LT Weekly: Dec 05, 2025

The suspense, intrigue, and twists & turns regarding what will happen with Warner Bros. Discovery and the major media juggernauts will certainly make for the next big docudrama! However, Netflix investors were not exactly thrilled with the Co finally agreeing to pay $27.75 per WBD share (subject to a collar) which would be a total consideration of $82.7bn EV. The $59bn that Netflix has lined up for financing is also one of the largest loans of its kind, per Bloomberg. The Co’s underlying thesis is that bringing these 2 assets together will make for a stronger company, as Netflix can leverage WB’s existing and new content across its subscriber distribution network and create new IP universes as well. There is also the opportunity for new streaming offers and bundles, which will create more engagement and retention.

But at least to start, the strategy for both Netflix’s core and WBD will remain basically the same. Netflix will continue to support WBD’s theatrical film distribution while Netflix originals will maintain its current selective approach theatrically.  There will be no change to Netflix’s sport strategy. HBO will also remain standalone.

Analysts and investors pushed back on the timing. Why now? Why not when WBD shares were trading at $6/share? Netflix mgmt said the assets simply were not for sale then and this is a “rare opportunity.” Executing on such a large transaction is also a concern, though Netflix has clearly done a great job evolving the Co over the years, since it first started as a DVD company.

But is this the end of it? Maybe not. CNBC reported that Paramount may be gearing up to make an offer directly to shareholders so there may be a sequel in the works! And down the road once the Discovery Global asset separates, consolidation is likely to come into play again.

See more thoughts below on the announced deal between Netflix and WBD.

-> Netflix shares closed down -3% on the back of the announcement on Friday (and are down -25% from the highs on June 30^th) while Paramount closed down -10% and WBD closed up +6%; YTD, Netflix is up +12%, Paramount is up +29%, and WBD is up +147%.

Netflix Is Buying Warner Bros (Includes The Film & TV Studios, HBO Max & HBO) For $27.75/Shr Or $82.7bn Enterprise Value

• Basic deal terms
  • Total EV $82.7bn, total equity value $72bn
  • Equates to $27.75 per WBD shr in cash & stock subject to a collar
    • WBD shareholders will receive Netflix stock valued at $4.50/shr, provided the 15-day VWAP of NFLX shr price (3 trading days prior to closing) falls btw $97.91-119.67 per share
    • If the VWAP is < $97.91, WBD shareholders will receive 0.0460 NFLX shrs for each WBD share.
    • If the VWAP is > $119.67, WBD shareholders will receive 0.0376 Netflix shares for each WBD share.
  • Timing – targeting a closing in 12-18 months & will be post the Discovery Global separation now slated for Q3 2026 (WBD had initially said the separation will be completed by “mid-2026”)
  • Netflix’s bid includes a $5.8bn break-up fee if the deal doesn’t get regulatory approval

• Synergies/valuation…the Co expects $2-3bn of run rate cost savings by the 3^rd yr: Most of the synergies will come from SG&A but there is also some overlap with tech stack capabilities, and the Co will realize some content efficiency over time
  • Pre-synergies valuation = 25.2x WB CY26E EBITDA of $3.3bn
  • Post-synergies (at the mid-pt) valuation = 14.3x WB CY26E EBITDA of $5.8bn
  • The deal will be accretive to GAAP EPS by year 2

• Mgmt acknowledged that investors might be surprised given their previous “build vs buy” approach but also views this as a “rare opportunity”
  • “I know some of you are surprised that we’re making the acquisition, and I certainly understand why. Over the years, we have been known to be builders, not buyers…But this is a rare opportunity”
  • Netflix thinks both companies will be stronger together vs alone
  • “Creates a better Netflix for the long term”

• Why does NFLX think this deal makes sense? They think it will…
  • Provide greater choice and value for consumers
  • Be great for WBD and creators as their stories will reach more people and more fans than now
  • Strengthen the entertainment industry as Netflix will be able to increase production capacity, more jobs will be added across the industry, and the Co can also build on IP
  • Create value for Netflix as WBD’s IP and franchises enable them to “better entertain the world”

• How will mgmt more specifically create value with the deal?
  • WBD has some of the top franchises that Netflix can create IP universes around
  • Netflix can leverage the deep development infrastructure that WB has built for 100 years
  • Netflix will have levers regarding streaming packages and bundles with HBO Max (bring in new subs and increase retention and engagement)
    • Though note that Netflix and HBO currently have a lot of subscriber overlap
  • Netflix will bring better distribution, better product experience, better discovery of the titles that Warner Bros has

• Why now? Because “it wasn’t for sale before. And they certainly hadn’t cleaned up the assets or separated the assets in the way that they have right now. So that goes to the why now”
  • Mgmt stressed confidence in its existing organic growth and that this was not a defensive move

• Why is this going to end well when so many big media deals have not?
  • A lot of industry failures happened as acquirors didn’t understand what they were buying but Netflix understands
  • Legacy businesses did big deals looking for a lifeline but that is not the case here
  • Netflix is not expert in large-scale M&A but has shown they can execute big transitions in the past (i.e., started as a DVD business and has evolved since)

