The Rundown - Ozempic-Maker Hits All-Time High, EU Charges Microsoft for Antitrust Violations

Episode Date: June 25, 2024

Stock market update for June 25, 2024.

Public.com presents the rundown, your daily market update in five minutes. My name is Zad Admani, and today is Tuesday, June 25th. In today's episode, we talk about the slide in Nvidia stock, and if investors are finally over AI, then we tell you about a farmer company's plans to build more weight loss drugs, and the EU is coming after another American tech company. This time, it's Microsoft. Then stick around to the end of the show to learn about Chipotle's stock split and why stocks tend to go up following a split.

All right, let's go. Not a great start to the week for the stock market. Both the S&P 500 and NASDAQ were in the red on Monday. In fact, the NASDAQ dropped more than 1%. And we can blame this one on NVIDIA, because NVIDIA was down more than 6% on Monday, which dragged the entire stock market down with it. What's funny is that more than 70% of the S&P 500 companies closed in the green yesterday,

but NVIDIA's market cap is so big and so influential that when there's a big movement in the stock price, it tends to move the entire index in the same direction. It was a lot more fun when Nvidia was just going up and up and up and up and just pulling the stock market up with it. Over the last three trading days, the exact opposite has been happening. Invidia has dragged the index down. Invita's stock is down more than 13% since it became the most valuable company in the world last Tuesday. Invita has lost over $400 billion in value since. Their market cap is now sitting below $3 trillion. So a tough few days for Invideo. It's not just NVIDIA, it's other AI stocks as well. Qualcomm, Broadcom, Super Micro, we're all down more than

4% on Monday. So yeah, there's some concern that maybe the AI bubble is starting to pop, or like I said yesterday, it could just be profit-taking by investors because investors maybe want to use that money to buy a boat or a pool or something, you know? I mean, it's hot out there, right? By the way, things might be turning around today. I'm looking at the pre-market right now and NVIDIA is up more than 2%. So maybe we get a nice bounce back today. And NVIDia's annual shareholder meeting is happening on Wednesday afternoon as well. So we'll let you know if anything interesting comes out of that. In a quick crypto update, Bitcoin was slumping hard yesterday, dropping below $59,000 late afternoon, but it started to bounce back this morning, currently

trading back above $61,000. So shout out to anyone out there that bought the dip yesterday. Let's run through some headlines, starting with Novo Nordisk. Novonordesk. Novo Nordisk is investing $4.1 billion to build a factory in North Carolina to help expand its supply of its really popular weight loss drug, Wegovy, and its diabetes. these drug, Zemping. Yeah, you might have heard of it. No surprise here, but there's been a huge supply shortage of these drugs, specifically the lower doses, because new patients begin the drug with the lower dosage. Now, this factory isn't going to be a solution overnight. It's not expected to be finished until like 2027 or even 2029. So it's going to be a few years, but obviously

this means that Nova Nordus thinks the demand for these weight loss drugs is going to be there even five years from now. Yeah, I don't think that they're wrong. Nova Nordus also announced that Weigovie also got approved in China, and that's a big market for them because the amount of overweight Chinese citizens is about half their population. In fact, the overweight population in China is larger than the entire population in the U.S. But even though Novanortis is entering China, they're currently going through legal battles with their patent in China because the Chinese patent is set to expire in less than two years, and there's been disputes with the Chinese government which would impact that further, according to Reuters. But one thing is clear all over the world,

the demand for these weight loss drugs, Wee Govi, Ozenpig, and then also Manjaro and Zepbaum, which is made by Eli Lilly have just been insanely popular and these companies can't make enough of them. I guess that explains why Eli Lilly is the 10th most valuable company in the world and Nova Nordisk is 12th. And both of their stock has been up more than 40% this year. Let's shift gears and talk about the European Union. They're charging Microsoft for antitrust violations. They're accusing the tech giant for illegally bundling its Teams app with its office product. So the EU claims that Microsoft gave its chat and video platform an unfair distribution advantage

by offering it with Microsoft Excel and Word, which put their competitors, like Slack, at a disadvantage. The EU opened an official investigation last year into Microsoft bundling of teams after complaints from their rivals like Slack. Now, if Microsoft is found guilty of breaching antitrust rules, Microsoft could have to pay a fine up to 10% of global revenue. That is wild.

It would be the first fine by the EU against Microsoft since 2013 when the commission charged Microsoft a $731 million fine for failing to offer users a choice of web, browsers. So yeah, man, the EU just coming after tech companies. Let's talk about some stocks making moves today. Starting with Gap. Shares of the iconic retailer are up in the pre-market after analysts T.D. Cohen upgraded the stock to a buy and raised their price target to $30. The analyst said that Gap is in the early innings of a transformation and the growth potential is underappreciated. That sounds pretty encouraging right there. And as a result, the stock

jumped more than 4% in the pre-market in reaction to that upgrade. Gab stock has had a great year so far, up more than 18% as if market closed yesterday, and up more than 180% from a year ago. I mean, that's pretty incredible. And it still kind of blows my mind how retailers like Gab and Avalcromby and others are making such a comeback right now. Even though I probably shouldn't be that surprised because my closet is full of Old Navy and Banana Republic, which are all Gap brands.

Now I just wish that every time I bought some jeans from Old Navy over the past year, then I opened up the public gap and invested in some gap stock as well. On the flip side, a stock not doing so good this morning is Airbus. The European planemaker told investors on Monday that they're having production challenges due to supply chain delays, and because of that, they're going to miss their plane delivery targets for this year. The company now expects to deliver 770 planes this year, which is down from their original target of 800.

And because of these delays, the company said they would not hit their profits target for the year. Investors did not like the sound of that, and Airbus is European. listed stock is down more than 11% in reaction to this news. Honestly, tough, tough year all around for plane makers. I mean, building planes is tough. Let's wrap the show with a fun fact. Chipotle is doing their first ever stock split after the market closed today. The 50 to 1 stock split will cut Chipotle stock price from $3,200 to like $64. Now, one of the reasons that companies do stock splits is to make their stock a little bit more approachable for retail investors. Because, you know, there's less of a sticker shock when you see a stock at $60 versus $3,000, even though the overall

value of the company hasn't changed. In fact, according to Bank of America, historically speaking, the average returns of a stock during 12 months following a stock split is 25%. So it's pretty good. Now, Chipotle's stock has already gone up more than 40% this year, so maybe the stock split is already priced in, but something to keep an eye on. And by the way, we've had a lot of high-profile stock splits this year. Invidia just as theirs, Walmart did it earlier this year, and now Chipotle? I wonder if Warren Buffett will ever do a stock split. Go look up at Berkshire Hathaway Class A's chairs if you want to know what I mean. Well, all right, guys, that's the rundown for today. I hope you guys enjoyed today's episode. If you did, please hit us with that five-star rating

on Spotify and Apple. Also, don't forget to vote in today's Spotify poll as well. We put up a poll every single day. That engagement really does help us out. Thank you guys so much for listening. Shout out to Connor and Mike 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. You should not take any mention of a publicly traded security as recommendation to buy, sell or hold that security.

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