The Rundown - Musk Changes Course for Tesla’s AI Chips, Big Tech Announces Fresh Layoffs

Episode Date: June 4, 2024

Stock market update for June 4th, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Admani, and today is Tuesday, June 4th. In today's episode, we give you the latest drama involving GameStop and Roaring Kitty. He might be looking for a new broker suit. Also, it looks like Elon Musk might be playing favorites with his companies. And then stick around to the end of the show to find out Spotify's latest moves. Look, we love Spotify here, but this one kind of hurts. All right, let's go.

Great start for the stock market on Monday. Both the S&P 500 and NASDAQ were in the green. The Dow continued to slump, but nobody cares about the Dow. And yesterday was another record day for Nvidia. The stock was casually up 4.9% making record highs again off the backs of their new AI chip announcements in Taiwan. Go check out yesterday's episode of The Rundown. If you guys want to learn more about that, we covered it there.

Now, yesterday was also memorable because there was a glitch at the New York Stock Exchange. Again, this time the glitch accidentally holds. halted trading on about 40 stocks and showed some weird prices for other stocks. Like, if you pulled up Warren Buffett's Berkshire Hathaway, it showed that it was down 99%. I mean, for a second, I thought that it was a once-in-a-generation dip buying opportunity, or maybe something happened to Warren Buffett. But no, it was just a glitch. The glitch was resolved in about 45 minutes or so.

But, you know, I feel like there's been a lot more glitches happening. Like last week, the S&P 500 and Dow froze for like an hour. And now this? What's going on with the stock exchanges, man? Are they running like window XP or something? Millennial joke. Sorry to all the Gen Z listeners out there. Let's run through some headlines.

Starting with Elon Musk. Elon might be putting his new AI company ahead of Tesla. Recent emails from Nvidia showed that Elon Musk moved a large shipment of Nvidia's H-100 AI chips that were meant for Tesla over to Twitter slash XAI. I'm still a little confusing what the difference between those two companies are. Tesla had ordered 12,000 H-H-1-1-1-7. 100 chips, which is about $500 million, well, he sent an email to Nvidia telling them to prioritize shipping AI chips to X slash XAI instead.

That's pretty weird. Now, Tesla originally bought these chips to set up their supercomputers to help develop autonomous vehicles, right? But that's probably going to be delayed now. So this raises a lot of questions, especially for Tesla shareholders. Like, what is Elon prioritizing right now? Seems to be that he's prioritizing his AI company and Twitter instead of Tesla. Or maybe Elon doesn't think that the autonomous vehicles are going to take off.

off anytime soon. And instead he wants to get XAI going. A lot of questions and, you know, it's Elon, so there's always drama. Speaking of drama, let's talk about GameStop and Roaring Kitty. Roaring Kitty might have to find himself a new broker to do trades because his current broker, E-Trade, is thinking about kicking him off the platform. As you mentioned on yesterday's episode, Keith Gill, aka Roaring Kitty, the OG meme stock trader that started this whole GameStop rally, shared a screenshot of his E-Trade account yesterday that showed that he had over $200 million of GameStop stock and options, which caused GameStop stock to jump 21% yesterday. Well, according to an article in the Wall Street Journal, E-Trade is concerned that Roaring

Kitty might be engaging in stock market manipulation, and they've had conversations about maybe removing him from the platform. Kind of wild, right? Now, there's no denying that Keith Gill, aka Roaring Kitty, does have influence. I mean, the dude has millions of followers, kind of a cult following, honestly. But I do find it kind of weird that E-Trade wants to kick him off their platform. He hasn't done anything illegal and the SEC or other regulatory bodies haven't come out and said anything. Hey, Keith, if you're listening to this man, just go check out Public.

All right? Public won't kick you off. In fact, public will give you a rebate on all your options trade. So that's pretty sweet. I mean, it felt like a natural plug there. I had to do it. By the way, because of GameStop's jump yesterday, Roaring Kitty's portfolio was up $78 million in just one day. And he shared another screenshot on Monday afternoon showing that he hasn't sold any stocks or options.

He's still holding. what happens today right now game stop is down 4% in the pre-market shifting gears a little bit let's talk about big tech they announced a fresh round of job cuts again this time in their cloud division Microsoft is cutting about 1,000 jobs in the azure cloud department and also their hollow lens group which was Microsoft's mixed reality moonshot i don't think it's really gotten much traction though and google is cutting about 100 jobs in their cloud unit including sales and engineering now big tech companies have been conducting layoffs since 23 and now these big tech companies have pivoted hards to AI, so other departments are being downsized. Now, it's never great to hear when people lose their

jobs, but keep in mind that these cuts do represent a very small percentage of the workforce at these companies. Let's talk about some stocks making moves today. Starting with Intel, their stock is up this morning after the chip maker revealed its new AI chip. I mean, everyone's getting into the AI chip race, huh? NVIDIA and AMB revealed their new chips earlier this week. Intel's new chip is called the Xion 6? Where do they come up with these names, man? Supposedly this chip. will boost performance for data servers running AI task and it will be more energy efficient. Intel also gave some details on its Lunar Lake chips that will be used in AI PCs. As I've mentioned in the past, I don't really know how an AI PC is different from a normal PC,

but yeah, they're coming. Big Tech has made a big push into AI PCs recently, so let's see how all this works out for Intel. The Lunar Lake chip is expected to begin delivery in Q3. Intel shares are up more than 1% on this news. On the flip side, a stock not doing so great, this morning is bath and body work. shares are on the downfall if the company provided weaker guidance for fiscal 2024. Do I love bath and body works. Are people not shopping there right now? The company expects revenues to either drop by 2.5% or remain flat for the year. I guess Big Soap isn't performing too hot. The stock is down more than 4% on this news in the pre-market. Let's wrap the show with a fun fact. Today's fun fact is about Spotify. They're raising prices again. I guess this fact

isn't really that fun, but I thought you guys should know. Starting in July, Spotify will raise prices in the U.S. from 1099 to 1199 for the individual plan, and the family plan is going up $3 to $20 a month. I'm going to have to start Venmo requesting my family members. Now, Spotify just increased prices last year, and they're doing it again. Prices have gone up about 20% in the past year. Now, look, we're big fans of Spotify here on the rundown, okay, go subscribe to the podcast on Spotify, hit that notification bell, all that good stuff. And Daniel Eck, the CEO of Spotify, If you're listening to this, big fan. But man, the price increases kind of hurt.

But look, I'm already like too locked into Spotify at this point to switch, so they got me. You know who is very happy about these price increases, though? Spotify shareholders. Spotify stock was up 5% on this news on Monday. All right, guys, well, 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 Spotify and Apple. Would be awesome to get some love on Apple as well.

Maybe hit us with a review on Apple because everybody reads the reviews before they listen to a podcast. Thank you guys again for listening to a podcast. to the show. Mike is out this week, so shout out to 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 this show reflect the opinions of the guests. You should not 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

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