Prof G Markets Podcast Summary
Episode: Is Google a Buy? + Is Uber Recession Proof?
Release Date: May 12, 2025

1. Weekly Market Review

Market Vitals
The episode kicks off with a review of the week's key market movements:

• S&P 500: Rose steadily.
• Dollar: Strengthened against other currencies.
• Bitcoin: Surpassed the $100,000 mark for the first time since February.
• 10-Year Treasury Yields: Remained relatively stable.

Trump-UK Trade Deal Announcement
President Trump unveiled a framework for a trade agreement with the UK aimed at lowering tariffs on British goods while maintaining a broader 10% tariff on imports. However, significant details remain unresolved:

• Automobile Tariffs: Planned reduction from 25% to 10%.
• Steel and Aluminum Tariffs: The UK expected a removal to zero, but the US proposed an alternative arrangement.
• Social Media Tax: Unclear whether the UK's tax on digital services would be abolished.
• Beef Trade: Discussions about expanding beef access and reciprocal trade agreements are ongoing.

Federal Reserve's Interest Rate Decision
The Federal Reserve decided to keep interest rates steady, with Chairman Jerome Powell expressing concerns that rising tariffs could lead to higher inflation and increased unemployment. Powell emphasized a "wait and see" approach, stating he would not rush into cutting rates without more clarity on trade policies. Notably:

• Rate Cut Expectations: Dropped from an 80% probability in July to 70%.
• Scott Galloway’s Prediction: Anticipates no rate cuts until September, awaiting the Q2 GDP report.

Melania Coin Scam Exposé
A significant highlight of the week was the revelation of a massive scam involving Melania Trump's meme coin. According to an analysis by the Financial Times:

• Profits: 24 anonymous accounts made nearly $100 million by buying Melania Coin before its official launch and quickly selling their positions.
• Mechanism: Insiders capitalized on early information to manipulate the market, leaving retail investors at significant losses.
• Scott’s Take: Describes it as "the greatest grift in history," urging legislative action to regulate and penalize those involved.

2. Melania Coin and the Crypto Grift

Scott and Ed delve deep into the intricacies of the Melania Coin scam, emphasizing its unprecedented scale and impact:

• Scale of the Scam: Insiders amassed billions monthly since Trump's presidency through various meme coins like Trump Coin and New World Financial Liberty Coin.
• Impact on Investors: While a few anonymous wallets profited, the vast majority of participants, approximately 800,000 people, suffered billions in losses.
• Kleptocracy Concerns: Scott labels the situation a "kleptocracy," where a select few exploit insider information to their advantage, undermining trust in financial markets.
• Regulatory Void: Ed highlights the lack of proper crypto regulation, labeling the crypto industry as "legal crime" due to these loopholes.
• Call to Action: Both hosts advocate for stringent legislation to clamp down on such schemes, stressing the detrimental effects on the broader economy and investor confidence.

Notable Quote:
Scott Galloway ([17:38]): "A kleptocracy is a small number of people with proximity to power oligarchs who get inside information and advantage. This is making Putin blush."

3. Google Stock Analysis Amidst AI Competition

Apple's SVP Eddie Q's Testimony
Apple's Senior Vice President Eddie Q testified during the DOJ's antitrust case against Google, revealing potential shifts in the search engine landscape:

• Decline in Google Searches: Safari experienced a drop in search volume for the first time, attributed to users migrating to AI-powered search tools like Perplexity.
• AI Integration: Apple is considering integrating AI search engines into Safari, signaling a possible reduction or elimination of Google's $20 billion annual contract to remain the default search option.

Impact on Google’s Stock
Following Eddie Q's comments, Google's stock plummeted by 9%, wiping out approximately a quarter of its $2 trillion+ market value. This sharp decline reflects market concerns over:

• Monopoly Threats: Google's dominant position in the search engine market is perceived to be under threat from emerging AI technologies.
• Valuation Concerns: Despite strong revenue streams, Google's multiple is considered low compared to its growth potential.

Scott Galloway’s Insights
Scott argues that Google's current valuation is a "carcass bleeding" but remains a formidable player:

• Undervalued Assets: A sum-of-the-parts analysis suggests Google's search business is being undervalued, trading at around 4 times sales.
• Growth Opportunities: Integration of AI and heavy investments in areas like Google Cloud and YouTube position Google for long-term growth.
• Breakup Benefits: Both Scott and Ed discuss how potential breakups of conglomerate structures (e.g., Alphabet) can be beneficial for shareholders, offering more focused investment opportunities.

