What you Need to Know for May 15th

Welcome back! The S&P 500 passed a new record and Cerebras, an AI chip maker, went public yesterday. After an initial pricing range of $115-$125 share, the final price was $185/share, but the stock opened at a whopping $350/share. It went as high as $385 yesterday before cooling off to ~$311 - a $95 Billion valuation!

Fun fact for anyone who didn’t know…this is what a Cerebras chip looks like…it’s massive:

Plus, the U.S. and China are having summit in Beijing to talk Iran, Taiwan, AI, Tariffs, and more. The hope is that talks between these two powers will lead to the Strait of Hormuz opening soon.

This morning’s breaking news? Bill Ackman is taking a stake in Microsoft.

Let’s get into it.

Earnings Corner 💸 

• Cisco $CSCO ( ▲ 13.41% ) revenue beat at $15.8B and EPS beat at $1.06, driven by strong networking sales as companies and hyperscalers bought more switches, routers, and AI infrastructure equipment to support data-center buildouts. Profitability benefited from higher revenue and operating leverage, while Cisco also raised its AI infrastructure order outlook to $9B and cut nearly 4,000 jobs to shift more resources toward AI networking, silicon, optics, and cybersecurity.

• Nebius $NBIS ( ▲ 6.7% ) revenue beat at $399M while the company posted a smaller-than-expected EPS loss, driven by surging AI cloud demand as enterprise and AI-native customers increased GPU and compute spending. AI Cloud revenue jumped 841% y/y, margins expanded as capacity remained sold out and pricing stayed strong, while Nebius raised infrastructure spending plans and expanded U.S. data-center capacity to support growing AI demand.

• StubHub $STUB ( ▲ 13.7% ) top and bottom line beat with revenue at $446M, driven by higher live event ticket demand, increased resale activity, and stronger monetization across concerts, sports, and entertainment events. The company reaffirmed full year guidance and returned to profitability as margins expanded and cash flow nearly doubled from last year.

• Jack In The box $JACK ( ▼ 14.15% ) revenue and EPS missed as same store sales fell 3.8% due to weaker customer traffic, while higher beef, labor, and commodity costs pressured margins and profitability. Trends improved through the quarter as value deals, digital promotions, and new menu items helped support same store sales, while management continued focusing on restaurant closures, debt reduction, and broader turnaround efforts under its new interim CEO.

• Klarna $KLAR ( ▲ 20.31% ) revenue beat, up 44% to $1B, while EPS beat expectations with a smaller loss then expected. Results were driven by strong Buy Now Pay Later demand, rising transaction volumes, and rapid growth in larger installment loans as consumers increasingly used Klarna for higher ticket purchases. GMV rose 33%, user and merchant growth continued accelerating, and improving scale and transaction economics helped drive a return to profitability, though 2Q guidance came in slightly below expectations as growth normalizes.

• Canada Goose $GOOS ( ▼ 7.4% ) revenue beat at $453M while EPS slightly missed. Results were driven by strong D2C, improving wholesale trends following a multi year reset, and higher full price selling across regions and channels. Continued momentum in e-commerce, outlet traffic, and brand engagement supported sales growth, though higher freight and input costs alongside broader macro uncertainty pressured profitability and led to soft guidance.

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On The Move 📈 📉

• DraftKings $DKNG ( ▲ 0.48% ) picked up a sell rating from BNP Paribas with a $20 price target, citing Kalshi and Polymarket as a dramatic threat with over 50% user overlap.

• Versant Media Group $VSNT ( ▲ 9.87% ) rallied after beating Q1 revenue estimates in its first quarter post Comcast spinoff and announcing a $100M accelerated buyback, with content licensing up 113%.

• Ford $F ( ▲ 6.71% ) stock surged following the announcement of Ford Energy, a US-assembled battery storage unit targeting data centers and hyperscalers, but Barclays warns the rally reflects meme-driven AI sentiment more than fundamentals.

• POET technologies $POET ( ▲ 43.15% ) surged after landing a $500M Lumilens deal for AI photonics hardware, the largest contract in company history and a replacement for its lost Marvell Celestial AI deal.

IPO Roundup 📍 

• Cerebras $CBRS ( ▲ 68.15% ) , the AI chipmaker, priced it IPO at $185 and shares jumped 68% to $311.07 on its first day of trading. The 30M share offering raised $5.55B, the biggest U.S. tech IPO since Uber went public in 2019. Cerebras is now valued at $95B and sets a strong precedent for the wave of AI IPOs expected next, including Space X, OpenAI, and Anthropic.

• Fervo Energy $FRVO ( ▲ 11.19% ) made its debut Wednesday after pricing its IPO at $27 and raising $1.89B. Shares opened at $36 and closed up 33%, pushing the company’s market cap past $10B. Fervo’s Cape Station project is set to become the world’s largest geothermal site, with demand fueled by AI data centers.

• Oman India Fertiliser Co. is planning an IPO targeting a valuation of at least $2.5B. The deal could launch as early as June, with the three shareholders selling a combined 25% stake proportionally. The IPO comes amid a fertilizer price rally driven by the regional conflict in the Middle East.

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Today’s Headlines 📖🍿 

• Powell hands off the Fed to Walsh on Friday: Powell’s chairmanship ends tomorrow, though he will remain on the board of governors until January 2028. Kevin Warsh, confirmed 54-45, takes over and holds his first FOMC meeting in June.

• OpenAI prepares legal action against Apple: OpenAI has hired an outside law firm to explore a breach of contract claim against Apple after the Siri and Visual Intelligence integration generated far less revenue and subscriber growth than projected. Apple has its own complaints, citing OpenAI’s privacy standards and hardware push.

