NVIDIA’s Kickback: Don’t Call It an Export Tax & AutoZone’s Muffled Earnings

Summary

Brew Markets – Episode Summary

Podcast: Brew Markets
Release Date: December 9, 2025
Host: Ann Berry
Episode Title: NVIDIA’s Kickback: Don’t Call It an Export Tax & AutoZone’s Muffled Earnings

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Overview

This episode dives into a whirlwind day across markets, focusing on three blockbuster stories:

1. The latest on the U.S. government’s “revenue sharing scheme” with American chipmakers exporting to China, specifically NVIDIA, AMD, and others—a major update at the intersection of tech, trade, and geopolitics.
2. A close look at AutoZone, whose earnings were hit by tariffs and margin pressures despite solid underlying sales growth—opening a broader conversation on the auto parts sector.
3. The market’s reactions to updates from Toll Brothers, Campbell’s, CVS, and Pfizer, with a particular eye on how they’re adjusting to economic headwinds and shifting consumer trends.

Ann Berry, with occasional banter from producer John, brings her sharp analysis and candid market takes throughout.

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Key Discussion Points & Insights

1. NVIDIA’s “Revenue Sharing” with the U.S. Government

[01:03 – 05:47]

• Background:

  • In August, NVIDIA and AMD agreed to a 15% revenue share with the U.S. government on AI chip sales to China as a workaround for export controls imposed for national security reasons.

• What Changed:

  • President Trump announced (via Truth Social) that NVIDIA can now ship its upgraded H200 chips to "approved customers" in China—if the U.S. gets a higher 25% cut of the revenue.
  • The Department of Commerce will apply the same approach to AMD, Intel, Broadcom, and other major chipmakers.

• Open Questions:

  • It’s unclear if China actually wants these expanded (but still restricted) chip exports, especially since NVIDIA CEO Jensen Huang says Huawei now offers “probably comparable” AI chips ([04:17]), and Chinese giants like Alibaba and Baidu are racing to develop local alternatives.

• Legal and Semantic Nuance:

  • Ann breaks down why these payments are called “revenue sharing” and not “export taxes.”
    • “Article 1, Section 9, Clause 5 of the US Constitution prohibits Congress from laying taxes and duties on articles exported for national security or policy reasons… The T word is heavily loaded.” ([04:44])
    • NVIDIA and peers are going along, “playing ball … rather than calling them out as export taxes.”

• Market Reaction:

  • “Nvidia stock nudged down today. AMD pretty flat. Looks as though the market’s still figuring out whether China will in fact lean in to buy.” ([05:28])

Notable Quote:

• “Never a dull moment in the trade wars and that endlessly lively intersection of the markets and politics that we love to cover here on Brew Markets.” — Ann Berry ([05:16])

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2. AutoZone’s Earnings: A Tariff-Troubled Sector

[05:47 – 11:44]

• Earnings Recap:

  • Revenue up 8.2% YoY to $4.6B but missed expectations.
  • Same-store sales up for a sixth straight quarter (5.5% growth).
  • Earnings ($31.04/share) and operating profit ($784M) both missed estimates; this marks AutoZone’s sixth consecutive earnings miss.

• The Tariff Impact:

  • Tariffs have forced AutoZone (and competitors) to increase prices for consumers.
    • “They have been increasing prices because of tariffs. They’ve been passing that cost along to the consumer.” — John ([07:23])
  • Not a glamorous business, but massive in scope:
    • 6,666 U.S. stores, 770 international locations; steady pace of new openings.

• Competitive Landscape:

  • AutoZone, O’Reilly Automotive (market cap $80B, 6,500+ locations), and Advance Auto Parts (market cap $3B, 4,300 locations), all saw share prices drop today (AutoZone -8%, O’Reilly -4%, Advance -7%).
  • Market share war is heating up—AutoZone’s CEO Phil Danielle declares intention to “aggressively open stores over the remainder of the fiscal year as we continue to focus on getting market share.” ([08:25])

• Analyst/Investor Disconnect:

  • Ann questions if repeated analyst misses are from company performance or faulty Wall Street projections:
    • “When you miss earnings expectations for six straight quarters, is it the company’s outlook that’s squirrely or is it just the analyst community not getting their projections quite right?” ([08:37])

• Consumer/Experience Insight:

  • Despite broader e-commerce trends, AutoZone’s business is still deeply reliant on customers seeking in-person expertise:
    • “That DIY element is really important … you want someone to say, ‘No, this is the right [part] for you.’” ([10:12])

• Stock Performance:

  • Up 8% YTD, up 205% over five years, despite a tough 2025 so far.

Notable Moment:

• Ann teases John as the archetypal DIYer—“I can totally see you, by the way, producer John in AutoZone browsing around chatting up one of the store associates trying to get their take on something.” ([11:02])

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3. Toll Brothers: Luxury Housing’s “Soft” Market

[11:44 – 15:34]

• Earnings Recap:

  • Toll Brothers: market cap $13B, shares up 8% YTD, up 200% over five years, but down 2–4% on the day.
  • Home sales revenue: $3.4B on 3,400 units (avg. sale ~$1M).

• Housing Market Analysis:

  • Despite high interest and mortgage rates, demand for high-end homes is softer.
    • CFO admits, “Given soft demand across many markets, we remain focused on running our business in a disciplined manner.” ([12:31])
    • Ann notes, “The average age of the first-time home buyer is now up at 40 years old. … This is a big ticket… for a first-time home, right?” ([13:53])

• Luxury Insulation:

  • CEO Douglas Yearly’s thesis: luxury buyers are less impacted by affordability pressures.
    • “Our fourth quarter and full year results demonstrate that our luxury business is differentiated as we serve a more affluent customer who is less impacted by the affordability pressures.” ([13:58])

• Strategic Moves:

  • Toll Brothers is exiting the multifamily market, selling a chunk of its portfolio for $347M (sale now delayed), to focus on single-family homes.

• Bigger Picture:

  • Summer NAR data: sales of homes above $1M up 7% YoY versus under 1% across the broad market.
  • Cautious optimism for 2026 driven by expectation of Fed rate cuts.

Notable Quote:

• “There are signs of confidence that the market is going to come back to a slightly more robust, higher velocity set of circumstances.” — Ann Berry ([15:34])

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4. Quick Hits: CVS, Campbell’s, Pfizer

[18:32 – 22:47]

CVS

• Investor Day: stock up 3% on strong guidance, leaning into Medicare and pharmacy services integration (Oak Street acquisition).
• Ann’s take: “It’s incredibly dense… had to print it out, get a strong cup of coffee and wade my way through it for everybody.” ([19:45])

Campbell’s

• Stock down 3.5% on weak earnings, declining sales in all major brands save for Rao’s pasta sauce.
• Campbell’s vertically integrates Rao’s supply.
• Ann highlights industry-wide trend: “We’re seeing … food companies… split themselves into places where they have either a real superpower, a real competitive edge, or splitting out the lower growth categories and brands.” ([21:24])

Pfizer

• Signs $2.1B licensing deal with China’s Yao Pharma for an obesity pill, after last month’s $10B acquisition bid for Metcera.
• Pill targets the GLP-1 pathway like Novo Nordisk, but is early-stage; “it could literally take years to reach patients, if at all.” ([22:47])

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Notable Quotes & Memorable Moments

• “My administration will always put America first.” — President Trump ([paraphrased, 03:54])
• “Never a dull moment in the trade wars and that endlessly lively intersection of the markets and politics that we love to cover here on Brew Markets.” — Ann Berry ([05:16])
• “When you miss earnings expectations for six straight quarters, is it the company’s outlook that’s squirrely or is it just the analyst community not getting their projections quite right?” — Ann Berry ([08:37])
• “Average age of the first time home buyer is now up at 40 years old. … This is a big ticket… for a first-time home, right?” — Ann Berry ([13:53])
• “Campbell’s … makes ‘highly processed food for poor people.’” — Ann Berry, quoting a former IT executive ([19:59])
• “Pfizer stock ticked down slightly on the news. Investors really must be wondering at this moment how much more Pfizer is going to spend going after this and when the return is actually going to come.” — Ann Berry ([22:47])

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Timestamps for Key Segments

• NVIDIA/Export Tax Story: [01:03 – 05:47]
• AutoZone’s Earnings Breakdown: [05:47 – 11:44]
• Toll Brothers and Luxury Housing: [11:44 – 15:34]
• CVS Investor Day & Campbell’s Recap: [18:32 – 21:24]
• Pfizer Obesity Pill Deal: [21:24 – 22:47]

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Episode Tone

Engaged, incisive, and conversational. Ann Berry mixes sharp financial analysis with wry humor—never shying from complicated details (or a good pun: “Let’s switch gears, pun intended…” at [11:02]). The episode balances actionable market insights with relatable discussion, making dense topics lively and accessible.

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Use this summary to catch up on today’s most interesting market stories and the strategic moves of big U.S. companies—all in Ann Berry’s trademark style.

Transcript

[A]

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AutoZone's earnings are muffled by tariffs and a soft housing market takes a toll on the Toll Brothers forecast. We roll through their earnings, the pasta sauce spicing up Campbell's bland earnings. We sample the latest in food and chips, China and the naughty T word. We break down the latest on the government's revenue sharing scheme for Tuesday, December 9th. It's free markets daily and I'm.

Foreign.

Details to come. But first, Nvidia's got it. So has amd, and soon Intel, Broadcom and quote, other great American companies will carry one too. Well, that's an export tax paid to the US Government for sales to select clients in China. We're going to come back to semantics in a moment, so stick with me on this. But first, some context. Back in August, both Nvidia and its rival Advanced Micro Devices AMD agreed to share 15% of revenue from chip sales to China with the US government, a partial workaround for export controls on AI chips that have been put in place owing to American national security concerns. But demand for these exports turned out to be limited, with China warning, for example, against using the H20AI chip that Nvidia had specifically designed for exports to that country. Now, to stimulate some motion, President Trump said yesterday that Nvidia will be allowed to ship its H2 100 chips, an upgrade from the H20, to, quote, approve customers in China on the condition that the U.S. gets an increased cut of that revenue of 25%. Now, in a post on Truth Social, the president wrote that, quote, the Department of Commerce is finalizing the details and the same approach will apply to amd, intel and other great or capsule American companies. He did go out of his way to point out that the permitted exports do not include the most advanced Blackwell and Rubin Nvidia chips, saying, quote, my administration will always put America first. But whether China actually wants the expanded chip options is really still an open question. Today the Financial Times reported that China would likely limit access to the H200, citing unidentified sources. Nvidia CEO Jensen Huang has said that the AI semiconductor products of the Chinese tech giant Huawei are, quote, probably comparable to the H200 chip today anyway, and they're quickly improving. Now, Chinese startups as well as stalwarts like Alibaba market cap over $370 billion and Baidu market cap 43 billion are also racing to bring competitive products to the local Chinese market. So there's a lot going on here and a lot that's going to keep developing. But there's also one nugget in amongst all of this that I've personally found fascinating. Because when these, quote, revenue sharing agreements between the US Government and chip makers were announced earlier this year, of course I raced to see which other US products have export taxes on them. Well, as it turns out, technically none. And there's a good reason that the words revenue sharing are used instead of export taxes. Article 1, Section 9, Clause 5 of the US Constitution prohibits Congress from laying taxes and duties on articles exported for national security or policy reasons. The US can put in place export controls limiting the actual physical flows, but the T word is heavily loaded now instead of pushing back or pursuing litigation as the likes of Costco have done with respect to Trump's taxes on imports. Interestingly, Nvidia and its chip peers are, at least for now, playing ball on the export front by accepting these so called revenue sharing terms rather than calling them out as export taxes. Never a dull moment in the trade wars and that endlessly lively intersection of the markets and politics that we love to cover here on Brew Markets. While Nvidia stock nudged down today AMD pretty flat, looks as though the market's still figuring out whether China will in fact lean in to buy. We're going to keep on watching. Coming up, shares in autozone are down. What the growth plan disclosed on today's earnings call tells us about the state of the auto parts sector. It's more interesting than it sounds. And Pfizer, CVS and and Challenge Campbells all moving. Today we trace in which direction. This episode is brought to you by State Farm. Listening to this podcast. Smart move Being financially savvy Smart move. Another smart move having State Farm help you create a competitive price when you choose to bundle home and auto bundling. Just another way to save with a personal price plan like a good neighbor, State Farm is there. Prices are based on rating plans that vary by state customers. Coverage options are selected by the customer availability, amount of discounts and savings and eligibility vary by state. Well, quarterly earnings reports continue to seep on in. They're not rolling in right now so much sort of dribbling on in and sending stocks moving. So we're still keeping on top of it. And today we are looking at two companies that saw their shares Fall, that's Toll Brothers, the luxury homemaker, and AutoZone, the ubiquitous auto parts company. Now these aren't the most glamorous names, but they are in fact bigger names than you might think. So we're going to take a quick peek to see what's going on with them. So, John, kick us off. What's going on with autozone?

[B]

That's right. We're going to start by getting into the zone, the earnings zone. AutoZone ticker AZO on the New York Stock Exchange with a market cap of $58 billion. Yeah, shares were down as much as 8% today with a Barron's headline pointing out that it was today's worst performer on the S&P 500. And to the earnings, the revenue of $4.6 billion was up 8.2% year over year, but fell short of estimates. Earnings of $31.04 a share also missed estimates. And operating profit of $784 million was down year over year.

[A]

So interesting, isn't it, that having revenue up 8% year over year for a lot of companies that actually that would be a real win and you'd be taking a victory lap. And also the, that magic metric in retail that we often talk about is same store sales. That's really for the same four walls that have been open for a while. Truly like, for like growth was pretty good here as well for autozone. Six straight quarter growth in same store sales up five and a half percent across both domestic and international strong sales. You know, you sort of ask yourself, well what's the market's problem?

[B]

Right.

[A]

But it really is the fact that this was the sixth straight earnings miss for autozone. So when I look at that symmetry, it's telling us that they've figured out what to do on the top line, but they're not translating it into gains in profit margin and they are having to invest in growth here. Which means that some of the hit to margin you expect to come back over time, but the market's perhaps not as confident in the ability to regroup, to recoup it. The other thing here, which we've got to talk about, tariffs, this industry really is feeling the tariff impact. Yes.

[B]

And this company and all the others have been saying over the last several months that they have been increasing prices because of tariffs. They've been passing that cost along to the consumer.

[A]

This is one where we took a step back, right, John, and we were looking at this and going this one to me feels like an undercovered story because we think about the number of auto owners in the United States is, is massive. Right. This is a large installed base of cars that is the addressable market for AutoZone and competitors like O'Reilly Automotive and Advanced Auto Parts. Going to come back to those in a moment. But just to give you the sheer sense of the size of this business, AutoZone already has 6,666 stores in the United States. It opened 39 new ones in the US in the last quarter. So it's got a pretty robust pace of opening up new doors. And it's also international. It's got a total international store count of over 7700, which is pretty meaningful. So here we've got a company that doesn't seem to get as much coverage as some of the other big retail players that we talk about.

[B]

That's right. And they're expanding. That's part of the whole plan. Phil Danielle, president and CEO, said we plan to aggressively open stores over the remainder of the fiscal year as we continue to focus on getting market share.

[A]

And I think that really is the key to it just to go back to the top again. We saw shares down as much as 8% today. Yes. Because of that earnings miss. Although you've got to ask, when you miss earnings expectations for six straight quarters, is it the company's outlook that's squirrely or is it just the analyst community not getting their projections quite right? So we can put that on pause for a moment. The key to this is the CEO saying our focus on gaining market share, which does explain some of the performance of some of the big competitors. So O'Reilly Automotive market cap $80 billion, six and a half thousand locations in North America. Advanced Auto Parts, also publicly traded. It's going through a restructuring. It's about two and a half years in now to a turnaround market cap much smaller, $3 billion, but a lot of locations again, 4,300. Both O'Reilly and Advanced Auto Parts saw their shares down today. O'Reilly by 4%, Advanced by 7%. Again, Autozone Zone down by 8%. And yes, it's the tariffs. But again, when you got the big player saying we're going to focus on gaining market share, that's not great news for the industry. That sort of saying there's a fixed amount of pie and we're just going to open more stores to make sure that our share of that piece accretes to us more aggressive.

[B]

And we talked about this and I think it's a lot of car owners want to buy their auto parts in person. That's you know, I looked through the earnings report. There was never a mention of we're going to go direct to consumer or we're opening up our E commerce, something like that. They're just saying more stores, more locations, more areas down the block.

[A]

That DIY element is really important and you do sort of see it. Let's take Home Depot for example. When it comes to deal DIY in your homes, they have a robust E commerce business. They've also got a professional line where they're trying to build out their B2B. But when you talk to executives at Home Depot, they do talk a lot about the experience. Now we've talked a lot on the show about experiences like going to Dick's Sporting Goods and using the batting cages or using the climbing walls. This is a different kind of experience which is really seeking out expertise and really feeling that you've got someone in the form of the store associate human being where you can go to them and say of the abundance of choice with the SKUs available here, which one do I go with? What's your expert opinion? I feel like this, I could go order, you know, screwdrivers and hammers online and I don't, I go to my local Ace Hardware store because I want someone to say no, this is the right, this is the right one for you.

[B]

Sure. Exactly. And I've had that experience going to AutoZone in the past.

[A]

There you go. I mean I can totally see you, by the way, producer John in autozone browsing around chatting up one of the store associates trying to get their take on something. Well, look, AutoZone stock is up 8% year to date. That is despite the down, the downdraft that we saw in the stock price today. Up 205% over the past five years. So again, not been a great 2025 in terms of the actual earnings results, but the stock still holding up pretty well. Let's switch gears, pun intended, and talk about McMansions. Yes, that's what Toll Brothers and McMansions which by the way, when I first moved to America people kept referring to these McMansion things and I had absolutely no idea what they were talking about. But I feel as though you sort of grew up seeing them pop up all over the place.

[B]

Oh absolutely. Grew up Outside of Washington D.C. in Virginia, Fairfax county, which is now where all the data centers are.

[A]

Interesting.

[B]

And at the time there was money coming in, just McMansions popping up like mushrooms overnight.

[A]

That's what happens when you have land, you know, you've got lands and developers. And I just didn't see that growing up at all. I just felt like, you know, London just had this installed base of ancient homes and you just hope the plumbing was working. That's sort of my experience.

[B]

This was kick out the cows and put in a big house ticker to L on the New York Stock Exchange for Toll Brothers market cap of $13 billion and year to date, the shares are up 8%. Over the last five years, shares are up 200%. But today the stock was down 4% before the training started and then inched back up throughout the day, but finished down about 2%.

[A]

Didn't quite decide what it wanted to do, but the company reported something very interesting. I just want to sort of set the stage stage a little bit. There's been a lot of debate around the state of the housing market, right? Is it a buyer's market, is it a seller's market? Is there demand? Despite the fact that interest rates and as a result mortgage interest rates have been so high, despite the fact that consumers have been squeezed, the disposable income and as the savings rate doesn't seem to have picked up, is there nevertheless demand for purchasing a home? Have people saved up their deposits and are they able to do it? And this is what really jumped out at me in this Toll Brothers earnings. They were pretty explicit that the market has been soft. Yes, they explicitly said, and I'm just going to find the quotation here. The Toll Brothers chief financial officer said given soft demand, this is a quotation across many markets. We remain focused on running our business in a disciplined manner. So they want to execute, but they're saying that the external stimulus isn't really there. Now the company reported home sales revenue of 3, $3.4 billion. That's off of 3, 400 units. So pretty simple arithmetic here. On average these new homes are being sold for just under a million dollars each. And I want to talk about that because Toll Brothers does, does position itself as luxury. But it does put into perspective some of these statistics we've been hearing about. The average age of the first time home home buyer is now up at 40 years old. I mean this is a big ticket for, for, for someone for first time home, right?

