My interview about 'Amazon Helios'; Amazon's entire AI strategy depends on this stealthy chip lab; Update on Helen of Troy; Problems at 100 Long-Term Underperformers

1) I was recently interviewed about the new research my team and I have done on what I'm calling "Amazon Helios"...

This initiative, led by Amazon (AMZN) founder Jeff Bezos, involves a revolutionary technology that could change the way society operates. And I'm not talking about AI, electric vehicles, robotics, or anything like that...

I'm talking about nuclear fusion, the same atomic reaction that powers the sun and stars. (That's not to be confused with nuclear fission, which is how all nuclear power plants generate electricity.)

According to the World Economic Forum, nuclear fusion is "arguably the most exciting human discovery since fire." That's because it has the potential to generate massive amounts of energy – 20 million to 100 million times more than coal, oil, or natural gas.

I cover all of this and more in my interview on The Daniela Cambone Show, which you can watch here on YouTube:

Nuclear fusion is a scientific advancement the late Stephen Hawking dreamed of seeing in his lifetime. One little-known company now has the best chance of turning it into reality – and early investors could make a fortune.

You can watch my longer video on the subject, plus learn the name and ticker symbol of this "Amazon Helios" company, by clicking here.

2) Speaking of Amazon, this Wall Street Journal article from last week tells the fascinating story of a little-known acquisition the company made a decade ago that became "one of the most consequential deals in tech history": The Stealthy Lab Cooking Up Amazon's Secret Sauce. Excerpt:

The entrepreneur looked around a Seattle restaurant for a booth where he could have a private conversation. As the co-founder of Annapurna Labs, a secretive Israeli chip-design startup, Nafea Bshara was used to operating in stealth mode. His business was so allergic to publicity that it barely even had a website.

But he was being especially discreet that night because his clandestine meeting was with an influential executive from one of the world's most valuable companies...

Their discussion of chips that began over beer and wine eventually led to Amazon buying the mysterious startup for about $350 million. Ten years later, it has become essential to the success of the whole company.

Amazon has long depended on Amazon Web Services – and Amazon Web Services depends on Annapurna.

But it's more than just Amazon Web Services ("AWS"), the company's cloud-computing platform – it's the core of Amazon's push into AI. Here's more from the article:

The company's entire AI strategy is now built on a foundation of chips designed by Annapurna, which is so crucial that analysts have described this custom silicon as the secret sauce of AWS...

It looks even more important now that the AI boom has sparked a trillion-dollar arms race with Microsoft and Google also investing gigantic sums of money in powerful chips – the brains of artificial intelligence. All the cloud titans are building their own custom hardware, partly to chip away at their reliance on Nvidia. And no company is spending more than Amazon.

This year, Amazon is planning more than $100 billion of capital expenditures, mostly on the AWS infrastructure required for AI systems. It's even building a colossal supercomputer trained on an "ultracluster" of advanced chips designed by Annapurna. All this homemade silicon is the reason it can offer faster, cheaper and more efficient computing.

What a fascinating shift when you think back to the beginning. Amazon got its start selling books. Today – as the WSJ puts it – it's "increasingly obsessed with chips."

And as the article argues, that strategy today was "quietly made possible a decade ago with the prescient acquisition of a company that you've never heard of."

This is one more reason why I continue to recommend Amazon's stock.

3) In Monday's e-mail, I updated my readers on three stocks I've written about previously, so today let's take a look at another: Helen of Troy (HELE).

It owns numerous well-known brands – such as Oxo kitchen products, Hydro Flask water bottles, Pur water filters, Revlon hair dryers, Osprey backpacks, and many more.

The company caught my eye after announcing earlier this month that it was replacing its CEO: Helen of Troy Announces CEO Leadership Change.

I first wrote about the company in my January 11, 2023 e-mail after seeing it present at the annual ICR Conference. I followed up a year later in my January 5, 2024 e-mail, in which I shared a pitch to short the company posted on ValueInvestorsClub.

I should have also shared this short pitch from January 2023 by famed activist short seller Marc Cohodes and retail analyst Brian McGough. They argue:

HELE is not in the game of running brands successfully, its game is to use a zero interest rate environment, lever up, buy mediocre brands with no synergies, and use creative accounting to manufacture non-cash, non-GAAP EPS that the Street takes hook, line and sinker. With a levered balance sheet, permanently higher interest rates, and floating rate debt, the game it plays is OVER. Now it comes down to running its mediocre portfolio profitably, which we think this team is unable to execute upon. It needs to dramatically change its business model, divest arguably half its portfolio, de-lever, stem share loss, and drive profitable growth. This management team is one of the worst stewards of capital we've seen in Consumer. It's like the second coming of Hanesbrands circa 5-years ago, or Newell 10-years ago, or Jones Apparel group 15-years ago.

I listened to the short sellers, and in my January 5 e-mail last year, I concluded that:

HELE shares are actually up 25% since mid-March and are roughly flat from a year ago, but I'm still not tempted.

It was a good call, as the stock has collapsed 74% since that e-mail, as you can see in this chart:

What happened? Well, as the short sellers predicted, the company missed earnings and free cash flow ("FCF") plunged, even before tariff concerns knocked the stock down even further, as you can see in this chart: