Group 1 - Building Benjamins is a free stock picking and market commentary investment newsletter published by Tradition Investment Management, LLC [1] - Benjamin Halliburton, the founder, has a notable background in investment, having founded Tradition Capital Management in 2000 and received multiple accolades for his performance [1] - Halliburton has extensive experience in the investment field, starting his career at Merrill Lynch in 1986 and earning an MBA with a focus on finance from Duke's Fuqua School of Business in 1990 [1] Group 2 - Halliburton was recognized as the top-performing portfolio manager at Brundage, Story and Rose, where his "Disciplined Growth Strategy" outperformed the S&P 500 during the 1990s bull market [1] - He was the youngest partner at his firm and received high praise from senior managing partners for his investment acumen [1]

Core Insights - DraftKings has launched a new Responsible Gaming tool called My Budget Builder, aimed at helping players manage their entertainment budgets across various platforms [1][2] - The tool allows players to set customized limits and reminders for their gaming activities, reflecting DraftKings' commitment to promoting responsible gaming [2][3] Group 1: My Budget Builder Features - My Budget Builder is designed to be intuitive, proactive, and personalized, enabling players to create a gaming budget based on deposit amounts, total wagers, maximum wager size, loss limits, time spent, contest entries, and contest fees [2] - Players can set limits or reminders for a specified duration (e.g., day, week, or month), and while limits can be decreased at any time, they cannot be increased until the selected time period expires [2] Group 2: Commitment to Responsible Gaming - The introduction of My Budget Builder enhances DraftKings' existing Responsible Gaming initiatives, which focus on accessibility, education, and innovation [3] - This new tool complements the previously launched My Stat Sheet, which has recorded over 20 million visits and provides players with insights into their gaming activity [3] Group 3: Company Overview - DraftKings Inc. is a digital sports entertainment and gaming company that operates in various sectors, including daily fantasy sports and regulated gaming [5] - The company is headquartered in Boston and is the only U.S.-based vertically integrated sports betting operator, with operations in 28 states and Ontario, Canada [5]

Company Performance - DraftKings (DKNG) closed at $42.24, reflecting a -1.17% change from the previous day, underperforming the S&P 500 which gained 0.8% [1] - The stock has increased by 22.05% over the past month, outperforming the Consumer Discretionary sector's gain of 4.49% and the S&P 500's gain of 5.12% [1] Earnings Forecast - DraftKings is expected to report an EPS of $0.4, representing a 233.33% increase from the same quarter last year [2] - The projected revenue for the upcoming earnings report is $1.38 billion, up 25.37% from the previous year [2] Annual Estimates - For the entire year, the forecasted earnings are $1.36 per share and revenue is expected to be $6.27 billion, indicating increases of +229.52% and +31.46% respectively compared to the previous year [3] Analyst Sentiment - Recent changes to analyst estimates for DraftKings are important as they reflect short-term business trends, with positive revisions indicating analyst optimism [3] - The Zacks Consensus EPS estimate has decreased by 6.67% over the past month, and DraftKings currently holds a Zacks Rank of 3 (Hold) [5] Valuation Metrics - DraftKings has a Forward P/E ratio of 31.54, which is higher than the industry average of 19.85, suggesting it is trading at a premium [6] - The company has a PEG ratio of 0.6, compared to the Gaming industry's average PEG ratio of 1.6, indicating a favorable growth expectation relative to its valuation [7] Industry Context - The Gaming industry is part of the Consumer Discretionary sector and currently holds a Zacks Industry Rank of 96, placing it in the top 40% of over 250 industries [7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Regulatory Changes & Impact - Illinois legislature imposed a $050 per wager tax increase, described as "illconceived" [1][2] - The tax increase is set to take effect on September 1st [1] - The company was not warned about the tax increase, which was decided unexpectedly [2][3] Business Strategy & Consumer Behavior - The company intends to pass the $050 tax on to consumers [2] - The company anticipates the tax will drive consumers to illegal markets or encourage them to bet more [2] - The company hopes for public reaction that will lead to reconsideration of the tax [3] Financial Implications - The $050 per wager tax makes it unprofitable for the company to accept small bets (e g, $1, $050, $5, or $10) [2] - The company is implementing the tax pass-through to continue offering its product in Illinois [3]

Illinois Tax Increase Impact - Illinois legislature raised taxes on sports wagers, introducing a $0.50 transaction fee per bet, effective September 1st [1][2] - DraftKings believes the tax is ill-conceived, as it taxes gross receipts rather than profit, making it difficult to offer bets profitably, especially on smaller amounts [3][9] - The company expects the tax will drive consumers to the illegal market or to bet larger amounts to offset the tax burden [3][7] - DraftKings had no prior warning about the tax increase, despite recent meetings with legislative leaders [4] - The company is passing the tax on to consumers to continue offering the product in Illinois, hoping for reconsideration from lawmakers [3][5] Industry & Market Dynamics - The industry believes education is needed for policymakers to understand that the tax impacts revenue and investment in product development [8][9] - DraftKings acknowledges that states are facing budget crises and are looking at sports betting and iGaming legalization for revenue [10] - The company operates in approximately 27-28 states and anticipates both opportunities and challenges across different regions [13] - DraftKings reports healthy customer behavior and strong growth rates, with customer-level metrics (bet frequency, average bet size, sports engagement) meeting or exceeding expectations [14][15] - Overall business is strong, with no signs of a slowdown, and customer retention and satisfaction are high [14][15][16]

