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Public.com presents the rundown, your daily market update in 10 minutes. My name is Zadodmani and today is Friday, July 24th. In today's episode, I'll tell you about the new tariffs that kicked in overnight and why the market isn't too worried about them. I'll also recap Intel's blowout earnings and why the company is finally benefiting from the AI boom. Then stick around to the end of the show to find out how much Google has made from their SpaceX investment and and why I think they need to change the accounting rules when it comes to earnings. We got a great show for you today. Let's go. Stocks got hit hard on Thursday with the S&P 500 dropping 1.2% while the Nasdaq fell more than 2.1%. It was the Nasdaq's worst day in about a month and most of the damage was concentrated at the very top of the market. Max 7 stocks yesterday lost a combined $889 billion in market value with GOOG Tesla getting hit the hardest. Google stock dropped more than 7% and Tesla fell more than 14% following their earnings report. We broke down both those earnings on yesterday's show, so go check that out if you missed it. The big takeaway so far seems to be that investors are getting increasingly nervous about just how much money these tech companies are spending on AI. But you know, tech wasn't the only thing dragging down the markets yesterday. Oil and tariffs are top of mind again for investors. Let's talk about oil first. Brent crude closed above $100 a barrel yesterday for the first, the first time since May. Oil prices have surged nearly 20% in just the past five days. It's the fastest spike since March. See what's happening right now is that the oil disruption in the Middle east is spreading beyond just the Strait of Hormuz. The Iranian backed Houthi rebels said they attacked two Saudi oil tankers in the Red Sea. Saudi Arabia has been rerouting a huge portion of their oil exports through the Red Sea to avoid the blockade at Hormuz. And now that backup route is under threat too. So that's making oil investors nervous. On top of that, President Trump says he's considering what he called a massive attack on Iran, potentially bigger than anything we've seen so far in this war. So this conflict is continuing to get worse and investors can't ignore it anymore. But that wasn't the only headline dragging down markets. We also got some tariff news. We talked about this earlier in the week. And it is now confirmed the Trump administration is imposing new tariffs ranging from 10 to 12 and a half percent on imports from about six 60 countries, including major trading partners like the EU, Canada and Mexico. These tariffs took effect today and essentially rebuilt a big portion of the tariffs that were struck down by the Supreme Court back in February. This time, the Trump administration is using a different legal authority tied to forced labor practices. And just like with the previous tariffs, I'm sure these tariffs will face legal challenges as well. But I also think the immediate economic impact might be less dramatic than the headlines make it sound. Because remember, after the Supreme Court struck down Trump's previous tariffs, the the administration put in a temporary 10% global tariff. Those temporary tariffs expired yesterday. So these new tariffs are replacing those temporary tariffs. So it's not like we have another 10% tariff on top of everything else. So the overall tariff burden on imports doesn't change dramatically right away. But I think the bigger issue here is the timing of these tariffs and the optics as well. You know, oil prices are rising again, gas is back above $4 at the pump, and inflation is still above the Fed's 2% target. So now with these tariffs back in focus, that could make the markets a nervous. And it also puts the Fed in a tough spot on what to do with interest rates. The market seems to be convinced that the Fed will be hiking rates at some point this year. Traders are now pricing in a 40% chance the Fed hikes rates at next week's meeting. In fact, the 10 year treasury yield just hit its highest level since January of last year. And traders are now pricing in a 40% chance the Fed hikes rates at next week's meeting. You know, a week ago the odds of a rate hike at next week's meeting was 12%. I personally don't think the Fed will hike rates next week, but I'm really curious to see what Fed Fed Chair Kevin Warsh has to say about everything. And by the way, next week is going to be absolutely huge for the market. On top of the Fed meeting, we're also getting earnings from Microsoft, Meta, Apple and Amazon. So there's going to be a lot to cover over the next few days. We're going to be staying on top of everything. So if you're new here, it's a great time to get subscribed to the podcast and tune in every day to stay in the loop. Let's run through some headlines and we're talking intel earnings. Intel might officially be back. The chip maker reported earnings last night and they absolutely crushed it. Revenues jumped 25% from a year ago to $16.1 billion. Crushing expectations. And adjusted earnings came in at 42 cents per share, basically double what the street was expecting. This was Intel's fastest revenue growth in about 15 years. And management expects that momentum to continue from for the current quarter, intel is projecting between 15.8 and $16.8 billion in revenue, which was well above the roughly 15.1 billion that Wall street was expecting. So intel is having a moment right now. You know, it's easy to forget that intel was actually losing money this time last year, but things are turning around. And a big reason for that is AI and data centers. For the longest time, everyone thought that intel was one of the biggest losers of the AI boom. Tech companies were buying up GPUs mostly from Nvidia because that's what was required to train AI models. So for the last two to three years, many people thought that intel might have missed the AI boom. But the AI industry has started to shift over the last few months. The