The Rundown - Microsoft Cuts 20% of Xbox Staff, Apple Locks In Broadcom for AI Chips

Episode Date: July 6, 2026

Market update for Monday July 6, 2026Interview with Bloomberg’s Mark Gurman about Apple: (Spotify)Check out the Public app for incredible investing tools and to support the show (LINK)Follow us on Instagram (@TheRundownDaily) for bonus content and instant reactions.In today’s episode, Zaid covers:Microsoft cutting thousands of jobs and hitting reset on Xbox after years of gaming acquisitionsApple extending its Broadcom chip partnership through 2031 as it builds out AI infrastructureTeraWulf surging after landing a 20-year Anthropic data center dealStrategy falling after selling Bitcoin to fund dividend paymentsBuc-ee’s turning clean bathrooms, brisket, and Beaver Nuggets into a roadside retail empire

Public.com presents the rundown. Your daily market update in 10 minutes. My name is Zadadmani, and today is Monday, July 6th. In today's episode, we'll tell you why Microsoft is cutting thousands of jobs and resetting their Xbox strategy. We'll also tell you about a brand new chip deal between Broadcom and Apple. Then stick around to the end of the show to find out why a giant gas station is attracting World Cup tourists.

We got a great show for you today. Let's go. Markets are coming off a pretty weird, but winning holiday short and week. Last week, the S&P 500 gained 1.8% while the NASDAQ added 2.1%. And I guess I have to mention the Dow here. It was up 2% and finished last week at record highs. Still don't care about the Dow, though. You know, there seems to be a lot of volatility right now in the market,

especially with chip stocks. It feels like the Sox Semiconductor Index is going up or down like 4 to 5% on a daily basis, which could be a sign that the market can't make up its mind on what to do with the AI trade right now. One day there seems to be a ton of optimism, the next day there's doom and gloom. So the market is bouncing headline to headline when it comes to AI. But what is clear, though, is that the money is rotating into other corners of the market. And the best example of that is small caps. The Russell 2000 Index, which tracks smaller companies.

companies climbed about 22% in the first six months of the year. That's the best first half performance by the Russell since 1991. It even beat the NASDAQ by around 9 percentage points, which is the biggest first half outperformance since 2006. And that's notable because this is a big change from what the last few years have looked like where small caps have basically been ignored by investors, while Nvidia, Micron, and other big tech names have gotten all the attention. So one of the things I'll be watching for in the second half of 2026 is,

is whether this small cap rally continues. And also, what's going to happen to the AI trade? Personally, I'm keeping my eye on some of the big tech names like Microsoft and meta that I've been beaten up recently. I think they could be in for a comeback in the second half of the year. Now, looking ahead to this week, it's a relatively quiet week when it comes to economic data, but there is one report the entire market will be watching, which is Samsung's earnings. Samsung is one of the three major memory makers in the world.

so what they report and say about memory chip demand could set the tone for chips and AI stocks this week. Samsung stock has doubled in the last three months, so expectations are really high going into this earnings report. Analysts are expecting Samsung to report operating profit of about $55 billion for the quarter, which would be an 18-fold jump from the same quarter last year, which just blows my mind. So if Samsung delivers a beat, it could calm the nerves around the AI trade. but if Samsung disappoints even by a little bit, then chip stocks could get hit again this week. We'll recap the earnings report tomorrow along with everything else happening in the market. So if you're new here, definitely get subscribed for the podcast and tune in every day to stay in the loop.

Let's run through some headlines, starting with Microsoft. Microsoft announced this morning that they are cutting thousands of jobs, and this time the Xbox division is taking the biggest hit. Microsoft is cutting about 4,800 jobs with about 3,200 of those cuts happening at Xbox, which is about 20% of the entire gaming division. On top of that, Xbox is divesting four of its gaming studios, so this is a total strategy shift for the company. This is a clear admission that Microsoft's strategy to go all in on GamePass and cloud gaming over the last few years did not work.

Remember, Microsoft spent a fortune buying up gaming studios, including $69 billion acquisition for Activization. Vision Blizzard, which is the maker of Call of Duty. Microsoft's plan was to put all these games on GamePass, which is like a monthly gaming subscription service, but GamePass's growth has plateaued, so now Microsoft is selling back the gaming studios and doing a full reset. New Xbox CEO Asha Sherma was brutally honest in a memo to employees saying that Xbox operates at margins three to ten times lower than comparable businesses, and that in a

typical year, Xbox was losing 64 cents for every dollar it invested. So the business was in rough shape and it probably needed a reset like this. And here's the thing, AI probably played a role in this decision as well. And Microsoft is one of the companies spending hundreds of billions of dollars on AI data centers and AI infrastructure. So now every business inside Microsoft has to justify its existence. And if you see Xbox losing all that money, I mean, it's hard to justify that. And it probably doesn't help that Xbox's hardware sales have also been weak compared to Nintendo and Sony. And then to make matters worse, Microsoft just had to raise prices on their

