The Rundown - Huawei Threatens Nvidia's AI Chip Dominance, Tesla Delays Launch of Affordable EV

Episode Date: April 21, 2025

Stock market update for April 21, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zaid Admani, and today is Monday, April 21st. In today's episode, we preview this upcoming week, including what earnings I'm looking forward to the most. We also tell you about a Chinese chipmaker ready to take on Nvidia and explain why Google just lost another antitrust case in court. Then stick around to the end of the show to find out why Netflix stock keeps rising. and a new delay from Tesla that's sending their shares lower. We got a great show for you today.

Let's go. Well, we're coming off another rough week from the stock market. The S&P 500 lost 1.5% last week. The NASDAQ dropped 2.6%. The markets are still on edge with the uncertainty around the tariffs and the ongoing trade war with China, which escalated last week. The Trump administration blocked the export of AI chips to China, which sent shares of Nvidia down more than 5%.

China on their end announced they're blocking the export of rare earth metals, which is kind of a big deal. It's going to impact a ton of industries here in the U.S. If you want to learn more about that, be sure to check out our weekend deep dive episode. We posted it yesterday. We break down why rare earth metals are so important, what industries rely on them, including the U.S. defense industry, and how China came to dominate the rare earth metal supply chain and how they're using it as leverage in this trade war. It was a great episode. Highly recommend checking that out.

We filmed it with video and included some interesting. charts as well. So go watch it on Spotify or YouTube. Now getting back to this week, trade tensions don't seem to be getting any better. There hasn't been any major deals announced with other countries. In fact, China is ramping up their rhetoric. This morning, they warned that they would retaliate against countries that cooperate with the U.S. in this trade war. So yeah, I'm sure that's going to have the markets on edge this morning. And also President Trump keeps taking shots at Fed Chair Jerome Powell. He just posted on Truth Socialist morning calling Powell a major loser and putting more pressure on him to lower interest rates.

And all this uncertainty is leading to gold prices continuing to surge. Gold now trades at over $3,400 in ounce, which is a record high. The price of gold has gone up almost 30% this year, which blows my mind. Also, I'm keeping an eye on Bitcoin right now. Despite Bitcoin being called digital gold, it really hasn't traded like gold over the last year or so. It's usually tracked the stock market. It's actually kind of traded like a tech stock. But over the past week, the price of Bitcoin has gone up 4% while stocks have been lower.

That is pretty unusual. Right now, Bitcoin is trading a little bit above $87,000. The price hasn't been this high since late March before Liberation Day. Now, if that wasn't enough, we also have a stacked week of earnings to look forward to. So big names reporting this week include Tesla, which reports Tuesday afternoon. Boeing and Chipotle report on Wednesday. And then Google and Intel report on Thursday after the market close. So we've got a lot going on right now.

It's going to be a busy few weeks for us. But we're locked in, you know, reading earnings reports, listening to earnings calls, and we're going to be recapping all the best stuff for you here every morning on the rundown. So if you haven't already, make sure you guys are subscribed to the podcast to stay in the loop. Longtime listeners know, I love earnings season. Let's run through some headlines. And we have to start with Huawei. The Chinese tech giant is developing a new AI chip to compete with Nvidia, according to reporting from Reuters.

According to this report, a Huawei's new AI chip could be ready as early as next month for mass shipment to Chinese customers. And the timing of this could not be better for Huawei because the Trump administration announced export restrictions for Nvidia's H20 chips last week. The H20 chip was specifically designed for the Chinese market, but these new restrictions will now require Nvidia to obtain a license to export these chips to China. That's going to be a pretty big hit to Nvidia's business. the company expects to take a $5.5 billion hit to the quarter related to the H20 restrictions, and this could mean that Nvidia misses out on $14 to $18 billion in revenue for this year, according to Bloomberg Intelligence. So Huawei is coming in, seeing this as an opportunity to fill the gap with their own AI chips.

Now, this is not the first time that Nvidia has faced export restrictions on China. The Biden administration also placed restrictions on Nvidia's ability to sell their state-of-the-art chips to China. but the recent restrictions by the Trump White House takes it to a new level that some experts say could open the door for China, specifically Huawei, to become an AI chip powerhouse. Chinese tech companies have been buying a bunch of Nvidia's AI chips because even Nvidia's H20 chip is better than anything that Huawei has. But if these Chinese tech companies can't buy Nvidia's chips anymore, they're going to turn to Huawei, which might allow them to become a major player in the space. And Huawei has done this before. For example, the company became a pretty fierce rival to Apple in the smartphone market. They've also cruised past Nokia and Erickson in the telecommunications market.