demand is shifting from training AI models to actually running them. With inference demand and also the rise of AI agents, those workloads lean more on CPUs, which is Intel's bread and butter. So now all these AI data centers need a ton of CPUs because of all this agentic AI workload. Intel said their Data center business grew 50, 59% last quarter to $6.3 billion. With CEO Lit Bhutan saying the demand is now outpacing supply. Intel said they've signed 10 long term agreements with data center customers. Big picture. This just shows you how the AI trade keeps expanding. It started with Nvidia and GPUs in 2023 and 2024. Then we had memory stocks like Micron and Sandex explode last year. And now we're seeing Stronger demand for CPUs, servers, networking equipment and and fiber optic cables. So intel is finally starting to get a piece of the AI pie. And by the way, it's not just Intel's CPU business making a comeback. Their foundry business is also booming. This is the part of the business where they manufacture chips for other companies that grew 31% to $5.8 billion. The company said they recently added Apple as a customer for some of their chip manufacturing. And management says they're seeing a lot of interest for their next generation 14amanufacturing process and also advanced chip packaging. The foundry business is key here because it's strategically important for US national security. The US government wants more advanced chip manufacturing happening on US Soil. And it's one reason why the government took a 10% stake in intel last year. And that investment seems to be working out. So far, intel stock has gone up nearly 300% since the US government invested $8.9 billion in intel back in August of last year. And shares of intel are up another 4% this morning in reaction to the earnings report. Now if you zoom out a little bit though, the stock is down about 30% from its G June peak. So I wonder if this earnings report will spark another rally and push intel back to all time highs again. Let's talk about some stocks making moves today. Oracle shares are moving higher this morning after the Pentagon announced a massive software contract with the company worth up to $7 billion over the next decade. This agreement covers things like software licenses, maintenance and consulting for systems running inside the government's data centers for the U.S. intelligence community and the Coast Guard. Fun fact, the CIA was literally Oracle's first customer back in the day. Now one thing to note here, this isn't necessarily $7 billion of new business for Oracle. This deal consolidates a bunch of the government's existing Oracle contracts into one larger agreement. And the Pentagon says this should actually save taxpayers at least $441 million over the life of the contract. This is coming at a good time for Oracle because their stock has been getting hammered this year. Shares are down around 38% so far as investors are worried about the company's debt load, not to mention their legacy software business getting disrupted by AI. So locking in a huge long term government contract definitely helps. Shares of Oracle are up around 2% this morning at the time of this recording. Now on the flip side, American Express is falling despite beating on earnings. Revenues for the credit card company grew 10% to $19.6 billion and earnings per share came in at $4.53, which is which exceeded expectations. Amex has a wealthy high income customer base and those customers continue to spend money Spending on amex cards jumped 9% to over $455 billion with travel and entertainment up 10%. But the stock is still falling this morning because of the company's guidance. American Express raised their revenue forecast, but they kept their profit forecast unchanged. And I don't think investors like that because expenses were already up 12% last quarter. So because of that, American express is down around 5 this morning at the time of this recording. Let's wrap the show with a fun fact. Google had a nearly $100 billion investment gain last quarter from stakes they own in other companies, mostly SpaceX and Anthropic. According to Google's earnings this week, Google's investment in SpaceX was worth about $94 billion as of the end of June, which means that Google owns about 5% of SpaceX. You know, Google invested $1 billion in SpaceX back in 2015, so this has to be one of the greatest venture investments of all time. Now, here's the thing. SpaceX stock has dropped about 30% since the end of the quarter. So on paper, Google's investment in SpaceX is now worth around $65 billion, which means that they had about $30 billion on paper profits wiped out in the last few weeks. So I wonder if and when Google will sell some of their shares in SpaceX. Like, are they going to do it right after the lockup ends, or will they wait for the stock to bounce back? Google, this is a lot of money for them. On a side note, I do think that we need to change the accounting rules when it comes to how unrealized gains are shown on earnings. There was some confusion yesterday because Google's earnings per share for the quarter came in at $9.11, which was way higher than the $2.88 that Wall street was expecting. But that was because it included the $98 billion in paper gains from their investments. Those are unrealized gains Google didn't actually sell the investment to to lock in those profits. So they probably should do something about that in the accounting rules, because now the opposite could happen next quarter. If SpaceX stock keeps slipping the way it is, Google could record billions in paper losses, making their headline earnings look way worse. I mean, honestly, I'm kind of surprised the accounting rules work this way in the first place. Well, all right, guys. That's the rundown for today. That's the rundown for this week. Hope you guys enjoyed today's episode. Thank you guys so much for listening, watching, and commenting. Shout out to Mike for all the work behind the scenes, and we'll see you guys back here tomorrow for the deep dive.