The Rundown - Apple Warns of $900M Tariff Hit, Take-Two Delays GTA 6

Episode Date: May 2, 2025

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Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Friday, May 2nd. In today's episode, we'll tell you why the latest jobs report has the president taking a victory lap and calling for a rate cut. We'll also recap earnings from Apple, Amazon, Reddit, and more. Then stick around to the end of the show to find out why NVIDIA CEO is getting a pay raise and why his salary might not be what you think it is. We got a great show for you today.

Let's go. Markets kicked off May with some solid gains. The S&P 500 was up 0.6% on Thursday, and the NASDAG jumped 1.5% thanks to a rally in big tech. Microsoft and Meta led the charge after posting some strong earnings on Wednesday afternoon. We actually broke down those earnings on yesterday's episode, so go check that out if you missed it.

Now, a fun stat for you guys, the S&P 500 has gone up for eight days in a row. And if it closes in the green again today, that would mark the longest winning streak for the S&P since 2004. Back when people used to have flip phones and MySpace and listen to Nickelback. Yeah, it was a very interesting time. You had to be there. Now, we got some headlines this morning that might help the stock market. China said they're open to restarting trade talks with the U.S. So maybe we are inching closer to the light at the end of this tariff tunnel.

And to add to that good news, we also got a pretty solid April jobs report. The U.S. economy added 177,000 non-farm jobs compared to the 133,000 that was expected. And the unemployment rate held steady at 4.2%. Honestly, a pretty solid report considering all the tariff drama last month, there doesn't seem to be any signs of weakness in the labor market. And of course, President Trump took notice of this report and immediately jumped. on Truth Social to take a victory lap. And he once again called on the Federal Reserve to cut interest rates. So now the ball is in Jerome Powell's court.

We'll have to see what he does next week at the Fed meeting. Right now the market still thinks there's a 95% chance the Fed does not cut interest rates. But we'll see what Jerome Powell has to say. That press conference should be a good one. It's all going down on Wednesday, May 7th at 2 p.m. Eastern. So we're going to be locked into that. Let's run through some headlines. And we're going to start with Apple.

Apple reported earnings last night, and they had a pretty solid quarter. Apple's revenues were up 5% in Q1 to $95.4 billion, and their profits rose 5% as well, hitting $24.8 billion. Both of those numbers beat Wall Street estimates. And pretty much every segment did well. iPhones, Macs, iPads, and services all came in above expectations. So yeah, I'd say that Q1 was pretty solid for Apple, but despite that, there's a lot. Their stock dropped after the earnings came out because Apple is facing some tough challenges moving forward.

Apple continues to lose market share in China to domestic rivals. Sales in China were down 2% in Q1 and that marks the sixth straight quarter of decline in that region for Apple. And then the issue everyone's been talking about is tariffs. Apple makes pretty much all of their gadgets overseas, most of it in China but also in India and Vietnam. CEO Tim Cook said that tariffs will add about $900 million in. costs to Apple just in Q2. And that's assuming no new tariffs pop up or other changes.

He also said it's very difficult to predict the impact of tariffs beyond June because he doesn't know what's going to happen with tariffs. Now Apple is trying to adjust here to this new reality. About half of the iPhones sold in the U.S. are now being sourced from India and most of the MacBooks and iPods sold in the U.S. are coming from Vietnam. Those two countries have a lower tariff rate than China. Now, Tim Cook also hyped up Apple's use of domestically produced chips saying that the company is buying 19 billion chips from the U.S. this year. So yeah, Apple is doing their best to navigate this trade war, but I mean, it's not easy. And then the other challenge that Apple is having is AI.

Because let's be honest, your Apple intelligence has been a disaster. It's pretty much useless, and Apple keeps delaying the rollout of new features. Tim Cook was even asked about this in the earnings call, and he just said that the company needs more time. Meanwhile, you got chat GPT out here doing people's taxes, diagnosing medical conditions, and becoming people's full-time therapist and even companions in some case. We all know that one person. Honestly, I'm not sure what a bigger challenge for Apple is right now,

navigating the trade war or actually making Apple intelligence useful. All right, now let's talk about Amazon. They also reported earnings last night, and similar to Apple, they put up solid Q1 numbers. Amazon's revenues were up 9% to $155 billion. Profits came in at $17 billion. Both of those numbers beat Wall Street estimates. And Amazon's advertising business is cooking right now.

