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Will Fortnite Woes Sink Disney’s Digital Future?
10:20 am — DIS -0.7%
Walt Disney Co. (DIS 0.54%) CEO Josh D’Amaro’s first week is defined by tech friction after a $1 billion partnership with OpenAI collapsed. The AI startup shuttered its Sora video app, abruptly ending a three-year plan to populate Disney+ with AI-generated franchise content. Simultaneously, Epic Games — the “Fortnite” creator in which Disney holds a $1.5 billion stake — announced 1,000 layoffs following poor engagement with new game versions. Despite these setbacks to D’Amaro’s “connected” digital vision, the company is already pivoting toward rivals like Alphabet (GOOG +0.10%) to salvage its AI monetization strategy.
- The Search for a Safety Net: Analysts suggest Disney must move quickly to secure a new generative video partner to protect its youth-focused franchise pipeline and justify its massive streaming overhead.
- Gaming Portfolio Pressure: The struggles at Epic Games cast doubt on the immediate ROI of Disney’s “digital universe,” forcing a potential re-evaluation of how the House of Mouse integrates interactive media into its core earnings.
Today’s Change
(-0.54%) $-0.52
Current Price
$95.87
Key Data Points
Market Cap
$171B
Day’s Range
$95.21 – $97.17
52wk Range
$80.10 – $124.69
Volume
83K
Avg Vol
12M
Gross Margin
31.61%
Dividend Yield
1.30%
Top of the Morning
10:15 am — ONON -8.6%
By Andy Cross
Motley Fool CIO
Swiss sneaker makers On Holdings (ONON 7.32%) announced today that its co-founders will step in as co-CEOss in May. Longtime executive, CEO/CFO Martin Hoffman, will step aside but stay on as an advisor through 2027. Frank Sluis joins as new CFO as part of the transition. And On will promote Scott Maguire to President and COO to focus on operations like logistics, technology, and marketing — critical areas to define On’s future success.
This won’t be the first time On has implemented a co-CEO structure. Just about a year ago, the company moved to the Hoffmann-single-CEO role when Marc Mauer stepped down as co-CEO after 12 years in that position. But Hoffmann kept the CFO role.
Opening Bell
9:35 am — NVDA +1.7%, AMD +5.1%, INTC +3.9%
The Dow jumped 548 points Wednesday following reports of a 15-point U.S. peace plan delivered to Tehran. The news sent West Texas Intermediate crude sliding 4% to $88, providing a reprieve for equity multiples. The S&P 500 and the Nasdaq tracked higher as Treasury yields retreated. Despite the optimism, Iranian state media’s rejection of ceasefire efforts and the U.S. Army’s 82nd Airborne Division deployment kept volatility high. Tech leaders like Nvidia (NVDA +2.77%), AMD (AMD +6.82%), and Intel (INTC +6.73%) led gains as investors bet on de-escalating inflationary pressures.
Leadership Shakeup at On as Growth Slows
9:15 am — ONON -5.2% in pre-market trading
On Holding (ONON 7.32%) is returning to its roots, appointing co-founders David Allemann and Caspar Coppetti as co-CEOs effective May 1. The leadership pivot follows a disappointing sales forecast earlier this month that sent shares tumbling, as the Swiss brand struggles with a projected slowdown in growth. Outgoing CEO Martin Hoffmann, who steered the company through its 2021 IPO, leaves as the firm fights to maintain its “premium play” status against legacy titans like Nike (NKE 0.65%) and Adidas (ADDYY +1.78%). Investors are wary; shares fell 4% in premarket trading as the market weighs whether this founder-led transition can preserve the innovative edge that originally stole market share from the industry’s old guard.
- Revolving Door at the Top: The executive shuffle extends beyond the CEO suite, with a new CFO and COO also slated to take the reins in May as part of a total operational reset.
- The Premium Gamble: By being increasingly selective with product franchises, the new co-CEOs are doubling down on high-margin exclusivity even as global consumer spending on athletic apparel begins to soften.
