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• Netflix said Friday it agreed to acquire Warner Bros. Discovery in an $83 billion deal.
• Warner Bros. Discovery still plans to split its cable TV channels like CNN and TBS off into a standalone company before its TV and movie studios and streaming services are acquired by Netflix.

The bidding war for Warner Bros. Discovery (WBD) is officially over, as the entertainment giant and Netflix (NFLX) announced an $83 billion deal Friday.

Warner Bros. Discovery plans to continue with its previously planned break-up, which will involve spinning off its cable TV channels including CNN and TBS into a standalone business, leaving the remaining studios that make TV and movies and the company's streaming services to be acquired by Netflix for $27.75 per share. The companies expect the deal to close in the third quarter of next year.

Netflix co-CEO Ted Sarandos said Friday that combining with Warner Bros. Discovery will help both companies "define the next century of storytelling."

Warner Bros. Discovery shares were little changed in premarket trading Friday, while Netflix shares fell 3.5% following the announcement.

Netflix acquiring Warner Bros. Discovery could reshape the streaming landscape, as the company will own both its namesake service and HBO Max. The deal would give Netflix even more influence in a streaming industry already dominated by a small number of firms.

Late Thursday night, reports emerged that Netflix and Warner Bros. Discovery had entered exclusive deal talks, with competing bidders Paramount Skydance (PSKY) and Comcast (CMCSA) looking to be out of the running.

The bidding war started earlier this year, when Paramount started to make offers to acquire all of Warner Bros. Discovery after the company completed its own merger with Skydance, owned by the Ellison family. Netflix and Comcast entered the running later.

Now, the deal could face regulatory scrutiny over whether it would make Netflix too dominant a player in streaming. Paramount has reportedly argued that the industry would become too consolidated by Netflix's win.

News of the day for Dec. 5, 2025

Stock futures are inching higher after the major indexes turned in a mixed performance on Thursday; investors are awaiting the release of the Federal Reserve's preferred measure of inflation; Netflix has reached a deal to acquire Warner Bros. Discovery; shares of Hewlett Packard Enterprise are tumbling after a disappointing earnings report; and Ulta Beauty shares are surging after the retailer released strong results. Here's what you need to know today.

Stock futures are slightly higher this morning as investors await the release of an important inflation report and digest news of the Netflix-Warner Bros. Discovery deal. Futures tied to the Dow Jones Industrial Average were up 0.1% recently, while those linked to the benchmark S&P 500 and the tech-heavy Nasdaq added 0.2% and 0.3%, respectively. The S&P 500 and Nasdaq inched higher on Thursday, gaining ground for the eighth time in the past nine sessions, while the Dow finished slightly lower. The Dow and the S&P 500 enter the session less than 1% away from new record closing highs. Bitcoin was at $91,200 recently, down from an overnight high of $92,700. Gold futures were up 0.3% to $4,255 an ounce, while WTI crude oil futures slipped 0.2% to $59.55 per barrel. The yield on the 10-year Treasury note, which affects borrowing costs on all sorts of loans, inched higher to 4.12%, near its highest level in two weeks.

Another piece of economic data delayed by the government shutdown is set to be released Friday morning. The Personal Consumption Expenditures index report, the Fed's preferred measure of inflation, is expected to show that prices rose 2.8% over the 12 months ending in September, which would be the highest since August 2024. "Core" inflation, which excludes more volatile items such as gas and some foods, is expected to have risen by 2.9%. The results of the report will factor into the Fed's decision on interest rates when its policy committee meets next week. The Fed is balancing concerns about a weakening labor market with lingering worries about inflationary pressure. Traders are pricing in an 87% chance that the Fed will trim its benchmark rate by a quarter point for the third consecutive meeting, according to the CME Group's FedWatch tool.

The bidding war for Warner Bros. Discovery (WBD) is officially over, as the entertainment giant and Netflix (NFLX) announced an $83 billion deal Friday morning. Warner Bros. Discovery plans to continue with its previous break-up, which will involve spinning off its cable TV channels including CNN and TBS into a standalone business, leaving the remaining TV and movie studios and streaming services to be acquired by Netflix for $27.75 per share. The companies expect the deal to close in the third quarter of next year. Late Thursday night, The Wall Street Journal and Bloomberg had reported that Netflix and Warner Bros. Discovery had entered exclusive deal talks, with other bidders Paramount Skydance (PSKY) and Comcast (CMCSA) out of the running. Warner Bros. Discovery shares were up 0.3% at $24.60 in recent premarket trading, while Netflix stock fell more than 2%. Netflix shares hit their lowest level since April this week amid investor concerns about the potential deal.

