The Rundown - Musk’s AI Factory, Apple Suspends Work on Next-Gen Vision Pro

Episode Date: June 20, 2024

stock market update for June 20, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zedadmani, and today is Thursday, June 20th. In today's episode, we tell you about Nvidia's rise to be the most valuable company in the world and why some people are throwing the B word around. We also tell you about Elon's new AI factory and Apple's shocking decision regarding the Vision Pro. And stick around to the end of the show to learn about the first company that reached $1 billion in market cap. All right, let's go. The stock market continues on its record-breaking week.

The S&P 500 and NASDAQ both closed at record highs on Tuesday. And Tuesday was a big day for Nvidia, which officially became the largest company in the world for the first time ever overtaking both Apple and Microsoft. This is the first time since 2019 that a company not named Apple or Microsoft have held the title for most valuable company in the world. There was a period back in 2019 where Amazon held that title for a few days. And what's more interesting is that since 2001, only two other companies have held the title for number one.

That would be Exxon Mobile and GE. And if you're wondering how those two companies are doing nowadays, Exxon is currently ranked 14th largest company in the U.S. And GE is currently ranked 46th. Low-key, kind of surprised that GE is still in the top 50. I wonder what the next company to hold the number one title will be. And when is that going to happen? I mean, I don't really see Apple or Microsoft going anywhere anytime soon. InVitya, on the other hand, I mean, look, I'm not trying to be a hater here,

I wouldn't be surprised if it's not in the top three in a few years. Like, it still blows my mind how fast the stock has grown in the last 20 or so months. They've added $3 trillion in market cap in the last two years. I mean, Nvidia wasn't even in the top 10 largest companies two years ago. And now they're number one. And that's why some people are getting bubble vibes. And I don't really blame them. But things aren't slowing down right now.

In fact, the stock is up another 3% in the pre-market today. With the way things are going right now, Nvidia might hit $4 trillion in the next couple months. Let's run through some headlines. Starting with Elon Musk's AI factory. Dell and Super Micro are building an AI factory for Elon Musk's AI company, XAI. Both these companies are building a fleet of AI servers that are going to be powered by, NVIDIA, of course.

This is why NVIDIA is the number one company in the world, right? Michael Dell, the founder and CEO of Dell, actually shared a photo of what this AI factory looks like, and it's just a ton of servers sitting in a warehouse. But these AI servers are in high demand right now. In fact, last month, Dell reported that the revenues from these servers have more than doubled from the previous quarter. And their backlog is jammed up right now. It's one of the reasons why Dell's stock is up over 100% for the year and SMCI is up over

200% for the year. Both Dell and Super Micro are rushing to build as much server capacity as they can, as more and more businesses are looking for that capacity to run AI applications, which require more data processing power. Now, going back to Elon here, it looks like he's really taking this. AI company pretty seriously, a company that he launched last year to compete with OpenAI, which is the previous AI company that he co-founded, but then he stepped away from. A lot of drama there. We've talked about this in previous episodes. But yeah, it looks like Elon is spending a lot of money

and time to really build out this AI company. Just wonder how Tesla shareholders feel about this. Let's shift gears and talk about Apple. It looks like Apple might not release a new high-end version of the Vision Pro anymore, according to the information. Now, Apple hasn't reported any specific sales numbers for the Vision Pro, but I think it's safe to say that they're pretty bad. Because if they were good, Apple would be talking about it nonstop. I mean, have you guys seen anyone wear these Vision pros outside of that initial week when it first launched? Because I haven't. I guess even Apple fanboys won't just blindly buy a $3,500 ski mask that weighs way too much.

So Apple's going back to the drawing board to create a product that is cheaper and lighter. They're trying to achieve this by cutting costs on the production side. The information reported that the company wants to make the product at least one-third lighter and make the price in line with a high-end iPhone. So, like, what, like $1,500? I think that's a good start. Still not sure if that's going to be enough for people to buy these in mass, but we'll see. Apple is planning to release the new Cheapervision Pro by the end of 2025. So they still got over a year to figure this out. Let's talk about some stocks making moves today.

Starting with Accenture. The consulting firm stock is up after reporting earnings this morning. Now, the company's revenues and profits came in below Wall Street estimates, but they talked about AI. Specifically, they reported more than $900 million in books. related to generative AI in the past quarter. And the company has booked over $2 billion from generative AI this year so far. Companies are hiring a censure to figure out how to integrate AI into their businesses. I mean, investors get pretty excited whenever you mention AI and this one's no different. Stock is up more than 6% in the pre-market.

So even consulting companies are benefiting from this AI boom. On the flip side of stock not doing so good this morning is Trump Media. Shares are plummeting after the SEC said the company's registration of additional shares are now effective. So what this fancy talk essentially means is that early investors in the company can now sell their shares of the company. And you guys already know, Donald Trump is a majority shareholder in the company. Trump Media has said that the stock could experience a significant decline if shareholders sold their stakes. So they're already warning investors about this. As a result, shares of Trump media are down more than 9% in the pre-market.

Let's wrap the show with the fun fact. In spirit of Nvidia taking the title of the number one most valuable company in the world, I thought it'd be pretty cool to go back and look at some previous companies. that had the title for most valuable company in the world. Let's talk about the first company to reach a $1 billion market cap. That would be United States Steel, which some of you guys might know as US Steel. It reached a $1 billion market cap back in 1901.

The public company was created with the merger of Andrew Carnegie Steel Company with John P. Morgan's company, JP Morgan, you might have heard of him. And the president of that company was a guy named Charles Schwab. Might have heard of him as well. Now, there's a lot of drama around US Steel. It actually ended up not living up to its hype. hype. The company actually ended up doing pretty bad. In fact, Charles Schwab left US Steel and started

his own company called Bethlehem Steel, which ended up dominating U.S. Steel. I feel like this should be a movie or something. I mean, there's so many big players here. You got Carnegie, you got J.B. Morgan, you got Schwab. Sounds like a really interesting Netflix miniseries or something. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you have a couple seconds, please open up to Spotify or Apple Podcasts app and give us a five-star rating. That engagement really does help the show. And if you're listening to this on Spotify, to vote in today's Spotify poll. Thank you guys so much for listening. Shout out to Connor and Mike for all the help behind the scenes. 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 the 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. Rundown 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 Zayidamani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.