The Rundown - Meta to Bring Ads to WhatsApp, OpenAI Wins $200M U.S. Defense Contract

Episode Date: June 17, 2025

Stock market update for June 17, 2025. Follow ⁠⁠⁠⁠⁠@TheRundownDaily⁠⁠⁠⁠⁠ on Instagram.This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Public.com/disclosures⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.

Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zadadmani, and today is Tuesday, June 17th. In today's episode, we'll discuss the latest geopolitical developments that has the markets in limbo. We'll also discuss meta's plans to monetize WhatsApp. Then stick around to the end of the show to learn about the new Trump phone being made here in the U.S. We've got a great show for you today. Let's go.

Stocks got up to a nice start this week with the S&P 500 up nearly 1%. And the NASDAG adding over 1.5% thanks to reports that the conflicts between Israel and Iran might be de-escalating and ending soon. But the situation is still fluid. Both sides continue to trade missile strikes. And President Trump hasn't given any indication that the U.S. plans to step in as a mediator. So that's starting to spook investors again this morning. stock futures are down in pre-market trading and oil prices are creeping higher. So yeah, I'm buckling up for some more volatility moving forward. Now, to add to the uncertainty, we're also getting

closer to the July 9th deadline where the reciprocal tariff pause expires. I think a lot of people kind of forgot about that. And there hasn't been many deals announced. So we're kind of in limbo right now. There's trade uncertainty. There's geopolitical uncertainty. But despite all that, the markets are within 2% of all-time highs. I mean, if the situation improves over the next few weeks, we might be looking at all-time highs by the time July 4th rolls around. Let's run through some headlines.

Starting with meta. Meta just announced that ads are coming to WhatsApp. That's right, 11 years after Facebook bought WhatsApp for $19 billion, they're ready to turn the most popular messaging app in the world into a digital billboard. And honestly, I'm kind of surprised it took him this long. I think many people thought they would do this sooner.

Now, META was still making money from WhatsApp, mostly by charging businesses for tools to message customers. But this wasn't a big money maker for them, relatively speaking. Analysts estimate that it brought in somewhere between $500 million to a billion a year, which is nothing compared to the $160 billion in revenue that META made last year. We're talking less than half a percent. So now, META is pulling the advertising lever to squeeze more out of WhatsApp. And it kind of makes sense, because what's the way.

WhatsApp is one of the most popular apps in the world with over 3 billion monthly active users. In fact, it has more users than Instagram. And while it's not as dominant here in the U.S. as it is globally, it's gaining traction here, too, with over 100 million monthly active users in the States. So these ads on WhatsApp could turn into a nice revenue stream for the company. Investors seem to be pretty excited. Meta stock was up 3% yesterday after this was announced. Now, Meta did say that ads will only appear on the Updates tab on WhatsApp, so the personal

chat still should be ad-free for now. And meta says they're going to start rolling out these ads over the next few months, probably to ease the shock. But I mean, at this point, who's really switching from WhatsApp, right? Most people aren't going to ditch WhatsApp over a few ads. In fact, most of my group chats are on WhatsApp now, and I'm not going to change that. Now, as for privacy concerns, meta says that all the chats and calls will remain end-to-end encrypted, meaning they're not using your actual messages to target ads. Instead, they're going to rely on information like your location, device type, and which channels you follow. So the ads might not be as targeted as they are on Instagram or Facebook. But I'm sure people are going to get creeped out nonetheless whenever they see

a hyper-specific ad that makes it seem like the company is listening to your phone calls. I mean, I still get creeped out from some of these Instagram ads for how specific they are. But yeah, WhatsApp had a good decade-long run as an ad's free experience, but I mean, it was just a matter of time. And with all the billions of dollars that Meta is investing into AI, I guess they could take all the extra revenue that they can get. Now, speaking of AI, let's talk about Open AI because they were just awarded a $200 million contract with the U.S. Department of Defense. The DOD announced a one-year deal with the maker of ChatGPT to help develop frontier AI capabilities for national security, everything from enterprise tools to battlefield tech. So this bigger trend that we're seeing

