The Rundown - Nvidia Announces New AI Products, Trump Slams Walmart for Price Hikes

Episode Date: May 19, 2025

Stock market update for May 19, 2025.

Public.com presents the rundown, your daily market update in under 10 minutes. My name is Zaid Admani, and today is Monday, May 19th. In today's episode, we'll tell you about the U.S. government's credit downgrade and why it might not be a big deal. We also tell you about the latest tech coming out of Nvidia and the internal struggles at Apple regarding their AI. Then stick around to the end of the show to find out why Warren Buffett's retirement could be a big problem for Omaha State.

We got a great show for you today. Let's go. Markets are coming off one of their best weeks of the year. All three major indices finished higher last week thanks to a de-escalating trade war with China and an encouraging inflation report. The S&P 500 was up more than 5% last week. The NASDAQ was up more than 7%. Even the Dow Jones squeezed out a 3.5% gain despite the debacle with United Health Group last week. We were seeing green across the board. Now, we did get an economic plot twist on Friday night. The Moody's credit rating agency downgraded the U.S. government's credit rating.

Moody's dropped U.S.'s rating from a AAA down to a double A1, which is still pretty solid, but it's not the S tier that we once were. Moody's says the reason for the downgrade is the U.S. government's rising deficits and rising interest costs. They're also concerned that politicians don't want to fix the spending problem either. So what does this downgrade even mean? Think of the credit rating as the government's credit score. Investors and lenders pay attention to it.

A lower credit rating could mean higher borrowing costs for the U.S. government. In fact, Treasury yields are already starting to jump this morning because of this downgrade. The 30-year yield is now above 5%. And if yields keep rising, well, that can make the cost of mortgages and car loans that much more expensive. And by the way, Moody's isn't the only credit rating agency to downgrade the U.S. debt. Fitch did it a couple years ago back in 2023, and Standard & Poor's downgraded the U.S. rating all the way back in 2011. Moody's is the last major credit rating agency to do this downgrade. But just to be clear, this downgrade doesn't mean a crash is coming in the stock

market. The U.S. stock market has done pretty well since the last couple downgrades. So it's possible this downgrade by Moody's is a nothing burger, but just, you know, keep an eye on U.S. Treasuries moving forward. Let's run through some headlines. Starting with NVIDIA. Nvidia made a ton of major announcements this morning from Taiwan, so let's go through some of them. First up, they announced NVLink Fusion. Now, without getting too technical, it essentially allows Nvidia chips to play nicely with processors from other companies. On top of that, Nvidia talked about the GDX Cloud Leptin, which is kind of like an Airbnb for cloud computing. This new platform by Nvidia will let AI teams buy and sell GPU capacity from a global pool of cloud providers.

So if your AI model is hungry for compute that day or week, you don't have to wait months to buy chips. You can borrow someone else's capacity. Sounds like a pretty good idea to me. And then lastly, Nvidia also announced a major investment in Taiwan. Jensen and Wong was given a speech in Taipei for Computex, where he announced a brand new Nvidia base and massive AI supercomputers being built in partnership with Foxconn and the Taiwanese government. This project will use 10,000 of Vinidia's new Blackwell chips. and one of the main customers will be TSM, which is NVIDIA's chip manufacturer. Now, NVIDIA still has to tiptoe around the U.S.-China tensions and all the export restrictions,

but it seems pretty clear that Jensen's plan is to expand his AI empire all over the world. Last week, he was in the Middle East making deals with the Saudis and the Emirates. NVIDIA also announced plans for an R&D facility in Shanghai, and now they're also investing big in Taiwan. Looks like NVIDIA is trying to go for total global dominance here. By the way, if you guys want to learn more about the Saudis ambitions in AI, we talked more about that in our weekend deep dive episode that we posted over the weekend. So go check that out if you missed it. Now, speaking of AI, let's shift gears and talk about Apple because they're facing some political heat in Washington regarding their deal with Alibaba to bring Chinese AI features to iPhones in China. The Trump administration and Congress are concerned that the partnership could help improve China's AI capabilities and also expose Apple to strict Chinese data sharing laws. Some US officials are even floating the idea of banning American companies from working with Chinese AI firms altogether.

