LXRX Skyrockets +64% on $1B Novo Nordisk Licensing Deal

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Lexicon Pharmaceuticals (LXRX) soared +64% in one day after securing a licensing agreement with Novo Nordisk for its LX9851 compound. The deal includes over $1 billion in potential milestone payments and royalties, marking a major win for the biotech firm. Investors reacted swiftly to the blockbuster contract, driving LXRX to one of the biggest daily gains across biotech this quarter.

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JFIN Surges +25% After Earnings Beat & Dividend Boost

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Jiayin Group (JFIN) jumped over 25% in a single day following a strong earnings report and news of a dividend increase. The fintech firm distributed $26.6 million in dividends during 2024, signaling robust profitability and shareholder-friendly capital allocation. The rally reflects renewed investor confidence in JFIN’s growth trajectory and commitment to returning value amid rising sector competition.

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Goldman Initiates ‘Buy’ on Las Vegas Sphere

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Shares of Sphere Entertainment (SPHR) have cratered -36% from their February highs amid fears over MSG Networks’ looming debt issues, but Goldman Sachs says the market is overreacting. Initiating coverage with a Buy and $42 price target (+24% upside), analysts argue investors are mispricing the Sphere’s long-term potential.

Key takeaways from Goldman’s bullish call:

• Undervalued asset: The Las Vegas Sphere—home to the largest 16K LED wraparound screen in the world—is driving ticketed event growth and premium experiences.
• Franchise potential: Expansion to global cities could add “tens of millions” in operating income through royalty fees alone.
• Overblown risk: Fears that MSG Networks’ debt restructuring will destroy value are “exaggerated.”

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Goldman forecasts Sphere adjusted operating income rising from -$20M in 2024 to $158M by 2027, outperforming Street estimates. They also note show counts could rival Madison Square Garden’s entire 5-venue portfolio by 2027. While short interest remains elevated (29.5% of float), analysts believe the venue’s ability to reinvent content—plus optionality on global Sphere builds—sets it up for multiyear growth, not a “newness” fade.

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CoreWeave’s $1.5B IPO Lands Flat as AI Hype Faces Skepticism

After much anticipation, CoreWeave (CRWV) debuted Friday on the Nasdaq—raising $1.5 billion in the largest U.S. tech IPO since 2021—but the stock closed flat at $40, reflecting cautious sentiment despite its AI exposure.
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Core details:

• Downsized deal: Target range was $47–$55; CoreWeave priced at the low end and trimmed fundraising by $1B.
• Microsoft risk: MSFT makes up 62% of CoreWeave’s revenue, creating heavy customer concentration risk.
• Cash burn warning: CoreWeave lost $863M in 2024 and has raised $13B in debt to finance GPU-heavy AI infrastructure.

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Founded in 2017, CoreWeave rents Nvidia GPUs to AI firms like OpenAI, Meta, and IBM—but critics are drawing WeWork comparisons due to high CapEx, debt reliance, and alleged “revenue round-tripping” with Nvidia and Microsoft.

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Legendary short-seller Jim Chanos added fuel to the fire, warning about Nvidia’s recent attempt to buy Lepton AI, calling it a possible red flag for hiding inventory or inflating revenue. With the AI trade under pressure and tech stocks down double digits YTD, CoreWeave’s IPO may be more of a red flag than a green light.

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Microsoft Retreats from AI Data Center Buildout Amid Oversupply

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Microsoft has quietly pulled back from data center projects totaling 2 gigawatts across the U.S. and Europe, citing oversupply relative to demand, according to TD Cowen. The move includes scrapped leases once intended to support OpenAI training workloads.
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The decision signals growing caution around AI infrastructure overbuild, just as investor concerns rise over high CapEx with slow returns. Alibaba’s Joe Tsai recently warned of a “$500B AI data center bubble,” while new players like China’s DeepSeek offer cheaper AI alternatives.
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Google and Meta are stepping in to absorb Microsoft’s vacated capacity, even as Microsoft maintains plans to spend $80B this year—now at a more measured pace.
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Meanwhile, Microsoft secured approval for a new Dublin data center, showing it’s still selectively expanding in high-demand markets.
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The pullback reflects a cooling AI narrative and a more disciplined approach to infrastructure spend—raising fresh questions about long-term ROI in the sector.

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Magnificent 7 Morphs Into the “Lagnificent” 7

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After two years of dominance, the mighty Magnificent 7—Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla—are finally showing signs of fatigue. These tech titans once carried U.S. equity markets on their backs, peaking at a staggering 35% of the S&P 500’s market cap in December 2024. But as Michael Hartnett of BofA puts it, the “Mag 7” trade may be transitioning into the “Lagnificent 7.”

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The AI narrative that propelled Big Tech to record valuations is now meeting resistance. China’s DeepSeek has undercut Western AI costs, Microsoft is scaling back data center leases, and global capex in hyperscaler infrastructure is forecast to peak this year. With average P/Es stretched above 60x at their peak, investors are questioning whether the growth narrative still justifies the price.

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