Nvidia is World's Most Valuable Company & Why the Cartel is Impacting Avocado Production

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0:27Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howe. Today, avocado shipments from Mexico to the U.S. have been paused. What are we supposed to eat toast with now? Then NVIDIA has vanquished all foes to become the most valuable company in the world. Where does it go from here? It's Thursday, June 20th. Let's ride.

0:52Happy first day of summer, everyone. Today, an absolute scorcher is the summer solstice in the Northern Hemisphere, which is the start of summer and the longest day of the year in terms of how much daylight we're going to have. If you live in cities like Denver, New York, Chicago, Portland, you'll have at least 15 hours of daylight to play with today. So make the most of it because I don't want to be a Debbie Downer, but it's only getting darker from here. Oh, come on. Look on the bright side. We have tons of things to look forward to this summer. There's ice cream, ice cream. I mean, you can have ice cream now that it's summer.

1:29No, seriously, summer is definitely my favorite season by far. fall winter people get the heck out of here you don't even believe yourselves give me shorts give me that vitamin d give me heat domes neil what do you associate with summer like what's a food that you associate with summer peaches oh peaches a hundred percent i mean there's nothing like a ripe summer peach when i think of summer i all i do is i can't wait for peach season i think of like salad season those alternative salads though with fruits in them a corn salad watermelon feta salad so we're gonna be eating good this summer now let's hear a word from our sponsor yahoo finance so a friend of mine who listens to this show said that he's getting better at predicting what we'll talk about the next day and i go oh no we're becoming predictable and he's like no no no i've just started to read yahoo finances news content oh no our ads are working too well we'll need to start gatekeeping our purple prince no we love that you guys are using yahoo finance it is an awesome place to stay up to date on the latest business news while also having real-time market data right at your fingertips.

2:31Whether you want to use it to become a better investor or to predict what Neil's numbers might be that day, you're not going to predict it at all today, I promise you. That is up to you. Yeah, honestly, Neil pulls numbers out of nowhere, so good luck with that. I'd stick with the becoming a better investor part. If you want to give Yahoo Finance a test drive, visit yahoofinance.com or download the mobile app for easy access on your phone. Change is always happening But no matter what changes in five years There's one thing that will stay the same The price of your internet With the Xfinity five-year price guarantee You get five years of the most reliable Wi-Fi With our best equipment included For a price that stays exactly the same Restrictions apply New residential customers only Taxes and fees extra and subject to change Most reliable Wi-Fi based on OpenSignal Awards USA Fixed Broadband Experience Report August 2024 There has been a game of mega cap musical chairs happening this week between Apple, Microsoft, and NVIDIA for the title of the biggest company in the world.

3:32But when the music stopped and the market closed before Juneteenth, it was newcomer NVIDIA perched atop the rest with a valuation of$3.34 trillion. dollars. It's the first time NVIDIA has held the mantle and also marks the first time a company not named Apple or Microsoft has held the title of largest company in the world since 2019 when Amazon briefly reached the summit. Neil often says that NVIDIA is in the pickaxe business during a gold rush. Its chips have been the workhorse of the AI boom with the likes of Meta, Google, Microsoft, and any other company with AI dreams lining up to purchase its chips to train their hungry models.

4:11The rise has been dizzying. Last year, NVIDIA was the fifth biggest company in the world. Two years ago, it was 10th. And five years ago, it didn't even crack the top 20. But its stock price has tripled in the past 12 months. And now, here we are. I want to go all the way back to its IPO. From then till now, NVIDIA has posted a total return of 591 ,078%. I don't think I can even comprehend that number. But if you do want to see how big NVIDIA is right now after that gain of nearly 600 ,000 percent, NVIDIA is worth more than the collective value of every single building in New York City. It's bigger than the global aviation industry.

4:51It's bigger than the entire GDP of France. And it's bigger than every ticket sold for Taylor Swift's 2023 Aeros tour if she toured for 3 ,000 consecutive years. The amount of money this company is worth right now,$3.4 trillion, is mind-boggling. With the AI revolution that it's helping to happen, Taylor Swift could feasibly be on tour for the next 3 ,000 years. But you're right. Just listen to what people who cover the stock are saying. There's a research analyst, Angela Zeno, who said that NVIDIA will be the most important company of our civilization over the next decade, and that chips in NVIDIA pioneered will be the most important invention of this century.

