LT Weekly: Sep 05, 2025

It was a sigh of relief for Alphabet investors this week as the verdict regarding remedies associated with Google’s Search antitrust case was finally delivered…and the outcome was positive for the Co. There were minimal penalties and far less severe remedies than feared. Concerns about the Co having to split up and divest Chrome are now off the table. What helped change the course of the case is the rise of gen AI tools that have introduced new ways for users to retrieve information, “challenging” Google’s dominance in traditional search. Judge Amit Mehta said that these new tools “may yet prove to be game changers,” but their emergence made harsh structural remedies less necessary. Interestingly, “Generative AI” and “GenAI” was mentioned 220 times in the remedies ruling and “large language models” (LLMs) were mentioned 82 times.

The outcome of this ruling was an overhang on Alphabet’s stock, hence investors were relieved to move forward with certainty on this front. Now the focus moves purely back to fundamentals…

-> Alphabet shares rallied +9% and Apple’s rose +4% in reaction to the final ruling; YTD, the stocks are up +24% and -4%, respectively while Meta, Amazon, and Microsoft are up +15%, +6%, and +18%, respectively

A Brief History … (link)

• Oct 20, 2020: During President Trump’s first term, the US DoJ filed a lawsuit against Google, alleging it illegally monopolized online search and digital advertising markets

• Aug 4, 2023: Judge Mehta granted partial summary judgment for Google, dismissing some claims but allowing the core “default search” allegations to proceed

• Sept 12, 2023: At trial, Google defended its practices, arguing that it earned its dominant market share by offering users a high-quality service

• Aug 5, 2024: Judge Mehta found Google in violation of US antitrust law, saying that “Google has no true competitor”

• Nov 2024: DoJ proposed remedies, including divestiture of Chrome and Android

• Sept 2, 2025: The final ruling on remedies was issued whereby Google will not be required to sell its Chrome browser

Details From The Final Ruling (link/link)

• The Co won’t have to sell Chrome but it must share search data with rivals
  • The court found that the plaintiffs overreached in seeking forced divestitures
    • It determined that the Co did not use these assets to effect illegal restraints
  • Google is allowed to continue to pay Apple for default search placement, which is obviously a plus for Apple as well
    • The Co pays Apple “$20bn annually” according to Morgan Stanley Analysts
    • Judge Mehta concluded that cutting off payments would impose substantial, even crippling, harm to partners, related markets, and consumers

• The changing competitive landscape with AI worked in Google’s favor
  • Judge Mehta noted the competitive landscape for Search is changing rapidly, particularly with the advent of GenAI technologies
    • “Tens of millions of people now use GenAI chatbots to gather information that they previously sought through internet search”
    • The GenAI market is highly competitive, with numerous new market entrants

• While the Co remains dominant, the rise of generative AI and new entrants is already reshaping the market
  • Judge Mehta had some final remarks on the matter…
    • “The Court must approach the question of remedies with a healthy dose of humility”
    • “Renders GenAI a potential threat to Google’s dominance in the market for general search services”

• Google is barred from entering or maintaining exclusive contracts for Google Search, Chrome, Google Assistant, and the Gemini app…the Co is prohibited from the following “conditioning” (making one business benefit contingent on another obligation, essentially tying access or payments to extra requirements that favor Google’s other apps)
  • Prohibited from conditioning Play Store or other app licensing on distribution, preloading, or placement of Google Search, Chrome, Assistant, or Gemini
  • Prohibited from conditioning revenue share payments for one app (e.g., Search, Chrome, Assistant, Gemini) on placement of another
    • Prohibited from conditioning revenue share payments on maintaining these apps for more than one year
    • Prohibiting partners from simultaneously distributing other GSE (General Search Engine), browser, or GenAI products (prevents Google from forcing exclusivity and ensures rivals can still get distribution)

• Google is subject to data sharing obligations and search syndication rules
  • The Co must provide “Qualified Competitors” with certain search index and user-interaction data (but not ads data)
    • This remedy is narrowed to only datasets linked to anticompetitive conduct
  • The Co must offer “Qualified Competitors” search and search text ads syndication services
    • Syndication to occur largely on ordinary commercial terms consistent with current practice

• The Co will not be required to present a choice of screens or compel Android partners to do so (choice screens = a setup screen on a new device that lets users pick their default search engine like Google, Bing, DuckDuckGo, etc., rather than automatically defaulting to Google)
  • Courts avoided remedies mandating product design; choice screens not proven to enhance competition

