The Fed completed its first Warsh-led meeting and promptly spooked the market with a hawkish dot plot. I think that doesn’t matter as inflation is being driven by Congress. Warsh is declining to provide guidance which I view as a positive. All the chatter wasn’t getting us better results and the Fed tends to be inaccurate in its forecasts. Fox is buying Roku in an attempt to stream directly to viewers instead of through others’ devices. Yum Brands is selling Pizza Hut to private equity and to a Chinese partner. When was the last time you were in a Pizza Hut and what’s your best prediction for how PE will ruin the in-restaurant experience? SpaceX is buying Anysphere, the owner of Cursor, an AI coding tool. At one point last week, SpaceX was worth more than Microsoft and Amazon. Intel is succeeding in its 18A plant, a key part of DKI’s positive thesis. President Trump announced a foundry deal with Apple. Intel is proceeding with 18A-P featuring better performance, reduced power draw, and better thermals. Things are going very well there as the company starts to sign TSMC customers. GM is partnering with Lockheed to address reduced US weapons stockpiles. And in this week’s educational topic, we discuss share dilution and when it’s a positive or a negative.

This week, we’ll address the following topics:

• The first Warsh Fed meeting concluded with no action and a more hawkish dot plot. DKI applauds the move towards less future guidance.
• Fox agrees to acquire Roku for $22B. They’re locking up one of the final device manufacturers in an attempt to reach Fox streaming viewers directly.
• Yum Brands is selling Pizza Hut to private equity and to a Chinese partner. Yum will have billions to invest in other branded chains.
• SpaceX intends to acquire Anysphere, the parent company for Cursor for $60B in stock. Cursor has a popular AI coding tool and is growing revenue rapidly.
• Intel is succeeding in its 18A plant and this week, President Trump confirmed a foundry deal with Apple. The new 18A-P process adds better performance with lower power consumption, and better thermal characteristics. Looks great to us.
• We’ve been reading about dwindling US weapons stockpiles. GM is now partnering with Lockheed Martin to help address this issue.
• We hear a lot about stock dilution. In this week’s educational topic, we explain what it is and the circumstances where it can be a positive for shareholders.

 

This week Kunal Arora and Eli Killorin do the usual heavy lifting for the 5 Things. DKI is also joined by NYU Intern, Param Shah. Param’s strong background in math and inclination towards technical analysis provide a different skill set for DKI. It will be interesting to see what we learn from each other this summer.

 

Ready for another week of acquisitions? Let’s dive in:

 

1) Fed Decision:

The Federal Reserve completed its June meeting and the first one with Kevin Warsh as Chairman. The details:  The Fed kept the fed funds rate unchanged. This was the overwhelming consensus expectation.

On the dot plot, nine of 19 Fed officials expect an increase in the fed funds rate later this year. (Warsh didn’t participate in the dot plot, so nine of 18 is more accurate.) That was more hawkish than many expected and consistent with DKI expectations where we previously reiterated a return to “higher for longer”. While the dot plot does indicate intentions, it’s also often inaccurate. DKI analysis from a few years ago indicated that the Fed is terrible at projecting the year-end fed funds rate, which is the thing they actually control so I don’t think the potential future loss of the dot plot is a tragedy for financial analysts.

The market worried that the dot plot got more hawkish. I think it won’t matter.

DKI Takeaway: Warsh refused to both contribute to the dot plot and also didn’t provide any forward guidance. I’m in favor of this. I previously have said that the Powell Fed was the chattiest I’ve ever seen and frequently joked that if I put a microphone at the end of my driveway on any random Tuesday, there would be at least three Fed Governors who couldn’t resist the open mike and would show up to give a press conference. The constant yapping and contradictory commentary weren’t helping the process and had the effect of handcuffing officials to stale opinions they had previously discussed in public.

 

The market sold off following the press release due to the more hawkish dot plot. There’s also going to be a task force to examine the Fed’s still massive $6.7T balance sheet. Warsh has said he wants to reduce it; a move I think is appropriate.

 

In the end, I don’t think this Fed meeting matters. While the market looks to the Fed to manage interest rates out of habit, current inflation is being driven by overspending and money creation out of Congress and interest rates are rising because the bond market is pricing in higher future inflation. The Fed raising or cutting by 25 basis points (.25%) a few times won’t change that.

 

2) Fox Agrees to Purchase Roku for $22B:

Fox intends to buy Roku for $160 per share in a deal valued at about $22B. Compensation is part cash (financed with debt) and part stock. Fox expects to close the deal in 1H ’27. Fox owns live sports rights, news, and the Tubi streaming service, while Roku makes streaming devices and software used in over 100MM homes worldwide. Roku also provides ad-supported content. Combined, the new company would become the third-largest player in the U.S. television industry by viewer share.

Great premium for Roku. The market wasn’t happy with Fox spending.

 

DKI Takeaway: The deal allows Fox to access a direct line into viewer devices. Roku maintains a broad operating system with high margins and devices that are part of millions of people’s daily lives. This allows Fox to collect viewing data and control the entry point for its own content, instead of renting space on someone else’s platform. As bigger players consolidate around streaming, Fox locked up one of the final major distributors in the industry.

