The Rundown - OpenAI Has Largest VC Funding Round Ever, Tesla Misses on Delivery Numbers

Episode Date: October 3, 2024

Stock market update for October 3, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Thursday, October 3rd. In today's episode, we previewed tomorrow's highly anticipated jobs report and why it's become the most important report on Wall Street. We also tell you how much money Open AI just raised and why it was a very unusual funding round. We then recap Tesla's delivery numbers and talk about Amazon's plans to become an advertising giant.

Then stick around to the end of the show to find out why NVIDIA's shares are up, Levi's shares are down and the newest medal available for sale at Costco. I bet you it's already sold out. All right, let's go. Stocks had a pretty flat day yesterday, and honestly, with everything going on, I take that as a win. The S&P and NASDAQ both did squeeze out a gain up less than 0.1%. Now, tomorrow is a big day because Friday morning, the jobs report comes out. And we'll find out how many jobs were added to the U.S. economy in September.

And I feel like these days, the market pays more attention to the jobs report. than it does to any other report, including inflation, because everybody wants to know how the job market is doing right now. You know, over the last couple weeks, the vibes have been good. The vides have been pointing to a soft landing, with inflation continuing to cool, but the unemployment rate had started ticking up over the past couple months. That led to the Fed cutting rates by 50 basis points last month, you know, in the hopes of the job market not getting any worse. Now, we did get a report from ADP, which is a payroll service. And according to their national employment report, private employers added 143,000 jobs in September.

That's actually more than what analysts were expecting. So hopefully that's a good sign for the jobs report that comes out on Friday morning from the Bureau of Labor Statistics. We're going to record this show after the report comes out, so we'll recap it in tomorrow's show. So make sure you guys are subscribed to the podcast and hit that notification bell if you guys want to be notified as soon as an episode goes up.

Let's run through some headlines. Open AI made Silicon Valley history yesterday. The AI startup officially closed a $6.6 billion funding round valuing the company at $157 billion. I mean, this blows my mind. Just to put that $157 billion number into perspective, that would make them worth more than Uber. Let me give you some more perspectives here. Open AI's revenues this year are expected to be $3.7 billion. Well, when Google first hit a $150 billion valuation, they were raking in over $10 billion

a year in revenue. So yeah, man, the AI hype is still alive. And there were a ton of investors ready to invest in Open AI. Thrive Capital was the lead investor. You had Microsoft, Nvidia, Kathy Woods Arc Invest also invested. And then SoftBank was also part of this funding round. Shout out SoftBank. They're getting back into the game. Now, this investment is contingent on Open AI restructuring to be a for-profit company within two years. Remember, Open AI was founded as a nonprofit company back in 2015. But that's all changing. They're going to be a for-profit company. company pretty soon. If they don't, investors can ask for their money back. And what I thought was most interesting is that Open AI is requesting exclusivity from their investors, meaning Open AI

doesn't want the investors funding other AI rivals. This includes Elon Musk's ex-AI and Anthropic. It's kind of an unusual move. But yeah, Open AI now has more than $6 billion to continue development of their AI and build cool stuff. I'm not going to lie, their voice feature is pretty awesome. I've tried it out. It is really good. But you know who's got to be loving this is an interesting. because some of that money that Open AI just raised is going to be coming right back to Nvidia to buy their AI chips. Speaking of Elon, let's talk Tesla. Tesla reported their Q3 delivery numbers on Wednesday, and it was a slight miss.

Tesla delivered 463,000 cars in Q3, missing expectations by 300, just 300. So not a huge miss. Overall, EV deliveries for Tesla grew by 6% compared to last year, which is nice to see after back-to-back quarters of declining deliveries in Q1 and Q2 of this. year. But that wasn't enough for investors to be excited. Tesla stock actually dropped 3% yesterday on the delivery numbers. Tesla has a pretty big month coming up. On October 10th, they had their Robotaxy event, which is there's a ton of hype for going into that. And then we'll learn more about how Tesla's business is doing when they report their Q3 earnings on October 16th.