5:34People are speaking like this. Like, it is the fourth industrial revolution. It's the fourth wave. This is propelling civilization forward. When you're talking on civilization scale change, that is why NVIDIA, even though if you look into the fundamentals of the stock, you look into its actual revenue, its valuation seems absurd. But then when you look at the sheer impact it's going to have on, or what people expect it to have moving forward, it is mind-boggling. The question here is what happens next, right? Is NVIDIA going to be this superpower, this huge company going forward, only getting bigger and bigger and continuing to power the AI revolution, what may be the next industrial revolution?

6:13Or does it look like maybe a more dot-com bubble stock where it has a meteoric rise and then it has a major fall? I think you could find arguments for both. I mean, on the one hand, let's talk about maybe the bulls for NVIDIA. It is putting up actual sales numbers. I mean, its stock rise has been insane, like nothing we've ever seen before. But in the recent quarter, it notched 262 % revenue growth. And the average S &P 500 company posted 5 % revenue growth. So it's actually bringing in sales. I mean, tripling revenue year over year as a company this big is almost unheard of. So it really has the balance sheet to back up, not necessarily back up this valuation, but to show that it is growing.

6:55On the other hand, if you go back to the dot-com bubble, look at another company that also provided the infrastructure for a new wave of technology, which is what NVIDIA is doing. That company, people are not going to know what I'm going to say, Cisco, because we don't talk about it anymore. At one point, Cisco was the most valuable company in the world in 1999, and its valuation has fallen a lot since then as people moved on as competitors have come into the space. So NVIDIA could be the next Cisco or it could be the next NVIDIA. Right. Cisco hasn't recovered to its peak stock price from 1999.

7:27It's still trading below that number. Another stat that's potentially concerning, about$50 billion have been invested in NVIDIA's chips since the artificial intelligence boom began, according to Sequoia Capital. But generative AI startups as a whole have only brought in$3 billion in sales. So there is clearly a mismanagement here. So again, if you're in the pickaxe business, but if you never find gold, then the pickaxe business suffers as well. So you need some of these AI startups, these AI companies that have promised big things to actually start delivering on them in order for them to still plow all this money into NVIDIA.

8:01Meanwhile, just 12 companies in history have led the S &P 500 by market valuation since the S &P was created in 1926. Just an interesting list to see how our economy has changed and what industries we valued the most. Those companies are AT &T, Apple, Cisco, DuPont, ExxonMobil, General Electric, General Motors, IBM, Microsoft, Philip Morris, Walmart, and now NVIDIA. What does that bring up to you? I don't know. Put a lot of hardware makers. Yeah, I guess so. All right. Golden Goose's plans to go public are looking almost as beat up as its shoes. The maker of sneakers donned by your favorite celebrity has postponed its Milan IPO slated for this week, saying that the European Parliament elections and the call for a snap election in France have led to a significant deterioration in market conditions.

8:53If you haven't heard of Golden Goose, just look down at the feet of an A-list celebrity or a rich Gen Z-er you know. Its distressed-looking sneakers with a signature star emblem, which sell for more than$500, have been worn by celebs like Taylor Swift, Selena Gomez, and Reese Witherspoon. They've also caught on with younger people as an understated status symbol. Ahead of its listing, the company was aiming for a market value of$2 billion. But then the European Union elections happened earlier this month, and the gains by the far right in France led President Emmanuel Macron to call a snap election that could put a big dent in his pro-business policies.

9:29French stocks were wiped out, and Golden Goose is putting its much-hyped IPO on ice. But Toby, Golden Goose blames the French election for pulling its public listing. Do you think there are other factors at play here? Yeah, there's definitely some other factors here because this was extremely contentious. The Financial Times reported that one advisor on a call on Tuesday when they were discussing whether to go public or not said, with all due respect, what the, are you talking about? You fill in the blank there. And then one banker responded, it looks bad to pull out two days before the debut, but it looks much worse if the stock plunges 20 % in the first week of trading.

