❌ Microsoft Cuts Data Centers

Good afternoon! Napster is getting its remix. The OG of digital music, once synonymous with piracy, has been scooped up by immersive tech firm Infinite Reality for a whopping $207 million. (I know right?!) The plan? Turn Napster into a full-blown metaverse music hub with virtual concerts, fan communities, merch sales, and AI-powered interactions.

Infinite Reality, which also owns the Drone Racing League and several esports orgs, wants Napster to ditch passive playlists for interactive, 3D fan experiences. CEO Jon Vlassopulos, formerly of Roblox, will stay on to lead the transformation, calling it a shift from “mobile to immersive.” Not bad for a brand that once got sued out of existence.

MARKETS

• Tariff talk rattled markets Wednesday as President Trump announced a 25% levy on auto imports, sending the Nasdaq Composite down 2% and dragging heavyweights like Nvidia, Tesla, and Broadcom with it.

• The S&P 500 fell 1.1%, slipping below its 200-day moving average, while the Dow Jones Industrial Average lost 133 points after giving up a morning rally—snapping a three-day win streak and reigniting fears that trade tensions could derail recent market momentum.

This tech company grew 32,481%...

No, it's not Nvidia... It's Mode Mobile, 2023’s fastest-growing software company according to Deloitte.

Just as Uber turned vehicles into income-generating assets, Mode is turning smartphones into an easy passive income source, already helping 45M+ users earn $325M+ through simple, everyday use.

They’ve just been granted their stock ticker by the Nasdaq, and you can still invest in their pre-IPO offering at just $0.26/share.

Invest Now

*Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
*The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
*Please read the offering circular and related risks at invest.modemobile.com.

STOCKS
Winners & Losers

What’s up 📈

• Playtika surged 20.45% after Bank of America gave the mobile gaming stock a double upgrade, citing impressive profitability in a maturing industry. ($PLTK)

• GameStop jumped 11.65% after announcing plans to allocate part of its corporate cash to bitcoin, mimicking MicroStrategy’s crypto strategy. ($GME)

• Perimeter Solutions climbed 9.99% after UBS upgraded the fire retardant maker to buy, highlighting growth potential as wildfires increase. ($PRM)

• Cintas rose 5.82% on stronger-than-expected third-quarter earnings of $1.13 per share, beating analyst forecasts. ($CTAS)

• Paychex popped 4.20% after beating earnings expectations with adjusted EPS of $1.49 and revenue in line at $1.51 billion. ($PAYX)

• Dollar Tree added 3.08% after announcing the $1 billion sale of its Family Dollar unit, a sharp markdown from its $8.5 billion acquisition price in 2019. ($DLTR)

• TotalEnergies SE gained 2.13% after Citi upgraded the French energy stock to buy, citing underestimated volume and margin growth. ($TTE)

What’s down 📉

• Hims & Hers Health tumbled 9.94% as momentum names broadly sold off and the FDA scrutinized weight-loss treatments. ($HIMS)

• Robinhood dropped 7.10%, continuing its slide as speculative tech names faltered amid renewed market volatility. ($HOOD)

• Nvidia fell 5.74% in a broader tech sell-off after reports said China may be tightening chip restrictions. ($NVDA)

• Tesla declined 5.58%, snapping a five-day winning streak as macro pressure and sector rotation weighed on the EV giant. ($TSLA)

• Meta Platforms slipped 2.45%, Amazon dropped 2.23%, and Alphabet slid 3.27%, dragged down by Nvidia’s weakness and profit-taking in large-cap tech. ($META, $AMZN, $GOOGL)

• Stellantis sank 3.55% and General Motors lost 3.12% as investors braced for President Trump’s anticipated new tariffs on auto imports. ($STLA, $GM)

AI
Microsoft Hits Pause on AI Data Center Spree

Microsoft is slamming the brakes on its AI infrastructure expansion, abandoning more than 2 gigawatts worth of data center projects across the U.S. and Europe, according to TD Cowen analysts. That’s roughly the power output of two nuclear plants—now unplugged. The decision stems from what analysts call an oversupply in data centers relative to AI demand, a red flag that the AI gold rush may have gotten ahead of itself.

This isn’t just a hiccup. The company has canceled and deferred multiple leases in recent months, while rivals like Google and Meta have swooped in to snatch up some of the newly freed capacity. Despite this, Microsoft says it's still spending $80 billion on AI infrastructure this fiscal year—just shifting focus from building new data centers to outfitting existing ones.

AI Boom or Bubble?

The timing couldn’t be worse for AI-enthused investors. Microsoft’s retreat adds to growing fears of an AI infrastructure bubble, especially after Alibaba’s Joe Tsai warned this week about overbuilding. Stocks tied to data centers and AI infrastructure got hit hard: Vertiv Holdings fell 10.8%, Super Micro Computer slid 8.9%, and Broadcom dropped nearly 5%.

