Markets Recap 8/6

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Welcome back to another weekly Friday Edition of OffTheTicker! Lots of things to recap this week. We’re excited to walk you through the key market news and developments from the past few days. More importantly, we’ll break down what these events mean—and share how we’re adjusting our investments in response.

Apple Doubles Down on U.S. (AAPL)

Apple made headlines this week with a massive announcement: the company is committing $100 billion over the next four years to expand its U.S. manufacturing footprint, bringing its total domestic investment to $600 billion. This move includes partnerships with over ten U.S.-based suppliers like Corning, Texas Instruments, Broadcom, and Applied Materials, along with a $500 million rare-earth magnet facility in Texas. The news was well received by the market, with Apple stock jumping 5% as investors cheered the company’s continued commitment to building in the U.S.

What’s particularly important about this announcement is how it plays into the broader tariff landscape. Apple, along with other tech giants that have made significant investments in U.S. production, is expected to be exempt from the newly proposed 100% tariffs on imported semiconductors. While these tariffs would be a major blow to companies reliant on foreign supply chains, Apple’s proactive reshoring strategy has positioned it ahead of the curve. In addition, most iPhones sold in the U.S. are now manufactured in India—devices which are not impacted by India’s recently announced 50% tariff on exports to the U.S., making the company even more insulated from international trade friction.

Apple also deepened its U.S. manufacturing relationships by partnering with Samsung to produce advanced image sensors for the iPhone 18 at Samsung’s facility in Austin, Texas. This gives them a clear edge over competitors like Sony, which lacks a U.S. production footprint and may face tariff exposure down the line.

The market rewarded companies aligned with these domestic production trends. Tech names like Samsung, TSMC, and SK Hynix all saw stock price gains this week, as investors began pricing in the benefits of tariff exemptions and long-term political goodwill. The message is becoming clear: companies that lean into reshoring and U.S.-based manufacturing are emerging as winners in this increasingly protectionist environment. Apple’s strategic foresight and adaptability continue to cement its leadership in both innovation and geopolitical navigation.

Thesis:

What really sticks us to us about this deal is something posted by an account that we follow and keep a close eye on called Quiver Quantitative. Obviously as we have mentioned before Apple is one of our key holdings, and we will continue to hold Apple barring a major announcement. It was released yesterday that Debbie Wasserman Shultz purchased a stock called Ichor $ICHR ( ▼ 3.53% ) . This is the first time any politician has bought the stock in over 8 years. She currently sits on the subcommittee for Energy and Water Development.

Ichor Holdings, Ltd. (NASDAQ: ICHR) is a company that provides critical fluid delivery subsystems and components primarily for the semiconductor capital equipment industry. Headquartered in the United States, Ichor serves major original equipment manufacturers (OEMs) in the semiconductor sector. We think that the purchase of this stock the same day that Apple announced its commitment to produce in the United States is not just a coincidence, and that Ichor could be the main beneficiary in this announcement by Apple. We are going to take a flyer on this stock as a short-term investment with a small amount of money.

Dutch Bros (BROS) Q2 FY 2025 Earnings Recap

Another Beat and Upgraded Guidance

As we predicted Dutch Bros delivered a strong Q2 showing that exceeded expectations across all major financial metrics. Revenue climbed 28% year-over-year to $415.8 million, easily beating the consensus estimate of around $403 million. Adjusted earnings per share came in at $0.26, a sharp jump from last year and well above Wall Street’s expected $0.18. Net income totaled $25.6 million, while adjusted EBITDA rose 36.6% to $89 million—a sign the business is scaling efficiently as it grows. Management also raised full-year guidance, citing continued strength in same-shop sales, transaction growth, and new shop performance. The quarter confirms that Dutch Bros is firing on all cylinders despite a cautious consumer backdrop, and it’s becoming one of the more exciting mid-cap growth names in the market.

What We Love About Dutch Bros

Dutch Bros is quickly maturing from a regional coffee chain into a national brand with strong unit economics and deep customer loyalty. The company opened 31 new locations in Q2, with 30 of them company-operated—bringing the total store count to 1,043 across 19 states. Same-shop sales rose 6.1% systemwide, with company-operated shops posting even stronger gains: 7.8% comps and 5.9% growth in transactions. These numbers show that Dutch Bros isn’t just growing through new locations—it’s building stronger relationships with existing customers and driving repeat business. We’re also seeing continued operational leverage, with adjusted net income rising to $45.5 million. Dutch Bros’ emphasis on culture, speed, and community engagement gives it a unique edge over larger chains, and its high-throughput drive-thru model is proving to be both scalable and resilient.

