It turns out you can make Blox Fruits childproof, but it’ll cost you.

Roblox learned that the hard way after shares plunged 18.29% today to their lowest level in 18 months after the gaming platform reported Q1 results after the bell on Thursday:

• Daily active users increased 35% over the quarter, far below the 44% increase analysts were expecting.
• At the same time, the company slashed its bookings guidance (aka, the measure of digital products sold on its platform), warning that it will only see an increase of 8% to 12% this year, down from expectations of a 22% to 26% bump.
• Management warned of “continued short-term friction” from new safety policies.

That last point is the important one. For years, Roblox has faced multiple lawsuits and investigations alleging that the platform has exposed children to predators and disturbing content. Just last month, the company agreed to pay $23 million to settle child safety cases in Alabama and West Virginia.

Part of what makes this challenging is that Roblox, on top of being a gaming site, is also a social platform where people can chat and meet. And because its user base is so young compared to other gaming platforms, it faces more pressure to mitigate the forces of, well, the entire internet.

Back in 2024, shares of Roblox fell after Hindenburg Research unveiled a short position in Roblox, arguing that the company inflated user data, calling the platform a “pedophile hellscape”—a claim Roblox denied vehemently.

Can Roblox reach the next level?

All of this pressure explains why Roblox implemented a strict age-verification policy in January, requiring users to confirm their age via facial recognition technology. The company has also tightened content moderation, disabled the chat function for younger users, and placed explicit limits on adult-child communication. These are all good safety measures, but the problem is that they’re also tanking user engagement on the platform.

“We were surprised, as was management, which did not anticipate the second order effects of rolling out age verification; namely, loss of access to communications reduced engagement within and outside of Roblox, including app store likes, Youtube views, etc,” wrote Bank of America analyst Omar Dessouky in a note today, downgrading the stock to Neutral.

But some analysts were far more optimistic: TD Cowen upgraded the stock from Sell to Hold today, even as it lowered its price target on the stock, arguing that the lowered expectations were more realistic.

Stricter age-verification policies are expected to become more popular as social media behemoths face increasing litigation about user safety. If that happens, the headwinds to engagement will be less of a Roblox-specific problem.

We don’t age-verify here at Brew Markets, because if you’re reading a newsletter about the stock market, you’re probably not playing games like Steal a Brainrot.—LB

🟢 What’s up

• Apple rose 3.28% as “extraordinary” iPhone 17 demand drove a beat on both revenue and earnings.
• Roku gained 6.02% with revenue up 22% year over year, boosted by platform deals and subscription growth.
• Estée Lauder climbed 3.38% after raising its annual profit outlook alongside a plan to cut 3,000 jobs.
• Reddit surged 13.07% on a top- and bottom-line beat, with revenue jumping 69% year over year.
• Twilio jumped 28.83% as strong results and higher guidance reflected surging demand for its AI voice tools.
• Veeva Systems advanced 10% after securing a spot in the S&P 500, set to join the index next week.
• Atlassian rose 29.58% on an earnings beat driven by strong cloud and data center growth, marking a rebound from earlier SaaS pressure.

What’s down

• Spirit Airlines plunged 22.86% as plans to secure a $500 million rescue deal fell apart, pushing the company to shut down.
• Clorox fell 9.67% after cutting its full-year earnings outlook due to acquisition costs and ongoing investments.
• Western Digital slipped 0.63% as solid results and guidance failed to meet elevated expectations amid AI-driven supply pressures.
• Amgen dropped 4.75% as weak forward guidance overshadowed stronger first-quarter profit and revenue.

Wall Street has a new paycheck king: Jane Street, which showered its employees with $9.38 billion in total compensation in 2025, or about $2.68 million per employee.

This record payout is not only double what Jane Street doled out in 2024, but seven times higher than the typical salary at Goldman Sachs. Jane Street was able to do so because this company of 3,500 pulled in $39.6 billion in trading revenue last year, surpassing JPMorgan by 11% with 1/60th the headcount.

Founded in 2000, Jane Street started out in the unglamorous world of trading American depository receipts before expanding to ETFs and other financial assets. Since then, it’s evolved into a major market maker that is ready and willing to trade whatever comes its way. The company is also known for hiring puzzle nerds and having no CEO, functioning more like “an anarchist commune.” In fact, all employees are paid out based on the entire company’s profits, not individual performance, which is common on the rest of Wall Street.

