The reasons why Tesla’s stock moves are often disconnected from the company’s results or any real news, but yesterday our best guess is that the carmaker’s stock was electrified by videos of a dancing, humanoid robot. Tesla’s X account even reposted a video from @Tesla_Optimus and joked, “We’re a car company right”? We have to admit, watching the robot is pretty, pretty fun.
Tech stocks did the heavy lifting on Wednesday to prevent major downside across key indexes. The S&P 500 inched up 0.1% and the Nasdaq 100 rose 0.6% while the Russell 2000 dropped 0.9%. The S&P 500’s advance-decline line was firmly tilted to the downside, with the number of stocks falling outnumbering those that rose by 204.
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We’re so back
If there’s anything that the past several days have confirmed, it’s that the AI trade is back, baby.
Stocks linked to AI data centers, be they chip makers, cloud infrastructure providers, or even the energy companies directly benefitting from the insatiable maw of electricity that is a data center, things are looking up and most are close to where they were on February 19, when the S&P 500 hit its all-time high (GE Vernova is actually higher!).
What’s fueling it?
For starters, Hyperscalers’ capex intentions (one of our most important charts to watch for 2025) have continued to go up and to the right. In fact, the expected growth in capex over the coming 12 months from Microsoft, Amazon, Alphabet, Meta, and Oracle has picked up steam throughout the year.
Recession fears are meaningfully lower in light of tariffs being dialed down. Many of these companies were effectively sacrificing free cash flow growth to go on this multiyear spending binge, which would become a tougher sell in a recession.
Despite “tariffs” being the most dominant force in shaping price action this year, access to foreign markets is seemingly improving, regulations poised to go into effect are being scrapped, and Nvidia and Super Micro, among others, have reached huge deals with big players in Saudi Arabia.
The Takeaway
DeepSeek’s results be damned, Jevons Paradox rules the roost. Given how critical the AI trade has been to powering the overall market’s gains since 2023, the intensity of the rally is both impressive and important.
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Who’s the real winner when OpenAI becomes a public benefit corporation?
OpenAI recently announced that it’s giving up its plans to change up its weird corporate structure. The company’s new goal: to convert its for-profit LLC into a public benefit corporation (PBC), which raises two big questions for us. First, what the heck is a PBC, and second, why does OpenAI want to make the change?
Let’s take the second part first. The company’s current structure is that a small nonprofit owns and controls the larger for-profit LLC that has been raising massive piles of cash. With the explosive success of ChatGPT, that arrangement is creating real problems for OpenAI’s huge growth predictions, as it makes it hard to retain talent and raise the “trillions of dollars” CEO Sam Altman says the company may need.
So, to the first part: what’s a PBC and why is it better for OpenAI? Simply, a public benefit corporation is a for-profit corporation “that is intended to produce a public benefit or public benefits and to operate in a responsible and sustainable manner.” One you might have heard of is eyeglass maker Warby Parker. We made a table of some other PBCs and how much they’re worth.
The most significant difference lies in the mission of a PBC’s board of directors, which, unlike that of a regular corporation, isn’t just beholden to its shareholders but “has a legal obligation to consider these benefits to society and its mission.” So if, say, a company whose name rhymes with “Smycrosoft” offers a huge chunk of change to buy OpenAI, the board has some wiggle room to fend off a takeover, even if it would be hugely profitable for its shareholders.
The Takeaway
While OpenAI might get a PR boost for the PBC designation, it may not mean much practically. An expert told Sherwood News that the enforcement mechanism to ensure a company complies with its mission statement is “unbelievably weak” and that ultimately, what’s going to dictate the company’s behavior is “whether they can get investment.”
The Best Thing We Read Today
Users are finally remembering that it’s called X now, not Twitter
Whether it’s a baby, a company, a pope, or a product, naming things is hard. Rebranding them may be even harder, as Elon Musk found when he bought the company FKA Twitter and declared it was now just “X.” Nearly two years later, there’s a clear sign the name change may finally be starting to stick.
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MyRadar’s current raise is open to investment — learn more.1
Off The Charts
Which word is living rent-free in Corporate America’s heads? (It’s been mentioned even more than the word “demand” during S&P 500 companies’ earnings calls.)
Yesterday's Big Daily Movers
Super Micro surged after reaching a $20 billion partnership agreement with a Saudi Arabian data center firm
AMD also spiked following news of authorization for a fresh $6 billion buyback
Rocket Lab USA took off after its second successful earth-return operation in two months
PVH leapt after Jefferies said a comeback is brewing for Calvin Klein’s parent company
What Else We're Snackin'
California’s pistachio farmers are going nuts over US-China tariff relief, as Chinese demand for the “happy nut” grows
Every few years a tech company invents “the bus.” Yesterday, it was Uber. Again.
Every few years HBO changes the name of its streaming service. Yesterday, they announced they’ll be HBO Max. Again.
Eye roll inducing news: Apple is reportedly releasing a feature that lets Vision Pro users scroll with their eyes
We’ll bite: Take this quiz to see if you can choose the least-sugary breakfast
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Snack Fact Of The Day
ChatGPT hit 780 million visits in April, more than 8x the traffic of all other AI chatbots combined.
Events
Earnings expected from Alibaba, Walmart, John Deere, Take-Two Interactive Software, and Cava
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