‘Jensanity’ Fuels Nvidia Past Apple & Tokyo Takes on Tinder

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0:27Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, in a shock move, New York City's congestion pricing plan has been put on ice. We'll tell you who's happy and who's furious. Then what happens when you give a remote Brazilian tribe access to the internet for the first time? Thanks to Starlink, we now know the answer. It's Friday, June 7th. Let's ride.

0:53Is the United States a cricket powerhouse? Some are saying after Team USA pulled off a shock upset of Pakistan yesterday in the T20 World Cup in Texas. Pakistan has won the tournament before, and they're currently number six in the world. So it isn't a stretch to say that this is one of the biggest upsets in the sports history. And you should expect to hear a lot more about cricket over the next few weeks. The United States is hosting the tournament along with the West Indies. So if the team continues its Cinderella run, it could serve as the sports breakout moment here. Toby, are you jumping on the bandwagon?

1:27I absolutely am full of American pride right now. The best part is that a software engineer was one of the U.S.'s key players that helped pull off the upset. According to his LinkedIn page, Saurabh Netravalkar is a principal engineer at Oracle. The man is absolutely living the dream. He's got a great tech job in the Bay Area. He's beating up on cricket heavywigs. And his fun facts during corporate icebreakers must go so hard. He's like, hi, I'm Saurabh. I also just beat Pakistan to win one of the biggest cricket matches in the United States history. So the man is living the dream. Yeah, this really could be a big marketing event for cricket in the United States.

2:04They built a special purpose stadium right out on Long Island that I'm hoping to get to a game to. There's an India-Pakistan game, one of the biggest rivalries in all of sports, India-Pakistan cricket, that's happening on Sunday morning. Just one problem. So tickets are over$700 to get in, which is a good sign, kind of, and it shows how people are super interested in cricket. And I think if the Team USA continues to do well, we could only see the sport grow here. Now let's hear a word from our purple print, Yahoo Finance. The reason why Yahoo Finance is so fun to talk about for you guys is that Neil and I actually use this platform.

2:40Right. If you want to check out how much NVIDIA has jumped in a year, head to Yahoo Finance. If you want to see how the jobs report that comes out later today is going to affect the market, head to Yahoo Finance. Or if you just like the color purple, head to Yahoo Finance. We are on that platform every day for the trusted news and insights as well as the real-time market data it provides. So if you want to be like MBD, head to Yahoo Finance. Download the Yahoo Finance app on the Play or App Store for real-time alerts on news and insights tailored to your portfolio.

3:13When did making plans get this complicated? It's time to streamline with WhatsApp. The secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. He wears leather jackets. He signs shirts. He single-handedly props up the entire S &P 500. It's Jensen Huang's world, and we're just living in it. On the cusp of NVIDIA's stock split later today, let's take a dive into the gen sanity, sweeping the world of AI and your portfolio.

3:56NVIDIA is conducting a 10 to 1 stock split today to make stock ownership more accessible to employees and investors. If you're lucky enough to own some NVIDIA shares, the economic value of your holdings won't change. You just will own 10 smaller shares price around$120 instead of one big$1 ,200 one. But it will do nothing to slow NVIDIA's roll. NVIDIA has gained more than$2 trillion in market value this year alone. That is more than the entire valuation of Meta. That surge has pushed it into the rarefied $3 trillion market cap club, passing Apple in the process to become the second most valuable company in the world.

4:34You know, there was this big computing conference in Taiwan this week, and it was clear just how fast Jensen's star has risen. Everywhere he went, people cheered. They asked him to sign their GPUs or their blouses in the case of one viral woman. It's Jensenity. It's Jensenity. Let's start with the stock split and then get into Jensenity a little bit. So this is a 10 to 1 stock split, and the way I like to think about this is if you own NVIDIA, you have a slice of pizza. What they're doing is coming over to your slice of pizza, taking a pizza slicer, that's what it's called, and just cutting it up into 10 smaller slices.

5:10You still have the same amount of pizza, but each slice is a little bit smaller. And the goal of a stock split is to entice more people to eat your pizza. If it's a little bit smaller, it's a little bit more manageable. It costs a little bit less to get in on the action and eat this pizza. So by cutting everything into 10, it doesn't change anything about the company at all. It still has the same market value, but they're hoping that people will look at the price of a share and say, oh, that's only$120. I think I'm going to buy it instead of, whoa,$1 ,200. That's a little bit scary. Warren Buffett is famous for never splitting his stock, which is why a single share of Berkshire Hathaway is up over$500 ,000 per share right now.

