IPO

As many stock market observers know, Warren Buffett‘s Berkshire Hathaway has been a net seller of stocks. The most notable sale has been Apple. That position made up over 40% of the portfolio at one time, but the share has since fallen to around 22%.

What investors need to understand is that the selling does not mean Buffett’s team isn’t buying stocks at all. One notable recent purchase has been Domino’s Pizza (DPZ -0.03%). The stock’s past gains and its value proposition have likely inspired this investment, and such optimism warrants a closer look at the business and the stock to see if it is a suitable choice for average investors.

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Berkshire Hathaway and Domino’s

Domino’s has returned more than 6,500% in stock gains and dividend payments since it went public in 2004. Most investors, including Berkshire Hathaway, have missed out on most of those gains, but Berkshire’s bets could indicate that significant upside remains.

DPZ Total Return Level data by YCharts

Buffett’s company began buying Domino’s shares in the third quarter of 2024 and has increased its position size in every quarter since that time. Today, it holds just over 2.6 million shares, or about 7.75% of the outstanding shares.

Another possible factor in Berkshire’s investment in Domino’s is that it is the world’s largest pizza chain, boasting 21,750 locations globally as of the end of fiscal Q3. Despite that success, investors may question why an investor would want to get into a business like pizza, which at least in theory, has low barriers to entry.

However, no other pizza business has grown to the same size, and one can find the kinds of competitive advantages that attract investors like Buffett when looking at Domino’s more closely.

One key part of Domino’s is its franchise model. This enables the chain to open a large number of locations with a relatively small amount of capital, leveraging high brand recognition to drive business.

Moreover, it offers a digital-first approach, which makes ordering easier and capitalizes on route planning for faster deliveries. Additionally, an efficient supply chain helps standardize food quality and costs, increasing consistency across locations.

Furthermore, despite a global footprint, Domino’s adapts its menu to suit local tastes, and new offerings such as parmesan-stuffed crust or added customization options keep its customers coming back to Domino’s.

The financial case for Domino’s

Buffett’s team was likely also drawn by its financial metrics. Indeed, with its global footprint, the maturity of the business appears to make it more of a value stock.

In the first nine months of fiscal 2025 (ended Sept. 8), revenue of $3.4 billion rose by 4%. Nonetheless, during that time, its free cash flow of $496 million surged 32% higher over the same timeframe. Gains on assets and lower capital expenditures bolstered that cash position.

Additionally, that free cash flow easily covered the company’s $119 million in dividend costs in the first nine months of the fiscal year. At $6.96 per share, its 1.6% dividend yield is well above the 1.2% average for the S&P 500. Buffett’s team also probably liked its 13-year history of payout hikes, a trend that makes further annual payout hikes likely to continue.

Investors should also take note of the pizza chain’s valuation. Its P/E ratio of 25 is below the company’s five-year average earnings multiple of 30. Also, since its P/E ratio has not fallen significantly below 25 since the early 2010s, one can assume that Domino’s stock sells at a reasonable price.

Should you follow Berkshire Hathaway into Domino’s stock?

Given the state of the company, investors can likely make a prudent move by following Berkshire Hathaway into Domino’s stock.

Indeed, a 6,500% total return over the stock’s history may cause some prospective buyers to shy away, particularly because of the competitive nature of the pizza industry.

However, Domino’s brand recognition and its focus on franchising, operational efficiency, and a robust supply chain give the company a competitive advantage. Moreover, investors can buy the stock at a relatively reasonable price and collect an above-average dividend yield.

In the end, even if Domino’s does not generate excitement, the stock is likely to cook up rising dividends and market-beating returns over time.

After languishing in a deep freeze over the past few years, the market for initial public offerings (IPOs) is finally gaining steam. In recent months, several companies have gone public, seizing the opportunity to meet the growing investor demand for newly listed shares.

I’ve closely watched the pre-IPO market, waiting for the opportunity to buy shares of some compelling companies. I recently invested in two standout companies: ServiceTitan (TTAN -2.87%) and Klarna Group (KLAR -5.71%). Here’s why I bought these hot IPO stocks.

Image source: Getty Images.

A huge market opportunity

ServiceTitan completed its IPO late last year. The company provides cloud-based software to contractors working in the trades industry, including heating and air-conditioning, plumbing, and electrical service providers.

One of the things that drew me to ServiceTitan is the huge opportunity for its software. The trades industry is enormous, with businesses in the U.S. generate an estimated $1.5 trillion in annual revenue. ServiceTitan currently offers software that could serve companies generating about $650 billion in annual revenue.

However, its current collection of customers only produces about $75 billion in revenue. This means the company currently addresses just a small slice of the market, providing ample room for expansion as it brings more businesses onto its platform and extends its services into added trades.

