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🗞️ xAi vs. Apple and OpenAI
PLUS: Why is Eli Lilly rising?
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Market Performance
S&P 500: 6,465.94 ⬆️ 0.41%
Nasdaq: 21,544.27 ⬆️ 0.44%
Dow Jones: 45,418.07 ⬆️ 0.30%
Musk's xAI Takes Aim at Apple-OpenAI Alliance
Elon Musk's xAI sued Apple (AAPL) and OpenAI, accusing the tech giants of an "anticompetitive scheme" to maintain monopolies in smartphones and generative AI.
The lawsuit, filed in a Texas federal court, alleges that Apple deliberately deprioritizes competing AI chatbots, such as xAI's Grok, in App Store rankings while favoring OpenAI's ChatGPT through deep product integration.
The complaint claims Apple's partnership with OpenAI creates an unfair advantage, with xAI arguing that "in a desperate bid to protect its smartphone monopoly, Apple has joined forces with the company that most benefits from inhibiting competition."
OpenAI dismissed the lawsuit as part of Musk's "ongoing pattern of harassment," while Apple didn't immediately respond.
This legal battle represents the latest escalation between Musk and OpenAI CEO Sam Altman, stemming from Musk's departure from the AI company he co-founded in 2018.
The timing is notable as xAI seeks to compete directly with OpenAI in the rapidly growing AI chatbot market.
Apple stock is fundamentally strong and has a Ziggma score of 81. However, it ranks in the bottom-half percentile in terms of valuation.
Our Takeaway
While Musk's antitrust claims face an uphill legal battle, this lawsuit highlights growing tensions in the AI ecosystem as tech giants increasingly favor their own partnerships over open competition.
Big investors are buying this “unlisted” stock
When the founder who sold his last company to Zillow for $120M starts a new venture, people notice. That’s why the same VCs who backed Uber, Venmo, and eBay also invested in Pacaso.
Disrupting the real estate industry once again, Pacaso’s streamlined platform offers co-ownership of premier properties, revamping the $1.3T vacation home market.
And it works. By handing keys to 2,000+ happy homeowners, Pacaso has already made $110M+ in gross profits in their operating history.
Now, after 41% YoY gross profit growth last year alone, they recently reserved the Nasdaq ticker PCSO.
Paid advertisement for Pacaso’s Regulation A offering. Read the offering circular at invest.pacaso.com. Reserving a ticker symbol is not a guarantee that the company will go public. Listing on the NASDAQ is subject to approvals.
Market Overview
Markets closed higher on Tuesday as investors looked past President Trump's unprecedented move to fire Federal Reserve Governor Lisa Cook, focusing instead on the possibility of multiple rate cuts.
Long-term Treasury yields rose while short-term yields declined, steepening the yield curve on expectations that a politicized Fed might be less focused on inflation control.
Consumer confidence came in stronger than expected at 97.4, surpassing the consensus estimate of 96.5.
Trump's removal of Cook, citing "false statements" on mortgage agreements, marks uncharted territory for Fed independence.
Cook plans to challenge the action in court, with her lawyer stating Trump has "no authority" to remove a Fed governor without proper cause.
The move leaves the Fed with potentially five members if Cook's legal challenge fails.
Investors remained cautiously optimistic about September rate cuts, as hinted at by Fed Chair Powell at Jackson Hole, while awaiting Nvidia's critical earnings report on Wednesday, which could determine the direction of the AI trade.
Stock Moves Deciphered 📈
V.F. Corporation (VFC) ⬆️ 6.22%
Baird upgraded VFC from "Neutral" to "Outperform" with $20 price target, citing a better 2026 setup and Vans brand recovery potential after 36% year-to-date decline.
Keurig Dr Pepper (KDP) ⬇️ 6.93%
Keurig Dr Pepper continued to decline after announcing the $18 billion acquisition of JDE Peet's, with investors concerned about the high price, integration risks, and debt burden implications.
Ansys (ANSS) ⬇️ 4.69%
Ansys declined due to the S&P 500 removal following Synopsys' completed $35 billion acquisition, triggering index fund selling pressure and reduced institutional demand post-merger.
Headlines You Can't Miss
📈 Interactive Brokers Joins S&P 500: The online brokerage will replace Walgreens Boots Alliance in the index effective Thursday, sending shares up 1%.
⚙️ Durable Goods Orders Drop: July orders fell 2.8% versus the expected 4.1% decline, while ex-transportation orders rose 1.1%, beating the 0.3% forecast.
🛡️ Pentagon May Take Defense Stakes: Commerce Secretary Lutnick revealed military officials are "thinking about" the U.S. taking equity stakes in contractors like Lockheed Martin.
💰 EchoStar Spectrum Sale: AT&T will buy EchoStar's spectrum licenses for $23 billion, sending EchoStar shares soaring over 70%.
🏪 Cracker Barrel Logo Backlash: Shares rebounded 6% after seven straight days of losses following widespread criticism of the restaurant's new logo and rebranding.
📺 Paramount Skydance Retreats: The media giant shed 4% despite being up 21% for August, giving back some of its recent merger-driven gains.
Trending Stocks
Eli Lilly (LLY)
Eli Lilly surged after its experimental weight loss pill orforglipron achieved impressive results in late-stage trials.
Patients taking the highest dose lost 10.5% of their body weight over 72 weeks compared to just 2.2% for the placebo group.
The results were competitive with Novo Nordisk's comparable study, which showed a 10.4% weight loss, reinforcing Lilly's position in the obesity treatment market.
Advanced Micro Devices (AMD)
AMD gained following a Truist upgrade from “hold” to “buy”, with the analyst noting "true interest" from hyperscale customers in deploying AMD's AI chips at scale.
The upgrade comes as industry contacts report hyperscalers are now working with AMD as genuine partners rather than just using them as a "price check" against Nvidia.
Tesla (TSLA)
Tesla rebounded despite Baird maintaining its neutral rating and $320 price target, citing concerns about "estimates being too high" for the remainder of 2025.
The analyst noted Tesla's "de-emphasis of fundamentals" as investors focus on long-term robotaxi and Optimus opportunities, rather than the current weakness in its automotive business.
What’s Next?
Key Events to Watch 👇
Nvidia reports Q2 results on Wednesday after market close, the most anticipated earnings of the season.
Fed independence concerns following Cook's firing could impact September rate cut expectations
August jobs report, due Friday, may show continued labor market softening
Treasury yield curve steepening suggests changing rate expectations
Track upcoming news and earnings on your portfolio companies with Ziggma.
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