The Rundown - S&P 500 Hits 5K, Sam Altman Seeks Trillions for AI Chips

Episode Date: February 9, 2024

Stock market update for February 9, 2024. The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.The content of the podcast is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures. Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome to the rundown, your daily market update in under five minutes. My name is Zadadmani, and today is Friday, February 9th. In today's episode, we talk about the S&P 500's path to 5,000 points. We also discussed Sam Altman's goal to raise $7 trillion with a T. And then we go over the winners and losers from the stock market today and end the show with a fun fact about the Super Bowl. All right, let's jump into it. Quick recap of the stock market on Thursday.

The Dow, S&P, and NASDAQ all take. higher and the S&P even crossed the 5,000 milestone for a brief second. But ultimately, it closed the day on Thursday at 4,997. Just three points away from 5,000. On the bright side, that was another record closed for the S&P 500, making it the 9th for this year. And the Dow also finished at record highs, making it the 11th for the year. And guys, I think the S&P is going to close at 5,000 today.

Right now, stocks are a mixed bag. The Dow is in the red, but the NASDAQ and S&P are in the green. at the time of this recording around noon Eastern. And unless we get an afternoon sell-off, the S&P might close above 5,000 for the first time ever. That would be a great way to end the week. The S&P 500 hit 4,000 for the first time on April 1st, 2021. So in less than three years, the index added 1,000 points.

You love to see it. All right, let's run through some headlines. Starting off with Sam Altman. Guys, Sam Altman is trying to raise trillions of dollars. There's an article that came out in the Wall Street Journal yesterday that the CEO of OpenAI, the maker of ChatGPT, is trying to raise between $5 and $7 trillion. Sam says one of the biggest challenges

or bottlenecks of generative AI seems to be the lack of powerful chips. And Sam wants to fix that problem and he thinks it's going to take trillions of dollars to do it. And he's talking to everyone to try to raise this money. Government officials from the UAE, he's talking to SoftBank founder Masa Sun. He also talked to chip manufacturer at TSMC.

So I can't really blame the guy for not trying and thinking big. But I'm kind of confused on the $7 trillion number. Like the entire global semiconductor industry right now is less than a trillion dollars. In 2023, the total sales of chips worldwide was $527 billion. The market cap for Apple and Microsoft, the two biggest companies in the world combined, is like $6 trillion. It makes for a good headline. I don't really know how realistic it is to raise that much money. I just want to know what the investors' reactions are when he throws that $7 trillion number out. Like, who has that much money? I guess it's not surprised that he's talking to government officials from the UAE.

All right, let's talk about some stocks making moves today. One of the big winners today is Cloudflare. The cybersecurity company's stock is up more than 20% at the time of this recording after reporting better than expected Q4 earnings. Cloudflare's revenues grew by 32% to $362.5 million, which is better than what Wall Street was expecting. Also, Cloudflare's losses narrowed to $27.9 million. That's down from the $45.9 million from a year ago.

So Cloudflare's revenues are up and losses are coming down, and that's why investors are happy. On top of that, cybersecurity continues to be a bigger issue every year, so that's a big opportunity for Cloudflare to grow their business. And that's why Cloudflare stock is up more than 20% today. Let's talk about some losers. We got two losers to talk about. Starting off with Pinterest.

Pinterest stock is down more than 10% at the time of this recording around noon, Eastern after reporting mixed Q4 earnings. Pinterest reported that their revenues grew by 12% to 981 million, but that was less than what Wall Street was estimating. Their profits came in at $201 million, which was actually slightly more than what Wall Street was expecting. Pinterest also reported growth in their user base, too. Honestly, the issue for Pinterest seems to be that their growth is not as fast as

as Meta or Amazon. Meta and Amazon have both set really high standards for every internet advertising company. Meta and Amazon's advertising revenues are going by 20 plus percent. Doesn't seem to be the case for Pinterest. And that's one of the reasons why Pinterest stock is down. Even though the revenues and earnings came pretty close to Wall Street estimates. It's just tough to be compared to a juggernaut like Meta and Amazon. Another stock that is down today is a huge.

Expedia. The stock is down more than 15% at the time of this recording around noon Eastern after reporting Q4 earnings. Actually, their Q4 earnings were pretty decent. Revenues and profits came in line with expectations. But what seemed to spook investors was that Expedia expects 2024 revenue growth to slow a bit because of declining airfare prices. And also they made a surprise announcement that their CEO will be stepping down. So the uncertainty around leadership and the business this year has investors a bit nervous. And the stock is now the worst performing stock in the S&P 500 today. All right. Time to wrap the show with a fun.

Fact. Today's fun fact is about the Super Bowl, because the Super Bowl is happening this weekend. Did you guys know that the cost to advertise during the Super Bowl this Sunday is about $7 million for a 30-second ad? Another fun fact, the cost to advertise during the first ever Super Bowl in 1967 was $37,000, which is honestly a lot more than I was expecting. I thought it might have been like $300 or something. These days, the cost for Super Bowl ads seems to go up about 10% every year. And on one hand, I get it. The Super Bowl is the most watched event in the U.S. This year is expected that over 115 million people are going to watch it. But I really wonder if the ROI on the ad spend is worth it.

Because it's not just the $7 million to buy the ad placement. Most of these ads have a ton of celebrities. They're probably expensive too. Someone needs to do a study on that. ROI on Super Bowl ads. I mean, it didn't really seem to work for the crypto industry a couple years ago. All right, guys. That's all I got for you guys today.

What another great record-setting week. Thank you guys so much for listening. Have a great weekend. Enjoy the Super Bowl. And I'll see you guys back here on Monday. This is Public Live. your real-time resource for news events and trends in the markets. All views presented in this 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. Public live hosts 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 slash disclosure. In paid partnership with Zaid Admani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.