← The Rundown
The Rundown
Investors Buy the Dip Despite Iran Conflict, Tesla Secures Bullish Call from Wall St.
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Public.com presents the rundown. Your daily market update in under 10 minutes. My name is Zadud Mani, and Today is Wednesday, March 4th. In today's episode, we'll tell you why bank of America just called Tesla the leader in autonomous driving. We'll also tell you about OpenAI's potential deal with NATO. Then stick around to the end of the show to find out how much Mark Zuckerberg just paid for a Miami mansion and why California billionaires are fleeing to Florida. We got a great show for you today. Let's go. While stocks were down on Tuesday with The S&P 500 and Nasdaq both dropping around 1%, but just like Monday, the markets rallied off the lows of the day. Now, at one point, the S and P was down like 2 1/2% over fears of a prolonged conflict in the Middle East. But investors are buying the dip. And when looking at the vix, which is Wall Street's fear gauge, it spiked as much as 20 in the morning before settling down to 10%. So there was genuine panic early on yesterday, but that faded. Now, one reason for the market rally yesterday was comments from President Trump. In a post on Truth Social, he said that the US Navy would begin escorting oil tankers through the Strait of Hormuz and that the US Government would offer insurance to ships passing through the region. Now, for some context, the Strait of Hormuz is arguably the most important energy choke point in the world. About 20% of the world's oil flows through it. And right now, tanker traffic through there has basically grounded to a halt because Iran has threatened to attack ships sailing through that region. And that's why oil prices have surged more than 10% since the start of the week, but have pulled back a bit after the post from President Trump yesterday. Overall, though, I'd say the market's response to the war has been volatile but surprisingly resilient. Investors are coming in and buying the dip. And most strategists don't think that this is the start of a full on bear market. The key, though, is whether this conflict stays contained or or if it turns into a prolonged regional war that disrupts global energy supplies. You know, if oil and gas prices keep climbing, that could have an impact on the global economy, especially inflation. So I expect the war to dominate headlines for the rest of the week, maybe even next week. There's still a ton of uncertainty right now, not to mention many of the airports in the Middle east, which are key hubs, are still shut down or scaling back flights. If fighting continues to escalate. I think markets will keep going lower but but any signs of de escalation with Iran could spark a major rally. So we'll see what happens. You know, we're staying on top of everything, so 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 Tesla. Tesla just scored an upgrade from bank of America, which labeled the EV maker as a clear leader in autonomous driving. The bank reinstated coverage of the stock with a buy rating upgrading from hold and and slapped a $460 price target which implies about a 16% upside from current levels. The bank of America analysts called Tesla the clear leader in autonomous driving and said they expect the company to quickly become a dominant player in robo taxi services. The main reason for that is because of Tesla's ability to scale quickly and profitably compared to its competitors. The key difference is that Tesla takes a cheaper camera only approach when it comes to autonomous driving. You compare that to their rivals like Waymo, which which have a more costly multi sensor fusion approach that includes cameras, lidar and radar. And that cost advantage is a big deal when you're trying to roll out thousands of robo taxis across the country. Right now Tesla's robo taxi services are live in Austin where it's ramping up unsupervised rides. And they also have services in the Bay Area where a safety driver is still in the car. Tesla plans to expand to more cities later this year. For context though, Waymo is already operating driverless in like 10 US cities. So Tesla is definitely playing catch up. But bank of America thinks that Tesla's cheaper approach will win out long term. Now critics argue that the camera only approach isn't effective, but I don't know. We'll see. Bank of America also assigned about a $30 billion in potential value to Tesla's Optimus humanoid robot program. The assumption here is that Optimus could be first deployed in Tesla's own factories and then eventually expand into broader industrial use and maybe even household uses. Tesla stock is up around 2% this morning. And if you zoom out, the stock has gone up more than 40% over the last 12 months. But 2026 has been a rough start for them. The stock is down around 13% year to date. That's largely because Tesla's core EV business is slowing down globally. So investors are increasingly focused on what comes next for Tesla. And it seems like it's robo taxis and robots. Let's shift Gears and talk about OpenAI. They seem to be expanding their partnership for for using their technology in the military. Last Friday, OpenAI struck a deal with the Pentagon and now there are