WEBVTT - Meta's $45 Billion Dilemma and Its Future in AI

0:00:01.360 --> 0:00:03.640
<v Speaker 1>This episode is brought to you by P and C Bank.

0:00:04.000 --> 0:00:06.760
<v Speaker 1>A lot of people think podcasts about work are boring,

0:00:07.000 --> 0:00:10.840
<v Speaker 1>and sure they definitely can be, but understanding a professionals

0:00:10.920 --> 0:00:14.160
<v Speaker 1>routine shows us how they achieve their success little by little,

0:00:14.560 --> 0:00:18.200
<v Speaker 1>day after day. It's like banking with P and C Bank.

0:00:18.680 --> 0:00:21.480
<v Speaker 1>It might seem boring to safe plan and make calculated

0:00:21.480 --> 0:00:24.599
<v Speaker 1>decisions with your bank, but keeping your money boring is

0:00:24.640 --> 0:00:27.960
<v Speaker 1>what helps you live or more happily fulfilled life. P

0:00:28.080 --> 0:00:32.879
<v Speaker 1>and C Bank Brilliantly Boring since eighteen sixty five. Brilliantly

0:00:32.960 --> 0:00:35.600
<v Speaker 1>Boring since eighteen sixty five is a service mark of

0:00:35.600 --> 0:00:38.840
<v Speaker 1>the PNC Financial Service Group, Inc. P and C Bank

0:00:39.280 --> 0:00:42.000
<v Speaker 1>National Association Member FDIC.

0:00:44.600 --> 0:00:45.279
<v Speaker 2>Erness What's Up?

0:00:45.360 --> 0:00:47.839
<v Speaker 1>You ever walk into a small business and everything just

0:00:47.960 --> 0:00:51.159
<v Speaker 1>works like the checkout is fast, the receipts are digital,

0:00:51.680 --> 0:00:54.640
<v Speaker 1>tipping is a breeze, and you're out the door before

0:00:54.680 --> 0:00:58.840
<v Speaker 1>the line even builds. Odds are they're using Square? We

0:00:58.960 --> 0:01:01.520
<v Speaker 1>love supporting business that run on Square because it just

0:01:01.560 --> 0:01:04.800
<v Speaker 1>feels seamless. Whether it's a local coffee shop, a vendor

0:01:04.840 --> 0:01:07.080
<v Speaker 1>at a pop up market, or even one of our

0:01:07.160 --> 0:01:10.800
<v Speaker 1>merch partners. Square makes it easy for them to take payments,

0:01:11.040 --> 0:01:14.760
<v Speaker 1>manage inventory, and run their business with confidence, all from

0:01:14.840 --> 0:01:18.240
<v Speaker 1>one simple system. If you're a business owner or even

0:01:18.360 --> 0:01:21.880
<v Speaker 1>just thinking about launching something soon, Square is hands down

0:01:21.880 --> 0:01:24.240
<v Speaker 1>one of the best tools out there to help you start,

0:01:24.600 --> 0:01:28.200
<v Speaker 1>run and grow. It's not just about payments, it's about

0:01:28.200 --> 0:01:30.640
<v Speaker 1>giving you time back so you can focus on.

0:01:30.560 --> 0:01:32.000
<v Speaker 2>What matters most ready.

0:01:32.040 --> 0:01:35.399
<v Speaker 1>To see how Square can transform your business, visit Square

0:01:35.480 --> 0:01:40.160
<v Speaker 1>dot com backslash, go backslash eyl to learn more. That's

0:01:40.200 --> 0:01:45.640
<v Speaker 1>Square dot com backslash, go backslash eyl. Don't wait, don't hesitate.

0:01:45.760 --> 0:01:48.160
<v Speaker 1>Let's Square handle the back end so you can keep

0:01:48.160 --> 0:01:49.400
<v Speaker 1>pushing your vision forward.

