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In today’s edition,
- OpenAI’s new model
- Apple’s US investment
- PayPal’s consumer pivot
- Ark Invest’s balancing risk & growth strategy
Market Snapshot
U.S. stocks ended the week mixed, with the Nasdaq plunging 3.80% to 18,847.28, its worst since September, and the S&P 500 down 1.20% at 5,954.50. In contrast, the Dow Jones gained 0.80%, closing at 43,840.91. Growth stocks, particularly AI-driven names, faced pressure as Nvidia (NVDA) fell 8.8% post-earnings. Trade tensions added uncertainty, with Trump reaffirming new tariff plans by March 4.
The core PCE inflation gauge rose 0.3% in January, with annual inflation at 2.6%, while consumer confidence dropped sharply, signaling economic caution. GDP growth held steady at 2.3% for Q4, driven by 4.2% consumer spending growth. However, jobless claims jumped to 242,000, their highest since October.
With inflation, trade risks, and a cooling AI rally in focus, markets remain cautious heading into March.
Stock market closing data for the week of Feb 24th to Feb 28th, 2025
News Summaries
OpenAI has launched GPT-4.5, its latest AI model. It has reduced hallucination rates from 60% in GPT-4 to 37% while keeping broad knowledge. The company is still investing in large-scale models, even with rising competition from smaller, cost-effective options like DeepSeek’s R1. OpenAI’s focus on scaling comes at a high cost—GPT-4.5 is compute-heavy and expensive to operate. This may lead the company to limit developer access through its API. The AI race is heating up, with Anthropic and xAI also releasing new models. Meanwhile, OpenAI is in talks to raise $40 billion at a $300 billion valuation. CEO Sam Altman mentioned a GPU shortage, highlighting the challenges of maintaining such models. Although GPT-4.5 isn’t designed for reasoning benchmarks, OpenAI suggests it has a unique form of intelligence. The real challenge is balancing innovation with accessibility. Bigger models offer more power, but their costs and infrastructure needs may force OpenAI to rethink its long-term strategy.
Apple has committed $500 billion to U.S. investments over the next four years. This includes a 250,000-square-foot AI server factory in Texas and 20,000 new R&D jobs. The investment covers various sectors, from U.S. supplier partnerships, like Corning for iPhone glass, to Apple TV+ productions. This move builds on Apple’s earlier $350 billion commitment from 2018. It also follows CEO Tim Cook’s meeting with Donald Trump, as Apple manages tariff risks on products made in China. Apple is doubling its Advanced Manufacturing Fund to $10 billion. Part of this funding will support TSMC’s Arizona plant, where it is now mass-producing its own chips. Additionally, Apple plans to launch a manufacturing academy in Michigan. This academy will train small and mid-sized firms in process optimization. While this investment strengthens Apple’s presence in the U.S., it also shows strategic risk management amid political shifts and supply chain challenges. The key point? Apple isn’t just reacting to policy changes. It’s actively shaping its supply chain to lead in AI and semiconductors.
PayPal is competing in a tough digital payments market by forming new partnerships and improving its checkout strategy. It aims for 8-10% growth in payment volume by 2027, up from 6% in 2024. Its focus on merchants, like partnerships with Verifone and JPMorgan, is enhancing its omnichannel reach. However, the main challenge is in consumer payments, where competitors like Apple, Klarna, and Affirm are making strides. Venmo, an important asset, is expected to generate $2 billion in revenue by 2027, thanks to new features like JetBlue payments. PayPal’s Fastlane checkout and tailored incentives are designed to increase user engagement. Despite a 21% rise in stock over the past year, investors remain cautious. Shares fell 16% in 2024 due to worries about maintaining consumer loyalty. CEO Alex Chriss points to PayPal’s two-sided ecosystem, but execution is vital. PayPal has tried many strategies before, and the market needs clear proof that it can turn transactions into lasting engagement.
From the World of Crypto
Ark Invest just made some big moves—buying $8.7 million worth of Coinbase (COIN) shares while offloading almost the same amount of its own spot Bitcoin ETF (ARKB).
The firm picked up 41,032 shares of COIN for its Next Generation Internet ETF (ARKW)—its first purchase since October—while selling 98,060 shares of ARKB, worth $8.6 million. This isn’t unusual for Ark, which keeps individual holdings under 10% to maintain balance.
Right now, COIN sits at 5.5% of ARKW, worth $94.4 million, while ARKB is the fund’s largest holding at 10.7%, valued at $182.2 million.
This all happened against a rough week for crypto.
Coinbase stock is down 17% this year, closing at $212.49 on Tuesday, though it’s seeing a small 2% pre-market bump. Meanwhile, Bitcoin took a 10% dive in two days, and altcoins got hit even harder—Ether dropped 18%, XRP 19%, and Solana 22% before stabilizing.
The pullback is tied to uncertainty around Trump’s tariff plans, Bybit’s massive $1.5 billion hack, and fading memecoin hype.
So what’s the bigger picture? Despite the slump, crypto is still up 50% year-over-year, and Ark clearly still sees Coinbase as a long-term bet. This kind of tactical shuffling is part of the game—taking gains, rebalancing risks, and staying ahead of the next big move.
Ark’s playbook isn’t about chasing every spike or dip—it’s about making sure they’re in the right place when the next wave comes.
Community Insights: What Investors Are Discussing
The Vested Community is actively engaging in discussions on stock strategies, portfolio allocation, and investment trends. Here’s what’s trending:
🏦 Berkshire Hathaway: Buy, Hold, or Pass?
Investor Karan started a quick poll asking if members bought Berkshire Hathaway (BRK) after the latest earnings call. Responses varied between buying, planning to buy, or staying out.
💰 Coinbase vs. ETFs: Portfolio Allocation
Investor Parag_Zenith_467 revealed that 10% of his portfolio is allocated to Coinbase (COIN) instead of ETFs, showcasing a preference for direct exposure over diversified crypto-related funds.
Takeaway: Investors are debating long-term holding strategies, direct stock investments vs. ETFs, and the potential impact of buybacks and crypto exposure on portfolios. Have an opinion on these investment plays? Drop a comment and let the community know!
