more bullish than others coming out of CES.

While we’ve already reference the MI455x and Helios platform, these were main features of the presentation from Lisa Su.

The Helios platform introduced “Yotta-scale” compute (this is just a lot of compute / performance. Trust me, I don’t understand how much this actually is lol) — which features 72 Instinct MI455X GPUs, the new EPYC ‘Venice’ CPUs and Pensando ‘Vulcano’ NICs for networking.

This thing delivers up to 3 AI exaflops in a single rack. I looked this up, and apparently to put that in perspective, it weighs nearly 7,000 pounds (weight of two compact cars!).

I think a multitude of enterprise customers will want Helios since it’s an open source rack and they’ll want to avoid the walled garden of Nvidia.

AMD also unveiled their MI400 and MI500 series in more detail, which can be referenced in the two images below:

One crazy stat I have to mention here on the MI500 series.

Lisa was claiming a 1,000x performance increase over the MI300X from 2023. It’s a bold claim, but it shows AMD isn't slowing down their R&D spend.

AMD also headlined their Ryzen AI 400 and Halo MAX+ series.

The Halo series processors were the dark horse of the show in my opinion (we already knew about Helios and the MI400 series) — it’s essentially a compact mini-PC developer platform designed for building, testing and running large models locally, without relying on cloud infrastructure!

This shows AMD is firing on all cylinders on the developer / software side as well.

I truly believe AMD is truly lowering the barrier to entry for anyone who wants to build AI without getting permanently stuck in the Nvidia ecosystem.

The Bottom Line of AMD vs. NVIDIA

Its a duopoly.

At this point, there’s no denying that.

Nvidia still owns ~90% of the data center compute market for AI and GPU compute, but market data from early 2026 suggests AMD has successfully grown its data center market share to roughly 10% (up from ~5% in 2024).

But Nvidia wants the whole stack. They build the chips, the racks, the networking and the software. It’s a closed-source walled garden that offers the highest token efficiency in the world.

If you believe the Jevons Paradox will drive infinite demand for the fastest possible compute, and Nvidia will capitalize on this, then Nvidia could be your best bet in your portfolio.

AMD is the open-source alternative. By doubling down on UALink and massive on-chip memory, they are the freedom play for hyperscalers who don't want to be indebted to Jensen’s pricing.

If you believe the market will eventually revolt against proprietary systems, move toward inference-at-scale, and value a full stack ecosystem with GPUs, CPUs, DPUs, NPUs, FPGAs and more, AMD is the clear winner, as they offer the broadest, open-source portfolio of compute.

There are many other factors in play here such as pricing power, financial dynamics, future partnerships, speed of ROCm software adoption (if at all) and others.

So…

Nvidia and AMD aren’t just competing on chips, but they’re competing on philosophies for how the AI compute economy gets built.

CES 2026 made one thing clear: AI is about who controls the rails of computation.

From here, for us investors, it’s less about predictions and more about tracking how these competing approaches shape the pace, cost and direction of AI adoption over time.

5 Stocks Worth Your Attention in 2026

The Private Public Investor — Sun, 04 Jan 2026 17:46:41 GMT

Happy New Year everyone!

Let’s enter the first full week of the 2026 stock market with conviction and better decision making than the previous year.

AI was the talk of the town in 2025. I think that narrative will continue this coming year, as the MAG7 are projected to spend over $500 billion in aggregate CAPEX.

Despite this, I do believe retail and financial institutions will act with more ‘analysis rigor’ and hesitance, as the ‘circular economics’ discussions have been discussed publicly in numerous instances, showcasing a possible scare of an AI investment bubble.

Below are my 5 highest-conviction picks for 2026, and why I believe each deserves a place in your portfolio.

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1. Advanced Micro Devices ($AMD)

AMD has spent the last 8 months proving it's not a one-dimensional play on data center weakness or GPU scarcity — this stock gained serious respect in 2025 and gained 75-80% in its stock price during the year.

Advanced Money Destroyer —> Advanced Money Duplicator

In Q3 2025, AMD delivered $9.25B in revenue, showcasing a 36% YoY increase, the highest quarterly result on record.

They beat on consensus analyst estimates by ~6%, and provided Q4 guidance of $9.3-9.9B, implying ~25% YoY topline growth and FY2025 between 30-35%.

AMD is experiencing revenue acceleration, and this growth is broadening.

Broadening (meaning): with GPUs, CPUs, DPU’s, AI accelerators, FPGAs, ROCm software and more, AMD has a full-stack competitive advantage that few appreciate.

Nevertheless, the ‘Data Center’ segment remains the main revenue driver accounting for the bulk of growth.

The ‘Client and Gaming’ segment surged 73% YoY.

Client (think CPUs like Ryzen) experienced 46% growth YoY
Gaming experienced a strong turnaround in Q3, with the U.S. commercial sector growing 7%+ YoY and overall executive sentiment becoming positive for the first time in over a year.

Great numbers across the board!

