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Berkshire Hathaway discloses Macy’s stake amid turnaround efforts. (0:15) ServiceNow up after BofA highlights autonomous AI potential. (1:10) Lululemon board rebukes founder Chip Wilson ahead of vote. (1:51)
This is an abridged transcript of the podcast:
Our top story so far, Berkshire Hathaway (BRK.A) (BRK.B) disclosed a $55M stake in Macy’s (M) — a small position with outsized symbolism.
The roughly 3M-share holding represents about 1% of the company. But it marks Berkshire’s first public department store investment since 1966, when Warren Buffett and Charlie Munger bought Baltimore-based Hochschild Kohn for about $6M.
Macy’s, rallying today on the Berkshire news, is at a pivotal moment in its “Bold New Chapter” turnaround. The retailer is closing roughly 150 underperforming stores by 2028 while concentrating investment in about 350 higher-performing locations.
The strategy appears to be gaining traction. In Q1, Macy’s reported its first annual comparable sales growth in years, with total sales reaching their highest level in more than three years.
Pilot stores undergoing the Bold New Chapter revamp generated about 75% of sales from the go-forward locations — a sign the modernization effort is beginning to move the needle.
Among other active stocks, ServiceNow (NOW) is rallying after Bank of America restarted coverage with a Buy rating and a $130 price target.
Analyst Tal Liani said ServiceNow’s “depth and breadth of workflow entrenchment” position it to benefit from the deployment of autonomous AI agents across IT, employee and customer workflows.
Regeneron (REGN) is the biggest S&P decliner after reporting a failure in a late-stage trial evaluating a combination therapy involving its anti-PD-1 drug Libtayo against Merck’s (MRK) Keytruda.
Sachem Capital (SACH) is climbing after agreeing to merge with a newly created publicly traded REIT that will include 98 industrial assets contributed by privately held Industrial Realty Group.
In other news of note, Lululemon Athletica (LULU) sent a letter to shareholders ahead of its June 25 annual meeting and a contested board vote.
The board criticized founder Chip Wilson, saying his views on the company’s direction are outdated and citing what it described as troubling conflicts of interest. It also said his recent actions have been damaging to the brand and to shareholder value.
Earlier this month, Wilson wrote to investors arguing that Lululemon has drifted from being a premium, innovation-led brand into a more generic athletic retailer — a shift he says has weighed on growth and the stock price.
And in the Wall Street Research Corner, veteran investor George Noble says the AI trade and semiconductor sector have become “totally overcooked,” warning that hyperscaler spending and weakening free cash flow profiles could pressure big tech valuations.
Speaking on a recent Wall Street Breakfast episode, Noble said investor concentration in AI-linked stocks has intensified just as rising bond yields and oil prices introduce broader macro risk.
“I’m very negative on the AI trade,” he said, arguing that while artificial intelligence will see widespread adoption, he does not yet see a clear monetization path that justifies current valuations.
He added that hyperscalers are spending hundreds of billions on AI infrastructure while sacrificing the free cash flow characteristics that once supported premium multiples.
And if you’d like to hear more from Noble, he’ll be hosting the Best Income Ideas Online Summit on Wednesday, May 20, in collaboration with Seeking Alpha. The event features Michael Howell, J Mintzmyer, Luke Gromen, Steven Cress and others sharing their top income ideas for today’s market.
The summit is just $99, and you can register through the link.
Editor’s Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
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