What you Need to Know for August 14th

Together with F2

Welcome back. Good news, the S&P hit an all time high yesterday!

On Wednesday, July CPI rose 0.1% m/m (3.4% y/y) and core CPI rose 0.2% m/m (2.5% y/y), in line with expectations and 0.1 points cooler than June. Inflation coming in line with expectations means there’s enough ammo for enough Fed members to wait and see come September. Jobless claims came in at 209k, slightly above estimates of 205k, but unemployment benefit claims fell by 22k to 1.78mm.

Polymarket traders are pricing in a 71% chance of no change in September, a stark move from what was a coin flip right after the July meeting.

Still, Kashkari and Hammack are among the Fed Presidents who have been quite vocal for a 25bps hike. In an interview yesterday, Hammack said “my view is we need to act now.” Fed Chair Warsh called last meeting a “family fight”, and the 3 dissenters (in last month’s 9-3 vote to hold rates) are unlikely to move despite what the market is perceiving as encouraging data.

Our early prediction for September? Another hold with Warsh being more bark than bite, but the dissenters get more numbers in their camp. I’m surprised no one has made a 12 angry jurors reference yet.

Let’s get into it.

Today’s Jobs:

1. Ares is hiring its in Credit Technology Engineering team (NY)

2. Neuberger Berman is hiring a Sr. Credit Analyst (Chicago)

3. Bain is hiring a Liquid Structured Credit Analyst (Boston)

4. Houlihan Lokey is hiring for multiple IB roles (NY)

5. Moelis is hiring an IB Associate focused on data centers (NY)

Earnings Corner 💸 

• Nebius $NBIS ( ▼ 1.61% ) revenue beat at $582.3M vs. $572.8M, while EPS also beat on a narrower loss than expected. Growth came from its AI cloud business, which generated $575M as customers raced to lock in scarce computing capacity, helping the company sign four AI-cloud deals averaging more than $1B each. That scale-up is starting to translate into profitability. The company is still spending heavily to add GPUs and data-center capacity, with Q2 capex at $5.7B, but customer prepayments are helping fund the expansion. Mgmt. raised its year-end contracted power target to 5 GW and said it could already sell all of its planned 2027 capacity.

• Cicsco Systems $CSCO ( ▼ 8.4% ) beat on both the top and bottom lines, driven by strong AI networking demand as hyperscaler infrastructure orders reached $9.3B and networking revenue rose 28% YoY because cloud providers continued spending heavily on the networking equipment needed to connect AI data centers. Mgmt. guided FY2027 revenue above estimates and expects AI infrastructure revenue to nearly double to $7.5B, but that heavier mix of AI hardware is expected to compress gross margins, while growth is also expected to slow as the year progresses. That combination helped explain the share drop despite the beat.

• Cerebras $CBRS ( ▼ 11.85% ) revenue missed at $180M vs. $194M, while EPS beat with a narrower loss than expected. Underneath the headline miss, core revenue more than doubled to ~$210M as its fast-inference cloud business nearly quadrupled, driven by the ramp of its OpenAI deployment and higher usage from other cloud customers, while hardware revenue grew 17%. Demand remains strong, with $25.4B of remaining performance obligations, and mgmt. raised FY core revenue guidance as it adds more data-center capacity to support growth. a $450M GAAP loss largely driven by stock compensation, and Q3 guidance that implies only modest sequential core revenue growth while gross margins are expected to dip before improving later in the year.

On The Move 📈 📉

• Sandisk $SNDK ( ▲ 13.67% ) popped after unveiling ambitious FY28-FY30 targets at its Investor Day: mid-to-high teens revenue growth, ~80% adj gross margins, ~75% adj operating margins, and ~50% adj FCF margin.

• StubHub $STUB ( ▼ 10.07% ) plummeted Thursday after quarterly expenses jumped 37% vs. 33% revenue growth, as World Cup ticketing chaos wiped out profits. CEO Eric Baker pointed to FIFA’s mobile-ticketing complications leading to a $40,000 net loss versus an expected 11-cent-per-share profit.

• Ackman rotation: $HTZ ( ▼ 16.25% ) tumbled and $NFLX ( ▲ 5.43% ) rose after Bill Ackman’s Pershing Square exited its Hertz stake and disclosed a new position in Netflix. CIO Ryan Israel cited loss of confidence in Hertz management after its funding plan, while praising Netflix’s dominance and subscriber base nearly double Disney+ and HBO Max combined.

