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Public.com presents the rundown, your daily market update in under 10 minutes. My name is Zadad Mani and Today is Tuesday, April 28th. In today's episode, we'll tell you the latest drama coming out of OpenAI and why it's bringing down the rest of the market. We'll also tell you about a new AI deal between Google and the Pentagon, then stick around to the end of the show to find out an interesting stat about the World Cup. We got a great show for you today. Let's go Stocks squeezed out a gain to start the week. The S&P 500 was up 0.1% on Monday while the Nasdaq went up 0.2%. Not huge moves, but enough to close at another record high and keep the momentum going. The S and P has now gone up about 10% in April alone, which puts it on pace for the best month since November of 2020. But here's the thing, if you look under the hood, the this rally is being carried by a very small number of stocks, mostly in the semiconductor space, especially Nvidia. Nvidia has quietly gone up 30% in the past month alone, hitting all time highs in the process. Nvidia's market cap currently sits at nearly $5.3 trillion. And here's a stat that really tells the story. According to Fundstrat, if you remove Nvidia from the Max 7, the remaining six stocks I'm talking about Meta, Apple, Amazon, Microsoft, Google and Tesla. Their earnings growth this quarter drops to about 7%. That would be below the 10% growth expected from the other 493 companies in the S&P 500. Now, most of the earnings growth right now is happening with semiconductor companies like Micron, Broadcom and SanDisk, and it'll be interesting to see if these hyperscalers bounce back. They're all reporting earnings tomorrow after the close, so I'm really curious to see what they have to say and how much they plan to spend on AI Capex and how the market's going to react to it. So we're going to be paying close attention to those earnings and breaking them down later in the week. Beyond that, we're also keeping an eye on the Iran situation. There seems to be no real movement on peace talks. The Strait of Hormuz is still closed and oil prices keep moving higher. Brent crude is trading at $112 a barrel as of this morning and WTI is back above a hundred dollars a barrel. Both those prices are at their highest level since early April. I know the market doesn't seem to care about oil prices anymore, but I'm still keeping my eye on it beyond that. The Fed meeting wraps up tomorrow afternoon. We'll see what Jerome Powell has to say about interest rates, especially as gas price elevated. So yeah, we have a busy week ahead. If you're new here, make sure you guys are subscribed to the podcast if you haven't already, and tune in every day to stay in the loop. Let's run through some headlines, starting with Open AI OpenAI recently missed internal targets for revenue and new users this is according to a report from the Wall Street Journal. OpenAI had an internal goal of hitting a billion users by the end of 2025. And and they never did it. And honestly, the fact that the company still hasn't announced that milestone probably means they haven't hit it yet. The company also missed on annual revenue targets for 2025 and has come up short on monthly revenue goals for this year. So now CEO Sam Altman is facing some heat from OpenAI's board of directors and investors for all of his spending commitments. See, over the past year, Sam has locked in about $600 billion worth of future data center commitments. His thinking was given the explosive growth of ChatGPT, his he wanted to buy as much COMPUTE as possible. I guess Sam didn't take the competitive threat from Google's Gemini and Anthropic's Claude seriously because they seem to be eating into ChatGPT's market share and hurting the company's growth. In fact, CFO Sarah Fryer has now expressed concerns that the company would not be able to pay for its upcoming spending commitments for COMPUTE if revenue growth falls short. But look, OpenAI is still growing. They reportedly hit about $25 billion in annualized revenue as of February, which is. Which is up 17% from the end of 2025. And their $30 billion revenue target for 2026 is still in play. But that growth might not be fast enough with $600 billion in spending commitments and an $800 billion plus valuation. And all of this is coming at a time when OpenAI was looking to IPO later this year. But remember, there were reports earlier this year that CFO Sarah Fryer has raised doubts about going public this year, given the company's financial position. So all of this is a very interesting development. You know, OpenAI is kind of back to dominating the but this time not in a good way. The story is already having a ripple effect across the market. This morning. Oracle, which has a $300 billion five year deal with OpenAI to supply computing power is down about 5% this morning. And then chip makers like Nvidia, Broadcom and AMD are also pulling back. Next up, we're sticking with AI and talking about Google. According to a report from the Information, Google just