CVS has itself covered coming and going: It’s not just a retail pharmacy where generics cost twice what they sell for at independent drug stores—it’s also a health insurer, a general retailer and, most lucrative of all, a pharmacy benefits manager. Tie all those together, and you have a healthcare conglomerate whose shares are up more than 50% so far this year.
Good news, right? Well, kinda. Under CEO David Joyner, a 30-year company veteran who took over in October, the company has moved to cut unprofitable business lines, including shutting underperforming stores and getting out of the Obamacare marketplace.
But as Vince Stanzione, an investor who’s taken a deep look at CVS notes, this year’s surge may just be a reversion to the mean. “CVS Health has been a dog of a stock, making no headway over the last decade,” said Stanzione. Over the last 10 years, CVS Health delivered a cumulative total return of -9.06% (-0.95% annualized), significantly underperforming the SPDR S&P 500 ETF, which returned ~223.5% to 247.8% (12.47% to 13.3% annualized).
One big drag on CVS has been its 2018 acquisition of insurer Aetna, for $78 billion including debt. The plan was to build out a network of primary care centers, including Oak Street Health, for seniors on Medicare, and MinuteClinic, in-store healthcare centers at CVS retail locations. But CVS’s market cap today is just over $86 billion, suggesting it overpaid significantly for Aetna.
That’s where Joyner’s restructuring plan comes in. The stock has shot up under his leadership, and while it’s early days, investors clearly see him as a rider to bet on, even if the horse is a little wobbly. Among his recent successes: a deal with Novo Nordisk to make Wegovy the preferred prescription weight-loss drug for its customers. The deal knocks the monthly cost of Wegovy down to $499 for Aetna clients shopping at CVS, a huge drop from the average uninsured price of about $1,350 a month. Some of the stock’s momentum may be coming from expectations of similar deals to come. Particularly with diabetes care.
But the other big cash spinner, CVS’s pharmacy benefit manager business, is not doing so well. Its share of U.S. prescriptions filled dropped to 27% last year from 34% in 2023, largely due to increased competition.
Ultimately, CVS’s success may come from two forces at work right now. The first is the crumbling consumer confidence under Trump. Consumers are pulling back from other spending, and conserving their cash for core expenses, like healthcare, so while the rest of the market is down, consumers are still paying to stay alive. The other may simply be momentum, rather than strong fundamentals in its business model, said Scott Y. Stuart, CEO of the Turnaround Management Association. “The story of optimism in a corporate turnaround is rooted in taking decisive, thoughtful action rather than reactive measures—and that’s exactly what CVS appears to be doing,” Stuart said by email.
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The Usual Suspects
- Google’s AI hit: The bad news, unusually, came from Apple. Eddy Cue, Apple’s senior VP of services, was testifying in a federal antitrust lawsuit against Google when he mentioned that AI is taking a huge bite out of usage of Apple’s Safari browser, and searches shrank for the first time ever in April. (Cue was testifying because Apple gets $20 billion a year from Google for making its search engine the default choice on Apple devices.) But the news, intended to make the case that Google’s search engine was not a monopoly, had an unintended effect: Shares in Google dropped 9% Wednesday, though they’d recovered a few points by Thursday morning. Cue said he believes AI search providers, including OpenAI, Perplexity, and Anthropic will soon replace standard search engines like Google. And Google’s revenue comes largely from the ads sold against those searches.
- Castles in the sand: Disneyland is expanding to the Middle East. The House of Mouse said it’s reached agreement with the Abu Dhabi government to open a new Disneyland on the Persian Gulf. An Abu Dhabi government firm will build the park, which could cost $5 billion and have a castle as well as rides tailored to the Gulf state. “You have to build it right. And quality means not just scale but quality and ambition. We are planning to be very ambitious with this,” Disney CEO Bob Iger told The New York Times. Disney will get paid to design the park, and receive royalties. That should help Disney offset falling revenues from cable TV and movies in the U.S. Sea World and the Louvre museum already have outposts in Abu Dhabi.
- The sun’s not Sheining on Google: The double whammy of 145% tariffs on Chinese goods and the end of the so-called “de minimus” exemption, which let packages worth up to $800 pass duty-free into the U.S., appears to have killed the fast fashion business in the U.S. That instantly dried up billions of dollars worth of advertising for sites like Google Shopping and Instagram. Research by marketing firm Tinuiti showed that on April 5, Temu accounted for 19 percent of all U.S. ads displayed on Google Shopping. That figure dropped to zero a week later. Shein went from around 20 percent in early April to zero by April 16, the New York Times reported.
