Edgen Stock·Sep 19 2025, 00:23
[1] Eli Lilly and Company (LLY) Unveils AI Platform to Enhance Drug Discovery (https://finance.yahoo.com/news/eli-lilly-comp ...)[2] Lilly launches AI platform for biotechs with $1 billion worth of data - Investing.com (https://vertexaisearch.cloud.google.com/groun ...)[3] Eli Lilly and Company (LLY) Stock: Surge on $1B AI-Powered Drug Discovery Platform and Circle Pharma Deal - CoinCentral (https://vertexaisearch.cloud.google.com/groun ...)
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Nov 11 2025, 17:29
Individual Equities Exhibit Divergent Performance Following Corporate Earnings and Strategic Updates
## Market Overview U.S. equities experienced notable divergence in early trading sessions as several companies reported third-quarter earnings and provided updated financial guidance. Investor reactions varied significantly across sectors, reflecting both optimism regarding strategic growth initiatives and caution concerning revenue shortfalls and increased operating expenses. ## Key Movers and Their Catalysts ### Paramount Skydance (PSKY) Advances Amid Restructuring and Growth Plans Shares of **Paramount Skydance (PSKY)** advanced approximately **8%** on Thursday following announcements detailing aggressive cost-cutting measures and substantial investments aimed at bolstering its streaming and studio divisions. The company declared plans to invest **$1.5 billion** into these segments, projecting **$30 billion** in revenue by **2026**. Management also raised its savings target to at least **$3 billion** and indicated a reduction of **1,600 jobs** tied to asset sales in Argentina and Chile, in addition to **1,000 layoffs** in October and **600 voluntary exits**. Further strategic moves include the unification of its streaming platforms and an increase in theatrical output to **15 films** in **2026**. The company’s forward price-to-earnings ratio of **14.58** positions it below competitors such as **Walt Disney (DIS)** at **16.96** and **Netflix (NFLX)** at **35.23**, suggesting potential for revaluation. ### BigBear.ai (BBAI) Surges on Strong Earnings and AI Acquisition **BigBear.ai (BBAI)** witnessed a substantial premarket increase of **18%** after reporting stronger-than-expected third-quarter results and providing optimistic guidance. **Cantor Fitzgerald** analyst Jonathan Ruykhaver reiterated an “Overweight” rating and raised the 12-month price target to **$7.00** from **$6.00**, citing “long-term secular tailwinds and expanding AI investments.” While the company’s topline revenue declined **20.1%** year-over-year due to federal program disruptions, momentum is building in its biometric scanner business. The acquisition of **Ask Sage** for **$250 million** was highlighted as a strategic move to expand BigBear.ai’s total addressable market and solidify its position as a leading provider of **AI**, computer vision, and decision advantage solutions for national security. **H.C. Wainwright** analyst Scott Buck echoed this sentiment, maintaining a “Buy” rating and an **$8** price target, anticipating that the transaction will be margin-accretive given Ask Sage’s SaaS-like margins. ### TheRealReal (REAL) Rises on Robust Q3 Performance and Increased Guidance **TheRealReal Inc. (REAL)** saw its shares climb **16.6%** in early trading after announcing a strong third quarter for **2025**. The luxury resale platform reported revenue of **$174 million**, a **17%** increase year-over-year, and a **20%** rise in gross merchandise value (**GMV**) to **$520 million**. The company raised its full-year GMV guidance to between **$2.10 billion** and **$2.11 billion**, representing **15%** growth. For the fourth quarter, TheRealReal anticipates GMV of **$585 million** to **$595 million** and revenue of **$188 million** to **$191 million**, with adjusted EBITDA projected between **$17.5 million** and **$18.5 million**. Average order value increased **12%** to **$584**, and active buyers reached a new all-time high, exceeding one million, a **7%** year-over-year increase. Third-quarter gross profit grew **16%** to **$129 million**. ### Rocket Lab (RKLB) Surges on Earnings Beat and Record Margins Shares of space launch company **Rocket Lab (RKLB)** rose **8%** in after-hours trading after exceeding revenue and earnings expectations for the third quarter and posting record gross margins. The company