Good morning! Wishing all of our readers a happy and safe Juneteenth, a celebration of emancipation in 1865 and America’s newest federal holiday. Today we're exploring:

• Number 1: The world has a new most valuable company.
• NATO: Defense spending within the alliance is rising.
• Chegg: The education platform has a plan to reverse its fortunes.

TOGETHER WITH

On top of the world

Nvidia, a chipmaker which 10 years ago was worth just $11 billion, is now the world’s largest company by market capitalization. Its latest upswing, a 10% gain in the last 5 days, has taken NVDA to a $3.35 trillion market cap — more than Microsoft, Apple... and everyone else.

So, NVDA is now ranked #1 on market cap, but what about other metrics?

Although the stock’s surge has been remarkable, there is financial momentum to support its valuation (whether it’s enough, however, is a question for analysts). Indeed, while Nvidia is only the 37th largest S&P 500 company by revenue, it’s actually the 4th most profitable in the entire index, pipped only by the rivals it has recently passed in market cap (Microsoft, Apple, Alphabet).

But, most importantly, Nvidia represents that which investors can never get enough of: growth. In the most recent quarter reported, the average S&P 500 company posted 5% revenue growth year-on-year. Nvidia notched 262%, the most of any company in America’s flagship index.

In fact, the only metric on which Nvidia is anywhere near the middle of the pack is number of employees, which throws up some interesting comparisons.

NATO spending soars

A record 23 out of the 32 NATO member nations are set to hit the alliance's 2% of GDP defense spending target this year, as member nations sharply increase spending, according to a NATO report released on Monday.

The 2% guideline was agreed upon a decade ago, in the wake of Russia's annexation of Crimea, when only three allies — the United States, Britain, and Greece — met the target. However, Russia’s invasion of Ukraine in 2022 has shifted global priorities and launched military spending to the forefront of policy discussions. NATO analysis reveals that defense expenditure is estimated to have increased more than 9% in 2023 and rise a further 18% in 2024, those are real gains — i.e. over and above the rate of inflation.

In the last 18 months, once-neutral Sweden and Finland have joined the alliance, further bolstering NATO's annual expenditure by $16 billion, though no nation, within or outside the alliance, comes close to the United States' budget. In 2024, America's defense spending is expected to reach a colossal $968 billion, which will be some 65% of NATO's total.

Military aid was one reason the Congressional Budget Office yesterday revised up the nation's budget deficit, which is now estimated to increase by 27% this year. Relative to the size of its economy, the US is actually not the biggest spender in NATO — Poland, which shares a 140+ mile border with Russia, spends more than 4% of its GDP on defense.

Like a student who starts the homework the morning that it’s due, digital education company Chegg is trying to adapt in the face of AI, with its April-appointed CEO announcing Monday a major restructuring plan. The strategy includes cutting its headcount by 23%, as well as an ambition to build a “platform that incorporates artificial intelligence verticalized for education”. Investors appear to like the plan, with the stock currently up around 15% on the news, but some might be thinking it’s too little too late.

Textbook troubles

Renowned for providing homework help, Chegg is seeking to reinvent itself as students increasingly turn to free AI tools like ChatGPT for assistance, a trend that’s compounded a brutal 3 years for the company.

During the pandemic, the company’s online platform became a lifeline for many as schools shut down and students "chegged" their way through homework and online tests by paying to access Chegg’s wide database of millions of textbooks to get the answers. Revenues at the company doubled between 2018 and 2020, turning Chegg into a business worth some $15 billion at its peak.

But, like so many pandemic-era trends, once schools opened back up, Chegg found itself losing ground. Shares lost an eye-watering 49% of their value in a single day in 2021. That misery was made worse when execs announced that ChatGPT's popularity was impacting customer growth — and its fortunes never really reversed. Once proclaimed “the most valuable edtech company in America” by Forbes, Chegg has lost some 98% of its peak market cap.

More Data

• Fast food managers in California are now earning up to $174,000 annually.

• Engineers have designed a robot capable of jumping 656ft (200m), 6x higher than the previous record.

• The goal of creating the Spotify of mental health is a ~$20B revenue opportunity. That’s why leaders from Apple and Meta are investing in Aura. Become an Aura shareholder by June 27th.**

• HBO's second season of House of the Dragon attracted 7.8 million viewers for its first episode, setting a record for Max, though that was a 22% drop from last year’s premiere.

• A YouGov survey reveals that most American men own at least one suit, but 28% never wear them.

**This is sponsored content.

Hi-Viz

• Visual exploration of South Korea’s balloon warfare against its northern neighbor.

Off the charts: Which company, that’s seeing sales growth slow as its competition catches up, are we charting about below? [Answer below]