Nvidia Throws $5B Lifeline to Intel & Amex Ups Annual Fee to $895

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0:29Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Intel and NVIDIA make like Aang and Zuko, going from enemies to friends. Then Amex just raised the annual fee on its Platinum card again. Nothing like spending money so you can spend more money. It's Friday, September 19th. Let's ride.

0:51Good morning and happy Friday. You know, I'd like to think I had a productive week, hosted five podcasts, onboarded a new colleague, did my laundry. But then I look at someone like Killian Jornett and think, you know, some guys just have that extra gear. Jornett has begun one of the most extraordinary athletic feats we've seen in years, attempting to summit the more than 60 mountains in the United States above 14 ,000 feet, known as the 14ers. But to make things more difficult for himself, because of course he is, he's going to reach all these peaks which span Colorado, California and Washington by foot or by bicycle.

1:27Toby, who wakes up one day and thinks, yep, going to climb all the 14ers and just walk or bike them? Killian Jornette does because this dude is insane. He once reached the summit of Mount Everest twice in a single week without using any extra oxygen. He's a four-time winner of the biggest trail race in this community. It's the Super Bowl of trail running, 106-mile ultramarathon. But I also think that it's funny that he is so nervous about the biking aspect of this because he's a runner. He's a mountaineer. He doesn't really like spending time on a bike, so his greatest fear is potentially getting hit by a car while doing these bikes in between the various mountain peaks.

2:05He also said that he attempted a similar challenge in a different mountain range and figured out that his nutrition wasn't really up to par. This time around, he's consuming 8 ,600 calories a day, which somehow doesn't feel like enough given all the activity that he's doing. And now a word from our sponsor, Roku. Toby, are you ready for Black Friday? It's September. Ah, Toby, you absolute fool. If you're not gearing up for Black Friday right now as a brand, you could miss out on customers. For brands less foolish than Toby, there's Roku Ads Manager. Roku Ads Manager takes the pain out of advertising.

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3:18If someone were writing a book about the chip industry in 2025, it'd be called From Bitter Rivals to Business Partners, the NVIDIA and Intel story. And the first chapter would begin yesterday when NVIDIA agreed to invest$5 billion in Intel, a roughly 4 % stake in the company, to co-develop chips for PCs and data centers. It's another surprise victory for fallen icon Intel, which is on the comeback leg of its Kenny Powers journey. NVIDIA and Intel teaming up is like if the Yankees and the Mets drop their bad blood in the subway series, if California had functional subways. The two chip makers are separated by a two-mile stretch of freeway in Santa Clara.

3:58But for decades, the rivalry was dominated by Intel. Intel gave Silicon Valley its name. And as recently as 2022, Intel did twice as much annual revenue as NVIDIA. Then came ChatGPT and the AI data center revolution and how the tables have turned. And suddenly, NVIDIA's GPUs that had previously been used for video games were hotter than the boo-boos, and Intel had no response. Next year, NVIDIA will do more sales per quarter than Intel sees in a year, and NVIDIA is worth over$4 trillion compared to Intel's$143 billion. But that's a lot higher than the day before for Intel, whose stock popped 22 % after NVIDIA's vote of confidence.

4:37This has actually been a long time coming. Apparently, the White House approached NVIDIA nine months ago and said, hey, we want you to get involved with Intel a little bit. Right now, the U.S. sees Intel as still a very strategic asset in this chip war that it's waging against China. They need someone to be able to fabricate chips here. And so they think by getting NVIDIA, who is the kingmaker now in this industry involved, it's going to increase Intel's chances. It also is a great deal for Intel or for NVIDIA because they are not locking themselves into having their chips made by Intel, which would not necessarily be good because, again, TSMC is still kind of the best in the world out there.

5:16Intel is still lagging behind. But what they do get is access to PC chips, which is just another way for NVIDIA to kind of expand its kind of share in this market. Right now they focus on GPUs, which are really good at crunching the numbers for training these large language models, but they're not so good at PC chips. So not only are they not locking themselves into an exclusive deal with Intel by any means, they are getting access to a new market as well. And it's curious that the U.S. government would be kind of brokering this deal, going to NVIDIA and saying, we want you to invest in Intel.