signed a deal with the Department of Defense and allowing the Pentagon to use Google's AI models on classified work. The agreement lets the military use Google's AI for, and I'm quoting here, any lawful government purpose. Now the reason I bring this up is because remember back in February, Anthropic refused to agree to that any lawful use language in their contract with the Pentagon. Anthropic wouldn't drop its safeguards around two specific use cases, mass domestic surveillance and autonomous weapons. The Pentagon didn't like that. They responded by declaring Anthropic a supply chain risk and Anthropic is now fighting that in court. So as Anthropic is dealing with that, other AI companies like OpenAI and now Google have swooped in and signed the deal with the Department of Defense. Now to be fair, Google's contract does say that their AI is not intended for mass surveillance or autonomous weapons without human oversight. But the language could be vague enough for the Pentagon to still use it that way. Anyways, I'm not a lawyer, so I don't know, but I can't say that I'm surprised by the outcome. This was probably inevitable if AI truly is the next major technological breakthrough, which it seems like it is. The US military was never going to sit on the sidelines without having access to the state of the art models. And that's why at this point Every major AI lab has a deal with the US government, including OpenAI XAI and now Google. And honestly, I wouldn't be surprised if Anthropic ends up settling with the US government at some point and signs another deal with them. I mean with how much better CLAUDE is than all the other AI tools I can imagine the people at the Pentagon who were using Claude probably want access to it again. Let's talk about some stocks making moves today. Coca Cola shares are up this morning after the company beat on both earnings and revenues for the past quarter and raised its profit guidance for the year. Not only did Coke see a jump in profits for the quarter, but it also saw unit volume growth across its entire business portfolio. Global unit case volume was up 3%, which is the strongest growth since early 2023. And North America volume was up 4% over the past year. There was concerns that Coke's price hikes would push customers away, but that doesn't seem to be happening so far. Shares of Coca Cola are up around 5% this morning. Now, on the flip side, Spotify shares are tanking. After the music streamer reported earnings this morning, the headline numbers were fine. Revenue and users both came in higher than expected. The problem, though, was the company's guidance. The company only expects to add an additional 6 million premium subscribers in the current quarter, while estimates were calling for 9 million premium subscribers in Q2 for Q1, Spotify saw a 9% increase in paid subs, bringing its total to 293 million. Now, most of Spotify's growth has been coming from markets outside of the US and Europe, probably because the company has been hiking prices in the US And European markets. At the start of the year, the company raised prices of its individual plans to about $13 a month. So now there's real questions about how much more money the company can squeeze and out of their subscribers. The stock was already down about 14% on the year heading into the earnings report, and shares are down another 10% this morning in reaction to the earnings. You know, we're big fans of Spotify here at the rundown, but right now investors don't seem to be. By the way, earnings season rolls on. Tonight we're getting earnings from Starbucks and Visa, and then tomorrow morning Etsy and Lemonade report before the opening bell. And then we get into the big tech earnings on Wednesday night. So a lot more to look forward to this week. Let's wrap the show with the fun fact the FIFA World cup is less than six weeks away, and according to analysts at Jeffries, the tournament is expected to boost global beer sales by roughly 1 billion pints. The tournament kicks off June 11 and runs through July 19 in the U.S. canada and Mexico. And the biggest winner from all of this outside of soccer fans, is expected to be Anheuser Busch. Anheuser Busch is the parent company of Budweiser, which is the official beer partner of the World Cup. Wonder how much they paid for that. Heineken is also expected to get a nice bump thanks to their presence in Latin America and Europe. So we'll see if the World cup actually ends up boosting beer sales and the stock price of these beer companies. You know, many beer stocks have underperformed lately with fewer people drinking alcohol these days. Also, let me know if you guys are planning to attend any of the World cup matches and and if so, how much you paid for your tickets. I was hoping to attend at least one match in Houston, but oh my God, the tickets are so pricey. 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 podcast. All that engagement really does help us out and it helps 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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There.