Daily Brief United States: Synopsys Inc, Legalzoom.com , Crude Oil, Futu Holdings Ltd, Olin Corp, Vera Bradley, C3.ai Inc, Build A Bear Workshop and more

• NVIDIA & Synopsys announced a new strategic partnership on Dec 1, mostly covering topics they were already strategically partnering on, with one exception, Cloud-Ready Solutions
• The partnership sees NVIDIA purchase $2 billion worth of Synopsys stock in a private placement. Other, recent, similar strategic partnerships e.g. Siemens & GM, involved no such investment
• They plan to start enabling cloud access for GPU-accelerated engineering solutions. Could this be where that $2 billion finds a home? Is this a new Neocloud in disguise? Let’s see

• LegalZoom is the market leader in the online legal services industry, benefiting from strong brand recognition and a large customer base. The company is strategically shifting its focus towards higher-margin subscription services to create a more predictable, recurring revenue stream.
• The company exhibits a strong financial profile with consistent revenue growth, expanding EBITDA margins, and a debt-free balance sheet. This financial stability supports investments in technology, strategic acquisitions, and share repurchase programs.
• Key risks to the outlook include intense competition from both established players and new entrants, potential regulatory changes concerning the unauthorized practice of law, and a high dependency on the macroeconomic environment which influences the rate of new business formations.

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• The current macro environment has elements of both the 1970’s and mid-2000s commodity bull market
• Investor interest and allocation to this asset class is still minimal
• A rising cost of capital globally favours a move out of long duration into real assets

• Futu Holdings is a high-growth, technology-driven online brokerage and wealth management platform with a strong foothold in Hong Kong and expanding international operations.
• The company has demonstrated exceptional financial performance, characterized by robust revenue and net income growth, and superior profit margins compared to industry peers, driven by a scalable business model.
• Significant regulatory risks, particularly concerning its mainland China client base and the evolving cross-border financial services landscape, remain a key uncertainty and a primary concern for investors.

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• Olin Corp. is a leading, vertically integrated global manufacturer of chemical products and ammunition, operating through its Chlor Alkali Products and Vinyls, Epoxy, and Winchester segments.
• The company is navigating a challenging petrochemical environment by focusing on a U.S.-centric sales strategy and prioritizing cash generation and shareholder returns, which has allowed it to outperform peers.
• Financial performance has been under pressure, with declining revenue and net income over the past three years, reflecting weak demand, low prices, and higher input costs in the broader chemical sector.

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• We are reiterating our Hold rating and projections for Vera Bradley with the company announcing 3QFY26 (October) results before the open on Thursday, December 11th.
• Given the continuing initial shifts under new management (who joined in July) and the limited ability to change product offerings until 1Q2026 (at the earliest), we believe overall financial results are not as important as are customer responses to the shift back to heritage looks, the return of key silhouettes, the launch of Outlet 2.0 at the end of the quarter and what further changes are in store going forward.
• We continue to view the changes as a positive, but await clarification on the overall implications for the company (and returns) before becoming more aggressive in VRA.

• In-line 2QFY26 revenue and EBIT beat on cost controls, but gross margin pressure from IPDs. 
• 2QFY26 revenue of $75.1 million was essentially on target and cost controls drove a better-than-expected bottom line with EBIT of ($42 million) [Street = ($52 million)]. 
• However, non-GAAP gross margin was 54.5%, up 280 bps but more than 300 bps below Street expectations.

• Crude oil futures on Thursday were climbing higher, as benchmarks maintained the firmer start to December, albeit amid conflicting signals.
• Front-month Feb26 ICE Brent futures were trading at $63.31/b (2033 GMT) versus Wednesday’s settle of $62.67/b, while Jan26 NYMEX WTI was at $ 59.72/b against a previous close of $58.95/b.
• Prices have found some support this week from the fading prospects of a ceasefire in the Russia-Ukraine conflict and the broader rise in geopolitical tensions, but it has not been enough to shake off the gloom around a growing surplus.

• We are reiterating our Buy rating, but lowering our projections and reducing our price target of BBW to $65 (from $75) after Build-A-Bear reported solid 3Q EBITDA & EPS upside, but lighter than expected revenue, and implied deep tariff impacts into 1HFY26 will serve to offset near-term positives and materially impact operating results.
• 3Q tariffs negatively impacted the company by $4 million (or a projected $0.23 in EPS) with a $6 million further negative impact in 4Q (projected $0.35 in EPS) and, we believe approximately $7 million to $9 million (projected $0.41 to $0.53 in EPS) in the first five months of FY26.
• While we view this scenario as potentially conservative, we have to face the facts that overall gross margins, if tariff impacts remain similar to 2HFY25 in 1HFY26 without any further material offsets, will significantly decline.