5:47You know, that doesn't seem that that is not typical for the U.S. government to play that particular role. But it's gone far beyond that in terms of its involvement with Intel. Just a few months ago, it took a 10 percent stake in Intel worth about nine billion dollars. It's Intel's largest shareholder right now. And Intel stock has risen. So it's been a pretty good investment for the U.S. government. That stake is now worth$14 billion, up from$5 billion on paper. So the government is up 50 % on its investment in Intel. Obviously, they are also putting the thumb on their scale by talking to NVIDIA and saying, hey, let's invest.

6:22There is also a big investment from SoftBank, from Japan, which invested$2 billion into Intel. And what Intel needs right now is capital. They're bleeding cash. They lost$3 billion last quarter. They need to build up their manufacturing operations to compete with AMD, which is a domestic chip maker in the United States, and to compete with TSMC, which is in Taiwan. So they've got a lot of, you know, building to do and they need a lot of fresh capital. It seems like, you know, they are getting that. And it's a big win for CEO Liputan. It is just crazy, though. Let's go back to 2022. Intel's revenue was two times that of NVIDIA.

6:55It just feels like a lifetime ago at this point. Now, NVIDIA is on pace to make more money per quarter than Intel does annually, so it's just been a complete reversal in the fortunes of these two companies that are just so poetically separated by just a small stretch of road. Moving on, American Express has released an upgraded version of its credit card designed for people who use summer as a verb, raising the annual fee on its platinum card from$695 to$895 a year. The card also now comes with$3 ,500 in annual perks, up from about$1 ,500 before. Outside of having a nice metallic clang when you drop it for dinners, those perks include$400 in dining credits through Resi,$600 in hotel credits,$300 towards Lululemon gear, and$200 in Uber rides.

7:44Amex thinks its laundry list of incentives justify its chunky annual fee. Then again, the high fee may be a feature, not a bug. All four major credit card issuers, Amex, Chase, City, and Capital One, have refreshed their premium cards this year. The Chase Sapphire Reserve raised its fee to$795 this summer and leapfrogged Amex in the process to steal the title of priciest card. With yesterday's announcements, Amex once more returns to the top of the heap where it can give off that luxury vibe it is after. However, consumers may be reaching their breaking point soon despite the advertised$3 ,500 in sugar being passed their way.

8:21Online forums are full of complaints calling the Platinum a coupon book because so many perks are difficult to access or take full advantage of. The value is real, but only if you're organized enough to use it. Neil, like many status symbols, maybe it's more about the status of actually having the card than the math of breaking even. Amex absolutely can't stand it when another card is more expensive than it. Go back to 1958. There were all these credit cards out there. And when Amex introduced its first card that year, it set the annual fee at$6, which was$1 more than the competition. You're absolutely right.

8:57They were also the first company to introduce airport lounges in 2013. So they want to be seen as the pioneer in this field. They want to be seen as the most exclusive card of all these exclusive cards. And they're doing that by jacking up the cost of this card to$895 a year. And they're also actively trying to court younger spenders, Gen Z and millennials. They are their fastest growing customer base. 75 % of new platinum gold cards accounts were opened by millennials or Gen Z. Millennials now account for 30 % of spending across Amex's total credit card portfolio. So it is definitely leaning into this idea of it being a status symbol.

9:36One aspect of the card that does separate from the rest. There's some limited edition drops where you can add designs on top of it. So it's almost becoming an accessory even more so than actual something that you swipe to spend money with. So it's just fascinating that their approach is let's go premium. Let's be top of the heap always. Let's court these younger people because they're clearly the spending base that we want to attract. It's true that all these rewards and cash back and credits and things like that can be extremely confusing. You mentioned a bunch of these benefits. But just when you break it down, it makes your head spin a little bit because that$600 hotel credit is available in two$300 installments over six months period.

