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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Fox Corporation has been riding on a ratings high since Donald Trump’s re-election in November. Shares in the conglomerate — now primarily a news and sports media company after Disney bought out its film and television entertainment assets — are up 63 per cent over the past 12 months. That handily tops the gains at Comcast and Warner Bros Discovery, the parent company of rival cable news networks MSNBC and CNN. But a more fragmented and competitive media landscape also means a second Trump administration could be a double-edged sword.

Fox News, the company’s crown jewel, was the most watched cable TV channel in 2024, according to Nielsen ratings. It averaged 2.4mn viewers during the primetime hours of 8pm-11pm, a 30 per cent year-on-year increase. The audience surge has continued post-election, with the channel averaging 2.8mn viewers in June, a 23 per cent jump compared with the same period the year before. By contrast, MSNBC, which averaged 955,000 viewers and CNN, averaging 642,000 viewers, both recorded declines in viewership.

Advertisers have followed. Fox News has attracted 125 new blue-chip advertisers — including Amazon, JPMorgan and Netflix — since the US election. For the March quarter, the company pulled in more than $2bn in advertising revenue, a 65 per cent jump from the same period last year. Analysts at Bernstein reckon the figure could exceed $6.5bn for the full financial year that ended in June, up from $5.4bn the previous year.

Fox’s challenge is to turn a bump into a durable ascent. At a market capitalisation of $19bn, the company now trades at 13.5 times forward earnings — well above its three- and five-year averages. But for the years between Trump’s two presidential terms, the shares largely traded sideways. A flurry of executive orders and divisive policies keep the administration in the news, but Fox can’t rely on the current White House occupant forever.

That means reckoning with two trends. First, traditional sources of information — TV and newspaper — have seen their influences steadily chipped away by independent journalists, podcasters, social media influencers and content creators. So although Fox may dominate cable news, many people — especially younger viewers — are turning to other right-leaning sources, including podcaster Joe Rogan and upstart channels such as Newsmax and One America News Network.

Perhaps the biggest test will be digital. Fox plans to launch a direct-to-consumer subscription streaming service. Details are scant for now. But attempts by traditional media companies and Big Tech to break into video streaming have been mixed — and expensive. Comcast’s Peacock streaming service racked up $20.7bn in operating costs and expenses between 2020 and 2024. Disney’s direct to consumer streaming services took five years to turn a profit. Trump has given Fox a fillip; it will have to do the next bit on its own.

pan.yuk@ft.com

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Violent encounters between police and US residents claim about 2,000 lives a year. Axon Enterprise claims it has a way to reduce the frequency of such tragedies: by selling “neuromuscular incapacitation” devices to law enforcement. Readers might know these by their brand name: tasers. Thanks to their growing use, Axon has become one of the better performing stocks on the US market.

Shares in the Arizona-based group are up more than sevenfold since the start of 2020, vastly outpacing companies such as Meta Platforms and Apple, and giving Axon a market capitalisation of $62bn. Other stocks linked to law and order have also risen since Donald Trump’s election, such as private prison operator Geo Group and surveillance software maker Palantir. Axon now trades at more than 20 times estimated revenue for this year, its top line growing at 30 per cent annually.

That multiple is partly justified by a pivot from hardware to software. Axon also makes police body cameras that deliver video feeds back to the precinct. Some of its subscriptions create automated transcripts of encounters between police and citizens, cutting time spent on paperwork. Non-lethal force and video monitoring, it says, together contribute to more accountable law enforcement.

Software subscriptions are often seen as “sticky” — and therefore attract high valuations from investors — because customers tend to be loath to cancel or switch suppliers, even, in this case, with stretched police budgets and the occasional call to “defund the police”. The company says its total addressable market — an aspirational measurement popular with growth companies — is about $130bn, or more than 40 times its revenue at present.

One challenge will be to secure a place in institutional portfolios, which means overcoming potential queasiness about a product which, after all, inflicts pain. Axon does have some elite credentials: its chief financial officer came from KKR; its revenue and product officers from Amazon. Its board includes Caitlin Kalinowski, a former Meta Platforms executive now building robots and hardware for OpenAI.