In addition to their robust Q3 earnings report, AMD also signed deals / partnerships in 2025 with:

OpenAI: expected to generate “tens of billions” in revenue through 2027 and beyond
Oracle: 50,000 MI450 chip deployment
Meta: Llama inference ramp
Microsoft: custom chips (gaming, compute, etc.)
U.S. Department of Energy: $1B supercomputer commitment
HUMAIN & Cisco: build a secure AI cluster in the UAE using
Instinct MI350X GPUs

AMD is no longer the runner-up to NVIDIA, but rather a fierce, novel competitor, anticipating to steal away market share.

The main, convincing driver of growth this year will be the release of MI400 series chips, along with the Helios rack-scale architecture platform.

The MAG7 and other large corporations spending big dollars on compute are highly anticipating the release of the MI400 series and are ready to put in more large orders after the commercial unveil.

If AMD executes well on the commercial release of the MI400 generation of chips and continues to put up good numbers across the board in the other segments of the business, I would not be surprised to see AMD as a top 5 performer in the S&P500 in 2026. This is their year to shine — it’s theirs to lose, in my opinion.

Key Risks:

China regulatory headwinds
NVIDIA pricing retaliation
ROCm improvement / adoption
Ordinary lack of execution

My Price Targets:

2026: $350

2029: $1,000+

—> See my Deep Dive on AMD below:

2. Adobe ($ADBE)

Adobe has gotten hammered from its $635 peak in January 2024 to $330 today.

The 40-50% decline reflects investor concerns about AI disruption that recent product announcements, partnerships and strong execution have demonstrably addressed.

As mentioned in my recent deep dive, the setup today is different than early 2024.

Adobe is monetizing AI rather than defending against it.

At MAX 2025, the company showcased Firefly Foundry, Project Moonlight (agentic AI) and announced the integration third-party models (OpenAI, Google, Luma) directly into its apps.

—> This ensures that even if another company builds a better AI model, the professional work still happens inside Adobe software.

Regarding their recent earnings report, Q4 delivered $6.19B in revenue (+10% YoY), beating analyst expectations, and full-year revenue reached $23.77B (+11% YoY).

Non-GAAP Adj. EPS came in at $5.50, beating analyst consensus estimates of $5.39–$5.40.

At a ~21x P/E with double-digit revenue and margin growth and $10B+ in FCF, this is a dominant SaaS business trading at a discounted price reserved for slower-growers.

The $25B buyback program (planned through March 2028) will also drive EPS growth and compounding going forward the next few years.

Key Risks:

Fierce competition from players such as Canva, Midjourney and Figma
Experience Cloud underperformance
Future elevated SBC payouts

My Price Targets:

2026: $450-500

2029: $800+

—> See my Deep Dive on ADBE below:

3. Nike ($NKE)

Elliott Hill's return to Nike as CEO is one of the most compelling turnaround narratives in the market.

After John Donahoe's (previous CEO) disastrous DTC obsession failed and destroyed Nike’s wholesale relationships, reputation and brand equity, Hill came back in October 2024 with a mandate to reignite growth through sports, wholesale relationships and other business partnerships (referred to as the “Win Now” strategy).

The latest Q2 FY2026 earnings report is evidence that this strategy is working.

Nike beat on both revenue and earnings expectations

Nike reported $12.4B in revenue (up 1% YoY and ahead of expectations) with North America wholesale revenue surging 24% YoY — a critical metric Hill explicitly stated was a priority in the Nike turnaround strategy.

EPS came in at $0.53, down 32% YoY, but much higher than the $0.37 analysts had projected.

The stock did trade down after this report due to a disappointing outlook, signaling that the turnaround timeline may be longer than expected.

—> Regardless, Nike is executing on this strategy just as planned.

The competitive moat remains intact with distribution across 190+ countries, $4B+ in annual marketing spend and a $500M R&D budget.

While Hoka, On Running and Lulu Lemon have exploited innovation gaps and emerged as strong competitors, Nike can outspend and out-invest them simultaneously.

Key Risks:

China "Guochao" trend: consumers increasingly favoring homegrown products
Continued fierce competition and macro consumer risk
Failed DTC pivot

My Price Targets:

2026: ~$75

2029: ~$160

—> See my Deep Dive on Nike below:

4. Celsius Holdings ($CELH)

Celsius is the only energy drink brand in the history of the country to materially steal away market share from Monster and Red Bull.

The business sits at a rare intersection of hypergrowth and operational maturity.

The stock rallied ~68% in 2025, yet I think consensus still underestimate what's happening as PepsiCo's distribution network continues to absorb and seamlessly integrate Alani Nu and Rockstar Energy product portfolios.

For context, in 2025, Celsius acquired Alani Nu, a female / younger generation health and wellness energy drink brand and also made a deal with Pepsi to acquire the rights of Rockstar energy in the U.S. and Canada. Rockstar is an energy drink brand for active and adventurous individuals.

With the heavy inorganic growth over the past year, Celsius now sits at 20%+ market share of the energy drink market in the U.S., with Red Bull and Monster still retaining larger shares respectively.

Even more impressive than Celsius’ growth in market share is that the brand contributed 27% of all energy drink category growth YTD, as of their November 2025 Investor Presentation.

—> Celsius has more market share to capture in the U.S., and certainly abroad

In my opinion, the largest catalyst for Celsius going forward is international expansion. International sales only represent 3-6% of total revenue for the brand today.

