Since becoming CEO of a small textile manufacturer in 1965, Warren Buffett has built Berkshire Hathaway into a powerhouse conglomerate with a market cap of $877 billion.

With a performance like that, it makes sense that investors would want to mimic Buffett’s latest portfolio moves. So, what is the Oracle of Omaha up to now?

Buffett has purchased shares of the oil and gas company Occidental Petroleum (OXY) for nine straight days, according to Berkshire Hathaway’s SEC filings. In fact, Berkshire Hathway has bought 7.3 million shares of Occidental since June 5, bringing Buffett’s total holdings to over 255 million shares, or a 28.8% stake in the company.

Shares of the Houston-based oil company have dropped 4% over the past month as the price of oil has pulled back. After oil prices peaked around April due to geopolitical conflict and supply chain issues, prices deflated over the past month as OPEC voted to increase output—making Buffett’s recent investments all the cheaper.

Buffett clearly has a special affinity for Occidental. He told CNBC that he started buying shares after reading a transcript of the firm’s earnings call.

“I read every word, and said this is exactly what I would be doing,” he said. He also noted that CEO Vicki Hollub’s leadership gives him confidence in the company’s direction.

Buffett has said that Berkshire Hathaway is not interested in taking control of the oil company, even though he continues to boost its stake—in fact, Buffett has received regulatory approval to purchase up to 50% of Occidental if he so chooses. Occidental is currently Berkshire’s sixth largest stock holding.

Buffett is selling BYD

At the same time that he’s scooping up oil, Buffett has also been bailing on electric vehicles. Berkshire Hathaway offloaded about 1.3 million shares of Chinese EV maker BYD on June 11, according to a filing to the Hong Kong Stock Exchange, bringing his stake in the company down to 6.9% from its previous 7.02%.

In fact, Berkshire Hathaway has been selling shares of the EV maker since mid-2022. Buffett’s late partner Charlie Munger was a fan of BYD and advocated for buying the Chinese carmaker over Tesla. Berkshire Hathway was an early investor in the company in 2008, when it bought 225 million shares. And despite recent speed bumps in the EV industry, this turned out to be a wise investment: BYD’s share price increased 600% from the start of 2008 to when Buffett began selling his stake in August 2022.

While Buffett is likely taking profits from BYD, the auto industry at large is facing the challenges of recent US and European tariffs on Chinese EVs, as well as a slowdown in international demand for EVs.—LB

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“Generative AI and accelerated computing are fueling a fundamental transformation as every industry races to join the industrial revolution."

Nvidia CEO-slash-tech superstar Jensen Huang was clearly optimistic when he joined Hewlett Packard Enterprise CEO Antonio Neri on stage at HPE’s Discover conference in Las Vegas. The two announced a new partnership that will allow other companies to develop AI infrastructure more quickly using Nvidia’s chips and HPE’s servers.

🟢 What’s up

• La-Z-Boy, your dad’s favorite recliner/stock, rose 19.39% after beating analyst expectations in the fourth quarter and issuing upbeat guidance for the year.
• Dell rose 5.13% a day after Morgan Stanley analysts named the company one of their top stock picks thanks to its focus on servers powering AI.
• Silk Road Medical exploded 24.04% higher upon the announcement that it will be acquired by Boston Scientific for $27.50 per share.
• Chegg popped 3.26% after announcing a restructuring plan that will see the online learning platform cut 23% of its global workforce.
• Nvidia only rose 3.51% today, but it was enough to push the semiconductor company’s market cap above Microsoft’s, making it the most valuable public company in the world.

What’s down

• Aerovate Therapeutics dropped another 14.55% today, a day after the company announced a failure in the phase 2 trial of its new blood pressure medication.
• Lennar sank 4.96% after announcing lower-than-expected home deliveries last quarter in yet another sign that the housing market is in the dumps.
• NextEra Energy fell 2.54% due to the company’s announcement it will issue $2 billion worth of new shares.
• Zentalis Pharmaceuticals plummeted 50.66% after it halted clinical trials of cancer treatments due to two deaths among patients being studied.

As you may have heard—or felt—a massive heat wave is currently crossing the US, with temperatures climbing to the 90s and “extreme heat” warnings being issued across multiple states.

Heat waves pose health risks for millions of Americans, but they can do damage to portfolios, too.