[B]

Exactly. And so they're saying there is some softness, but they're also pointing out that they think they're in a unique position in the luxury business. Douglas Yearly, the chairman and CEO said on the call today our fourth quarter and full year results demonstrate that our luxury business is differentiated as we serve a more affluent customer. Who is less impacted by the affordability pressures. And so there's that K shaped economy where Toll Brothers CEO is saying, don't worry too much about us. There's a, there's a soft forecast, but we're still selling to high income folks.

[A]

Yeah, some confidence that there's still a base of resilience there. One thing that was also interesting is there was some, some context for the earnings miss which relates to M and A activity or the lack thereof or the lack of closing on it. Back in September, Toll Brothers had announced it was planning to completely exit the multifamily business. So to focus on building single family homes. And as a result, Toll Brothers announced it was selling a chunk of its multifamily portfolio to the real estate company Kennedy Wilson for $347 million, which included apartments and even student housing. That sale actually had to be delayed until next year. So as a result, the cash coming in didn't do so on time. But the idea is the company wants to use the proceeds from these sales to fund again building more single home property. So Dolbro Toll Brothers picking its spot not only in the luxury end of the market, but also making it very clear that they want to be in the single home business.

[B]

So because they were also managing those apartments and those complexes. And so it's just a whole big part of the, of the company that they're getting rid of so they can focus on having money to build these single family.

[A]

Very different skill set to actually being the service provider and one that's fraught with litigation and complexity. So the idea that Toll Brothers wants to stick to its knitting makes a ton of sense. This one isn't necessarily a bellwether for real estate, but it's just point that there are signs of confidence that the market is going to come back to a slightly more robust, higher velocity set of circumstances. Summer data from the national association of Realtors showed that sales of homes priced above a million dollars were up 7% over the previous year compared to a measly under 1% increase across the board. And this reminded me of the conversation I had with the CEO of Caldwell Banker Realty a couple of weeks ago. Caldwell again focused a little bit more on that luxury market. And she had said, no, we're actually seeing a decent amount of activity and we're just getting more optimistic as the, as the horizon expands to include potential rate cuts, including which I'm going to come back to the rate decision we're expecting this week from the Fed. Well, we're going to Keep on watching. This one toll did see say that it sees between 10,300 and 10,700 homes being delivered next year coming in below the average analyst estimate. Again, a little bit of softness but overall they're saying we think it could get better. As as again, this interest rate activity becomes clearer. We're going to take a quick break and when we come back, Pfizer is going international in its quest for a weight loss pill. And now a word from our sponsor, Vanguard Financial Advisors. Listen up. Capturing value and fixed income is not easy. Bond markets are massive, murky. And let's be real, lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. Vanguard.

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[B]

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[A]

4Pm on the east Coast. There it is, the bell indicating the market's closing. Wrapping up for the day. We don't have a ticker tape, but we'll throw it over to our human ticker, our producer John that's right, The.

[B]

S&P 500 finished down a tenth of a percent, the NASDAQ finished up a tenth of a percent and the Dow was down 410 of a percent on the day.

[A]

So pretty flattish overall in the markets. Of course we are eagerly anticipating what happens with the Fed. A meeting starting tomorrow. Fed rate decision due out on Wednesday. But despite the flattishness today we saw a couple of folks make real moves, starting with CVS jumped 3% today on the back of its analyst investor day, which was filled with pretty good news for shareholders. Revenue guidance for the whole of CVS for the year was boosted by $3 billion to hit at least 4,400 billion in sales for 2025 earnings per share, guided to mid teens annual growth through 2028. I've got to tell you, John, I have up in front of me at the moment, I've got it on my computer. The Investor Day presentation that CVS issued, I got to tell you, it's incredibly, incredibly dense. But there are a couple of interesting nuggets in there. They talked about integrating Oak Street. That was a big acquisition that they'd done. They talked about leaning into Medicare because they just see the outlook, but what a high proportion of Americans ultimately will be dependent upon Medicare. And they talked about faster in their pharmacy services. So this is one very much a play to do with diversification. Lots of different business lines and you can tell it's a really long presentation. I had to really sort of print it out, get a strong cup of coffee and wade my way through it for everybody.

[B]

Did they keep the presentation behind Lucite and you had to ring a bell to be able to read it?

