The Rundown - Target Tanks After Naming New CEO, White House Eyes Chip Stakes

Episode Date: August 20, 2025

Stock market update for August 20, 2025.This video is for informational purposes only and reflects the views of the host and guest, not Public Holdings or its subsidiaries. Mentions of assets are not recommendations. Investing involves risk, including loss. Past performance does not guarantee future results. For full disclosures, visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Public.com/disclosures⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.

Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zaid Admani, and today is Wednesday, August 20th. In today's episode, we'll tell you why the AI hype train might be starting to lose some steam. We'll also recap earnings from Target, Lowe's and T.J. Max, and dig into why Palantir is riding a five-day losing streak. Then stick around to the end of the show to find out the economic impact of the U.S. Open Tennis Tournament. It's a lot more than I expected. We got a great show for you today. Let's go.

Markets took a dive on Tuesday with the S&P 500 down 0.6%. And the NASDAQ lost 1.5%. Now, this sell-off was kind of weird because more than 350 companies in the S&P 500 actually finished in the green yesterday. It was mostly tech stocks that got wrecked. and drag the entire market down with them. Some of the worst performing stocks yesterday include Palantir, which dropped more than 9%.

Other big losers include Coinbase, Oracle, and Invidia, which lost between 4 and 5%. So there seems to be a bit of a vibe shift from investors around the hot tech names, and I wonder if we might be starting to see the first cracks in the AI hype machine. Because, you know, OpenAI's GPT5 released from a couple weeks ago, was underwhelming after being hyped as AGI

for the past few months. And it probably doesn't help that Sam Altman, then the CEO of OpenAI himself is now saying that AI is a bubble. And then there was a report this week published by MIT saying that 95% of generative AI pilot programs at corporations are failing to deliver measurable impacts on P&L. So yeah, while all these AI tools are great, they're not really having an impact on the bottom line just yet. So we'll see if the hot tech names can recover from the selloff.

But either way, this makes Nvidia's earnings next week so critical. Now that there's some creeping doubt around the AI hype, if Nvidia's earnings come in even slightly soft, it could take more air out of the AI hype cycle that's been pushing the markets up for the last few months. So once again, everyone's entire portfolio depends on Nvidia delivering on earnings. They report one week from today on Wednesday, August 27th. That could be the moment that decides whether the markets keep flying or come crashing back to Earth. We're obviously going to be watching that one closely, so make sure you guys are subscribed to the podcast to stay in the loop. Let's run through some headlines, starting with Target.

Target reported earnings this morning, and on the surface, the results looked pretty good. The company beat estimates on revenue and profits while also sticking to its full year outlook. But the reason that Target stock is getting crushed this morning is because their sales continued to drop. Revenues in Q2 came in that $25.2 billion, which is 1% less than Q2 of last year. And if you look at same store sales, that dropped 1.9% compared to last year. In fact, Target is now reported negative same store sales in six out of the last nine quarters. And that's where the problem is. Target sales have basically been flat for the past four years.

And that might be one reason why the stock is down 60% from its 2021 peak. Now, Target is trying to turn things around. They even announced a new CEO. The current CEO, Brian Cornell, has been in charge since 2014. He's stepping down at the end of January. and he's going to be replaced by Michael Fidelke on February 1st. Now, Fidelke is a target lifer. He's been working there for 20 years, starting as an intern back in 2003.

Fidelki has been target C-O-O-N-CFO, and now he's finally taken over the big chair. On the earnings call, he laid out his vision to make Target stylish again and use technology to run things more efficiently. But investors weren't buying his pump-up speech. Target stock is down more than 10% this morning at the time of this recording. I think investors were hoping for an outside high. to come into Target to provide a fresh perspective. Fidelke's been there for 20 years.

So he's going to have a lot of pressure from investors to turn things around. You know, you know, I do feel like Target is losing their special sauce that made them different from other retailers like Walmart. Like, just looking at my wife, I feel like she orders more stuff from Walmart these days

than she does Target. I mean, that should have been an immediate red flag for me for Target stock once I saw more Walmart packages at my door. Let's shift gears and talk about chips. On Monday's episode, we talked about how. the Trump administration was in talks to take a 10% stake in Intel? Well, they might not stop there.

