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⚡️Tesla's Robotaxi Launches Tonight

+ AMD Launches AI Chip To Rival Nvidia’s Blackwell

October 10, 2024

Good afternoon! Before he became the billionaire you know today, Mark Cuban was hustling his way through college—literally. In the early '80s, Cuban ran what he openly called a Ponzi scheme at Indiana University to cover his tuition. The setup? A $50 “chain letter” that had people sending cash to the person at the top of the list. Cuban admits it was a scam, but hey, it paid the bills.

Fast forward to post-college Dallas. Cuban was sleeping on floors, selling software, and scraping by until he launched his first company, MicroSolutions, which sold for $6 million. But the big break came in the late ‘90s when he and two friends created Broadcast.com, selling it to Yahoo for $5.7 billion. Not a bad leap from chain letters to billions.

MARKETS

*Stock data as of market close*

  • Stocks took a hit after inflation came in hotter than expected, tossing a wrench into the Fed's game plan. The consumer price index rose 2.4% over the past year, just a touch higher than the 2.3% forecast. Core inflation wasn’t much better, with prices (minus food and energy) climbing 3.3%. Add in a modest uptick in jobless claims, and now the market’s debating whether the Fed will opt for a smaller rate cut in November—or hit the pause button altogether.

  • The S&P 500 and Dow both pulled back from their all-time highs, losing 0.21% and 0.14%, respectively, while the Nasdaq slipped 0.05%. Wall Street wasn’t thrilled with the CPI report, leading to a sell-off in rate-sensitive small- and mid-cap stocks. Despite a brief afternoon rally, stocks closed in the red.

STOCKS
Winners & Losers

What’s up 📈

  • Celsius Holdings ($CELH) surged 14.42% after receiving positive commentary from multiple research firms following a recent conference. Stifel highlighted energy drink trends, predicting acceleration driven by comparables, innovation, and pricing. Piper Sandler also noted Celsius' popularity among teens in its latest survey.

  • Cloudflare ($NET) rose 8.84% after appointing Chirantan "CJ" Desai as President of Product & Engineering. Desai, previously President and COO at ServiceNow, is known for driving innovation at scale. This move is part of Cloudflare's strategy to reach $5 billion in annual recurring revenue.

  • CrowdStrike ($CRWD) climbed 5.56% as RBC Capital named it a top software investment idea for 2025, believing the cybersecurity firm will rebound from the massive IT service outage in July.

  • Micron Technology ($MU) increased 3.92% after unveiling a new corporate logo, marking a shift in its brand identity and symbolizing the company’s commitment to leading technology trends.

  • Atlassian ($TEAM) ticked up 3.90% after announcing the General Availability of Rovo at the Team '24 Europe event in Barcelona, a key milestone indicating the product is fully developed and ready for broader commercialization.

What’s down 📉

  • First Solar ($FSLR) slipped 9.29% after Jefferies cut its price target and expressed concerns over its upcoming third-quarter report. Ongoing supply chain and labor shortages are expected to continue into 2025, though Jefferies maintained a buy rating.

  • Enphase Energy ($ENPH) dropped 5.82% as it followed First Solar's decline, which was driven by concerns over supply chain challenges and disappointing third-quarter expectations.

  • TD Bank ($TD) fell 5.29% after reports that it is expected to pay about $3 billion in penalties and face restrictions on its U.S. business as part of a settlement over money laundering charges.

  • PayPal ($PYPL) declined 3.27% following a downgrade from Bernstein to market perform. The firm noted uncertainty regarding the stock's upside after its recent rally and expressed concerns that Venmo may lose ground to competitors in peer-to-peer payments.

  • AMD ($AMD) slid 4.00% after launching a new artificial intelligence chip that is set to compete directly with Nvidia's data center GPUs.

  • Polestar Automotive ($PSNY) dropped 7.23%.

AUTO
Tesla’s Robotaxi Day Is Upon Us After A Decade Of Promises

Elon Musk, never one to shy away from grand promises, is gearing up for Tesla’s biggest reveal since the Model 3. Tonight at 7 p.m. Pacific (10 p.m. Eastern), the long-awaited robotaxi, dubbed the Cybercab, will make its debut at Warner Bros. studios. For those tuning in, the event will be livestreamed on Musk’s X platform (formerly known as Twitter).

For Musk, this is more than just a new car—it’s a pivot toward AI and robotics that he believes could propel Tesla’s value to $30 trillion (yes, trillion). But as history has shown, Musk’s lofty ambitions often come with missed deadlines, so investors are cautiously optimistic.