John Fieldly (CEO) and the management team have mentioned this is a primary long-term driver of growth, and the Pepsi distribution network will be key for driving this strategic initiative for Celsius and Alani (Pepsi retained Rockstar international distribution rights as part of the deal)

In addition to international growth, the Pepsi distribution integration hasn’t nearly matured yet.

Alani began its phased rollout across Pepsi’s distribution network on December 1 (month ago) — this is going to be accretive to topline and bottom line going forward.

—> Rockstar has already been integrated into this network for over 15 years, as Pepsi actually sold the Rockstar brand rights to Celsius and owned the entire business prior

Lastly, from a valuation standpoint, I like to look at revenue for this business, as there has been a lot of earnings noise lately with the M&A and integration costs.

Celsius trades at a 5.6x P/S ratio while Monster trades as a 9.4x P/S ratio. Celsius has traded higher than this historically since Covid as well.

Celsius management actually guided towards a rocky Q4 in their latest Q3 report, due to the integration costs, giving lower expectations and clearing room to beat analyst expectations in result.

Quick Financial Breakdown (YTD Nov-25):

Revenue: $1.8B
Gross Margin: 51.6%
Net Income: $83M
Adj. EBITDA Margin: 27.1%

Key Risks:

Slow international expansion
Higher than expected integration costs, distributor wind-downs and co-packing inefficiencies
Tariff pressures

My Price Targets:

2026: ~$65

2029: $100+

—> Bullseye Picks (someone I follow) posted an informative Deep Dive linked below:

5. ASP Isotopes ($ASPI)

ASP Isotopes is the speculative play in my portfolio, and thus, has an inherent chance to outperform all other positions in my portfolio in 2026, but with considerably more risk. The company currently trades at a $600-650M valuation at $5.50-6.00 / share.

Let me paint a picture for you here on this one…

What is the biggest bottleneck in AI compute?

—> Energy

I believe the most practical solution to energy constraints in the United States is nuclear energy. And I’m not talking about large reactors (3 Mile Island Disaster, etc.)

I’m talking modular nuclear reactors via small modular reactors (SMRs).

SMRs are widely known to be one of the most practical and REAL solutions to constraints in our energy infrastructure, but the U.S. regulatory framework is extremely tight and the U.S. ability to convert uranium into usable uranium is very low.

Isotope enrichment is the solution to this bottleneck, and very little of this process is done by the United States.

According to industry veterans like Scott Nolan from General Matter (private company that provides uranium enrichment), the United States enriches under 5% of global uranium, with China and Russa enriching over 90% combined…

ASP Isotopes converts Uranium-235 (U-235) to "usable" nuclear fuel known as High-Assay Low-Enriched Uranium (HALEU), which CAN be used in SMRs.

This conversion process is called isotope enrichment, and this is ASP Isotope’s main revenue driver. ASP Isotopes enriches isotopes not only into HALEU as nuclear fuel, but also into isotopes for medical imaging and semiconductors.

ASP Isotopes operates their HALEU conversion business through their UK subsidiary Quantum Leap Energy — I am most bullish on this subsidiary (I believe the medical imaging and semi segments will be successful as well).

While the company HQ is in the U.S., the company maintains significant operations and manufacturing facilities in South Africa, where it operates the isotope enrichment plants.

But, ASP Isotopes just became commercial this past year. Before Q2/3, the business just processed raw materials prior, preparing to go commercial.

Overall, there is a lot of risk with this position, but ASP Isotopes is one of those tiny, under-the-radar names sitting right on top of a massive bottleneck — isotope enrichment.

It’s still a small-cap story, but if their tech scales and early commercialization succeeds this coming year and beyond, this could turn into a monster in one of the most strategically important industries on the planet.

My Price Targets:

2026: ~$10

2029: $100 ( which equates to an ~$11B valuation)

Note: There is much more to this story, which I will discuss in a later Deep Dive. See this link to their latest Q3 Investor Presentation from November

ADBE & the AI Pivot

The Private Public Investor — Mon, 29 Dec 2025 19:33:53 GMT

“People who use AI will replace people who don’t use AI, just like people who used automation or computers probably replaced those who didn’t.”

— Shantanu Narayen, CEO

Investment Contents

1. Thesis for Investment

2. The AI Narrative Shift & MAX Conference

3. Business Model: Subscription SaaS at Scale

4. Stickiness, Customers & Growth

6. Risks / Competition

7. Financial Performance, Projections & Valuation

8. Concluding Thoughts

Investment Thesis:

Adobe has gotten hammered from its $635 peak in January 2024 down to where it sits today around $340-360 a share.

The stock’s 40-50% decline from the peak reflects investor concerns about AI disruption that recent product announcements and strong execution have demonstrably addressed.

The setup today is different than early 2024. AI expectations have been reset, the valuation has compressed lower and Adobe is now monetizing AI rather than defending against it. The business has improved while the stock has declined.

The combination of AI offerings and tech innovation announced at MAX 2025, along with recent partnerships and acquisitions with AI businesses like ChatGPT and Semrush showcase that Adobe is crafting their own AI narrative and pushing forward initiatives to make sure they are part of this new phase and don’t get left behind as an archaic SaaS business.

