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there's a lot of earnings news out there
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this week let's start with meta's q1 the
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company saw Revenue increased 27% uh
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from
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28.6 uh 5 billion in the same period
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last year net income more than doubled
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to
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12.37 billion this this company is
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making some money but meta's forecast of
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rising costs related to AI they've
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replaced a you know their um virtual
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reality stuff with AI sent which is very
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expensive sent its share price down 15%
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in extended Trading it's going to cost
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some money for them to get into this
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business Mark Zuckerberg said on the
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earnings call that his immediate goal is
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getting millions or billions of people
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using meta AI with Revenue coming down
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the line they do not have Revenue plans
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that's one thing we need to stress a lot
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of this AI doesn't have a business plan
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yet um and or there's it's a small
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business plan um and there's
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anticipation of huge profits in the
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future so he's doubling down on doing
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this um and at the same time is current
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business is killing it right I mean
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thoughts I it's arguably unfortunately
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for our children this is one of the best
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run companies in the world it's just uh
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the amount of money here they're
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Printing and he's the what what was I
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thought the most interesting thing about
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their earnings call relative to Tesla
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was Tesla's
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massive uh investment in AI you know um
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musk was bragging about how many gpus
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they'd order ordered because he's trying
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to create a distraction the fact his
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core businesses well let me get let me
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put those earnings you can let's talk
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about the let's talk about metaph first
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so should a lot of should he be focusing
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on the other parts of his business no
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because that's he's going to have this
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is something we were both making fun of
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his uh investments in virtual reality
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and uh Occulus you know all the
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metaverse stuff you know and changing
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the name we thought that was ridiculous
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and a waste of money and throwing money
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down a down a toilet essentially in this
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case do you think the spending which is
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going to be massive is he's got to be in
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here right this is not a choice so I
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can't I I can't predict if these
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Investments are going to pay off but I
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think they have to make them I I just
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yeah when you have when you have the
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Premier Technology eating the world and
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the market the market seems to offer you
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a return on investment on that the
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perception that you're investing here I
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mean to a certain extent even to St
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despite the fact let me back up
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Microsoft has spent more money on AI
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than every other company in venture
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capitalist I believe
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combined if you look at Microsoft and
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its Affiliates and its
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proxies it is in Sachin nadela is now
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considered in my opinion the probably
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the brightest minding business and I
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mean there's a lot of them but his
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forward lean his forward leaning
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investments in AI have increased the
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market cap of that company probably one
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or one to$ 1.4 trillion dollar offer of
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a huge investment but relative to $1.4
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trillion it's the best corporate
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investment it's probably arguably the
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best Venture investment in history and
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so everyone says we can't be the company
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that got behind I mean quite frankly
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Mark uh the supposedly the brightest man
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in technology musk he's way behind in AI
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he talks about it a lot he doesn't have
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a single real victory in AI it's not his
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he's known in AI for walking away from
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the most successful AI company ever
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without a single sh or anything so he's
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trying to play catchup and everyone so I
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I think Mark Zuckerberg taking his
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forward-leaning Investments which he can
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afford out of virtual reality into AI
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that just feels right as rain to me yeah
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yeah I agree I mean look his main
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business right now is going to carry him
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through look at these increases he owns
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the current business environment right
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it looks like uh you know these numbers
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are really impressive um and it's sort
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of like Microsoft's owning windows and
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leaning into the future right like where
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they wanted to lean and uh when they
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leaned into Cloud for example it's a but
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this is so much more expensive it's just
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they he has to do this and I think
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people were thrilled when he was making
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cuts to employees but this stuff is
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expensive and it's also we have to build
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new Fabs we it's just there's going to
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be enormous investment here um for this
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and and as we get into Quantum Computing
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and he just can't he cannot miss this
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turn or else another company will will
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will take over the all the next version
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of business even without a business plan
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that people can foresee at this moment
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um but it's almost like shifting from
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horses to cars that's what it you know
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the other we're going to have cars the
