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Sam Dickie: Fisher Funds expert on Meta and Microsoft reporting their results · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk sed B.
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  Speaker 2: The US results season is in full swing. Got two
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  Speaker 2: of the big ones, METSA and Microsoft reporting just in
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  Speaker 2: the last few hours, and obviously across what it means
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  Speaker 2: for investors is Sam Dickey from Fisher Funds US with
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  Speaker 2: US now.
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  Speaker 3: Happy New Year, Sam, happy to you here there, welcome back.
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  Speaker 2: Thank you very much.
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  Speaker 3: Back.
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  Speaker 2: Now give give me the highlights of what you think
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  Speaker 2: you saw the results for both of these companies.
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  Speaker 3: Definitely two contrasting fortunes. So Meta's share price was up
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  Speaker 3: six percent after market earlier today and Microsoft's was down
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  Speaker 3: six percent, and a couple of themes or reasons there.
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  Speaker 3: Both companies revenue beat expectations, and that's been an ongoing
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  Speaker 3: theme really for the past couple of years. These companies
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  Speaker 3: are either taking market share or growing the size of
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  Speaker 3: their market in cloud, compute, advertising or software, and a
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  Speaker 3: lot of that growth has been supercharged by AI, which
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  Speaker 3: brings me to the cost did you generate that revenue?
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  Speaker 3: And that was the primary reason why there was a
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  Speaker 3: disparity in the performance. So both companies have been increasing
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  Speaker 3: their capital expenditure recently in recent quarters and sorry rapidly
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  Speaker 3: in recent quarters, and this quarter was no different. So
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  Speaker 3: for context, we spoke about this last year. The year
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  Speaker 3: ahead capex for both companies combined was expected to be
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  Speaker 3: about one hundred and forty billion this time last year.
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  Speaker 3: It's now expected to be two hundred and sixty billion,
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  Speaker 3: and that eighty billion dollar increases largely on AI infrastructure
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  Speaker 3: and chips. So, in short, though Meta outperformed because it
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  Speaker 3: beat revenue expectations by more. So both are spending an
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  Speaker 3: accelerating amount, but Meta is on the face of it,
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  Speaker 3: getting more return out of its spend.
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  Speaker 2: And so what do you see as the key key
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  Speaker 2: themes from these results.
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  Speaker 3: I think it's what we talked about last week. I
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  Speaker 3: talked about with Ryan is a key risk for investors
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  Speaker 3: to watch in twenty twenty six is big tech companies
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  Speaker 3: in the US and no longer being given a blank
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  Speaker 3: check by the market to spend on AI, chips and
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  Speaker 3: infrastructure at any cost. So they have to show accelerating
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  Speaker 3: revenue or set another way. They have to justify the
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  Speaker 3: massive dollar has been invested by showing a decent return
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  Speaker 3: on that spend. And we've got Google and Amazon next week.
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  Speaker 3: That will be extremely closely watched. And indeed, any company
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  Speaker 3: that is just deploying capital at scale into AI must
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  Speaker 3: start showing a return.
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  Speaker 2: Do you think that this gives any insight into what
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  Speaker 2: we can use for the rest of the earning season.
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  Speaker 3: I think that we another wrinkle actually, on top of
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  Speaker 3: keeping an eye on how much these guys are returning
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  Speaker 3: on that massive capex is open Ai, which is the
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  Speaker 3: company behind chat GPT, as we know, is quite out
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  Speaker 3: of favor. And remember last year we talked about the
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  Speaker 3: disconnect between the fifteen to twenty billion of revenue that
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  Speaker 3: open ai generates and the more than one trillion dollars
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  Speaker 3: of AI infrastructural bility that they've committed to. So anything
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  Speaker 3: associated with that has been under pressure. Oracle share prices
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  Speaker 3: down to fifty percent, and remember they had committed to
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  Speaker 3: spend huge amounts to house open AI's chips and Microsoft
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  Speaker 3: today open ai accounts for about forty five percent of
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  Speaker 3: their pipeline of business and their massive cloud operation. So
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  Speaker 3: investors are a bit twitchy and they're saying, are open
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  Speaker 3: Ai good for it? So anyone associated with open Ai
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  Speaker 3: during this earning season should be watched closely.
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  Speaker 2: Very interesting. Hey Sam, as always, it's lovely to talk
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  Speaker 2: to you mate. We'll talk to you next week. Look
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  Speaker 2: after yourself, that is Sam Dickey Fisher Funds.
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