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It’s the last post of 2025. So, it’s time to reflect!
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Most popular posts in 2025
Before we start 2026, here are 12 of the most popular posts of 2025.
Best and worst investments of 2025
2025 was another great year to be an investor.
Chances are, you are pretty happy with your portfolio today. After a catastrophic 2022, the market rose over 20% in 2023 and 2024, and now 18% in 2025.
S&P 500 annual returns (Macrotrends)
The S&P benchmark returned an average annual 10% from 1926 to 2024, and 74% of years were positive. The longer the time horizon, the higher the chance of positive returns. If you want to stack the deck in your favor, the easiest step by far is to trade less and ignore the doomsayers.
“Pessimists sound smart. Optimists make money.”
I share my stock portfolio with a community of long-term-focused investors. So I wanted to share the best and worst-performing investments this year:
📈 Best investment: AppLovin (APP): In March 2025, I wrote: “Several short reports have targeted the company, but they generally come from low-level analysts or content creators with no reputation or research teams. Conversely, hedge funds like Baillie Gifford, Coatue, and Sands Capital have invested in APP.” The market has been underestimating the leverage within AppLovin’s software platform. As the AI-driven AXON engine continues to optimize ad matching, we are seeing a decoupling of revenue growth from operational costs, leading to a massive repricing. The stock has nearly tripled since then, dramatically outperforming the market.
📉 Worst investment: The Trade Desk (TTD): I added to my existing position in February 2025, aiming to capitalize on what appeared to be a reasonable entry point. Since then, the stock has struggled with sentiment shifts in the ad-tech category and a slowdown in revenue growth, partially explained by tough comps from US political spending in 2024. The stock is down 50% from that specific purchase, making it our worst investment this year. TTD has also been the worst performer in the S&P 500. But consider this: TTD has been a holding since 2017, and despite the recent drawdown, the stock price remains over 10x our initial purchase price. It's another great reminder, if you needed one, that zooming out and keeping a long-term view is critical in investing.
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Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
Disclosure: I am long AAPL, AMZN, GOOG, META, PLTR, UBER, and TSLA in the App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members here.
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Today at a glance:
🌐 Accenture: AI Scaling, Outlook Stalling
👟 Nike: Middle Innings
🚚 FedEx: Increased US Volume
🛳️ Carnival: Dividend Returns
🍪 General Mills: Price Cuts Pay Off
🫒Darden: Traffic Returns
1. 🌐 Accenture: AI Scaling, Outlook Stalling
Accenture kicked off FY26 with Q1 revenue (November quarter) rising 6% Y/Y to $18.7 billion ($0.2 billion beat) and non-GAAP EPS of $3.94 ($0.22 beat).
New bookings rebounded12% Y/Y to $21 billion. They represent the value of new contracts signed during the quarter, which will fuel future revenue. A closer look at the past few quarters reveals a trend of stabilization rather than acceleration. New bookings have grown at a 10% CAGR in the past five years.
The drive behind the recent growth remains the same. Advanced AI bookings hit a record $2.2 billion for the quarter (up from $1.8 billion in Q4). This metric now includes not only GenAI, but also agentic and physical AI.
However, the stock dipped despite the beat, largely due to a tepid near-term outlook. Management guided Q2 revenue to ~$17.7 billion in the midpoint ($0.1 billion miss).
While they reaffirmed the full-year growth target of 2%–5%, CEO Julie Sweet noted that discretionary spending remains unchanged and there is no immediate catalyst for improvement. Management announced that Accenture won’t report Advanced AI metrics in future quarters, noting that AI is now embedded in every deal rather than as a standalone line item. This fits the narrative we covered yesterday about measuring AI revenue impact.
2. 👟 Nike: Middle Innings
Nike’s Q2 FY26 revenue managed to stay positive, growing 1% Y/Y to $12.4 billion ($0.2 billion beat), while EPS declined 32% Y/Y to $0.53 ($0.16 beat).
The Wholesale vs. Direct pivot remains the central story. Wholesale revenue climbed 8% to $7.5 billion, as the company re-engages with retail partners to drive volume. This strength helped offset a continued slump in Nike Direct, which fell 8% to $4.6 billion.
CEO Elliott Hill described the turnaround as being in the “middle innings.” The strategy is clearly working for NIKE Brand in North America, where sales jumped 9% driven by momentum in Running and new products.
