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Max Knoblauch

Netflix declines to raise bid for Warner Bros., paving the way for Paramount to triumph

Netflix said Thursday evening that it was declining to increase its offer for Warner Bros. Discovery, effectively ending the streaming platform’s pursuit of the studio and ensuring that Paramount’s improved bid of $31 per share would emerge victorious.

Netflix is up almost 9% on the news in premarket trading on Friday, while Paramount is up more than 8%, too, as of 4:15 a.m. ET.

In a statement, Netflix co-CEOs Ted Sarandos and Greg Peters said “this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

The Warner Bros. Discovery board said Thursday afternoon that it had determined Paramount’s latest bid constitutes a superior proposal to the $83 billion agreement it has with Netflix.

Before Netflix’s announcement Thursday evening, the Netflix-Warner Bros. merger had remained in effect, and Netflix had a four-business-day window to amend its deal to match or beat Paramount’s. The streamer’s announcement effectively eliminates that waiting period and allow Paramount’s offer to move forward.

Netflix’s statement that it is pulling out of the race allows the Warner Bros. board to terminate its merger agreement with the streamer.

It had been reported that Netflix had ample cash to increase its offer for Warner Bros., but in not doing so, it appears that Netflix management saw its share price increase in the wake of Paramount boosting its bid, and took to heart the strong signal from its own investors that they weren’t exactly rooting for it to make the purchase.

Earlier on Thursday, Warner Bros.’ announcement boosted Paramount’s odds on prediction markets to end up in control of the company. As of 4:40 p.m. ET on Thursday, event contracts speculating on which company would ultimately come out on top of the bidding war had Paramount at a 62% chance over Netflix’s 33% odds.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

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Netflix Declines to Raise Offer for Warner Bros.

Netflx declines to raise offer for Warner Bros.

In a statement, Netflix co-CEOs Ted Sarandos and Greg Peters said “this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

The Warner Bros. Discovery board said Thursday afternoon that it had determined Paramount’s latest bid constitutes a superior proposal to the $83 billion agreement it has with Netflix.

Before Netflix’s announcement Thursday evening, the Netflix-Warner Bros. merger had remained in effect, and Netflix had a four-business-day window to amend its deal to match or beat Paramount’s. The streamer’s announcement effectively eliminates that waiting period and allow Paramount’s offer to move forward.

Netflix’s statement that it is pulling out of the race allows the Warner Bros. board to terminate its merger agreement with the streamer.

It had been reported that Netflix had ample cash to increase its offer for Warner Bros., but in not doing so, it appears that Netflix management saw its share price increase in the wake of Paramount boosting its bid, and took to heart the strong signal from its own investors that they weren’t exactly rooting for it to make the purchase.

Earlier on Thursday, Warner Bros.’ announcement boosted Paramount’s odds on prediction markets to end up in control of the company. As of 4:40 p.m. ET on Thursday, event contracts speculating on which company would ultimately come out on top of the bidding war had Paramount at a 62% chance over Netflix’s 33% odds.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

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Matt Phillips

Intel is having its best year since 1987

Intel is up for its ninth straight session Monday, continuing the romp that has made it the top performer in the S&P 500 this month, ganing roughly 46% in April so far.

The series of deals Intel has recently struck with Alphabet on a custom chip collaboration and Elon Musk on his Terafab project seem to be helping to reshape traders’ views on what was seen, only a few months ago, as an ailing American tech icon.

That turnaround in perception has been nothing short of historic.

Intel is now up almost 230% over the last year. You have to go back to 1987 to find a better 12-month run for the stock.

Still, the forward-looking market is giving Intel credit for a turnaround that really hasn’t happened yet on an operational level. Wall Street analysts expect another year-on-year sales decline when Intel reports results on April 23, while anticipating that Intel can cobble together adjusted earnings per share of a penny.

All the same, the market clearly sees a future that, at least for now, it likes.

markets
Luke Kawa

Neoclouds surge as Anthropic’s deals mean the scramble for compute is on

Just because software stocks are crushing semiconductors on Monday in a reversal of recent trends doesn’t mean the AI trade is taking a nosedive.

