Microsoft Soars, Meta Sinks: Has The AI Narrative Flipped?
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Thousand. I'm gonna start.
Money market's mad.
If money is evil, then that building is hell. Show goes up. The pros are never watched. The show sell. Welcome to Prof G Markets. I'm Ed Elson. It is July 30. Let's check-in on yesterday's market vitals. The major indices fell sharply as president Trump vowed to resume strikes on Iran. He told Fox News, quote, we're going to beat the out of them. Brent crude rose back above $90 per barrel. Meanwhile, the Federal Reserve held interest rates steady, sending stocks even lower. More on that later. And finally, treasury yields surged. Okay. What else is happening? Two of the largest companies in te
It was barely passable. So they beat by just a little bit, and they guided below expectations for next quarter. As you pointed out, they're growing expenses faster than revenue. They're growing CapEx faster than revenue. They increased their CapEx guidance by just a little bit, which was a little relief. But overall, it's not an impressive result. And more importantly, Mr. Zuckerberg had a whole hour to explain how he's going to monetize the massive AI investments. And he didn't really give us a firm answer. He basically said, we'll figure it out as we go. And that's just not good enough right
That was gonna be my main question is, has he laid out a plan for how he will actually generate a return on these incredible AI infrastructure investments, which continue to rise? I mean, as you say, he raised the CapEx by a little bit, but he still raised the CapEx. Is there anything? I mean, do do we have any understanding? There was the rumor, for example, that Meta would start a cloud business. That was the reporting we heard. Do we not know at all?
We know what the pieces are, and he confirmed that that is one of the pieces they have on the board. So one is, hey. We sell a lot more ads for a lot more money. They've always been doing that recently. Let's not forget. Let's be kind to Meta for a second. They just grew 28%. That's almost twice as fast as Google. There's massive share gainers in the advertising market. That's the part investors would love to own. It's all the other stuff that they're less comfortable with. But what he said is, okay, we do that, right? Then we do have this opportunity to sell compute to others. We have opportu
Help me understand what's going through his mind and his team's mind because this is the multi trillion dollar question. He knew this was coming. This is the only question share
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