The Rundown - Palantir Pops +20% After Crushing Earnings, Spotify Reports First Full Year of Profitability

Episode Date: February 4, 2025

Stock market update for February 4, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadmani, and today is Tuesday, February 4th. In today's episode, we tell you why the U.S. is pausing tariffs on Mexico and Canada, but not China, and how China is responding. We also recap earnings from Palantir, Spotify, and PayPal. Then stick around to the end of the show to find out why Waffle House is charging extra for eggs. All right. Let's go.

What a wild start to the week. The markets were full on panic on Monday morning as investors processed the fallout of a potential trade war. Trump was slapping Canada and Mexico with a 25% tariff. He was slap in China with a 10% tariff. And then Mexico and Canada said they were going to retaliate with their tariffs against the U.S. I mean, the vibes were not good.

And the S&P 500 was down around 2% at the open on Monday morning. And then like 30 minutes into trading, the market shot up when Mexico. announced that they had reached a deal with the U.S. to pause tariffs for 30 days. Mexico agreed to send 10,000 soldiers to better protect the border and stop the flow of illegal immigrants and drugs. I guess that guarantee was enough for Trump to pause tariffs for 30 days, which gave investors a bit of relief. Markets did still finish the day in the red with the S&P down 0.8% and the NASDAQ dropping 1.2%. But we got some more good news after the markets closed. Canada also announced that they had reached to deal with the U.S. to pause tariffs for 30 days.

Similar to Mexico, they agreed to send 10,000 people to secure their border. They agreed to spend $1.3 billion to implement a border plan, along with appointing a fentanyl czar. So it looks like the trade war might be temporarily on pause. I mean, who knows what happens in 30 days. I mean, this is Trump we're dealing with. The guy can change his mind in the blink of an eye. I want to point out that tariffs on China did not get paused, and as at this moment, they are being implemented on Chinese imports. As a result, China announced this morning some retaliation tariffs of 10 to 15 percent on

select U.S. imports starting February 10th. China isn't slapping a full blanket tariff like the U.S. is doing. Instead, they're targeting specific industries. There's going to be a 15% tariff on coal and liquefied natural gas and a 10% tariff on American agricultural equipment. And what I thought was weird and kind of funny was that China is going to investigate Google for antitrust violations, which just caught me off guard because Google hasn't operated in China since 2010. So I don't really know what that's about. The markets don't seem to be reacting very strongly to these retaliations, since it's relatively small in nature. I think just like with Mexico and Canada, tariffs seem to be a negotiation tool for both countries, and I'm sure we'll get further

development over the next couple weeks. Or it might even happen by the time this episode comes out with the way things are moving. The last 24 to 48 hours have just felt like a week. It's been so much happening. My screen time has been through the roof. Let's run through some headlines. Donald Trump yesterday signed an executive order creating a sovereign wealth fund for the U.S. This opens the door to invest tax dollar funds into companies, infrastructure projects, and more. Now, a ton of countries have sovereign wealth funds. The most popular ones that you might have heard of is the Saudi Arabia's public investment fund. Saudi has nearly $1 trillion in their fund, and they made some notable investments in companies like Uber, Lucid, Blackstone, SoftBank, and more.

Saudi's public investment fund is also invested big on the, live golf tour. They're also using the money to build a futuristic city in their country called Nome. So Saudi Arabia is doing big things with their investment fund. And Donald Trump wants to do something similar here in the U.S. One of Trump's first big investments he wants to make is in the TikTok. He said the fund could be used to buy the social media giant. President has previously said he wanted the U.S. to have a 50% stake in TikTok as part of a joint venture deal. And maybe that happens to the sovereign wealth fund. So we'll see what ends up happening. I wonder if Nancy Pelosi would be down to run the sovereign wealth fund. I mean, her investing track record