This news is sending shares of both Alibaba and Apple lower this morning. And just zooming out a bit, Apple's AI efforts in general have been an outright disaster. Siri is still garbage. All the AI features we were promised a year ago have been delayed, or they're buggy, or they're straight up bad? Like, how many times have you used Gen Moji after it launched? If you say more than twice, I probably won't believe you. We got a bombshell report from Bloomberg over the weekend highlighting some of the internal struggles at Apple.

It's a great read, highly recommended. Essentially, Apple's AI teams have called the current situation a crisis. Executives are pointing fingers. Engineers are getting burnt out. And the morale seems pretty bad inside Apple right now. Apple is trying to write the ship. They're building a new Siri from scratch. And they put the guy who built the Vision Pro to lead the AI charge.

I'm not really sure how I feel about that. But whatever they were doing before wasn't working. so maybe they need to shake things up. We should get an update from Apple about their AI efforts in a couple weeks at their WWDC conference, which is on June 9th. But I really don't want to get my hopes up at this point

because I'm tired of getting hurt from Apple. At this point, they should just full-on replace Siri with chat GPT. Like, stop trying to make Siri a thing. You had a decade to figure things out. Also, fix the photos app while you're at it because that's also been so bad. By the way, this week we're going to be hearing

from both Microsoft and Google, both of their developers conference launched this week. I'm sure they're going to be talking a lot about AI, so we'll keep an eye on those conferences and let you guys know if anything noteworthy is announced. Let's talk about some stocks making moves today. United Health is bouncing back this morning after getting absolutely wrecked last week. Shares of the health giant dropped more than 23% over the past five days after the company pulled its full year guidance and announced that their CEO was stepping down.

But the stock is bouncing back this morning. It's up more than 4% in the pre-market, so it looks like some investors are buying the dip. On the flip side, shares of Walmart are down this morning after President Trump said that Walmart should absorb the cost of tariffs instead of passing them on to shoppers. During their earnings call last week, Walmart announced that they might have to raise prices due to the tariffs, which apparently didn't sit well with the president. So if Walmart does end up eating the cost of tariffs, that'll probably hurt their profit margins. And as a result, their shares are down more than 1% this morning.

Let's wrap the show with a fun fact. The annual Berkshire Hathaway shareholder meeting in Omaha, Nebraska, brings more than $20 million in tourism revenue for the city every year. I mean, this conference is a big deal. Every year that turns Omaha into like the Super Bowl. In 2024, 95% of Omaha hotel rooms were sold out the days of the meeting. On top of that, restaurants and bars were packed. But now that the 94-year-old Warren Buffett is officially stepping down as CEO, he said he's no longer

going to be sitting on stage and taking questions. Some local businesses are worried that the same. level of crowd might not come. Buffett's successor Greg Abel is going to take over, but I mean, let's be honest, you know, Greg Abel doesn't have the aura just yet to get people to fly to Omaha for the weekend. But I don't know, we'll have to see. Maybe Warren Buffett will do a surprise Q&A to keep the crowds coming. I got a feeling that hotel rooms in Omaha next year, probably going to get a lot cheaper. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. We got a pretty stacked week coming up with earnings

from major retailers like Target, Lowe's, TjMax. We also have the developer conference from Google and Microsoft. I mentioned that earlier. So as always, we'll keep you guys in the loop. If you guys haven't already, make sure you guys are subscribed to the podcast. And if you guys want to help us out, consider giving us a five-star rating on Apple or Spotify. And if you're listening on Spotify, don't forget the vote in today's Spotify poll. Leave us a comment on Spotify.

All that engagement really does help us out. And it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor. for all the help behind the scenes, and we'll see you guys back here tomorrow.