Apple Commits $30B to Broadcom in Chip Deal, Blue Origin Raises $10B

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Wednesday, July 8th. In today's episode, we'll tell you why oil prices are moving higher again. We'll also tell you why Apple is spending more than $30 billion with Broadcom, and why Jeff Bezos' Blue Origin is raising money for the first time ever. Then stick around to the end of the show to find out why Netflix, Disney and YouTube all want the World Cup. We got a great show for you today.
Let's go.
Stocks pulled back on Tuesday with the S&P 500 losing about half a percent, while the NASDAQ fell 1.2%. The chip rally that we saw on Monday pretty much gave back all its gains on Tuesday. The SOX Semiconductor ETF fell more than 5% yesterday after Samsung reported earnings, which were incredible, by the way, but apparently not good enough for the market. We actually did a full breakdown of those earnings on yesterday's show, so go check that out if you missed it. By the way, speaking of Samsung, which is a South Korean company, the South Korean stock market had been one of the hottest stock markets in the world. The South Korean Kospi index, which is like their version of the S&P 500, was up over 100% this year at one point, but it's now in a bear market, which means it's down 20% from its peak. So the sell off that we're seeing in chip stocks over the last few weeks has been happening all over the world. Now, there seems to be more pain headed for the market today. I'm seeing red across the board in pre-market trading. And this time, it seems to be because of the Iran war, which is making headlines again. The US military launched a new round of strikes inside Iran and revoked their waiver that allowed Iran to sell their oil to the global market in retaliation to Iran launching strikes on three commercial ships in the Strait of Hormuz earlier this week. President Trump was currently in Turkey right now for a NATO summit. He was asked about the ceasefire. And he says that he thinks that it's over with Iran. So his latest comments and attacks are sending oil prices higher. Brent crude is up more than 6% this morning and trading around $79 a barrel. The timing of this is pretty funny because yesterday I was just talking about how the market was concerned about an oil glut and oversupply and how Saudi Aramco was cutting prices and now we have missiles flying again and oil prices are jumping. So this continues to be a fragile situation and the higher oil prices and renewed conflicts need to be dragging down the market today, along with questions about the AI trade. We'll continue to stay on top of all this. So if you're new here, make sure you're subscribed to the podcast and tuning in every day to stay in the loop.
Let's run through some headlines starting with Apple. On Monday's show, I talked about how Broadcom had locked in Apple as a custom chip customer through 2031 Well, now we just got some more details about that deal. Over the next five years, Apple said they will spend north of $30 billion with Broadcom to produce more than 15 billion chips. And all those chips will be made here in the US. This deal also includes a $1.5 billion expansion of Broadcom's manufacturing facility in Fort Collins, Colorado. This investment by Apple is part of their $600 billion pledge that they made last year to invest here in the US. Remember last year, President Trump threatened Apple with 25% tariffs on iPhones unless Apple moved iPhone manufacturing to the US. That freaked out Apple. Tim Cook went to the White House, presented Donald Trump with a gold trophy, and as part of that, he pledged $600 billion investment here in the US. And instead of trying to move the iPhone assembly to the US., which probably would have taken a decade plus and cost a fortune, Apple is moving the chips production, which I think is actually a smart idea. So this investment could be good tariff insurance, and I'm sure it'll curry favors with the current administration as well. In fact, Apple name dropped President Trump in the press release about this investment. So yeah, Tim Cook keeps making deals. Remember, he's stepping down as CEO on September 1st, but he's still gonna be sticking around as executive chairman of the board, and I imagine a big part of his role will be continuing to maintain his political relationships in the US and also China. As for Broadcom, like I said on Monday, they continue to be winners here. We now have deals with Google, OpenAI, and now Apple to make custom chips.