0:01:51.680 --> 0:01:56.320
<v Speaker 3>So that has lost forty five billion dollars on their

0:01:56.360 --> 0:02:02.720
<v Speaker 3>Metaverse division and the stock dropped after their earnings report

0:02:02.800 --> 0:02:07.840
<v Speaker 3>last Thursday. I believe when their guidance so we didn't

0:02:07.840 --> 0:02:13.519
<v Speaker 3>really meet the expectation. Even though their revenue am expectations.

0:02:13.520 --> 0:02:14.120
<v Speaker 2>They're incredible.

0:02:14.120 --> 0:02:19.080
<v Speaker 3>Their revenue outpaced expectations, profits were doubles, but their guidance

0:02:20.120 --> 0:02:23.120
<v Speaker 3>fell short and as a result, it dropped I think

0:02:23.160 --> 0:02:27.440
<v Speaker 3>like fifteen percent. On Friday, they lost two hundred billion

0:02:27.440 --> 0:02:31.120
<v Speaker 3>in market cup. So, okay, Ian, what's your take on this.

0:02:31.919 --> 0:02:33.200
<v Speaker 3>I'm gonna come in listen.

0:02:33.240 --> 0:02:33.440
<v Speaker 2>I know.

0:02:33.520 --> 0:02:36.639
<v Speaker 4>Normally I'm on the other side of his argument. This

0:02:36.680 --> 0:02:41.920
<v Speaker 4>is unfair like for them to have outperformed this well.

0:02:42.840 --> 0:02:47.760
<v Speaker 4>Zuckerberg is still an incredible shape. All offices are on fire.

0:02:48.800 --> 0:02:53.639
<v Speaker 4>Whatsappens doing incredibly well? Instagram is different. Put Sports Illustrated

0:02:53.639 --> 0:02:55.400
<v Speaker 4>out of business. You got all the bikini girls on

0:02:55.440 --> 0:02:59.800
<v Speaker 4>Instagram for free. They are the ultimate competitor, and they

0:03:00.040 --> 0:03:03.480
<v Speaker 4>dropped fifteen percent because they're guiding lower for the next quarter.

0:03:04.600 --> 0:03:07.400
<v Speaker 2>Meanwhile, Dusk and Master was.

0:03:07.440 --> 0:03:10.440
<v Speaker 4>Saying, hey, Tesla may be the new n Ride, and

0:03:10.520 --> 0:03:14.480
<v Speaker 4>they popped after earnings and then pop this morning after

0:03:14.520 --> 0:03:17.400
<v Speaker 4>they get the China deal done, like it's one of

0:03:17.400 --> 0:03:18.680
<v Speaker 4>those in it and I get it. I was talking

0:03:18.680 --> 0:03:20.760
<v Speaker 4>to everyone a red Pandla in stock club about it.

0:03:21.480 --> 0:03:24.360
<v Speaker 4>There was more upside on the Tesla trade at one

0:03:24.520 --> 0:03:27.000
<v Speaker 4>thirty eight one thirty nine than there is the Meta trade.

0:03:28.200 --> 0:03:29.919
<v Speaker 4>But for Teslas, I mean, for a matter to the

0:03:30.000 --> 0:03:32.280
<v Speaker 4>gap down fifteen percent, which I don't remember them ever

0:03:32.280 --> 0:03:36.080
<v Speaker 4>gapping down that much, and earnings, I don't know what

0:03:36.120 --> 0:03:39.400
<v Speaker 4>the analysts were thinking. Like normally I'm banging the table

0:03:39.440 --> 0:03:40.640
<v Speaker 4>on the other side of this argument.

0:03:40.640 --> 0:03:42.760
<v Speaker 2>But when it dropped. I'm like, the fucking happened?

0:03:42.800 --> 0:03:46.240
<v Speaker 4>Like the numbers were great, this appear he was honest,

0:03:46.280 --> 0:03:47.760
<v Speaker 4>and what's gonna happen next quarter?

0:03:48.080 --> 0:03:50.000
<v Speaker 2>And as a result, they fall fifteen percent?

