The Rundown – October 30, 2025

Episode Theme:
A fast-paced look at the latest stock market moves, focusing on the “AI spending arms race” among Big Tech giants, the Federal Reserve’s interest rate drama, and major winners and losers in earnings—including deep dives on Google, Microsoft, Meta, Eli Lilly, and Chipotle.

Federal Reserve Update: Rate Cut Drama

• [00:54] Key Point:
  • The Fed cut rates by 25 basis points as expected (now at 3.75%–4%).
  • Markets had been pricing in a 90% chance of another cut in December.
• Jerome Powell’s Surprise:
  • Powell suggested a December rate cut is “far, far from a foregone conclusion,” sparking a brief market drop.
  • “As soon as those words came out of his mouth, the markets tanked for a few minutes.” (Host, 01:48)
• Market Resilience:
  • Investors quickly “bought the dip”; the S&P closed flat, Nasdaq +0.6%.
  • Host commentary: “Kind of wild that not even Jerome Powell can stop this AI powered bull run.” (02:06)
• Fed’s Dilemma:
  • Inflation up to 3% and rising due to tariffs; labor market data incomplete due to a government shutdown.
  • Powell claims if tariffs were excluded, inflation would be 2.3%—near target.
• Investor Sentiment:
  • Despite Powell’s caution, 70% of the market still expects a December cut.
  • “Maybe a rate cut doesn’t even matter anymore with the entire market just focused on AI.” (03:23)

Big Tech Earning Highlights

Google (Alphabet): Soaring with AI

• [03:36] Quarter Performance
  • Q3 Revenue: $102B (+16% YoY), first-ever quarter above $100B
  • Profits: $35B (+33% YoY)
• AI & Cloud Growth:
  • Google Cloud: $15.2B revenue (+34%), powered by 70% of cloud customers using AI tools.
  • CEO Sundar Pichai: “Signed more cloud deals this year than the past two years combined.” (Paraphrased, 04:28)
• Infrastructure Spending:
  • Projected CapEx: $92B in 2025—almost double last year—with further increases in 2026, focused on AI data centers.
• Other Wins:
  • Gemini AI chatbot: 650M MAUs (up from 450M last quarter)
  • Google Search: $56.6B revenue (+15% YoY)
  • Google Ad sales: >$10B
• Stock Response:
  • Google stock +5%, hitting a record high.
• Host Take:
  • “All that chatter from earlier this year of ChatGPT and AI destroying Google’s business, that’s all gone away. … Google seems to be the clear winner, maybe even the leader of the AI boom.” (05:09)

Microsoft: Doing Well, but Investors Wary

• [05:38] Quarter Performance
  • Q3 Revenue: $77.7B (+18% YoY), beating expectations.
  • Azure Cloud: +39% YoY, outpacing AWS and Google Cloud.
• AI-Fueled Spending:
  • CapEx hit $34.9B in Q3; will keep climbing (CFO Amy Hood).
  • This reverses earlier guidance expecting spending to cool off.
• Wall Street Reaction:
  • Stock -3% despite strong results; concerns over aggressive AI spending.
• Host Commentary:
  • “It’s just funny how markets work though. Google pretty much said the same thing as Microsoft, but their stock went up while Microsoft’s stock is going down.” (06:40)
  • Rationale: Google’s “leading edge AI model” vs. Microsoft using OpenAI as a partner.

Meta: Crushing Numbers, Spooking Investors

• [07:02] Quarter Performance
  • Revenue: $51.2B, first quarter ever above $50B.
  • Ad business: +26% YoY.
• AI Investment Shock:
  • Plans to spend >$70B on AI infrastructure (over 2x last year, ~37% of revenue).
  • Mark Zuckerberg says Meta is “seeing the returns” in recommendations, Llama model, Ray-Ban smart glasses—but analysts question future monetization.
• Reality Labs Losses:
  • Division posted a $4B loss.
• Stock Reaction:
  • Meta down >10% on the spending news.
• Host Take:
  • “I wonder if Zuck will just inject more ads into our Instagram feed… while he spends billions of dollars to reach superintelligence.” (08:15)
  • “Investors are now finally asking companies to justify the massive AI spend.” (08:29)

Other Market Movers

Eli Lilly: Surging on Drug Demand

• [08:40] Quarter Performance:
  • Diabetes drug Mounjaro revenue >doubled ($6.5B).
  • Weight-loss drug Zepbound: revenue up 184% ($3.6B).
  • Total revenue: $17.6B (+54% YoY); profits well above expectations.
• Guidance:
  • Raised full-year sales and profit outlook.
  • Stock +4% this morning.

Chipotle: Plummets on Weak Demand

• [09:11] Outlook Cut:
  • Projects same-store sales to shrink in 2025, vs. prior guidance for growth.
• Sales Drop:
  • Traffic declined third straight quarter.
  • Reason: Weaker economy, declining restaurant visits especially from younger/lower-income customers (“those earning $100,000 or less a year, which makes up about 40% of Chipotle’s customer base”).
  • “Chipotle’s quality has also gone way downhill while getting more expensive at the same time.” (09:36)
• Market Impact:
  • Stock down nearly 20% today.

Notable Moment: Nvidia’s $1 Trillion Jump

• [09:54] Fun Fact:
  • Nvidia hit $5T market cap just 78 trading days after $4T—a historic record.
  • For comparison, it previously took a year to move from $3T to $4T.
  • Host: “It’s a great example of the AI trade just continuing to heat up.” (10:02)

Memorable Quotes & Timestamps

• “Kind of wild that not even Jerome Powell can stop this AI powered bull run.” (Host, 02:06)
• “All that chatter from earlier this year… Google seems to be the clear winner, maybe even the leader of the AI boom.” (Host, 05:09)
• “I wonder if Zuck will just inject more ads into our Instagram feed… while he spends billions of dollars to reach superintelligence.” (Host, 08:15)
• “Investors are now finally asking companies to justify the massive AI spend. And if there’s no clear pathway for more revenue, then investors are getting nervous and selling off the stock.” (Host, 08:29)

Summary Takeaway

• Main Theme:
  Big Tech is spending unprecedented amounts on AI infrastructure, and while revenue growth is impressive, investors are starting to ask tough questions—especially of those with less clear paths to near-term profits.
• Market Sentiment:
  Powell’s uncertainty about rate cuts had only a fleeting impact; enthusiasm for AI-powered growth is the dominant force.
• Winners: Google (AI leadership), Eli Lilly (blockbuster drugs), Nvidia (AI-driven valuation surge).
• Losers: Microsoft (investor caution on spending), Meta (spending panic), Chipotle (demand slump).

For full context and market nuance, listen to the episode or see the timestamps above for key discussions!