The Rundown - Apple Cuts About 100 Services Jobs, Abercrombie Shares Plunge After Warning from CEO

Episode Date: August 28, 2024

Stock market update for August 28, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Wednesday, August 28th. In today's episode, we get you ready for Nvidia's earnings tonight. It might be the most anticipated earnings report of the year. We also tell you about job cuts happening at Apple and Instagram's new feature with Spotify. Then stick around to the end of the show to find out how much money podcasters are getting paid these days. All right, let's go. Well, stocks were pretty flat on Tuesday, both the S&P and NASDAQ did finish in the green,

but we're up just slightly. And I think at this point investors are just waiting for Nvidia to report earnings before making any major moves, whether up or down. Nvidia is the most important stock in the world right now, and it seems like every quarter of the fate of the stock market and our portfolios depends on Nvidia outperforming the sky-high expectations. And to be fair, every quarter for the last couple of years, they've exceeded expectations. But I feel like the vibes going into this earnings report is a bit different.

All the big tech companies that reported earnings earlier this month gave investors some pause, particularly on the AI spending. Companies are spending billions of dollars in AI without seeing anything in return, at least right now. So if these companies decide to cut back on AI spending, that would mean cutting back on buying Nvidia chips, which would impact Nvidia stock and could impact the overall stock market. Because some people think the only thing that's pushing the stock market higher these days

is the AI hype or bubble, whatever. you want to call it. So if there's any signs of slowdown in AI spending, that could definitely spook investors. So not only are investors going to be paying attention to how much money Nvidia made last quarter, but they're going to want to know from the CEO how much the company is expected to make in this upcoming quarter and for the rest of the year. If Nvidia crushes earnings and increases their guidance, the good times will continue. But if if Nvidia falls a bit short, it could be a brutal day in the markets. So yeah, I feel like these earnings along with whatever comments that CEO Jensen Huang says in the earnings call tonight,

it might be more important than any comments that Jerome Powell has made. The wait is almost over. InVedia reports earnings after the bell today. We're going to recap it all on tomorrow's episode of the rundown. Make sure you guys are subscribed to the podcast. Hit that notification bells or you're notified as soon as an episode goes up. Let's run through some headlines. And let's start with Apple.

Apple is cutting about 100 jobs from their services division. According to Bloomberg, the layoffs include some engineering roles, but the biggest cuts seem to be from the Apple Books app, an Apple's bookstore. I mean, I'll be honest with you guys. I don't even know that Apple still had a Books app or a bookstore. According to Bloomberg, Apple Books has become less of a priority for the company. But overall services is becoming more important for Apple.

Services include all the money that Apple makes from its app store, from selling us iCloud storage, AppleCare, you know, things like that. And that money now accounts for over 22% of Apple's revenue. A decade ago, that was about 10%. So even though Apple's hardware sales are slowing down recently, the growth and services is helping buffer some of that. By the way, layoffs are pretty rare at Apple, but this year the company has made at least four rounds of layoffs. The biggest one was when they laid off their entire self-driving team earlier this year. So yeah, Apple's kind of going through a

mini shake-up here. We mentioned on yesterday's episode how their CFO of over a decade is stepping down. And this all comes at a time when Apple's about to show off their latest iPhone. Apple's iPhone event is scheduled for September 9th. And they're going to probably show off a lot of AI stuff there as well. Apple stock still having a pretty great year. It's up more than 20% as a market close yesterday. The company's market cap is close to $3.5 trillion, and the stock is about 3% away from all-time highs. So investors, not too concerned, at least not yet. Let's do some more tech talk. Instagram and Spotify are working together to offer more integration between the two apps. This is according to reporting from TechCrunch. The feature that Instagram is working on

will allow Spotify users to post what they're listening to on Instagram notes straight from the Spotify app. Now, I haven't really seen anyone use the notes feature on Instagram, but maybe with this integration, more people will. The notes section is usually in the messaging tab, and it shows up above all your DMs. A very few people that I know use it. I guess maybe Instagram is hoping that this feature will help it compete against TikTok in music discovery. I don't really know about that, but they're trying some stuff. The feature hasn't been fully released yet, and maybe after some beta testing, they'll realize that no one uses notes and scrap the whole thing. Let's talk about some stocks making moves. today. Semiconductor maker Ambarella shares are up 20% this morning after providing an

upbeat third quarter outlook. Now for anyone that doesn't know Ambarella, don't worry, you're not alone. I had to look them up myself. The company makes chips that help with video and image processing. According to the website, they specialize in AI vision processing for edge applications. A lot of buzzwords. Essentially, they make cameras really smart. But hey, I guess the good news is that we have one chip maker who's secured a win today with solid earnings. So let's hope the slug spreads through Nvidia tonight for the sake of the markets and our portfolios. I have a lot of anxiety right now. Now, a stock not doing so great this morning is Abercrombie. The stock is dropping this morning even though the company beat earnings and provided guidance that was in line with estimates.

But I mean, Abercrombie stock has been one of the best growth stories in recent times. The stock is up more than 230% in the past year. I think investors were hoping for even more growth. So as a result, shares are down more than 10% on this news. Let's wrap the show with a fun fact. NFL brothers turned podcasters, Travis and Jason Kelsey are getting $100 million for their podcast called New Heights from Amazon's Podcasting Network Wondery. You know what? Now I know why Jason Kelsey retired. And don't be surprised if Travis Kelsey retired at the end of this season.

Now, $100 million is pretty crazy, right? But that just seems to be the going rate for podcasters these days. Call Her Daddy recently signed a $150 million deal with Sirius X. which I don't know a single person that has a subscription to that. And Joe Rogan got a $250 million deal from Spotify earlier this year. So podcasters are getting the bag. Next time my parents asked me to get a real job, it's going to send a link to the story. As for the Kelsey Podcast New Heights, it's not going to be exclusive on Wondry.

It's still going to be available on all platforms like Spotify, Apple, YouTube. But Wondry will get the rights to sell ads for the show, and Wondry plus subscribers will get early access to the show and an ad-free version of each episode. You know, I also wonder if there's a clause in this deal that requires a certain famous pop star to come on at least one episode a year. Well, all right, guys, that's the rundown for today. Tomorrow's episode should be a big one again. Invidia earnings come out tonight.

Jensen Huang, if you're listening to this episode, come through for us, man. He obviously already knows what the results are. But the rest of us are going to find out tonight, and we'll let you know tomorrow morning. So make sure you guys tune in tomorrow for that recap. And if you guys are enjoying the show, don't forget to hit us with that five-star rating on Apple and Spotify. and if you're listening on Spotify, don't forget to vote in today's Spotify poll. Again, all that engagement really does help us out. And who knows, maybe soon we'll get a $100 million offer from Amazon one day.

All right, thank you guys so much for listening. Shout out to Connor and Mike for all the help behind the scenes. And we'll see you guys back here tomorrow. This is the rundown, your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests. You should not take any mention of a publicly traded security as recommendation to buy, sell, or hold that security. Run-down guests are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult,

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