10:14The$400 dining credit through Resi is also parceled out quarterly. The$200 Uber credit is limited to$15 a month except for December when it comes with an additional$20. Like you need a notebook. You need an AI to like track this all for you. So they are actually – they kind of understand this. and they're rolling out a specific app and dashboard on their website to help you track all of these things. I don't know whether people will use it, but they are kind of acknowledging the problem of how confusing it can get to claim these$3 ,500 in rewards because when they say something like that, I think, well, there's no way I'm actually getting all of those because that is a full-time job.

10:52I do wonder too if the rationale behind jacking the price up to almost$900 is the fact that so many people have been complaining about their Centurion Lounge being overrun. It used to be this very premium place. Now you go in there and it feels like all the exclusivity is gone. I've never actually been in one, so this is just hearsay of what I'm saying right now. But maybe if they're saying, all right, it doesn't feel as exclusive anymore, let's jack it up and see what that does to these crowded airport lounges. So maybe that's something they've been hearing and are trying to address with this price hike as well.

11:24Got to get the riffraff out. I know. Moving on, yesterday the FTC sued Ticketmaster and its parent company Live Nation in a blockbuster lawsuit accusing the company of engaging in illegal ticket resale tactics. Every part of the ticketing process is under scrutiny from the exorbitant fees at checkout to the bots that steal your chance to see Lady Gaga at MSG. With the agency even accusing companies of tacitly working with scalpers, allowing them to jack up prices in the secondary market. The FTC claims Ticketmaster is triple dipping, which outside of being a delicious Chili's appetizer combo, means charging fees to brokers on the primary market, fees to brokers on the secondary market, and of course, applying fees to the consumers who ultimately purchase the tickets on the secondary market.

12:08The FTC says that this behavior violates both the Better Online Ticket Sales Act, aka the Bots Act of 2016, which bans bots from bulk buying tickets, and the FTC Act, which prohibits deceptive conduct. The complaint says an internal review by the company showed that just five brokers owned 6 ,345 Ticketmaster accounts that held 246 ,000 tickets. Each violation of the BOTS Act can carry a$53 ,000 fine, and with literally millions of BOT resold tickets under the microscope, Ticketmaster theoretically faces hundreds of billion dollars in penalties. Neil, it's hard to think of a more unpleasant process than trying to buy tickets to go see your favorite artist.

12:50The Ares Tour and the legions of pissed-off Swifties it created was a tipping point, but these alleged practices are something I know a lot of you all listening have come into contact with. Now the FTC is taking the company behind the unpleasantness to court over it. If there's one thing that red and blue America can agree on, and it's not much these days, it's that Ticketmaster wields too much power in the live ticketing market and should be brought to heel. Last year, the Biden administration's Justice Department sued Live Nation, an antitrust action, accusing it of operating a legal monopony, wants to break up its control of Ticketmaster.

13:25Remember, Live Nation bought Ticketmaster, and then together the two combine up to 78 % to 80 % of the live ticketing market. And, you know, it doesn't matter whether you're the Trump administration or the Biden administration. They're saying that that is too much and it is abusing its power by collecting all of these fees. What they're saying is that the incentives are aligned such that Live Nation or Ticketmaster is going to look the other way when all these bots come and scalp all these tickets. because when they charge higher prices, then that means higher fees for Live Nation and Ticketmaster.

13:57And so they're saying this whole incentive system is out of whack. Yeah, and the damning information here is that if just five brokers actually own 6 ,000 Ticketmaster accounts, clearly they're running a bot operation there. There's no way that you can possibly manage that many tickets going into that many accounts. So that is something that this Bots Act is raising penalties for. And it is just like, obviously the penalties are really, really astronomically large if every single one of those accounts came out to over$50 ,000 in fines and penalties. But it also is one of those things that has a political dimension to it.

14:32Of course, Biden went after it because it is just deeply unpopular. Trump is going after it as well. He had Kid Rock come inside the Oval Office and start railing against ticket resale prices that are up 500%. So this is definitely a consumer protection win that both administrations looked at and said, this is something we can go after because absolutely no one loves this process. All right, let's take a quick break and come back with our stock and dog of the week. One of the hardest parts about B2B marketing is reaching the right audience. I remember when I bought a coffee maker and then months later kept getting served ads for a coffee maker after I'd already cozied up to my new one.

