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Many employees can't afford a hefty medical bill that pops up out of the blue. But it happens. And employees who are financially stressed are understandably more likely to be distracted at work, costing their employers greatly in lost productivity. Luckily, Aflac plans help with out of pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more@aflac.com Frumarkets that's aflac.com Frumarkets Marvel Technology the latest AI winner to join the S&P 500 we break down what it means for America's benchmark stock index. Underwater drones. Yes, you heard that correctly. We answer a listener question about a new arms race and the company's racing to the bottom of the sea and Corning landing a multibillion dollar deal with Amazon. We explore what's turning fiber optics into one of AI's hottest trades for Monday, June 8th. That's blue markets Daily Diamond Foreign. Details to come. But first, Corning, an unlikely winner in the AI trade once known for making ballistic missile parts, Pyrex cookware and the gorilla glass found on smartphones, now seeing its shares surge today after the company landed yet another major deal tied to the data center boom. The specialty glass manufacturer just announced a quote multi billion dollar agreement with Amazon to help power the tech giant's next generation of US AI data centers. Amazon will purchase optical fiber, cable and connectivity products from Corning, essentially the digital highways and its constituents that allow massive amounts of data to move between servers, networking equipment and AI processors. And specifically, this deal will boost Corning's North Carolina operations in what's actually a second piece of good news for the on this front, this agreement is of course, in addition to Amazon's plans announced last year to invest $10 billion in North Carolina to expand cloud computing infrastructure. Well, as companies race to build larger and more powerful AI systems, demand for that infrastructure is skyrocketing, as we all know. And with it the share price of Corning, whose stock is up a whopping 270% over the past year. Well, earlier this year the company announced an up to $6 billion fiber optics agreement with Meta, and last month Corning also expanded a commercial partnership with Nvidia, in which the chip giant has the right to invest up to $3.2 billion in the glass OG through a structured deal that involves warrants with shares in Corning today up around 5%, and something I actually couldn't help but find a tiny bit curious, not directionally, because some big deal with Amazon likely of course to drive up the share price. But it's curious to me that this new announ with Amazon didn't actually disclose the number of dollars at play. Multi billion. What does that mean? It could be 2 billion. It could be 10 billion. Not specified for the $162 billion market cap. Calling the market though, again with a 5% share price increase. Deciding to put a pin in its best estimate for what that dollar amount could be. Well, coming up in a moment, a spin through the headlines that are moving the markets today, including earnings out of Campbell's and why Corning isn't the only fiber optics company making headlines. But first, this episode is brought to you by Liquid. John, how many times have you wanted to move your money around the market but had to wait for markets to reopen? Oof.
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And you're setting alarm clocks in advance.
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Well, in a moment we'll dive into subsea technology, underwater drone makers and the growing arms race unfolding on the ocean floor. But first, a few headlines from today's
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trading session, starting with Marvel Technology Ticker MRVL trading over 12% higher today. On that it will join the S&P 500. The semiconductor company has been on a tear with its stock up over 250% this year as it capitalizes on the AI boom. Nvidia CEO Jensen Huang for his part proclaiming last week that the firm could be the quote next trillion dollar company which sent its share soaring at that time.
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And more concentration of tech in the S&P 500 as a result of that. Plus of course a new wave of tech IPOs coming this year, which means the index may get even more top heavy depending on which of those decide to out. We're going to keep on watching. And with an addition to the S&P 500 that means somebody had to go. And it is Campbell's getting the boot. The food and beverage company ticker CPB reported earnings today that were mixed, sending shares about a percent lower now. While the company did beat on earnings, it missed on revenue. And snack sales proved yet again to be a persistent weak spot, falling 4% for the period.
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Folks are eating healthier, Ann.
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Yes, they are no good for the snack industry.
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Campbell's also stuck with its conservative full year guidance, projecting a net sales decline of up to 2%. CFO Todd Comfort called the lower end of the range a quote, more realistic assumption at this point. Campbell's shares down 23% just this year. And finally, another headline of the fiber optics space today, it's not just all about Corning. Shares of optical Cable Corporation ticker OCC surged more than 60% this morning after an impressive earnings report. Debt sales increased 26%, gross profit surged 42%. And the company swung to profitability. It reported net income of roughly $1 million compared to a loss from a year ago.
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Still pretty small. Net income of just $1 million. And for context there OCC market cap of around 180 million. So it's pretty small, but again, directionally another one of these businesses to look at. Very tiny compared to cornings. $162 billion. Well, let's take a quick break. When we come back, from underwater drones to unmanned subse, we survey the companies at the center of the growing underwater technology race. Ready to soundtrack your summer with Red Bull Summer All Day Play. You choose a playlist that fits your summer vibe the best. Are you a festival fanatic, a deep end dj, a road dog or a trail mixer? Just add a song to your chosen playlist and put your summer on track. Red Bull Summer All Day Play. Red Bull gives you wings. Visit Red Bull.com BrightSummerAhead to learn more. See you this summer.
