The Week Ahead Of Us 🔍 |
Welcome back! |
We have a busy week ahead - don’t snooze off at work quite yet. We have Nvidia reporting this week and Fed Chair Warsh speaking at Jackson Hole Friday; but I do want to talk about a touchy subject that might derail the AI trade - a large part of the U.S. hating datacenters: |
While many of the people reading this are leveraging AI for productivity gains, or are invested in AI-related stocks, there’s tens of millions of Americans who are not in fact happy with AI. And it’s hard to blame them given all the negative messaging about data center energy and water usage, as well CEOs screaming about 50% of entry-level white-collar jobs going away. |
Americans would rather have a nuclear plant in their backyard than a data center: A Gallup survey found 71% of Americans oppose a data center in their area. This compares to the 53% who would oppose a nuclear energy plant in their area. |
It’s not like data centers are new though. You’re using a data center to read this right now. You need data centers to do all the basic things you do on your phone and computer. National data center water consumption accounts for 0.3% to 0.4% of daily water withdrawals at the moment, and of course, data centers have cooling services without water consumption. |
But politicians are starting to issue moratoriums and local communities are pushing back. There’s energy bill worries, environmental concerns, and questions regarding taxation benefits. Loudoun County, a DC suburb with 250 data centers, expects to generate $1.3B in tax revenue next year (40% of its total tax revenue) from data centers. Some states and cities though, wonder whether they’re giving away too many tax incentives. |
This data center pushback doesn’t look like it’s going away, and it looks like data center buildouts will vary by state-by-state policies. Regardless of where you stand, this messaging looks likely to heat up going into the midterms. |
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Here’s a look at earnings this week. |
Tuesday: Bank of Montreal, Bank of Nova Scotia, Intuit, Heico, Zoom, Dick’s Sporting Goods, Box, FS Credit Opportunities Corp, Wednesday: Nvidia, CrowdStrike, Salesforce, Synopsys, Trip dot com, Williams-Sonoma, HP, Okta, JM Smucker, Dycom, Abercrombie & Fitch, Bath & Body Works, Kohl’s Thursday: RBC, Marvell, TD, Autodesk, Workday, Dollar General, Affirm, Dollar Tree, Ulta Beauty, Burlington Stores, Rubrik, Best Buy, IREN, SentinelOne, Gap, Hyperliquid Strategies, Petco, Build-A-Bear
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Here’s a look at economic data this week (estimates are in quotations). |
Monday: None scheduled Tuesday: S&P Cotality Case-Shiller Home Px Index, New Homes Sales (619K), Conference Bd Consumer Confidence (90.1) Wednesday: Durable Goods (0.5%), 2nd estimate GDP (1.5%), Personal Income M/M% (0.2%), Consumer Spending M/M% (0.1%), PCE Price Idx M/M% (0.1%), PCE Price Idx Y/Y% (3.6%), PCE Core Price Idx M/M% (0.2%), PCE Core Price Idx Y/Y% (3.3%) Thursday: Weekly Jobless Claims (206K), Advance U.S. Trade Balance in Goods, Wholesale Inventories, Retail Inventories, Kansas City Fed Survey Friday: Kevin Warsh’s Jackson Hole Speech (10am ET), Chicago Business Barometer ISM-Chicago Business Survey Chicago PMI (57.9), U. Michigan Final Consumer Survey (51)
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Earnings Corner 💸 |
BJ’s Wholesale Club $BJ ( ▲ 5.61% ) Beat on the top and bottom lines, with revenue of $6.23B and EPS of $1.36 vs. $1.17. Results were driven by value seeking shoppers responding to lower gas prices and grocery deals, with comparable sales up 11.9%, led by grocery, consumer electronics and home goods. Membership momentum also remained strong, with fee income up 9.9% as the member base reached a record 8.5M, driven by strong new member acquisition, retention and higher tier membership penetration. Mgmt. raised FY EPS guidance to $4.60-$4.80 from $4.40-$4.60, above expectations.
