The Rundown - Meme Stock Rally Fizzles, Google Showcases AI at I/O Event

Episode Date: May 15, 2024

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Public.com presents the rundown, your daily market update in five minutes. My name is Zadmani, and today is Wednesday, May 15th. In today's episode, we give you the latest on meme stock mania. The hype might be starting to fizzle out a bit. Also, we got some fresh inflation data this morning that's making the investors pretty excited. We'll also catch you up on the latest AI news coming out of Google. And then stick around to the end of the show to see how the meme stock mania of this week compared to 2021. Let's just say the sequel,

not as good as the original. All right, let's go. Stock market continued to rally on Tuesday. All three major indices were in the green, with the NASDAQ leading the way and closing at record high. That's the seventh record closed for the NASDAQ for 2024. Now, meme stocks continue to dominate. GameStop was up another 59% on Tuesday, and the stock has almost tripled in the past five days and is up more than 350% in the past month, which is crazy. And AMC was also a up 30% on Tuesday with the price doubling in the last five days. But the meme shock rally might be fizzling out a bit because both AMC and GameStop grew slower

than they did on Monday and they both closed yesterday down from their intraday highs. So I wonder if we're kind of getting to the end of this rally or does this have another big surprise pump coming up? Not really sure. Both of these stocks are down more than 8% in the pre-market. So we'll see what happens today. Well, we got some inflation data to talk about this morning. The April CPI report was just released and the number of the number of the number of

not looking so bad. The CPI in April was up 0.3% from March, which was lower than the 0.4% that was expected, and it was up 3.4% on a 12-month annual basis, which was in line with expectations. And looking at just core CPI, which excludes volatile prices from food and energy, that came in at 3.6% on an annual basis, also in line with forecast. So kind of a relief because the last few CPI reports have come in hotter than expected. Yesterday, we had the PPI report come out, which measures wholesale prices, that came in hotter than expected, up 0.5% compared to the 0.3% that was expected. But the markets were loving the CPI data. I mean, it is the most popular, most set at inflation report, so I can see why. And all three major indices are up in the pre-market.

It's going to be interesting to see what Jerome Powell feels about this, because while this report is encouraging, inflation is still far away from the Fed's 2% target. Jerome Powell did make some comments yesterday while speaking in Amsterdam at the Foreign Bankers Association. He said that inflation is falling slower than a. expected and that interest rates will have to be elevated for an extended period. We'll see if he feels differently now. We're going to find that on June 12th, which is the next Fed meeting. Let's run through some headlines. Starting with Google, Google announced a new wave of AI features on Tuesday during their Google I.O. Developer Conference. Now, the most notable

announcement was related to Google's Android smartphones with introductions to new tools, including an AI for spam call protection. Boy, could I use that. They're also rolling out an AI photo assistant for cluttered camera rolls and an email summary generator. Google also provided a brief look into a new AI project, Astra, which is able to analyze and interact with the physical world through the phone's camera. A lot of these AI features will be able to run on Android devices through Gemini Nano, including Google's Pixel 8A smartphone, which came out last week. Android is the dominant operating system within the global smartphone market with a 74% market share as of the fourth quarter of 2023. And Samsung makes up 20.

8% of total global market share in Q1 of 2024, beating Apple's 17.3% share, according to IDC. But Apple's not sitting back either. There's rumors that Apple is partnering with OpenAI for their next iPhone. No official announcement yet, but I hope maybe we'll get some more information at WWDC in June. Back to Google, Google is also bringing AI to its search business, which really is the breadwinner for the parent company. Their search business made over $46 billion in the recent quarter and accounts for 57% of their total revenue. So there's been a lot of attention being given to Google's newly announced AI overview product, which will leverage generative AI to create search summaries, and it's going to be rolled out to billions of users by the end of the year.

I've had this turned on on my Google search, and honestly, I'm pretty impressed by it. I'm not going to lie. Now, along with Google's AI announcements yesterday, Open AI shut off their new AI model on Monday called GPT4O. That's a lowercase O, by the way. It's supposedly faster and more conversational than chat GPT. But just one day after their event, Open AI said its chief scientist in co-executive. co-founder, Ilya Sutskiver would be leaving the company. He helped create the company back in

2015 after being recruited by fellow OpenAI co-founder Elon Musk. But his standing in Open AI got a little rocky after a failed attempt by him and other board members to remove CEO Sam Altman. You guys remember that drama back in November of last year? After that failed attempt, I guess Ilya is leaving. What's that old saying? If you come at the king, you best not miss. Let's talk about some stocks making moves today. Starting with Dell. Shares of Dell are rising after Morgan Stanley raised its price target to $152 per share. This move comes after Morgan Stanley found that there was a higher demand and momentum for Dell's AI server products than previously expected. Dell's server products provide AI tools for data storage and management.

Of course, it was AI related, right? Really fun stuff. The stock is up more than 2% and is currently trading at more than $137 per share in the pre-market. On the flip side, shares of Sunpower are tumbling after, Wolf's research downgraded the solar energy stock to underperform with a $2 price target. Wolf downgraded the stock after it rose by 90% in the past week with the research firm blaming the meme craze for the price spike. The stock is down more than 20% in the pre-market and it's currently trading around $3.31

per share. Mem stock rally, not just exclusive for GameStop and AMC. It pumps some other stocks as well. Let's wrap the show with a fun fact. Today's fun fact is about meme stocks. What else, right? the amount of retail money going into GameStop and AMC this year compared to 2021 is significantly less. I'm talking 75, 80% lower.

Like, for example, on Monday, GameStop saw $15.8 million of inflow from retail traders. And AMC saw $37.5 million. Well, back in January of 2021, when the initial meme stock craze started, the inflows in GameStop was 87.5 million. And AMC had 170 million. So while it's similar vibes to three years ago, The level of mania that we had back in January of 2021 was just next level. But maybe we'll still get there this year. Who knows?

All right, guys, that's the rundown for today. I hope you guys enjoyed today's episode. If you did, please consider giving us a five-star rating on Apple and Spotify. And if you tap that bell icon, you'll be notified as soon as our episodes go up every day. Also, we do a daily poll on Spotify, and the results for these polls is always interesting. Like, for example, on yesterday's poll, we asked if you guys planned on buying a meme stock this week and more than 70% of the response was no. So if you guys are listening to this on Spotify,

tap today's episode and vote in today's poll. Thank you guys again for listening. Shout out to Mike and Connor for all the hard work 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 this 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, respective 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.