Emma

Co-founder of Top Percentile. 20 years in global banks. Helping investors understand companies, industries, and what actually matters.

[Emma @EmmaStockNotes]

@burrytracker You didn’t need to find Nvidia. You just needed to buy Microsoft, let it compound at ~15% a year plus dividends, and get rich slowly over 25 years. Buying quality and being patient pays off.

[Emma @EmmaStockNotes]

@StockSavvyShay Quite a fall from grace for $TTD. Growth has slowed sharply, margins are under pressure and now it’s out of the S&P 500. It still ranks highly on overall business quality, but the direction has clearly changed.

[Emma @EmmaStockNotes]

@StockMKTNewz Quite a comeback for $ILMN. Back in the S&P 500 after being removed in 2024, just as the underlying business has recovered sharply.

[Emma @EmmaStockNotes]

A remarkably flat finish to a week that really wasn’t.

Oil surged as US-Iran tensions escalated, feeding straight back into the inflation and rates debate. Friday’s much stronger jobs report then pushed the odds of a September Fed hike higher again.

AI demand remained extraordinary. Broadcom is now talking about $115B of AI semiconductor revenue in FY27 and $230B in FY28, although a slightly light near-term guide still sent the shares lower.

Tesla launched its purpose-built Cybercab in Austin, a major step for its robotaxi ambitions, although regulatory scrutiny followed almost immediately.

Lululemon’s problems deepened. It cut its outlook again as weakness spread beyond the Americas into China.

That’s it for the week. Have a great weekend everyone.

[Top Percentile @TopPercentileHQ]

😴 MARKET WEEKLY UPDATE (1W performance):

S&P 500: +0.09% 🟢
Nasdaq 100: +0.38% 🟢
Dow Jones: -0.27% 🔴

VIX: 14.5 | +0.10 pts (+0.69%) 🔴⬆️

Leaders: Energy +2.20%, Tech +0.86%
Laggards: Discretionary -1.96%, Materials -1.39%

[Emma @EmmaStockNotes]

@SchwabNetwork @infotechRG @NPetallides I like the downside argument on $GOOGL. Even if the AI spending gets ahead of itself, there is still an incredibly strong business underneath it.

[Emma @EmmaStockNotes]

Share prices move constantly for all sorts of reasons and get all the attention.

What matters more over time is knowing which businesses are actually getting better. That’s what our Business Excellence rankings are designed to track.

Here’s who moved up most in August.

[Emma @EmmaStockNotes]

Our free August Monthly Market Review:
https://t.co/C5X1C67O7j

[Emma @EmmaStockNotes]

Before we get too far into September, have a look at what August brought.

AI, software, rates, currencies and robotics all had their moment. Quite a month.

Our August Monthly Market Review pulls together the key market moves and themes.

[Emma @EmmaStockNotes]

@Investingcom This may be quite a spanner in the works for $FICO’s growth story.

[Emma @EmmaStockNotes]

@Ashton_1nvests Totally agree. The good dips are the ones caused by fear while the business is still intact.

[Emma @EmmaStockNotes]

@KennyZufall Makes sense.
At this point the new CEO has a lot harder turnaround job.

[Emma @EmmaStockNotes]

@zerohedge Lulu has become a lot harder to defend. The Americas were already struggling, now even China has joined the slowdown, with no clear line of sight to an inflection. I used to never leave a Lululemon store empty-handed. Now I do.

[Emma @EmmaStockNotes]

@InvestmentGuru_ Completely agree. AI isn’t just about building the best models. It’s about making this entire supply chain work from bottom to top. 👇

[Emma @EmmaStockNotes]

Spoiler: Jeremy’s strongest software pick here is $CRM.

He thinks the software rebound is still early. $NOW can keep running, but he has more conviction in Salesforce and says “Salesforce is the one.”

Snowflake’s blowout strengthened the point: the “SaaSpocalypse” went too far. AI is becoming an opportunity for the strongest software companies, not simply a reason they disappear.