Chewy Soars as Record FCF Hits $232 Million
8:45 am — CHWY +10.23% in pre-market trading
Chewy (CHWY +14.67%) achieved growth in active customers and cash flow but posted lower GAAP earnings year over year. Revenue increased slightly to $3.26 billion while adjusted EBITDA rose 30.4% in the quarter. Management expects continued profitable growth and margin expansion in fiscal 2026, though no specific guidance was provided.
Today’s Change
(14.67%) $3.44
Current Price
$26.89
Key Data Points
Market Cap
$9.7B
Day’s Range
$25.01 – $27.33
52wk Range
$22.74 – $48.62
Volume
537K
Avg Vol
7.9M
Gross Margin
28.58%
Merck’s $6.7B Terns Deal Targets 2028 Patent Risk
8:00 am — MRK +0.42%, TERN +5.34% in pre-market trading
Merck (MRK +2.05%) announced Wednesday a definitive agreement to acquire clinical-stage biotech Terns Pharmaceuticals (TERN +5.36%) for $6.7 billion. The all-cash deal, priced at $53 per share, aims to secure Terns’ lead candidate, TERN-701, an oral allosteric BCR-ABL inhibitor for chronic myeloid leukemia (CML). Merck CEO Rob Davis is moving aggressively to diversify the company’s oncology portfolio as its mega-blockbuster Keytruda–which generated $31.7 billion in 2025 (nearly half of total revenue)–approaches its 2028 U.S. patent expiration. The transaction is expected to close in the second quarter of 2026, resulting in a one-time charge of approximately $5.8 billion.
- Clinical Differentiation: TERN-701 is currently in the CARDINAL Phase 1/2 trial, with data presented in late 2025 showing a 75% molecular response rate. Merck believes the drug could be “best-in-disease,” offering better safety and convenience (no food restrictions) compared to Novartis‘s (NVS +1.56%) rival therapy, Scemblix.
- Structural Reorg: The acquisition follows Merck’s February 2026 decision to split its “Human Health” business into two stand-alone units: Oncology (led by Jannie Oosthuizen) and Specialty, Pharma & Infectious Diseases (led by Sanofi veteran Brian Foard). This restructuring is designed to streamline the launch of over 20 anticipated “blockbuster” growth drivers by 2030.
Today’s Change
(2.05%) $2.39
Current Price
$118.76
Key Data Points
Market Cap
$288B
Day’s Range
$116.00 – $119.18
52wk Range
$73.31 – $125.14
Volume
83K
Avg Vol
12M
Gross Margin
74.21%
Dividend Yield
2.85%
This Morning’s Breakfast News
7:30 am — BRZE +22.64% in pre-market trading
Braze (BRZE +21.75%) popped 20% overnight, after the Rule Breakers recommendation beat fourth-quarter revenue expectations with a 28% jump year over year (YoY) to $205 million. Operating income came in 84% higher than last year’s comparable quarter, as the company’s communications tools attracted 13.6% more net customers.
- “Early in fiscal 2027, we passed $800 million in annual recurring revenue”: CEO William Magnuson spoke of organic revenue growing for the third straight quarter, as remaining performance obligations broke through the trillion-dollar level.
- 2027 revenue between $884 million and $889 million: Management expects 20% revenue growth in fiscal 2027, starting with around $205 million in the first quarter. Investors should watch Braze’s dollar-based net retention rate, which declined YoY.
ICYMI: Tuesday’s Scoreboard
7:00 am — NUE unchanged in pre-market trading
Nucor (NUE +1.94%) was the subject of the latest Scoreboard video.
Abel’s First Deal Is a Perfect Capital Fit
6:15 am — BRKB +0.46% in pre-market trading
By Buck Hartzell
Berkshire Hathaway (BRKB 0.26%) just inked a 10-year strategic partnership with Tokio Marine. Berkshire subsidiary National Indemnity will invest $1.8 billion to purchase 2.49% of Tokio Marine Holdings. They can increase their ownership up to 9.9% of Tokio’s shares through open market purchases.
Tokio has a proven acquisition track record and as everyone knows, Berkshire has plenty of capital. This seems like a good match and it’s the first deal under Greg Abel. It’s nice to see Mr. Abel start to put some of that cash hoard to work!