- Oil’s down again: Oil fell below $56 a barrel this week, great for consumers, who have seen gasoline prices dip slightly, but bad news for the oil companies that want to drill more, and which count on a $60 price to make a profit. But it’s even worse news for countries like Saudi Arabia that depend on a price of $90 or more to finance their economies. That rush for cash has pushed the Saudis and some OPEC+ states to pump more oil, betting that even if they drive the price down a bit more, they’ll make up on volume what they lose on price. But that may not work this time. The current world oil glut is largely due to a lack of demand as countries from the U.S. to China are struggling with a tariff-induced economic slowdown.
- Uber up: The ubiquitous ride-hailing app reported a Q1 profit, its first in a while, along with a rise in revenue and profit margins. Uber reported a profit of $1.78 billion, or 83 cents a share, from a loss of $654 million, or 32 cents a share, a year earlier, as the number of trips rose 15% to 3 billion in Q1. That was powered by some 8.5 million drivers, each earning an average of $2,188 in the first quarter. Revenue missed expectations by less than 1%, which may be what drove the stock down slightly. But under CEO Dara Khosrowshahi, Uber is turning around, and expects more growth to come from robotaxis.
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Car Talk
- Tariffs have forced Ford to raise sticker prices on its Maverick, Bronco Sport, and Mach-E models by between $600 and $2,000 per vehicle, according to a memo seen by the Wall Street Journal. On Monday, Ford withdrew its 2025 financial outlook, saying it couldn’t be sure how tariffs would hit its business. The change will apply only to cars built after May 2. Ford said that all in, tariffs will cost it $1.5 billion this year. (GM said last week tariffs could cost it between $4 and $5 billion this year).
- Rivian says tariffs are making it slam the brakes on profit guidance. The California-based EV maker says deliveries could drop to 40,000–46,000 from 46,000–51,000 this year. Rivian narrowed its Q1 loss to $545 million from $1.45 billion last year.
- GM said it will cut 700 jobs by eliminating an entire shift at a Canadian plant that makes Chevy Silverado pickups for North America.
- Toyota’s made good: Its new bZ3X electric car starts at $15,000—but only in China. A similar model, the bZ4X sells in the U.S. at $37,070. Back home, EV sales are shrinking, down 5% in April even as car sales overall were up 10% from March.
Trumplandia
- Movie mania: Trump’s tariffs hit a new target: Movies. Trump said he wants to slap 100% tariffs on foreign-made films to help Hollywood, which has been losing business as a film locale as other states and foreign countries offer lower costs and tax breaks. Trump called foreign films a “National Security threat.” But Hollywood was left puzzled. What exactly did he want to tax, and why now? After all, many Hollywood studios shoot films abroad for the locales or just to save money, and post-production work can be done anywhere in the digital age. It soon emerged that 86-year-old actor Jon Voight, a MAGA diehard, had just returned from Hollywood on a mission from Trump. Voight says overseas production is leaving Hollywood’s legions of actors, makeup artists, and camera crews without jobs, and threatening its role as the heart of American culture. “We can’t let it go down the drain like Detroit,” Voight told Variety. California’s Democratic governor, Gavin Newsom, says he’ll work with Trump to get federal tax breaks to bring films back to Hollywood. But will it bring back U.S. production? For independent movies, one veteran producer told The Hollywood Reporter, a 100% tariff “means most of those films just won’t get made.” Maybe they can film the next Lord of the Rings remake in the Poconos?
- Crypto logic: All those crypto deals are raising new calls from Congress for scrutiny of the Trump family crypto empire, and threaten to disrupt what was emerging as a very crypto-friendly regulatory environment. At a closed-door meeting last week, Senate Democratic leader Chuck Schumer, a long-time friend of big finance, say that they should take back their support for the GENIUS Act, a deregulation bill backed by the crypto industry. The New York Times reported, with a deserved pat on its own back, that its exposé of the Trump family crypto business has put a chill on crypto rule rollbacks. A top concern among lawmakers: A deal by Trump-linked World Liberty Financial to sell $2 billion of a stable coin to a fund backed by the government of Abu Dhabi. Trump’s crypto scheme is a blueprint for fraud,” Senator Jeff Merkley, an Oregon Democrat, wrote on X. “By pushing digital assets tied to his name, he’s selling access to the highest bidder.”
- No “Made in America for me,” say Euro shoppers. Trump tariffs are pushing European consumers away from U.S. goods, and those shoppers may be lost to U.S. products for good, even if tariffs eventually drop, according to a survey by the European Central Bank. “Consumers’ reactions may not just be a temporary response to tariff increases, but instead signal a possible long-term structural shift in consumer preferences away from US products and brands,” a group of five economists wrote on the bank’s blog.