CoreWeave is on fire yet again, with strong follow-through after having reached deals to provide AI compute to Anthropic and Meta last week. Other data center companies like Nebius, IREN, Cipher Digital, and Applied Digital are also up big.

A scramble for compute is particularly great news for these providers of “surge capacity.”

Anthropic is producing AI tools and capabilities that people love. What people have been less than enamored with about Anthropic (especially as of late!) is access to compute, with myriad complaints of stealth token rationing.

OpenAI has reportedly argued that its immense cash burn to accumulate compute is therefore its competitive advantage over the Claude developer. Anthropic is now under pressure to spend a lot more on compute so that its customers are happy with the ability and availability of its offerings.

Similarly, a lot of networking/connectivity stocks that spiked on Friday, like Astera Labs and POET Technologies, are building on that momentum, with flash memory standout Sandisk up strongly as well.

Separately, PJM warned after the close on Friday that the US grid operator is looking to add 15 gigawatts of new power supply due to expected increases in demand tied to AI through Q1 2027. It’s seemingly clearer that there’s strong visibility into increased appetite for compute, power, and the other materials needed to facilitate the boom.

As such, AI energy plays like Vistra, Bloom Energy, Oklo, and Plug Power are also enjoying a solid start to the week.

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Luke Kawa

Unloved software stocks have their day in the sun

Call it a dead-cat bounce — or for the more optimistically inclined, beaten-down growth stocks finally offering some value:

The iShares Expanded Tech Software ETF is catching a bid on Monday morning, up nearly 3% as of 10 a.m. ET, while the VanEck Semiconductor ETF is trading roughly flat.

As a compromise, you could say that software’s trading like nobody owns it and investors have decided to maybe not short it so much.

The likes of Workday, ServiceNow, AppLovin, CrowdStrike, Atlassian, Palantir, and Circle are posting massive gains to kick off the week.

In the five sessions ended Friday, the semis ETF outperformed its software counterpart by a whopping 18.4 percentage points, the most on record.

For what it’s worth, the chart also shows that semis vs. software has had some very significant, tradable reversals despite how poorly the latter has performed this year. In fact, software’s best-ever five-session stretch relative to semis came in early March, when traders were digesting the US-Israeli attacks against Iran.

These two major parts of the tech sector have never traded more out of step with one another than they have been lately.

markets
Matt Phillips

Goldman analysts are watching these non-software growth stocks

It’s been a rough run for what Wall Street calls secular growth stocks: companies that can boost sales because of long-term shifts in their sector, almost regardless of broader economic conditions.

Software stocks, longtime secular growth poster children, have recently been creamed by worries their days are numbered due to AI. Despite weathering the market shocks from the war with Iran relatively well, software remains down sharply, with the iShares Expanded Tech Software ETF down roughly 30% for the year.

But software hasn’t been the only problem.

“Even excluding Software, many secular growth stocks have recently
underperformed and trade at discounted valuation multiples relative to the
past decade,” Goldman analysts wrote in a note published Friday.

That could be an opportunity, they suggested.

“The median non-software stock in our ‘Rule of 10’ secular growth screen trades at a P/E of 29x, a 53% premium to the median S&P 500 stock that is close to the bottom of the range during the past 10 years. Consensus 2027 sales growth for the median company in the screen is 3x the growth rate for the median S&P 500 company. PEG ratios are also similar to levels reached during recent troughs.”

The company noted that power infrastructure is a particularly interesting place to prospect for non-software-related growth at something of a discount.

It also provided a helpful list of non-software growth stocks based on its screen for companies that have notched 10% sales growth in 2024 and 2025 and are expected to do the same through 2028.

It includes familiar AI-related names like Broadcom, Advanced Micro Devices, Vertiv Holdings, Arista Networks, and Nvidia, as well as a couple outliers such as DoorDash and Axon.

We’ve thrown in the dates of their upcoming earnings reports, which will be interesting to keep an eye on over the next few weeks.

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