The Rundown - Buffett's Cash Pile Hits New Record, Apple Commits $500B Investment in U.S.

Episode Date: February 24, 2025

Stock market update for February 24, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Monday, February 24th. In today's episode, we tell you why the markets tanked on Friday and preview a pivotal week. We got Nvidia earnings and an inflation report. We also recap earnings from Berkshire Hathaway and tell you why President Trump just thanked Tim Cook on Truth Social this morning. Then stick around to the end of the show to find out. how much money studios spend campaigning for the Oscars.

I'm talking nine figures. All right, let's go. Well, guys, stock market ended last week on a pretty bad note. The S&P 500 and Dow both dropped 1.7%. The NASDAG dropped more than 2%. I mean, it was absolutely brutal. In fact, it was the worst day of the year for all three major indices. Talk about a vibe shift, because remember, the S&P closed at record highs on Tuesday and Wednesday.

In fact, I even joke the markets were totally ignoring all the noise around tariffs and trade wars and higher inflation. Well, I think I might have jinx the whole thing because all of a sudden, Wall Street seems to be concerned about the economy. And that makes this upcoming week even more crucial. Nvidia is reporting earnings on Wednesday after the market closed. And then on Friday morning, the PCE inflation report comes out, which is the Federal Reserve's preferred inflation gauge. So a lot is writing on those two reports, a soft Nvidia earnings or a really high. hot inflation report could send more shockwaves through the markets. So pretty pivotal week coming up. Not to mention all the other earnings coming out this week like Home Depot, Hymns, Kava,

Salesforce, and Dell, just to name a few. We're going to be covering all the heavy haters on the podcast this week. So it's a great time to get subscribed to the podcast. And let us know in the comments on Spotify or YouTube on which earnings reports you're looking forward to the most. Feels like yet again NVIDIA is carrying the weight of the stock market on its shoulders. Hope Jensen comes through for us. Let's run through some headlines. Warren Buffett's Berkshire Hathaway reported earnings over the weekend, and the most notable thing was that they ended 2024 with a record $334 billion in cash.

And it's causing investors to debate whether Warren Buffett is giving a warning sign about the market. Berkshire's been selling stock and piling cash for a while now, and their cash pile continued to grow, increasing by 3.6% from three months ago. And their cash pile has skyrocketed by $145 billion from Q1 of 2024 to Q4 of 2024. Just to put that in perspective, Berkshire's total cash holdings is now larger than the market cap of all but just 30 publicly traded companies in the world. And just to be clear here, they're not just holding this money in a bank account. A lot of this money is being invested in U.S. Treasury builds, so Berkshire is earning interest on it. Now, in addition to the record cash balance, Berkshire Hathaway also did not repurchase any of its shares in Q4. That makes it the second straight quarter of no buybacks.

In the annual shareholder letter, the company said buybacks will continue when Warren Buffett believes that the repurchase price is below the intrinsic value, which is another way of saying that Warren Buffett thinks that Berkshire stock is too expensive, and the markets might be a little too frothy right now. Warren Buffett also defended his cash position in the shareholder letter saying that despite the scrutiny from media commentators, the great majority of investor money remains in equities. Right now, cash makes up about 27% of Berkshire assets. So the majority of the money is still in stocks, but it is pretty notable that their cash position has gotten so high. Now, beyond just the cash stuff, the conglomerate also shed light on their other businesses, specifically their operating profit, which jumped by 71% in Q4, largely driven by a fourfold, increase in insurance underwriting led by GEICO.

Overall, it doesn't seem like investors or the overall market is too concerned about Berkshire's growing cash pile. In fact, Berkshire's stock is up more than 2% this morning in reaction to these earnings. Also, why is Berkshire the only company to report earnings on a Saturday? Let's shift gears and talk about Berkshire's biggest stock holding, Apple. They're making some news this morning saying that they'll invest $500 billion in the U.S. over the next four years to expand chip and server manufacturing. including plans to build a factory to build AI servers in my hometown of Houston, Texas.

Apple was calling the move its largest ever spent commitment. And the announcement follows a meeting between Apple CEO Tim Cook and President Trump at the White House last Thursday. Trump was so excited about this news that he leaked this news before Apple did during a news conference last week. Take a listen. Yesterday I had Tim Cook in the office from Apple. He's investing hundreds of billions of dollars. I don't know. I hope he's announced it. Hope I didn't announce this says, but what the hell?

Now, this factory will add about 20,000 research jobs, and it's expected to be completed by 2026. The reason this is significant is the servers that are going to be made in Houston were previously made outside of the U.S. And Apple says this move will create thousands of new jobs that will play a key role in powering Apple Intelligence. The company's also doubling its advanced manufacturing fund from $5 billion to $10 billion. This fund expansion includes a multi-billion dollar commitment from Apple to produce advanced silicon in a TSM facility in Arizona, where mass production of Apple chips began last month. So I gotta say, this is an example of Tim Cook being the goat at navigating politics. In fact, he even got a shout out from Trump again this morning on truth social. Let's talk about some stocks making moves today.

Nike stock is up this morning after the investment bank Jeffries up. integrated the stock to a buy rating with a price target of $15 per share. Jeffrey said that Nike's new CEO, Elliot Hill, is ready to put the iconic brand back on top after losing market share to Hoka and on over the last couple of years. Jeffries thinks that Nike's brand remained strong and Nike's issues were all self-inflicted. Jeffrey cited Nike's focus on innovation and its return to wholesale strategies as they stand out for the company. So as a result, Nike shares are up more than 2% this morning.

on this upgrade. You're starting to get a lot of buzz these days. On the flip side, shares of Domino's Pizza are taking a dip this morning after the company had an underwhelming earnings report. Revenues were up 2.9% and earnings per share were up 9.2%. Both those metrics missed Wall Street estimates. The company is dealing with slower growth in the U.S. market, with U.S. same store sales up just 0.4% from a year ago. The international market, though, is doing a bit better with same store sales up 2.7%. But the weakness in the U.S. market has investors a bit worried, and the stock is down more than 4% this morning in reaction to these earnings. By the way, Berkshire Hathaway doubled their stake in Domino's in Q4. So Warren Buffett seems to be a believer in the company.

Or maybe he's just a big fan of the pizza. Because I mean, Domino's is the best national pizza chain, right? Like there's no debate about that, right? Like, they're way better than Pizza Hut, Papa Johns, or Little Caesars. Let's wrap the show with the fun fact. The Oscar this weekend and these movie studios pay an arm and a leg just to be considered for the golden statue. Movie studios can spend up to $25 million on PR and marketing campaigns according to experts interviewed by Bloomberg. In fact, Netflix greenlit $100 million to be spent for Oscars campaigning last year according to Bloomberg. I mean, it's like a presidential campaign. You've got to convince these Oscar voters to vote for your movie. Conan O'Brien's going to be hosting the Oscars on

Sunday March 2nd. I just want my boy Timothy Shalame to win. Best actor. All right. He's on a generational run right now. Give my boy Timmy the golden statue. Well, all right, guys, that's the rundown for today. Thank you guys so much for listening. We have a big week coming up. Seems to be a pretty pivotal week with the vibes shifting on Wall Street. InVIDIA earnings and the PCE inflation report could set the mood for the rest of the quarter, maybe even the rest of the year. So we'll be watching that closely and recapping it here on the rundown. If you guys enjoyed today's episode and have like 15 extra seconds, consider giving us a five-star rating on Apple or Spotify.

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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, board subsidiaries. You should make your own financial and investment decisions or consult. Respected professionals.

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