The Rundown - GameStop Rallies as 'Roaring Kitty' Returns, Apple Nears Deal with OpenAI

Starting point is 00:00:00 Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Monday, May 13th. In today's episode, we get you ready for a pivotal week on Wall Street. We got some major earnings coming up and an inflation report that might have the markets on edge. Also, this week might be a big one for AI. Rumor is that Apple is getting ready to announce an AI partner. And then stick around to the end of the show to learn about the goat investor Jim Simons, who passed away last week at 86 years old.

Starting point is 00:00:30 was investment fund did 100x better than Warren Buffett. No, seriously, you're going to want to hear this. All right, let's go. Well, guys, it looks like stocks are starting to get on a roll again. Last week, the stock market had its third positive week in a row, and don't look now, but all three major indices are starting to flirt with all-time highs again. And the Dow especially has been on a hot streak with eight positive days in a row. And last week was the best week of the year for the Dow. I don't want to jinx it, but 40,000 might be in play this week. But, you know, nobody cares about the Dow, so whatever. I might have to officially retire that bit pretty soon.

Starting point is 00:01:04 We'll see if the good vibes continue this week because this week might get pretty wild. We are getting fresh inflation data on Wednesday morning where the April CPI report will be released. And the last couple of CPI reports have not been very encouraging, coming in hotter than expected. And that's been one of the main reasons why the Federal Reserve has held off on cutting rates this year.

Starting point is 00:01:22 So the market is going to be paying very close attention to the latest CPI report. Right now, estimates call for CPI to come in at 3.4% year over year. This week, we're also going to learn about how consumers are spending their money because we're getting earnings from Home Depot on Tuesday and Walmart on Thursday. Home Depot's quarterly results can give us a good insight into both the construction industry and a pulse check on if dads across the country are still doing random DIY projects. And Walmart's quarterly results can give us a peek into how consumers are feeling, like if there's a cutback on spending in certain

Starting point is 00:01:50 categories. We're going to recap it all here on the rundown. So make sure you guys tune in. Let's run through some headlines. Starting with Apple. According to multiple, multiple reports, Apple is close to finalizing a deal with Open AI to bring AI to the next iPhone. The two companies are nearing an agreement that would allow Apple to use chat GPT in Apple's next operating system, iOS 18, and ultimately the upcoming iPhone 16, according to Bloomberg. Now, it's expected that the Open AI Power Tech will support a ton of new AI features from Apple that could be announced at the Worldwide Developer Conference on June 10th. Some reports, including from the New York Times, are suggesting that the new and improved

Starting point is 00:02:28 Siri will be unveiled at that conference. I mean, it's about time. I have been a day one Siri hater, so I'm really happy here that Siri might finally be getting a glow up. Wall Street analyst Dan Ives from Wedbush said on a note this morning that he expects Apple to eventually roll out a separate monthly subscription for like this next level Siri technology. Dan Ives believes that there's going to be an exclusivity around the number of these advanced open AI features on the iPhone. So I wonder what those features are going to be because they have to be insanely good if Apple wants people to pay a separate monthly fee. But remember, this is Apple, right? Apple has over two billion devices worldwide. So whatever AI thing they come up with is going to be a big deal. It's going to have a massive

Starting point is 00:03:07 impact on the way we interact with AI. I really hope that it's truly groundbreaking. I mean, at least they're going to make Siri better. Sticking with the AI theme, we have a few other headlines, so let's run through them. Arm Holdings, a subsidiary of SoftBank, is planning to launch its own AI chip by the spring of 2025. This is according to the NICA Asian report. SoftBank, which owns 90% of arm after acquiring it for $32 billion in 2016, is in talks with Taiwan Semiconductor, also known as TSMC, to manufacture the AI chips. Next up, we have Intel. Intel is closing in on a deal to receive $11 billion in financing from Apollo to build a new plant in Ireland.