- Status quo at the Fed: Federal Reserve chair Jerome Powell and his fellow governors did not make a cut at Wednesday’s meeting of the federal Open Markets Committee. Instead, Powell warned against Trump’s economic policy: “If the large increases in tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment,” Powell said at a news conference. And the Fed is in no hurry to change its mind, he said. “We don’t feel like we need to be in a hurry. We feel like it’s appropriate to be patient,” Powell said Wednesday. Speaking earlier in the week, Trump again said he wants a rate cut, which he thinks could create a short-term boost to offset the effects of his tariffs.
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Elon’s World
- Good fences make good neighbors: Musk has lost his bid to keep a 16-foot-high chain link fence around his home in West Lake Hills, Texas, and got slammed again by town officials who said his work in Washington didn’t mean they had to block the public from a hearing on his fence. The fence was put up without a permit, and neighbors complained to the local authorities. The 6,900-square-foot, six-bedroom home is one of three homes Musk bought recently for his children and their mothers.
- SpaceX has a brand new town: Boca Chica, the Texas area where SpaceX has its launch pad on the U.S.-Mexico border, will become the city of Starbase, after 218 of the 238 eligible local residents voted to incorporate the town. Only 6 people voted against it.
- NY says nix on X: Musk’s effort to build a payment network for X, like the one he once ran at PayPal, has hit a wall in New York, and that could keep him offline nationwide. Legislators in the Empire State say they don’t trust Musk and his companies with access to reams of consumer data, and are among eight states still refusing to allow an X-pay system to run in their states. That’s bad news for Musk, who is hoping that a payment system will allow him to turn the money-losing social media platform into a lucrative shopping channel.
The Short Stack
- Let’s go, Barbie: Barbie maker Mattel said it will raise prices on its marquee doll brand and other toys to offset the cost of the 145% tariff on imports from China, where most of America’s toys are made. The tariffs are meant to bring manufacturing back to America, but Mattel CEO Ynon Kreiz sneezed at the idea; “We don’t see that happening,” he said on CNBC Tuesday, less than a day after the company withdrew annual financial targets. Shares have fallen as much as 26% since Trump announced the tariffs on April 2, but have since recovered a bit.
- Who needs profits? OpenAI co-founder Sam Altman said Monday he won’t convert the AI pioneer into a for-profit corporation. Instead, the nonprofit part of OpenAI will control a public-benefit corporation that’s intended to be the money-spinning arm of the whole project. That may mollify Elon Musk, who helped fund OpenAI and claims OpenAI’s effort to chase profits is illegal. (It also competes with Musk’s own, less successful, xAI venture.) The change will still allow OpenAI to access a promised $30 billion investment from Softbank. How will this saga end? Ask Grok.
- Is DoorDash going global? No, you can’t order fish and chips from a pub in London, but delivery app DoorDash is expanding overseas. This week, it agreed to pay $3.9 billion for Deliveroo, a UK-based food delivery app that’s active in Europe and the Middle East. (It also paid $1.2 billion this week for SevenRooms, a U.S.-based hotel and restaurant reservation management system.)
The Oracle Departs
America’s favorite investor, Warren Buffett, followed through this week on his decade-old promise to step down as the head of the world’s most successful major investment firm, Berkshire Hathaway. At 94, Buffett has spent 60 years steering Berkshire Hathaway, his investment vehicle and holding company that has owned shares in everything from Coca-Cola and Apple to the Buffalo Evening News, the BNSF railroad, and Geico. Ever since Donald Trump appeared likely to win the presidency in 2024, Buffett moved much of Berkshire’s holdings to cash, and is now sitting on nearly $350 billion.
Berkshire Hathaway’s shares have risen 5,502,284% between the time Buffett took over a failing textile company in 1965 and the end of 2024, according to the company’s most recent annual report. The S&P 500 rose 39,054% during that period, with dividends. Buffett was a value investor, following the principles of Benjamin Graham by basing his investments on the long-term prospects of the companies, and often taking a role in managing them.
“The billionaire always comes across as a gentleman, and in an age of distrust he became someone people could trust,” the New York Times wrote of Buffett. At Berkshire Hathaway’s annual meeting last weekend in Omaha, Buffett announced his departure with some strong words for Trump: “Trade should not be a weapon,” he told a crowd of some 40,000 people. “I do think that the more prosperous the rest of the world becomes, it won’t be at our expense, the more prosperous we’ll become, and the safer we’ll feel, and your children will feel someday.”
Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story.