However, this success was sharply contrasted by severe weakness elsewhere. Greater China revenue plunged 17% Y/Y to $1.4 billion, and Converse sales collapsed 30%. Profitability also took a significant hit. Gross margins fellto 40.6% (from 40.9% a year ago), pressured by the “Win Now” aggressive promotions and the looming impact of tariffs, which management confirmed is a ~$1.5 billion annualized headwind.
Reflecting the uneven recovery, Nike’s stock fell over 10% post-earnings. Management warned that the comeback “won’t be a straight line,” and revenue is expected to decline by low single digits in Q3. While the North American rebound is encouraging, the global turnaround is far from complete.
Amazon is reportedly negotiating a $10 billion investment in OpenAI, effectively mirroring the strategy Microsoft executed just last month.
Microsoft went all-in on OpenAI first ($13 billion), then hedged by backing Anthropic ($5 billion).
Amazon bet big on Anthropic first ($8 billion), and is now potentially hedging by backing OpenAI ($10 billion).
The era of exclusive AI marriages is over. Cloud giants have realized that picking a single winner is too risky. Instead, they are becoming arms dealers. Whoever prevails in the model war, the underlying cloud infrastructure wins. That’s particularly critical for Amazon’s custom Trainium chip, which OpenAI reportedly plans to use.
Meanwhile, OpenAI needs to raise hundreds of billions to fund its CapEx ramp. It also reinforces the growing trend of circular financing in AI. Just last month, OpenAI signed a $38 billion multi-year deal with AWS.
OpenAI once again demonstrates its ability to secure commitments. Tech giants are effectively tying part of their success to OpenAI’s ability to scale.
The Information also reports that OpenAI and Amazon are discussing commerce partnership opportunities. Plot twist?
Today at a glance:
ServiceNow On a Buying Spree
Enterprise Software “Show Me” Era
Micron’s Shocking Guidance
ServiceNow On a Buying Spree
ServiceNow (NOW) shares plunged nearly 12% on Monday, wiping out $21 billion in market cap for the software giant, and have not recovered since.
So what happened? The trigger may have been a report that the company is in advanced talks to acquire cybersecurity firm Armis for $7 billion. But it was likely less about the news itself, and more about a sum of developments of late:
💰 M&A overload: Armis would be the fourth sizable acquisition this year. Critics worry this aggressive spree signals that organic growth is harder to come by and that management is scrambling to make moves.
👔 KeyBanc downgrade: Analyst Jackson Ader raised concerns that AI could reduce IT back-office headcount, shrinking ServiceNow’s core total addressable market (TAM).
The reality check: Despite jittery sentiment, ServiceNow has been growing its top line by more than 20% (twice the pace of peers like Salesforce and Adobe), and cybersecurity remains a top priority for enterprise budgets. Management may simply be taking advantage of a more lenient regulatory environment for tech mergers.
Is the panic justified? Not if you look closely at the business momentum.
Here’s what we wrote for PRO members after the company’s earnings last month.
🧑💻 ServiceNow: AI Fuels Blowout
ServiceNow delivered another stellar quarter, with Q3 revenue rising 22% Y/Y to $3.4 billion ($50 million beat) and adjusted EPS soaring 30% Y/Y to $4.82 ($0.55 beat). The outperformance was driven by accelerating AI adoption and strong enterprise demand. Subscription revenue grew 22% to $3.3 billion, and cRPO climbed 21% to $11.3 billion. Large customer momentum continued, with customers spending over $5 million in ACV growing 18% Y/Y to 553.
Management highlighted exceptional AI traction, noting its AI products are on pace to exceed $0.5 billion in ACV this year, tracking ahead of plans. Reflecting this strength, ServiceNow raised its FY25 guidance significantly: Subscription revenue is now expected at ~$12.84 billion ($55 million midpoint raise), operating margin guidance was lifted 50bps to 31%, and free cash flow margin guidance jumped 200bps to 34%. Q4 guidance also points to continued strong growth (~19.5% subscription revenue).
ServiceNow’s board authorized a five-for-one stock split, pending shareholder approval. While management prudently factored potential government deal timing delays into Q4 guidance, the beats put the company on a strong trajectory.
Enterprise Software “Show Me” Era
The market has spent the last year punishing software stocks that promised an AI revolution but delivered only incremental features. Investors have largely dumped shares of any company that couldn’t draw a direct line between GPU spend and ARR growth, while OpenAI and Anthropic are sucking all the air in the room.
