The Rundown - Nvidia Seeks 6th Straight Day of Gains, DOJ Considers Breaking Up Google

Episode Date: October 9, 2024

Stock market update for October 9, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Wednesday, October 9th. In today's episode, we tell you why Nvidia stock has been on a hot streak and what they set at their AI summit in D.C. that has investors' height. We also tell you about Google's latest legal troubles. This time the U.S. government is thinking about breaking them up. Then stick around to the end of the show to find out why Reddit stock is up, why Boeing stock is down, and the economic merit. happening in the MLB playoffs. All right, let's go.

We saw a nice bounce back from the stock market on Tuesday, especially tech stocks. The S&P was up 1% and the NASDAQ was up 1.5%. And NVIDIA was the big winner on Tuesday, up more than 4%. Nvidia has quietly been on a 5-day win streak, up more than 14% in that span. We'll talk more about them in a bit. So it was great to see the stock market rebound after a tough Monday,

and this is just how things going. sometimes, you know, historically, October has been the most volatile month of the year. And that seems to be playing out so far. By the way, I have some quick corrections from yesterday's show. Yesterday, I said that Tesla's Robotaxi event is happening on Wednesday night. Turns out I sometimes struggle reading a calendar. The event is actually happening on Thursday night at 7 p.m. Pacific time. It's going to be taking place on the Warner Brother Discovery's movie studios in California.

Oh, I wonder why they're holding it at a movie studio. And why is the event so late? makes it tough for us 30-year-olds to stay up past that late. But I'll definitely stay up past my bedtime to cast the event because, you know, there's a lot of hype going into it. And I'll recap the event on Friday's episode. And I forgot to mention that we're also getting a inflation report this week. September CPI report comes out tomorrow morning. So we'll see how inflation did in the month of September.

I mean, this used to be the biggest report of the month. But I feel like these days, everyone's kind of moved past inflation because inflation is consistently shown to be like in the 2% range. but we're still going to look through the report and see if there's any unexpected surprises. So make sure you guys are subscribed to the podcast. Tune in tomorrow for a recap on inflation. And then Friday's episode should recap some earnings and Tesla's Robotaxy event. So strong way to close out the week. Let's run through some headlines.

Let's start with Nvidia because they're hosting an AI summit in D.C. And it's been getting investors pretty excited. At the center of the event so far has been what Nvidia calls a game. name-changing energy efficiency and AI-driven initiative. That's a lot of buzzwords there, but let's try to break it down. Nvidia executives spoke about the potential for something called agentic AI, which takes AI one step further by enabling agents or chat box to understand and reason autonomously without any human intervention.

That doesn't sound scary at all, no. Nvidia says that agents will be able to think through longer task and complete them without having a human insert step-by-step instructions, kind of like how we do an AI chat box right now. Invidia says that this will allow tasks that used to take days to only be done in minutes. They highlighted industries like manufacturing, healthcare, and customer service, which could benefit the most from AI. In the keynote on Tuesday, Nvidia says that it's unlocking a $10 trillion opportunity in healthcare and using AI to make advancements and diagnostics, drug discovery, and medical imaging. So yeah, a lot of good stuff was hyped up at the event,

and investors are hyped too. Like I said, Nvidia stock was up 4% yesterday, and their market cap has jumped over $400 billion in the past five days. Nvidia's market cap is back above $3 trillion, and they're creeping close to their record highs and taking the top spot from Apple to become the most valuable company in the world again. So yeah, the AI hype is still alive. And you know, my take on all of this is that I still think we need to kind of wait and see on how much potential payoff all this AI investment is going to have. Not trying to sound like a hater. Okay, I use a lot of these AI tools, but I mean, some of these numbers that are being thrown out seem pretty nuts. I know it's still

early. It's only like two years into the AI revolution, but I don't think that we've seen the efficiencies and productivity increases from companies that I think that some people thought that AI was going to unlock. But again, it's still early. Not trying to sound like a, like a hater. Speaking of being a hater, Google seems to have a lot of haters right now. They're having a tough week. You know, yesterday we talked about how Google lost their court case against Epic Games and how they're going to have to open up their app store, which would end up costing them billions of dollars potentially. Well, now the Department of Justice just came out saying that they're considering breaking up Google because of their monopoly in search.

The DOJ claims that Google's dominant position in search has prevented other search engines from getting off the ground. They mentioned that Google has been able to maintain their monopoly because they use their other businesses like Android and Chrome to help solidify Google's monopoly. So now they want to potentially break up Google because of that. That's pretty wild. I'm not going to lie, I'm a big shock by this. Like, yeah, Google does seem to have a monopoly in search.

They do own 90% of the search market. they make a lot of money from it. Nearly $50 billion a quarter in revenue. On the other hand, they kind of are the best search engine, you know? Like, go try using Bing. And these days, Google is facing more competition, especially from some of these new AI startups, like Perplexity, which is one of my favorite new AI search engines. I think I've started to use it more than Google at this point. And Google's dominance in search advertising is also weakening. We mentioned that on Monday's episode, where Google is facing more competition from Amazon and TikTok. But I guess the Department of Justice thinks that none of these other search engines will have any shot at competing with Google,

because Google also owns Chrome and Android, and they can just use those platforms to continue to push Google search. So I guess there's a case to be made, and Google might potentially be broken up, which is crazy to think about. Investors don't seem to be super worried right now. Google stock is down just 1% this morning.

I think that's because it's going to take years for this to fully play out in court. I mean, there's going to be multiple appeals, and this is going to keep dragging and dragon. So we might not know how this fully plays out until like the end of the decade. But the fact that this is even a conversation has to be kind of concerning for Google.

Let's talk about some stocks making moves today. Reddit shares are rising after Jeffries gave the stock a buy rating with a price target of $90 per share. Jeffries believes that Reddit's EBIT will rise more than 100% in the next two years and thinks the company has the ability to benefit from large language model data deals. Reddit's data is pretty valuable because they have millions and millions of users that are posting new data on the website every day. And so that can be used to train AI models. And that's what's making Jeffrey's bullish on the company. The Reddit shares are up more than 3% in the pre-market off this news.

Now, on the flip side, shares of Boeing are falling after the company failed to end the machinist strike. In fact, Boeing ended up withdrawing their contract. Boeing basically said the union was underceptive to the New Deal, and they're making demands that are out of reach for the aerospace company. I mean, the strike has been happening for a few weeks now. It started all the way back in September 13th. There's more than 30,000 workers that are on strike, and it's going to continue to halt work, I guess. According to estimates, the strike is costing Boeing $1 billion a month.

Boeing shares are down more than 1% in reaction to this news. Let's wrap the show with a fun fact. Let's talk a little playoff baseball. Now, I'm not a big baseball guy, but I wanted to mention what the Detroit Tigers are doing. During the playoffs right now, making a playoff run, despite having one of the lowest payrolls in the MLB. This stat blew my mind. The 26 players that are on the playoff roster for the Detroit Tigers make a total of just 18.4 million dollars.

Like that's the combined salary of all the players, which comes out to just under $700,000 per player. To put that into perspective, the Yankees total payroll for the 2024 season is estimated to be more than $300 million. And Aaron Judge alone makes $40 million a year. So Aaron Judge alone makes double what the entire Detroit Tiger roster makes.

I just love stats like that. So shout out to the Detroit Tigers. At this point, I want them to win the World Series. That would be a great story. Well, all right, guys, that's the rundown for today. Remember, if you guys enjoyed today's episode, consider giving us a five-star rating on Apple and Spotify. And if you're listening on Spotify,

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