Happy Monday! It’s Sept. 9, 2024. We have three great stories to wrap up the past few weeks in markets, business, and the economy for you and your family.

Here are the highlights:

• Apple’s Ai-Phone: The latest hardware from the tech giant
• Berkshire at $1T: A trillion-dollar birthday present for Warren Buffett
• Chipmaker Chaos: As Nvidia and AMD do a victory lap, Intel is flailing

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Apple Infuses AI Features Into New iPhone 16

Another year, another iPhone that looks a little different than the last one. On Monday, Apple announced its brand new slate of hardware products, including new Apple Watches, new AirPods, and the all-new iPhone 16. The four new handsets — the iPhone 16, 16 Plus, 16 Pro, 16 Pro Max — range in prices from $799 to $1199.

• What’s the same? It wouldn’t be much of an upgrade without a bigger screen and better battery life — things that Apple claim are the best they’ve ever been.
• What’s different? Earlier this year, Apple teased a suite of new AI products called Apple Intelligence (AI for short) which would lend a hand to its next-generation devices. Apple Intelligence will replace Siri with a more conversational and capable assistant — and other features littered across iOS will allow users to be even more productive.
• Why does it matter for Apple? Apple Intelligence ****has been boosted by Apple’s partnership with ChatGPT creator OpenAI, which could help it sell more phones. In recent years, handset sales have stagnated — which has many analysts hoping 2024 could be the time to upgrade. For Apple, which generated more than half of its over $300B in revenue last year from iPhone sales, urgency to upgrade could be ground-breaking.
• But there’s a problem… Apple has faced delays with its new Apple Intelligence features, which can help generate text, edit photos, and carry out more complicated tasks. Furthermore, the new AI features are only available in the U.S. and not all of them will be available at launch for the iPhone 16.

Why does it matter for EarlyBird families?

If you’re in the market for a new phone, it’s probably not because it has ChatGPT on it. And in this case, it’s for the best. With Apple’s delays throwing a jag in the smooth rollout of its new AI-infused phone, AI + iPhone might not be the match in heaven that the company was hoping for. Otherwise, if you’re in the majority — that is, people who replace old phones when their battery goes bad or upgrade every few years — you might find the new iPhone to be an appealing buy when it becomes available on Sept. 20.

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Berkshire Hits $1 Trillion Valuation

Berkshire Hathaway CEO and Founder Warren Buffett just got a very special birthday present. On Aug. 30, while celebrating his 94th birthday, Buffett’s Berkshire broke through a $1 trillion valuation. It’s the first non-tech U.S-based firm to eclipse that milestone.

• What’s Berkshire? Most people know Warren Buffett, the Oracle of Omaha, for his investing prowess and dip-buying. Less know his firm, Berkshire Hathaway — which invests in outside companies like Apple, American Express, and Bank of America. It engages in this investing behavior to realize profits for its investors. However, it also operates as a conglomerate which wholly owns dozens of businesses you probably know or frequent — GEICO, Dairy Queen, and Fruit of the Loom to name a few.
• What $1 trillion means for Berkshire: Unlike tech firms which fetch a premium valuation, Berkshire trades at a relative discount to major indexes like the S&P 500 and Nasdaq-100, which makes the milestone all the more impressive. It also comes as the company’s cash position nears $200 billion, making it one of the largest holders of U.S. treasuries and cash equivalents outside of the government itself.

Why does it matter for EarlyBird families?

Berkshire’s concentration of clothing, transportation, and insurance companies has become so valuable that it now represents a significant portion of America’s markets and economy — even if you didn’t know it. Thankfully, by investing in a diversified portfolio, you’ve had exposure to Berkshire and its portfolio companies all this time. A few dollars of every deposit you make in your EarlyBird account has been invested in Berkshire, alongside hundreds of other high-quality companies. Up 25% year-to-date, it’s another reminder of the strength and capability of the market — you can put money in and let it handle the rest.

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Chipmaker Chaos: Intel’s Billion-Dollar Problem

While NVIDIA and AMD are celebrating bumper sales from their data center business amid a boom in AI demand, once-mighty chipmaker Intel is ailing — with the company’s stock down more than 60% this year. At its $81 billion valuation, Intel is the cheapest it has been since 2010. But why?

• What’s wrong with Intel? In 2019, 2020, and 2021, Intel averaged about $20 billion in net income each year. However, the company’s big profits have been erased. In 2022, it made less than half of what it made in its boom years — and in 2023, it made just under $2 billion. So far, 2024 has been even worse for the company, with net losses of $381 million in Q1 and $1.7 billion in Q2.
• Why are they losing so much? Intel has embarked on an effort to try and become a world-class chipmaker again, seeking to compete with the likes of TSMC and Samsung, both foreign businesses. As a result, the company is spending tens of billions to build domestic chip manufacturing plants. And at the same time, the company is facing declines in revenue as one-time customers go with the competition instead.
• What are they doing? Intel has already announced layoffs — 15% of the company — and committed to cut as much as 20% of its capital expenditures this year. In simple terms, that means the company is significantly paling back its spending, even on its big reshoring effort.
• What comes next? Intel has employed the services of investment banks to help evaluate what it should do next. It might involve divestment of businesses, cancelling projects, or further cost cutting. In any case, it’s a bad outcome regardless.

Why does it matter for EarlyBird families?

Only a few years ago, Intel was one of the market’s high-flying stocks — and a pandemic-era success story. Today, that’s a different story. For investors in Intel, the losses could be staggering. This is why many Americans benefit from diversified investing, rather than stock-picking. Just think: if you had bought the S&P 500 at the start of the year, you’d be up over 15%. If you bought Intel? Well, with losses like these? You’d need an adult drink, that’s for sure.

What else is up?

• YouTube to age-limit weight and health videos: The video giant, a popular destination for young people, will stop recommending videos about fitness, body weights, or physical features due to “harmful” effects. Read more in The Guardian.
• Layoffs hit five-month high: U.S. layoffs reached a five-month high as a byproduct of downsizing in the tech, education, and entertainment industry. The higher layoff numbers came in spite of a decline in unemployment in last week’s report from the Bureau of Labor Statistics. Read more in Forbes.
• Ticketmaster in hot water… again: First, it was the Swifties. Then, it was the Bey-Hive and Springsteen Stans. And now, it’s the Oasis fans. Ticketmaster is in hot water over allegations that the company used dynamic pricing in the presale for the popular British act, which is hitting the road for the first time in over a decade. Read more in CNN.