Today’s Change
(-0.26%) $-1.24
Current Price
$478.09
Key Data Points
Market Cap
$1.0T
Day’s Range
$477.13 – $482.91
52wk Range
$455.19 – $542.07
Volume
55K
Avg Vol
4.8M
Gross Margin
23.63%
Apple Reboots Siri as a Conversational AI App
6:00 am — AAPL +0.62% in pre-market trading
As it works to restructure its AI offerings, Apple (AAPL +0.52%) is testing a stand-alone app version of its Siri AI assistant – set to be launched at its annual Worldwide Developers Conference in June, reports Bloomberg.
- “Ask Siri” button coming to iOS 27?: Delayed from last year, Apple promised the new Siri would launch in 2026, and it’s likely to integrate across Mac and iPhone products – with access to personal data, including messages and emails.
- AI chatbot format: The new Siri is expected to offer users a conversational, chat-like, interface using voice and text – to counteract the growing dominance of tools like ChatGPT.
Today’s Change
(0.52%) $1.31
Current Price
$252.95
Key Data Points
Market Cap
$3.7T
Day’s Range
$251.61 – $254.99
52wk Range
$169.21 – $288.62
Volume
358K
Avg Vol
47M
Gross Margin
47.33%
Dividend Yield
0.41%
Arm Launches First-Ever Chip in Historic Pivot
5:30 am — ARM +12.85% in pre-market trading
Arm Holdings (ARM +14.99%) shattered its 35-year business model Tuesday, transitioning from a pure-play intellectual property licensor to a direct chip manufacturer. At its “Arm Everywhere” event in San Francisco, CEO Rene Haas unveiled the Arm AGI CPU, the company’s first-ever physical silicon product designed specifically for “agentic” AI infrastructure. Meta Platforms (META +1.26%) is the lead development partner and flagship customer, with OpenAI, Cloudflare, and SAP also signed on as early adopters. While the move puts Arm in direct competition with its own licensees–including Nvidia, Amazon, and Microsoft–investors cheered the shift. After-hours, the stock jumped 6% as Haas projected the new silicon business would drive total annual revenue to $25 billion within five years, a five-fold increase from current levels.
- The 136-Core Powerhouse: Manufactured on TSMC’s 3nm process, the AGI CPU features up to 136 Neoverse V3 cores and is designed to deliver 2x the performance-per-watt of traditional x86 racks, potentially saving data center operators billions in energy costs.
- Economic Pivot: By selling physical chips rather than just blueprints, Arm can capture up to $500 in gross profit per unit compared to the roughly $10 to $100 it typically earns in royalties, a massive expansion of its capture-of-value in the AI stack.
Today’s Change
(14.99%) $20.23
Current Price
$155.19
Key Data Points
Market Cap
$143B
Day’s Range
$148.21 – $157.80
52wk Range
$80.00 – $183.16
Volume
504K
Avg Vol
6M
Gross Margin
94.84%
Before the Opening Bell
5:15 am
Stock futures are climbing Wednesday morning as global markets react to a potential diplomatic breakthrough in the Middle East. Reports from the AP and New York Times indicate the Trump administration has delivered a 15-point peace plan to Tehran via Pakistani intermediaries, aiming for a 30-day ceasefire and the reopening of the Strait of Hormuz. While Iran has publicly downplayed claims of “direct talks,” the prospect of an off-ramp has triggered a massive liquidation of the “war premium” in energy markets. Brent crude plummeted nearly 6% to trade below $95 per barrel, providing a significant relief valve for a market previously bracing for $150 oil and a prolonged inflationary shock.
- The 15-Point Framework: The proposal reportedly includes strict curbs on uranium enrichment and missile development in exchange for full sanctions relief and U.S. assistance in developing a civilian nuclear energy program at Bushehr.
- Economic Data Pivot: Beyond geopolitics, traders are eyeing February’s import and export price figures due later today. With fuel import prices already trending lower in January, any further cooling in these metrics could bolster the case for a more accommodative Federal Reserve policy later this spring.
