🤒 Moderna Is Feeling A Bit Sick...

Good afternoon! A Miami mansion sale has turned into a legal showdown, and Jeff Bezos is at the center of it. The seller, Leo Kryss, is suing real estate firm Douglas Elliman for allegedly keeping him in the dark about one key detail: that Bezos was the buyer. Kryss sold his sprawling $79 million estate on Indian Creek Island—also known as the "billionaire bunker"—for less than the asking price. According to Kryss, he only agreed to lower the price because he was assured Bezos wasn’t involved. Spoiler alert: the Amazon founder was, in fact, the buyer.

Kryss claims that knowing Bezos was the one purchasing the property could have netted him an extra $6 million. The lawsuit alleges that Douglas Elliman misled him, which influenced his decision to cut the price by 7.1%. While it’s common for wealthy buyers to hide their identities to avoid price hikes, Kryss says this crucial information was “highly material” to the sale. Now, he’s seeking compensation for what he believes he lost in the deal.

MARKETS

• U.S. stocks got their groove back on Thursday as investors weighed fresh inflation and labor data against growing hopes for a rate cut next week. Major indexes posted solid gains, with investors seemingly shrugging off a rough start to September and diving back into the market with renewed optimism.

• Economic reports showed inflation ticking along as expected, reinforcing the belief that a rate cut is on the way. The market didn’t flinch, and all signs pointed to a positive close. Though there was a little late-day drama in some corners, the overall mood remained upbeat as traders kept their eyes on the Fed’s next move.

STOCKS
Winners & Losers

What’s up 📈

• Signet Jewelers ($SIG) surged 11.33% after posting better-than-expected results in its second-quarter earnings report.

• Warner Bros. Discovery ($WBD) jumped 10.37% after announcing a groundbreaking, multi-year distribution partnership with Charter Communications, integrating linear video and streaming services.

• Unity ($U) climbed 9.81% after canceling its controversial runtime fee pricing model one year after its announcement.

• Kroger ($KR) rallied 7.18% following mixed fiscal second-quarter results, where adjusted earnings exceeded expectations by 2 cents per share.

• Roku ($ROKU) gained 5.67% after Wolfe Research upgraded the stock to outperform, citing expectations of accelerating sales growth due to a streamlined cost structure and new sales strategies.

• Axon ($AXON) rose 6.30% after JMP Securities raised its price target for the stock and reiterated its outperform rating, boosting investor confidence in the maker of Taser stun guns and Axon body cameras for police.

• Robinhood ($HOOD) was up 4.84%.

  eBay ($EBAY) increased 4.03%.

What’s down 📉

• Moderna ($MRNA) dropped 12.36% after the company announced plans to cut $1.1 billion in expenses by 2027, launch 10 new products, and pause or stop work on some pipeline products.

• Sirius XM ($SIRI) fell 9.86% after announcing its merger with Liberty Media, a 10-for-1 stock split, and a $1.2 billion stock buyback plan.

• Ryanair ($RYAAY) declined 4.85% despite Baillie Gifford acquiring over 5% of the airline.

• Wells Fargo ($WFC) slid 4.02% after entering an agreement with the OCC to address deficiencies in financial crimes risk management and anti-money laundering controls.

• Micron ($MU) dropped 3.79% after two price-target cuts from analysts.

• Enphase Energy ($ENPH) was down 4.30%.

  Texas Instruments ($TXN) decreased 3.18%.

PHARMA
Moderna Is Feeling A Bit Sick…

Cost Cutting Mode
Moderna’s getting out the scissors. The biotech giant announced plans to cut its R&D budget by $1.1 billion over the next three years as it faces the harsh reality of slumping vaccine sales. The company is pulling the plug on five programs and slowing down late-stage trials to rein in costs. Translation: it’s aiming to survive the post-COVID world by focusing on 10 key product launches by 2027. But there’s a catch—Moderna’s break-even target just got pushed back two years, from 2026 to 2028.

Investors to Moderna: Not Impressed
Wall Street took one look at that plan and said, “Nope.” Shares tanked over 12%, marking a rough day for a stock that’s already down 20% this year. While Moderna claims it’s exercising "financial discipline" by scaling back, investors are skeptical. They’re wondering if this is less about discipline and more about desperation. The company’s revenue projections for next year didn’t help either, coming in way below analysts' expectations. Some are questioning whether Moderna can make it to 2028 without asking for more cash from shareholders.

So, What’s Next?
Moderna is betting big on 10 new products, with vaccines for flu, RSV, and a combo flu-COVID shot leading the charge. The company’s pipeline also includes some cancer treatments, but fast-tracking those approvals has hit a snag with regulators. Still, Moderna is pushing forward, expecting these new launches to drive growth. However, don’t expect any major cash infusions until at least 2025—revenue contributions from these new products are likely a couple of years away.

