🕹️ Vice City layoffs
Hey Snackers,
John Deere is hiring a social-media-savvy Chief Tractor Officer to make its farming and construction equipment pop off on TikTok. With a $200K salary, the job posting should get some traction.
The S&P 500 and Nasdaq ended the week on a six-day losing streak, their longest since October 2022, as tech stocks dragged down the market. This week, investors will be digesting a cornucopia of earnings, including from Big Tech and Big Oil.
GTA publisher Take-Two joins the flood of gaming layoffs — which could be felt for years
We got 19K layoffs before GTA 6… Gamers have been waiting 11 years for the next “Grand Theft Auto,” but there’s no joyriding in the industry right now. Take-Two, GTA’s publisher, last week announced plans to lay off 5% of its workforce (~600 people) and scrap several projects in development. Take-Two said the move’s meant to boost profit margins, adding to a flurry of layoffs that’ve been KO’ing the industry. By some estimates, since last year, nearly 20K workers have been let go from video-game giants like Microsoft, Sony, EA, and Epic.
Watch the cutscene: By comparison, gaming layoffs were 12x worse than news-industry cuts as of February. Over a third of game devs said they’d been affected.
Vice City gridlock: GTA 6 — which could inject billions into the industry — will likely be unaffected by the reductions. But production challenges have reportedly pushed back its release window, which could slip into 2026 (at least we have this trailer?).
Tweakin’ the difficulty sliders… At play in the cost cuts: production expenses have ballooned with bigger worlds and chattier NPCs. GTA 6 has a rumored $2B price tag, and Sony’s “Spider-Man 2” budget hit $315M, 3x the first installment. To boost chances of success, gaming companies have mirrored Hollywood by leaning on successful IPs (think: “Star Wars,” Marvel). Ubisoft has put ~3K devs to work on its “Assassin’s Creed” franchise. But gaming execs say standard game prices (now $70, but the $60 price point held on for 15 years) aren’t covering costs. Stalling demand isn’t helping: US game sales hit $57B last year, up just 1% from a year earlier (and down from lockdown-boosted 2021).
Gaming’s stuck on a level… Games take ages to make (ahem: GTA 6) and the industry’s cost cuts could be something gamers feel for a long time. Sony’s already said it wouldn’t release a major franchise game this year, and Nintendo is said to be delaying its Switch 2 till next year. All this could have broader economic ramifications, given that the gaming industry is significantly bigger than Hollywood.
Traders, get to know
Fill in the blanks: Every trader has that one concept that they never fully grasped. Whether you’re just starting out or want to digest complex index-related ideas, Nasdaq’s Investor Education Suite is your go-to source.
Basics and beyond… Nasdaq has produced 3 guides on Options, Indexes and Annuities, tailored to individuals who want to enhance their understanding of index-related concepts. Complete with practical examples, charts and infographics, Nasdaq’s guides are the ideal reference point for investors of all levels.
Discover Nasdaq’s Investor Education Suite and take your trading strategies to the next level.
Coming up this week
Big Tech on deck… Microsoft, Google, and Meta report this week (Amazon’s lonely next week). In February, techies crushed estimates as AI drove growth. Meta 3x’d its profit after its ad biz got a boost from more AI in its targeting algos. Microsoft notched record sales as AI mania helped its cloud products excel, and Google’s cloud unit enjoyed 25% growth. Tech’s profit-boosting “efficiency” era is still going, with 75K tech layoffs this year so far. With cost cuts + AI hype, tech cos are again expected to lead S&P 500 profit growth this earnings szn.
Spinnin’ out… Tesla is set to report on Tuesday, but already public delivery #s suggest the biz is stuck in a rut. The EV giant’s deliveries fell 8.5% last quarter, its first year-over-year drop since 2020. Last week, Tesla announced mass layoffs as repeated price cuts failed to drive demand. Also not inspiring: Tesla just recalled all its Cybertrucks (FYI: it’s only delivered 3.9K). GM and Ford, which also report this week, could shine added headlight on EV demand. The OG carmakers have delayed billions of e-vestments as growth loses speed.