5:50And so it has become common for companies to split their stock in order to juice demand for it. Right. It doesn't change anything about the fundamentals of a company, but interest does usually peak around stocks when a stock split is coming up. I mean, just think back to 2021. Tesla also did a stock split back then. It ran up, shares ran up 61 % in the two weeks leading up to it. There's just a lot of interest and activity around the stock. NVIDIA is also sweeping the options market right now. 19 out of 20 of the most actively traded options tied to NVIDIA are set to expire on Wednesday at the end or set to expire at the end of this week.

6:27So there's a bunch of short term options activity around NVIDIA right now tied to this enthusiasm around the stocks. Yeah, and we've been talking about NVIDIA for the past year because they make the picks that arm the people who are doing the gold rush around AI. That's been the metaphor that's grown, that's emerged. But I would say this is the week that everyone kind of realized, wow, this guy Jensen, the CEO, is an absolute rock star, especially in his native Taiwan where he grew up. I mean, every single move of his was followed, as you mentioned. There was breathless media reports about every single place that he was going to to eat, which jacked up sales at all these places.

7:05He threw out a first pitch at a baseball game. He was signing autographs. And he wasn't even a keynote speaker there, but you could just tell where he was because of the throngs of people that followed. So he is an absolute rock star there. He is their native son, and he's come back to show what he's built here in the United States. And it is remarkable. I'm just – the question here is can anything slow NVIDIA's role right now? Yeah, let's just put into context how fast NVIDIA has been rolling. The shares have gained more than 3 ,300 % in the last five years. It took Apple about three years to go from a$2 trillion market cap to a$3 trillion one.

7:41Microsoft did it in quicker time, two and a half years after hitting$2 trillion. For Nvidia, the trip from$2 trillion to$3 trillion took three months. It's insane how fast. You look at the stock chart. You just have to laugh because I want to say parabolic, but it's something even more. We need the math people to come and tell me what formation Nvidia stock chart is making right now because it's truly insane. And there are competitors coming after NVIDIA. You have AMD and Intel that want to build the same types of graphics chips that power AI just for a lot cheaper because NVIDIA charges tens of thousands of dollars for a single one.

8:15And then you also have the big tech giants like Microsoft, Meta, Amazon, all trying to make their own chips. But still, every analyst is like, I still think for the next two to three years, NVIDIA has this incredible moat because they make the best chips and everyone wants the best chips to power their AI platforms right now. So they're like, I don't know. You know, this thing is on a rocket ship. I don't see any sort of force of gravity that could bring it down. So we'll just have to see. But yeah, this was the this is the week that everyone learned how big of a deal Jensen Huang is. On June 30th, just a few weeks from now, a plan to charge vehicles entering New York City was supposed to go into effect in a first of its kind congestion pricing scheme in the U.S.

8:56Well, as you can gather from the words supposed to, it's not happening anymore. In a shocking 11th hour announcement, New York Governor Kathy Hochul said she was shelving the tolling plan despite having publicly supported it two weeks before and the work on it having gone on for decades. Hockel playing the Uno reverse card, flabbergasted environmentalists, transit advocates and economists who consider the idea of taxing city driving a sensible way to curb emissions and invest in transit. The tolls collected from congestion pricing were going to send one billion dollars each year to improve subway and bus service in the city.

9:30Now there could be a gaping budget hole. In defending the decision, Hochul argued that the$15 toll would put too much of a burden on lower income residents who are already struggling with inflation. She added that the plan was hatched before the pandemic when offices were full five days a week and tourism was at record highs. The economy was in a better place to absorb the driving tax. Then she said, still, Toby, I'm on urban planning Twitter. I've never seen such anger, such a sense of betrayal directed toward a politician. There's concern that the entire concept of congestion pricing anywhere in the U.S.

10:04has been put on ice by New York's U-Turn. Yeah, this has been a debate for years. For 15 years in New York City, congestion pricing debates have been swirling around. It's always angered kind of the car driving suburbanites. It's always been exciting for public transportation enthusiasts, subway enthusiasts. The benefits were supposed to be that you were going to decrease traffic. It was supposed to decrease traffic by around 17 percent. That translates to around 120 ,000 cars per day and by doing so improve air quality in the process. And then the tolls were supposed to boost the MTAs, the Metropolitan Transit Authority's budget.

10:43And that's really I think the big fallout here is that there is now, as you put it, a gaping hole in their budget because they need that money to improve the transportation infrastructure around New York City right now. Yeah. And critics of Hochul's move just say it's a pure political ploy because putting a tax on people is always just never going to be popular. And the majority of New York residents and especially people in the suburbs in Long Island and in the Hudson Valley did oppose this plan. The majority were against it. And I think a lot of other Democratic politicians looked at what Hochul did.

