The Rundown - DOJ Investigates UnitedHealth for Fraud, Dick's Sporting Goods Buys Foot Locker for $2.4B
Episode Date: May 15, 2025Stock market update for May 15, 2025. This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not re...commendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit Public.com/disclosures.
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Public.com presents the rundown.
Your daily market update in under 10 minutes.
My name is Zadad Mani, and today is Thursday, May 15th.
In today's episode, we'll tell you about the rally in AI stocks.
Companies like Nvidia, AMD, and more are on a tear.
We also dive into earnings from Walmart and why they're still concerned about tariffs.
Then we discussed the drama over at United Health Group and why their stock is in freefall.
Then stick around to the end of the show.
to find out why Warner Brothers is bringing back the HBO brand.
We get a great show for you today.
Let's go.
Yesterday was a pretty quiet day in the market.
It's not a lot of volatility.
It still was a winning day, though.
The S&P 500 was up 0.1%,
while tech stocks had a bit more juice pushing the NASDAQ up 0.7%.
AI stocks in particular have been on a tear recently.
Like go pull up Nvidia's charts on the public app.
The stock is of 15% just this week.
it up more than 40% from its lows back in April.
We talked more about Nvidia and their major deal to sell AI chips to Saudi Arabia on yesterday's episode.
So go check that out if you missed it.
But it's not just Nvidia that's pumping.
Other AI names like AMD, Broadcom, and CoreWeave are all up more than 50% from their lows.
And this has happened in a matter of like five weeks.
So the AI rally might be back in full force.
By the way, we're going to talk more about CoreWeave in a bit.
Now, we got some interesting economic data this morning.
retail sales data for April showed just a 0.1% increase compared to March.
That's a sharp drop from the 1.7% jump we saw in retail sales in the month of March.
Now, the most likely reason for this is tariffs.
Americans bought a bunch of stuff in March before the tariffs kicked in,
and as a result, spending in April slowed.
But now that the tariff shock has kind of cooled off,
I wonder what that's going to do to retail spending moving forward.
Like, are people just going to panic by now during this pause in tariffs?
Or are people just going to completely agree?
nor the tariff drama at this point.
I guess we'll learn more when the May retail sales data comes out next month.
Now, there is one big retailer that's still worried about tariffs.
So let's talk about them.
The retail giant Walmart reported earnings this morning,
and it was kind of a mixed bag.
The company did miss revenue estimates for the first time since 2020,
but their earnings came in above expectations.
But the bigger story here, though, is what Walmart expects moving forward.
They're still worried about the impact of tariffs.
Right now, tariffs on Chinese imports is 30.
That's better than the old 145%, but this 30% rate is still going to be a major headache for Walmart.
Now Walmart said they're going to try to eat some of these higher costs, but they won't be able
to hold the line forever.
In fact, they expect the prices of tariff affected goods to start going up by the end of this
month.
But it's not just the tariffs on China.
Tariffs on countries like Costa Rica, Peru, and Colombia have put pressures on the prices
of things like bananas, avocados, and coffee.
So Walmart's doing their best to keep prices low, but this is going to have an impact on Walmart
's profit margins, and they're already letting us know that price hikes might be coming soon.
Investors not reacting so great. Walmart stock is down around 4% this morning. But here's the silver
lining for Walmart investors. Walmart's U.S. E-commerce division just turned a profit for the first
time ever. E-commerce sales grew by 21% in the U.S. and they grew by 22% globally. On top of that,
their ads business grew by 50%. Walmart's acquisition of the TV maker Vizio for $2 billion last year
is helping them get a stronger foothold
in the streaming ad space.
So yeah, Walmart might experience some bumpiness
in the short to medium term from the tariffs,
but in the long term,
the growth of their e-commerce and ads business
looks pretty promising.
On a side note, how do we feel about
every company essentially turning into an ads company
at this point?
What's going on here?
Are we just going to have ads everywhere?
Let's shift gears and talk about United Health
because, oh boy, there's a lot going on over there.
The health care giant is now under criminal investigation
by the Department of Justice
for potential Medicare fraud.
Here's what the feds are looking into.
United Health runs a massive Medicare Advantage business.
That business gets taxpayer money
to cover senior citizens.
And according to the Wall Street Journal,
investigators are looking into whether United Health
may have patted some diagnoses codes
to score bigger payouts.
Essentially, the government is claiming
that United Health Care
exaggerated how sick their patients were
to get a bigger payout from the government.