The billion-dollar club
While hyperscalers (Microsoft, AWS, Google, Meta) have captured most of the upside (as reflected in growth acceleration), some pure-play companies in the platform and apps categories have emerged. Notably, Palantir, Salesforce, and Databricks have all crossed the $1 billion AI revenue run rate milestone.
Palantir ($1.6 billion US Commercial run rate): The standout performer. Their AIP Bootcamps strategy has successfully converted pilot programs into committed revenue, driving US Commercial growth to 121%.
Salesforce ($1.4 billion Agentforce + Data): By bundling their new Agentforce with the less glamorous but essential Data Cloud, they generated $1.4 billion in annualized AI-related ARR, growing 114%. However, the market has focused on the overall organic growth (now at 9% excluding Informatica) and remains skeptical.
Databricks (>$.1.0 billion run rate from AI products): The Data and AI company just announced a $4 billion Series L investment, valuing the company at $134 billion. They crossed $4.8 billion in overall revenue run-rate in Q3, growing over 55% Y/Y.
Here’s a look at the other large movers.
As you can see, the aforementioned ServiceNow follows, alongside Adobe. The latter has been deemed the ultimate AI victim, though the jury is still out.
Can incumbents also win after all?
The data highlights a critical divergence: software incumbents are not building flashy models. Instead, they are capturing the “boring” enterprise context that makes those models useful.
Companies like ServiceNow and Salesforce are executing a small-ball M&A strategy by acquiring niche tools to feed their agents.
Massive acquisitions like Warner Bros. are essentially focused on the old economy.
Smaller AI acquisitions are happening weekly. They may not capture headlines, but they focus on what comes next, from data management to cybersecurity. Those are the acquisitions that can be overlooked and still deliver massive returns if integrated properly.
This unsexy integration is fueling the trifecta of software economics:
Acquisition: AI as the hook to get in the door (see Palantir Bootcamps).
Retention: Embedded agents that learn enterprise context, making them painful to rip out.
Monetization: Usage-based pricing (Databricks/Snowflake) or premium agent consumption (Salesforce) that scales with value.
If we judge the AI revolution solely by the few billions here and there directly attributed to AI products, the math looks broken. But this view misses the massive, invisible uplift in core businesses. For giants like Google and Meta, AI is the algorithm making their existing ad machines smarter, boosting revenue lines that are part of the core business. In fact, having an existing business that can be significantly enhanced by AI may be the fundamental aspect of the AI boom that favors incumbents.
Micron’s Shocking Guidance
Last quarter, we discussed how Micron’s reorganization revealed the HBM-powered recovery (High-Bandwidth Memory).
The company just released its Q1 FY26 earnings (ending November 2025), and the numbers shattered estimates. The story has moved from recovery to what management calls the “most significant disconnect between supply and demand in 25 years.” And while Q1 results were strong, the market was stunned by the Q2 forecast.
Wall Street expected a steady climb, but Micron delivered an explosion. The Cloud Memory unit generated $5.3 billion, a 2x year-over-year increase.
Revenue surged 57% Y/Y to $13.6 billion ($0.8 billion beat), and EPS was $4.78 ($0.82 beat). Margins continued to expand to their highest level since 2018, marking a historic expansion in profitability driven by pricing power.
Micron’s revenue guidance was 31% higher than expectations. The forecast implies a staggerring 38% sequential revenue growth and nearly 59% operating margin. This P&L is starting to look like NVIDIA’s!
Why is guidance so high? We are officially out of chips. Executive VP Manish Bhatia described the current environment as the most severe supply/demand imbalance he has seen in his career.
HBM is sold out: Micron is sold out of HBM chips for 2026.
Rationing: CEO Sanjay Mehrotra admitted they can currently meet only 50% to 66% of demand for key customers.
What it means for Micron
As Micron shifts production lines to build complex HBM chips for AI, there is now a shortage of standard memory for PCs and smartphones. This allows Micron to raise prices across the board, not just in AI.
Despite 25 upward revisions heading into the print (usually a setup for disappointment), Wall Street still dramatically underestimated the reality.
What to watch next
CapEx: Micron raised its fiscal 2026 CapEx forecast to $20 billion (up from $18 billion). They are spending aggressively to build capacity in Idaho and New York.
Consumer Impact: Watch for price hikes in consumer electronics (PCs, phones) as commodity memory becomes scarce.
HBM4: Production is slated for early 2026. With current generation chips sold out, the race for next-gen allocation has already begun.
