💸 Intel Snags $7.9B

+ Walmart Steps Back from DEI Efforts

November 27, 2024

Good afternoon! Phone scammers have a new nemesis: Daisy, an AI-powered “granny” created by British phone company O2. Daisy mimics a sweet, chatty grandmother, rambling on about her family, knitting, and her cat, Fluffy. Her mission? Waste scammers’ time so they can’t target real people. With global scam losses topping $1 trillion last year, every minute she ties up a fraudster counts.

Armed with a custom language model and fake personal details, Daisy has kept fraudsters on the line for up to 40 minutes. Modeled after a real grandmother’s voice, she plays into scammers’ assumptions, turning their tactics against them. It’s just one more step in O2’s efforts, which last year blocked over $315 million in fraudulent transactions.

MARKETS

*Stock data as of market close*

  • The market took a breather after November’s rally, with inflation data landing right on the mark. PCE, the Fed’s go-to inflation measure, rose 2.3% over the past year, but that wasn’t enough to keep the momentum alive. The S&P 500 slipped 0.38%, the Nasdaq fell 0.6%, and the Dow dropped 0.31% as traders hit the road for Thanksgiving.

  • Tech stocks had a rough day, with the sector shedding 1.2% after disappointing earnings from smaller software and computer companies. Light trading volumes didn’t help, leaving the markets to close in the red before the holiday break.

STOCKS
Winners & Losers

What’s up 📈

  • Unusual Machines soared 84.51% after Donald Trump Jr. joined its advisory board. ($UMAC)

  • Iris Energy jumped 29.71% after the bitcoin miner announced rapid growth, with expectations to distribute funds to shareholders sooner than anticipated. ($IREN)

  • Urban Outfitters surged 18.31% on strong holiday revenue expectations, marking its best third quarter ever. ($URBN)

  • Crypto stocks:
    Bitcoin's price recovery toward $100,000 boosted several related stocks.

    • MicroStrategy climbed 9.94%. ($MSTR)

    • Coinbase rose 6.03%. ($COIN)

    • Robinhood gained 3.38%. ($HOOD)

  • SolarEdge Technologies climbed 8.55% after announcing the closure of its energy storage division, along with plans to cut 500 jobs to reduce costs. ($SEDG)

What’s down 📉

  • Symbotic plummeted 35.86% after the robotics company announced accounting errors, delaying its 10K filing and prompting a downward revision to its first-quarter guidance. ($SYM)

  • Dell Technologies fell 12.25% as its earnings missed expectations, and management provided a disappointing outlook for the next quarter. ($DELL)

  • HP sank 11.36% following weaker-than-expected earnings guidance for the upcoming quarter, marking its worst session since 2020. ($HPQ)

  • Autodesk fell 8.59% after providing disappointing fourth-quarter guidance, with earnings and revenue projections below analyst expectations. ($ADSK)

  • Nordstrom declined 8.12%, despite beating earnings expectations, as the retailer reported a slowdown in sales since late October. ($JWN)

  • Workday dropped 6.21% after issuing weaker-than-expected guidance for the fourth quarter, citing $2.025 billion in subscription revenue and a 25% adjusted operating margin. ($WDAY)

  • CrowdStrike slipped 4.59% after providing lighter-than-expected earnings guidance for the next quarter, raising concerns about its recovery from a summer IT outage. ($CRWD)

CHIPS
Intel Snags $7.9B Grant to Expand U.S. Chipmaking

The Biden administration has finalized a $7.9 billion CHIPS Act grant for Intel, the largest award yet in the push to boost domestic semiconductor manufacturing. The funding will back Intel’s factory projects in Arizona, Oregon, and New Mexico—but Ohio’s delayed plant isn’t in the mix just yet.

This deal is smaller than the $8.5 billion initially floated, partly because $3 billion is now earmarked for military-grade chip production. Intel also turned down $11 billion in loans offered through the program, a move that underscores its cautious financial strategy as it navigates a rough patch.

Chips Down, but Not Out

Intel’s struggles are no secret—falling revenue, delays in tech development, and fierce competition from TSMC and Samsung have left the company on shaky ground. CEO Pat Gelsinger has mapped out an aggressive $100 billion U.S. manufacturing expansion to reestablish Intel as a chip leader, but execution has been bumpy.

Ohio’s factory timeline has slipped into the next decade, while production at its Arizona site, originally slated for this year, is now penciled in for 2025. Despite these delays, the company has spent $30 billion so far on its U.S. buildout, banking on the CHIPS Act to sustain momentum.