• Additional rejected provisions from the lawsuit which to Google will not be subject
  • No obligation for a nationwide public education campaign
  • No requirement to modify policies for publishers’ content use
  • No investment reporting requirement
  • No anti-retaliation, anti-circumvention, or self-preferencing provisions

While A Big Win For Google, There Are Other Regulatory Actions To Note (link/link)

• The determination on remedies associated with the other DoJ case whereby Judge Brinkema found the Co to hold illegal monopoliesin online advertising technology is still pending; The DOJ is pushing for…
  • Unbundling of ad tech services
  • Restrictions on data sharing
  • Measures to prevent future monopolistic behavior, especially in emerging areas like AI advertising

• Also this week, Google was fined €325mn ($381mn) this week for showing ads to Gmail users and placing cookies without first obtaining proper consent from account holders
  • France’s CNIL gave the Co 6 months to stop showing ads in Gmail inboxes without prior consent: Google must ask users clearly and explicitly for permission (“valid consent”) before using their account data for ads
    • If not followed, both the Co and its Irish subsidiary will have to pay a penalty of 100k euros per day
  • Google is reviewing the decision and counters that “users have always been able to control the ads they see in their products”: Google asserts that it has already taken steps over the past two years to address CNIL’s concerns by:
    • Adding an option to decline personalized ads during account creation
    • Modifying how ads are displayed in Gmail

Antenna’s latest State of Subscriptions: Specialty SVOD 2025 report also made the cut this week. It examined the growth and evolving dynamics of Specialty SVOD services within the broader streaming market. Specialty SVODs continue to outpace Premium SVODs in y/y growth, though their pace is slowing, while the share of consumers engaging with Specialty, Sports, or vMVPD services has steadily increased each qtr. Churn rates remain highest in Sports and Specialty categories, though Premium SVODs benefit from a large base of long-term subscribers.

See below for what we thought were the key highlights, and click HERE for the full report.

The Report Breaks Streaming Svs Into 4 Categories –

• Premium SVOD: i.e., Apple TV+, Discovery+, Disney+, HBO Max, Hulu, Netflix, Paramount+ Peacock, Starz

• vMVPD: i.e., DIRECTV STREAM, Fubo, Hulu + Live TV, Philo, Sling TV, YouTube TV

• Sports: i.e., DAZN, ESPN+, FanDuel Sports Network, MLB TV, MLS Season Pass, NBA League Pass, NFL+, NFL Sunday Ticket, UFC Fight Pass

• Specialty SVOD: i.e., A&E Crime Central, Acorn TV, ALLBLK, AMC+, BBC Select, BET+, BritBox, Cinemax, Crunchyroll, CuriosityStream, Gaia, Hallmark+, History Vault, Lifetime Movie Club, MGM+, PBS Documentaries, PBS KIDS, PBS Masterpiece, PureFlix, Shudder, Sundance Now, UP Faith & Family, ViX Premium and Zeus Network

Specialty SVOD Growth Is Outpacing That Of Premium SVODs, But The Pace Is Decelerating

• Premium SVOD Subscriptions grew at +11% y/y in 2024 and +10% into 2025

• Specialty SVOD grew +22% y/y in 2024 and +12% y/y into 2025

The Share Of Total SVOD Consumers Who Have Transacted With Specialty, Sports, Or vMVPD Svs Is Increasing Each Qtr

Source

Churn Rates Are Down Slightly Across Categories

• Specialty, Sports, and vMVPDs have higher churn rates than Premium…
  • Premium SVOD Churn is currently 4.1% and has ranged from 4.1% to 5.5% monthly since 2023
  • vMVPD Churn is currently 4.5% and has ranged from 4.1% to 7.1% monthly since 2023
  • Sports SVOD Churn is currently 5.1% and has ranged from 4.4% to 12.0% monthly since 2023
  • Specialty SVOD Churn is currently 6.6% and has ranged from 6.6% to 9.2% monthly since 2023

• …BUT Premium SVOD’s overall churn is reduced by its large base of long-term subscribers, particularly Netflix users

Avg Monthly Churn Rates For Different Sub-Categories Vary Significantly, But The Sports Sub-Category Exhibits The Highest Volatility 

Source

There was quite a bit of chatter this week as companies in the sector addressed investors at a large Wall Street conference. We highlighted the key incrementals we found particularly noteworthy from Warner Bros. Discovery, T-Mobile, Publicis, and Charter which covered strategic moves around spinoffs and debt reduction, as well as synergy expectations, service performance, M&A plans, growth metrics, and more.