• Strategically, a lot is staying the same…
  • WBD’s business will largely be run as is
    • Film & TV studio operations will remain the same; 3^rd party content licensing will remain in place
    • Theatrical release for films will be supported as is…NFLX will keep the output movie deals that WB has in place; But mgmt. did say that overtime the windows will be evolved to be more “consumer friendly”
    • HBO Max & HBO will remain in place
  • Netflix’s core operations also remain roughly the same
    • Netflix’s theatrical strategy will not change and they are still negative on long exclusive windows
    • No change to their sports strategy
    • No change to their studio licensing strategy

• Content spend at both Netflix and WBD will stay at roughly the same level and should continue to grow on a combined basis but there will be efficiencies over time (i.e., content spend as a % of revenue will not increase)
• There has been some market/investor concern about anti-trust, but Netflix mgmt is “confident in the regulatory process”: Citing that the deal is pro-consumer, pro-innovation, pro-worker, pro-creator and pro-growth; The 2 businesses are complementary

-> Friday morning following the announcement, the NYPost reported that Senator Elizabeth Warren called the deal an antitrust “nightmare”; This follows a slew of similar comments by other politicians

-> Earlier this week it was also reported that some officials at the Justice Dept are concerned that Netflix owning HBO Max would give it too much power in the streaming mktplace, but the dept’s antitrust division hasn’t formally evaluated a potential transaction; There was also reportedly a recent meeting of high-level White House officials in which concerns about a Netflix-WBD deal were discussed

Sources: SEC Filing 12/5; Netflix Company Materials 12/5; New York Post 12/30

We wish we had a dollar for every time we heard “agent” this week! They were particularly topical at Amazon’s AWS re:Invent 2025 this week where building and deploying agents were key themes. AWS CEO Matt Garman started out by saying that while the true value of AI has not yet been unlocked, we are starting to see material business returns from all the investment in AI. He prophesized that there will be billions of agents inside every company across every field, and that agents are already accelerating healthcare discoveries, improving customer service, making payroll processing more efficient, etc. But to support all this, the limits of infrastructure need to be pushed.

With AWS adding 3.8 GWs of capacity in that last 12 months and having 9m KMs of fiber optic cabling (which is more than to the moon and back 11+ times!), the Co has the largest AI cloud infrastructure globally. At the re:Invent event, we thought that the most incremental new product releases and updates included: 1) the launch of Nova 2, which is the next generation of its foundational model; 2) the launch of Nova Forge, which is an open-training model where customers can use their own data; 3) the release of Trainium 3, which is their next generation AI chip and takes another leap forward in price/performance; 4) the Co has been seeing a lot of momentum with its Amazon Bedrock AgentCore, which makes it earlier for companies to build agents; and 5) AWS also launched their own new Frontier Agents which are autonomous, massively scalable, and long running, but also safe and with controls.

All in all, the AI wars continue to heat up across capacity, foundational models, chips, and agents. AWS continues to focus on maintaining its lead in price vs performance, security, and offering customers choice. See more details below on the most important updates from the event this week.

-> Amazon shares closed down -2% this week and are up only +5% YTD; Nvidia’s stock also dropped -1% in response to AWS’ new Trainium 3 announcement on Dec 2nd

AWS Has The Largest AI Cloud Infrastructure Globally

• AWS added8 GWs in that last 12 months and has 9m KMs of fiber optic cabling, which is more than to the moon and back 11+ times!

Expanded The Numbers Of Models That Customers Can Access On Bedrock, Annc’d Nova 2, & Launched AI Factories

• Bedrock fast tracks building and scaling genAI applications, where companies don’t need to manage infrastructure or train models from scratch
  • Customer adoption is “strong”
    • More than 100k customers use Bedrock, which is up +2x y/y
  • Have already doubled the number of models that they offer in Bedrock and now are adding Mistral Large 3 and Ministral 3

• “Tens of thousands” of customers are using Amazon’s Nova foundational model and the Co annc’d Nova 2 this week: A “cost optimized low latency model with frontier level intelligence”
  • Nova2 Lite: Fast cost-effective reasoning model for everyday workloads (generally avail)
  • Nova 2 Pro: Most intelligent reasoning model for highly complex workloads (avail in preview)
  • Nova 2 Sonic: Speech to speech foundation model for real time, human-like conversational AI (generally available)
  • Nova 2 Omni: A unified model for multimodal reasoning
• Also annc’d Amazon Nova Forge – an open training model with which you can blend your proprietary data and then you can upload your custom model to Bedrock (for businesses where standard models are too generic but don’t have the resources to build a model from scratch on their own)

-> Per CNBC, this new service costs $100k/year and doesn’t include help from Amazon experts; It can cost hundreds of millions or even billions to build a large language model from scratch, and this process is more affordable, Amazon said (link)

• The Co also launched new AWS AI Factories, which are dedicated customer-specific AI infrastructure inside a customer’s own datacenter, but managed by AWS
  • Integrates with existing hardware, data center, and networking investments
  • This is targeted to govts, regulated industries, and large enterprises w/ strict data residency requirements

Also Released Trainium3 Which Takes Price Performance To A New Level…& Trainium 4 Is Already In The Works

