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Netflix’s $25B Buyback Signals Share Confidence
8:00 am — NFLX +1.22% in pre-market trading
Netflix (NFLX +0.49%) is shifting its capital strategy from mega-mergers to shareholder returns, authorizing a new $25 billion share repurchase program following its exit from the $72 billion race for Warner Bros. Discovery (WBD +0.00%). The move comes as the streamer sits on $12.3 billion in cash–boosted by a $2.8 billion breakup fee from Paramount Skydance (PSKY 4.41%)–and looks to soothe investors following a tepid Q2 forecast and the impending departure of co-founder Reed Hastings. With acquisition “noise” behind it, Netflix is pivoting toward internal growth, including the recent purchase of AI film-tech firm InterPositive and a $20 billion content spend targeting live sports and advertising scale.
- High-Yield Confidence: The buyback resumes with $6.8 billion still remaining from a previous 2024 plan, signaling management’s belief that shares are undervalued after a recent 10% post-earnings dip to roughly $94.
- Scaling the Ad Tier: Analysts expect the ad-supported segment to double revenue to $3 billion in 2026, serving as a critical offset to slowing subscriber growth in mature markets like the U.S. and Canada.
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This Morning’s Breakfast News
7:30 am — IBM -7.48% in pre-market trading
IBM (IBM 9.89%) fell over 7% ahead of the market open despite quarterly results beating revenue and earnings estimates, as cautious guidance for the full year weighed on sentiment, something CEO Arvind Krishna blamed on broader geopolitical uncertainty.
- “A lot of consumer companies are my clients”: Krishna pointed out that higher inflation could see people spend less at companies such as Walmart (WMT +1.10%), which indirectly impacts IBM from reduced activity.
- “IBM’s consulting business will be both threatened and supported by more sophisticated AI tools”: In late February, TMF chief investment officer Andy Cross explained the Hidden Gems recommendation is under pressure from AI disruption, but “mainframes remain necessary infrastructure for hugely complex computing systems.”
ICYMI: Wednesday’s Scoreboard
6:00 am — AOS unchanged in pre-market trading
A.O. Smith (AOS +0.77%) was the subject of the latest Scoreboard video.
China’s Tech Giants Race to Back DeepSeek
5:30 am — BABA -2.34% in pre-market trading
Chinese internet giants Tencent (TCEHY 2.86%) and Alibaba (BABA 3.13%) are in advanced talks to lead a landmark $300 million funding round for DeepSeek, a move that could value the AI pioneer at over $20 billion. The start-up, owned by hedge fund High-Flyer Capital Management, has gained global recognition for its high-efficiency, low-cost open-source models that rival U.S. leaders like Alphabet (GOOG +0.04%). Tencent has reportedly proposed acquiring up to a 20% stake, though negotiations remain fluid as DeepSeek resists ceding significant control. For the tech titans, the deal is a strategic grab for “agentic AI” leadership and a way to lock in demand for their respective cloud computing and data center services.
- Benchmark Battle: DeepSeek’s target valuation is being compared to MiniMax, another Chinese “super unicorn” recently valued by Goldman Sachs at $38.9 billion due to its extreme optimization of computing costs.
- Agentic Shift: DeepSeek is pivotally expanding into software “agents” capable of autonomous task execution, a sector where Alibaba recently consolidated its AI services into a single business unit to drive 2026 growth.
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Top of the Morning
5:15 am — BNTX -0.69% in pre-market trading
By Morning Show host Thomas King, CFA
Team Rule Breakers
Pancreatic cancer is one of the deadliest. In 2019 and 2020, sixteen patients were treated with a cancer vaccine developed by BioNTech (BNTX 0.70%) and Genentech which was designed to stimulate their immune system to recognize and attack the cancerous cells. Of the sixteen patients treated, eight had a significant immune system response, and of these eight, seven were alive five years after receiving the vaccine. Seven of the total of sixteen patients (44%), and seven of the eight (88%) that had an immune response were alive five years later. This is a dramatic improvement from the typical five-year survival rate for pancreatic cancer, which is 13%. This was a small study with only sixteen patients, but the results are encouraging and the vaccine will now be tested in a larger group of patients in a Phase 2 study.
Tilray Jumps on Cannabis Rescheduling Hopes
4:45 am — TLRY +2.50% in pre-market trading
Tilray (TLRY 2.16%) shares surged over 11% as cannabis stocks rallied following reports that the Trump administration is expected to move toward reclassifying marijuana to Schedule III. The potential regulatory shift has sparked heavy buying interest across the sector.
- Rescheduling catalyst drives sector rally: Reports indicate the administration is expected to finalize marijuana reclassification, which investors view as a major regulatory catalyst that could ease tax burdens and boost the industry.
- Analyst sees significant upside potential: A Wall Street analyst highlighted over 40% upside for Tilray based on its leading Canadian market share and growing beverage revenue, adding to the bullish sentiment surrounding the stock.
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Before the Opening Bell
4:30 am
Stock futures retreated Thursday as a breakdown in U.S.-Iran negotiations overshadowed President Trump’s “indefinite” ceasefire. While the truce holds, a complete naval blockade of the Strait of Hormuz has pushed Brent crude back above $103 per barrel, fueling stagflation fears ahead of April’s manufacturing data. Tesla (TSLA 4.33%) added to the volatility; despite a Q1 earnings beat, shares fell 2% after CEO Elon Musk jacked up 2026 capital expenditure guidance to $25 billion to fund a massive “Cybercab” and AI robotics push. As cash flow concerns mount, investors are pivoting to pre-market results from American Express (AXP 1.99%), Blackstone (BX 4.25%), and American Airlines (AAL +3.26%) to gauge consumer and industrial resilience.
- The $25B Bet: Tesla’s tripled capex run-rate targets six simultaneous production lines, including a dedicated “Optimus” humanoid robot facility in Austin set to begin large-scale output this August.
- Banking on the Premium: American Express is expected to post a 10% earnings jump to $4.01 per share, as its high-net-worth customer base remains largely insulated from war-related energy spikes.
American Express is an advertising partner of Motley Fool Money. This article was created using Large Language Models (LLMs) based on The Motley Fool’s insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. Thomas King, CFA has positions in Alphabet, Amazon, BioNTech Se, Mastercard, and Tesla. The Motley Fool has positions in and recommends A. O. Smith, Alphabet, Amazon, Blackstone, DoorDash, International Business Machines, Mastercard, Netflix, Tencent, Tesla, Walmart, and Warner Bros. Discovery. The Motley Fool recommends Alibaba Group, BioNTech Se, and Tilray Brands. The Motley Fool has a disclosure policy.