Warner Bros Discovery Is Considering Selling A Stake In Its Studio & Streaming Business Before The Spinoff (link/link)

• “We want to get full value for it…we’ve had some serious people asking about ways to get their hands on that,” per WBD CFO Gunnar Wiedenfels: WBD, which is splitting in two, is mulling selling a 20% stake in its studio and streaming biz (Warner Bros.) before the planned separation next yr
  • Selling the stake in Warner Bros. is considered a “creative tool in the box” to help reduce debt: Warner Bros has reduced its net debt down to ~$30bn, and it will be “significantly lower at the end of the year”
  • Achieving optimal value from a buyer is “definitely going to be a priority,” Wiedenfels said
    • The Co has a yr to execute a sale without taking a tax hit
    • “We have had some interest and some discussions earlier than that. And technically, we would be able to monetize part of it, all of it, whatever, before we even close the transaction”
    • “There’s nothing specific here yet, but definitely something that I’m going to be a lot more focused on over the next few months”

-> WBD closed up +2.3% on the day the news hit the tape and ended the week up +4.0%; YTD, the stock is up +14.6%

T-Mobile Provides Updated Synergy Expectations Following The Close Of UScellular, Along With Addtl Biz Updates (link)

• The Co raised its synergy target w/ UScellular by 20%, now expecting to reach ~$1.2bn in total annual run rate cost synergies upon integration: This is comprised of ~$950mn in OpEx and ~$250mn in CapEx run rate synergies
  • The integration is now expected to be achieved in ~2 ys, an acceleration from the original 3-4 yr expectation
  • Costs to achieve are expected to be ~$2.6bn, within the original guidance range, and TMUS continues to plan to reinvest a portion of synergies toward “enhancing consumer choice, quality and competition in the wireless industry”

• Stronger core business performance on T-Mobile postpaid net additions is expected to offset the impacts of the initially higher-churning UScellular base
  • Overall postpaid & postpaid phone customer guidance for the yr is unchanged at this time as a result

• Expected financial impacts from UScellular acq in Q3…
  • Svs rev of ~$400mn
  • Core adj. EBITDA of ~$125mn
  • ~$100mn in costs to achieve as the Co begins an accelerated integration process, which are excluded from Core Adj. EBITDA, and ~$175mn in D&A expenses
  • Acquisition of the lower postpaid ARPA UScellular base, together with postpaid accounts acquired from the Metronet joint venture also with lower Postpaid ARPA, will impact consolidated T-Mobile Postpaid ARPA by ~$1.50
    • Excluding UScellular and Metronet, T-Mobile’s underlying biz continues to see “strong” postpaid ARPA growth, with ongoing expectations for full year 2025 versus 2024 growth of at least 3.5%

• Business transformation initiatives and addtl updates…
  • Accelerating its move to a more “streamlined and dynamic” billing technology stack in Q3, which will result in an expected ~$350mn in predominantly non-cash costs associated with its digital technology transformation
    • Including non-cash impairment expense and accelerated depreciation related to the retirement of software, and personnel costs primarily associated with technology modernization
  • Expects its recent acquisitions outside of UScellular, alongside ongoing network investments, to generate an additional $120mn in D&A, integration and other expenses

-> TMUS fell -0.2% on the day of the announcement but ended the week up +0.3%; YTD, the stock is up +14.5%

Publicis Is Bullish on H2 + Not Looking To Do Large-Scale M&A (link/link)

• “We can fairly say that we had a good summer,” CEO Arthur Sadoun said, adding “the marketing cuts that we have discussed in Q2 did not appear”
  • Back in July, the Co warned that H2 would be more challenging and could result in cuts to client spending, particularly at the end of the year
  • Sadoun also expressed confidence that the Co would achieve its target of 5% growth for organic revenue in 2025

• Publicis is not interested in pursuing large-scale consolidation: “We are not interested in consolidating more of the same for the sake of efficiencies. This was true a year ago, it is even truer today.”
  • What they are actually interested in is AI: “With the speed of change AI is bringing, we are only interested in buying capabilities in data, technology, and AI that will enable us to continue to outperform the market and deliver immediate value to our clients”

-> Publicis shares closed up +2.7% on the day the comments were made, the highest since July 29

Charter Expects A Slightly More Challenging EBITDA Trends In Q3 Vs Q4

• Regarding EBITDA trends, “my expectation is that third quarter is actually a little more challenging than the fourth quarter. And [for] some of that is, I think, there are operational efficiencies that we’ll get more of as we get later into the year”, per CFO Jessica Fischer
  • But on a full year basis, the Co continues to expect “to grow” EBITDA