It might sound unusual, but you can’t deny that whatever Jane Street is doing is paying off. With success like this, who needs a CEO?—JD

The Pentagon is assembling an AI dream team as it pushes to modernize the military, lining up partnerships with tech giants SpaceX, OpenAI, Nvidia, Google, Amazon, Microsoft, and Oracle, as well as startup Reflection AI, which focuses on open-weight models.

Today’s deals give the Defense Department broad leeway to deploy cutting-edge AI across operations, including classified uses like identifying targets, and helping “accelerate the transformation toward establishing the United States military as an AI-first fighting force,” according to the press release.

A different playbook

The push comes after a messy fallout with Anthropic, which pushed to restrict the use of its AI from things like mass domestic surveillance and fully autonomous weapons—limits defense officials weren’t willing to accept. The company was ultimately blacklisted after being deemed a supply chain risk.

This time, the rules are looser. Companies like Nvidia have agreed not to impose usage restrictions beyond US law, giving the Defense Department more flexibility in how it deploys advanced AI. By lining up multiple partners, officials are also reducing reliance on any single provider, building redundancy into what’s becoming core military infrastructure.

The odd one out

Among all the major AI players listed above, the odd man out is Reflection. While the company hasn’t released an AI model yet, it already counts Nvidia as an investor and is reportedly in talks to raise a $25 billion valuation.

Meanwhile, Meta Platforms—fresh off a disappointing quarter that sent shares tumbling—is notably absent, despite positioning itself as an AI leader. Every other Mag 7 name that is investing heavily in AI made the list.

As for the market’s reaction, today’s news didn’t move stocks much. But it signals something more important: AI demand is no longer just coming from Big Tech—it’s now backed by government budgets, which tend to be bigger, stickier, and less cyclical, adding a more durable layer of demand beneath the massive spending spree already underway.—SY

• Nostalgic for the trade war already? President Trump said he’s raising the tariff rate on EU auto imports to 25%.
• Hopecore: BlackRock’s Rick Rieder thinks the economy is recession-proof.
• Berkshire Hathaway announces earnings tomorrow without Warren Buffett, but there’s one thing BRK loyalists don’t want changed: its analog ’90s website.
• Paramount subscribers are suing the company over its $110 billion deal with Warner Bros. Discovery.
• Luxury cars are the latest victims of disruption from the Strait of Hormuz.
• Here’s how an industry of addictive “social casinos” is taking over the internet.

Monday: The earnings bonanza continues next week, kicking off with Palantir, Norwegian Cruise Line, Tyson Foods, Duolingo, Pinterest, and Vertex Pharmaceuticals. No economic reports worth mentioning, though you may want to tune into New York Fed President John Williams, who will kick off a week of Fedspeak.

Tuesday: All eyes are on tech, with reports from AMD, Super Micro Computer, and Arista Networks. We’ve also got Microstrategy, PayPal, Shopify, Pfizer, and Ferrari. Next week’s theme is labor market reports, and we’ll get the first of many with the JOLTS survey.

Wednesday: Earnings from Disney, Uber, CVS Health, Kraft Heinz, Marriott International, Snap, DoorDash, and Arm Holdings are sure to grab headlines. The ADP Employment report will keep labor market news rolling in, and we’ll hear from Chicago Fed President Austan Goolsbee.

Thursday: The day begins with McDonald’s, Vistra, Celsius Holdings, and Shell, then ends with Coinbase, CoreWeave, Rocket Lab, and Airbnb. In between, we’ve got weekly initial jobless claims, a look at Q1 US productivity, the March consumer credit report, and both the February (delayed) and March construction spending report. Oh, and we’ll hear from John Williams again.

Friday: A relatively quiet day of reports delivered by TeraWulf, Enbridge, and Wendy’s. But that’s okay, since all eyes will be on the monthly US jobs report for April. Plus, we’ll hear from Chicago Fed President Austan Goolsbee, San Francisco Fed President Mary Daly, and Fed governors Michelle Bowman and Christopher Waller.