Wall Street Lunch: Yahoo’s AOL Heads To Italy In Potential Sale To Bending Spoons

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Italy’s Bending Spoons is close to buying the company that once bought Time Warner. (0:15) Major music labels close in on AI deal. (1:04) Berkshire-Hathaway buys OxyChem. (1:34)

This is an abridged transcript of the podcast:

Our top story so far, “C’è posta per te!” Yahoo’s AOL may be heading to Italy.

Reuters reports that Apollo Global’s (NYSE:APO) Yahoo is in advanced talks to sell the legacy media brand to Italy’s Bending Spoons for about $1.4 billion. Sources caution no final deal has been signed yet, but talks are advanced.

Bending Spoons is known for snapping up struggling digital names and giving them new life. The Milan-based tech firm already has more than 300 million monthly users across its apps, and last month agreed to take video platform Vimeo private for $1.38 billion.

For Bending Spoons, AOL would bring a broad user base and fresh advertising reach. AOL has quietly seen traffic rise 20% year over year among younger users, thanks to new sections like Health, Fitness, True Crime and Science & Tech.

That $1.4 billion price tag would be 0.8% of what AOL paid to buy Time Warner in 2001.

And speaking of Warner, Warner Music (WMG) and Universal Music (OTCPK:UMGNF) are closing in on landmark AI deals.

The Financial Times reports that the labels could reach licensing agreements within weeks.

Startups such as ElevenLabs, Stability AI, Suno, Udio, and Klay Vision have been involved in talks, alongside larger players like Google and Spotify.

At the heart of the negotiations: how labels will license their songs for AI-generated tracks and training large language models. The labels want to get paid the same way they do from streaming services — with micropayments every time a song is used.

Among active stocks, Berkshire Hathaway (BRK.A, BRK.B) is buying Occidental Petroleum’s chemical business for $9.7B in cash. The move adds another non-insurance asset to Warren Buffett’s empire of fully owned companies.

Occidental (OXY) says it will use most of the proceeds — about $6.5B — to pay down debt, with the rest shoring up its balance sheet. The payoff: more than $350M a year in interest savings, plus stronger credit metrics and added financial flexibility.

Tesla (TSLA) delivered 497,100 vehicles in Q3 — a new quarterly record and well above Wall Street’s 448,000 estimate, as buyers rushed to lock in the expiring $7,500 EV tax credit.

Production came in at 447,000 vehicles. Of that, nearly all were Model Y and Model 3, with more than 481,000 of those delivered.

And FICO (FICO) is soaring after it announced a new licensing model that allows mortgage tri-merge resellers to calculate and distribute FICO Scores directly, eliminating reliance on the three nationwide credit bureaus. The program is expected to reduce average per-score fees by up to 50%.

Looking to the economy, there are more teething problems as Wall Street’s focus shifts to private data providers, with the shutdown halting official releases.

As first reported by Seeking Alpha, Challenger, Gray & Christmas’ September job cuts figures were released more than an hour before their scheduled time. Challenger said that was due to a scheduling error.

For the numbers, employers announced 54,064 job cuts in September, down 37% from August. But the year-to-date cuts are the highest since 2020.

On the hiring side, employers plan to add 204,939 jobs so far this year, down 58% from the same period in 2024 and the lowest year to date figure since 2009.

SA Analyst Damir Tokic says labor market numbers are signaling a recession, and this is consistent with other data.

Investors should “brace for recession and the recessionary bear market, as the current rally is clearly unsustainable,” he said.

In other news of note, Caterpillar (CAT) has suddenly become one of Wall Street’s surprise beneficiaries of the AI boom. Bloomberg reports that as soaring electricity demand ripples through the economy, investors are betting on Caterpillar’s lesser-known turbines.

The rally highlights how the AI trade has broadened. It started with chipmakers and cloud providers, then spread to utilities and data-center builders. Now investors are eyeing industrial companies that supply the power and infrastructure needed to keep AI running.

Caterpillar shares jumped 14% in September — their best month since 2023 — and are now up 32% on the year, handily outperforming the Nasdaq 100 (QQQ). The move gathered steam after Oracle (ORCL) forecast stronger cloud growth, fueling speculation that Caterpillar’s turbines will play a bigger role in meeting data-center energy demand.

Analysts say the story isn’t just about power. Oppenheimer’s Kristen Owen notes Caterpillar also sells the mining equipment needed to dig up copper and the machinery used in constructing data centers. Lower interest rates could revive traditional building activity too, giving the company multiple growth drivers.

And Bank of America recently lifted its price target to $517, calling Caterpillar’s power-generation unit its highest-margin business.

And in the Wall Street Research Corner, how about 12 top takeout targets in tech?

Wedbush Securities says deal activity is likely to accelerate as AI spending continues on a tear. And smaller firms will become prime takeover targets.

Wedbush notes that while AI keeps racing ahead with new features and large-language model updates, many startups don’t have the cash to keep up with soaring costs for engineers and computing power. That makes them ripe for acquisition.

Among the potential candidates:

Tenable (TENB), a cybersecurity firm.

Qualys (QLYS), another security software player.

SentinelOne (S), known for AI-driven endpoint protection.

Elastic (ESTC), with its search and analytics platform.

C3.ai (AI), one of the most recognized pure-play AI names.

And TripAdvisor (TRIP), which could have strategic value in an AI-driven consumer environment.