MERIDIAN RESEARCH

🧭 MACRO SNAPSHOT

The macro setup remains constructive but increasingly two-sided. Fed funds at 3.64% (FRED) reflects the easing cycle that began in late 2025; the 2s/10s curve has re-steepened to +50bp (10Y at 4.43%, 2Y at 3.93%, FRED), which is consistent with a soft-landing market expectation rather than a recession signal. HY credit spreads at 275bp (FRED) and VIX at 17.4 are both in benign territory — risk appetite is healthy but not euphoric. Unemployment at 4.3% with real GDP growth of 2.0% is the textbook "neither too hot nor too cold" reading, but CPI data continues to show services stickiness and the diesel/energy complex is now a political pressure point heading into the midterms (Politico).

Two macro crosscurrents matter for the portfolio today: (1) Oil retreating on reported Iran deal progress (CNBC) is a tailwind for consumer-facing names (MELI, BABA, PDD/SOFI) and a headwind for XOM (-5% on the week, -6.5% on the month — consistent with crude weakness); (2) NVDA's $500M Corning investment for fiber-optic capacity expansion (WSJ) is another data point in the AI infrastructure capex story — directionally bullish for NVDA, MSFT cloud demand, and indirectly for the semiconductor supply chain. I'm watching whether the AMD earnings beat (CNBC) signals broader compute demand or company-specific share gains.

₿ BITCOIN UPDATE

Action: STRONG HOLD | Conviction: 9/10

Price $79,997, +4.89% on the week, +17.19% on the month. BTC dominance at 58.4%. We are ~12-13 months post-halving (April 2024), squarely inside the historically most kinetic window of the four-year cycle. Nothing structural has changed this week that would alter the thesis — supply issuance remains halved, ETF flows have been net positive on the month, and dominance >58% indicates capital is still concentrating in BTC rather than rotating to altcoins (which historically marks late-cycle behavior). The thesis remains: BTC is the highest-quality monetary asset in a world of structurally elevated sovereign debt, and we are in the phase of the cycle where institutional accumulation typically meets supply scarcity. Hold with size.

🔬 TODAY'S DEEP DIVES

SOFI — SoFi Technologies, Inc. — NEW IDEA

Conviction: 6/10 | Status: MONITORING | Sector: Financials / Fintech

WHAT THEY DO: SoFi is a digitally-native financial services platform with three segments: Lending (personal loans, student refi, mortgages), Financial Services (checking/savings, brokerage, credit card), and Technology Platform (Galileo + Technisys — banking-as-a-service infrastructure sold to other fintechs and banks). Following its 2022 acquisition of Golden Pacific Bancorp, SoFi operates as a chartered national bank — a structural cost-of-capital advantage over non-bank fintech competitors who fund loans on warehouse lines.

WHY IT'S INTERESTING NOW: CEO Anthony Noto has been aggressively positioning SoFi to be valued as a software/platform stock rather than a bank, and management just disclosed 18 consecutive quarters of Rule of 40 performance (Barchart, 2026-05-04). With revenue growth of 42.5% TTM and 18.3% operating margins (yfinance), the financial composition genuinely is software-like — but the market is still applying a financials multiple. The disconnect is the opportunity, if you believe the credit book holds up.

BULL CASE:

• Rule of 40 durability across 18 quarters; revenue +42.5% TTM with 18.3% operating margins (yfinance) is rare for a regulated financial.
• Bank charter gives a structural deposit-funding cost advantage vs. non-bank fintechs (Affirm, Upstart) who depend on capital markets.
• Galileo/Technisys is an under-appreciated B2B platform that monetizes fintech sector growth even when SoFi's own consumer business is cyclical.

BEAR CASE:

• Credit cycle exposure unproven — the loan book has not been stress-tested through a real recession with the current member mix; fair-value accounting on held loans is a frequent short-seller critique (the recent Block & Leviton investigation headline noted in the news feed warrants monitoring).
• Personal loan charge-offs and consumer credit deterioration are tail risks if unemployment rises beyond 4.5%.

KEY METRICS: Revenue growth +42.5% TTM | Operating margin 18.3% | Analyst PT $21.25 (consensus "hold," yfinance) | Differentiator: only major US neobank with a bank charter + a profitable B2B BaaS arm.

BOTTOM LINE: Belongs on the list at 6/10 — software-like growth at financial-services valuations is interesting, but I need to see one credit cycle before going to high conviction.

PDD — PDD Holdings — NEW IDEA

Conviction: 6/10 | Status: MONITORING | Sector: Consumer Discretionary / China E-commerce

WHAT THEY DO: PDD operates two of the most disruptive e-commerce franchises globally: Pinduoduo, China's value-tier marketplace that pioneered group-buying mechanics and dominates lower-tier-city commerce; and Temu, the cross-border discount marketplace that has scaled rapidly across the U.S., EU, LatAm, and Southeast Asia since its September 2022 launch. The model leverages China's manufacturing supply chain factory-direct (cutting middlemen) paired with aggressive algorithmic merchandising.

WHY IT'S INTERESTING NOW: PDD trades at a forward P/E of 7.3x and EV/EBITDA of 1.77x (yfinance) on a business growing revenue 12% with 21% operating margins. That is an extraordinary valuation dislocation by any framework — and Temu's international optionality is essentially being valued at zero. The question is whether this is a deep-value setup or a value trap driven by structural China-ADR risk that never resolves.

BULL CASE:

• Forward P/E 7.3x / EV/EBITDA 1.77x on 12% revenue growth + 21% op margins (yfinance) is a deep-value multiple; consensus PT $142.90 implies ~40% upside (33 analysts, yfinance).
• Temu international optionality is largely unpriced — the platform has scaled to billions in GMV in <3 years.
• Even applying a 50% China-ADR governance discount, the stock screens cheap on absolute and relative metrics.

BEAR CASE:

• Geopolitical risk is binary: U.S. de minimis exemption is under active legislative threat; closure would directly hit Temu's U.S. unit economics.
• VIE structure / HFCAA delisting risk / capital-controls risk are non-zero and unhedgeable.
• Quoted beta of 0.033 is suspiciously low — likely a regression artifact, not true risk profile.

KEY METRICS: Revenue growth +12% | Operating margin 21% | Forward P/E 7.3x | EV/EBITDA 1.77x | Differentiator: only Chinese e-commerce platform with a credible Western consumer franchise (Temu).

BOTTOM LINE: Belongs on the list at 6/10 — extreme valuation cushion against well-known but unhedgeable Chinese ADR risks; high conviction requires either a de-escalation in U.S.-China trade rhetoric or a clearer Temu disclosure.

PDD — PDD Holdings — ROLLING DEEP REVIEW

Conviction: 7/10 (modest upgrade from 6) | Status: MONITORING | Sector: Consumer Discretionary / China E-commerce

This is a same-day re-examination of the PDD initiation. After closer scrutiny of the absent SEC filings (PDD files 20-Fs annually as a foreign private issuer, so absence of recent 10-Q-style filings is structurally normal, not a red flag) and the absent news flow, conviction nudges up modestly to ~6.5–7/10, status remains MONITORING.

Why the upgrade: The valuation dislocation is large enough that even applying a deeper governance discount, the asymmetry favors the long. Forward P/E 7.25x with 21% operating margins is the kind of multiple that historically marks deep-value entry points (when the bear case doesn't materialize fully). I'm not yet at high conviction because:

• 1. China ADR/VIE structural risk is real and binary;
• 2. The Temu de minimis loophole is a direct policy risk under both parties;
• 3. Insider ownership data and management track record require deeper validation.

BOTTOM LINE: Adjusted to 7/10 monitoring. Catalyst to upgrade further: clearer Temu segment disclosure, or a de minimis policy resolution that allows the bull case to be priced.

📋 TARGET LIST STATUS

Conviction changes: PDD upgraded to 7/10 after rolling review. SOFI and PDD added to list today. Names dropped: A material reshuffle today — KTOS, MEDP, CAVA, CELH, FICO, DEEP, DUOL, CFLT (all 5/10), and CEG, COST, AXON, DDOG, TTD, BWXT, CSGP, PCTY, SPSC, DOCS, NET, EXPO (all 6/10) were displaced. The list-management discipline: SOFI and PDD's combination of valuation asymmetry + identifiable thesis crystallizers (credit-cycle test for SOFI; Temu disclosure / China policy resolution for PDD) edges out names where the conviction was sustained-mediocre rather than convex.

💼 YOUR PORTFOLIO

• AAPL | 200 sh @ $50.46 | HOLD | 8/10 — Foundational long-horizon holding; +455% unrealized. $250M Siri AI settlement (Wired) is noise, not thesis-relevant. Services + installed base remain durable.
• ALTO | 3,000 sh @ $1.04 | TRIM | 4/10 — +422% on small-cap ethanol; speculative rerating, harvest some gains.
• BABA | 40 sh @ $127.86 | HOLD | 7/10 — Chinese e-commerce + cloud at deep discount; pairs thesis-wise with PDD initiation.
• FSLR | 10 sh @ $186.18 | HOLD | 7/10 — Best-in-class US solar manufacturer with structural IRA cost moat.
• GOOGL | 32 sh @ $320.20 | STRONG HOLD | 9/10 — Hyperscale profitability + AI optionality + Cloud growth; remains highest-conviction equity holding.
• HIMS | 200 sh @ $45.12 | TRIM | 5/10 — Down 39%; thesis under pressure on regulatory + competitive fronts. Reduce exposure.
• ISRG | 5 sh @ $578.24 | HOLD | 8/10 — Down 21% but franchise dominance intact; tariff/macro de-rate, not fundamental break.
• MKL | 13 sh @ $909.50 | HOLD | 7/10 — Mini-Berkshire compounder up +95.6%; let it run.
• PLTR | 12 sh @ $176.97 | HOLD | 6/10 — BofA's "clear message" headline (TheStreet) worth tracking; thesis intact but valuation full.
• SEG | 210 sh @ $22.91 | HOLD | 5/10 — Spinoff value play; needs operational milestones.
• SOUN | 270 sh @ $11.13 | HOLD | 6/10 — Voice AI pure-play; small position, let thesis develop.
• TSLA | 83 sh @ $419.09 | TRIM | 5/10 — Auto economics deteriorating; AI/robotaxi optionality real but unproven. Position too large for conviction level.
• U | 100 sh @ $25.98 | HOLD | 6/10 — Real-time 3D platform duopoly with Epic; turnaround in progress.
• UNH | 15 sh @ $314.29 | HOLD | 7/10 — +17% gain; integrated managed care scale unmatched.

⚠️ WATCH LIST

• MDB (6/10): +30.9% on the month with Rosen Law fiduciary investigation headlines. Cross-check 10-Q for governance disclosures; downgrade trigger = material insider-related findings or guidance cut.
• AAON (6/10): +49.6% on the month with no explanatory news flow. Action trigger = identify the catalyst (data center HVAC tailwind?) before chasing or trimming list slot.
• WDAY (6/10): Up 16.8% on the month; the GRR-decay article (Section: "High GRR Is Great. But It Can Also Mask Decay") is a thoughtful bear case worth pressure-testing. Upgrade trigger = next earnings showing net new logo growth re-accelerating; downgrade trigger = NRR deterioration.
• PDD (7/10): On clear path to 8/10 if (a) U.S. de minimis policy is clarified and (b) Temu segment disclosure improves. Upgrade trigger = either of the above.
• HIMS (5/10, portfolio): Continuing to deteriorate. Sell trigger = next quarter's subscriber growth deceleration combined with margin compression below 5%.