So Huawei is now ready to do the same thing for AI chips. We'll see how this all plays out. I think Nvidia's CEO, Jensen Huang, is kind of freaked out about this. He actually flew to Beijing last week to meet with Chinese trade officials. In that meeting, he stressed the important of the Chinese market and Nvidia's commitment to finding ways to do business there. while complying with the new restrictions by the Trump administration. So tough times for Nvidia right now,

their stock is down close to 30% this year, but the price dropping under $100 a share. Now, another company having a tough go recently is Google. For the second time in eight months, Google lost an antitrust case. A federal judge last week said that Google was guilty for violating the Sherman Antitrust Act for their dominance in the online advertising industry.

And it has to do with Google's ad tech. Basically, Google's been accused of bullying advertisers by forcing them to bundle services, which the judge labeled as unlawful tying. Here's an analogy to kind of explain what Google's been accused of. So imagine trying to go to a store to buy sneakers, right? But the store insists that you buy socks and shoe laces too along with the shoes. That's kind of what Google was found guilty of doing for advertisers, but with billions of dollars involved. Google's ad tech business brought in $31 billion last year.

it's roughly 10% of Alphabet's total revenue. So the stakes are pretty high here. Now, Google does plan to appeal this ruling. They argue that publishers chose their ad tech because it's simple, it's affordable, and it's effective. So this case is not over yet, but Google continues to take L's in court. And if you just zoom out a bit,

big tech overall has been facing a ton of antitrust cases. Meta is currently under trial in a case that was brought on by the FTC to break up the company. Amazon and Apple are also facing scrutiny. So we'll see how this all ends up shaking out. Google stock has been taking a beating this year as well, down more than 20% so far. Let's talk about some stocks making moves today. Not a lot of green on the board this morning.

Netflix stock, though, is one of the bright spots. Their shares continued to rally after delivering strong earnings on Thursday. Revenue grew 13% in the first quarter, and the company didn't change their full year forecast, saying that they don't see the tariffs or the current macroeconomic environment having a significant impact on their business. Co-CEO Greg Peters also said on the call that Netflix has historically been resilient

during tough economic times. I mean, some people on Wall Street are pointing to Netflix as a recession-proof stock, which kind of makes sense, right? Because Netflix might be the last subscription that people cancel. So Netflix stock is up nearly 2% this morning from the momentum carrying over

from the earnings from last week. Now, on the flip side, Tesla shares are falling this morning after Reuters reported the company's affordable EV model launch is going to be delayed. I am so shocked right now. Tesla originally planned to release a lower cost version of the Model Y in the U.S. within the first half of this year, but now the target is looking like either Q3 or even sometime during 2026.

So this is bombing out investors and shares are down more than 4% this morning in reaction to this news. Tesla's earnings tomorrow afternoon should be very interesting. Let's wrap the show with a fun fact. A lot of billionaires sold a ton of stocks in Q1. Mark Zuckerberg sold nearly $733 million worth of meta stock during the months of January and February. Jamie Diamond, the CEO of J.P. Morgan, sold $234 million of his stock in his portfolio. Stephen Cohen, the president of Palantir, sold more than $337 million worth of Palantir stock in Q1.

And Ted Sarandos, the CEO of Netflix, sold $195 million worth of stocks. I got to say, pretty good timing on that sell because stocks have taken a nosedive since the start of Q2. Well, all right, guys, that's the rundown for today. Stacked episode to start the week, I got a feeling it's going to be more of the same throughout the week, throughout the next few weeks as we get into the thick of earning season and all the uncertainty around the tariffs and the trade war and the showdown between Trump and Powell. We're going to be locked in. Again, leave the doom scrolling to us and just tune in every morning and we'll keep you guys in the loop. Thank you guys again 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. 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. Respected professionals. Learn more at public.com disclosures. In partnership with Zaid Mani, brokerage services for U.S. listed, registered securities are offered by open to the public investing incorporated, member FINRA and SIPC.