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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
MAG seven earnings recapping what's happening in public markets. The trillion dollar tech companies that have been powering and holding up the entire global economy. Will they continue to hold up the global economy? So far, the answer is yes. I'm glad that chat is enjoying the costumes.
Speaker 1:Jordy, who are you today?
Speaker 2:You gotta be living under a data center to not know who I'm dressed up as today. None other than Mark Andreessen.
Speaker 1:Spitting image. Spitting image.
Speaker 2:How how am I how am I doing?
Speaker 1:I think you look great. Of course, I am Elia Siskomer.
Speaker 2:If you are watching the recording of this at some point in the future, I recommend whenever I'm talking, put it on three x speed Yes. To get the full simulate. Mark experience.
Speaker 1:If you're if you're not taking Halloween this seriously, what's going on? You gotta be taking it seriously. Tyler, have are you taking Halloween seriously?
Speaker 3:I'm taking Halloween extremely seriously.
Speaker 1:Well, who are you?
Speaker 3:Sam Altman at at two thousand eight WWDC.
Speaker 1:Trump cut China tariffs after he met up with Xi Jinping. The US agreed to lower a fentanyl related tariff on Chinese goods to 10 from 20% after China promised to crack down on chemicals used to make the often deadly Precursors. Precursors. Beijing also promised to ease some of the controls it imposed on exports of processed rare earth minerals for one year. China dominates the production of the minerals, which are needed to make everything from smartphones to submarines.
Speaker 1:Wow. The bigger news in tech world, of course, is earnings. Amazon posted a big jump in profit and revenue. Net profit surged 39%, and revenue rose for the third quarter. The last earnings, they were sort of left out of the AI narrative.
Speaker 1:Every all the other hyperscalers in their cloud businesses telling great stories about acceleration and growth, and Andy Jassy was a little bit on the defensive. Well, now he's back on the offensive. They beat on the top line. They beat on the bottom line. They also beat on AWS revenue.
Speaker 2:They were, you know, proud member of the Lag seven. Yep. You look at The Lag seven. Alphabet. I mean, not the Lag seven, but they were the lagging part of the Mag seven.
Speaker 2:It's a it's a pleasure to introduce you to a new name. Alphabet up 247% over the last five years. Amazon is still only up 62% even after the pop Wow.
Speaker 4:Yeah.
Speaker 2:This week. So so the only thing better than Halloween is Halloween AI edition. In case you missed it, tagged, Ilya and Mark. And, of course, no AI here. We did this one the old Microsoft.
Speaker 2:Fashioned Microsoft. What's your Microsoft take? Top line beat. Earnings beat. Stock traded down, three to 4% after hours.
Speaker 2:It's recovered quite a bit since then. Satya, in my view, has already gotten a lot more credit for the company's opportunities in AI than Amazon and even Google. Mhmm. People have known about Google's strengths, but the big questions around search have held back performance to date. There are so many companies that are trying to build Excel plus an agent on top of it.
Speaker 2:Sure. Which is exactly what Microsoft is also doing with Excel with Copilot. Right? And, they're model agnostic. They're gonna be able to let you know, bring in any any kind of intelligence that they want.
Speaker 2:And so it's also fascinating because they have access to OpenAI's IP.
Speaker 1:Slack was very much the same thing, where Slack was this product that was so much better than the alternatives. Like, you I don't know if you ever used, like, workplace chat pre Slack, but it was I was basically born on on Slack. Okay.
Speaker 2:I never knew John was so ripped. There's been some other comments.
Speaker 4:Yeah. Yeah, baby. Let's go.
Speaker 1:Ilya, AGI has been achieved. Let's go.
Speaker 2:Let's talk about Meta.
Speaker 1:Yes.
Speaker 2:Meta. Top line beat, earnings miss.
Speaker 1:Massive miss, like a $12,000,000,000 not people are not talking enough about what happened. It is crazy that you could be operating such a big company and just be like, oops, $10,000,000,000.
