# 710 – 🤯 Nvidia > Apple – The Average Joe

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    # 710 – 🤯 Nvidia > Apple

    victorlei

    June 6, 2024

    Good morning. According to a recent study from INRIX and Stanford, super-commuters (those who travel over 75 miles and spend an average of 2 hours and 19 minutes each way) have increased by 32% from pre-pandemic levels.

    • New York City and Washington, DC, saw an 89% and 100% surge in super-commuters, respectively.

    • Conversely, the percentage of those commuting between 20-34 miles has decreased over the same period.

    Spending two hours stuck in traffic (one way) to sit in a cubicle and then do it all again the next day? That’s the dream.


    ELECTRIC VEHICLES

    China Plots Course For Global Auto Domination, Threatening Western Automakers

    Today, almost every aspect of American life involves Chinese goods — from electronics to furniture to toys. To get ahead in the growing electric vehicle (EV) market (despite what Tesla’s stock price says), China is focusing on its next major product category — one that rolls on four wheels.

    Stay schemin’: In 2023, China surpassed Japan as the world’s largest auto exporter, and to keep that spot, China plans to push its low-cost EVs. Leveraging cheaper labor, production, and material costs, Chinese automakers like BYD ($BYD), NIO ($NIO), and XPeng ($XPEV) can offer cars as cheap as $10K — and conceivably generate billions in annual revenue by attracting more affluent customers to Chinese-built vehicles.

    • Chinese automakers have plans for the US market. NIO aims to enter by 2025, while BYD is opening up factories in neighboring Mexico — possibly a step towards bringing its $10K Seagull to North America.

    • Besides their affordability, many Chinese EVs boast advanced features, longer ranges, and are nearing full self-driving capabilities.

    Preparing for (Price) War

    BYD Americas’ CEO stated that Western automakers are “not ready” for Chinese competition, and he might be right. Currently, Chinese EVs can’t be sold in the US due to regulatory concerns about Chinese subsidies and economic security. But if they find a way to bypass these restrictions, they could wreak havoc on Western automakers — potentially threatening union jobs.

    • Chinese EVs can be up to $50K cheaper than American-built ones, which could significantly undercut US automakers.

    • In response, the US imposed a 100% tariff on Chinese EVs last month to prevent an “extinction-level event” for its carmakers (NBC).

    Battle of the Brands: The disruptive potential of Chinese EVs has Western automakers on alert. Many are developing lower-cost EVs ahead of the competition’s arrival. Last week, Stellantis ($STLA) CEO Carlos Tavares announced plans for a $25K EV Jeep, joining companies like General Motors ($GM) and Volkswagen ($VWAGY) in the race. While targeted tariffs might give these companies a fighting chance, Tesla’s ($TSLA) CEO Elon Musk remains skeptical.


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    LARGECAP RECAP

    📈 Wall Street Giants Plan 2025 Launch for Texas Stock Exchange

    Jay-Z and Alicia Keys once said, “There’s nothin’ you can’t do, now you’re in New York.” Big businesses seem to disagree. Over the past decade, they’ve flocked to Texas, drawn by lower taxes and less demanding regulations. Now, Texas hosts the headquarters of 55 Fortune 500 companies. Adding to its unprecedented ascent, Wall Street giants BlackRock ($BLK) and Citadel Securities are challenging New York’s monopoly on the financial world.

    • Investors have raised $120M to open the Texas Stock Exchange (TXSE), which could start trading as early as 2025 — and host listings by 2026.

    • The exchange pledges to be more CEO-friendly, avoiding higher compliance costs and demands, like diversity targets and ESG reports, faced by current exchanges.

    Lone Star state of mind: Everything is bigger in Texas, but can its new exchange really challenge America’s largest stock exchanges? New entrants like IEX, Cboe, and the Long-Term Stock Exchange (LTSE) have struggled to gain traction — showing just how difficult it is to compete with the Nasdaq and New York Stock Exchange (NYSE). However, with Wall Street giants backing it, the TXSE might take a bite out of New York’s decades-long financial dominance.

