← The Rundown
The Rundown
OpenAI Signs $38B Cloud Deal with Amazon, Tesla Sales Plummet in European Countries
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Public.com presents the rundown, your daily market update in under 10 minutes. My name is A Mani and today is Monday, November 3rd. In today's episode, we'll get you ready for another stacked week of earnings, including all the companies that I'm looking forward to hearing from. We'll also tell you about the troubling Tesla sales coming out of Europe and why this is a big week for Elon Musk. We'll also recap all the latest AI deals announced this morning, including the ones from Microsoft, Amazon and OpenAI. Then stick around to the end of the show to find out how much cash Warren Buffett is sitting on and if it might be a mistake. We got a great show for you today. Let's go. Markets are coming off a wild but winning week. The S&P 500 added 0.7% last week and the Nasdaq gained more than 2% thanks to strong earnings from big tech companies. Recap all the major earnings on Thursday and Friday show, so go check that out if you missed it. Now zooming out. If you look at the month of October as a whole, I feel like it was pretty nuts, but it ended up being a pretty good one for investors. The s P added 2.3% last month and the Nasdaq did even better, jumping more than 4.7%. The strong start to earnings season has been the main driver of the recent rally. In fact, 83% of the S&P 500 companies that have reported earnings so far have have beat estimates, according to research from LSEG, and overall profits are up more than 13% compared to last year. So despite all the noise surrounding tariffs and the government shutdown and the lack of economic data and mixed signals from the Fed regarding future rate cuts, the markets are just focused on the strong corporate earnings right now. You know, we're about halfway through earnings season and we have another stack week of earnings coming up. Companies like Palantir, Uber, amd, Qualcomm and Spotify are just some of the big names reporting earnings this week. So it's going to be another busy week for us. Make 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 sales plummeted in several key European markets for the month of October, according to recent data. New car registrations dropped by 89% in Sweden, 86% in Denmark, and 50% in Norway. Now Tesla is facing some tough competition in those markets, especially especially from cheaper Chinese EV brands like byd. But it's not just the cheaper brands. They're also losing to luxury car brands like Porsche, which outsold Tesla in Sweden in the month of October. Overall, Tesla's European sales have dropped by nearly 30% year to date. Now, I think it's a mix of Tesla's brand taking a hit because of Elon, but also Tesla's lineup in Europe has gotten pretty stale. Now Tesla is starting to take orders for the refresh model Y's in Europe, but those aren't expected to be delivered until 2026. But despite Tesla's struggles in Europe and overall as a company, I mean their profits were down 37% last quarter. Tesla stock price hasn't been impacted much. In fact, Tesla stock is up more than 30% since the start of September. I think investors are fully bought into Elon's vision for the company of being a robotaxi slash robotics company. Now we'll see how long investors are willing to be patient for this vision to come true. But that's the narrative driving the stock right now. Now, speaking of Elon, this week is actually a big week for him and Tesla as a whole because Tesla shareholders will vote on Elon' one trillion dollar pay package this Thursday. The board proposed this pay package earlier this year and it's up to the shareholders to grant this pay package to the CEO of the company. Now, even if this pay package does get approved by shareholders, it doesn't mean that Elon will get a one trillion dollar check right away. Tesla stock has to hit some very high growth targets, including getting their market cap to over $8.5 trillion. For Elon to get his money, essentially, Tesla Stock would have to 8x from where it currently is for Elon to get the full pay package. Now, there's been some chatter that this pay package might not get approved, which would be very interesting. We'll cover the results of the vote on Friday's episode. If you are a Tesla shareholder, let us know in the comments on if you're planning to vote for or against this Elon $1 trillion pay package. Let's shift gears and talk about a couple other trillion dollar companies, Microsoft and Amazon. Let's start with Microsoft first. The US Government just gave Microsoft the green light to export Nvidia's advanced AI chips to the United Arab Emirates, making it the first American company under the Trump administration to get that kind of approval. With this approval, Microsoft can Now send over 60,000 of Nvidia's GPUs to the UAE, including the state of the art Blackwell GB300 chips. These chips will be installed in Microsoft's data centers in the UAE and used to power AI models from OpenAI, Anthropic and others through Microsoft's cloud network. So