Their revenues grew by 18% hitting nearly $14 billion. But Amazon's cloud business, AWS, was a slight disappointment. It grew by 17%, which isn't bad, but much lower when you compare it to companies like Google and Microsoft. But the big story for Amazon right now is tariffs and how it will impact their e-commerce business. In their earnings report, the company explicitly called out tariffs and trade policies as a material risk to future earnings. You know, Trump's 145% tariff on Chinese imports might force Amazon and its third-party sellers to hike prices. Now, CEO Andy Jassy tried to calm some nervousness, he said that prices haven't gone up yet and demand is still steady. In fact, he tried to put a

positive spin on the whole tariff situation saying that Amazon could come out of this whole thing stronger than ever before because of their scale and ability to offer lower prices. I mean, Honestly, I respect the optimism, Andy, but I don't know if Wall Street's buying it. Amazon stock dropped 4% after the earnings call last night. But then it did bounce back this morning thanks to the news that China might be reopening trade talks with the U.S. So we'll have to see how it goes. I mean, tariffs just went into effect.

So we might not know the full impact on Amazon's business until they report Q2 earnings. Let's talk about some stocks making moves today. Reddit shares are on the rise this morning after the company beat earnings for the quarter. Reddit continues to put up solid growth numbers with daily active users jumping 31% year over year, and their advertising revenue grew by 61% in Q1. So shout out to Reddit. You know, I kind of clown them when they went public last year, but they're crushing it. Their stock has gone up more than 150% since they IPOed in March of last year. Now let's talk about some losers today. One of the big ones being Block, the company formerly known as Square,

their shares are tanking after the company reported weak, revenue and gave a disappointing guidance. Block's revenue fell by 3% from a year ago, and their gross profit margins also missed Wall Street expectations. Now, Block operates cash app, and they also have their point of sales systems that you see at restaurants and food trucks. They're blaming uncertain macroeconomic conditions and said it's taking a cautious stance moving forward.

I mean, even cash app, which is usually a bright spot for the company, missed expectations for gross payment volume. That could be because of increased competition from, Venmo and Zell. So yeah, pretty rough day for Block. Their shares are down more than 20% this morning at the time of this recording. Another company in the red this morning is Airbnb. Their shares took a dip after the company gave a weaker than expected Q2 Fork. Airbnb said guests are booking trips closer to their actual travel dates. And honestly, that kind of tracks because I wouldn't be making any big vacation plans months in advance right now while there's a trade war still looming

and a potential recession on the horizon. Airbnb said that nights and experiences bookings grew 8% in Q1, but it wasn't enough to keep the stock from falling. I say this every time, but hotels are better than Airbnb. I haven't stated in an Airbnb since 2019. I don't think I will anytime soon. Let me know in the comments if I'm wrong here, okay? Because I'm willing to change my mind. Oh, and finally, I want to quickly point out, take two interactive, the maker of Grand Theft Auto.

Their shares are down more than 8% this morning after the company announced that GTA6 is being delayed again and now it's expected to come out in May of. of 2026. This game was supposed to come out this year and now is delayed again. You know, GTA 5 came out when I was in college and I'm increasingly convinced that GTA 6 is going to come out when my kids are in college. We're never getting this game. Sorry, I didn't mean to rant. I just can't believe this game keeps getting delayed. Let's wrap the show with a fun fact. NVIDIA's CEO Jensen Wong just got his first salary raise in over a decade. Jensen's base salary was bumped up to $1.5 million, which is a 50% increase from 2024. Now, that's just

Jensen's cash compensation, the money that hits his bank account every two weeks. He also gets awarded stock. So his total cop for 2025 is expected to be around $50 million. But again, that doesn't even matter either because Jensen owns about 3.5% of Nvidia, and that stake is worth nearly $100 billion. So yeah, I don't think Jensen is stressing about what numbers show up on his W-2 forms. Well, all right, guys, that's the rundown for today. That's the rundown for this week. What an action-packed week it was. And then next week, we're going to get the Fed meeting. So we've got a lot to look forward to a lot to talk about. So make sure you guys are subscribed to the podcast. Consider hitting the notification bell if you haven't already.

And if you guys have 12 extra seconds and want to help us out, leave us a five-star rating on Apple or Spotify. All of that engagement really does help us out. And it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. We'll see you guys back here this weekend for the deep dive.