• The broadband market “continues to be a competitive space,”
  • Expects broadband pricing to remain “pretty resilient… I think we’ll continue to be able to grow rapidly in that space based on the unit economics we have now”

-> Charter was down -0.7% on the day the comments were made and ended the week down -1.5%; YTD, the stock is down -23.7%

The health of the jobs market was in focus this week given the release of July job openings, which marked the lowest level in 10 months. Available positions fell to 7.18mn, which was below economists’ 7.38mn consensus estimate (per Bloomberg) and lower than the downwardly revised 7.36mn in June, per the BLS, a division of the US Department of Labor. But one area of the job market that is super hot is for AI engineers! We found an analysis by Pragmatic Engineering on open positions for software engineering had some interesting findings, which includes that TikTok and Apple have the highest number of open positions for AI engineers.

See below for more on what we thought were the top takeaways (link to the analysis).

• Following layoffs in 2022-23, there has been a “slow, steady rise in recruitment” for software engineers across Big Tech & top startups

Source

• Which companies are hiring the most software engineers? Among the Top 5 were Apple, Amazon, Oracle, and TikTok, but perhaps the most surprising was IBM at #2
  • IBM is recruiting a large # of backend and generic software engineers, and specialists like AWS DevOps engineers, and SAP/ServiceNow developers

Source

• Surprise, surprise…there has been a massive increase in demand for AI engineers since mid-2023…
  • It is interesting to see the slope of demand for AI engineers vs software engineers

Source

• Who is looking to hire the most AI engineers? TikTok, Apple, Amazon, ByteDance, and Nvidia are the Top 5

Source

• Tenure of engineers is rising fast at Big Tech
  • More than half of open engineering roles are at the senior level or above
  • Since 2023, the avg tenure at Big Tech companies has incr’d at a record pace and publicly-traded companies have the most high-paying vacancies

Source

• Other observations regarding Big Tech software engineering headcount, by company –
  • Meta’s software engineering headcount has bounced back the most: After the sharpest cuts in 2023 (down ~-12%), Meta now has 19% more engineers vs Jan 2022, which is the biggest recovery among Big Tech employers
  • Google & Apple have had steady growth in software engineering headcount: Compared to 2022, Google’s engineering headcount incr’d by +16%, and Apple’s by +13%
  • Amazon & Microsoft have had the slowest growth in software engineering headcount: Amazon’s engineering headcount is only 8% above its 2022 level, while Microsoft’s has barely grown since early 2023

Source

There has been a lot of debate on the “existential risk” that AI poses on software companies and as one can imagine, this was a point of focus as it related to Salesforce this week. Overall, CEO Marc Benioff is not worried…he believes AI will fundamentally extend SaaS vs eliminate AI.

How defensible is SaaS against the disruption from AI native apps and customer built AI? The below says it all…

• “The software industry is going through a tremendous transformation, and it’s really driven by… the fundamental acceleration of artificial intelligence”
• “These large language models only have a certain level of accuracy and it’s not 100%. It’s probably about in the 90s when it really gets well architected with our data cloud and with all the different kind of capabilities and kind of really advanced techniques that we’ve come up with to make our AI as accurate as it can”
• Agents have not “completely taken over the huge customer support channel, it’s Salesforce, it’s just not possible”
• “In the last nine months, about 1.5mn conversations happened directly with these agents and 1.5mn of these conversations happened with humans. And so it’s those apps and it’s the agents working together”
• “And so by doing that, yes, there’s a lot that we can resolve, automatically through these agents with the customers, but there’s also a lot that cannot be resolved and that has to be escalated to the humans”
• And so it’s humans and agents working together to satisfy customer success. And this is what has been extremely important”
• In addition to support, AI is also creating opportunities “for sales as well. As I mentioned with this incredible new robotic salesperson that’s out there, calling back every single one of our leads and setting appointments and even in many places closing deals. And it’s going to be true in every application we made”
• “There are very smart people in our industry and other executives who are saying absolute nonsense. And I don’t understand why they’re saying this nonsense. Maybe it’s just to create a certain level of FUD (fear, uncertainty, doubt) in the market. But I think it’s inappropriate at this point, and what it’s done for the whole enterprise software industry, I think, is crazy”
• “Over the weekend, I read that MIT study that’s becoming very popular which really goes to show that a lot of companies have thought they were on the right path with generative AI, building their own models, doing it themselves, hooking it all up and now they’re claiming about 94% of those projects have failed. Well, we’ve been saying that was going to happen for the last several years, as you know”
• “So, it’s not about the fundamental, oh, I would say elimination of SaaS. And what I would say it’s the fundamental extension of SaaS”

Separately, Microsoft’s Nadella’s 5 Key AI Prompts

On the topic of AI implementation at the workforce, we also wanted to flag Microsoft CEO Satya Nadella making headlines this week when he revealed 5 AI prompts that he uses that can ‘supercharge your everyday workflow’ (link). For those that would like to leverage or try out his prompts, see below!