reported revenue of **$155.08 million** against an anticipated **$154.78 million** and a loss of **$0.03** per share, significantly narrower than the expected **$0.11** loss. Management provided guidance for fourth-quarter revenue between **$170 million** and **180 million**, indicating **13%** sequential growth, and projected narrowing adjusted EBITDA losses of **$23 million** to **$29 million**. CEO Peter Beck highlighted the quarter's success, stating: > "We've delivered record revenue at record GAAP gross margin, and a new annual launch record is just days away." Rocket Lab also secured **17 Electron** launch contracts and completed a **$325 million** acquisition of **Geost**, maintaining substantial liquidity with **$807.88 million** in cash. ### Nvidia (NVDA) Declines Following SoftBank Stake Sale **Nvidia (NVDA)** shares experienced a modest premarket decline of **1.1%** after **SoftBank (SFTBY)** disclosed the sale of its entire stake in the U.S. chipmaker. SoftBank divested **32.1 million** shares in October for **$5.83 billion**. While SoftBank was an early investor in Nvidia, fully exiting its position in January **2019** after an initial **2017** stake, its broader exposure to the **AI** industry remains significant through various portfolio and infrastructure investments that rely on Nvidia’s technology, including its planned **$500 billion Stargate** data-center project. ### Beyond Meat (BYND) Falls on Disappointing Guidance and Widening Losses **Beyond Meat (BYND)** shares declined **8%** after reporting third-quarter earnings that fell short of analyst expectations and issuing disappointing fourth-quarter revenue guidance. The plant-based meat producer posted an adjusted loss of **$0.47** per share, exceeding the anticipated **$0.43** loss. Although revenue reached **$70.2 million**, slightly above consensus estimates, it represented a **13.3%** year-over-year decline. The company projects fourth-quarter revenue between **$60 million** and **$65 million**, below analyst expectations of **$70.33 million**. Notably, U.S. retail channel revenues plummeted **18.4%**, and U.S. foodservice revenues dropped **27.3%**. Gross margin deteriorated to **10.3%** from **17.7%** in the prior year, and the operating loss widened significantly to **$112.3 million**, largely due to **$77.4 million** in non-cash impairment charges. The company maintains **$131.1 million** in cash but carries **$1.2 billion** in total outstanding debt. ### Rigetti Computing (RGTI) Sheds Value Despite EPS Beat **Rigetti Computing Inc. (RGTI)** shares fell **6.39%** in premarket trading, despite reporting a third-quarter earnings per share (**EPS**) of **-$0.03**, surpassing the forecasted **-$0.05**. The decline was primarily driven by revenue shortfalls, with the company reporting **$1.9 million** against a forecast of **$2.17 million**. Gross margins significantly decreased to **21%** from **51%** in the comparable prior-year quarter, and total operating expenses rose to **$21 million** from **$18.6 million**. The company's strategic partnership with **NVIDIA** for quantum integration was noted, offering a potential long-term positive amidst the immediate financial concerns. ## Broader Market Context and Implications The varied performance across these individual equities underscores a nuanced market environment where company-specific catalysts heavily influence investor sentiment. Strong earnings beats, strategic acquisitions, and clear growth roadmaps, particularly within the **AI** and specialized technology sectors, continue to be rewarded. Conversely, companies facing revenue declines, widening losses, and conservative guidance are experiencing significant investor apprehension. The ongoing earnings season serves as a critical indicator of corporate health and provides granular insights into sector-specific trends that may influence broader market movements. ## Looking Ahead Investors will continue to closely monitor upcoming earnings releases and corporate guidance for further indications of economic health and sector-specific momentum. The market's reaction to strategic pivots and investment in high-growth areas, such as **AI** and sustainable technologies, will remain a key theme. Additionally, broader macroeconomic indicators and any shifts in central bank policy will continue to shape overall market direction in the coming weeks.
