Meta Is Suddenly the Hottest AI Stock

Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zayd Admani and today is Tuesday, September 22nd. In today's episode, we'll break down Monday's massive market rally and the weird warning sign that hasn't happened since 1999. We'll also tell you why Meta's new Muse AI app is exploding in popularity and why Amazon is trying to block it. Then stick around to the end of the show to find out how a super El Nino could impact everything from food prices to global shipping. We've got a great show for you today. Let's go. Markets kicked off the week with a massive rally on Monday. The S&P 500 jumped 1.5 percent and the Nasdaq surged 2.3 percent to a record close. It was the first record close for the Nasdaq since June 2nd and the S&P is also less than 1 percent away from its own record high. There were two factors that really drove the rally on Monday. The first one was oil prices pulling back. Oil prices dropped about 5 percent with Brent crude now dropping under $100 a barrel. So it seems like investors are becoming more optimistic about a potential peace deal between the US and Iran. The other factor yesterday was that the AI hype came roaring back. The semiconductor index jumped 4.3 percent, its biggest one day rally since early August. Meta was one of the big winners yesterday. Their stock jumped 11 percent after their new Muse AI agent app became the number one app on the Apple App Store. AMD was also a big winner. Their stock jumped 10 percent and their market cap crossed $1 trillion for the first time ever. So apparently all it took was oil prices falling a bit and one viral Meta AI app for investors to stop stressing about the macro factors and FOMO right back into the AI trade. Now I should point out, there is something really weird happening underneath the surface. Despite the S&P jumping more than 1 percent yesterday and sitting less than 1 percent from record highs, 30 stocks in the S&P 500 hit new 52-week lows on Monday while only 7 stocks hit 52-week highs. That is very unusual. In fact, according to Sentiment Trader, the last time the S&P rose at least 1 percent, sat within 1 percent of a record high, and had more new lows than new highs was December of 1999. Just a quick history lesson, that was a few months before the dot-com bubble peaked. And before 1999, the last time it happened was July of 1929. Now before you start panicking because I just mentioned 1999 and 1929 in the same sentence, there is some important context here. Yesterday 8 of the 11 S&P sectors still finished higher on Monday, so this wasn't a situation where just 5 or 6 AI stocks went up and everything else went down. And if you zoom out and look at the equal weight S&P, it's up around 10 percent this year compared to roughly 13 percent for the regular S&P. So there's a gap, but it's not a massive one. I think this is a good reminder that an index sitting near record highs doesn't mean that every stock is doing well in that index. There's still plenty of companies stuck in their own personal bear markets, likely from higher oil prices and the macro factors that we talked about, but the AI winners right now keep dragging the overall index higher. And honestly, that's one of the big advantages of owning an index. You don't have to pick which individual companies are going to be the winners. Now looking ahead, the next big thing the markets will be watching this week is Thursday's meeting between President Trump and Chinese President Xi Jinping. The two leaders are meeting in Washington DC and the main topics will be trade, of course, and probably AI as well. So we'll see what comes out of that. We'll stay on top of it for you guys along with everything else happening in the market. 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 Meta. Meta is getting a lot of love from Wall Street right now, thanks to their new AI app called Muse. Now I talked about Muse on this show a couple of weeks ago when it first launched, and the app has exploded in popularity. Muse is the number one free app on both the Apple App Store and Google Play Store, sitting ahead of ChatGPT and other AI apps. In fact, according to CensorTower, the Muse app has been downloaded 2.5 million times in the last 13 days. I've used this app since the day it launched, and I can see why it's gaining popularity right now. By the way, I'm not getting paid to say this by Zuck, but if he wants to throw me a bag, my DMs are open. But what Muse can do is it connects to your email, calendar, Facebook, Instagram accounts and do stuff like book appointments or fill out forms or find items for you on Facebook Marketplace and a lot more. I've seen people use it to save money on their power bill or find cheaper car insurance. And you can even connect it to your public app so Muse can trade for you as well. And by the way, you can do all these things on ChatGPT and Claude too, but it's just faster and easier on Muse, and I think that's why this app has taken off. Muse is the first AI app that my wife has liked using. So yeah, you can see why the market is super excited here. MetaStock is up almost 20% since Muse launched back on September 8th. It seems like Zuck might finally have a hit new AI product that justifies his $100 billion cap expense. But you know, as the popularity of Muse has exploded, Muse is now running into a problem. Their AI agents are now being blocked by certain websites. Like yesterday, Amazon came out and blocked Muse from accessing its website. You know, when you ask Muse for a product recommendation, it was going on Amazon using its built-in browser and finding stuff for you. Amazon is now blocking that access and other AI bots. And you can see why Amazon is doing this. They don't want AI agents shopping for people instead of actual humans because it could impact their ads business. You know, AI agents don't click on ads, humans click on ads. And like I said, other websites are also starting to block AI agents as well. So there's an interesting