0:03:50.680 --> 0:03:52.880
<v Speaker 1>But there's a keyer point. There's a key a point,

0:03:53.040 --> 0:03:54.800
<v Speaker 1>So like I think I text you, I think I

0:03:54.880 --> 0:03:57.600
<v Speaker 1>text you after Tesla and I'm like, yeah, makes sense

0:03:57.600 --> 0:03:59.760
<v Speaker 1>of it because we got to explain the why, and

0:03:59.800 --> 0:04:02.080
<v Speaker 1>so I had to dig really deep in the research

0:04:02.120 --> 0:04:04.200
<v Speaker 1>to figure out, like, all right, fifteen percent is crazy

0:04:04.280 --> 0:04:07.640
<v Speaker 1>and meta. Over the past few years, we've seen historic drops, right,

0:04:07.720 --> 0:04:09.160
<v Speaker 1>like they had the large decline in.

0:04:09.160 --> 0:04:11.480
<v Speaker 2>History, but they've also had the largest appreciation history.

0:04:11.720 --> 0:04:15.000
<v Speaker 1>This fifteen percent, this is when the honesty part of

0:04:15.080 --> 0:04:17.880
<v Speaker 1>being a CEO and a leader actually backfired for him.

0:04:18.000 --> 0:04:21.360
<v Speaker 1>But yes, it may it made sense why so yes,

0:04:21.480 --> 0:04:24.679
<v Speaker 1>the numbers doubling, profits, revenues is up twenty seven percent.

0:04:24.880 --> 0:04:28.359
<v Speaker 2>They actually increased their average ad price by six.

0:04:28.200 --> 0:04:30.440
<v Speaker 1>Percent, so they see more people put it as they

0:04:30.560 --> 0:04:33.960
<v Speaker 1>raise the prices on those the weak guidance was cast

0:04:34.040 --> 0:04:36.680
<v Speaker 1>for it. But what he admitted to is that they're

0:04:36.680 --> 0:04:39.080
<v Speaker 1>going to have to increase the spending in AI. They

0:04:39.120 --> 0:04:40.840
<v Speaker 1>want to be the leaders in it. They want to

0:04:40.880 --> 0:04:42.560
<v Speaker 1>have the infrastructure for it, they want to have the

0:04:42.600 --> 0:04:44.760
<v Speaker 1>platform for it, they want to be the innovators in it.

0:04:45.120 --> 0:04:46.640
<v Speaker 1>So you would think that would be a good time.

0:04:47.080 --> 0:04:49.720
<v Speaker 1>I want to get leaded behind. On the surface, it

0:04:49.800 --> 0:04:51.920
<v Speaker 1>is a good sign, so that increase. I think he

0:04:51.960 --> 0:04:54.520
<v Speaker 1>said up to ten billion a year in the AI spending,

0:04:55.000 --> 0:04:57.680
<v Speaker 1>which is a futuristic technology.

0:04:57.760 --> 0:05:01.200
<v Speaker 2>Correct, yes, So then we have to peel back the layers.

0:05:01.760 --> 0:05:05.600
<v Speaker 1>How much money or what was the last futuristic innovation

0:05:05.680 --> 0:05:07.080
<v Speaker 1>that they said they were going to spend money on.

0:05:07.800 --> 0:05:10.080
<v Speaker 4>I get it the metaverse. I've waived that flag loud

0:05:10.080 --> 0:05:12.320
<v Speaker 4>and clear. But guess what when you have market makers,

0:05:12.640 --> 0:05:13.239
<v Speaker 4>how much.

0:05:13.080 --> 0:05:15.679
<v Speaker 2>Did it lose? Quadrullions?