Shares of Hewlett Packard Enterprise (HPE) are tumbling Friday morning after the server maker reported lower sales and profits than analysts had expected. After the bell Thursday, HP Enterprise said fiscal fourth-quarter revenue was $9.68 billion, and while earnings per share came in at 11 cenrts, less than a third of what analysts had forecast, per estimates compiled by Visible Alpha. The company's revenue and EPS forecasts for the first quarter of fiscal 2026 were also below the analyst consensus. HP Enterprise shares were down 9% in recent premarket trading. Coming into today's session, the stock had gained 7% since the start of the year, significantly lagging the performance of the S&P 500.

Ulta Beauty (ULTA) shares are jumping after the cosmetics retailer reported earnings that beat Wall Street estimates. Ulta reported $2.86 billion in sales and $5.14 in earnings per share for the third quarter, each well above the analyst consensus. JPMorgan analysts lifted their price target for Ulta stock to $647 from $606 previously, noting that executives said Ulta was happy with its performance over Black Friday and Cyber Monday to start the current quarter, but acknowledged that there may be a decline in sales heading towards Christmas because of uncertainty around consumer spending. Ulta shares, which enter the day up 23% so far in 2025, were up more than 7% at $572 ahead of the opening bell.

• Salesforce shares climbed Thursday amid signs its AI offerings are taking off, though they remain in negative territory for the year. 
• Wall Street analysts are widely bullish on the stock, suggesting investors are underestimating the software giant while waiting to see more evidence of its advances with AI.

Does Salesforce's new momentum have the stock on track for a comeback?

The shares climbed about 4% to close Thursday near $248, making Salesforce (CRM) one of the top gainers in the S&P 500, a day after the company posted a better-than-expected profit boosted by demand for its AI offerings and hiked its outlook.

The day's move had the stock at its highest level in about a month. Still, the shares have a way to go before they recover from the losses taken earlier this year amid worries about its company's outlook. The stock remains down nearly 30% for 2025.

Salesforce's stock has lagged many of its peers in software this year, missing out on the AI rally that's boosted shares of a wide range of companies. Thursday's gains on a stronger outlook and signs that it's making progress could point to a turnaround.

Morgan Stanley analysts, who reiterated an "overweight" rating and a Street-high target of $405 following the company's results, told clients they believe investors are underestimating the software giant's AI potential.

"It may take a few more data points for a skeptical investor base to come on board," they said. Still, the analysts said they would be buyers at this stage, with signs of a pickup in new AI-related business and easing bookings headwinds.

Analysts at Bank of America pointed to Salesforce's backlog, which expanded faster than anticipated, as another strong signal of future demand bolstering their bull case and $305 target for the stock.

Jefferies analysts, who maintained a $375 objective and "buy" rating, said they believe the company's current-quarter forecast could be conservative, leaving room for another upside surprise.

While Wall Street's ratings may be in flux, most analysts are sticking by their support for the stock. Of the 18 analysts surveyed by Visible Alpha, 14 have issued "buy" calls, compared to four neutral ratings. Their mean target around $330 would suggest a near-full recovery to its levels to start the year.

• Sales of spirits that cost $100 or more have plunged, and consumers are shifting from "super premium" to "premium" tequila, liquor-company executives said.
• The business leaders said people "trading down" shows that Americans still want to buy and drink alcohol.
  

Fewer booze buyers are reaching for the top shelf.

Americans aren't thirsting for for the high-end tequila that once flowed freely, spirits companies said, as demand for $100 spirits has dropped off. Consumers appear to be trading down—or selecting less expensive versions of their preferred beverage—said Lawson Whiting, CEO of Brown-Forman (BF.A, BF.B), on Thursday, as sales of more affordable bottles fell less.

“We are seeing some weakening, for the first time, in terms of trade down,” Whiting said on a conference call, according to a transcript made available by AlphaSense. "When you look at $100 and above or $50-to-$100 [segments], those price points have weakened considerably."

Industrywide, the number of $100-plus bottles sold has fallen 18% in the past three months, according to the market research firm NielsenIQ.

Consumers are trying to cut back on booze amid concerns about the job market and inflation. Many are likely to step back first from discretionary items, such as fancy liquor or meals out.

Diageo, which makes Johnnie Walker and Crown Royal, said sales of its "super premium" tequila brands have weakened, including Don Julio, which can cost as much as $470 for a 750-ml bottle of Ultima Reserva, as well as Casamigos, which retails for $40 to $62, according to Total Wine & More quotes for New York.