Racing Against the Clock

With Trump’s team criticizing the CHIPS Act as wasteful, the Biden administration is racing to wrap up grant agreements before the presidential handoff in January. Intel’s funding offers a critical boost as the company juggles job cuts, strategic reviews, and an uphill battle to reclaim its tech edge.

The $7.9 billion is more than just a lifeline—it’s a vote of confidence in Intel’s role as America’s chipmaking champion. Whether it can deliver on that promise remains to be seen.

NEWS
Market Movements

  • 📉 Fed Eyes Gradual Rate Cuts Amid Stable Inflation: The Fed's preferred inflation gauge rose 2.3% annually, with core inflation at 2.8%, both meeting expectations. Spending increased 0.4%, while personal income jumped 0.6%. Markets are pricing in a 66% chance of a December rate cut as the Fed balances inflation with economic growth.

  • 🌎 Reddit Targets Global Growth: Reddit plans to expand internationally, focusing on markets like India and Brazil to increase ad revenue. Currently, only 17% of its ad revenue comes from outside the U.S. ($RDDT)

  • 📋 FTC Launches Broad Antitrust Probe Into Microsoft: The FTC has initiated an antitrust investigation into Microsoft, examining cloud computing, AI, and cybersecurity practices. The probe highlights bundling concerns with Office products and security software like Entra ID, as competitors claim Microsoft's practices hinder fair competition. ($MSFT)

  • 📈 SoftBank Invests in OpenAI: OpenAI secured $1.5 billion from SoftBank, allowing employees to sell shares in a tender offer at a $157 billion valuation. The investment, via SoftBank's Vision 2 Fund, brings OpenAI's liquidity to $10 billion, fueling its expansion. ($SFTBY)

  • 🏭 Volkswagen Exits Xinjiang: Volkswagen sold its Xinjiang plant to Shanghai Motor Vehicle Inspection Center amid allegations of forced labor. The facility, which had halted vehicle production, faced global scrutiny over human rights concerns. ($VWAGY)

  • 💉 Sanofi Opens Vaccine Facility: Sanofi inaugurated a $595 million vaccine facility in Singapore, designed for rapid production shifts to enhance pandemic response. The plant, part of a $948 million global investment, will be fully operational by mid-2026. ($SNY)

  • 🏎️ GM Joins Formula 1: General Motors will enter Formula 1 in 2026, paying a $450 million entry fee. This move increases the number of engine manufacturers to six, including Ford and Audi. ($GM) ($F)

RETAIL
Walmart Steps Back from DEI Efforts

Walmart is pulling back on its diversity, equity, and inclusion (DEI) initiatives after pressure from conservative activist Robby Starbuck.

The company announced it will phase out “DEI” from its corporate vocabulary, reduce racial equity training, and reconsider funding for Pride events. Starbuck had threatened a boycott just before Black Friday unless the retail giant made changes.

What’s changing: Walmart will no longer use race and gender as factors in supplier contracts or collect demographic data for financing eligibility. It will also review LGBTQ-themed merchandise, particularly items aimed at children, following complaints. While the retailer says some changes were already in the works, critics see this as a response to Starbuck’s ultimatum.

A Ripple Through Corporate America

This isn’t just a Walmart story. The retail giant’s decision reflects a broader trend as companies like Boeing and Deere also scale back diversity efforts. Activists and legal challenges following the Supreme Court’s affirmative action ruling have forced businesses to rethink DEI programs.

For Walmart, the stakes are high. Over half of its U.S. workforce is made up of people of color and women, and it’s invested billions in diverse suppliers. While some argue diversity fosters innovation and talent retention, others see it as a risk in today’s polarized landscape.

The Big Question

Will scaling back on DEI hurt Walmart’s workforce and customer base—or solidify its standing with conservative consumers? CEO Doug McMillon, once vocal about racial equity, now faces a tricky balancing act. The retailer plans to fund its Center for Racial Equity through 2025, but its pivot could impact its broader reputation.

For now, the markets approve—Walmart shares ticked up after the announcement was made. But whether this strategy is a retail win or a cultural misstep remains to be seen.

Calendar
On The Horizon

Tomorrow

Tomorrow’s lineup? Nothing at all—it’s Thanksgiving here in the US. We (and the stock market) are taking a break to enjoy some turkey ham and Mac & Cheese, relax, and carefully navigate around Uncle James’s latest political hot takes.

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