Stories we’re watching
Oil-garchy… Crude-oil exports from Russia surged to an 11-month high last week, even though Russia told OPEC that it would slash exports (womp). Oil revenue has supported Russia’s economy during its war in Ukraine, even after the EU and US restricted Russian energy imports. China and India have offset Western sanctions by ramping up Russian barrel buys: Asian countries are importing 3M+ of Russia’s 4M daily barrel exports. Meanwhile, the US produces an estimated 75% of its own oil supply, and Exxon and Chevron (both reporting this week) have limited Russian ops.
Hot bill summer… A/C is getting pricier as electric bills heat up. Last year, 30+ US states saw higher electricity rates, with California and Northeastern states like New York leading the spikes. To keep up with demand, the US is building hundreds more power lines (and passing those costs to consumers). Next month, CA officials will vote on a controversial new flat fee of $24/month for customers of utility giants like PG&E to try to lighten prices. Electricity costs are outpacing overall inflation, and experts say demand could grow 5% by 2029.
âś… Tech exec-approved
Right now, new AI tech is hitting the market daily. They’re not all created equal… but execs from Google and Meta have opted to invest in RAD AI, a branded content tool, the essential AI for brands. Why?
RAD AI has achieved ~3X revenue growth from 2022 to 2023 — while landing major clients, including Hasbro, Skechers, Sweetgreen, and more.
Brands using RAD AI have seen 3.5X ROI on campaigns and marketing channels.
It’s a proven and working AI backed by 6500+ investors and the Adobe Fund for Design.
Invest before April 29, when the RAD AI investment round closes.
What else we’re Snackin’
BrainFreeze: Snacks headed to the “Frozen Dead Guy Days” fest to learn about cryogenic freezing. While techpreneurs’ sci-fi hopes may not pan out, they could help bring about scientific advancements.
Cru$t: J.M. Smucker’s Uncrustables are a profit meal. The biz sold nearly $700M worth of the circular PB&Js last year, and sales are up 136% since 2019. But Smucker’s overall sales growth has stalled.Â
Wash: Lululemon is getting heat, and not from yoga. A new report said that though the brand has touted sustainability, its emissions are up. The company is facing accusations of greenwashing in Canada.
Snack Fact of the Day
It costs 3 cents to make a penny
This Week
Monday: Earth Day. Passover begins. Earnings expected from Verizon, Albertsons, SAP, and Nucor
Tuesday: Shakespeare’s birthday. Earnings expected from Tesla, Pepsi, GE Aerospace, GM, Spotify, Mattel, Philip Morris, UPS, Halliburton, Novartis, Lockheed Martin, JetBlue, RTX, NextEra Energy, Chubb, and Visa
Wednesday: Earnings expected from Biogen, Boeing, Hilton, Meta, IBM, Hasbro, Ford, AT&T, Chipotle, Norfolk Southern, Humana, General Dynamics, Sallie Mae, Synchrony Financial, Waste Management, and Western Union
Thursday: NFL Draft begins. Earnings expected from Royal Caribbean, American Airlines, Altria Group, Caterpillar, Whirlpool, Wyndham Hotels & Resorts, Southwest Airlines, Bristol Myers Squibb, AstraZeneca, Comcast, Valero, Merck, Dow Chemicals, Keurig Dr Pepper, Union Pacific, Honeywell, Sanofi, Nasdaq, Hertz, ADT, Microsoft, Alphabet, Intel, Snap, T-Mobile, Capital One, Harley-Davidson, and Airbus
Friday: National Pretzel Day. Earnings expected from ExxonMobil, Chevron, AbbVie, Colgate-Palmolive, Charter Communications, Phillips 66, and AutoNation
Authors of this Snacks own shares of: Alphabet, Amazon, Capital One, Comcast, Exxon, GM, Microsoft, Snap, Tesla, and Visa
Nasdaq Disclosure: Nasdaq® is a registered trademark of Nasdaq, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security, digital asset or an overall investment strategy. Neither Nasdaq, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or digital asset or any representation about the financial condition of any company.
Statements regarding Nasdaq-listed companies or Nasdaq proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing.
ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.
© 2024. Nasdaq, Inc. All Rights Reserved.
RAD AI Disclosure: This is a paid advertisement for RAD AI’s Regulation CF offering. Please read the offering circular and related risks at invest.radintel.ai. Equity crowdfunding investments in private placements, and start-up investments in particular, are speculative and illiquid. They involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest in start-ups.