So Tesla stock might be for a wild ride over the next couple weeks. And let's quickly talk about Amazon. You're probably going to start seeing more ads on Prime Video next year. According to the financial times, that's what Amazon's plans are, to push more. ads onto Prime Video next year. Amazon turned on ads for Prime Video earlier this year. Previously, there were no ads. And it didn't really lose many subscribers. So obviously, Amazon's just going to jam more ads. And that's going to include shoppable ads that will allow viewers to buy items from Amazon directly. I mean, hey, Amazon's spending a fortune on sports rights, you know, NFL and NBA. So they're going to make up that money somehow. Don't be surprised

if advertising becomes a significant part of Amazon's business over the next couple years. Like Amazon did over $50 billion in advertising revenue over the past 12 months, and that number's only going to go up. Like, it's not crazy to think that Amazon might be in the same tier as Google and meta when it comes to online advertising. Let's talk about some stocks making moves today. Invidia's shares are up this morning after CEO Jensen Huang hyped up Nvidia's new Blackwell AI chips on CNBC yesterday. He said that Nvidia is seeing insane demand for the Blackwell chips. The Blackwell chips is the successor to the H-100 chips, which was the key driver of Nvidia's AI revenue.

It essentially turned the company into a multi-trillion dollar business, and the Blackwell chips are supposed to be even better. Jensen said that the new Blackwell chips are on schedule and expected to begin shipping in Q4. Invidia's shares are up nearly 2% on this news. Now, on the flip side, shares of Levi Strauss are down after the iconic denim jeans company reported disappointing earnings and lowered their Q4 guidance. This was actually a pretty interesting earnings report because, Levi's is being dragged down by their Dockers brand.

Dockers is khakis, right? Well, khakis aren't cool anymore. Sales of docker's were down 15% in Q3, even though I do think I have a couple pair in my closet. So now Levi's is thinking about selling the Docker's brand and just focusing on denim. And that makes a ton of sense because there's still a big demand for denim right now. Sales for Levi's brands were of 5% in Q3,

which is the biggest jump in two years. And then Levi's also has an athlete's brand because every company has an athlete's your brand at this point. It's called Beyond Yoga, and that grew by 19% in Q3. So yeah, Levi's just might dump Dockers, and it really wouldn't be that huge of a loss for Levi's because Dockers only makes up 5% of total revenue for the company. Now, I would think this would be positive news for the stock,

but no, investors were selling the stock this morning, which shares down more than 10% in reaction to these earnings. On a side note, I think I might have to rebalance my closet based on this information. I might do what Levi's did and just get rid of all my dockers. Let's wrap the show. with a fun fact. Costco members can now buy one ounce platinum bars. Currently, the one ounce platinum bar is going for over $1,000 on their website. But this is just an interesting trend by Costco. You know, they first started selling gold bars back in 2023, then they started

selling silver bars and now platinum. And people are buying them up. You know, my mom is one of those people that wanted to buy the gold bars from Costco. And every time she would go to Costco to buy them, they would be sold out. Now, I've personally never been a gold guy myself. And even if I wanted to invest in gold, I probably wouldn't do it by buying it from Costco. Because even if the price goes up, you can't sell the gold back to Costco for a higher price, you know? And the easiest way to invest in gold is just buying a gold ETF. And you can actually do that on the public app.

Just look up a gold ETF like ticker symbol GLD, and you can add it to your portfolio on the public app. Just takes a few taps. Seeneless plug there, right? Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. Remember tomorrow should be a pretty big day in the markets because the jobs report is coming out. We're going to be recapping that in tomorrow's episodes.

So make sure you guys are subscribed to the podcast. And if you guys enjoyed today's episode, consider giving us a five-star rating on Apple and Spotify. 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. This is the rundown. Your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests.

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