10:02And I do think Permira, the PE firm that owns the majority of Golden Goose, got a little cold feet because of some past experiences they've had. They brought Doc Martens public in 2021, which makes this very high-scale, high-quality boot. And they've issued five profit warnings. Their stock has plunged 80 % since they've gone public. So here they are sitting on top another kind of upscale luxury shoe business looking at the current political environment, looking at what happened to Doc Martens and saying, let's just pull the plug here. Things aren't looking great right now. So definitely a contentious decision, but one that they felt that they had to make.

10:40Yeah, and it's not just the political environment or what happened to Doc Martens, which they could look as sort of a proxy for what their stock might do. The entire luxury business is slowing down. Kering, which owns Gucci, said that Gucci sales fell 18 % in the first quarter because of lower demand in China. And then LVMH, which is the biggest luxury company in the world, saw just 2 % organic sales growth in their fashion and leather goods business, which was down 18 % from a year earlier. And then you have Golden Goose, which is trying to pitch itself as a luxury company. The problem is that 90 % of their sales come from these sneakers.

11:16They're very concentrated in footwear. So when investors look to this company, they're looking at it and saying, I don't know if you're a fully fledged luxury company yet. You make sneakers that have caught on with the youth. 80 % of their sales go to Gen Z and millennials and a bunch of celebrities are wearing it. Yes, that's all great. But fashion trends come and go and you don't really have a mature business other than your sneakers. They were trying to rise. They had a reported 12 % rise in revenue in the first quarter. They were trying to position themselves as we are the exception when it comes to the broader overall slowdown that the global luxury market is facing.

11:51But it is also just a blow to the resurgent IPO market. I don't want to call it fully resurgent, but Europe was getting a little bit more momentum around its IPO market. This one, though, is definitely going to halt that momentum. Meanwhile, the French elections are just causing all sorts of problems. The French stocks were wiped out 6 % last week for their worst week since 2022. that had over$260 billion worth of market cap. And you even have athletes, French athletes like Kylian Mbappe, who's the biggest superstar in the world, warning about the French election coming up, saying that extremes are at the gates of power.

12:27More than 200 French athletes have signed into a document urging people to vote. So this French election, which we didn't even know was coming before two weeks ago, it's going to be the talk of the summer. Your side of guac at Chipotle might be getting more expensive after two U.S. Agricultural Department employees were assaulted and temporarily detained at a local protest in the Mexican state of Michoacan last week. In response, U.S. authorities have temporarily halted avocado inspections in Mexico. This is a big deal because most of the avocados you do the squeeze test on in grocery stores here in the U.S.

13:02are imported from Mexico, and Michoacan is the biggest producer in the country. U.S. employed inspectors are an important part of the supply chain. Since we also farm avocados in the U.S., the Agricultural Department has inspectors stationed in Mexico to make sure exported fruits don't carry disease or pests that can hurt U.S. crops. The inspectors have been released, and Mexican and U.S. authorities are in talks about improving their safety measure before the halt is lifted. But still, any pause in experts of the so-called green gold could impact prices here in the U.S. Yeah, this happened in 2022 as well when an inspector got a threatening message and they paused shipments for a little bit.

13:41It didn't impact avocado prices here. It didn't impact much. And they're hoping that if they get this situation resolved, it won't have any impact on the supply chain either because the avocados and mangoes that are in shipment are still coming to grocery stores here in the United States. But it just speaks to the boom in avocado industry in Mexico. The United States used to grow them. We never, as recently as 1993, I was born in 1991. When I was born, there was no avocados being imported from Mexico into the United States. And those were because of trade barriers with the United States trying to protect California growers.

14:19But the industry here has completely plummeted and the industry there has boomed. And it's led to a lot of organized crime cartels getting into the action, which has led to a lot of violence, which is what we're seeing here today. Right. It wasn't until NAFTA really came into place that we did start that flow of avocados across the board. And as demand has grown, as more money has entered the industry, cartels have started becoming involved in the industry. A lot of avocado growers in Michoacan say that gangs threaten them and say, unless you pay us protection money, then we'll make your life difficult.

14:50And, yeah, it is interesting, too, because this is a very concentrated supply chain. It used to be that Michoacan was the only Mexican state supplying the fruit to the United States. Now Jalisco has begun its own export, so it's a little more diversified still. It is very, very concentrated in this one Mexican state, and so you don't want to see U.S. inspectors being threatened there. Michoacan supplies a third of all global avocados. So, yes, you're right. It is super concentrated. What's one interesting thing about the avocado plant is that it consumes so much water. Some say 12 times as much water as a tomato.

