Brew Markets — Episode Summary

Podcast: Brew Markets (Morning Brew)
Host: Ann Berry
Episode: Polymarket Joins NYSE’s Family & Why Beer Stocks Aren’t Shining
Date: October 7, 2025

Episode Overview

This episode tackles two timely market stories: the New York Stock Exchange’s (NYSE) $2 billion investment in Polymarket and what it signals for the mainstreaming of prediction markets, and the ongoing struggles of beer stocks, particularly Constellation Brands, amidst shifting demographics and consumer trends. The show also answers a listener question about how warrants work, using OpenAI and AMD’s recent deal as a real-world example, and wraps up with a quick market rundown and a nod to brewing robotics M&A.

Key Discussion Points & Insights

1. NYSE Invests in Polymarket: Prediction Markets Go Mainstream

[01:00-04:12]

• Background: NYSE’s parent company, Intercontinental Exchange (ICE), announced a $2 billion strategic investment in Polymarket, the crypto-based event prediction market recently cleared of DOJ investigations and newly licensed for US operation.
• Why It Matters:
  • Marks a legitimizing step for prediction markets, bringing them closer to the financial mainstream.
  • ICE will distribute Polymarket’s event-driven data globally, integrating it with its existing analytics across exchanges, mortgage tech, and data services.
  • Polymarket’s new valuation hits $8 billion as it rejoins the US market.
  • ICE shares responded positively, up about 1.5% on the news.
• Speaker Highlight:
  • Ann Berry describes ICE as “a global distributor of polymarket's event driven data and sentiment metrics, adding to its already large treasure trove of analytics.” (03:40)
  • “Prediction markets as a result [are] seeming to go ever more mainstream.” (03:55)

2. Beer Industry Woes: Constellation Brands & Sector Pain

[05:20-11:01]

• Constellation Brands Results:
  • Ticker: STZ, Market Cap: ~$25B.
  • Q2 earnings: $3.63/share (beat by $0.05), down 16% YoY.
  • Sales: -15% to $2.5B; beer net sales down 7%.
  • The stock is down 40% YoY, reflecting broader sector weakness.
  • Emily quips that after reading the report, “it doesn’t seem like shareholders...are going to be cracking open a cold one.” (04:27)
• Broader Industry:
  • Anheuser Busch InBev (BUD): Sales volumes -2% (also fell in 2024, 2023); share price -10% YoY.
  • Molson Coors (TAP): Beer sales -2% Q2, stock -16% YoY.
  • Headwinds: Demographic shifts, rise of mocktails and non-alcoholic beers (e.g., Athletic Brewing), possible substitution from cannabis, and impact of weight-loss drugs (GLP-1 agonists).
• Demographic & Cultural Trends:
  • Gen Z is drinking less; Constellation is innovating with products like Corona Sunbrew Citrus Cerveza, inspired by youth mixing OJ with Corona at spring break—now their “number 1 SKU so far this year.” (07:35)
  • CEO Bill Newlands downplays GLP-1 impact (“There just isn't a lot of evidence that GLP is having much impact whatsoever...I think cannabis could be, as you go forward...consumers make choices as to where they spend their discretionary funds.”) (08:13)
  • Over 50% of Constellation’s consumer base is Hispanic; policy changes impacting social gatherings are seen as drivers for sales declines.
• Market Analysis Moment:
  • Ann reflects: “It’s an opportunity to...not just see the headlines...but actually [dig] into the earnings calls...here we are touching on so many questions around the consumer by demographic, by preferences...” (09:33)

3. Explainer Segment: What are Warrants? (OpenAI & AMD Deal)

[12:02-16:40]

• Listener Question: Jerome in California asks about warrants in the OpenAI-AMD deal.
• Ann’s Explanation:
  • A warrant gives the holder the right, not the obligation, to buy a company’s stock at a pre-set price (strike), before an expiration date.
  • Useful in riskier situations to incentivize investment; less common for established companies like AMD.
  • In the OpenAI-AMD deal, OpenAI can buy up to 160M AMD shares at $0.01; AMD trades at ~$200/share. Maximum OpenAI outlay: $1.6M.
  • “This deal is even juicier because it’s structured with something called cashless exercise...OpenAI doesn’t actually have to pay out that $0.01 in cash...” (15:07)
  • Warrants vest over five years based on AMD hitting price/technical milestones; deal ends early if supply relationship falters.
  • “This is a particularly unusual deal...a rich deal, but it’s one that AMD is banking on to make sure it’s up there in the same sentences as Nvidia...” (16:33)

4. Quick Market Wrap & Noteworthy Moves

[16:45-19:11]

• Major indices:
  • Dow: -0.2%
  • S&P 500: -0.4%
  • Nasdaq: -0.7%
• Commodity surge:
  • Gold tops $4,000/oz, up >50% YTD; Ray Dalio recommends 15% gold allocation.
• Supply chain news:
  • Ford down 6% after WSJ report on NY aluminum plant fire impacting F150 supply.
• Tech:
  • Oracle rebounds after a 7% drop; cloud/AI margins lagging due to Nvidia chip rental.
• Memorable quote:
  • John: “Gold futures topped $4,000 per ounce for the first time today, up over 50% already this year. At a conference this morning, hedge fund founder Ray Dalio said he believes investors should allocate as much as 15% of their portfolios to the commodity.” (16:55)

5. Closing Thought: Robotics as the Next AI Frontier

[18:00-19:11]

• Nvidia CEO Jensen Huang: Robotics is the “next AI frontier.”
• Qualcomm acquires Arduino (terms undisclosed), “gives Qualcomm direct access to the tinkerers, hobbyists and companies at the lowest levels of the robotics industry.” (18:30, quoting CNBC)
• Ann's insight: Lack of disclosed deal terms often signals street skepticism.
• Qualcomm stock fell 2% on announcement.

Notable Quotes & Moments

• On Polymarket Investment:
  • Ann Berry: “Prediction markets as a result [are] seeming to go ever more mainstream.” (03:55)
• On Demographics & Product Innovation:
  • John Coteau Tarkab Delatif: “Young people were mixing OJ and Corona...Corona, Sunbrew, Citrus Cerveza...became the company’s number 1 SKU so far this year.” (07:35)
• On Cannabinoids vs. Beer:
  • Bill Newlands (CEO, Constellation): “...consumers are constrained about their spending patterns, they make choices as to where they spend their discretionary funds.” (08:20)
• On Warrants (Ann Berry):
  • “The beauty of this deal for OpenAI is it set up to get them up to a 10% equity stake in AMD without shelling out a ton of cash for it.” (15:40)
  • “This is a particularly unusual deal...it’s one that AMD is banking on to make sure it’s up there in the same sentences as Nvidia...” (16:33)
• On the Fun of Market Deep-Dives:
  • Ann Berry: “...this is really why looking at the markets for us is so much fun.” (09:33)

Timestamps of Key Segments

• Polymarket/NYSE Investment News: 01:00–04:12
• Beer Industry Earnings & Analysis: 05:20–11:01
• Warrants 101 / OpenAI-AMD Deal: 12:02–16:40
• Market Recap: 16:45–18:00
• Robotics & Qualcomm--Arduino Acquisition: 18:00–19:11

This episode delivers both a big-picture look at the financial world embracing the prediction markets and a detailed exploration of the pain points in legacy industries like beer, all in Brew Market’s signature lively, data-driven analysis with real-world relevance for investors and market-watchers.