Summary of Key Points from Conference Call Records Company: Adobe (ADBE) Financial Performance - **Net-new Digital Media ARR**: $460 million, roughly in line with expectations [3] - **Revenue**: $5.87 billion, up 11% year-over-year, exceeding market expectations of $5.80 billion (9% year-over-year) [3] - **Non-GAAP EPS**: $5.06, up 13% year-over-year, compared to Street's expectation of $4.98 (11% year-over-year) [3] - **Digital Media Revenue**: $4.35 billion, 12% year-over-year growth, surpassing Street's expectation of $4.29 billion [3] - **Digital Experience Revenue**: $1.46 billion, 10% year-over-year growth, slightly above Street's expectation of $1.44 billion [3] - **Non-GAAP Operating Margin**: 45.5%, compared to Street's expectation of 45.1% [3] Guidance - **F3Q Revenue Guidance**: $5.875 billion to $5.925 billion (mid-point 9.5% year-over-year) vs. Street's expectation of $5.88 billion [4] - **Full-Year Revenue Guidance**: Raised to $23.50 billion to $23.60 billion, slightly above consensus [4] Market Sentiment - **Bullish Perspective**: Advocates argue that Adobe's AI initiatives are beginning to generate real revenue, with Firefly and Express enterprise traction indicating potential for pricing leverage. The stock trades at a ~40% discount to large-cap software peers, with management confident in double-digit revenue growth and mid-40s margins [5] - **Bearish Perspective**: Critics point out that core growth is slowing, with net-new ARR down 6% year-over-year. Concerns include AI monetization challenges, rising operational expenses, and competition from Canva and Meta. The FY-25 guidance is seen as merely FX-aided rather than indicative of demand improvement [6] Company: Apple (AAPL) Market Performance - **iPhone and iPad Demand**: Morgan Stanley anticipates a surge in June revenue by up to $4 billion due to strong sales in China, driven by promotions and subsidies [8][9] - **Production in China**: iPhone builds are expected to rise by 19% year-over-year, while iPad builds are projected to increase by 38% year-over-year [8][9] - **Global Sales Growth**: iPhone sales in China reached the top spot in May, with global sales growing 15% year-over-year during April and May [10][11] Strategic Developments - **Siri AI Upgrade**: Apple plans to release a delayed upgrade for Siri in Spring 2026, which will enhance its capabilities by utilizing consumer data [12][13] Company: Tesla (TSLA) Market Outlook - **Guggenheim's Position**: The firm reiterated a Sell rating, citing deteriorating fundamentals despite short-term enthusiasm around robotaxi narratives. Q2 delivery trends are soft, with a forecast of only 360,000 deliveries, significantly below the consensus of 415,000 [20] - **Model S and X Updates**: Tesla has upgraded its Model S and X vehicles in the U.S., raising prices by $5,000 [21] Company: Zscaler (ZS) Analyst Upgrade - **Wells Fargo Upgrade**: The firm upgraded ZS to Overweight, raising the price target to $385, citing accelerating growth and margin expansion potential. Zscaler is on track to reach $5 billion in ARR by FY27 [16] Company: Oracle (ORCL) Analyst Upgrade - **BMO Upgrade**: BMO Capital upgraded Oracle to Outperform, raising the price target to $235, driven by strong results and confidence in FY26 growth [17] Company: DocuSign (DOCU) Analyst Upgrade - **Wells Fargo Upgrade**: The firm upgraded DOCU to Equal Weight, raising the price target to $80, citing a more reasonable valuation following underwhelming Q1 results [18] Industry Insights - **Chinese Robotics Leadership**: Morgan Stanley highlights China's rapid advancement in robotics, driven by structural advantages and long-term strategies, including dominance in rare earths and government support [36][37] Other Notable Developments - **Walmart and Amazon**: Both companies are exploring the issuance of their own stablecoins, potentially disrupting traditional financial systems [27][28][29]

Core Viewpoint - DraftKings Inc. will implement a 50-cent transaction fee on all mobile and online bets placed in Illinois starting September 1, 2025, in response to recent tax increases on sports wagering by the Illinois state legislature [1][2]. Company Overview - DraftKings Inc. is a digital sports entertainment and gaming company founded in 2012, headquartered in Boston, and operates as the only U.S.-based vertically integrated sports betting operator [3]. - The company offers a range of products including daily fantasy sports, regulated gaming, and digital media, and is operational in 28 states, Washington, D.C., and Ontario, Canada [3]. - DraftKings is committed to responsible gaming and has partnerships with major sports leagues such as the NFL, NHL, PGA TOUR, WNBA, UFC, NBA, and MLB [3]. Industry Context - The Illinois state legislature has more than tripled the tax rate on sports wagering over the past two years, raising concerns about the impact on the legal, regulated industry and potentially fueling the illegal gaming market [2]. - DraftKings emphasizes the importance of collaborative policymaking to ensure the long-term sustainability of the sports betting industry in Illinois [2].

