As we wind our way through the Iran conflict, markets continue their debt-driven slow melt. The Fab Five have lost $548 billion over the last two weeks and $1.7 trillion so far in 2026. The Telco Top Five have lost $34 billion over the last two weeks but have gained $77 billion year-to-date. It interesting to note how AT&T, Verizon, and T-Mobile are now wthin $32 billion of market cap between each other: T-Mobile’s $90 billion lead at the end of 2024 (even with sizeable buybacks) has shrunk considerably as the executive ranks have changed and competition has intensified.
Two weeks ago, Amazon issued $54 billion in dollar and Euro-denominated bonds which was met with immense ($126 billion) demand. A small part of this debt offering (8%) were 50-year bonds that were priced at a mere 1.3% above Treasury notes.
Amazon’s massive raise piggybacks on oversubscribed Google’s $32 billion raise ($20 billion in dollars, $7.5 billion in British Pounds, and the remainder in Swiss Francs). The US portion was oversubscribed 5:1, a remarkable show of support from institutional investors. The GBP portion featured a “century bond” (100-year term) with a 6.125% fixed coupon. Whether the bond rating agencies treat a 50- or 100-year denominated debt as equity or debt is anyone’s guess.
We included the 2025 performance column in the opening picture so put 2026 declines in context. The Fab Five tend to have a down year every four or five years – the last one was 2022 as the post-COVID world was taking shape. We would not be surprised to see this year flat to down as well as the market scrutinizes the debt and equity structures (and, in MSFT’s case, long-term leases). A pause after $9.4 trillion of accumulated gains from 2023-2025 is healthy for each stock and the group as a whole.
The big news out of the Fab Five was that Amazon is thinking about getting in to the smartphone business again (Reuters article here). There are a lot of things to think about when introducing a new piece of hardware, and Amazon is no stranger of the problems of battery life and power optmization. Our guess is that it would have to have an Android component, but stranger things have happened. With the use of AI coding bots, they could offer to develop the app in a 3rd operating system for (nearly free). This is an interesting development that we will keep our eyes on.
The big news with the Telco Top Five ths week was the New York state approval of the Charter-Cox merger (article here from Broadband Breakfast). We anticipate this will place additional pressure on the California settlement. By Memorial Day (perhaps earlier in May) they should have all approvals.
More in the file below. Hope your bracket is staying intact!