of tech companies partnering with the U.S. military continues to play out. In fact, we did a whole deep dive episode on this exact topic a couple weeks ago. So scroll back in your podcast feed and go check that out if you want to learn more. Now as OpenAI is strengthening their relationship with the Pentagon, their relationship with Microsoft seems to be a little rocky. See, Microsoft and Open AI have had a relationship going all the way back to 2019. That's when Microsoft invested $1 billion into the company. This was before chat GPT, before all the hype, before most people had even heard of the company. And in exchange for that investment, Microsoft got extremely exclusive rights to sell OpenAI's tools through their cloud platform Azure and early access

to their AI models. So this deal worked out for Microsoft because they made Azure one of the go-to platforms for AI. But today, OpenAI has become one of the biggest, most important companies in the world. So now they're trying to loosen Microsoft's grip on them, especially since these two are now competing in areas like developer tools and enterprise services. And to further complicate things, Open AI is trying to convert from a nonprofit company to a for-profit public benefit corporation,

and they need Microsoft to sign off in order to do that. And according to the Wall Street Journal, talks have gotten so tense between the two sides that OpenAI executives have even floated accusing Microsoft of anti-competitive behavior and possibly bringing in regulators if Microsoft refuses to play ball. So this relationship is starting to get kind of toxic,

and we could be headed for a messy breakup. Now, all that being said, Microsoft's not sweating this too much. Their stock, in fact, hit all types. high's yesterday and the company's market cap crossed $3.5 trillion. But yeah, the Open AI Microsoft relationship might be the tech world's version of J-Lo and Ben Affleck. Who knows what's going to happen next? Let's talk about some stocks making moves today. Shares of Lanar are ticking up this morning after the home builder beat revenue expectations for the quarter. The company delivered over

20,000 homes, slightly above estimates, which is impressive, considering. considering how tight the housing market has been. Now, that said, the average home price sold was around $389,000, which missed estimates of over $400,000. The company's profit guidance came in lower as well. Lanar says they see the housing market continuing to soften due to affordability issues and high mortgage rates. Still, Lanar stock is up around 2% this morning in reaction to the earnings.

Now, on the flip side, it is a rough day for solar stocks. They are getting crushed after the new version of Trump's federal spending bill working its way through the Senate, still had cuts to solar energy incentives. If this bill passes, incentives for solar and wind will be phased out completely by 2028. So that news sent solar stocks into his tailspin this morning. Shares of sunrun, end phase energy, and first solar are all down between 10 to 20%. Let's wrap the show with a fun fact. The Trump organization is getting into the smartphone business. That's right. Later this summer, the company will be launching a new wireless carrier called Trump Mobile and even their own smartphone

that they're calling the T1. Trump Mobile will be an MVNO, which stands for a mobile, virtual, network operator. Essentially, this phone company will rent capacity from the bigger carriers like Verizon, T-Mobile, and AT&T. In fact, we've seen plenty of celebrity-back carriers pop up in the past few years, including Ryan Reynolds Mint Mobile, which got bought by T-Mobile back in 2023. So it seems to be a successful model and the Trump organization is jumping in. On top of that, they're launching a gold colored Android phone called the T1, which is going to cost $499. And what's interesting is they say the phone will be built here in the U.S., which is a pretty big deal because there's no major smartphone company making their phones in the U.S. So that'll be very interesting. What I want to know is

if the phone's going to be preloaded with Truth Social. Now, to be clear, President Trump himself isn't directly involved in this. The Trump organization is being run by the president. President Sons, Eric and Don Jr. But with all the tariff that Trump's been pushing on foreign-made phones, like the recent threats against Apple for making their phones in China and India, this launch feels pretty strategic. I feel like they did miss an opportunity to call the service MAGA mobile, which I think flows better than Trump mobile. Well, all right, guys, that's the rundown for today.

Hope you guys enjoyed today's episode. If you did, and you have like six extra seconds, consider giving us a five-star rating on Apple, Spotify, or wherever you listen to your podcast. If you do listen on Spotify, don't forget the vote in today's Spotify poll. Leave us a comment on Spotify. And what's really cool about our podcast is that we have listeners from all over the world. So if you're listening from outside of the U.S., let us know in the comments where you're listening from. 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.