• Workday $WDAY ( ▲ 17.78% ) rocketed intraday after Reuters reported Silver Lake is in talks to take the HR software provider private. The talks have been ongoing for months, though no deal is guaranteed.

• Tapestry $TPR ( ▼ 16.49% ) crashed to a six-month low as FY27 revenue guidance implied a slowdown to mid-single-digit growth, even after a Q4 beat and a 16% dividend hike. Kate Spade sales fell 7% in Q4 while Coach grew 14%.

• Birkenstock $BIRK ( ▲ 11.6% ) soared after raising FY26 revenue guidance to the top of its 13-15% range at 15% constant currency growth. Q3 also delivered double-digit growth across every region.

• Wendy’s $WEN ( ▼ 0.12% ) jumped Wednesday on a FT report that Nelson Peltz’s Trian Fund Management is preparing a takeover bid for the burger chain with backing from BlueFive Capital and Flynn Group.

• Reddit $RDDT ( ▲ 3.04% ) pumped after hours after being added to the S&P 500, replacing Avalon Communities effective August 18. Reddit becomes only the second pureplay social media company in the index after Meta.

IPO Roundup 📍 

• Anthropic is eyeing a $2T IPO in October, which would make it the largest IPO ever, surpassing SpaceX. Anthropic closed a May round with $47Bn of annualized revenue, which many believe they have dramatically passed over the past few months. Investors now expect $100-120Bn of revenue by December, more than 10x growth in a year.

• OpenAI’s annualized revenue is on track to top $40B, roughly doubling its run rate from the end of 2025 ahead of its planned IPO. Growth is driven by AI coding software, subscription sales, and its nascent advertising business. The run rate jumped more than 20% month-over-month in July alone.

• DeepSeek is jacking up prices for its flagship V4 models by more than 4x ahead of its potential IPO, signaling a shift toward profitability. Starting August 16, V4-Flash jumps to $1.32 per million tokens (from $0.28) and V4-Pro to $3.96 (from $0.87). Even after the hike, DeepSeek remains far cheaper than Chinese rival Moonshot ($15/M for Kimi K3 and Anthropic’s Fable 5 ($50/M).

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Today’s Headlines 📖🍿 

• AI disruption fears are colliding with private equity debt piled into software companies, with more than $150Bn of software debt due through 2029 and lenders now demanding steeper terms to finance it. Fitch found that 9% of software companies it rates face high AI disruption risk, with the pattern already playing out at Thoma Bravo’s Medallia.

  

• OpenAI’s Chief Revenue Officer is departing the Company less than a year in. This follows a recent $7B tender and former COO Brad Lightcap’s departure.

• A proprietary survey from Wells Fargo shows that CIOs have increasingly adopted Anthropic over the last twelve months and will increasingly do so over the next twelve:

• The US refunded $33.4Bn in tariffs in July, outpacing the $24.8Bn collected that month and marking the third straight month of negative net tariff revenue, pushing total refunds past $100Bn since the Supreme Court struck down Trump’s IEEPA tariffs in February. The overall federal deficit hit $1.8T for FY 10 months, with the CBO projecting a $2.1T full-year deficit.

• Citadel is imposing two-year non-competes for some investing staff, including analysts. The length of garden leave is tied to compensation. The more you earn, the longer the non-compete, with a year-long minimum.

• Manhattan average rent hit an all-time high of $6,655/month, up 10% YoY, with vacancy rates falling to 1.49%. Brokers point to Mayor Mamdani’s incoming October rent freeze and new pied-à-terre tax as recent accelerants, with landlords already padding market-rate rent to offset costs.

• Mark Walter has agreed to sell the LA Lakers to Joshua Kushner and Bob Iger for $12.5Bn, the highest price ever paid for a sports team, just a year after buying the team at a then-record $10Bn. Walter, whose insurance companies are under federal investigation and restructuring pressure, needed liquidity with the sale expected to free up collateral.

• Databricks raised $5Bn at a $190Bn valuation, a 42% jump from its $134Bn valuation in February. The company has crossed $7Bn in revenue run-rate, more than 80% YoY in Q2.

• Bending Spoons is facing customer backlash after aggressive price hikes on acquired apps. One Harvest invoicing customer saw his annual subscription jump 12x from $211 to $2,547. $BSP ( ▼ 16.46% ) also fell after BofA cut its rating on concerns about acquisition debt access.

• Bill Ackman’s Pershing Square USA is now trading at a 22% discount, among the widest of any US closed-end funds, which Ackman called “frankly absurd” on his first earnings call since taking the company public in April. Ackman, who rotated new stakes in Netflix, Visa, Mastercard, and S&P Global, acknowledged missteps in how the IPO was marketed to investors.

