The Rundown - Post-Election Rally Takes a Breather, Amazon Reveals Line of AI Chips

Episode Date: November 12, 2024

Stock market update for November 12, 2024.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Tuesday, November 12th. In today's episode, we talk more about the face-melting Bitcoin rally and why it's making me kind of nervous. We also tell you about Amazon's plans to take on NVIDIA with their own AI chip. We also recap earnings from Live Nation and Home Depot. Then stick around to the end of the show to find out why Netflix's strategy shift two years

ago is paying off. All right. Let's go. Well, guys, stocks continued to rally on Monday, hitting record levels in the process. The S&P 500 was up 0.1% and closed above 6,000 for the first time ever. The NASDAQ and Dow were also in the green hitting record levels as well. In fact, the Dow closed about 44,000 for the first time ever. Still don't care about the Dow.

And small-capped stocks continued to rally. The Russell 2000 was up 1.5% on Monday. And it's now gone up more than 10%. percent since last week. Personally, I've never really been a small-capped stock guy, but the jump in small-caps has been pretty impressive. A quick fun fact, the Russell 2000 has outperformed the S&P 500 over the last 12 months. So stocks continue to move higher, but the most talked about thing right now has to be this face-melting rally from Bitcoin. Bitcoin nearly hit $90,000 last night. I think it was at 89,900. Now, it's given back some of those gains overnight, currently sitting around $86,000 at the time

of this recording. But I mean, Bitcoin was under $70,000 eight days ago. So seeing the price go up like 25, 30% in a week is absolutely crazy. Oh, and Tesla keeps ripping too. It was up 9% yesterday. And it's up more than 40% over the last week. So the markets have been cooking, especially Tesla and Bitcoin. And if I can just be in the trust tree here, I'm starting to get a little nervous, all right? Just a little bit. I mean, I'm not complaining. You know, it's fun every time I open up the public app and see the numbers go up. But just seeing the numbers go up that fast, this aggressively, just give me a little bit of pause, you know? And if I'm being honest, I'm getting a little fomo too, especially when it comes to crypto. Let's run through some headlines.

Amazon is jumping into the AI chip game. The tech giant is working on a new chip called Traneum 2 and they're expected to show it off in December, according to the financial times. This chip is being developed by Anapurna Labs, which is a company that Amazon acquired all the way back in 2015 for like $350 million. And according to the financial times, Amazon's goal is to take on Nvidia, who's become the biggest company in the world this year, thanks to their dominance in the AI chip space. Amazon's AI chip is already being tested by Anthropic, which Amazon has a significant investment in.

Anthropic makes the clawed AI chat box. And the chip will also be used within Amazon's Web Service division in an effort to lower the high cost of operating AI models within their data centers. Right now, Nvidia makes the best. AI chips. And they're in high demand, which makes them very expensive. But these big tech players like Microsoft and Meta and Amazon, they don't really have a choice right now. They have to buy Nvidia's chips. And they're spending billions of dollars to do that. In fact, Meta plans to spend around $40 billion in CapEx in 2024. A lot of that is going towards buying Nvidia chips and

building out their AI infrastructure. Tesla also bought 65,000 Nvidia AI chips, each one costing $25,000. So it's not a cheap investment. So that's why these big tech, companies are working to make their own chips. And Amazon's not the only one doing this. Meta's doing it. Apple is also doing it. But as of right now, Nvidia is still dominant. But if these big tech players end up making their own AI chips that can compete with NVIDIAs, that could really hurt NVIDIA's business moving forward.

I'm not trying to be an NVIDIA hater here, and I'm totally not upset about the fact that I sold my NVIDIA stock a year ago and the stock has tripled since. No, it's just that I wanted to, you know, point out some of the potential downsides moving forward. Let's shift gears and talk about live music, specifically live native. shares of the live entertainment company are up this morning after reporting a 39% jump in profits from last year, despite the revenues being down 6% and ticket sales falling 17%. Now, the company did say that it was the most active summer concert season ever, and the company expects strong growth moving forward.