Nov 11 2025, 17:24
Michael Burry Alleges Artificial Earnings Boost by Hyperscalers Through Depreciation Practices
## Detailed Allegations on Depreciation Practices Famed investor **Michael Burry**, known for his prescient call on the 2008 housing market collapse, has raised significant concerns regarding the accounting practices within the cloud and artificial intelligence (AI) infrastructure sectors. Burry alleges that major "hyperscalers" are artificially inflating their reported earnings by extending the "useful life" of their computing assets, consequently understating depreciation expenses. According to Burry's analysis, spreading depreciation costs over longer periods effectively lowers reported expenses and inflates net income. He estimates that this practice could lead to a cumulative **$176 billion understatement of depreciation between 2026 and 2028**. Specifically, Burry projects that by 2028, **Oracle (ORCL)** could overstate its earnings by 26.9%, and **Meta Platforms (META)** by 20.8%. Several prominent tech companies have adjusted the reported useful lives of their network equipment and other assets: **Meta's** network equipment lifespan increased from 3 years to 5.5 years by 2025, **Alphabet (GOOGL)** extended from 3 to 6 years, and **Oracle's** from 5 to 6 years. **Microsoft (MSFT)** implemented a similar shift, extending to six years by 2025. **Amazon (AMZN)** also saw its network equipment lifespan rise from 4 years in 2020 to 6 years in 2024, before decreasing to 5 years in 2025. Burry characterized this practice as "one of the more common frauds of the modern era," contending that computing equipment, especially that using advanced **NVIDIA** chips, typically has a product cycle of 2-3 years, making these extended useful lives questionable. ## Market Reaction and Broader Context Burry's allegations arrive amidst his continued bearish positioning against the broader AI sector. His firm, Scion Asset Management, disclosed substantial put options against AI leaders **Nvidia (NVDA)** and **Palantir Technologies (PLTR)** in Q3 2025. These positions totaled approximately **$1.1 billion**, comprising 1 million **NVDA** put options and 5 million **PLTR** put options. This disclosure contributed to market volatility, with the **Nasdaq Composite** experiencing a decline of 3% following the news. This is not Burry's first warning concerning the AI industry; he has previously drawn parallels between the current enthusiasm for AI and the late-1990s tech bubble. The accounting standard **ASC 360** under US GAAP governs property, plant, and equipment, including depreciation. It mandates that financial statements accurately reflect the economic value of assets, underscoring the importance of appropriate depreciation schedules for investor confidence and regulatory oversight. ## Expert Commentary and Counterpoints The investment community has offered mixed reactions to Burry's claims. **Daniel Newman**, CEO of The Futurum Group, acknowledged the validity of the depreciation practice discussion but questioned Burry's specialized expertise in assessing the useful life of complex tech assets compared to the companies' own executives. Newman further noted that any short-term overstatement of earnings resulting from these practices would likely be offset by an understatement in the longer term, as accounting measures primarily shift expenses across reporting periods rather than eliminating them entirely. **Ross Gerber** of Gerber Kawasaki Wealth and Investment Management referenced Burry's past misjudgments, specifically recalling his critical stance during the retail-driven rally of **GameStop (GME)** in 2021, suggesting a potential pattern of bearish calls that do not always materialize as predicted. ## Outlook and Implications Burry's renewed focus on tech accounting practices could lead to heightened scrutiny of financial reporting within the AI and cloud computing sectors. The debate over asset useful lives and depreciation schedules may prompt regulators and investors to re-evaluate the true profitability and underlying valuations of key players. While the immediate market impact includes volatility for companies like **Nvidia** and **Palantir**, the long-term implications could involve a broader reassessment of AI-driven growth narratives. Investors await further details from Burry, who has indicated plans to provide more specific analysis around late November. These potential disclosures, coupled with ongoing discussions about accounting transparency, will likely shape market sentiment and influence investment strategies in the rapidly evolving technology landscape.