• Jane Street’s lease is backing $2.25B in green bonds for an Oklahoma AI data center. The 15-year triple-net structure covers a 149 MW facility developed as a Fluidstack/Next Frontier joint venture, and the notes are rated Ba2 by Moody’s.

• 26% of Gen Z investors say sports betting is part of their long-term financial plan, vs. just 1% of boomers. Over half of young investors have redirected money from investing to sports betting in the past year.

  

• Goldman Sachs agreed to buy active ETF provider NEOS Investments for up to $2.25B, doubling down on the $180B “boomer candy” market. NEOS manages $30B in options-strategy ETFs that maximize payouts and minimize taxes for investors seeking upside with limited downside.

• AMD raised $4.75B in its largest-ever US dollar bond offering, further adding to a wave of AI-related debt. The high-grade notes were sold in four tranches, with maturities ranging from 3 to 10 years, and the longest tenor priced at 90bps over Treasuries.

Chart of the Day

M&A Transactions💭 

The Los Angeles Lakers has entered into an agreement to be acquired for $12.5B by Josh Kushner and Bob Iger from Mark Walter. The transaction represents a record valuation for a North American sports franchise.

Accelerant Holdings (NYS: ARX), operator of a data-driven specialty insurance platform, has entered into an agreement to be acquired for $4.4B by Thoma Bravo. EV/Revenue was 3.85x. Houlihan Lokey and Morgan Stanley advised on the sale.

Arize, developer of an AI observability platform, has entered into an agreement to be acquired for $915M by Dynatrace (NYS: DT).

Decart, developer of an AI infrastructure platform, has entered into an agreement to be acquired for KRW 8.5BB by Anthropic.

Béis, operator of an on-the-go lifestyle brand and weekender bags, has entered into an agreement to be acquired for $178.5M by Samsonite Group. Raymond James advised on the sale.

BlackSea Technologies, developer of AI-enabled manned and unmanned systems, has entered into an agreement to be acquired for $650.0M by AEVEX. EV/Revenue was 4.33x. Raymond James advised on the sale.

EnviroServe, provider of environmental and waste management services, has entered into an agreement to be acquired for $470.0M by Clean Harbors. EV/EBITDA was 17.41x and EV/Revenue was 1.88x. Brown Gibbons Lang & Company and RBC Capital Markets advised on the sale.

NEOS Investments, provider of investment management services, has entered into an agreement to be acquired for $2.25B by Goldman Sachs. The company will receive contingent payout, which is in cash and stock, contingent upon the fulfillment of certain performance and/or service commitments. Barclays advised on the sale.

New Mexico Gas Company, supplier of natural gas services, was acquired for $1.25B by Bernhard Capital Partners. J.P. Morgan advised on the sale.

Systex (TAI: 6214), provider of information technology and consulting services, has entered into an agreement to be acquired for TDW 29.1B by Taiwan Mobile. EV/EBITDA was 7.29x and EV/Revenue was 0.60x.

The Microbiology Business of Thermo Fisher Scientific was acquired for $1.08B by Astorg. Perella Weinberg Partners and Wells Fargo advised on the sale.

BMC Manufacturing, manufacturer of low-voltage switchgear and electrical equipment, has entered into an agreement to be acquired for $1.03B by Kingspan Group. EV/EBITDA was 9.85x and EV/Revenue was 3.89x.

H&R Real Estate Investment Trust, owner and operator of real estate investments, has entered into an agreement to be acquired for $5.01B by Blackstone. EV/Revenue was 9.12x.

Private Placement Transactions💭 

Bank of America (NYS: BAC) reached a definitive agreement to acquire an 49% stake in Jio Credit, a provider of digital lending services, for INR 182.68B.

Lovable Labs, developer of an AI driven application builder, raised $400.0M if Series C funding led by EQT and Menlo Ventures.

CodeRabbit, developer of an AI-powered platform, raised $143.0M of Series C venture funding led by Smash Capital and Atomico Partners at a pre-money valuation of $1.36B.

Claris Bio, developer of a topical formulation technology, raised $118.0M through a combination of Series B1 and Series B2 venture led by Catalio Capital Management and Samsara BioCapital at a pre-money valuation of $84.0M.

Bridge to Life, developer of a preservation products and technologies, raised $110.0M of Series C venture funding through a combination of debt and equity. The equity led by Soleus Capital.

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Obviously, none of this constitutes financial or investment advice. *Today’s Odds of the Day is in paid partnership with Polymarket