How We Are Trading BROS

Dutch Bros has long been one of our favorite stocks, and it’s a name we hold a sizable position in. If you’ve been following us for a while, you’ll remember we did a deeper dive on the company last month, outlining all the reasons we’re such big fans.

Dutch Bros continues to trade at a premium compared to other restaurant stocks, but its strong growth profile, solid unit economics, and improving margin trajectory justify the valuation. While risks like wage inflation and broader macroeconomic uncertainty persist, Dutch Bros has proven more resilient than many of its peers in navigating these challenges. With increased guidance, growing margins, and a consistent pace of new store openings across the country, the company is well-positioned to deliver high-teens revenue growth for years to come.

A new Dutch Bros recently opened near us, and we’ve been incredibly impressed. As they continue expanding eastward, we believe Dutch Bros will become a serious challenger to all major coffee chains. We're holding BROS as a long-term core position and will look to increase our stake on any short-term pullbacks. We see anything under $60 as an attractive buying opportunity.

OpenAI’s Biggest Beneficiary: Microsoft

As many may know, OpenAI and Microsoft have a strategic partnership centered around advancing artificial intelligence and making AI tools widely accessible. Microsoft is a key investor in OpenAI, having invested billions of dollars, and provides the computing power needed to train and run OpenAI’s models through its Azure cloud platform. In return, Microsoft integrates OpenAI’s technologies like GPT and Codex into its products, including Microsoft 365 (e.g., Copilot in Word and Excel), Azure OpenAI Service, and GitHub Copilot. This partnership connects OpenAI’s cutting-edge AI research with Microsoft’s cloud infrastructure and global reach, aiming to deliver safe and powerful AI tools to businesses and individuals.

Over the last couple of months, Microsoft and OpenAI have been engaged in complex and strategic negotiations regarding the future of their financial and operational relationship. The primary focus of these discussions has been OpenAI's interest in buying out Microsoft's equity stake in the company. This move is aimed at avoiding the substantial financial obligation of paying Microsoft 50 cents on the dollar until Microsoft receives a tenfold return on their initial investment. This arrangement, if left unchanged, would result in OpenAI having to share approximately 120 billion dollars in revenue with Microsoft, a significant financial burden that could impact OpenAI's long-term growth and sustainability. Where our thesis below begins to take shape is the need for a deal to get done quickly. SoftBank currently has promised to invest 40 billion dollars into OpenAI, 20 of which comes from OpenAI needing to buy out Microsoft within the year to be able to switch to a for-profit business. This is why the next two earnings calls will be huge.

The investment relationship between Microsoft and OpenAI is multifaceted and extends beyond mere financial transactions. Microsoft has been a pivotal partner, providing critical support through its robust cloud infrastructure and extensive global reach. These resources have been instrumental in facilitating OpenAI's rapid growth and expansion, enabling the company to scale its operations and enhance its technological capabilities. Microsoft's Azure cloud services, in particular, have been a backbone for OpenAI's computational needs, supporting the vast and complex data processing tasks required for AI development.

Eventually a deal will need to be closed between the two parties (Microsoft and Open AI), which we think will get resolved by year end due to what we previously stated about Open AI needing to convert to a For-Profit company. We think that Microsoft will get around 1/3 of Open AI at around 160 billion dollars. This would be a MASSIVE mark up going into one of their next earnings calls, which could send the stock surging. We came to this 1/3 number from the fact that Microsoft owns the IP and originally Microsoft wanted half of the company, but Microsoft cannot hold all of the compute required and OpenAI needed to go to Google for help with this compute. We are currently invested in Microsoft and are continuing to add to our position in the hypothetical scenario where a deal will happen and Microsoft owns a significant stake of OpenAI.

Disclaimer: The information provided in this newsletter is for educational and informational purposes only and should not be considered financial, investment, tax, or legal advice. While we strive to ensure accuracy, we make no guarantees about the completeness, reliability, or timeliness of the content. All investing involves risk, including the potential loss of principal. You should conduct your own research or consult with a qualified financial advisor before making any investment decisions.

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