Walmart's $120 Bundle Has Me Rethinking Costco

Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Tuesday, October 20th. In today's episode, we'll tell you why too many shares and the lack of share buybacks could put a stop to the AI rally. We'll also tell you about Apple's next big product event and why GM stock is dropping despite decent earnings. Then stick around to the end of the show to find out why Walmart's new $120 membership bundle has me thinking about canceling my Costco membership. We got a great show for you today. Let's go. Stocks bounced back to start the week with the S&P 500 gaining 0.4% and the NASDAQ jumped by 1.1%, clawing back some of the losses from last week. It was kind of a weird day though, because more than 300 stocks in the S&P actually fell yesterday. but a rebound in tech stocks pushed the index into the green. I still feel like the market isn't sure how to feel about the AI trade right now because the relief rally from yesterday is already losing some steam. One of the concerns about the AI trade is the level of debt that some of these companies like CoreWeave and Oracle are taking on. We've been talking about that for the last couple of weeks now. The other problem, though, might be the supply of stocks. Not many people are talking about this, but I found this very interesting from a breakdown in the Wall Street Journal. See, for the last 20 years or so, the total supply of US stocks have actually shrunk by about 1% a year because tech giants were constantly buying back their own shares from all the money they were making. But now these tech companies are spending every dollar they make plus more on AI data centers. So all the share buybacks have dried up. Meta is a good example of this. They bought back nearly $150 billion of their own stock between 2021 and Q3 of 2025. But since then, they've bought back zero dollars worth of their shares meanwhile you also have companies like Alphabet and Oracle that have issued tens of billions of dollars in new shares to raise money for AI investments not to mention you have expiring lockups from the SpaceX IPO plus upcoming mega IPOs from Anthropic and OpenAI they're about to flood the market with even more shares so the supply of shares are going up which could put a cap on the rally there was a great report from the asset manager GMO that found that for every 1% increase in the supply of shares, tends to knock about 4% off of the overall market over the next year. So it's funny, everyone keeps waiting for the AI bubble to pop because chip demand will slow down. There seems to be no signs of a slowdown in chip demand, but we could see a pullback in the market because there aren't enough buyers left to absorb the increased supply of stocks. Something to keep an eye on. Not many people are talking about that. Now, zooming out, there's also some macro headwinds to factor in. Oil prices are surging again brent crude is back above 110 a barrel which is the highest level since may so i think investors are really counting on a strong earnings season to come through and keep this rally alive we have a stacked week of earnings coming up tonight we are hearing from netflix and spacex spacex actually made a last minute announcement that they were reporting earnings today which is pretty unusual companies typically give weeks of notice but yeah we'll break down all the numbers on tomorrow's show with everything else happening so if you're new here you picked a great time to start listening to the podcast. Definitely get subscribed if you haven't already and tune in every day to stay in the loop. Let's run through some headlines, starting with Apple. Apple CEO John Ternus has been really busy since he took over as CEO two months ago from Tim Cook. Apple had their iPhone event back in September where they showed off their first foldable phone called the iPhone Duo. Then they had another event in New York last week where they showed off the home view device and now apple just announced they're having another product event on october 28th called pro intel all the rumors are pointing to the launch of apple's first ever touchscreen macbook pro you know for the apple fanboys like me this would be a pretty big deal because apple has said multiple times that they would never launch a touchscreen laptop and honestly i still kind of think that touchscreens on laptops aren't really needed but it looks like apple's finally going to launch one and I bet it's going to be very expensive. By the way, at this event, Apple is also expected to launch a new iPad mini and a refreshed iMac. So we'll cover the event next week when it goes down. By the way, Apple also reports earnings next week. So next week is going to be a big one for Apple. By the way, I should mention the iPhone Duo comes out this Friday, but unless you pre-ordered your phone right when it became available last week, you're probably not getting one until next year. If you try to order an iPhone Duo right now, the expected delivery date is january apple said that the pre-order demand was nothing short of extraordinary you know when apple showed off this phone a month ago i had a feeling the duo would be pretty popular but the phone being backordered is also a supply chain story apple can't build them fast enough because of supply constraints in fact apple actually announced this morning that they are bringing on a new u.s titanium supplier for the duo's frame so they're doing whatever they can and scrambling to make more duos. You know, I thought about getting the Duo myself, but if I have to wait till January to get it, I mean, at that point, you're already a quarter of the way to the launch of the Duo 2, so you might as well wait, you know? I wonder if this show has enough pull to get a review unit from Apple. I don't know if we're quite there yet, but if you're listening and you work at Apple or you know someone that works at Apple, let me know if you can hook it up. We'll do a special edition deep dive episode of the iPhone Duo if we're able to secure a review unit. let's shift gears and talk about general motors they reported earnings this morning and the car maker stock is getting crushed gm's earnings were pretty solid for the most part revenues grew about three percent to 50 billion dollars and earnings per share came in at three dollars and 70 cents both metrics beating wall street estimates not to mention their operating profit came in at 4.1 billion dollars that was up from the 3.4 billion dollars a year ago and free cash flow jumped 40 percent to 5.9 billion dollars but the company did cut their top end of their annual profit forecast which seems to be the reason the stock is down shares are down around four percent at the time of this recording what's crazy is that it wasn't even that big of a revision gm now