Some customers are shifting to Astral, a "premium" alternative that Total Wine sells for $32, Diageo's interim CFO Deirdre Mahlan said, explaining that the tequila category has also grown competitive as the spirit exploded in recent years.

The spirits companies offer a sign that consumers are cutting back on alcohol because of the economy, rather than in response to health concerns and changing norms, which are also reconfiguring consumption and spending in the sector.

Research shows younger Americans drink less than prior generations. Several factors may be at play: health and wellness is a bigger priority; some socializing has moved online; and disposable income is tight. Legal cannabis may also rival its appeal, and many are now buying non-alcoholic spirits and beers. But some companies believe money is at the root of the change.

"It's largely economic," Mahlan said last month, according to a transcript. "Look at the changes that we're seeing in terms of trade down both in formats and price points."

This article has been updated since it was first published to clarify the industry data from NielsenIQ.

• A discount retailer got a boost on Thursday, Dec. 4, 2025, as bargain-seeking shoppers bolstered its quarterly results, while a semiconductor stock retreated from its recent highs.
• Dollar General stock surged after the retailer topped quarterly sales and profit forecasts.
  
• Shares of Intel pulled back following reports the company would retain its networking and communications unit.

Shares of a dollar-store chain took off after its latest quarterly report revealed its offerings are attracting cost-conscious consumers across income groups. Meanwhile, an American chipmaker came under pressure after reports that it's not looking to sell its networking business.

Major U.S. equities indexes finished Thursday's session mixed and little changed ahead of key inflation data due for release Friday morning, which could sway the Federal Reserve's upcoming decision on interest rates. The S&P 500 ticked 0.1% higher, and the Nasdaq rose 0.2%, while the Dow slid 0.1%. See here for more daily markets coverage from Investopedia. 

Dollar General (DG) shares surged 14% to log the S&P 500's top performance Thursday, after the discount retailer beat quarterly earnings estimates and lifted its full-year forecast. The company said it saw strong demand from consumers across income categories as shoppers search for value.

Shares of GE Vernova (GEV) advanced close to 5% after Barclays lifted its price target on the stock. Analysts pointed to strong demand for the energy technology company's gas and electrification equipment, bolstered by the buildout of data centers and electric vehicle charging infrastructure.

Meta Platforms (META) stock added 3.4% following reports the Facebook, Instagram, and WhatsApp parent is considering major cuts to its metaverse business. Meta's budget for the unit, which is focused on creating a virtual 3D universe where users can interact via avatars, could be reduced by as much 30% and will likely include layoffs, Bloomberg reported.

Intel (INTC) shares dropped nearly 8%, losing the most of any S&P 500 stock Thursday, after reports indicated the chipmaker plans to hold onto its networking and communications unit following a strategic review. The company reportedly considered selling or spinning off the unit earlier this year as part of a plan to exit noncore businesses. With the downturn Thursday, Intel stock gave back some of the recent gains posted amid speculation about possible new business from Apple (AAPL).

Shares of Kroger (KR) slid 4.6% after the supermarket chain reported lower-than-expected revenue for the third quarter. Although adjusted earnings per share surpassed consensus estimates, the company reported a net loss, reflecting the impact of a $2.6 billion impairment charge related to the closure of three automated delivery fulfillment facilities.

Executives from Marriott International (MAR) indicated that the hotel operator's revenue per available room could come in at the lower end of previous forecasts. The company pointed to softness in U.S. markets as a factor behind the more subdued outlook, which came just a few weeks after Marriott reduced its forecast for net room growth following the termination of its licensing agreement with short-term rental firm Sonder, which filed for bankruptcy in November. Marriott shares fell 3.5% Thursday.

• Dollar General shares jumped 11% Thursday after the retailer's third-quarter profits came in well above estimates.
• The company joins several of its discount retail competitors that have recently topped estimates as U.S. consumers hunt for value.

Dollar General's shares led the S&P 500's gainers after its latest quarterly results showed that Americans are continuing to hunt for value, benefitting the discount retailer and its competitors.

The company's shares were recently up some 13%. The retailer said Thursday that it generated $10.65 billion in revenue in the third quarter as same-store sales rose by 2.5%. Both figures were roughly in line with what analysts had forecast. Earnings per share handily topped estimates at $1.28, compared to the $0.93 that analysts had expected, according to Visible Alpha.

The company saw "disproportionate growth" in business from higher income households, CEO Todd Vasos said during a Thursday conference call, per a transcript provided by AlphaSense. The low- and middle-income consumer "continues to be stretched" and is seeking value in both the products and merchants, they choose, he said.