11:15And they were like, well, you know, the election year coming up like this is kind of OK. And then the advocates on the other side say, yes, putting a tax on driving is never going to be popular, but you just do it. And eventually the benefits will emerge and the transit becomes better. And over time, people see the benefits and you just kind of have to do it. But there's a reason that the other climate policy of the United States is more incentive based than tax based. If you look at the Inflation Reduction Act of Biden, which is the biggest climate policy ever in the history of the United States, most of that is carrots and not sticks.

11:50It's providing subsidies and tax incentives to companies instead of imposing a tax. And you just see how hard it is politically to get a tax like this across the finish line. We were almost there just a few weeks away. But I think this is sort of dejecting and depressing for a lot of people who wanted this to happen, because if it can't happen in New York City, it's not likely to happen anywhere else in the United States. It is in cities across the world, Singapore, London, Stockholm. but if it can't happen in New York, it's very tough to get it in LA or anywhere else. It was a bummer because this felt like the shot, and it was kind of taken out from out of us at the 11th hour.

12:28Okay, we're going to do Stock of the Week, Dog of the Week, like we always do on Fridays, but NVIDIA was so clearly the Stock of the Week that we're going to run through some headlines instead. First up, another big rocket launch took place yesterday On the heels of a successful mission to the ISS for Boeing's Starliner, SpaceX and Elon wanted to steal back some of the limelight. Starship, the most powerful rocket ever assembled in the craft Elon eventually wants to use to colonize Mars, held a successful launch at its base in Boca Chica, Texas. It achieved two major milestones that it hadn't pulled off before yesterday.

13:02Both the super heavy booster and the spacecraft itself returned back to Earth, mostly intact. The two crafts fired their engines to slow their descents before soft splashdowns in the Gulf of Mexico and Indian Ocean, which is a big step towards the ultimate goal of getting them to land on dry land. It wasn't a perfect flight. As we were watching Starship falling back to Earth yesterday, we could literally see parts disintegrating under the intense heat before our eyes. But still, this was a successful mission. Definitely a successful mission. And you have to look at NASA headquarters right now in Houston.

13:34and they're probably starting to drink, I don't know, in like two hours from now because their plan of offloading spaceflight is starting to finally come into fruition. You had both Boeing and SpaceX, the companies they awarded contracts to 10 years ago, literally flying rockets at the same time. You had Starliner linking up with the ISS. Meanwhile, you had Starship from SpaceX blasting off and improving every single time in its fourth mission. So their plan 10 years later, rocket science is hard, is finally starting to to come into being. So it's pretty it's pretty cool to see. A major central bank cut interest rates yesterday after making significant progress on bringing down inflation.

14:14Unfortunately, it wasn't the U.S. Federal Reserve. It was the European Central Bank, which lowered rates by one quarter of a percentage point. It is a milestone event that shows how economic officials around the world are starting to loosen up their ultra tight monetary policy as inflation has subsided. The ECB is the first major central bank to lower borrowing costs, which is said was justified after eurozone inflation in May felt at just two point six percent down from a peak of ten point six percent. The question now is what will the Fed do? Central bankers are clickier than your three person group chat.

14:48So when one takes action, the others tend to follow your move, Jerome Powell. Yeah. And the answer probably is that Jerome Powell doesn't really care about what anyone else around the world is doing because I don't know, this is America. We are definitely paying more attention to domestic macroeconomic data than what other international banks are doing. And you're right, though. There is a tide swelling because Sweden, Switzerland, central banks also both announced rate cuts this year already. Canada, too, became the first G7 nation to slash rates back on Wednesday. So there is definitely some movement around here.

15:20But again, the Fed is probably going to just pay close attention to the data that actually moves the needle for us, which stateside, which is labor, consumer indicators, how consumers are spending and what those inflation numbers actually are here. So we have to wait till September, it seems like. Yeah, that is wake me up when September rate cuts happen. That was OK. Your final headline is this. the FDA has reversed its ban on Juul e-cigarettes. While it spends time reviewing court decisions and looking over new info provided by the vape maker, the agency will allow Juul products to stay in stores.

15:54Remember back in 2022, the FDA ordered Juul to halt its sales, but then a month later said, okay, you can keep selling while we review your appeal. And as of yesterday, the agency placed the products back under scientific review, which takes us full circle, essentially moving Juul back to its original regulatory position before the 2022 ban. It's a little confusing, but this move paves the way for their products to be federally cleared and get out from this regulatory purgatory. Neil, what's behind the FDA's decision here? I mean, it seems like the FDA doesn't really know how to address e-cigarette use.

16:32There's been a lot of ham-fisted policies that they aren't exactly sure how they're going to move forward with this. But I think that the e-cigarette peak has kind of passed anyway. And the big thing now in terms of nicotine, these smokeless pouches like Zin, Zin and other smokeless products accounted for 40 percent of all Philip Morris revenue. So this is the new waves e-cigarette use like Juul peaked in 2019. And Juul as a company has just utterly collapsed under all this regulatory scrutiny, this red tape and just people moving on to other products like Chinese disposable vapes coming in. I mean, Juul was worth$38 billion when Altria bought a 35 % stake in it.