The company currently generates less than $900 million in annual revenue. With a fully deployed platform, it estimates that revenue from existing customers could hit $1.5 billion. Looking ahead, it sees a $13 billion opportunity with its current platform, and more than $30 billion in annual revenue potential as it expands into new trades and markets.

The company is actively capitalizing on this opportunity. Revenue grew 25% in its fiscal second quarter of 2026 to $242 million. Retaining existing customers and expanding those relationships helped drive growth, as evidenced by its net dollar revenue retention of over 110%. It hasn’t yet achieved profitability under generally accepted accounting principles (GAAP), but its free cash flow rose over 83% in the period to $34.3 million.

I believe ServiceTitan can continue to grow rapidly for years to come, given its substantial untapped market and expanding customer base. This significant opportunity presents a long path to increasing revenue, which is why I believe it could deliver robust returns in the coming years.

An AI-powered fintech leader

Klarna Group just completed its long-awaited IPO last month. The Swedish financial technology company enables consumers to make buy now, pay later (BNPL) purchases. It also actively leverages artificial intelligence (AI) to boost productivity and enhance its services.

The company is capitalizing on several trends to build a unique commerce network. Consumers are increasingly using digital payments to process transactions.

At the same time, they’re shifting away from credit cards and have low trust in banks. That’s enabling Klarna to bridge the gap between consumers and merchants with a digital solution for payments and banking built on its proprietary AI-powered technology.

Klarna makes money from payments and advertising, which are huge and growing market opportunities. The current addressable market for its payments offering is $520 billion. It has a tiny sliver of that market (0.6%).

Management estimates that there’s over $100 billion of growth ahead in its existing markets and a more than $400 billion expansion opportunity in potential new markets. Meanwhile, the digital advertising market is $570 billion. The company has an even smaller slice of this (0.03%), which it sees growing to $735 billion in the coming years.

The business is growing rapidly and now serves 790,000 merchants (a 34% year-over-year increase in the second quarter) and supports 111 million active customers (a 31% increase). This expanding user base helped drive a 20% boost in revenue to $823 million.

With two huge addressable markets, Klarna appears to have significant long-term potential. The small share of both the payment and digital advertising markets that it currently holds suggests there’s plenty of room to deliver rapid revenue growth as it continues to expand into new sectors. This growth potential could enable the company to generate strong returns in the coming years.

Two potential game changers

I believe ServiceTitan and Klarna have tremendous opportunities, and both companies are using their proprietary technology to capitalize on it. I expect that they could deliver game-changing returns, which makes me excited to finally add these recent IPOs to my portfolio.

Philippe Laffont was known for successfully investing in technology stocks before he founded Coatue Management, a technology-focused hedge fund, in 1999. Since then, he has grown the fund’s size to more $35 billion in assets under management.

Laffont has his finger on the pulse of the artificial intelligence (AI) revolution. His contrarian investment in Super Micro Computer, a company that manufactures high-end servers for data centers, turned some heads earlier this year.

Image source: Getty Images.

Coatue bought into Supermicro at a controversial moment, but it seems Laffont had a change of heart. At the end of June, there were zero shares of the custom server builder in its portfolio.

While Coatue was disposing of Supermicro with its left hand, it was buying up shares of Intuitive Surgical (ISRG -1.34%) with its right. The hedge fund snapped up 39,512 shares of the robot-assisted surgery pioneer in the second quarter.

Intuitive Surgical stock has tumbled this year, but Laffont has reasons to expect a rebound. Here’s a look at what they are to see whether this stock could be a good fit for your portfolio.

An unbeatable advantage

When the market closed on Sept. 12, 2025, shares of Intuitive Surgical were up 19,390% since its initial public offering (IPO) 25 years ago. A few years before its IPO, the Food and Drug Administration made the company’s da Vinci robotic surgical system the first one with clearance to assist with minimally invasive abdominal surgeries.

Medtronic, Johnson & Johnson, and Stryker market surgical robots, but they entered the market after Intuitive Surgical. The pioneer is still the largest member of its industry. At the end of 2024, there were 11,040 Intuitive Surgical systems installed in hospitals worldwide.

Intuitive’s massive installed base of machines isn’t sitting idle either. Surgical teams trained to use da Vinci systems performed 2.7 million procedures last year. Plus, Ion, its more recently launched lung tumor biopsy machine, performed 95,000 procedures last year.

To date, competing systems generally address procedures that don’t already employ da Vinci systems, such as knee replacements and spinal surgeries. Hospital systems can spend more than $1 million installing a da Vinci system and then an even larger sum supporting and training the professionals who will use it. That’s a huge advantage over newer surgical systems that competitors probably won’t be able to overcome.

