Updates on Willis Lease Finance, Alphabet, Walmart, Costco Wholesale, Amazon, and Palantir Technologies
Today, I'd like to share some quick updates on a number of companies I've covered before...
1) I continue to be bullish on aircraft-engine lessor Willis Lease Finance (WLFC) for reasons I've outlined in many previous e-mails (archive here).
This Financial Times article reinforces my view that the engines Willis owns are worth far more than what the company is carrying them for on its books:
Companies that lease aircraft to airlines have in some cases begun leasing engines rather than whole planes as an industry-wide shortage has sent their rental values soaring.
The recent grounding of Spirit Airlines in the US has led to almost-new A320neo aircraft being dismantled for their engines, according to industry executives and analysts...
Engine constraints have been one of the biggest concerns for the industry as manufacturers have struggled to keep up with booming demand for Airbus and Boeing planes. At the same time, problems with some of the newest engines have led to long waits for repairs and a shortage of crucial spares.
On January 7, I listed Willis as one of my favorite "out-of-favor stocks that haven't worked – yet" for 2026. Since then, the stock is up 19%.
2) I also continue to be bullish on Alphabet (GOOGL) because I think it will be one of the big winners of the AI race. As this recent New York Times article notes, it didn't always look that way:
Just two years ago, Google looked like it was in trouble. In a desperate move to play catch-up with the OpenAI chatbot that had upended the tech industry, the search giant debuted an unpolished version of its artificial intelligence on Google.com. The A.I. spat out shoddy information, including advice for people to eat rocks and put glue on their pizza...
But today, consensus is forming in Silicon Valley not only that Google has recovered and caught up but that it could actually win the A.I. race, a testament to how so much can change in so little time.
But as the article continues, Google's chatbot Gemini is pulling ahead of the competition:
Google announced on Tuesday at Google I/O, its conference for software developers, that in only one year the number of people regularly using its chatbot, Gemini, had more than doubled to 900 million, on a par with OpenAI's self-reported number of active users for ChatGPT and nearly 30 times the estimated web traffic of Anthropic's Claude chatbot, which is more focused on business customers.
And unlike Anthropic and OpenAI, which are still losing money from operating expensive A.I. data centers, Google is rapidly developing ways to use A.I. to increase profit with online advertising, its bread and butter. In its last quarter, Google reported, its advertising revenue rose 16 percent to $77 billion, fueled by A.I. technology that has helped marketers collect deeper information about users' interests.
Meanwhile, I still think some of the losers in this race will be xAI/Grok, which is owned by SpaceX, and OpenAI.
3) Another reason I'm bullish on Alphabet is the extraordinary growth of its Waymo driverless-taxi service.
The chart below from Charlie Bilello's latest Week in Charts shows that Waymo has seen trips in California, its largest market, rise by 16 times in the past two years:
4) This next chart from Bilello shows the huge expansion in the forward price-to-earnings (P/E) multiples of retail giants Walmart (WMT) and Costco Wholesale (COST):
These are two of the greatest companies of all time, but I think they're significantly overvalued today. That doesn't mean their stocks are going to crash. But I expect them to go sideways for many years while their earnings catch up with the stocks.
5) The final chart below from Bilello shows one of the many reasons I think Amazon (AMZN) is a much better buy today than Walmart – its stock is growing much faster.
As recently as a decade ago, Walmart's revenues were 4 times greater than Amazon's... But Amazon recently surpassed Walmart:
6) Meanwhile, Palantir Technologies (PLTR) remains on my list of "Stinky Six" stocks to avoid (archive here). And my friend Michael Burry of The Big Short fame shares my bearishness in this X post:
Here's the Wall Street Journal article he references, which details how AI is a "product, a punching bag – and a problem" for Palantir.
7) Lastly, here's an interesting X post about disgraced cryptocurrency-exchange founder Sam Bankman-Fried:
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.
P.P.S. I went from the clay courts of the French Open in Paris on Friday to the dirt courts of the Limuru Country Club outside Nairobi, Kenya on Saturday, where I'm visiting my parents. This morning, we flew down to the coast for one last hurrah at my parents' beach house in Lamu. After 20 years, they've sold it (boo hoo!) and the deal closes shortly, so they're clearing out their personal effects. Here are some photos:
