Buffett’s Big Pizza Bet, Capitol Hill’s Stock Secrets, and the AI Chip Grab

Good Morning,

Welcome to another edition of Market Intel, where we break down financial data into easy-to-digest insights. In today’s edition, Warren Buffett takes a surprising bite out of Domino’s stock, a few senators seem to have some “well-timed” trades, and the AI boom has politicians piling into semiconductor stocks. We’ll dive into why Buffett doesn’t care about negative book equity, which lawmakers are making big bets, and whether their trades hint at something bigger.

And with that, welcome to Market Intel! 🚀

BUFFET’S LATEST INVESTMENT

Well, well, well—looks like the Oracle of Omaha just rang up Domino’s (DPZ) for a delivery of stock shares, and Wall Street took notice. Buffett’s Berkshire Hathaway has a long history of betting on cash-printing machines, but why exactly is Buffett interested in a company with negative book equity? Some investors panic when they see negative book equity on a balance sheet, but if you’re in that camp, you might be missing the bigger picture. Here’s why DPZ’s balance sheet doesn’t scare off Buffett:

• Share Buybacks Lower Equity, but Raise Value DPZ aggressively repurchases its shares, which reduces its book equity. This is a capital allocation strategy Buffett has praised for years—fewer outstanding shares mean higher earnings per share (EPS) and a lower cost of capital.

• Consistent Dividend Payouts: If there’s one thing Buffett loves, it’s getting paid while he waits. DPZ consistently dishes out dividends, and its ability to generate strong cash flows ensures those payments keep coming.

• Cash Flow is King. Forget book value—Buffett follows the cash. Over the last 20 quarters, DPZ has reliably churned out ~$200 million in EBITDA per quarter and ~$150 million in operating cash flow.

This steady cash generation allows DPZ to reinvest in growth while rewarding shareholders. Buffett’s strategy revolves around durable competitive advantages (a.k.a. economic moats) and long-term value creation. Here’s why DPZ fits his playbook:

• Franchise Model = Asset-Light Growth DPZ doesn’t have to spend billions opening new stores. Instead, it collects fees from franchisees while maintaining brand dominance—classic Buffett.

• Pricing Power & Brand Loyalty People aren’t abandoning Domino’s just because inflation spikes. With strong digital ordering, an efficient delivery system, and customer stickiness, DPZ can protect its margins.

• Capital Returns to Shareholders Between share buybacks and dividends, DPZ is laser-focused on rewarding investors—a strategy Buffett has championed for decades.

Buffett doesn’t chase hype; he buys long-term cash flow machines at reasonable valuations. If you’re an investor who cares more about cash flow than book equity, DPZ might be worth a look. But if you were hoping for a deep-value play, you might need to order elsewhere—this stock isn’t exactly trading at a discount.

DPZ - REVENUE & REVENUE SEGMENTS

Looking at the revenue trend, DPZ has demonstrated consistent performance over the past few years, with periodic spikes, likely due to seasonal demand or promotional strategies. Despite some fluctuations, revenue remains strong, reinforcing DPZ’s resilient business model and steady cash flow, which likely contributed to Warren Buffett’s recent interest in the stock.

Domino’s Pizza (DPZ) generates revenue from three key segments: Supply Chain, Domestic Stores, and International Franchise. Based on the latest data, the Supply Chain segment contributes the largest share, indicating the importance of DPZ's vertically integrated logistics and ingredient distribution. Domestic Stores form the second-largest portion, highlighting strong sales from company-owned and franchised U.S. locations, while International Franchise operations make up a smaller portion, reflecting growth potential in overseas markets.

CONGRESS TRADES - MARKWAYNE MULLIN’S PORTFOLIO SHUFFLE

Senator Markwayne Mullin has been busy on the stock market in 2025, logging 73 trades year-to-date with a clear preference for buying rather than selling. His recent purchases, disclosed on February 27, 2025, include big-name tech stocks like Amazon (AMZN) and Microsoft (MSFT), financial giants like Goldman Sachs (GS) and LPL Financial (LPLA), and defense contractors like L3Harris Technologies (LHX). His filings suggest a broad mix of tech, finance, and industrials, raising eyebrows about whether these moves align with policy decisions or upcoming legislation. Given the delay between trade execution and disclosure, it’s always worth watching whether Mullin’s portfolio outperforms the market—or if it’s just another case of “well-timed” investing from Capitol Hill.

CONGRESS TRADES - ASHLEY MOODY’S AMAT PURCHASES

Senator Ashley Moody has gone all-in on Applied Materials (AMAT), making multiple six-figure purchases of the stock between February 20-21, 2025. While there’s no clear public connection between Moody and AMAT, her timing is intriguing given the ongoing semiconductor and AI boom. AMAT is a key supplier of semiconductor manufacturing equipment, meaning it directly benefits from the growing demand for AI chips, high-performance computing, and increased government incentives for domestic chip production. With the CHIPS Act funneling billions into U.S. semiconductor infrastructure, AMAT stands to profit from this tech arms race. Whether Moody is simply betting on a red-hot industry or has deeper insights into legislative tailwinds remains an open question—but her high-conviction buying spree certainly raises eyebrows.

CLOSING THOUGHTS

That’s all we have for you in today’s edition of Market Intel. If you found this valuable, please consider forwarding it to a friend.

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Have a fantastic week!

-Market Intel

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