• The majority of inference on Amazon Bedrock is powered by Trainium…the Co has deployed 1m+ Trainium chips to date

• Now released Tranium3 ultra servers (generally available) which has the “best price performance for large scale AI training and inference”
  • 4x more compute
  • 9x higher memory bandwidth
  • 5x higher AI tokens/megawatt

• Already “hard at work” on Trainium 4…it will be “massive leaps across every single dimension vs T3”
  • It will deliver 6x the FP4 compute performance
  • 4x memory bandwidth
  • 2x memory capacity

“We Are In A New Era Of Software Development”

• Launched Kiro – helps developers take advantage of the speed of AI coding but with more structure
  • Turns prompts into detailed specs and then into code
  • Understands the intent behind prompts
  • Hundreds of thousands of developers have used Kiro in the 5 months since the preview
  • Amazon is giving away 1 years’ worth of Kiro and 100 seats for qualified startups
  • Amazon is using this internally for their own development…Garman gave an example: Instead of taking 30 developers 18 months to complete a project, it took 6 developers 76 days instead

Agents Are Going To Change Everyone’s Business & Amazon Is Making It Easier For Companies To Build Their Own Agents, Safely & Securely

• “There’s going to be billions of agents inside of every company across every imaginable field”
• The Co is seeing strong momentum with Amazon Bedrock AgentCore (2mn+ SDK downloads since the launch a couple months ago)…it is comprehensive, open, and modular: Customers can pick and choose which services they want, deploy and scale; “Agents can be deployed in under a minute”…“Seeing so much momentum”
  • Agents can run in a session in isolation
  • Can keep context with short term and long term memory
  • Agents can discover and securely connect to tools, data, and other agents
  • Can do secure authentication
  • Real time visibility of agent workflows
  • Agents can execute real world workflows

• Annc’d policy in Agent Core: Provides real-time deterministic controls for how agent interacts with enterprise tools and data to make sure there are checks and balances
  • Can set up policies to control actions that agents can take with respect to tools, data, and other agents

• Also annc’d AgentCore Evaluation (avail in preview today): Developers can inspect the quality of their agent based on real world behavior
  • Analyzes correctness, helpfulness, safety, etc
  • Includes pre-build evaluators
  • Can also create custom evaluators

Amazon Is Making Agents For Customers As Well…Including New “ Frontier” Agents

• Amazon Quick agent: An agentic app where users can conduct deep research, get detailed analysis, analyze & visualize data, automate workflows, and includes enterprise grade security and privacy standards across customers’ data
  • Amazon has deployed this internally and already hundreds of thousands of employees are using it; Tasks in some cases are taking 1/10^th of the time
• Amazon Connect agent, for customer services: AI+ human agents work together, natural conversations and personalized experiences
  • Toyota, State Farm, Capital One, NAB were highlighted customers
  • Passed $1bn revenue mark
• Also intro’d Frontier Agents…a new class of agents that are a step function more capable vs what exists today: They are autonomous, massively scalable, long running
  • The Kiro autonomous agent… navigates multiple code repositories to fix bugs (will roll out in the coming months)
  • AWS Security Agent… actively tests applications for vulnerabilities (in public preview)
  • AWS Dev Ops Agents… responds to system outages (in public preview)

-> “Three to six months in,” Garman said, “these agents behave like part of your team. They know your naming conventions, your repos, your patterns.” (link)

Helping Customers Move Away from Legacy Platforms

• Amazon Transform (launched last year): An agent to transform Windows, mainframe and VMware workloads; Reduces legacy licensing, infrastructure and modernization costs
  • Launched AWS Transform custom this week: Gives ability to create custom code transformation agents; Can be converting any code

Source: Amazon Keynotes  

Ahead of its spin out on January 2^nd, Comcast’s VERSANT hosted its first ever Investor Day this week, which was chock full of strategy updates, partnership announcements, Q&A, and more. While a lot was covered, CEO Mark Lazarus summarized the Co’s mandate in a short and simple statement…to “build beyond cable…in fact, beyond media.”

The overall point that mgmt kept coming back to was that while linear is not a growth business, it is far from dead. Cable continues to represent ~2/3 of professional video hours consumed and remains the primary home for live sports and news. This is the foundation Versant plans to not only maintain but build off of as it expands into areas beyond cable.

In fact, VERSANT is already taking steps to do just that. An MS Now DTC product is currently in development, VERSANT announced acquisitions of both Free TV Networks and Indy Cinema Group to expand digital distribution and operational capabilities, and CNBC is partnering exclusively with Kalshi across its properties. They are also scaling existing digital platforms such as GolfNow and building new audience touchpoints through podcasts, social video, live events, and transactional offerings.

The long-term plan is to gradually rebalance VERSANT’s revenue mix, moving from heavy reliance on pay-TV (83% of 2024 revenue) toward a more even split. While commentary on industry consolidation was limited, mgmt noted a focus on “vertical scale” and driving growth in their four main mkts (note that this commentary was before the Netflix-WBD deal was announced Friday morning – see Theme #1 for details). Ultimately, the overall message consistently returned to the same point which is that VERSANT intends to leverage its linear footprint as a base to build a broader portfolio that reaches audiences across both traditional and emerging distribution channels.