Core Insights - FanDuel is implementing a 50-cent surcharge on all wagers in Illinois to offset the impact of new state taxes, which are particularly burdensome for leading sportsbooks [1][3] - DraftKings is expected to follow FanDuel's lead in response to the new tax structure [2] - The new tax structure includes a progressive tax rate that can reach up to 40% for the most successful sportsbooks, significantly higher than the previous 15% rate [3][4] Company Actions - FanDuel's new surcharge is projected to generate an additional $86 million in revenue for 2026, representing about 2% of its EBITDA [3] - DraftKings anticipates a revenue increase of $79 million from the surcharge, which would account for approximately 5.4% of its projected EBITDA for the same year [3] - Flutter has stated that if the state reverses the tax decision, FanDuel will eliminate the surcharge immediately [2] Industry Context - The Illinois tax is part of a broader trend, with other states like New Jersey, Maryland, Massachusetts, Michigan, and Pennsylvania considering similar tax increases [6] - Flutter's CEO expressed concerns that the new tax structure disproportionately affects lower-wagering customers and could drive gamblers to unregulated operators [5][6] - The CEO emphasized the need for an optimal gaming tax rate to enhance customer experience, market growth, and state revenue over time [5][7]

Core Insights - The article highlights three companies that have been undervalued by the market but have the potential for significant returns in the future due to their growth prospects in their respective industries. Group 1: Marvell Technology - Marvell Technology is a chip designer benefiting from the growth in artificial intelligence (AI) spending, particularly through its custom AI accelerators and networking chips [5][6]. - The company has secured deals with major hyperscalers like Amazon and Microsoft for next-generation AI accelerators, despite concerns about competition from other chip designers [7][10]. - Marvell's stock is currently trading at around $65 per share, with a forward P/E ratio of 23, indicating strong growth potential and less downside risk compared to previous months [10]. Group 2: Block - Block, the parent company of Cash App and Square, has faced recent challenges due to a shortfall in Cash App's gross profit growth, but this may present a buying opportunity for growth investors [11]. - Cash App is focusing on increasing revenue per user through new services like Cash App Borrow, which aims to enhance user engagement and address spending slowdowns [12][15]. - Block's current share price is around $63, with a P/E ratio of 16.5 based on 2026 earnings estimates, suggesting a strong long-term outlook despite short-term economic uncertainties [15]. Group 3: DraftKings - DraftKings is a leading sports betting company that has leveraged its brand strength in Daily Fantasy Sports to expand into sports betting, attracting approximately 400,000 new monthly unique payers [16][17]. - The company benefits from valuable user data, which enhances its ability to offer personalized promotions and expand into new betting types [18]. - DraftKings' stock is trading at $34 per share, with an enterprise value-to-forward-EBITDA ratio of about 21, and management projects an average EBITDA growth of 35% from 2026 to 2028, indicating strong growth potential [20].

Core Insights - SailGP is partnering with gaming companies DraftKings and Bet365 to allow fans to place bets on races, starting with the Mubadala New York Sail Grand Prix on June 7 and 8, 2024, aiming to enhance fan engagement and attract new audiences [1][2] Group 1: Business Strategy and Revenue Generation - The introduction of betting is part of a broader strategy to increase engagement and attract new fans to SailGP, which was co-founded by Larry Ellison and Russell Coutts in 2018 [2] - SailGP is already generating revenue through ticket sales, sponsorship, and media rights, with significant viewership growth noted [4][9] - The league has seen record attendance and viewership, with the 2025 ITM New Zealand Sail Grand Prix attracting 25,000 fans and the 2025 KPMG Australia Sail Grand Prix reaching 21.1 million viewers globally [5][6] Group 2: Audience Engagement and Demographics - SailGP is drawing a younger and more diverse audience, with 49% of its YouTube subscribers aged 18 to 34, compared to about 25% for other sailing leagues [6] - The league captures 270,000 data points per second during live races to provide real-time odds to bookmakers, enhancing the betting experience [7] Group 3: Team Ownership and Investment - SailGP teams are being acquired at increasing valuations, with the U.S. team sold for $35 million, a significant increase from previous acquisition ranges of $5 million to $10 million [10] - The recent acquisition of the Red Bull Italy SailGP Team by a consortium, including actress Anne Hathaway, indicates a trend of diverse investors in the league, with teams now being valued at over $50 million [11][12] - Currently, 10 of the 12 teams are independently owned, with future teams expected to follow this model [12]