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Meta's $45 Billion Dilemma and Its Future in AI · Earn Your Leisure

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  Speaker 3: So that has lost forty five billion dollars on their
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  Speaker 3: Metaverse division and the stock dropped after their earnings report
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  Speaker 3: last Thursday. I believe when their guidance so we didn't
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  Speaker 3: really meet the expectation. Even though their revenue am expectations.
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  Speaker 2: They're incredible.
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  Speaker 3: Their revenue outpaced expectations, profits were doubles, but their guidance
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  Speaker 3: fell short and as a result, it dropped I think
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  Speaker 3: like fifteen percent. On Friday, they lost two hundred billion
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  Speaker 3: in market cup. So, okay, Ian, what's your take on this.
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  Speaker 3: I'm gonna come in listen.
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  Speaker 2: I know.
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  Speaker 4: Normally I'm on the other side of his argument. This
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  Speaker 4: is unfair like for them to have outperformed this well.
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  Speaker 4: Zuckerberg is still an incredible shape. All offices are on fire.
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  Speaker 4: Whatsappens doing incredibly well? Instagram is different. Put Sports Illustrated
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  Speaker 4: out of business. You got all the bikini girls on
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  Speaker 4: Instagram for free. They are the ultimate competitor, and they
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  Speaker 4: dropped fifteen percent because they're guiding lower for the next quarter.
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  Speaker 2: Meanwhile, Dusk and Master was.
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  Speaker 4: Saying, hey, Tesla may be the new n Ride, and
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  Speaker 4: they popped after earnings and then pop this morning after
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  Speaker 4: they get the China deal done, like it's one of
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  Speaker 4: those in it and I get it. I was talking
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  Speaker 4: to everyone a red Pandla in stock club about it.
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  Speaker 4: There was more upside on the Tesla trade at one
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  Speaker 4: thirty eight one thirty nine than there is the Meta trade.
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  Speaker 4: But for Teslas, I mean, for a matter to the
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  Speaker 4: gap down fifteen percent, which I don't remember them ever
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  Speaker 4: gapping down that much, and earnings, I don't know what
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  Speaker 4: the analysts were thinking. Like normally I'm banging the table
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  Speaker 4: on the other side of this argument.
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  Speaker 2: But when it dropped. I'm like, the fucking happened?
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  Speaker 4: Like the numbers were great, this appear he was honest,
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  Speaker 4: and what's gonna happen next quarter?
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  Speaker 2: And as a result, they fall fifteen percent?
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  Speaker 1: But there's a keyer point. There's a key a point,
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  Speaker 1: So like I think I text you, I think I
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  Speaker 1: text you after Tesla and I'm like, yeah, makes sense
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  Speaker 1: of it because we got to explain the why, and
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  Speaker 1: so I had to dig really deep in the research
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  Speaker 1: to figure out, like, all right, fifteen percent is crazy
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  Speaker 1: and meta. Over the past few years, we've seen historic drops, right,
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  Speaker 1: like they had the large decline in.
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  Speaker 2: History, but they've also had the largest appreciation history.
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  Speaker 1: This fifteen percent, this is when the honesty part of
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  Speaker 1: being a CEO and a leader actually backfired for him.
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  Speaker 1: But yes, it may it made sense why so yes,
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  Speaker 1: the numbers doubling, profits, revenues is up twenty seven percent.
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  Speaker 2: They actually increased their average ad price by six.
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  Speaker 1: Percent, so they see more people put it as they
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  Speaker 1: raise the prices on those the weak guidance was cast
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  Speaker 1: for it. But what he admitted to is that they're
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  Speaker 1: going to have to increase the spending in AI. They
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  Speaker 1: want to be the leaders in it. They want to
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  Speaker 1: have the infrastructure for it, they want to have the
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  Speaker 1: platform for it, they want to be the innovators in it.
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  Speaker 1: So you would think that would be a good time.
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  Speaker 1: I want to get leaded behind. On the surface, it
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  Speaker 1: is a good sign, so that increase. I think he
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  Speaker 1: said up to ten billion a year in the AI spending,
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  Speaker 1: which is a futuristic technology.
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  Speaker 2: Correct, yes, So then we have to peel back the layers.
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  Speaker 1: How much money or what was the last futuristic innovation
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  Speaker 1: that they said they were going to spend money on.
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  Speaker 4: I get it the metaverse. I've waived that flag loud
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  Speaker 4: and clear. But guess what when you have market makers,
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  Speaker 4: how much.
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  Speaker 2: Did it lose? Quadrullions?
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  Speaker 1: It was a lot, a fifty billion dollar futuristic innovation
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  Speaker 1: that didn't pan out. You're now telling investors we're going
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  Speaker 1: to spend more on a futuristic now we know that
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  Speaker 1: this has a use case, right, which should be since
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  Speaker 1: the future literally we can see it like we've see
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  Speaker 1: it now, we're using it now, it has cuse. So
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  Speaker 1: there was there were some paws in that, right. People
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  Speaker 1: are looking like, well, they're going to spend more, We're
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  Speaker 1: not gonna be able to recruit it, and Zuckerber said,
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  Speaker 1: we're not going to be able to see profits from
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  Speaker 1: the spending until maybe twenty twenty seven.
