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Public.com presents the rundown, your daily market update in 10 minutes. My name is Zaydad Mani and Today is Friday, May 8th. In today's episode, we'll break down the surprisingly strong April jobs report. We'll also recap earnings from coreweave, Iron Rocket Lab and cloudflare, then stick around to the end of the show to find out why the AI boom is making gaming more expensive. We got a great show for you today. Let's go. Stocks pulled back a bit on Thursday. The S&P 500 dipped 0.4% while the Nasdaq was off by 0.1%. And I have to bring up the Dow here. It lost 0.6% a long time. Listeners know I'm a Dow hater and right now is a great example of why the Dow has been the worst performing index this year compared to the S P and Nasdaq. And it's because the index is only 30 stocks and doesn't have much exposure to AI and chip stocks, which is where all the money is going right now. And that's why Dow investors are getting left behind. The other thing that we got this morning is the April jobs report and the numbers were solid. The economy added 115,000 jobs in April, roughly double the 55,000 economists were expecting. The unemployment rate held steady at 4.3%. So the data is showing that the labor market is holding up despite fears of AI replacing jobs and a economic slowdown. And if the labor market continues to stay healthy, it could give the Fed cover to to move forward with rate cuts later this year. What's interesting though is that the market is only pricing in a 12% chance of a rate cut this year, but also a 12% chance of a rate hike. So that tells me the market is still somewhat concerned that elevated oil prices could cause inflation to rise and force the Fed to either hike rates or at least hold them where they are. Speaking of inflation, we are getting a CPI report next week, so we should get more data there. So we're going to be staying on top of all that stuff. Make sure you guys are subscribed to the podcast and tuning in every day. To stay in the loop, let's run through some headlines starting with Core Weave and Iron. Both Core Weave and Iron reported earnings last night. These are the up and coming NEO cloud companies that rent out data center capacity specifically built for AI workloads and the earnings were really interesting. Let's start with Core Weave first. It's the household name. It's been one of the Hottest stocks of the year. But the earnings were a mixed bag. Revenues did more than double to just over $2 billion, beating Wall street estimates. But everything else on the earnings was a miss. For one, the company lost $740 million in the quarter, which was more than expected. Then to make matters worse, they gave Q2 revenue guidance that came in below estimates. And then the company says they're going to have to spend even more money this year on capex, with that number rising to between 31 billion and $35 billion. Management is blaming the rising capex on component costs becoming more expensive. Now, here's the thing about CoreWeave. They're funding most of that CapEx with with debt. Core Weave ended the quarter with $25 billion in debt on the books. Now, the good news is the company does have a contracted backlog of nearly $100 billion. So the demand is clearly there. The question, though, is whether the math works out when you're borrowing so much money to meet it. Now, Core Weave has to either buy or lease the data centers. They have to buy all the GPUs, they have to connect everything. They have to pay for the power. And all of that is really expensive. Investors are starting to get a bit nervous. Core Weave Stock is down 8% this morning and at the time of this recording. Now, let's talk about Iron. They're a neocloud company based out of Australia, and their earnings were a huge miss. Revenues came in at $145 million, which was more than double from the same quarter last year. But it was well below Wall street estimates of $220 million. On top of that, the company's net loss widened to 248 million, much worse than the $53 million loss that analysts were expecting. So that's a huge miss across the board. And normally that type of result would send the stock to tanking. But Iron stock is up today because the company announced a major deal with Nvidia. The two companies are partnering to deploy 5 gigawatts of AI infrastructure globally. As part of this deal, Nvidia has a five year right to purchase 30 million iron shares at $70 per share. So that means that Nvidia could potentially take a $2.1 billion stake in iron. On top of that, Iron signed a separate $3.4 billion deal to provide cloud services directly to Nvidia for its own internal AI research. So those deals with Nvidia was enough to overshadow the poor earnings results. Iron Stock initially popped 20% after the Nvidia news, but is now up around 10% this morning. At the time of this recording, you know, Nvidia continues to spread money across the AI ecosystem. You know, they're already one of coreweave's biggest investor. Now they're investing in Iron. They also announced a deal with Corning this week. You know, nobody's asking the circular financing question anymore, but it's worth keeping in mind that Nvidia is still doing these deals. As for the takeaway from Core Weaves and Iron's earnings, clearly the AI demand is real, but building the infrastructure behind it is expensive. You know, these companies are growing revenues at triple digit rates and