The Bigger Picture
This isn’t just about tightening the belt. Moderna’s once high-flying COVID vaccine sales have fallen to earth, forcing the company to recalibrate. Its COVID cash cow dried up faster than expected, and competition in the vaccine space is heating up. Now, the company is left navigating a landscape that’s looking a lot less certain. CEO Stéphane Bancel insists that they won’t need to raise equity, but investors aren’t convinced.

Moderna’s “pivot” may sound like a savvy long-term strategy, but in the short term, it’s raising a lot of eyebrows. With revenue projections looking iffy and product launches still a few years out, the biotech darling has some convincing to do if it wants to regain Wall Street’s trust. Until then, it’s all about survival—and cutting those R&D costs is just the beginning.

NEWS
Market Movements

• 🎧 Apple Turns AirPods Into Hearing Aids: Apple ($AAPL) received FDA authorization to transform AirPods Pro into hearing aids, marking a significant innovation for the popular earbuds.

• 💊 Eli Lilly Expands in Ireland: Eli Lilly ($LLY) invested $800M to expand its manufacturing plant in Limerick, Ireland, aiming to address shortages of its obesity drugs, Mounjaro and Zepbound.

• 🦾 Oura Acquires Veri: Oura the sleep tracking wearable, acquired Finnish startup Veri, which specializes in tracking glucose levels. The much-anticipated Oura Ring 4 is expected to launch soon.

• 🚗 General Motors and Hyundai Collaboration: General Motors ($GM) and Hyundai announced plans to co-develop internal combustion, electric, and hydrogen-powered vehicles, aiming to reduce costs.

• 🛑 Norfolk Southern Fires CEO: Norfolk Southern ($NSC) dismissed CEO Alan Shaw for an inappropriate relationship with a subordinate. CFO Mark George has been promoted to replace him.

• 🥣 Campbell Soup Co. Rebrand: Campbell Soup Co. ($CPB) plans a rebrand after 155 years, with investors set to vote in November on renaming the company to The Campbell’s Co. to reflect its diversifying product line.

• 🇫🇷 General Mills Yogurt Sale Talks: General Mills ($GIS) is in discussions to sell its U.S. and Canadian yogurt operations, including Yoplait, to French dairy companies Group Lactalis and Sodiaal in a deal potentially worth $2B+.

• ✈️ Boeing CEO’s Strike Warning: Boeing’s ($BA) new CEO, Kelly Ortberg, urged workers to avoid a strike, warning it could jeopardize the company’s recovery. Boeing offered a 25% pay raise and better benefits in hopes of averting labor unrest.

• 🤖 Nevada Pays Google for AI: Nevada paid Google ($GOOGL) over $1.3M for AI technology to speed up unemployment rulings, amid a backlog of 40K+ appeals. However, experts are concerned about potential AI errors.

FORECAST
Oracle’s Big Cloud Dreams — $104 Billion Sales by 2029

Oracle has its eyes on the clouds… and a lot of cash. The software giant just upped its forecast, predicting at least $104 billion in annual revenue by fiscal 2029, thanks to the rapid growth of its cloud infrastructure business. This ambitious target was laid out by Executive VP Doug Kehring during Oracle’s annual analyst briefing, where the company also raised its fiscal 2026 sales outlook to $66 billion, beating analyst estimates by $1.5 billion.

Cloud Wars Heating Up
Oracle’s game plan? Keep expanding its cloud services to compete with the likes of Amazon, Google, and Microsoft. The company has been gaining traction in cloud infrastructure, particularly with generative AI workloads, boasting high-profile clients like Elon Musk’s xAI. Oracle’s strategy also includes making its database software easier to run on rival platforms—a move it hopes will help migrate its on-premise customers to the cloud, a key pillar of its growth strategy.

The Numbers Game
Oracle’s stock is having a banner year, up 55% so far, trailing only Nvidia among the tech giants. Shares jumped another 6% following the updated revenue forecast, capping off a good week that saw the stock surge 15% over three trading sessions. CEO Safra Catz was confident about hitting these targets, citing partnerships with cloud heavyweights like Amazon, Google, and Microsoft to help boost Oracle’s cloud revenue, which has already grown by 45% in the latest quarter.

Eyes on AI
Oracle’s not just riding the cloud wave—it’s betting big on AI, too. The company announced it’s taking orders for a massive cluster of Nvidia’s next-gen GPUs, which could solidify its place in the AI race. And as capital expenditures are set to double in fiscal 2025, Oracle’s banking on both cloud and AI to keep the revenue train rolling.