reports that the company could be partnering with NATO. In that deal with the Pentagon, the US Department of Defense will use OpenAI's AI technology unclassified information. This agreement with OpenAI was signed after the Pentagon dropped Anthropic for refusing to remove safeguards on its tech. The CEO of Anthropic, Dario Amade, was worried that their technology could be used for surveillance or autonomous weapons. So the Pentagon dropped Anthropic and signed with OpenAI. And now CEO Sam Altman is facing backlash from some employees and researchers who are worried about how AI could be used by the military. According to the Wall Street Journal, in an internal meeting with the staff, CEO Sam Altman told employees the backlash has been really painful. But he defended the decision to sign the deal with the Pentagon. In fact, now Reuters is reporting that OpenAI is close to signing a deal with NATO to help with things like analysis and operations. Now look, we're not here to have a full on debate about what role AI should play in modern warfare. You know, I want to focus on the economic story here and to me that story is that OpenAI is looking for their next area of growth. Anthropic seems to be winning at the enterprise. They're also making inroads when it comes to consumer. Cloud recently became the number one app on the App Store, overtaking Chat GPT. So OpenAI is trying to find their next area of growth and that seems to be government contracts. You know, OpenAI has to keep growing and increasing revenue to justify their 800 plus billion dollar valuation. So I wonder what kind of impact this is going to have on OpenAI and Anthropic's plans to IPO later this year. Let's talk about some stocks making moves today. Shares of Ross stores are moving higher after the discount retailer delivered a strong earnings report and upbeat outlook. In the fourth quarter. Same store sales jumped 9% which easily beat Wall street expectations of 5%. And and overall revenue was up 12% to $6.6 billion, also topping estimates. And Ross expects this momentum to continue. The company is forecasting same store sales growth of 7 to 8% in the current quarter, which is nearly double what analysts were expecting. This is a pretty big turnaround for Ross. Earlier last year the company was seeing low single digit sales growth. Now they're posting one of its strongest quarters in years. The company says that traffic is Picking up with more customers walking into the stores are across all income levels. And that's why shares of Ross are up around 6% this morning. the time of this recording. You know, I had a big Ross phase. At one point it was pretty much the only store I used to shop at. There's some good value at Ross, especially on clothes and sneakers. Now on the flip side, shares of GitLab are dropping. After the software development platform warned that growth is slowing, the company actually delivered a strong quarter. Revenues in Q4 rose 23% to about $260 million, beating expectations. But investors were focused on the outlook. GitLab now expects revenue growth of about 15 to 17% this year, which is a noticeable slowdown from the 26% growth it posted last year. Part of the challenge that GitLab is dealing with is the rapidly changing world of software development. The rise of ChatGPT and Cloud and these vibe coding tools have changed how developers work. Now GitLab is trying to adapt. They have a new AI agent platform called GitLab Duo. But management says that this won't meaningfully contribute to revenues this year. As a result, GitLab stock is down around 10% today at the time of this recording. Let's wrap the show with a fun fact. Mark Zuckerberg just bought the most expensive home in Miami. According to the Wall Street Journal, Mark Zuckerberg and his wife dropped $170 million on a 30,000 square foot mansion that's still under construction, which sits on Indian Creek island, which is basically like a private island in Biscayne Bay. This Indian Creek island, by the way, is very exclusive. There are only like 40 homes on this island. People call it the billionaire bunker. Zuck's new neighbors include people like Jeff Bezos, Tom Brady and Carl Icahn. The bigger story here though is that a ton of Silicon Valley billionaires are buying mega mansions in Florida right now. Google co founders Larry Page and Sergey Brin each bought expensive homes in South Florida recently. And all this seems to be driven by a proposed wealth tax in California which, which would impose a one time 5% wealth tax on any California resident worth more than a billion dollars. Now, this tax bill still has to pass in November, but it's clearly already having an effect. Tech billionaires are getting out before the bill comes due. So I guess Zuck might be commuting from Silicon Valley to Miami every day. By the way, as someone who grew up in Florida, just a heads up to these guys, it gets pretty hot down there. The weather not as nice as California. So invest in a very nice pool is all I'm saying. Well, all right, guys, that's the rundown for today. 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 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. 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.
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