| | Good morning. Time for a tariff reset. Again. Last week, the Supreme Court struck down most of the import taxes the Trump administration tried to impose under an emergency powers law. But President Donald Trump has sworn to use other methods, including some that have never been used before, to impose tariffs on foreign goods. On Tuesday, he became the first commander in chief to use Section 122 of the Trade Act of 1974 by placing 10% across-the-board levies on a wide swath of global imports. Trump plans to crank the tariffs up an additional five points to 15%, the maximum allowable under the law, but would need congressional authorization to keep them in place after 150 days. At which point, we might be dusting off old law books once again to understand what happens next. | | | | | With apologies to Joni Mitchell, this is the circle game. Shares in AMD climbed 8.8% Tuesday as markets reacted favorably to a chip deal worth up to $100 billion that the semiconductor-maker struck with Meta. Nearly identical to a pact the company hatched with OpenAI late last year, it took the same "circular" shape as deals that triggered some initial AI anxiety last fall. Circularity for the Singularity It goes like this. Meta agreed to purchase 6 gigawatts of computing power from AMD to meet its growing data center needs. In exchange, AMD agreed to give Mark Zuckerberg's social media giant warrants to buy up to 10% of its shares for a mere penny each. There are conditions of course: Most notably, the warrants will be paid in full only if AMD's stock reaches $600. That's almost triple the $213 it sold for on Tuesday. Meta has an extraordinary incentive to keep buying AMD chips. The more business it throws to its partner, the greater the chance of converting those warrants. Since AMD has basically the same deal with OpenAI, 20% of the company is potentially working under warrant to two of its biggest customers. "Circular" transactions like these, where the interests and commitments of suppliers, customers and investors all seemingly become one big loop, raise plenty of eyebrows. Microsoft has invested nearly $14 billion in OpenAI and holds a 27% stake in its for-profit subsidiary, while the AI developer agreed to purchase up to $250 billion in Microsoft Azure Cloud services. Amazon, Microsoft and Nvidia have all invested billions in Anthropic, which has in turn pledged to buy from them. Intel struck a circular deal of its own on Tuesday, becoming an investor in and manufacturer for startup AI chipmaker Sambanova. Comparisons to the 1990s dotcom bubble have been made in some cases, though that could be overblown: - After the AMD-OpenAI pact was announced in October, JPMorgan Asset Management said it's worth scrutinizing the "enormous" scale and "unprecedented" pace of AI investments, as well as the return-on-investment assumptions in the sector.
- However, JPMorgan also noted that only 7% of the fiber-optic network during the dotcom era was utilized, meaning there was a massive capacity surplus. Today is a different day: "Data center vacancy rates are at record lows and utilization levels hover around 80%. Demand for compute continues to far outpace supply: More data has been created in the last three years than in all history."
  Zuck's Edge: Notably, some of these deals could be seen as a pragmatic hedge. Meta agreed last week to buy millions of chips from Nvidia, and the AMD deal gives Meta leverage in a year where its capital spending could reach $135 billion. Now it has two major suppliers to bargain with. You don't even need an analyst to read between the lines, because Zuckerberg all but said so himself, calling the deal "an important step for Meta as we diversify our compute." Written by Sean Craig | | | | | | | | | | | | | | Hollywood's longest-running soap opera may be nearing its final episode. After reopening negotiations last week, Warner Bros Discovery said on Tuesday that it had received Paramount's latest and greatest acquisition offer, which came in at $31 per share and now may be the most appealing bid, according to reports. Now begins another review process, and if the board prefers the deal, Netflix will be given a four-day window to present a (presumably) final counterbid. But what are these media giants bidding for exactly? Up, Down, Left, Right Paramount and Netflix look at WBD and see different things. For Paramount, the acquisition would amount to pure horizontal integration, pairing two of Hollywood's remaining legacy studios to achieve the scale needed to truly compete in the streaming age. According to the most recent tallies, Paramount+ has 79 million subscribers, while WBD's HBO Max has about 128 million. Netflix, with its 325 million subscribers, swears its potential (if not likely) acquisition of WBD's streaming and studios unit amounts to vertical integration, not consolidation en route to apex predator status. After years of saying otherwise, Netflix is suddenly interested in the theatrical box office. WBD, on the other hand, recently scored its ninth-straight debut at the top of the US box office with the recent release of its Wuthering Heights adaptation. Co-CEO Ted Sarandos has also touted how roughly 80% of HBO Max subscribers also subscribe to Netflix as proof that the two services are complementary. Either way, a new era in media and entertainment appears imminent: - After a period of massive expansion, subscriber growth across the entire industry is beginning to slow. According to market data firm Antenna, premium services added only 18 million subscribers in the final quarter of 2025, resulting in year-over-year growth of just 7%, compared with 27 million new subscribers and 12% growth a year earlier.
