Good morning! Pharma execs are sweating bullets this week as Trump’s latest drug pricing proposal threatens to drain a staggering $1 trillion from their pockets.

Trump takes on Big Pharma

The pharmaceutical world is reeling. What started as a trial balloon out of the White House—an unassuming budget lever to offset tax cuts—has, within days, detonated into a full-blown political landmine for Big Pharma.

The proposal? Tie Medicaid drug prices to what foreign governments pay. It’s a deceptively simple idea. In practice, though, it’s a direct assault on the pricing power that U.S. drugmakers have spent decades defending tooth and claw. According to the industry’s top trade group, PhRMA, this single policy could gut pharmaceutical revenues by as much as $1 trillion over the next decade.

Welp, it doesn’t seem like Pharma saw this coming—not like this. Sure, Trump has long rattled his saber over high drug prices. But the industry believed the bluster was political theater, not an economic guillotine. This time, they misread the room. And now, the titans of the drug world—CEOs, lobbyists, consultants—are flooding Washington in damage-control mode. According to insiders, some of the most powerful execs in the sector are scrambling to get face time with lawmakers. Some didn’t even wait for their chauffeurs—just straight to Capitol Hill.

Make no mistake: this isn’t just another policy skirmish. It’s a power struggle. And it could define the future of how drugs are priced, regulated, and even developed in the U.S.

PhRMA, convened an emergency call with board members this past Sunday. That tells you everything you need to know. The word from their spokesperson, Alex Schriver, was blunt: “Government price setting in any form is bad for American patients.” That line may sound familiar—boilerplate, even—but this time, the stakes feel different. Because it’s not just the rhetoric that’s changed. It’s the math.

Trump, true to form, didn’t bother softening the blow. The plan zeroes in on Medicaid, the very program designed for society’s most vulnerable—and, as it happens, one of the few levers the government can pull to exert real pricing pressure. The catch? Any change to Medicaid’s pricing formula would trigger downstream chaos, particularly because those prices are tied to a parallel hospital discount system. What sounds like fiscal prudence on paper could, in practice, scramble supply chains and destabilize pricing structures across the board.

Then there’s BIO, the biotech lobby. They’re warning—rightly—that smaller, innovative firms could be collateral damage. Unlike the Pfizers and Mercks of the world, these companies live or die by single product pipelines. Disrupt their margins, and you don't just shrink profits—you snuff out innovation.

Behind closed doors, key Republicans—remain skeptical. But pressure is mounting. Republican leadership needs a “pay-for” to justify tax cuts. And the optics of cracking down on drug prices? Politically irresistible.

Here’s the uncomfortable truth for BIO and PhRMA: the pharmaceutical industry, for all its lobbying muscle and campaign contributions, now finds itself playing defense against a president who’s shown time and again that loyalty is transactional and disruption is personal.

And maybe that’s the story. Trump’s war on drug prices isn’t a pivot—it’s the continuation of a doctrine.

And for big pharma, the question is no longer “if” the ground is shifting—it’s how fast it’s falling out from under them.

AMD Q1 Earnings

AMD managed to surpass Wall Street’s expectations

Initially, AMD’s stock jumped around 4% in after-hours trading, sparking a flash of optimism. But just as quickly, those gains evaporated, turning into a modest decline after CEO Lisa Su stepped into the ring, candidly acknowledging the shadow cast by the latest U.S. export controls on advanced AI chips. Yet, this turbulence didn't seem to shake her composure. It rarely does.

Let's dig into the numbers first:

• Earnings per share stood at 96 cents adjusted

• Revenue climbed to an impressive $7.44 billion, comfortably beating the expected $7.13 billion.

For the current quarter, AMD's guidance is notably robust—projecting about $7.4 billion in revenue with a solid gross margin of 43%.

This comfortably overshadows Wall Street's consensus of $7.25 billion. Still, these upbeat figures carry an asterisk, as Su openly admitted: Export restrictions will likely carve out about $700 million from their anticipated revenue, with cumulative losses projected around $1.5 billion through the fiscal year.

Zooming out, net income surged remarkably to $709 million or 44 cents per diluted share, compared to a mere $123 million, or 7 cents per share, from the same quarter last year. Revenues are up a striking 36% year-over-year, a testament to AMD’s steady, albeit sometimes underestimated, march forward.

Now, it's important not to forget AMD’s position in the bigger semiconductor battleground. Trailing Intel as the second-largest server CPU provider, AMD continues to chip away aggressively with its Epyc processors. And let's not overlook their fierce competition with Nvidia in GPUs—the engines powering the generative AI revolution. AMD’s AI GPU sales alone hit a remarkable $5 billion in fiscal 2024, underpinning a massive 57% spike in data center revenue, now at $3.7 billion.

Indeed, AI continues to be the buzzword in Lisa Su's lexicon. She proudly pointed to major AI model developers like OpenAI and DeepSeek leveraging AMD’s chips for intensive training and inference processes—applications at the heart of the modern AI frenzy.

Meanwhile, AMD's Client and Gaming segment delivered mixed signals. Strong laptop and PC sales, driven by the successful Zen 5 chips, soared an astonishing 68% year-over-year, reflecting robust consumer appetite. Conversely, gaming revenues, impacted by softer console chip sales, dropped 30%. Embedded segment sales—mostly from the 2022 Xilinx acquisition—experienced a modest 3% decline, clocking in at $823 million.

Headline Roundup

• Amazon’s Zoox is set to scale up US expansion of robotaxis

• DoorDash set to buy Deliveroo for 3.9 Billion

• Open AI buys Windsurf for $3 Billion

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DISCLAIMER: None of this is financial advice. This newsletter should be used for discussion, education, and illustrative purposes only and should not be construed as professional financial advice, solicitation, or recommendation