Important Information
This information is provided for general educational purposes only without regard to your particular investment needs. This material, including any attachments or hyperlinks, should not be taken as investment or tax advice of any kind whatsoever (whether impartial or otherwise) on which you may rely for your investment decisions, nor be construed as an offer, solicitation or recommendation for any investment strategy, product or service. Investors should consult their financial and tax adviser before making investments in order to determine the appropriateness of any investment discussed herein.
Material authored by any particular Artisan Partners individual or team represents their own views and opinions, which may or may not reflect the views and opinions of Artisan Partners, including its autonomous investment teams or associates. Statements are based on current market conditions and other factors, which are as of the date indicated and are subject to change without notice. While this information is believed to be reliable, there is no guarantee to the accuracy or completeness of any statement in the discussion.
All investments are subject to risk, which includes potential loss of principal. Past performance is not indicative of future results.
This material may reference index or other information that is subject to copyright by its respective service provider, including the following: MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. This report is not approved or produced by MSCI. Frank Russell Company ("Russell") is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell's express written consent. Russell does not promote, sponsor or endorse the content of this communication. The S&P 500 and S&P UBS Leveraged Loan Indices are products of S&P Dow Jones Indices LLC (“S&P DJI”) and/or its affiliates and has been licensed for use. Copyright © 2025 S&P Dow Jones Indices LLC, a division of S&P Global, Inc. All rights reserved. Redistribution or reproduction in whole or in part are prohibited without written permission of S&P Dow Jones Indices LLC. S&P® is a registered trademark of S&P Global and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). None of S&P DJI, Dow Jones, their affiliates or third party licensors makes any representation or warranty, express or implied, as to the ability of any index to accurately represent the asset class or market sector that it purports to represent and none shall have any liability for any errors, omissions, or interruptions of any index or the data included therein. Information has been obtained from sources believed to be reliable but J.P. Morgan does not warrant its completeness or accuracy. The Index is used with permission. The Index may not be copied, used, or distributed without J.P. Morgan's prior written approval. Copyright 2025, J.P. Morgan Chase & Co. All rights reserved. Source ICE Data Indices, LLC, used with permission. Source ICE Data Indices, LLC is used with permission. ICE® is a registered trademark of ICE Data Indices, LLC or its affiliates and BofA® is a registered trademark of Bank of America Corporation licensed by Bank of America Corporation and its affiliates ("BofA"), and may not be used without BofA's prior written approval. The index data referenced herein is the property of ICE Data Indices, LLC, its affiliates (“ICE Data”) and/or its third party suppliers and, along with the ICE BofA trademarks, has been licensed for use by Artisan Partners Limited Partnership. ICE Data and its Third Party Suppliers accept no liability in connection with the use of such index data or marks. See www.artisanpartners.com/ice-data.html for a full copy of the Disclaimer. The index(es) are unmanaged; include net reinvested dividends; do not reflect fees or expenses; and are not available for direct investment.
© 2025 Artisan Partners. All rights reserved.
Growth Team Weekly Investment Insights
1) Another Disappointing Inflation Data Point
Expectations of a 2024 rate cut were further hampered last week when both the personal consumption expenditures (PCE) and core PCE inflation measures came in higher than expected.
Source: FactSet, US Bureau of Economic Analysis. As of 4/29/2024
Source: FactSet, as of 4/29/2024
Furthermore, the silver lining of economic strength driving sticky inflation took a hit as preliminary GDP growth came in at an annualized pace of 1.6% Q/Q versus expectations of 2.2%. However, within the GDP data, consumer spending continued to look strong.
Source: FactSet, US Bureau of Economic Analysis. As of 4/29/2024
2) Defense Spending
Our team has been looking at companies in the defense industry as conflicts around the world are leading to sizable upticks in global spending. As this Financial Times article points out, military spending around the world rose almost 7% to a record $2.4tn last year, the steepest annual increase in 15 years. In particular, European defense spending rose 16% to $588bn.
3) Alphabet
Alphabet surged ~10% after reporting strong fundamental results and its first-ever dividend.
4) Big Tech Artificial Intelligence (AI) Spending is Accelerating
We have been closely watching for signs of what future datacenter capex may look like for major enterprises and hyperscalers, which was recapped in this Financial Times article.
Source: FactSet, as of 4/29/2024
We believe these rising capex numbers indicate continued tailwinds for companies selling into different parts of the datacenter supply chain, such as graphic processing units, networking equipment, power management, liquid cooling and electrification.
5) Spotify’s Margin Explosion
Spotify reported net income of €197mn on €3.6bn in revenue in Q1. In the same period a year ago, it lost €225mn on €3bn in revenue.
Source: FactSet, as of 4/29/2024
As outlined in this Financial Times article, Spotify has been more focused on cost discipline, including cutting more than 2,000 employees (roughly a quarter of its workforce) last year. This helped Spotify’s gross profit margins in the quarter rise to 27.6%, up from 25.2% a year ago.
However, one negative in the recent report was a disappointing monthly active user number. The total number reached 615 million, lower than the 618 million Spotify had forecast, which it blamed on “moderated marketing activity.” In addition, the company only reached its paying subscriber forecast of 239 million, an increase of just 3 million.
Overall, investors cheered the report and sent Spotify's shares up over 10%. The company’s stock has more than doubled over the past year.
Artisan Partners Growth Team manages portfolios that held securities issued by Alphabet, Microsoft and Spotify as of 3/31/24. Portfolio securities are subject to change.
Contact the Editorial Staff
Have a question or comment? We welcome your feedback. Comments will not be made public, but will be read by a member of our editorial staff.
Thank you for your question or comment.