Dear Reader,
Here's what most analysts won't say publicly:
The original Magnificent Seven trade is overcrowded.
Apple, Microsoft, Amazon, Nvidia, META…
Everyone owns them now.
Wall Street owns them.
The media talks about them nonstop.
And historically, that's when the biggest upside starts disappearing.
The real fortunes were made years ago — before these companies became trillion-dollar giants.
That's exactly why I'm now focused on a completely new class of AI stocks.
Smaller.
Faster growing.
And positioned at the center of the AI boom.
One just signed a major deal with Apple through 2040.
Another is becoming critical infrastructure for the AI internet itself.
And several are growing far faster than the original Magnificent Seven can realistically sustain at their size.
This is where I believe the NEXT major gains will come from.
Not from overcrowded mega-cap tech everyone already owns.
I recently recorded a presentation revealing what I call "The Next Magnificent Seven."
Click here to watch it now before Wall Street fully catches on.
Good investing,
Alexander Green
Chief Investment Strategist, The Oxford Club
Pinterest Pins a Profit Play To Its Mood Board
Reported by Jeffrey Neal Johnson. Date Posted: 5/6/2026.
Key Points
- Pinterest is now effectively converting its massive and growing user base into accelerating revenue streams.
- Pinterest’s proprietary artificial intelligence delivers superior returns for advertisers and drives increased ad spend.
- An aggressive share repurchase program signals strong management confidence and provides direct value to shareholders.
- Special Report: Elon’s “Hidden” Company
A blowout first-quarter performance from Pinterest (NYSE: PINS) has sent shares up almost 8%, signaling that the company's multiyear transition from a digital discovery tool to a commercial shopping platform is gaining traction. Pinterest posted strong top-line growth and a solid beat on profitability estimates, supported by record user engagement and the maturation of its artificial intelligence (AI)-driven advertising technology. For investors, this operational momentum, combined with a disciplined capital allocation strategy, strengthens the case for Pinterest as a compelling Growth at a Reasonable Price (GARP) play within the competitive digital advertising sector.
Cashing in on Curation: Monetization Finally Follows Engagement
Pinterest's Q1 2026 results offered a clear sign that its monetization engine is beginning to fully reflect the strength of its user base. Pinterest delivered revenue of $1.01 billion, an 18% year-over-year (YOY) increase that topped consensus estimates.
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Reveal the $3 AI PickThis acceleration reflected more than just audience growth; it also came from more effective commercialization. Global Monthly Active Users (MAUs) reached an all-time high of 631 million, marking the 10th consecutive quarter of double-digit user growth.
Critically, Pinterest is converting this engagement into revenue more efficiently. Global Average Revenue Per User (ARPU) climbed 6% to $1.61. The gains were more pronounced in developed markets, with the U.S. and Canada growing ARPU by 9% and Europe by 17%, suggesting that recent ad-tech enhancements are resonating most in regions where advertiser budgets are largest.
While Pinterest reported a GAAP net loss of $74 million, its focus on operational efficiency remains clear. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $207 million, and robust free cash flow of $312 million highlights a healthy underlying business model. Non-GAAP earnings per share (EPS) of 27 cents decisively beat the analyst consensus of 22 cents.
How Tech and Tactics Are Driving the Turnaround
The catalyst behind this improved performance is twofold: a smarter, AI-powered ad platform and a strategic restructuring of its go-to-market organization.
Proprietary AI Delivers Advertiser ROI
Pinterest is leveraging its unique dataset, the Taste Graph built on billions of user pins, to train proprietary AI models that deliver superior advertiser return on investment (ROI). The recent deployment of PinRec, a generative retrieval system, improved search fulfillment by 180 basis points while reducing Cost Per Action (CPA) and Cost Per Click (CPC) for advertisers by a similar margin.
Furthermore, its automated ad suite, Pinterest Performance+, now accounts for approximately 30% of lower-funnel ad revenue, with adopters increasing their spend at nearly twice the rate of non-adopters. This demonstrates tangible product-market fit, reducing friction and improving outcomes for advertisers, which encourages them to consolidate more ad spend on the platform.
A New Go-To-Market Focus
The platform's internal sales structure is undergoing a critical evolution under Chief Business Officer Lee Brown. The organization is shifting from a traditional upper-funnel brand awareness focus to a full-funnel performance model, equipped with AI tooling and a sharper accountability structure.
This operational pivot is crucial for diversifying Pinterest's revenue base. Management noted that while its largest retail partners still face margin pressure from tariffs, this headwind was more than offset by accelerating growth from mid-market and small-to-medium-sized business (SMB) clients in Q1, a direct result of the new, more scalable sales approach.
The Gen Z Shift and Capital Returns
Beyond its internal execution, Pinterest appears poised to benefit from broader market and demographic shifts. As advertisers grow more cautious about brand safety on other social platforms, Pinterest's highly moderated, positive environment offers a structural advantage.
A significant demographic shift further amplifies this advantage: Gen Z now represents the platform's largest and fastest-growing cohort, accounting for over 50% of the user base. This migration is partially attributed to Pinterest's proactive safety measures, such as making user accounts under 16 private by default, a policy that attracts safety-conscious brands looking to reach this key demographic and redirects ad dollars away from less secure platforms.
The investment thesis is further supported by an aggressive and shareholder-friendly capital allocation strategy. Since the start of the year, Pinterest has repurchased approximately $2 billion of its own stock at a weighted average price of $18 per share. This action, part of a board-authorized $3.5 billion program, has already reduced the total number of shares outstanding by roughly 16%, providing a direct mechanical lift to EPS. Such a substantial buyback signals management's confidence and provides a valuation floor for the stock.
