The Rundown - CoreWeave's IPO Debut, Lululemon Shares Plunge on Weak Outlook

Episode Date: March 28, 2025

Stock market update for March 28, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zaid Admani, and today is Friday, March 28. In today's episode, we dive into the CoreWeave IPO and why it might be a sign that the AI boom is coming to an end. We also tell you why Lulu Levinstock is taking a hit today. Then stick around to the end of the show to find out why Facebook's newest feature might make it cool again. We've got a great show for you today.

Let's go Well, we had a wild day of trading yesterday Markets were seesawing from red to green multiple times But ultimately finishing in the red with the S&P 500 down 0.3% And the NASDAQ dropping 0.5%. The big story yesterday was Trump's 25% tariffs on cars And car parts coming into the U.S. These tariffs are going into effect on April 3rd

We talked more about that in detail on yesterday's show So go check that out if you missed it. But not surprisingly, GM was the worst performing stock yesterday and the S&P 500 dropping more than 7%. Many think the price of new cars will go up now because of these tariffs. That's why the shares of auto part retailers like AutoZone and O'Reilly were up more than 3% because people might choose to fix up their old cars instead of buying new ones. But overall, most people believe that these tariffs will lead to higher prices and a potential

resurgence of inflation. Now, speaking of inflation, we did get some inflation data this morning. The PCE inflation report came out. This is the Fed's preferred inflation gauge. It measures inflation slightly different than the more popular CPI gauge. The PCE inflation in February was up 2.5% compared to February of last year. And core PCE, which removes food and energy prices, came in at 2.8%, which was slightly higher than the 2.7% that was expected. Now, this number doesn't take into account the impact of tariffs because this data is from February.

And most tariffs don't go into effect until April. So we're not going to know the full impact of tariffs. on inflation for a couple months. Now, we also got some information today on spending data. According to the Bureau of Economic Analysis, consumer spending was up 0.4% in February, which is below the 0.5% that was expected. So the macro data not looking so great.

You know, inflation came in slightly hotter than expected and consumer spending is slightly lower than expected. Not a great combo. And I don't think the markets are going to like that. You know, as of right now, the S&P and NASDAQ are still both, up for the week, but just slightly. So depending on how today goes, we're going to either have another winning week or the fifth losing week in the last six. I got to say, these reports probably don't help. Let's run through some headlines, starting with CoreWeave. Corweave is

IPOing today. Their stock will start trading on the stock market, and things aren't looking so great. The AI cloud computing provider is planning to raise $1.5 billion by selling 37, and a half million shares at $40 a piece. But see, their original plan was to raise $2.7 billion by selling 49 million shares at $55 apiece. But there wasn't enough demand for CoreWeave stock at that price point. So they settled on raising $1.5 billion,

which would still be the biggest tech IPO since 2021. But this could be yet another sign that the hype around AI is starting to cool. And there's also concerns about CoreWeave's business. I mean, it's a pretty interesting company. They started off as a crypto mining company back in 2017, and they bought a bunch of Nvidia GPUs to mine crypto. But then they pivoted to being an AI data center company when the AI boom took off.

They realized that was more profitable than just mining Ethereum. They might be the only company in the world to successfully pull off a crypto to AI pivot. These days, CoreWeave has a ton of AI data centers stacked with Nvidia chips, and they sell capacities at their data centers to tech companies like Microsoft. And that's where the concern comes in. Because Corwee's business is relying on just a handful of customers. In fact, Microsoft is rumored to make up about 60% of their revenue. And there's also a concern of a lack of moat around their business.

They build data centers with Nvidia chips. They don't really have a breakthrough technology themselves. So theoretically, other companies could start doing the same thing. I guess it does help that Nvidia is one of the biggest investors in Corweave. And that probably helps them get access to Nvidia's latest AI chips sooner than everybody else. And Nvidia is increasing their investment in Corweeve by $250 million by buying Corweave stock at the IPO price of $40 a share.

They're essentially backstopping the IPO. But still, investors seem to be a bit hesitant about Corweave. And it could just be an overall reflection about the vibes around the AI hype. So we'll see how the stock does on its first day of trading. If you want to track the price of their IPO, pull up the public app and look up ticker symbol CRWV. Let's shift gears and talk about steel. The Japanese conglomerate Nippon Steel has offered to increase their investments in the U.S. to $7 billion

in an effort to get the Trump administration to approve their $14.9 billion takeover of U.S. steel. Nippon Steel has been trying to buy U.S. steel for over a year now, but back in January, former President Biden blocked the merger deal over national security concerns and the importance of keeping steel manufacturing in the U.S. So Nippon is hoping that by increasing the investments in the U.S. that the Trump administration will let this deal go through. Now, Trump has said in the past that he's open to Nippon Steel taking a minority stake in U.S. Steel. So something to keep an eye on.

Nippon is not giving up hope that they can ultimately merge with U.S. steel. Let's talk about some stocks making moves today. Shares of Rocket Lab were up this morning after the U.S. Space Force, which is a branch of the Department of Defense, added the launch, to its list of potential providers. Rocket Lab will now be able to compete for a $5.6 billion National Security Space Launch Program contract from Space Force competing against the likes of Blue Origin,

SpaceX, and the United Launch Alliance. So that's pretty big news for Rocket Lab, and shares are up more than 7% this morning on this news. On the flip side, shares of Lulu Lemon are diving after the Athleisure Company provided a weaker than expected outlook for 2025, point of the point. pointing to higher inflation and fears over the macroeconomic climate having an impact on consumer spending. On top of demand concerns, Trump's tariffs are expected to impact Lulu's bottom line,

along with other factors, with the company's gross margin expected to drop by 0.6% in 2025 per Lulu's management. As a result, shares of Lulu Lemon are down around 15% today on this news. I know a lot of you guys have highly recommended that I try Lulu Lemon gear. I haven't had the chance to do it yet, but I think this summer I'm going to be rocking some Lulu Lemon. Let's wrap the show with the fun fact. Mark Zuckerberg is bringing back OG Facebook. Meta debuted a Friends tab on Facebook yesterday, which is a new feature that only shows Friends status updates.

Honestly, I'm pumped for this, because it might be harder for some of you younger folks to believe, but Facebook was incredibly cool from like, what, 2007 to 2012-ish? Because it was all about status updates from Friends. It was about pictures. It was about games like Farmville. And, you know, these days, I still check Facebook on occasion, mostly for Facebook Marketplace.

And the main feed is just full of junk, for a lack of a better word. So having a friends-only feed where it's just status updates or pictures of my friends, I kind of like that. I'm not sure if that's going to make Facebook cool again. But I think it's a move in the right direction. I'm telling you, man, Zuck has been cooking over the last couple of years. Well, all right, guys, that's the rundown for today. that's the rundown for this week.

We do have a deep dive episode coming out this weekend, so keep an eye on your podcast feed for that. And if you guys enjoy our show and have like six extra seconds, consider giving us a five-star rating on Apple or Spotify. If you're listening on Spotify, don't forget to vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement really does help us out.

Next week should be a big week with more tariffs going into place. We have the TikTok sale deadline, so it's a great time to be subscribed to the pod. Thank you guys again for listening. Shout out to Mike. And Connor, for all the help behind the scenes, I'll see you guys back here this weekend. 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. Respected professionals. Learn more at public.com disclosures. In partnership with Zayidmani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.