Welcome back!
Markets continued to have a nice rally as oil and rates cooled. It remains a great time to be an AI-centric bull; but we continue to caution on rates.
Jamie Dimon had a great point yesterday, warning that a global bond selloff will start to squeeze corporate borrowers. Rising government borrowing costs & AI boom spending will push up the cost for companies refinancing or raising new debt.
The ROIC on AI continues to outpace any wall of worries, but tougher capital markets + any noise regarding Anthropic ARR deceling (MSFT and META were scaling back) are something we’re keeping an eye on in the rear-view mirror.
Let’s get into it.
Here’s a look at the remaining earnings for this week.
Wednesday: Applied Digital, Levi Strauss & Co.
Thursday: Pepsico, Tilray Brands
Friday: Delta Air Lines
Here’s a look at economic data this week (estimates are in quotations).
Wednesday: ADP National Employment Report (68,000), 3rd estimate GDP (1.5%), Advance U.S. Trade Balance in Goods, Wholesale Inventories, Retail Inventories, Personal Income M/M% (0.4%), Consumer Spending M/M% (0.8%), PCE Price Idx M/M% (0.3%), PCE Price Idx Y/Y% (3.7%), PCE Core Price Idx M/M% (0.3%), PCE Core Price Idx Y/Y% (3.3%), Chicago Business Barometer ISM-Chicago Business Survey Chicago PMI (52)
Thursday: Weekly Jobless Claims (200K), US Manufacturing PMI (57), ISM Report On Business Manufacturing PMI (54.9), Construction Spending (0.1%)
Friday: Employment Report (84K), Unemployment Rate (4.1%), Avg Hourly Earnings M/M% (0.3%), Avg Hourly Earnings Y/Y% (3.1%), Factory Orders (0.2%)
Earnings Corner 💸
Constellation Brands $STZ ( ▲ 2.08% ) beat on the top and bottom lines with revenue of $2.63B vs. $2.54B and EPS of $3.74. Results were helped by slight growth in beer sales and a 17% jump in wine & spirits, but underlying beer demand remained soft as depletions fell, with weakness in Modelo and Corona suggesting some sales growth came from distributor inventory rather than consumer demand. Mgmt. reaffirmed FY27 guidance slightly below consensus, while higher logistics, commodity and marketing costs remain a margin headwind.
On The Move 📈 📉
Constellation Energy $CEG ( ▲ 12.25% ) jumped after agreeing to a 20-year, 890MW power-purchase agreement with Google, boosting output at 11 existing reactors and lifting Talen $TLN ( ▲ 12.43% ) , Vistra $VST ( ▲ 10.77% ) , and NRG $NRG ( ▲ 7.03% ) on the back of potential Trump administration loan rumors.
Corteva $CTVA ( ▲ 12.27% ) rose after JPMorgan upgraded the stock to Overweight and undervalued following the company’s seed-and-genetics spin-off into Vylor.
Marvell $MRVL ( ▲ 5.81% ) climbed after management raised 2028 revenue outlook and outlined heightened AI goals at its Investor Day presentation.
Genomics stocks $TWST ( ▼ 18.55% ) and $TXG ( ▼ 17.48% ) tumbled as ARK Invest trimmed positions in both after massive runs.
Option Care Health $OPCH ( ▲ 32.65% ) surged after agreeing to be acquired by McKesson $MCK ( ▲ 0.68% ) and Clayton Dubilier & Rice for $5.8B, a 37% premium.
NeoGenomics $NEO ( ▼ 13.72% ) sank after announcing a CEO succession plan naming COO Warren Stone as its next CEO. Q3 revenue beat estimates, but the company didn’t raise guidance.
Neoclouds $NBIS ( ▲ 7.44% ) and $CRWV ( ▲ 4.96% ) popped after Nebius acquired Inferize, a startup whose technology cuts idle time on GPUs used to run AI models. The deal price wasn’t disclosed.
IPO Roundup 📍
Moonshot AI heads toward a Hong Kong IPO in Q1 2027 after closing its final private funding round at a $50B valuation, up from $31.5B this summer. ARR is expected to double from $1B to $2B by December.
OpenAI is in talks with UAE funds for a $30Bn raise. The raise would value the company at about $1.4T, up from $852B in March.
