TSMC Posts Record Profit, Pepsi's Snack Business Bounces Back

Your daily market update in under 10 minutes. My name is Zayd Admani, and today is Thursday, April 16th. In today's episode, we'll tell you about a major milestone in the stock market. We'll also break down earnings from TSMC and PepsiCo. Then stick around to the end of the show to find out why a shoe company is pivoting to becoming an AI company. We got a great show for you today. Well, it's been a while since I've said this, but stocks are back at all-time highs, baby. The S&P 500 jumped 0.8% yesterday, closing above 7,000 for the first time ever. The Nasdaq did even better, up 1.6% yesterday, and it's currently riding an 11-day win streak. This was the first record close for the S&P since January and the first for the Nasdaq since October of last year. You know, personally, I'm just pumped to see that tech and software stocks are leading this rally. Names like Microsoft, Tesla, Intuit, and ServiceNow were all up more than 5% yesterday. So the vibe has totally shifted in the last couple of weeks. Not only are investors fully convinced the war with Iran is all but over, but they're also jumping back into tech and software stocks that have been beaten down for most of the year. Now, speaking of the war, I hate to be a Debbie Downer here, but the war still isn't over. The good news is the ceasefire between the U.S. and Iran continues to hold, and both sides are planning to resume peace talks in the coming days. But to me, the key thing to watch is the Strait of Hormuz. Traffic through the Strait of Hormuz is still at a near standstill. Oil prices are still elevated. And I just saw a report this morning that Europe could run out of jet fuel in six weeks, according to the International Energy Agency. So there's still some uncertainty around the war, especially when it comes to energy. But I guess it's not enough for investors to worry about anymore. You know, this whole situation reminds me of how the tariff saga played out last year when President Trump announced really high tariffs on Liberation Day. The markets freaked out, then Trump backtracks on some of the tariffs, and then the markets end up ripping higher. So, yeah, the bulls seem to be back in control of the market right as we enter into the thick of earnings season. Netflix is reporting earnings tonight after the bell. And then over the next couple of weeks, we'll be hearing from the big tech companies, which I'm really looking forward to. So, yeah, there's a lot to watch over the next few days and weeks. We're staying on top of everything. So it's a great time to get subscribed to the podcast and tune in every day. To stay in the loop. Let's run through some headlines, starting with TSMC, the Taiwan chipmaker reported earnings this morning, and man, they are absolutely crushing it. Revenues were up 41% to $35.9 billion dollars and profits jumped 58% to $18 billion dollars. And to me, the guidance was even more impressive. TSMC raised their 2026 revenue forecast, now expecting growth of more than 30% this year. And what stood out to me was they said their CapEx will come in at the high end of their 52 to 56 billion dollar range. In fact, they expect CapEx over the next three years to be significantly higher than the 100 billion dollars they spent in CapEx over the last three years. To me, the reason that's key is because that shows TSMC, which has historically been very conservative when it comes to CapEx and overbuilding, thinks the demand for AI chips won't be slowing down anytime soon. Remember, TSMC is the company that pretty much every company turns to physically make their chips. They manufacture chips for NVIDIA, Apple, AMD, you name it. So if they're telling you they need to spend even more money to build factories, that's a pretty good signal that AI is probably not in the bubble. In fact, TSMC said they're running into supply constraints, meaning they can't meet all the demand fast enough. Now, that's been good for business, though, because it gives TSMC pricing power. Investors have definitely noticed that TSMC stock is up more than 20% this year, outperforming their customers like NVIDIA and the rest of big tech. Let's shift gears and talk about PepsiCo. They reported Q1 earnings this morning and beat expectations across the board. Revenues came in at $19.4 billion of 8.5% year over year, and earnings per share came in at $1.61, also beating expectations. The most important number in this report was volume. PepsiCo's North American food business, which includes things like Doritos, Lays, Cheetos and Tostitos, reported volume growth of 2% last quarter. That doesn't sound like a lot, but it's actually the first time they've had volume growth in more than two years. And a big reason for that is price cuts. Now, for some context here, after the pandemic, PepsiCo kept jacking up the prices of their snacks and chips. At Walmart, Dorito prices jumped nearly 50% from 2021 to 2024. In fact, there were some bags of Doritos selling for over $7. So consumers had enough, they started buying cheaper private labeled chips or switching to competitors like Takis, and that was showing up on Pepsi's top line. PepsiCo's Frito-Lay