Coupled with an attractive valuation at a ~21x P/E, a robust buyback program and growing topline and bottom line double digits YoY, Adobe is a classic, misunderstood value play in the SaaS market.

The AI Narrative Has Fundamentally Shifted

When generative AI emerged broadly in 2023, investors voiced legitimate concerns about whether the technology would cannibalize Adobe’s subscription seat counts.

Rather than cannibalizing demand, Adobe has pushed for AI-powered tools to become a driver of engagement and monetization across Adobe’s Creative Cloud ecosystem.

At MAX 2025, Adobe showcased several key AI projects, solutions and offerings to bolster their innovation pipeline:

Firefly Foundry: Allows enterprise customers to train Firefly models on proprietary data and branded content, creating a uniquely customized AI experience. In addition, these custom models can now run on Google's infrastructure with native integration of Google's own generative AI models (Gemini, Veo, etc.).
Project Moonlight: Agentic AI assistant that allows users to delegate repetitive tasks and creative workflows to AI agents (rather than managing disparate applications)
Adobe Firefly Studio “All-in-one Offering”: Image generation Model 5 (explained below because I think it’s important), new audio generation and video editing tools, partner models (agnostic: OpenAI, Google, Luma AI, etc.) and collaborative boards
- Firefly Image Model 5: Advanced AI model for image generation and editing, offering top-tier resolution, superior photorealism (lighting, texture) and powerful prompt-based editing
Project Graph: Tool that allows creators build, control, and share custom, AI-powered creative workflows by connecting Adobe tools (like Photoshop) and Adobe Firefly models

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An important point here on AI innovation is that Adobe is no longer just pushing its own Firefly model.

Adobe is integrating third-party models (OpenAI’s Sora/GPT, Google Gemini, Runway) directly into its apps, ensuring that even if another company builds a better AI model, it’s all integrated into the platform and the professional work still happens inside Adobe software.

Adobe has also recently announced integration of their services directly within ChatGPT, making Photoshop, Adobe Express and Adobe Acrobat available within the LLM.

Earlier in 2025, Adobe integrated Adobe Express and Adobe Marketing Agents directly into MSFT 365 Copilot.

Adobe has made massive strides through these partnerships and others (Google, Runway, HUMAIN, etc.) to bolster their offering and make sure they aren’t behind during this wave of AI.

Business Model: Subscription SaaS at Scale

Adobe provides a suite of subscription-based services to customers for creating and managing digital content.

Of Adobe’s revenues, 96%+ comes from subscriptions according to their latest Q4 earnings report, up from ~90% one year ago.

See below for a revenue by region breakdown:

America (~59% of revenue)
EU, Middle East, Africa (~27% of revenue)
APAC (~14% of revenue)

Adobe operates across three primary business segments, with their portfolio skewed toward high-margin creative and productivity software. I like to think of Adobe’s business as:

75% Creative Engine (Photoshop, Acrobat, AI)
25% Enterprise Experience (Data, Marketing, Analytics)

See below for a revenue by business segment breakdown:

Digital Media: 74.3% of ‘25 Revenue

This segment encompasses Creative Cloud and Document Cloud, serving creative professionals, content creators and business professionals.

Creative Cloud delivers professional creative software including Adobe Photoshop, Illustrator, InDesign, Premiere Pro, After Effects and Lightroom
Document Cloud provides what business professionals utilize when printing to pdf through Adobe Acrobat or signing an agreement through Adobe Sign. Broadly, services include PDF creation, editing, e-signatures and document management

The most notable AI innovation initiatives are being pushed through the Creative Cloud. With the addition of Gen AI capabilities through Adobe Firefly, Creative Cloud adoption has accelerated, with ‘freemium’ monthly active users surging 35% YoY to over 70 million!

But, don’t discount the good ole pdf segment of the business — Document Cloud revenue reached ~$3.48B in FY2025, growing ~18% YoY.

Recently, Adobe has enhanced Acrobat with AI-powered features through Acrobat Studio (most likely helping that impressive growth rate), driving strong adoption with 70% renewal upgrade rates to the new AI-enhanced offering in Q4 2025.

Digital Experience: 24.7% of ‘25 Revenue

This segment encompasses Adobe's marketing, analytics and enterprise customer experience solutions.

It is designed for large corporations (think Delta, Nike, or Marriott) that need to manage millions of customer interactions across websites, mobile apps, emails and physical stores

Adobe Experience Platform (AEP) provides an open, central hub, unifying customer data from various sources (web, mobile, CRM, etc.) to ensure every department has a single, up-to-date view of the customer. AEP is the underlying "brain" launched a few years ago that connects all these separate tools into one unified system.
Real-Time Customer Data Platform allows marketers to build precise segments and push them to various channels (social, email, ads)
Customer Journey Analytics allows professionals to see how a customer moves from a mobile app search to an in-store purchase
Adobe Journey Optimizer orchestrates personalized, multi-channel customer communications and marketing automation workflows
GenStudio utilizes generative AI, brand compliance and content creation tools for marketing teams. The Performance Marketing and Content Supply Chain solutions enable marketers to generate ad variants and manage content workflows
Adobe Target and Adobe Commerce complete the suite with personalization and e-commerce capabilities

GenStudio represents the segment's highest-growth offering, with ARR growing 25%+ YoY in FY2025, now exceeding $1 billion.

