The iPhone Duo Is Cheaper Than Expected (Here's Why)

Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zayd Admani and today is Thursday, September 10th. In today's episode, we'll break down the latest PPI inflation report. We'll also recap Apple's big hardware event yesterday and their brand new $2,000 foldable iPhone. Then stick around to the end of the show to find out why an AI researcher at Anthropic quit his job over fears of human extinction. We got a great show for you today. Let's go. Stocks had another rough day on Wednesday. The S&P 500 fell about half a percent while the Nasdaq lost 0.6%. Stocks have now dropped for three sessions in a row and the big story continues to be the oil market. Oil prices have now gone up for seven straight days as fighting in the Middle East picks up and things continue to get uglier. U.S. crude is now back above $100 a barrel while Brent crude is trading above $105 a barrel. Prices have now gone up 15% since the start of September and that's obviously bad news for inflation. And speaking of inflation, we just got the producer price index report this morning for the month of August. This report measures inflation at the wholesale level and it came in at 0.4% in August when compared to July, which was right in line with expectations. And if you look at core PPI, which strips out food and energy, that actually came in a little cooler than expected on a monthly basis, rising just 0.2%. But when you dig a little deeper in the report, energy is clearly becoming a problem again. Energy prices jumped 4.2% last month, including a 24% surge in diesel prices. And again, when energy prices go up, that has a cascading impact across the economy because it's an input cost on pretty much everything. And what worries me about this PPI report is that it's already backward looking. The numbers I just talked about are August numbers and oil is now back above $100 a barrel in September, so pressure from energy prices aren't going away. And remember, the Fed meets next week with a rate hike on the table. Now we are getting another piece of inflation data tomorrow morning with the CPI report, so we'll be talking about that on tomorrow's show. Also Oracle reports earnings today after the bell, so we'll cover that as well. So definitely get subscribed to the podcast if you haven't already and tune in every day to stay in the loop. Let's run through some headlines and we're talking Apple. Apple had their big iPhone event yesterday and we finally saw Apple's new foldable iPhone. Apple is calling this new phone the iPhone Duo and it starts at just $1,999. Now the reason that I say just is because earlier this week on here, I said I expected Apple to price the foldable phone closer to $2,500 because that's kind of what Apple does. Well, Apple kept the price under $2,000, which was a shock to a lot of people, but it does make the iPhone Duo comparable to other foldable phones. And I think the fact that Apple is doing this is a sign that they really want a hit new product, which they haven't had in a while. The Vision Pro was a massive flop and the iPhone Air didn't have great sales either, so Apple is pricing the foldable phone competitively to hopefully have a good launch. Now $2,000 might still be too much for the average consumer to spend on a phone, plus the foldable category is still pretty niche. I don't know if people want foldable phones. The expectation from Wall Street is still all over the place when it comes to sales. I've seen estimates as low as 5 to 8 million units sold this year and others estimating as high as 14 million units. Personally, I think the iPhone Duo looks pretty cool. Now I'm considering trading in my iPhone 17 and upgrading to it, but I want to try it out first at the Apple Store. Unfortunately, this phone won't go on sale until October 23rd, so I'm going to have to wait a couple of months before I try it. Now, the iPhone Duo wasn't the only thing announced yesterday. Apple also released an iPhone 18 Pro, which is pretty much like the iPhone 17 Pro, but with a slightly better camera and a higher price tag. This year's Pro starts at $1,200 and the Pro Max starts at $1,300, both phones getting a $100 increase compared to last year. But I mean, this price hike was expected because remember earlier this year, Apple raised the prices on their other products like the iPad and Max due to the surge in memory prices. In fact, I think some people thought the price hikes would be worse for the iPhone 18. Beyond the iPhone, Apple showed off some new AirPods, which look pretty great and start at a decent price, and they showed off a new Apple Watch. Surprisingly, Apple didn't spend too much time talking about AI or Apple intelligence. The new Siri is coming next week with the iOS 27 update, but I think the reason Apple didn't hype it up too much is because Apple has learned not to over-promise and under-deliver, which they've done for the last couple of years when it comes to AI. In fact, the most interesting AI thing that was announced at the event was on the Apple Watch. There's a new feature on this new Apple Watch called Siri Recap that listens to your conversations all day and then gives you a summary of what was said. Sounds pretty creepy, but I think it's Apple's answers to the AI wearables