Placing systems and training surgeons to use them generates revenue for Intuitive, but these aren’t the main sources. Around 84% of total revenue last year came from recurring sources such as instruments and accessories that must be replaced before each procedure.

Why Intuitive Surgical stock is down

Intuitive Surgical has been a terrific stock for its long-term shareholders, but it’s been a stinker this year. It’s down about 26% from a peak it set in February.

Fear that tariffs will pressure profit margins has been a weight on Intuitive Surgical’s stock price. When reporting second-quarter results in July, management reduced its adjusted gross profit margin expectation to a range between 66% and 67%. That would be a minor decline from the 69.1% gross margin reported last year, but this temporary setback is hardly a reason to avoid the stock.

Earlier this year, Medtronic submitted an application to the Food and Drug Administration to perform urology procedures with its Hugo RAS system. Roughly one-fifth of all procedures performed with da Vinci machines last year were in the urology category.

Investors concerned that the Hugo system will pull market share from da Vinci should know that its launch overseas hasn’t been very successful. It’s been authorized for sale in the European Union since 2021, but Medtronic still doesn’t tell investors how much revenue Hugo’s generating in its quarterly reports.

Time to buy?

In the U.S., hospitals considering a new surgical system for urologic surgeries could have a new option from Medtronic by the end of the year. Luckily for Intuitive Surgical, the da Vinci 5 system, which launched in March 2024, already makes Medtronic’s Hugo system seem outdated.

Despite tariff pressure, investors can expect significant growth from Intuitive Surgical. Management is forecasting overall procedure growth of 15.5% to 17.0% this year. High switching costs for hospitals could lead to procedure growth that continues rising for another decade or two.

With a stock price that’s been trading at 55.3 times forward earnings expectations, investors are already expecting profit growth at a double-digit percentage for years to come. Intuitive Surgical stock could fall hard if Medtronic or another competitor begins pressuring sales growth in the years ahead.

Given Hugo’s performance in the E.U., threats from well-heeled competitors appear toothless. Adding some shares to a diverse portfolio now could be the right move for investors with a high risk tolerance.

By&nbspAP with Doloresz Katanich

Published on
11/09/2025 – 8:13 GMT+2

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Klarna stock opened at $52 (€45) a share on Wednesday, a 30% premium on the company’s $40 pricing. It took roughly three-and-a-half hours for the specialists on the floor of the NYSE to manually price the first batch of trades of the company. The shares rose as high as $57 before losing some momentum and ending at $45.82, up 14.6%.

More than 34 million shares worth approximately $1.37 billion (€1.17bn) were sold to investors, making it the largest IPO this year, according to Renaissance Capital. That’s notable because 2025 has been one of the busier years for companies going public.

Founded in 2005 as a payments company, Klarna entered the US buy-now-pay-later market in 2015 in partnership with department store operator Macy’s. Since then, Klarna has expanded to hundreds of thousands of merchants and embedded itself in internet browsers and digital wallets as an alternative to credit cards. The company recently announced a partnership with Walmart.

The company is trading under the symbol “KLAR”. While Klarna was founded in Sweden and is a popular payment service in Europe, company executives said they made the decision to go public in the US as a signal that Klarna’s future growth opportunities lay with the American shopper.

“It’s the largest consumer market in the world, and it’s the biggest credit card market in the world. It’s a tremendous opportunity, from our perspective,” said CEO and co-founder Sebastian Siemiatkowski in an interview with The Associated Press ahead of the IPO.

Over the years and in multiple interviews, Siemiatkowski has made it clear that Klarna wants to steal away customers from the big credit card companies and sees credit cards as a high-interest, exploitative product that consumers rarely use correctly.

Klarna’s most popular product is what’s known as a “pay-in-4” plan, where a customer can split a purchase into four payments spread over six weeks. The company also offers a longer-term payment plan where it charges interest. The business model has caught on globally, particularly among consumers who are reluctant to use credit cards. The company said 111 million consumers worldwide have used Klarna.

The buy-now-pay-later market is booming

Klarna and other buy-now-pay-later companies have attracted increased public interest in recent years as the business model has caught on. State and federal regulators, as well as consumer groups, have expressed some degree of worry that consumers may overextend themselves financially on buy-now-pay-later loans just as much as they do with credit cards.

Siemiatkowski says the company is actively monitoring how consumers use their products, and the average balance of a Klarna user is less than $100 (€85.50). Because the company issues loans that are six weeks or less, Klarna argues it can more easily adjust its underwriting standards depending on economic conditions.

With Klarna going public, its co-founders are now billionaires. At Klarna’s IPO price of $40, Siemiatkowski’s 7% stake in the company is worth around $1bn (€850 million), while Victor Jacobsson, who left the company in 2012, owns an 8.4% stake in the company now worth $1.3bn (€1.11bn). Siemiatkowski said he did not sell shares as part of the IPO.

