What we’re reading (7/23)
“Google Revenue Soars On AI Boom, And Investors Eye Spending Surge” (Wall Street Journal). “Google’s parent company reported a 14% jump in year-over-year revenue, driven by growth in its cloud and search divisions that was tempered by heavy spending on artificial intelligence. The parent company, Alphabet, had record sales of $96.4 billion in the second quarter but also said capital expenditure expectations for the year would increase by 13% to about $85 billion. That compares with $52.5 billion in 2024.”
“Bank Earnings Are Sending A Message: The Economy Isn’t That Bad” (Barron’s). “Quarterly report cards from the largest, most systemically important U.S. banks brought investors and consumers welcome news this past week. The message: The economy is faring better than it feels. Consumers, for one thing, are generally staying on top of their debt. JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo all said their relatively low rates of consumer delinquencies, as well as debt they have written off as unrecoverable, were either about the same or looking better than a year ago.”
“New Analysis Suggests PE Funds Are More Volatile Than We Think” (Institutional Investor). “[Dan] Rasmussen, with the assistance of Harvard College student Julia Grinstead, looked at 10 of the largest and most liquid private funds traded in London, a list that includes ‘marquee brand-name firms and even includes funds-of-funds that own diversified holdings.’ They concluded that the market volatility is roughly 1.5 times the market average and that these funds are trading at a significant discount to their internally reported NAVs.”
“Chipotle Stock Plunges After Company Reports Second Straight Sales Decline, Cuts Guidance” (Yahoo! Finance). “Chipotle (CMG) on Wednesday reported another quarter of negative sales growth, sending shares sharply lower in extended trading as the company navigates an uncertain consumer environment and its new leadership deals with the most challenging backdrop for the chain in years.”
“The Sea Slug Defying Biological Orthodoxy” (The Atlantic). “This particular slug starts life a brownish color with a few red dots. Then it begins to eat from the hairlike strands of the green algae Vaucheria litorea: It uses specialized teeth to puncture the alga’s wall, and then it slurps out its cells like one might slurp bubble tea, each bright-green cellular boba moving up the algal straw. The next part remains partially unexplained by science. The slug digests the rest of the cell but keeps the chloroplasts—the plant organelles responsible for photosynthesis—and distributes these green orbs through its branched gut. Somehow, the slug is able to run the chloroplasts itself and, after sucking up enough of them, turns a brilliant green. It appears to get all the food it needs for the rest of its life by way of photosynthesis, transforming light, water, and air into sugar, like a leaf…[t]he algae and the slug may have managed some kind of gene transfer, and over time, produced a new way of living, thanks not to slow, stepwise evolution—the random mutation within a body—but by the wholesale transfer of a piece of code. A biological skill leaked out of one creature into another.”
