November 2nd - The Week Ahead

The Week Ahead Of Us 🔍

Welcome back!

A significant amount of the S&P 500 has reported solid earnings, and a lot of the Big Tech players have put up robust numbers and shown no signs of stopping aggressive capex spend. These catalysts, the rate cut, and the expectation of a U.S. and China trade deal have futures up nicely (SPX +0.35% and NASDAQ +0.42%).

Election Day is this Tuesday so make sure you exercise your right to vote! The race everyone is watching is whether Zohran Mamdani will become NYC’s next mayor. A new poll has Zohran still leading (40.6%), but Andrew Cuomo suddenly inching up behind him at 34%. The prediction markets aren’t budging though, with Zohran holding 92% odds of winning per Kalshi.

Btw, on Buyside Hub, we recently launched a massive database of verified Interview Questions. Now Buyside Hub is the clear destination of compensation analytics, jobs, and interview & firm culture insights. Get started here.

Let’s get into it Here’s a look at earnings this week.

• Monday: Palantir Technologies, Vertex Pharmaceuticals, ON Semiconductor, Loews Corporation, Clorox Company, Hims & Hers

• Tuesday: Uber, Shopify, Spotify, Pfizer, Ferrari N.V., Norwegian Cruise Line, Advanced Micro Devices, Pinterest, Beyond Meat, Upstart Holdings, Marriott, Yum! Brands, CAVA Group, Life Time Group

• Wednesday: Qualcomm, Humana, McDonald’s, Novo Nordisk, Arm Holdings, Robinhood, AppLovin, Unity Software, e.l.f., Snap Inc.,Dutch Bros, AMC Entertainment, MetLife, Allstate, Duolingo

• Thursday: Airbnb, Vistra Corp, Warner Bros Discovery, Datadog, DraftKings, Certara, TripAdvisor, Metallus, D-Wave Quantum, theTradeDesk, Opendoor, BCE Inc., Oscar Health, Moderna, Iris Energy

• Friday: Constellation Energy, Wendy’s, American Axle & Manufacturing Holdings, Fluor Corporation, Brookfield Asset Management, Six Flags, Duke Energy, Holley, TELUS, KKR & Co.

Here’s a look at economic data this week (estimates are in quotations).

• Monday: None

• Tuesday: S&P Case-Shiller home price index 20 cities (1.4%), Consumer confidence (93.2)

• Wednesday: Pending home sales (1.0%), FOMC interest-rate decision, Fed Chair Powell press conference

• Thursday: Fed Vice Chair for Supervision Michelle Bowman speaks

• Friday: Chicago Business Barometer PMI (42.0)

Knowledge Gaps = Security Gaps

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Download the report to learn how organizations are navigating this gap, and what early adopters are doing to stay ahead.

Earnings Corner 📈 📉 

Amazon $AMZN ( ▲ 9.58% ) had a strong beat on both revenue coming in at $180.2B and EPS at $1.95, powered by 20% growth in AWS and a 24% jump in ads, with retail sales also up 10% on solid Prime Day demand. Management lifted full year capex to $125B to expand AI capacity including its new Project Rainier data center and signaled more investment ahead. Despite layoffs to streamline operations, strong cloud and holiday guidance show that AI and core commerce are driving a renewed growth cycle.

Apple $AAPL ( ▼ 0.38% ) Top and bottom line beat on revenue of $102.5B and EPS of $1.85, as strong iPhone 17 demand and record services growth offset weakness in China. iPhone sales narrowly missed estimates due to supply constraints, but CEO Tim Cook said demand was “off the chart,” guiding for 10% to 12% revenue growth in the December quarter, the best in company history. Apple is absorbing higher tariff costs without raising prices currently

Exxon Mobil $XOM ( ▼ 0.29% ) Record output from Guyana and the Permian underscored resilience amid weaker oil prices, though rising leverage and softer gins highlight the challenges of sustaining shareholder payouts in a cooling energy ket.