Dollar General and several other value-focused retailers like Walmart and Dollar Tree have noted for several quarters that they are seeing more high-income consumers come to their stores. The trend is also extending to other areas of retail, with companies like Ross Stores and TJX Companies recently topping estimates.

Dollar General (DG) lifted its outlook for sales growth, EPS, and same-store sale growth for the full year. The company affirmed plans to open about 575 new stores in the U.S. this year and 450 next year, and it looks to remodel or renovate thousands of other locations.

On Wednesday morning, rival Dollar Tree (DLTR) topped estimates, and said it was continuing to see its market share among higher-income consumers grow. After the closing bell Wednesday, fellow discount retailer Five Below (FIVE) also beat expectations, with comparable sales jumping 14% year-over-year.

With Thursday's move, Dollar General shares are up more than 60% since the start of the year and at their highest point since August of 2024.

• BlackRock CEO Larry Fink this week defended big AI spending, saying "other countries are going to beat" the U.S. otherwise.
• He also linked the technological change underway to the U.S. economy, questioning whether this year's lack of job growth should be attributed to uncertain policy or labor substitution.

There are worries about AI spending. Sometimes, that means worries that companies developing artificial intelligence capabilities aren't spending enough.

Larry Fink, chief of BlackRock (BLK), the world's largest asset manager, yesterday defended spending on artificial intelligence during a wide-ranging interview at the New York Times DealBook Summit. "If we don't spend enough—faster—on AI, digitization and tokenization, other countries are going to beat us," he said.

Fink's comments landed amid ongoing debates about whether the AI sector is getting over its skis, with some likening the enthusiasm around the tech to the Dotcom bubble. While spending in AI development has triggered investor skepticism and dinged shares of the biggest players in the business, including Oracle (ORCL), Microsoft (MSFT), and Amazon (AMZN), Fink said the technological change underway is already visible in the U.S. job market and corporate margins.

As Big Tech companies invest more in AI and lower their headcount, corporate execs, analysts and central bank officials are increasingly referencing what is called a "K-shaped economy," which describes a situation in which high-income earners and certain industries thrive while lower-income households and other businesses struggle.

The CEO of New York-based BlackRock, which managed over $13 trillion in assets as of the third quarter, said that while hyperscaler CEOs "aren't certain if they're overspending or underspending," their conviction of future demand was high and most don't have the raw processing power needed to power their AI models.

Fink, however, didn't outright dismiss the possibility of some companies showing disappointing results. "I'm not here to suggest that there's not going to be some, you know, headline blow-ups," he said. "There are going to be some huge winners and huge failures."

The cost of building global data centers, AI infrastructure, and related power supplies could cost over $5 trillion in the years to come, according to JPMorgan analysts. In order to garner a 10% return on modeled AI investments through 2030 would mean roughly $650 billion of annual revenue in perpetuity, they said.

Fink linked the development of AI technology to the K-shaped economy, which describes a bifurcation in recovery where certain industries and segments of the population experience outsize growth while others struggle.

"What I think is happening, is more and more companies are doing more with the same amount of people or less," Fink said. "This technological change is happening today, but it's gonna have a profound impact on our economy."

• Netflix shares fell Thursday, a day after after closing at a seven-month low, as investors mulled the likelihood it beats out Paramount Skydance in a bidding war for competitor Warner Bros. Discovery.
• Netflix is seen as the preferred buyer, but federal officials have reportedly raised antitrust concerns.

Netflix could be on the verge of a big purchase. Wall Street’s not thrilled about it. 

The streaming giant is reportedly the odds-on favorite to acquire competitor Warner Bros. Discovery (WBD). That hasn't helped the stock: Netflix (NFLX) shares were down more than 1% in recent trading—after falling to a seven-month closing low on Wednesday.

Netflix is vying with fellow streamers Comcast (CMCSA) and Paramount Skydance (PSKY) to acquire the owner of the HBO Max streaming platform and a deep bench of intellectual property that includes Harry Potter, Game of Thrones and DC Comics. 

"The market is witnessing the endgame of the cable TV era," Bank of America analysts wrote last month, calling Warner Bros. "another domino in a likely cascading series of transactions that redefine the competitive fabric of the media & entertainment industry."

The acquirer of Warner Bros. Discovery will gain ownership of some of the world's most valuable intellectual property, including the Harry Potter universe. It will likely also combine two of America's largest streaming platforms, further consolidating an industry already dominated by just a few companies.

