Welcome to this week’s Market Pulse, your 5-minute update on key market news and events, with takeaways and insights from the Sidekick Investment Team.
Today, we’re looking at SpaceX’s surprise $60 billion deal for AI coding firm Cursor, Apple’s bet on sharper decision-making in CEO John Ternus, and UniCredit’s hostile takeover push for Germany’s Commerzbank.
But first, our number of the week…
7.55%
That’s the YTD increase in the value of the Norwegian krone relative to the US dollar. On the back of the Iran war, soaring energy prices have helped boost the Norwegian economy – a major oil exporter.
Sidekick Takeaway: The rise in NOK/USD helps showcase Norway as one of the unexpected winners of the Iran war. Non-Gulf oil producers have seen a windfall from high energy prices, without the supply disruptions that have plagued the embattled region.
Only have a minute to read? Here’s the TL;DR:
- SpaceX has secured the right to acquire AI coding startup Cursor for up to $60 billion ahead of the rocket firm’s trillion-dollar IPO. Cursor explicitly cited ‘compute bottlenecks’ as motivation for the deal – a sign that AI infrastructure remains strained, even as investors worry about an overbuild.
- Apple announced this week that hardware chief John Ternus will replace Tim Cook as CEO. Despite Cook overseeing Apple's growth from $350 billion to $4 trillion, recent years have been marked by expensive product missteps like Vision Pro. Investors hope that Ternus’ decisive style could be set to break that pattern.
- Italy’s UniCredit has launched a hostile bid for Germany’s Commerzbank after friendly talks collapsed. The approach has drawn opposition from Commerzbank’s largest shareholder – the German government – making the deal a decisive test of cross-border European banking consolidation.
It’s important to note that the content of this Market Pulse is based on current public information which we consider to be reliable and accurate. It represents Sidekick’s view only and does not represent investment advice - investors should not take decisions to trade based on this information.
Bottlenecked: Cursor Deal Shows AI Compute Crunch
Right now, equity investors are grappling with one essential question: Is there too much AI infrastructure, or not enough?
Anxiety about an AI overbuild has been potent, especially given trillion-dollar infrastructure plans from major tech firms.
But recent evidence points to just the opposite – AI compute power isn’t abundant at all.
In fact, a proposed tie-up between Cursor and SpaceX is the latest signal that existing AI infrastructure remains strained.
The deal within the deal
Cursor, an AI coding firm, was most recently valued at $29 billion.
Now, SpaceX is seeking to acquire the company for up to $60 billion just ahead of the rocket firm’s public listing:
- The deal is part of CEO Elon Musk’s efforts to reframe SpaceX as an AI firm ahead of IPO. SpaceX recently acquired xAI on the back of that vision.
- For now, SpaceX has only purchased the option to acquire Cursor – but a full deal could be on the horizon.
- Crucially, the arrangement allows Cursor to access xAI’s supercomputer infrastructure. Cursor explicitly named ‘compute bottlenecks’ as motivation for the deal.
For SpaceX, the deal helps beef up the firm’s AI portfolio ahead of its trillion-dollar IPO.
For equity investors as a whole, the arrangement indicates something else – that the AI industry is still pushing up against compute limits.
Sidekick Takeaway: Crucially, Cursor’s demand for additional resources is driven by downstream customer adoption. Cursor is one of the most widely used AI coding agents in the tech industry, competing with other popular options like Claude Code and OpenAI’s Codex.
Decision Time: Apple Bets Ternus Can Break the Consensus Trap
Apple has been responsible for some of the most recognisable product launches in history, ranging from the iPhone to the AirPods.
But in recent years, the company has been plagued by incrementalism. Rather than bold new innovations, Apple has preferred to focus on slowly improving existing products.
Now, a new CEO could be set to break that pattern.
This week, Apple announced that hardware chief John Ternus would replace long-standing CEO Tim Cook.
Within Apple, Ternus is noted for his clear decision-making – a notable shift from Cook’s consensus-focused approach.
Cook’s mixed product legacy
During Tim Cook’s tenure, Apple grew from a $300 billion company to a $4 trillion one – a track record that’s hard to criticise.
But at the same time, Apple’s approach to product innovation left something to be desired:
- After spending billions of dollars on Apple Vision Pro, the company’s vision of augmented reality failed to pan out. Ditto for Apple’s ditched self-driving car.
- In fact, one of the more notable recent successes under Cook was a cheaper-priced MacBook – championed by Ternus.
- Still, Ternus is inheriting a complex product line-up. The company’s smart glasses have already been delayed, potentially to 2027.
Apple’s challenge has never been capital or talent.
Instead, it’s been a consensus culture – a culture that Ternus could be set to break.
Sidekick Takeaway: Although investors appear excited about the possibilities that a new CEO could bring to Apple, decisiveness can cut both ways. Still, while Ternus won’t be immune to flops, a more conviction-led approach could help break Apple’s curse of incrementalism.
Banking On It: UniCredit’s Hostile Bid Tests European Consolidation
For decades, the European banking system has been seen as structurally fragmented.
Regulators have long pitched a single rulebook and unified oversight as the solution. But political opposition has prevented clear integration.
Now, one of Europe’s largest banking takeovers is putting cross-continent consolidation to the test.
A tie-up between Italy’s UniCredit and Germany’s Commerzbank has been in the works for months. But governmental opposition could threaten to undermine the deal.
A decade-old thesis meets reality
Talks between UniCredit and Commerzbank started friendly.
But after negotiations broke down, UniCredit launched a hostile takeover effort:
- UniCredit has offered Commerzbank investors €35 billion, a slim premium over current share prices.
- That approach has riled the German government, Commerzbank’s largest shareholder. German Chancellor Friedrich Merz stated that ‘every form or type of takeover’ is not welcome in the country.
- Even if UniCredit’s pitch fails, the company will likely remain an activist investor – with a full combination potentially years in the future.
For their part, the Italian government backs UniCredit’s ambitions.
But their enthusiasm appears to be based on supporting a national champion, not pursuing European banking integration.
Sidekick Takeaway: For all the talk of a consolidated post-crisis European banking industry, deals have been surprisingly sparse. The industry remains fragmented, and the UniCredit-Commerzbank deal – featuring CEO clashes and political opposition – helps showcase why.
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