The Rundown - Trump Slams Nvidia with New Export Constraints, OpenAI's Plan for a Social Network

Episode Date: April 16, 2025

Stock market update for April 16, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zadadmani, and today is Wednesday, April 16th. In today's episode, we tell you about why everyone is talking about the death cross and what it means for the stock market. We also tell you why OpenAI is looking to build their own social network and why Nvidia has to take a $5.5 billion hit because of the trade war with China. Then stick around to the end of the show to find out,

why Mark Zuckerberg thought about spinning out Instagram into a separate company. We got a great show for you today. Let's go. Tuesday was another up and down day for the market. Stocks once again started off pretty hot, but ultimately fizzled out throughout the day, finishing in the red. The S&P 500 was down 0.2%. And the NASDAQ was down less than 0.1%.

That put an end to a three-day win streak for both of these indices. Now, I do need to mention something big that just happened yesterday that the chart nerds can't stop talking about. It's called the Death Cross and the S&P 500 just experienced it yesterday. The Death Cross is a term used by technical analysis people. It's when the 50-day moving average dips below the 200-day moving average. You know, if you pull up the chart of the S&P 500 and add in a line of the 50-day moving average and a line for the 200-day moving average, you'll see that the 50-day moving average crossed over

the 200-day average yesterday. And that's historically been a bad omen. It's a sign that the market is losing momentum. In fact, the last time the S&P had a death cross was back in March of 2022, and just a month later, the S&P was down 5% and had a maximum drawdown of 12% following that cross. So that's why this is called the Death Cross.

Pretty scary name, but the good news is that during the past 20 instances of a death cross, the S&P 500 was higher 80% of the time just one year later. This is according to the Dow Jones market data. Now, there is a lot of uncertainty this time around tariffs and trade wars. So we'll see what happens this time. Let's talk about OpenAI because they're reportedly working on building their own social network.

This is according to reporting from the verge. Now, the social network is rumored to be like Twitter, but powered by AI and potentially integrated into chat GPT. There's no details on that this will be a standalone app or built into the chat GPT app, which I really hope they don't do. But if this does happen, it's going to escalate the beef between OpenAI CEO Sam Altman and Elon Musk. Elon was actually a founder of OpenAI, but he left back in 2018. And now these two guys aren't boys anymore.

In fact, they're fierce competitors. Elon has his own AI company now, XAI, and they're making some big progress with GROC. On top of that, Elon is trying to block Open AI from being a free. for-profit company, and he tried to buy Open AI back in February for $97 billion. That offer was rejected. So yeah, Sam and Elon, they're constantly throwing jabs at each other on X. Makes for good drama, though. So if Open AI does end up launching their own social network, it's only going to add to that. Now, when I first saw this story, I was kind of confused because why would Open AI want to even make their own social media platform? But it's

possible that Sam Altman was inspired with how GROC is integrated into X. You can actually ask Grock to explain some viral tweet or something that you don't understand, and does a pretty good job of that. On top of that, think of all the data that social media platforms generate. All that data can then be used to train AI models. So, you know what, I can understand why OpenAI wants to go down the social media route. I just don't want another social media platform to join. I think we're good there. Let's shift gears and talk about Figma. The design software startup has confidentially filed for an IPO with the SEC. So this means the company is testing the waters to see what the demand for their IPO would be before fully committing to go public.

Now, Figma is interesting because back in 2022, Adobe actually tried to buy Figma for $20 billion, but that deal was blocked by regulators in the UK. And as a result, Adobe had to pay Figma a $1 billion breakup fee. Now, these days, Figma is estimated to be valued. at $12.5 billion that's based on their most recent money raise, which was back in 2024. So that's a pretty big haircut from what Adobe was willing to pay. So I wonder what the public market thinks that Figma is actually worth. We might find out soon enough. The timing of this is pretty interesting, though, because the IPO market has gone pretty

cold recently. A ton of major names like Calarna, Stubhub, Chime, have paused their IPO plans because the markets have been in turmoil since all the tariff stuff started a few weeks ago. So Figma trying to go public right now is an interesting move. But the company could decide to back down after testing the waters. We'll see what they end up doing. I actually wonder what Figma would be like today if Adobe was allowed to move forward with the acquisition.