Microsoft’s step back also coincides with a looser cloud relationship with OpenAI, which can now work with other providers—suggesting Microsoft may no longer be OpenAI’s exclusive landlord.

Cooling the Hype

Microsoft’s move isn’t a full-on retreat, but rather a recalibration. CEO Satya Nadella once said scaling up AI services was limited by how fast data centers could be built. Now, Microsoft seems to be signaling that it scaled too fast—or at least faster than demand justified.

The verdict for investors: The AI boom is alive—but the smooth, billion-dollar runway Big Tech sold us may be cracking under its own weight.

NEWS
Market Movements

• 💳 Affirm partners with JPMorgan for BNPL expansion: Affirm has struck a deal to offer buy-now, pay-later loans to U.S. merchants through JPMorgan’s payment network. The partnership boosts Affirm’s reach as it faces rising competition from Klarna and others. ($AFRM)

• 🚗 Waymo to launch robotaxi service in D.C. by 2026: Google’s Waymo plans to expand its self-driving taxi service to Washington, D.C., following 4M paid rides in 2024. The move puts Waymo ahead of Cruise and Tesla in the autonomous race. ($GOOGL)

• 🖼️ OpenAI debuts new GPT-4o image generator: OpenAI released a powerful new image generation tool integrated with GPT-4o. The update improves rendering of complex prompts and expands ChatGPT’s creative abilities. ($MSFT)

• 💵 Fidelity tests stablecoin as crypto bill gains momentum: Fidelity is experimenting with a stablecoin while continuing to expand its blockchain-based financial offerings. Though it has no immediate plans to launch, the firm recently filed with the SEC to tokenize a money-market fund on Ethereum. The test comes as Congress considers new stablecoin legislation, with support from the Trump administration. ($FNF)

• 🤖 Amazon tests AI tools for retail and healthcare: Amazon is trialing two generative AI tools as part of its wider push into artificial intelligence. The initiative includes applications in e-commerce and healthcare. The move signals Amazon’s intent to stay competitive in the AI arms race. ($AMZN)

• 🚫 Canada freezes Tesla EV rebates and bans future participation: Canadian authorities halted $30.11M in EV rebates for Tesla and banned it from future programs, citing tariffs and irregular claims. Despite regulatory pushback, Tesla is set to begin selling vehicles in Saudi Arabia in April. ($TSLA)

• ✈️ Boeing sets missile production record, trial date for 737 MAX set: Boeing delivered over 500 PAC-3 Patriot missile seekers in 2024 amid soaring demand. Meanwhile, a judge set its 737 MAX fraud trial for June 23 over alleged regulatory deception. ($BA)

• 🛢️ Phillips 66 adds board members amid Elliott pressure: Phillips 66 will nominate two new board members in response to pressure from activist investor Elliott. Elliott, with a $2.5B stake, is pushing for a spinoff of the midstream business valued over $40B. ($PSX)

• 🧸 Sesame Workshop faces $40M shortfall after HBO deal ends: The maker of "Sesame Street" is grappling with a major financial crunch after losing its HBO deal and key grants. It laid off 20% of staff and is now seeking a new partner like Netflix, Amazon Prime, or YouTube. ($WBD)

ACQUISITION
Dollar Tree Dumps Family Dollar in $1B Fire Sale

Ten years after scooping up Family Dollar for nearly $9 billion, Dollar Tree is throwing in the towel—offloading the struggling chain for just $1 billion to private equity firms Brigade Capital Management and Macellum Capital Management. It’s a humbling end to a discount retail experiment that never quite paid off, slicing Dollar Tree’s store count in half and putting an exclamation point on a failed merger.

The Dollar Store Divide

Though often lumped together, Dollar Tree and Family Dollar serve different customers. Dollar Tree thrives in suburban areas with fixed-price goods (formerly $1, now up to $7), while Family Dollar is rooted in urban neighborhoods, offering essentials like groceries and cleaning supplies. But despite its urban footprint, Family Dollar has battled store closures, rat infestations, inflation pressures, and a failure to gain retail momentum—especially against heavyweights like Walmart, Aldi, and even Shein and Temu.

'Addition by Subtraction'

Analysts were quick to label the deal as a relief, not a loss. Evercore’s Michael Montani called it “addition by subtraction,” noting that Family Dollar had long dragged down margins, sales, and management bandwidth. Dollar Tree is now free to focus on its core brand and new ventures, like expanding multi-price items and acquiring leases from the defunct 99 Cents Only Stores.

What's Next for Dollar Tree?