expects to earn between 14.5 and 15.5 billion dollars this year compared with the previous forecast of 14 to 16 billion dollars so the company actually raised the low end of their forecast but investors seem to be more focused on the fact that it also capped the upside. I mean, the company is facing some challenges right now, one of them being affordability. See, over the last couple of years, GM has cut back on EVs and leaned more into the high margin pickup trucks and SUVs. You know, those trucks are expensive and they carry a higher profit margin, which is why GM's core profit jumped 22%, while the North America profit margins improved to 8.7% compared to the 6.2% a year ago. So GM is making more profit per car sold, but they're also selling fewer cars. Sales fell in the U.S. and China this quarter. GM's U.S. deliveries dropped by 5.5%. And the thing is, with gas prices continuing to go up, that could put more pressure on the sale of these giant SUVs and pickup trucks. Meanwhile, you have companies like Toyota and Hyundai. They're benefiting from the higher gas prices because they sell hybrid cars and multiple models start below $30,000. GM has fewer offerings in those categories. Essentially, GM has become a luxury truck company. CEO Mary Barra said that hybrids are coming, but she wouldn't say which models or when. Now, GM did announce a $20 billion stock buyback plan to get investors excited. This is a pretty massive buyback plan given the fact that GM's market cap is about $70 billion right now. So $20 billion is more than a quarter of the company. The company has been aggressively buying stock over the last few years. They bought $29.5 billion of their own stock since 2023 and $43 billion worth of their stock since 2015, cutting the share count by 45%. But you know, the share buyback news wasn't enough for investors to overlook some of the challenges facing the company. Now, GM stock is still up around 40% over the past 12 months, but it's basically flat for 2026. I think for the stock to start rallying again, GM is going to have to show that they can keep growing profits even with their sales under pressure, or they're going to have to hope that gas prices come down soon so people start buying more trucks and SUVs. Let's talk about some stocks making moves today. Shares of 3M are moving higher this morning after the company beat third quarter earnings expectations and announced a new data center deal with Amazon. 3M is the maker of things like Scotch tape and Post-it notes, they reported adjusted earnings of $2.50 a share on $6.6 billion in revenue, both metrics beating Wall Street estimates. The company also raised their full-year profit forecast for the second straight quarter. And a big reason for that has to do with their data center business. And that was the most interesting development to come from these earnings was the data center business and their expanded partnership with Amazon. Beyond just making post-it notes, 3M also makes fiber optic connectors, which helps move data between equipment inside data centers. 3M disclosed a deal where Amazon gets warrants to buy up to 3.2 million shares of 3M stock, but those shares vest only after Amazon spends $6 billion on 3M's fiber optic cables and other data center products. Another way to think about this is that 3M is basically paying Amazon in their stock so Amazon buys their products. I mean, this is just the latest example of creative dealmaking happening in the AI space. But look, the market seems to like it. Shares of 3M are up more than 4% this morning at the time of this recording. But if you zoom out, though, the stock has been pretty flat on the year coming into this earnings report. Now, on the flip side, GE Aerospace stock is down this morning, despite Despite the jet engine maker beating earnings expectations and raising their outlook, revenues came in at $13.3 billion and earnings came in at $2.25 a share, both comfortably beating estimates. In fact, GE also reported orders of $19 billion in the third quarter, which is up 49% from a year ago. And the cherry on top was that they raised their full year guidance for the eighth time since the start of 2024. So it seems to be a pretty solid earnings report, but despite that, the stock is down around 4% this morning at the time of this recording. The reason for the stock falling might be because of a slowdown the company expects in their maintenance business. The aerospace companies make most of their profits servicing engines and selling replacement parts. GE Aerospace expects commercial services to grow at a low double-digit rate next year compared with the 17% growth in this past quarter. That slowdown might have investors worried, and it could be the reason why GE Aerospace stock is down this morning. Let's wrap the show with a fun fact. Walmart just launched a new joint membership that combines Walmart Plus and Sam's Club Plus into a single bundle for $120 a year. See, normally Walmart Plus costs around $100 a year, and the top tier Sam's Club Plus membership costs $120 a year by itself. So if you bought both separately, you'd be paying nearly $220 a year. With this bundle, you're basically getting Walmart Plus thrown in for free. And this is a pretty solid membership. It gets you access to Sam's Club warehouses, free delivery from both stores, gas discounts, 2% Sam's Club cashback, and even a subscription to either Peacock or Paramount Plus. You know, every company these days is trying to get recurring revenue because Wall Street loves that. That's one reason why Costco stock trades at such a high premium. So I think this is a smart move by Walmart to boost membership numbers. I'm actually kind of surprised that Walmart didn't do this earlier. You know, Walmart has a pretty strategic advantage here. They're pretty much the only company that has thousands of actual stores. Plus, they have warehouse clubs and a massive e-commerce network. By the way, this is not a sponsored segment by Walmart, even though they probably should sponsor me at this point, given how much I talk about them. Now, I've been a subscriber to Walmart Plus for a couple of years now. I talk about it a lot on the show. It's a great service. We use it all the time. And now that I'll get access to Sam's Club warehouses for an extra $20 a year, I'm thinking about canceling my Costco membership at this point. In fact, there are some Sam's fans out there who swear that Sam's is better than Costco. I'm not sure if I'm ready to give up Costco pizza just yet, but let me know in the comments on where you guys stand. Should I drop Costco for Sam's? Is Sam's low-key actually better than Costco? If you're listening and you have experience with both, drop your thoughts in the comments on Spotify or 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