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On The Move 📈 📉 |
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IPO Roundup 📍 |
Nscale is looking to raise $3Bn in a US IPO as soon as this September, telling investors it has $51Bn in total contracted revenue ahead of the listing. Orion180 Insurance Group filed for a US IPO to expand in the growing excess homeowners and flood insurance market. YMTC plans to raise $4.9B in a Shanghai IPO following rival CXMT’s $9.9B debut last month. The Wuhan-based chipmaker’s Q1 2026 net income hit 33.4B yuan, more than double its 2025 total. DayOne Data Centers is eyeing a ~$5B US IPO as soon as next quarter, adding to a borrowing spree that includes a new $237M loan for its Hong Kong facility. The Singapore-based operator, backed by SoftBank Vision Fund, Coatue, and Ken Griffin, closed a $4.5B Series C in June.
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Job of the Day: |
Beacon Software, an AI-driven holding company that acquires mission critical vertical software companies, is hiring an Investment Lead (SF, CA)
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Today’s Headlines 📖🍿 |
Tariffs with Canada are now in effect: Alcoholic beverages, dairy products, and electronics are among the 500+ product categories now facing 50% tariffs by the U.S. Following the last minute breakdown in talks, Canada will place tit-for-tat retaliatory tariffs on the U.S. effective September 8th. Sam Altman sat down with David Sentra to talk all things AI. This included addressing fears around AI, how its scaled, and the regret he has about messaging. He took yet another shot at Anthropic for the messaging around “50% of the jobs are going to go away in the next year”. Altman also admitted he was wrong about the speed of AI adoption, now realizing people aren’t changing their habits overnight. You can view the full podcast here Nvidia plans to hike prices by more than 15% on servers containing chips like Vera and Blackwell, with increases taking effect on systems shipped next year. Nvidia has to pass prices on due to the supply cost of inputs like memory. Hugging Face is working with a bank to explore a sale that would value the AI platform at more than $13 Billion. The “GitHub for machine learning” is an online platform where developers share, test and deploy AI models. Blue Owl released their 2026 Mid-Year in focus, calling out several key points: 1) Default rates remain below averages 2) Private credit is offering a 200bps premium to public loans 3) Private Credit is roughly 25% of leveraged lending today and expected to grow further 4) Manager selection is becoming more important and 5) Blue Owl is getting more bullish on digital infrastructure. Apollo confirms a data breach exposing names, birth dates, addresses, and Social Security numbers after hackers used social engineering to access its cloud systems. The breach follows a Google-flagged extortion campaign targeting PE and financial firms. Vista is exploring a $3B+ sale of Allvue, an asset & credit manager focused data provider. Acquired back in 2019, the Company behind Black Mountain Systems initially had plans to go public in 2021 that were scrapped. Lenders are pushing against CD&R: The Sponsor has historically been known as lender friendly, but recent aggressive tactics with Multi-Color have led lenders to rethink things, and form co-op groups faster. PIMCO says rising sovereign debt, AI-related corporate issuance, and inflation concerns are pushing 30-year yields to nearly two-decade highs across the US, Europe, UK, and Japan. The firm expects episodic volatility rather than a fiscal crisis and views current yields as an attractive entry point for long-term investors. Brookfield deep dive: Specialization is reshaping private credit. The firm sees increasing interest in the expanded private credit spectrum, including opportunistic credit, real-asset credit, and asset-backed finance. Specialty finance accounted for roughly 20% of all private credit fundraising in 2025, up from 4% in 2024.