 

3) Yum Brands Strikes Two Deals to Sell Pizza Hut for $2.7B:

Yum Brands announced that it’s selling Pizza Hut to private equity firm LongRange Capital for $1.5B. This excludes the chain’s locations in China, which will be acquired by Yum China for $1.2B. Following the closing, Pizza Hut China will be able to discontinue paying licensing fees to Yum. Consumer brands continue to have value. As someone who travels constantly, I see US-based brands like McDonalds, Burger King, Dunkin Donuts, and Pizza Hut all over the world.

Unsurprisingly, the market liked the deal.

 

DKI Takeaway: Pizza Hut has around 20,000 stores in 100+ countries, generating $12.8B in sales. However, the company has been struggling for years and has lost market share to Domino’s. The ability of DoorDash to bring a greater variety of food options to customers’ doors isn’t helping the pizza delivery businesses either. Yum Brands should benefit from this as it will be able to focus more on scaling its more successful chains like Taco Bell. The multi-billion dollars of proceeds from this sale give Yum the dry powder to invest in other assets. LongRange Capital presents an opportunity for Pizza Hut as the founder, Bob Berlin, led Arby’s turnaround in the early 2010s. His long-term holding strategy provides encouragement for the pizza chain.

 

4) SpaceX Plans to Acquire Anysphere for $60B:

SpaceX made its stock market debut last Friday. Post-IPO buying combined with new listed options briefly drove its valuation past those of Amazon and Microsoft. Following the IPO, SpaceX agreed to acquire Anysphere (the startup behind Cursor, an AI coding startup) in a $60B all-stock deal. Cursor was founded in 2022 and has crossed $4B in annualized revenue while facing competition from both OpenAI and Anthropic.

Just under $2.5T in market cap in one week.

 

DKI Takeaway: After acquiring xAI in February, SpaceX is working through its position in the competitive AI business. Acquiring Anysphere is an attempt to boost its capabilities. The combined entity intends to build proprietary coding models, reducing Cursor’s current dependence on Anthropic and OpenAI while leveraging SpaceX’s Colossus supercomputer. Cursor’s market share declined from 41% in June 2025 to around 26% by May 2026, and SpaceX itself posted over $9B in losses across 2025 and 2026.

 

While there’s been a lot of negative press regarding the valuation of SpaceX, the company does have the leading business in delivering payload to orbit and the best Satellite communications capability in the world right now.

 

5) Intel Begins Production of 18A-P:

Intel’s 18A-P processor node entered production this week. This is the performance variant of the 18A chip which is already used for Core Ultra Series 3 chips and Xeon 6+ data center processors. After completing initial production, the chip will move into high-volume manufacturing. Intel’s foundry system is recovering quickly and making inroads into TSMC’s customer base. Google has placed an order for 3MM TPUs with Intel indicating Google is no longer relying on TSMC as its sole-source chipmaking partner. Deals with Microsoft have been announced, and this week, President Trump highlighted the previously disclosed foundry deal with Apple. The world’s biggest chip customers are now coming to Intel for outsourced high-end semiconductor manufacturing.

DKI started buying $INTC at $35 in October of 2025.

 

DKI Takeaway: Intel’s ability to make the 18A-P chips shows that Intel is now a reliable foundry partner, something that’s been a struggle for the company for years. A big part of DKI’s positive thesis on the stock was our belief that they’d succeed in the 18A plant, and we’re getting more evidence that’s the case each week. The new 18A-P process builds on early 18A success with higher performance combined with reduced power consumption and improved thermal characteristics. DKI research calls in the industry reveal that Intel’s yields in the 18A plant have been in the 60% – 70% range; not as strong as industry leader Taiwan Semiconductor, but good enough for second place right now.

 

6) General Motors Strikes Partnership with Lockheed Martin:

General Motors and Lockheed Martin have signed an agreement to work together to produce American military equipment. The department of defense brought the two companies together in the hope of rebuilding U.S. weapon stockpiles which have been depleted by recent conflicts. Lockheed is investing $9B through 2030 to modernize 20 of its facilities, while GM is investing $7B on research and development in the U.S.

A lot will be done by drones, but until then, replenishment is crucial.

 

DKI Takeaway: The partnership puts GM in a position to capture growing demand and tap into a new weapons manufacturing revenue stream. GM already runs huge and efficient automotive factories. Mass production and industrial efficiency is what Lockheed needs to better succeed at meeting demand. This provides GM with a second growth engine outside of auto manufacturing and partnering with the government means stable long-term contracts.

 

7) Educational Topic: Share Dilution:

Share dilution happens when a company issues new shares, adding to the existing pool. This means each pre-dilution share now share represents a smaller piece of ownership.

Share dilution is not the same as stock splitting. If the company does a 2-for-1 split, you would receive twice as many shares representing the same percentage ownership, so your total stake is unchanged. With dilution, new shares are sold or granted to someone else, meaning your ownership percentage shrinks.

You’d own the same number of shares, but a smaller percentage of the company.

 

DKI Takeaway: While the ownership change can appear negative on the surface, new shares are often issued to raise necessary cash which can keep a company out of bankruptcy, fund acquisitions, or pay employees with stock. One example is Alphabet’s recent equity raise to fund its AI spending plans. This was an $80B stock sale with the hope that the associated AI investments will earn a high return on capital. Share dilution can be a negative if new capital isn’t put to productive use or if it’s a sign the company is struggling to stay afloat and needs funding.

 

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