Hey Snackers,
Despite an estimated $10.5 billion spent on advertising for the World Cup, the brands getting the biggest buzz of the tournament might not be the official sponsors, but the banned sponsors. Consider Levi's Stadium in San Francisco, whose logo has been covered up at the request of FIFA, as it is not an official sponsor, or Heinz ketchup bottles with taped-over logos, which Kraft Heinz turned into a limited-edition product release. Sports marketing expert Adam Britton attributes this to the Streisand effect, named after Barbra Streisand, whose efforts to wipe all photos of her home from the internet only piqued search interest: blocking out these brands' logos paradoxically makes them hypervisible.
The S&P 500 and Nasdaq 100 closed lower on Friday, posting weekly losses, while the Russell 2000 eked out gains for both the day and the week. Industrials and information technology were the worst-performing sectors on Friday, while health care was the best performer.
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What is the cheapest US holiday destination by average plane fare?
BlackBerry managed to build a real business out of its memestock boom
The former meme stock BlackBerry surged on blowout earnings last week — the bull case has nothing to do with phones. When you think of BlackBerry, you probably picture the clunky QWERTY keyboard and yearn for the pre-AI slop era. But for many traders, that nostalgic memory could have been getting in the way of evaluating a rising star.
In its first-quarter earnings on Thursday, the cell-phone-turned-B2B-enterprise-software-company blew past estimates with revenue up 26% and a 44% EPS beat after back-to-back 30%+ beats before that. The company hiked its full-year profit forecast to 16 cents to 20 cents per share with revenue between $594 million and $621 million.
“The market still misdefines BlackBerry,” analyst Suthan Sukumar of Stifel said Tuesday in a note to clients. “This is…a mission-critical software layer in the physical AI stack and a dominant partner to silicon leaders like Nvidia, Qualcomm, and AMD powering the build-out from cloud to edge, across cars, robots, factories, and medical devices.”
QNX, BlackBerry’s real-time operating system, runs inside of 275 million cars worldwide. Modern autos generate terabytes of daily data, from tire pressure to monitoring driving behavior, and QNX is the foundation beneath all of it.
About 20% of QNX revenue now comes from noncar segments. Uses in robotics, medical devices, drones, and industrial automation are growing. In June, Nvidia announced Halos for Robotics, and QNX is in the stack. Per QNX’s own research, 85% of robotics engineers expect software’s role in their field to increase over the next three to five years.
The Takeaway
On Friday, when Bloomberg asked if consumers could swap out iPhones for the nostalgic keyboard again, Giamatto said “I don't think you'll see us get back into the phone game anytime soon.”
BlackBerry shed its consumer identity years ago. What’s left is a profitable B2B software company that’s already embedded in tech infrastructure from cars to robots to drones. As physical AI scales, the demand for trusted safety-certified software is likely to grow.
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The US knows who it will be playing next: Bosnia and Herzegovina.
How good is Bosnia and Herzegovina? Well, they came into the tournament ranked 60th in the world football Elo ratings, earned what was considered a surprising 1-1 draw with Canada, got blown out 4-1 by Switzerland and beat Qatar 3-1 to finish third in Group B. They advanced with 4 points, despite the minus-1 goal differential, and currently sit 59th in Elo.
No team is an easy win at this phase of the tournament, and the market gives the Americans a 20-25% chance of being eliminated in the Round of 32. Soccer is a low-scoring, often chaotic sport, even though the best teams tend to go deep in the World Cup more often than not. There are no guarantees here.
Stories we’re obsessed with
A different methodology for investing in small caps: While the Russell 2000 is the benchmark for small cap stocks, asset managers at Bridgeway Asset Management found that some of the constituents of the index include stocks that have been demoted to the small cap category as their market cap has fallen, or recent IPOs. They discovered that excluding those two categories improved annual returns by 1.57%. For passive investors looking for a small cap index, the S&P Small Cap 600, which requires its constituents to meet profitability requirements, has a 600% higher return than the Russell 2000 over the past 30 years.
Nostalgia toys are back: We’ve discussed the resurgence of '90s toys before, with respect to Tamagotchis, as the “kid-dulting” economy booms as more grown-ups yearn for playtime. The toys from millennials’ youth are hot again, as Beyblades, spinning tops inspired by traditional Japanese beigoma, are making a comeback in Asia. Additionally, footbags, more commonly known by their trademark brand name “Hacky Sacks,” have been rediscovered by Gen Alpha, largely thanks to TikTok.
Snacks Shots
⚽️ World Cup: Today sees three huge matches in the knockout round of the World Cup, including a must-watch between Brazil and Japan, Germany’s toughest match yet, and a match featuring underdog Morocco taking on The Netherlands, a Dutch team, which has the fourth-highest chance of winning the entire tournament. As it stands going into the knockout round, France has a 27% chance of winning the tournament, Argentina17%, and Spain 15%.
*Event contracts are offered through Robinhood Derivatives, LLC - probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.
What else we're Snackin'
Who likes short shorts? YouTube, apparently, given that YouTube Shorts are getting even shorter, as the Google-owned platform announced an update that lets you double the playback speed.
CNBC ranked the most valuable sports empires, with Kroenke Sports & Entertainment, owner of the LA Rams, Denver Nuggets, Premier League’s Arsenal, and more topping the list.
Tesla settled the lawsuit over a fatal 2023 crash involving Full Self-Driving technology.
Do you have what it takes to goalkeep in a penalty shoot-out? Try this interactive game.
Snack Fact of the Day
20% of all collisions in the United States happen in parking lots.
This week
May US Job Openings and Labor Turnover Survey released at 10 a.m. ET. Postmarket earnings expected from: Nike and Constellation Brands
Premarket expected from General Mills. Fed Chairman Kevin Warsh due to participate in a panel discussion.
US June nonfarm payrolls report to be published at 8:30 a.m. ET.
US markets closed for Independence Day.