and pins that have become popular these days. Overall, as an Apple fanboy, I thought this was a pretty solid event, but as an Apple investor, well, I guess it wasn't as impressive. Apple stock barely moved yesterday, and it's only up 1% today at the time of this recording. Let's talk about some stocks making moves today. Shares of the drone maker AeroVironment are flying high this morning after the company reported earnings. Revenues were up 6% to $480 million, and earnings per share came in at $0.59, which was way higher than the $0.22 that Wall Street was expecting. And maybe the most encouraging number from this earnings report was the backlog, which jumped to $1.5 billion, up from the $1.2 billion just a few months ago. You know, what I find funny is that AeroVironment is a company that makes military drones and other unmanned defense technologies, and you would think a company like that would be having a great year given what's happening in the world right now. But no, coming into this week, the stock was down around 40% this year, partly because investors are worried that political gridlock in Washington could slow down defense spending. The company also lost a billion-dollar Space Force contract earlier this year. So expectations coming into this earnings report were low, and the company easily cleared them, and that's why the stock is up around 4% this morning at the time of this recording. Now, on the flip side, shares of American Eagle are getting hammered today after the clothing retailer reported earnings. At first glance, the numbers look pretty solid. Revenues grew 8% to $1.38 billion. That slightly beat estimates, and adjusted earnings came in at $0.79 per share, which absolutely crushed expectations. But yet the stock is still down 15% this morning for a few reasons. For one, comparable sales grew just 6%, which missed expectations. Wall Street wanted to see 7% growth. And right now, the growth for American Eagle is coming from their underwear and swimwear brand called Aerie. Revenues at Aerie jumped 25% last quarter. Now, the other big issue for American Eagle is that a huge chunk of their profits came from a $196 million tariff refund, which obviously isn't something the company can count on every quarter. In fact, the company saw their margins take a hit. Margins fell by 3.3 percentage points because American Eagle had to discount some items to clear inventory. So the headline numbers look great, but when you dig in, the company is somewhat struggling. I mean, at this point, maybe American Eagle should consider renaming the company to Aerie since that's driving all the company's growth. I wonder if the stock would pop if they just simply renamed the company. Let's wrap the show with a fun fact. An AI researcher at Anthropic quit his job because he's worried that technology could eventually spiral out of control and wipe out humanity. The researcher's name is Jacob Coxon. He previously worked at OpenAI, then he moved to Anthropic because of their reputation for taking AI safety more seriously. Well, now he thinks the lack of AI safety is an industry-wide problem. Coxon posted a long explanation on X on why he quit, and one of the things he's specifically worried about is self-improving AI. Basically, he's worried that AI will get so smart that it will start building smarter versions of themselves and then humans will eventually lose control, which is like the plot point of half of the 80s movies. But you know what makes this story even crazier is that another AI researcher who is currently working at Anthropic, Evan Hubinger, he agreed with Jacob. He posted on X that we really do earnestly believe AI could kill all humans, and he added that he personally puts the odds of extinction at greater than 10% within the next decade. I mean, this is just crazy. Imagine if any other industry would say stuff like that. Like, imagine if Boeing was out here saying that, yeah, our planes are great, but there's a 10% chance that our wings fall off. You'd probably never set foot in an airport again. Actually, that Boeing example is probably not the best one. But you get what I'm talking about, right? These AI companies tend to be so doom and gloom. And personally, I don't really buy it. I think these AI researchers say stuff like this to make themselves seem more important, and it could just be a marketing play too. Regardless, the timing here is pretty interesting because Anthropic is preparing for their massive IPO this year, which could value the company at over $2 trillion. So if they really do believe in human extinction, are they gonna put that in their S1 risk disclosures? I mean, it is kind of funny to imagine how some Wall Street analysts hearing all of this will have to add like a human extinction probability into their Anthropic valuation model. All this stuff is pretty crazy. Let me know what you guys think. I mean, does any of this stuff freak you out? Should I be more worried about this? You know, I wanna hear from normal non-tech AI-pilled people. So drop your thoughts on Spotify and YouTube. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. Thank you guys so much for listening, watching, and commenting. Shout out to Mike and V for all the work behind the scenes. And we'll see you guys back here tomorrow.