division, which includes the chips that I just talked about, saw revenues drop in 2024, snapping a 53 quarter streak of revenue growth. Now, I don't know what took Pepsi so long, but they finally caved in February of this year and announced price cuts on Doritos, Lays, Cheetos and Tostitos. And based on this morning's numbers, it looks like that price cut strategy is working. Now, it's still not all good news for PepsiCo. Their beverage side of the business is still struggling. North American drink volumes were down 2.5% last quarter. And PepsiCo warned that the Iran war is making the rest of the year harder to predict because higher oil prices means higher packaging and ingredient costs. So there's still some uncertainty around the company, but PepsiCo stock is up around 2% this morning at the time of this recording. Let's talk about some stocks making moves today. Shares of HIMS are popping this morning after the health secretary, RFK Jr. announced the FDA is moving to loosen restrictions on peptide injections. Peptides are basically short chains of amino acids that can do a bunch of things in your body from regulating hormones to healing injuries. The most famous peptide right now is semi-glutide, which is the active ingredient in Ozempic. Now, the reason this matters for HIMS is because the FDA may allow certain peptides to be made by compounding pharmacies again, like HIMS, potentially reversing a Biden-era decision that said there were too many safety risks for them to be widely manufactured and sold. And HIMS has been getting ready for this moment. The company bought a peptide manufacturing facility in California last year. They've already signaled they want to expand into this market if the rules loosen up. As a result, HIMS stock is up around 4% this morning at the time of this recording. Now, on the flip side, Live Nation stock took a hit yesterday after a federal jury ruled the company illegally monopolized the live events industry. Live Nation owns Ticketmaster, and that combo has been under scrutiny for years now. There was a coalition of 33 states and Washington, D.C. that took Live Nation to trial, and in the trial, the jury found that Live Nation used its dominance in ticketing in ways that hurt competition and made fans pay more. According to the verdict, concertgoers overpaid by about $1.72 per ticket. I don't know about you guys, but I feel like that number should be a lot higher. What's going viral right now is that internal emails came out during the trial where Live Nation's own ticketing directors bragged about their high fees and joked that the company was, quote, robbing them blind. So that's not a good look. I can see why the jury ruled in that way. Now, the judge will ultimately decide what the penalty should be for Live Nation and what kind of remedy makes sense. That could mean fines for the company or changes to how the business operates or even forcing Live Nation to sell Ticketmaster. We'll see what happens. Live Nation says they plan to appeal the decision, but shares of Live Nation did drop 6% yesterday but are bouncing back a bit this morning. Let's wrap the show with a fun fact. The former shoe company, Allbirds, is pivoting to become an AI company. This sounds like a Mad Libs headline, but no, this is legit. Yesterday, Allbirds announced that they're changing the company's name to NewBird AI and they're gonna buy AI chips and rent out computing power. Basically trying to become the next CoreWeave or Nebius. And Wall Street ate that up. The stock jumped nearly 600% yesterday from this news. What I find funny is that Allbirds said they raised $50 million for this AI pivot, which is like nothing when it comes to AI. Like that probably gets you what half an NVIDIA chip these days. So yeah, I'm not sure how this pivot is gonna work out. Pivot to AI movement reminds me of when struggling companies used to pivot to becoming a blockchain or crypto company a few years ago. There was a company called Long Island Ice Tea that changed its name to Long Blockchain in 2017. The stock initially ripped after that announcement and then the company got delisted within a year. And then there was also Kodak, the famous photo company that launched their own cryptocurrency in 2018. Again, that pivot didn't work either and Kodak filed for bankruptcy shortly after. So yeah, I'm not sure how this is gonna work out for Allbirds. Remember the company actually sold their shoe business last month for just $39 million. So they don't even sell shoes anymore. I guess this is their last ditch effort to stay relevant. But hey, if this somehow miraculously works, then maybe Nike should consider doing the same thing because their stock is down bad. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like five extra seconds, consider giving us a five-star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. If you are listening on Spotify, don't forget to vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement. It really does help us out and it helps other people find the show. Thank you guys so much for listening, watching, and commenting. Shout out to Mike and Connor for all the work behind the scenes. And we'll see you guys back here tomorrow.