The Rundown - Netflix's Blowout Earnings, Microsoft's $3T Milestone

Episode Date: January 24, 2024

Stock market update for January 24, 2024. Netflix shares pop 10% as streamer adds 13.1 million subscribers (CNBC) Microsoft’s Journey to $3 Trillion Aided by Cloud Growth, AI Optimism, and Big Deals (WSJ) Germany’s SAP to Cut 8,000 Jobs. The Stock Is Rallying on Updated Financial Guidance. (Barron's) DuPont Stock Plummets on Shaky Outlook (WSJ) The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome to The Rundown, your daily market update in under five minutes. My name is Zadadmani, and today is Wednesday, January 24th. And today's show, we go over Netflix's blowout earnings, and if we're ready to finally declare a winner of the streaming wars, we also give some flowers to Microsoft and meta for crossing major milestones. Finally, we end this show with winners and losers in the markets today, and a fun fact that you can use on your next date. All right, let's go.

Let's start with a quick recap of the markets on Tuesday, day because it was a mixed day. The S&P 500 rose for the third straight day in a row making new record highs again, and the NASDAQ was also up. But the Dow was the one that dropped a bit because some companies in the Dow, like 3M, reported weaker than expected earnings. Remember, the Dow Jones is only made up of 30 companies, so when one company has a bad day, it can take the whole index down with it. I'm sure we're going to get a lot more movement as we get into the thick of earnings season. Stocks continue the hot streak today as all three major indices are in the green at the time of this recording around noon eastern. All right, let's run through some headlines. Starting with

Netflix earnings. Guys, Netflix has been on a role this week. On Tuesday morning, they announced the deal with WWE to broadcast Monday Night Raw on Netflix for the next 10 years starting in 2025. Then on Tuesday evening, they released their Q4 earnings, and I gotta say, they probably surprised a lot of people. Netflix did $8.8 billion in revenue, which was higher than expected, and they added 13.1 million subscribers in Q4. That's the most ever they've added in Q4 in their history. And it's way more than the 8 to 9 million subs that Wall Street was expecting. So now Netflix has over 260 million subs. I guess that password crackdown that they started a year ago seems to have worked. Now, digging a little bit deeper at their finances, Netflix posted a net income of $937 million in Q4.

So Netflix is out here making a profit while some other streamers are kind of struggling. I think this might be the end of the streaming wars. This one line in Netflix's shareholder letter made me laugh. Netflix wrote that mergers and acquisitions among traditional entertainment companies won't materially change the competitive environment. That's corporate talk for saying that Netflix isn't really worried about their competition. Despite other streamers cutting back on content, Netflix is going to be using some of their cash to invest in new content like this WWE deal. And again, I wouldn't be surprised if we get more sports-related content on Netflix moving forward.

Netflix stock jumped more than 10% after the earnings, making it one of the big winners today. I want to take this time to give some flowers to a couple other big tech companies. Let's start with Microsoft because Microsoft's market cap just hit $3 trillion for the first time ever. Microsoft is having a great start to 2024. They recently overtook Apple to be the most valuable company in the world, and now their stock is hitting all-time highs. You know, Microsoft is only the second company ever to cross the $3 trillion mark. The first company was Apple, which did it back in June of last year. Two drivers of Microsoft's recent success is their growing cloud business, also the hype around AI.

Investors think that Microsoft will be one of the big winners of AI because of their investment. and Open AI and all of their own AI initiatives as well. I wonder if Microsoft's going to hold the crown for most valuable company in the world for an extended period of time. Another tech company that deserves some flowers today is meta. Meta's market cap crossed one trillion dollars. Again, meta was a trillion dollar company in the past back in June of 2021. But then they hit a bit of a rough patch. Their value dropped below $250 billion by October of 2022. But it's back. Bringing this back to Microsoft. Microsoft first hit a trillion dollar market gap back in 2019. Microsoft went from one trillion to three trillion in like five years. Pretty impressive stuff. All right, let's talk about some other

stocks making moves today. The big winner today is Netflix. We already talked about them. Their stock is the top performing stock in the S&P 500. Another big winner is SAP. The stock is up more than 7% at the time of this recording around noon Eastern. SAP is a giant software company based in Germany and they reported better than expected Q4 earnings. The revenues and profits both came higher than what Wall Street was expecting. SAP also announced that they're going to be undergoing a restructuring program that will likely result in 8,000 jobs being cut. So it's another case of more job cuts happening in the tech sector. Let's talk about a loser today. DuPont is a big loser. The stock is down more than 10% at the time of this recording around noon eastern, making it the

worst performing stock in the S&P 500 today. DuPont is a chemical maker, and they issued disappointing earnings guidance for Q1. The company said they expect to make about $2.8 billion in Q1, which is less than the $3 billion that Walshut was expecting. They also expect their earnings to be lower than previously expected. So investors didn't like that news and the stock is down more than double digits today. All right, let's wrap up to the show with a fun fact in a segment that I'm calling stocking stuffer. It's a work in progress, but, you know, I kind of like the name.

In this segment, I share a fun fact about the stock market, the economy, or anything that I found to be interesting. Today's fun fact. With meta now crossing a $1 trillion market cap, there are now six U.S. companies with a market cap of over $1 trillion. dollars. Microsoft, Apple, Google, Amazon, Nvidia, and meta. I'm kind of sensing a common theme there. I was actually playing this game with my friends. If you had to drop three companies from that list that you can never use again, what three companies would that be? It's kind of a tough decision. All right,

that's all I got for you guys today. Another fantastic show. Thank you guys so much for listening, and we'll see you guys back here tomorrow. This is Public Live, 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 recommendation to buy, sell, or hold that security. Public live hosts are not financial advisors and are not affiliated with public holdings or its subsidiaries.

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