← The Rundown
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Public.com presents the rundown, your daily market update in 10 minutes. My name is Zadod Mani, and Today is Friday, May 22nd. In today's episode, we'll tell you why Spotify stock was ripping after their big investor day and what my experience was like attending in person. We'll also recap some major AI news, including Anthropic's big chip deal with Microsoft, then stick around to the end of the show to find out how many people are expected to travel this long weekend. Got a great show for you today. Let's go. Stocks had an up and down kind of day on Thursday, but did squeeze out a win. The S&P 500 was up 2% while the Nasdaq was up 1% and the Dow actually closed at record highs. But nobody cares about the Dow. So now the markets did actually open in the red yesterday because oil prices were spiking again. But then there was a report that the US And Iran were inching closer to a peace deal and then stocks rallied off that headline. Overall, the S and P is track for its eighth straight winning week, which would be the longest streak since late 2023, which is, I think, right around the time we started this podcast. Now, a quick update on the bond market because that's gotten a lot of attention this week. Bond yields have pulled back a bit from earlier this week, but they're still elevated compared to just a couple weeks ago. And we're starting to see the impact of these rising yields. Mortgage rates are now at their highest level in nine months and, you know, zooming out. I really wonder what the market is going to focus on moving forward, especially with earnings season pretty much wrapped up. You know, without the daily earnings, the market tends to latch to macro headlines. So oil prices in the bond market could dominate the narrative for the next few weeks. And SpaceX is going to dominate the headlines as well. Their IPO is right around the corner. The company actually filed their S1 on Wednesday. We broke that down on yesterday's show. So go check that out if you missed it. You know, there was some really interesting financial information in the S1. I've seen some people question if SpaceX is actually worth the 1.5 trillion dollar valuation. So I'm really curious to see how this stock is going to trade its first day of trading. The IPO is scheduled for sometime in mid June, so we don't have to wait too much longer. So yeah, I think that's going to suck a lot of attention and capital from Wall street. So it's going to be a really fascinating few weeks ahead. 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 Spotify. Spotify held an Investor's Day event yesterday. It was their first one in four years and investors love what they heard. Remember, Spotify recently went through a leadership transition. CO CEOs Gustav Sutterstrom and Alex Nordstrom took over from founder Daniel Ek, who stepped down earlier this year. And during this Investors Day event, the new CEOs laid out a roadmap for Spotify's future and announced some pretty awesome features. I was actually in attendance at this presentation in New York. I even got a selfie with Gustav and it was an overall great experience. Shout out to Spotify for the invite. And look, there was a lot of big announcements during the event. The one that got the most buzz was an AI Music licensing deal with Universal Music Group. Under this new deal, spot will let users create covers and remixes using the actual voices of artists and songwriters who opt in. This is going to be a paid add on for premium subscribers, which could mean new revenues for Spotify and for the artists that opt in. Now. The other big announcement that got a lot of love was a partnership with Live Nation. Spotify. Premium subscribers will soon be able to buy two concert tickets of their favorite artists before they go on sale to the general public. This new feature is called Reserved, and honestly, it might be the greatest idea that Spotify has ever come up with. See, buying concert tickets right now is a nightmare. You're competing against bots and scalpers, and tickets sometimes get sold off in like 30 seconds. But you know, Spotify has the data, they know who the true fans of an artist are. So giving true fans the option to buy tickets is just, to me, it's a genius move. Now, a couple other things that stood out to me from this event was that Spotify said their podcast business has been profitable for the last two years. They also said that 500 million people have streamed a video podcast on Spotify now, which is up 50% from a year ago. So yeah, shout out to everyone watching this podcast on video. Also, what was really shocking to me is that Spotify's entry into audiobooks has been very successful so far. Spotify says They've already captured 20% of the US audiobook market and they only got into it like a couple years ago. Now, zooming out, Spotify did lay out some pretty ambitious targets for 2030, which is probably when their next Investors Day is going to be they're targeting mid teens revenue growth annually and an operating margin above 20% and their long term goal is 1 billion subscribers and over $100 billion in revenue. Currently Spotify has 761 million monthly users with 293 million subscribers. So they do have a long way to go. But investors like what they heard yesterday and shares jumped 13% following the event. I actually had the Spotify stock pulled up on the public app during the event. I could just see it spike during some of their major announcements. Let's shift gears and talk about some AI news making waves this morning, starting with Anthropic, because according to the information, Anthropic is in talks with Microsoft to use Microsoft's custom AI chips called Maya. I'm not going to lie, I was vaguely aware that Microsoft had their custom AI chips, but they really haven't gotten much buzz