0:05:17.360 --> 0:05:20.520
<v Speaker 1>It was a lot, a fifty billion dollar futuristic innovation

0:05:20.680 --> 0:05:23.560
<v Speaker 1>that didn't pan out. You're now telling investors we're going

0:05:23.600 --> 0:05:25.600
<v Speaker 1>to spend more on a futuristic now we know that

0:05:25.640 --> 0:05:29.160
<v Speaker 1>this has a use case, right, which should be since

0:05:29.240 --> 0:05:31.920
<v Speaker 1>the future literally we can see it like we've see

0:05:31.960 --> 0:05:34.280
<v Speaker 1>it now, we're using it now, it has cuse. So

0:05:34.320 --> 0:05:36.240
<v Speaker 1>there was there were some paws in that, right. People

0:05:36.240 --> 0:05:38.880
<v Speaker 1>are looking like, well, they're going to spend more, We're

0:05:38.880 --> 0:05:41.120
<v Speaker 1>not gonna be able to recruit it, and Zuckerber said,

0:05:41.279 --> 0:05:43.039
<v Speaker 1>we're not going to be able to see profits from

0:05:43.040 --> 0:05:45.119
<v Speaker 1>the spending until maybe twenty twenty seven.

0:05:45.680 --> 0:05:46.440
<v Speaker 2>And so now you're.

0:05:46.279 --> 0:05:50.159
<v Speaker 1>Telling investors futuristic innovation, we're going to put more capital

0:05:50.160 --> 0:05:52.640
<v Speaker 1>into it. People have seen it over the past three years,

0:05:52.680 --> 0:05:55.760
<v Speaker 1>the future innovation they lost money in as an investor

0:05:56.760 --> 0:05:57.440
<v Speaker 1>fifty percent.

0:05:57.600 --> 0:05:58.679
<v Speaker 2>I mean, it doesn't make sense.

0:05:58.520 --> 0:06:01.600
<v Speaker 1>But those are some of the is that I fear, yeah,

0:06:01.800 --> 0:06:05.840
<v Speaker 1>that look, that's that that that slight fear of investigato

0:06:05.839 --> 0:06:07.440
<v Speaker 1>the future again and what if it doesn't work?

0:06:08.240 --> 0:06:11.599
<v Speaker 4>The different main differences between Metaverse and this spend is

0:06:11.640 --> 0:06:15.000
<v Speaker 4>that Meta wasn't a hardware company, per se, and no

0:06:15.040 --> 0:06:18.320
<v Speaker 4>one wanted the glasses. The AI move is in play

0:06:18.720 --> 0:06:23.440
<v Speaker 4>by Apple, Microsoft, Cisco, and Video Intel if you want

0:06:23.480 --> 0:06:25.640
<v Speaker 4>to throw them in the race. So there's already a

0:06:25.760 --> 0:06:28.760
<v Speaker 4>market for it. Then if you look at the gross

0:06:28.800 --> 0:06:32.080
<v Speaker 4>margins eighty percent, the Meta AI isn't bad.

0:06:32.160 --> 0:06:35.120
<v Speaker 2>And they also made the operating system for.

0:06:36.760 --> 0:06:39.760
<v Speaker 4>Their glasses open source, which I think was a brilliant

0:06:39.800 --> 0:06:42.680
<v Speaker 4>move to be able to have something open source in

0:06:42.720 --> 0:06:46.920
<v Speaker 4>an era where like Apple is too closed to let

0:06:47.000 --> 0:06:50.599
<v Speaker 4>developers develop on that platform. And of course because they're

0:06:50.640 --> 0:06:52.479
<v Speaker 4>not in the lead and that they're letting that be

0:06:52.560 --> 0:06:54.600
<v Speaker 4>open source. But I think they made a lot of

0:06:54.600 --> 0:06:57.720
<v Speaker 4>great moves these last two quarters. I think that that's

0:06:57.800 --> 0:06:59.040
<v Speaker 4>kind of like being like, well, I'm not going to

0:06:59.120 --> 0:07:00.880
<v Speaker 4>listen to Ian because you call square, what about the

0:07:00.880 --> 0:07:04.560
<v Speaker 4>fifteen hundred other great things? I'll call right Like, he