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  Speaker 2: And so now you're.
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  Speaker 1: Telling investors futuristic innovation, we're going to put more capital
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  Speaker 1: into it. People have seen it over the past three years,
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  Speaker 1: the future innovation they lost money in as an investor
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  Speaker 1: fifty percent.
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  Speaker 2: I mean, it doesn't make sense.
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  Speaker 1: But those are some of the is that I fear, yeah,
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  Speaker 1: that look, that's that that that slight fear of investigato
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  Speaker 1: the future again and what if it doesn't work?
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  Speaker 4: The different main differences between Metaverse and this spend is
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  Speaker 4: that Meta wasn't a hardware company, per se, and no
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  Speaker 4: one wanted the glasses. The AI move is in play
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  Speaker 4: by Apple, Microsoft, Cisco, and Video Intel if you want
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  Speaker 4: to throw them in the race. So there's already a
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  Speaker 4: market for it. Then if you look at the gross
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  Speaker 4: margins eighty percent, the Meta AI isn't bad.
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  Speaker 2: And they also made the operating system for.
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  Speaker 4: Their glasses open source, which I think was a brilliant
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  Speaker 4: move to be able to have something open source in
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  Speaker 4: an era where like Apple is too closed to let
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  Speaker 4: developers develop on that platform. And of course because they're
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  Speaker 4: not in the lead and that they're letting that be
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  Speaker 4: open source. But I think they made a lot of
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  Speaker 4: great moves these last two quarters. I think that that's
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  Speaker 4: kind of like being like, well, I'm not going to
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  Speaker 4: listen to Ian because you call square, what about the
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  Speaker 4: fifteen hundred other great things? I'll call right Like, he
• 7:04
  Speaker 4: got that one thing wrong and I was the main
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  Speaker 4: one wave in that flag. But if you look at Instagram,
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  Speaker 4: even Messenger, the amount of uses they have on Messenger,
• 7:13
  Speaker 4: Facebook is still moving for the older crowd. I think
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  Speaker 4: he's doing a hell of a job running that organization,
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  Speaker 4: and in profits will higher. I like that the profit
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  Speaker 4: margins twenty percent, gross margin is eighty.
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  Speaker 2: You can't yeah, you can't argue with that. So I
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  Speaker 2: think it was a mistake. And it's had a tremendous run.
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  Speaker 1: So even with the fifteen percent pullback that the run
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  Speaker 1: that has had over the past.
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  Speaker 2: Two quarters has been incredible. Yea, So people who have
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  Speaker 2: some profit take Yeah.
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  Speaker 1: So if you've been in the stock since it was
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  Speaker 1: down in the one hundreds one sixties, and you've wrote
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  Speaker 1: this thing all the way up to four hundred four fifty,
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  Speaker 1: fifteen percent pull back. Yeah, okay, a slight correction that
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  Speaker 1: makes sense of it.
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  Speaker 3: Yeah, well I spoke to it in cider. Are you
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  Speaker 3: telling me this?
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  Speaker 2: Yeah? Yeah, Anonymous.
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  Speaker 3: So so I'll share what he had to say about
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  Speaker 3: right after the earnings came out and it was crashing,
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  Speaker 3: and he said revenue was up by twenty seven percent.
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  Speaker 3: We're increasing cap x for artificial intelligence, and the same
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  Speaker 3: risks that always persisted are there. Q one results are
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  Speaker 3: instantly positive, especially with twenty seven percent year over year
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  Speaker 3: growth in revenue. Market is over reacting at the moment.
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  Speaker 3: I agree with that he said what we just said.
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  Speaker 3: But yeah, I think it's interesting the kind of hair
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  Speaker 3: from I mean that that even confirms, like kind of
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  Speaker 3: what we just said, like perfect if there's an insight
• 8:47
  Speaker 3: who was saying the same exact thing I think this
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  Speaker 3: is about. I think the CFO might be to blame too,
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  Speaker 3: because she gave a very pessimistic outlook in her in
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  Speaker 3: the guidance. So that's interesting. While she would do that,
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  Speaker 3: I'm not sure, but I think that she. I don't
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  Speaker 3: think her guidance report was something that they probably were
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  Speaker 3: happy about, or maybe they wanted to stock to go
• 9:19
  Speaker 3: down so they could buy more who knows, but she
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  Speaker 3: the CFO gave a very pessimistic guidance.
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  Speaker 1: Outlook for the second quarter, right, Yeah, and so it
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  Speaker 1: wasn't even a full guidance for the entire year.
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  Speaker 2: So I mean take that with a grain of salt.
• 9:34
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