Nov 11 2025, 17:07
Meta Platforms Navigates AI Strategy Shift Amidst Leadership Transition
## Meta AI Leadership Shift and Strategic Reorientation **Meta Platforms (META)** is undergoing a significant leadership transition within its artificial intelligence division, as **Yann LeCun**, the company's chief AI scientist, reportedly plans to depart to establish his own startup. This move coincides with a comprehensive restructuring of **Meta's** AI strategy, initiated by CEO **Mark Zuckerberg**, aimed at accelerating the deployment of AI models and products to enhance competitiveness against rivals such as **OpenAI** and **Google (GOOGL)**. ## The Event in Detail **Yann LeCun**, a Turing Award laureate and a foundational figure in deep learning, has been instrumental in **Meta's** AI endeavors since leading the creation of the Facebook Artificial Intelligence Research (FAIR) unit in 2013. His planned departure signals a personal ambition to advance his research in "world models" through an independent venture, with early fundraising discussions already underway. Simultaneously, **Meta's** leadership is recalibrating its AI focus. **Mark Zuckerberg** has shifted the company's emphasis from FAIR's long-horizon research to a more aggressive, rapid deployment of AI technologies. This reorientation includes a substantial $14.3 billion investment to bring **Alexandr Wang**, founder of Scale AI, onboard to lead a newly formed "superintelligence" division. This restructuring places **LeCun**, who previously reported to Chief Product Officer Chris Cox, under Wang's purview, marking a clear change in the organizational hierarchy. Following these announcements, **META** shares experienced a 1.2% dip in premarket trading. ## Analysis of Market Reaction The market's immediate reaction to **LeCun's** planned exit, characterized by a premarket decline in **META** shares, reflects investor uncertainty regarding the implications of losing a prominent AI visionary amidst a strategic pivot. While **Meta** aims for faster AI deployment, the departure of a figure known for fundamental research could raise questions about the long-term innovation trajectory. This leadership change also occurs in a broader environment of increased scrutiny over tech giants' financial reporting. Famed investor **Michael Burry** has openly accused major cloud and AI infrastructure companies, including **Meta** and **Oracle (ORCL)**, of "understating depreciation." Burry contends that these companies artificially inflate profits by extending the "useful life" of assets such as chips and servers beyond their realistic operational lifespan. He estimates that **Meta** could overstate earnings by 20.8% by 2028 due to extending network equipment lifespan from 3 years to 5.5 years, a practice he referred to as one of the "more common frauds of the modern era." This accusation adds a layer of skepticism to the financial transparency of companies heavily investing in AI infrastructure, impacting investor confidence. ## Broader Context and Implications **Meta Platforms**, with a market capitalization of $1.59 trillion, reported a strong third quarter, with revenue climbing 26% year-over-year to $51.2 billion, primarily driven by $50.1 billion in advertising revenue. Despite a 32% rise in expenses, operating margins remained robust at 40%. CEO **Mark Zuckerberg** emphasized that **Meta's** evolution into a frontier AI company necessitates aggressive "front-loading building capacity" for the next computing era. The company continues to demonstrate strong user engagement, with 3.5 billion daily users across its applications, and **Instagram** now boasting 3 billion monthly active users. **Reels** maintains significant momentum with a $50 billion annual run rate, and AI-driven ad tools generated over $60 billion in annualized revenue. However, these ambitious AI investments come with substantial capital expenditures, which hit $19.4 billion in Q3 and are projected to reach $70–$72 billion for FY2025, with further acceleration anticipated in 2026. **Meta's** valuation metrics, including a P/E Ratio of 27.9 (compared to a historical median of 28.7), a P/S Ratio of 8.58 (near its 1-year low), and a P/B Ratio of 8.21 (within historical norms), suggest a relatively fair market position despite the ongoing strategic shifts. The broader market context reveals the disproportionate influence of AI-centric companies. **NVIDIA (NVDA)**, for instance, recently surpassed **Apple (AAPL)** in market capitalization, reaching over $5 trillion, and holds a 7.77% weighting in the S&P 500, illustrating the AI sector's pivotal role in market movements. **Michael Burry's** bearish positions in **NVIDIA** and **Palantir (PLTR)**, alongside his critiques of **Meta**, **Oracle**, **Alphabet**, **Microsoft (MSFT)**, and **Amazon (AMZN)** for similar accounting practices, highlight a growing concern over the sustainability and genuine profitability metrics within the AI industry. ## Expert Commentary > "Michael Burry has accused tech giants such as **Meta Platforms Inc. (META)** and **Oracle Corp. (ORCL)** of