Put a Pin in It? Pinterest's Next Phase
Pinterest's Q1 results validate its strategic pivot toward becoming an indispensable tool for visual discovery and commerce. The combination of a growing, engaged user base and an increasingly efficient, AI-driven ad platform creates a compelling narrative. While investors should remain mindful of ongoing macroeconomic pressures on the retail sector and Pinterest's path toward consistent GAAP profitability, the current trajectory points to sustained growth.
Investors aligned with GARP principles may find the combination of accelerating monetization, a reasonable valuation, and aggressive capital returns to be an attractive entry point. Those focused on the ad-tech sector could monitor continued adoption of Performance+ and ARPU growth in international markets as key performance indicators. Cautious investors may prefer to see evidence of a stabilized environment for Pinterest's largest retail advertisers before committing capital.
Axon Surged After Earnings and Is Still Down Over 50% From Highs
Reported by Leo Miller. Date Posted: 5/12/2026.
Key Points
- Axon Enterprise went from a market darling to getting crushed, partially due to AI fears hitting software stocks
- Despite investor pessimism, Axon has consistently impressed with its financial results, leading to large post-earnings spikes
- AI is becoming a growth driver and the latest element of the company's hardware-driven flywheel effect
- Special Report: Elon’s “Hidden” Company
After getting beaten down for much of the past year, Axon Enterprise (NASDAQ: AXON) scored a big win after its latest earnings report. Shares surged nearly 11% following the company’s May release, as it posted impressive sales, earnings, and guidance.
Even so, the defense stock remains under pressure, still trading at less than 50% of its 52-week high reached in August 2025. Some of that decline was likely justified, but other parts are more questionable.
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Reveal the $3 AI PickAt its past highs, Axon traded at a forward price-to-earnings ratio (P/E) near 130x, evidence of a company “priced for perfection.”
However, the stock has also fallen amid fears surrounding artificial intelligence in the software industry. That’s despite the fact that hardware sales play a critical role in Axon’s business and help make its flywheel effect work.
When push comes to shove, Axon’s results show there is still plenty of room for optimism about the stock going forward.
Axon’s Beat and Raise Q1
In Q1 2026, Axon reported revenue of $807.3 million, representing growth of 34% year over year (YOY). That easily topped estimates of $778.9 million. Meanwhile, adjusted earnings per share (EPS) rose by just under 10% to $1.61, a slight beat over expectations of $1.60. Notably, gross margins took a meaningful hit, causing revenue to grow much faster than adjusted EPS.
Gross margin fell by 150 basis points YOY to 59.1%, with the company citing global tariffs as the primary driver. This has become another legitimate headwind for Axon stock and a persistent topic on earnings calls.
Despite that, the company maintained its full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin guidance of 25.5%. Axon also raised its full-year revenue growth guidance to a midpoint of 31%. That marks a meaningful increase from prior midpoint guidance of 29%, coming as contracted booking growth increased 44% YOY, well above Q1 sales growth. Importantly, Axon is seeing strong growth from its AI offerings, countering the narrative that the technology is a major threat to the company rather than a tailwind.
AI Growth Soars as Law Enforcement Buys In
Axon’s AI Era plan is its most expensive hardware and software package for law enforcement. Bookings for this offering rose 140% YOY, with the company noting that “nearly all large domestic law enforcement agencies are now including AI in their purchases.” That is a powerful statement, showing that AI is becoming central to how agencies make purchasing decisions rather than simply a nice-to-have feature.
Slide 23 of the company’s Investor Deck also shows how hardware sales form the foundation of the company’s software, services, and AI flywheel effect. In year one of the AI Era Plan, hardware sales represent about half of revenue. This includes products like tasers, body cameras, virtual reality headsets, and drones.
After year one, however, hardware sales become much smaller. Over a five-year period, the combination of AI and non-AI software and services accounts for more than 75% of total plan revenue. That includes offerings like Draft One, where AI uses body camera recordings to create a first draft of incident reports, saving officers time on paperwork.
Agencies continue to pay for these services over several years, but they are useful only after the necessary hardware has been purchased. So while Axon certainly has meaningful software exposure, its hardware-first model provides protection from AI competition that software-only companies do not have.
Adding to that is the fact that demand for Axon’s drones is spiking. During the quarter, its counter-drone revenue increased by 300% YOY. Bookings rose even more sharply, up 500% YOY, indicating that demand is accelerating.
Axon Continues Its Post-Earnings Success; Markets Remain Unconvinced
Notably, despite recent declines, Axon has continued to demonstrate the strength of its business through its financial results. Following its past 10 earnings releases, Axon has seen an average post-earnings gain of approximately 12%. That is a feat investors would be hard-pressed to find in many other stocks.
Of course, past post-earnings success does not guarantee the same outcome going forward. However, it does show one thing: the market has repeatedly underestimated Axon and then corrected after the company delivers numbers that are hard to ignore. It’s arguable that the same thing is happening now, given the stock’s steep decline and post-earnings jump.
Furthermore, much of Axon’s price action continues to track the broader software market. That suggests investors have yet to fully separate Axon from software stocks, despite the significant differences in its business model.
Analysts continue to have a positive outlook on Axon. The MarketBeat consensus price target sits near $713, implying upside of more than 75%. Targets updated after the company’s earnings report are considerably lower, averaging around $604. Even so, that figure still implies substantial upside of just over 50%.
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