Prof G Markets Podcast Summary: July 31, 2025

Hosted by Scott Galloway and Ed Elson, "Prof G Markets" delves into the latest developments affecting capital markets, offering insights to help listeners build financial literacy and security. In the July 31, 2025 episode titled "Figma’s IPO is Finally Here, Fed Holds Rates Steady & Amazon’s $20M AI Licensing Deal with the NYT," Scott and Ed explore significant market events, regulatory impacts, and major corporate deals shaping the financial landscape.

Market Overview

Ed Elson opens the discussion with a snapshot of the previous day's market movements:

• S&P 500 and Dow Jones Industrial Average experienced declines following the Federal Reserve's decision to hold interest rates steady.
• NASDAQ saw gains ahead of earnings reports from major tech giants, notably Meta and Microsoft. Meta's stock surged by 10% in after-hours trading after reporting a 22% year-over-year revenue increase, surpassing analyst expectations by nearly $3 billion. Similarly, Microsoft saw a 7% increase after announcing a 34% year-over-year growth in Azure revenues and raising their capital expenditure guidance by $10 billion for the year.

Notable Quote:

"With Azure revenues up 34% year over year, the company also raised their CapEx guidance for the year by $10 billion."
—Ed Elson [04:50]

Scott hints at upcoming discussions:

"Tune in on Monday for a full breakdown on all of the big tech earnings from this week, including tonight's reports from Amazon and Apple."
—Ed Elson [04:55]

Figma’s Highly Anticipated IPO

A major segment of the episode centers on Figma's IPO, a significant event in the tech sector for 2025.

Key Points:

• Figma, a prominent design software firm, is set to go public with a target valuation of nearly $19 billion.
• The IPO is expected to raise approximately $1.2 billion, with initial shares priced between $30 to $32, up from the original $25 per share after strong demand.
• The offering is nearly 40 times oversubscribed, marking it as potentially the hottest IPO of the year.
• Both hosts express strong bullish sentiments, predicting a massive first-day pop in Figma's stock price, drawing parallels to past successful IPOs like Airbnb and Reddit.
• Scott Galloway emphasizes the company's robust fundamentals, citing Figma's high net retention rate of 134%, placing it in the top 5% of all SaaS companies.

Notable Quotes:

"Figma has swept in and has said, okay, there is a middle ground. There is an E class in between the C and the S class. It's a Mercedes metaphor."
—Ed Elson [06:20]

"I'm going to go 30% up."
—Scott Galloway [15:34]

"This is crafty markets IPO of 2025, unless something else blows our socks off, we're excited about this one."
—Ed Elson [15:14]

Discussion Highlights:

• Ed shares personal anecdotes about the overwhelming demand, illustrating the IPO's popularity.
• Scott underscores Figma's strategic importance in the design software market, positioning it as a disruptor that challenges established giants like Adobe.
• The hosts debate the impact of regulatory actions, particularly how EU antitrust decisions prevented Adobe from acquiring Figma, thereby fostering a competitive environment beneficial for investors and the broader market.

Federal Reserve’s Interest Rate Decision

The episode also delves into the Federal Reserve's recent decision to hold interest rates steady, marking the fifth consecutive meeting without a rate cut.

Key Points:

• The Fed maintained the target interest rate at 4.25% to 4.5%.
• Notably, two Fed governors dissented, advocating for an immediate 0.25% rate cut—a first since 1993 where multiple governors opposed the majority.
• Ed anticipates no rate cuts until at least September, emphasizing Jerome Powell's cautious stance and his reliance on forthcoming economic data, particularly the Q2 GDP report and inflation data.
• Despite a 3% GDP growth in Q2, Ed argues the figure is misleading due to distorted trade balance metrics influenced by recent tariffs, suggesting the need for more definitive data to inform policy decisions.

Notable Quotes:

"Jerome Powell is extremely cautious. He said the words wait and see 11 times in the press conference."
—Scott Galloway [08:00]

"This is a case study in the good. Regulation and competition create economic growth and wins across our tax base, employee base and give people better products at a lower price."
—Ed Elson [14:47]

"The question is whether or not Jerome Powell is going to look at this GDP data and decide yes, I should cut rates. And the answer to that question is almost certainly no."
—Ed Elson [11:50]

Amazon’s $20M AI Licensing Deal with The New York Times

In the realm of corporate agreements, Amazon's $20 million licensing deal with The New York Times marks a significant development in AI content utilization.

Key Points:

• Amazon will pay $20 to $25 million annually to license The New York Times' content, enabling AI models like Alexa to use Times reporting in responses.
• This deal is highlighted as the first AI content licensing agreement from The New York Times, setting a precedent in compensating content creators for AI training data.
• Ed critiques the deal's magnitude relative to Amazon's overall revenue, noting that $20 million is less than 4% of Amazon's $640 billion revenue in 2024.
• The discussion raises concerns about whether the deal adequately compensates for the value of content in AI development, suggesting that true compensation could warrant hundreds of millions to billions.
• Market reaction was tepid, with The New York Times' stock initially rising by 4% but later closing down 1%, indicating investor skepticism about the deal's long-term benefits.

Notable Quotes:

"The markets told us the real story here. The New York Times stock initially jumped on the news about 4%, but by market close, that had completely reversed and the stock ended down 1%."
—Ed Elson [14:30]

"This AI companies could not survive if they didn't have access to the content that lives across the Internet."
—Ed Elson [13:40]

"For Amazon, it is equivalent to two months of revenue from one single client in the AWS division."
—Ed Elson [13:30]

Discussion Highlights:

• Ed emphasizes the disproportionate nature of the deal relative to both companies' valuations and revenues.
• The hosts debate the broader implications for content creators and AI companies, questioning the sustainability and fairness of such agreements.
• The episode underscores the ongoing tension between content valuation and AI's reliance on expansive data sources.

Conclusion

The July 31, 2025 episode of "Prof G Markets" provides listeners with a comprehensive analysis of pivotal market events:

• Figma's IPO emerges as a standout, promising significant returns for investors amid strong demand and solid fundamentals.
• The Federal Reserve's cautious approach to interest rates reflects ongoing economic uncertainties influenced by trade policies and lagging economic indicators.
• Amazon's AI licensing deal with The New York Times sparks a critical conversation about the valuation of content in the age of artificial intelligence.

Through engaging discussions and insightful commentary, Scott Galloway and Ed Elson equip their audience with a deeper understanding of the forces shaping today's financial markets.

For more insights and daily updates on the capital markets, financial literacy, and security, tune into "Prof G Markets" every weekday on the Vox Media Podcast Network.