The Rundown - Nvidia Crosses $1,000 a Share on Earnings, OpenAI Inks Licensing Deal with News Corp

Episode Date: May 23, 2024

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Public.com presents the rundown, your daily market update in five minutes. My name is Zadadmani, and today is Thursday, May 23rd. In today's episode, we talk Nvidia earnings. They did it again, everyone. We'll give you all the details. And Open AI strike another deal with a publisher, and is also finding themselves in some potential legal trouble with a very famous actress. And then stick around to the end of the show to hear some shocking stats about Nvidia's market cap.

It's truly incredible. All right, let's go. Stocks have been on a heater recently, but took a dip on Wednesday with the Dow, S&P, and NASDAQ all down across the board. And we could probably thank the Fed for that dip. The meeting minutes from the Fed meeting earlier this month was released, and there was some language in there that suggested that some Fed officials are worried about the lack of progress on inflation and might be willing to raise rates if inflation gets worse. That was a bit shocking to investors since Jerome Powell indicated in his press conference that the Fed was most likely done hiking rates.

But it seems like not all Fed officials agree with him. Also, JP Morgan CEO Jamie Diamond yesterday said that he thinks that interest rates will still go up a bit at the JP Morgan Global China Summit in Shanghai. And he also said a hard landing for the U.S. economy can't be ruled out. But, you know, Jamie Diamond has always been a bit pessimistic. I guess maybe you have to be if you're running the biggest bank in the world. So despite stocks making all-time highs and some relatively encouraging inflation data, there are still some people that are worried about a potential hard landing. And I really hope that they're wrong. Let's run through some headlines.

Starting with Nvidia. Nvidia reported earnings on Wednesday after market close, and they did it again, coming in clutch, beating the sky high expectations, and their stock jumped more than 5% in after hours trading, crossing the $1,000 mark. Sales for the quarter tripled to $26 billion, and the company gave better than expected guidance for the current quarter, which is a sign that demand for AI chips will persist through the end of the year. Because it turns out selling shovels during a gold rush is very good for business. And some of these numbers for their business almost sound fake, like their Data Center business grew by 427%, with big cloud providers such as Amazon Web Services, Oracle, Microsoft Azure, and Google Cloud, accounting for about 45% of the segment's total revenue.

They're selling to the biggest cloud players in the game, but it's not just cloud providers that are splurging on Nvidia chips. The company also said that meta intends to spend billions of dollars to buy 350,000 Nvidia AI chips. CEO Jensen Huang said he wants to expand their market beyond cloud hyperscalers and sell to other consumer internet companies. companies, automakers, and health care companies. They think that every industry is going to want AI chips. Nvidia also calms some fears over delays on the delivery of their newest chip called Blackwell. They confirm that shipments for these Blackwell chips will start in the second quarter and be available in data centers in the fourth quarter.

And the cherry on top to these exceptional financial results was that Nvidia announced a 10-for-one stock split, which will go into effect on June 10th. It's crazy to think that you could have bought one share of Nvidia for $50 less than five years ago. And now it's a thousand. I wish I had a time machine. Let's stick with the AI theme and talk about OpenAI's $250 million publishing deal with News Corp, the company behind sites like the Wall Street Journal, Barrens, and MarketWatch. This agreement might be the biggest content licensing partnership made by OpenAI so far,

and it extends over five years. It allows Open AI to use content from News Corp's publications to answer user questions and train its tech, according to the Wall Street Journal. This deal follows other licensing agreements with publishers and media companies, including the Associated Press, Financial Times, and Reddit. But other publications like The New York Times are suing Open AI, alleging copyright infringement. And Open AI is also dealing with some other legal controversy lately

regarding their new voice assistant for ChatGPT named Sky, which they showed off last week. That voice sounds pretty similar to Scarlett Johansson's voice in the movie Her, where she played an AI assistant, and the actress took notice and wrote a strongly worded letter to OpenAI, saying that OpenAI might have stolen her voice. Now, she hasn't officially sued OpenAI yet, but she has lawyered up to get some answers from OpenEyI on how the voice was created.

So yeah, we'll let you know once we get more information about this. Always some drama with Open AI, man. Always something. Let's talk about some stocks making moves today. Starting with Snowflake. Shares of the data cloud company are up this morning after they reported first quarter earnings and raised their revenue forecast for the rest of the year. Snowflake expects their revenues to come in at $3.3 billion for their fiscal year,

which would imply a 24% growth. That's better than what Wall Street. was expecting. They also announced plans to further collab with Nvidia, which got investors pretty excited and the stock is up more than 3% in pre-market trading. Invita is kind of like the Taylor Swift of tech. Everyone just wants to collab with them. Now, the reaction to these earnings are a lot different than the previous earnings that Snowflake had, where the stock dropped more than 20% after they announced that their former CEO, Frank Slutman, was stepping down. So it looks like the new CEO seems to be off to a pretty good start. Stock not doing so good this morning is Live Nation. Shares are

down this morning after the Wall Street Journal reported that Justice Department plans to file a lawsuit against Live Nation today for being a monopoly and they plan to break up the company. Now, there's been rumors of a lawsuit for a few weeks now, but it's finally here. The lawsuit will allege that Live Nation illegally suppressed competition. Obviously, investors don't love lawsuits from the government and shares are down more than 8% in the pre-market. Let's wrap the show with a fun fact. Today's fun fact is about InVity. I feel like we don't talk about them enough. InVidia's market cap briefly crossed $2.5 trillion, which is more than Amazon and Tesla combined. I mean, that is wild. Here's another one. Invidia's market cap is now worth more than every company on the German

stock market combined. I got one more for you. Invita has added $1 trillion in market cap this year alone, and it's now within striking distance of overtaking Apple to be the second largest company in the world. And would anybody be surprised if Nvidia overtook Microsoft to be the largest company in the world. And I know that we mention these stats every few months, but it still blows my mind, like, the meteoric rise of this company. And they've been able to sustain it for, like, the last 12 plus months. So let's see how long they could keep it going. Honestly, we need a Taylor Swift-invdivir-in-callab. I mean, they're the two most talked about economic stories of the last 12 months. Can you imagine a collab? Maybe Taylor Swift should use AI to write a

song if she ever runs out of ideas. I'm just spitballing here. All right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. I'm recording this episode in my hotel room in Scotland looking out at great skies and rainy weather, but with Nvidia beating earnings, I don't think that anything could bring me down. If you guys enjoyed today's episode, please consider giving us a five-star rating on Apple and Spotify and don't forget to vote in the Spotify poll for today. We put up a poll every day, and the results are pretty fascinating. Thank you guys so much for listening.

Shout out to Connor and Mike for all the hard work 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 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. 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.

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