Firmus Grid is oversubscribed on its IPO of up to $5.5B, one of Australia's largest ever. Still, some investors are wary that 57.6% of existing shares can be sold as soon as the Nvidia-backed data center operator lists.
Lambda is raising up to $4B at a $14.5B valuation ahead of a planned 2027 IPO. The AI cloud provider recently signed a $35B deal with Anthropic.
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Today’s Headlines 📖🍿
The New York Fed has been visiting big banks to review their private credit loans. Officials have visited JPMorgan, Wells Fargo, Barclays, and Morgan Stanley since the spring.
Skydance CEOs David Ellison and Ynon Kreiz told staff layoffs are coming after the Paramount-Warner Bros. merger closed. The company is targeting at least $6Bn in synergies, part of which will come from layoffs.
Only 11% of businesses can accurately forecast their AI spending. AI is billed by the token, but usage swings so much from task to task that one study found cheaper models ended up costing more 32% of the time.
SpaceX is in talks to raise $40Bn of debt to buy Nvidia chips. Apollo is leading the financing, which includes about $10Bn in bank loans and $30Bn in IG debt.
Citi is cutting its investment banking analyst program to two years from three. The move is part of a push to retain top talent as buyout firms poach aggressively from Wall Street.
Wall Street bonuses are expected to top last year’s record as the industry is on pace for more than $90Bn in profits, up from a $49.2Bn bonus pool in 2025 when the average bonus was $246,900.
Meta and Microsoft are scaling back internal use of Anthropic’s Claude. Both are steering employees toward their own in-house AI tools.
KKR’s BDC K-FITS exceeded its 5% quarterly redemption cap to meet all withdrawal requests, which came in at 5.06%, up from 3.43% last quarter, even as many direct lending peers saw redemptions ease.
Apollo plans to fund its £3.5Bn debt package for the EasyJet acquisition through asset-backed aircraft financing rather than high-yield bonds, as surging government bond yields make secured aircraft debt cheaper.
JPMorgan is marketing a $5Bn leveraged loan for Volta Infrastructure at a yield of ~11%, one of the highest borrowing costs for AI financings, split into a $3.7Bn loan for 36,000 Nvidia GPUs and a $1.3Bn loan backing the lease on a Norway data center.
L’Oreal’s US subsidiary is looking to move its talc and hair-relaxer tort liabilities into a separate entity for sale to an outside investor, resolving the claims outside of Chapter 11.
A potential Starbucks-Chipotle merger “might be crazy enough to work,” per Semafor. The chains would operate separately but combine their real estate and back-office operations, similar to Yum Brands.
The Euroleague rejected a merger offer from the NBA. The NBA is now pitching European teams directly on joining NBA Europe.
Niobrara Capital closed its Founders Fund at over $1.1Bn, beating its target by 50%. The firm invests in middle-market B2B technology companies.
Deep dives:
J.P. Morgan says the future will be defined by talent that doesn’t exist yet. Its new report argues workers must be capable of thinking across fields as AI, biotech, advanced materials, and energy collide.
Carlyle’s Q3 economic indicators are out. Jason Thomas breaks down what data from 2,000+ portfolio companies says about growth, rates, and AI spending.
Brookfield says infrastructure investing will look materially different over the next decade. Digitalization, decarbonization, and deglobalization are widening the opportunity set, yet many portfolios may lack exposure to these growth trends.
PIMCO says global growth is holding, but the risks around it are widening. Its outlook relies on AI investment, resilient consumers and China, plus steady central banks. A failure of one of these could pressure the others.
M&A Transactions💭
Paramount officially closed its $110.0B deal to acquire Warner Bro. Discovery.
StormTrap, manufacturer of underground stormwater management systems, has reached a definitive agreement to be acquired by Advanced Drainage Systems (NYS: WMS) for $490.0M. EV/EBITDA was 12.25x. Raymond James and William Blair & Company advised on the sale.
Sofie Biosciences, developer of molecular imaging probes and devices designed to offer radiopharmaceutical products, has reached a definitive agreement to be acquired by GE HealthCare Technologies (NAS: GEHC) for $945.0M.
RXO (NYS: RXO), a brokered transportation platform, has reached a definitive agreement to be acquired by C.H. Robinson Worldwide (NAS: CHRW) for $6.5B. EV/EBITDA was 342.12x and EV/Revenue was 1.07x. Goldman Sachs advised on the sale.