According to a new report from Reuters, Commerce Secretary Howard Lutnik is exploring taking equity stakes and other chipmakers too, including Micron, TSM, and Samsung. Now, his idea is to swap out the big grants these companies were promised under the Chipsack and instead convert that into equity. Now, quick refresher here, the Chipsack was signed back in 2022 by President Biden with the goal of boosting U.S. semi-conductor manufacturing. The original plan was to hand out grants to these chip makers so they would build more chip factories on U.S. soil. But Howard Lutnik wants to change that a bit. He doesn't want to give this money away for free to these chipmakers without the taxpayer owning a piece of the company. And potentially seeing a return on that investment. It's an unconventional approach, but not really

out of character for this administration. Remember a couple months ago, the Pentagon took a stake in MP materials. And I think this administration is trying to do the same thing with the Chips Act. Most of the $52 billion from the Chips Act hasn't been handed out yet, and it's overseen by the Commerce Department. So Secretary Lutnik has some leverage here. Now, of course, this kind of government involvement makes companies nervous, especially foreign companies. A U.S. stake in a foreign company like TSM or Samsung would be unprecedented. Still, it seems like President Trump and Secretary Lutnik are sold on the idea, so don't be surprised if more of these kind of deals are announced soon. Let's talk about some stocks making moves today.

Low shares are up this morning after the home improvement retailer beat earnings and double down on catering to professionals and contractors. The company announced an $8.8 billion acquisition of foundation building materials, which is a distributor that supplies drywall, ceiling systems, and all the stuff that pros use on job sites. We heard a similar strategy from Home Depot in their earnings call earlier this week. Professional contractors seem to be a more consistent. consistent source of business compared to DIYers. Investors seem to love this move by Loaves and shares are up more than 3% this morning at the time of this recording. Let's stick with the winners here and talk about TJ Max.

Their earnings also came in strong, beating expectations across the board. The company also raised its full year guidance, assuming that tariffs stay about where they are now. DJ Max is less sensitive to tariffs compared to other retailers because they purchase excess merchandise from brands, usually after the item has already been imported into the market. the U.S. So T.J. Max isn't the one paying the tariffs. Shares of TJ. Max are up more than 4% this morning at the time of this recording. Now, on the flip side, we got to talk about Pallantier because they continue to have a rough few days. The stock has been on a five-day losing streak, and it's looking like it's going to be six after short-seller Cintron research called the company

heavily overvalued. Citron points out that Pallantir trades at a much higher sales multiple, then even Open AI, which kind of puts things into perspective here. On top of that, Insiders at Palantir have been dumping shares over the last 12 months, including CEO Alex Carp, who sold roughly $2 billion worth of shares in the last two years. Palantir shares are down more than 5% this morning, and the stock has shed about 20% of its value since August 12th. Let's wrap the show with the fun fact. The U.S. Open Tennis Tournament kicks off this week in Queens, and

And the tournament is projected to bring in over $1.2 billion in economic impact to the New York area during the three-week period. That is more than the projected economic impact for the entire baseball season of the New York Yankees and Mets combined. So that's kind of wild that the U.S. Open has a bigger economic impact in three weeks than the Mets and Yankees do all season combined. By the way, the U.S. Open is an incredible tournament. I've been there a few times now. It might be the best sports tournament that I've ever been to. So if you guys live near the New York area are going to be in New York during the tournament,

highly recommend going there for at least one day. You don't even have to be a big tennis fan. It's just a great vibe and it has great food and the atmosphere is great. In fact, I feel like the tournament has now become more known for their trendy cocktails than the actual tennis. The honeydews drink goes pretty viral every year on social media.

It's a vodka drink that includes honeydew melon in the shape of tennis balls. And it's a big moneymaker for the tournament, bringing in around $13 million in sales last year at $23 a cup. And this year there's going to be a new addition to the cocktail roster. They're calling it the watermelon slice and is going to sell for $39 a glass. The drink includes moat, chondon, watermelon juice, etl flour liquor, and lime with a watermelon slice garnish. That is a little too fancy for my taste, but if some of you guys end up going to the U.S. Open, try it out.

Let me know if it's worth the $39 price. tag. I am so tempted to fly to New York this weekend and attend the tournament for a few days. Just got to convince the wife. Maybe I can bill it as a business trip, you know? Honey, we got to record the rundown at the U.S. Open. We might get Carlos Alcaraz on. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did, and you have like six extra seconds, consider giving us a five-star rating on Apple, Spotify, wherever you listen to your podcast. And if you are listening or watching on Spotify or YouTube, consider leaving us a comment.

Let us know what you think about the U.S. Open if you plan on going this year or if you've been before in the past. All that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening and watching. Shout out to Mike and Connor for all the help behind the scenes

and we'll see you guys back here tomorrow.