The Rundown - Nvidia Invests $2B into xAI, Oracle's AI Business Weighs on Profits

Episode Date: October 8, 2025

Stock market update for October 8, 2025. Follow us on Instagram ⁠⁠⁠⁠⁠⁠⁠⁠⁠@therundowndaily⁠⁠⁠⁠⁠⁠⁠⁠⁠This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Public.com/disclosures⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.

Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zadadmani, and today is Wednesday, October 8th. In today's episode, we'll tell you why some on Wall Street are getting nervous about the gold rally. We also have some more news in AI. Oracle's profits are shrinking in Nvidia just made another massive investment. Then stick around to the end of the show to find out why Google might dominate the quantum computer. era. We got a great show for you today. Let's go. The stock market snapped a seven-day win streak

on Tuesday with the S&P 500 dropping 0.4%. And the NASDAQ was down 0.7%. Now, this might be partially my fault. I might have jinxed the markets on yesterday's show because I was talking about how great the vibes were and how investors were ignoring the government shutdown. But the markets were quick to remind me that stocks don't always go up. But, but the markets were quick to remind me that stocks don't always go up. But you know what does always seem to go up these days is gold. The price of gold crossed $4,000 an ounce yesterday for the first time ever. It's now up more than 50% this year. And this gold rally is catching the attention of some heavy hitters on Wall Street, including Ken Griffin, the billionaire founder of Citadel. He called this gold rally concerning

and said that the U.S. economy is basically on a sugar high right now. I'm starting to hear phrases like the debasement trade a lot more these days. That's when traders move money into safe haven assets like gold, silver, or even Bitcoin, because they're worried about inflation and the long-term value of fiat currencies like the US dollar. And remember, the Fed is likely to cut interest rates again later this month, which could add to the inflation fears and keep this gold rally going. You know, people say that AI is the new gold, but gold might be the new gold because gold is outperforming Nvidia's stock this year. Imagine telling that to someone back in January. So we're going to keep an eye on the gold rally along with

stocks because remember earning season is right around the corner. So make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop. You know, every time I go to Costco and walk past where they're selling their gold, I just get regret for not buying it last year. Let's run through some headlines. Starting with Oracle. Oracle's AI cloud business could be facing some financial challenges. Now Oracle's stock price has gone up more than 70 this year, thanks to their massive growth in their AI cloud business. Oracle assigned massive cloud deals with companies like Open AI, ByDance, and Meta to rent out capacity in their data centers, which are packed with Nvidia GPUs. But according to a report from the information, Oracle's margins

are getting squeezed. In the three months ending in August, Oracle brought in about $900 million from renting out their Nvidia GPUs to their clients. But after factoring in costs like power, labor and depreciation, the company only kept around 14 cents on the dollar. That 14% gross margin is brutal when you consider that Oracle's usual margins hover around 70%. And it might not just be the cost of operating the data centers that is squeezing Oracle's margins. It's possible that Oracle might have offered heavily discounted cloud pricing to win the multi-billion dollar contracts from OpenAI, Meta, and others. Oracle's chasing growth at the expensive profit, at least in the short term.

And that's catching the attention of investors. Oracle stock dropped more than 6% yesterday after this report from the information came out. And the stock did recover to finish flat, so maybe investors are okay with it. It's a pretty big bet by Oracle and we'll have to see if this pays off. But what I wonder, though, is if other AI cloud providers are also operating at thin margins. It's definitely something that I'll be keeping an eye on as these companies start reporting earnings over the next few weeks. Let's stick with the AI theme and talk about XAI. According to Bloomberg, Elon Musk's AI startup, X-AI, is raising $20 billion to fund its massive new data center project called Colossus 2.

And one of the biggest investors in this funding round is Nvidia. Invita is reportedly investing as much as $2 billion into XAI. And of course, the money that XAI is raising will be used to buy more of Nvidia's AI chips. But it's being done in a creative way this time. A special purpose vehicle is being set up, which will buy tens of thousands. of Nvidia's GPUs and those GPUs will then be rented to XAI to power the data centers in Memphis. Kind of a weird setup, but that way XAI doesn't have to buy the chips directly. Now, Elon's Colossus 2 data center will need roughly 300,000 chips to reach full scale.