And that's the kind of fraud
that could cost taxpayers.
billions of dollars, and it might potentially land some United Health Care executives in a
courtroom. And I guess that explains why United Health Group CEO Andrew Whitty just stepped down
out of nowhere earlier this week. I thought he might have gotten fired. He said it was for personal
reasons. I think we can now connect the dots of what might be going on here. I don't think he
wanted to deal with this mess. The United Health did come out and say they haven't been formally notified
of this investigation yet. And they're standing by the integrity of their Medicare Advantage business.
But yeah, the company has been under a lot more scrutiny lately, not just from the government,
but also the public after their healthcare CEO, Brian Thompson, got gunned down in New York late last year.
People don't have a lot of nice things to say about this company, and it looks like the feds don't either.
And that's causing investors to bail fast.
The stock has lost nearly half of its value in the past month, which is just crazy.
Let me know in the comment, are you guys brave enough to buy the dip here?
Because this stock is just cratered.
Let's talk about some stocks making moves today.
Foot Locker stock is up more than 80% this morning after Dick's sporting goods announced that they're buying the shoe retailer for $2.4 billion.
Dix will pay $24 a share in cash for the company, which is a near 90% premium of where Foot Locker stock price was yesterday.
And Dix might be getting a pretty good deal here since Foot Locker stock is down more than 40% this year.
Dick says they plan to operate Foot Locker as a standalone business unit within their portfolio and maintain the Foot Locker brand.
So we'll see if foot locker can turn things around under the Dick's sporting goods umbrella.
On a side note, I don't think I've been to a foot locker this decade.
No, online shoe shopping.
Plus, like, I'm more of a Skechers guy at this point.
I don't think I'm going to find that at a foot lockers.
Now, on the flip side, shares of the AI infrastructure, Corweave is down this morning,
despite the company reporting solid earnings.
Remember, Corweave IPOed earlier this year, and there's been a lot of buzz around the company.
Coreweave owns and operates a bunch of AI data centers,
and they sell the capacity in those data centers to big companies.
Some of their biggest customers include Microsoft and OpenAI.
Now, going back to their earnings report, their Q1 numbers were pretty insane.
The revenue was up 420% in Q1,
and the company expects 2025 revenue to grow by more than 360% to around $5 billion.
So they're still expecting triple-digit growth moving forward.
But the stock is still down 5% this morning because I guess maybe investors were hoping to see more.
Another tech stock in the red this morning is Ali Baba.
Their shares are moving lower after the Chinese tech giant missed earnings expectations on both top line and bottom line.
Now, Alibaba's revenues and profits were still up, but Wall Street wanted to see more.
And there's also concerns about Alibaba moving forward.
They're dealing with macroeconomic uncertainty.
Now, while tariffs on Chinese imports have been lowered from the 145% down to around 30%,
that can still have a pretty significant impact on Alibaba's U.S. e-commerce platform Ali Express.
On top of that, their domestic e-commerce business in China is facing intense comprehensive.
competition from players like PDD and JD.com.
Now, Alibaba has been investing a lot in AI.
I keep hearing about their state-of-the-art AI models that the company keeps putting out,
but it hasn't led to significantly more revenues or profits just yet.
And as a result, Alibaba's shares are down around 5% this morning.
But zooming out, though, Alibaba's stock is up nearly 60% this year,
so it's hard for investors to complain too much.
Let's wrap the show with a fun fact.
HBO is back, everybody.
This story is so ridiculous.
So about two years ago, HBO's parent company, Warner Brothers Discovery,
rebranded their streaming service from HBO Max to just calling it Max.
They dropped the HBO name.
And I'm pretty sure everyone on the internet clown them for that decision.
Because HBO is such an iconic brand, and they were purposely removing it.
So it looks like they're finally hearing their criticism and they're changing the name back to HBO Max.
On top of that, the company plans to scale back the volume of content on HBO Max
and focus on quality programming and storytelling.
I gotta say, pretty smart move.
Bringing back the HBO name and doubling down on good content.
I wonder which consulting firm HBO hired for these rebrands
because whoever it is, McKenzie, Deloitte, I don't know,
they're the ones that are benefiting the most from this
because they probably made so much money over the last couple of years.
And while we're on the topic of streaming,
bonus fun fact,
Netflix yesterday announced that their ad tier
now has over 94 million monthly active users,
which is a 20 million jump from back in November.
So don't be surprised if Netflix becomes a serious player in the ad business pretty soon.
Just a matter of time.
Well, all right, guys, that's the rundown for today.
Hope you guys enjoyed today's episode.
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