Chevron $CVX ( ▲ 2.74% ) Record output and stronger refining gins helped offset weaker crude prices, with the Hess acquisition boosting scale and cash flow as management signaled confidence in sustained free cash generation.

Mastercard $MA ( ▼ 0.31% ) Strong spending and 15% cross-border gains drove solid revenue and EPS growth. The company is leaning into AI-driven “agentic commerce” and stablecoin payments to power its next phase of growth.

Cigna $CI ( ▼ 1.09% ) shares fell dramatically after earnings last week, with rising medical costs and member losses from the Medicare sale, pressuring the industry.

Charter $CHTR ( ▲ 1.27% ) Broadband losses and flat revenue underscored competitive pressure, sending shares bleeding lower, though Spectrum’s mobile growth and network upgrades helped steady cash flow.

Comcast $CMCSA ( ▲ 1.89% ) Broadband losses weighed on results even as mobile growth, Peacock improvement, and strong theme park performance helped offset pressure ahead of its Versant spinoff.

Coinbase $COIN ( ▲ 4.65% ) Trading revenue surged on higher retail and institutional activity, lifting earnings well above forecasts as its “everything exchange” strategy and expanding asset mix gained traction.

Reddit $REDDIT.X ( ▼ 0.49% ) Sales surged 68% with ad strength and growing data licensing driving a major earnings beat, while upbeat guidance and expanding global engagement underscored momentum despite slower U.S. user growth.

Roku $ROKU ( ▲ 6.1% ) Roku swung back to profit and wrapped a $50M buyback as ad and platform revenue climbed, with new sports features and DSP partnerships fueling optimism despite lingering device weakness.

Roblox $RBLX ( ▲ 0.64% ) Shares tumbled after management warned of thinner gins from rising safety and infrastructure spending, overshadowing a strong beat on bookings and revenue as daily users surged 70% y/y.

Clodflare $NET ( ▲ 13.84% ) Cloudflare rallied on a clean beat, with revenue up 31% and EPS above forecasts, fueled by enterprise demand and its growing AI platform. The company reaffirmed 28% growth and a $5B run-rate target by 2028.

Today’s Headlines 🍿 

• China trade deal: China will suspend some rare earth curbs for one year and end probes into U.S. chip firms. In exchange, Trump has called off a potential 100% tariff increase and cut fentanyl-related tariffs down to 10% from 20%, bringing China’s effective rate to 47%. Trump says “every year we’ll renegotiate the deal,” but the two countries have seemingly settled things for the short-term

• Sam Altman’s Interview Meltdown: VC Brad Gerstner’s interview with OpenAI CEO Sam Altman and Microsoft CEO Satya Nadella led to a viral awkward moment. When nicely asked by Brad how OpenAI could make $1.4T of spending commitments with revenue of $13B, Sam went on an odd tirade about how he could easily find buyers for anyone who wants to sell their shares. Elon chimed in, calling the video clip “disturbing”

• Berkshire sells more stock as profits rise: Operating profits jumped 34% y/y, driven by a more than 200% surge in insurance underwriting income. The firm continues to stockpile cash, now at a record $358B, ahead of Buffett’s year-end departure. Berkshire has yet to make any buybacks this year, but has remained active in the market, selling $12.5B in equity securities while purchasing only $6.4B during the September quarter

• The Utah leasing company caught up in the First Brands debacle: This little known, Utah-based company, Onset Financial, leases everything from chickens to Blackhawks and now is owed $1.9B by the First Brands estate, as reported by FT. Rates were north of 12% though - very strong levels for the lender that says they are the “rightful owner of the inventory and equipment it leased to First Brands.” Most notably, Onset was able to layer $380mm of forbearance fees in the months leading up to the First Brands collapse.

• BlackRock’s Private Credit deal gone wrong: BlackRock unit, HPS, among several other lenders, are seeking to recover up to $500m from Bankim Brahmbhatt, a founder of Broadband Telecom and Bridgevoice, who allegedly fabricated invoices. HPS wrote off its $150mm stake to zero, according to Bloomberg

• PIK is on the rise: With Private Credit defaults continuing to make a lot of noise, our chart of the day, focuses on the rise of “bad PIK” - instances where companies move from paying interest in cash to deferring it with payment-in-kind debt.