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other big shift that just really blew me
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away meta is essentially a video company
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video now represents more than 60% of
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time yeah on both Facebook and Instagram
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on Instagram isn't that your experience
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now with it it's pretty much video but
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it wasn't that way just 2 or 3 years ago
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I mean if you think about just how
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TV is on Instagram reals makes up
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50% of the time that's spent on
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Instagram and that's a new product and
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it's a video-based product it's not
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images it's not Stills it's video I mean
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people people constantly criticize
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including myself meta for its inability
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to come up with new products it's not
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good at Hardware but technically
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speaking they pivot or supplemental or
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their Venture into video has been
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enormously successful and also they're
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getting a big bump this week from the
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the the um Tik Tock Bill passing and
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Biden signing it I mean this has been
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this is going to this is going to it's a
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waterfall to all companies and
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especially Facebook this is this has
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been the greatest there's a great story
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in the Washington posit to how these
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legislators quietly got together to do
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this but they got a lot of lift from
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Facebook he's been talking about this he
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talked about it with me in 2019 he's
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been aiming at Tik Tok and China for
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years and now he's gotten his reward I I
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do think we just but but I don't think
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it's a fair to come play off because
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let's talk about the Tesla's earnings
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you were talking about them investing
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their profit fell 55% to 1.1 billion
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quite a small company from the first
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quarter of 2023 and revenue fell um 9%
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to 23 uh 21.3 billion the biggest
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decline since 20 uh 2012 the drop in
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sales was steeper than Tesla's last
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decline in 2020 which was due to
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disrupted production during covid uh
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Tesla put the focus on some of its other
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efforts he's the jazziest hands of jazz
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hands on earnings call including
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accelerating the launch of more
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affordable models which she didn't give
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any details about cyber taxis which he
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didn't really give any details about um
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and everything else um he's been doing a
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number of things to try to Jazz up the
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stock and the one thing that did affect
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people is Cuts job cuts which
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immediately someone asked me why the
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stock went up and I said because he's
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doing job cuts and you can do the math
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right essentially um these numbers are
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rough numbers but the stock has been
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going up in the last few days largely I
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think because of cost savings that will
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will you'll see on the bottom line for
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the next earnings um thoughts on on this
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they're trying to create any sort of
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misdirect or weapon of mass distraction
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from the fact it's an automobile company
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that's attracted a lot of competition
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and will ultimately trade it uh like an
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automobile company so they went out of
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their way to talk about the fact that
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their energy storage business would grow
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at least 75% from 2023 but that's a
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pimple on the elephant of this company
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and they're just trying and and then
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they're saying and we're spending all of
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this money on AI and when Elon Musk goes
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into a new category watch out and people
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should pay attention because he is a
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genius around you know Innovation but
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they're trying to talk about anything
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but they're
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core well that's a that's a different
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talk show in the sense that I mean one
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of the reasons meta is performing is
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Mark Zuckerberg is not launching Rockets
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into space or you know buying you know
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buying Sky Media or whatever he's not
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buying Myspace musk is very distracted
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with a lot of different things and this
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is an automobile company so they're
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trying to say look over here AI look
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over here you know our energy business
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but here's the thing if you look at um
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if you look at Tesla Google trades a 20
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times Enterprise Value deb. Google's 20
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met is 21 Microsoft is 26 these are both
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quite frankly better businesses Tesla
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despite being the worst performing stock
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year-to date in the S&P trades it 35
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times now let's compare that to auto
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companies for to 16 times GM is seven
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times byd their biggest competitor is
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trades at six times so if Tesla just
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normalizes across big Tech it's going to
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get cut in half again and if Tesla if
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people finally acknowledge wake up from
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their hallucination and realize this is
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not a mobile company it's probably down
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50 to 80% in the next
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year yeah well he he does not want to be
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called a dead car he actually in the
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call very not noted this um uh he said
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we should be thought of as an AI
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robotics Company If You value Tesla as
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an auto comp just an auto company just
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the wrong framework if you ask the wrong
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question then the right answer is
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impossible he's really he's really a
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clever piece of person
