Hey Snackers,
At a Timothée Chalamet look-alike contest in New York, one attendee stood out: Timothée Chalamet. The “Wonka” actor crashed the gathering of Timmy wannabees, and things got chaotic as people called him by his name.
Yesterday the Nasdaq had its first record close since July. Post-close, Alphabet stock popped after Google’s parent breezed past sales expectations. Traders were betting on a quarter-point rate cut next week, after US job openings fell to their lowest level since January 2021.
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Ozempic dupes draw employer interest as pricey drugs weigh on plans
RTO for GLP-1s… Open-enrollment season is upon us, and employers are sniffing out ways to offer one of the most in-demand perks — weight-loss meds — without getting clobbered by their cost. Injectables like Novo Nordisk’s Wegovy and Ozempic and Eli Lilly Mounjaro cost $1K+/month. Now bargain versions of the GLP-1s (priced at ~$200/month) offered by telehealth companies including Hims & Hers and Noom have garnered employer interest. Hims shares jumped 29% after it announced it would offer compounded GLP-1s this year.
Compounding pharmacies like those that supply Hims make custom meds for patients (think: removing allergens). They can also address drug shortages by making dupes until the FDA says a shortage is over.
Work perk: 25%+ of employers are considering adding coverage of weight-loss drugs in the coming years. Employer healthcare costs are projected to jump 9% in 2025.
Compounding problems… A shakeup could be coming for weight-loss copycats, which have been allowed to boom as brand-name shortages persist. The FDA earlier this month said the two-year shortage of tirzepatide (the substance in Zepbound and Mounjaro) was over and Eli Lilly sent hundreds of cease-and-desist letters to compound producers and sellers. But then the FDA said pharmacists could keep making dupe versions as its shortage decision is tied up in court. Last week, Novo Nordisk asked the FDA to ban its copycats, saying its drugs were too complex to be replicated safely.
Profit taking can create openings… and competition can fill them quickly. Researchers this year found that Ozempic could be produced at a profit for less than $5/month — or less than 1% of its current price. That major markup has drawn scrutiny from lawmakers and allowed telehealth cos and compounding pharmacies to make big $$ while demand exceeds supply.
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Snap and Reddit report a tale of 2 social cos as they follow different visions
A ghost and an alien… walk into a boardroom. Reddit (mascot = Snoo the alien) and Snap (mascot = Ghostface Chillah the ghost) posted earnings yesterday: while Snap’s sales grew an expectation-beating 15%, it projected disappointing guidance for the holiday quarter. The teen-populated app has struggled to lure advertisers from larger rival Meta, which reports today. Reddit stock popped 16% to a record high after the site known for quirky forums like r/BreadStapledToTrees said revenue surged 68% last quarter (and it gave a strong holiday-quarter forecast).
Two stories… Both social cos, which are largely dependent on ads, have been laying the groundwork for fresh revenue streams. Reddit’s looking to AI. The site has data-licensing partnerships with Google and OpenAI, supplying both with an endless trove of quirky convos to humanize their AI bots. Reddit’s deal with Google is worth an estimated $60M/year, while its OpenAI deal is sweetened with AI features planned for redditors. While Snap’s dabbled in AI with a Google-powered chatbot called “My AI,” its big bet is on augmented reality (think: AR filters).
Snap Spectacles: Last month Snap rolled out its fifth-gen AR glasses for developers. Snap says it’s bullish on helping developers build advanced experiences within its app (picture: petting a virtual Moo Deng) that can be used to create engaging ads.
Companies need a vision… apart from just good ol’ ad revenue. Investors get hyped by big bets on futuristic tech, which is partly why AI, AR, and VR have become buzzwords in earnings reports. Big bets can help companies diversify and get an edge on rivals, but turning those visionary dreams into dollars is the hard part.
What else we’re Snackin’
Alphabet crushed sales estimates, fueled by 35% growth in Google's AI-infused cloud platform, as companies doubled down on AI computing.
Chipotle stock dropped after the burrito bigshot’s sales growth came in milder than expected (though smoked brisket beefed up demand).
McDonald’s returned to US same-store sales growth last quarter as it pushed promos. Also: McD’s franchise owners can finally fix McFlurry machines themselves.
Luckin Coffee, the Starbucks of China, has made a comeback after being charged with fabricating its sales #s. Now it’s reportedly planning to undercut Starbs in the US.
Royal Caribbean lifted its annual profit forecast as cruise demand stayed strong while cabin prices surged. Its private island in the Bahamas is also boosting biz.
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Snack Fact of the Day
Japan has one vending machine for every 23 people
Wednesday
ADP employment data
Earnings expected from Allstate, MetLife, Eli Lilly, Chubb, Caterpillar, Humana, AbbVie, ADP, Garmin, Kraft Heinz, GlaxoSmithKline, GE HealthCare, Microsoft, Meta, Coinbase, Robinhood, Etsy, Carvana, Roku, Starbucks, eBay, MGM, DoorDash, and Amgen
Authors of this Snacks own shares of: Alphabet, Kraft Heinz, Microsoft, Reddit, Snap, Starbucks, Luckin Coffee, Microsoft, and Robinhood
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Âą The ETF is concentrated in 20 individual stocks that can cover up to 8 sectors. Holdings are subject to change.
² Source: S&P Global Indices for market cap as of Sept. 23, 2024. Past performance is no guarantee of future results
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