- Bull Street
- Posts
- 📈 EA'S $8B Tactical Opportunity
📈 EA'S $8B Tactical Opportunity
AMD beats on earnings, Super Micro drops, DHL acquires US e-commerce logistics business, WeightWatchers files for bankruptcy, EA issues strong bookings guidance
Evelio Silvera
May 07, 2025
Good morning.
⚡ The Fast Five → AMD beats on earnings, Super Micro drops, DHL acquires US e-commerce logistics business, WeightWatchers files for bankruptcy, EA issues strong bookings guidance
🔎 Market Trends → US stocks close lower as tariff uncertainty weighs; US Futures Edge Lower Ahead of Fed Meeting
🚨 Bull Street Airs on FinTech.tv → Tune into Market Movers: Opening Bell LIVE on FinTech.tv from 9-10AM EST
And now…
⏱️ Your 5-minute briefing for Wednesday, May 7, 2025:
MARKET BRIEF
Before the Open
As of market close 05/06/2025.
Pre-Market
| 
|
Fear & Greed
Markets in Review
US Deficit Soars, But Bulls Hold Their Ground
The Dow (-1%), S&P 500 (-0.8%), and Nasdaq (-0.9%) pulled back Tuesday, snapping recent momentum as investors digested a record US trade gap and President Trump’s latest trade stance.
The Big Picture:
Wall Street tapped the brakes as the US trade deficit widened to $140.5B in March—a 14% jump—while President Trump made clear the US isn't rushing into trade agreements. Despite the rhetoric, tariff-driven import front-loading may have juiced this data more than it signaled lasting weakness.
Markets are now eyeing the Fed’s rate decision Wednesday, with expectations that Chair Powell will stay the course, holding rates steady and emphasizing patience amid tariff and growth uncertainty.
Meanwhile, WTI crude popped 3.4% to $59.09, fueled by OPEC+ plans to hike supply and growing questions over the global growth outlook. Gold jumped 3.2% to $3,428.90, a clear sign investors are hedging geopolitical noise.
Market Movers:
📈 Constellation Energy (CEG) soared 10%, leading the S&P 500, after topping revenue expectations and reaffirming full-year guidance.
📈 Marriott (MAR) rose 1.9%, with strong Q1 earnings despite a modest guidance reset for room revenue.
📉 DoorDash (DASH) dropped 7.4% after announcing a nearly $4B acquisition of Deliveroo and delivering mixed Q1 results.
📉 TreeHouse Foods (THS) fell 5.8% after flagging flat Q2 sales and soft consumer demand.
What They’re Saying:
“We don’t have to sign deals—they want a piece of our market,” —President Donald Trump, on trade negotiations
WHAT WE’RE WATCHING
Events
Today: Federal Reserve - Federal Funds Rate - 2:00pm
Why You Should Care: Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.
Today: Federal Reserve - Federal Open Market Committee (FOMC) Statement - 2:00pm
Why You Should Care: It's the primary tool the FOMC uses to communicate with investors about monetary policy. It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes. Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes.
Today: Federal Reserve - Federal Open Market Committee (FOMC) Press Conference - 2:30pm
Why You Should Care: It's among the primary methods the Fed uses to communicate with investors regarding monetary policy. It covers in detail the factors that affected the most recent interest rate and other policy decisions, along with commentary about economic conditions such as the future growth outlook and inflation. Most importantly, it provides clues regarding future monetary policy.
Earnings Reports
Today: Walt Disney, Uber, DoorDash, Emerson Electric, Fortinet, Novo Nordisk, Applovin, Carvana
Tomorrow: Anheuser-Busch, Monster Beverage, Coinbase, Restaurant Brands International, Shopify, HubSpot
MARKET BRIEF
Leading News
EA Readies for Blockbuster Launch as Rivals Delay
Photo Credit: REUTERS/Dado Ruvic
Why it matters:
EA's fortuitous timing with "Battlefield" fills a market gap created by Take-Two's "GTA VI" delay, potentially boosting EA's fiscal 2026 performance despite broader economic headwinds.
Zoom Out:
Electronic Arts ($EA) is betting big on its iconic shooter franchise, forecasting fiscal 2026 bookings between $7.6-$8 billion — above Wall Street's $7.62 billion expectation. The publisher's shares jumped more than 6% in after-hours trading following the announcement.
The summer reveal of a new "Battlefield" installment couldn't come at a better moment. With Take-Two's ($TTWO) highly anticipated "Grand Theft Auto VI" pushed out of fiscal 2026, EA finds itself in an enviable competitive position with gamers hungry for AAA content.
Key Insights:
Sports portfolio remains EA's foundation – The company's "FC" franchise saw monetization increase by double digits after a January update, recovering from earlier underperformance while "Madden NFL" continues to deliver reliable revenue.
Q4 performance exceeded expectations – EA reported bookings of $1.80 billion against analysts' predicted $1.56 billion, powered by strong sales of "Split Fiction," which became one of March's best-selling titles.
Macro concerns haven't dimmed outlook – Despite broader consumer spending pressures from economic volatility and tariff impacts, EA's confident forecast suggests digital entertainment remains resilient even in uncertain markets.
Market Pulse:
"It is always good to avoid GTA... Battlefield gives people something to look forward to and to play until GTA comes out," notes Wedbush Securities analyst Michael Pachter, highlighting the strategic advantage of EA's release timeline.
Bull’s Take:
Smart investors should consider that while gaming stocks often face seasonal volatility, EA's diversified portfolio and opportunistic release schedule position it to potentially capture outsized market share in a year when its biggest competitor is notably absent from the battlefield.
Headlines
AMD beats on earnings but will take $1.5 billion hit to revenue from chip restrictions to China (link)
DHL acquires US e-commerce logistics business IDS Fulfillment (link)
WeightWatchers files for bankruptcy (link)
Harman To Acquire B&W, Denon, Polk And Marantz From Masimo In $350 Million Deal (link)
Super Micro drops as AI server maker lowers revenue outlook on tariffs, economic uncertainty (link)
DoorDash splashes over $7b to buy Deliveroo and SevenRooms (link)
CRYPTO
Fear & Greed
Headlines
DAILY SHARE
On the Socials
*Hat-tip to wallstmemes