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So good, so good, so good.
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well.
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John, we got a question from the audience.
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That's right. We heard from David who left a comment on The Broom Markets YouTube channel. David wrote. Hey Ann and John, congratulations on 200. A question I had was since everyone is focusing on space right now, what about sea and sub tech? What is going on there in terms of players, competitors and how is the race to the bottom of the sea? That was his joke. Cheers and thanks.
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Well, David, great to hear you and thank you for the kind note. Yes, we hit our 200th episode last week and so about that race to the bottom of the sea. Well, I was particularly excited to get this question because I've spent some time looking at aerial drones and we've covered that in lots of different ways. We've talked about the space race and the use of drones in that application. We've talked about drones that are currently manned. They're piloted. That's like Joby Aviation and Archer Aviation.
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The EV Tall space.
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EV Tall space, exactly. Which currently, again, they're piloted. But I think the ultimate vision is that one day perhaps be flying around in unpiloted unmanned flying taxis. But then there's underwater drones, which are part of unmanned sub sea systems. And there's so much that we could cover, but we thought we'd survey some recent developments. And I'm particularly excited, John, because I literally just got back from a fantastic weekend in Annapolis in Maryland, home of the United States Naval academy, established in 1845. So I definitely, I went out on a boat this weekend.
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Wonderful.
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I could see the Naval Academy from the Chesapeake Bay. It's absolutely fabulous. Well, just for some context here, what's old is new again. And we've seen that in different parts of the tech trade. We saw Dell sort of having this moment of coming back, not quite from the dead, not a Lazarus moment, but certainly an unexpected resurgence and in a different sector. I've been having a sense of deja vu because I actually spent several years investing in oil field services. And over that period I took a look at investing in something called rov, that's remotely operated vehicles or subsea robots that you control from the surface, and they use to inspect assets and perform tasks. I think offshore oil and gas platforms or checking pipes that are running under sea. So I was looking at these 12 years ago. And today, of course, they do have military applications. Right. That you're able to use them to go and do sort of reconnaissance more and more, more and more, more and more. So let's talk about the commercial side and some of the businesses doing this over in the commercial sector, where some of the technology has been born to serve the military application.
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Absolutely. So just for some context, the global economy runs through infrastructure that's sitting on the seafloor, sort of out of sight, out of mind. 95% of intercontinental Internet traffic still travels through cables that are laid down there, along with power cables that might be connecting offshore wind. So let's talk about one company Oceaneering International, it has fleets of those ROVs you were talking about that inspect subsea infrastructure for commercial customers. Ticker OI market cap near $4 billion and shares are up 63% year to date in that company.
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That's right. And there was a bit of a sell off recently because there was a slight earnings miss. I was watching this one. But it is trading at a single digit multiple of ebitda. That's a measure of profit. And when you look at something like Kratos, for example, which is the air drones at trading at massive, massive multiples. You know, I'm not advocating for the stock or investment advice, but I do sort of look to see why these things have such big differences. And of course, that's because the preponderance of Oceaneering's business does come from the old school sector, that is offshore oil and gas. But again, lots of these industries is where technology is birthed and then subsequently different applications are considered.
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Well, here's where one of those pivots happen. We're talking about maintenance and inspection. But a pivotal moment happened in 2022 in the Nord Stream. Sabotage. There was a series of explosions that erupted 3 of 4 Nord Natural Gas pipelines in the Baltic Sea. Those connected Russia and Germany and it caused massive gas leaks and permanently damaged a key piece of Europe's energy infrastructure. And the point here is that it was a wake up call that, you know, these things had been on the bottom of the sea and companies and governments suddenly had to adapt and understand that surveillance and security of these assets was key.
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Yeah, just, just by the way, as pipelines in North America have got drones going overhead. Right. Doing sort of aerial reconnaissance. So again, it's a similar kind of theme. I just wanted to call out again that stat that you just very casually threw out there, John. 95% of intercontinental Internet traffic still traveling through cables on the ocean floor. And I think that's just such a striking metric when we look at the SpaceX IPO set to happen at the end of this week. We're all talking about Starlink, we're all talking about Internet and data whizzing through the skies. And here we are at 95% that goes intercontinentally, still going subterranean.
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Exactly. And so one of these companies, General Dynamics. Let's talk about another one. Yeah, they're a major player in underwater and they're one of the largest aerospace,
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one of the OG. Yeah, absolutely.