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robotics yeah that's what he said mhm
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it's a
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car I get it but he's he's of course
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pushing the Affordable Car forward they
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were going to have a more affordable car
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um which they were delayed and now he's
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going to do them earlier I he's got a
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deliver he's just got he can't make
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these Pro you know he's his mouth is
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making a lot of promises he can't
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possibly deliver but yes he's an AI
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robotics company as what they're doing
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um and that's his line that's his okay
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let's see it let's see I to me I'm just
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like show us the money show us the money
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kind of thing um he went on to encourage
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the autonomous non-believers to get lost
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of course this is what he always does he
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can't possibly make a statement without
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saying something obnoxious if somebody
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doesn't believe in that Tesla is going
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to solve autonomy I think they should
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not be an investor in this company and
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we will and we are that is his bet that
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is his thing he's made a lot of promises
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he never C kept um he really feels that
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uh when when tesed switches on on full
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self-driving he calls he's going to say
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it's going to be the the biggest asset
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value appreciation in history um so he
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sounds like Kathy Wood he should get a
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you should go through transition and
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wear chunky glasses and start a hedge
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fund that loses a lot of money well you
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know what I think if he could come out
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with more affordable cars he'd be in a
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better position but the overall Market's
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harder and the China competition and the
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competition competition I just you want
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to get into an affordability competition
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with China yeah you want to get into an
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affordability race with the Ben Johnson
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of of affordability see above China
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unless also service you know if one more
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one more picture of of a cyber truck
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getting hauled away because it got stuck
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in the mud he's getting speaking of
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video in line he is getting killed by
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videos about these trucks and they
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seemingly didn't sell very many either
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so for a car that only sold it looks
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like a couple thousand um boy is it an
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outsized lemon like you know again he's
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getting killed on all ways look good
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luck Elon we hope you become an AI
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robotics company that's great for you
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but just as just a you know I always
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feel like I got to I do think I've owned
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a Tesla it is a fantastic car it's just
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it should trade at the upper range of
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automobile companies it should be the
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highest multiple on IA of any auto
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company which means it's going to go
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down 60 to
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70% and still I would argue back it
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doesn't hasn't had a new thing in a
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while and the service sucks from what I
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understand that right I've never had the
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I was amazed at yeah a lot of people and
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a lot of people I've had this complaint
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from lots of Tesla owners um service is
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not as good as the ones who are good at
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service which are the big car companies
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service is an important part of carip
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the other thing is new fresh things it
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doesn't it has not had a new Fresh look
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except for the Cyber truck which is not
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fresh something else I can validate the
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problems around service when he called
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me an insufferable num skull I put took
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a big dump in the passenger seat and no
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one came no came to clean it up from
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Tesla do you still have your Tesla oh no
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the moment
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he look you taught me this and the
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moment he started being mean I'm going
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to Virtue signal now and feel masculine
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when he called you the definition of
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pure evil MH I'm like look I give the
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guy a hard time no my heart was filled
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with hate that was heart was filled with
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hate yeah see when he said that and
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and and was it wasn't even like tongue
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and cheek it was like he woke up and
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decided that you're the definition of
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pure evil the devil you said something
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to me that's always struck me why am I
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painting this guy's fence I sold
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my Tesla and I I I'm I haven't been on
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Twitter in almost a year now yeah well
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thank you Scott I appreciate it in any
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case good luck Elon with your robotics
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company and by the way I now see you a
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lot better since I took C of me anyway
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um Microsoft alphabet earning are coming
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out after we record any predictions
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Microsoft and who alphabet you've heard
00:13:34
of them well my I don't know if you've
00:13:36
heard this uh but big Tech is just this
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great business they they just they've
00:13:42
got this they've got this thing I think
00:13:44
it's called Sam Sera
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search and it's a monopoly and it keeps
00:13:51
printing money uh look the answer is I
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don't know but the good money is always
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on Big T so so I'm going to go out on a
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limb here and say that the numbers are
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going to be amazing even with meta their
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numbers are amazing but their stock is
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accelerated so much that the the I think
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people were hoping for another like oh I
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fired half the staff and my revenues are
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still going up yes firing people gets
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you good stock hits I'll tell you that