See below for more.

-> Comcast shares were down -0.8% on the Investor Day, but ended the week up +2.3%; YTD, the stock is still down -27.1%

VERSANT’s Mandate Is To “Build Beyond Cable” 

• The Co is “a strong, profitable business from day one” – for fiscal 2025, it is expect to generate…
  • Rev of $6.6bn (down -6% y/y)
  • EBITDA of $2.2bn (down -10% y/y)
  • FCF of $1.4bn (down -15% y/y)
  • While holding $3bn in debt and $750mn in cash

• Will operate in four “large” and “growing” mkts –
  • Business news and personal finance
  • Political news and opinion
  • Golf and athletics participation
  • Sports and genre entertainment

• Outlined a 3-part growth strategy –
  • Maintain its TV content business while leveraging its brands
  • Expand reach beyond pay TV through new distribution channels
  • Scale digital platforms (i.e., GolfNow and Fandango) while developing new services

• Mgmt is confident in pay-TV’s longevity: “While it’s not a growth business, we believe pay-TV’s demise has been significantly exaggerated, and we’re confident it will be an important part of the media ecosystem and highly profitable for many years to come”
  • Pay-TV still represents two-thirds of all professional video hours consumed and “virtually all” of sports and news watched

• BUT “we’re not stuck in old media”: “Our mission is to expand beyond the multichannel universe. These vertical markets all have significant opportunities”
  • Pay-TV today reaches 67mn households and VERSANT aims to reach the other half of US households via AVOD, SVOD, OTA, social, audio, live events, etc.

• Ultimately, over time, VERSANT expects to generate half of its revenue from traditional pay TV and half from a series of new ventures (but will take some time)
  • In 2024, 83% of Versant’s revs were derived from pay-TV vs 17% from digital and other non-pay-TV biz
  • 3-5 yr goal is to change that rev split to 67% for pay-TV and 33% non-pay-TV
  • Longer-term goal is a 50/50 split

How Will They Achieve These Goals? 

• MS NOW will be launching a DTC product
  • The product will be “centered around community, membership, and democracy and as a digital hub for progressives,” rather than a traditional streaming platform, though the company says it will include live streaming of the linear channel
    • Plan is to create “a home for progressives on digital” that can stitch together MS NOW content w/ podcasts, YouTube and short-form video, alongside interactive content and community features.
  • Pouring “significant investment” into the offering: It will be the most significant digital investment in the channel’s history
  • Still in the research phase of building, but aiming to launch the product next summer, “just as the midterm elections are heating up”

• Annc’d the acq of Free TV Networks
  • A provider of digital broadcast networks (“diginets”) and FAST channels that will be used to help expand Versant’s digital distribution

• Also annc’d the acq of INDY Cinema Group, which will operate under Fandango
  • INDY Cinema Group is a cloud-based cinema operating system which, as part of Fandango, will help support key operational functions across ticketing and point of sale operations

• CNBC and Kalshi annc’d a multi-yr, exclusive partnership: CNBC will incorporate Kalshi prediction markets across TV, digital, and subscription properties
  • Starting in 2026, CNBC will incorporate exclusive Kalshi predictions market data into its programs, including Squawk Box and Fast Money
  • A Kalshi ticker will run alongside segments of CNBC’s on-air programming
  • Kalshi will also launch a CNBC page on its site, featuring CNBC-selected markets.

-> Separately, but related, Kalshi annc’d this week it raised a Series E funding round of $1bn at an $11bn valn; The valn is more than double from just two months ago, when Kalshi raised a Series D round of $300mn at a $5bn valn

 Some Additional Key Commentary 

• On M&A strategy – “we’re very happy with the portfolio that we have… vertical scale is really our growth strategy”
  • VERSANT has four core markets, and they want to grow within those, b/c they see “significant” growth oppties there and have strong brands to build from
    • Will grow their audiences both organically and with investments, which they hadn’t been able to do at NBCU
    • By 2030, expect to be “a lot bigger” in these four growth mkts
  • Already have 62% of live sports and news – “we don’t really feel that there’s much value for us, frankly, in having more scale in that area”
    • “Puts us ahead of established competitors like Paramount, WBD and Disney on a percentage basis”
    • The remaining 38% comes from entertainment programming (mix of live, scripted and unscripted programming)

• That is the biggest misconception around VERSANT? That “we will be challenged without NBCUniversal”
  • The Co will now be able to operate with more creative freedom and agility
  • And will be able to invest back into the biz and create more oppties to experiment and move quickly

• On sports rights strategy – VERSANT isn’t going to try to compete for every league but rather “really focus on properties that work for us”
  • Will focus on properties that are ROI positive…
    • “That may mean that we’re not in the mix for properties like the NFL or NBA, which for us we wouldn’t be able to get a return on based on our current set of factors”
  • …and properties that grow adjacent synergistic digital properties like GolfNow and GolfPass alongside their linear assets

Sources: Versant Press Release 12/4; Indy Cinema Group Press Release 12/4; Free TV Networks Press Release 12/4; The Hollywood Reporter 12/4; Kalshi Press Release 12/2; Cooley Press Release 10/10 

Early data from Adobe, Shopify, Salesforce, and major retail trackers point to a solid start to the 2025 holiday shopping season, with strong consumer engagement across both e-commerce and in-store channels (though with some pockets of y/y deceleration). Despite each firm using slightly different dates for “Cyber Week,” the underlying trends indicate that spending accelerated globally, mobile commerce continued to gain share, Buy Now Pay Later usage hit new highs, and AI-driven shopping experiences surged well beyond last year’s levels. Retailers saw y/y gains in total online sales, traffic volumes, and record participation from shoppers across Thanksgiving weekend. Price discount rates also have been more or less in-line with last year’s levels.