CEO Mike Creedon, who’s been shaking things up with a fresh C-suite, now has breathing room—and $1 billion more in strategic firepower. But the macro headwinds are still swirling. Trump’s new tariffs are expected to cost the company $20 million a month, and executives acknowledged that even higher-income shoppers are trading down in this inflation-riddled economy.

So while Family Dollar fades into the private equity shadows, Dollar Tree’s next act will be one to watch. As Creedon put it bluntly: “Doesn’t matter how much money you make, everybody is hurting right now.”

Calendar
On The Horizon

Tomorrow

The calm won’t last much longer. After a snoozy few days on the economic front, Thursday’s data dump could stir the pot with a trio of reports worth watching.

Jobless claims are up first, now under a brighter spotlight as Wall Street watches for cracks in the labor market. Then come the final Q4 GDP figures and the advance goods trade balance, both offering early clues on how the president’s tariff push is starting to ripple through the economy.

Before Market Open:

• Lululemon Athletica might still be flexing on Instagram, but its stock has struggled to keep up. With concerns mounting over a potential consumer pullback, discretionary names like Lululemon are starting to feel the pinch. The brand’s push into menswear hasn’t exactly turned heads, and the crowded athleisure space isn’t doing it any favors. Its international growth could be promising—but slow-and-steady won’t cut it when investors are looking for fast results. ($LULU)

NEWS
The Daily Rundown

• 📱 Officials Deny Leaking Classified Plans on Signal, Journalist Says Otherwise: Top Trump officials testified that no classified material was shared in a group chat that mistakenly included a journalist. However, The Atlantic’s Jeffrey Goldberg claimed the chat contained detailed war planning, which he withheld from publication to protect troops. The chat reportedly included the VP and defense secretary.

• 💸 Private Market Investing Opens to Individuals with $5K Minimum: Platforms like EquityZen and Forge Global have lowered the entry bar for investing in companies like SpaceX and OpenAI. Previously, such deals required tens of thousands of dollars. Experts caution that private investments come with higher risk and less liquidity than public stocks.

• 🕊️ Samsung Co-CEO Han Jong-Hee Dies of Cardiac Arrest at 63: Han was a major figure in turning Samsung’s TV business into a global powerhouse. His sudden death leaves semiconductor head Jun Young-hyun as the company’s sole CEO. Samsung is now navigating increased competition and market pressure.

• 🌊 U.S. Brokers Fragile Black Sea Ceasefire Between Ukraine and Russia: A temporary truce has been agreed to by Ukraine and Russia following talks led by the U.S. in Saudi Arabia. Ukraine pledged to comply, but Russia demands sanctions be lifted before following through. The deal is seen as shaky, with further talks ongoing.

• 🌍 Foreign Tourism to the U.S. Declines Sharply Amid Tariffs and Tougher Borders: International travelers are increasingly skipping the U.S. due to Trump-era policies, immigration detentions, and anti-foreigner rhetoric. Canadian visits have dropped 13% year-over-year, with nearly half of surveyed Canadians saying they’re less likely to cross the border. A rising U.S. dollar is also making travel more expensive, costing the U.S. economy billions.

• 😟 U.S. Consumer Confidence Falls to Lowest Level in 12 Years: The Conference Board reported a steep drop in consumer confidence for the fourth consecutive month. Inflation and tariff fears have shaken American optimism, with future income expectations collapsing. Economists warn the current reading could signal a looming recession.

• 🚫 Global Travel to the U.S. Could Fall by 5% Due to Trade War Concerns: Tourism Economics has revised its projection, now expecting a 5% drop instead of a 9% increase in U.S.-bound international travel. If realized, this would slash foreign tourist spending by $18 billion. The shift is blamed on escalating trade tensions and fears of detainment at the border.

• 🪙 Trump-Linked Crypto Project Launches USD-Pegged Stablecoin: World Liberty Financial, backed by Trump and his family, has unveiled USD1, a stablecoin tied to the U.S. dollar. Critics warn it may facilitate cross-border money laundering, even as banks show interest in stablecoins for fast payments. Trump Media’s stock jumped after announcing crypto ETF partnerships.

• 📺 Seth Rogen’s Hollywood Satire 'The Studio' Debuts to Critical Acclaim: Apple TV+’s newest comedy series stars Rogen as a clueless studio exec navigating the modern movie industry. Critics are praising its sharp writing and industry-insider humor. The show features a strong supporting cast, including Catherine O’Hara and Kathryn Hahn.

• 📉 Canadian Travel to the U.S. Drops as Tariff Tensions Rise: Canadian leaders are urging citizens to avoid U.S. goods, and that sentiment is extending to tourism. Canadian travelers now take fewer return flights, while destinations like Palm Beach and Buffalo fear serious economic losses. A 10% dip in Canadian tourism could wipe out $2B and 14,000 jobs.

RESOURCES
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