Market Roundup: Broadcom-Apple Extends, Meta's Compute Dilemma, And 0DTE Options Hit A Record
A run through the smaller stories that mattered this week.
Broadcom and Apple extend their silicon partnership through 2031. The two companies expanded their long-running custom chip relationship, with Broadcom set to develop and supply a range of custom ASIC products across multiple future generations of Apple devices. It’s a quiet but important signal: Apple continues to lean on Broadcom for specialized silicon rather than bringing every chip category in-house, and a six-year commitment gives Broadcom unusually long revenue visibility from one of its largest customers.
Retail is leveraging up on options, and the trade is getting shorter-dated. Zero-days-to-expiration (0DTE) options now account for a record 48% of total retail options volume — more than tripling over five years. Across the entire U.S. options market, 0DTE contracts hit a record 30% of volume in May, well above the 2022 peak of about 18%. The average options contract now expires in under three days. This is a structural shift in how retail speculates: shorter duration means more leverage per dollar risked, but also far less room for a trade to be wrong before it expires worthless.
JPMorgan’s take on Meta’s AI compute options. JPMorgan flagged that Meta could monetize excess AI compute by building out a cloud business — potentially generating around $20 billion in annual revenue per gigawatt of capacity rented out, with a meaningful lift to EPS. But the bank’s stated preference is for Meta to keep that capacity in-house, using it to drive inference demand across its more than 4 billion users and Family of Apps products. The read here matters for how investors should interpret Meta’s continued heavy capex: JPMorgan frames it as a sign the company sees enough internal demand to justify the spending, not a slowdown warning.
Deutsche Bank on U.S. debt as the biggest macro risk. The bank highlighted that federal deficits have held around 5-6% of GDP since 2022 despite an economy near full employment — unusual for a non-recessionary period. Debt held by the public is set to cross 100% of GDP this year, and interest payments now exceed defense spending, making interest the fastest-growing line item in the federal budget. The CBO’s own projections point to public debt reaching 120% of GDP by 2036. This is a slow-moving risk, but one that shapes the backdrop for every rate-sensitive asset class investors are trading right now.
AI labs are subsidizing the next generation of enterprise customers. OpenAI, Anthropic, and Google have reportedly been offering free compute credits worth hundreds of thousands of dollars to win startup customers early. The logic is straightforward customer-acquisition economics: subsidize usage today, get startups dependent on your platform, and convert that dependency into durable revenue once they scale and start paying full price.
Trump Accounts launched with strong early uptake. Robinhood CEO Vlad Tenev highlighted nearly 6 million sign-ups for the children’s investment accounts ahead of their official contribution start date, with millions of accounts already funded. SpaceX president Gwynne Shotwell and her husband separately pledged to gift SpaceX shares to more than 2 million of the accounts, a donation valued in the hundreds of millions of dollars at the time of the announcement. The accounts allow up to $5,000 in annual contributions from family, friends, and employers, on top of an initial federal contribution for eligible children.