• Business schools slash MBA tuition as application decline: Top programs such as Purdue and John Hopkins are cutting prices up to 50% on specialized degrees, offering AI training to attract professionals worried about job security. Purdue is knocking 40% off its online MBA, while UC Irvine is cutting up to $48,000 on its Flex and Executive programs.

• Lawmakers target private equity in youth sports: The proposed “Let Kids Play Act” would ban PE firms from owning or investing in youth sports leagues, teams, facilities, and tournaments, forcing divestitures within two years. The bill, albeit unlikely to pass in its current form, follows mounting backlash over consolidation strategies and rising participation costs, with lawmakers accusing firms of turning community-based athletics into profit extraction vehicles.

• Delta CEO says Spirit’s failure reflects deeper pressure on low-cost airlines: CEO Ed Bastian pointed to weak economics in the ultra-budget carrier model as fuel costs rise and consumers continue shifting toward premium experiences, doubling down on higher-margin products.

• Franklin Templeton CEO flags data center obsolescence risk, cautioning that 20-year AI infrastructure bets are increasingly vulnerable to technological disruption. Instead, she argues illiquid private assets belong in retirement accounts where long horizons justify the premium.

• Brookfield closes in on $935M five-year, covenant-like loan for World Freight acquisition, part of a wave of funding across APAC amid an otherwise depressed buyout loan market, as buyout loans are down 61% from last year.

• Welsh, Carson, Anderson & Stowe are targeting a $5B middle-market buyout fund for technology and healthcare related investments.

• SK Capital’s chemical bets unravel amid sector downturn: The $10B chemical-focused private equity firm has handed four portfolio companies to creditors in recent years, with Archroma narrowly securing a $1B high yield debt extension. Its 2019 $2B buyout fund yielded -0.35% IRR against a 13.9% peer median, as post-Ukraine energy shocks and Chinese oversupply gutted the sector.

• Whirlpool looks to refinance $3B debt wall: Whirlpool is in early investor talks for a bond issue to address front-end maturities, as shares near a 17-year low and free cash flow hit $896M last quarter. Moody’s cut the company to Ba3, citing recession-level appliance demand.

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M&A Transactions💭 

Sun Country Airlines, operates low-cost air carriers, was acquired for $1.386B by Allegiant Travel (NAS: ALGT). EV/EBITDA was 11.47x and EV/Revenue was 1.82x. Goldman Sachs advised on the sale.

Storyteller, retailer of handmade fashion accessories, has reached a definitive agreement to be acquired for JPY 567.5M by Shikigaku Growth Capital Partners.

Orla Mining (TSE: OLA), a mineral exploration company, has reached a definitive agreement to be acquired for CAD 18.821B by Equinox Gold (TSE: EQX). EV/EBITDA was 20.63x and EV/Revenue was 10.61x.

National Taxi, provider of taxi and mobility services, has reached a definitive agreement to be acquired for AED 1.45B by Dubai Taxi Company (DFM: DTC).

Lacorium Health International, developer of dermatological skincare products, has reached a definitive agreement to be acquired for $150.0M by Prestige Consumer Healthcare (NYS: PBH). EV/Revenue was 3.75x.

FW, operator of a special-purpose company, has reached a definitive agreement to be acquired for $314.0M by Inbound Tech (TKS: 7031).

Eight Directions Technology, manufacturer of customized disposable foodservice packaging products, has reached a definitive agreement to acquire Quartzsea Acquisition (NAS: QSEA) through a $515.0M reverse merger.

Assertio Holdings (NAS: ASRT), a pharmaceutical company, has reached a definitive agreement to be acquired for $191.549M by Zydus Lifesciences (BOM: 532321). EV/Revenue was 1.88x. Moelis & Company advised on the sale.

Aireon, manufacturer of space-based air traffic surveillance systems, has reached a definitive agreement to be acquired for $366.7M by Iridium Communications (NAS: IRDM). PJT Partners advised on the sale.

Private Placement Transactions💭 

Semidrive Technology, manufacturer of automotive-grade semiconductor chips, raised nearly $100.0M of Series C venture funding led by Jiangsu Industrial Investment Group.

Recursive, developer of a self-improving AI system, raised $650.0M of Series A venture funding led by GV and Greycroft at a pre-money valuation of $4.0B.

Oishii, producer of vertically farmed, indoor-grown berries and tomatoes, raised JPY 24.0B of venture funding through a combination of debt and equity. JPY 18.0B of Series C was led by SPARX Group Company. JPY 6.0B loan was provided by Aozora Bank, Shoko Chukin Bank, Hokkoku Bank, Mitsubishi UFJ Trust and Banking, and Mizuho Bank.

Mind Robotics, manufacturer of AI-driven robotic systems, raised $400.0M of venture funding led by Kleiner Perkins.

MicroCyto, manufacturer and developer of biotechnology solutions, raised CNY 1.5B of venture funding led by Mr. Zhang Qibin, Mr. Tan Ruiqing, and Xingyin Investment.

Fractile, developer of advanced AI inference hardware, raised $220.0M of Series B venture funding led by Founders Fund, Accel, and Factorial Funds.

Anduril Industries, developer of an autonomous defense technology, raised $5.0B of Series H venture funding led by Andreessen Horowitz and Thrive Capital at a pre-money valuation of $56.0B.

Create Medicines, developer of a cell therapy platform, raised $122.0M of Series B venture funding led by Newpath Partners, Hatteras Venture Partners, and ARCH Venture Partners.

Odds of the Day 🍒 

Polymarket traders are pricing in a 74% chance of Starmer being ousted as Prime Minister by the end of the year.

Video of the Day 🧭

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