Can Tesla Go Driverless?
The hype is real, and Tesla’s stock has surged 52% since the event was announced. But skeptics are quick to remind everyone that Musk has been teasing the robotaxi concept since 2016, with little to show for it. While Waymo already has driverless cars cruising around cities like San Francisco and Phoenix, Tesla’s autonomous tech still requires human oversight.

The big question: Can Tesla leapfrog its competitors and actually deliver on the promise of a fully autonomous vehicle?

All Eyes on the Cybercab
Musk has called tonight’s event “one for the history books.” The Cybercab, expected to be a sleek, two-seater without a steering wheel, could launch Tesla into new territory. However, the road ahead is bumpy.

Tesla’s Full Self-Driving (FSD) software still isn’t fully autonomous, and regulatory hurdles are a massive roadblock. While Waymo is already operational in select cities, Tesla will need to convince regulators and investors that its tech is ready for primetime.

High Hopes, Big Risks
Analysts are split. Bulls see the robotaxi as a multi-billion-dollar opportunity, potentially adding $4 billion in sales by 2030. Skeptics, on the other hand, point to Musk’s track record of overpromising and under-delivering. If tonight’s event doesn’t meet expectations, it could deal a blow to Tesla’s stock, which is already down nearly 40% from its peak.

But if Musk pulls it off? Tesla might just shift into the next gear, leaving competitors in the dust.

NEWS
Market Movements

  • 📉 Inflation Eases in September 2024: The consumer price index (CPI) rose 2.4% year-over-year in September, slightly down from August’s 2.5%. Gasoline prices dropped 16% from a year ago, helping to cool inflation, though groceries and car insurance saw increases. Egg prices surged 40% due to an avian flu outbreak. Housing inflation also slowed, with shelter costs rising just 0.2% compared to 0.5% in August, offering positive signs for the overall inflation trend.

  • 🚀 SpaceX Dominates Rocket Launches and Eyes Starship Approval: SpaceX has used its dominance in rocket launches to push satellite competitors like OneWeb to share spectrum rights with its internet business, raising concerns about market power abuse. Meanwhile, SpaceX may receive FAA approval for its next Starship launch by Sunday.

  • 📺 Apple TV Plus to Join Amazon Prime Video as Add-On: Apple's ($AAPL) TV Plus will be available on Amazon's Prime Video in the U.S. as a $9.99 monthly add-on. Apple aims to leverage Amazon's vast subscriber base after struggling to compete with Netflix, Prime Video, and Disney Plus.

  • 💸 TD Bank Faces $3B Fine for Money Laundering Failures: TD Bank ($TD) is expected to pay $3B in U.S. penalties and face growth restrictions in a settlement over anti-money laundering failures involving drug cartels. The settlement includes a guilty plea and regulatory monitors for compliance oversight.

  • 📈 Nvidia Nears Record High After Surge in GPU Demand: Nvidia ($NVDA) has surged 25% in the past month, nearing a record high, and is up 165% YTD due to high demand for its GPUs from companies like Meta, Microsoft, and Google.

  • 💊 Pfizer Execs Step Back from Activist Push: Former Pfizer ($PFE) CEO Ian Read and ex-CFO Frank D’Amelio have stepped back from Starboard Value’s $1B activist campaign targeting the pharmaceutical giant. Both executives expressed support for current CEO Albert Bourla.

  • 📦 Amazon's Employment Classification Under Scrutiny: The National Labor Relations Board (NLRB) is considering arguments for classifying Amazon ($AMZN) as a joint employer of its delivery drivers, a move that could force the company to negotiate with unions.

  • ⚖️ Healthcare Giants Challenge FTC Over Insulin Price Lawsuit: CVS Health ($CVS), UnitedHealth Group ($UNH), and Cigna ($CI) have requested that FTC Chair Lina Khan and two commissioners recuse themselves from a lawsuit alleging the companies inflated insulin prices, claiming Khan violated due process through public statements.

SEMICONDUCTOR
AMD Launches AI Chip To Rival Nvidia’s Blackwell

Advanced Micro Devices ($AMD) has been hot on Nvidia’s trail, trying to stake its claim in the booming artificial intelligence chip market. On Thursday, AMD revealed its newest AI chip, the Instinct MI325X, at an event in San Francisco. While CEO Lisa Su boasted about the chip's edge over Nvidia’s H100, investors were left wanting more.

AMD’s stock slid 4% after the event, its steepest drop in over a month, as key details about customers and financial performance remained elusive.

The AI Chip Race Heats Up
With Nvidia dominating the AI accelerator market, AMD is in catch-up mode. Su claims the MI325X, with its new high-bandwidth memory, offers better AI inference performance.

But here’s the catch: Nvidia’s upcoming Blackwell chips, set to ship next year, could leave AMD’s latest chip in the dust. Investors have been eagerly waiting for AMD to prove it can chip away at Nvidia’s market share, but Thursday’s event fell short of the expected breakthrough.