Very different view on $META and $PLTR. He still likes both businesses, but sees the stocks as more range-bound for now, with Meta held back by capex and Palantir facing tougher growth comparisons next year.

My take: $CRM is a great pick. The business is showing both reacceleration and real AI monetisation.

[Emma @EmmaStockNotes]

Yes, it’s an investment research platform. We pull company filings and evaluate every stock consistently across 30+ metrics to produce a Business Excellence score, then rank it against the whole market.

We do the same for valuation using multiples. Lots more in development too.

The site is linked in my bio if you want to explore it. It’s free

[Emma @EmmaStockNotes]

@Technimentals Exactly

[Emma @EmmaStockNotes]

@fksickindianf Haha you clearly have strong opinions on this one. Hard to deny how much Chip Wilson shaped the brand.

[Emma @EmmaStockNotes]

The $LULU earnings call was more revealing than the release.

The tone changed. Management said it expected a better response from the turnaround plan by now. Product launches remain inconsistent, management disclosed leggings sales fell 20%, and August started slowly.

KEY TAKEAWAYS

The product problem is becoming clearer. Management said leggings sales fell 20% in Q2. New away-from-body bottoms such as Groove and Dance Studio are working, but not enough to offset weakness in the core. Accessories fell 13%.

China deteriorated sharply. Management pointed to negative brand commentary, a weaker Tmall 618 event and inconsistent product newness, rather than macro. FY26 China revenue growth was cut from 20% last quarter to high single digits, implying a much weaker second half after strong H1 growth.

There is no turnaround in the current numbers yet. August started slowly. Q3 assumes North America revenue falls mid-teens, while China and Rest of World grow only 3–5%. Any upside from the actions underway is not included.

Lululemon is starting to resize around the weaker business. Planned net store openings were cut to around 35 from 40, and management is taking a deeper look at the cost base while protecting product and brand investment.

KEY QUESTIONS ANSWERED

Analysts challenged whether the underlying problem has actually been diagnosed. Management increasingly pointed to product inconsistency and brand sentiment rather than macro, while acknowledging the action plan has delivered less than expected.

They also asked whether Q3 should be the trough. Management did not call one. August started slowly and the guidance reflects what it is seeing today.

The cost structure was another concern. With sales falling, significant fixed-cost deleverage is emerging. Management is now looking more deeply at right-sizing the business, but gave no 2027 cost framework yet.

WHAT STILL NEEDS TO PROVE OUT

The clearest test is conversion.

Some new products are working and community engagement remains strong, but management said the increased marketing has not yet changed the top-line trajectory. Stronger away-from-body styles also haven’t offset the decline in leggings.

Incoming CEO Heidi O’Neill starts next week. She inherits a turnaround where the problems are becoming clearer, but there is still no evidence yet that the fixes are restoring demand.

[Emma @EmmaStockNotes]

$LULU -16%. The turnaround just got harder. Comparable-sales weakness is no longer confined to the Americas, and incoming CEO Heidi O’Neill inherits a much broader growth problem.

Revenue: $2.42B vs $2.46B expected (miss)
Global comps: -9%
Q3 revenue guide: $2.29-$2.32B
Q3 EPS guide: $0.93-$0.98 vs ~$2.52 expected (miss)

Americas comps fell 12%, while China and Rest of World comps also turned negative. International revenue is still growing, but the deterioration has clearly broadened.

The $2.92 Q2 EPS included an $0.86 tariff-refund benefit. More importantly, FY26 revenue and EPS guidance were both cut sharply.

Stock: -16% after hours

Verdict: The turnaround evidence went backwards. Growth weakened across regions and the outlook deteriorated again.

What still needs answering is whether this is fixable product execution or a deeper loss of brand momentum.

[Emma @EmmaStockNotes]

@ParadisLabs Exactly. They probably would’ve been fine too if they hadn’t had so much leverage.