- YouTube, meanwhile, continues to dominate TV time in the US. According to Nielsen, the Google-owned platform regularly accounts for 12% to 13% of all monthly TV viewing, more than any rival. Sarandos has argued that a combined Netflix-WBD venture would create a Hollywood-centric entity capable of competing in a new tech-dominated landscape (Note: Instagram launched a Reels TV app in December).
HALOw Blow: To put it in the parlance of the buzzy HALO framework (that'd be: Heavy Asset, Low Obsolescence), WBD isn't exactly checking the second box. On the other hand, its rich library of intellectual property, running the gamut from Batman to Harry Potter and Tony Soprano, certainly qualifies as asset-heavy. Does partial credit count in an $80 billion bidding war for the media world's most passed-around company? Written by Brian Boyle | | | | | | | | | Photo via Fisher Investments | | | | | | | | | Home Depot has remodeled Wall Street's outlook on its stock. Shares of the home improvement giant climbed 2% on Tuesday after the company's performance beat analysts' expectations during the last three months of its fiscal 2025 despite a lackluster housing market and drooping consumer confidence. Home Depot's adjusted earnings per share of $2.72 topped the $2.53 average estimate of analysts polled by FactSet. While sales fell nearly 4% to $38.2 billion, they were still higher than the $38.09 billion analysts expected. The Atlanta-based retailer also raised its quarterly dividend by 1.3% and said it would open about 15 new stores. Housing vs. HALO The home improvement company's fortunes may get an additional boost from Wall Street's latest obsession with asset-heavy stocks. Strategists at Goldman Sachs recently wrote that investors are increasingly turning to stocks with the "HALO effect" (heavy assets and low obsolescence) amid fears of AI disruption across industries such as financial services and software. Home Depot's business relies on a vast real estate footprint, inventory of everything from tools to paint to patio furniture, and a physical supply chain. In other words, it can't turn much of its business over to bots in the way capital-light companies can, which investors find soothing: - "Interest in Home Depot may be increasing as investors seek safety from AI-related volatility," CFRA senior equity analyst Ana Garcia told The Daily Upside. "We have seen volume activity trending above its five-year average, which has seen share value increase since the beginning of 2026."
- When asked whether AI-related fears are prompting investors to turn to Home Depot, Morningstar analyst Jaime Katz said, "I'd guess that has already happened." The stock traded between $330 and $340 at the end of 2025 and has since moved up "without the home improvement environment changing much," she added.
Housing Headache: Home price growth continued to cool at the end of last year, according to the latest S&P Cotality Case-Shiller Index data released on Tuesday. The numbers show a 1.3% annual gain for December 2025, down from 1.4% the previous month. "Inflation outpaced home price appreciation from June 2025 onward, eroding real home values through year-end and reversing a decade-long trend of positive real returns," S&P Dow Jones Indices said in a statement. Written by Mallika Mitra | | | | | - Reincarnated Spirit: Budget airline Spirit struck a deal with creditors to emerge from bankruptcy by early summer, with plans to slash flights and reduce its fleet in the offing.
- Robbed of a Job: Louvre director Laurence de Cars resigned Tuesday, months after the October heist of $102 million worth of jewels from the world's most visited museum.
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