[A]

Yeah, like every other experience we have in cvs. No, this one was easily accessible. It was downloadable. The Lucite things are driving me bananas. It's so painful. They need to do something about that. Yeah.

[B]

All right. And then over to Campbell's, which recently was hit by the release of a recording of a now former IT executive saying that the company makes, quote, highly processed food for poor people. Well, Campbell saw its stock drop today over three and a half percent on the back of weak earnings.

[A]

I dug into this one. I printed out the earnings report and I was just searching for some glimmers of hope. I got to tell you, this one was pretty replete with bad news. Net sales are down 3% overall, if you looked at the different categories they compete in, meals and beverages. Saw weakness across the major brands. Snacks, all those delicious household names. Schneider's of Hanover, Pretzels, Goldfish crackers, all pretty much down, too. And then adjusted ebit, which is a measure of profit, was down a pretty hefty 11%, hitting just over $380 million for the quarter. So it was pretty rough news, except there was one sort of bright spot.

[B]

That's right. The one limited bright spot was growth in Rao's, the pasta sauce brand. Campbell's doubling down there with an agreement to buy 49 La Regina, which actually produces Rao's.

[A]

It's so funny. So John has written out Rao's phonetically and the reason he's done this is when we talked about this brand in the past, I kept calling it Raoz. And Dan Bowser, one of our producer who's a proudly Italian, was like, anne, you gotta stop saying that. It's Rao's. So thank you for the phonetic spelling it out properly for both of us. For both of you. But Campbell's, which already owned the brand, Rao's vertically integrating the supply chain here by buying its 49% stake in its producer. Very interesting move. I thought it is very difficult in food right now. We're seeing a lot of consolidation. We've talked a lot about that on this show. We're seeing consolidating to break up as we see the food companies really trying to split themselves into places where they have either a real superpower, a real competitive edge, or splitting out the lower growth categories and brands from the higher growth categories and brands. So Campbell's is one that hasn't actually made a major move yet. So really watching this one to see if it's forced to do something strategic, including some acquisitions or divestitures. And finally, we're going to touch on Pfizer, which clearly just really, really, really wants oral treatments for obesity. Now, we remember that the pharmaceutical giant market cap, $145 billion, agreed to pony up 10 billion bucks for the nascent obesity treatment biotech company Metcera last month after the most incredible bidding war in against Novo Nordisk. That is how badly they want to go and diversify away from injections to actually having oral treatments.

[B]

Well, today Pfizer said it has struck up to $2.1 billion licensing deal with China's Yao Pharma to develop and commercialize its obesity pill with an upfront payment of $150 million, followed by up to nearly $2 billion in milestone payments, plus tiered royalties on sales if that drug is approved.

[A]

Now, Yao Pharma's drug targets the Same gut hormone GLP1, as Pfizer's arch rival, Novo's blockbuster weight loss injection, Wegovy. But the pill is still in really early stage development. It could literally take years to reach patients, if at all. So Pfizer stock ticked down slightly on the news. Investors really must be wondering at this moment how much more Pfizer is going to spend going after this and when the return is actually going to come. Really interesting space. The GLP one's constantly moving. Well, that's it, folks. We are actually putting on some coffee. There are some more earnings to come. We're getting ready for the next couple of Fed days that's it. Meanwhile, for today, it's Brew Markets Daily.

[B]

Brew Markets Daily is hosted by Anne Barry and produced by Jon Crateau, Tarkip Delatif and Emily Milian. Technical direction by Lonnie Fiskis. Jim Orzo is our audio engineer and the president of Morning Brew, Inc. Is Devin Emery. We'd love to hear from you. If you have any feedback, a company you'd like to hear us cover, send an email or Voice memo to brewmarketshoworning.

[A]

Brew.Com Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily. We'll see you back here tomorrow, same time, same place.

[B]

And Doug, here we have the Limu Emu in its natural habitat, helping people customize their car insurance and save hundreds with Liberty Mutual. Fascinating. It's accompanied by his natural ally, Doug.

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Uh, Limu is that guy with the binoculars watching us?

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[A]

Excludes Massachusetts.