We’re moving deeper into earnings season and things are starting to heat up in my Stocks and Shares ISA.
Last week, Rolls-Royce popped 7.5% after releasing a reassuring trading update. AstraZeneca also delivered a solid first quarter, though management didn’t raise full-year guidance so the share price didn’t move much.
However, it’s this week when things really get interesting. Many of my ISA and Self-Invested Personal Pension (SIPP) holdings report first-quarter earnings, meaning there’ll probably be big swings one way or the other for a few of them.
Here are the companies:
| Date | |
| Duolingo (NASDAQ:DUOL) | 4 May |
| Ferrari | 5 May |
| HSBC | 5 May |
| Shopify | 5 May |
| Axon Enterprise | 6 May |
| Uber Technologies | 6 May |
| Cloudflare | 7 May |
| Coca-Cola HBC | 7 May |
| InterContinental Hotels Group (IHG) | 7 May |
| MercadoLibre | 7 May |
Zooming out
Looking at these stocks, I notice a divergence in recent performance between those listed in London and across the pond. HSBC has surged more than 50% in the past year and sits near an all-time high, as does IHG. Coca-Cola HBC has also been doing really well.
By contrast, Axon Enterprise, Duolingo, MercadoLibre, and Shopify are all a long way below their 52-week highs. As I type, they’re down 54%, 80%, 33%, and 33% respectively.
What’s going on? Well, I think the FTSE 100 stocks aren’t perceived to be at risk of disruption from artificial intelligence (AI).
For example, IHG sells hotel stays via brands including InterContinental, Crowne Plaza and Holiday Inn, while Coca-Cola HBC bottles and sells drinks such as Fanta, Sprite, Coca-Cola, Costa coffee, and Monster. ChatGPT and Claude are no immediate threat to any of this.
But the others mentioned are software-oriented businesses (in one way or another) and these have been put in the skip by nervous investors. Perhaps AI’s a threat to these firms long term, but when I look at them I don’t really have any cause for concern.
E-commerce enabler Shopify is expected to announce around $100bn in total platform sales (GMV) for the quarter (about 34% growth). It powers loads of businesses, small and large.
Meanwhile, Axon remains a very relevant company. Last week in north London, there was a declared terrorist attack that was headline news. The armed suspect was apprehended after an officer deployed one of Axon’s Tasers, while Axon body-camera captured the footage that was immediately sent to its data platform Axon Evidence (to be stored for decades, likely).
I’ll be keeping an eye on Latin American e-commerce leader MercadoLibre because it’s under competitive pressure in Brazil from Amazon and Shopee. But I see AI ultimately benefitting all these holdings.
Zooming in
Zooming in on Duolingo though, Monday’s going to be interesting. The stock collapsed after management announced it would focus on user growth over the next few quarters rather than profits.
By changing focus, Duolingo’s confident it can reach 100m daily active users (DAUs) in 2028, up from 52.7m at the end of 2025.
If it can succeed in doubling DAUs, CEO Luis von Ahn said “the payoff would be huge: a more resilient brand; a business with meaningfully higher bookings and profit“.
The big risk now, of course, is that accelerated user growth doesn’t actually materialise. That would be the worst of both worlds.
I’ve been thinking a lot about this holding recently, and I’m going to persist. Duolingo remains a profitable category-leading business.
And now trading at just 4.1 times forward sales — a steep discount — the stock looks worth considering around $100 for risk-tolerant growth investors.
