Interactive Brokers | June 25th, 2024

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GOOD MORNING

Here's everything you need to know this week: Amazon has unveiled Metis, a new AI chatbot designed to rival OpenAI’s ChatGPT. Leveraging Amazon’s Olympus large language model, Metis offers intelligent, conversational responses and AI-agent capabilities, potentially intensifying competition with major players like Microsoft, Google, and OpenAI.

Chipotle Mexican Grill announced a 50-for-1 stock split following its all-time high closing price of $3,427.61. This move aims to democratize stock ownership and enhance market liquidity, reflecting Chipotle’s robust financial performance and strategic efforts to attract more retail investors.

Shares of Trump Media surged over 25% ahead of the upcoming presidential debate, highlighting the stock’s dependency on Trump’s public presence and media coverage. This resurgence underscores the meme-like behavior of DJT shares, where media attention can significantly impact stock performance.

Let’s dive into more detail below.

AI

Amazon Unveils Metis AI Chatbot to Rival ChatGPT

Metis leverages Amazon’s Olympus large language model for real-time information and automation, enhancing user experiences

BREAKING NEWS
Amazon has unveiled its new AI chatbot, Metis, which is designed to compete with OpenAI’s ChatGPT.

This innovative chatbot, managed by Amazon’s AGI team and led by Rohit Prasad and Vishal Sharma, leverages Amazon’s Olympus large language model to provide intelligent, conversational responses and AI-agent capabilities.

The launch of Metis could significantly impact the AI assistant market, intensifying competition with major players like Microsoft, Google, and OpenAI.

WHAT HAPPENED
Amazon’s new AI chatbot, Metis, will launch in September, coinciding with a major Alexa event. Amazon’s advanced AI is designed to provide intelligent, conversational responses and AI-agent capabilities for various tasks, aiming to compete directly with OpenAI’s ChatGPT. Metis features retrieval-augmented generation, allowing it to fetch information beyond its original training data, deliver current responses such as real-time stock prices, and support text and image-based answers. Its integration with Amazon’s ecosystem means it can automate tasks such as creating travel itineraries, controlling smart home devices, and booking flights, showcasing Amazon’s strategic push to enhance user experiences and drive greater engagement with its services.

In the short term, Metis could attract significant attention and investment interest, while in the long term, it could foster innovation and intensify competitive dynamics in the AI sector. Overall, Amazon’s foray into this space underscores the growing importance of AI in consumer technology, potentially altering market dynamics and investor perceptions.

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FAST CASUAL

Chipotle Announces 50-for-1 Stock Split Following Record High

Initially announced in March, the split provides 49 additional shares for each one held, enhancing market liquidity

BREAKING NEWS
After reaching an all-time high closing price of $3,427.61 on June 18, Chipotle Mexican Grill announced a 50-for-1 stock split, similar to a recent strategy employed by Nvidia. Shareholders will receive 49 additional shares for each one they own, with the first day of split-adjusted trading set for Wednesday. While this move aims to democratize stock ownership and potentially boost investor interest, its impact on stabilizing the stock remains to be seen, given its recent mixed performance.

WHAT HAPPENED
Chipotle’s 50-for-1 stock split, approved by shareholders earlier this month, follows an initial announcement in March. This move is significant as it aims to make Chipotle’s high-priced shares more accessible to a broader range of investors, including employees. The decision is underpinned by Chipotle’s robust financial performance, with shares up more than 57% over the past year and surpassing $2,000 in April 2023, despite a general pullback in discretionary spending. In the short term, the stock split could boost investor interest and trading volume, while in the long term, it might promote greater employee ownership and loyalty. This strategy highlights Chipotle’s efforts to democratize its equity, potentially enhancing market liquidity and reinforcing its strong market position.

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POLITICS

Trump Media DJT Surges 25% Ahead of Presidential Debate

The stock’s resurgence underscores its dependency on Trump’s public presence and media coverage

BREAKING NEWS
Shares of Trump Media surged over 25% on Monday, rebounding from recent lows to trade around $34.50 per share. This company, primarily owned by former President Donald Trump, has experienced significant volatility, particularly around its main product, Truth Social. This resurgence in stock price underscores the meme-like behavior of DJT shares, where media attention—positive or negative—can significantly impact stock performance.