Overall, the data reflects healthy spending out of the gate for the holiday shopping season. We’ll be keeping an eye on more spending datapoints as we progress towards the end of the year.

See more details below.

Adobe, Shopify, Salesforce, % Mastercard Data Show Strong Holiday Shopping Trend

• First note that each Co has a different dataset for “Cyber Week”
  • Adobe: Thanksgiving through Cyber Monday (Nov 26-Dec 1)
  • Salesforce: 2025 Cyber Week (Nov 26-Dec 1)
  • Shopify: Black Friday-Cyber Monday

• Adobe: $48.5bn was spent over Cyber Week (no comparable numbers were disclosed)
  • Last yr, Adobe reported sales of $41.1bn during Cyber Week, defined as Nov 28 – Dec 1 (two fewer days then this yr’s report)
  • This year reported total holiday spend from Nov 1 – Dec 1 of $137.4bn (up +7.1% y/y)

• Salesforce: Global sales growth accelerated, while US sales growth was strong but decelerated
  • US: $79.6bn (+5% y/y, decel from +7% y/y in 2024)
  • Global: $336.6bn (+7%, accel from +6% y/y in 2024)

• Shopify: Merchant sales were up sharply y/y
  • Global sales from merchants reached $14.6bn, up +27% y/y or +24% y/y on CC
  • Shopping peaked at 12:01 p.m. EST on Black Friday when sales reached $5.1mn per minute
  • Average cart price: $114.70

• And… Mastercard SpendingPulse found U.S. Black Friday retail sales up +4.1% y/y (accel from +3.4% in 2024)
  • E-commerce retail sales excluding autos jumped +10.4% y/y (decel from +14.6% y/y)
  • In-store sales grew +1.7% y/y (accel from +0.7% y/y)

Spend Breakdown On Key Days Of Cyber Week Shows Pockets Of Acceleration & Deceleration

• Adobe –
  • US: Y/Y growth was strong though reflected an overall deceleration across all three days compared to 2024
    • Thanksgiving: $6.4bn in total spend was up +4.9% y/y but decel’d from +8.8% y/y in 2024
    • Black Friday $11.8bn in total spend was up +9.1% y/y but decel’d form +10.2% y/y in 2024
    • Cyber Monday: $14.25bn in total spend was up +7.1% y/y but decel’d from +7.3% y/y in 2024

• Salesforce –
  • US: Sales growth decelerated y/y on Black Friday but accelerated on Cyber Monday
    • Thanksgiving: $8.4bn in total spend was up +3% y/y (no comparison available)
    • Black Friday $18bn in total spend was up +3% y/y but decel’d from +7% y/y in 2024
    • Cyber Monday: $13.6bn in total spend was up +6% y/y and accel’d from +3% y/y in 2024
  • Global: Sales growth accelerated
    • Thanksgiving: $35.6bn in total spend was up +6% y/y (no comparison available)
    • Black Friday $78.9bn in total spend was up +6% y/y and accel’d from +5% y/y in 2024
    • Cyber Monday: $53bn in total spend up was +7% y/y and accel’d from +2% y/y in 2024

AI Is Growing In Popularity Amongst Online Shopping

• Adobe – Reported a +758% increase y/y over the Holiday Season (Nov 1-Dec 1) in AI traffic, beating their estimate of up to +515-520% y/y
  • 5% of AI referrals were from a desktop, while 25.5% came from mobile devices

• Salesforce – Globally, AI and agents influenced $14.2bn in online sales on Black Friday, of which $3bn came from the U.S.
• Lastly, according to Apptopia, ChatGPT referrals to US retailer mobile apps incr’d +28% y/y during Cyber Week
  • This year, Amazon’s share of ChatGPT referrals grew to 54%, up from 40.5% in 2024
  • Walmart’s share incr’d from 2.7% last year to 14.9% now

The Average Price Discounts Were Mostly Similar To Last Year’s Levels

• Salesforce: Overall, discounts were more or less in-line with last year
  • US: Discounts were ~the same as last year, though were slightly higher on Cyber Monday
    • Thanksgiving: 28% (same as last yr)
    • Black Friday: 28% (same as last yr)
    • Cyber Monday: 28%, up from 26% last year
  • Global: There was some variability in discounts depending on the day
    • Thanksgiving: 26%, up from 26% last year
    • Black Friday: 26%, down from 27% last year
    • Cyber Monday: 27%, up from 25% last year