0:07:04.640 --> 0:07:06.800
<v Speaker 4>got that one thing wrong and I was the main

0:07:06.880 --> 0:07:10.760
<v Speaker 4>one wave in that flag. But if you look at Instagram,

0:07:10.920 --> 0:07:13.320
<v Speaker 4>even Messenger, the amount of uses they have on Messenger,

0:07:13.400 --> 0:07:17.240
<v Speaker 4>Facebook is still moving for the older crowd. I think

0:07:17.240 --> 0:07:19.440
<v Speaker 4>he's doing a hell of a job running that organization,

0:07:21.000 --> 0:07:22.840
<v Speaker 4>and in profits will higher. I like that the profit

0:07:22.880 --> 0:07:25.160
<v Speaker 4>margins twenty percent, gross margin is eighty.

0:07:26.160 --> 0:07:29.360
<v Speaker 2>You can't yeah, you can't argue with that. So I

0:07:29.400 --> 0:07:31.960
<v Speaker 2>think it was a mistake. And it's had a tremendous run.

0:07:32.640 --> 0:07:36.280
<v Speaker 1>So even with the fifteen percent pullback that the run

0:07:36.320 --> 0:07:37.680
<v Speaker 1>that has had over the past.

0:07:37.440 --> 0:07:40.200
<v Speaker 2>Two quarters has been incredible. Yea, So people who have

0:07:40.480 --> 0:07:41.880
<v Speaker 2>some profit take Yeah.

0:07:41.880 --> 0:07:43.680
<v Speaker 1>So if you've been in the stock since it was

0:07:43.720 --> 0:07:46.720
<v Speaker 1>down in the one hundreds one sixties, and you've wrote

0:07:46.760 --> 0:07:49.160
<v Speaker 1>this thing all the way up to four hundred four fifty,

0:07:49.840 --> 0:07:55.480
<v Speaker 1>fifteen percent pull back. Yeah, okay, a slight correction that

0:07:55.640 --> 0:07:56.320
<v Speaker 1>makes sense of it.

0:07:57.800 --> 0:08:02.720
<v Speaker 3>Yeah, well I spoke to it in cider. Are you

0:08:02.720 --> 0:08:03.240
<v Speaker 3>telling me this?

0:08:03.360 --> 0:08:04.600
<v Speaker 2>Yeah? Yeah, Anonymous.

0:08:04.640 --> 0:08:08.640
<v Speaker 3>So so I'll share what he had to say about

0:08:08.880 --> 0:08:11.880
<v Speaker 3>right after the earnings came out and it was crashing,

0:08:11.960 --> 0:08:15.679
<v Speaker 3>and he said revenue was up by twenty seven percent.

0:08:16.040 --> 0:08:21.240
<v Speaker 3>We're increasing cap x for artificial intelligence, and the same

0:08:21.520 --> 0:08:26.080
<v Speaker 3>risks that always persisted are there. Q one results are

0:08:26.280 --> 0:08:31.520
<v Speaker 3>instantly positive, especially with twenty seven percent year over year

0:08:31.600 --> 0:08:36.720
<v Speaker 3>growth in revenue. Market is over reacting at the moment.

0:08:37.440 --> 0:08:40.400
<v Speaker 3>I agree with that he said what we just said.

0:08:40.600 --> 0:08:42.839
<v Speaker 3>But yeah, I think it's interesting the kind of hair

0:08:43.000 --> 0:08:45.800
<v Speaker 3>from I mean that that even confirms, like kind of

0:08:45.800 --> 0:08:47.880
<v Speaker 3>what we just said, like perfect if there's an insight

0:08:47.920 --> 0:08:49.839
<v Speaker 3>who was saying the same exact thing I think this

0:08:49.920 --> 0:08:54.960
<v Speaker 3>is about. I think the CFO might be to blame too,

0:08:55.000 --> 0:08:59.480
<v Speaker 3>because she gave a very pessimistic outlook in her in

