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The convergence of satellite and terrestrial networks is accelerating, with Amazon's Leo acquisition positioning the company as a serious Starlink competitor. This infrastructure play could reshape how we think about connectivity stocks going forward. The inevitability of these platforms competing directly (rather than just complementing cellular) suggests significant market disruption ahead.
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ACI delivered mixed Q4 results with EPS beating at 48 cents versus Street estimates of 43 cents, while EBITDA hit $903.4 million against expectations of $860 million. The upside came from higher gross margins and expense controls, though sales disappointed as comparable store sales rose just 0.7% versus the Street's 1.7% forecast. Pharmacy headwinds from the Inflation Reduction Act's drug pricing provisions and unfavorable mix shifts weighed on performance. For 2026, guidance midpoints show EPS of $2.27 (in-line with consensus) but comps of +0.5% (missing the Street's +1.23% expectation). The company boosted its buyback authorization by $900 million to $2 billion total and raised the dividend 13% to 17 cents (yielding 4%).
C posted strong Q1 results with EPS of $3.06 crushing Street estimates of $2.66, driven by revenue growth of 14% to $24.6 billion (versus $23.5 billion expected) and impressive expense discipline that delivered an efficiency ratio of 58.1%—more than 200 basis points better than anticipated. Equities trading surged 39% to $2.08 billion (well above the $1.7 billion forecast), while Fixed Income climbed 13% to $5.16 billion (slightly beating $5.01 billion estimates). Investment banking fees rose 12% to $1.232 billion, just shy of the $1.27 billion consensus. Provisions ran about $200 million ahead of expectations, while a lower tax rate helped the bottom line.
AMZN is acquiring GSAT for $90 per share in a cash-and-stock deal (with cash capped at 40% of aggregate consideration) to strengthen its Leo satellite service against SpaceX's Starlink. The move comes as Amazon and Apple announced a partnership for Leo to power iPhone and Apple Watch satellite services, including Emergency SOS capabilities (The Information). While both Leo and Starlink currently position themselves as complementary to cellular networks, direct competition seems inevitable—don't be surprised if Amazon eventually launches a device offering complete voice and data coverage via Leo.
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