• Adobe: Electronics had the highest avg discount on Cyber Monday, while Toys had the highest avg discount on Black Friday
  • Black Friday: Average discount
    • Electronics: 28.7%
    • Toys: 29.6%
    • Apparel: 24.9%
  • Cyber Monday: Average discount
    • Electronics: 30.9%
    • Toys: 28.1%
    • Apparel: 25.1%

Adobe Findings Show all 7 Highlighted Spend Categories Beat Last Year’s Numbers

• Listed categories in the report
  • Toys: $8.8bn vs $8.2bn in 2024
    • Top products include Labubu Dolls, LEGO, MrBeast Lab Toys, Fisher-Price Little People & Mini Brands
  • Apparel: $47.6bn vs $46.6bn in 2024
  • Electronics: $57.5bn compared to $55.3bn in 2024
    • Top products included: iPhone 17, Google Pixel 10, Samsung Galaxy S25, Oura Ring & Kindle Colorsoft
  • Furniture & Home: $31.1bn vs $29.2bn in 2024
  • Grocery: $23.5bn vs $21.5bn in 2024
  • Cosmetics: $8.4bn vs $7.7bn in 2024
  • Sporting Goods: $8.2bn vs $7.8bn in 2024

Mixed Datapoints On In-Store Foot Traffic… The NRF & Simon Reported An Increase, While Retail Next Reported A Decline

• National Retail Federation: Reported record shoppers both online and in-store
  • A record 202.9mn consumers shopped from Thanksgiving Day through Cyber Monday (beating the forecasted 186.9mn)
    • Up from 197mn shoppers last year and surpassed the previous record of 200.4mn set in 2023
  • Overall: 5mn consumers shopped in-store, up +3% from 126mn in 2024; Online saw 134.9mn shoppers, up +9% from 124.3mn last year
    • Black Friday brought in 80.3mn in-store shoppers and 85.7mn online (this was slightly below last year’s totals of 81.7mn and 87.mn, respectively)
    • Saturday drew 62.7mn in-store consumers, up slightly from 61.1mn in 2024, and 63mn online compared with 53.9mn last year
    • Sunday drew a record 32.6mn in-store shoppers, a +27% increase over the 25.6mn who shopped in 2024; 38.7mn shopped online on Sunday, compared with 32.8mn last year.

• Simon Properties reports a +6.4% portfolio traffic increase on Black Friday Weekend, with a +7.1% gain reported at Simon’s Malls nationwide
  • Traffic was up +5.9% y/y on Black Friday and grew throughout the weekend, including a +6.3% increase on Saturday and +8.2% on Sunday

• Retail Next data showed foot traffic dropping by -3.6% on Black Friday
  • Foot traffic data was mixed in the US across all regions
    • Midwest: -3.7% (-7% in 2024)
    • Northeast: -3.9% (-2.1% in 2024)
    • South: -4.2% (-3.5% in 2024)
    • West: -2.5% (-3.2% in 2024)

Other Holiday Spending Trends & Updates

• More transactions are being made on mobile devices: Per Adobe, over the Holiday Season (Nov 1 – Dec 1), 52.8% of revenue came from mobile devices
  • That translates to $143.7bn, up from $131.5bn in 2024 and $113.5bn in 2023
  • The National Retail Federation reported that mobile remained the most popular way for online shoppers to buy on Cyber Monday for the 2^nd year in a row, with 46.9mn consumers shopping, up from 40.4mn last year

• BNPL transactions are also on the rise: Adobe data shows that over the Holiday Season (Nov 1 – Dec 1), Buy Now Pay Later (BNPL) spend came in at $20.2bn, which is up from $18.2bn in 2024 and $16.6bn in 2023
  • $8.3bn was spent on BNPL on mobile devices

• The National Retail Federation reported other key stats in their findings
  • The top shopping destinations during Thanksgiving weekend were:
    • Supermarkets (47%) and online (45%)
    • Other top destinations included department stores (40%), clothing stores (37%) and discount stores (30%)
  • 96% of shopping over the weekend made a holiday-related purchase, spending $337.86 on avg on gifts, holiday apparel, decoration and other seasonal purchases
    • This is up from $315.56 last year and is the highest figure since 2019’s record of $361.90
    • ~67% ($225.74) was spent specifically on gifts

• Outside of survey data, T-Mobile launched their most aggressive Black Friday promotion
  • The deal is 4 iPhone lines on the Essentials plan for $100/month total with AutoPay enabled
    • That means a family of four gets brand-new iPhone 17 devices and unlimited service for what many people currently pay for just two lines elsewhere
    • The promotion will run from Nov 6^th through Dec 3^rd

• Additionally, Amazon tested their new ‘Amazon Now’ 30-minute delivery service in Seattle and Philadelphia
  • Prime Members get discounted delivery fees starting at $3.99 per order (vs. $13.99 for non-Prime)
    • A small basket fee of $1.99 will apply to orders below $15

Sources: Shopify Press Release 12/2, Adobe Holiday Trends 2025, Salesforce Holiday Trends 12/2, TechCrunch 12/2, Mastercard SpendingPulse 11/29, Gadget Hacks 11/27, Geek Wire 12/1, Amazon Press Release 12/1, OpenAI Press Release 11/24, Reuters 12/1, NRF 12/2, Simon Properties 12/2, Retail Next 11/30, Retail Wire 12/2, Reuters 11/29

As year-end wrap ups and top 10 lists gain popularity, YouTube joined the parade by introducing its “YouTube Recap” for the first time, which offers a personalized, shareable highlight reel summarizing users’ 2025 watch history, including top-channels and interests, how users’ viewing evolved over the year, music listening stats, and also a “personality type” (like Adventurer or Creative Spirit) based on their viewing habits.

