Daily Briefs

• Fermi set terms for its IPO on Wednesday afternoon and will offer 25 million shares at $18-$22 and to debut on Wednesday, 10/1.
• One of Fermi’s founders is former energy sector director, Rick Perry.
• The underwriters have reserved for sale at the initial public offering price up to 5% of the shares of common stock for sale through a directed share program.

• Big Tech is throwing hundreds of billions of dollars at the AI boom and neocloud providers, who are building AI data centers, are central players.
• I wrote a Research piece about Nebius two months ago. Since then, its stock has doubled, thanks in part to a $17.4 billion contract with Microsoft.
• I took a close look at the deal, ran some scenarios, and came across IREN, a promising but lesser-known company that’s trying to follow the same playbook

• Robinhood has successfully disrupted the traditional brokerage industry with its commission-free, mobile-first platform, attracting a large and loyal base of younger investors. The company has recently achieved consistent profitability, driven by a rebound in trading volumes, higher net interest revenues, and growth in its subscription services.
• The company’s growth trajectory is supported by product innovation, including the expansion of its cryptocurrency offerings, introduction of retirement accounts, and a push into AI-driven trading tools. Potential inclusion in the S&P 500 could further enhance its market visibility and credibility.
• Significant risks remain, primarily centered on regulatory scrutiny of its key revenue source, Payment for Order Flow (PFOF), and its high dependence on volatile retail trading activity, particularly in speculative assets. Intense competition from both fintech startups and incumbent brokers who have adopted similar commission-free models also poses a threat to long-term market share.

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• Crude oil futures steadied Wednesday, consolidating the previous session’s gains as investors eyed threats to oil supplies, including Russian diesel after the last spate of refinery attacks.
• Front-month Nov25 ICE Brent futures were trading at $67.90/b (1030 BST) versus Tuesday’s settle of $67.63/b, while Nov25 NYMEX WTI was at  $63.55/b against a previous close of $63.41/b.
• Benchmarks have largely been rangebound in September with markets torn between supply disruptions and concerns over a Q4 supply glut as OPEC+ continues its unwinding program.

• Alphabet‘s dominance in the digital advertising market, driven by its core Google Search and YouTube platforms, continues to fuel strong revenue growth and robust free cash flow generation. This financial strength allows for significant investments in high-growth areas.
• Google Cloud is emerging as a significant growth engine, consistently capturing market share and benefiting from the increasing enterprise adoption of cloud computing and AI-powered services. Management has highlighted strong AI demand as a key driver for its 32% YoY revenue increase in Q2 2025.
• Strategic investments in Artificial Intelligence are being integrated across Alphabet‘s entire product ecosystem, from enhancing search results and ad monetization to powering its Cloud offerings. This AI-first strategy is pivotal to maintaining a competitive edge against peers like Microsoft and Amazon, though it also necessitates increased capital expenditures.

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Key points (machine generated)

• UEIC develops control and sensor technology solutions for home entertainment, including universal remotes and smart home devices.
• The company has been operational since the 1980s, holds around 500 patents, and has 24 subsidiaries worldwide.
• The rise of OTT streaming services is causing a decline in traditional cable subscriptions, threatening the relevance of universal remotes.

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• Culp reported 1QFY26 GAAP EPS of ($0.02) versus ($0.58) in 1QFY25.
• Adjusting for one-time items, including a $4.0MM gain on the sale of property in Canada in 1QFY26, we estimate that ongoing EPS was ($0.30) versus ($0.36) in 1QFY25; management does not provide an adjusted EPS number.
• Please note with this report, we are assuming coverage of Culp, Inc.

• ARK Innovation ETF (ARKK) is an actively managed exchange-traded fund (ETF) that seeks long-term capital growth by investing in companies involved in disruptive innovation. The fund’s strategy, led by CEO and CIO Cathie Wood, focuses on themes such as artificial intelligence, DNA sequencing, robotics, energy storage, and blockchain technology.
• The ETF has experienced periods of stellar performance, notably a more than 150% return in 2020, but also significant drawdowns, highlighting its high-risk, high-reward nature. Its concentrated portfolio and aggressive growth focus result in high volatility compared to broader market indices.
• Key risks for investors include the fund’s high concentration in its top holdings, dependence on the vision of Cathie Wood (‘key-person risk’), a fluid and sometimes informal investment process, and the inherent volatility of the disruptive technology sector.

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• We are initiating coverage of SOL Strategies, Inc. (NASDAQ: STKE), a pioneer in the Solana market.
• SOL Strategies is a publicly traded company that provides infrastructure for the Solana blockchain ecosystem, which is the fastest-growing project in crypto.
• The company’s catchphrase is “Solana Grows, We Win. It’s That Simple.”

On 10 September, Wheaton (WPM) announced that it had committed to contribute to Carcetti Capital’s financing of its acquisition of the Hemlo mine from Barrick in the form of a US$400m gold stream (c 39% of Carcetti’s total funding requirement). At the current gold price of US$3,650/oz, we calculate a 9.2% pre-tax internal rate of return (IRR) to Wheaton from its investment in Hemlo. At Edison’s more conservative, longer-term gold prices, we forecast that Hemlo will contribute an average of 0.9c/share to Wheaton’s EPS per annum, over the official 14-year life of the mine, and that it will contribute an average of 7.2c to Wheaton’s operational cash flow per share. At the same time, we have increased our Q325 EPS estimate by 4.4% and our FY25 EPS estimate by 5.7% to reflect recent strength in precious metals prices. Note that, at these levels, our FY26 EPS estimate rises from the US$1.44/share shown below to US$3.15/share.