Historically, this segment has had lower margins than the rest of the business because it required more labor intensive, human support.

However, by using AI to automate support, Adobe is actively working to expand these margins to match the rest of the company.

I think this is arguably Adobe’s most critical growth engine for the next decade, despite the heavy amount of competition from competitors like ZETA or the large tech conglomerates like META. Let’s say a Creative Cloud subscription is $600/year for an individual — an Experience Cloud contract for a Fortune 500 company can be $10M to $50M+ per year!

Topline growth can be driven heavily from this segment going forward.

Publishing & Advertising: 1% of ‘25 Revenue

I m going to ignore this segment of the business in my analysis, as this is a minimal contributor with ~$260M in FY2025 revenue.

This legacy segment has been intentionally de-emphasized by Adobe management, as Adobe redirects resources toward higher-growth and higher-margin opportunities.

See below for a breakdown on 2026 target projections:

Stickiness, Customers & Growth

Stickiness

Once a business adopts the ‘Creative Cloud + Document Cloud’ stack, the cost of switching becomes prohibitively high for customers (especially enterprise customers with more complex operations and moving parts), creating a very sticky business model.

Think about distribution, compliance and IP protection

Yes, AI tools can now generate images, videos and designs in seconds, and some of those tools are free or dramatically cheaper than Creative Cloud.

On the surface, it sounds like direct disruption, but that is a shortsighted thought. Adobe’s software integrates compliance adherence tools and copyright and legal safety protocols / permissions. Most of these ‘startups’ or growth-phase AI software’s don’t meet these compliance/IP standards, especially scaled enterprise-size clients.

This disqualifies a lot of competition from replacing Adobe inside large organizations and displacing their software in the SMB market.

Enterprise Performance

In Adobe’s latest Q4 earnings, they reported 25% YoY growth with customers with over $10M in ARR — this shows AI is driving larger, multi-year enterprise deals rather than smaller, individual seat subscriptions.

This Q4 growth also brought the total number of customers in this $10M+ ARR bracket to >150 (added 30) and provides a massive, pre-committed revenue base entering FY2026.

“Our customer group strategy, large market opportunity and product innovation drove strong FY25 results. This is the foundation for our FY26 Total Adobe ARR growth target of over 10% and we’re focused on accelerating this momentum beyond FY26.”
— Shantanu Narayen, Q4 Earnings Call

An important note: management attributed these results to the accelerating adoption of AI functionality

The Experience Cloud (containing tools like Adobe Real-Time CDP and Adobe Journey Optimizer) is naturally where most of these enterprise contracts will be signed going forward.

I understand most investors don’t like this segment, but it’s important for cross-selling services within Adobe and increasing wallet share with current customers.

AI Monetization

Adobe isn’t just utilizing AI tools, but rather using them as a revenue driver through Generative Credits. Generative credit usage tripled QoQ in Q4!

Here’s how it works:

Users get a base amount of usage with their base subscription — once this limit has been reached, customers must buy "Credit Packs" or upgrade to higher-tier plans

This fits the company’s growth strategy perfectly because Adobe needs higher ARPU (avg. revenue per user), not more seats. When users utilize upgraded subscription plans, the generative credits will convert usage into incremental revenue.

Even if 15–20% of Creative Cloud users exceed base plan AI usage and spend an incremental $10–15/month on credits, that alone adds hundreds of millions in high-margin revenue over time, without adding a single new seat.

Risks and Competition

The biggest risk to Adobe is competition.

We can’t ignore the competition present in the creative landscape, from other innovative platforms and up-and-coming AI businesses.

Canva is scaling rapidly among non-professionals and small teams. Figma (prior to Adobe’s blocked acquisition) was clearly encroaching on Adobe’s collaborative design workflow.

Open-source and low-cost alternatives continue to exist.

But none of them have the ecosystem depth or enterprise capabilities that Adobe does.

In my opinion, competition arguably keeps Adobe sharper than they otherwise would be (it’s a pretty simple business model). Competition forces faster innovation, creative pricing / discipline and more aggressive AI integration.

Another risk is that inorganic growth is likely to be more limited going forward. This is evident after Adobe’s ~$20B bid of Figma was rejected. Regulators argued the deal would harm competition and innovation in the design software market.

That stance likely caps Adobe’s ability to pursue large transformative acquisitions in the future.

However, I don’t believe Adobe needs M&A to materially grow further. Its core businesses still generates strong organic growth, high margins and expanding free cash flow. With AI features being layered into existing subscriptions, this will drive incremental growth into the future.

Lastly, recession risk poses a threat and could slow growth. Marketing spend is often the first thing companies cut when times are tough and budgets are tight.

Thus, a recession would hit the Experience Cloud segment the hardest.

But, Adobe’s other software products such as their Document and Creative Cloud are still needed by businesses and other professionals in their day-to-day workflow.