Netflix and Paramount Skydance are considered the leading contenders, but shareholders of both appear to have reservations about the deal. Their shares are down about 6% and 9%, respectively, since submitting their first bids Nov. 20. Netflix didn't respond to Investopedia's request for comment in time for publication.

It’s common for a company’s stock to fall when it submits a big takeover offer, because the buyer usually pays a premium to sweeten the deal. On top of that, some existing investors may doubt the wisdom of the tie-up or decide that they’re not interested in owning the combined company. 

But there may be more to Netflix stock’s recent slide. White House officials have reportedly raised antitrust concerns, arguing the combination of Netflix and HBO Max could give the combined company too much power over the entertainment industry.

President Donald Trump also looms over the deal. The New York Post recently reported that a Netflix offer "faces mounting opposition from the Trump administration," citing antitrust concerns.

Trump is also closely tied to Larry Ellison, father of Paramount Skydance CEO David Ellison. Any ensuing litigation could jeopardize a deal, bog down Netflix in a costly legal fight, and otherwise amplify government scrutiny of the company.

Major U.S. equities indexes wavered between gains and losses Thursday afternoon, as tech stocks climbed but consumer staples stocks lost ground. The Dow Jones Industrial Average edged 0.1% lower in recent trading, while the S&P 500 and Nasdaq ticked up 0.1%.

Dollar General (DG) led gains on the S&P 500, with its stock up close to 12% after the discount retailer became the latest to post solid quarterly results, after a strong report from rival Dollar Tree (DLTR) yesterday.

Meta Platforms (META) shares also surged, with shares jumping 4% following a Bloomberg report the Facebook and Instagram parent is looking to slash spending on its metaverse segment next year.

Kroger (KR) was the largest decliner in the S&P 500. Its shares fell 6% after the grocery giant reported quarterly sales that missed analysts' expectations.

Snowflake (SNOW) shares tumbled 11% after the cloud data analytics company issued a disappointing margin forecast, raising some worries on Wall Street about the company's AI-related investments.

Intel's (INTC) stock sank 6%, giving up most of its gains earlier in the week. Reuters reported the embattled chipmaker, which has explored selling parts of its business to improve its finances, plans to keep its networking and communications segment after a strategic review.

Oil and gold futures rose. The yield on the 10-year Treasury note climbed to 4.10%. The U.S. dollar lost ground to the euro and yen, while gaining on the pound. The price of Bitcoin slipped to trade just above $92,000 and Ethereum gained, while most other major cryptocurrencies lost ground.

• Meta is reportedly looking to slash spending on the "metaverse," the tech giant's suite of augmented reality hardware and software products.
• The company's push into the metaverse was the inspiration for its name change from Facebook four years ago. However, investors have increasingly questioned whether the massive spending is paying off.

Shares of Meta Platforms (META) surged Thursday following a report that the company is looking to significantly cut spending on its "metaverse" projects next year.

Bloomberg reported that CEO Mark Zuckerberg has requested that executives find at least 10% in budget cuts across the company for next year, with cuts as high as 30% in the metaverse departments.

Shares were up 4% in recent trading. The stock has gained 14% since the start of the year, lagging the performance of the benchmark S&P 500 index.

Meta and other big tech companies have looked to cut costs in various ways in the last few years as their plans to spend hundreds of billions on artificial intelligence have grown. Several companies, including Meta, have cut jobs as a way to save money they now plan to use on building infrastructure for AI.

For years, Zuckerberg has called the metaverse the future of the company, and it was the inspiration for the company's new name when it changed from Facebook in 2021. However, some investors and analysts have called for the company to stop spending billions on the project because of a lack of progress in sales or interest from consumers.

Citing unnamed sources familiar with the talks, Bloomberg reported that executives have been asked to cut more metaverse spending because of a lack of competition from other tech companies. The cuts are reportedly expected to hit the virtual reality segment of Meta's operations hardest, and could include layoffs as early as January, though the report noted that the decisions aren't finalized.

Meta did not immediately respond to a request for comment on the reported cuts.

Separately Thursday, the European Commission said it will evaluate whether Meta's new policy potentially blocking AI companies from being able to reach users in the European Union directly through WhatsApp violates competition law by making Meta's own AI chatbot, Meta AI, the only available option.

A WhatsApp spokesperson told Investopedia that the Commission's claims are "baseless," and that the policy change is being made because AI companies operating their chatbot services on WhatsApp strains the platform's infrastructure. "Even still, the AI space is highly competitive and people have access to the services of their choice in any number of ways, including app stores, search engines, email services, partnership integrations, and operating systems," the spokesperson said.