• Vested Finance
  • Blog
  • US Stocks
  • Vested Shorts: Apple tops Microsoft, OpenAI’s lobbying efforts, Affirm rises 11%, Stellantis and Bitcoin miners adapt to global changes

Vested Shorts: Apple tops Microsoft, OpenAI’s lobbying efforts, Affirm rises 11%, Stellantis and Bitcoin miners adapt to global changes

by Parth Parikh
June 15, 2024
4 min read
Vested Shorts: Apple tops Microsoft, OpenAI’s lobbying efforts, Affirm rises 11%, Stellantis and Bitcoin miners adapt to global changes

In today’s edition

  • Apple regains top spot
  • OpenAI’s strategic lobbying
  • Affirm’s Apple Pay advantage
  • Stellantis adjusts to tariffs
  • Southeast Asia – A new bitcoin mining hub

Market Snapshot

This week, the S&P 500 index retreated from record highs, closing up 1.6% at 5,431.60 despite a dip in consumer sentiment. This marked its seventh weekly gain in the last eight weeks, buoyed by cooling inflation and renewed hopes for a Federal Reserve rate cut.

Conversely, the Dow Jones Industrial Average fell by 0.5% to 38,589.16, reflecting concerns over persistent high inflation and interest rates impacting consumer spending and economic growth.

The Nasdaq Composite, however, continued its upward streak, hitting a new all-time high for the fifth consecutive day and ending the week up 3.2% at 17,688.88. Strong performances from tech giants like Alphabet and Nvidia drove these gains, underscoring the tech sector’s robustness amid broader economic uncertainties. Overall, the markets closed the week mixed, with ongoing challenges balanced by strong tech sector growth.

Stock market closing data for the week of Jun 10th to Jun 14th, 2024

News Summaries

Apple Inc. (Explore: AAPL) has recently reclaimed its position as the world’s most valuable company, surpassing Microsoft (Explore: MSFT) with a market capitalization of $3.285 trillion, fueled by investor optimism around its AI initiatives. This resurgence follows Apple’s significant three-day stock rally, which added approximately $323.9 billion to its market cap, marking its largest increase since August 2020. The rally was spurred by a promising AI presentation at Apple’s Worldwide Developers Conference, which increased expectations for the upcoming iPhone models and a potential AI-driven upgrade cycle. Despite these gains, Apple’s year-to-date performance, with an 11% increase, still trails the Nasdaq 100’s 16% rise, highlighting ongoing concerns about its growth relative to other tech giants more directly linked to AI advancements.

OpenAI is significantly growing its global affairs team, increasing from three to 35 members in 2023, with plans to reach 50 by the end of 2024. This proactive build-up aims to engage with policymakers in key regions like the EU, UK, and the US, where AI legislation is most advanced. Unlike larger tech companies that heavily invest in lobbying, OpenAI’s strategy is focused on tailored influence, addressing AI legislation to ensure it promotes innovation while safeguarding public interests. This measured approach reflects a need to navigate complex regulatory environments effectively, ensuring that AI regulations remain adaptable to future scientific advancements.

Affirm Holdings, Inc. (Explore: AFRM), a prominent buy now, pay later (BNPL) provider, announced its integration with Apple Pay, set to launch later this year in the US. This partnership allows Apple Pay users to select Affirm’s payment options during online or in-app checkouts on iPhone and iPad, enhancing user experience by offering additional payment flexibility and maintaining Affirm’s commitment to transparency and no hidden fees. Despite this significant collaboration, Affirm does not anticipate a material impact on its revenue or gross merchandise volume for the fiscal year 2025. Following the announcement, Affirm’s stock saw a substantial rise, gaining over 11%, although it remains down by about 36% year-to-date. Analysts view this partnership positively, noting Affirm’s robust brand and advanced underwriting technology as competitive advantages that Apple would struggle to replicate independently.

Stellantis NV (Explore: STLA) is contemplating moving the production of Leapmotor models to Europe from China due to new EU tariffs on electric vehicle imports, which vary based on carmaker cooperation with an ongoing probe into state subsidies. The EU’s decision to impose additional levies, which could see manufacturers like BYD Co. paying an extra 17.4% and SAIC Motor Corp. as much as 38.1%, has accelerated Stellantis’s plans to localize production to mitigate these costs. The company had previously indicated that its Tychy, Poland facility might be repurposed for manufacturing Leapmotor vehicles, aligning with broader strategic adjustments in response to escalating global trade tensions and the new EU tariff measures set to be officially implemented in November.

From the World of Crypto

Following China’s stringent crackdown on cryptocurrency-related activities in 2021, Bitcoin mining operations have shifted significantly, with Southeast Asia emerging as a new hub. This region’s attraction is attributed to the availability of competitive power prices, skilled labor, and existing infrastructure suitable for such operations. The crackdown led miners like Peter Lim, owner of Bityou, to relocate their operations from China to places like Tanjung Manis, Sarawak, where they utilize abandoned industrial spaces to set up over 1,000 mining machines under expansive sheet-metal roofs. Despite this shift, Southeast Asian miners face challenges such as inconsistent regulatory environments and a lack of the ability to scale operations due to local conditions favoring smaller setups.

Manufacturing of mining rigs has also followed the shift to Southeast Asia. The imposition of a 25% tariff by the US on electronic goods from China in 2018 spurred manufacturers to move their operations to avoid these levies. Major mining rig producers, previously concentrated in Chinese cities like Shenzhen and Guangzhou, now have facilities in Malaysia, Thailand, Indonesia, Taiwan, and even the US. This decentralization aims to meet the growing regional demand and navigate the changing geopolitical landscape affecting trade and manufacturing.

The transition to Southeast Asia, however, is fraught with challenges, particularly regarding energy use. In countries like Malaysia, Indonesia, and Laos, Bitcoin mining operations often lead to significant energy theft, resulting in substantial financial losses and frequent police raids. For instance, Malaysia reported losses amounting to approximately 550 million ringgit ($130 million) due to electricity theft by Bitcoin miners as of early 2022. Despite these issues, Southeast Asia remains poised for growth in the cryptocurrency mining and manufacturing sectors, driven by the need for miners to find advantageous setups in terms of power costs and local competition.

Leave a Comment

Your email address will not be published. Required fields are marked *

Alternative Investments made easy