15:26So concerns about, well, the water supply are also impacting the potential future of avocado that the United States has just grown to love. And it's just crazy to think that, like, just a few decades ago, no one was even eating avocados. And now it's been certainly one of the biggest global success stories of any produce. Up next, a segment that is guaranteed to get your heart rate pumping. My favorite segment of the week, Neal's Numbers. eczema isn't always obvious but it's real and so is the relief from ebglyss after an initial dosing phase about four in ten people taking ebglyss achieved itch relief and clear or almost clear skin at 16 weeks and most of those people maintain skin that's still more clear at one year with monthly dosing ebglyss librikizumab lbkz a 250 milligram per two milliliter injection is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema.

16:25Also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies. EPCLIS can be used with or without topical corticosteroids. Don't use if you're allergic to EPCLIS. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with EPCLIS. Before starting EPCLIS, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EPCLIS and visit ePCLIS.lily.com or call Call 1-800-LILLY-RX or 1-800-545-5979.

16:55Tuesday on NBC, Jimmy Fallon and Bozema St. John host the highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not play play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On brand with Jimmy Fallon. Series premiere Tuesday on NBC. Welcome to Neil's Numbers, the segment where I share three stats from the week's news that will quench your thirst for knowledge like a glass of cold lemonade.

17:36First up, if you're wondering whether the buzz over women's basketball has made the leap from college to the WNBA, oh, it definitely has. Sunday's matchup between the Indiana Fever and the Chicago Sky on CBS was the league's most watched game in 23 years, drawing peak viewership of 3 million people. It's pretty easy to explain why this game was a showdown between Kaitlin Clark and Angel Reese, whose teams Iowa and LSU were big rivals in college ball. But the surge in interest over the WNBA is not limited to just one game. Clark, Reese, and the rest of a star-studded rookie class are drawing historic number of eyeballs to the sport since the season began in May.

18:17Fans are packing stadiums. The WNBA has had its highest attended opening month in 26 years. And on TV, the league said it had its most watched start to the season ever. So just what the doctor ordered, right? Well, with all this interest has come loads of controversy, and the WNBA and Caitlin Clark have now become a battleground for culture wars over race, gender, sexual orientation, and other topics that divide Americans. Toby, the WNBA has to be happy the way more people are paying attention so far this season. It feels like the basketball is being overshadowed by off-the-court drama. See, that to me is encouraging to see because if you look at the men's side, if you look at the product the NBA puts on, the drama is as much a part of the equation as the actual basketball that is played on the court.

19:03The interpersonal drama, the social media posts, that has always been a part of basketball. I think part of it is because they're so accessible. You see their faces. It's very much a personality-driven sport. That same thing is happening on the WNBA level as well. That attention that they're getting, as well as the play on the court, is what's making this swell in viewership across not just Cainton Clark games, but the league as a whole. So I think that the drama is a feature, not a bug of this. This is what makes people care about sports, specifically basketball in general. Definitely drama. I mean, it has verged on some really nasty and toxic stuff related to race and gender and people have called on Caitlin Clark to push back on critics of her people who have been fouling her hard.

19:48That's been a main storyline. And she said, and she did come out recently, said, I don't want anybody to use me to push their political agenda. So this is where we've come to where it's just become a very nasty discussion. And I agree with you that, you know, drama and chatter is good. It has gotten quite ugly in terms of what is being said about these players. So, I mean, it's just a lot of drama, a lot of chatter. If you turn on ESPN any morning now, they used to be talking about football and the NBA. Now they're talking about the WNBA, but it has drawn a lot more eyeballs. Teams' valuations are surging.

20:24Mark Davis bought the Las Vegas Aces for$2 million in 2021. A recent valuation put the Las Vegas Aces at a valuation of$140 million. I can't do the math in my head, But that is almost NVIDIA-like explosion. So there is so much more interest in the WNBA. So I think it's really good that we were wondering whether all the interest around college basketball would transfer over. And I think it has. And the fever started to win some games too. So at least the product on the court has caught up to the attention that they've been getting. But Cameron Brink. Come on, the ACL is tough. Yeah, Cameron Brink, one of the stars of the roster class, of the rookie class, is out for the season with a torn ACL.