Now, personally, I've never used Figma, but I know a lot of people that use it all the time. I use a few Adobe software, mostly for editing. And let's just say it can be pretty frustrating at times. So the Figma stands out there. Please let me know in the comments, what you think about Figma going public, and would they just be better off if they were under Adobe?

I mean, the founders and employees that own Figma stock would definitely be richer if Adobe was allowed to buy them. Let's talk about some stocks making moves today. Shares of United Airlines are up this morning after the company beat earnings estimates and maintain their full year guidance for this year. This is despite everyone freaking out about a possible recession. They also provided a second lower guidance

in case the economy does go into a state, significant downturn. I don't think I've ever seen a company provide two guidance before. If there is a recession, the airline expects their earnings to drop between 30 to 40% on an adjusted per share basis. But as of right now, the company's doing pretty well. In fact, they saw a 17% jump in premium bookings and international bookings were up 5% year over year in the first quarter. As a result, shares of United Airlines are up nearly 6% this morning in reaction to these earnings. Now, on the flip side, Nvidia stock is taking a big here. hit this morning after the Trump administration announced new export restrictions on AI chips.

These new restrictions prevent Nvidia from selling their H20 chips to China. And that's a huge blow because this H20 chip was specifically designed to comply with the previous export restrictions. But now this chip is being banned too, which could be because of the escalating trade war with China. Now, as a reminder, this H20 chip from Nvidia is a less powerful version than their state-of-the-art AI chips. But the U.S. government is worried that these H-20 chip, 20 chips are still too good in helping China develop their AI technology. So since Nvidia can't sell these chips anymore, they expect to take a $5.5 billion hit this quarter because of unsold inventory. Bloomberg estimates that Nvidia could lose between 14 to $18 billion

in revenue this year if these restrictions stick. Now, the timing of this is pretty interesting because on yesterday's show, I mentioned that Nvidia is building $500 billion worth of AI infrastructure in the U.S. And I thought that it might be like a 4D chess month. to get preferable treatment from the Trump administration? Turns out that wasn't enough, and Nvidia's business will still take a hit because of export restrictions to China. Invidia's stock is down more than 6% this morning

in reaction to this news. Let's wrap the show with a fun fact. Back in 2018, Mark Zuckerberg actually considered spinning off Instagram into a separate company. See, Facebook bought Instagram back in 2012 for a billion dollars, and the app was growing like crazy, which was making Zuck kind of jealous. In fact, Zuck wrote in an email that he was frustrated that Instagram was growing faster than Facebook.

On top of that, he was worried that meta might be broken up in five to ten years anyways, and he wanted to get ahead of that by spitting out Instagram. Ultimately, though, he decided not to, and Instagram today has 2 billion users and brings in about half of meta's ad revenue. So I'd say it was a good decision, but they might ultimately have to break off Instagram anyways because Meta is currently on trial against the FTC and an antitrust lawsuit for being a social media monopoly. If Meta ends up losing this trial, there's a real possibility they would have to sell off Instagram and WhatsApp. So we'll see what happens. It's been a very interesting case.

Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did, and you have like 12 extra seconds, consider giving us a five-star rating on Apple or Spotify. And if you're listening on Spotify, don't forget to vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement really does help us out. And it helps other people find this show. I want to give a special shout out to Tony for leaving an awesome comment on yesterday's show on Spotify.

He recommended that Houston be called Chip City because of all the moves the city is making an AI. Honestly, I love that recommendation. I'm going to bring it up in the next city council meeting. So shout out to Tony. Thank you guys again for listening. Shout out to Mike. Mike and Connor for all the help behind the scenes, and we'll see you guys back here tomorrow.

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