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Market cap of $92 billion. And they're the parent company of Bluefin Robotics and they design and manufacture those autonomous underwater vehicles. AUV, there's lots of acronyms here. Bluefin was acquired in 2016 and folded into the mission systems business over at General Dynamics. So they don't break out financials, but it's quite large. I was looking at their website today and I thought this was interesting. They talk about all of the commercial underwater applications. So you've got offshore survey, that makes sense. Ship hull and infrastructure inspection, all these different things, security. But also on the list is anti submarine warfare. And that's been a huge part of it. I saw this in late 2024, the US Navy awarded a contact to General Dynamics to develop Medusa, which is one of my favorite, a mining, expendable delivery, unmanned submarine asset. And here's the idea. The US submarine launches Medusa from a torpedo tube and it autonomously travels and deploys a mine. So this is for mine laying for defense, instead of risking a $2 billion plus submarine by bringing it close to enemy coastline. And a press release from earlier this year said that Medusa is running test
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missions off of Massachusetts currently, also for mine countermeasures. Right, so you just described laying mines. There is also detecting mines and ultimately trying to diffuse them or in fact detonate them to try and make sure that you don't have people or assets in harm's way. So trying to do that effectively remotely through these unmanned systems. So, you know, just to bring that home, this idea of mines, I mean, this is literally happening at the moment. Multiple news sources have reported that Iran has been laying mines in the Strait of Hormuz. And so part of the blockade there and part of the issues about folks wanting to run through the blockade is they actually don't know or they suspect that there might be mines laying there so that they're not, you know, motivated to take that risk. So this is an inflection point for subsea military action. It feels, and in the same way that Iran has cast a light on the impact of low cost aerial drones that are being used by Iran, also being used by Russia in Ukraine. Countermeasures are getting a ton of light shone on them here in the United States. And the administration is really focused when it comes to aerial drones on trying to build out domestic manufacturing and design capabilities. And it just seems as though subsea could be next. So really watching this one. The Pentagon's budget for the fiscal year 2026, which is on a June, it was unveiled in June of last year, explicitly includes just over $5 billion in a budget for unmanned maritime systems. So exactly here that includes $3 billion ish for counter drone capabilities and then $734 million for these unmanned underwater vehicles. So this is really happening. There's real defense spending coming into this sector.
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Absolutely. And there's a new development even beyond that. So you can imagine these unmanned craft down there, some of them are laying mines. Well, there's a new class of weapons where the drone is the munition. This is new technology. Last December, Ukrainian underwater drones struck a Russian submarine causing critical damage to the vessel. And this was the first publicly acknowledged successful combat strike by an underwater unmanned vehicle against a submarine. So essentially these weapons are long range torpedoes and they look like black cylinders with fins and they're capable of traveling hundreds of miles. And the tech here is outstanding. They can potentially lurk for days or weeks under the water conducting surveillance and then they attack. And they're the munition.
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Exactly right. Well, there are other companies in this space either supplying drones or assembling drones in their entirety or they're involved in the design and manufacture and the parts or the systems. Another couple of these just to survey them. We've got teledyne ticker TDY market cap $28 billion general defense contractor. Does manufacturing of subsea drones. Also does a lot in sonar and imaging systems. Kraken Robotics supplies many parts, which is a little bit more pure play. Canadian companies supplying pressure tolerant deep sea batteries and sonar. And then you've got Kongsberg, which is the Norwegian defense and maritime technology conglomerate. Market cap $30 billion. Selected by the Pentagon to work on underwater vehicles. That's an overseas business, but nevertheless working on US defense. So look, there's a lot, a lot, a lot going on in the defense space. We're going to keep on watching. It's going to keep getting a lot of attention. And as investors, of course the market's moving quickly in response to new developments in this space. So David, thanks again for your Congratulations on our 200 episodes. Thank you for your question. And we're going to keep an eye on the seas. Well, if you do have a question, please do leave a comment. Whether that's on YouTube or Spotify or Apple. You can leave comments there or send an old fashioned email. We love those to Brew Markets show@morning brew.com that's Brew Markets Show@morning brew.com We do read everything and we get around to most. So we're excited to hear from you. Well, there it is, the closing bell, 4pm on the east coast and the markets wrapping up for the day. We don't have a ticker tape, so but we'll throw it over instead to our human ticker. Our producer, John and all the major
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indices started the day quite up, the S&P 500 finishing up 3.10 of a percent, the NASDAQ finishing up almost 9.10 of a percent, jumping up from the pullback last Friday, and the Dow finished the day down about a tenth of a percent.
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That's it for today's Brew Markets Daily.
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Brew Markets Daily is hosted by Anne Barry and produced by John Crateau, Tarka, Bella Teef, Amin Laroya and Emily Millair. Our technical director is Lonnie Fiskis, Brittany Dotacco is our audio engineer and the president of Morning Brew, Inc. Is Devin Emery.
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Wake up tomorrow with a Morning Brew newsletter and tune in to Neela and Toby on Morning Brew Daily. See you back here tomorrow, same time, same place. Your next chapter in healthcare starts at Carrington College's School of Nursing in Portland. Join us for our open house on Tuesday, January 13th from 4 to 7pm you'll tour our campus, see live demos, meet instructors and learn about our Associate Degree in Nursing program that prepares you to become a registered nurse. Take the first step toward your nursing career. Save your spot now at Carrington. Edu Events. For information on program outcomes, visit carrington. Edu Sci Fi.