21:03For my second number, take this scenario. You bought a product online, say a chair, but when it was delivered, it had a leg missing. You're angry, but instead of taking it up with the company that sold you the chair, you call your credit card company, dispute the charge, and they credit your account with the amount you paid for the chair. Anyone done something like this? Well, it seems a growing number of you are. According to the Wall Street Journal, last year, consumers in the US disputed about 105 million charges worth$11 billion with their credit card issuers. That's up from just 7.2 billion in 2019.

21:39And the value of disputed charges is expected to grow by nearly 40 % in the next two years. Why is this happening? Well, calling up a bank and challenging a charge on your account used to be time-intensive and complicated. It was your last resort when you couldn't reach an agreement with a merchant. But during COVID, when everyone was canceling everything, Credit card companies made the disputing process a lot easier, and they're quick to replenish your account. No questions asked once you lodge a complaint. Toby, this is a sign that consumers are becoming even more savvy about their rights as card holders, but it's got to be a pain in the butt for merchants who say this move to sidestep around them is ripe for abuse.

22:19Yeah, the power hierarchy is clear here. Credit card companies get to almost play God when it comes to settling these disputes, and they want to keep the cardholder happy more so than the merchant because that relationship is more valuable to them. Consumers have more options when it comes to choosing a credit card. So they do tend to want a side to them. And then merchants are at the bottom of the pyramid here. Yeah, this is not necessarily something about, you can call it savviness, but it's also friendly fraud is another term for it. Because if you do just want to try to get something for free, then it is you're engaging in fraud there.

22:53So consumers right now face very few consequences. So I do think we're only going to see a rise in these disputes going forward. Half of the largest 12 largest credit card issuers just give you a just say the refund or the chargeback, as it's called, makes it permanent. Even if the merchant disputes it and says that you are engaging in fraud, half of them just say, yeah, sure, take the money. So you can see why a lot of people are starting to do this. My final number is a date, June 26th, which is when the two astronauts who rocketed up to the International Space Station on Boeing's Starliner spaceship are now scheduled to return to Earth.

23:28It's an important date because their return was not supposed to be June 26th. It was initially intended to be June 18th, this Tuesday. They got pushed back to June 22nd, and now it's four days after that. If they do come home on the 26th, it'd mean their stay in space was 20 days, more than double the original plan of eight days. So, in effect, these two astronauts, Barry Wilmore and Sunita Williams, are stuck in space. And yes, it's because of a problem with the spaceship. Two problems, actually. One is a series of helium leaks in the propulsion system, and the other are concerns about thrusters that temporarily failed when the ship was docking with the ISS.

24:04Boeing and NASA are studying both of these issues before they allow Starliner to leave the station with the two astronauts. And just to be clear, this isn't a David Bowie, Major Tom situation. There's plenty of food on the ISS and it seems like they'll eventually be back home. But remember, this mission was a pivotal moment for the US space program. Starliner's first time carrying a human crew and it's not exactly going according to plan. Right, not going to plan, but it is not an emergency situation as of now. They said if it was an emergency, we could put the astronauts on and bringing them home right now.

24:35And you're right, this helium leak issue is something that they identified before launch. During the actual spaceflight itself, there was helium leaking, and now it's continuing to go on. Just to put it in perspective about how small these leaks are, Starliner needs seven hours, give or take, of helium on board to finish the flight. Right now it has 70 hours of helium left remaining. So again, this is all being more than cautious. It is technically feasible to fly the craft right now, but you don't. If you have the time, you have the resources to leave the astronauts up there, then you might as well dot your I's and cross your T's because it is spaceflight after all.

25:11Finally, move over Josh O 'Connor and Jeremy Allen White. Hot rat boy summer is out. Chipotle boy summer is in. Chipotle boys, a term that the internet has assigned to a very specific type of boy, exists in the middle of three overlapping Venn diagram circles. You got finance bros, gym bros, and people who love Chipotle. They don AirPods, wear button-downs, usually take their health and fitness seriously, and yes, eat a lot of the fast casual chain, like six to seven days a week of Chipotle. A bustle piece from early June first identified the phenomenon, and now Chipotle itself is embracing its boys.