Competition and macro risk are real, yes, but Adobe’s moat remains intact at the end of the day.

Financial Performance, Projections & Valuation

Adobe’s financial performance provides a solid foundation for the bullish case and reinforces what long-term holders already know: this is still one of the cleanest compounding machines in large-cap software.

FY2025 closed with ~$23.8B in revenue (+11% YoY), strong double-digit ARR growth, and $10B+ in operating cash flow. Creative Cloud and Document Cloud drove a majority of the growth, while Digital Experience held up better than feared in a suboptimal environment.

Over the last five years, Adobe has consistently expanded operating margins despite reinvesting heavily. AI has shifted this reinvestment curve. Once the software, APIs, other supporting service pieces are built, incremental usage is extremely high-margin.

Concerning reported profitability, EPS growth outpaced revenue, reflecting Adobe’s operating leverage and disciplined cost structure, even when they are reinvesting in the business to push AI initiatives.

Q4 Revenue: $6.19B vs $6.11B expected — BEAT (+1.3%)
Q4 EPS: $5.50/share vs $5.40/share expected — BEAT (+1.8%)
FY’25 Revenue: $23.77B vs $23.65-23.70B expected — BEAT
FY’25 EPS: $20.94/share vs $20.20-20.50/share expected — BEAT

Was Q4 it a blowout quarter?

No, but it doesn’t have to be… Adobe management continues to execute on a high level and beat expectations while building an AI layer on top of an already entrenched digital ecosystem.

Below are my estimates for future year growth and margin expansion, growing topline at a conservative 9.5% a year and net income $ by ~16% to 38% margins in 2029.

In addition, in March 2024, Adobe’s board of directors approved a new share repurchasing program of ~$25 billion through March 14, 2028.

In FY2025, Adobe repurchased 30.8 million shares, including 7.2 million in Q4, which is nearly $12B throughout the year. That’s a 5-6% share reduction in a single year!

I see a common problem/issue going around that Adobe’s SBC expense is very high and the business doesn’t have ample cash flow to support this spend. Folks are saying the company is potentially using buybacks to mask a massive hidden expense. This is simply not true:

In FY2025, the gap between Adobe’s GAAP operating income ($8.71B) and non-GAAP operating income ($10.99B) was approximately $2.28 billion. The vast majority of this (~$2.1B) is SBC
At ~$2.1B, SBC represents roughly 8.8% of total revenue ($23.77B)
For a high-growth big tech software company, an 8–9% SBC-to-revenue ratio is actually quite disciplined. For comparison, many high-growth SaaS companies operate with SBC at 15–20%+ of revenue. Adobe is far from the ‘worst offenders’ in this category

I agree that $12B in one year is an aggressive buyback strategy, but Adobe’s SBC is easily covered by their massive cash margins.

Now let’s get to the full projections. See below:

Financial Projections

I’ve assumed revenue growing from $23.8B in FY2025 to $34.2B by FY2029, with growth decelerating from 11% → 8%.

The company just grew YoY by 11%. This simply assumes with the company’s ARR growth acceleration, AI monetization and existing customer wallet cross-selling, that this growth will continue through 2026, then slowly dip by 1% every year thereafter.

I am also assuming net margins expand to 38% in 2029, which may seem aggressive, but:

AI reduces support, onboarding and content production costs
Digital Experience margins will likely normalize as AI automates some services
Buybacks will reduce share count (even faster than SBC grows in my opinion)

Assuming Adobe’s strategic initiatives and AI investments eventually pay off somewhat, expanding margins, I think this is a reasonable assumption.

Valuation Offers Meaningful Upside

Adobe currently trades at a 21x P/E and a 15x 1-year forward P/E — this is arguably the cheapest the company has ever traded at, even though the company continues to capitalize on AI.

This is a company growing topline 10%+, expanding margins, generating $10B+ in annual cash flow and aggressively buying back shares. When you combine double-digit top-line growth with consistent buybacks without aggressive spending, per-share earnings growth comfortably outpaces revenue.

Nonetheless, we really don’t need material margin / multiple expansion for this thesis to play out — if the market stops treating Adobe like an archaic ‘ex-growth’ tech business and starts giving them some credit, valuation becomes a tailwind and the business could trade up rapidly.

When the Dust Settles, Adobe Wins

As the AI wave continues to filter throughout our economy and the corporations within it, the public will soon realize AI cannot overtake all businesses that offer unique, sticky software solutions in an entrenched ecosystem.

When the dust settles, corporations who are utilizing AI to enhance their capabilities, create efficiencies and additional value-add to their customers will stay on the battlefield and emerge victorious.

Adobe is putting up record numbers and beating every target, but the market is still skeptical about whether AI will grow the pie and protect their existing monopoly or aggressively compete, cannibalize and replace their existing value proposition. With a 1-year forward P/E of ~15x, you are getting a dominant, high-margin SaaS monopoly at a price usually reserved for much slower-growing companies

In my opinion, Adobe remains the dominant provider in their category, with unmatched dominance in creative software and digital document solutions.

