Strong results meet steady change

The second-quarter earnings season remained one of the decisive drivers in the capital markets last week. Several companies impressed with impressive growth. However, the market continued to distinguish very clearly between operational development, valuation, and future expectations.

During the reporting week, several significant UMBRELLA positions published new figures, including Palantir Technologies, Bayer, Eli Lilly, MercadoLibre, Revolution Medicines and Rheinmetall.

Development of the UMBRELLA Strategy

Healthcare sector remains the stabilizing core

The healthcare sector remains the largest thematic focus within the UMBRELLA strategy.

Eli Lilly delivered another strong quarter. Revenue rose by 48%, primarily due to the continued high demand for Mounjaro and Zepbound. The quarterly figures strengthen the long-term investment thesis. However, high expectations and an ambitious valuation mean that even strong results can be accompanied by short-term profit-taking.

Also Bayer reported operational progress. Group revenue and operating result increased moderately, while management confirmed the full-year outlook. Crop Science recorded a significant improvement in results. At the same time, newer pharmaceutical products such as Nubeqa and Kerendia continued their growth. Legal risks, debt, and patent expirations remain key challenges. However, the improved chart pattern following the results supports the current position within the strategy.

At Revolution Medicines, clinical and regulatory developments are more important than current financial figures. The company remains in the pre-commercial phase and is investing significantly in research, production, and the preparation of a potential market launch. Daraxonrasib remains at the center. Strong Phase 3 results and progress toward a potential first approval support the long-term prospects. Revolution Medicines is currently the strongest position in the UMBRELLA strategy. However, further development will increasingly depend on regulatory decisions and successful commercialization.

Johnson & Johnson provided stability. The diversified engagement in innovative medicines and medical technology, as well as robust cash flow generation, make the company an important defensive component of the portfolio. The stock price moved sideways.

Palantir confirms the AI growth story

One of the most important developments of the week came from Palantir Technologies.

The company reported exceptionally strong growth in the second quarter and raised its full-year outlook. Revenues increased with both government and corporate customers. At the same time, free cash flow continued to improve.

The biggest risk remains the valuation. The current stock price already factors in very high expectations for future growth and profitability.

Engagement in the defense sector stronger

The defense sector continues to be supported by long-term geopolitical and structural trends. Higher European defense budgets, NATO commitments, and the modernization of military infrastructure create sustained demand for defense electronics, cybersecurity, naval systems, and air defense technology.

Thales with strong half-year figures

The half-year results from Thales showed strong operational development. Order intake increased significantly, and the order backlog reached a new record. Thales is broadly diversified compared to many traditional defense groups. The company’s technologies are used on military and civilian platforms. This reduces dependency on individual major programs. The position developed positively in its first week in the portfolio.

TKMS expands engagement in naval defense

TKMS offers targeted access to naval defense. This includes submarines, frigates, maritime electronics, and underwater systems. The company benefits from the expansion of European defense capabilities and increasing international demand for modern naval platforms. Germany approved the procurement of additional frigates, while TKMS was selected as the preferred provider for the Canadian patrol submarine project. Furthermore, the company reported a record order backlog and increasing operational profitability. The upcoming quarterly announcement will therefore be particularly important to assess order intake, margins, and the conversion of the strong project pipeline into earnings.

Rheinmetall achieves record growth – cash flow remains in focus

Also Rheinmetall delivered strong half-year results. Revenue rose by 39%, while the operating result increased by 74%. The order backlog reached more than 80 billion euros, illustrating the scale of demand resulting from the European defense expansion.

However, the report also contained important warning signals. Operating free cash flow remained significantly negative due to inventory buildup and high investment activity. Following the cancellation of the German F126 frigate program, management also adjusted the annual revenue forecast.

The figures therefore present a nuanced picture. Rheinmetall remains one of the most important beneficiaries of rising European defense spending. However, the market now expects the company to convert its record order backlog into revenue, margins, and sustainable cash flows.

MercadoLibre: Strong growth with continued high investments

MercadoLibre reported another strong quarter. Revenue and financial income rose by 50% and exceeded the $10 billion mark for the first time.

Growth was broad-based and included e-commerce, digital payments, advertising, and financial services. The number of active buyers rose, Mercado Pago continued its expansion, and the advertising business benefited from the increasing use of artificial intelligence.

At the same time, the company continues to prioritize long-term investments over short-term margin maximization. Spending on logistics, free shipping, consumer credit, and technology weighed on profitability in the quarter.

Why Apple and NextEra Energy were reduced

The portfolio changes were not limited to new purchases. The positions in Apple and NextEra Energy were partially reduced.

Apple had previously reported the strongest June quarter in its corporate history. The figures confirmed the quality of the ecosystem and the company’s high cash flow generation.

However, the strong operational development was already factored into high market expectations. The reduction does not represent a negative assessment of the long-term prospects of Apple.

Also NextEra Energy was reduced. The company combines predictable earnings from the regulated utility business with growth opportunities in renewable energies and increasing electricity demand from data centers. The partial reduction in the strategy was primarily a decision based on opportunity cost considerations.

Both Apple and NextEra Energy remained part of the UMBRELLA strategy.

Positioning after the changes

The healthcare sector remains the stabilizing core, led by Revolution Medicines, Bayer, Eli Lilly and Johnson & Johnson. The engagement in the European defense sector was expanded through Rheinmetall, Thales and TKMS . Palantir complements the portfolio with a combination of artificial intelligence, software, and defense technology.

This structure is intended to create a balance between defensive quality and structural growth.