Category: Daily Diary

Netflix’s ($NFLX) ad-supported subscription tier now reaches 250 million global users, the company announced at its Wednesday Upfront presentation, up from 94 million last year. (Netflix stopped reporting subscription numbers in Q1 2025.) 

Its ad-supported tier will debut in 15 new countries this year. 

Netflix also secured another five NFL games, including a Thanksgiving game the company had been publicly gunning for and a Week 1 match in Australia.

Other announcements included an aggressive push into advertising across new content formats. Ads will soon come to its recently launched vertical video feed, as well as its video podcasts—though it’s unclear whether ad-free subscribers will be exposed to these ads. New personalization tools will also debut to improve contextual targeting.

Position: The Pro Portfolio is long NFLX

This morning Visa ($V) published its updated look at the U.S. economy:

Over the last couple of months, we assumed the conflict would be short lived. This month we have once again revised this view and expect the conflict to last through early summer. While we think most of the upside to oil prices has subsided, it will likely take some time for traffic to begin moving through the Strait of Hormuz and for oil production to recover enough to rebuild global inventories. As a result, we now see oil and gasoline prices remaining elevated through at least Q3 of this year, resulting in higher inflation for longer. 

This revised set of assumptions has a few material impacts on our outlook for this year and next. For starters, we now see inflation peaking around 3.9 percent on a year-over-year (YoY) basis this quarter as measured by the PCE deflator. The duration of elevated oil and gas prices has also led us to upwardly revise core inflation, which excludes food and energy prices, suggesting that higher energy prices will be passed on through other consumer goods as well. The good news is that the labor market still appears to be on solid footing. With higher headline and core inflation and job growth continuing, we no longer expect any interest rate cuts from the Federal Reserve this year and expect only one 25-basis-point cut in late 2027. 

Higher inflation also has the effect of taking a bite out of consumer spending as real (inflation-adjusted) income growth is expected to reach stall speed towards the middle of this year, weighing on real consumer spending. We now expect the economy to grow 2.2 percent YoY this year, down from our estimate of 2.5 percent last month. Inflation pressures should ease next year, which should help lift real income growth once again, but only modestly. We are not expecting much change in next year’s growth outlook, with GDP likely expanding at the same 2.2 percent pace as this year.

In the back of Visa’s May report, on page 3, thumbing through its quarterly forecasts, we find the following:

Q1 2026 GDP: 2.0%

Q2 2026 GDP: 2.3%

Q3 2026 GDP: 2.3%

Q4 2026: GDP: 2.6%

Q1 2027: 2.1%

Q1 2026 CPI: 2.7%

Q2 2026 CPI: 3.8%

Q3 2026 CPI: 3.7%

Q4 2026 CPI:  4.2%

Q1 2027: 3.7%

Position: None

Underneath the pop we’re seeing the shares of Versant ($VSNT) we’re seeing things that confirm a few of our thoughts over at the Pro Portfolio.

First is the continued shift to digital content consumption, which has been highlighted rather nicely in the monthly data published in Nielsen’s The Gauge. While Cable commanded 24.5% of the market back in April 2025, as of February of this year that fell to 20.0%. Where did it go? Streaming, which accounted for 48.0% of TV viewing  as of February 2026.

The top three platforms?

Google’s ($GOOGL) YouTube with 12.7% of total U.S. TV viewing

Netflix ($NFLX) at 8.4%

Disney ($DIS) gets the bronze with 5.0%. 

Getting back to Versant, linear distribution revenue for its pay TV networks — which include CNBC, MS NOW and the Golf Channel as well as USA, E!, Syfy and Oxygen — was down roughly 7%.

Because advertisers look to spend where consumer eyeballs are, it’s not surprising to see Versant’s advertising revenue fell 5% year over year. 

Position: The Pro Portfolio is long GOOGL, NFLX.

Cisco ($CSCO) CEO on CNBC – There is a networking supercycle that is starting now.

Nice confirmation between the linkage of rising AI adoption and usage, and the demand for networking. 

As I pointed out recently, the autonomous driving market will be another tailwind for data center and networking given the amount of data that will be created, processed and consumed. 

Position: None

Retail sales in the United States increased 0.5% in April 2026 over the previous month.

Retail sales in the United States increased 4.90 percent in April of 2026 over the same month in the previous year.

Retail-only sales rose 5.2% year over year, with notable strength in non-store retailers:  +11.1%, the strongest month in February-April

Sporting goods, hobby, musical instrument, & book stores: +13.4%

Gasoline stations: +20.9% (no surprise given the climb in gas prices)

Electronics & Appliances: +7.6%

Clothing & accessories: +5.5%

Food services & drinking places up 2.7%, a tad better than March but weaker than February.

Declines in furniture and department stores. 

Those figures are very good for the Pro Portfolio’s positions in Amazon ($AMZN), TJX ($TJX), and of course, Costco ($COST). 

Costco’s U.S. adjusted comp sales rose 8.0% – Clearly continuing to win consumer wallet share in the current environment, and poised to do so as consumers grapple with inflation headwinds. 

TJX reports next week, and tonight’s earnings from Ross Stores ($ROST) will help frame or possibly re-frame expectations. 

Position: TheStreet Pro Portfolio is long AMZN, COST, TJX. 

The shipments component of the Cass Freight Index fell 4.4% y/y in April, but rose 0.4% month over month (m/m), building on a 10.4% m/m gain in February and a 3.0% gain in March.

Per the good folks that publish the data, the normal seasonal trend would put the shipments component of the Cass Freight Index down just 1% y/y in May.

Positions: None.

