The Rundown - Nvidia Sales Jump 78% on AI Strength, Amazon Unveils Quantum Chip

Episode Date: February 27, 2025

Stock market update for 2/27/25. Follow us on Instagram @TheRundownDaily

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadmani, and today is Thursday, February 27. In today's episode, we tell you about the latest tariff threads from President Trump that has investors concerned. We also recap NVIDIA's earnings and tell you why the markets weren't impressed. Then we dive into the big AI and quantum announcements from Amazon. Then stick around to the end of the show to find out what Mr. Beasts' company is

valued at. It's a lot more than I thought. All right, let's go. Well, the stock market nearly blew a big lead yesterday. Shout out Atlanta Falcons. The S&P 500 started Wednesday in the green, up nearly 1% at one point, only to blow the lead in the afternoon and dip into the red. Thankfully, the S&P did rally back to finish the day up 0.01%. So pretty much flat, but technically in the green, which snapped a four-day, losing streak. The NASDAQ also finished in the green up 0.3%. Now, obviously, the big story yesterday was Nvidia earnings, which came out after the market closed. We're going to dive into those in a bit. But the news that seemed to rock the markets yesterday was additional tariff threats by the president.

Donald Trump said he was preparing to hit the European Union with 25% tariffs, which seems to have spooked investors. And to add to that, this morning the president said that 25% tariffs against Mexico and Canada will go into effect on March 4th. Trump will be. also hit China with an additional 10% tariff and reciprocal tariffs will go into effect in April. So yeah, Trump was pretty active on truth social this morning. Might be a bumpy ride to close out this week for the stock market, especially since we're also getting an inflation report tomorrow morning. The PCE inflation report, which is the Federal Reserve's preferred inflation gauge is coming out. And there's already concerns about inflation starting to creep back up again, especially with

these tariffs going into place, which tend to be inflationary. So tomorrow's report will be a pretty critical one. We'll recap that report on tomorrow's episode and tell you how the markets are reacting to these new tariff threats. So make sure you guys are subscribed to the podcast to stay in the loop. I think investors might be starting to take the tariff threats pretty seriously now. Let's run through some headlines. And we have to start with the most anticipated earnings report of the season. Salesforce. No, I'm just kidding. We're going to talk about InVIDia. Invidia reported earnings last night and they're still cooking. Invidia's revenues jump 78% to $39 billion. Their profits nearly doubled to $22 billion. Both those numbers beat Wall Street

expectations. But despite the earnings beat, investors didn't seem to be that impressed. InVIDIA stock was flat after the earnings came out, which is pretty unusual for Nvidia. It's currently down around 1% at the time of this recording. Now, to be fair, this was the fourth consecutive quarter that Nvidia's revenue growth slowed. And their profit margins are also starting to shrink a little bit. And they're beating each earnings estimates by a smaller margin. But don't get me wrong, they're still insane demand for their AI chips. Nvidia expects to generate $43 billion in revenue in Q1, which is higher than what Wallstreet was expecting. And they're very excited about their Blackwell AI chip.

Nvidia's CEO, Jensen Huang, was hyphen up Blackwell saying the demand for these chips has been amazing. In fact, Nvidia sold $11 billion worth in Q4. Add in the fact that their cars and robot division continues to put up strong growth with revenues up 100% to $570 million. So again, huge demand for Nvidia chips all over the world. But there are some long-term concerns from investors. Earlier this week, we talked about how Trump is planning to increase export restrictions. On top of that, you have big tech companies like Amazon, Microsoft, Open AI, and Google, potentially working on building their own AI chip, which could decrease the demand for Nvidia chips in the long term.

Because these big tech giants are some of Nvidia's biggest customers right now. So I think that's why some of the hype around Nvidia is starting to fade a bit. They're still the market leader. They still make a ton of money. but the excitement just isn't the same. Now, beyond just the AI stuff, remember, Nvidia used to be a gaming company. They sold graphics cards.

These days, gaming only accounts for 6% of Nvidia's total revenue, and it continues to be a shrinking piece of the pie. In fact, their gaming revenue dropped 11% in Q4. Back in 2022, gaming was nearly 50% of their revenue. So it's crazy to think how much their business has changed in just three years. Now, shifting gears a bit. Let's talk about something that's been taking some hype away from AI. And that is quantitative.

I feel like we get some sort of quantum breakthrough every week at this point, and it happened again. Amazon just announced their first quantum computing chip called Oslot. In a partnership with Caltech, this quantum computing chip integrates two small silicon microchips on top of each other. Amazon says the chip could reduce costs associated with error correction by 90%, which would help accelerate quantum adoption for real-world use case. Now, still waiting to get some clarity on what the real-world use cases are, but let's not worry about that right now. This announcement from Amazon follows Microsoft's quantum chip announcement last week. And then Google really kicked off the quantum hype cycle back in November when they announced their willow chip. So you had these big tech giants competing on multiple fronts now.

First, it was AI and now quantum computing. And speaking of AI, Amazon really stepped up their game in that department as well. Yesterday they announced Alexa Plus, which is a supercharged version of Alexa with generative AI. I mean, the promo video for Alexa Plus got me pretty hyped. So I'm excited to try it out. It's going to be free to use for prime subscribers, and it's going to cost $20 a month for non-subscribers. AI folder on my phone is starting to get pretty crowded right now. Let's talk about some stocks making moves today.

Warner Brothers Discovery shares are rising after the media giant released earnings, showing that they added 6.4 million subscribers to its max streaming service. Warner Brothers says it plans to grow the total max subscribers to 150 million by the end of 2026, representing nearly a 30% growth from the current subscriber count of 117 million. Max is planning to launch internationally with services coming to UK, Ireland, Italy, and Germany by next year. So investors like the sound of that and shares of WBD are up more than 4% this morning on this news. On the flip side, shares of Sweet Green are falling after the salad company missed on revenue estimates

and provided weaker than expected same store sales guidance for the year. The company blamed the California wildfires for hurting Sweet Green's Q1 performance, as LA makes up about 15% of their sales. Sweet Green expects same store sales growth to be between 1 to 3% for the year, while estimates were calling for growth to be around 4%. So investors are kind of nervous right now, and shares of Sweet Green are down more than 10% this morning on this news. By the way, Salesforce also reported earnings last night,

and funny enough, Slack, which they own, was down for pretty much the entire day yesterday. Coincidentally, it was also probably the most productive day of the year for a lot of people. Salesforce stock is down around 3% this morning, maybe because people might stop using Slack because they realize how productive they can be. Or it could also be the fact that Salesforce missed on revenue expectations and provided a weak guidance.

But hey, this Slack thing is funier, right? Let's wrap the show with the fun fact. The biggest YouTuber in the world, Mr. Beas, is looking to raise hundreds of millions of dollars to expand his business, according to reporting from Bloomberg. This new funding round by Mr. Bees would value his company at $5 billion, which is really shocking. Now, to be fair, Mr. Bees does.

have a lot of businesses. Obviously, he does his YouTube videos, but also he owns Feastable Choclets. He also has lunch lead that he launched recently, which is a competitor to luncheables. And according to Bloomberg, Mr. Beast's businesses generate over $400 million in revenue, and they're profitable. And so it looks like he's trying to expand that. I'll be honest with you guys, not really a Mr. Beast guy. I think I've seen like two of his videos. Not really my cup of tea, but the numbers speak for themselves. All right, he has more than 300 million subscribers on his main YouTube channel and he's making hundreds of millions of dollars. Well, all right, guys, that's the rundown for today.

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