compared to Google's TPUs or Amazon's Trainium chips. So you know this would be a big win for Microsoft's custom AI chip efforts if this deal with Anthropic goes through. And it's also a sign with how desperate Anthropic has gotten to get their hands on on as much AI computing power as possible. Anthropic already has a deal with Amazon and Google for their custom chips, and they recently signed a deal with SpaceX for computing power that pays SpaceX $1.25 billion per month to use their Colossus data center in Memphis, Tennessee. Big reason that Anthropic is scrambling right now is because of the insane growth they've seen over the last few months. The Wall Street Journal reported recently that Anthropic is projected to do 10.9 billion billion in revenue this quarter alone. That is more than double the $4.8 billion that anthropic did in the first quarter of this year. And they're expected to turn an operating profit for the first time ever of roughly $559 million. So to put this growth into perspective, the Wall Street Journal said that Anthropic's quarterly revenue is now growing faster than Zoom did during the pandemic, and faster than what Google and Facebook were growing before their ipo. And the fact that Anthropic is doing it at this scale is just absolutely crazy. And that's why so desperate for computing power. By the way, there was also a report from the Wall street journal that OpenAI is planning to file for an IPO very soon. In fact, it might even happen before the end of this week. According to the reporting, their goal is to hit the public markets as early as September. You know, as I mentioned earlier, SpaceX is planning to IPO sometime in June and now OpenAI is right behind them. I think these AI companies are rushing to go public to ride the AI wave and raise as much money as possible right now before the music stops. So yeah, this is going to be the summer of IPOs and I just can't wait to see what OpenAI's S1 looks like. Let's talk about some stocks making moves today. Zoom shares are moving higher this morning after the video conference platform reported earnings and raised their annual revenue and profit forecasts. You know, Zoom has been stuck in an innovation drought ever since they became a verb because of the pandemic a few years ago, but they never really capitalized on that momentum. Well, now the company is betting big on AI to change that narrative. They've been integrating AI agents and tools into their platform and it seems to be working. Paid users of Zoom's AI companion grew 184% year over year, and a new AI note taking tool called My Notes hit 1.5 million users in just four months after launch. So that's pushing revenues up. Revenues came in at $1.24 billion ahead of the 1.22 billion that was estimated. And looking ahead, Zoom lifted its 2026 outlook to about $5.08 billion, and they now expect earnings per share to come in at $6 on the high end, which is up from the $5.81 previously forecasted. So as a result, shares are up around 10% this morning at the time of this recording, and up nearly 30% for the year. But if you Zoom out, no pun intended, the stock is still down 70% from its peak back in 2021. I don't know if they're ever going to get back to that level. 2021 was a wild time. Now on the flip side, shares of Take two Interactive are moving lower this morning after the video game company reported earnings and gave a weaker than expected bookings outlook for the year. Take Two Interactive makes video games like NBA 2K and also Grand Theft Auto, and their earnings numbers for the previous quarter were fine. But the full year guidance looking forward is what spooked investors. Take two is projecting bookings between 8 billion and 8.2 billion for the year, and Wall street was expecting $9.1 billion. So that's a pretty significant miss on the outlook. But here's the key takeaway for me from the earnings report is that GTA 6 is still on track for a November 19 launch. I mean, this game has been delayed so many times. It was supposed to come out last year and then in March and then it got delayed to November. But so far that November launch is still on track. So I think I know what I'm doing for my birthday this year. But, you know, despite no additional delays in the game, it wasn't enough to make investors feel better. Shares are down around 6% this morning at the time of this recording. Let's wrap the show with the fun fact this is going to be a busy weekend for travel. AAA is projecting that a record 45 million Americans will be traveling over Memorial Day weekend, and 87% of those travelers will be driving. And you know, all this travel is still happening despite gas prices sitting at $4.50 a gallon. Last year Memorial Day gas prices were around $3.17 a gallon. So that's about a 44% increase in just a year. But it doesn't look like that's going to be enough for people to stop traveling over the long weekend. Let me know if you guys have any big travel plans ahead for this weekend. Personally, I'm flying from New York back to Houston tonight, so hopefully the airports aren't going to be too bad. Also, just a heads up, the market is closed on Monday for Memorial Day, so we're not going to have a show on Monday. And we're also not doing a deep dive this weekend as well. But we will post an interview on Sunday. It's with the CEO of Applied Digital, which is an up and coming AI infrastructure company. And honestly, it was an awesome conversation. It's one of my favorite interviews that I've done so far. So if you need something to listen to while you're driving over this weekend, keep an eye on your podcast feed on Sunday morning. Well, all right guys, that's the rundown for today. That's the rundown for this week. 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 other people find the show. 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 on Sunday.