JPMorgan is out with bullish comments on Netflix ($NFLX), reiterating its “Overweight” rating and $118 price target.

The action follows Netflix’s fourth annual advertising upfront. JPMorgan is positive on Netflix’s reach, content strategy, and improving advertising technology. And sees its upfront announcements demonstrating “progress towards building a scaled advertising strategy and highlight the view of Netflix becoming “Global TV.”

The Pro Portfolio recently added to its NFLX position at $88.64 on May 11. 

Position: TheStreet Pro Portfolio is long NFLX

A few more price target increases for Nvidia ($NVDA) ahead of its earnings report next week:

Cantor Fitzgerald takes its target to $350 from $300

UBS resets its at $275 from $245.

Position: TheStreet Pro Portfolio is long NVDA

Klarna’s guidance disappoints

While Klarna’s ($KLAR) March-ending quarter results topped consensus expectations, its guidance falls short:

It sees Q2 revs of $960 million to $1.00 billion vs. the $1.06 billion consensus and the $1.01 billion posted in Q1 2025. 

Many questions on this. Is Klarna’s reach slowing, or is it more indicative of the consumer’s appetite for additional credit and spending? Perhaps share loss to Affirm ($AFRM)?

Data in the New York Fed’s latewst Quarterly Report on Household Debt and Credit found:

Aggregate delinquency showed little change in Q1 2026, with 4.8% of outstanding debt in some stage of delinquency. Transitions into early delinquency held steady for auto loans, but ticked down for credit cards, from 8.7% annually to 8.6%, and for mortgages from 3.9% to 3.8%. Transitions into serious delinquency were mostly unchanged for auto loans and credit cards but accelerated slightly for mortgages from 1.4% to 1.5%.

That makes me go hmmm when it comes to Klarna.

Position: None

Upgrades:

AN2 Therapeutics ($ANTX) upgraded to Outperform from Market Perform at Leerink, target $9

Cheesecake Factory ($CAKE) upgraded to Neutral from Underweight at JPMorgan, target $68

Commercial Metals ($CMC) upgraded to Buy from Neutral at UBS, target $89

Compass Minerals ($CMP) upgraded to Neutral from Underweight at JPMorgan, target $30

Gladstone Land ($LAND) upgraded to Buy from Neutral at Lucid Capital, target $11.50

Illumina ($ILMN) upgraded to Outperform from Neutral at Daiwa, target $155

Orsted ($DNNGY) upgraded to Overweight from Equal Weight at Morgan Stanley

Starbucks ($SBUX) upgraded to Buy from Hold at TD Cowen, target $120

Staar Surgical ($STAA) upgraded to Outperform from Neutral at Wedbush, target $40

Downgrades:

Amphastar ($AMPH) downgraded to Equal Weight from Overweight at Wells Fargo, target $19

Autohome ($ATHM) downgraded to Hold from Buy at HSBC, target $17.30

Bandai Namco ($NCBDF) downgraded to Sell from Buy at Goldman

Camden Property ($CPT) downgraded to Underperform from Sector Perform at Scotiabank, target $95

Doximity ($DOCS) downgraded to Equal Weight from Overweight at Wells Fargo, target $18

Doximity ($DOCS) downgraded to Hold from Buy at Jefferies, target $19

Doximity ($DOCS) downgraded to Neutral from Buy at BTIG Research

Doximity ($DOCS) downgraded to Neutral from Outperform at Robert W. Baird, target $18

Doximity ($DOCS) downgraded to Sector Weight from Overweight at KeyBanc

Everpure ($P) downgraded to Neutral from Buy at Citigroup, target $90

Flex LNG ($FLNG) downgraded to Reduce from Hold at Kepler Cheuvreux, target $25

JBS ($JBS) downgraded to Neutral from Overweight at JPMorgan, target $18.50

KT Corp. ($KT) downgraded to Neutral from Buy at BofA Securities, target $23.08

MAA ($MAA) downgraded to Underperform from Sector Perform at Scotiabank, target $120

Prestige Consumer ($PBH) downgraded to Perform from Outperform at Oppenheimer

Solv Energy ($MWH) downgraded to Neutral from Buy at UBS, target $50

Solstice Advance Materials ($SOLS) downgraded to Hold from Buy at Vertical Research; target $90

Tango Therapeutics ($TNGX) downgraded to Hold from Buy at Jefferies, target $27

Whirlpool ($WHR) downgraded to Neutral from Buy at Goldman, target $53

Wix.com ($WIX) downgraded to Equal Weight from Overweight at Wells Fargo, target $54

Wix.com ($WIX) downgraded to Neutral from Buy at Citigroup, target $66

Wix.com ($WIX) downgraded to Sector Perform from Outperform at RBC Capital, target $60

Initiations

Academy Sports ($ASO) initiated with an Overweight at Stephens, target $78

Brightstar Lottery ($BRSL) initiated with a Neutral at BNP Paribas Exane, target $12.60

Cipher Mining ($CIFR) initiated with a Buy at Jefferies, target $32

DraftKings ($DKNG) initiated with an Underperform at BNP Paribas Exane, target $20

Flutter Entertainment ($FLUT) initiated with an Underperform at BNP Paribas Exane, target $80

Hut 8 ($HUT) initiated with a Buy at Jefferies, target $156

Kalaris Therapeutics ($KLRS) initiated with an Outperform at Wedbush, target $17

Riot Platforms ($RIOT) initiated with a Hold at Jefferies, target $24

Suncrete ($RMIX) initiated with a Buy at Roth Capital, target $21

TeraWulf ($WULF) initiated with a Buy at Jefferies, target $28

Position: None