0:08:59.480 --> 0:09:04.440
<v Speaker 3>the guidance. So that's interesting. While she would do that,

0:09:04.559 --> 0:09:10.080
<v Speaker 3>I'm not sure, but I think that she. I don't

0:09:10.120 --> 0:09:17.080
<v Speaker 3>think her guidance report was something that they probably were

0:09:17.120 --> 0:09:19.640
<v Speaker 3>happy about, or maybe they wanted to stock to go

0:09:19.679 --> 0:09:22.439
<v Speaker 3>down so they could buy more who knows, but she

0:09:22.679 --> 0:09:27.559
<v Speaker 3>the CFO gave a very pessimistic guidance.

0:09:27.240 --> 0:09:30.040
<v Speaker 1>Outlook for the second quarter, right, Yeah, and so it

0:09:30.080 --> 0:09:31.880
<v Speaker 1>wasn't even a full guidance for the entire year.

0:09:32.360 --> 0:09:34.080
<v Speaker 2>So I mean take that with a grain of salt.

0:09:34.160 --> 0:09:37.320
<v Speaker 1>But medis here to stay, not going anywhere.

0:09:37.559 --> 0:09:39.840
<v Speaker 4>Yeah, and we got to reward seeos. To be honest,

0:09:41.440 --> 0:09:43.080
<v Speaker 4>I'm not going to continue rail on Elion.

0:09:43.880 --> 0:09:56.120
<v Speaker 2>But yeah, but Jesus Christ children, but the children.

0:09:56.559 --> 0:09:59.600
<v Speaker 4>He hasn't delivered on some promises, the mouse per gallon

0:09:59.679 --> 0:10:04.120
<v Speaker 4>that the carr can get at best. I think Dustin

0:10:04.120 --> 0:10:05.920
<v Speaker 4>went a little bit far calling at the new airon,

0:10:06.000 --> 0:10:08.280
<v Speaker 4>but math is not mathing.

0:10:08.440 --> 0:10:12.079
<v Speaker 5>An illegal alien from Guatemala charged with raping a child

0:10:12.120 --> 0:10:15.920
<v Speaker 5>in Massachusetts. An MS thirteen gang member from Al Salvador

0:10:16.160 --> 0:10:20.280
<v Speaker 5>accused of murdering a Texas man of Venezuelan charged with

0:10:20.360 --> 0:10:24.240
<v Speaker 5>filming and selling child pornography in Michigan. These are just

0:10:24.360 --> 0:10:28.120
<v Speaker 5>some of the heinous migrant criminals caught because of President

0:10:28.120 --> 0:10:31.680
<v Speaker 5>Donald J. Trump's leadership. I'm Christy Noman, the United States

0:10:31.720 --> 0:10:36.520
<v Speaker 5>Secretary of Homeland Security. Under President Trump, Attempted illegal border

0:10:36.559 --> 0:10:40.120
<v Speaker 5>crossings are at the lowest levels ever recorded, and over

0:10:40.160 --> 0:10:43.400
<v Speaker 5>one hundred thousand illegal aliens have been arrested. If you

0:10:43.480 --> 0:10:47.320
<v Speaker 5>are here illegally, your next you will be fine nearly

0:10:47.400 --> 0:10:51.440
<v Speaker 5>one thousand dollars a day, imprisoned, and deported. You will

0:10:51.480 --> 0:10:55.120
<v Speaker 5>never return. But if you register using our CBP home

0:10:55.160 --> 0:10:58.520
<v Speaker 5>app and leave now, you could be allowed to return legally.

0:10:58.880 --> 0:11:03.600
<v Speaker 5>Do what's right. Leave now. Under President Trump America's laws,

0:11:03.800 --> 0:11:06.240
<v Speaker 5>border and families will be protected.

0:11:06.320 --> 0:11:08.480
<v Speaker 2>Sponsored by the United States Department of Homeland Security,