The shortage is real, the margins are historic, and the cycle is accelerating. We’ll find out next quarter if Micron was still conservative with its $18 billion promise.
Just don’t forget: memory remains the quintessential cyclical business.
That's it for today.
Happy investing!
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Disclosure: I own ADBE, AMD, AMZN, CRM, GOOG, META, NOW, PLTR, and NVDA in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
While tech investors have been glued to AI listings, the largest deal of 2025 comes from a very different sector: Healthcare Supply.
Medline is the plumbing of the US healthcare system. If you’ve ever been to a hospital, you’ve used their products, from surgical gowns and exam gloves to anesthesia kits and wheelchairs.
In 2021, Medline was taken private in a massive $34 billion leveraged buyout (LBO) by Blackstone, Carlyle, and Hellman & Friedman. It was one of the largest LBOs since the 2008 financial crisis. Now, just four years later, the private equity giants are bringing it back to the Nasdaq.
Medline is targeting a $55 billion valuation, making it the largest IPO since 2021.
I went through the 300+ pages of Medline’s S-1 so you don’t have to.
Today at a glance:
Overview
Business Model
Financial highlights
Risks & Challenges
Management
Use of Proceeds
Future Outlook
Personal Take
1. Overview
Medline has been the largest privately held manufacturer and distributor of medical supplies in the United States.
Founded in 1966 by the Mills family, the company traces its roots to 1910, when A.L. Mills began making butcher aprons for the Chicago stockyards. He soon realized that surgeons needed aprons too, and a healthcare dynasty was born.
For decades, Medline operated as a family business, compounding quietly. Today, it serves the entire continuum of care: hospitals, surgery centers, nursing homes, and physician offices.
Headquarters: Northfield, Illinois.
Mission: To make healthcare run better.
Ticker: MDLN (Nasdaq).
The “One-Stop Shop”
Let’s capture Medline’s scale in a few key numbers:
335,000+ products in their catalog.
69 distribution centers globally.
2,000+ trucks in their own fleet (”MedTrans”).
Next-day delivery to 95% of the US population.
The 2021 LBO Context
Why are we seeing an IPO now? In 2021, the Mills family sold a majority stake to private equity giants.
The goal was to accelerate global expansion and invest in infrastructure without the quarterly pressure of public markets. Now, these PE firms are looking for an exit (or at least liquidity), and the S-1 shows that their bet has paid off: Medline has grown revenue by roughly $5 billion since the buyout.
Medline S-1
2. Business Model
Medline operates a vertically integrated model that blends Manufacturing and Distribution.
Most competitors do one or the other.
Manufacturers: Front line care and surgical solutions providers like 3M and Becton Dickinson make the products. It’s high-margin, but they lack the direct logistics relationship.
Distributors: Supply chain solutions providers such as McKesson and Cardinal Health move boxes. It’s a low-margin, high-volume game.
Medline doesboth. They use their distribution network to get in the door with hospitals, then upsell them on their own high-margin private-label products.
Medline S-1
They report in two main segments:
🏥 1. Medline Brand (~49% of Sales)
This is the profit engine. It includes products manufactured or sourced by Medline (surgical kits, PPE, sterile drapes).
Economics: While this is half of the revenue, it generates 84% of the EBITDA, thanks to a 27% adjusted margin.
Why it matters: By owning the manufacturing, Medline captures the margin that usually goes to third-party suppliers.
Medline S-1
🚚 2. Supply Chain Solutions (~51% of Sales)
This is the logistics arm. They distribute products from other manufacturers alongside their own.
Economics: This generates only 16% of the EBITDA, with a much lower 5% adjusted margin.
Why it matters: It makes them a one-stop shop. Hospitals sign Prime Vendor contracts, designating Medline as their primary supplier.
The Flywheel
The business thrives on a simple but powerful cycle of land and expand:
Land: A hospital signs a Prime Vendor deal for logistics efficiency.
Audit: Medline analyzes the hospital’s total spend.
Expand: The company proves it can lower costs by swapping out third-party supplies for Medline Brand alternatives (standardization).
Win-Win: The hospital cuts costs, while Medline earns higher margins.
This lock-in is incredible. Medline reports a 98% retention rate for its Prime Vendor customers over the last 5 years. Medline Brand conversion steadily increases over the tenure of a contract.
Medline s-1
3. Financial Highlights
Let’s turn to the financials and where the money flows.