Xbox hardware because of higher memory prices from the AI boom, which Microsoft is partially responsible for causing. So that's kind of funny how this is all playing out. So yeah, Microsoft continues to have a terrible year. Their stock has been the worst performer of all the mega cap tech names this year down 19% as investors question their AI strategy and all the Kappex spending. But look, Microsoft reports earnings on July 29th. And that's going to be a closely watched report to see if Microsoft can turn things around. Let's shift gears and talk about Broadcom because they just locked in Apple as a customer through 2031. Broadcom announced this morning that they are expanding a partnership with Apple to develop

and supply custom chips. Now, Broadcom and Apple go way back. You know, Broadcom has been making the wireless and connectivity chips inside iPhones for years now. In fact, Apple accounts for roughly 20% of Broadcom's annual revenue. But lately, the relationship has been a bit shaky because Apple has started to replace Broadcom's parts in the iPhone with their own. own in-house chips. But it seems like the two sides are back to working it together. Broadcom

will help Apple develop and supply custom A6 chips built specifically for AI. See, right now, Apple uses their M-Series chips for the servers that power Apple intelligence. But according to Bloomberg, Apple has been working on its first dedicated AI server chip, codename Bultra. So Broadcom will play a role in developing that chip. So yeah, this is a big win for Broadcom. And I got to say, they've done a great job positioning themselves to be the arms dealer of the AI era. Broadcom now makes custom chips for Google, now Apple, meta, and Open AI are also in the mix, too. So whoever wins this AI race, Broadcom will get paid. Broadcom stock is up around 5% this morning at the time of this recording.

And if you zoom out, the stock has gone up 38% over the past year. Apple stock is also up around 2% this morning. By the way, if you want a more in-depth discussion about Apple and AI and why they raise prices on their products and the impact that'll have on their business, go check out my interview that I did with Bloomberg editor and Apple Insider Mark German. We posted that interview yesterday. It was a great discussion. I'll put a link in the description. Let's talk about some stocks making moves today. Shares of Tara Wolf are ripping this morning after the company signed a massive 20-year lease agreement with Anthropic. Terah Wolf is another one of those companies that started off as a

Bitcoin miner back in 2021 during that crypto boom, but then pivoted to being an AI data center after the AI boom. And now they just announced a deal with Anthropic, where Anthropic will lease compute from a purpose-built AI data center at TerraWolves campus in Kentucky. This deal is expected to generate about $19 billion in contracted revenue over the initial lease term. So investors were loving this, and TerraWolf stock is up around 14% this morning at the time of this recording, and if you zoom out, the stock has gone up more than 80% this year. Now, on the flip side, strategy stock is moving lower today after Michael Saylor announced the company sold $216 million worth of Bitcoin last week to help fund its dividend payments. Now, here's the thing,

Strategies average cost to acquire Bitcoin is around $75,000, but the company sold about 3,500 Bitcoin last week at around $60,000 each, so they took a loss on that sale. But the thing is, they had to do it to pay their dividend bill. And the concern now is that strategy could be forced to sell even more Bitcoin to cover their interest and dividend payments this year. So strategy stock is down around 3% this morning after rallying 22% last week. And Bitcoin is down over 2% as well, taking the wind out of the 6% rally from last week. Let's wrap the show with the fun fact. Gas stations in America are getting bigger and bigger. And that strategy seems to be bringing in more customers. Buckies is the king of this trend. It has over 50 locations in 13 states, and their biggest store in Texas

is more than 75,000 square feet with over 100 gas pumps. I mean, 75,000 square feet is like 10 times the size of a typical gas station. And as someone who's lived in Texas for over 20 years now and has made frequent road trips between Houston, Austin, and Dallas, Buckees is like a road trip staple for me at this point. I mean, they got cheap gas, they got great food and really, really, really clean bathrooms, that's hard to beat on a road trip. Plus, they also have a ton of Tesla chargers, which is really nice for me. And look, all of that has been great for their business. According to placer.a.I, the average customer spends nearly 21 minutes inside of Buckees.

That is double any other convenience store chain. And for convenience stores, most of their profit comes from selling stuff inside the store, like food and t-shirts and plush beaver toys. Buckies now has such a strong reputation and a cult following for that matter, that small towns are fighting to get one. Bloomberg reported that West Memphis, Arkansas is giving Bucky's land worth $3.5 million plus tax breaks and road improvements because the city expects the store to bring in huge traffic and as a result hundreds of decent paying jobs. That's the other thing about Buckeys. They pay pretty well. In fact, a car wash manager can make over $125,000 a year. So shout out to Buckees.

You know, one of my favorite parts of the World Cup being in the U.S. has been seeing international tourists flocking to Buckees and just being in all of it. And I wonder if we're going to see more gas stations try to copy the Buckees model in other parts of the country. Well, all right, guys, that's the rundown for today. If you guys enjoyed today's episode, if you did, and you have like five extra seconds, consider giving us a five-star rating on Apple, Spotify, YouTube,

wherever you listen to your podcast, all that engagement. Really does help us out, and it helps other people find the show. Thank you guys so much for listening, watching, and commenting, shout out to Mike for all the work behind the scenes. And we'll see you guys back here tomorrow.