Daily Brief United States: NVIDIA Corp, Novelis Corporation, Paramount Skydance, Brady Corporation Cl A, Southern Copper, Children’S Place, Starz, Crude Oil and more

• NVIDIA has secured unprecedented demand visibility with a reported USD 500 Billion order book for its next-gen AI chips, solidifying its position as the keystone of the AI industrial revolution.
• The company’s financial health highlighted by a USD 48.3 Billion net cash balance and strategic capital return, affirming confidence that structural growth will outweigh geopolitical risks.
• Following a period of short-term volatility and profit-taking, the confluence of long-term structural catalysts suggests the stock is poised to resume a higher trajectory and trading range.

• Novelis is the world’s largest producer of flat-rolled aluminum (FRP) products and the global leader in aluminum recycling, uniquely positioning it to benefit from the secular trend towards lightweighting and sustainability in the automotive and beverage packaging industries.
• The company’s business model is centered on a closed-loop recycling system, which provides a significant cost and sustainability advantage over primary aluminum producers, as recycling aluminum requires only 5% of the energy needed for primary production.
• Significant capital investments in expanding rolling and recycling capacity are underway to meet growing demand, particularly in the high-value automotive and beverage can segments. However, operational disruptions and cost inflation present near-term headwinds to profitability.

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• New Leadership, New Strategy: The August 2025 merger of Paramount Global and Skydance Media, creating Paramount Skydance (PSKY), marks a pivotal moment. Led by CEO David Ellison, the new entity aims to blend Paramount’s iconic content library and distribution network with Skydance’s modern production prowess and tech-focused approach. The strategy centers on revitalizing key franchises, achieving profitability in the Direct-to-Consumer (DTC) segment, and realizing significant cost synergies, now targeted at $3 billion.
• Navigating a Shifting Media Landscape: PSKY operates in a highly competitive and rapidly evolving industry characterized by the secular decline of linear television and the intense ‘streaming wars’. The company’s success hinges on its ability to grow its Paramount+ streaming service profitably while managing the decline of its traditional cable and broadcast assets. Management has signaled a focus on technology improvements to enhance user experience and reduce churn on its streaming platforms.
• M&A Remains a Key Theme: The formation of Paramount Skydance is a major act of consolidation, but the company remains a subject of further M&A speculation. As noted by Smartkarma analyst Baptista Research, the company is already contemplating an ambitious bid for Warner Bros. Discovery. This highlights the industry-wide pressure to scale up to compete effectively with larger, well-capitalized rivals, including tech giants like Apple and Amazon.

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• Brady Corporation is a global leader in identification and workplace safety solutions, demonstrating consistent growth through a combination of organic initiatives and strategic acquisitions. The company’s focus on innovation, particularly in high-performance materials and digital integration, positions it well to capitalize on secular tailwinds such as increasing workplace safety regulations and the rise of industrial automation.
• Financial performance is robust, characterized by steady revenue growth, strong and expanding margins, and significant cash flow generation. Brady has a long-standing commitment to shareholder returns, evidenced by a multi-decade history of consecutive annual dividend increases and disciplined capital allocation.
• While exposed to global economic cycles and competitive pressures, Brady’s diversified end-market exposure, strong brand recognition, and niche market leadership provide a resilient foundation. Future growth is expected to be driven by continued R&D investment, expansion in high-growth regions, and accretive M&A activity.

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• Southern Copper (SCCO US) reported stellar earnings and execution in Q3 2025, with revenues/operating income up 15% and 21% YoY, respectively, beating street estimates by ~4-5%.
• The company included slides in its presentation deck highlighting that the copper deficit could rise to 3 million tons by 2030e and 12.1 million tons by 2040e. 
• This would be led by a transition to EVs (electric vehicles), greater use of renewable energy with higher capex intensity, and other nascent areas of demand, such as AI infrastructure.

• The Children’s Place is navigating a significant downturn, characterized by persistent revenue declines, net losses, and negative cash flows, driven by intense competition and macroeconomic pressures on its core consumer.
• A new management team has been installed in 2024 and is implementing a turnaround strategy focused on reducing promotions to improve gross margins, cutting SG&A expenses, and optimizing its omnichannel strategy. The success of this execution is paramount but carries a high degree of uncertainty.
• The company faces severe financial risks, including a high debt load, negative shareholder equity, and liquidity concerns. While the stock appears inexpensive on some metrics, the potential for further sales declines and margin pressure makes it a high-risk, speculative investment.

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• The Wall Street Journal recently published a good article highlighting that streaming costs are soaring but consumers continue to be willing to pay.

• This is good news for Starz (STRZ), a pure play streaming service that is relatively cheap vs. its larger competitors.
• I continue to think Starz looks attractive. It is showing sequential revenue growth and OTT subscriber growth yet trades at 3.7x EBITDA and 2x FCF.

• Crude oil futures on Friday continued to recover from three-week lows as Russian supply disruptions and broader geopolitical concerns got the better of oversupply fears at least for the day Front-month Jan25 ICE Brent futures were trading at $64.35/b (2015 GMT) versus Thursday’s settle of $63.01/b, while Dec25 NYMEX WTI was at $60.04/b against a previous close of $59.70/b.
• The latest drone strike from Ukraine targeted the Black Sea export hub of Novorossiysk overnight Thursday.
• Multiple reports, including from Russian and Ukraine media, reported a major blaze at the terminal, suggesting significant disruption in loading crude from the Black Sea hub.