Over 20 million tickets have already been sold for 2025. And there's also positive momentum for stadium sales with tours from Coldplay and Shakira. I didn't know Shakira was still touring. Now, remember, the company is facing an antitrust. lawsuit brought on by the Department of Justice. Back in May, the DOJ sued the company for antitrust violations and proposed splitting up LiveNation up from Ticketmaster. Yes, they're both the same company.

Ticketmaster might be like the most hated company in America. Has to be top 10. But now with a new administration coming into the White House, Live Nation executives seem to be hopeful that this antitrust lawsuit might go away. A lot of investors think that the new administration will have more of a hands-off approach when it comes to regulation. So we'll see if Trump's DOJ pursues this antitrust lawsuit against Live Nation further, or they just drop it. Investors seem to be pretty optimistic, though, about Live Nation.

Their shares are up around 5% this morning in reaction to these earnings. Let's talk about some stocks making moves today. Let's start with Home Depot. Their shares are up this morning after the Home Improvement Store reported better than expected earnings. Home Depot sales were up 6%, which came in better than what Wall Street was expecting. Now, one reason for the sales jump was because of all the repairs needed after a couple hurricanes hit Florida and Texas over the last few months. I can relate to this. I had to fix a part. on my fence after Hurricane Barrel ripped through Houston back in July. So Home Depot sales are

improving and the company also raised their outlook for the year. Home Depot CFOs said that there's a pent-up demand for projects and home remodeling, but he also said that many consumers are putting off projects and likely waiting for lower mortgage rates. So if the Fed continues to drop rates and borrowing becomes cheaper, that could be beneficial to Home Depot. Investors seem to be somewhat optimistic after these earnings. Home Depot stock is up around 2% at the time of this recording. Now, on the flip side, we're seeing some pullback on the Trump trade stocks. Like, for example, Geo Group, a company that invests in private prisons is down 2% this morning after the stock skyrocketed nearly 80% in the past month.

I guess investors were buying the stock thinking the company would perform better under a Trump administration with his immigration policy. Also, Trump's media company, ticker symbol, DJT is down around 7% today. Coinbase is down around 3% after jumping 75% over the last week. And a company called Robin Hood is down around 4% after being up 30%. after being up 35% over the last week. Huh, haven't really heard much about them. Let's wrap the show with a fun fact.

Netflix now has over 70 million subscribers signed up for their ads tier. This is just two years after Netflix first introduced their ads tier back in November of 2022. It's funny, Netflix used to say that they were never going to have ads. And then two years ago, they saw a slowdown in their subscriber growth. So they introduced the ads tier model. And it seems to be pretty successful. The company says that 50% of new subs are signing up for the ads tier today. On top of that, the company also said it's sold out all the ad inventory for its two NFL games that will be broadcasting live exclusively on Christmas.

And they also have a live event on Friday. Jake Paul is fighting Mike Tyson in a boxing match. So we'll see how those numbers do. But overall, it looks like Netflix's strategy to jump into live events and advertising seems to be paying off. Not great for anyone that hates ads, but I think it's inevitable. I think we're going to have ads everywhere. At some point, we're all going to have chips in our brains and companies will be able to pump ads directly into our brains. So we won't even be able to skip them.

Speaking of chips and brains, you guys should go listen to the latest episode of the leading indicator podcast. We interviewed the first patient that had their brain implanted with a Neurlink chip. Neurlink is Elon Musk's company. They're working to advance the human brain. The company is working on some life-changing stuff. And I highly recommend you guys go listen to this interview to learn more about it. We'll leave a link in the description. Well, all right, guys, that's the rundown for today.

A little bit of a lighter week compared to last week, not as much breaking news happening, but the markets keep moving higher, so can't complain. If you guys enjoyed today's show, consider giving us a five-star rating on Spotify, leave a comment on Spotify, vote in the Spotify polls, and do the same for Apple as well. 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.

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