they're still losing a ton of money. So at some point they're going to have to show investors that they can earn a profit. Let's shift gears and talk about the latest company announcing an ipo. I'm talking about Lime, which is the company behind those bright green E bikes and scooters that you see scattered across major cities. They just announced that they're planning to go public soon. Now, it's not as sexy of a name as SpaceX or anthropic, but it's a sign that companies are still trying to take advantage of the IPO window. Right now Lime is hoping to raise around $250 million as part of the IPO and go public at around a $2 billion valuation. And I'm really curious to see how this plays out because micro mobility companies haven't had a great experience in the public markets. I don't know if you guys remember the company Byrd. It was a scooter company similar to Lime. At one point it was worth north of $2 billion. But then by 2023 they for bankruptcy and their stock was delisted from the New York Stock Exchange. Now, Lime seems to have a better handle on the business, no pun intended. Revenues grew 29 last year to nearly $900 million, and they've been free cash flow positive for three straight years. Lime is also backed by Uber, which owns 5% of the company and it's integrated directly inside the Uber app, which is a real distribution advantage. That said, though, the company did lose $59 million last year and, and they've got about a billion dollars in liabilities coming due, which is part of the reason they're going public is to pay down debt. So personally I'm not a fan of the scooters or the business model. But you know what, I respect that Lime has managed to survive. We'll see how the public market ends up pricing them. Let's talk about some stocks making moves today. Rocket Lab shares are flying after the space company reported a monster quarter with revenues jumping 64% to a record $200 million. The company also gave an upbeat guidance for the current quarter with sales expected to be between 225 and 240 million dollars. And the key metric that caught my attention is the company's backlog, which grew to $2.2 billion in the quarter, rising by more than 20% quarter over quarter. They signed their largest launch customer in history in the quarter and the company expects 36% of the backlog to be recognized as within 12 months. So that's nearly $800 million. And by the way, Rocket Lab isn't just a launch company. They're pushing to be a full on end to end space company. They announced that they are acquiring a space robotics company called Motive. So overall, great quarter for Rocket Labs investors seem to be hype. Shares are up more than 20% this morning at the time of this recording. Now on the flip side, shares of Cloudflare are plummeting despite the Internet company beating earnings. See, Cloudflare is an Internet infrastructure and cybersecurity company. You've probably been hit with their Are you a robot Checkboxes when visiting some websites. And their last quarter was fine. Revenues grew 34% to $640 million, beating Wall street estimates. And they also beat on profits as well. But the stock is getting clobbered today because their Q2 guidance was underwhelming. And then on top of that, the company also announced they plan to cut roughly 20% of its workforce, which is about 1100 jobs, because of AI, saying that their internal AI usage has surged 600% in the past three months. And the firm is claiming to have embraced agentic AI, from engineering to HR to finance to marketing in order to complete tasks. Now, what's confusing to me is that news like this tends to push up the stock price. But that's not the case for Cloudflare today. Shares are down more than 25% this morning. In reaction to this news, let's wrap the show with the fun fact. Nintendo is raising the prices of the Switch 2 by $50, going from $450 to $500 starting September 1st. And it's all because of AI. See, all these big tech companies spending hundreds of billions of dollars on AI data centers has led to a huge surge in demand for memory chips, which is leading to shortages and sending prices through the roof. So yeah, because of the rising prices, Nintendo is passing that cost down to the consumer. Nintendo says they're going to take about a $640 million hit this year from rising component costs and also tariffs. In fact, they're now expecting to sell fewer Switch 2s this year than last year, which almost never happens in the second year of a console. That's one of the reasons why Nintendo stock is down around 30% this year. And by the way, I don't want to just blame Nintendo here. Sony also raised prices of the PS5 back in March, and Microsoft raised the prices of the Xbox back in October. So one of the biggest losers of the AI boom has been gamers. Especially if you try to build a gaming PC right now. I mean, GPU and memory prices are just brutal these days. And unfortunately, with the way things are going, I don't know if the prices are going to come down anytime soon. So if you've been thinking about buying a Switch to buy it before September 1st because prices are going up, well. All right guys, that's the rundown for today. That's the rundown for this week. Hope you guys enjoyed today's episode. If you did and you have like five extra seconds, consider giving us a five star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. All that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here tomorrow.