What’s Behind Apple’s Rocky 2025 Start?

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Hello and happy Sunday! Today, we’re diving into the biggest headlines shaping tech, markets, and the future of wealth. Here’s what’s on tap:

• Billionaire heirs take center stage: For the first time, inherited fortunes outpace self-made wealth, highlighting a massive wealth transfer underway.

• Meta’s $65 billion AI bet: Zuckerberg doubles down on AI infrastructure, outspending even the biggest tech titans.

• Apple’s rocky 2025 kickoff: Slumping iPhone sales, AI missteps, and valuation concerns weigh heavily on the tech giant.

• S&P 500 hits record highs: A few standout stocks in tech and AI lift the index to an all-time milestone.

• Netflix tops 300M subscribers: A banner quarter fuels growth, but another price hike could test user loyalty.

The Rise of Billionaire Heirs

For the first time since UBS began tracking billionaire wealth in 2015, inherited fortunes outpaced self-made wealth. In 2023, 53 heirs inherited a staggering $150.8 billion 🫨, surpassing the $140.7 billion amassed by 84 new self-made billionaires. UBS attributes this shift to a "great wealth handover," as wealth built by billionaire entrepreneurs over the past three decades transitions to the next generation.

Oxfam’s report Takers, Not Makers sheds more light, estimating that 60% of billionaire wealth comes from inheritance, monopolies, or cronyism. Inheritance alone accounts for 36%. While billionaire wealth grew by $2 trillion in 2024, creating 204 new billionaires, Oxfam warns of widening inequality, with 3.6 billion people still living below the poverty line.

Meta’s AI Ambitions Come With a $65B Price Tag

Meta CEO Mark Zuckerberg announced plans for a colossal data center to fuel the company’s AI ambitions, projecting capital expenditures of $60–65 billion this year. 🏗️ 🚧 That’s a 70% jump from already high analyst estimates and a 40% increase over 2024’s spending.

For perspective, Meta’s planned spending exceeds the combined capex of Meta, Amazon, Alphabet, and Microsoft last quarter. It’s also larger than the market capitalization of 343 companies in the S&P 500—or 69% of the index.

Apple’s Rough Start to 2025

While most Big Tech companies have carried their momentum into the new year, Apple is moving in the opposite direction.📉 Nvidia, for example, is up over 8% despite Friday’s slight dip, but Apple has seen its shares tumble nearly 11%, marking a rough start to 2025.

Several factors seem to be weighing on the stock. iPhone sales, particularly in China, aren’t what they used to be, creating headwinds for its core business. On top of that, Apple is struggling to impress in the AI space. Its Apple Intelligence platform has underwhelmed users and left the company lagging behind competitors like Nvidia and Microsoft. Lastly, questions around Apple’s valuation persist. With a P/E ratio of 29x compared to the market average of 22x, investors are wondering if the premium is still justified. 🤔 

Netflix and AI Standouts Propel S&P to Record Levels

The S&P 500 reached a milestone Friday, hitting 6,100 in intraday trading shortly after noon—a new record for the blue-chip index. 🎉 💸 This comes just weeks after its rally in early December narrowly missed crossing that threshold.

Interestingly, today’s market activity paints a mixed picture. While the index reached new heights, only three of its 11 sectors—technology, communications services, and industrials—are in the green. The majority of individual stocks in the S&P 500 are actually declining, though the gains from a handful of big players have carried the index to its new peak.

Netflix is leading the charge, buoyed by strong earnings, while AI infrastructure-related companies like Monolithic Power Systems and Oracle have also delivered notable contributions. Together, these high-performing stocks have managed to outweigh the broader softness in the market and push the index to its historic high.

Netflix’s Final Subscriber Count Breaks Records, Tops 300M

Netflix has officially delivered its final batch of subscriber numbers, and it's going out with a bang. The streaming giant added 18.9 million subscribers in Q4 2024, marking its best quarter ever and pushing its total to over 300 million paid memberships. This milestone was fueled by strategic moves like live sports streaming, including a Tyson vs. Paul boxing match (a $150M spectacle despite technical hiccups) and a record-breaking Christmas Day boosted by NFL games. Drama fans added to the momentum with the Boxing Day release of Squid Game season two.

Beyond subscribers, Netflix posted impressive financials, pulling in $10.25 billion in revenue and $1.9 billion in net profit for the quarter. The stock jumped more than 13% as investors digested the news.

The decision to stop reporting subscriber numbers may ease pressure on Netflix to match its own sky-high growth rates, which competitors like Disney, Warner Bros., and Paramount have struggled to rival. However, the company has announced yet another price hike—raising its standard plan to $18 🏷️ ⬆️ —which could test just how much value users feel they’re getting for their dollar.