Hey Snackers,
Are birds developing a cigarette habit? Researchers across multiple continents have discovered that birds are putting cigarette butts in their nests. Apparently, the toxins in tobacco help ward off parasites.
The S&P 500 and Nasdaq 100 closed lower on Thursday, but trimmed steeper losses from earlier in the session after Israeli Prime Minister Benjamin Netanyahu said his country was helping with US efforts to open the Strait of Hormuz. Oil prices retreated from an earlier spike after attacks on Iranian and Qatari energy facilities. The Russell 2000 closed higher.
🧠 Test yourself with our Snacks Seven Quiz… Here’s the first question:
If you invested $100 in Disney stock on Bob Iger’s first day as CEO in 2005, how many Disney World tickets could you buy with your return?
Everyone’s piling into robotaxis
EV maker Rivian surged 4% on Thursday following an announcement that Uber will invest up to $1.25 billion in the company through 2031 as part of a robotaxi partnership. Winning the robotaxi business has become a top goal for automakers and ride-share companies alike.
The deal means that Uber will get thousands of these on the road, and sooner than you think: the deal will begin with an initial $300 million investment, and Uber will purchase 10,000 autonomous versions of the R2. Uber will have the option to buy 40,000 more in 2030.
The R2 is Rivian’s smaller, less expensive model, and is set to roll out to buyers in the second quarter of this year.
It’s going to be pricey for everyone: per a company filing on Thursday, Rivian “no longer expects to be adjusted EBITDA positive in 2027 due to an expected increase in R&D spend associated with the acceleration of its autonomy roadmap.”
Uber, which has more than 20 autonomous vehicle partnerships ranging from Alphabet’s Waymo to Baidu, has become a dominant robotaxi force. Rivian had first hinted at robotaxi plans at its Autonomy and AI Day in December.
The Takeaway
Meanwhile, the National Highway Traffic Safety Administration said it is expanding its probe into Tesla’s Full Self-Driving system into an engineering analysis covering about 3.2 million Teslas, a majority of its vehicles that are on the road in the US. The agency is focusing on Tesla’s “degradation detection system,” which is meant to recognize when its camera-based technology cannot reliably perceive the road and prompt drivers to intervene. Tesla CEO Elon Musk has long argued that the company’s self-driving approach does not require the expensive lidar sensors used by rivals like Waymo.
Micron blew the lights out on earnings, so why did the stock fall?
For a company of its size, Micron delivered one of the most stunning beats in recent memory Tuesday, with shades of Nvidia in the early days of the AI boom, as revenue came in 21% ahead of Bloomberg-compiled analyst estimates and adjusted earnings per share beat by 36%.
So, why exactly did it get crushed on Wednesday?
Micron notched 196% annual revenue growth in Q2 and posted revenue of $23.86 billion, completely beating estimates of $19.74 billion.
When Micron provided an outlook for this quarter three months ago, even the bottom ends of its adjusted sales and earnings guidance were above the most optimistic analyst’s estimates. It crushed that guidance.
And yet, the stock finished down almost 4% yesterday. Some pundits on Wall Street might rush to point out higher capital expenditure and minimal further upside to gross margins as reasons that the stock is in the red.
A simpler explanation is that red-hot Micron has roughly doubled since mid-December, has risen 283% since July 1 of last year, and is now bigger than Netflix and Costco, and that the buy side’s expectations were just maybe a little more elevated than those on the sell side.
The Takeaway
Longer-term concerns about how long the memory supply crunch might last and whether Micron can sign more multiyear deals (the company has signed just one, so far) could also be playing on the minds of investors. And, of course, it doesn’t help that equities generally got hammered yesterday as concerns about inflation and the global supply of oil weighed on risk assets.
Elon Musk gives an estimate for Tesla’s AI6 chip timeline... while the AI5 is still unfinished
Tesla CEO Elon Musk recently said that the company’s AI6 chip could, with “some luck and acceleration using AI,” be finalized and sent to manufacturing by December. For those paying attention, Tesla hasn’t confirmed that its previous chip, the AI5, has reached tape-out, with Musk saying only that the design is in “good shape” and “almost done.”
Snacks Shots
🏀 Round of 64: Are you not entertained? Yesterday’s start to the action continues today with the other half of the opening round of March Madness. Games we’re going to keep an especially close eye on include No. 10 Santa Clara taking on No. 7 Kentucky, as well as No. 9 Utah State vs. No. 8 Villanova.
🏀 Round of 64: Today is also the start of the women’s NCAA tournament, with what’s expected to be close matchups between No. 10 Tennessee and No. 7 NC State as well as No. 9 Virginia Tech vs. No. 8 Oregon.
🏀 Round of 32: This weekend will also see the 16 games of the round of 32, where the winners of yesterday’s and today’s blitz of basketball try to punch their tickets to the Sweet 16. Those probabilities will be moving quickly all weekend.
*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.
What else we're Snackin'
CarMax says EV and hybrid searches are up 9.3% this month as gas prices surge
OpenAI acquired open-source Python tool developer Astral, beefing up its Codex team
Novo Nordisk says the FDA has approved a high-dose Wegovy shot
Hyperliquid is the “1,000 pound gorilla in the room” leading year-to-date crypto market gains
Snack Fact of the Day
Apple will rake in $1 billion in App Store fees this year from other companies’ generative-AI apps.
Friday
Earnings expected from XPeng