Speaker 2:I mean, think of how they've been spending. This is like, you know, I'm sure Meta and the executive team, it's like after a weekend vendor checking, like, your credit card statement.
Speaker 3:Okay. So apparently, it was a one time tax charge
Speaker 4:Yes.
Speaker 3:Related to the big beautiful bill What? So
Speaker 1:Is that why is the stock traded down 10%? Is it specifically because of this one time tax charge? Like, be I think it could
Speaker 3:be a
Speaker 2:little bit of vibes in the mix. The timeline loves the core meta business, but doesn't have a lot of faith in Zuck. Right. People thought Bezos, who had a similar similar level of control over Amazon, was crazy to spend like he did building AWS. And he was ultimately completely vindicated.
Speaker 2:People thought Mark was crazy going all in on the metaverse and VR. So far that part of the business, like, has not shown any signs of of being ROI positive. Right? Yeah. Reals is now a $50,000,000,000 revenue run rate business.
Speaker 1:Tesla beat earnings, missed beat on revenue, missed on earnings. The stock reaction was down about 4% after hours. If you wanna go straight shot to the full self driving equivalent for humanoid robots, basically no teleoperation, the project should be years behind what's going on with one X, I would imagine. Just like the Waymo dynamic, Tesla's going full moonshot, full send. No one debates the fact that, like, Tesla's robotaxi fleet is a year or two behind Waymo's right now.
Speaker 1:Now the the the the Tesla bull hope is that you come from behind and start compounding because you have just structurally better costs. Yeah. Way more manufacturing capacity. More of a flywheel on the actual data and the training. Elon Musk on data centers in orbit.
Speaker 1:SpaceX will be doing this. He's gonna do data centers in space.
Speaker 2:It's easy to be bullish on space right now. Yep. But if you're investing in different categories, you have to imagine that if there are adjacent opportunities besides Starlink for SpaceX to do Yep. They will enter them if they are large enough categories. And it's also just fascinating to look at the Yeah.
Speaker 2:Space industry versus the automotive industry. Like, the automotive industry is the most brutally competitive challenging business where Elon is having to compete with every car manufacturer in the world. In space, it's like, you know, you can imagine that being not a perfect monopoly. It's certainly having every possible advantage in order to dominate in that, category when the time is right. Apple, beat top line, beat on, bottom line.
Speaker 2:Mhmm. China sales declined year over year. You've been paying any attention to Apple, you know that their China business is slowly going away. IPhone revenue, they missed just just by $300,000,000. Not not
Speaker 1:50,000,000,000.
Speaker 2:John, your take, you said sort of the inverse meta core business not at risk due to AI, but not investing aggressively. Consumers seem happy to just open an LLM app. Good take. I said Apple's trading at 40 times PE with very low growth. This feels steep even if I don't think they're threatened by AI in the near term.
Speaker 2:We should close it out with Nvidia just to finish this little earnings wrap up. John, your take was on top of the world, but is that head that is the head that wears the crown heavy core AI factory build out going flawlessly, but unclear why NVIDIA is pushing data centers in space, humanoids, quantum computing, mumbo jumbo. Maybe it's real. Maybe it's sort of the same old AI story question.
Speaker 1:Yeah.
Speaker 2:I said, I don't think Jensen would be, just chugging beers on camera in Korea
Speaker 1:Chugging beer.
Speaker 2:If he was having a a rough one. So
Speaker 1:He is the most value creative founder CEO in human history. Like, no one's created 5,000,000,000,000 in any in any capacity.
Speaker 2:I'm sorry, but no company generating the cash meta is with the margins it has should ever be raising money. Of course, they announced another, bond sale yesterday morning. Don't pay every AI scientist like their Shohei Ohtani.
Speaker 1:Yeah. When I hear that they're setting up a big data center and they're raising debt for that particular deal, I don't have, like, red flags flying off in my mind.