Starting point is 00:03:43 Intel is an exclusive talks with the investment firm, and a deal could be finalized in the coming weeks, according to the Wall Street Journal. And then finally, we have another winner in the Chips Act sweepstakes. The Biden administration announced this morning that it will award $120 million to polar semiconductors to help build out its chip manufacturing facility in Minnesota. Now, if your first thought was to run to the public.com app to see what the stock ticker is, don't because polar semiconductor is not publicly traded. Let's talk about some stocks making moves today.

Starting point is 00:04:15 Starting with GameStop. GameStop shares are soaring after Roaring Kitty, the Reddit user behind the meme stock's 2021 historic rise returned to Twitter after a three-year hiatus. Roaring Kitty posted a meme on his Twitter account. It's the meme of the gamer leaning forward and locking in focus. You know what I'm talking about. Memes are better consumed visually. Now, this could be a potential sign that Roaring Kitty is paying attention to GameStop's

Starting point is 00:04:38 more than 70% increase in the past month. Roaring Kitty was the one leading the way to push retail investors from Reddit into GameStop, which caused a short squeeze that saw the stock rise to nearly $500 a share back in 2021. I mean, those were some wild times. man. GameStop is up more than 30% in pre-market trading around $23 a share. Another stock on the rise today is Squarespace. The website creation platform is going private in a $6.9 billion takeover by private equity firm, Primera. The deal is for a $44 a share, which is a 15% premium to the stock's closing price on Friday. SquareSpace raised money back in 2021 at a $10 billion valuation as a private

Starting point is 00:05:16 company and then went public shortly after with a $50 a share reference price for its direct listing, valued the company at less than $7 billion. A stock not doing so good this morning is Penn Entertainment. The shares are down after Bank of America downgraded the stock to neutral the price target of $1750 a share. The move comes over worries that the company's sportsbook venture deal, ESPN Bet, will experience higher losses for a longer than expected timeframe due to elevated fixed cost. Bank of America is also worried that these costs will get worse as competition heats up,

Starting point is 00:05:47 which could cause the company to burn more cash in order to keep ESPN bet customers, active. Penn stock is down more than 3% on the news. All right, let's wrap the show with a fun fact. Today's fun fact is about Jim Simons, one of the greatest investors of all time. He passed away last week, and I just wanted to share some of his investment returns because the numbers are truly mind-blowing. Borderline unbelievable. I mean, this man was putting up Wilk Chamberlain-type numbers. So Jim Simon started a hedge fund back in the 80s called Renaissance Technologies, and his flagship fund, the Medallion Fund, averaged an annual return of 62% from 1988 to 2021. 62% average annual return for 30 plus years is absolutely ridiculous.

Starting point is 00:06:32 I mean, nobody else comes close. Not Warren Buffett, Steve Cohen, Ray Dalio, nobody put up those kinds of numbers. Just to put this into perspective, $100 invested in the Medallion Fund back in 1988 would be worth $4.2 million in 2020. While $100 invested in the S&P 500 would have grown to about $4,000 in the same time period. So the Medallion Fund outperformed the S&P 500 by a thousand X over the last 30 years. So what was Jim Simon's secret? Math. See, Jim Simons was a math whiz, and he hired a bunch of other math geniuses to find ways to beat the market using math and algorithms.

Starting point is 00:07:11 So Jim Simons, man, he makes a strong case for goat investor. Well, all right, guys, that's the rundown for today. we have an action pack week coming up, especially that CPI report on Wednesday morning. That's going to be a big one. We're going to be covering that along with all the market drama throughout the week. So make sure you guys are tuning in every day. Thank you guys so much for listening. We'll see you guys back here tomorrow.

Starting point is 00:07:31 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. Rundown 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. Respective professionals. Learn more at public.com disclosures. In partnership with Zayidamani, brokerage services for U.S. listed, registered securities

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The Rundown - GameStop Rallies as 'Roaring Kitty' Returns, Apple Nears Deal with OpenAI

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