Meanwhile, Spotify’s Wrapped 2025 was also unveiled this week and the Co added new features like “Listening Age” and “Clubs” that classify users’ music taste into playful archetypes, plus interactive shared-listening options, while Apple Music’s Apple Music Replay compiled users’ top artists, genres and streaming time.

See below for the Top 10 lists from each!

To Start, YouTube Introduced Their 2025 Recap Across Five Categories

• YouTube Recap – a personalized and shareable highlight reel summarizing users’ watch history for 2025: It is accessible on the home page or “You” tab on mobile and desktop; It will show users their…
  • Top channels and interests
  • Evolution of viewing habits
  • Music listens
  • Personality types based on watched content: Examples = Adventurer, Skill Builder, Creative Spirit, Sunshiner, Wonder Seeker, Connector, Philosopher, and Dreamer (last two are rare)
• Rollout details:
  • Soft launch: Began in New Zealand last month
  • Global launch:
    • North America: December 2, 2025
    • Worldwide rollout during the same week

• Methodology:
  • Topics: Based on views, uploads, and creator activity; must show significant popularity or growth in 2025
  • Creators: Ranked by in-country subscriber gains
  • Songs: Based on in-country views of new or fast-growing tracks
  • Podcasts: Ranked by total U.S. watch time for podcast playlists

• What are the Top 10 trends overall for 2025 in the US?

Spotify Unveiled Its Wrapped This Week As Well

• Spotify – more than 700mn listeners around the world clocked in for this yr’s edition: The Co added two new features that offer insight into your listening habits
  • Clubs: Rather than simply saying you listened to metal the most, you’ll be placed in the collective, which “believes in rebellion through music”
  • Listening Age: Is designed to highlight how you might not fit in with your generation, for example “You listen to the music of a 70-year-old, even if you’re only 38”

• What are the Top 10 lists for both the U.S. and globally?

Lastly, Apple Revealed The App Winners Across 2025

• On Thursday Apple shared its annual list of the best apps and games of the past year

Sources: Apple Press Release, Spotify Press Release, YouTube Press Release

It caught our attention this week that New York enacted a law to directly curb the practice of AI-driven “personalized pricing,” setting a precedent regarding for how states may regulate the use of consumer data for the purpose of algorithmic price-setting. After months of legal challenges from the National Retail Federation and other industry groups who support this practice, the law ultimately took effect in late November 2025. Opponents are concerned about price hikes and discrimination.

The debate comes after AI-assisted price personalization has been expanding across industries, from airlines and travel platforms to major retailers. Although dynamic pricing has existed for years, advancements in AI have supercharged their capabilities. U.S. states and federal lawmakers are now considering a patchwork of new regulations, while industry leaders, consumer advocates, and academics remain split on whether it harms or benefits consumers.

All in all, we believe the theme of AI personalized pricing will increasingly be front and center with regard to retail pricing practices.

Read more details below.

New York Aims To Protect Consumers From “Personalized Pricing” But Will Other States Follow?

• This month, NY became the first state to enact a law targeting what’s called personalized pricing, which is when retailers use AI and customers’ personal data to set prices online
  • What does the law do?
    • It aims to prevent retailers from overcharging customers by abusing their data
    • For example: Jacking up the price of jeans for a shopper with a history of buying expensive pants
  • How does the law work?
    • It requires retailers that use personalized pricing to post the following disclosure: “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA”

• The law was signed mid-2025 but was held up in legal battles
  • It was originally signed in New York on May 9^th, 2025
  • It was slated to be put into effect July 8^th, 2025
  • But the NRF filed suit on July 2, 2025, to block enforcement of the law, claiming it violated retailers’ 1^st and 14^th Amendment rights
  • On October 8, 2025, a federal judge dismissed the challenge
  • As of late November 2025, the law took effect and retailers in New York are subject to it

• Will other states follow suit? There are bills pending in 10 states that would either ban it outright or require disclosures, like NY
  • State lawmakers in CA and federal lawmakers in WA are considering broad bans on the practice

• Opinions are mixed on the practice:
  • Chad Yoes, who formerly oversaw pricing at Walmart and co-founded Waypoint Retail, said he believed large retailers’ use of personalized pricing was generally limited just to rewards programs
  • Justin Kloczko, a researcher with Consumer Watchdog, said it may be hard for customers to know when they are being targeted and that may make them less likely to report violations
  • Ryan Thornton, an Uber spokesman, acknowledged that the Co had started displaying a disclosure to New Yorkers as required by the new law but in an email, said the law was “poorly drafted and ambiguous”
  • Stephanie Martz, the CAO and general counsel of the NRF said, “I wish I understood what harm exactly lawmakers think they are solving” … The NRF tried to block the enforcement, filing a lawsuit mid-2025 when the law was first passed on First Amendment grounds but was later dismissed
  • Jed S. Rakoff was the federal judge in NYC who allowed the law to move forward