A recent research paper from the University of Calgary found that earnings for companies in certain sectors—utilities, healthcare, energy, and business equipment—are all hurt by unusually high temperatures.

The researcher, Amir Hosseini, used 10-K SEC filings to correlate financial metrics with a company’s geographic location within the US and its exposure to “heat anomalies,” or periods of unusually high heat. Turns out, exposure to heat can decrease earnings—particularly during warmer months.

“As expected, the negative economic impact of heat anomalies is concentrated in the third and fourth quarters, while its occurrence in the first quarter predicts higher earnings,” he wrote. “This is because larger heat anomalies in warmer seasons often negatively impact earnings, while smaller anomalies in colder seasons can boost profitability.”

Energy use and consumer demand are key drivers of this dynamic, according to Hosseini. When the weather is unbearably hot, consumers are less likely to participate in the transportation and hospitality industries, while utility bills often spike from increased cooling needs.

Hosseini also found that the less geographically dispersed a company is, the higher the correlation is between extreme heat and earnings—and therefore the more sensitive it is to climate change.

“Thus, investors with climate concerns favor the stocks of firms with lower exposure to heat anomalies as they are expected to perform better under climate conditions that are conducive to larger heat anomalies,” the researcher wrote.

Interestingly, despite the negative effects of heat on certain industries, Hosseini noted that investors are willing to pay a “heat anomaly premium”—meaning that they are already weighting their investments based on sensitivity to climate change, and have been doing so in growing numbers since about 2015.

In other words, “Stocks with the highest exposure to heat anomalies, outperform those with the lowest, especially in recent years.”—LB

• The bull market will continue to run higher, according to analysts at Citi. The firm joined Evercore and Goldman Sachs in upping its S&P 500 price target, bumping it from 5,100 to 5,600.
• NY Mets owner and Point72 founder Steve Cohen is raising $1 billion for a new hedge fund focused on investing in AI.
• Wells Fargo is bleeding $10 million a month thanks to a partnership with Bilt, the fintech startup letting users pay their rent with a credit card and earn rewards points on the payment.
• The EV market is stalling, and Fisker is paying the price. The electric SUV manufacturer has declared bankruptcy due to “macroeconomic headwinds.”
• The Amazon Labor Union has joined forces with the powerful Teamster Union in a bid to force Amazon to the bargaining table.
• Predict the next recession with Walmart’s stock. The key: when shoppers switch from luxury goods to bargains, you know there’s a problem with the economy.

Here are a few of the biggest analyst upgrades from today and what the pros are saying about these investments.

• Apple was reiterated as a “buy” by JPMorgan’s Samik Chatterjee, who thinks the company’s upcoming iPhone upgrade cycle will be especially strong thanks to new AI features. Price target: $245, up from $225.
• Kroger was upgraded from “market perform” to “perform” by BMO Capital Markets. Analysts like Kroger’s chances of buying Albertsons, but even if the deal falls through the company should still maintain strong margins. Price target: $60, up from $58.
• Nvidia got not one, but two price target upgrades today. The first was from Wells Fargo’s Aaron Rakers, who maintained his “buy” rating but upped his price target from $125 to $155. The second came from Rosenblatt Securities’ Hans Mosesmann, who became the biggest Nvidia bull on Wall Street by raising his price target from $140 to $200.
• Celsius Holdings has dropped like a stone over the last few weeks, but Piper Sandler’s Michael Lavery says the selloff has been overdone. He reiterated his “overweight” rating and his $90 price target due to the company’s “sustainable, volume-driven sales growth.”

If the Ace of Cups told you to buy shares of Amazon, would you?

Apparently, Gen Z would. Young traders have flocked to financial markets over the last few years, but inexperienced investors looking for guidance about where to put their money have turned to some unusual sources: tarot cards and astrology.

Gen Z is the most confident generation of investors yet, according to a recent Charles Schwab study, and have more access to investment opportunities than any who came before them. The combination of FOMO, a YOLO mentality, and a Robinhood account makes it easy to throw caution to the wind and throw money at investments based on vibes.

Look, it’s easy to scoff at such methods as unsophisticated—but when monkeys throwing darts at stocks can still beat the pros, maybe it’s not so crazy to base your investments on the lunar cycle.—MR