Notable Quote:
Scott Galloway ([32:20]): "Google is way undervalued right now. If you're thinking about buying Google, I would argue the time to buy is right now. It's gotten crushed year to date, down almost 20%... Google's just a better business than Pinterest."

4. Uber’s Earnings and Recession Resilience

First Quarter Earnings Overview
Uber reported its Q1 earnings, surpassing certain expectations but falling short in others:

• Revenue: $11.5 billion vs. Wall Street's expectation of $11.6 billion.
• Gross Bookings: Slightly below forecasts.
• Earnings Per Share (EPS): $0.83, doubling the expected $0.50.
• Year-over-Year Growth: Revenue up by 14% from the previous year.
• Operating Profitability: Adjusted EBITDA increased by 35% year-over-year.

Market Reaction
Despite beating EPS expectations, Uber’s stock dropped over 2%, largely due to revenue and gross bookings missing analyst forecasts.

Scott Galloway’s Perspective
Scott emphasizes Uber’s shift from a growth-centric model to profitability:

• Profitable Growth: Highlighting Uber’s first profitable year in 2023 and continued improvements in 2024 and 2025.
• Valuation: At 19 times earnings, Scott views Uber as undervalued, especially considering its steady financial performance.
• Autonomous Vehicles: Uber's partnership with Waymo introduces autonomous vehicles into its network, presenting significant growth opportunities.

Autonomous Vehicles Partnership
Uber has partnered with Waymo to deploy 100 autonomous Waymo vehicles in Austin via the Uber app:

• Performance: These vehicles are reportedly more productive than 99% of human drivers in the city.
• Long-Term Implications: While the current arrangement benefits Uber, there are concerns about future dependencies on Waymo and the potential for Waymo to establish its own network, which could disrupt Uber’s operations.

Notable Quote:
Ed Mylett ([43:03]): "The SEC's job is to regulate insider trading and to prosecute it. And the trouble is, everything he's doing because of the fact that we have not established any proper regulation on crypto, so far, it's legal and that's why they're doing it."

5. Upcoming Week Preview

Looking ahead, Scott and Ed anticipate several key earnings reports and economic indicators:

• Earnings to Watch: Walmart, Toyota, and Alibaba.
• Economic Indicators: Consumer Price Index (CPI) and Producer Price Index (PPI) for April.

Scott Galloway’s Prediction on Alibaba
Scott expects Alibaba to surpass earnings expectations, citing a global shift in perception towards Chinese companies:

• Global Sentiment: A significant increase in the belief that China is a "force for good in the world," potentially boosting Alibaba’s cloud business.
• Earnings Impact: Enhanced confidence from international companies using Alibaba’s cloud services could lead to strong earnings growth.

Notable Quote:
Scott Galloway ([55:38]): "Alibaba is going to report earnings that show especially strong growth in their cloud unit, which will give their stock a pop."

Conclusion

In this episode, Scott Galloway and Ed Elson provide a comprehensive analysis of current market trends, highlighting significant developments in the trade sector, Federal Reserve policies, and the crypto industry’s challenges. They delve into the implications of AI advancements on tech giants like Google and explore Uber’s financial health and future prospects amidst evolving autonomous vehicle technologies. The hosts emphasize the importance of regulatory action in the crypto space to prevent widespread financial fraud and advocate for strategic investment opportunities arising from potential corporate breakups.

Whether you're an avid investor or seeking to enhance your financial literacy, this episode offers valuable insights into navigating the complexities of today's capital markets.

Notable Quotes:

• Scott Galloway ([02:44]): "Nothing I do is original, Ed."
• Ed Mylett ([07:11]): "It's your hard work becoming revenue."
• Scott Galloway ([18:12]): "What he might pardon himself and his kids. But if you don't get a presidential pardon and you participated in anything ranging from ICE raids to engaging in a grift, we're coming for your ass."
• Ed Mylett ([24:22]): "Profgue markets Google stock fell 9% after Apple SVP Eddie Q testified..."
• Scott Galloway ([37:24]): "They sold. They sold. What a baller. Gateway."
• Ed Mylett ([43:03]): "The SEC's job is to regulate insider trading and to prosecute it."

This summary aims to provide an engaging and comprehensive overview of the podcast episode, highlighting all critical discussions and insights offered by Scott Galloway and Ed Elson.