dynamic playing out here. If AI agents are how people interact with the internet in the future, well, then what are these websites going to do? There's some companies right now that are jumping on the trend. Amazon might be trying to keep Muse out, but Shopify is opening the door. Shopify announced yesterday that Muse will integrate directly with ShopPay and allow the AI agent to shop across Shopify merchants and actually complete purchases on your behalf. For now, the market's like that. Shopify stock closed up more than 7% on Monday and it's up another 7% this morning at the time of this recording. You know, I was kind of bearish on the concept of personal AI agents, but like I said, after using Muse, I can kind of see the vision and I'm really curious to see if this is the start of Meta's next big business or is it just a flash in the pan right now? There are rumors that ChatGPT is launching their own version of personal AI agents and like an app similar to Muse. So we'll see what that looks like because, you know, one of the problems that Meta will continue to have is trust. You know, there are probably millions of people that don't want to give Meta access to their emails, calendar, passwords, and personal accounts. So again, really curious to see how this all plays out and we should learn more about Meta's AI plans this week. The MetaConnect conference starts tomorrow, Zuck is giving the opening keynote, and rumors are that Meta will be announcing more functionality for Muse and showing off new glasses and maybe announcing a new AI model as well. So yeah, I'm really excited for that and we'll recap anything notable later this week. Let's talk about some stocks making moves today. Shares of the Swiss shoemaker On Holdings are up more than 6% this morning after the company laid out some pretty ambitious long-term targets at their investor day this morning. You know, On has become a household name at this point. They're backed by the tennis legend Roger Federer and best known for their running shoes. Well, now the company is trying to expand into other categories like tennis, golf, apparel, and soccer. The company just signed superstar Kylian Mbappe away from Nike to a 10-year deal, and they even hired Thierry Henry as a director of football. So soccer is a big part of the company's growth. They expect sales to reach at least 5.6 billion Swiss francs by 2029, while maintaining gross margins of at least 65%. The company also announced their first-ever share buyback up to $1 billion. So yeah, On is making some pretty aggressive moves and taking advantage of Nike stumbling right now. Now, I should mention On stock is also in a slump. Shares are down about 40% over the past year and trading below their 2021 IPO price as of Monday. But I like what I'm hearing from the company, and the stock could be a potential buy low opportunity. Moving on, let's talk about a couple losers this morning. Shares of LabCorp and Quest Diagnostics are both down more than 5% this morning after getting some bad news from Medicare. Both these companies run laboratories that do things like blood tests and diagnostic testing. Well, the Center for Medicare and Medicaid Services found that Medicare has been paying about 16% more for lab services than private insurers, and the agency now plans to bring most of Medicare reimbursement rates closer to private sector rates. So if Medicare starts paying less, that's going to impact the revenue and margins for these lab companies, and that's why shares are down around 5% this morning. On a more personal note, I feel like every time I go get my blood work done at one of these places, I'm getting random bills that aren't covered by my insurance, but I'm going to save the health insurance rent for another day. Let's wrap the show with a fun fact. One of the biggest risks to the global economy over the next few months might be the weather. We're currently experiencing what meteorologists are calling a super El Nino, and this one is shaping up to be the strongest El Nino in at least 70 years. Now, a quick explainer here, El Nino happens when a huge section of the Pacific Ocean gets unusually warm, and that impacts weather patterns around the world. Some places will get drought while others will get floods and extreme storms, and this is already becoming an economic problem all over the world. For example, a drought in Panama has forced the Panama Canal to limit ship traffic, and now companies are paying more at auction to jump the line. The price that jumped the line went from $800,000 up to $2.5 million now, so that's just one problem. Agriculture, though, might be an even bigger problem. El Nino is threatening crops all over the world, ranging from rice and sugar and corn and coffee and cocoa, and economists warn that the combination of a smaller harvest and higher food prices could push inflation even higher. So, you know, we spend all this time talking about the Fed and AI and tariffs and wars moving markets. Meanwhile, the temperature of the Pacific Ocean could end up being one of the biggest economic stories of the next six months. And that California is so worried that they've already declared a state of emergency to prepare for El Nino. Now, there is one silver lining from all of this. El Nino tends to mean less hurricanes in the Atlantic. And as someone who lives in Houston and has been through my fair share of hurricanes, I was happy to see that hurricane season this year was pretty quiet. And that was a huge break for gas prices, too, because no hurricanes this summer meant that all the oil refineries in the Gulf Coast stayed in operation at a time when global fuel supplies are already tight. You know, one thing that I was thinking about doing was using Publix AI agents to identify some investment opportunities to hedge against a worst case El Nino situation. I'll play around with it this week. But yeah, this could be a big story over the next few months. 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.