• “Based on my prior interactions with [/person], give me 5 things likely top of mind for our next meeting”
• “Draft a project update based on emails, chats, and all meetings in [/series]: KPIs vs. targets, wins/losses, risks, competitive moves, plus likely tough questions and answers”
• “Are we on track for the [Product] launch in November? Check eng progress, pilot program results, risks. Give me a probability”
• “Review my calendar and email from the last month and create 5 to 7 buckets for projects I spend most time on, with % of time spent and short descriptions”
• “Review [/select email] + prep me for the next meeting in [/series], based on past manager and team discussions”

• NBCUniversal cites record NFL season ad rev (link)
  • This NFL season is its highest grossing ever in overall ad & partnerships
    • Super Bowl LX ad inventory is fully sold out, earlier than ever
    • Already sold 90% of “Sunday Night Football” ad slots
    • Over 150 partnerships for “Sunday Night Football” in 2025-26, with ~40 new brands

• Ad pricing & demand
  • Super Bowl ads are going for $8mn per 30-second spot which is consistent with the $8mn last Super Bowl, but up from $7mn in 2024
  • High demand from consumer products, entertainment, finance, and alcohol brands
  • Digital spend up +20% vs NBC’s last Super Bowl in 2022

Source

• Speculation mounts ahead of Apple’s “Awe Dropping” event next week (link/link)
  • Rumored headliners…iPhone 17 lineup, including –
    • iPhone 17 Air – thinnest iPhone ever (5.5mm), A19 chip, single camera on the back
    • iPhone 17 – bigger screen, 24MP front camera, ProMotion and always-on screen,
    • iPhone 17 Pro / Pro Max – major camera upgrades with new camera bar design, 48MP telephoto + revamped ultra-wide
  • Other rumored launches –
    • Apple Watch SE, Apple Watch Series 11, and Watch Ultra 3 + health upgrades
    • iPad Pro
    • Vision Pro
    • AirPods Pro 3
    • AirTag 2
    • New Apple TV 4K (2025)
    • HomePod, now with display
  • Event date/time: Sept 9^th / 1pm EST

-> Related to Apple and also notable this week… the Co is reportedly in advanced talks to use Google’s Gemini AI models to power a major upgrade to Siri, aiming to make it more conversational, context-aware, and competitive with tools like ChatGPT and Perplexity (link)

• Lululemon’s stock was a big mover this week, falling post-earnings for the third qtr in a row
  • Q2 was in-line/above expectations: Rev of $5.53bn was ~in-line w/ cons $2.54bn, while EPS of $3.10 beat by +9%
    • Rev beat was driven by RoW as both Americas and China Mainland missed by -1.7% and -0.9%, respectively
  • Q3 guidance was well below expectations: Rev and EPS missed consensus at the midpt by -3% and -23%, respectively
  • Cut FY guidance: Rev of $10.85bn- $11bn, down from prior qtr’s $11.15bn-$11.3bn; EPS of $12.77-$12.97 vs prior guidance of $14.58-$14.78  
    • Guidance includes an estimated reduction in gross profit of ~$240mn, net of currently anticipated mitigation efforts, including vendor savings, and pricing actions, reflecting company’s current assumptions about higher levels of tariffs on imports into the United States and the removal of the de minimis exemption
    • “We are facing yet another shift today within the industry related to tariffs and the cost of doing business. The increased rates and removal of the de minimis provisions have played a large part in our guidance reduction for the year”
  • Other factors impacting Co performance –
    • “The overall market for premium athletic wear in the US remains challenging with declines continuing in Q2”
    • “Consumers are spending less on apparel overall, spending less in performance activewear, and are being more selective in their purchases”
    • “The competitive landscape is different today than it was even two or three years ago and while no single competitor is having a meaningful impact on our business, there are now many players in the market”

-> Lululemon fell -18.6% on the back of its Q2 print (had previously fallen -19.8% after its Q1 results and -14.2% post its Q4 report); The stock closed the week down -17.0% and is down -56.1% YTD