Growing Market, Fierce Competition
AMD is playing the long game, forecasting the AI chip market to hit $500 billion by 2028. While the company is making strides in AI, capturing just 34% of the market for server CPUs, Nvidia remains the top dog with over 90% of the data center AI chip market.

And while AMD’s AI accelerators have potential, the widespread use of Nvidia’s CUDA programming language continues to lock developers into the Nvidia ecosystem, making it harder for AMD to gain traction.

Looking Ahead: AMD has ambitious plans, unveiling its next-generation MI350 GPU series, set to arrive in 2025 with a whopping 35 times more performance than its predecessors. But by then, Nvidia may have already one-upped AMD with newer, more powerful GPUs.

Investors are keeping a close watch on whether AMD can deliver on its promises and grab a bigger slice of the AI pie, but for now, Nvidia still holds the upper hand.

Calendar
On The Horizon

Tomorrow

Tomorrow, all eyes will be on the Producer Price Index (PPI), which gives us a peek at inflation from the viewpoint of producers. Sure, CPI is the main event, but PPI still plays a key role in shaping the Fed’s strategy. Economists expect September’s PPI to tick up 1.6% year-over-year, down slightly from August’s 1.7%. Fingers crossed this slowdown picks up speed.

We’re also getting the University of Michigan’s Consumer Sentiment Index, which will offer a sneak peek into how Americans are feeling ahead of the holiday shopping spree. Will shoppers be in a spending mood or tighten their wallets? We’ll find out soon enough.

Before Market Open:

  • JPMorgan Chase ($JPM) is a banking powerhouse that’s expected to report Q3 EPS of $4.01, which would mark a 7% drop from last year’s third quarter. Despite that, revenue is projected to grow nearly 3% to $41.02 billion. Investors will be eager to learn how the bank is navigating a tough macroeconomic environment and if it can sustain revenue growth while grappling with declining profits. Consensus: $4.01 EPS, $41.02 billion in revenue.

  • BlackRock ($BLK), the asset management giant, is forecasted to post Q3 EPS of $10.26, down 6% year-over-year, while revenue is expected to rise 11.6% to $5.04 billion. Shareholders will want to hear more about how BlackRock is balancing this earnings decline with impressive revenue growth and what management sees in the months ahead, especially with market volatility at play. Consensus: $10.26 EPS, $5.04 billion in revenue.

  • Wells Fargo ($WFC) is expected to have a challenging quarter, with projected Q3 EPS of $1.27, representing a nearly 9% decline from the year prior. Revenue isn’t looking much better, with a forecasted 2.3% drop to $20.38 billion, the weakest showing of the major banks. Investors will be looking for clarity on how Wells Fargo plans to rebound after this weaker-than-expected performance. Consensus: $1.27 EPS, $20.38 billion in revenue.

NEWS
The Daily Rundown

  • 📺 CBS Faces Internal Turmoil Over Ta-Nehisi Coates Interview: A recent interview on CBS’s morning show with author Ta-Nehisi Coates has led to internal tensions at CBS News. Anchor Tony Dokoupil challenged Coates on his new book, sparking debate over whether CBS's editorial standards were violated. CBS shareholder Shari Redstone pushed back against executives, stating that their response to the interview was mishandled.

  • 🍟 Lamb Weston Closes Plant Amid Declining Fry Demand: As fast-food orders dwindle, North America's largest fry producer, Lamb Weston, is closing one of its plants and laying off 375 employees. The company is feeling the effects of consumers opting to cook more at home amid rising dining prices. McDonald’s, its biggest customer, is launching the Chicken Big Mac in an effort to boost foot traffic and fry sales.

  • ⚾ Detroit Tigers’ $18 Million Payroll Defies Odds: The Detroit Tigers, with a payroll of just $18.4 million, are making a Cinderella run for the World Series. Despite being major underdogs and having one of the smallest payrolls in the league, the Tigers are just a few wins away from a championship, proving that internal talent development can sometimes beat big spending.

  • 🏰 Disneyland Raises Ticket Prices by 6%: Disneyland in California increased the price of most of its tickets by 6% after the company revealed that its parks division missed earnings expectations last quarter.

  • 💸 Melinda French Gates Launches $250 Million Women’s Health Fund: Melinda French Gates launched a $250 million fund aimed at addressing barriers to women’s health, with a focus on providing greater access to healthcare for women in underserved areas.

  • 🏔️ Mountain Dew Reveals New Logo: Mountain Dew has unveiled a new logo that prominently brings back the mountain in Mountain Dew , in a move that underscores the brand’s connection to adventure and outdoor culture.

RESOURCES
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