Judge orders Trump admin. to fund SNAP, Robinhood stock jumps

Market Domination host Josh Lipton and Yahoo Finance senior reporter Brooke DiPalma track several of the day's top trending stock tickers, including Walmart (WMT) as a federal judge orders the Trump administration to fund SNAP benefits (Supplemental Nutrition Assistance Program) amid the US government shutdown, a Bernstein analyst note looking into the value of OpenAI (OPAI.PVT) through its partnership with Microsoft (MSFT), and Robinhood Markets (HOOD) stock gains ahead of its earnings next week.

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Video Transcript

00:06 Speaker A

Now time for some of today's trending tickers. going to start off here with Walmart. That stock under pressure but off earlier lows. It's after a judge ruled the Trump administration must fund Snap benefits during the government shutdown. Millions of Americans are set to lose those benefits starting Saturday, as of now unclear if the ruling will be enacted in time. And this one uh and Brooke Di Palma, of course here with me to talk about all this. Uh, Brooke, so investors have been watching this because we had these reports about uh companies including big names, Walmart were preparing for, I guess a dip in November sales if the benefits had lapsed because of the shutdown.

00:40 Brooke DiPalma

Yes, there's there's a few different factors going into play right now. We did see Walmart shares recover down from about 2%. Now they're down, you can see on your screen, nearly 1%. So Walmart, about 25% of Snap funds are used at Walmart. Now, other stores that we're looking that potentially could get impacted here were dollar stores like Dollar General, Dollar Tree. Now we're seeing a bit of a reprieve here based upon this fact that it seems potentially like these Snap benefits could continue even beyond despite the government shutdown. Then on top of all of this, there were these rumors flying around social media today that on November 1st, which is effectively Saturday, uh Walmarts would shut down across the country because they were scared of potential looting. And this was really a social media video that really took off today. Can confirm though that Walmarts will not be shutting down based upon any fear that there could be looting. But definitely a crazy rumor that certainly took off and that definitely impacted Walmart as well.

01:23 Speaker A

Yeah, beyond Walmart, packaged food companies, just reading, Kraft, Heinz, J.M. Smucker, General Mills, Tyson Foods, could also take a sales hit November of a couple of percentage points. That's per a a Reuters report.

01:32 Speaker A

All right, turning now to Microsoft and OpenAI. It's a new note from uh Bernstein digs into one number that caught analysts by surprise. It's a $4.1 billion hit on its OpenAI investment and based on that stat, Bernstein says it implies the AI giant had uh a more than $12 billion quarterly loss, Brooke.

01:47 Brooke DiPalma

Yeah, what we heard on the call last night was essentially the executives trying to sort of take a step back and say that, you know, not too fast, too quick. We did have CFO Amy Hood say that the Q1 number was not impacted at all by the new agreement that was put in place. We do know that Microsoft took about a 27.5% stake in OpenAI. And the big question here that has investors really swirling around this is these companies that are essentially not profitable yet and we yet we have this money pouring into OpenAI and what exactly this will come up to be. And this is something that we've been talking about, this bubble risk. Does this actually come to fruition? When will we see returns? And now earlier this week, we were reporting around Open AI potentially having a, what was it, a trillion dollar valuation. And and so it's pretty significant to see when exactly will Microsoft see a return from this and now that potential of that major loss during the quarter.

02:24 Speaker A

Yeah, it's interesting because I mean Sam Altman has weighed in on these heavy losses in the past. Um, and basically said, listen, OpenAI, we're going to invest, invest, invest because the opportunity is that great. And according to Sam, if you got to burn billions,

02:32 Brooke DiPalma

That's what he said. Yeah, he said, whether we burn 500 million a year, 5 billion a year, or 50 billion a year, I don't care. I genuinely don't. It's going to be expensive, but it's going to be worth it. And that's what investors seem to be banking on as well.

02:42 Speaker A

All right, lastly, shares of Robinhood jumping. The company reports next week. Investors are feeling optimistic. It's likely getting a lift thanks to Coinbase. Uh what's interesting about this one, Robinhood, earnings on deck, that stock is a rocket ship. It's up nearly 300% this year. 300%. Even still, most analysts heading into this print, fans Brooke, nearly 70% who cover that name still say, you know what, it's still a buy right here. Look at that short.

03:04 Brooke DiPalma

It's pretty fascinating to see the run-up of this company, especially as it gets into just so many different markets here. I mean, credit cards, they have gold, I think, they have crypto. And what we're seeing here is from the CFRA analyst, they did say that uh their exposure here that they think uh Robin Hood's democra- uh democratic- democratize, rather, finance for all is really winning over this environment. They have been slowly leading up this momentum ever since that meme trade really has taken off. And now really there they say here on the CFRA note that their mission is firing on all cylinders and represents a fundamental challenge to the traditional barriers that have historically excluded everyday people. Of course, retail investors really looking to get on trends here.

03:34 Speaker A

Just this week, by the way, analysts at Compass uh point raised their target. they go they went to 16, uh citing revenue growth from equity transaction transactions, prediction markets and crypto fees. They're all they are all over it.

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