For Context, This Concept Of Dynamic Pricing Has Been Around For A While, But GenAI-Based Personalized Pricing Has Been Launched In Spots

• Which retailers use dynamic pricing the most? See table below which is based on a 2024 Decodo report
  • Methodology: Data was collected from the US and Canada, tracking 12 random products from the most popular categories at four-hour intervals over 33 days, capturing over 245K price data points between April 25 and May 27, 2024

• In 2012, the travel site Orbitz told The WSJ that it had sent Mac users ads for pricier hotels than it had sent P.C. users
  • Its reasoning was that those with more expensive laptops could afford to spend more on a vacation
  • The Co later abandoned the practice, according to Expedia, which acquired them a decade ago

• Earlier this year, Delta made headlines after it revealed its plans to use AI Pricing as well
  • They plan to use AI to set prices for ~20% of its domestic flights by the end of the year, up from its current 3%, eventually with plans to move fully to dynamic pricing
  • Clint Henderson with ThePointsGuy.com says integrating AI takes the dynamic pricing model airlines already use and puts it on steroids
    • “Instead of having ten humans doing pricing, they’ll have a machine doing it for them”

• Retailers in Europe are also slated to increase use of AI base dynamic pricing
  • ~61% of European retailers now use a form of dynamic pricing, according to a poll conducted by Valcon
  • The survey of 350 retailers from across Europe found that although ~61% use some form of dynamic pricing, less than ~15% use AI based dynamic pricing
  • However, ~55% plan to pilot a form of GenAI-based dynamic pricing throughout 2025

Sources: The New York Times (11/29), Decodo Report, Techradar Report, CBS Delta Plans, CPI 12/1, PYMTS 11/30, Forbes 12/3, Master.of.Code Dynamic Pricing Survey  

• Microsoft’s shares took a hit on reports that AI product sales are missing growth goals
  • The Co on Wed denied a report from The Information that multiple divisions at the Co lowered sales growth targets for certain AI products
  • What did the report say?
    • Citing two salespeople in the Azure cloud-computing unit, less than a fifth of salespeople in one U.S. Azure unit met the sales growth target of 50%
    • And the Co reportedly lowered their targets in July to ~25% y/y growth for the current FY
  • A Microsoft spokesperson came out to say –
    • “The Information’s story inaccurately combines the concepts of growth and sales quotas, which shows their lack of understanding of the way a sales organization works and is compensated”
    • “Aggregate sales quotas for AI products have not been lowered, as we informed them prior to publication”

->Microsoft shares still fell -2.5% in reaction

• Meta is reportedly planning to cut up to 30% of its Metaverse budget, per Bloomberg
  • The proposed metaverse cuts are part of the Co’s annual budget planning for 2026
  • More specifics? The cuts could come as soon as next month and amount to 10-30% of employees in the Metaverse unit (the Metaverse group sits within Reality Labs), as per 3 employees familiar with the matter
    • They work on virtual reality and a V.R.-based social network
    • The total number of employees of the overarching group, Reality Labs, is not stated
  • The Co does not plan to abandon building the Metaverse, the people said: Instead, executives expect to shift the savings from the cuts into investments in their augmented reality glasses
  • On Wed, Zuckerberg annc’d that he had hired Alan Dye, a designer at Apple, to lead a new creative studio inside the Reality Labs division that would focus on design, fashion and technology
    • Dye will report to Andrew Bosworth, Meta’s chief technology officer, who leads Reality Labs

->The company’s stock closed up +1% (but was up as high as +6% intra-day)

• There were two major prediction market updates to highlight this week –
  • First, Connecticut Consumer Protection ordered Robinhood, Crypto.Com, and Kalshi to cease and desist conducting unlicensed online gambling: DCP Commissioner Bryan T. Cafferelli said “None of these entities possess a license to offer wagering in our state, and even if they did, their contracts violate numerous other state laws and policies”
  • What will happen:
    • All three platforms are ordered to immediately stop advertising, offering, promoting, or otherwise making available “sports event contracts” or any other form of unlicensed online gambling to CT residents
    • DCP also ordered all 3 platforms to allow CT residents to withdraw any funds currently held by the platforms
  • In CT, the 3 gaming platforms licensed to offer sports wagering are DraftKings (Foxwoods), FanDuel (Mohegan Sun) and Fanatics (Connecticut Lottery)
    • Participants must be at least 21 to engage in online or in-person gaming or sports wagering
    • For fantasy contests, participants must be at least 18

• Second, Fanatics officially launched prediction markets in 24 states (after recent press speculation)
  • The platform will allow people to trade events in sports, finance, and culture
  • It will launch in segments across the country over the next several days
  • Early next year, the Co will expand into contracts for crypto, stocks, tech, music, and more
• Which states are involved?
  • Alabama, Alaska, California, Delaware, Florida, Georgia, Hawaii, Idaho, Maine, Minnesota, Mississippi, Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin

Source: CNBC 12/3, Fanatics Press Release 12/3, Department of CP 12/2, The Information 12/4, Reuters 12/4, CNBC 12/3