Hyperscalers’ off-grid power push for AI is facing early problems: 3 of 4 operational US off-grid data centers have reported issues. AI workloads create massive power swings that stress equipment, and downtime can cost tens of millions per day. Blackstone has already directly deployed AI engineers into portfolio companies. Blackstone and Hellman & Friedman had recently launched Ode with Anthropic, a 160-person AI engineering team already embedded in six Blackstone portfolio companies, and OpenAI has a rival venture backed by TPG. Florida-based EverBank is up for sale three years after five PE firms bought it from TIAA in 2023, and an IPO is a backup if no deal materializes. The five owners have clashed over strategy, dragging out the sales process for months. At Wall Street’s exclusive Camp Kotok gathering in Maine, veteran finance pros are increasingly anxious about the AI trade. Attendees debated whether the massive AI capex will pay off and were worried the Aschenbrenner blowup could be an early “cockroach.” Satellite startup Muon Space raised a $250M Series C backed by Google and Salesforce Ventures. Muon has raised $386M total and is preparing for a potential IPO, projecting $10B+ in future business from NASA, NOAA, and the US Space Force. Clearlake-backed FinThrive reported weak Q2 Adj. EBITDA of $40M, down 17% YoY as revenue slipped from $105M to $100M. The company drew upon its $150M credit line to bolster liquidity. JPMorgan hired David Fishman from Bank of America as vice chair and head of North America tech M&A. Fishman was most recently co-head of TMT M&A at BofA and reunites with former colleague Kevin Brunner. Sweetie Candy owner Tom Scheiman turned down a PE deal and sold a stake in the company to his employees instead, giving dozens an ownership share.
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M&A Transactions💭 |
Zonda Home, developer of media and analytics platform, was acquired for $800.0M by CoStar Group (NAS: CSGP). Houlihan Lokey and Solomon Partners. |
Steadfast Group (ASX: SDF), the largest general insurance broker network in Australia and New Zealand, has entered into a definitive agreement to be acquired for AUD 7.7B by Kohlberg Kravis Roberts and AmWINS. Citigroup and J.P. Morgan advised on the sale. |
Kartos Therapeutics, developer of targeted oncology therapeutics, was acquired for $450.0M by Ipsen (PAR: IPN). PJT Partners and Goldman Sachs advised on the sale. |
PT Chandra Asri Pacific (IDX: TPIA) reached a definitive agreement to acquire The Cycle & Carriage Automotive Distribution Business of Jardine Cycle & Carriage for SGD 265.0M. |
Private Placement Transactions💭 |
Cityblock, operator of personalized health systems, raised $116.0M of Series E venture funding led by General Catalyst. |
Starcloud, developer of power and cooling systems, raised $420.0M of Series A1 venture funding led by EQT, Manhattan West Asset Management, and Benchmark Opportunity Partners at a pre-money valuation of $1.88B. |
Restructuring Updates💭 |
Braskem Idesa |
Type: Chapter 11 (prepackaged) Debt: ~$2.4B funded debt What happened: Filed Aug. 17/18 with creditor support; plan would reduce senior debt by >$920M, to roughly $1.6B.
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BFG Supply |
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NEP Holdings |
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Restructuring Rumors💭 |
BitMart |
Type: Restructuring / potential insolvency process Debt: Not disclosed What happened: Hired White & Case as restructuring counsel and is considering a partial restart alongside creditor distributions after announcing a shutdown.
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Cornerstone Building Brands |
Type: Creditor restructuring watch Debt: Multi-billion-dollar debt load What happened: Lenders to the CD&R-owned company have begun organizing and seeking tighter protections following the contentious restructuring of another CD&R portfolio company, Multi-Color.
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Cloudera |
Type: Creditor restructuring watch Debt: Multi-billion-dollar leveraged capital structure What happened: Creditors have discussed organizing with advisers and pushing for stronger protections as lenders take a more aggressive stance across CD&R’s portfolio.
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Chart of the Day 🧭 |
Investment-grade AI debt is drawing junk bond investors as yields hit levels that look like double-B credit. QTS priced $3.9B in high-grade bonds last week at 7.23%, and BlackRock is paying 7.53% on IG bonds for a Texas data center. |
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Obviously, none of this constitutes financial or investment advice. *Today’s Odds of the Day is in paid partnership with Polymarket |
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