Summary
Highlights
The Couch Investing portfolio saw a 7.76% gain over the past week, outperforming the S&P 500's 1.45% increase. Year-to-date, the portfolio is up 40.47% compared to the S&P's 10.93%. Since inception, the portfolio has grown by 253.78%, while the S&P is up 52.28%. The video also outlines upcoming earnings reports from companies like Credo, Victoria's Secret, Palo Alto, GitLab, Broadcom, Crowd Strike, Rubric, Planet Labs, Lululemon, and DocuSign, with a particular focus on cybersecurity and semiconductor names.
The portfolio's current top holdings include Nebius, Rocket Lab, and SoFi, with an additional 200 shares of SoFi being purchased. Other significant holdings are Visa, Google, Meta (believed to be undervalued), Rubric (showing strong recovery), and Micron. A new position in Axon was established with 20 shares bought at approximately $392 each. This investment reflects exposure to drones, physical AI, and defense sectors, with Axon being an "amazing company with a huge TAM" expected to become a $100 billion company.
Axon, a $36 billion company, despite being down 40% over the past year, is expected to grow its revenue above 30% annually for the next three fiscal years. Its free cash flow is projected to increase from $432 million in fiscal year 2026 to over $1 billion by 2028. Axon's business model, which started with tasers and expanded into software subscriptions for body cameras and cloud storage, boasts a net retention rate of 125%. The company is aggressively expanding beyond traditional law enforcement into enterprise and commercial spaces, leveraging AI to improve efficiency for police officers and drones for dispatch and threat mitigation. Its ecosystem, coupled with proprietary hardware and strict security clearances, creates a significant barrier to entry for competitors.
A discounted cash flow (DCF) analysis for Axon suggests a potential downside of 7.7% at its current price based on probability-weighted scenarios, but the company is expected to continue growing significantly. Key risks include a declining GAAP gross profit margin due to a mix shift towards fast-growing, lower-margin segments like drone integrations, and high stock-based compensation (SBC) impacting operating margins. However, the company targets dilution cap under 2.5%.
Rubric, a cybersecurity company, has seen a significant recovery, up over 60% from its year-to-date bottom, despite still being unprofitable. The company is expected to grow revenue by 22.1% year-over-year. For the upcoming quarter, Rubric is projected to report $366 million in revenue and a loss of 3 cents per share, with expectations of continued beat on estimates. The recent 30% drop in Zscaler, another cybersecurity firm, attributed to cautious forward-looking statements, highlights the importance of guidance for Rubric's stock trajectory.
The video ends with a brief sports recap, celebrating Crystal Palace's Conference League win. In tennis, the host expresses shock over Yanik Sinner's physical breakdown at Roland Garros and praises the Feka vs. Djokovic match. The host, a Chelsea fan, also humorously gloats over Arsenal's loss in penalties against PSV, preventing them from winning the Premier League setpiece FC trophy.