← The Rundown
The Rundown
Google Dodges Chrome Sale in Antitrust Win, Anthropic Raises $13B at $183B Valuation
00:09:57
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Public.com presents the rundown, your daily market update in under 10 minutes. My name is Zaydad Mani, and Today is Wednesday, September 3rd. In today's episode, we'll tell you about the big antitrust win for Google in court yesterday and why Apple is probably even happier. We also recap earnings from Macy's and Dollar Tree, then stick around to the end of the show to find out about the latest video game coming to the big screen and why investors are taking notice. We got a great show for you today. Let's go. September not off to a great start for the stock market. Both the S and P and Nasdaq dropped around 0.7% on Tuesday. In fact, more than three quarters of the stocks in the S and P finished in the red yesterday. Now, I mentioned this on yesterday's episode, but it's worth repeating that September has historically been the worst month of the year for the stock market. And so far it's living up to that reputation. And especially for this year, there's a lot of uncertainty for for investors to deal with over the next few weeks. For one, we might have tariffs get struck down by the Supreme Court later this year. We talked more about that on yesterday's episode. So go check that out if you missed it. On top of that, inflation is still stuck north of 2% and the labor market is flashing some warning signs. Now we should learn more about the labor market this week because the August jobs report is dropping on Friday morning. Now this is going to be a crucial one because remember, last month's jobs report came in shockingly weak. That was when the Bureau of Labor Statistics revised their May and June numbers lower by a quarter of a million jobs. And then President Trump ended up firing the chief of the BLS because he was upset about the revisions. So that now puts the credibility of this upcoming jobs report in the spotlight. If the numbers come in strong, I wonder if investors will actually believe them or just shrug them off, you know, and then what happens if the numbers come in weak again? So if you haven't already, make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop because the next couple weeks could set the tone for the rest of the year. Let's run through some headlines, starting with Google. Google just got a huge win in court. Yesterday, a federal judge ruled that Google doesn't have to sell off Chrome as part of their antitrust case. Now a quick refresher here. Last year, Judge Amit Mehta found that Google illegally monopolized the search market by paying companies like Apple billions of dollars to be the default search engine on their devices. But the penalties for Google losing that case were still being sorted out. The Justice Department, which brought this case Against Google in 2020 put was asking the court to force Google to sell off the Chrome browser and stop Google from paying companies like Apple, Samsung and others for being the exclusive search engine on their devices. But Google was able to avoid both of those harsh penalties. The judge said that forcing Google to sell Chrome or Android would have gone too far and probably hurt consumers. And he also said that stopping Google from paying companies like Apple, Samsung, Firefox and others would hurt those companies as well. So instead, the penalties on Google were much lighter. The judge said that Google can't do exclusive deals with these companies anymore, but it can still pay Apple and others for being the default search engine as long as users have the option to switch to other search engines like Bing, duckduckgo or others. So this was a huge win, not just for Google, but for Apple as well, because they were getting more than $20 billion a year from Google for being the default search engine on iPhones, and they can continue that deal. Now, Google does have to make some concessions as part of losing this case. The the court is requiring Google to share parts of their search data with competitors to give Companies like Microsoft, DuckDuckGo, OpenAI, Perplexity and others a chance at building a better search product. But crucially, Google doesn't have to share their advertising data, which is the real money maker for Google at this point. Google's brand is so strong that even if other search engines got better, I don't think many people are switching. Like, if Bing got really good overnight, is anyone really going to switch? I highly doubt it. Now what's really interesting here is that Google got off pretty light because of the rise of ChatGPT. The judge even said that the emergence of AI has changed the competitive dynamics of the search business. And that was a strong reason for the courts to not jolt the system and force Google to be broken up and instead let the market forces do their thing. So overall, huge sigh of relief and a huge win for Google and probably even a bigger win for Apple. You know, Google gets to keep their Chrome browser, that's great, but Apple gets to keep collecting the billions of dollars Google for being the default search engine. That money is pretty much pure profit for Apple. Everyone seems to be happy here, including shareholders. Google stock is up more than 6% this morning at the time of this recording. And Apple stock is up more than 3%. I honestly think that ChatGPT saved Google here because if Chad GPT didn't exist and starting to take market share from Google, I bet the judge would