WHAT HAPPENED
Trump Media’s stock price reversed its downward trend, trading around $34.50 per share after plummeting nearly 50% over the past few weeks. The stock had previously dropped to as low as $22 from a high of $79.38. The rebound may be attributed to renewed media visibility for former President Trump, who remains central to the company and its flagship product, Truth Social. In the short term, this media-driven spike in stock price may attract speculative trading, while long-term outcomes will depend on Trump’s continued engagement with the platform and the company’s ability to expand its user base.

Overall, the recent volatility in Trump Media’s stock highlights its dependency on Trump’s public presence and suggests that any media coverage, whether positive or negative, could drive significant fluctuations. If Trump’s media presence remains strong, DJT shares may increase. Conversely, if his presence diminishes, the stock could suffer, akin to what was observed with Gamestop following the fluctuation in media attention around Roaring Kitty.

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1. Apple Charged Under New EU Competition Law

The European Union has accused Apple of violating its Digital Markets Act (DMA), which aims to prevent anti-competitive practices by tech giants. Apple’s App Store policies, which allegedly restrict app developers from steering users to alternative payment systems, are at the center of this charge. If found guilty, Apple could face substantial fines up to $38 billion.

2. Nvidia Stock Falls Amid AI Sector Selloff

Nvidia shares have entered correction territory, dropping over 6% on Monday as investors rotate out of AI stocks. This decline follows Nvidia’s record highs earlier this year, driven by the company’s leadership in AI chip technology. Market analysts are closely watching Nvidia’s performance as a barometer for the broader AI sector.

3. Prosus Writes Off 9.6% Stake in Byju’s

Prosus, a major investor in Byju’s, has written off its 9.6% stake in the Indian edtech company, signaling a significant loss of confidence. Byju’s, once valued at billions of dollars, has faced increasing scrutiny and challenges, leading to this drastic decision by one of its key backers.

4. Elon Musk Faces New Legal Battle Over Tesla Pay Plan

Elon Musk is embroiled in a legal battle to secure his $56 billion pay package approved by Tesla shareholders. The case will determine whether Musk’s compensation plan, which is tied to aggressive performance targets, complies with corporate governance standards. This comes after Musk won an earlier dispute over the same pay plan.

5. Nvidia-Backed Synthesia Launches Multilingual Video Presentation Feature

AI startup Synthesia, backed by Nvidia, has introduced new features that enable users to create multilingual video presentations using only a phone or webcam. This innovation aims to democratize video content creation and expand the capabilities of AI-driven avatars in digital communication.

6. ByteDance Partners with Broadcom for Advanced AI Chip Development

ByteDance, the parent company of TikTok, is collaborating with Broadcom to develop an advanced AI processor. This partnership aims to secure a reliable supply of AI chips for ByteDance’s growing technological needs, reflecting the increasing importance of custom hardware in the AI industry.

7. Target Collaborates with Shopify to Enhance Online Marketplace

Target has partnered with Shopify to expand its third-party marketplace. This collaboration allows Shopify merchants to sell their products directly to Target’s customer base, enhancing Target’s e-commerce platform and providing new opportunities for small businesses to reach a larger audience.

8. Novo Nordisk to Build $4.1 Billion Facility in North Carolina

Novo Nordisk announced plans to construct a $4.1 billion facility in Clayton, North Carolina, to increase production of popular medications like Wegovy and Ozempic. The new plant will handle filling and packaging of syringes and injection pens, supporting the company’s growing market demand.

9. China Urges EU to Reconsider EV Tariffs

China is pressuring the European Union to lift preliminary tariffs on Chinese electric vehicles (EVs) by July 4, following an agreement to hold new trade talks. The tariffs are seen as a significant barrier for Chinese EV manufacturers aiming to expand in the European market.

10. McDonald’s, Starbucks Engage in Price Wars Amid Consumer Fatigue

Major retail chains like McDonald’s and Starbucks are lowering prices in an effort to attract consumers who have become resistant to rising costs. This trend highlights the growing consumer fatigue with inflation and the strategies businesses are adopting to maintain customer loyalty.

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Today’s insights are courtesy of Interactive Brokers. According to Investopedia, Interactive Brokers has more fractional shares available across more markets than anyone else.

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