Adobe’s integration of generative AI positions the company to strengthen its moat rather than lose ground to competition. With high recurring revenues, industry-leading margins and significant free cash flow, Adobe offers long-term compounding potential.

I personally own 80 shares at an avg. price of ~$348/share

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Beyond SEO

The Private Public Investor — Sat, 20 Dec 2025 20:37:48 GMT

“SEO is about being found. AEO is about being the answer”

Evolution of the Online Visibility Landscape

If you want a quick pulse check on whether a modern business actually understands how to sell product today, you don’t go to Google anymore (unless you’re in Gemini). You don’t dig through their website. You just… ask an LLM.

Who makes the best collagen supplement?
What’s the best budget travel backpack?
Which small-cap HR software is actually worth it?

Five years ago, you would’ve gotten a list of blog posts and long-form SEO farms.

Today, ChatGPT, Perplexity, Gemini, Grok and Claude respond immediately. If a brand shows up in those answers, that’s not an accident. That’s AEO (Answer Engine Optimization). And it’s turning into the most important marketing battleground most companies aren’t talking about yet.

SEO built the last decade of digital commerce. AEO will build the next one.

And for investors like us who spend time identifying emerging competitive advantages, this shift is a massive tell for which companies are going to win long term, specifically in marketing, advertising and overall brand engagement.

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What Exactly is AEO? (Quick and simple)

SEO = building content so Google ranks you.
AEO = structuring your brand, products, and content so AI answers recommend you.

AEO focuses on presenting information in a way AI systems can quickly interpret and surface in answers. This means organizing data cleanly, writing straightforward responses to common questions, and reinforcing credibility through consistent, trusted sources so models can confidently reference your content.

The traditional SEO game was:

Write keyword-heavy blogs
Build backlinks
Optimize page speed
Build landing pages around “best ___ in 2021”

LLMs answer based on:

Structured product data
Brand clarity
Real customer sentiment
Clean descriptions and metadata
Clear positioning
Verifiable signals
Third-party product knowledge they can easily digest
Authority / trust

Put differently: LLMs don’t browse. They interpret. They summarize. And they pattern-match.

SEO gets you found; AEO gets you chosen. Search engines are rapidly becoming answer engines. When users ask a question—whether it’s typed, spoken to Alexa, or messaged in a chatbot—they expect a clear, instant answer, not a list of websites to sift through. This is where AEO comes in: it’s about being the trusted, authoritative answer source, not just another result in the crowd.
— Luke M.

Why This Matters From an Investor’s Perspective

This shift is deeper than a new marketing strategy. AEO is an operational tell and a signal for which businesses understand distribution in an AI-native world.

This shows which companies have an intelligent team in place, look forward, continually innovate, and are not afraid of the future.

I like to think of the perfect management team as a group of folks who have the blend of a Gary Vaynerchuk mindset with a background in corporate / institutional business. You want people who intuitively understand attention, culture, and how narratives move online, but who also know how to operationalize that insight inside a real business with processes, accountability, and capital discipline.

Here are the big things investors should pay attention to:

1. AEO compresses the marketing funnel

In a Google world, the customer journey looked like:

Search
Click
Research
Compare
Buy

In an AI-answer world, it looks more like:

Ask the LLM
Buy the recommendation

That’s terrifying for any business that relies on “top-of-funnel awareness.”

BUT, it’s incredible for any business already winning recommendation slots in AI engines.

Think about the companies that benefitted early from Amazon’s “Frequently Bought Together.” AEO is the same dynamic but across the entire internet.

2. The businesses that win AEO will look like they have brand magic

But it’s not magic. It’s structure!

Brands that clean up:

Product descriptions
Schema markup
Customer FAQs
Training data sources
Public documentation
Review consistency
Press coverage clarity

…will suddenly start showing up disproportionately in AI-generated answers. Investors who spot this early will recognize brand momentum before it shows up in revenue.

Because before AEO shows up in revenue, margins, or growth acceleration, it shows up in behavior. In other words, in how companies actually talk.

As AI becomes the middleman between customers and products, companies don’t win by shouting the loudest anymore. They win by being clear, structured, and easy for machines to understand and trust.

The companies that get this right early get recommended more often, spend less on marketing, and compound faster over time.

This is why data is so important, and also why companies like Snowflake and Palantir have so an attractive service to most-all businesses.

3. AEO scales exponentially faster than SEO ever did

SEO had diminishing returns and became overly competitive, saturating the market heavily.

AEO is winner-take-most.

Once LLMs gain confidence that a brand consistently satisfies user intent, that brand gets recommended more often.

More exposure → more data → more confidence → more exposure.

It’s a flywheel.

Try asking ChatGPT or Perplexity about categories like:

Consumer supplements
Travel gear
Kitchen items

You’ll notice the same 3–5 brands appear over and over. Those brands are already optimizing for AEO.

4. This CAN disproportionately benefit smaller companies

SEO was a big-company game. Whoever had the budget to pump out 200 keyword articles a month won.

But not for AEO.

If a 20-person DTC brand structures its data clearly and creates transparent product info, it can outrank a Fortune 500 brand inside AI answers instantly.

—> The LLM robots don’t have feelings or inherent biases. They don’t care how big you are. They care how coherent and credible you look in the data they digest.