17:12And then it cut down the valuation to just$450 million by 2022, which is 3.5 % of the original valuation. So some look at Altria, which is the maker of Marlboro, that investment in Juul as one of the worst corporate decisions in history. Yeah, it is a little too little too late for Juul because you're right. People have moved on. The kids are doing upper deckies. They got their zins in these days. So too little, too late. Up next, would you use a dating app designed by your city? Does it ever feel like you're a marketing professional just speaking into the void? But with LinkedIn ads, you can know you're reaching the right decision makers, a network of 130 million of them.

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18:43Hinge, Tinder, and Bumble are facing a new competitor on the dating app landscape, the city of Tokyo. Yes, the Tokyo government is planning to launch a dating app in the summer, not necessarily to challenge Tinder, but to try to get more of its residents married and reverse an alarming decline in population. The country's birth rate has fallen to an all-time low, and last year there were just 474 ,000 marriages, a 6 % annual decline, and the least amount in nearly a century. By 2070, the population of Japan is expected to decline by 30 % to 87 million, while 4 in 10 people will be over the age of 65.

19:21So it's not hard to see why Japan considers its baby bust an existential crisis. Prime Minister Fumio Kishida warned that the country finds itself on the brink of being unable to maintain social functions because of its low birth rate. And this dating app, which costs$1.3 million, is one of a series of attempts by the government to fill its empty preschools. It's a bold move. It's a bold move, Toby. Let's see how it pays off for them. I like how this dating app is going about it, though. It requires a very rigorous registration process to make sure your intentions are in the right place and that you're actually looking for merit.

19:56It's not a hookup app. It is not a hookup app. It requires a photo ID, but also an income certificate, and then also some documents confirming your relationship status. I don't know what that entails. I promise I am single. And then there's 15 categories of personal data to fill out. You got your height. You got your education. You got your occupation. That's all available to see to potential matches. And then also, this is the best part. You have to attend a mandatory interview with the app's operators before getting on the apps, basically ensuring that you are signing a pledge. You're looking for a marriage partner.

20:27So imagine signing up. Like when you sign up for a dating app these days, you just make an account. But you have to do a full – you got to jump through a lot of hoops to make sure, yeah, your intentions are in the right place. This seems like a whole lot of social engineering on behalf of the government. But honestly, Desperate Times call for desperate measures. A recent survey found that 42 percent of all adult Japanese women say they're never going to get married. And that rises to 50 or never going to have children. That rises to more than 50 percent among men. And this has led to some serious problems, long term problems for their economy.

20:59Two thirds of businesses surveyed said they have a worker shortage. And Japan is not a country that's known for having a lot of immigration to fill in the gaps like we do here in the United States. But it seems like that's changing. They're bringing in a lot more foreign workers. The number of foreign workers last year hit a record 2 million, which was up 12.4 percent from 2022. But projections are that to hit its growth goals by 2040, they need to triple that number to above 6 million foreign workers. So they are pulling out all of the stops here because this is something that tumbles where there's fewer babies, fewer people working, fewer people having kids in the future.

21:34and people like Elon Musk have warned that this is this population decline, which is not just happening in Japan, it's happening in South Korea, it's happening in Russia, is a far bigger existential crisis for the human race than global warming. The Javari Valley is one of the most isolated places on Earth. It is an indigenous territory in Brazil where the Maribo people live. It also just got internet connection thanks to Elon's Starlink satellites. It's an interesting experiment. What happens when a remote tribe gets access to the internet for the first time? Well, pretty much exactly what you'd expect.

22:06The tribe has only had Starlink for nine months, but the New York Times already reports that there are teenagers glued to their phones, group chats filled with gossip, addictions to social media, violent video games getting played, and of course, people watching explicit content. The Maribou tribe has essentially sped-run the last 30 years of existing online to arrive at the same dilemmas we all struggle with. To be fair, there has been a lot of good to come from the tribe's connection to the outside world, jobs, education, and expanded community. But with the good comes the bad. Neil, this story is wild, starting with how they got Starlink to their village in the first place.

22:41Yeah, so an activist working with the indigenous tribes in this area saw an American woman speak at a space conference, and they contacted her via video. It turns out this woman has done various projects all over the world, and they asked for Starlink satellites to come to their village and provide internet access. So they sent this video. She saw it, did the math, and it cost about$15 ,000 to get 20 antennas down there. And she was like, sure, I'll do it. So they sent out this cold outreach, and she came there with a bunch of other people. They carry these antennas through the jungle, set them up, and then all of a sudden, for the first time ever, you had people connected to the Internet.