But with Klarna’s 20-year-long incubation period before going public, and several fundraising rounds, major parts of Silicon Valley are walking away with a handsome return for their patience. Sequoia Capital, the storied venture capital firm that was an early backer in the company, has accumulated a 21% ownership in Klarna worth roughly $3.15bn (€2.69bn). Silver Lake, another major VC firm, owns roughly 4.5% of the company.

Klarna reported second-quarter revenue of $823 million (€703.64mn) in August before going public and had an adjusted profit of $29m (€24.8mn). The delinquency rate on Klarna’s “pay-in-4” loans is 0.89% and on its longer-term loans for bigger purchases, the delinquency rate is 2.23%. Those figures are below the average 30-day delinquency rates on a credit card.

Klarna will now be the second-largest buy-now-pay-later company by market capitalisation behind Affirm. Shares of Affirm have surged more than 40% so far this year, putting the value of the company around $28bn (€23.94bn), helped by a belief among investors that buy-now-pay-later companies may take away market share from traditional banks and credit cards. Affirm fell slightly on Wednesday.

Klarna’s primary underwriters for the IPO were JPMorgan Chase and Goldman Sachs.

The fintech company made its debut on the New York Stock Exchange on Wednesday.

Klarna, the Swedish buy-now-pay-later company, has made its highly anticipated public debut on the New York Stock Exchange (NYSE), the latest in a run of high-profile initial public offerings this year.

Klarna sold 34.3 million shares to investors at $40 a share late on Tuesday and was listed on the exchange on Wednesday. That is above the forecasted range of $35 to $37 a share and values the company at more than $15bn. The stock is expected to start trading once the NYSE is able to initiate the first batch of trades.

The amount of money raised in Klarna’s initial public offering, approximately $1.37bn, is the largest IPO this year, according to Renaissance Capital. That’s notable because 2025 has been one of the busier years for companies going public.

Other IPOs this year include the design software company Figma and Circle Internet Group, which issues the USDC stablecoin. Investors are also looking forward to the expected market debuts of the ticket exchange StubHub and the cryptocurrency exchange Gemini, which is majority-owned by twins Cameron and Tyler Winklevoss.

Founded in 2005 as a payments company, Klarna entered the United States buy-now-pay-later market in 2015 in partnership with department store operator Macy’s. Since then, Klarna has expanded to hundreds of thousands of merchants and embedded itself in internet browsers and digital wallets as an alternative to credit cards. The company recently announced a partnership with Walmart.

Klarna will trade under the symbol “KLAR.” While the company was founded in Sweden and is a popular payment service in Europe, company executives said they made the decision to go public in the US as a signal that Klarna’s future growth opportunities lay with the US shopper.

“It’s the largest consumer market in the world, and it’s the biggest credit card market in the world. It’s a tremendous opportunity, from our perspective,” said CEO and co-founder Sebastian Siemiatkowski in an interview with The Associated Press ahead of the IPO.

Over the years and in multiple interviews, Siemiatkowski has made it clear that Klarna wants to steal away customers from the big credit card companies and sees credit cards as a high-interest, exploitative product that consumers rarely use correctly.

Split purchases

Klarna’s most popular product is what’s known as a “pay-in-4” plan, where a customer can split a purchase into four payments spread over six weeks. The company also offers a longer-term payment plan where it charges interest. The business model has caught on globally, particularly among consumers who are reluctant to use credit cards. The company said 111 million consumers worldwide have used Klarna.

Klarna and other buy-now-pay-later companies have attracted increased public interest in recent years as the business model has caught on. State and federal regulators, as well as consumer groups, have expressed some degree of worry that consumers may overextend themselves financially on buy-now-pay-later loans just as much as they do with credit cards.

Siemiatkowski says the company is actively monitoring how consumers use their products, and the average balance of Klarna users is less than $100. Because the company issues loans that are six weeks or less, Klarna argues it can more easily adjust its underwriting standard depending on economic conditions.

Klarna reported second-quarter revenue of $823m in August before going public and said that it had an adjusted profit of $29m. The delinquency rate on Klarna’s “pay-in-4” loans is 0.89 percent, and on its longer-term loans for bigger purchases, the delinquency rate is 2.23 percent. Those figures are below the average 30-day delinquency rates on a credit card.

Klarna will now be the second-largest buy-now-pay-later company by market capitalisation behind Affirm. Shares of Affirm have surged more than 40 percent so far this year, putting the value of the US-based company around $28bn, helped by a belief among investors that buy-now-pay-later companies may take away market share from traditional banks and credit cards. Affirm fell slightly on Wednesday.

Klarna’s primary underwriters for the IPO were JPMorgan Chase and Goldman Sachs.