The Rundown - Electronic Arts Suffers From Soccer Gaming Slowdown, American Airlines Stock Sinks On Weak Outlook

Episode Date: January 23, 2025

Stock market update for January 23, 2025. Follow us on Instagram! ⁠@TheRundownDaily

Public.com presents the rundown. Your daily market update in five minutes. My name is Zayad Mani, and today is Thursday, January 23rd. In today's episode, we recap some of the big tech stocks that are making all-time highs and tell you why Apple is having a tough time right now. We also discuss earnings from EA and American Airlines and why some investors are bailing. Then stick around to the end of the show to find out how much money Apple has spent on original programming and how their watch time stacks up against Netflix.

The numbers will shock you. All right, let's go. Well, the stock market is getting close to all-time highs again. The S&P 500 was up 0.6% on Wednesday. It even touched a record high for a few minutes before giving some of it back, and the NASDAQ was up 1.2% yesterday. Now, what's interesting is that 65% of the stocks in the S&P were actually in the red on Wednesday, but big tech stocks carried the markets to a higher close.

Netflix and Amazon closed at record highs, AI players like Oracle, Arm, Microsoft, and Nvidia all had big days. Thanks to enthusiasm around the Stargate Project, which was announced earlier this week, that project plans to invest around $500 billion in AI infrastructure in the U.S. over the next four years. It's a big number. In fact, it's so big that Elon Musk doesn't think that it's legit. There's already drama around it. Elon and Sam Alvin exchanging jabs on Twitter. We talked about it on yesterday's show, so go check that out if you missed it. check out our Instagram account for a 50 second recap. Now, I forgot to mention this earlier in the

week, but Nvidia is back to being the most valuable company in the world again. Invidia stock has had a good start to the year. Their market cap is now over $3.6 trillion. They have a pretty comfortable lead over Apple, whose market cap sits around $3.4 trillion. Apple has had a rough start to the year. In fact, their stock is down 10% in 2025, making it one of the worst performing stocks in the S&P 500 this year. I mean, who saw that coming? Next week could be a make or break week for Apple because they are reporting earnings. And we're going to find out if all the rumors and reports of iPhone sales being sluggish are true. There's been a lot of talk about how Apple intelligence has been a disappointment and hasn't resulted in the sales bump that some

had expected. So we'll get the official numbers next Thursday when Apple reports earnings after the market close. We're going to be recapping those earnings along with all the other big tech earnings that come out next week on the podcast. So if you haven't subscribed already, it's a great time to do so. Let's run through some headlines. And we're going to to recap a couple earnings, starting with EA. Electronic Arts, the giant video game maker, is slashing the revenue outlook, and one reason for that is because their soccer video game franchise is underperforming expectations. EA's global football franchise, which includes the EA Sports FC-25 game, experienced a slowdown

in December following two straight years of double-digit net booking growth. Now, some of you guys might be confused when you hear the name EAFC. Well, you might know the game as FIFA. That's what it used to be called until EA lost the rights to that branding back in 2022, when EA's 30-year partnership with FIFA ended. So now they call the game EAFC, which just doesn't have the same ring to it. On a side note, I used to be a FIFA addict back when I was in college. I mean, oh my God, I miss playing that game.

Now, on top of the struggles with the soccer video game, EA is also having issues with other games as well. The game Dragon Age, which is a fantasy role-playing game, engaged 1.5 million viewers, which is down nearly 50% from the company's expectations. EA also reported disappointing outlooks for the current quarter. They expect revenues to come in at $2.22 billion, which is below their original range of $2.4 to $2.5 billion.

So the company seems to be struggling across the board, and I know some hardcore video game fans that are just loving this right now, because EA doesn't have a great reputation amongst the gaming crowd. So if you're an EA hater, you are going to love this. Shares of EA are down more than 15% today in reaction to these earnings. I'm just a casual gamer, but I just wish EA didn't have an exclusive license with the NFL

so other companies could make a football video game because right now we only have Madden, which has been bad for like a decade. All right, my EA rant is over. Switching gears, let's talk about American Airlines because they are also struggling this morning. They reported a surprise loss in their recent quarter and their revenue forecast for 2025 missed Wall Street expectations.

The reason this is such a surprise is that both United Airlines and Delta Airlines who reported earnings earlier, both had strong forecast for 2025, but not so the case for American Airlines. It seems like the airline is feeling the effects of rising jet fuel prices and a strategic error in 2023 that has since pushed away corporate travelers. I remember that debacle happening and my corporate and consulting friends were not happy, especially the ones that live near Dallas.

What American Airlines was trying to do was cut out the middleman and have business travelers booked flights directly through American. But the tech was so bad that it really frustrated corporate clients, and I guess a lot of them ended up switching over to Delta or United. and it hurt Americans' bottom line. American Airlines shares of revenue in corporate travel was down 9% in Q4, so they haven't really recovered yet. As a result, American Airlines stock is down around 9% this morning in reaction to these earnings.

Let's talk about some stocks making moves today. Shares of GE Aerospace are soaring today after the jet engine maker had blowout earnings in Q4. No pun intended. Revenues were up 14% and the company made $1.9 billion. in profit. The company makes jet engines for aircraft makers like Boeing and Airbus. But these plane makers are facing delays, which has resulted in a huge demand for GE's maintenance services and aftermarket parts since these airlines are now forced to extend maintenance cycles for their older aircrafts. So it kind of worked out for GE Aerospace. On top of that,

the company plans to do $7 billion in share buybacks in 2025, and they're raising their dividend by 30%. And there's not much that investors love more than shared buybacks and strong profits. As a result GE Aerospace stock is up more than 8% this morning and is trading at its highest level since 2007. On the flip side, shares of AST Mobile are plummeting after the satellite company announced plans to offer $400 million in a convertible senior debt note. Now, without getting too technical, the company is just trying to raise money to continue to build out their cellular network for smartphones with satellites in space. In fact, its first satellites were launched into orbit by SpaceX in September. It's a relatively unknown company, but their stock has jumped 6.000.

100% in the past year. But investors might be losing a bit of enthusiasm as their shares are down around 17% this morning in reaction to this news. Let's wrap the show with the fun fact. Apple has spent more than $20 billion on original programming since launching their Apple TV Plus streaming service back in 2019. And to be honest, they haven't had much to show for it. They've had very few hits. Ted Lasso and I think Severance are the only two that come to my mind. Speaking of Severance, according to Parrot Analytics, season 1,000, of Severance, which is a dystopian sci-fi show that Apple bought rights to back in 2019, generated around $200 million for Apple TV Plus. And to add to that, nearly half of that revenue

came in 12 months after the finale for season one, which was released back in 2022. So I think good word of mouth is driving the success of that show. The reason I bring this up is that season two of Severance debuted last Friday, and it's getting a lot of buzz again. So it's probably going to help boost Apple TV Plus numbers a bit. But Apple TV Plus has such a long way to go before they catch up to the other streamers. Just to put it into perspective, Apple TV Plus generates less viewers in one month than Netflix does in one day. So despite Apple making great shows that get a lot of critical acclaim, no one seems to be watching them. Well, all right, guys, that's the rundown for today.

Hope you guys enjoyed today's episode. We got one more episode to cap off the week, and then next week should be an absolute banger. I can't wait. By the way, if you enjoyed the show and you have like 15 extra seconds, consider giving us a five-star rating on Apple or Spotify. leave us a comment on Spotify voting today's Spotify poll follow our Instagram accounts for clips and bonus content all 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 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.

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