• Private Credit is becoming Private Equity (by accident): Just because a direct lender takes an equity stake, it doesn’t mean they’ll necessarily lose money. Private lenders can use debt-for-equity swaps to have their workout team focus on improving the business, while shopping the asset. Ares Capital last week made $262mm from selling Potomac Energy Center, generating a 15% IRR on the total deal. Still, private credit default rates of 5.2% mean there’s a lot of Unitranche lenders taking hits in a restructuring

• SNAP funding latest: Two federal judges have blocked the Trump administration from ceasing to pay SNAP food benefits, ruling that the benefits must be paid out of emergency funds. Bessent says the benefits could restart as early as Wednesday, and that the administration is exploring funding options to restore the aid, which helps feed 42 million Americans

• Flight Cancellation latest: Airlines are calling for an end to the government shutdown so air traffic controllers can be paid. Delta and United urged senators to immediately pass a solution, while American Airlines warned travelers “to be prepared for more delays” amid an expected record holiday travel season

• Healthcare prices are set to jump: Congress has yet to extend the enhanced subsidies that make insurance premiums cheaper for about 22 million of the 24 million Americans who buy insurance over the ACA exchanges. According to a nonpartisan research group, without these subsidies recipients’ health premiums are set to increase by an average of 114% next year. These subsidies are the driving cause behind the government shutdown, for Democrats refuse to pass any funding bill that doesn’t extend them

• AI companies turn to off-balance sheet financing: Special purpose vehicles are becoming the go-to for AI data center deals, allowing firms to raise enormous sums with a limited impact to their financial health. Morgan Stanley estimates that by 2028 tech firms will need as much as $800B from private credit in deals tied to specific assets, including SPVs

  • Meta was able to sell $30B of corporate bonds at tight spreads, with 40-year paper coming at 110bps above treasuries, tight of initial talk of 140bps over

• AI Bubble Talk: Our friend NetCapGirl put out a very detailed substack post thinking about AI bubble talk, recent Tech earnings, and the energy related constraints in AI. Worth a read if you have time for a long read

• Netflix has hired Moelis to advise on a bid for Warner Bros. Discovery’s studio and streaming businesses

• How tariffs could impact you this holiday season: LendingTree estimates that new tariffs will increase holiday costs for consumers by $29B, while retailers are expected to take on $12B in extra costs

• AI companies are downplaying energy needs: According to venture capitalist and previous Palantir co-founder Joe Lonsdale, top AI executives are underselling the resources they need to meet their ambitious goals. Lonsdale said these companies are “afraid to scare their investors, and so they are telling them they need a lot less capital, a lot less energy than they know they actually do"

• Thoma Bravo’s Divy Recap: The PE giant is expected to recoup most of its initial equity investment in Ping Identity following a $1.1B dividend payment. Thoma Bravo is also expected to save more than $10mm in annual interest by refinancing in the BSL market vs. in Private Credit

• Brightline’s bondholder deal: Yes, that Brightline, the Florida passenger railroad company, got municipal bondholders to agree to a deal to extend the maturity in exchange for a junior claim on equity backing a $775mm line of credit

Phase 2 of WSR Investing Club - M&A Data Analytics:

Want access to an aggregation of all of the M&A transaction comps we publish every week? By becoming an WSR Investing Club member, you will be able to access it.

We are building out the full database, but for now, we have included all YTD M&A Transactions that have appeared in The Wall Street Rollup.

The database will be updated on a monthly basis, including deals that don’t make the final cut in our M&A Transactions section.

The first edition of the database will drop on Tuesday, in conjunction with our standard WSR Investing Club email.

We’re going to update the access link every month as well, so stay alert as our monthly premium emails come out.