Speaker 2:AI is not above all. Enterprise AI is very strong. Nearly a 150 enterprises each process 1,000,000,000,000 tokens with Gemini models for a wide range of apps. And then they say, wait. That's less than a million bucks per year per enterprise or a 150,000,000 of annual revenue, I e, 0.3% of GCP annual revenue.
Speaker 1:What percentage of GCP annual revenue is AI, is Gen AI? Sometimes the hyperscalers don't know. Tyler, what what you got?
Speaker 3:Trillion is just, like, not a lot at all. Like, like, Open AI is doing, like, on just on the API, like, something around, like, $250,000,000,000,000 a month. If it's a trillion over the past, like, year Mhmm. Even if it's a 150, I mean, that's, like, that's pretty bad.
Speaker 2:This was crazy. I wasn't sure if this was Yeah. Fake news or not. But on the Coinbase earnings call yesterday, Brian Armstrong Yeah. Went there was a prediction market that people were betting on which words he would say, during the during the earnings call, and he waited until the end.
Speaker 2:And he just read through and read off every single word that he had missed.
Speaker 4:Because I was tracking the, prediction market about what Coinbase will say on their next earnings call, and I just wanna, you know, add here the words Bitcoin, Ethereum, blockchain, staking, and Web three.
Speaker 2:We we've had prediction markets created around different interviews we've done and
Speaker 1:When Sam Baldwin came in and he was
Speaker 2:distracting when I'm looking at the chat and people are like, say this word. Yeah. Say that word again.
Speaker 1:It's crazy.
Speaker 2:Say it three more times here. Microsoft seemingly just revealed that OpenAI lost 11 and a half billion last quarter. They did some profitable business in world. Who's losing more money than OpenAI?
Speaker 1:These are not losses. These are investments. So like, if I raise $10,000,000 for my startup and then I'm like, okay, I'm gonna buy an office building for $5,000,000 that's not negative $5,000,000 earnings. That is negative $5,000,000 cash flow. I've lost $5,000,000 cash, don't and have liquid cash anymore.
Speaker 1:And so I would assume that a lot of OpenAI's losses are actually investments in CapEx one way or another.
Speaker 3:The 2025, they were gonna do 3.5 in losses.
Speaker 1:Mhmm.
Speaker 3:So this is basically double that.
Speaker 2:Palantir sues former employees for stealing company secrets. Mhmm. Company alleges Pear violated noncompetes to create Copycat AI firm. Interesting. The two employees, they're accusing them of stealing confidential data to build a rival company called Percepta backed by General Catalyst.
Speaker 1:I would not want to steal from Palantir. Bad idea. That seems like one of the worst companies to steal from.
Speaker 4:They will
Speaker 2:find you, and they will kill you. BlackRock stung by loans to businesses accused of breathtaking fraud. An entrepreneur tapped private credit funds to finances telecom businesses. AV in the chat. Large scale fraud is actually a sign of good times.
Speaker 1:I mean, that's true.
Speaker 2:Please, mister president, respectfully, us buy this truck.
Speaker 1:Let's go.
Speaker 2:Yeah. I don't know why. I know if these these trucks are blocked. Yeah. Either blocked in The US or just you would have to import one yourself.
Speaker 2:I think this one from Toyota internationally sells for, like, 10 to $20. Like, it's very cheap.
Speaker 1:If I ran a company, my first act would be to ban hard boiled eggs in the office.
Speaker 2:Hard boiled eggs are really an insane snack.
Speaker 1:Is it more it's not more protein than a steak in a bag. You gotta go Chesky mode. Throw a steak in the bag and take it with you everywhere. Like, I wouldn't have a problem with somebody going in if there's, a cigarette smoking area, like a back alley, and you can go into the back alley and scarf scarfs, hard boiled eggs. That seems reasonable.
Speaker 2:Am I gonna go home and trick or treat with the kids like this? No. I do not wanna traumatize my young children.
Speaker 1:Yeah.
Speaker 2:I will be, dressing up as something else, but we will see you back here on Monday.
Speaker 1:We'll talk to you soon. Can't wait.