speaks for itself. Let's shift gears and talk about one of the internet's favorite stocks, Palantir. Shares are booming this morning after the company just pulled off the earnings trifecta. They reported earnings last night and their revenues and profits both beat Wall Street estimates and their guidance came in stronger than expected as well. And the stock is up more than 20% this morning in reaction to those earnings, crossing $100 for the first time ever. I mean, look, I know that Palantir has a reputation for being a bit of a meme stock, but the company continues to grow. Total revenues in the fourth quarter last year reached a record $828 million up 36% from a year ago. And what really stood out to me was Palantir's growth outside of government

contracts. Their U.S. commercial business grew by 64% in Q4. So they aren't just a government contractor anymore. There's a lot of demand for Palantir's software and AI integration. Palantir seems be one of the big winners of the AI boom. And unlike other AI stocks like Nvidia, which dropped after Deep Seek showed the cost of AI is coming down. Cheaper AI is probably going to end up helping Palantir's business. I guess it's no surprise why Ballanteer stock has got up more than 400% in the past year outperforming other AI names like Nvidia and Broadcom. So yeah, the Palantir fan boys, and there's a lot of them, must be loving this right now.

This stock just is a rocket ship, and it has been for the last year. Let's talk about some stocks making moves today. Shares of Spotify are on the rise. company reported earnings, and they did it again. They beat expectations and they raised their guidance moving forward. Spotify's monthly active users grew by 35 million. They now have over 675 million monthly active users. That's the most Q4 additions ever and second most all the time. The streaming platform also added 11 million net paid subscribers, finishing with 263 million paid subscribers. That was an 11% jump from a year ago. And I think the most notable thing is that Spotify

closed out its first full year of profitability with record highs in revenues, gross profits, and operating income. So, 2024 was a banner year for the company. They've been able to capitalize on the rise of podcasts. We here at The Rundown are a big fan of Spotify podcast and video podcasts. On top of that, the company also has 350,000 audio books across 10 markets. And essentially, they have a full catalog of music. So they are executing on all fronts right now. And their stock is up more than 10% this morning in reaction to these earnings. Dude, Spotify, stock is up more than 170% in the last year. Absolutely wild. Now, on the flip side, shares of PayPal are falling after the FinTech company reported payment volumes that missed estimates. Now, PayPal did

announce a $15 billion share repurchase program and they also beat their earnings for the past quarter, but their stock is still down more than 8% this morning in reaction to these earnings. Investors just seem to be hesitant about the company moving forward. PayPal CEO has been on the role since 2023 is working on strategies to help PayPal deal with competition and boost their revenue. PayPal is a household name. They also own Venmo, which most people don't know. They also have a buy now pay later service. But despite all that, they haven't been able to gain any momentum. Their shares are down more than 70% from their all-time high levels back in 2021. So they got a long way to go before they get back to 2021 levels. Let's wrap the show with the fun fact.

Waffle House is slapping extra charges on every egg and it sells to combat the nationwide spike in egg prices. The chain said they're jacking up the prices of eggs by 50 cents due to the shortage of eggs caused by the bird flu, which is put a strain on the supply chain of eggs. Waffle House says they're going to monitor the market and they're going to adjust their prices once overall egg prices settle down, but that's not expected to happen anytime soon. In fact, egg prices are expected to rise another 20% in 2025 according to the USDA. Well, all right, guys, that's the rundown for today. Hope you guys. enjoyed today's episode. The week is off to a wild start and there's going to be a lot more

to talk about this week because we got some big time earnings yet to come. Google's reporting earnings after the market closed today. AMD's reporting after the market closed today. Uber and Disney are reporting tomorrow morning before the market opens. To tomorrow's episode's going to be jam-packed with info. Great time to get subscribed to the podcast. Hit that notification bell if you want to be notified as soon as an episode goes up every morning. And if you have like 15 extra seconds, consider giving us a five-star rating on Apple or Spotify. Vote in our Spotify poll. Leave us a comment on Spotify, follow our Instagram account for clips and bonus content, all that engagement really does help us out and it helps other people find the show. 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. You should not mention of a publicly traded security as recommendation to buy, sell or hold that security. Run-down guests are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult. Respective professionals. Learn more at public.com disclosures. In partnership with Zayidimani,

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