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15:43toby i want to talk to you about exposure oh you mean like that reoccurring nightmare where i show up for the podcast in my underwear it's actually nothing like that at all because i'm talking about exposure to the nasdaq 100 index using micro index options oh well that's totally different nasdaq 100 micro index options xnd offer precise and manageable exposure to the nasdaq 100 index at a smaller notional value. The smaller notional value can make it an attractive option by allowing retail investors to participate in options trading with lower capital requirements. Plus, this can provide flexibility for those managing smaller accounts or looking to diversify investment strategies without committing significant resources.

16:25Potential tax benefits can help sweeten the deal too. Index derivatives like XND index options may benefit from a potentially lower blended tax liability. There are many more ways you can benefit from X and D index options. So to learn more, head to Nasdaq.com slash MBD. That's Nasdaq.com slash MBD. Let's head to Stock of the Week, Dog of the Week, the Friday segment where Toby and I pick one stock that read a book before bed and another that scrolled mindlessly on their phone. I won the pre-show birdwatching contest, spotted that elusive scarlet tanager, so I get to go first. My stock of the week is cocaine, whose use and production has reached record levels and minted a new drug kingpin in Mexico.

17:09Cocaine consumption in the western United States has surged 154 % since 2019 and has risen 19 % in the east, according to the Wall Street Journal. It's not just the Americans regaining their glow for blow. The most recent World Drug Report from the UN found that cocaine is the fastest growing illegal drug market, with the estimated number of users globally growing to 25 million people in 2023, up from 17 million 10 years earlier. This trend has been lining the pockets of one particular guy, Nemesio Mencho Oseguera, who runs the Jalisco cartel in Mexico and has been called the most powerful drug trafficker operating in the world.

17:47After spending decades building his cartel from the ground up, Oseguera's business prospects took an NVIDIA-level turn when the Trump administration began cracking down on the fentanyl trade, which was dominated by the Sinaloa cartel. Fentanyl use in the U.S. has dropped since mid-2023, denting the fortunes of the Sinaloans and limiting their influence. Meanwhile, Oseguera's Jalisco cartel has seen its star rise thanks to its strangleholds on cocaine distribution in America, which has regained its appetite for the drug as the memory of the crack epidemic of the 80s fades from memory. This guy has a$15 million bounty on his head.

18:21Yeah, he clearly takes security very seriously as well. He has all his top lieutenants go through their call logs every week. And then after that, he has them replace all of their phones. So when you're running an operation of this scale, of course, security is of the utmost importance. But with this kind of re-embracing of cocaine in America and across the world, we have seen prices collapsing as well. They've fallen about 50 percent in five years. And then purity has been on the rise as well. So you're getting falling prices and higher purity, of course, is going to regain a foothold in America and around the world, especially as fentanyl kind of is on the downturn given the trump administration extreme focus on that one particular drug now there is a lot of cocaine coming from colombia through ecuador through mexico into the united states but we americans aren't the uh highest consumers per capita of cocaine in the world according to that world drug report in 2025 the two countries that consume the most cocaine per capita are australia and new zealand three percent of people aged 15 to 64 in Australia and New Zealand, used cocaine back in 2023, which is double the proportion in the Americas and triple the percentage in Europe.

19:36It's also hard to just crack down on one single person. It is kind of this super cycle at this point when you just have so many different markets and so many different operations pumping this out into the world. It's very hard to just find, you know, El Chapo back in the day. You could really meaningful dent the cartel kind of ecosystem. Now it's run like a conglomerate across multiple different states and multiple different producers. So definitely a tough battle if you are, you know, maybe this UN drug report saying like, hey, how do we maybe stop this from happening? It's very hard to do so these days.