EARNINGS
Adobe’s AI Ambitions Stumble — Guidance Misses Mark

By the Numbers:

• $5.5B - $5.55B: Adobe's revenue forecast for the upcoming quarter, falling short of analysts’ $5.6B expectations.

• 8%: Adobe’s drop in extended trading after the guidance miss.

• 11%: Increase in third-quarter revenue to $5.41B.

• $4.65: Adobe’s third-quarter profit per share, beating estimates of $4.53.

• $550M: Net new digital media subscriptions, slightly below the $561M forecast.

Adobe has been busy rolling out AI tools like Firefly in its creative software, but investors are still waiting for that AI magic to show up in the company’s numbers. On Thursday, the software giant reported revenue for the upcoming quarter that fell short of Wall Street’s lofty expectations. The company expects revenue between $5.5 billion and $5.55 billion, slightly below the $5.6 billion analysts had predicted. In after-hours trading, the stock dropped 8%, leaving investors unimpressed.

Strong Results, But Not Strong Enough
Adobe’s third-quarter numbers weren’t bad by any stretch—sales jumped 11% to $5.41 billion, and profit topped estimates at $4.65 per share. The company’s core digital media business, which includes its AI-infused Creative Cloud, also grew 11%. However, guidance for the fourth quarter disappointed, leaving many to wonder when the much-hyped AI features will start meaningfully boosting revenue.

AI Hype vs. Reality
Adobe has been aggressively adding AI capabilities to its software lineup, hoping to cash in on the generative AI trend. But investors were banking on seeing bigger results by now, and the slower-than-expected adoption of AI tools like Firefly has some worried. Competitors like Canva have already hiked prices for AI features, putting pressure on Adobe to follow suit—although such changes could take quarters, if not years, to fully materialize.

Price Hikes and Patience
Adobe is looking for ways to monetize its AI features, but price increases for its software take time to roll out to all customers. Meanwhile, its key metric of net new digital media subscriptions came in at $550 million, slightly below estimates, adding to investor jitters. Despite all the hype surrounding AI, Adobe’s leadership insists the company is just scratching the surface of what these innovations can do.

The Takeaway
For now, it seems Adobe’s AI-driven future is more about potential than actual results. With shares down 8% after the guidance miss, investors are growing impatient for the promised AI uplift. As the company continues to invest in generative AI, the question remains: when will it start paying off in a big way?

Calendar
On The Horizon

Tomorrow

Tomorrow, we’ll get the latest pulse on consumer sentiment with the University of Michigan’s September Survey of Consumers. While it won’t sway the Fed’s decision on interest rates, it still gives us a decent read on how people are feeling about the economy—which, let’s be honest, is always worth knowing.

On the earnings front, it’s pretty quiet. With no big reports on deck, it looks like companies are enjoying a bit of a breather—perhaps gearing up for something bigger down the line.

NEWS
The Daily Rundown

• 🗳️ Presidential Debate Draws Big Ratings: The first (and possibly only) debate between Vice President Kamala Harris and former President Donald Trump drew 67.1 million viewers, surpassing the 51.3 million who tuned into the June debate between Trump and President Biden.

• 📱 Huawei's $2,800 Trifold Phone Hits 5M Preorders: Huawei’s Mate XT, a phone that folds into three configurations, has amassed 5 million preorders ahead of its launch. Despite its $2,800 price tag, the phone’s AI capabilities and 10.2-inch screen have generated significant interest.

• 🚨 Alameda CEO Asks for No Prison Time: Caroline Ellison, the former CEO of Alameda Research, requested no prison time for her role in the FTX collapse, citing her cooperation with investigators.

• ⚽️ Ken Griffin Funds US Soccer Coach Hire: Billionaire hedge fund manager Ken Griffin made a large philanthropic gift to pay for the hiring of new US men’s national soccer team coach, Mauricio Pochettino.

• 📺 Bluey Becomes Most-Watched Show in the US: Australian kids’ show Bluey racked up 35 billion minutes of viewing time in the US this year, making it the most-watched show, even surpassing last year’s leader, Suits.

• 🌍 Zimbabwe Considers Elephant Culling (Slaughter): Zimbabwe is weighing the option of culling elephants for the first time since 1988 to address food shortages, sparking debate over wildlife conservation and human needs.

• 💻 State Department Eases Passport Renewals: The US State Department announced an easier process for online passport renewals, boosting the speed at which applications can be processed.

• 🎓 Black Enrollment Drops at Elite Colleges: Less than three months after the Supreme Court struck down affirmative action, Black enrollment at Harvard dropped from 18% to 14%, and at MIT, it fell from 15% to 5%. Other universities like Princeton and Yale saw little change in their demographics.

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