And right now, XAI is reportedly losing nearly a billion dollars a month to keep up with OpenAI and Anthropic. Now, not going to lie, I haven't seen much buzz come out of GROC lately. So I think they have a lot of catching up to do, which is why Elon is raising all this. money. But the bigger concern here is that this is yet another one of those deals that looks like circular financing in the AI space. Invita is handing out money to companies so they can use that money to buy more of their chips. The money seems to be going back and forth amongst a handful of companies. I actually posted a flowchart of all these AI deals on Instagram last night,

along with a rant, so go check that out if you missed it. We also did a deep dive about the circular financing concerns in AI back on September 27. So go scroll up on your podcast feed and give that a listen if you want to learn more. But yeah, it just every week that goes by, it just feels more and more like a bubble. Let's talk about some stocks making moves today. Shares of Confluent are ripping higher this morning after reports that the data streaming software company is exploring a potential sale. According to Reuters, Confluent has drawn interest from both private equity firms and big tech buyers

that want its technology to help power AI systems. Everything's about AI these days, right? Now, the company's market cap sits around $7 billion, which is nothing for a big tech company, and the stock is down 25% this year after losing a big customer over the summer. So the company's set up to be a takeover target, and the rumors of a takeover has confluence stock up 15% this morning in pre-market trading. Now, on the flip side, Tesla stock dropped 4% yesterday, and it's down again this morning after they showed off their so-called affordable Teslas.

Now, we were hyping up this Tesla launch on Monday. There was some thinking that Tesla was finally going to show off their second generation roadster. But no, instead, it's a stripped down version of the Model 3 and Model Y. The Model 3 will start at $36,990, and the Model Y will start at $39,990, making both of these cars some of the least expensive EVs in the U.S. market. But I mean, both these cars are still pricier than the sub-30,000 range that investors were hoping for. Now, to hit these lower prices, Tesla has stripped out a bunch of features from the cars. There's fewer speakers, no ambient lighting, less fancy seats, no rear seat screen, and slightly less range with 320 miles.

Now, the reason that Tesla is doing this is because the $7,500 federal EV tax credit expired on September 30th. So Tesla is hoping that by offering these cheaper models, they can keep the demand up. But personally, I don't know. I still think that the price is still too high, especially in international markets, where Tesla, Tesla has to compete with Chinese maker BYD. I mean, those cars from BYD are decked out with all the features, screens everywhere, and they're still cheaper than Tesla. So I think investors were disappointed with these new cars,

and that's why Tesla stock slid yesterday, and it continues to slide this morning. Let's wrap the show with the fun fact. The Nobel Prize in Physics this year went to three American scientists, John Clark, Michael DuVarrett, and John Martinez for their research that helped make quantum computing possible. The three scientists are winning the prize for experiments that did back in the 1980s when they proved that quantum laws, stuff that we usually can't see, could actually be observed with the naked eye. One of those discoveries was quantum tunneling where a particle can pass through a barrier instead of over it. Now I'm not going to pretend to be a quantum expert here,

but that discovery ended up being a big deal. It became one of the core principles behind quantum computing, which is all the rage these days. We take a look at these quantum. They have been surging. Now, now bonus fun fact, two of the three Nobel Prize winners now work at Google's Quantum AI Lab. So that means that not only is Google a leader in AI, but they might also be a leader in quantum computing because that explains why their stock is at all time highs right now. By the way, the three scientists are going to split a prize money of $1.2 million. So that's about $400,000 each. And I wonder if they're going to invest that money into quantum stocks. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like eight

extra seconds, consider giving us a five star rating on Apple, YouTube, Spotify, wherever you listen to your podcast. And if you are listening on Spotify, don't forget the vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement really helps us out and it helps other people find the show. Thank you guys so much for listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes. We'll see you guys back here tomorrow. Frozen lasagna, medium power, 15 minutes. Sounds like Ojo time.

Let's play. Feel the fun with Play-O-Jo, the online casino with all the latest slot and live casino games. What you win is yours to keep with no wagering requirements, instant payouts, and no minimum withdraws. Hey, I just won. Woo-hoo! Feel the fun, play Ojo.

Honey, forget about the lasagna. Let's celebrate. 19 plus Ontario only. Please play responsibly. Concern about your gambling or that if someone close to you. Call 1-6-6-5-3-21. or visit Conxonterio.ca.