20:08Well, getting Osaguera would be helpful. The problem is this dude is held up in a mountain compound in Mexico and getting him is not going to be easy. He's guarded by what is known as the special force of the high command. They have RPG heat sinking shoulder fired rocket launchers capable of piercing a tank. And if you want to go visit him, you get hooded and then you go on a six hour car trip through terrain that is completely blasted with landmines that only are the locations of which are only known by his inner circle. And then they rotate these phones every week. So, you know, this guy is has got a quite a security operation.

20:46My dog of the week is Dave in Busters because I fear its business model appears to be busted. It reported falling sales, net income, earnings per share, and revenue in the second quarter, pushing its stock down 11 % over the last week. At the core of its business issues is one of its core offerings, games. While food and beverage sales at the giant arcade were up, entertainment revenue from its games, sports, and merchandise fell 3%, a dangerous sign for an entertainment-first destination. New CEO Tarun Lal laid a lot of the blame at the feet of previous management. He says the company had been running too many promotions, confusing customers and hurting profitability.

21:25His predecessor also eliminated TV ads, leading to a sharp decline in brand awareness. Lal also called out an overemphasis on appetizers, which cannibalized sales of higher margin entrees. Finally, the last misstep was cutting new arcade games introductions by nearly 80%, which is a vibe killer for customers. Lyle says he's working to right those wrongs, reframing the headwinds not as a business model problem because who doesn't want decent food while playing whack-a-mole, but an operational discipline problem, which is easier to fix. Neil, he's working to create a dance dance revolution at a company that has gone through a rough couple of quarters.

22:03Yeah, it's down. Same-store sales are down for 10 straight quarters now. And same-store sales declined 3%. And you're like, yeah, that's really not good in the last quarter. But then when you look at the previous two quarters before that, it was 9.4 % and 8.3%. So a decline of 3%. You're like, oh, that's kind of okay. And it is pretty hilarious how this new CEO has come in and just kind of blasted the previous one for making the dumbest mistakes that a corporate CEO can make. He said they removed high-revenue menu items like, you know, entrees and pushed appetizers, sort of the opposite of what you would expect.

22:36So he's talking this big game and saying, this guy was so bad, I'm going to be so much better. and the thing, I guess the one thing he has going for him is the expectations couldn't be lower and the fact that you only declined, your sales only declined 3 % in a quarter is seen as good. Well, you know, there's only up to go from here. I love Dave & Buster's though. So I think it's just a great time. I mean, who doesn't want a little burger and just go sit and play a game? They're trying to invest in a new game. Because I can understand how that would make customers kind of meh on the whole experience.

23:05If you walk in and you see the same games that you saw, I don't know, 10 years ago, it's not new and it's not exciting. So they're trying to invest in this thing called the human crane experience, which is when you basically say no more. I know you they like hang you from the ceiling and you go down and you grab stuff like you are a human claw. So it's that kind of stuff that you need to get people out because it's just such a competitive entertainment landscape right now. All right. Before we move on, I do want to give a bonus stock of the week because this is pretty cool. And it's actually about the stock market.

23:34Stock market is doing extremely well. so well, in fact, that the S &P 500, the NASDAQ 100, the Dow Jones Industrial Average, and the Russell 2000 Index of small cap stocks all closed at record highs in unison yesterday for the first time since 2021. That's not fair. Now, you can't pick every single stock as your stock of the week. Fine, I'll allow it this week. All right, let's sprint to the finish this Friday with some final headlines. Yesterday's headlines in public discourse were once again dominated by the shock news that ABC late night host Jimmy Kimmel had been suspended by Disney over comments he made about the murder of Charlie Kirk.

24:09And top Trump administration officials made one thing clear, they weren't done yet. While in the UK, President Trump defended Kimmel's suspension and said that U.S. broadcasters should maybe get their licenses taken away by the FCC if they were too critical of him, a suggestion that would violate free speech protections under the First amendment. Meanwhile, FCC chair Brendan Carr, who's played a central role in the saga, told CNBC, quote, we're not done yet, saying Kimmel was appearing to directly mislead the American public about one of the most significant political events we've had in a long time.