Still, there is work to do. In 2022, nine members of Axon’s artificial intelligence ethics board resigned after the company disregarded advice about piloting a “taser-equipped drone” initiative. And the hardware component of the business still remains important, and may be too edgy for some. Consider the “Taser 10” model equipped with a range of 45 feet, and 10 shots that can pierce “dense clothing”.

Axon’s gross margin of about 60 per cent shows there’s substantial profit to be had from providing innovative gadgets to law enforcement agencies. Last week’s US budget bill, which allocated $165bn to the Department of Homeland Security, shows how much there is at stake. For investors who can get comfortable with that — and with the fact that the company ultimately has limited control over how, and on whom, its tools are used in the field — Axon is undoubtedly a stock for the times.

sujeet.indap@ft.com

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

CoreWeave has struck a $9bn deal to acquire its rival Core Scientific, in a transaction set to eliminate $10bn of expensive lease costs for the artificial intelligence data centre operator.

CoreWeave announced on Monday that it was acquiring Core Scientific in an all-stock transaction, capitalising on a rally in its share price to seal a deal that will hand the latter company a stake of less than 10 per cent in the overall business.

The New Jersey-based group said the deal valued its competitor’s shares at about $9bn, significantly higher than a previous takeover attempt last year that Core Scientific then rebuffed as “significantly” undervaluing its shares.

After that aborted takeover, CoreWeave struck billions of dollars of long-dated lease transactions with its Delaware-based rival, under which it rented out Core Scientific’s high-performance data centres in order to power the AI computing needs of its customers.

“Owning Core Scientific’s high-performance data centre infrastructure enables us to significantly enhance operational efficiencies and de-risk our future expansion,” CoreWeave’s chief executive Michael Intrator told analysts and investors on Monday, adding that the deal would help its customers “to unleash the full potential of artificial intelligence”.

Core Scientific’s shares fell as much as 20 per cent on Monday — having rallied last month on a Wall Street Journal report of a potential takeover — while CoreWeave’s shares slipped nearly 5 per cent.

Core Scientific shareholders will receive 0.1235 of newly issued CoreWeave shares if the deal closes as planned in the fourth quarter of 2025. This fixed ratio means Core Scientific shareholders bear the risk of a CoreWeave share-price slide devaluing the transaction.

“The price appears low,” Cantor analysts wrote in a note, adding that the agreed share price for the takeover was only about 10 per cent higher than Core Scientific’s record high in November. “The implied acquisition multiple is too low, we are a bit underwhelmed with the agreed takeout price,” they wrote.

CoreWeave buys cutting-edge graphical processing units from Nvidia — which is also a shareholder and one of its biggest customers — and rents them out to large tech companies to power their AI usage.

While CoreWeave had a rocky reception when it floated its shares in March — scaling back both the size and valuation of its initial public offering — its shares have since rallied nearly 300 per cent. CoreWeave’s market capitalisation is currently about $75bn.

CoreWeave’s underwhelming debut was largely driven by concerns over its substantial debts and financial complexity, driven in part by the long-dated and expensive nature of its lease liabilities with Core Scientific.

The new deal could allay some of those concerns. CoreWeave claimed that the transaction would “eliminate” $10bn of lease costs and estimated that it could achieve $500mn of annual cost savings by 2027.

Both CoreWeave and Core Scientific began as cryptocurrency miners, but have pivoted to focusing on AI as demand for vast computing power and large data centres soars.

While the two companies share similar names and a history in the bitcoin mining space, they have operated as separate businesses until now.

Darin Feinstein, a former nightclub owner and noted cryptocurrency enthusiast, co-founded Core Scientific in 2017 to provide data centre capacity for computer-intensive bitcoin mining companies.

The company filed for Chapter 11 bankruptcy protection in 2022, when a cryptocurrency crash roiled its biggest customers, and Feinstein stepped down as group co-chair in 2023.

Crypto miners run powerful computing sites where they solve complex mathematical puzzles in order to authenticate transactions and produce digital coins. These data centres are in high demand because the powerful graphics processing chips are used in both crypto mining and AI processing, while large computing facilities are expensive to build from scratch.

CoreWeave said Monday’s deal would gave it the “potential to repurpose or divest” Core Scientific’s crypto mining business “over the medium-term horizon”.

Intrator further underscored the pivot away from crypto, telling investors: “We are not looking to expand our footprint into cryptocurrencies.”