    🪙 Bitcoin Miners Are Chasing AI Opportunities In Hopes of Billion-Dollar Returns

    Crypto firms made millions mining Bitcoin. But with the Bitcoin Halvening reducing mining profits, these firms are looking to diversify their options — and lock in an even bigger market: artificial intelligence (AI). Cloud computing provider CoreWeave, which recovered from bankruptcy in January and is under pressure to find new revenue streams, is now focusing on AI computing by acquiring Bitcoin miner Core Scientific ($CORZZ).

    • Bitcoin miners already have the equipment to repurpose their rigs into data centers that can help deliver power to AI — a more capital-intensive but potentially more profitable endeavor.

    • The 12-year partnership between the two companies could reshape their businesses, generating $3.5B in expected revenue over the contract term.

    Digital pickaxes: The shift from crypto mining to AI is reflected in mining companies’ buying spree of Nvidia ($NVDA) equipment. Firms that previously relied on GPU-based mining operations have invested millions in Nvidia chips to meet the high demand for AI computing power. Despite the high costs, the financial rewards are proving worthwhile, with companies like Bit Digital ($BTBT) and Hut 8 ($HUT) already reporting substantial earnings from their emerging AI operations.


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    Markets & Economy

    Are IPOs still frozen? Despite recent big IPOs from companies like Reddit ($RDDT) and Viking Cruises ($VIK), one IPO aspirant is delaying its $900M IPO citing market conditions. [Read]

    Bitcoin ETFs on a winning streak: US spot Bitcoin ETFs notched their 15th consecutive session of inflows, with Wall Street investors once again embracing crypto through funds like BlackRock’s iShares Bitcoin Trust ($IBIT), which now has over $20B in assets. [Read]

    Small Business Administration to unveil new loan options: With record small business formation in recent years, the SBA will roll out new credit lines up to $5M, providing more lending options for fast-growing small businesses. [Read]

    Business & Wealth

    Warner Bros Discovery ($WBD) hikes Max price: The streaming service will increase the cost of its ad-free Max plans by $1 per month and $10-20 per year for annual plans. [Read]

    Married? Don’t forget this tax break: The Wall Street Journal highlights the lesser-known “spousal IRA,” which allows a non-working spouse to max their IRA, benefiting couples filing jointly. [Read]

    Federal Aviation Administration certifies eVTOL company: Archer Aviation, backed by United Airlines ($UAL), received Part 135 certification from the FAA, allowing it to “effectively become an airline,” marking a milestone for the electric air taxi producer. [Read]

    *Thanks to our sponsors for keeping the newsletter free.


    CHART


    DIGIT OF THE DAY

    Modi’s 44% Seat Election Win Triggers Major Indian Stock Market Losses

    Exit polls predicted a landslide win, but the ballot boxes held a surprise twist. Indian Prime Minister Narendra Modi, initially expected to secure a clear victory, failed to achieve an outright majority for the first time since his rise to power in 2014. Although he won his third consecutive term, Modi needed coalition support to form a government — causing ripples across political and financial sectors.

    • Modi’s Bharatiya Janata Party (BJP) secured around 240 seats out of 543, down from 303 in 2019 — while the opposition Congress party nearly doubled its seat count.

    • Political analysts attribute the setback to high unemployment and inflation, which likely influenced voters despite Modi’s appeals to Hindu nationalism.

    Victory’s costly aftermath: Following the election results, India’s stock markets plunged due to political uncertainties, erasing gains from a record high just a day earlier buoyed by favorable exit polls for Modi. The NSE Nifty 50 index fell nearly 6%, marking one of its worst performances in over four years and wiping out $390B in market value. While markets modestly recovered on Tuesday, the Indian rupee depreciated by ~0.5% against the dollar as a consequence of the BJP’s unexpectedly poor performance.


    EXTRA JOE

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