This levels the playing field for up-and-coming brands, especially in:

Beauty
Consumer health
Outdoor gear
Supplements
Niche SaaS
Digital tools

As an investor, this can help you assess how efficiently a company (in an industry like the above) is utilizing AI to market and sell their products.

In these early stages of AEO ( I believe we are still early btw), small businesses can scale rapidly without spending exorbitant amounts of capital. I do think large conglomerates will dominate largely due to their endless budgets and willingness to dominate this space.

How Investors (like you) Can Actually Check AEO Strength

You already have the tool — just look it up on ChatGPT or another LLM.

Ask the models:

What are the best [category] products for 2025?
Which brands are known for [key attribute] ?
Recommend 3 alternatives to [competitor] .
What company is leading in [specific niche] ?

If the brand you’re researching shows up without you prompting it, that’s real AEO traction.

And if it shows up repeatedly across several LLMs? That could be a marketing moat forming.

What Businesses are Doing Behind the Scenes

The companies that really understand the shift are quietly rebuilding their entire marketing stacks around AEO:

Cleaner Product Taxonomy

LLMs need clarity and brands are rewriting product pages to be more explicit and structured

FAQ-heavy content

Models love Q&A format, so expect businesses to expand FAQs massively

Structured data markup

Gives context to web content for search engines (and now LLMs)

Consistent messaging

If a company’s own website, Amazon listing, and retailer descriptions all tell slightly different stories, LLMs flag it as ambiguity

Real reviews > SEO content

LLMs de-weight keyword blogs and up-weight user sentiment — businesses are beginning to obsess over reviews and the accuracy of them

Creating direct AI training data

Some brands are now publishing “LLM-ready” datasets about their products. This means clean, structured documentation explicitly written to be digestible for AI.

The smartest companies are treating models as their new customers.

Product Placement and The Shift to AI Shopping

This past Black Friday was a clear inflection point, with LLMs like ChatGPT being used at record levels to research products, compare options, and make purchase decisions.

Salesforce reported that AI and AI agents drove $14.1 billion in global online sales on Black Friday 2024 alone (Salesforce, 2024). Traffic from chatbots to retail sites increased 1,800% on Black Friday 2024 compared to 2023. These weren’t incremental improvements — they represented a fundamental restructuring of how people discovered and purchased products.
— Goeoff Gibbons

Adobe also published the following on their website:

Last holiday season, LLMs accounted for less than 1% of shopping traffic to U.S. retailers, but over the last year (as of July 2025), this traffic has increased by a staggering 4,700%. At this rate, LLM-driven shopping will still remain a small percentage of overall shopping, but these shoppers represent the future of e-commerce.
— Adobe Blog

If a brand isn’t showing up in AI-generated recommendations, it’s effectively invisible to a growing portion of demand.

The companies that win from here will be the ones that understand how to translate brand, product, and trust signals into formats AI can surface confidently.

From an investing standpoint, AEO is becoming a real indicator of whether a company’s growth is built for the next decade or anchored to the last one.

Where this gets Exciting for Public Stock Investing

AEO isn’t just a marketing tactic, but rather a proxy S&M acumen for businesses you are assessing in the market.

For public market investors looking at a business where branding and an online digital matters heavily for sales, AEO matters mostly as a lens into how well a company can actually market and sell products in an AI-driven discovery environment.

This is especially true in categories like beauty, consumer health, outdoor gear, supplements, niche SaaS, and digital tools, where purchase decisions are increasingly influenced by recommendations, not ads.

It’s easy for a company to check the “innovation” or “cool factor” box, whether through a trendy brand, strong product design, or a well-timed acquisition, BUT innovation alone doesn’t matter if the business can’t efficiently get that product in front of consumers at the exact moment they’re deciding what to buy.

Take a little bit of time to figure out if the business you are looking at is doing this.

So… will AEO replace SEO?

No. From reading more into AEO vs SEO and if they co-exist or if AEO replaces SEO, I’ve come to the following conclusion:

The future is hybrid.

Traditional SEO will matter for navigational queries
AEO will dominate for recommendation and decision queries

It’s more accurate to view AEO as an evolution and extension of traditional SEO, not a substitute.

SEO still plays the foundational role of making a site technically discoverable and authoritative, while AEO builds on that foundation by tailoring content so AI and answer engines can understand and cite it as a direct response to user queries.

In other words, SEO helps a brand get found in search results, while AEO helps a brand get quoted by models like ChatGPT or Gemini — a distinction that’s becoming increasingly important as AI-powered interfaces change how people shop and research online.

In my experience in private equity, working with businesses that want to be knee deep in this rather than tipping their toes in, driving AEO alongside SEO is worth it.

In this complementary relationship, businesses must integrate both strategies to future-proof their visibility and avoid losing traffic to AI summaries that don’t link through to traditional search results.

Final Take

AEO is a structural AI shift in how customers find and trust products. It rewards companies that communicate clearly with the models shaping the modern web.

If you want to know whether a company is ready for the next decade of digital commerce, don’t check their blog.

—> Ask the models.

If they don’t show up, the market may eventually agree.