this is a big win for Microsoft, but also the uae, which has been investing billions of dollars in AI to be become a leader in that space and also diversify away from being an oil economy. The US Government sees this as a strategic move. They're using AI chips essentially to keep Middle Eastern allies close to the US over China. I think the bigger picture here is that Middle Eastern countries could end up playing a big role in the AI story, not just because they have a ton of money, but also because they have access to a ton of cheap power which is lacking in the US but is needed to power AI data centers. So I'm definitely keeping an eye on this. Don't be surprised if more and more tech companies start building AI data centers in in the Middle East. Now the other big AI story this morning is that OpenAI is signing a deal with Amazon. OpenAI and Amazon announced a $38 billion partnership where OpenAI will run workloads on Amazon's data centers that are powered by thousands of Nvidia GPUs. See Previously, OpenAI was mostly relying on Microsoft's Azure cloud data centers because Microsoft was an early investor in OpenAI and currently owns 27% of the company. But recently OpenAI has been making deals with Microsoft's cloud competitors like like Oracle and now Amazon. You know, Amazon stock is seeing a nice pop this morning. It's up 5% following this deal and it's up nearly 15% since the company reported earnings on Thursday. Let's talk about some stocks making moves today. Shares of Iron are skyrocketing this morning after the Australian company announced a massive AI data center deal with Microsoft and Dell. Iron signed a $9.7 billion five year agreement with Microsoft to provide them with Nvidia data centers. This deal includes a 20% prepayment. Iron also signed a $5.8 billion agreement with Dell to buy Nvidia GPUs and other equipments that will end up powering Microsoft's data centers. So they're getting 9.7 billion from Microsoft and then using 5.8 billion to pay Dell for the GPUs and equipment. So it seems like a pretty good deal to me. The new hardware from Dell will roll out through 2026 at IRON's Texas campus, adding around 200 megawatts of computing Power. So yeah, investors are pretty excited about this. Iron stock is 20% this morning on this news. And Dell stock is also getting a nice bump. It's up more than 4% now. On the flip side, shares of Kimberly Clark are tanking this morning after they announced a $49 billion deal to acquire Kenview, the consumer health spinoff from Johnson and Johnson, which includes products like Band Aids, Tylenol, Zyrtec and more. Now on paper, this seems like a good strategic move. You know, Kimberly Clark is known for consumer brands like Scott's toilet paper, Huggies diapers and more. So this deal expands their footprint, especially in the health care products. But the market did not like this deal at all. Kimberly Clark stock is down more than 15% this morning after the deal was announced. I think the negative reaction might be coming from the fact that Kimberly Clark plans to fund this acquisition partially through debt, which isn't great. On top of that, Ken View has been dealing with some product scrutiny, including lawsuits over its baby powder and also the Trump administration linking Tylenol used to autism. So I think investors don't like the fact that Kimberly is buying this company now. But if you're a can you investor, you're happy about this. Can you stock is up more than 19 this morning. Let's wrap the show with a fun fact. Warren Buffett's Berkshire Hathaway is sitting on a record $382 billion in cash right now, according to their third quarter earnings report. This is the most amount of cash any company has ever held. You know, Warren Buffett just hasn't put cash to work because he thinks there aren't any good deals in the markets right now. In fact, he continues to sell sell stocks with Berkshire selling $6 billion worth of stocks last quarter. On top of that, Berkshire didn't buy a single share of its own stock for the fifth straight quarter because they think that their stock is too expensive right now. So I guess Warren Buffett is just waiting for a market crash or something to swoop in and put the cash to work. I don't know. Berkshire has missed out on a massive rally in the markets this year. Now what's interesting is that Warren Buffett is actually stepping down as CEO of Berkshire at the end of this month. And I wonder if the next CEO, Greg Abel will will also take a wait and see approach when it comes to buying stocks or is he going to start buying right away when he takes over? By the way, Berkshire stock has significantly underperformed the s and P500 this year, going up just 5% compared to the 15% gain in the S and P. 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. By the way if you guys missed it, definitely go check out our weekend episodes. We posted a deep dive about the K shaped economy on Saturday and we had an awesome interview on Sunday with Kyla Scanlan and Harvard economist Jason Furman. Thank you guys again 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.