M&A Transactions💭 

Orange (PAR: ORA) agrees to take control of MasOrange in a $4.9B buyout.

The Gray Surety Company, operator of a specialized financial protection platform, has reached a definitive agreement to be acquired for $300.0M by Palomar Holdings (NAS: PLMR). J.P. Morgan advised on the sale.

Tennova Healthcare-Clarksville, operator of a hospital, has reached a definitive agreement to be acquired for $600.0M by Vanderbilt University Medical Center.

Sumitomo Densetsu Company (TKS: 1949), operator of a construction company, has reached a definitive agreement to be acquired for JPY 169.46B by Daiwa House Industry (TKS: 1925). EV/EBITDA was 7.34x and EV/Revenue was 0.79x.

Skaylink, provider of cloud services, has reached a definitive agreement to be acquired for EUR 175.0M by Vodafone Group (LON: VOD). Arma Partners advised on the sale.

REV Group (NYS: REVG), designer, manufacturer, and distributor of specialty vehicles, has reached a definitive agreement to be acquired for $425.0M by Terex (NYS: TEX). EV/EBITDA was 4.01x and EV/Revenue was 0.31x. J.P. Morgan advised on the sale.

Grupo Solitium, provider of printing and information technology services, was acquired for EUR 411.76M by Koesio. EV/Revenue was 1.87x. Houlihan Lokey advised on the sale.

Convex UK, operator of a specialty insurer and reinsurer, has reached a definitive agreement to be acquired for $2.1B by American International Group. Evercore Group and Goldman Sachs advised on the sale.

Brainpad (TKS: 3655), provides total service solutions, has reached a definitive agreement to be acquired for JPY 56.58B by Fujitsu (TKS: 6702). EV/EBIDTA was 27.9x and EV/Revenue was 4.77x. Nomura Holdings advised on the sale.

SNF Water Science reached a definitive agreement to acquire The Oil & Gas Business Unit of Syensqo (BRU: SYENS) for EUR 135.0M.

Richardson Wealth (TSE: RCG), a wealth management focused company, was acquired for CAD 597.0M by Industrial Alliance Insurance Financial Services (TSE: IAG). The purchase price of CAD 597.0M includes a CAD 370.0M valuation for RF Capital’s fully diluted equity and CAD 227.0M in financial obligations. EV/EBITDA was 12.2x and EV/Revenue was 1.58x. CIBC Capital Markets and Cormark Securities advised on the sale.

Probe Gold (TSE: PRB), a gold exploration company, has reached a definitive agreement to be acquired for CAD 766.775M by Fresnillo (LON: FRES). EV/Cash Flow was 51.49x. Canaccord Genuity and CIBC Capital Markets advised on the sale.

KOREGE, provider of insurance services, was acquired for EUR 925.0M by Matmut.

Grand Venture Technology, a manufacturing solution and service provider, was acquired for SGD 319.0M by Aalberts (AMS: AALB). EV/EBITDA was 11.38x and EV/Revenue was 1.76x.

Private Placement Transactions💭 

Tidal Vision, manufacturer of a io-degradable industrial biopolymer, raised $189.02M of Series B2 venture funding led by Cambridge Companies SPG at a pre-money valuation of $453.25M.

PhonePe, developer of a mobile payment application, raised $600.0M of venture funding from General Atlantic at a pre-money valuation of $13.9B.

Lenskart, operator of an omnichannel eyewear retail business, raised INR 33.58B of venture funding from HDFC Life Insurance Company, ICICI Prudential Life Insurance Company, and Bajaj Allianz Life Insurance.

Legora, developer of an AI assistant, raised $150.0M of Series C venture funding led by Bessemer Venture Partners at a pre-money valuation of $1.65B.

CENTRA, developer of interconnection data centers, raised $230.0M of venture funding led by Columbia Capital.

Snapmint, developer of an online shopping platform, raised $125.0M of venture funding led by General Atlantic.

Meme Cleanser - Bill Ackman poked some fun at himself this Halloween😆 

Until next time!

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