The Rundown - Meta & Apple Explore AI Deal, Target Enlists Shopify to Expand Marketplace

Episode Date: June 24, 2024

Stock market update for June 24, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zad Admani, and today is Monday, June 24th. In today's episode, we get you ready for this week. We got earnings. We have a presidential debate and an inflation report to look forward to. Also, we tell you about a potential AI partnership between Apple and meta and a deal with Target and Shopify that's looking to take on Amazon. Then stick around to the end of the show to find out where NVIDIA ranks on the list of most recognizable brands in the world.

world. It's probably not where you think. All right, let's go. Last week, we saw the stock market continue to move higher. The S&P 500, NASDAQ, and Dow were all in the green for the week. It was kind of a mixed bag, actually, because the week started off hot with the S&P and NASDAQ making record highs on Monday and Tuesday, thanks to tech stocks, especially Nvidia. I mean, Nvidia even became the most valuable company in the world on Tuesday. But then the markets had back-to-back red days to close out the week. And Nvidia especially took a hit. hit, losing more than 6% in just two days. Now, I'm not sure if this is just profit taking by investors or a start of a bigger sell-off in tech. We'll see what happens this week. Speaking of this week,

we got a few key events to look forward to. We're going to be getting earnings from FedEx, Micron, and Nike. And then on Thursday, we have the first presidential debate of the election season. And the NBA draft is also on Thursday night for my hoop heads out there. And then on Friday, we get the PCE inflation data, which is the Fed's preferred inflation measurement. Investors are going to look to see if we continue to see further progress in inflation, which might increase the odds of a Fed rate cut sooner rather than later. So, you know, I know it's summer, but things are still happening in the markets and we'll keep you guys updated every day here on the rundown. Also, a quick crypto update. Bitcoin is down this morning. I mean, Bitcoin has been in a slump

for the past couple of weeks, and it just got worse. Bitcoin dropped to below $61,000 this morning after starting the month around the $70,000 range. So June has not been great for Bitcoin or the crypto markets in general across the board. Let's run through some headlines. Starting with Apple and Meta. These two tech rivals are thinking about partnering up, and it has to do with AI. Meta has been talking to Apple, but potentially adding their AI model, Lama 3, to Apple Intelligence, which is going to run on iPhones and other Apple products.

Apple showed off Apple Intelligence a couple weeks ago at WWDC, and they also announced a partnership with OpenAIs chat GPT. But see, Apple is not stopping there. They also want to partner with other AI companies to offer their models on their. the iPhone. They've had talks with Google and startups like anthropic and perplexity and I guess meta as well. You know, it's kind of like the App Store model. Apple just wants to offer as many AI models as possible. And if users decide to upgrade to the premium version of those AI models, Apple's going to take a cut of that because that's what Apple does. So if you're using chat GPT on your iPhone, you want to upgrade to the premium version of Chad GPT, Apple gets a cut. And the reason

these AI companies want to partner with Apple is because Apple has massive distribution, right? There's a billion iPhones out there. So AI companies want access to all those users, then Apple gets a lot. And Apple gets a nice 15 to 30% cut of any user to decide to upgrade to the premium version. So despite any previous bad blood between Apple and meta, I can see why a deal would get done here. By the way, you can actually use meta's AI tool right now. They recently integrated it into Instagram and other meta products, even though I kind of feel like the integration is kind of annoying. But yeah, it's there if you want to use it. Let's shift gears and talk about another partnership. Target and Shopify. Target agreed to a deal with Shopify that will allow Shopify

store owners to add their products to the Target Plus marketplace, essentially allowing their products to be shown on Target's website. So think of it kind of like Amazon, but, you know, owned by Target. By the way, if you're not familiar with Shopify, it's a tool that helps you create your own e-commerce website. Like, if you bought something off of an Instagram ad, odds are that it was a Shopify website. And it's a pretty popular service. There are over 4.4 million Shopify stores globally. And now these stores can apply to be shown on Target's marketplace. And if you're approved, your Shopify store products would then show up on. on Target's website, potentially putting your products in front of more shoppers.

Overall, I think this is a win-win for both companies. Target has been struggling with their online sales. The digital sales only grew by 1.4% in the first quarter. And their online marketplace is significantly smaller than rivals like Amazon and Walmart. Like, for example, Amazon has over 2 million sellers on their website. Walmart has about 135,000 sellers. Target has 1,200. And the reason for that is because Target was the only one out of these companies that

required an invite from Target first. So they have a lot of catching up to do and this partnership with Shopify will probably help bring in a lot more sellers onto their website. So yeah, keep an eye out on Target as they try to grow their e-commerce business. I mean, I already get a ton of target packages delivered to my house. I got a feeling I'm about to get a lot more. Let's talk about some stocks making moves today. Starting with a firm. The Buy Now Pay Later company is up after Goldman Sachs upgraded the stock to a buy with a price target of $42 a share. Goldman said the company is the leader in the buy now, pay later space with offers for modern credit solutions. So I guess Goldman thinks that buy now pay later isn't going anywhere anytime soon.

Investors were liking that upgrade and the stock is up more than 3% in the pre-market in reaction to this news. On the flip side, a stock not doing so great this morning is Under Armour. Chairs of the sportswear are down this morning after they agreed to pay $434 million in settlement regarding an investigation about misleading shareholders about revenue growth back in 2017. Under Armour was under investigation by the Justice Department and the SEC about doing some shady accounting back in 2017 to mask the fact that their demand was slowing down. So this payment by Under Armour is to settle all of that and move on.

The company says this agreement is not an admission or finding of wrongdoing. I always just find that funny. What's not funny, though, is the stock price shares are down more than 2% in reaction to this news. I mean, Under Armour has had a tough time recently. I mean, I remember when they were hot back like a decade ago. I mean, they had Steph Curry, they had The Rock. was legit noise that Under Armour might be the next Nike or something. But yeah, things really haven't worked out that way. Under Armour shares are down more than 85% from their peak back in

2015. All right, let's wrap the show with the fun fact. Invita might be one of the most valuable companies in the world, but not many people actually recognize their brand. In fact, Nvidia wasn't even in the top 100 most recognizable brand, according to a consulting firm, interbrand. The top four brands on their list was Apple, Microsoft, Amazon, and Google. You might have heard of those companies. And those companies are actually four of the top five most valuable companies in the world. Other brands on this list include McDonald, Starbucks, Disney, and Netflix. But you know, I kind of understand this, though. Is this really, you shouldn't be that shocking because most everyday people aren't interacting with Nvidia products. Unless you're

like a hardcore gamer wanted to get your hands on the latest Nvidia GPUs for your gaming rig, you're not going to know about Nvidia. Like, my parents have no idea what Nvidia is. Like, I'm sure Nvidia's brand will become more popular now because of all the height the stock price is getting, but I don't think it will ever be like in the top 10 most recognizable brands, maybe not even the top 50. But I don't think Nvidia's shareholders really care about that though, right? As long as the stock keeps going up. Well, all right, guys, that's the rundown for today. We've got another exciting week coming up. By the way, if you guys want to be notified as soon as an episode goes up, tap that notification bell on Spotify. And if you got like five more seconds, go vote in today's

Spotify poll and give the podcast a five-star rating. The engagement really does help us out. Thank you guys so much for listening. Shout out to Connor and Mike 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 this show reflect the opinions of the guests. You should not take any mention of a publicly traded security as a 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.

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