Key Takeaways
- Larry Ellison's $40 billion backing strengthens Paramount Skydance's bid for Warner Brothers Discovery.
- Gold and silver prices have reached record highs, with silver's industrial demand exceeding supply.
- Alphabet is acquiring Intersect for nearly $5 billion to secure AI data center power and capacity.
- Skepticism grows over Tesla's stock performance amid increasing EV market competition and delivery concerns.
- The banking sector, particularly small caps and regional banks, shows potential for significant growth in 2026.
Deep Dive
- Paramount Skydance increased its bid for Warner Brothers Discovery.
- Larry Ellison personally guaranteed over $40 billion in equity financing, addressing previous funding concerns.
- An analyst predicted an Ellison win, emphasizing the critical role of content and streaming competitiveness for the next five years.
- Lionsgate Vice Chairman Michael Burns believes the Warner Brothers Discovery battle validates premium content value.
- He noted Lionsgate's library represents a significant asset with strong revenue and margin potential.
- Lionsgate is now positioned as a pure-play content company after separating from Starz.
- Lionsgate's stock is perceived as undervalued, with market recognition expected soon due to its extensive content library.
- Projections for fiscal years 2026 and 2027 indicate a strong movie slate and twice the television output from the previous year.
- The company is focused on consolidating its businesses and strengthening earnings projections across management, television, and film divisions.
- Gold and silver reached record highs, marking their best year since 1979, with mining stocks also hitting all-time highs.
- Silver's annual demand is exceeding supply, with its price expected to rise considerably due to significant industrial applications.
- Bitcoin, tracked by the IBIT ETF, is underperforming, suggesting investors are favoring gold as a diversification asset due to market nervousness.
- Alphabet is acquiring data center and energy infrastructure company Intersect for nearly $5 billion.
- The acquisition aims to secure power and capacity for Alphabet's AI build-out, addressing surging demand.
- This move represents vertical integration to secure energy supply, managing a projected U.S. power deficit where demand outstrips supply.
- Analysts express skepticism about Tesla's continued stock growth, citing competitors like Ford and GM rolling back EV investments.
- Concerns include potential double-digit delivery declines due to the expiration of EV tax credits and unpopularity in Europe.
- Robo-taxi limitations and challenges with battery capacity for Optimus robots are highlighted as significant hurdles.
- KBW's Chris McGratty highlights Citi's ongoing turnaround, business simplification, and projected return on equity improvement, noting it trades below its tangible book value.
- He sees continued opportunity in the bank trade due to excess capital, with large bank earnings revisions outperforming smaller ones.
- McGratty favors a selective approach for regional banks, specifically liking Citizens Bank for its organic momentum and capital markets exposure.
- The Russell 2000 has shown strong performance, hitting all-time highs and pacing for its best monthly gain streak since mid-2021.
- The outlook for small caps in 2026 is considered positive, especially with potential benefits from lower interest rates due to their sensitivity to variable rates.
- Three small-cap stock picks include Ollie's (discount retailer), LeMetch (healthcare), and Molis (acquiring bankers during private equity downturn).