PTC (NAS: PTC), PTC is a US-based global company that offers high-end computer-assisted design, product lifecycle management, and augmented reality solutions, has reached a definitive agreement to be acquired by Schneider Electric (PAR: SU) for $24.305B. EV/EBITDA was 14.09x and EV/Revenue was 8.23x.
Prathyak Laboratories, provider of pharmaceutical research and development services, was acquired by Sai Parenteral's (NSE: SAIPARENT) for $150.0M.
IntraBio, developer of novel therapies designed for the treatment of rare and neurodegenerative diseases with high unmet medical needs, has reached a definitive agreement to be acquired by Shionogi (TKS: 4507) for $2.0B. Centerview Partners and Morgan Stanley advised on the sale.
Hermes Transportes Blindados (LIM: HERMESC1), engaged in providing services of transfer, custody & processing of money & securities, was acquired by Loomis (STO: LOOMIS) for SEK 4.0B.
EnviroServe, provider of environmental and waste management services, was acquired by Clean Harbors (NYS: CLH) for $470.0M. EV/EBITDA was 17.41x and EV/Revenue was 1.88x. Brown Gibbons Lang & Company and RBC Capital Markets advised on the sale.
Athabasca Oil (TSE: ATH), an exploration and production company developing Thermal Oil and Light Oil resources in the Western Canadian Sedimentary Basin, has reached a definitive agreement to be acquired by Cenovus Energy (TSE: CVE) for CAD 5.931B. EV/EBITDA was 12.88x and EV/Revenue was 4.26x. National Bank Capital Markets advised on the sale.
Clarion Events, provider of event and exhibition organization services, has reached a definitive agreement to be acquired by Informa (LON: INF) for GBP 2.24B.
Vaquero Midstream, operator of midstream energy infrastructure, has reached a definitive agreement to be acquired by Energy Transfer (NYS: ET) for $2.625B. Houlihan Lokey advised on the sale.
Sunrise Senior Living, operator of senior living communities intended to provide residential care and support services, has entered into a definitive agreement to be acquired by BDT & MSD Partners through a $1.0B LBO. J.P. Morgan advised on the sale.
ezCater, provider of online corporate catering services, has reached a definitive agreement to be acquired by Uber (NYS: UBER) for $2.3B. Evercore Group advised on the sale.
DBM Global (OTCM: DBMG), a United States-based company engaged in providing construction and superior asset management solutions, was acquired by IES Holdings (NAS: IESC) for $701.148M. Jefferies advised on the sale.
Private Placement Transactions💭
Valon, developer of a mortgage servicing operating system, raised $150.M of Series D venture funding from Andreessen Horowitz, Ribbit Capital, and other undisclosed investors at a pre-money valuation of $2.15B.
SignSplit, developer of a signed-data platform designed to protect and verify real-world human data, raised $400.0M of seed funding from W Group at a pre-money valuation of $600.0M.
Vinci AI, developer of a physics-based artificial intelligence simulation platform, raised $250 million of venture funding in a deal led by ADVENT, Xora Innovation, and Temasek Holdings at a pre-money valuation of $1.25B.
Databricks, developer of a data analytics platform designed to offer an open and unified environment for the data and artificial intelligence sectors, raised $5 billion of Series M venture funding in a deal led by Coatue Management, MGX, Blackstone, T. Rowe Price Group, and Sixth Street Partners at a pre-money valuation of $185.0B.
Type One Energy, manufacturer of fusion energy systems intended to provide sustainable, affordable fusion power to the world, raised $200.0M of Series B venture funding in a deal led by Breakthrough Energy and Clutterbuck Capital Management at a pre-money valuation of $1.23B.
Capitolis, developer of a financial platform designed to optimize resource allocation among market participants, raised $220.0M of venture through a combination of debt and equity at a pre-money valuation of $1.78B. $120.0M of Series E equity was led by Citigroup with participation from Tradeweb Markets and J.P. Morgan. State Street and other investors also participated in the round. A $100.0M loan was provided by Silicon Valley Bank, Pinegrove Venture Partners, and Hercules Capital.
Odds of the Day 🍒
Polymarket traders are pricing in a 34% chance of Google having the best AI model at year-end.
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