have come down hard on Google and might have forced them to sell off Chrome or maybe even Android. So in a way chatgpt taking market share from Google in the short term might have saved Google in the long term. Crazy how it worked out that way. Let me know in the comments what you guys think about this ruling. Do you think that it was fair? Do you think that Google should have been broken up and do you think that ChatGPT existing played a big role in this? Let me know in the comments on Spotify or YouTube. Now, sticking with the AI theme here, let's talk about anthropic. The four year old startup behind the Claude chat box is raising $13 billion at a valuation of around $170 billion. That's nearly triple what they were valued at back in March. Just for some perspect, Anthropic is now valued just a notch below Uber. Again, this company is 4 years old and not making any profits. Investors in the latest round include iconic capital Fidelity Lightspeed and the Guthr Investment Authority, which is Guthr's $524 billion sovereign wealth fund. Amazon is still Anthropic's largest investor with $8 billion invested, and Amazon also provides much of the computing power that Anthropic runs on. Anthropic says that their run rate revenue, which is their projected annual revenue, has exploded from $1 billion at the year to more than $5 billion today. So their business is growing like crazy. But despite all that growth, the company is losing money because of all the high cost of computing, developing and training state of the art AI models takes a ton of money, but for now, investors are willing to pay up at these crazy valuations. Also, there were some rumors earlier this year that Apple might potentially acquire Anthropic, but now that they're being valued at $170 billion, I doubt Apple would move forward at this point. Let's talk about some stocks making moves today. Macy seems to be on the verge of a comeback. The retailer easily beat earnings and revenue expectations for last quarter and even raised its full year guidance. Same store sales grew at the fastest pace in a year thanks to Macy's doubling down on categories that are working, like denim and women's contemporary apparel. It seems like the turnaround plan from CEO Tony Spring, which he announced back in February, is working. The company is planning to shut down 150 underperforming stores by 2026 while investing heavily in locations with the most potential. That strategy, plus steady demand across its portfolio of brands, which includes Bloomingdale's and Blue Mercury, has helped Macy's navigate an uncertain tariff environment that led them to cut their full year guidance last quarter. Investors seem to be optimistic about this turnaround. Shares of Macy's are up more than 10% this morning at the time of this recording. Now on the flip side, Dollar Tree stock is dropping despite the company beating on both sales and earnings estimates for Q2. Same store sales rose 6.5% last quarter, which is better than the 5% that Wall street was expecting. In fact, the demand for bargains is so strong that Dollar Tree lifted their annual sales outlook. But the problem was that their profit expectations for the current quarter came in soft, so investors didn't love that. And after an early bump in the stock, shares have now reversed and are now trading down 7% at the time of this recording. It also doesn't help that Dollar Tree stock has already surged more than 50 this year going into that report. So the bar was set pretty high and Dollar Tree just couldn't quite clear it. Let's wrap the show with a fun fact. Call of Duty is headed to Hollywood and honestly, I'm surprised it took this long. Paramount Skydance just signed a deal with the video game developer Activision, which is owned by Microsoft, to make a live action Call of Duty movie. Call of Duty has been the best selling video game in the US for 16 straight years, selling more than 500 million copies worldwide. Which is why I'm surprised it took this long to make movie. I like this move for Paramount. Call of Duty is one of the most recognizable entertainment franchises in the world and these days the only thing that gets people to go to the movies are well known IPS and franchises. So I think it's worth it for Paramount to take a swing at this. Like, I wouldn't be surprised if the Call of Duty movie ended up making a billion dollars, so we'll see what happens when the movie finally comes out. But this also shows that Paramount is serious about their content ambitions. Ever since the merger with Skydance last month and David Ellison taking over, Paramount has made big moves. They dropped $7.7 billion to secure rights to the UFC and put them on Paramount. Plus they also signed the Duffer Brothers to a multi year deal. Those are the guys who created Stranger Things and now they're bringing Call of Duty to the big screen and I got a feeling they're not done making moves. And investors are already starting to take notice. Paramount Skydance stock is up more than 20% since the merger. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like 7 extra seconds, consider giving us a 5 star rating on Apple, Spotify, wherever you listen to your podcasts. And if you are 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 the show. You know, we've seen a lot of comments over the last few weeks, so thank you to everyone for the feedback. Thank you guys again for listening and watching. Shout out to Mike and Connor for all the work behind the scenes, and we'll see you guys back here tomorrow.